as Chairman, presented the First Report of the Select Committee on Bantu Affairs.

Report and proceedings to be printed and considered.

as Chairman, presented the Second Report of the Select Committee on Bantu Affairs.

Report and proceedings to be printed and considered.

Mr. Speaker, today we shall follow the Order Paper as printed. On Monday the Justice Vote will be disposed of. Immediately after that the Committee Stage of the Prisons Amendment Bill and the Second Reading of the Second Supreme Court Amendment Bill will be taken. The Police and Prisons Votes will then be discussed. On Wednesday the Finance Vote will come up for discussion, followed by the Second Reading of the Financial Institutions Amendment Bill and the Second Reading of the South African Reserve Bank Amendment Bill. On Thursday and Friday the House will proceed to dispose, as far as possible, of legislation still appearing on the Order Paper.

Mr. Chairman, when the House adjourned last night, I was pointing out that even the managing director of Continental Ethicals had admitted that there would be an increase in the costs to the patient with regard to X-ray films, but that the radiologists were alleging that the increase would be much larger than he estimated. The question is why an artificial price increase should be caused at this stage when there is such strong competition between international companies and they are cutting their prices to such an extent that it sometimes looks like dumping. It is a price increase which will place a burden on the sick and the injured.

†The hon. the Minister should consult his “McCrystal” ball and see how this all fits in with his anti-inflation campaign. However, this is not all. One of the companies suffering under this economic discrimination is AEC Phototek, who are the distributors of Agfa Gevaert. Until recently this firm was the largest distributor of X-ray film in the Republic and probably the firm with the longest experience in that distribution. They, in turn, are a subsidiary of the East Asiatic Company (SA) (Pty) Ltd. of Johannesburg and Salisbury, Rhodesia. While the parent company of East Asiatic is in Copenhagen, Denmark, it has never taken anything out of the Republic other than directors’ fees and now has built up a widely diversified set of subsidiaries with an overall investment in the Republic of some R60 million, providing work for some 3 000 South Africans with an annual pay-cheque of some R6,8 million. In one forestry project alone 800 Blacks with 3,200 dependants are employed.

In the X-ray film division alone the investment of this company is R6,5 million. This is considerably more than the investment of Continental Ethicals, the marketers of 3M, who are now receiving preference as a border industry and wish to be further protected through a protective tariff. The point is, Mr. Chairman, that this action in regard to the X-ray film subsidiary has caused concern, quite naturally, in the directorate of EAC, and certain development schemes in other subsidiaries which were to have taken place have been placed in cold storage because of the attitude of the Board of Trade and the hon. the Minister’s department in regard to X-ray film.

At a time when the hon. the Minister should be stimulating the economy, he is, in fact, cooling it off through over-protection. This company, EAC, is involved and has been involved since 1905 in shipping lines, with interests in the Moller Shipping Line and Safmarine in the servicing of tankers off Durban and Cape Town, export, import, the forestry industry, the timber industry, food processing and vegetable oil production. They have begun exporting timber to the UK, Israel and Iran. The company services and arranges the repair of ships in South African shipyards. Their subsidiary, Natal Oil, exports vegetable oil to the value of R3 million per annum. This is not a little chicken company; it is run by hard-headed businessmen.

I want to conclude by warning the hon. the Minister to think very carefully indeed about this matter. Over-protection of a local industry can be just as dangerous as the indiscriminate importation of luxury goods. None of us wants to disturb the economy and create an imbalance, least of all, I believe, the hon. the Minister. We simply cannot afford aggravating the confidence crisis by means of our own actions.

Mr. Chairman, the hon. member for Albany referred to certain proposed tariffs in respect of specific industries. I should not like to comment on that, because I think the hon. the Minister will do so. As a back-bencher I made an interesting observation yesterday concerning two political parties here in this House. The best simile I could think of was that they were heading for the sound barrier of political bankruptcy. The moment anything with a tiny crack hits the sound barrier, it disintegrates. From that state of political bankruptcy they levelled accusations at the hon. the Minister of Economic Affairs and the National Party Government yesterday alleging that the National Party Government’s political policy was responsible for our experiencing economic problems at the present time. However, as soon as the Minister of Economic Affairs tried to react to their accusations from the political wealth of the NP, there was a chorus from my right urging the hon. the Minister of Economic Affairs to return to the discussion of economic affairs. How many more cracks shall we find in the political dispensation of these two parties? One can well understand there being so many cracks, because they are trying to do business across the floor of this House from a position of political bankruptcy with a powerful political policy of the NP and a strong economy which has come about over the years as a result of that policy.

Yesterday we again had the old hardy annual, the story that the Government was interfering with the private sector. I want to make the unambiguous statement that it is the Government’s policy not to interfere with the private sector, but to follow a policy of economic participation together with the private sector. I should like to illustrate that by taking Iscor as an example. Iscor is the undertaking which has been disparaged down the years by these bankrupt political opponents as the outstanding example of Government interference on the largest scale. I want to use Iscor as an example to prove the Government’s economic participation. Before doing so, I want to make one other statement, and that is that Iscor is South Africa’s most outstanding technical achievement. When we look at Iscor and its achievements, we see Iscor standing there as a monument to the NP Government and its economic policy. It is also a monument to the technicians, engineers and the engineering abilities at Iscor. When we want to see economic participation, we look at Sishen first of all. It is generally known that the richest ore deposits in the Sishen area do not belong to Iscor, but to the private sector. However, what did the private sector do? It waited until Iscor had created the infrastructure and the facilities to export ore. Now they are trying to share in and use those facilities to exploit their own rich ore deposits. Is that interference or participation? In my submission it is participation.

We may examine the policy regarding the price of steel followed by Iscor over the years. During the ’fifties the price policy of Iscor remained the same. Why? The reason was to help the private sector to rationalize their own undertakings economically.

Mr.Chairman, may I ask the hon. member a question?

Sorry, I do not have the time. In the ’sixties we saw, in the case of the price of steel, the gap with regard to the index of gross domestic expenditure becoming increasingly wider. Why did this widening of the gap occur? It was because Iscor subsidized the private secton in the ’sixties to make its undertakings viable. This is a fine example of economic participation. As a result of this ever widening gap Iscor was obliged to increase its tariffs in the early ’seventies. Let us examine these increases. In June 1974 there was an increase of 25%, in January 1975 an increase of 10,3%, in June 1975 one of 15% and in May 1976 one of 15%. These give us a total of 65,3%. I want to make the statement that this price increase of 65,3% over so short a term in actual fact represents the extent to which Iscor had been subsidizing the private sector in the steel industry to enable them to make their undertakings viable. The price Iscor had to pay for doing so, was that it could not form capital during those years to finance any future expansion. In the early ’seventies when the demand for steel grew, Iscor had to keep abreast of that demand for steel. At that time Iscor had to embark on major expansion programmes. Let us examine the extent to which their production assets increased in those years.

In 1967 their production assets amounted to R415 million, in 1972 to R762 million and in 1976 to R3 000 million. Because it was unable to create capital resources itself, they had to borrow this money. Let us examine its loans in relation to its own capital. In 1967 it had no loans. Its own funds stood at R357 million. In 1972 it had loans amounting to R175 million as against its own funds of R456 million. In 1976 its loans amounted to R1 800 million, as against its own capital of R873 million. This, in other words, caused a serious disturbance in the ratio of loan capital to own capital and imposed an unprecedented burden of interest on Iscor.

Iscor also had to safeguard its sources of raw materials and for that reason it invested in subsidiaries over the years. Taking all these things together, we see from the data concerning Iscor that its production increased by 73% over the past 10 years, as against a 700% increase in production assets. We on this side of the House are very concerned about the survival of Iscor as it is a strategic industry and as it is an industry which meets a very important need. Therefore it is our privilege on this side of the House to ask the Minister to convey a few factors to Iscor for its consideration. In the first place, we want to suggest that Iscor revise its capital programme for the future. In other words, it should terminate its capital programme for the future, except for those parts which are important to exploit its present capacity to the full. Iscor should first utilize its present production capacity and its present industrial capacity to the full, before considering new expansions. Iscor should also revise its investments and interests in subsidiaries so as to retain interest only in those subsidiaries which will supply it with raw materials. In addition we want to suggest that Iscor consider its range of products. Apart from its range of strategic products, Iscor should be a manufacturer of primary steel and not manufacture uneconomic products. The last point I want to mention, is that Iscor is to maintain a realistic price policy in the coming decade, a price policy directed at enabling it to form and to create capital for any future expansions.

Mr. Chairman, the hon. member for Wonderboom broke a lance for Iscor in a very well-thought-out speech. I want to congratulate him on it, because I think it was very necessary. Some of these matters should have been cleared up long ago and the hon. member did it in a very efficient manner.

I want to speak on another matter which was touched on yesterday during the discussion of another Vote: the question of our energy resources. Questions were asked about this yesterday and the hon. the Minister concerned with that Vote replied to them. Many questions still remain unanswered. One of the issues which we are very much concerned with is the cost aspect of our sources of energy. By our sources of energy I mean in the first place our electricity in particular, the coal and oil we use for energy. We also have atomic energy and solar energy which has been much discussed of late. There are also other sources of energy such as wave energy, tidal energy, wind energy and many others which have not yet been exploited.

With regard to electricity, and also other sources of energy—I think that we, and this country in general, have to realize that it has now become very clear that cheap energy is something of the past. We shall have to become reconciled to that and adjust to it. If we consider electricity, the fact that there were tariff increases on various occasions is still fresh in our memories. Perhaps that shocked the country a bit, but we have not yet come to the end of these tariff increases. If one looks at Escom’s balance sheets, at the demand for electricity in the country and at the high cost of generating power, one realizes that we have not yet reached the end of these tariff increases.

There have been many complaints, especially from the agricultural sector. I spoke with the hon. the Minister on behalf of my constituency and I have to thank the hon. the Minister of Economic Affairs for requesting an inquiry by the Board of Trade and Industries the chief aim of which was to determine how the tariff increases are going to affect the economic growth in the country. The effects of different tariffs in different parts of the country on different groups of people who have to pay the tariffs, should also be investigated. The effectiveness of the present legislation with regard to our tariff policy should also be determined. We should like very much to hear in due course from the hon. the Minister what the result of these investigations was and if there is any further clarification in this regard.

We know, too, that the industries complain a great deal about the high electricity tariffs. As I read recently, what their objections amount to is that tariff increases should not be used to generate capital for the further extension of our power stations and generation of electricity. As far as I can remember, however, provision was made in the legislation of 1970 that 3% of the tariffs could be used for mustering capital for the extension of power stations. This year an amendment Bill was approved which increased the percentage to 6%. Therefore I cannot see any reason for complaint from the industries with regard to this matter.

The municipalities are also complaining about the increase in tariffs and their complaints are based mainly on the fact that the consumers of power in municipal areas, the householders, have to pay the higher tariffs, and together with other tariffs which have been raised, like rates and taxes, etc., it makes it impossible for the average home-owner to own a house in the town.

There have also been complaints from the agricultural sector on increases in tariffs, especially with regard to food production, which is, of course, of prime importance to our country. The agricultural sector is a very major earner of currency. Therefore the agricultural sector also complained about this question of higher electricity tariffs.

Perhaps in due course we shall have more clarity from the hon. the Minister on these increases in tariffs and the reasons for them. Personally, I can imagine a few of those reasons. The increase in oil costs and the increase in coal prices all contribute to the increases in tariffs. 1976 was a bad year for us with regard to energy, but we do hope that this year, things will be much better, especially if one looks at the turnover of Escom over the past year.

With regard to oil, the second source of energy in our country, we were probably all shocked in October 1973 when the Opec countries increased the price of crude oil so drastically. The Opec countries are meeting again in July and one is already concerned about what could happen and whether the meeting is possibly going to cause another shock.

With regard to oil we should like to hear from the hon. the Minister whether any progress has been made in our drilling for oil and whether we have had success in our search for oil in this country. Any further information which the hon. the Minister can furnish in this respect, will be much appreciated. We are of course very grateful that Sasol 2 has progressed this far, especially in view of the speech made by the hon. member for Standerton yesterday in which he indicated how far Sasol 2 had progressed with the manufacture of oil.

Another source of energy is, of course, our coal resources. Many confusing statements have been made about our coal resources. I know there are people who said our coal resources will last for many centuries yet and that they are virtually inexhaustible. Someone like Dr. Kotzé, however, said that we should be concerned about our coal resources, especially towards the end of this century, and that we should protect our coal resources. It would be much appreciated if we could get further information on this matter.

According to Dr. A. J. A. Roux, a very staunch advocate of nuclear energy, which is also one of our sources of energy, nuclear energy is the answer for the future. He mentions uranium as well as coal as future sources of energy. The price of uranium has indeed skyrocketed. Not very long ago the price of enriched uranium was approximately $10 per half a kilogram and today it is already more than $30 per half a kilogram. One also wonders whether enriched uranium is going to be one of our cheaper sources of energy in the future.

We are very grateful for the progress already made with the nuclear power station at Duinefontein, especially the fact that 85% of the capital for the building of the nuclear power station was supplied by the foreign syndicates who are going to build the nuclear power station for us. It is a pity we did not start with the nuclear power station earlier, because when the contract for its construction was signed in May last year, the initial cost was R875 million and it has now reached the R1 150 million mark. It is expected that the nuclear power station will be completed by 1980 and one wonders what the price will be at that stage.

Another source of energy which is still unexploited, is solar energy. One would very much like to have more information about this. Various people have built and mounted solar energy generators. Such generators are being manufactured in the country. One thinks of various countries in the world like Israel, where 80% of their dwelling units are already using solar energy for the heating of water and for central heating. [Time expired.]

Mr. Chairman, the two speeches that have just been made dealt with energy and also with Iscor. Arising from them, I should like to put two points to the hon. the Minister in respect of which I should like to receive a reply from him. Firstly, is a statement going to be forthcoming from the hon. the Minister on the implications for Iscor of the change in the world price of steel and the reduction in demand, and on the financial position in which Iscor finds itself today as a result of those circumstances? The second matter relates to Escom. What is the future going to be in respect of the financing of the capital requirements of Escom in view of the problems that exist in regard to adequate overseas loan finance sources? I should like to hear the hon. the Minister’s reply to those two questions arising from the two preceding speeches.

I should then like to turn to an issue which has been raised in this debate. I must say that I am more than pleased that the hon. the Prime Minister is here at this moment in time because he, too, has raised that issue. The issue I am referring to is the redistribution of wealth. That has become a very real issue in the 20th century because taxation has become a major factor in regard to the redistribution of wealth. The major concept of taxation is to tax those who are able to afford it in order to provide services for the community as a whole. Those who can least afford it very often get the greatest benefit from the bulk of those services because social services in particular are enjoyed primarily by those members of the community who can least afford to help themselves in that respect. Therefore in the 20th century in particular taxation has been used, also by the present Government, as a means of redistributing wealth. The second means of redistributing wealth is an involuntary means. I am referring to inflation. Inflation has become, especially in South Africa with its present rate of inflation, a major redistributor of wealth. Those two are factors which redistribute wealth in a free enterprise system when, on the one hand, taxation is not kept within reasonable limits and when, on the other hand, inflation takes a toll of the community and is not kept in control.

That is not what you Progs want.

Wait a moment; I am going to tell the hon. the Prime Minister what we want. Incidentally, it is not “we Progs”, but “we members of the Progressive Reform Party”. The hon. the Prime Minister—and that is why his presence is so vital at this moment in time—makes the allegation that we want to take the wealth away from one set of people and transfer it to another set of people by a physical act. That is not our policy and it is not our intention. I want to get this matter out of the way so that there will be no misunderstanding about it. We in these benches in particular are always the first to be heard when the question of expropriation without compensation arises.

That kind of redistribution of wealth is that very thing.

I want to say that in our view the question of taking away assets from one set of people and giving them to another set of people is in any case never appreciated, because what one does not work for or achieve, is in fact not appreciated. That is not our policy; it has never been our policy. Let me say what our policy in fact is. There must be no misunderstanding about it. We believe that a society cannot exist in which there are exclusive privileges for one particular group. No such society has ever survived in the world. It cannot be done. What we seek to achieve in the community is a situation in which there is true equality of opportunity. The hon. the Minister of Economic Affairs has often heard me on this issue in relation to the combating of exploitation and when dealing with State interference. I am not one who has said the State must never interfere in the economy. On the contrary. There is an obligation on the State to interfere in the economy in order to create an equality of bargaining power between different sections of the community. The poor are in a disadvantageous position as regards bargaining power in this instance. That is why a society must be created in South Africa in which, to the extent that it is possible and practical, there is complete equality of opportunity. The State must ensure that the inequality which prevents that must be removed. That is what we mean. The major problem that exists is that although the hon. the Prime Minister keeps talking about the threat of communism and the threat of Russian imperialism, and although he deals with the problem of the military threat, he actually does not deal with the threat from the economic point of view.

The concept which is being sold to the under-privileged people in South Africa is the concept that communism is the answer to then economic problem, that overnight their whole situation will change, that overnight they will become rich and that the whole picture will change in South Africa. But the problem to which the hon. the Prime Minister should pay attention is how to combat that propaganda, how to put a free enterprise system across to these people. How do you sell a free enterprise system to a community which is underprivileged and which is being offered everything by the communists? The hon. the Prime Minister correctly says, and I agree with him, that that is incorrect because communism is not the solution to the economic problems of South Africa, but they are being offered that. There is no public relations effort in the whole of South Africa to sell free enterprise as a solution to the problems of those people. That is what has to be done. You have actually to combat the ideology. You cannot merely say that there is a threat of violence, that there is a threat of imperialism and that it is a terrible thing; you actually have to sell the alternative to these people. I want to ask the hon. the Prime Minister to deal specifically with this situation. How does one sell free enterprise to a community when, for example, one looks at the Black urban areas of Johannesburg? If the White man wants to choose a profession or an occupation, he has no problem in choosing what he wants. But if a Black man wants to practise a profession in the Black urban areas of Johannesburg he has a choice of only two. Only two are allowed, namely, doctors and lawyers. If a White man wants to carry on a business activity there are 55 categories from which he can choose. But a Black man in a Black urban area has only 24 categories from which he is allowed to choose in terms of the law.

What about the homelands?

These are not logical ways to sell the free enterprise system. If you want to sell the free enterprise system, if you want to combat communism, then you must combat the ideology with something which the people will regard as being a true alternative. That is what we in these benches stand for.

That is why we differ.

We believe in the free enterprise system, but we believe in a free enterprise system which has exploitation removed from it. We believe that you must create a situation where there is equality of opportunity in the true sense of the word and where the Black man is brought into the system not merely as a worker, but as an entrepreneur, as an owner of capital, as a person who has a true interest in that system.

That is what has to be achieved in South Africa. That will not be achieved by taking anything away from anybody. It can only be achieved by giving equality of opportunity. That is why to suggest that we believe in a redistribution of wealth which means taking something away from people who have worked for it and who have achieved it, is a falsity. It is a political falsity which is being advanced for a purely political motive.

I want to say to the hon. the Minister of Economic Affairs that we are now in a time of difficult economic circumstances. We are in a time when, because times are difficult, people exploit more. He has an increasing duty to see to it that exploitation is not allowed to operate in this community. It is going on now. It is increasing in volume, because the more difficult times are, the more the poor are taken for a ride. This is an issue which is a dangerous issue for South Africa, because that kind of exploitation is used by the communists, the agitators and by everyone else in order to say: That is what the system is. But free enterprise is not exploitation. It is merely that people abuse free enterprise and exploit it. [Time expired.]

Mr.Chairman, the hon. member for Yeoville prefaced his speech with a question to the hon. the Minister in connection with the capital requirements of the corporations. I think that the hon. the Minister will reply to that. The hon. member, however, touched upon another very important matter when he referred to the “redistribution of wealth”, something we have heard so much about in recent years. The hon. member was possibly airing his personal view on the matter. I think, however, that he must have a brief discussion about the matter with Colin and Helen. In all probability they have completely different views on this matter. [Interjections.] When Pres. Carter of the USA spoke about “redistribution of wealth” during his election campaign, he said:“We will have to look at the profits of the big companies.” There is a completely different interpretation of this concept in America. I think that the time has also come for us in South Africa to obtain clarity on this matter.

Yesterday, in his “semi-automatic peashooter” speech, the hon. member for Yeoville asked here … [Interjections.] … whether it is the policy of the Government that the standard of living in South Africa be lowered. My reply to the hon. member is, of course, that it is not the policy of the Government that the standard of living be lowered. The hon. member should realize, however, that South Africa cannot allow a repetition of the phenomenon of about three years ago when R106 had to be spent for every R100 which was earned.

If we take stock of the speeches which have been made so far in this debate, we find that a few clearly distinguishing characteristics emerge. It is clear that in the present recessive economic conditions South Africa is still going through a very difficult phase in spite of a few rays of light which are even now discernible. Speaking about rays of light, the first one which I want to mention is the improvement in our foreign balance of payments. There is also our greater volume of exports, our greater revenue from exports, decreased imports, a stabilizing of the gold price during the past year, the decrease in the rate of inflation in South Africa and a sustained inflow of foreign capital, although this may still be rather limited at the moment. We must not forget either that the economic conditions of our trading partners abroad are also showing a considerable improvement. On the local political scene there is also relative stability. Of course this is more than what can be said about the Opposition parties. In their ranks absolute confusion reigns.

Chaos!

And chaos!

Not all of them.

No, not all of them.

In general, during this debate hon. members of the Opposition were the prophets of doom as far as the South African economy was concerned. Pessimism, however, will not get us anywhere. The attitude of hon. members of the Opposition is in sharp contrast to the attitude which we have observed amongst hon. members on the Government side, including the hon. the Minister.

We have faith in the future. We have faith in ourselves. We shall overcome our problems. We cannot, however, sit and wait for the expected boom trend to manifest itself of its own accord. We are not fatalists like Spengler. We believe in the philosophy of Toynbee. We believe that we have the intelligence and the will to change a slump trend into a boom trend. We are all aware of the potential of South Africa, the potential of its human material, its mineral wealth and its strategic position.

I should just like to quote what the president of the S.A. Chamber of Commerce, Mr. Plumridge, said recently—

Mr. Plumridge also says that no country has a greater potential for growth and prosperity than South Africa does. Gold is still, however, the greatest source of our foreign exchange. That is why gold is economically indispensable to us. It is vitally necessary to the development of our economy. A great deal of progress has been made in gold mining, and that is why the accent in this debate has consistently been placed on exports as the cure for our economy. Our sale of minerals last year furnished a record amount of R4 690 million as against R4 134 million the previous year. If we exclude gold exports, it already provides an amount of R2 089 million. The volume of production also shows a considerable increase of 81% over the past ten years. The production of chrome has improved eight-fold to R61 million; the production of manganese five-fold; that of antimony fivefold; that of asbestos four-fold; that of coal six-fold; that of fluorspar sixteen-fold and that of vanadium nine-fold. South Africa is the most important source of minerals for the Free World. We are also the only source for the East as far as certain minerals are concerned. The economic power of South Africa therefore lies in mining and in the future application of its mineral wealth.

I am very concerned, however, about two aspects. The first relates to the threats the West has made against us in recent times in connection with the possibility of political pressure by way of economic boycotts and sanctions. In a debate like this I think it is fair to ask the hon. the Minister what steps the Government is considering or has taken to combat this if these threats should be carried out.

The second aspect which causes me great concern relates to the economic problems of the refining industry of South Africa and the future utilization of our mineral sources which is the key to our economic recovery. The question that arises is whether we should arrange our planning in such a way that the development of these assets will replace our dependence on gold more rapidly. If we want to do this, we shall have to re-establish certain priorities as far as this industry is concerned. It is becoming increasingly essential to give the refinement of our minerals the highest priority. Because of the higher production costs and the problems which the industry experiences, however, there is a tendency to export minerals in an unprocessed form. In the long run this will not be in South Africa’s interest.

Firstly, the problem experienced by the people is one of capital, because the industry is becoming increasingly capital-intensive. The second bottleneck is the tremendous increase in the production costs in the refining industry, especially as far as transport and electricity are concerned. I consider the alloys industry to be the salvation of the economy in the future and that is why we must pay serious attention to this matter. If we want to market these minerals on world markets, we must keep the price as low as possible and we must make it possible for this industry to do so. The Railways and Escom must make increasing use of their own sources in order to meet their own capital requirements. This is why costs and tariffs will increase. The alloys industry is becoming increasingly energy-intensive. I have in mind, for instance, the aluminium foundry at Richards Bay which uses as much electricity per day as Port Elizabeth does.

If one looks at the other cost increases and one takes the electricity consumption of a foundry in the Eastern Transvaal, one finds that the cost has increased by 370% since 1973. The energy costs per ton for three alloys have increased from R27,9 to R103; that of ferro-manganese from R10,5 to R39,l and that of ferro-chrome from R13,64 to R50,8. [Time expired.]

Mr. Chairman, I am grateful that I do not, at this stage, have to react to something the Opposition speakers said. It does save a little of one’s time. Today I want deal with the theme of the “decentralization of industries”.

It is a recognized fact that we in South Africa often simply link up the concept “dencentralization” with the NP’s ethnic policy and that in the process we actually detract, to a certain extent, from the economic value of the concept of “decentralization” because there is some scepticism about the concept “decentralization” when it is linked to South Africa’s ethnic policy. I want to state categorically today that the concept of “decentralization” has always been accepted throughout the world as a stimulus to the economy and that it can be used to stimulate sections other than the economy. I want to make the following statement: It is specifically in a slump like the one we are experiencing now that it is easier to decentralize and to accelerate the whole process of decentralization.

I know that there are many questions about the whole concept of “decentralization”. We in South Africa will most certainly also have to ask ourselves a few questions. I want to ask five questions. Although I am aware of the fact that I shall not be able to deal with all five in the short time at my disposal, I should nevertheless like to place on record the questions which we in South Africa must ask when we are dealing with decentralization. Firstly, we must ask why decentralization must take place; secondly, to what areas the decentralization must move; thirdly, to what extent decentralization must take place; fourthly, how it must take place and fifthly, what influence decentralization has on the economic growth of the regions at which decentralization is directed.

If one dwells on the “why”, one finds that there are many aspects which one can point out to illustrate why one should decentralize. One can begin by asking why one should specifically decentralize at this stage; there is one aspect I can mention initially. We have already proclaimed 120 growth points. The necessary infrastructure to the value of millions of rands has already been made available for those 120 growth points which have been proclaimed. This infrastructure is being under-utilized. This is a very important reason why we should decentralize. A second reason why it is important to decentralize involves the shifts in the population in the country.

Data shows that 86,8% of the Republic’s White population was living in the cities in 1970 as against 78,7% in 1951 and 67,2% in 1936. If one takes a closer look at these things, one sees that 42,3% of the country’s population lives in the PWV area. 66,6% of the Whites in South Africa live in the four well-known metropolitan areas. As far as these metropolitan areas are concerned, one must also take note, on the other hand, that urbanization of the Bantu population also took place. In 1936 18,5% of the total Bantu population of South Africa were living in urban areas, as against 33,1% in 1970—a very large percentage increase as far as the urbanization of the Black people is concerned.

One can also point out that 80% of all industrial products are, at present, produced on 3% of South Africa’s surface area. One also sees that the PWV area alone provides 47,5% of all industrial products which are produced on 2% of South Africa’s surface area.

It is very important that one should take note of the fact that the decentralization of industries, in a country which is being threatened in the military sphere, is of inestimable value. This is also another reason why decentralization is essential in South Africa. Owing to decentralization, the necessary infrastructure arises in any event, and such infrastructure can be very well utilized as far as the defence of the country is concerned.

If one asks oneself to what areas decentralization should move, one must note that there are naturally certain things which cannot be decentralized. It is true, however, that there are certain industrial activities which can be decentralized. An analysis has been made, by a certain university in South Africa, of the ability of certain industrial posts in the PWV area to decentralize. It is interesting to note that the academics found that 91 000 posts in the industrial sector of the PWV are can be centralized. If, in addition to those 91 000 posts, one deals with aspects such as the families that are involved, one finds oneself able to decentralize a tremendous number of people in one and the same decentralization process. It would be a great asset to us in South Africa if we wished to do so.

It is a very well-known fact that in the establishment of cities and the creation of the concomitant infrastructure, one is dealing with precisely the opposite of a normal manufacturing process. It is a well-known fact that as the volume increases, the cost per unit decreases, but in the administration of large cities, one is dealing with just the opposite, because the larger the administration of a city or of an area becomes, the more expensive it becomes on a percentage basis.

If one therefore asks oneself to what areas decentralization must move, one sees very clearly that one has to decentralize towards the points where the necessary labour and other resources such as water, etc., are available. One would be able to decentralize very easily. If one looks at the position as regards Black men who are temporarily absent from their homelands to work in the industrial sector, one sees, amongst other things, that in the case of Transkei there are 164 000 Black men annually working beyond the borders of Transkei. In the case of KwaZulu there are 152 000 Black men and in the case of Lebowa there are 9 100 Black men. It is very clear that decentralization will have to move to areas where labour is available.

In the course of the debates over the past few days, a great deal has been said about unemployment and particular reference has been made to the Black people who are supposedly becoming unemployed. I want to put it in the following terms, however: We must not use the mere fact that people are unemployed, in the slump we are experiencing at the moment, as a lever to try to circumvent section 3 of the Environment Planning Act. I am very concerned about the fact that we are now talking about the creation of labour-intensive industries merely to absorb the unemployed. We can, however, decentralize and absorb the labour in the decentralized industries. We can make use of labour-intensive industries in the centralized areas, while using capital-intensive industries in the centralized areas. I think that this is the only way to steal a march on unemployment in that sphere. [Time expired.]

Mr. Chairman, I want to deal with a sub-department of the Department of Industries which I can only describe as the hon. the Minister’s stepchild. It is one of the most neglected departments in the Government. It is neglected for some extraordinary reason because it should be one of our most important departments. It is one of the departments that must provide us with food in the future. I refer to the Department of Sea Fisheries. I want to refresh the hon. the Minister’s mind—because he was not the Minister of that department at the time—that in 1967 a commission of inquiry was appointed. After five years of investigation into the position of sea fisheries off the coast of South West Africa and off our coast it tabled a report in 1972. It was a detailed report giving the history of the development of sea fisheries off the coast. It referred to the shortcomings of various sectors of the industry exploiting the living resources of the sea. In that year certain departmental changes were made which I think were an improvement. First of all, the Division of Sea Fisheries upgraded itself and it became known as the Sea Fisheries Branch of the Department of Industries.

I have made reference before in this House during the discussion of various ministerial posts to the necessity of having a Maritime Affairs Department. I have started my speech this morning by saying that the Sea Fisheries Department is the stepchild of the Department of Industries. What I am going to say now will, I think illustrate my argument. It is a neglected department. I do not mean this in a disrespectful sense to the Secretary or to the other officials in the department.

However, very often they are not people who are aware of or are conversant with the manifold problems that concern the maritime industry. It is not their fault because they come from Pretoria and many of them are unfamiliar with the sea. It is, however, a fact that they are not able to cope with the problems that the coastal people are aware of. I will try to deal with some of these matters during the course of my speech. I understand that in the Sea Fisheries Department there is a director, a deputy director for research, and various assistant directors. Their functions are environmental studies, physical, chemical and biological matters and oceanography. There is another assistant director for fisheries biology, an assistant director for South West Africa and an assistant director for resource management and control. In addition to that the director and his staff are charged with the responsibility for numerous administrative duties. My first question to the hon. the Minister is whether all those posts are filled and whether all those officials are functioning in the way that was envisaged in that report and in the Sea Fisheries Act of 1973 which also referred to this matter.

I want to refer to the position in Cape Town. In Cape Town we have no fewer than 13 offices of the Department of Sea Fisheries. These 13 offices are in 13 different buildings. What sort of co-operation and control can one have in a situation like that? I just mention this in passing. It illustrates my point that this is a stepchild. The branch should have its own administrative block so that all the departments and sub-departments can be housed under one roof. No deep-sea research vessel has been built for the Department since 1947. One was to have been built about two years ago, but it has been put off because of the economic climate. This is a very important department indeed and one of the most important aspects of the work of this department is research.

Let us look at the department for a minute. Its duties are first of all research, but the research facilities are practically negligible. I speak from some experience because I deal with this department regularly and I think I am aware of what is going on in the department. In addition to research duties, it has to patrol and inspect. This is normally called the administrative control side of the department. In addition to that, it is responsible for fishing harbours. Those are three important functions that the department is supposed to discharge.

Before going on to the next point, which deals with research, may I say that we in South Africa are very lucky to have a man like Dr. De Jager, who is a world renowned marine biologist, as head of the Sea Fisheries Department. How he discharges his research duties together with his administrative duties and his control of fishing harbours is beyond me. A man like that you do not find growing on trees. He is a rare species. We are very lucky to have a man of his calibre in South Africa, but I am afraid that this man suffers from difficulties found in other Government departments as well. Because the pay is inadequate, many members of his staff, those who have reached a certain stage of efficiency and proficiency leave the department to go into private enterprise. This is the one sphere where you cannot afford to lose highly qualified research people. May I refer to the special interim report which preceded the commission’s report. It was one of the three interim reports and dealt specifically with research. This is what it says—

Then it goes on—

That interim report was embodied in the commission’s report itself and was endorsed by the finding of the commission as a whole. The interim report concludes by referring to a matter to which I now wish to refer. That is that there are numerous complaints in connection with the ineffectiveness of the Sea Fisheries Division’s patrol and inspection services. I am saying this not with a view to criticizing the department unduly. It is not their fault. I am trying to make out a case for the department. It is not their fault. They are short of funds. They are short of research officers. They are short of an effective inspectorate and they are short of adequate facilities in their duties as controllers of harbours.

Now, Sir, what are the problems? Here I want particularly to deal with the rock lobster. One has inspectors who are paid, when they first start, something like R150 to R160 to R180 per month. You can give or take a few rand but my figures are more or less correct. After about five years they rise to R350 per month. Now these people have inspection duties in one of the most lucrative branches of the Sea Fisheries Department. Sir, look at the harbour-masters. The harbour-masters are grossly underpaid and only after about five or six years, I think, do they get something like R500 per month. They have very responsible duties. I did not have time to undertake detailed investigation and research as I did into the rock lobster and pelagic fishing industries some years ago, but it is common knowledge in the industry and it is common knowledge among the public in the coastal areas that there is corruption on a large scale in the rock lobster industry. The Division of Sea Fisheries itself is aware of the fact that there is abnormal poaching taking place. There is widespread and highly organized poaching. I understand that the department itself has launched an investigation into what it regards as abnormal poaching. It is obviously unable with its present resources to control poaching, but there is now an abnormal incidence of poaching. The officials of the Sea Fisheries Department I believe have on record the names of individuals and fishing concerns who are strongly suspected of involvement in organized poaching. There are certain companies who are believed to buy up illicitly stocks of rock lobster, store them in cold storage and ultimately transport them illegally. The Sea Fisheries Division is short of staff and of fisheries vessels with which to patrol the coast. There is widespread rumour that other Government departmental officials are also involved in this poaching effort. It has almost become a joke here in Cape Town that various Government departmental officials concerned with the sea and the administration of some or other aspect of the sea, are involved in poaching. It has become a big thing. It has become an additional source of income to them. The Sea Fisheries Department knows about this. Something has got to be done about it and the only thing that can be done about it is the appointment of a much more adequate inspectorate than is the case at the moment.

The poachers have developed poaching to a fine art and the inspectors find it very difficult indeed to keep tabs on how and where the bagged rock-lobsters are landed and marketed. Sir, I can tell you that there is an organized poaching ring at the moment in the Cape Peninsula and that the stocks are landed at different parts along the coast in the Peninsula and elsewhere in the province every day and every night. [Time expired.]

Mr. Chairman, I am pleased to react to the hon. member for Simonstown in the sense that we who live inland are very aware of the importance of sea fisheries and of sea-food. If there is no more fish in the sea, this is going to deprive those of us who live inland of one of our little pleasures. Not only will it deprive us of the pleasure of catching fish, but of eating it too.

Mr. Chairman, I actually want to link up in my speech with what the hon. member for Potgietersrust said about an extremely important subject, namely energy. I should like to link up with what he said by saying that I think it is a subject whose importance we cannot emphasize enough in South Africa. Energy is probably the most important commodity in the modern world. We only have to look at our sea transport, air transport, road transport, rail transport and similar facets to realize that we can do absolutely nothing without energy. Without energy we can just as well go back to trees, the branches and the jungle. Energy is important to us, as developed people, in the maintenance of our standard of living. That is why it is important for us to ensure a continual increase in energy.

Then, of course, the savings aspect comes very strongly to the fore. I want to state, however, that no matter how much energy we save in South Africa and in the world as a whole, it will be an extremely small part of the total energy requirements of the world. I do not thereby want to say that saving is not important. I think that saving is vitally necessary, especially because it will contribute towards increasing our individual standards of living. It can make an extensive contribution in this regard.

Let us take a brief look at a world review of energy. What I want to say does not come from me; it is what the greatest experts in the world say about the energy position. If one merely looks at the two most important energy sources, one sees that, firstly, coal production has increased by 3,6% since 1940 and, secondly, that oil production has increased by 7% per year since 1910, while the demand for energy in the world has increased by 6% since 1920. Since the increases in demand and production are virtually balanced, it is extremely difficult to predict what the position will be in the future. The experts have, however, made a prediction. They have combined all the energy sources and expressed the result as the equivalent of so many billion tons of oil. In 1950 the demand was 1,67 billion tons whilst the production was 1,9 billion tons. It is calculated that in the year 2010 the demand will be 20,7 billion tons as against production figure of 20,5 billion tons. Therefore there will be an equilibrium. In the year 2020 the demand will be approximately 30,7 billion tons as against a production figure of 25,9 billion tons. There will consequently be a shortage of 20% in production. In the year 2050 there will be a shortage of 37%. We must also take into consideration the fact that only 30% of the population of the world use 80% of the world’s energy. This paints an extremely sombre picture for us. We must also take into consideration the fact that it is calculated that the present-day known oil fuel sources will have been used up by the year 2050. The British Coal Board conducted a survey in 1972 of the coal sources of the world. They estimated those sources to be 6 711 billion tons. The sombre aspect of this picture is that only 7% of those sources are proven sources. It is therefore very clear to us that the world is moving towards an energy crisis. What does this energy crisis hold for us? It embodies a threat to our standards of living, a threat to our level of civilization as we know it today, and a threat to the development of the Third World. There is also a threat to the future of the Third World if we cannot make the necessary provision.

I now want to make the statement that coal is going to become one of the most important energy sources in the decades ahead, because we must have a source of energy with which to generate electricity. 20% of the total energy requirements of the world were met by electricity during 1976. An estimated 50% of the total energy requirements of the world will be met by electricity in the year 2000. In the year 2050 the figure will be 80%. Therefore we must have sources for the generation of electricity, and therefore I want to make the statement that the people and the country which succeeds in rationalizing and co-ordinating its energy sources and its energy demands and realizing them in a co-ordinated way—in the case of South Africa I am referring specifically to coal and also uranium—will be able to secure its economic future in the decades which lie ahead.

What are we doing here in South Africa? What we are doing in South Africa is praiseworthy. If one looks at Sasol, one can have nothing but praise for it. One can have nothing but praise for our techniques of mining increased amounts of coal. Whereas certain mines could only mine about 10% earlier on, figures of 60% and 70% have now been achieved. One can have nothing but praise for our uranium enrichment. One can have nothing but praise for the CSIR and other bodies which do research on energy sources. Technically speaking, our insurance for the future is therefore sound, but administratively we fall far short of the mark.

The administrative aspect fall short of the mark for the simple reason that we are looking at our energy sources and requirements in an unco-ordinated fashion. There is the Department of Planning which has certain responsibilities. There are the Departments of Commerce and Industries which have other responsibilities. There is also the Department of Mines which has a third set of responsibilities. One must therefore ask oneself the following very serious questions: Since our future is so closely interwoven with the availability of energy—I am the last one to ask for more departments in our State hierarchy—has the time not come for us to co-ordinate our entire energy requirements under one umbrella body? I do not want to say that we should create a Department of Energy, but should we not take a very careful look at creating something? Should one not create an umbrella body with statutory and administrative authority and take a co-ordinated look at our energy sources in South Africa?

Mr. Chairman, the hon. member for Wonderboom has raised in his initial 10 minute speech the question of the pricing policy of Iscor and as the hon. member for Yeoville has raised certain pertinent questions too, I merely want to round the situation off by correcting the record. Perhaps the hon. member for Wonder-boom will realize that the pricing policy of Iscor is not set by Iscor. In my address to the House yesterday I praised the achievements of the personnel of Iscor and regarded them as a major asset for South Africa. In the annual report their problems are highlighted and on pricing policy the report says the following—

It goes on to say—

In view of the capital problems that Iscor is facing—and if one reads the balance sheets correctly and interprets comments made during the year correctly, it is possible that Iscor may face a loss of some R100 million next year—I believe the questions asked by the hon. member for Yeoville are germane, and I hope the hon. the Minister will answer them.

Then I want to deal very briefly with the hon. the Minister’s speech of yesterday. If he and I were boxing-men I would have said that he had—in a literal sense—a weight advantage, because he had two hours within which to paint the whole canvas of the South African economy, against the 20 minutes I had available to do the same. In general he complained that we were oversimplifying our economic arguments. I just want to point out to the hon. the Minister that I only dealt briefly with the main economic problems facing the country, and with certain specific ones among those problems. On the subject of import control the hon. the Minister asked me to indicate to Assocom and to commerce in general that they should be highly selective in their imports. I agree. However, I think in all fairness the amount of Scotch salmon, or even of Scotch whisky, imported in relation to the R400 million consumer goods imports, is positively insignificant. This is a more political point. Let us save what we can. However, on the theory of import control, I think that this side of the House must establish its credentials. We have always opposed import control as a general principle, because we do not oversimplify our situation. We believe in free trade and free enterprise. If the hon. the Minister does the same, he will recognize the following points made by City Bank of America—

If we want to sell our oranges, we have to buy other products from other peoples. That is what it boils down to in simple terms. Do politicians understand what principles of comparative advantage of gains could be had from specialization and from unrestricted trade? What they do not grasp, is that exports are the cost of trade, while imports are the benefit of trade, not the converse. In other words, a country’s standard of living is measured, not by what it produces, but by what it consumes.

Next I want to refer briefly to the question of the fish meal subsidies. I want to correct the hon. the Minister’s impression that I was merely appealing for an increased price. What the chairman of this particular board says, is—

I ask the hon. the Minister to apply the mind of his department to this categorical statement by an important and responsible company dealing in an important section of the business. If we believe that South Africa will survive on its exports, it seems tragic that we are losing a 100% income on exports in order to maintain the low price that is being maintained at the moment, if the article is being wastefully consumed in this country.

What about the price of maize?

If it is being wastefully used, the same argument would apply. Let us not waste our country’s resources. We need every cent of overseas exchange that we can get.

In conclusion, I want to come to the hon. the Minister and to other members of the House who indicated that we on this side of the House had not taken the trouble to put our economic solutions after having criticized the Government’s overall economic policies. We on this side of the House believe, with other leading economists, that the standard of living of South Africans is falling.

Yet, we had the extraordinary statement by the hon. the Minister of Finance on the 1975 devaluation, that the standards of living of South Africans would not fall, but would be rising in fact. The hon. the Minister of Economic Affairs knows that it is falling and that with a rate of inflation of 11% to 13% it is the lower income groups who are suffering most This is the tragedy of the political situation as we see it. Therefore I want to say that we on this side of the House would get our priorities in the following order: We would endeavour to restore the political credibility of the Government in South Africa amongst all the other race groups. And we would endeavour to restore the economic credibility of the Government by, first of all, taking steps to restore business confidence. I want to quote no less an authority than Prof. R. R. Tusenius of the University of Stellenbosch. He says—and this is our policy too—

Then, Sir, I would support the Afrikaanse Handelsinstituut in its plea that I read out yesterday, that things are so serious in our country and in our economy that we should, contrary to what the hon. the Prime Minister has said, call in the best possible brains and form a think-tank. In this regard Prof. Tusenius says—

Note, that he says “overworked” and not “overpaid”—

Then I would say I would restore business confidence, which immediately would change the whole scene in South Africa. I would immediately do away with job reservation without any hesitation. I would bring about the upliftment of the non-Whites, both socially and economically. Bigger thinkers than myself also seen that our market of 25 million people can bring about the economic prosperity of this country. It can uplift every facet of industry—the motor trade, the TV trade, the hardware trade, the building trade—if we would use each individual to the best possible opportunity. Then, Sir, I would dismantle price and profit controls as fast as they humanly can be dismantled, because we believe in free enterprise. [Time expired.]

Mr. Chairman, before I react to the hon. member’s speeches—I shall try to do so as comprehensively as time permits—I want to avail myself of this opportunity, pursuant to what the hon. member for Cape Town Gardens said, to make a few observations on what I think our future industrial development strategy should be. I want to make a few observations about the direction in which I think we should move, and on the problems, as I see them, which lie in the way of our future industrial development. I want to reiterate that at present South Africa still finds itself in the acutest and longest recession since the Great Depression of the early ’thirties. In the industrial sector in particular this economic low-water mark finds expression in increased unemployment, low production volumes, and therefore, too, unutilized production capacity, as well as in limited profit possibilities. Under these circumstances I understand the doubt and hesitation which are descernible among some industrialists. Nevertheless it is gratifying to observe a basic confidence in the inherent strength of our economy and also in our economic future among industrialists and entrepreneurs.

This confidence, so I believe, is not misplaced. It is based in the first place on South Africa’s wealth of natural resources— to which the hon. member for Overvaal referred—its workers and entrepreneurs who, as I see it, are still, in the spirit of true enterprise, prepared to accept the challenge of the problems as well. Secondly, this confidence is based on the proud history of the industrial development of our country. The manufacturing industry has for a long time now been making the largest percentage contribution to South Africa’s gross domestic product. This contribution rose from 17% in 1946 to 24% in 1975. This sector is also—and this I want to emphasize—the most important provider of employment in our economy. It is at present responsible for approximately 24% of the total employment in the various sectors of our economy, regular farm workers included.

In addition it is general knowledge that we do not have a single product type industrial sector, but that our industrial development takes place on a diversified basis. Then, too, important contributions are being made by the sophisticated chemical and basic iron and steel and other metal industries. The hon. member for Newcastle referred to this.

We are all indebted to those industrialists who have made this development possible. I should like to pay tribute to them on behalf of all the hon. members. However, one should in all fairness admit that the public sector— which is scorned by some—also plays and has played an important part in our industrial development, as the hon. member for Wonderboom inter alia also said. I have referred on numerous occasions to the way in which the Government puts free enterprise and free enterprise choice at a premium. Nevertheless this Government has always felt itself called upon, for reasons which I enumerated earlier this year, to intervene and to participate in the economic life. That this policy has paid dividends, any objective observer will have to admit if he evaluates the contributions to our industrial development by the public corporations such as Escom, Sasol, Iscor and the IDC, the protectionist policy of the Government, the contribution of the CSIR, the SABS, the National Productivity Institute, the directing research of my department and of the Board of Trade and Industries, as well as the close and uninhibited liason between my department and industry.

I have already referred to the state of recession in which our economy finds itself at present. I have also, in fact, referred to the structural changes which have recently taken place. It is a fact that the regular course of the cyclical movement in a capitalistic economy will result in an upward phase from the present economic low-water mark. However, we would be making a mistake if we did not admit that there are certain problems in the economy which will not simply be rectified by the upswing of a normal business cycle, and that in the absence of a planned and co-ordinated attempt to solve these problems, our economic future would be less favourable than it would otherwise be. If the interaction which inevitably exists between our economic welfare and the solution to our socio-political problems is taken into consideration—I referred to this in detail yesterday—it is very clear to me that the elimination of these problems will have to be accorded a very high priority.

I want to single a few of these problems, problems which to a large extent are interrelated. In the first place I want to point out the urgent necessity—and this was emphasized by hon. members on both sides of the House—of providing work for South Africa’s growing population, a growth which is producing a net annual number of entrants to the labour market of 325 000 men and women. I think that hon. members will agree with me that in this specific connection the industrial sector has to make the most important contribution towards creating the expected work opportunities. But if one takes into consideration that an industrial sector which is already employing 25% of the labour force has to increase its provision of work by 12% per year in order to absorb fully a mere 3% increase in the total labour force, and if we compare this with the approximately 3,5% average annual increase in the provision of work in the manufacturing industry since 1970, it becomes obvious that we shall have to devote meticulous attention to industrial growth. It may be added in passing that the industrial sector will not be able to bear this work-providing burden alone.

In the second place we must take cognizance of the fact that as far as the foreseeable future is concerned, industrial growth and economic development must in general take place in the new situation as far as the foreign capital supply is concerned. Foreign capital is available, but not to the same extent and on the same favourable conditions of the past.

In the third place the problems we experienced in the recent past with the capital account of the balance of payments focused attention once again on the chronic shortage on the current account of the balance of payments. This in turn focuses attention on our industrial strategy in regard to import substitution. Industrial growth in South Africa was to a large extent based on the protection of local industries in order to promote import substitution. Although, so I believe, there is already room for import substitution and we have to avail ourselves of these opportunities, we must admit that import substitution as in the case of other developing countries, will become increasingly difficult, because these opportunities are limited primarily to branches of industry requiring large amounts of capital, a large market and advanced technology. I believe that we shall, under these circumstances, have to give attention—and do so urgently—to the possibility of export-directed industrial growth through the optimum utilization of the production factors in which South Africa has a comparative cost advantage on the external market.

The hon. member for Yeoville mentioned, with much gesticulation, the insufficient labour-intensive undertakings in South Africa. I replied to that in part yesterday. I admit that it is a problem and I find it disturbing, in general terms, that the manufacturing industry has in the aggregate become so capital-intensive since the early ’sixties. I appreciate that the aggregate figures frequently conceal more than they reveal, but it is with concern that I take cognizance of the fact that the fixed capital supply for the manufacturing industry—calculated at constant prices—per worker employed since 1962, has doubled. My department is already giving attention to the determination of the nature and extent of this problem.

In conclusion I want to say that we have no reason to become pessimistic at our economic prospects, but similarly—and I want to emphasize this—we should face up to the realities and we should admit that our, problems will not simply disappear with a normal upswing in the business cycle. Consideration and planning are of cardinal importance under these circumstances and are essential requirements. To meet this particular need, I have decided to appoint a working group, with representatives from both the private sector as well as the public sector, to reformulate our industrial development strategy, and to propose adjustments in order to obviate these problems. The investigations which my department are already undertaking into the capital-intensiveness of our industrial structure and into the desirability of the creation of export processing zones, will link up with this study. I want to announce at this stage that I shall ask the following gentlemen to form this working group under the direction of Dr. Kleu: Dr. Brand, of the Economic Council of the Prime Minister’s office, Dr. McCarthy of my own department, Mr. Visagie of the Department of Finance, Mr. De Vries of the Bureau for Economic Research of the University of Stellenbosch, Prof. Van Zyl of the University of Pretoria, Mr. Hammond Tooke of the Federated Chamber of Industries and Mr. Jacobs of the Afrikaanse Handelsinstituut. I am confident that these gentlemen will be able, having regard to what I have said and having regard to the structural changes which we must take into consideration, to come forward with proposals on the planning of our future industrial development strategy.

As for the matters raised by hon. members, I shall reply to them as quickly and comprehensively as possible, and I apologize in advance if I am not able to do so in the time at my disposal.

The hon. member for King William’s Town referred to the East London harbour. With his permission I should prefer to let him have a memorandum in this regard. It is more comprehensive than I am able to deal with the matter here.

He also referred to industrial centralization, and to the position at Berlin. We are making concessions and other benefits available to the private sector for industrial decentralization. However, these undertakings have to be financed by the private sector itself. I want to make one observation, and the hon. member must forgive me for doing so. I have told the people in East London before that they themselves were to a large extent responsible for the fact that the potential of that area is not being properly appreciated and that the necessary confidence is not present. The reason for that is that they always emphasize the negative in public and never the positive.

It is untrue.

It is true. I told them so myself.

It is not true.

I do not want to argue with that hon. member now. He was not present during the debate and has only walked in here this minute.

I was here all day.

A great deal has already been done for East London. In the case of East London we created a steel repository, at special request—which is costing the State R2 million—on the strength of the assurance which was given …

You told me R1 million.

Order! The hon. the Minister should not allow himself to be led astray by the interjection.

It costs a great deal of money, and industrialists will be established on the strength of it. Those are the facts. Once again the State cannot begin any undertakings there itself. Therefore I want to tell the hon. member that that community should preferably launch its own campaign to propagate the area rather than to speak negatively of power tariffs and other factors. There are Railway rebates and road transportation concessions, as the hon. member knows. The hon. member for Rustenburg made a very important contribution in this regard. He presented industrial decentralization as a positive step, as the hon. member for Schweizer-Reneke also did this morning. I cannot reply to this in detail, but I can say that R93 million has already been spent on the creation of an infrastructure since the inception of this policy, inter alia, too, in the area which the hon. member for King William’s Town represents. Township development and Bantu housing alone has cost R486 million. The loans that have been granted, amount to more than R470 million. Tax concessions amount to R184 million and investment by the private sector, in other words their contribution, amounts to approximately R891 million. The number of workers employed, totals 173 000. If the number of dependents are added, hon. members will understand what this really means.

The hon. member for Overvaal and the hon. member for Sunnyside spoke about export promotion, and I want to thank them for their speeches in this regard. It is true that the state of the current account during the first quarter this year improved considerably. The indications are for the first time that there may be a small surplus. If it is seasonally adjusted, it indicates a deficit of R240 million on the current account this year, while the deficit for the first quarter of last year was estimated at R2 400 million after it had been seasonally adjusted.

This gives one an idea of the favourable reversal which has taken place. It is a fact that the capital account still gives cause for concern. It is also a fact that we shall have to rely to a large extent on the current account if we wish to reinforce the capital account. That is why export promotion is one important instrument for doing this. In this regard I want to point out that since the export concessions and incentive measures were introduced, there has been significant progress. Prior to 1975 the number of exporters registered with my department was 1 500. Last year there were 6 000, who were all exporting on a regular basis. In this regard it is also important to refer to the development at Richards Bay. In the first nine months since exports from that harbour commenced, coal to the value of R100 million has been exported from that harbour. At present prices the proceeds in the form of foreign exchange in respect of coal alone amounts to R400 million per annum. In view of our experience of the functioning of concessions, there are certain questions which arise. The first is whether we should continue to distribute them over such a wide field in regard to the forms in which they are granted. The second, very appropriate question, is whether we should not grant them to selected industrialists, because they can market far more intensively in the outside world, rather than to distribute them among such a large number of small exporters and then not necessarily have the momentum, in terms of monetary value, which they could otherwise have. The question arises whether we should not launch a dynamic marketing policy in Europe. In reply to these questions, I decided in the first place to convene a conference this year of all my overseas trade representatives, together with representatives from the private sector, to launch an overarching marketing initiative in respect of our exports and discuss the methods by means of which this could be done.

Then, too, I think it is important that there should be warehouse accommodation at certain selected points in our export markets where goods can be stored and supplied to prospective customers at short notice. This is part of the investigation. I hereby announce that I have already given instructions for a committee of inquiry—not a commission of inquiry—to be appointed, which will investigate the aspects to which I have referred. I hope that I shall in the near future receive their report in this regard, in the knowledge that if we have to obtain favourable results in this regard, we shall have to deserve them and plan as practical people, if the hon. member for Carletonville will forgive me for using his words.

I shall deal very quickly with the speech by the hon. member for Walmer. I shall prefer not to reply to his political statements, because he talks absolute nonsense. He said that we have, during the past 30 years, been the cause of there being no capital flow.

Not enough.

The position is as follows: From 1970 to 1974 foreign investment capital amounted to R2 385 million. During 1975 we had the greatest net capital inflow into this country. That alone amounted to more than R1 800 million. I think that one should at least be reasonable. The hon. member referred to the semi’s factory at Saldanha Bay and asked me whether I would give consideration to it being operated by the private sector. I want to say that not only shall I consider it, I have anticipated him. I am entirely prepared to allow this, but I find it strange that file hon. member states that Iscor should quarantee the factory with its dividends. I thought the hon. member was advocating a private sector economy.

The hon. member for Carletonville was entirely practical, and complained about the hooters, spare parts, models and variations in the motor industry. I agree with him, but I wish he could give me some practical advice in order to solve the problem, without telling certain manufacturers that they may not, and telling certain others that they may. We are sitting here with a real problem, and in my department we are doing everything possible to alleviate it. In fact, the entire investigation into the motor industry, to which I referred, was inter alia based on attempts to see whether we cannot reduce the number of manufacturers. I agree with him that our country is too small for the existing number of manufacturers in South Africa.

The hon. member for Klip River, Albany and King William’s Town, discussed Escom power. I shall reply to them when we discuss the relevant legislation here and I shall then be able to give them all the information. The time aspect does not allow me to do so now. In this regard I just want to say that the capital requirements of Escom from now until 1985 will amount to R14 979 million. In the past this money came primarily from the capital market abroad and from the money market in South Africa. As hon. members know, the means of those markets have diminished considerably.

The hon. member for Albany discussed the firm Continental Ethicals. The problem to which the hon. member referred, is not a problem which I can discuss here at present. The hon. member is aware that the Board of Trade and Industries is investigating an application for protection. Representations ought therefore, to be addressed to that board in the first place. The hon. member will also understand that X-ray plates are a strategic commodity and that in view of other considerations we should do everything in our power to be independent as far as possible in this respect as well.

The hon. member for Wonderboom made an important contribution in respect of Iscor. He made certain statements with which I am in fundamental agreement. I want to go into these very quickly. I want to tell him that in view of the price increases and in view of the problems, the Government has become convinced that an investigation at Iscor is justified. Iscor itself agreed to this and appointed a committee consisting of independent people to undertake the investigation. The investigation was instituted into the following aspects: Managerial and operational efficiency; the price and financing policy adopted in the past and the one which ought to be adopted in future; the efficiency of the corporation’s financial management department; methods which may be utilized to balance revenue and expenditure; and accusations that Iscor’s activities extend over too wide a field. I received the report from the committee and I am studying it. I shall make an announcement in this regard later.

The hon. member for Potgietersrus discussed energy resources. I want to thank him for his contribution. There are two pieces of legislation on the Order Paper relating to this matter which still have to be discussed. During the discussion of that legislation I shall react fully to the points which he raised.

The hon. member for Yeoville tried to explain his own position in respect of his standpoint concerning the “redistribution of wealth”.

The party’s standpoint.

He is now saying that it is his party’s standpoint. Unfortunately I do not have much time left. I now want to ask him, however: Why does he use the term “redistribution”? Surely it means that the existing wealth has to be divided. Surely there is no other meaning which one can attach to it. He will recall that I said yesterday that it is our objective “that there must be an equitable division of wealth”. That does not mean that the existing wealth should be divided. If he wants people to understand what he means, he must use the words which suit his standpoint. He is constantly playing with words.

He also asked me about Iscor. I have replied to that in part. Iscor does indeed have problems and, if there is no improvement in the price, we shall have to consider curtailing its production further.

Votes agreed to.

Chairman directed to report progress and ask leave to sit again.

House Resumed:

Progress reported and leave granted to sit again.

Mr. Speaker, I move—

The Bill which is being introduced here proposes to extend the territorial waters of the Republic of South Africa from six to twelve nautical miles and the fishing zone from 12 to 200 nautical miles.

I shall first deal with the extension of the fishing zone.

The relatively rich fishing resources found along the coasts of the Republic and of South West Africa are no longer just being watched by covetous eyes from abroad. The experience of the past decade has shown us that more and more of the world’s fishing fleets are prepared to travel long distances to exploit these resources, to such an extent that it has become necessary for us to attempt to protect these resources from over-exploitation by means of the following measures, inter alia—

1. (a) Intensified patrol services within the coastal strip of 12 nautical miles in order to protect the coastal fish species against illegal exploitation by foreign boats.
2. (b) The ratifying of the International Convention for the Protection of the living Resources of the Continental Shelf.
3. (c) The creation, at the instigation of South Africa, of the International Convention for the Protection of the South-East Atlantic Ocean Fisheries, in terms of which the 14 member countries have already agreed to a minimum mesh size for nets which will allow immature fish to escape. Together with this, catch quotas have been determined within the capacity of the late resources outside the present fishing zone of 12 miles off the coasts of the Republic and South West Africa, for the exploitation of these resources.
4. (d) Support, in principle, of the International Law of the Sea Convention, in terms of which an attempt is made to encourage further measures for the protection of the fishing resources of coastal States.
5. (e) As a member country of the International Whaling Commission, we took an active part in attempts to provide adequate protection against over-exploitation of the world’s whaling resources.
6. (f) As a member country of the International Tuna Convention, the Republic took an active part in research projects for determining the extent of the resources, as well as measures for the protection of the resources.

Although attempts have already been made at the International Law of the Sea Conference to come to an agreement concerning the exploitation of the marine resources and to draw up a clearer definition of the rights of coastal states to exploit and control the fishing resources along their coasts, a wide spectrum of matters have hitherto been discussed at these conferences, and because of the complicated nature of the issues concerned, there are still many aspects on which it has not been possible to reach agreement. Nevertheless, there is a large measure of consensus about the concept of an economic zone of 200 nautical miles, within which area coastal states will be entitled, amongst other things, to exercise certain exclusive rights in respect of fishing resources.

Since it is expected that it will take a long time before consensus is reached about the whole field covered by maritime law, and because of the serious concern which certain coastal states have come to feel about the over-exploitation of their traditional fishing resources and their inability to enforce effective conservation measures and orderly exploitation by means of regional agreements on an international level, one country after another has resorted to the unilateral proclamation of fishing zones of 200 nautical miles.

Countries which have taken the initiative in this connection are Canada, the USA, Iceland and certain South American States. Within the past 12 months, more countries have followed their example, with the result that there are approximately 70 countries at the moment which have extended their fishing zones to 200 nautical miles. Apart from Canada and the USA, these countries include the UK and other EEC member States—comprising the major part of Europe—as well as Russia and our neighbouring States of Mozambique and Angola. Because the extension of the fishing zones of these countries are forcing foreign fishing boats to seek out other fishing waters, it is essential that South Africa, too, give serious attention to the protection of this important food resource along its coast, with a view to conservation and the development of a vigorous industry with great export potential.

The resource consists mainly of two components. The one component is the coastal resources found in our present fishing zone of 12 miles, namely the pelagic resources— surface shoal-fish which are processed into canned fish, fish-meal and fish-oil—as well as the resources of crayfish, which is mainly an export commodity. The landed value of this component is approximately R25 million a year. The other component is the off-shore resources, which are mainly found outside our present fishing zone of 12 nautical miles and which consist of white fish or table fish, which has a potential yield of more than 170 tons a year off the coast of the Republic, with a landed value of more than R50 million a year. In both cases, the processed value is of course much higher.

The Department of Industries has been concerned for many years about the state of our white fish resources—especially the hake resources—since research shows a strong downward tendency in catches per effort unit. This indicates that these resources are being over-exploited. This state of affairs is chiefly due to the large number of boats from foreign countries which are fishing here. The local trawling industry has been faced with a sharp increase in costs in recent years, in addition to declining catches per effort unit, and are finding it very difficult to continue on the present basis.

†The South African white fish trawling industry currently consists of more than 80 deep-sea trawlers, representing an investment of R36 million at book value, while it provides employment for 6 200 workers. It is estimated that the catch potential of our trawler fleet, should the resources be allowed to regain their former full strength, could well be double the existing catch.

In the circumstances the Government has decided to follow the example of the other countries I have referred to and to extend South Africa’s fishing zone from twelve to two hundred nautical miles, measured from low-water mark as proposed in clause 3 of the Bill.

Territorial Waters:

Until about the middle of this century the generally accepted limit for the width of a coastal State’s territorial waters was fixed at three miles, although a number of countries claimed rather wider limits for certain specific purposes, such as defence and security, customs and health control and the protection of fisheries. Thereafter more and more States claimed a wider territorial sea, although it was generally accepted that no State could legitimately lay claim to a zone wider than 12 nautical miles and many, including the Republic, claimed no more than six nautical miles.

Today almost 100 countries claim a territorial sea of 12 nautical miles or more, while at the recent Law of the Sea Conference the overwhelming majority of the participating States expressed support for a uniform 12 mile limit.

Since a State has sovereignty and exclusive jurisdiction over its territorial waters, subject only to the right of foreign ships to innocent passage, the advantages of an extended zone are obvious—not only for the purposes already mentioned, but also for purposes such as the effective control of pollution—especially oil pollution—and of scientific marine research.

The Government has accordingly also decided, in line with other countries, to extend the Republic’s territorial waters from six to twelve nautical miles, as is proposed in clause 2 of the Bill.

South West Africa:

When the Government considered the position of South West Africa as far as the application of the provisions of this Bill is concerned, it could not disregard the present quota agreement that had been made through ICSEAF. This agreement has a most important bearing on the necessity or not of the expansion of the fishing zone of South West Africa.

According to this agreement South West Africa, as a coastal State, is entitled to a quota of 17 000 tons, plus a quota of 4 000 tons based on historical catches. However, what is very important is the protection which is afforded to the hake resources through this agreement.

In 1972 catches of hake in ICSEAF area amounted to 1 115 000 tons. For 1976 the allowable exploitation level of this resource was determined by scientists at ICSEAF to be 950 000 tons, but in order to accomplish a larger measure of protection for this resource, its exploitation level for 1977 has been fixed at 700 000 tons and the quotas have been allocated accordingly. This arrangement was agreed to on the explicit understanding that if a 200 miles fishing zone for South West Africa was established then, apart from the other international implications attaching to measures of this nature the protection presently enjoyed by South West Africa under the ICSEAF arrangement will fall away and the South African Government is accordingly of the opinion that at this point in time South West Africa’s interests could best be served by maintaining the present position whereby the total fishing effort is restrained by the agreed ICSEAF quotas, which quotas, as I have already mentioned, have been fixed below the present yield potential of the total hake resources.

In view of these circumstances, clause 3 of the Bill therefore determines that the proposed extension of the territorial waters and fishing zone of the Republic shall not apply to South West Africa.

As the amendments contained in Ais Bill will necessitate certain consequential amendments to the Sea Fisheries Act, No. 58 of 1973, clause 5 determines that the provisions of this Bill shall come into operation on a date to be fixed by the State President by proclamation in the Government Gazette.

Mr. Speaker, we South Africans have as our ancestors people wiA a deep seafaring tradition. In fact, we ourselves are a seafaring nation. So, at a time when our northern borders are being threatened, it is only logical and natural that we should be seeking lebensraum in the one field where we have a clear advantage. The hon. member for Simonstown in better days became known as somewhat of an expert m affairs regarding our fishing industry. The contribution that he made in the debate on the Vote which preceded this debate, forms a valuable background to the discussions on Ais Bill. The hon. the Minister has presented the House with a clear and explanatory Bill. To get the Bill into its perspective, I think one should have regard to the debate in the Other Place on the parent Bill when Senator Woolf said inter alia—

Having regard to the fact that we are dealing with the sea around us and having regard to the legal concept in the early days that the dominion of the land ends where the power of arms ends—in other words, we have very little control beyond the stage where we can give effective military defence control—then the extension of the fishing zone to 200 miles is one which can only be advantageous to the South African fishing industry, one which has been asked for by the South African fishing industry for years. It is clearly recognized that our fishing waters are amongst the richest in the world and that we as a nation are amongst the largest seafishing industrial nations in the world.

However, in past years and at present we are sharing our fishing resources wiA the national commercial fishing fleets of many countries, namely Portugal, Spain, Japan and particularly Russia. We believe that they have been able to pick a major portion of the rich fruits of the sea harvest which would have been available to our own fishing industry, had we been thoroughly capitalized and had we had the necessary research, ability and capital investment.

I believe we on this side of the House are right in saying to the hon. the Minister that we are going to support Ais Bill wholeheartedly. We do, however, hope that the Minister will be able to assure the House that we shall have an effective means of controlling our extended fishing zones because, unless we can do that, we are merely playing with words.

Those of us who are sea-lovers and who live near the coast could do well to fill in our background knowledge by studying the 1963 discussions which took place both in Ais House and in the Other Place. I believe that nothing but good can come from the implementation of this Bill when it is finally placed on the State Book. I believe it will carry with it the support not only of those interested in the fishing industry, but also of those interested in the land-based side of the industry, namely the canning and manufacture of fish products.

However, I also believe that we must realize that even if we have greater access to the rich bounty of nature which is ours, it must still be critically controlled if we are not to experience the situation which was experienced off the coast of the Americas where the harvest of the sea was abused. Once the Bill becomes an Act of Parliament, I Aink we must apply our minds to ensuring that for all time the fishing industry is maintained in a viable condition. I would go so far as to say that the fishing industry is even more important to the future of South Africa than the gold industry. Gold is a diminishing asset. People can live without gold, but they cannot live without food. In the harvest of the sea we have the wherewithal to feed the larger population of our Greater South Africa in the years which lie ahead. We shall therefore support the Bill.

Mr. Speaker, we are pleased that the official Opposition is supporting this Bill through the hon. member for Cape Town Gardens. It does not often happen nowadays that a Government measure is supported by the Opposition. We welcome it on this Friday.

It is an exceptional privilege for me too to support this Bill. We in South West Africa, in Walvis Bay and I personally have devoted our energies for more than a decade to extending those fishing waters around our coasts. Consequently the realizing of this ideal is a major victory. I think this is a giant step in the furtherance of a vast food resource given us by the Creator. It is for man to utilize this larder in which food is preserved in its natural form and state, and to see to it that this larder is not exhausted. This measure, then, authorizes the Government to preserve these resources in order to ensure that South Africa gets its rightful share of it.

The hon. the Minister referred to the trawler fishing grounds and I want to devote specific attention to this matter because as far as this is concerned, South Africa has a great deal of leeway to make up. This resource has already been over-exploited by a large number of boats sailing under Western and Eastern flags. South Africa’s catches from this total food source vary between 12% and 13% per annum. One has to bear in mind that the total value of the catch of the past three years has been about R270 million per annum. Various maritime law conferences have already taken place but without much success, and as a result various countries—the hon. the Minister said that there were 70 of them—have already extended their territorial waters. It is of importance to us that countries like the USA, Canada, the EEC countries, Russia and some of our neighbouring states have already done this. The fact that the Government has now also taken this step is welcomed.

I believe that we are already in the red as far as our fishing resources are concerned. However, I want to mention that the Government has not simply sat back and watched every thing around it being destroyed. For example, as far back as two years ago the Department of Sea Fisheries took a step in the right direction with regard to crayfish by exercising control over the so-called continental shelf which extends between 25 and 200 miles seawards. These measures have been implemented and enforced successfully.

It is a pity that the hon. member for Simonstown stated his standpoint with regard to crayfish somewhat negatively. Irregularities do occur from time to time—I do not wish, and cannot, condone them—but I feel that to refer in general here to senior officials is unfair. Our senior officials in particular, and our officials in general, are performing a tremendous task. What would the Department of Sea Fisheries and the Government do without its officials? In my opinion it is unfair to make such a general statement. What senior official is exempted from this accusation? That is what I am against.

I spoke about a new department.

I want to give the hon. member for Simonstown the assurance that if irregularities should occur, then I support him in saying that such irregularities ought to be dealt with and stopped. I want to mention that my experience has been that where irregularities have occurred I have had the fullest co-operation from the industry and from the hon. the Minister in rectifying them. That is why I do not doubt that if there really are problems, the statements by the hon. member for Simonstown will be taken cognizance of. The Division of Sea Fisheries and the Department of Industries deserve praise for what they have already done in this connection.

The hon. the Minister also referred to the ICSEAF conferences which take place every year. Quotas were allocated at this conference in December last year, the most important of which are the stockfish quotas. I should very much like to refer to the quotas allocated. At the meeting in Spain last year, 14 countries divided the convention area into two zones. Zone 1 is the area which is mainly to the north of the Orange River and zone 2 is the area south of the Orange River. The following countries received quotas in zone 2: Bulgaria, 1 000 metric tons; Japan, 44 000 tons; Portugal, 1 500 tons; South Africa, 110 000 tons; Spain, 2 500 tons; and Russia, 5 000 tons. Out of a quota for zone 2 of 164 000 tons, therefore, South Africa has 110 000 tons. In zone 1—this includes the South West African coast and much of the Angolan coast—the quota allocations are as follows: Angola, 19 900 tons; Bulgaria, 13 000 tons; Cuba, 28 000 tons; France, 5 000 tons; the German Democratic Republic, 5 000 tons; the Federal Republic of Germany, 9 000 tons; Israel, 7 400 tons; Italy, 8 200 tons; Japan, 4 000 tons; Poland, 35 000 tons; Portugal, 15 000 tons; South Africa, 39 000 tons; Spain, 155 000 tons; and Russia, 191 000 tons. Out of a total quota of 536 000 tons, South Africa only has a quota of 39 000 tons. This is a vast resource and we are grateful that quotas are being determined. I want to say that this is a reduction in comparison with the previous year. Another encouraging measure to which the hon. the Minister referred is the fact that it was possible to enlarge the mesh size of nets from 50 mm to 110 mm in order to protect the resource.

How effective is that?

It is only effective— if the hon. member for Simonstown will give me a chance—if it can be implemented. If it cannot be implemented, then it does not help at all. We have already found a net in Walvis Bay—it is lying there for anyone to see— which complies with the requirements for mesh size but which has been perfectly fitted out on the inside with a net the mesh size of which is about 25 mm. This just goes to show how these measures are being abused, and they cannot be enforced. That is why the extension of our territorial waters to 12 miles and that of our fishing zone from 12 miles to 200 sea miles, or to use the more general term, to 370,4 km, is a very important aid in preserving these resources from over-exploitation and seeing to it that South Africa obtains its rightful share in them. I want to stress that it will have to be enforced if necessary. This can only be done by making use of the eyes of Simonstown, of the grey denizens of Simonstown. However, we believe that it will be recognized, since many fishing countries have already announced this in their own countries.

I should very much life to refer to the Press statement issued by the Secretary for Industries in this connection. On page 2 of this statement the secretary makes specific mention of the fact that the quota measure is regarded as a step in the right direction. He goes on to say that the department remains convinced that this is only a transitionary measure until such time as the fishing zone is extended to 200 miles. It is very important that we take cognizance of this. The fact that clause 4 specifically excludes South West Africa comes as a major disappointment to us because it will result in fishing trawlers from throughout the world descending on South West Africa’s richest resources. If hon. members look at the quotas that were allocated they will see that the fishing grounds are situated along the South West African coast. The fishing industry is one of the pillars upon which the economy of South West Africa rests. If it were to be destroyed, the economy of South West Africa would suffer a serious blow. Up to now these resources have been the richest in the world.

It has been possible up to now to guard these resources but I fear that if this extension of the territorial zone is not made applicable to South West Africa as well, the consequences will be catastrophic. The hon. the Minister mentioned that as far as pelagic fish were concerned, the quota for sardines in South West Africa has been drastically curtailed from 475 000 tons last year to 250 000 tons. If we look at the catches up to and including 25 May we see that this year about 100 000 tons of sardines, 63 000 tons of anchovy and 73 000 tons of maasbankers were caught. These drastic measures in themselves are going to have a serious effect on the economy of South West Africa. If we bear in mind the extent of the investment of the industry and the private individual, if we bear in mind the value of this industry to South West Africa, if we bear in mind the Fishery Development Corporation’s aid, investment and expansions in South West Africa it is clear that drastic protective measures are essential in that territory as well. South Africa is the lawful authority. No one else can extend the territorial waters there. No one else is in a position to enforce it. The South West African Administration has already asked for this. The constitutional Conference asked for it. In any event, Walvis Bay forms part of the Republic of South Africa. We should also like to hear from the hon. the Minister whether it applies automatically to the territory of Walvis Bay which has a coastline of 60 kilometres, and whether it applies to the islands off the South West African coast which belong to the Republic. As far as the extension is concerned, we want to make a serious appeal to the hon. the Minister to reconsider this decision and to include South West Africa in this as well.

As far as the 200 miles are concerned, we have to accept that a great deal is still going to be said about this, particularly about the exploitation of minerals which occur in that area. But whatever the outcome of further conferences on maritime law may be, we believe that 1977 will be known as the year in which the 200-mile fishing zone was accepted so widely, so internationally, that the brief period in which the 12-mile zone applied, will soon be forgotten.

This development will lead to a redisposition of the world’s catching power. I think we can expect that in the future, large vessels with modern equipment will range the oceans of the world in search for the fish that remain outside the 200-mile zone, and also in search for opportunities to scavenge where measures are not stringent enough. Welcome as this step may be, I believe that it does not herald the end of our problems, and that the Government will still have to keep a close watch over this important resource. If quotas are allocated to foreign boats that are already active here, then they, too, will have to be watched in the interests of our own fishing industry. As far as our own industry and our own fishermen are concerned, experience has taught us that they too are not averse to over-exploit certain species mercilessly in their own interests.

Hear, hear! Now you are talking.

Various countries throughout the world are now apparently entering a new phase. A serious threat to this new order, this new discipline, is the fact that a major part of the catching power will become redundant. Many trawlers will be unemployed. And we can expect that those trawlers, that should never have been there, will seek to make a living elsewhere due to resources elsewhere in the world having been over-exploited and exhausted because many countries have neglected to protect their fishing grounds. I am convinced that if South West Africa is not included, the South West African area will become the hunting ground of the robbers of the sea.

Mr. Speaker, may I say at the outset that we will support this measure. In respect of the hon. member for Omaruru who has just spoken, I should like to say that I fully appreciate the feelings that he has in respect of South West Africa. However, I in fact support the proposal put forward here because, whatever the demands of South West Africa are in respect of the extension of the limits—and they are legitimate demands for South West Africa—we are in such a delicate situation, irrespective of the other problems that exist, that I think the hon. the Minister has taken the correct course in excluding South West Africa from this.

Hear, hear!

If one may be permitted a pun, an hon. member has just said “Hear, hear” but I think the hon. member for Omaruru has to wait for Uhuru before he can in fact extend the fishing limits. I wish him well because I hope they will be extended.

I do not believe one should make long speeches in order to support a measure. I do not propose to do so. However, I just want to raise a couple of points for the Minister to react to.

Firstly, our relations with other States become very important when one deals with limits in respect of both territorial waters and fishing waters. I should like the hon. the Minister to tell us whether there have been any discussions with the Transkei Government in respect of this issue and whether there have been any discussions with the Mozambique Government. He must also tell us whether there have been any discussions—I am sure there have not been—in respect of South West Africa’s problems vis-à-vis Angola. This is an important issue and may become an increasingly important one.

The second matter I should like to deal with is the question of the resources other than fish within the limits of the fishing zone. The resources other than fish within that zone may in the years to come become as important to us as the fishing resources themselves. I should like to hear from the hon. the Minister what his plans are in respect of that. We are not only dealing with oil resources. As I read this, we are in fact limiting ourselves to 12 nautical miles at present, while the mineral resources which are available in the sea in the immediate proximity of the African continent belong to the people of Africa and not to foreigners. Those adjoining South Africa, should belong to us. In my view we have to take this into account and do so relatively soon.

The third point I want to raise is the issue of enforcement. It is all very well having laws passed in this Parliament saying that we now have a 200 nautical mile fishing zone, but my mind goes back to the conflict between Iceland and Great Britain. What is our ability to enforce this law? Will we seek to enforce it? Do we have the resources to enforce it, and what is going to be the relationship between the hon. the Minister’s Department of Fisheries and the Defence Force? Parliament can pass this law, and we accept it, but what is going to happen in respect of enforcement? Only laws which are capable of enforcement are laws which are worth passing. I think the hon. the Minister must tell us something about that situation. It is quite interesting to note that, as the hon. the Minister knows, in the whole debate which is being carried on at the moment about hot pursuit, the only matter which is defined in so-called international law—I have some doubts about that myself— is the issue of hot pursuit outside a country’s territorial waters. Our ability to protect our territorial waters and our fishing waters is a most material matter.

I do not want to enlarge upon what has been said by the hon. member for Gardens and the hon. member for Omaruru in respect of the value to us of the resources of the sea; I merely want to stress that, as we see the situation, it is not only fishing resources which will have to be protected in the years to come, but also the other resources that the sea can make available to South Africa’s people.

Mr. Chairman, the hon. member for Yeoville has made three points and I should like to deal with them briefly. The first one is that he does not agree with the hon. member for Omaruru in his plea for the inclusion of South West Africa under the provisions of this Bill. The hon. member for Yeoville, echoed by the hon. member for Cape Town Gardens, says it is a delicate situation. But it was not a delicate situation ten years ago, which is when this step should have been taken. This step should have been taken in 1967, for reasons I shall advance later. It is all very well to talk now about a delicate situation. The situation has become progressively worse. But even under these circumstances South Africa has a duty and a responsibility to the people of South West Africa, and I support the view of the hon. member for Omaruru that the provisions of this Bill should also be made applicable to South West Africa. This ties up with our general attitude to delicate situations. Every situation that has an element of danger in it is apparently a delicate situation:“Ons moet versigtig wees”; we must not exercise our rights to national sovereignty. In the case of South West Africa we have had over the years a clear-cut duty and responsibility as the power entrusted with the supervision and control of South West Africa. According to the hon. member for Omaruru, the Turnhalle supports the idea of the extension of territorial waters and the creation of a fishing zone. Therefore I see no reason why we should pussy-foot with this business at this stage. Why should we not take constructive action in the interests of the inhabitants of South West Africa? If the resources off the South West African coast, within the fishing zone or within the territorial waters, are to be destroyed by foreigners, the only people who are going to suffer will be the inhabitants of South West Africa, White and non-White, who are represented in the Turnhalle. And whom will they blame? They will have cause to blame South Africa as the power responsible for their future, most closely responsible for their future, for not having taken the appropriate steps at the appropriate time.

The second point made by the hon. member for Yeoville is that there are other resources within both the territorial limit of 12 miles and the proposed fishing zone of 200 miles. In any event I had proposed dealing with those matters later. He makes the point that they belong to the peoples of Africa, and then he concluded with great drama by saying that they belong also around our coast to the people of South Africa. I do not quite know what he means, whether there is a distinction between the peoples of Africa and the peoples of South Africa in this particular context, but as he ought to know, some of the big problems in present discussions on the future of the law of the sea arise from the fact that many of the African nations do not have a seaboard. In spite of the fact that they do not have a seaboard they are claiming rights to the deep seas. To me this is a most extraordinary doctrine and it ties up once again with the tendency amongst certain nations of the world to fall over themselves to try to placate the so-called underdeveloped countries. What earthly right can a country without any seaboard have to the resources of the sea which does not lap around its coasts? Yet it seems, if one reads the reports of the three or four recent conferences over the last five or six years, that the developed nations and the nations with a seaboard are only too anxious to placate those without a seaboard and to give them rights to the fruits of future exploitation, which their own ability and efficiency would never give them. To me this is a most extraordinary doctrine. I should like to say something about it on some future occasion, but it is an extraordinary tendency, this idea of always placating people who do not have the ability that other nations have had, and who do not even have the right to a seaboard.

The third point made by the hon. member was in regard to the question of enforcement. Here he refers, quite rightly—it is a good point—to the necessity of enforcement measures when this Bill becomes law. However, the hon. member was wrong when he referred to the question of our enforcement ability. He mentioned Iceland as being a small country which laid claim to a large portion of the sea. Iceland is a typical case of what a small nation can do. Iceland stood up for its national rights and for its national sovereignty against the might of Britain. Over a period of time, not only has it succeeded in establishing its claims, but it has got Britain to agree to accept its claims. There were incidents. Iceland has an effective coast guard and patrol service. They took a strong stand on their national sovereignty and on their national rights, even against a great maritime power. And they have succeeded. It is a fact that while many people are prepared to decry the methods of enforcement generally under international law, my experience is that where a nation stands up strongly for its own rights and presents its case, then over a period of time at least the other nations of the world come to have regard for and to respect the rights of that particular nation. Iceland is a case in point.

The hon. member for Omaruru dealt with different matters. He put up a case for the peoples of South West Africa with which I am in agreement. He took me amiss, however, on what I said in the last debate, during the discussion on the previous Bill before this House, and I do not think he quite understood what I did say. For that reason I should like to have the opportunity of explaining briefly what I meant.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Speaker, perhaps you were surprised when I asked before the lunch break whether it was possible to adjourn the debate a minute or two before the normal time. The reason for my request was that I had in my room a document which I was anxious to bring into the House. I thought that before dealing with the matter I should be in possession of that document I will deal with the document in a minute.

However, before dealing with the document—the hon. member for Omaruru knows all about the document; he is quite familiar with it—may I state that he, who is the speaker to whom I am replying, was a member of the Fishing Commission. He is also the hon. member who represents the fishing interests of Walvis Bay. According to the hon. member I made an attack on departmental officials. I feel I must clear up that matter. I did not attack departmental officials. I complained about the lack of research facilities. I referred to the fact that the present department was overburdened with work, more particularly as, in addition to research, it also has to exercise administrative control including the control of harbours.

I said it had 13 offices, the activities of which it was unable to co-ordinate. I also said it had an underpaid inspectorate. Those were the reasons why I raised that matter earlier.

I now refer to South West Africa. The hon. member mentioned the fact that the South West African pelagic fish resource is the richest of its kind in the world. He has made a plea to the hon. the Minister that this Bill should be applicable to South West Africa as well as to the Republic of South Africa. He says that if it is not, the economy of South West Africa is going to be heavily hit, and that investments made by the private sector, as well as by Fishcor for example, could possibly be affected should the resource collapse.

This is not a new story. This is an old story. This resource has been in danger of collapse since at least the beginning of 1970. That is a matter which has been raised by me in the House from time to time. The hon. member for Omaruru has asked the hon. the Minister to reconsider his decision and to include South West Africa. In support of that he says: “Die Turnhalle se Staatkundige Beraad vra ook daarvoor.”

I said that we in these benches unreservedly support him in his plea. We believe that this Bill should be extended to South West Africa for the reasons given by me before the lunch adjournment. I would like to ask the hon. member where he was when I raised these matters in the House repeatedly some five, six, seven years ago. I asked for co-ordination of the fishing policies of the Republic and of South West Africa, and for the extension of our territorial waters. I asked, for example, for the formulation of a common policy in regard to the conservation and the exploitation of marine resources off the coast of South West Africa and South Africa, in view of the very serious danger of depletion of our marine resources as a result of both external and internal overfishing. I moved a private motion on 7 February—my birthday—1967; exactly 10 years ago. I moved it by way of a private member’s motion. However, the hon. member for Omaruru and other members opposite did nothing to help in speaking to the motion I then moved. The third point the hon. member makes is that: “Daar moet met arendsoë gekyk word, veral na buitelandse bote, en ook na ons eie mense, want ons eie mense verwaarloos ook ons bronne in Suidwes-Afrika.” The hon. member concluded by saying: “Suidwes-Afrika kan die jagveld van die rowers van die see word.”

This is also nothing new. This has been going on for some years. The international fleets have been operating, as the hon. member knows, from the harbour of Walvis Bay for many years. He knows that there has been over-exploitation of the resources by those with quotas and with licences in South West Africa. The hon. member knows that this has been the case for many, many years. He has a short memory, and the criticism that I have of him is this. He has known this all these years. He has in fact taken steps behind the scenes over all these years, but when it came to discussions in the House, he never said anything about it at all. Neither did other hon. members for South West Africa who must have had knowledge of these things and who could quite easily have supported me across the floor of the House when I introduced these matters here.

In the light of what I have just said, I want to refer to the notes I was given of the private meeting at which the hon. member, in his capacity as mayor of Walvis Bay, gave evidence to the then Deputy Minister of Economic Affairs, Mr. Jan Haak. This has to do with the fishing state of affairs at Walvis Bay. It is amusing because it refers to the state of affairs with which the hon. member was so familiar. At this meeting of the hon. the Minister he said …

Order! May I point out to the hon. member that past affairs in connection with fishing quotas and fishing rights, and the exercise thereof in South West African waters are not the subject of this Bill. I am not going to allow the hon. member to go into detail on those points. I have already allowed him to make reference to it.

Mr. Speaker, I accept your ruling. I was only going to do it in a light vein. I was going to pull the leg of the hon. member who is an old friend of mine.

Order! Even through legpulling I cannot allow it. [Interjections.]

The Bill in question extends our territorial waters to a distance of 12 miles and the fishing zone to a distance of 200 miles. As I said earlier, this is a matter which I raised ten years ago and, in fact, this is a sort of 10th anniversary present. The aims and objectives of this Bill are precisely the aims and objectives that I had all those years ago, namely the conservation of the marine resources, the pelagic fisheries, the rock lobster industry and also the deep-sea industry or the white fish industry. The hon. the Minister in his speech referred to 70 countries which have accepted a 200-mile fishery zone.

He said that there are over 100 countries which have agreed upon a 12-mile territorial sea. It is interesting how this development has taken place. For many, many years, certainly until the war, it was generally accepted that there should be a three-mile limit within which sovereignty could be exercised by a coastal State. That was known as the “cannon-shot” rule. In the old days it was, of course, the distance to which a cannon could fire from the seashore. After the war, more particularly after the proclamation by President Truman which concerned the continental shelf and also coastal fishing in 1945, various countries with seaboards advocated not only the extension of their territorial waters, but also the creation of economic zones or fishery zones. First of all one had what was known as the “six and six rule”. One had a six-mile territorial sea and a six-mile fishery zone. In more recent years, particularly with the advent of international fishing conferences, one had a territorial sea of 12 miles agreed upon. This is a far cry from the original plan, going back as far as Grotius, that there should be complete freedom of the seas. In the first place it was modified by the “cannon-shot” rule, thereafter by the Truman proclamation and thereafter by International Conventions. Now it is generally accepted in international affairs that there should be a 12-mile territorial sea and a 200-mile economic or fishery zone.

What about our own situation? In South Africa one has a pelagic fishing industry and a rock lobster fishing industry, all of which actually take place for the most part within 12 miles of the shore and, therefore, within one’s territorial sea. Then one has the deep sea fishing industry which is outside the 12-mile limit and, generally speaking, extends to the edge of the continental shelf. As far as I am aware, the continental shelf is at its widest off our coast at Cape Agulhas. There, I think, it extends to some 80 miles to sea. However, I believe we are wise in claiming an extra amount of sea as being within our fishery zone, to an extent of 200 sea miles.

The hon. the Minister has given as his reasons for this step the desire to be able to control pollution within that area and also to further the research abilities of the Republic. However, the most important reason is one that he did not mention. That is the primary right of a coastal State to exploit the economic resources off its coast. That is a claim that we must make. We have a primary right to exploit the economic resources in the sea off our coast to a distance of 200 sea miles.

I want to conclude by saying that I have referred from time to time, and again before lunch today, to the absolute necessity for us to have a maritime department in South Africa. The sea is a vast subject, a surface which has not even been scratched by us in the Republic. Two-thirds of the surface of the globe consists of water. There is the question of territorial waters and the problems of continental shelves, the ocean bed, the exploitation of minerals and oil, to say nothing of the undoubted ability of advanced nations to further exploit resources in the sea, for example krill and plankton which will become staple foods in days to come. I am hoping that in 10 years’ time—if this Government is still in power—we shall be presented with a 20th anniversary present, viz. the creation of a maritime department, because it is long overdue.

Our industry is a very important one. It earns a tremendous amount of foreign reserves for us every year. As a fishing nation we are among the 10 top nations of the world. There is a large capital investment in South Africa. We have a combined fleet of fishing vessels in South Africa and in South West Africa in excess of 1 000 boats. The big danger, as the hon. the Minister recognizes in presenting this Bill, is over exploitation, not only internally within the coastal fishing industry, but also by the fleets of foreign nations. This is a natural tendency. There is a tendency amongst other nations to go even further afield, more particularly when they have exhausted their own fish resources. They go to other waters to see if they can increase their catch. However, that situation arose many years ago, particularly in the case of South West Africa, where there have been incursions into the coastal waters of South West Africa by foreign nations. This has to be stopped. That is why we on these benches particularly welcome the provisions of this Bill. We wish it success. We hope the hon. the Minister will be able to set up an effective patrol system, if not under his department, then at least by a department which must be formed one of these days, viz. a department of maritime affairs.

Mr. Speaker, I shall not reply to the hon. member for Simonstown at any length, except to say that I do agree with him in his plea for a department of maritime affairs. Since I have been in this House, I have on every occasion also asked for exactly the same thing. I really think it would be to the advantage of South Africa.

The hon. member for Yeoville has already expressed the attitude of the members on these benches. I should like to raise a particular point of detail with the hon. the Minister which concerns the actual positioning of the boundaries. Both clauses 2 and 3, which refer to the territorial waters and the fishing zones, read that the sea within a distance of 12 or 200 nautical miles respectively from the low-water mark shall constitute either the territorial waters or the fishing zone. The question I have is in which direction this distance is to be measured. Is it at right angles to the coast itself? Perhaps the hon. the Minister can tell me whether there have been any international agreements with, for example, Angola, South West Africa, Transkei or Mozambique, agreements which would in fact lay down where that boundary is. There is a bit of an anomaly in this. I should like to know from the hon. the Minister whether, if one establishes a boundary 200 miles from the low-water mark of the Change River mouth and one extends it until it meets the South West African 12 mile-boundary, the area north of the Orange River mouth will in fact constitute territorial waters or a fishing zone in terms of this Act. I have an idea that there might be an international agreement which lays down the angles at which such boundary will be set. I should like to hear from the hon. the Minister what the situation is and whether or not we do have international agreements in this respect.

Mr. Speaker, I want to thank hon. members for their support of the legislation, although it took them quite a while to formulate their support, in terms of time as well as words. The hon. member for Cape Town Gardens asked me a question—several other hon. members asked a similar question—which I want to answer at once. The hon. member referred to the question of efficient control. The fact that the countries I referred to have already accepted these zones goes to prove that they recognize those boundaries. In my opinion it would be wrong to proceed from the assumption that there is bound to be a challenge to our authority. In fact, the steps contemplated in the Bill is no more than has already been taken by most countries.

In other words, the impression that may exist that the proclamation of this legislation may have the effect that both the 12-mile and the 200-mile boundaries may not be recognized is not correct. The 12-mile zone will be enforced by the South African Defence Force. The patrol work in this connection has hitherto been done by my department. As far as the future is concerned, it is obvious that there will be consultations between my department and the Department of Defence with regard to the part to be played by the Defence Force in this particular connection. I confirm that they have a real function to fulfil in this regard. I do not doubt for one moment that the patrol services of my own department and their ability to do the patrol work will have to be expanded in the future. Therefore we shall have to accept, in the first place, that the basic principle is the recognition of the zones by other countries, and, secondly, that the Defence Force has a part to play in enforcing the new boundaries, as they have had in respect of the existing ones. My own department will also have to undertake patrol services in this connection and it will naturally have to expand its ability to do this in the future. I agree with the principle that the legislation itself cannot possibly be effective if we are unable to enforce its provisions to proclaim the areas.

The hon. member for Omaruru is probably the member in the House who is best qualified, by virtue of his knowledge and experience, to discuss this subject. I want to thank the hon. member, not only for his contribution, but also for the service he has rendered to the fishing industry in general over a period of many years. The hon. member for Simonstown must forgive me, but in my opinion the attack he made on the hon. member for Omaruru was really undeserved. If the hon. member had misunderstood his standpoint concerning the officials of the Sea Fisheries Division, that was still not enough reason, in my opinion, for attacking the hon. member in those terms. I agree with the hon. member’s standpoints on the fishing waters of South West Africa, but I do not agree with the standpoint adopted in this connection by the hon. member for Simonstown. I take it amiss of the hon. member that he based his argument in favour of the application of the legislation to the territory of South West Africa as well on a statement which implied that he was the only one who thought that South Africa had a responsibility towards South West Africa. That South Africa not only has a responsibility to the people of South West Africa, but has also fulfilled its responsibility to South West Africa in the letter as well as in the spirit, I need not prove again today, because the hon. member and I may differ about the way in which we should handle this responsibility to South West Africa. I have to bear the responsibility and it is my task to judge how the interests of South West Africa and its people may best be served, and this applies to the matter under discussion as well. I believe that its interests will best be served by not involving it in this matter.

Secondly, I want to tell him that there are practical considerations which would make it difficult at this stage to patrol the territory of South West Africa as well and to enforce legislation if it were to be made applicable to South West I want to request that we should not question one another’s motives and sentiments in respect of our attitude to South West. Even if we differ, we have to concede that we all want the best for the people of South West Africa In reply to the question asked by the hon. member I want to say that as far as the sea off Walvis Bay is concerned, this is naturally included under this legislation, for the legislation will be applicable to the waters and the islands which are the property of the Republic of South Africa. I want to give him the repeated assurance that we take an intense interest in these valuable resources, just as he does. We all agree that they must be preserved as a very important source, not only of income, but also, and especially, of food for mankind in the years to come.

The hon. member for Yeoville asked three questions. He agrees that the legislation should not be applicable to South West Africa. Therefore I do not want to take this aspect any further at this stage. The first question he asked was whether we had discussed the legislation—I take it that he was also referring to its enforcement—with our neighbouring States. As far as the Transkei is concerned, the negotiations were conducted by the Department of Foreign Affairs. In this connection I want to make the general remark that in respect of the conservation of marine resources, the Government of the Transkei has always co-operated with the Government of the Republic up to now. I have no reason to believe that their attitude will not be the same in respect of the principle under discussion. As regards the Governments of Angola and Mozambique, I want to point out that both these countries have already extended their own boundaries and zones in accordance with what is being proposed in the Bill and that there was consequently no need for any discussions. The hon. member also enquired about the other resources, for we are now extending the fishing zone to 200 miles instead of the existing 12 miles. The Convention on the Continental Shelf provides for the exploitation of minerals, and concessions have already been granted for the exploitation of oil in areas situated far outside the territorial waters as presently delimitated. If the hon. member will look at section 7 of the Territorial Waters Act, he will find that the circumstances which he is pleading for—and with which I agree—are already covered by the section concerned. The section reads as follows—

How far from the coastline does the area extend?

The continental shelf extends over a distance of 50 miles to 200 miles and to a depth of 200 metres. It is an international concept. I believe that this provision covers the circumstances referred to by the hon. member.

If it is 200 miles.

If it is within 200 metres.

For all practical purposes, this is the maximum depth at which exploitation can take place at the moment. The reply to the question of the hon. member for Orange Grove is that the distance is measured in terms of international norms or convention in accordance with the curve of the coastline—whatever that may mean.

Sir, I dealt with the question of the enforcement of the legislation in my reply to the contribution made by the hon. member for Cape Town Gardens. By way of illustrating the standpoint of the hon. member for Omaruru I want to say that I have indicated that our own capacity in the Republic is sufficient to exploit the resources that are exploitable. This is why there is some controversy regarding the allocation of quotas in respect of other countries. I want to make my own attitude in this connection quite clear.

It is also the attitude I shall adopt towards the Government. This is that no quotas will be granted to any other country for catching hake, panga or horse-mackerel in the fishing zone of the Republic. I think it would be wrong to grant quotas in the short run until you want to exploit the source to the full and to bring other countries under the wrong impression and then to bring pressure to bear upon yourself. I hope the hon. member agrees with me in this connection. I hope that this standpoint will be accepted when we come to discuss this matter eventually.

The hon. member for Simonstown told us what had happened on his birthday and what he was predicting for the next ten years. They say that hope maketh not ashamed, but whether the hon. member can reasonably expect to be here in ten years’ time is doubtful.

He will be here, but you will not!

I did not know the hon. member for Walmer was a prophet. If he is, I ask him why he stayed in the political desert for such a long time, according to his own standards? It should not take a prophet so long to see the error of his ways.

He is still in the desert!

There are other people who think that he is still there.

The hon. member asked certain questions which I should like to reply to. The first was whether the posts in the department had all been filled. The answer is “yes”. As far as I know, almost all the posts have been filled by qualified people. Of course it is true that the Director of Sea Fisheries—one of the best qualified people in marine biology—to a large extent performs a management function as well. But the hon. member will understand that proper research required managerial qualities and skills, but the fact that he has to perform that function as well does not detract in any way from his great knowledge of his own subject. I want to say at once that I agree with the hon. member that we have to postpone certain things, such as the provision of the research boats we should like to have. I regret this as much as he does. I am just so sorry as he is that we cannot accommodate all our officials in the same complex of buildings. This has been postponed because of other reasons and economic reasons. I shall make a point of meeting this need of the department when circumstances have changed. Secondly, I want to tell him that his complaint about poaching is justified. I do not think he will expect me to furnish particulars to the House in this specific connection. But I want to tell him that my department has already brought this particular aspect to the attention of departments concerned, and I have no doubt that if his allegation is proved, proper steps will be taken. Secondly, I want to say to the hon. member that I agree with him that we should be able to enforce statutory provisions in respect of this resource. In fact, my department has already negotiated with the Department of Justice and asked them, for example, not to accept spot fines from offenders. I want to make a public appeal to the people responsible for enforcing the law and for trying offenders to be merciless in punishing this type of crime, because it is so difficult to discover and to prove. I think that the hon. member feels the same way about this matter.

As regards staff affairs, such as the remuneration of staff and inspectors, the hon. member will understand that this is a matter over which my department and I have no control because it has to be dealt with by the Public Service Commission. However, I shall convey the remarks made by the hon. member in this connection to the body responsible for the matter.

Furthermore, I want to say that I have no doubt about our ability to enforce the legislation. Two factors are involved. Firstly, one must have the physical ability to do so and, secondly, this kind of legislation is recognized by general international conduct. The hon. member explained his attitude towards the legislation of 1967. I want to make only one remark in this connection, and with that I shall conclude. In order to protect the resources, which are important resources in terms of money and food for mankind, I shall not hesitate to take the necessary steps. The hon. member for Omaruru referred to the fact that I had almost halved the sardine quota for South West Africa within the space of one year. Let me say at once that I am prepared to reduce it even further if it should be proved to me that this is essential for the protection of the resource. I am prepared to do this in respect of the Republic as well. I shall not hesitate for one moment to do the right thing, even if it is unpopular.

You would be right in doing so.

I have already replied to the questions put by the hon. member for Orange Grove.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

Mr. Speaker, I am convinced that we shall dispose of this Bill even more rapidly than the previous one.

In the Territorial Waters Amendment Act, 1977, authority is being granted to extend the fishing zone of the Republic of South Africa from 12 to 200 nautical miles. Such an extension entails that a number of consequential amendments have to be effected in the Sea Fisheries Act, 1973 (Act No. 58 of 1973), and these amendments are contained in the Bill at present before the House.

Since I have already indicated in my Second Reading speech on the Territorial Waters Amendment Act how important the fishing industry is to the economy of South Africa, and have furnished statistics in that regard, I do not intend to demonstrate the importance of this industry to the hon. House again. I only wish to indicate what connection the consequential amendments in this Bill have with the envisaged extension of the fishing zone. Furthermore, I want to deal in principle with the several other amendments which are contained in this Bill.

Clause 1:

Mr. Speaker, an agreement has been reached with the S.A. Railways Administration that those portions of the commercial harbours of Saldanha Bay and Walvis Bay which are occupied by the fishing industry and which are situated within the boundaries of the commercial harbours which are controlled and protected in terms of Railway legislation, may be designated as fishing harbours.

In accordance with the provisions of the present section 4 of the Sea Fisheries Act, 1973, the Minister of Economic Affairs may declare a fishing harbour “subject to the provisions of any other laws” and consequently the issuing of regulations for the management and control of such a fishing harbour in terms of section 13(1)(k) of the Sea Fisheries Act is by implication also subject to the provisions of any other applicable law or regulation.

This entails that doubt may arise as to the validity, in its own right, of the declaration of such a fishing harbour and the regulations issued for the control and management thereof. To eliminate this doubt, it is being proposed in clause 1 of the Bill that the words “subject to the provisions of any other laws” in section 4 of the Sea Fisheries Act, 1973, be deleted, with the result that the regulations relating to fishing harbours and commercial harbours in terms of the respective laws will apply substantively in conjunction with one another.

Clause 2:

In its fishing harbours the department provides the fishing industry with amenities and services. These amenities are also available to the owners of pleasure boats, and in this process, pleasure boat clubs with all their members become involved. At times the need arises to have more than the normal number of officers on duty in fishing harbours— particularly over the weekends and on public holidays, and particularly because marine sport is becoming so popular among our people—in order to ensure that the flow of motor and boat traffic in the fishing harbours concerned functions as smoothly as possible. Since these situations only arise at times, it is not justified to incur additional expenditure on the appointment of additional staff, and the idea was expressed that nominated members of the clubs in question could be appointed honorary fisheries officers in terms of section 5 of the Sea Fisheries Act, 1973, and that certain powers could then be entrusted to them by way of regulation enabling them to render assistance without remuneration within the fishing harbours concerned with the regulation and control of traffic and the public. Clause 2 contains the envisaged amendment to section 6 of the Sea Fisheries Act in this regard.

Clauses 3 and 8:

The envisaged insertion in the Sea Fisheries Act, 1973, of a new section 22A, as provided in clause 8 of the Bill, also entails consequential amendments to the principal Act. Clause 3 has consequently been written into the Bill, but I shall first deal with clause 8.

Certain foreign fishing boats are at present engaged in catching fish in areas which will be included in the envisaged extended fishing zone of the Republic, i.e. in the area between 12 and 200 nautical miles from the low-water mark, measured as the hon. member for Orange Grove now understands it will be measured.

It is expected that the governments of the countries of origin of these vessels—at this juncture these are in particular those of Japan, Russia and Spain—will approach the South African Government with the request that these vessels be permitted, in terms of the Sea Fisheries Act, to continue their fishing activities within the proposed extended fishing zone of the Republic after the promulgation of the Act. Clause 8 therefore provides that the State President may conclude a fishing agreement with such a foreign country, in which case the Minister of Economic Affairs may direct the Director of Sea Fisheries to issue the necessary permits for the use of the vessel/s concerned for fishing in South African territory. Furthermore, heavy fines and penalties are being prescribed in the envisaged section 22A for contraventions within the extended fishing zone. The high level of these fines and penalties indicate that the Government is in earnest about not tolerating contraventions in South African fishing waters.

The amendment proposed in clause 3 stems from the insertion of a new section 22A in the principal Act, i.e. clause 8 of the Bill. In terms of this consequential amendment the Minister may, if he is satisfied that the owner or lessee of a foreign vessel is a South African citizen or that the company to which such a vessel belongs is a South African registered company, instruct the Director of Sea Fisheries to issue the necessary authority for a licence for the use of the vessel/s concerned for fishing in South African waters.

†Clauses 4, 5 and 6:

These clauses provide for various amendments and textual improvements of sections 10, 11 and 13 of the present Act. In the first instance clause 4 provides for the extension of the existing scope of section 10(d) of the Act in order to enable the Minister to take the necessary regulatory or prohibitive steps regarding the supply of ships’ stores to fishing boats with a view to curtailing the presence of foreign fishing vessels in South African waters, other than those which may operate in South African waters in terms of an agreement under the new section 22A, as I have indicated.

While clauses 5 and 6 provide for textual improvements of sections 11 and 13 of the principal Act, which speak for themself, I do not consider a full explanation is warranted. I merely wish to say that the scope of activities in regard to which the Minister may make use of his powers in terms of the Act is extended in order to improve the protection of the fish resources of the Republic of South Africa.

In terms of clause 6(c) which proposes the insertion of a new subparagraph 13(1)(mA) in the principal Act the Minister will be empowered to make regulations regarding research into fish resources, fishing techniques or the marine environment. This may become important as it is conceivable that foreign vessels allowed to operate within the extended 200 mile fishing zone may consider conducting some research with regard to the aspects mentioned above. It is therefore necessary that the Minister should be in a position not only to control the techniques or the methods of research to be deployed so as to ensure that no harm is done to the marine environment, but that he should also be able to obtain the findings of such research.

Clause 9:

In terms of section 24, the Administration of South West Africa controls the exploitation of salt in South West Africa and a request has now been received to also transfer to the Administration the control over the exploitation of seaweed along the coast of South West Africa. There is no objection to this request and clause 9 now proposes to amend section 24 of the principal Act for this purpose.

Clause 10:

This clause contains the short title and provides that the Act shall come into operation on a date to be fixed by the State President by proclamation in the Government Gazette. It is envisaged that this Act and the Territorial Waters Amendment Act, 1977, be put into operation on the same day.

Mr. Speaker, the Sea Fisheries Amendment Bill may be seen as being both complementary and supplementary to the Bill which has just been discussed in the House, the Territorial Waters Amendment Bill. The hon. the Minister has asked us to be brief. I shall certainly oblige. I believe that the long tide of the Bill and the hon. the Minister’s Second Reading speech adequately explain the matter. In his speech the hon. the Minister has dealt with the Bill clause by clause, and I take it he feels the debate on the general background of the Bill has actually taken place already, and to his satisfaction, during the discussion of the previous Bill.

I think that all fishing interests in South Africa will welcome this Bill and will cede to the hon. the Minister those powers which he has deemed fit to seek on behalf of the Government. I believe that if we are to have an orderly fishing industry at a time when we are extending our territorial waters, then the hon. the Minister has the right to ask for these powers. I take it that the foreign interests who have been fishing in our waters, particularly off our east coast, must be concerned about the Bill. However, I accept that they will have lined up in front of the hon. the Minister’s office and that they will possibly be in the act of negotiating now for concessions to enable them to fish under licences and on payment of certain fees. It is interesting—and I think our South African fishing industries should take note of the available harvest that is there for them—to read a short article by Professor J. J. Smith of Rhodes University, in which he says—

I am happy to note in clause 2 that the hon. the Minister has taken cognizance of the fact that in South Africa we have this phenomenon of the small-boat sports fisherman. Those of us who live either along the False Bay or Hout Bay coast, or even at Saldanha Bay, find it quite a fascinating aspect of the South African scene to see many hundreds of boats going out to sea during snoek-fishing seasons. They do create a log-jam in the harbour itself. They create problems for harbour authorities who often have to negotiate large commercial fishing fleets. However, with the aid of the clubs concerned and the discipline of authorized control officers, I am certain that this problem can be sorted out. The other clauses are entirely reasonable. As the tavern of the seas, while we cannot allow illegal fishing in our waters, but where fishing fleets are legitimately in our waters and need to be serviced we should offer them that facility. The Bill makes provision accordingly.

Finally, I think that we can happily agree with the hon. the Minister in respect of clause 9, i.e. the request of the South West Africa authorities that they be allowed access to the proceeds of the seaweed resources off the coast of South West Africa and that this be brought under their departmental control. I think this is entirely reasonable. Therefore we support the Bill.

Mr. Speaker, it is not my intention to speak long on this, because here again, is a measure that we in these benches support entirely. We have no quarrel with any of its provisions in fact, we welcome all of them. I would go as far as to say that this measure and the Bill which we have just discussed are somewhat overdue. We are glad to see them here at last. The Bill with which we have just dealt, the Bill extending the limit of our fishing zone, makes it necessary to bring in legislation which would enable us to enforce effectively conservation measures within our new limit. The Bill now before us does just that. We especially welcome the control of factory ships and, specifically, the control of foreign fishing vessels and foreign factory ships within the new limit. This is a vitally important provision. At the present time the resources which lie off our coasts are literally being stolen by countries from the far ends of the earth, countries which can have no possible moral right to our fishing resources. These resources are diminishing fast. We are already in a situation where these pirate fishermen have depleted the numbers of fish to a dangerously low level. Our fishing resources have deteriorated and our fishing industry is suffering seriously as a result.

Mr. Speaker, may I ask the hon. member whether he and his party will be satisfied, and will agree, if we introduce a very strict patrol service and take strong action against trawlers from other countries coming to steal fish in our territorial water. I want to have that assurance from the hon. members.

Mr. Speaker, I can reassure the hon. member for Carletonville that we would support any move of this nature. In fact, I am going to devote the next part of my speech to making a further plea in this respect. If the hon. member for Carletonville had been here during the discussion on the last Bill, he would have heard the hon. member for Yeoville pleading for exactly what he has asked for. I would like to add to the plea of the hon. member for Yeoville that we should make absolutely certain that our enforcement of these regulations is comprehensive and as strict as it could possibly be. I agree entirely with the hon. member for Carletonville that it is absolutely vital that we have more than adequate control of these very scare resources.

Clause 2 makes provision for the extension of duties for honorary fisheries officers. Some time in the past—I think it was last year—I made a plea to the hon. the Minister to increase the number of honorary fisheries officers. I want to repeat that plea today however, we do not have the money to employ as many fisheries officers as we would like. But there are a certain number of these officers and I would like to see many more appointed and that their powers be extended. Then we would have an opportunity to make sure that the provisions aimed at defending our resources are more adequately enforced.

I must admit that I am not entirely certain why the South west African Administration should have asked for a special dispensation with regard to seaweed. Seaweed and seaweed concessions have been a subject of upset in the past. It is perhaps a quite legitimate request they have made. However, I must admit that the explanation given by the hon. the Minister does not actually make it clear to me why it is necessary to treat South West Africa differently from the rest of the Republic in this respect.

Otherwise we totally agree with the Bill and are very glad that it has been introduced.

Mr. Speaker, I do hope that the Press has noticed the transformation in the parties on my geographical right in this House. They are voting with the Government! I seem to remember one or two other matters which have been discussed in this House where on the basis of merit and merit alone, my party has seen fit to support the Government. However, the parties on my geographical right and the Press supporting them were quick to say that we were on our way to join the party on the other side of the House. This is an amazing transformation we have noticed here today.

There has even been reference to foreigners as being pirates! I would have thought that such delicate matters should not be referred to in such disparaging terms as those which have been used by the hon. member for Orange Grove.

It might be the continental drift.

I must confess that nothing surprises me any more having been a member of this House for a few years.

Order! The hon. member must see to it that his own boat is seaworthy.

Mr. Speaker, if I may say so, if I give you the opportunity to exercise your wit, you improve by the day! [Interjections.] With regard to clause 2 of the Bill, I just want to say that in all our harbours around the coast which are used by small boats as distinct from commercial craft and fishing craft, there is a number of South African fishermen who fall into the category of amateur fishermen. They must be some of the best amateur fishermen in the world, judging from their participation in international events, events which they win with great regularity. They are outstanding fishermen and, apart from that, they are outstanding seamen. It is because of the fact that this clause 2 recognizes the role these men can play that we are particularly pleased to support this Bill.

For years and years there has not been an effective coastal patrol system, anything like a coast-guard system. As a result, when amateurs or even professional boatsmen, particularly yachtsmen, get into trouble off our coast, not only does the Navy have to come to their rescue and mount sea searches, but also these amateur fishermen to whom I am eferring. One thinks of well-known skippers round the coast, like David Susman and the Hare brothers, to mention only a few people who, for years and years at great expense to themselves, and at the risk of life and limb, have put to sea to rescue others who have foolishly taken to the sea at times they should never have been allowed to do so.

If this clause is also recognized as a tribute to these men who have been of such assistance to all of us in South Africa, it is a well-paid tribute indeed. These people not only know the sea; they also know our harbours, very often the individuals concerned, and those administering the harbours. In most cases they know all of those people who use the sea and who have boats in our harbours. I think they will play a great role in enforcing safety measures with the powers now being given to them in terms of this clause.

The only other matter to which I want to refer is that the Government is now taking unto itself the power to deal with supplies to foreign fishing vessels in our harbours. In this respect I merely want to point out that the ship chandler business in South Africa is a profitable one. It is a business that has done good service to the many foreigners who use our ports and I should therefore not like to see them being put out of business. This is, however, a necessary control step that has been taken and I believe the ship chandlers themselves, who are very often on a good footing with foreign countries whose vessels they serve, will be able to exercise some influence and some control over the fishing fleets that they serve. I think it is a good provision and that it should be welcomed. For the rest, the provisions are consequential on the Territorial Waters Amendment Bill which we have just passed and we in these benches welcome it. We hope that the necessary and effective enforcement measures will be able to be carried out in all respects.

Mr. Speaker, I merely rise to thank hon. members for their support. I just want to point out that it is phenomenal what one can achieve when a calm atmosphere prevails.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, I hope the hon. the Minister will take to heart what I have said in regard to this and the previous Bill and that he will very carefully consider the situation in regard to research facilities and administrative control within the department, aspects which I referred to, at the beginning of the Second Reading debate of the previous Bill, as being the stepchild of the Department of Industries. I do not mean that in a derogatory sense, I mean it purely in a factual sense, because it is a matter which deserves his attention. I should very much like to have the opportunity to discuss it with the hon. the Minister outside the precincts of the House.

Mr. Speaker, I do not agree with the hon. member that the Division of Sea Fisheries is the Cinderella of the Department of Industries, but I am nevertheless prepared to discuss the merits of his proposals with him and also with the Director of Sea Fisheries to see whether it is necessary for any improvements to be effected in the activities of the department.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

In terms of the provisions of section 3(b) of the Standards Act, 1962, one of the most important aims of the SABS is to prepare and draw up a code of practice. Such a code of practice consists of voluntary guidelines which have up to now been published by the bureau on various subjects, for instance, the way in which modern parquet flooring can be laid efficiently.

Some cases have however come to light where entrepreneurs who provide services claim that their service or product will be rendered in terms of the provisions of the bureau’s code of practice, but then fail to render them according to the specifications of the code of practice concerned.

I am of the opinion that the public should be protected against such practices and clauses 1 and 2 of this Bill empower the council of the bureau to have such codes of practice as it may deem fit published in the form of a brochure or in the Government Gazette. It is also provided that if an entrepreneur claims that his service or product complies with the provisions of the code of practice, he will in fact be obliged to comply with it—in other words, so as to protect the public. Clause 3 extends the powers of inspectors of the bureau to enable them to carry out the necessary inspections with regard to the code of practice which can in this way be made compulsory if the entrepreneurs states that he will do the work according to the code.

Clause 4:

It very often happens that the provisions of codes of practice and specifications prepared and published by the bureau, are incorporated by other persons and bodies for enforcement in legislation and ordinances by simply referring to the number and date of publication in the Gazette of the code of practice and specifications concerned, and without therefore publishing them again in their entirety.

Although the principle of incorporation by means of reference is not foreign to South African legislation, the State law advisors are of the opinion that its effective implementation is greatly complicated because of the different ways in which empowering authority in this respect is regulated at present with regard to the various persons and bodies, provinces and local authorities, and that it can be regulated far more effectively by including an all-purpose, non-recurring provision in the Standards Act, 1962. Clause 4 of the Bill provides for this.

†As you are aware, Mr. Speaker, the SABS functions on a revenue-earning basis regarding the services it renders to commerce and industries. Although I am sure that there can be no doubt about the valuable services rendered by the SABS, I must point out that the fees levied for these services are extremely reasonable. In fact the level of these fees is such that the income derived from them does not cover the organization’s expenses in this regard in full. Accordingly a substantial amount is appropriated annually towards the budget of the SABS by Parliament.

However, it is considered necessary that the copyright pertaining to SABS work as published, should be protected to ensure future earning of revenue from the sale of such publications, and for this purpose clause 4 of the Bill makes provision for the insertion of a new section 23B in the Act.

Clauses 5, 6 and 7:

Clause 5 extends the existing section 25 in order to make a contravention of a compulsory code of practice in terms of clause 2 an offence, while clause 6 contains a consequential amendment to the long title of the Act and clause 7 contains the short title of the Bill.

Mr. Speaker, the last three Bills, including this one, are probably indicative of what can be achieved in this House if we can only cut out the political slant. During the discussion of the hon. the Minister’s Vote I referred to the excellent work carried out by the SABS. We also recognize, as the hon. the Minister has just indicated, that in his Vote we provide a sum of some R6 820 000 as a contribution towards the expenses of running the SABS. This, I think, is money well spent, and it will certainly be seen as such by the business and the industrial community. The Bill in front of us makes provision for the maintenance of standards and codes which, I believe, are fundamental if we are to provide that sort of qualified service and the standard quality which is sought by the public. The hon. the Minister discussed the clauses and we agree in almost every case. We shall certainly support the Bill. We note that clauses 1, 2 and 3 call for compulsory specifications which must be complied with by all. If the manufacturer wants to use the voluntary specification and the SABS mark, we note that he must also then comply with the compulsory specification as set out in clause 1. We note that clause 2 forces people who purport to comply with the requirements of the SABS, to in fact, comply. Otherwise they commit an offence. We heartily commend this so that nobody can sail under false colours. This measure will result in the public having that security.

We also accept that clause 3 broadens the powers of inspectors to enable them to enforce the compliance of specifications. We think that this is necessary if the Bill is to be effective in every sense. We also accept that local authorities are required in terms of clause 4 to apply SABS specifications by merely referring to the number thereof. The previous provision was too broad and we accept that the clause now provides for a much greater authority. Finally, the new section 23B enables the SABS to make much greater use of publication in the Government Gazette. We notice that this new section protects the bureau’s copyright when its mark is published in the Government Gazette. This we find entirely reasonable.

With those few words we support the Bill.

Mr. Speaker, I am going to be even briefer. We from these benches support the Bill and we think it is a provision to which there can be no objection. I should only like to say two other things. The first is that I should like to record our appreciation for the work done by the bureau. It seems an appropriate occasion to do so. I think they render a tremendous service. The second point I should like to make is that one should use every opportunity possible to indicate to the public in South Africa that they should actually buy goods which bear the bureau’s mark, because it is a guarantee of quality and it is a guarantee that the goods in fact meet specifications which are quite independently assessed. If they were to do that, I think the very many problems that we have of people who complain that they buy shoddy goods and goods that do not serve their purpose, would fall away. I merely should like to take the opportunity of again appealing to the public to support and to buy goods which bear the bureau’s mark.

Mr. Speaker, the S.A. Bureau of Standards functions on a revenue-earning basis in relation to the services that it renders to commerce and industry. Obviously its charges are far less than they perhaps should be and it is equally obvious that it cannot make ends meet on the fees that it receives from commerce and industry. Therefore each year we in Parliament have to allocate a certain sum of money to the SABS and I think it is only correct that we do so because it renders invaluable service. We should like to pay tribute to it.

*This Bill is an improvement on the present Act, and consequently we shall not oppose it.

Mr. Speaker, it is a great and pleasant occasion this afternoon to have the hon. the Opposition setting such a high standard by supporting this legislation. It shows us what can be done, and I hope they will maintain the same standard in future and for the rest of this session.

I referred to the Bureau of Standards yesterday and I should like to ask the hon. the Minister whether he cannot use his influence with the hon. the Minister of National Education to have much more publicity given on television, the radio, etc., to the fine work being done by the Bureau of Standards. The hon. members of the Opposition also said that much more publicity could be given for every member of the public to see what he can do to give the bureau his positive co-operation in the interests of South Africa.

Mr. Speaker, since we are dealing with the subject of codes of practice, it seems to me I may recommend that the codes of practice presently being applied in the country be maintained, because in that case we shall be able to dispose of our business very expeditiously. I merely rise to thank the hon. members for their support and I immediately want to point out two important matters. The first is that the mark of the S.A. Bureau of Standards is a mark of quality.

The hon. member for Yeoville is correct in the sense that if more people insisted on the marie, much fewer complaints would reach my department with regard to defective goods lacking the necessary quality one would like to expect on the market. Secondly, I want to say that the hon. member for Sunnyside yesterday pointed out quite correctly that percentagewise the fees earned by the bureau are much higher than before. This is indicative of the important fact that the services of the bureau itself are held in very high esteem by commerce and industry and that the mark has become a mark of distinction and quality. I thank the hon. members for their support.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

Mr. Speaker, I believe that, if possible, we shall be even briefer than we were a moment ago.

The Explosives Act, 1956 (Act 26 of 1956), came into effect on 2 May 1956 when it replaced the Explosives Act, 1911. During 1972 the Act was also made applicable to the territory of South West Africa. The existing Act contains detailed directives with regard to the manufacture, storing, sale, conveyance, import, export and use of explosives and has had to be amended on several occasions since it came into effect, to keep pace with changing circumstances. I do not believe that this is the last time we are amending the Act either. So it has again become necessary to effect further amendments to the Act to provide for the efficient combating of certain evils which have, particularly in recent times, begun to assume greater proportions and for which no provision has so far been made in the Act.

The first amendment which is being proposed contains an addition to section 24 of the Act. Although this section provides for punitive measures in cases where inspectors of explosives are hampered in the exercise of their duties, or where someone refuses to reply to their inquiries, the Act makes no provision for punishment if someone should falsely hold himself out to be an inspector of explosives. It is unnecessary for me to elaborate on the serious consequences that could arise from this deficiency in the existing Act. I therefore consider it to be essential—I think hon. members will support me in this—that a provision be added to the Act as a preventive measure in terms of which it will be an offence to falsely hold oneself out to be an inspector of explosives.

†The amended section 24 shall prohibit a person from falsely holding himself out to be an inspector of explosives, whilst the penalties which may be imposed for a contravention of this provision shall be the same as those prescribed for the infringement of other provisions of the said section of the Act.

The second amendment which is proposed and which, I believe, is very important, is aimed at the effective curbing of a crime which has largely escalated in recent times and which should be viewed in a very serious light, especially in the present circumstances. Here I refer to the so-called bomb threats where people make telephone calls to large office blocks, airports, factories, schools, etc. and pretend that a bomb which will explode within a given time, is hidden in that particular building. It follows that the building must of necessity be evacuated until the police have completed their search for the alleged bomb. This procedure results in the disruption of services and a considerable loss of manpower. What is more, the police have to waste their time on completely unnecessary investigations, sometimes at the expense of much more important work. The fact that the police had to investigate no fewer than 149 such cases of bomb threats during the period 1 July 1976 to 31 December 1976 gives an indication of the proportions which this “crime” is assuming. If the present situation is allowed to continue, and if it should escalate any further, I fear this could have a very detrimental effect on, inter alia, the country’s economy.

The police are hampered in their efforts to take effective action against offences of this nature in that the existing legislation does not make adequate provision for such action to be taken against offences of this kind. As a result, it is virtually impossible for the police to obtain convictions in the courts against persons who render themselves guilty of offences of this nature.

The South African Police, accordingly, approached the Department of Commerce earlier this year with the request that the Explosives Act be appropriately amended in order to assist them in their efforts to take effective action against offences of this nature.

*Clause 2 of the Bill now under consideration, will insert a new subsection (1A) in section 27 of the Act. In terms of that subsection it will be an offence to threaten to cause an explosion or to allege falsely, knowing it to be false, that any other person intends to cause an explosion whereby life or property is endangered. It will also be an offence to communicate false information, knowing it to be false, regarding any explosion or alleged explosion or any attempt or alleged attempt thereto. The punitive measures prescribed for offences of this nature, i.e. imprisonment without the option of a fine for a period of not less than three years, and not more than 15 years, may appear drastic, but it should be seen against the background of the evil which has to be fought. Besides that, it is also a fact that only a few offenders are ever traced. It is therefore important that the sentence imposed, should serve as a deterrent to intending offenders of this nature.

Mr. Speaker, in these frightening times, when the escalation of urban terrorism is preoccupying our minds more and more and causing concern to all countries in the world, what the hon. the Minister has said clearly reflects entirely the sentiments of this side of the House. I say at once that we shall support the Bill.

However, there are two matters which I wish to raise with the hon. the Minister. One is particularly on behalf of the hon. member for Berea, who cannot be here today. His concern is about inspectors presenting themselves to the public without identifying themselves. In line 15 on page 1 of the Bill we find the words “one who falsely holds himself out to be an inspector”. My colleague the hon. member for Berea feels that this case is a clear indication of the need for legitimate inspectors to validate their claim to be inspectors by identifying themselves. He feels that we should have some provision whereby written authority should be issued to an inspector, an authority that should be produced to any person who will be affected by the exercise of the powers and duties of inspectors. In other words, if a man falsely gives himself out to be an inspector, the public can rightly refuse to accept his identity and demand that he should be clearly identified as an inspector.

Unfortunately I cannot deal with that aspect under this Bill. Nevertheless, I shall consider the matter and shall come back to the hon. member on it.

Thank you. Then, at the end of the Bill, where sentences are dealt with, we read in lines 31 and 32—

In this respect this side of the House has always adopted the attitude that we have such complete faith in the efficacy of the courts of our country that we do not favour the imposition of minimum sentences. While we recognize the seriousness of this type of crime, we feel that there can always be circumstances when the courts, in the light of the knowledge available to them, might feel that they would not like to be bound. We felt the same about the drugs legislation. While we fully support the heinousness of the crime and the necessity that it should be suitably penalized, we believe that the imposition of a minimum sentence binds the hands of the courts and lessens their image in our country. We support the Bill.

Mr. Speaker, we regard this amending Bill as being both timeous and very essential. The hon. member for Cape Town Gardens referred to the penal provision contained in the Bill, and I shall refer to this briefly in a moment. Up to now there has been no basic legislation for combating this evil of bomb scares. In the past people were mainly charged with fraud. This type of danger is occurring to an increasing extent, so much so that during the period July to December 1976 we had 149 such cases which were brought to the attention of the police. The question arose as to whether we could tolerate such irresponsibility any longer. The possibility of internal and urban terrorism escalating, to which the hon. member for Cape Town Gardens referred, consequently renders this measure very essential indeed. Also the detrimental, negative effect which planted reports concerning explosions have on the economy of our country, is of the utmost importance here. How often has it not happened in the past that buildings and premises have had to be vacated so as to enable the police to investigate warnings? Another aspect which one should be concerned about, is the fact that this type of call may condition responsible people to such an extent that in time they will become passive and will no longer react when they receive a call of this nature. In this way it may happen that a really serious warning is ignored by them; an action which may have fatal consequences in the case of a genuine warning. We can no longer tolerate this type of trick or joke, or whatever we want to call it. This type of thing often occurs in our schools too. It even happened on one occasion that a call of this type was received while matric pupils were writing their final examinations. Only the fact that the call was made by a child and that there was sufficient time for a thorough investigation to be made, prevented a catastrophic situation from arising.

I should like to ask the hon. the Minister to see to it that the implications of the legislation under discussion are taken further, to be more specific, are brought to the attention of the various Government departments, especially the departments of education, so that pupils at schools may be warned of the consequences of transgressing this legislation.

At first glance the penal provisions contained in this legislation seem rather harsh. I believe, however, that the legislation is intended purely as a deterrent. The alternative penalty of a fine, or the absence of a minimum penalty, would decrease the effective impact of this measure. In this case we need legislation with teeth.

The Civil Aviation Offences Act (Act No. 10 of 1972) makes provision in section 2 for imprisonment for a period of not less than five years but not exceeding 30 years in cases where a sham danger of this kind is created when an aircraft is in flight. In other words, we already have that principle in our legislation. It does not happen often that this kind of offender is traced, but the penal provision is definitely going to have the effect to make prospective offenders think twice before committing a reprehensible deed of this kind.

We on this side of the House thank the hon. the Minister for the timeous introduction of this legislation. We are pleased to support it.

Mr. Speaker, we will support the Second Reading of this measure. However, there are some problems I would like to indicate to the hon. the Minister. Firstly, in regard to section 1, there is no question that falsely holding oneself out to be an inspector should constitute an offence. I have only one problem with this. That is that those people who are inspectors must be able to adequately identify themselves so that there can be no misunderstanding in the eyes of the public. To my mind that is an essential. I believe, particularly in these times, the whole issue of being an inspector, when it relates to matters of this nature, might well have implications beyond the ordinary.

Then we come to the second provision. Here I must, with respect, disagree with one aspect of the previous speaker’s remarks. That is that I do not regard everyone who makes a false bomb scare as being either a practical joker or as being sick. I believe this is part of the weapons of urban terrorism, because what is done is that one gets so many false alarms which are designed to disrupt. One cannot afford to ignore any alarm as being false, because it may be a genuine alarm. This is part of the weaponry used—and which will unfortunately be used—against us. Therefore, I do not regard it as a joke. I regard it as something very serious, and as a weapon which is used against us in order to achieve a purpose with which we certainly cannot agree.

From that point of view I support the concept that people who indulge in false scares of this kind should realise that if they think they are making jokes, these are very sick jokes in this land of situation. They are certainly not jokes which we can tolerate. They may be in need of psychiatric treatment, but that is another story, because it in fact has far wider implications.

As far as we are concerned, we accept the principle that this kind of activity should constitute an offence. We accept the principle that it should be very substantially punished, but we have only one difficulty here. That is that my party is against the concept of minimum sentences. We believe that a judicial officer must have a discretion. We believe the punishment must be a heavy one so as to act as a deterrent in these circumstances, but that the nature of the punishment must be in the discretion of the judicial officer. For that reason I would like to indicate to the hon. the Minister that, whereas we shall not seek to obstruct the passage of this Bill and shall agree to the steps that are taken, we shall move an amendment in the Committee Stage in terms of which I will ask the deletion of the words “not less than three years and” in line 31. In other words the maximum penalty of 15 years must remain. People must know that they can be very heavily punished, moreover people, if they are convicted, must be substantially punished. However, the discretion must remain with the judicial officer.

Mr. Speaker, this is a tough measure. It deals with a very serious situation and imposes strict sentences. False rumours and scare tactics are some of the techniques of the urban terrorist. With the situation on our borders and with our internal situation being what it is, there is no doubt that this type of criminal—because that is what they are if they are convicted—should be shown no mercy whatsoever.

*It is a very serious matter we are discussing today. We are fighting for our survival in South Africa and we have a responsibility as regards Bills of this nature.

† People who make telephone calls pretending that a bomb is going to explode at an airport, for instance, are people who have the economic ruination of this country as their aim. We have heard from the hon. the Minister that they have had 149 cases in the last six months. This must of necessity disrupt our economy to a very great extent. This type of criminal, I should imagine, is very difficult to locate and I presume that he is very seldom brought to book. But when this sort of criminal is brought to book, I believe he should be shown no sympathy whatsoever. We on this side of the House shall not oppose the measure.

Mr. Speaker, I am just rising to thank hon. members for their support of the legislation and to react to the two aspects which the hon. member for Cape Town Gardens raised. The first is the question of the identification of the inspectors. The hon. member will realize that we are not dealing with that particular subject in the proposed section 24. The proposed section merely creates a particular crime, namely when people falsely profess to be inspectors. In section 2 of the principal Act, the Minister is authorized to appoint inspectors. There is no provision concerning the identification of inspectors. Nevertheless, I undertake to consider it, but the hon. member must realize that I cannot include a provision of this kind in this specific legislation. I think, however, that it is a valid request that the inspector should be able to identify himself on request. I cannot find fault with this argument, and if it will satisfy the hon. member, I shall move an amendment next year in order to provide for that.

As far as the penal provision is concerned, I too, like all hon. members, am not in favour of prescribing minimum penalties in legislation. Therefore, we are not in disagreement on the principle. I think, however, that hon. members will understand that specific circumstances oblige one to depart from the general rule. I think that there are three important reasons why a departure from the rule is justified in this case. The first—and the hon. member for Walmer mentioned it—is that very few of the transgressors of this proposed provision, can be brought to book. Usually the offence takes place anonymously, in most cases by telephone. Apart from the other principles which we should like to uphold in meting out punishment, the penal provision must serve as a deterrent for this type of offence. The hon. member for Gezina put another important argument to the House, apart from the economic implications of such deeds. This is that if a warning for one and the same building, institution or school, is delivered repeatedly and the warning is proved to be unfounded every time, people can say that they are not going to bother about such a warning any more. In this way the lives of innocent people can be endangered. Therefore I think that it is our responsibility to prevent this type of thing.

Secondly—and the hon. members for Yeoville and Cape Town Gardens are correct as far as this is concerned—it is one of the most reprehensible forms of urban terrorism and terror. As such we must eradicate it mercilessly. I do not consider it a joke.

There is a third argument which I want to advance. I want to ask the hon. member for Yeoville not to go ahead with his amendment, not because I do not have sympathy with the standpoint which he is adopting on principle, but because I think that in spite of the fact that a minimum penalty can be imposed, a magistrate or presiding officer still has the discretion to suspend the whole sentence. According to my knowledge of law, they can also postpone the sentence. [Interjections.] Yes, I myself have dealt with cases of this type in the past. The sentence can be postponed until the accused is called up at a later stage. Let us not, however, argue about the technical aspect of it. The fact is that a discretion still exists.

Mr. Speaker, may I ask the hon. the Minister how, if the actual causing of an explosion—I am not referring to the provisions of the Terrorism Act—is not, as I understand it, at the moment an offence in terms of which there is a minimum sentence, we can make the actual threat of it an offence subject to a minimum sentence, when the carrying out of it is not subject to a minimum sentence? That is the problem I have with the provision.

The argument which the hon. member is advancing, is that a minimum sentence should also be imposed in the case of an actual explosion. If the provision in that regard is not sufficient, I shall pay attention to it. Once again I request the hon. member’s sympathy as regards my standpoint, that a magistrate has a discretion in respect of the imposition of the penalty, as regards not putting it into effect. In view of the fact that a very small percentage of the guilty parties can ever be brought to book, people must know that they will be sent to prison, even if it is not for the maximum period. Our Criminal Procedure Act contains the provision that the magistrate can decide not to impose the sentence, under given circumstances and after consideration of all the relevant facts. I think that we are then serving the purpose which the hon. member wants us to serve. If hon. members agree with me, however, that this type of thing is not a joke and that it is in fact dangerous, no one who is found guilty of it should escape imprisonment, even if it should only be a threat of a minimum imprisonment hanging over his head. That is why I want to ask the hon. member to reconsider his standpoint. I want to assure him that if the provision could possibly lead to consequences which I cannot foresee now—it is difficult for me to foresee any at this point—I shall report it to the House myself and ask that the legislation be amended. I want to ask that we accept it as such at this stage.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 2:

Mr. Chairman, I would like to respond to what the hon. the Minister said about the question of minimum sentences. The difficulty I experience in this regard is that the principles which relate to suspension are somewhat different to the principles which relate to the imposition of the sentence itself. I do not believe that the suspension of a sentence is an answer to this problem. There can be cases where, in the particular circumstances that prevail, there should be a prison sentence. But it should perhaps not be for three years. If one has a maximum sentence of 15 years and if magistrates and judges are fully aware of what the attitude of legislator is—as demonstrated by the fact that a maximum penalty of 15 years is prescribed—it is quite clear that the deterrent exists in that that penalty can be imposed. In these circumstances there should not be a minimum sentence. I expressed my attitude in this regard in the Second Reading debate. This is not a joke; it is far too serious to be a joke; it is a weapon of urban terrorism. But I still believe that there should not be a minimum sentence. In these circumstances I move as an amendment—

Mr. Chairman, I want to agree with what the hon. member for Yeoville had to say and we therefore support his amendment. I believe the hon. the Minister is aware of the fact that for a variety of reasons we as a party are against the question of minimum sentences. I want to restate some of them.

In the first place, I believe that the report of the Viljoen Commission on the question of crime and punishment, indicates quite clearly that the trend today in regard to punishment should be punishment based mainly on the question of not only being a deterrent, but should also be punishment in itself for the offence that has been committed. Its main aim should be the rehabilitation of those who have overstepped the law and who have become criminals. The experience of our prisons authorities with the rehabilitative process of law, is that when minimum sentences of four years or five years are imposed, the rehabilitative process starts to wane and the criminals themselves find it difficult to accept that there is such a thing as rehabilitation in normal society. This is the difficulty judges have in sentencing somebody for a crime where there is a minimum sentence, because they believe that they should have the discretion to judge whether that person is a real criminal or somebody who could potentially be rehabilitated.

I want to repeat what the hon. member for Yeoville said in this respect, i.e. that there should always be a discretion available to the court, because there are always certain particular circumstances in these cases. I think the hon. the Minister will remember that only recently it happened at the Jan Smuts Airport that a young man warned that there was a bomb in the luggage of somebody who was about to board an aircraft. This was obviously a case where the person concerned was not in a state of mind—I believe that he was under the influence of liquor at the time—to realize what he was doing. If he were to be faced with this provision, he would have to be sent to gaol for three years. I am sorry that I have to disagree with the hon. the Minister in regard to the question of the suspension of sentences. I have before me the latest Criminal Procedure Act and I would like to read the provision in question to the hon. the Minister. Section 297 reads as follows—

1. (a) postpone for a period not exceeding five years the passing of sentence and release the person concerned …
2. (b) pass sentence but order the operation of the whole or any part thereof to be suspended for a period not exceeding five years …
3. (c) discharge the person concerned with a caution or reprimand …

It appears in point of fact that when a minimum sentence is prescribed, there is no provision that allows a court to suspend or to delay the operation of that particular provision.

Finally, I do not believe that this is a crime that is going to be committed very frequently or very readily. I believe that the mere fact that we, in passing this particular provision, make it known that in this legislative body we believe that the crime is of such a serious nature that it can under certain circumstances merit a punishment of 15 years imprisonment, would indicate to the court the seriousness with which the legislation considers this particular crime. I would therefore seriously ask the hon. the Minister to allow the courts a discretion in this particular case. We support the amendment.

Mr. Chairman, I have listened to the hon. member for Yeoville and to the hon. member for East London City. I have sympathy with the arguments that they have advanced. We are not, however, living in normal circumstances. We are living in abnormal circumstances. Furthermore, we all concede that this is a very serious matter. I would like to go back to one argument used by the hon. member for East London City. He dealt with the question erf a person being in a certain state of mind. I believe the case he mentioned would be a suitable case for the magistrate to order a suspension. I would like to ask whether the hon. the Minister would clear up the question about whether the magistrate is entitled to suspend a sentence or whether alternatively, he is entitled to hold a sentence in abeyance or to postpone the sentence. If the hon. the Minister is not certain, I would like to see it being cleared up before it goes to the Other Place. At this stage, however I may say that we are not prepared to support the amendment moved by the hon. member for Yeoville.

Mr. Chairman, the hon. member for East London City said, amongst other things, that this is not a crime that occurs frequently. Yet I said in my introduction to the Second Reading debate that over a period of six months there were 149 of these cases. I therefore argue that this proves the exact opposite of his argument in that specific connection.

If I remember rightly he referred to the case of a student who said that there would be a bomb in an aircraft. He argues that the student was apparently under the influence of liquor. If that was, in fact, the case, the question of accountability crops up. I think that in the specific case he will concede that it is arguable because mens rea is part of the crime. I think the hon. member concedes that much. Now I come to the argument the hon. member for Yeoville raised. I agree with that. Here we are not dealing with people who make jokes.

†We are in fact dealing with criminals, proven criminals, and we are dealing with them under circumstances where, in any event, it is very difficult to prove the commission of the crime. In other words, though I share with the hon. member the general view that one of the objectives of sentences for statutory and common law offences should not only be the deterring effect of the sentence, but also the rehabilitation of the prisoner, I submit that when we are dealing with an offence of this nature, especially in the circumstances in which we live these days, I think that there should be evidence written into our law and into our legal system that, in contrast with those countries in the world who are prepared to acquiesce in this type of terrorism, we in South Africa are united not to allow it in our country.

*I therefore want to ask that we pass the clause unchanged and negative the amendment. I am quite prepared to study the Criminal Procedure Act. Unfortunately I do not have the time to do so now. I am prepared to reconsider whether it is possible, under the circumstances, to remove the minimum restriction. At this stage I am not convinced of the desirability of removing it, but I am prepared to give the undertaking that I shall reconsider it. If I should come to the conclusion that the minimum restriction should be omitted, even only as a temporary measure, I would be prepared to introduce an amendment in the Other Place.

Mr. Chairman, I appreciate the hon. the Minister’s willingness to give further consideration to this matter, but I think he should also understand our situation. We believe that the principle of minimum sentences is wrong. That has been established by the hon. member for East London City. He has referred the hon. the Minister to the Criminal Procedure Act. I have indicated that the question of suspension is a completely different matter, a matter to which a different principle is applied, and that it does not assist in this particular instance.

The point which the hon. the Minister made in regard to the fact that it is difficult to prove the commission of the offence is, with respect, irrelevant. Once it is proved, the question of sentence arises. If it is not proved, then it does not matter whether one has a minimum sentence or anything else. Then it becomes academic. With great respect, whereas we regard the offence as serious and the crime as one which must be stamped out, we regret that we must persist with our amendment even to the extent of demanding a division.

Question put: That the words stand part of the Clause,

Upon which the Committee divided:

Ayes—87: Albertyn, J. T.; Aronson, T.; Badenhorst, P. J.; Ballot, G. C.; Bodenstein, P.; Botha, G. F.; Botha, J. C. G.; Botha, L. J.; Botha, M. C; Botma, M. G; Coetzee, S. F.; Conradie, F. D.; Cronje, P.; Cruywagen, W. A.; Deacon, W. H. D.; De Beer, S. J.; De Klerk, F. W.; De Villiers, D. J.; De Villiers, J. D.; Du Plessis, B. J.; Du Plessis, G. F. C.; Du Plessis, P. T. C.; Du Toit, J. P.; Greeff, J. W.; Greyling, J. G; Grobier, M. S. F.; Hartzenberg, F.; Hayward, S. A. S.; Herman, F.; Heunis, J. C.; Hickman, T.; Hoon, J. H.; Janson, J.; Kotzé, G. J.; Kotzé, W. D.; Langley, T.; Le Grange, L.; Le Roux, F. J. (Brakpan); Le Roux, F. J. (Hercules); Le Roux, Z. P.; Ligthelm, C. J.; Ligthelm, N. W; Lloyd, J. J.; Louw, E.; Malan, G. F.; Malan, W. C.; Morrison, G. de V.; Mouton, C. J.; Nel, D. J. L.; Nothnagel, A. E.; Palm, P. D.; Potgieter, J. E.; Potgieter, S. P.; Raubenheimer, A. J.; Reyneke, J. P. A.; Schoeman, J. C. B.; Scott, D. B.; Simkin, C. H. W.; Smit, H. H.; Steyn, D. W.; Steyn, S. J. M.; Streicher, D. M.; Swanepoel, K. D.; Terblanche, G. P. D.; Treurnicht, A. P.; Ungerer, J. H. B.; Van den Heever, S. A.; Van der Merwe, H. D. K.; Van der Merwe, S. W.; Van der Spuy, S. J. H.; Van der Walt, A. T.; Van der Walt, H. J. D.; Van der Watt, L.; Van Heerden, R. F.; Van Tonder, J. A.; Van Wyk, A. C.; Van Zyl, J. J. B.; Venter, A.; A.; Viljoen, P. J. van B.; Vilonel, J. J.; Vlok, A. J.; Vorster, B. J.; Vosloo, W. L.

Tellers: J. P. C. le Roux, P. C. Roux, A. van Breda and W. L. van der Merwe.

Noes—25: Basson, J. D. du P.; Baxter, D. D.; Bell, H. G. H.; Boraine, A. L.; De Villiers, I. F. A.; De Villiers, J. I.; De Villiers, R. M.; Eglin, C. W.; Enthoven ’t Hooft, R. E.; Fisher, E. L.; Graaff, De V.; Hughes, T. G.; Jacobs, G. F.; Kingwill, W. G.; Miller, H.; Murray, L. G.; Oldfield, G. N.; Olivier, N. J. J.; Pitman, S. A.; Schwarz, H. H.; Slabbert, F. van Z.; Van Eck, H. J.; Van Hoogstraten, H. A.

Tellers: D. J. Dalling and R. J. Lorimer. Question affirmed and amendment dropped. Clause agreed to.

House Resumed:

Bill reported without amendment.

Third Reading

Mr. Speaker, I move subject to Standing Order No. 56—

I do not want to extend the debate, but I do want to clarify the legal position in answer to the hon. member for East London City. This is merely for the record so that there will be no misunderstanding. I want the hon. member to have a look at section 297(4) of the Criminal Procedure Act, which reads as follows—

Then reference is made to the conditions.

If the hon. member will read this with section 284 of the same Act he will find that section 284 provides the following—

In other words, the whole sentence can be suspended, except for four days.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

In the past, Escom financed its entire expansion programme from loan capital obtained on local and foreign capital markets. In view of the trends towards shortages of funds, the higher interest rates and shorter buying terms which were already reflected on these markets at the time, the Government decided in 1970 that a method should be created of generating development capital out of Escom’s revenue from sales of electricity so that Escom would be in a position to finance a large portion of its expansion itself, and thus be left dependent for loan funds on the capital markets referred to. The wisdom of this standpoint is very clearly apparent in the present circumstances. An analysis was made at the time on the basis of prognostications which were valid at that stage, to decide what annual contributions should be levied to build up a capital development fund which would achieve this objective within a reasonable period.

These studies revealed that if an annual contribution of 2,35% of Escom’s unredeemed loans was to be paid into the proposed fund, a point would be reached within ten years where the accumulated contributions to the fund, plus interest earned, would amount to the present maximum prescribed limit of 15% of Escom’s unredeemed loans.

According to those prognostications and analyses, the fund would then be in a “state of equilibrium” in which approximately 49% of Escom’s expected expansion capital requirements could be financed from this fund.

Parliament was prepared to accept this proposed principle of a capital development fund and the Electricity Act, 1958, was amended in 1971 to provide for such a fund in section 13, in respect of which annual contributions, bearing in mind the contributions of the reserve fund, could not exceed 3% of Escom’s unredeemed loans, and the total accumulated contributions to which could not exceed 15% of Escom’s unredeemed loans.

The accumulated funds in the Capital Development Fund Account as at 31 December 1976 already amounted to R181,6 million.

Although the estimates made in 1970 in respect of the fund were based on prognostications which were quite valid at that stage, circumstances have since indicated that these prognostications are no longer valid, and that in view of an increased continuous demand for Escom power, a higher rate of price increases in respect of capital goods and increased interest rates on loan capital, the proposed contributions to the fund were insufficient to achieve the desired state of equilibrium in the fund within ten years. An increase, not only of the maximum annual contribution, but also the maximum permissible total of the fund, is therefore proposed in clause 1 of the Bill in terms of which the maximum annual contribution to the Reserve and Capital Development Fund will be increased from 3% to 6% of the commission’s unredeemed loans; and it is proposed that the total amount in the Capital Development Fund may now constitute 30% instead of 15% of the commission’s unredeemed loans.

Based on current prognostications, it is anticipated that with the contribution from revenue equal to almost 6% of its unredeemed loans per annum, Escom will have approximately 60% of its capital requirements avail able from internal financial resources by the year 1983. A maximum contribution of 6% will at present lead to a tariff increase of approximately 14%.

Now there is a matter which I want to waste no time in rectifying. It concerns newspaper reports which appeared after the Bill in question had been agreed to in the Other Place. According to the reports which appeared in the Press, the tariffs for the supply of electrical power are being increased by 14%. Such a conclusion is obviously wrong, since this is merely empowering legislation and does not therefore determine the tariff but only the maximum tariff with regard to the loading of tariffs as contributions to the Capital Development Fund.

Clause 2:

Electrical power, as is generally known, is an exceptionally important source of energy for the country’s industries and mines, as well as for the S.A. Railways, the municipalities and the domestic consumers. The sharply rising costs of electrical power are a source of concern to all of us, and everything possible is being done to keep costs as low as possible.

†Most users of electricity are able to recover the normal cost of electricity from the consumers of their products. This is fortunately also the case with some of our exports, particularly those products which enjoy a strong demand such as ores and minerals and certain of our locally produced alloys. Future investment in export orientated industries which are very large users of electricity is, however, often at stake and depends on the arrangements which can be made by Escom to accommodate their special position by a firm long term contract or by other special means. However, in terms of section 14 of the Electricity Act, Escom is not permitted to differentiate between users in order to meet the special position of such a prospective investor, even though Escom may be in a position to supply his needs and it, as well as the other users of electricity, may benefit from the steady load off-take of such an undertaking. I would not wish such developments to be discarded by a prospective investor merely because Escom has no flexibility or means of accommodating his special position. It is with this situation in mind that I am proposing introducing into the Act a principle which would permit the Minister of Economic Affairs, after consultation with the Electricity Control Board, to pay into a separate fund an amount not exceeding 3% of Escom’s total income from sales of electricity and to use such moneys in concurrence with the Minister of Finance for such purposes as he may prescribe.

Clause 3:

In terms of the present provisions of section 24(3) of the Electricity Act, 1958, an applicant for a licence to supply electricity must submit the information prescribed by this subsection regarding his proposed supply scheme. As not all the information in this regard is of significance to the Electricity Control Board in all instances it is proposed that section 24(3) be amended, as suggested in clause 3, to enable the board to indicate what specific information an applicant will be required to submit in respect of his application.

Clauses 4 and 5:

Clause 4 proposes a textual improvement of the Act and clause 5 contains the short title.

*As hon. members will note, I have already had an amendment placed on the Order Paper, which I envisage moving at the Committee Stage. It contains a consequential amendment to section 14(1)(c) of the Electricity Act, 1958, with a view to recovery by Escom from revenue of any contribution levied under the provisions of the proposed new section 13A.

Mr. Speaker, I hope that the hon. the Minister has enjoyed his period of comparative calm where opposition to his proposals has been comparatively isolated. We now come to a different kettle of fish.

First of all, I would like to make it quite clear that we on this side of the House appreciate the importance of electricity as a source of energy. In particular do we appreciate the greater importance which electricity has assumed since the oil crisis, which produced problems of relying too much on oil as a source of energy. Therefore, we appreciate that there is a very strong case to be made out for ensuring that Escom has sufficient capital for expansion to enable it to provide South Africa’s expanding electricity needs. We on this side of the House, therefore, would like to see Escom in a position to expand in order to provide the necessary electrical energy requirements of the country. However, equally strong, if not stronger, is the case for keeping the price of electricity to consumers down to reasonable levels. The price of electricity is an administered price to all intents and purposes, in that Escom enjoys a monopolistic situation where it is in a position to, within wide limits, set its own prices for electricity. We all know what a strong impact administered prices do have on the cost of living. Their impact over the last year or two has been crucial to the rate of inflation in this country.

Electricity is pricewise also a very sensitive commodity—if one can call it that. Like petrol and rail tariffs, an increase in the price of electricity sets up a chain reaction and induces other costs and price increases which are very difficult to stop.

Therefore, Mr. Speaker, I think first of all we have to examine clause 1 of the Bill very carefully, because the purpose of the clause is to enable Escom to raise more capital for expansion from internal resources or, in other words, to raise more capital from electricity consumers by raising electricity tariffs. That is the position in a nut shell. To me it is therefore obvious why this measure is being brought in at this present time, viz. because of the difficulty experienced in raising capital for Escom overseas, which has been a source of substantial capital for Escom in the past. It is being brought in to reduce the pressure of Escom borrowing on the local capital market and to relieve Escom from future interest charges on the capital it is using. In my view that is a very dubious exercise, because it relieves Escom from the discipline of the capital market.

This Bill is following the pattern which has been recommended by the Franzsen Commission report as long ago as 1968. That commission recommended that public corporations should provide 40% to 50% of their capital requirements from internal sources. Escom in particular was mentioned in that report. This is the policy which is already being followed by the Post Office and indirectly also by Sasol. I do not believe, however, that the Government has paid sufficient attention to the impact on prices which the raising of capital internally in a highly capital-intensive industry or undertaking can have.

Escom is probably the most capital-intensive undertaking we have in this country. If one compares it with the other public corporations which are also capital-intensive, one sees that the Post Office, for instance, requires R204 of assets to produce R100 of income; our telephone services require R217 of assets to produce the same income; the Railways R250, Iscor R277 and Escom R555 of assets to produce R100 of income. In other words, to raise the same relative amount of capital to finance assets, Escom would have to raise tariffs three times as much as the Post Office. I can find no example of any undertaking amongst the most capital-intensive undertakings, such as chemical companies, in the private sector which provides for its capital requirements anything like the proportion out of revenue that is called for by Escom.

Keeping these facts in mind, I should like to examine the potential effect of clause 1 on electricity tariffs. I realize—as the hon. the Minister has said in his Second Reading speech—that this is only an enabling measure, and that tariffs may not be raised to the extent this measure enables them to be raised. However, the fact remains that the hon. the Minister is taking the power to raise tariffs to that extent. That is what this Bill is all about.

Clause 1 empowers Escom to increase from 3% to 6% of the total of unredeemed loans, the amount paid each year into the Reserve Fund and Capital Development Fund taken together. Based on the latest available figures for Escom—the figures as at December 1975— this means increasing the amount which can be paid into these two reserve funds combined, from R65 million to R130 million per annum. To put it in another way, and I think this is the way in which we should look at it, this increase in the percentage contribution to these funds means that Escom will be permitted to contribute not 14,6%, as they are permitted to contribute at present, but they will be permitted to contribute double that, i.e. 29,2% of the cost of electricity to these funds. The House should understand that that is the effect which this legislation is going to have on the price of electricity, viz. that it enables the price of electricity to be as much as 29,2% higher than the cost of the electricity. When one adds the 3% of income—which is covered by the provisions of clause 2 of the Bill—the effect will be to increase the contribution of the cost of electricity to funds out of revenue from 14,6%, what it is at present to 32,2%. That is the inflationary effect of the legislation which is before the House.

Before I draw any conclusion from the figures that I have quoted, I would like to distinguish between the two reserve accounts which are affected by the Bill, i.e. the Reserve Fund and the Capital Development Fund. The purpose of the Reserve Fund is to provide for the replacement of plant, for insurance and for certain exceptional contingencies. We on this side of the House have no objection to building up the Reserve Fund to a level which is necessary to take care of its objects. In fact, I would regard it as absolutely necessary to provide sufficiently for the replacement of worn-out and obsolete plants. That is what the Reserve Fund is there for. But the fact is that the contributions to the Reserve Fund as opposed to the Capital Development Fund are minor. In 1975 the Reserve Fund received only 3% of the contributions, whereas in 1974 the figure was 0,2%. Therefore they barely affect the financial position of Escom in regard to this Bill. In any case, the Reserve Fund as opposed to the Capital Development Fund, is already up to the limit of 7½% of unredeemed loans, which confirms the conclusion that this Bill is aimed at building up the Capital Development Fund and not the Reserve Fund. Much as we on this side of the House appreciate the need for electrical energy, we cannot agree to a measure which means adding 32% to the price of electricity in order to provide capital for the expansion of Escom. I know of no undertaking in the private sector that would attempt to raise capital out of revenue to anything like this extent I consider the contribution which is allowed under the provisions of the existing legislation—which amounts to approximately 14% of revenue—to be quite a high enough contribution to capital expansion. To increase this figure from 14% to 32% is highly inflationary in today’s situation, particularly when one takes account of the sensitive nature of electricity charges in the economy. The Government would be very wise to avoid an increase of this nature, because it is going to have unfortunate effects when the country is already suffering from inflation at the rate of 11,5%. I believe Escom can and must obtain its capital in the market and that it must pay the market price for that capital. This will be cheaper in the long run as far as the consumer is concerned. While electricity is a very important source of energy, I do not regard Escom as a holy cow which can be protected from the disciplines of market forces.

I would now like to come to clause 2. I believe that the establishment of the special fund which is proposed in this clause by surcharging the price of electricity by a further 3% to enable Escom to make special arrangements with individual consumers, is not the correct way to tackle this problem or the situation it is designed to tackle. In effect this proposal will be to levy all electricity consumers with a 3% surcharge so that special arrangements may be made with individual consumers. The hon. the Minister in his Second Reading speech referred particularly to consumers who might be able to contribute to exports. If there is justification for subsidizing the electricity accounts of these particular users—there must be exceptionally strong justification for it if we are going to subsidize any undertaking in this country—then the subsidy must come out of State revenue and not out of the pockets of other electricity users. This is the principle that has already been accepted by this House and that has already been accepted by the Government. One has the case of subsidization of export rail rates, by the hon. the Minister’s own department, to the extent of R19 million in this year’s budget. One already has the case with electricity of subsidization to the extent of R5 million for the refining of base minerals. If it is required to subsidize any other export undertaking in respect of electricity charges, and if the hon. the Minister finds that he is prevented from doing so by section 14, which requires increases and decreases of tariffs to be proportional for all users, then I think it is section 14 of the present Electricity Act that should be amended instead of this clause being introduced. I think it is entirely wrong to levy other users of electricity. It smacks of a surreptitious way of levying a tax, a tax that should be levied on all taxpayers and not only on a particular group of taxpayers. It is also a further inflationary step, in that it further increases the price of electricity by 3% and as such, for the same reasons that I have already advanced, it is a step that should be avoided.

Clause 1 and 2 of this Bill are the important clauses as they are the clauses that really contain the principles of the Bill. As they are clauses that we are unable to support, I regret that we are unable to support the Second Reading of the Bill.

Mr. Speaker, the hon. member for Constantia listed many problems. In his argument, however, he failed to grasp the whole problem and the whole matter. In fact, he came forward with a whole series of popular points of views and highlighted these. He did not see the problem in any way as we on this side of the House see it. In considering the present position, we must realize that capital is one of the scarcest commodities today. I think that if we want to act intelligently, we must utilize our capital as such correctly. We often have arguments from that side of the House that the Government is utilizing the resources of South Africa incorrectly. Then we have the popular cries. For ideological reasons arguments are advanced about the supposedly plentiful supply of labour which we are not utilizing correctly. As far as I am concerned, the hon. member’s argument this afternoon, amounts to no more than adopting a popular standpoint, something which is usual in the case of the Opposition.

Let us look at what the position is. Unless any corporation starts seeing to part of its financing itself, its interest burden as a percentage of its total revenue, will tend to increase. This state of affairs would become progressively worse if new expansions and the replacement of existing capacity have to be financed from loans entered into at relatively high rates of interest. This is the fact of the matter. The result of more self-financing in the public sector will be that the consumer of the public goods and services in question will be held responsible for a larger contribution to the financing of essential capital expenditure. We simply cannot get away from this. The claims on the capital market made by the public sector will thus be reduced. Since we have to contend with high rates of interest in these times, we shall also be diminishing the burden on the domestic capital market in this way. This is a good direction.

It is interesting to know that the International Bank for Reconstruction and Development, which has, amongst other things, granted loans to Escom, recommends by way of guidance that in a developed country, public utility corporations, should be responsible for financing between 40% and 50% of their new capital expenditure from internal funds. In the past the Government and this hon. the Minister have been following an intelligent policy by trying to comply with this very recommendation. The Bank therefore relates the self-financing of public utility enterprises to the degree of development which exists in the economy concerned. When I look at the economy of South Africa, when I look at the contribution of Escom to this economy, at the price at which the private sector was able to buy electricity in the past, I am convinced that Escom was one of the contributors to the development of the vast and strong economy of South Africa. In the case of Escom the demand for electric power is such that these measures, as contained in the Act, are indispensable. Great burdens are laid on Escom. There is a tremendous demand for electricity. If we look at the annual report of Escom, we see what a large demand there is. We cannot escape from the fact that South Africa is a developing country, and that we therefore need electricity. We are already importing electricity. The tariffs of most public corporations and Government enterprises are determined in such a way that they can cover their costs inclusive of provision for depreciation or for the redemption of loans at the original purchase price of the assets or amount of the loan.

This was a very fair standpoint in the past, but in these times it is not sufficient, especially if we bear in mind the higher replacement costs with which we have to contend. Consequently adequate internal funds are not being accumulated. Reputed demands on the capital market have therefore to be made, not only for enlarging the existing capacity, but also for the replacement of existing assets. This is wrong. We cannot accept this as sound economic policy any longer. The present practice is therefore an unjustified shift of the burden of higher prices onto future generations. From an accounting and a wise financial operational point of view, it is therefore a healthy principle to bring about an increase in internal financing in order, amongst other things, to provide for the eventual replacement of existing capacity and capital assets at increased replacement costs. The Franzsen Commission—the hon. member referred to it and therefore he is aware of this— recommended in paragraph 195, page 49, of its report that the share of internal funds as a source of financing the capital expenditures of Government enterprises, should be increased not only that dependence on borrowed funds and the accompanying pressure on interest rates can be reduced, but also that the interest and redemption burden on current revenue can gradually diminish, or at least, not rise so rapidly. Having regard to the fact that the Government is laying down sound, practical financial policy by means of this legislation, we on this side of the House are pleased to support what the hon. the Minister is doing here. We have no alternative. It is good policy based on sound economic principles.

Mr. Speaker, I shall only keep the House a moment. Our view is that this Bill creates the machinery whereby in due course the electricity tariffs can be increased. As has been stated here, this is because Escom can at the present time not raise sufficient overseas funds to meet its requirements. We believe that this is an inflationary method of financing and makes the public pay directly for the policy, literally, of the Government, a policy which has created the lack of confidence which has led to Escom finding itself in the situation in which it now finds itself. The hon. member for Constantia has broadly set out the view of the Opposition. We subscribe to and support that view.

Mr. Speaker, I wonder if I could ask the hon. member for Constantia whether I heard him correctly as saying that the official Opposition intends opposing this Bill at the Second Reading?

That is right.

The reason why I asked is that when the First Reading, Second Reading, Committee Stage and Third Reading of this Bill were taken in the Other Place the official Opposition opposed neither the Second Reading nor the Third Reading. The PRP also did not oppose the Second Reading or the Third Reading.

The left hand does not know what the right hand is doing!

Is your party going to support it?

I shall deal with that in a moment. Mr. Speaker, both the official Opposition and the PRP therefore supported this Bill in the Other Place. The amazing thing is that not so long ago I used to serve as secretary of the economic affairs group of the official Opposition. I know that their economic affairs group consists of both Senators and members of Parliament. How, therefore, the official Opposition can adopt one stand in the Other Place and another in the House of Assembly is beyond me. I do not understand it.

Are you disclosing secrets?

This is an illustration of their joint strategy in which the left hand does not know what the right hand is doing.

We in this party will not oppose the Bill. That is also the sort of decision we would have taken had we still been in the UP.

I am pleased to hear that a commission has been appointed to investigate the affairs of Escom. I hope the hon. the Minister is listening now. We are living in very difficult times, and consumers generally are having a very tough time of it. People are prepared to make sacrifices, but are very unhappy when they read newspaper reports to the effect that Escom is erecting buildings to the value of R24 million. This is an accomplished fact, but I think it is a matter that should also be referred to the commission in order that they may report on the matter to the hon. the Minister. I realize these buildings can be erected by Escom without the authority of the hon. the Minister since Escom is autonomous, but I feel that, seeing that he has set up an investigatory commission, he could very fruitfully ask them to report on this matter. Escom requires R15 billion up to 1985, and it has been indicated that all possible sources will be tapped, including new sources like the Treasury, to find the additional funds required. Sir, we agree that some development capital can still be generated out of Escom’s revenue from the sale of electricity so that Escom can finance a portion of their expansion. The reason is obvious. The growth of our country is dependent on the expansion of Escom and Escom cannot be left vulnerable to the vicissitudes of the local or the overseas capital market. One does not like to see capital projects being tackled out of revenue. That is not a principle which one accepts. But in these times, where it is essential in the interest of the country that Escom expands, one must allow it to use some of its revenue for capital development.

Having said that, we also say that Escom must be encouraged to attack foreign capital markets as far as possible. There are so many calls on the available local funds that it is absolutely essential for Escom, whenever it is possible, to flex its muscles in the overseas capital markets. The hon. the Minister said in the Other Place that over the full period the added costs to the consumer would be 14% if the maximum of 6% was applied. I would like the hon. the Minister to give us some idea of what the percentage increase to the consumer is estimated to be for each year up to 1985. Escom has estimated its capital requirements up to 1985 at 15 billion dollars. It must have planned its expenditure for each year up to 1985, and at the same time it must have calculated its estimated sources of revenue for each of these years. Therefore it should be possible for the hon. the Minister to give the consumer some idea of what they may be in for. The cost of living of all South Africans will of necessity rise when the Escom tariff increases are put into effect. In order to avoid the increased cost of living the Government must do everything in its power to raise the standard of living of all South Africans so that they can afford these increases when they are put into effect.

As I have said, we shall not oppose this Bill.

Mr. Speaker, with reference to the comments made by the hon. member for Walmer, I want to say that we in the UP have a convention in our caucus and our group committees that we do not, after having taken decisions, band them across the floor of the House.

Why? Are you ashamed of your decisions?

That the hon. member was a member of our committee does not stand to his credit in the light of the comments which he has just made. He will even live to regret it when he has tested public opinion.

The hon. member for Constantia has made the viewpoint of this side of the House clear. We accept that in the Other Place our party Senators voted for the Second Reading of the Bill, but if hon. members will take the trouble to read their speeches, they will see that our members had extreme reservations during all the stages of the Bill. One must realize that in South Africa our homes are heated, but not by using oil energy as is the case throughout Europe and throughout the rest of the civilized world.

We are dependent upon electricity, an item which plays a far greater part in our standard of living and in our cost of living than does oil. It happens that we live in a country with coal resources which are among the cheapest and the greatest in the world. We believe that the consumer as such has been taxed to such an extent at this stage that this is the last straw which will break the camel’s back. Any threat of the result of this Bill leading, as the hon. the Minister has been candid enough to indicate, to an increase in electricity tariffs, is just not acceptable. Clauses 1 and 2 of the Bill, as indicated by the hon. member for Constantia, will lead to a theoretical increase of up to 32,5%. We cannot accept this. We believe that the market disciplines must apply to Escom as they apply to other State corporations. We do not agree with the Franzsen Commission’s recommendation that in the present era we should contribute up to 50% of the capital requirements necessary to subsidize the future. We shall therefore vote against the Bill.

Mr. Speaker, before making a few general remarks relating to the issue of energy, I want to express my amazement at the behaviour of hon. members of the official Opposition and the hon. member for Sandton. This legislation was originally introduced in the Other Place and although hon. Senators on the Opposition side were naturally critical of an increase in electricity tariffs—just as was the case with hon. Senators on the Government side in fact—they nevertheless reported the legislation in all its stages. Moreover, the hon. Senator Bozas, who was really the chief spokesman on the subject, said that if I had furnished more information initially …

Mr. Speaker, on a point of order: With reference to Standing Order No. 131, is it in order for an hon. member to refer to a debate which took place in the Other Place?

Yes, he may discuss your sin if he so wishes. [Interjections.]

Order! Speeches made by hon. Ministers in the Other Place may in fact be quoted here. However, speeches made by hon. Senators in the Other Place may not be quoted here, but a factual rendition of what took place in the Other Place, appears to me to be relevant in this case.

Mr. Speaker, may I address you on the same point of order?

I shall not allow a general discussion. However, I shall still allow the hon. member for East London City to say something in this regard.

Mr. Speaker, I understood you to say that you would allow a general discussion in regard to that debate. However, I cannot read that in the particular Standing Order. Standing Order No. 131 reads as follows—

If I apply this particular Standing Order strictly, it will make proper discussion in Parliament as a whole absolutely impossible. For that reason I am prepared to allow a resumé to be given of what actually happened in the Other Place. Various parties have supported various Bills. I cannot see that this is not in order. I have given my ruling.

*The hon. the Minister may proceed.

Mr. Speaker, it amazes me that hon. members are now trying to make use of a technical point to cover up their sins. [Interjections.]

I should have done the same! [Interjections.]

I really do think that with the way our party system functions, one could surely be justified in expecting that the standpoints which hon. members in one of the Houses of Parliament adopt, ought to correspond with the standpoints which they adopt in the other House. Now I am wondering where the error crept in. Was it in the Other Place, or here?

I want to repeat what happened there. What the standpoint of the hon. Senator Bozas amounted to—after I had furnished him with more information—was that if I had furnished him with all the information initially, he would not have been critical of the legislation. Furthermore, this is on record. That is why I am amazed to encounter this phenomenon here. It amazes me that it is now apparently felt in the ranks of the official Opposition and of the PRP that it no longer matters who adopts what standpoint where. I am therefore not surprised that they are in their present divided state; so divided that they are apparently going to disband as a party before the end of this month.

Mr. Speaker, may I ask the hon. the Minister whether he intends to deal with this matter on an economic basis instead of on a political basis? [Interjections.]

Mr. Speaker, my reply to the hon. member for Jeppe is that I think there is a tremendous need on their part to be economical with their members, because their numbers are continually diminishing. I want to repeat that this sort of action is not in accordance with parliamentary usage and conventions as we know them. We are used to parties adopting a standpoint, but not to the standpoint depending on where, in which House of Parliament—the upper house or the lower house—the members concerned have a seat. That is why I am wondering what has happened since then. The UP and the PRP are at present holding discussions with each other and I wonder whether or not it was on the agenda for them to take a decision as to what they should do as regards this legislation. It seems to me that they have at least managed to adopt a common standpoint here in relation to this legislation.

They are going to support it in the Third Reading.

The hon. the Prime Minister says that they will probably support the Third Reading of the Bill. [Interjections.] I have an idea that they are going to increase the contribution during the Committee Stage. It simply depends on whom they are going to consult after the House has adjourned.

Let us consider the standpoint of the hon. member for Constantia. The hon. member is a businessman and an economist and it is very clear that his argument is without foundation after he made an analysis of Iscor’s operating statements. He argues that no private concern would allow capital formation from revenue to the extent I am proposing.

To that extent.

Yes, I say to the extent I am proposing. I wonder whether the hon. member would concede that there is a difference between Escom and a private undertaking. I wonder whether he would concede that the first principle of Escom is contained in the Electricity Supply Act, namely that Escom has no profit motive whatsoever. Escom’s Enabling Act provides that it may not work at either a profit or a loss. The hon. member does not tell us that, however.

Secondly, I want to tell the hon. member that if he had analysed Escom’s financial statements, as one would have expected from someone who wants to make a meaningful contribution to a debate of this nature, he would have seen that unlike the case of a private company, no provision is made in the statements for the depreciation of capital assets. The hon. member ought to know, even if he does not, that the percentage cost increases in respect of Escom’s capital goods requirements are most probably the highest of all. Secondly, the hon. member knows that in contrast to the Railways and the Post Office, Escom’s equipment is far more independent of foreign sources.

Purely for argument’s sake, if Escom were to allow for a depreciation of only 10% per annum in its operating account, this would mean that taking the present assets into consideration, R189 million would be written off annually. If one looks at what the increased levy would entail during this particular year, one finds that it is less than R189 million. The hon. member wants to equate Escom with a private undertaking. How would a private undertaking make provision for depreciation other than by way of prices? Which product of Escom has a tariff or a stipulated price? What does Escom sell?

You are talking nonsense.

I am not talking nonsense. That hon. member has been talking nonsense the whole afternoon.

Or their Senators. [Interjections.]

Yes, he can make his choice.

We will deal with it in the Committee Stage.

We shall naturally also deal with it at Third Reading.

*For the purposes of calculating their profits, a business concern would allow for a depreciation and recover it from the prices of their products. What does the hon. member say, however? Never before have I heard such nonsensical arguments.

In the first place, he is advocating that Escom expand, and that consequently, Escom must find the funds to do this. I now want to ask him whether he agrees with the principle that Escom is entitled to derive a portion of its capital requirements from a development fund which it will collect from tariffs? The hon. member must not sit and read from the Act now. I am asking him a question now. Is he completely against the principle that Escom should recover its capital requirements from tariffs?

I have already said that we would agree to the existing position when it is allowed that 14% of revenue can be used for capital requirements.

Why does the hon. member only agree to the existing position? Which principle is involved?

One has to put the limit somewhere.

Oh, I see. So one has to put the limit somewhere. That limit differs whether you are here or in the Senate?

*What is the actual position? If the hon. member did not know, he could have asked someone who did. Escom’s compulsory capital requirements from this year up to 1985 amount to R14 979 million, a large portion of which will go towards repayments in terms of existing arrangements. If the maximum in terms of this enabling provision—if the House were to accept it—is levied, it will mean that over that period, up to 1985, if the interest earned is included, an amount of R6 166 million will be collected, whilst the total obligation will amount to almost R15 000 million. Now the hon. member is arguing with me about whether Escom needs the funds. I must accept, therefore, that the basis of his argument is that Escom does in fact need them but that he is arguing about the sources from which they should come. The hon. member is nodding affirmatively.

At the moment there are three sources. The first is the foreign capital market from which Escom may borrow money. Secondly, it may borrow money on the domestic money market. Thirdly, there is the Reserve Fund for which section 13 of the Act makes provision.

If the hon. member wants to argue with me against this Bill and against the quantum of the Capital Development Fund, I must arrive at the logical conclusion that he thinks that those sources to which I have referred, are adequate. I now want to ask him what evidence he has that they are adequate. I have explained to the hon. member that on the basis of the original assumptions of 1970, which are contained in the 1971 legislation, it was estimated that if 3% of the unredeemed debts were to be recovered every year, it would be possible for Escom to generate 49% of its capital requirements by itself within ten years. I think I am correct in saying that. I also pointed out, however, that at the end of last year the fund stood at R181,9 million. If one compares this to its obligations it is an insignificant figure. However, the hon. member could in fact have criticized this side of the House by saying that it was possible that we were introducing the proposal too late. He could have said that we were experiencing difficult circumstances and it would have been better to have done it whilst the business cycle was at a higher level.

Let us look at the picture realistically. There is no argument about the need for capital. No hon. member is asking Escom to limit its activities or cut back on its plans for expansion. Escom is continually being overwhelmed with representations to expand its services and capital expenditure in order to provide for what are often essential needs. I want to ask the hon. member which economic objective is more important: to provide the country with power on a reasonable basis to ensure economic development or, in isolation, to keep tariffs low and have no expansion of capacity? Secondly, I want to ask the hon. member whether he is satisfied that it is possible to find amounts of the order to which I have referred, from the one source he is advocating, namely loan capital? It is no secret—in fact, we have debated it for two days—that it is chiefly external political and economic causes that have had a detrimental effect on the flow of capital to South Africa. I am sure that in his usual simplistic manner, the hon. member is going to do what he did yesterday and what the hon. member for Sandton also did, viz. say that the inadequate flow of capital is due to the Government’s policy.

That was a stupid argument of his.

It was not only a stupid argument; it was also a nonsensical argument. If that were true, then the hon. member opposite must also argue that we ought to bring our domestic policy into line with the demands of the outside world. Surely that is the only logical conclusion one can draw.

No, that is not true.

The hon. member says it is not true.

We can find a solution ourselves.

That is not what we are arguing about. The hon. member apparently does not understand Afrikaans. I said that if the hon. member was arguing that our domestic policy alone was the cause …

It is not the only cause.

Then the hon. member must say how many of our problems are due to it. Perhaps he should go once again and ask Senator Bozas in the Other Place what the policy should be. Hon. members are arguing, therefore, that the reduced flow of capital is due to our domestic policy. Surely all this means is that if we want the flow of capital to pick up again, we must bring our domestic policy into line with the wishes of the outside world. Surely there is no other logical conclusion.

Into line with the policy of the Opposition.

The hon. member says it must be in line with the policy of the Opposition but the Opposition truly does not even have a policy as regards the supply of power. How, then, can they have a policy relating to politics? That party’s lifetime only extends up to 27 June this year. I now want to put an end to this sophistry for once and for all. The friendliest gesture in that regard would be to bring our policy in line with that of the Western world, as the hon. member for Constantia asked yesterday. But the hon.member knows full well what the demands of the Western world are. Not even the PRP is prepared to do it. We are not prepared to allow other countries to prescribe formulas to South Africa for the abdication of the people of this country.

We agree with you in that regard.

Is the hon. member sure he is allowed to say that? Will it not get him into trouble with his people in the Other Place?

I now want to disillusion the hon. member for Constantia by pointing out to him that it is not possible now to find all the amounts that are required by Escom and other institutions. This is not due solely to political considerations. After all, the hon. member for Constantia is an economist. Does he not know there is an oil crisis? Does he not know about the recessionary conditions that prevailed for two years in Europe when there was a negative growth rate? Does the hon. member not know that according to estimates, the capacity for capital formation of those countries has been reduced to 40% of their original capacity and that apart from political considerations, the capital available for loans and investments in other countries has accordingly been reduced? I now want to ask the hon. member a very pertinent question: Does he want us to place Escom in a position in which it will not be able to fulfil its obligations? I should like the hon. member to answer me. I am including Escom’s obligations towards foreign countries. It is very easy to come to this House with arithmetical exercises, but the time has come for hon. members and that hon. member in particular to become aware of the realities we are working with so that his contributions will not be theoretical flights of fancy, but will take account of the practical situation and of what we have to live with.

It is true, of course, that increases in the price of electricity are a sensitive matter. But in that regard, I want to ask the hon. member: Is it not a fact that despite everything, our tariffs for power are still among the lowest in the world?

That is no argument.

The hon. member says that that is no argument. But he lives in a vacuum and his arguments are completely unrelated to the facts.

He is merely logical. [Interjections.]

If the hon. member would look for a moment at the hon. member sitting behind him, he would see that they do not even believe him, not even the hon. member for Constantia.

For the information of the hon. member for Walmer, I want to say that I requested Escom to limit its capital requirements to a minimum and not to take on any new capital obligations before I personally had approved them. I went further and, with the approval of the commissioners of Escom, I ordered an investigation by Dr. Du Plessis of the Reserve Bank into Escom’s financial position. That is not to imply that there is anything wrong with them. It was done for no other reason than to ensure that there is an external assessment of Escom’s finances as well. I think it is my duty to do this. I have no doubts about what the result of the investigation will be, but I have not neglected my duty; not in any way. The hon. member for Constantia tried to make a calculation as regards revenue for investment. But he compared things that cannot be compared and built up an argument that had no substance whatsoever. I want to ask him a question. Does the hon. member know that as far as the Railways are concerned, as regards a large proportion of the traffic it carries, there is no relationship between costs and tariffs? Secondly, I want to ask him: Does he know how much of the Railway’s capital requirements compared to those of Escom can be provided by domestic sources? I also want to tell the hon. member that if the maximum of 6% were to be levied, the tariff increase on the basis of the present tariff structure would amount to 14%. I should like to study the hon. member’s calculation of 32%. I cannot comment on it at this stage, because I do not know how he calculated it. Since I have clearly impressed upon Escom the need for efficiency and good financial and other forms of management, as well as the need to spend capital with circumspection in the times we are living in, the hon. members must also bear in mind that I have to ensure that power is in fact provided and that Escom’s capital requirements are satisfied so that it can honour its obligations. It is not a popular thing to do to increase tariffs under the present circumstances. I know that it will have an effect on the inflation rate and on the consumer price index. At the same time I said yesterday that the increase in the inflation rate during the first quarter of this year was attributable, inter alia, to the increase in administered prices as well. I included Escom. Therefore, the hon. member has not made a discovery in this particular regard.

I want to thank the hon. member for Heilbron for his contribution. I want to say at once, and by doing so, reply to those other hon. members who also referred to this, that a powerful plea has been made for the provision of power to our rural districts. Moreover, a plea was made for “economic” tariffs for the rural districts, which can only mean that the tariffs have to be lower than the cost of providing the power. Although I have sympathy with my friends in the country districts—there are many things they have to do without—I have to look at the problem in the light of the very problems we are discussing today. That is why hon. members will understand my problems. I do not believe there is a more difficult task for me than to increase power tariffs, because I know that I am affecting every household directly and indirectly by so doing. However, if I am to discharge my responsibilities properly, then in general, the interests of the country as a whole supersede those of particular groups. The hon. member will understand that.

Having said that, I also want to say that as regards the tariff structure of Escom and the continual pleas, justified or unjustified, that we should have a uniform structure, once again I did not leave the matter there, but issued a specific directive to the Board of Commerce and Industries to investigate the price structure of Escom with regard, too, to this particular facet of it. I want to say at once—and this holds true for the hon. member for King William’s Town, the hon. member for Albany and all the other hon. members as well—that the principle at the moment is that every undertaking should pay its own way. That is why there are differentiated tariffs. Like other hon. members, I am looking forward to the report of the Board of Commerce and Industries in that particular regard. Hon. members will remember, however, that I also announced that we shall also have to investigate the prices of another source of energy, namely that of fuel, because those prices are also differentiated according to the distance between the source and the market.

There is a final argument to which I want to react and with that I shall conclude. The hon. member for Constantia and other hon. members as well, have made mention of the levy which may be authorized to provide for a fund which would enable Escom to enter into long-term contracts for the supply of power. The hon. member argued once again that if it appeared necessary—he did not argue about the possibility of its being necessary—the necessary money could come from the State Revenue Account. But if we do that, he will argue that taxes are too high. Our modus operandi is wholly in line with what happens in other countries. The electricity generating bodies in all countries may enter into longterm contracts which entail benefits for the consumers of power, benefits such as the creation of employment opportunities and the raising of standards of living. My problem is that the hon, members argue about everything in isolation. When they are arguing about unemployment, it is my responsibility, but if we want to create investment opportunities, they say “No, we must do it another way”. They want to have the best of both worlds. Mr. Speaker, I shall deal more fully with the entire energy position during the Third Reading.

Question put,

Upon which the House divided:

Ayes—88: Aronson, T.; Badenhorst, P. J.; Ballot, G. C.; Bodenstein, P.; Botha, G.F.; Botha, J. C. G.; Botha, L. J.; Botha, M. C.; Botma, M. C; Coetsee, H. J.; Coetzee, S. F.; Conradie, F. D.; Cronje, P.; Cruywagen, W. A.; Deacon, W. H. D.; De Beer, S. J.; De Klerk, F. W.; De Villiers, D. J.; De Villiers, J. D.; Du Plessis, B. J.; Du Plessis, G. F. C.; Du Plessis, P. T. C.; Du Toit, J. P.; Greeff, J. W.; Grobler, M. S. F.; Hartzenberg, F.; Hayward, S. A. S.; Herman, F.; Heunis, J. C.; Hickman, T.; Hoon, J. H.; Janson, J.; Janson, T. N. H.; Kotzé, G. J.; Kotzé, W. D.; Langley, T.; Le Grange, L.; Le Roux, F. J. (Brakpan); Le Roux, F. J. (Hercules); Le Roux, Z. P.; Ligthelm, C. J.; Ligthelm, N. W.; Malan, G. F.; Malan, W. C.; Maree, G. de K.; Meyer, P. H.; Morrison, G. de V.; Mouton, C. J.; Mulder, C. P.; Nel, D. J. L.; Nothnagel, A. E.; Palm, P. D.; Potgieter, J. E.; Potgieter, S. P.; Raubenheimer, A. J.; Reyneke, J. P. A.; Schoeman, J. C. B.; Scott, D. B.; Simkin, C. H. W.; Smit, H. H.; Steyn, D. W.; Steyn, S. J. M.; Streicher, D. M.; Swanepoel, K. D.; Terblanche, G. P. D.; Treurnicht, A. P.; Ungerer, J. H. B.; Van den Heever, S. A.; Van der Merwe, H. D. K.; Van der Spuy, S. J. H.; Van der Walt, A. T.; Van der Walt, H. J. D.; Van der Watt, L.; Van Heerden, R. F.; Van Tonder, J. A.; Van Wyk, A. C.; Van Zyl, J. J. B.; Venter, A. A.; Viljoen, P. J. van B.; Vilonel, J. J.; Vlok, A. J.; Vorster, B. J.; Vosloo, W. L.; Wiley, J. W. E.

Tellers: J. P. C. le Roux, P. C. Roux, A. van Breda and W. L. van der Merwe.

Noes—21: Basson, J. D. du P.; Baxter, D. D.; Bell, H. G. H.; Dalling, D. J.; De Villiers, I. F. A.; De Villiers, J. I.; De Villiers, R. M.; Eglin, C. W.; Hughes, T. G.; Jacobs, G. F.; Lorimer, R. J.; Miller, H.; Murray, L. G.; Oldfield, G. N.; Olivier, N. J. J.; Pitman, S. A.; Slabbert, F. van Z.; Van Hoogstraten, H. A.; Wainwright, C. J. S.

Tellers: E. L. Fisher and W. G. Kingwill.

Question agreed to.

Bill read a Second Time.