Mr. Chairman, I should now like to reply to the debate as it proceeded yesterday. I take it that we have reached the end of the debate on this specific Vote, and therefore I shall reply seriatim to the hon. members, as the questions were put to me since I am now, finally, adopting a summarizing standpoint.

I want to begin with the hon. member for Durban Central, who raised the question of the two Zulu areas in the vicinity of Pietermaritzburg. Regular talks in that connection are still taking place. He said that sound cooperation between the city councils and the administration boards was lacking. The Deputy Minister has already replied to that, but I just want to add as an example to the hon. member that more talks were held a short while ago on the settlement of Blacks from Marian Hill in that area. He referred to the two areas where development is going to take place. The 1978-’79 estimates make provision for an amount of R2,5 million for QuaNgendesi and R1,5 million in respect of QuaNdebeka. Six hundred houses have already been completed, and have been occupied. There are three schools available, as well as all the necessary services. 4 100 plots are available for development there. In this respect the administration board acts as an agent for the department. Therefore I want to say at once that I do not think that there is any justification for the complaint that the necessary development is not taking place there.

The hon. member for Pietersburg, naturally, made a good speech on an area which he knows very well, viz. the Lebowa homeland. In respect of that homeland he pointed out to us that, politically and otherwise, the homeland policy is a success. To substantiate what he said he referred to the fact that so many members of the homeland population who are still living in Johannesburg and other areas, were participating actively in elections and were being elected. I think that proves conclusively that these people are making use of the political resources which are being made available to them.

The hon. member for Geduld referred to the question of community councils and said that a corps of leaders would be created in this way, to whom powers to manage their own affairs could be entrusted. I have already announced that it is my standpoint and policy that we shall in due course transfer powers to the community councils on a local government level. As soon as such a community council has been established, the powers pertaining to the first phase of local government are transferred to it. The Vaal Triangle area is at present at that stage. The powers which are being transferred in this way, are being exercised to the full by them in their own interests and in respect of their own people. As I have stated before, such powers include aspects such as a voice, a say and the final decision on that part of the estimates which are allotted to them and over which they have control. In the case of the Vaal Triangle area the amount on which they themselves were able to take decisions, was R27 million. What is also involved here is the allocation of houses, the question of housing in general, the question of the raising of tariffs, house rentals, etc. These matters are already being controlled with great ease and satisfaction by certain of these councils. The other stages which follow, in other words stages 2, 3 and 4, are in due course transferred to them. It is my premise and my policy—let there be no illusions about this— that these councils may ultimately receive total autonomy over local government matters. That is what I am aiming at and that is what I eventually want to do. These are real powers which they are receiving. They are going to receive sufficient potency, if that is what hon. members want to know. They are even going to govern their own cities, as any other city council does. This is my policy and I shall implement it step by step. I ask hon. member please to exercise a little patience in regard to the precise details and wait until I announce my five-year plan. This aspect forms a major component of the five-year plan and will be spelt out in detail in that plan. Consequently I am not going to announce that aspect now. Hon. members will have to wait until I announce my five-year plan. I hope to be able to do so soon. But then, I may as well discuss the five-year plan now.

When I accepted this position, I announced that I was going to draw up a five-year plan for the urban Blacks. I immediately indicated certain areas which I had caused to be investigated, areas in which I thought there were problems that had to be solved. I immediately instructed a large number of the officials of my department, the Commission and other experts to carry out certain investigations and to make reports available to me. I have already held two or three discussions on the entire matter, and I have also made further inquiries, because I do not want to announce a plan which hangs in the air. I want to announce a plan which can be implemented in practice, and in order to know that I will be able to implement it in practice I must carry out certain research so that I may be certain that it can be converted into practical action. It is not going to consist of words only. It is going to be converted into deeds. For that reason there is quite a lot of preparatory work to be done before I can announce the final plan. I hope to be able to do so within a reasonable period of time, and then, immediately afterwards, to take action in terms of it. This is how matters stand in connection with the five-year plan.

The hon. member for Sandton spoke about Alexandra. The Deputy Minister has already furnished a partial reply to that. The interesting aspect in connection with Alexandra is that it is the one area where the Black people own land at present. They have owned land there ever since the days of the old Transvaal Republic. Hon. members complained about the slum conditions there, but this is the one place where the Black people themselves own land and that is what things look like there at present. However, we are in the process of buying back the land. A total of 2 533 plots have already been bought back, and 515 have still to be purchased in order to recover all the land. Alexandra has already been replanned to accommodate between 25 000 and 30 000 single persons, with ample provision for open spaces, sports facilities and full community amenities.

But no families.

A total of 2 624 hostels for men and 2 800 hostels for women have already been provided at a cost of R3 million, and considerably more are being planned. [Interjections.]

Order!

It seems to me the hon. member is upset. In that specific area they will be established on a single basis. We have numerous other places where they can be established on a married basis. In that area, however, they are being established on a single basis.

But they are not single people. They are all married people.

The married people must be established in the other places. [Interjections.] I just want to tell the hon. member for Sandton that I listened to his standpoint. He also informed me in private of certain offers that had been made. I shall content myself by saying that I shall follow up the offers and give my personal attention to Sandton.

The hon. member for Kuruman made out a clear case in connection with his area, the North Western Cape. He conveyed his thanks to the commission as well as to the Deputy Minister, for the visits which they paid there and for the planning which is being done on a regional basis. Let me tell him at once—I want to make this clear—that I believe firmly—and this shall be my policy as long as I occupy this position—in causing development to take place in the homelands as far as is practicable. Where they are in any way within attainable distance we shall cause development to take place in the homelands and convey people to their work and back on a daily basis by means of commuter services. That is my point of departure, and I shall implement it as long as I occupy this position. We have caused research to be carried out—it has also been established internationally— that a journey of an hour and a half per day is not unfair. In the great cities of the world, this is not unfair. It also depends on what form of transportation is used. One can then work out what distance can be covered in an hour and a half. This means that one can develop residential areas for Black people on a family basis in nearby homelands at the same cost at which they can be developed in the White area. Workers can then be conveyed to their work and back on a daily basis. That matter will therefore be investigated. It can work in any part of the world and in South Africa as well. That, therefore, is my point of departure, and I shall apply it in this area. I shall continue on that basis.

Will it be a journey of three-quarters of an hour in each direction?

The international standard is an hour and a half in each direction.

Three hours per day, therefore?

Yes, three hours per day. That is the international standard. It has been established that in the heavy traffic of today a great many people need an hour and a half to get to work.

Perhaps in New York.

I am referring to New York, Washington, Tokyo and other places. Let us be realistic.

Yes, let us be realistic!

That is precisely how I am going to act. I am going to be realistic. If one is able to provide an express train service from certain parts of the Rand, certain homelands can be reached within an hour and a half. In any event, an express train provides a completely relaxed and comfortable journey. One does not sit behind the wheel of a motor-car but peacefully travels back and forth every day in a train. A great many people normally do this in any case, of their own free choice. We shall go into that method. Our policy will be implemented, and not the policy of the hon. members opposite. They must please accept this.

Mr. Chairman, may I ask the hon. the Minister whether he is going to adopt a policy of subsidization of fares in instances of that nature?

Not necessarily. It is a matter which can be investigated. However, it need not necessarily be done. There are many other ways in which this can be done. We are giving attention to the matter. I am merely laying down the principle that people will as far as possible be established in the homelands and taken to work on a commuter service basis.

That is unnecessary and a waste of money.

This must be clear. As long as I occupy this position, this will be my point of departure. [Interjections.] The hon. members opposite can make as much noise as they like; these are the facts.

I want to turn briefly to the hon. member for Marico and thank him for the absolutely clear standpoint which he stated in respect of the meaningful consolidation and also the inclusion of White farms without buying them out. I want to tell him at once, as I said the other day already, that I endorse both those standpoints. I therefore want to thank him for his contribution on behalf of his constituency.

Then there are one or two thoughts which I wish to express in reply to the speech made by the hon. member for East London North. These relate to the development of his area. The border area of Berlin has been created in a special attempt to provide work in the specific vicinity of East London North. I have certain statistics available.

†Developments by the Industrial Development Corporation alone in that area provide jobs in East London for 6 326 people and in Berlin for 575 people at the moment. The investment of the IDC only in the East London area amounts to R38,4 million and in Berlin to R5,5 million. According to my information private investment in East London amounts to R43,2 million and in Berlin to R9,7 million. In other words, we are doing our utmost to create circumstances in which these people will be given employment. However, the fact must not be lost sight of that as a result of the present economic climate, the development is not as satisfactory as we should like it to be. That is one of the reasons why we have problems in that area.

*The hon. member for Cape Town Gardens made a very constructive contribution, a contribution which was also historically and scientifically justified. He is a member to whom one always listens gladly when it comes to the philosophic concepts of our party. I want to thank him for a splendid, positive contribution.

The hon. the Deputy Minister of Plural Relations and of Education and Training discussed the question of research. He put three questions: Greater co-ordination, concentration on practical requirements and the research projects which should be allocated to Black researchers. My reply to all three questions in principle is “yes”. He even got in a fourth question during injury time. It dealt with a little more money. Therefore I am also replying in injury time, and I say “yes”. We shall do our best.

Must he discuss these things here in open House?

We prefer to discuss matters in this House. It makes for far greater clarity, and in any case this is a responsible House.

It does not look like one. [Interjections.]

Mr. Chairman, I do not begrudge those hon. members their modicum of pleasure, for they get so little pleasure out of politics. Therefore I say that they are entirely welcome to this modicum of pleasure. They have been in the political wilderness for so many years—ever since they came here—that they are more than welcome to this modicum of pleasure.

I should like to say a few things to the hon. member for Hillbrow in connection with the speech he made yesterday. Firstly he discussed the possibility of the development of a White business centre just beyond the borders of Soweto, a White area over which my department has no control, as the hon. member himself pointed out. I want to assure him that I do not like developments of this kind. I shall oppose it. I shall do everything in my power to prevent it from taking place, for the sake of the Black people of Soweto. I think that that capital could be utilized in a different way on behalf of the people of Soweto, rather than to spend it on that scheme. Therefore I am ad idem with him on this matter. I am not in favour of the development of White areas on the borders of Black areas so that all the benefits which the Blacks represent can be siphoned out without giving them anything in return. That is why I am opposed to this, and I shall speak to my colleague to see whether we cannot block this development. It is not my province, because I do not have any control over the land at present. In addition I do not have the money at my disposal to buy out that area for that specific purpose.

All that is necessary is to declare a group area.

We shall consider the necessary steps in this connection. The hon. member spoke primarily about the trading rights of the Black man in Black areas. However, I want to ask him to exercise a little patience in this sphere. Trading rights and the expansion of such rights and privileges are one of the matters to which specific attention is being given in the five-year plan. Negotiations with various organizations are in progress. Talks are being held with the Black chamber of commerce. I have already held talks with them, and I shall hold talks with them again. In this way we shall eventually be able to reach an agreement in connection with precisely what is feasible and what is not. I shall announce this in my five-year plan. But I just want to say—because I think it is necessary for us to take cognizance of this—that we should not underestimate the financial potential of Soweto. I am referring specifically to Soweto now because that hon. member discussed this area. According to our information the buying power in Soweto amounts to R650 million per annum. This is not to be scorned. I think it can support a considerable number of business concerns. In fact, the Black chamber of commerce has already pooled its resources and formed the “Black Chain” company and they intend to establish Black supermarkets. This meets with my approval, and I shall encourage it as far as possible so that they can do their shopping in their own city and in this way manage their own affairs.

Is that amount the buying power of Soweto apart from the rentals and transportation costs?

I said that R650 million is the aggregate earnings in Soweto for the year. That is therefore the buying power. However, I shall establish precisely what this figure entails. This is the figure which was given to me.

After that we had two good speeches from this side of the House. Usually all the speeches on our side of the House are good. The one was the speech made by the hon. member for Innesdal. I definitely took full cognizance of what he said. I am in complete agreement with him that a danger arises when a depressed area, or a poor area adjoins a wealthy area. It is logical that it could lead to friction, conflict and to the desire to be in the more favourable position on the part of any person—irrespective of his colour. Hence my standpoint throughout that the position of the Black man in his own area should be improved and that his cities should eventually be just as attractive according to his needs as those of the Whites are according to theirs. Hence my premise that those cities should be improved, that all amenities should be made available there so that those people can have their own attractions in their own area, which occupy them and which satisfy all their needs there. To my mind that is the ideal situation. That is my premise, and I shall proceed on that basis.

Next there is the question of the Blacks living in White residential areas. Once again we have a problem here. It is true that there is a concentration of Blacks in White areas and that this is causing certain problems in many of our towns. I am also going to give this aspect my personal attention. But it is not an easy aspect to deal with. The Black man is there because he is employed by the Whites, and this is what creates the problem in practice. Sometimes there are wonderful ideals among some people who believe in the idea of “White by night”. If our Whites are prepared to make more sacrifices, this will be feasible in practice.

They should make their own coffee.

Yes, it will mean that one will have to make one’s own coffee in the mornings.

I have a cup of coffee every morning.

The hon. member for Houghton says that she has a cup of coffee every morning. She can make her own coffee and wash the dishes herself in the evenings …

Does she drink black or white coffee?

Yes, I wonder whether it is black or white coffee. Perhaps it is mixed?

But always sweet. [Interjections.]

The hon. the Minister of course drinks plural coffee! [Interjections.]

The ultimate question is of course whether those sacrifices will be made. If those sacrifices are made, our cities can become White. There is no doubt about that. However, it is a question on which each individual will have to reach a final decision in his own mind.

I want to thank the hon. member for Eshowe for his speech which dealt in particular with the buying power of the Black people in general. He spoke about the country-wide buying power of the Black people and the millions of rands earned by them. He pointed out that we should always take their buying power into account and do our planning accordingly. He made a very positive contribution and I thank him for having made a study of this matter.

I come next to the requests made by the hon. member for Pinelands concerning the Western Cape area. He asked me whether it was my policy that the 99-year leasehold system should not be applicable in the Cape. I shall reply to this immediately: It is the policy of the party and I shall so implement it.

Will you consider it?

It is the policy of the party and I shall so implement it.

You will therefore not consider it?

I say: It is the policy of the party and I shall so implement it.

But your policy is changing all the time.

If the policy of my party should change, I shall implement it in a different way. Whatever the policy of my party is, I shall implement. [Interjections.] To that I wish to add that surely hon. members are aware that the Erica Theron Commission also recommended this. The Erica Theron Commission, which they are so fond of supporting, also recommended this. I also want to say that to the question of whether the Western Cape is a preferential area for the Brown man I reply very definitely: Yes, it is. I ask in all fairness: If the Western Cape is not a preferential area for the Brown man, where else in South Africa is there then a preferential area for the Brown man?

They do not want it. [Interjections.]

Order!

The case which the hon. member made out was that there have been Black people here since the earliest times.

Yes.

I concede that, but they were here in small numbers. Moreover, it should be mentioned that in reality the Brown man had his basis here from the beginning. If I have to judge on historical grounds, therefore, I say that the Brown man has a far greater claim to be here than the Black man. Am I correct?

That is correct.

As a result of that I say it is my standpoint that this should be a preferential area for the Brown man. In addition, it should remain a preferential area for the Brown man because it is the only area in the entire South Africa which can be a preferential area for the Brown man. If that were not our point of departure, we would be doing the Brown man an injustice. Therefore it is my premise that as long as this is the policy of my party, I shall implement it. It is my task as the responsible Minister, and I shall not allow myself to be sidetracked.

The hon. member for Pinelands also put other questions to me. He wanted to know, inter alia, whether I would bend the laws of the economy. I say that I shall implement our policy. Our policy is not incapable of implementation within the laws of the economy. The hon. member who adopts as his standpoint equality between people, simultaneously adopts the standpoint that certain work cannot be done by the Brown man. If he adopts such a standpoint, he is casting a reflection on the Brown man.

No, I did not say that.

That is the reflection, or insinuation. He said the laws of the economy should be bent. Does he now want to tell me that there is certain work which a Brown man cannot do and which only a Black man can do?

Yes, of course.

Then it is a reflection on the potential of the Brown man, and what about the equality of people which that hon. member has so much to say about every day? Why does he have so much to say about it then? I say that the Western Cape is historically a preferential area for the Brown people. If I were to accept the policy of that party that all people are equal and that all people should be given equal opportunities, I must say that the Brown man is capable of performing all tasks in his preferential area. I must create the opportunity for him to be able to perform such tasks.

Mr. Chairman, may I ask the hon. the Minister a question? Before doing that, I should like to clarify my major point…

You cannot make a speech now.

Order! The hon. member is only allowed to put a question.

Yes, Sir, I want to put it in the form of a question in order to clarify my major point. If there are no Coloured people available to do a job in the Western Cape and therefore the only people available will be Blacks …

Why are they not available?

Order!

I apologize, Sir. However, I must point out that I was merely making an interjection. [Interjections.]

Will the hon. the Minister concede—this point has been made earlier—that there are specific occasions where, despite the fact that employers have advertised and have tried to secure Coloured labour, they have not been successful. Following that, because they have now to employ Blacks, is the hon. the Minister telling me that he is prepared to allow Blacks to be employed, but is not prepared to give them the benefits of decent housing, decent facilities and decent education? [Interjections.]

I have heard the hon. member’s long question, and shall give a brief reply. The hon. member asked the question on the basis that posts for Brown people are advertised and that they are not available, but that Black people are in fact available. I want to tell him that the Western Cape is not exclusively the area of the Brown people; it is their preferential area. I hope that solves the matter.

No, it does not.

Yes, it solves the problem. As the hon. member said, there are cases where it is impossible to find Brown people. However, conditions change from day to day and work which is not acceptable to the Brown people today may be acceptable to them in two years’ time. For me, however, the Western Cape remains a preferential area for the Brown people, and I adhere to that view. The hon. member must not allege that the people are not being provided with decent housing or that they cannot be provided with decent housing. We shall provide the Black people who must be here with decent housing, but I do not want to give them the permanence of the 99-year leasehold in this area because it is in my opinion a preferential area for the Brown people and I want to keep it that way. [Interjections.]

Mr. Chairman, may I ask the hon. the Minister whether he is aware that there will be housing built on a family basis in the Western Cape? I ask this because there has not been one house built in 10 years on this basis.

At present there is housing on a family basis in the Western Cape. The removal from the Crossroads area is going to take place on a family basis because these are certain families that are living here quite legitimately and that are entitled to be here. We are going to deal with the situation humanely, and act humanely. But the fact remains—and from this I shall not deviate—that the policy of the NP is that the Western Cape is a preferential area for the Brown people. [Interjections.]

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

Order! Is the hon. the Minister prepared to reply to a question?

I shall reply to one more question, but then I want to continue with the debate.

Does the hon. the Minister concede that certain work that Coloureds used to do and now, after moving up the economic ladder, refuse to do and which becomes available to Black people … [Interjections.] Mr. Chairman, may I ask how many Chairmen are in the House?

Order! The hon. member must not make a speech.

Mr. Chairman, my question is: Is the hon. the Minister prepared to concede that there are certain jobs which become available at the lower economic level which only Black people coming from outside are prepared to do and that this factor therefore must be taken into consideration?

The preferential policy is very clear. It lays down that when there is a certain percentage of unemployed Brown people, Black people may not be employed. At present we have such a situation, because there is unemployment among the Brown people in the Cape. What kind of policy would it be then if I were to allow unemployed Brown people to wander around in large numbers in the Cape, while I bring in Black people from outside in the meantime to do the available work here? Surely that is absurd.

What about the Coloured worker who would not take up a pick and shovel …

The hon. member has asked 20 questions already, and he must now give me a chance to state my point of view. The Western Cape is not an exclusive area; it is a preferential area for the Brown people. This policy will be applied with humanity and with realism. However, it remains a preferential area for the Brown people, and I shall keep it this way. As I have said, the situation changes every day and from one year to another. Work which is not available now or which is not acceptable, will probably be acceptable under more difficult circumstances, and I have to make provision for that. The simple fact remains that the Coloureds are here, and that this is their natural habitat. This is the place they are accustomed to; this is their area. The Brown people have preference here, and I shall keep it that way. To tell the truth, these arguments were refused in this debate yesterday by the hon. member for False Bay. I want to thank him for doing so. I need not say very much more about it. As a Cape member he stated his standpoint well, strongly and effectively, to the Opposition.

The hon. member for Sasolburg discussed the great success which has already been achieved with the community councils. He referred to the community council in the Vaal Triangle, under which Sasolburg falls. I want to endorse wholeheartedly that this is one of our model community councils which is discharging its duty with great success in cooperation with the Bantu Affairs Administration Board. We have already derived the greatest benefit from this co-operation.

As usual the hon. member for Bloemfontein West made a sound and fundamental contribution. The hon. member for Potgietersrust referred to the compassionate cases in regard to consolidation, and asked for additional funds. The hon. the Deputy Minister has already replied to that. The question of funds is a matter of very great importance to me. I shall do my utmost to deal with this matter and to find the funds. We have priorities which we have to establish from time to time. I think that this question of consolidation and the implementation of our policy in this connection are now becoming priorities which ought to be placed very high on our list and which will justify the making available of larger amounts next year. I shall state the case in the year which lies ahead. The hon. the Minister of Finance is as accommodating as he can possibly be. However, he is also experiencing problems in determining priorities. But I really think that this matter is becoming so urgent now that we shall have to accord a higher priority to it next year and make a larger amount available because so many problems are arising in connection with it.

The hon. member for Rondebosch raised the entire question of squatters and tried to tell us what an ideal, wonderful and harmonious community the Cross Roads community is at the moment. However, when I travel to the Cape by air and look down at Cape Town, I see something which I would not like to advertise.

Is that the closest you have been to it?

Oh please, keep your big mouth shut so that I can continue with my speech. You are an unmannerly MP. I was there. Keep your mouth shut now and withdraw what you said.

Order! The hon. the Minister must please withdraw the word “unmannerly”.

I shall withdraw the word “unmannerly” and say that he has bad manners.

From you that is a compliment.

I cannot believe that a party could appoint such a man as Chief Whip. [Interjections.] The hon. member for Rondebosch discussed the squatter situation. Squatter conditions are, as I have already said before, a world-wide phenomenon. They have nothing to do with multiplicity and multiracialism, but are a result of urbanization. There is urbanization in every country in the world, and in most developing countries there are squatter conditions. If we were to condone such conditions, they would form the nucleus of an ever-growing squatter situation which would remain here and in the entire country like a suppurating sore. Situations would then develop such as those which we see in the Far East, for example in Indonesia and India, where squatter conditions are an everyday phenomenon and normal housing the exception, or such as those in South America, where they are an eyesore. The most beautiful scenery is spoilt there by shantytowns. Here we are trying to prevent South Africa from developing in that way. We would prefer to develop according to the model of older European towns and cities where squatter conditions are not allowed and where normal housing is provided. That is the principle at issue here; the issue is not colour or race, it is urbanization and the provision of decent housing for people. We are clearing up shantytowns because we do not want to allow the nucleus of a growing squatter situation to arise which will spread throughout our country. We could of course, at far smaller cost, close our eyes and allow South Africa to develop as the Far East did. Because of a sense of honour, however, we are not doing this. That is why we are clearing up the squatter situation.

Mr. Chairman, may I ask the hon. the Minister whether he agrees that if there is no money available for the provision of housing at this stage, there is no alternative to squatter camps, for how else can these people be accommodated?

Let me state my point of view. There are laws in this country that have to be obeyed. There are laws which determine whether a person is lawfully entitled to be in an area or is not lawfully entitled to be in such an area. Those who are here lawfully will be accommodated on the normal basis in existing Black residential areas. The illegality of those who are not here lawfully cannot be condoned simply because they came in from outside and became squatters. Because they are here unlawfully, they will be removed, not because they became squatters, but because they are here unlawfully.

Where are they being accommodated?

They will be taken to where they belong, and to where they may lawfully be, and that is not the Cape Peninsula. It will be done with humaneness, as humanely as possible. No one can order the right weather conditions, but we shall definitely not do so in the middle of winter. We shall not do so in the rainy season. However, there is advance planning which one has to do. If the wind happens to be blowing that morning, surely we cannot stop the whole operation simply because the wind is blowing. We shall plan the operation. We shall do so with as few problems as possible. We cannot tolerate squatter conditions in South Africa. Talking about squatter conditions and the clearing up of squatter conditions, I have a report in my briefcase which I could quote if hon. members want me to, which proves that bulldozers are also used in India. The squatter huts of people there who refuse to evacuate them are bulldozed to the ground while the people are still inside the houses.

Is that good?

No, of course it is not good. I want to ask the hon. member at least to give us credit for the fact that in South Africa we are applying the policy as humanely as possible and are clearing up squatter conditions for the sake of South Africa.

The hon. member for Lydenburg made a few interesting contributions last night, to which the hon. member for Houghton reacted. I leave the two of them alone to wander up their lovers’ lane together and solve their problems between themselves, if they do in fact have problems.

†I want to refer to the hon. member for Orange Grove, who asked me a few questions on the development of Glenmore. The farm Glenmore has been bought recently. The hon. the Deputy Minister of Plural Relations and Development paid a visit to the area and is giving his personal attention to the matter. Only this farm is earmarked for development at the moment. It can ultimately be incorporated into the Ciskei territory. A portion of the farm is suitable for agriculture. It has been agreed upon in collaboration with the Chief Minister of the Ciskei that township planning is continued and people are settled in this area. We are negotiating at the moment with the Department of Water Affairs as to the availability of water for this housing scheme. In the meantime, a limited use is being made of existing water for irrigation, also on the recommendation of the Department of Water Affairs. That is all I can tell the hon. member in connection with Glenmore.

Mr. Chairman, may I ask the hon. the Minister whether it is still envisaged that this will be a dormitory town for Grahamstown?

It will not be a dormitory town. It will be developed as a normal town which ultimately can be incorporated in the Ciskei homeland territory.

*I come now to the few questions which the hon. member for Houghton put to me yesterday evening in connection with reference books. Legislation in this connection will also be introduced during the next few days. The legislation has already been prepared and deals with the entire question of the reference book system and the application of the new system, how it is going to be done in respect of the homelands. This is empowering legislation, and I do not want to anticipate it now. Homeland documents will be made available, and these will be accepted by South Africa in substitution for the reference books, with more lenient standpoints in respect of those documents. The matter can however be debated when we deal with that legislation, which will, it is to be hoped, be done during the present session.

The second matter which she raised was once again the question of Dr. Motlana. I shall talk to Dr. Motlana, but I am doing so at the request of Mr. Thebehali, the chairman of the community council. I want to make this unequivocally clear, because I do not want any illusions about this matter. The fact remains that the Community Council of Soweto is the official mouthpiece for the inhabitants of Soweto and that I shall negotiate with them on the problems of Soweto. I shall regard them as such, and shall discuss the problems of Soweto with them in the first instance. Furthermore, all actions which are taken and changes which may be effected, I shall negotiate with the community council, for they are the people whom I regard as the official leaders. However, I am prepared to see Dr. Motlana on the same basis as I conduct a dialogue with any other person in respect of matters, for the sake of sound communication and dialogue which I think must be in the interests of South Africa.

Mr. Chairman, could I ask the hon. the Minister whether he is aware of the fact that the majority of the people who voted in those community council elections, and the later by-elections, were migrant workers and therefore not concerned with housing and education?

Mr. Chairman, the hon. member is basing her deduction on the fact that in certain of the wards which she knows about and where people are accommodated on a single basis, there was a higher percentage poll than in other wards. That is what she is basing her deduction on. I can assure the hon. member that I am aware of the result of the election. I am aware of precisely what happened there. As a result of the suspicion-mongering against community councils, and as a result of the rejection by numerous people of the community councils, there is a feeling of prejudice against the community councils, and the councils are at present finding it tough going. The fact remains that it is my wish, that it is my desire and that I am going to make it my business in practice not only to allocate effective powers to the community councils but also to effect those changes which ought to be effected through the community councils. Therefore I want to venture to predict now that community councils —I am not referring now to the by-elections which are due to be held, for that is still too soon; I am referring to future community council elections—will show higher polling percentages than those of the recent elections because the councils are going to receive real powers.

They could not possibly be lower.

They could be lower. They could even be zero. After all, that was the result in the case of the hon. member for Houghton. She received no percentage of the votes.

Mr. Chairman, there is another matter which I want to rectify here this morning. It concerns the rights of inheritance of children, a matter which was broached in this debate. I think it is necessary for me to say this, particularly for the edification of the hon. member for Houghton. During the debate reference was made to the rights of a Black child who subsequently becomes heir to a 99-year leasehold registered in favour of his father over premises in an urban Black township, in view of the fact that, according to the Act, Black children who are born in the Republic of South Africa after the date of independence are citizens of the new independent Black State which formerly formed part of the Republic and not citizens of the Republic and do not have those privileges either. In this case there are two clear elements, elements which we should distinguish from and not confuse with one another. In the first place there are the rights pertaining to his inheritance and, in the second place, his right to be physically present in the prescribed urban area and to occupy the premises concerned. The first element is therefore his right to own or take possession of his property bequeathed to him by his father, while the second element is his right to be physically present there. As far as I am concerned, these are two separate things.

As far as the first element is concerned his position is absolutely clear, viz. that he may dispose of the asset and may, for example, sell it to a Bantu person who is entitled to acquire such a lease in his own name, or he may lease it to a Bantu person who acquires the right to do so. He may therefore exercise his full proprietary rights over that property. He has the right of ownership of that property.

On the second aspect, namely his right to occupy the premises physically, I have taken cognizance of the standpoints stated during the debate, as well as of the general dialogue in this regard. I am investigating the legal position, particularly the position relating to section 10 of the Bantu (Urban Areas) Act, as well its possible practical implications. During the discussion of the Bill which makes provision for the 99-year leasehold—a Bill which will be introduced next week—I shall enlighten hon. members fully on this aspect. I am keeping my options on that matter open. I want to re-examine the implications. I shall therefore deal with the matter on that occasion.

Finally, I want to come to the speech of the hon. the Leader of the Opposition. At the same time I also want to refer to the friendly note which the hon. member for Bezuidenhout sent me in regard to the policy of their party. It concerns the standpoint of the Opposition on a unitary state or otherwise. But I have a problem, and therefore I am sorry that the hon. member for Bezuidenhout is not here now.

Mr. Chairman, when he defines the word “eenheidstaat”, does the hon. Minister mean that it is a unitary State, or does he mean a federal system?

An “eenheidstaat” is a unitary State.

We make it one State, but with a federal system.

Mr. Chairman, the problem with the Opposition is that some of them are still Progs, while others are PFPs. That is their difficulty. It explains the division in their party. The Progs are those who make statements and standpoints on Black majority rule in such a system. The hon. member for Groote Schuur is a Prog. He made his standpoint clear in the Other Place. Therefore, no one need have any problems with it. It is clearly recorded in the Hansard of the Other Place. It is absolutely clear that the hon. member for Groote Schuur is in favour of Black majority rule in South Africa. In fact, he said so. [Interjections.]

You are talking absolute rubbish!

Mr. Chairman, can you believe that the hon. member is shaking his head at that? It serves no purpose for the hon. member to shake his head. Four questions were put in the Senate. I do not have the Hansard with me at the moment, but hon. members will know that he stated that his policy was Black majority rule.

In a unitary State?

He referred to Black majority rule in South Africa. [Interjections.] The hon. member for Houghton spelt out that same standpoint abroad. She referred to Black majority rule and said that there would, almost immediately, be parity between Whites and Blacks as a result of their policy. As the numbers of the people who have the necessary qualifications increase, she said, Black majority rule would follow in due course. That is the standpoint of that hon. member. But the hon. member for Bezuidenhout, who took the federal idea with him into that party, does not agree with that. Here I now have the Hansard to which the hon. member for Durban Point referred yesterday. Here it is quite clearly stated. He had said in a previous speech: “My problem with hon. members of the Official Opposition is that they see South Africa as a multiracial, integrated unitary State.” To that the hon. member for Groote Schuur immediately replied: “Quite right.”

And then, what did the hon. member for Orange Grove say? [Interjections.]

Mr. Chairman, that in fact proves my point. The hon. member for Orange Grove is under the influence of the hon. member for Bezuidenhout, but the hon. member for Groote Schuur still clings to the old dispensation. Actually, that party is split in two. The one part says it is a unitary State, “quite right”, and the other says it is a federal State.

It is the same thing. [Interjections.]

If a unitary State, “quite right”, and a federal State are the “same thing”, then that hon. member and the hon. member for Houghton are also the “same thing”. But allow me to continue, Sir. This same tendency which we discern among those hon. members, also occurs in the literature of that party. I have here the constitution of the PFP, its objectives and its principles. [Interjections.]

Order! I want to appeal to the hon. the Leader of the Opposition to give the hon. the Minister a fair hearing. The hon. the Minister listened to him in silence.

He asked me a question, Sir. [Interjections.]

The hon. member can get up and ask a question if he wants to.

No, he asked me.

I should like to reply to any question put by the hon. member. [Interjections.] In the programme of principles of the PFP we find all the federal ideas neatly inserted, as they were inserted by the hon. member for Bezuidenhout. For example, I quote the following from this programme of principles—

There you have it, beautifully stated. I quote further—

The concept of “plural” is stated here—

The entire federal idea has been inserted there. But, Sir, in the PFP pamphlet in which the few principles for which it stands are summarized there is no mention of federalism, except for the name of the party. The seven points which form the nucleus of that party’s policy are set out here … No, the hon. the Leader of the Opposition must not shake his head now. The essential points of that party’s policy were set out here, and the federalism concept did not appear in them, while that concept appears throughout in the comprehensive programme of principles. One can read the essential concepts in this pamphlet. There are seven points, and if the federal concept is such a basic ingredient of that party’s policy, surely it would have figured somewhere in that abstract. It does not appear anywhere. That is my problem with those hon. members. That party consists of two elements, the one based on the federal concept and the other on the multiracial unitary State concept. This is the evidence which I am producing here today. When the hon. member for Bezuidenhout and his people put in an appearance, the federal concept is very clear and prominent.

It is written into our principles.

Yes, it is beautifully elucidated in the principles, but when an abstract is made, as in the case of this pamphlet, that concept does not appear, except for the name of the party. The seven principles of the party are set out, even more briefly than in the programme of principles, and the word “federal” does not appear anywhere in that entire document.

So what? [Interjections.]

Mr. Chairman, I want to conclude with this idea. We are dealing here in South Africa with a situation where we have Black people and White people living in this country. Naturally I am referring to the situation as seen from the point of view of my department. I am not referring to the Brown people and the Asians because that is not my province. There are other Ministers who deal with them. As groups, these Black people and White people are all entitled to be in South Africa. This is their basic, their only father-land. They have no other. Every individual is entitled to the full development of all his potential, and is also entitled to realize his political ideals to the full. Seen from my point of view, there is one of two alternatives.

In pursuance of the one alternative one sees a multiracial unitary State with one political institution in which these people have the franchise and will eventually, as a result of their numbers, dominate one. This is division of political power in terms of which Black majority rule must eventually take over. However many intermediate steps one takes—i.e. federation, “checks and balances” and other conditions or considerations of merit—these are merely intermediate steps which must lead to eventual Black majority rule. The moment one tells a person that he must realize his political rights in this political institution, in whatever way this is done, he cannot and he will not be satisfied—because his national pride will not allow him to be—until he has equal franchise on an equal footing, and then his numbers will immediately put one in the minority. After all, this is fundamental in the soul of every individual. That is the one choice: An attempt to share political power in one political framework, a situation which must eventually lead to majority rule by the people who are in the majority.

The alternative to that is that one does not share political power but that one does in fact share the geographic area, and establishes separate States and gives each individual his own dispensation in such a State. That is the alternative my party is applying. From time to time a choice has to be made between these two, and I have no doubt in my soul about what is in South Africa’s interests and what is in the interests of the future of our people, both Black and White.

Vote agreed to.

Vote No. 19.—“Treasury”, Vote No. 20.—“S.A. Mint”, Vote No. 21.—“Inland Revenue”, Vote No. 22.—“Customs and Excise”, and Vote No. 23.—“Audit”:

Mr. Chairman, I request the privilege of the half-hour. The responsibilities of the hon. the Minister are clearly defined in the budget document which is before us, and those responsibilities include the establishment and maintenance of the overall financial policies of the Republic and the regulation and control of the finances of the State. The budget document which has been tabled, and which can be read in conjunction with the hon. the Minister’s budget speech as such, makes it very clear that the major policy objective of this Government is that of economic growth with stability and also a high level of employment together with a sound balance of payments situation.

When the hon. the Minister recently introduced the budget, he made it very clear that as far as he was concerned there was now going to be a change of emphasis in the sense that the emphasis should be on the stimulation of the economy in order to bring the economy back onto a real growth path, bearing in mind the unsatisfactory growth we have had for a period of three years. The question which can be posed today, however, a question to which I think we need an answer now, is whether, in fact, the measures introduced by the hon. the Minister for the stimulation of the economy are adequate for bringing about the degree of growth that is necessary for South Africa and also whether those measures that he has announced have, in point of fact, at this stage had any effect which will allow us to judge the merits of those proposals. In the view of the hon. members on these benches we are not going to have the growth that South Africa needs, and the budget has already been shown to be inadequate in so far as the stimulatory measures are concerned. Our appeal to the hon. the Minister today is that he should introduce further measures to stimulate the economy, because without those measures I do not believe that the degree of growth that South Africa needs can be brought about.

Let me now deal with some specific matters to which I should like the hon. the Minister to respond. On this occasion I specifically appeal to him to respond to specific questions that are addressed to him because I believe that it is in the national interest for him to do so.

Firstly, let me deal with the question of the availability of money. There is no doubt that there is a large amount of money available in certain sectors. The tragedy, however, is that instead of that money being invested in industry and the creation of jobs, there is a clear tendency, which has been demonstrated, that people want to invest in fixed-interest securities. There is a clear sign that they themselves do not yet have the degree of confidence that is required in order to invest in equities and in means of production for South Africa. The signs of that are clear because we have a reduction in the interest rates on long-term securities and we have over-subscription of municipal and other stock issues. There is quite clearly a tendency for those rates to go down. While the money is available for those fixed-interest securities, it does not appear to be available for industry or for those areas where there could be a degree of growth in South Africa. I believe therefore that the hon. the Minister has an obligation to create a situation in which people will invest in order to create healthy and stable growth in South Africa. I again want to appeal to the hon. the Minister to give incentives to people to create new jobs so that we can deal not only with a growth situation on the one hand but so that we can also attempt to solve the serious problem of unemployment on the other hand. I believe that industry needs far more attention on the part of the hon. the Minister.

There are also some matters in the banking sector which I think he could look at again. Let us take the situation of credit ceilings for instance. Surely, the time has come for the hon. the Minister to get up in the House to tell us something about the credit ceilings and, in fact, to amend that situation, because there seems to be no reason why the present situation in that regard should continue. Then there is the question of short-term deposits. The high cost to the banks of the short-term deposits does not in these circumstances seem warranted. To some extent this is keeping up short-term interest rates.

It is therefore making money more expensive to industry and, while I for one do not want to have a situation leading to the revival of speculation regarding the leads and lags so that people will tend to obtain more finance in South Africa at a time when we should be continuing to obtain finance from overseas, I do believe the time has come for the hon. the Minister to look at short-term interest rates because long-term interest rates are being dealt with by economic forces existing at the moment.

Then, I think it is quite obvious that, as regards the question of raising money today, we also need to look at foreign loans once again. It is difficult enough to obtain foreign loans today, but is there not a case to be made out for a degree of security to be given in regard to cover on foreign exchange for those loans which are to be obtained for productive purposes in South Africa? I recognize the hon. the Minister’s difficulty, which is to a large extent self-created in that there exists today a link to the dollar. Therefore he does not know what will happen to the rand in relation to the Swiss franc, the Deutschmark and sterling. He does not know that; it is beyond his control. What is within his control, however, is the fact that the rand is linked to the dollar. Therefore, if there is to be any change in the value of that, if for example there is to be a devaluation, that is within his control and he is well able to give cover to industry in respect of loans which are for productive purposes and not merely for the movement of goods as applies at the moment. That is entirely within his control. I should like the hon. the Minister to indicate to us that he is prepared to assist industry in regard to loans for productive purposes by at the very least giving cover to industry in respect of those loans if, due to the actions of this Government, the currency is perhaps devalued in the years that lie ahead or perhaps even shortly. These are matters which I believe he must deal with. I believe industry needs a shot in the arm. I also believe that he needs to do more in order to encourage consumer demand because consumer demand has not risen to the extent which we would have liked to have seen in the time since the budget was introduced.

I also want to ask the hon. the Minister to respond once again to the issue of the link of the rand to the dollar. We have had a situation since we last debated this matter in terms of which, as the hon. the Minister knows, sterling has gone down in value. It has gone down in value without any action on our part. Surely we must determine our own destiny in relation to our own major trading partners? It suited the hon. the Minister’s purpose, so he said, to create a situation where there was in fact a silent, unannounced devaluation of the rand. However, what is now the situation when sterling moves in one direction while the dollar appears to be stabilizing? What has it to do with South Africa if a coal strike is settled in the United States or when other extraneous features in fact take place? We should be determining the value of our own currency in relation to the different currencies of the world on the basis of a basket of currencies based on our own situation in relation to our trading partners. The world situation is obviously relevant, but we are finding that, as far as the South African rand is concerned, we are being affected by matters entirely beyond our control. I sometimes find it quite remarkable when I watch television, to hear the announcer saying, almost jubilantly it seems, that the dollar has gone down again. He says so in a fit of ecstacy—so it seems—as if it is destroying President Carter and the foreign policy of the United States. However, what he does not tell us is that it is the rand that is going down because we are linked to the dollar. It is a ludicrous position when somebody takes joy in the dollar going down when the rand, which is linked to it, is experiencing the same sort of fate. It is really an example of the SABC going quite haywire in relation to what South Africa’s situation is.

I also want to deal with the whole question of the creation of jobs. The hon. the Minister, as well as everybody else in this House, knows that it is the economic policy of the hon. the Minister which, in the period that has just passed, has aggravated unemployment in South Africa. He found himself in a situation where his first priority was to seek to safeguard the balance of payments, and as a result he took certain measures which resulted in a recessionary condition in South Africa being aggravated, causing unemployment in South Africa and keeping us in a recession. When one does that for an economic purpose, one also has a social responsibility. One has a social responsibility to those people who become unemployed as a result of that economic policy. This is the position in other countries of the world, as the hon. the Minister will tell us. He will tell us that there is unemployment in Germany, Britain and the United States. However, what the hon. the Minister will not tell us is that it is less of a hardship in Germany, for example, as well as in the other countries, to be unemployed than it is in South Africa. The unemployment benefits in Germany, for example, are of such a nature that the State can afford to employ that kind of economic measure without the social consequences that exist in South Africa. One can look at the other countries and the position will be exactly the same. However, when one looks at South Africa and if one looks at the real position of the majority of the unemployed in South Africa, it will be apparent that their situation is quite different from those unemployed in Germany and the United States. That is where the hon. the Minister is not discharging his responsibility, because in this regard he has a social obligation. When one’s economic policy deliberately causes unemployment, one has a responsibility to the people who are then without jobs.

Let me turn to another matter, the question of the general sales tax. I find it remarkable that the uncertainty in regard to the general sales tax is being perpetuated since we cannot get the hon. the Minister to do something which creates certainty in regard to this matter. As at this moment in time, every time we try to establish what the real ambit is going to be, we are told that the legislation is still not final. Yet, the date for the imposition of the general sales tax is coming very close. I want to appeal once again to the hon. the Minister that he should take us into his confidence today. He should tell us, for example, whether it is going to be adding or whether it is going to be add on. We are told that Assocom is making representations to the hon. the Minister that it should be both; that there should be a choice.

I want to make a forecast today that unless the hon. the Minister now takes some real action in respect of this matter, we are going to find, when the general sales tax is introduced, that again the consumer will be exploited by many people and that inadequate protection will be given to him. The hon. the Minister has a great responsibility because he is creating this situation of uncertainty.

I make a further appeal to him. In addition to creating certainty, he should postpone the date on which this tax is to be introduced. He should postpone it for a number of reasons, firstly, to allow it to be able to come into operation reasonably and to allow the degree of certainty which is required to come in; and secondly, to allow dealers to move the stocks on which the ordinary sales tax is being paid to obviate the situation that there will be the degree of double taxation to which we have referred previously. I want to make an appeal to the hon. the Minister to do this since it is quite clear that in the existing circumstances we are going to face a situation where there will again be exploitation of the consumer.

This year is supposed to be the year of the consumer, but, in fact, it is turning out to be the year in which the consumer is exploited more and more.

Let me give another example. The hon. the Minister announced certain sales tax concessions. I say to him that he should tell us today to what extent they have been passed on since our information is that in many, many cases they are not being passed on to the consumer. This again means more profits to other people while the consumer is being exploited.

The tragedy that is happening in South Africa is that the hon. the Minister, together with other members of the Cabinet, is becoming more and more the 19th century type of capitalist without the reformed free enterprise as we want it. The hon. the Minister is the man who wants to encourage all these things. I find it very difficult to understand since I remember a time, before the hon. the Minister became a member of the NP, when the NP used to be the party of the worker, the party of the poor. Now it has become the party of the fat cats of South Africa and it ignores the poor of South Africa. [Interjections.] This is remarkable. Perhaps the NP would have been better off without the Marais Steyns and the Horwoods because in those days it was the party of the workers. This is something which I find quite remarkable. It is this 19th century capitalist influence which has stopped the NP from being the party of the worker, the party of the people who actually have to work for a living. This is the tragedy.

You are just making a noise for the benefit of the Press.

The hon. the Minister sits there and smiles, but let me tell him on his own statistics, which he has been kind enough to give me only now, what the situation is. One half of the White, Coloured and Indian taxpayers of South Africa earn less than R5 000 per annum. I do not refer in this connection to individuals, but to taxpayers and it therefore means that the statistics also bear relation to families. The hon. the Minister has forgotten those people. He has forgotten the millions of Black people who earn less than that. The hon. the Minister is concerned with the fat cats of South Africa. His is the fat-cat party which ignores the poor.

Let us deal with another matter. Let us deal with the question of how the hon. the Minister approaches the tax situation. The tragedy of the hon. the Minister is that he is, what I would call, the discriminator in respect of tax. He seems to have discrimination as his whole concept. When he presented his budget he discriminated against the lower-income group in respect of the tax concession. He creates a situation where there is a discriminatory attitude towards the people who are at the lower end of the income scale. He ignores the fact that there is a major income gap and wage gap in South Africa. There is no doubt that the hon. the Minister is a discriminator against the poor.

Utter rubbish.

It is not rubbish; it is statistically correct.

What about the statistics which I quoted in reply to the Second Reading debate?

The hon. the Minister ignored the reality of the situation because up to R4 000 per year there is no question at all of getting a concession. If the hon. the Minister considers the figures which I have given, which he carefully ignored, he has to admit that the benefits at the higher income levels are substantially greater than those of the lower income levels where there is some benefit. The truth is that the majority of the taxpayers of South Africa get nothing out of this budget in regard to tax relief.

However, not only does the hon. the Minister discriminate against the poor. He is also a discriminator on sex, i.e. against married women. He continues with a policy in terms of which there is discrimination against working wives in South Africa. The hon. the Minister does not want to change this discrimination.

In the third instance, this Government discriminates on the basis of colour in respect of tax. All we are told in this regard is that there is an investigation going on, but in the meantime the Black man at the lower income levels continues to pay a higher tax than does the White, the Coloured and the Indian. Let the hon. the Minister not say that that is nonsense because he knows it is a fact and a reality.

In other words, the hon. the Minister is a discriminator. His whole approach is in accordance with the policies of a Government who do not treat people equally and fairly, but who discriminate against the poor, and on the basis of sex and colour.

Mr. Chairman, it is quite clear why the hon. member for Yeoville did not make use of the full half-hour at his disposal. He made exactly the same speech he made during the Second Reading debate on the budget. He put the same questions which he put in that debate, and consequently the hon. the Minister will give precisely the same replies. The hon. member is always trying to give the impression that the people on this side of the House are the ones who always want to tax the country’s poor people. I have said before that when one switches to a new tax system, this naturally gives rise to duplication and in the process it is possible that some people might be adversely affected. We must have no illusions. We have not changed to this system because we need less money or are looking for less money to administer the country. We have changed to this system for the very purpose of obtaining more money to administer the country’s affairs. That should be all too apparent.

I should like to dwell for a moment on the history which preceded the change-over to the new system. If time permits, I shall return later to some of the aspects raised by the hon. member for Yeoville. Obviously, many of the aspects which the hon. member raised fall within the ambit of the hon. the Minister. Up to 1969 we had certain principal sources of financing in South Africa. In reality, at that stage these sources numbered only two, viz. the levying of income tax—which played the dominant role—and excise and customs levies. These were the two main sources of financing which the State used at that stage. Of course, there were other less important sources such as transfer duty, stamp duty, estate duty, etc., but it became quite apparent that these two sources were insufficient for the needs of the State. In the nature of things, the income from customs and excise levies fluctuates, and we were approaching the situation where the revenue from income tax was at its maximum. The Franzsen Commission was therefore appointed and this commission examined the whole question of the sources of financing. It is necessary to mention these things to have the right background music. The hon. member for Yeoville has already suggested that we have landed ourselves in something we cannot handle and that for this reason we are taxing the poor. It is very clear that the commission was looking for a broader base on which to collect tax. Eventually we found this broader base in the form of the sales duty which was introduced in South Africa for the first time. For the first time in South Africa’s history we moved away from the normal tax sources and moved towards a system of a tax on spending. At that stage it was clear—it was said too in so many words—that South Africa would have to introduce sales tax, but at that stage sales duty was still the most practical system. However, it was still the intention to find a broader base on which tax could be collected. Only this year, the hon. the Minister referred in no uncertain terms to the problems which had arisen as a result of sales duty. For the very reason that the Government and the hon. the Minister were worried that certain people might be discriminated against and unnecessarily taxed because of the sales duty, attention was given to this matter. The hon. the Minister said that the escalation factor, for instance, was taking more money out of John Citizen’s pocket, money which did not accrue to the Treasury. This was one of the restrictive qualities of sales duty. He also referred to the diversity of scales and the determination of values, and the fact that the scales in many cases had reached saturation point.

We are seeking a system which is sufficiently flexible and adaptable and which has a broad enough base for collecting taxes in such a way that as the country’s economy grows or encounters setbacks, the system will not only be aimed at certain sectors of the national economy. The base of the system must be so broad that if one sector is affected, the hon. the Minister’s income source will not be affected to such an extent that it will be impossible for him to proceed without finding other sources of tax. Further, this tax system must embody possibilities for growth. As spending increases, so the expenditure of the State will become greater.

There is not one single political party in the House which has not previously asked for a broadening of the tax base. As we are now proceeding to broaden that tax base, we must not cast suspicion on it at the same time. If we want to broaden the tax base—we have all asked for it—we must not tell the less affluent people of the country that they are going to pay because the tax base is being broadened. It is something for which all of us, without exception, have asked. Regardless of what the hon. member for Yeoville had to say, the NP has always taken the less privileged people of this country into account. [Interjections.] The hon. member can say that I am a member of a “fat cat” party, but it is not necessary to accuse the whole party of this. After all, it cannot be said that the hon. the Minister of Social Welfare and Pensions is a “fat cat”. South Africa needs a certain amount of money each year to administer its affairs. The sources available, such as income tax, have reached saturation point, and the hon. the Minister has already made certain concessions in that regard. Those sources have become inadequate. The revenue from customs and excise is too uncertain. So we have asked for this broad base. If we look at the issue in perspective now, it is necessary for us to bear in mind—I shall come back to the hon. member for Yeoville’s remark about “fat cats”—that South Africa has accepted the principle of income tax and still retains it, the principle that the person with an income must pay income tax. That is the premise throughout the world. It is not something novel which South Africa is introducing now. It is the point of departure all over the world. We can argue about the rate at which income tax is paid. If we now consider the rate at which income tax is paid, let us look at the effect of the announcement by the hon. the Minister regarding the reduction in income tax. It means that the tax rate for a man with an income of approximately R50 000—I am disregarding the loan levy—is now approximately 44%. Compared to other countries of the world, that is a good rate. The hon. member for Yeoville says, shamelessly, that South Africa cannot afford unemployment, because if there is unemployment in South Africa, then those people who will be hardest hit in South Africa are those people who do not receive adequate benefits in terms of unemployment insurance. If 44% is not an adequate rate, the hon. member must say so. What are the tax rates for people in Germany, England and the other countries he has mentioned, where they have so-called good unemployment insurance schemes? [Time expired.]

Mr. Chairman, I ask that the hon. member be given an opportunity of continuing with his speech.

Mr. Chairman, I am very grateful that there is a wide-awake Whip in this House. Let us analyse the question further. The hon. member for Yeoville mentioned a few countries which have unemployment insurance and said that those workers, in fact, were in a far better situation than the workers in South Africa. The hon. member should then, in the first place, show what the tax percentage is which is paid there. In the second place, the hon. member should show which categories of people can claim unemployment insurance, and what their contribution is to the gross domestic product. We cannot over-simplify the situation in South Africa. After all, the hon. member is a realist. He knows the position in South Africa regarding the different population groups we have here. It is obviously not possible for us to have un employment insurance on the same basis as other countries of the world.

Then you should not have a policy which gives rise to unemployment.

The hon. member has answered that question himself. When he blamed the hon. the Minister because his economic and financial policy gave rise to unemployment, the hon. member added that the hon. the Minister must not tell him that there is unemployment in America, in England and in Germany as well. But these are realities. The hon. member for Yeoville cannot maintain that there is unemployment in South Africa simply because of the financial and economic policy of the two hon. Ministers sitting in front of me. This, after all, is a universal problem. Its intensity decreases or increases as fluctuations occur in economic conditions in the world. But to say quite blandly that the policy of this side of the House is the cause of unemployment is an over-simplication of the problem.

I want to come to yet another aspect regarding the concept of the broader base. We are therefore retaining the most accepted source of revenue, namely income tax, where the man who can pay does pay income tax. We shall continue in this way for a time, and as the new system progresses, I think it will be possible for the hon. the Minister to make even further adjustments with regard to the scale.

In the second place we retain the income from customs and excise. In this respect, therefore, we are concerned more with commodities. The hon. the Minister has also indicated the probability that certain things which will remain from sales duty, will eventually be included in customs and excise. It will therefore amount to a commodity tax. Then we still have the broad base of sales tax. These are the three principal sources of revenue on which our tax structure in South Africa will be based.

These three main sources of revenue now make it much easier for the hon. the Minister to implement his planning and his administration. He has the stable broad base, a base which, as the economy shows a rising or declining tendency, will in turn reflect its trends. Then there is the basis of income tax, a basis on which the man who can pay does pay. In the third place we also have a tax structure which relates to the prosperity and growth of the economy. That is the tax on customs and excise. In other words, we have a basket, a package … What was it the hon. member for Yeoville said? He wanted to bring the dollar into something new. What was it again?

A basket.

In a new basket!

In a “mandjie”.

Yes, in a “mandjie”.

He has only heard of the word.

He means the basket they put Moses in!

Not when the hon. member for Schweizer-Reneke is called a basket!

We have here virtually the same idea as that expressed by the hon. member for Yeoville. This is now built into our tax system. Of course, there will still be snags. Nobody will deny that. It is also true that pressure will probably be brought to bear on the department in the process. However, I believe that many countries of the world will envy South Africa its basket of a tax system.

I should like to refer specifically now to a few things which the hon. member for Yeoville mentioned. The linking of the rand to the dollar is something which the hon. member simply cannot get away from, it seems. Notwithstanding the fact that he has been assured that the matter is being investigated, and despite the fact that he himself knows that the Government is not prepared just to link the rand to any currency and simply to let the rand go under should the currency of the country to which the rand is linked collapse, the hon. member for Yeoville persists with his argument. He keeps talking about a basket, but he still has not told us what the contents of that basket should be.

He doesn’t know!

The hon. member for Yeoville must make it clear to us. This reminds me very much of the hon. members’ so-called national convention. They talk of a national convention, but they do not say what it should involve. If we should now free the rand from the dollar— this is something I do not want to say too much about at this stage because the matter is being examined at the moment—what would the implications be? But the hon. member for Yeoville keeps on asking that the rand should be freed from the dollar. He then asks for a basket …

Probably a laundry basket!

Yes, it is probably a laundry basket.

No, it is Moses’s basket!

Yes, if we go on like that, we shall end up with Moses and his basket.

You are beginning to see the light!

We know what the hon. member means. But we want to know what he wants in that basket. Personally, I feel that South Africa has probably reached the stage where we can look at the situation—especially the situation in Southern Africa—and perhaps bring about certain linkings in this respect.

I want to reply to another aspect of the speech made by the hon. member for Yeoville. This is his observation that people are investing more in fixed deposits at the moment. The hon. member’s observations were quite correct. It is quite clear that at this stage this is the position. However, the hon. member says that this points to the fact that people do not have confidence in South Africa’s industry and manufacturing sphere, that people in any case have no confidence in the growth of South Africa.

Not enough!

Not enough. That is right. This is something which I find somewhat disturbing too, but I want to say to the hon. member what I said during the budget debate, namely that the hon. the Minister and the Government have created the climate and provided stimulation. Whether that stimulation is sufficient is another matter. It is debatable. But the fact is that as far as I am concerned, the stimulation applied by the Government has put the ball in the private sector’s court. It is up to private initiative now to take that ball and run.

You are admitting now that the Minister made a mistake.

I have already put that standpoint previously. I have said before that those in the private sector who are not prepared to pick up that ball and play with it must not complain later that they are not doing well. It was the Official Opposition which kept telling us in the past that we were leaving too little in the hands of private initiative and that we wanted the State to become too involved in the economic growth and development of the country. Now I want to tell the hon. member this: The quickest and most direct growth would probably be attained in South Africa by involving the State more deeply in the economic development of the country. This we could probably have done. Had we done that, we should probably have had a much more rapid reaction. But true to our policy, and of course bearing in mind that those hon. members are always asking us to give the private sector a better chance, the private sector now has its better chance, and the ball is in the court of the private sector. [Time expired.]

Mr. Chairman, the facts are going to show that this budget is going to fail in terms of the hon. the Minister’s major economic objectives, which are namely growth and employment. The hon. member who has just sat down says that because the hon. the Minister has injected approximately R400 million into the economy by drawing on the Stabilization Fund, the ball is now in the court of private enterprise. That is, however, not going to alter the fact that the budget as a whole is not going to give the stimulus that is required. This is what I intend to prove during the course of the few minutes at my disposal.

We believe this budget is going to fail, and we also believe that this need not have been the case. The hon. member who has just sat down talks about inflation and unemployment overseas. Let us look at the facts in South Africa. During the period 1970 to 1977 South Africa’s net gold output and merchandise exports grew at an average annual compounded rate of 21,8%. Let us face it; this was spectacular in anyone’s terms. When it is considered that we have had this tremendous growth in our exports, that we have tremendous natural resources and that, until the mid-’seventies, we had a considerable capital inflow, we in this party believe that South Africa should have been one of the economic stars in the world today, with all sections of our population enjoying employment and a high standard of living. But this is not the case at all. At the present time our economy is stagnating. Inflation is still with us at most unacceptable levels and unemployment is still bedevilling our population. The facts show that the gross domestic product grew, during the period 1970 to 1977, at a rate of only 3,6% per annum, in real terms. That is far below this Government’s economic development programme, which sets a growth rate of 6,1% in order to keep unemployment at an acceptable level. These are the facts.

I should like to put it to the hon. the Minister and to the hon. member who has just sat down that another way to measure whether the Minister is achieving his objectives of growth and full employment is to examine the growth of South Africa’s gross national product per capita, and to compare this with the position in other countries. Hon. members opposite are always saying that it is the recession in other countries which is causing our problems. Let us look at the growth rates in some of these other countries. Let us look at some of them in Africa. I have a list here which appeared in a Nedbank publication recently. During the period 1965 to 1974 the gross national product per capita in various countries grew as follows: in Libya, by 6,5%; in Tunisia, by 5,4%; in Rhodesia, notwithstanding all the sanctions imposed against it, by 3,5%; in Angola, by 3,2%. Where did South African stand in this ball game? South African grew at a miserly rate of 2,5% per annum. In fact, if one examines the growth in the GNP per capita over the period in which the NP has been in power, one finds that it has only averaged a growth rate of 1,9% per annum. In my book, and I think in most people’s books, this is a dismal performance indeed. It means that this Government has squandered the wealth of this country, wealth which has been created by the private sector, instead of utilizing it to the best advantage of all our people. I say this because the answer to our present economic problem is to be found in the policies which this Government has adopted. This one can find, firstly, in the creeping socialism which we have found this Government involving itself with.

Do you want us to intervene more?

Would the hon. the Minister just listen to what I have to say for the moment. Dr. Wassenaar, who is a member of that party and who is an Afrikaner businessman, has said that this is exactly what has happened. What about the excessive bureaucracy? The facts show that the number of employees in the public sector is growing annually. What about the ideologically based policies of that party? I am thinking here, for example, of the Physical Planning Act which created capital investment allowances which led to an unnecessary capital intensive industry in South Africa, this in turn leading to wage inflation and unemployment. What about the mistimed infrastructural spending to which I shall refer shortly? It is all these policies which we, in these benches, believe have led to an erosion of the wealth of members of the general public in South Africa, resulting in a lower standard of living for them, and to an erosion of the private sector’s share of the economy as a whole. This has now resulted in inflation, recession and unemployment. Surely this is evident in the fact that while the gross domestic fixed investment, as a percentage of the gross domestic expenditure, rose by 6% from 1946 to 1976, private consumption expenditure actually declined by 9% whilst Government consumption expenditure rose by 3% during the same period. If one looks at the gross domestic fixed investment of South Africa, one finds that during the period 1950 to 1976 public authorities, i.e. Government, increased by 9% while public corporations also increased by 9%. Private business enterprises, on the other hand, actually decreased by 18% during this period. Where has all this money gone? Has it created any new wealth in South Africa? Has it created any more jobs for our expanding population? If one studies the budgets of this Parliament and also those of State corporations one finds that the bulk of the available investment capital in South Africa has gone into the Public Service, the Railways, the Post Office, Escom, Iscor, Sasol, Armscor and all these Government and State corporations. I want to make it quite clear that we, in these benches, do agree that there are strategic considerations and that there is a case to be made out for the development of the infrastructure, but we want to submit to the hon. the Minister that he does not have a suitable balance of investment in these various sectors. Escom’s capital investment, for example, represents R107 000 per employee. The Railway’s investment represents over R15 000 per employee. The iron and steel industry and the chemical industry are approaching a level of R8 000 to R11 000 per employee.

The bulk of the available capital has, of course, in recent years been invested in these particular industries. Had it been invested in a manufacturing sector, however, one would have found the investment to have been in the order of R1 500 per employee in the wood and wood products industry, increasing to about R2 000 in the metal products industry or the textile and clothing industry.

What is your case?

My case is that the available capital in South Africa has been spent on projects that are not creating employment for expanding populations. The result of this is that the standard of living of the average person is dropping. If one studies this, one finds that Escom at this very moment is embarking on a major expansion programme and that it already has a 22% surplus generating capacity. That appears in the annual report for this year. The hon. the Minister of Transport admitted during the debate on the Railway budget that there is a surplus capacity in the Railways at the present time. Yet the manufacturing industry also has a surplus capacity, the reason being that there is no consumer demand to buy the goods. The growth rate the hon. the Minister has set for himself can only be achieved through a growth resulting from a consumer-led demand for manufactured products. To achieve this, more money must be left in the hands of the consumer. This can only be achieved by lowering taxes. We should like to suggest that the hon. the Minister should consider eliminating the remaining sales duties and even making further concessions in respect of direct taxation.

The hon. the Minister has tried to do this in this particular budget. As I have said earlier on, he has drawn on the Stabilization Fund. But the sales tax is going to take the money he has injected into the economy back into the Treasury and this is not going to create the type of stimulus which we believe is required at the present time. The only solution to this problem is to get the economy of South Africa into a better balance which can only be achieved by curbing Government expenditure and also by curbing the escalation of administered prices resulting from the Government’s present investment policy. Escom’s tariffs, for example, have increased by 97% in two years. What about the increases in the Railways’ tariffs in recent years? This is where the discipline really should lie. [Time expired.]

Mr. Chairman, the predecessor of the hon. the Minister of Finance, now our honoured State President, said on occasion, as reported in The Argus of 30 January 1975—

After listening to the hon. member for Yeoville and the hon. member for Amanzimtoti, I have come to the conclusion that I must agree with the hon. State President, the predecessor of the present hon. Minister of Finance, that it is a dangerous office to occupy. I just want to wish the hon. the Minister of Finance everything of the best in this dangerous position he holds. I must say he is in good company, because it seems to me that there is another post in the Cabinet today which is just as dangerous, and perhaps even a bit more dangerous, namely the post of Minister of Agriculture. So the hon. the Minister of Finance is in good company.

The hon. member for Amanzimtoti got very hot under the collar when he made the statement that the hon. the Minister of Finance would not reach his objective of a higher growth rate, etc. He laid all the blame for the fact that we do not have a higher growth rate at the door of the hon. the Minister, as if he should do everything necessary to increase that growth rate. All I can say to the hon. member is that if he would wait and see, he would find that it really will work. We can talk about it again in a year’s time.

The hon. member for Yeoville, who is unfortunately not here at the moment, made a most derogatory statement. He said that the NP would be better off without the Marais Steyns and the Horwoods. I want to warn him that he runs the danger of being told by members of his party: “The PFP would be better off without the Harry Schwarzes.” [Interjections.]

However, I want to talk about another matter, namely the question of State aid to our gold mines. There is no doubt about the fact that the American Administration is doing everything in its power to weaken our position by forcing down the price of gold. Here I want to pay tribute to the hon. the Minister of Finance for constantly stressing the positive role of gold in our economy. I want to pay tribute to him for always being positive about the future of gold and the future price of gold. It is no use always decrying one of our most important economic assets. We must be positive, and that is precisely what the hon. the Minister does.

The Carnegie Foundation in the USA has brought out a report. It is known as the “Leiss Report”. I quote from this report—

This policy first came strongly to the fore in the period 1974 to 1976 and the price of gold was forced down in two ways. One was the psychological method, and the other the actual sale of gold from American reserves. As a result of that double assault on the price of gold, the price fell from $198 per fine ounce to just over $100 per fine ounce. The Carter administration is now using the same policy and the same methods to achieve its aim. It has been announced again that gold will be sold from American reserves. This has already caused the price to drop from $190 per fine ounce to approximately $170 per fine ounce. I should like to predict that this method has lost its efficacy and that the policy which America will now apply to force down the price of gold, thereby forcing South Africa to its knees, will not succeed. In addition, the price will not drop much below its present level. However, the fact remains that as the price of gold falls, low-grade ore is not mined. Because of this, a great deal of gold which could be mined is lost to us. That is why it is so important that this Government should implement a policy of State aid to marginal mines. For this reason I want to pay tribute to the hon. the Minister for proceeding with his policy of support for the marginal mines, because the time will come when there will again be a tremendous rise in the price of gold. Then gold which has not been mined because the price has been forced down, will be mined to the great benefit of our economy.

It is a fact, too, that when one closes down a mine, it is enormously expensive to open it again later, because usually the mine is flooded with water. So it is essential that we should persevere with this policy, so that we do not lose that unmined gold from our low-grade ore, preserving it instead for future development in our economy. If we should succeed in this, our economic growth rate, of course, would also rise. Gold is one of our most important earners of foreign exchange and such a revival would also help to give our industries further stimulus and assistance.

Our previous Minister of Finance said that a Minister of Finance has a very dangerous task, but it is no longer so dangerous today because he has brilliantly succeeded in getting the co-operation of the public. In all modesty I should like to raise one matter to show how the hon. the Minister could do something more to get the co-operation of the public. I refer to the question of the collection of employees’ tax by the employer. [Time expired.]

Mr. Chairman, after listening to the hon. member for Paarl saying, at the start of his speech, in what danger the life of the hon. the Minister of Finance is, I am only hoping that the hon. the Minister will still be able to get a life insurance policy after that speech. I agree with some of the things that the hon. member for Yeoville said, but I cannot agree that he can speak for his party when he refers to others as a “fat-cat party”. If ever there is a party which represents the fat-cat interests and receives finance from the fat-cat financiers, then the PFP is the fattestcat party to have ever entered South African politics. [Interjections.]

We must face the fact that foreign loans may not be easy to obtain. In fact, they are going to become very difficult to obtain. In these circumstances the Government must encourage the people in commerce and in industry, who have long associations with suppliers overseas, to obtain the maximum credits they can get from them. The Government has said that encouragement will be given by giving some tax allowances on losses suffered through foreign exchange losses.

This is a very good concession and obviously it is acceptable. In these very difficult times one wonders, however, whether there should not be an additional incentive as these foreign credits, if they are given for long enough, are tantamount to foreign loans. We would like to see, instead of allowing the local borrower a reduction of the loss on his tax, a far more effective incentive, i.e. that importers who go for these long-term loans in the form of credit should get complete indemnity against their exchange losses. This would encourage importers to go for loans for as long as possible. The effect would be that the importer would not use his South African borrowing facilities and that that money would be left in the economy over here so that it could be used for other projects in our economy. This would be a form of obtaining foreign loans to boost our economy terrifically. I also believe that the semi-public corporations, who obviously throughout the years must have been buying hundreds and millions of rand of goods from suppliers overseas, have established themselves with these overseas suppliers to the extent that they should find no difficulty in obtaining long-term foreign credits in the form of loans. This also supplements foreign loans.

Another point I wish to make is that the Government must create an atmosphere of confidence, and encourage the expansion of commerce and industry. This can be done by offering special tax concessions to businesses expanding or to new businesses who are establishing themselves. If they can get some of the concessions that are, for example, allowed to border industries—this need not have to be a permanent innovation, but merely a temporary one—the economy can be stimulated and therefore I believe that the granting of such concessions should be considered.

As the Government is now proceeding with a general sales tax, I feel it is obliged to abolish the sales duty and the 12½% ad valorem surcharge on imports from the date the general sales tax is introduced. There can surely be no justification for retaining this surcharge. Even the hon. the Minister himself referred to this surcharge as a temporary fiscal measure. The hon. the Minister must tell us today how temporary it is, and when he is thinking of abolishing it.

There is another matter which I should like to raise with the hon. the Minister. We have heard that the building society movement has agreed in principle to the 99 year lease scheme of the Government to sell houses to Black people, so obviously they will have to provide an enormous amount of finance if they are going to do the bonding of these particular schemes. In the circumstances it is obvious that the hon. the Minister must think in terms of further concessions to the building societies so that they can gear themselves up to take part in this vast undertaking.

The other matter which I should like to raise with the hon. the Minister is that the Kruger rand earned over R436 million for South Africa in 1977. We have only, I believe, scratched the surface in this regard and I have the fullest confidence that this source of income can be vastly expanded. I know that intensive efforts have been made to promote sales, but the sales campaign must be intensified to the extent that every man, woman or child living overseas must realize the value of the Kruger rand and must want to acquire a Kruger rand. Every South African going overseas must know enough about the Kruger rand—there isn’t all that much to know—in order that they during their travels can promote the Kruger rand. I have noticed that certain women wear a gold necklace with a Kruger rand suspended at the end and I have seen in various towns that this has become an attraction passed on from one woman to the other. The result is that dozens of women have bought these necklaces with Kruger rands suspended at the end. I would like to see that when South African women go overseas they wear these necklaces constantly because this is another form of free advertisement for the Kruger rand.

Are you in the jewellery business?

I have no interest in jewellery. In addition to that the professional people publicizing the Kruger rand must also publicize this necklace item. I think the hon. the Minister must tell us whether it is possible for the offices of Satour or S.A. Airways to exhibit some of these necklaces and Kruger rands in their premises throughout the world. This would be another way in which people would be able to see what South Africa is able to do. Not only does the sale of Kruger rands increase our income, but it can also have the effect of our having to put less gold bars on the market. This will have something of a bull effect for gold itself and will have a beneficial effect on the price of gold. As we all know the value of money is depreciating and dropping all the time, but the value of gold, if taken over a period of time, is a value which is forever increasing.

I should like to raise another matter, a matter which I consider in a serious light, with the hon. the Minister and his department. This is a matter which I should like the hon. the Minister to consider; I do not expect him to respond to it at this stage. The hon. the Minister has appointed a commission in regard to the matter. The Government is obviously anxious to get back all the money into the economy which legitimately belongs in the economy. I am referring in the first place to money or objects that have been exported overseas illegally. Another example is where people do not cash in their travellers’ cheques and a third example is where a person has a cash business and has not declared all his interests to the Receiver of Revenue. We know the Government has been most successful in various prosecutions, but in addition I should like to ask whether the answer would not be to work out with the department and the officers of the Attorney-General a method whereby one can obtain even further sums of money from people who have not been prosecuted during a cooling off period. By “cooling off” I mean that the Government should widely advertise and announce that for a period of a certain number of months they will allow people to declare such funds and bring them back during a limited period of a few months in which there will be no prosecutions or sanctions. Will this not have the effect of getting in large sums of money from people who have not yet been investigated, prosecuted and arrested? I am not suggesting that the Government goes “soft” in any of those cases, but will this not be an additional source of funds? It in no way debars the Government from pursuing the investigations and prosecutions of people who have not come forward in the meantime with these declarations. This suggestion is something which I feel can be given a trial period of a few months and is something which the hon. the Minister must consider.

If the hon. the Minister does not like this suggestion, I also have an alternative one. The hon. the Minister has appointed a commission to make recommendations, but I feel this is a lasting problem which will always be with us. In the circumstances I should like to suggest to him to think in terms of appointing a permanent commission to deliberate permanently on this matter. I do not believe that a commission can come up with all the answers as commissions normally operate. I believe all the facets will change over the years. We need a permanent commission for this purpose. Under the item “Treasury” an amount of R800 000 is voted for “Capital subscription: International Bank for Reconstruction and Development”. I think the hon. the Minister has said something about this in the past, but I should like to ask him to explain this item a little more fully to us.

In conclusion I want to say that South Africa has the potential of becoming one of the greatest countries in the world. It is up to all of us to ensure that that potential is realized. [Time expired.]

Mr. Chairman, I agree with the hon. member for Walmer that the PFP is a “fat cat” political party, but at the same time tries to pose as the champion of the poor. The hon. member for Yeoville has not said anything new in this debate. His speech was a conglomeration of the speeches which he made at the Third Reading of the Part Appropriation Bill and at the Second Reading of the Appropriation Bill. He has therefore not said anything new today. He has mainly made vague statements and put vague questions which have already been answered. For lack of fresh arguments, he has therefore merely repeated these arguments.

During the Third Reading of the Part Appropriation Bill, the hon. member for Yeoville made six requests of the hon. the Minister of Finance. I should like to repeat them briefly. I quote from his speech (Hansard, 20 February 1978, col. 1431)—

What are the facts? From the proposals of the hon. the Minister, it is clear that the general Bantu tax of R2,50 has been abolished with effect from 1 April 1978. He has repeated that today, and has said that an interdepartmental committee in connection with the income tax system in respect of the Blacks has been appointed, and that the matter will be examined in due course. I again quote from the hon. member’s speech—

He need merely go and read up in Hansard my speech in the Third Reading debate on the same Bill to see quite clearly that it is in the financial interests of the vast majority of working married women to retain the present tax system. Furthermore, with the abolition of the 10% surcharge on individuals, more working women are being placed in that category.

Thirdly, the hon. member said—

The hon. the Minister has not proposed a five-year budget plan, but has come up with a much better plan, namely a change-over to a system of taxation which is based on spending rather than on income.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Chairman, I move—

I do this in order to give the Minister of Information the opportunity to make a statement.

Agreed to.

House Resumed:

Progress reported.

Mr. Speaker, during a recent debate in the House of Assembly I announced that an investigation was to be conducted into the functioning as well as the administrative controls of the Department of Information.

However, another set of factors and considerations has now come into play and has made it necessary to consider the matter from a wider political perspective.

In recent years, in view of the harsh general onslaught on the Republic, the Department of Information has been expected to deal with certain sensitive and unorthodox liaison matters and information actions. This has resulted in officials having to perform unusual tasks and having to act in unusual circumstances at times.

Unfortunately, this has given rise to questions which have resulted in a stream of harsh publicity concerning the activities of the department. Speculative reports, the linking of private matters to official matters, the process of emphasized repetition of the same kind of reports, allusions and insinuations— all these methods have created an atmosphere of suspicion in respect of the activities of the department. Mostly these things have taken the form of sustained concentration on the persons of a few individuals in the department.

The sustained and intensive nature of this campaign of suspicion-sowing and discrediting has now made it extremely difficult for the Department of Information to continue its activities on the existing basis.

Therefore, it is clear that the Department of Information can no longer continue to exist in its present form. I shall, therefore, request the Cabinet to approve of the Public Service Commission investigating a complete restructuring of the Department of Information and making an evaluation of its functions. The Public Service Commission will be requested to take existing models in other countries into consideration as well, for example the British Central Office of Information and the American International Communication Agency. The Government regards the task of its information machinery as extremely important, especially in the light of the present propaganda, political and economic onslaught on the Republic. Therefore the Public Service Commission will be requested to commence the investigation immediately. Obviously, it might take several months before the Public Service Commission may be able to make a considered recommendation. In the meantime the department will proceed in the normal way with its activities and the Secretary for Information and I shall, after the Parliamentary session, attend the annual conferences of our foreign officials in Europe and the USA.

In the meantime the Public Service Commission has, in the light of these circumstances, made a recommendation for certain interim changes, and these are the regrading of the two existing posts of Chief Director: Information and Chief Director: Planning, as well as the creation of a post of Chief Director: Administration, i.e. charged with administrative and financial services, as the second highest post in the department. This will result in the existing post of Chief of Administration—with a rank of Deputy Secretary—being abolished.

In this way the internal administrative and financial control in the department will be strengthened to a considerable extent. The officials whose posts will be affected by the regrading and abolition of posts, i.e. Dr. D. O. Rhoodie and Mr. J. F. Waldeck, have already indicated that they are prepared to retire on pension at the end of May. The Public Service Commission has indicated that these steps flow purely from re-organization and have no bearing on individual officials’ efficiency or performance of duties.

Mr. Speaker, may I ask the hon. the Minister whether he is of the opinion that the inquiry by the Select Committee of the House of Assembly has played no role in this matter? [Interjections.]

Order! I just want to point out to hon. members that the Vote of the hon. the Minister of Information will come up for discussion next week. All matters in this regard may be thrashed out at that time. At this stage I can, at best, allow a very relevant question about the Department of Information.

Mr. Chairman, I have already said that during the Third Reading of the Part Appropriation Bill, the hon. member for Yeoville put six requests to the hon. the Minister of Finance. I have already dealt with three of these requests. Now I come to the fourth point which the hon. member for Yeoville made. He said—

What do the hon. the Minister’s proposals comprise? The reduction of 2,5% on the levy on companies on normal tax, as well as the abolition of the full 10% surcharge on individuals, already satisfies this request.

The fifth request which the hon. member for Yeoville put to the hon. the Minister was the following (col. 1435)—

The hon. the Minister has increased social pensions by 11,4% to 23%. He has increased civil pensions by 5%, with minimum of R15. The sixth request by the hon. member is (col. 1436)—

The fact that the 10% surcharge has been abolished satisfied this request. But after the hon. the Minister has complied with these requests by the hon. member—and even to a greater extent than he expected and hoped— the hon. member makes a great fuss and says (col. 3348)—

He continues and says (col. 3349)—

He then tried to illustrate this by means of examples. His first example was (col. 3641)—

Is this not what the hon. member and his party have been advocating here all these years, namely the scaling down of marginal limits?

What do you get when you earn R3 500?

We are coming to that. He carries this argument further with a piece of nonsense. He says that we should look at income after tax. In the case of a married man with two children, the income after tax which one has left when one earns R5 000 per annum is R4 703. If one earns R20 000 per annum, one’s income after tax amounts to R14 808. At R30 000, one’s income after tax is R19 000. What is interesting, he says, is that the income after tax of a man who earns R20 000 per annum is three times greater than that of a man who earns R5 000 per annum, but his tax concessions are 17½ times greater. The income after tax of a man who earns R30 000 is four times greater than that of a man who earns R5 000 per annum, but his tax concessions, in terms of the budget, is 37 times greater. I want to ask him whom he thinks he is bluffing with such a specious argument. The hon. member tries to indicate how much greater are the tax benefits of those with a higher income. One can easily conjure with figures. But on the basis of the same figures I want to prove the opposite to him. The man who earns R5 000 per annum pays 5,9% of his income in tax.

The man who earns R20 000 per annum pays 26% of his income in tax. The man who earns R30 000 per annum pays 36,7% of his earnings in tax. We therefore have a ratio of 5,9:26:36,7. I might just as well ask the hon. member whether that is fair. No, it is very clear that with this year’s excellent budget, the hon. the Minister has succeeded in presenting a budget against which no real criticism can be expressed. For that reason one should expect such senseless criticism.

I conclude with the statement with which I started: The PFP is a “fat cat” political party which poses as the champion of the poor.

Mr. Chairman, according to the programme of the Treasury as described in the estimates of expenditure this year, one of the tasks of the Treasury is—

This, on the face of it, would seem to create an opportunity to discuss a statement made earlier this afternoon and which cries out for urgent debate. I understand, however, Mr. Speaker to have ruled that the debate of this matter will have to wait for the discussion of the Vote in question next week. I shall therefore, with great regret, turn to a happier subject and one which perhaps bears more hope for the future of this country than the sorry tale which we heard at the beginning of our proceedings this afternoon.

The happier subject is that today has been announced to be the international solar energy day. It was so announced on the radio and it is a day which is being honoured in South Africa more in the breach than in the observance. I hope, however, to elicit some response from the hon. the Minister since this particular prospect is one which may yet play, if properly handled, an important part in the financial economy of this country. I believe that if full encouragement were to be given by the hon. the Minister in his capacity as the main taxing authority or the main revision of taxes authority in this country a great deal could be done to encourage the economic use of solar energy, more particularly for low-intensity heating in respect of houses. This would enable the hon. the Minister to make quite substantial savings in capital expenditure on the creation of generating equipment in South Africa at an ever-increasing pace. If the hon. the Minister, without necessarily going into detail at this stage, would give an indication that he would examine ways in which, by means of tax concessions, he could create incentives for the rapid growth of the use of solar energy in South Africa, given our abundant sunshine, given the need for fuel conservation, given the enormous capital demands which are going to be made on a body like Escom to provide electricity, I think this is a field in which the hon. the Minister can make a very valuable contribution.

In the course of the debate on the Second Reading of the Appropriation Bill I dealt with the question of productivity. The hon. the Minister did not reply to my argument and I hope that his silence was not the silence of dissent because he certainly must also be a convert to or an upholder of the belief that productivity does, indeed, hold the key to the recovery of the South African economy. I believe that it is hardly necessary to point out that in South Africa the high inflation rate, high unemployment rate and slow growth rate are all, to some extent, due to the low productivity in this country. It is, for example, a fact that in South Africa only 5% of the economically active population have been employed in the technical, professional and managerial classes of employment since 1946. This figure has been static since 1946, whereas in the USA, for example, it has steadily increased to the extent that now the technical and professional classes alone represent 14,4% of the total employed population. Quite clearly, when one has a high percentage of managerial skills, this in turn generates further employment, better productivity and jobs and, in fact, helps to keep down inflation and the other evils with which we are now faced.

In South Africa we have to do two things. We have to provide employment opportunities on a great and growing scale. On the other hand, we have to increase our productivity with the consequent improvement in wages and promotion incentives which this entails. I believe that these two things go hand in hand. Employment opportunities, as I have said, are created by good management and productivity. Mercabank recently published some figures—I think they were published last year—illustrating that in South Africa the earnings per worker in the manufacturing industry rose by 180% between 1963 and 1975, whilst the output per worker over that period increased by only 20%. In the mining industry earnings increased by 400% whilst production hardly increased at all. In the construction industry the labour costs increased by 200% whilst output increased by only 20%. This is a very poor record. It is something we simply have to do something about. We are compelled for social reasons—if you wish, for reasons of social survival—to ensure that people are paid wages which enable them to maintain a decent standard of living. If these wages, however, outstrip productivity to the degree that I have indicated, clearly there is something wrong with the level of productivity in South Africa because the wages we pay are by no means exaggerated in ordinary world terms.

Let us look at the GNP per capita and see what is happening. In Japan the GDP per capita is $2 320 per year. The figures I am now giving are 1972 figures. They are somewhat higher, therefore, at the present time. For West Germany the figure is $3 390 and for Australia $2 980, approximately $3 000 per person. In South Africa our per capita figure is $850.

Look at the composition of our population.

Indeed, that is exactly the point I am coming to. If one took only the Whites in South Africa, one would certainly find a much higher per capita figure. The fact is, however, that we are a mixed population, and in order to achieve the growth we need, the productivity we need and the international competitiveness we need, one cannot tell one’s customers abroad that they must treat our prices differently from other peoples’ prices because we have a large Black population that is not very productive. One has to do something about the productivity of one’s own people. That is the answer. These comparisons are futile unless we ourselves learn the correct lessons from them.

In a recent paper from Assocom it is shown that in the USA a 23% increase in the GNP could be directly attributed to an improvement in the educational system in that country and a correspondingly wider participation, by all sections of the population, in that system. We would all agree that part of the method of increasing productivity in South Africa must be to equalize the educational system so that everyone in South Africa gets a fair chance to improve his educational qualifications. More than just education, there must also be equality of opportunity. In this regard I want to quote what Dr. Anton Rupert said quite recently—

[Time expired.]

Mr. Chairman, I agree with what the hon. member for Constantia said at the beginning of his speech about the more economic utilization of solar energy. In a country like South Africa, where the sun shines such a lot, we ought to conserve energy for domestic use in particular by utilizing the energy of the sun. It struck me that the warmer countries around the Mediterranean were already utilizing the sun to a great extent for the supply of domestic energy. I think it is one of the sources of energy which is far from being sufficiently utilized in South Africa.

The hon. member has also referred to the fact that we should try to bring about higher productivity in South Africa, and also that we should create more employment opportunities. I think the hon. member said that these two matters went hand in hand. Although I am not an expert in this field, it appears to me that in South Africa, it is difficult to link these two concepts. In a recent leading article in Die Burger, the level of productivity of our country was compared with those of other comparable countries, and it was absolutely shocking to see the result. One must, however, take into account that it is a reality in respect of our country that we have a workers’ corps with a wide spectrum of skill. That should be taken into account. The productivity can only be increased if we industrialize more, mechanize more and automate more. But that would also mean that we should be able to supply fewer people with employment.

Not necessarily.

Yes, it is so. In our country, we shall seriously have to consider going back to manual labour to a greater extent and partially eliminating machinery to create employment opportunities for people. For that reason, I say that although it is an excellent idea which we all strive to achieve, and although it is possible in certain parts of our national economy, the two concepts to which the hon. member referred, can otherwise simply not be linked.

That, however, is not the reason why I have risen to speak. I should like to address a few words to the hon. the Minister regarding one of our national monetary units, namely the R1 note. Today, every one of us can feel the effect, on ourselves and on our pockets, of the decision gradually to withdraw the R1 note from circulation. Anyone with a few R1 coins in his pocket, can feel how inconvenient and irritating it is.

Hear, hear!

I realize that it is late in the day and that very sound reasons have been furnished why this decision was taken. I should nevertheless like to make an appeal to the hon. the Minister at this late stage seriously to reconsider the matter for the reasons which I shall advance. The R1 coin is not a popular or a practical coin. Nobody likes to receive it at a counter. It is therefore not welcome. It is clumsy and heavy and causes confusion on account of the fact that it looks very much like the 50 cent coin and that the milled edge is not as conspicuous as we thought it would be, and therefore does not make the difference clear. Hon. members have probably also experienced such confusion at some time or another. Sometimes one pays one’s account with what one takes to be a 50-cent coin. When one walks away, one is asked to come and collect one’s change, because one has actually used a R1 coin. In a dining-room of this House, I have seen an hon. Minister putting down a R1 coin and a 10 cent coin to pay for his meal. The waiter evidently thought that he was not getting all his money, but because it was a Minister he did not want to say anything to him. He just looked at the money but did not take it. However, the Minister concerned noticed this and took out a R1 note and put the R1 coin back in his pocket. The waiter then took that, satisfied. What this amounts to is that confusion arises in this connection. I am now merely referring to the additional considerations. My most important consideration is the fact that coins are regarded by the public at large as small change. It must be borne in mind that the rand is our national monetary unit. But if one equates it with small change in the eyes of the public, it has the effect that its value will depreciate in the eyes of the public.

But that has in any event been caused by the NP policy. The rand is no longer worth anything in any case.

The hon. member can make his speech just now. Can he not keep his mouth shut for just one moment? [Interjections.] Mr. Chairman, I am not quarrelling with anyone. I am just putting a case to the hon. the Minister. That hon. member can put his own case.

It would have been different if the R1 coin had contained gold. But we know that is not possible. The R1 note is a practical popular monetary unit, especially among our less developed population groups. Hold out a R1 note and a R1 coin to one of these people and he will immediately take the R1 note, without hesitation.

The reason for the heavy wear and tear on the R1 note is precisely that it is such a popular and practical monetary unit and its turnover is consequently very high. We learned a lesson by withdrawing the R2 note. The insistence of the public and other practical considerations resulted in our reintroducing it. I predict today that if we withdraw the R1 note, the public will insist on it, and it will be essential that we should bring it back into circulation. I should like to ask whether we could not find some other means of preventing the wear and tear on the R1 note, for example, by using a better type of paper for the note. I should not like to see us reducing the value of the national monetary unit to the level of small change in the eyes of the public. I should not like to see us doing our national monetary unit an indignity.

Mr. Chairman, I want to deal immediately with one or two matters which were raised in the course of the debate, specific matters to which I want to refer briefly. Then I shall return to policy matters.

I should first like to reply to the submission by the hon. member for Parow. I listened attentively to what was said, and I shall immediately undertake a thorough investigation of this matter. I just want to give the assurance that this decision was not taken lightly, and I think the hon. member will agree with me. The most important consideration was actually the cost aspect, for it was found that the R1 notes lasted an average of only three or four months. Then they had to be withdrawn because they were in such poor condition. There are possibly technical ways in which one can rectify this. I shall immediately have the matter re-investigated and then I shall discuss it with the hon. member again.

The hon. member for Walmer also referred to a specific matter. He is not here at the moment, but I should like to reply to his speech. He referred to the capital subscription of R800 000 to the International Bank for Reconstruction and Development. I could perhaps explain this by saying that the Government intends increasing its capital subscription with the World Bank, in accordance with World Bank resolutions Nos. 3 and 4. Only 20% of half the capital subscription will be accumulative immediately. This will amount to approximately to 8,84 million U.S. dollars. 2% of this amount is payable in gold or American dollars and the remaining 18% in rands. The latter amount can, however, also be covered by an acknowledgement of debt so that it will only be necessary to provide for the rand value of the 2% portion during the financial year 1978-’79. Converted at the present exchange rates, this portion amounts to approximately R767 000. As the exchange rate position is still somewhat uncertain, R800 000 is provided for this purpose. This, then, is the explanation for that amount of R800 000.

†The debate has varied from the general to the specific. The hon. member for Yeoville dealt with a number of issues on a very wide basis. What I would like to do, is at the start very briefly to remind the House of what the general world economy looks like in the eyes of experts, and with that background we can perhaps look at a few other aspects of our position and our policy. I have here summarized reports from Mexico City where a meeting of a number of Ministers of Finance has just been held. These reports were published only two days ago. The IMF itself reported on the world economic position and then there is also the OECD. It is interesting to note that the two prognoses of the economic outlook correspond very substantially. It is a gloomy picture. In the introduction to both reports the phrase “gloomy outlook” appears. Mr. Witteveen from the IMF and the head of the OECD, Mr. Von Lennep, amongst others draw attention to the very substantial payments deficits that far too many countries are experiencing in the world. They then talk about the financial instability as a result of that. They also refer to the inadequate investment worldwide.

This is a big problem which featured prominently at the IMF discussions of last September. The fear of a resurgence of worldwide inflation is also stressed by both of them. They also both stress the very stubborn problem of unemployment worldwide and they do not seem to hold out very much hope that we are going to see any sudden improvement in this respect. Furthermore, they point to increased protectionism, as the one calls it, and the slow growth rate of world trade as a result of these protectionist measures. They then both refer to inadequate growth rates or growth rates that are too low in relation to all sorts of criteria. I mention these things, because this is the sort of world we live in. I also have a report before me—I need not read it—by one of the leading American banks which has also referred to the capital market in the USA. It refers to considerable uncertainties in the capital market, very largely as a result of the sort of things that I have mentioned here on a more worldwide basis.

*Then I just want to refer very briefly to the South African situation. After all, it is only a month since the budget was introduced. What can we expect to see in one month? The hon. member for Yeoville and the hon. member for Amanzimtoti were pessimistic. They said that the Government had not stimulated the economy enough and that very little had happened since we announced the stimulant measures in the budget. Surely one cannot expect a miracle within one month. However, what is the position? Hon. members will remember that I emphasized growth with financial discipline during the budget debate. I naturally emphazed the point that a better growth rate was essential, but I also tried to emphasize that precisely because of the necessity that we should protect our balance of payments in this uncertain world and also fight inflation, we should nevertheless be very careful not to abandon the policy of financial discipline which we have implemented during the past two to three years. I should like to state that that policy was a real success story. From all the newspaper commentary and commentary from the business world, it appears to me— and I find this encouraging—that there has recently been a better atmosphere and more confidence in our economy, even during the past few weeks. This is something which, to my mind, can be of real importance. We should remember that South Africa has a free market economy. Despite what others say, it is not a socialist economy, but predominantly a free market economy. There is very clearly a limit to what the Government should do. Do hon. members want the Government should do. Do hon. members want the Government to interfere everywhere and use the public’s tax money to promote all kinds of matters? I think we should be very careful in this field. There is a limited role for the Government in the economy, and we should always face this fact. This does not mean, however, that we should do nothing from the Government side and I think the budget proves this. I think— here I differ from the hon. member for Yeoville—that there is an increasing indication, even now, that the economy is slowly but surely improving. I think we are experiencing the beginning of an upswing. I want to be very careful and do not wish to put it any higher than that. Why do I say this? In the first place, because the volume of factory production during the three months from December 1977 to February 1978, was 3,7% higher than the volume during the previous three months. This may only be the figure for three months, but nevertheless there was an increase of 3,7%. In the second place, the sales of new motor vehicles during the four months from December 1977 to March 1978 were 19,4% higher than during the previous four months. This, to my mind, is a significant figure. In the third place, the downward trend in real retail and wholesale sales was reversed towards the end of 1977 and at the beginning of 1978. In the fourth place, the seasonally adjusted number of registered unemployed Whites, Coloureds and Asiatics decreased markedly, from 34 600 in December 1977 to 29 700 in March 1978. This is a decrease of 5 000, i.e. approximately 14% to 15%, during a period of three months. I find these to be encouraging developments and one truly hopes that these trends will continue. Therefore I expect that we shall experience a significant increase in the real gross domestic spending during 1978 and therefore also in the growth rate of the real gross domestic product.

One cannot see into the future, but with the facts at our disposal, we try to establish what could happen. I think all hon. members will concede that it is of the greatest importance that our economy should grow. We should avoid the one extreme, i.e. over-expenditure, and the other extreme, i.e. stagnation, and try to follow the golden mean. I have the fullest confidence that we can and shall achieve this aim with the co-operation of the private sector. This will, however, demand a joint effort. Another encouraging sign is that the rate of increase in the consumer price index was less than 10%, i.e. 9,9%, between March 1977 and March 1978. It is to be expected that this rate will fluctuate, inter alia, as a result of the delayed effect of increases in certain administered prices and the introduction of the new general sales tax. There is, however, good reason to expect that the inflation rate will show an underlying downward trend. The latest figures in respect of the wholesale price index, which have just been released, also show an increase of less than 10%, i.e. 9,5%, between March 1977 and March 1978.

According to the latest indications the current account of the balance of payments should once again show a surplus in 1978. This, of course, is of the greatest importance. The export of goods, excluding gold, will probably show a smaller increase in 1978 than in 1979, but it should increase nevertheless. In addition, the value of the net gold production will probably, and hopefully, be higher in 1978 than in 1977. In contrast, the imports should increase in the course of 1978, especially if the economy is moving into a new upswing. Because there is still considerable surplus capacity in the South African economy, the increase in imports should, for the time being, be reasonably moderate. I therefore reach the conclusion that the current account ought to fare well in 1978. Figures are not yet available for the first quarter of 1978, but provisional indications are that there has once again been a reasonable current surplus during the first quarter of this year.

As far as the Capital Account is concerned—we know that problems exist there— I do not yet have definite figures for the first quarter at my disposal, but it seems that once again there has been a significant net outflow of capital. I must, however, repeat that an important reason—not the only reason—for this is that we, the Reserve Bank as well as the private sector, are still engaged in large-scale repayments to abroad of short-term debts in particular. The gross reserves showed a small decrease but the Government and the banking sector, as I have said, have both repayed considerable loans, with the result that the net gold and other foreign reserves increased by R50 million—this is not a final figure—during the first quarter of this year after increasing by as much as R59 million during the fourth quarter last year. In other words, during the six months there was an increase of R109 million in the net reserves of our gold and foreign reserves. Therefore we can take it that we are now in a phase of moderately increasing net reserves. This is, of course, a very good sign.

†The hon. member for Yeoville today simply continued with the rather odd philosophy he propagated in the debate on the budget. He then said that we were taxing the poor. Today he became a bit lyrical and said that I was a discriminator and apparently discriminated against everybody I should not discriminate against. He came to the remarkable conclusion that we were a party of “fat cats”. I have heard some remarkable things in this House while I have been here, but I think that is about the most remarkable of them all. That a member of the PFP can accuse anybody else of being a fat cat is beyond my comprehension. What is that party by eminence? From where do they draw their support? Their support is among the wealthiest section of the population in a handful of places in this country.

Like the people of Yeoville.

Yes, it is a good thing the hon. member said that. He only got 4 300 votes in the last election.

But you have not got one single vote.

In a constituency where I would have thought he would have got at least 8 000 or 9 000 votes he only got 4 300 votes. That does not mean to say that that party is not representative of, not the rich, but the very rich in this country. That is what they are. It is a normal psychological phenomenon.

They are also their agents.

Yes, of course, they are their agents. It is a normal psychological reaction. One reads about it in the most elementary books on psychology. When one has a guilt complex in a matter like that one becomes aggressive. One becomes aggressive and tries to put it onto somebody else. I heard the hon. member say that I had not received a single vote. I suppose he said that because I did not stand in any constituency.

That is right.

I wish to be quite humble about this, but I happen to represent Natal. How many representatives did his party send back to this House, to the Senate and to the provincial council in Natal together?

But you did not have the guts to stand.

He has one member from Natal in this House.

You do not have the guts to stand even in a seat like Vryheid.

It is not a question of guts, it is a question of success. That hon. member who is making such a noise spoke for half an hour and I did not interrupt him. Anyway, he can interrupt if he likes. The fact is that one member of his party came back to this House and I have more than a feeling about it that in the next election even that one hon. gentleman will not be here. This party— my party—has the majority of parliamentary representatives from Natal in this House. The hon. member talks about fat cats. It struck me to go back to one of the sources of wisdom and I thought we might just have a look at Shakespeare. I should like to refer hon. members to Julius Caesar. Hon. members may remember where Caesar says—

Those are the people Caesar wanted, people who sleep at night. He says further—

What did I say? I said the hon. member was dangerous. Then Anthony says—

Then Caesar says—

I could go on quoting because there are some very apposite remarks here, but perhaps we shall leave the matter there. The next time the hon. member for Yeoville wants to accuse people of being fat cats, he must put his hand into his own bosom and he must consult amongst others, perhaps, people like Shakespeare.

Do you see yourself as Caesar?

The hon. member asked whether our stimulatory measures were adequate. He says that they are not. He spoke a good deal about interest rates and about too much money being invested in fixed interest securities, which, incidentally, is simply a symptom of the times. This will change. It is obviously a seasonal thing. In the third and fourth quarters of the year we will find that that will redress itself to quite an extent. However, he does not tell us, not even once, precisely what should be done. This is my difficulty with the hon. member for Yeoville. In debate after debate he comes to the House with a long list of criticisms, but he never tells us exactly what we have to do. What have we done? Last November, during a year in which the amount then voted for non-White housing and housing as a whole was a record in the budget, we arranged for an additional R250 million for non-White housing, to be spent over a period of about two years and eight months. It is being spent now on a significant scale. It started slowly, but it is now getting under way.

By January this year the Civil Service had not had relief from high living costs for 18 months, and we agreed to a moderate increase of 5%. It was not much of an increase, but if one adds to that the Railways and the Postal Services, one finds that it is probably about R230 million which is being injected into the economy over the year. Referring now to the budget, I believe that the budget gave relief exactly where it was needed, viz. in the form of a general income tax concession, which, in a full year, will be no less than R206 million.

The budget also gave companies relief of R48 million. In addition—and I think this is often left out of account—instead of repaying the next loan levy moneys in February, as we normally would, we are in fact now arranging to repay those moneys in July this year—on either 1 or 15 July. I think that is another very important circumstance because several millions of rand will go into the economy in a few months time in that form as well. The question again arises of how far a government should go in a basically private enterprise economy. How far should a government go? If we go much further, we are going to be attacked because of socialist tendencies, because we are intervening too far. However, what weighs with me is that the people who are really most affected—and this goes for the whole spectrum of business in South Africa—have informed me that they back this, that they support this order of magnitude of stimulation. With very few exceptions they support this. Almost 100% of them say they think this balance is just about right. I make this point because we gave a great deal of thought to it.

The hon. member talks of interest rates. Interest rates are tending to ease, as the hon. member knows, and I think this is a good thing because high interest rates obviously do not really make for any great incentive for further growth from an investment point of view. We have to be careful, however. I think the hon. member realizes it himself. We have to be careful if we bear in mind what has happened to comparable interest rates abroad. As the hon. member himself said, if these two get out of line, and if people, instead of finding their trade credits abroad, are now going to finance their imports, for example, out of domestic credit, it could well happen that a good deal of short-term money will go out of the country. That will not be to our advantage at all.

The hon. member referred to forward cover. I think the hon. member for Walmer also referred to the possibilities of extending forward exchange cover. I have a document here on which we have been working and I can assure the hon. House that this is something we have been looking at very carefully since before the budget. What we have done is to ask the Reserve Bank and the Department of Finance to look very closely at the possibilities of perhaps extending this scheme, among other things, to include the possibility of perhaps granting this type of forward exchange cover for private loans obtained abroad. This costs money, but it may in the long run have great advantages, depending on conditions. I cannot commit myself, but I hope to be able, before this session ends, to say more about that. Perhaps I can do so fairly soon. The investigation, however, has been under way and still is under way. As soon as I have a clear recommendation, I shall see what we can do about it.

The hon. member for Yeoville has returned to the question of the rand-dollar link. I think I have on two clear occasions—in the House and also outside—during this session dealt with this. In a particular speech I made in Johannesburg I was at some pains to explain precisely how I see this matter. I think that under present conditions it still makes a lot of sense to maintain the link with the dollar. The depreciation of the rand that has taken place since about September 1977, when the dollar began its downward movement, has still not amounted to much more than 5%. I think on balance it has been in our favour. Not long ago, as the hon. member knows, we did have the rand linked to a basket of currencies and that did not work. In fact, it worked very badly because what happened was that clever people anticipated our short-term adjustments. One could almost say that they broke our code. It did not work and we lost a lot of short-term money. We are therefore rather careful. The hon. member knows that there is an authoritative commission under Dr. De Kock looking into this. It is giving priority to this matter and we shall certainly have opportunities to go further into the matter in the light of what will be an authoritative report on the matter.

The hon. member for Yeoville made a remarkable statement, too, when he said the Government’s policy has kept us in a state of recession. I think that is an unfair statement. The hon. member is losing sight completely of what the situation was. A depression hit the world economy at the end of 1973—it was a depression; not a recession—and many countries are still wallowing in it. When towards the end of 1974 and after that the depression started spilling over into South Africa, we found, particularly when it came to round about 1976, that there was a very substantial deficit emerging in the current account of the balance of payments. At the same time we were faced with an unacceptably high rate of inflation. Clearly these two things had to be dealt with.

It is as clear as can be—the hon. member, I am quite certain, will concede this to me— that if one wants to deal effectively with inflation and the balance of payments under those conditions, the steps one takes will affect the rate of growth adversely. One cannot have one’s cake and eat it. That is exactly what we knew and we said it in this House. The hon. member should look at my budget speech of a year ago and also at the one before that. We said quite clearly that we had to determine the priorities. What were the priorities? Firstly, rectifying the balance of payments; secondly, countering inflation; and thirdly, economic growth. This therefore was an absolutely conscious, deliberate policy and I am very grateful to be able to say again that this policy has worked remarkably well. If one looks at the current account of the balance of payments, one sees that in one year, from 1976 to 1977, there was a swing-about of nearly R2 400 million from a big deficit to a big surplus. That is as well, because we have encountered a difficult capital market. Therefore, one is more than grateful that that came about. Thus, one cannot say that our policy was simply continuing or causing a recession. We had to make a clear decision and every responsible commentator I have ever come across in this country during the last three years has wholeheartedly supported the Government on that, whatever the other criticisms might be. The IMF has stated it unreservedly in writing that they consider that not only was this absolutely the correct policy, but that it is probably the most successful to have been applied worldwide in recent years.

But it caused unemployment.

Obviously, if one is going to have a low rate of growth, this must affect the level of employment. In fact, the two are synonymous. We can therefore not pretend that we did not realize that there was going to be an easing in the labour market. We realized this. In fact, I said so. Here we have the situation. It is not, however, a problem in regard to the Coloureds, the Whites and the Indians where the present unemployment rate is something like 1¼% of the labour force. One does, of course, always regret the hardships caused in individual cases. For the Blacks, of course, the figure is higher. I regret it. We have tried to publish official figures. They do not indicate the final picture but we shall be getting more figures as we go along. The figures, however, relate mainly to the urban areas. One need only look at the USA. Where is the real unemployment problem, almost a crisis? It is in the big cities. The overall unemployment figure in the USA today is roughly 7%, which is high, but in some of the big cities the unemployment rate is 30%. And who are the people who are mostly affected? The Negroes. This is how it is.

How does that help us?

That hon. member, however, says that we have caused this. He does not mention world-wide conditions of depression and recession, but he blames us. He says we must, in fact, introduce fiscal incentives in order to create jobs. I should like to remind the hon. member for Yeoville, however, that the country which has, to my knowledge, tried this more extensively than any other is the USA. The USA has a system which it calls the Work Incentive Tax Credit System. They call it “Win” for short.

I want to remind the hon. member that there is considerable dissatisfaction with this system in the USA. So much so, in fact, that they are now talking of withdrawing it by 1981. This is a scheme designed to encourage entrepreneurs to employ workers who are unemployed. The reward for doing so is a tax credit equal to 20% of the wages paid to people so employed during the first 12 months of their service. The credit is restricted to those who carry on a trade or business. The credit is limited to the first $25 000 of tax plus half of the tax liability in excess of $25 000. Where an employer discharges the employee concerned during the first 12 months, he forgoes the relevant portion of the credit. As I have said, the USA has found that the scheme is of virtually no practical value, as one commentator has put it. He points out that hardly anyone has availed himself of it. As things are at present, the scheme is destined to be abolished in 1981. I do not think I need to go into the financial figures relating to what they have set aside. The amounts are not very large in relation to the USA budget.

We are nevertheless always grateful to have constructive proposals affecting the finances or the economy of the country and we shall certainly analyse this further. We shall go into this matter further and see if we can find examples of what has perhaps happened in other countries. We shall see if we cannot perhaps find a more viable sort of scheme than the USA seems to have been able to find. I shall come back to that.

The hon. member for Yeoville criticized us and said that we were exploiting the consumer. He was talking about the sales tax. I shall come to the sales tax a little later. In referring to the exploitation of the consumer, he said there were a number of examples that were known to him. If the hon. member knows of specific cases of exploitation of the consumer in any form, I would certainly expect him to let us have the details so that we can immediately follow them up. My colleague, the hon. the Minister of Economic Affairs, stated recently that he had instructed his price control inspectors to ensure that the reductions in the sales duty and other duties were passed on to the consumer. They are spending a good deal of time on that exercise.

I should also like to draw the attention of the House to the fact that, as regards the motor industry, the reduction in sales duty averaged out in such a way that it enabled the manufacturers to reduce the retail prices of cars with effect from 30 March, the very day after the budget. This had the effect that the retail prices of motor-cars on which the higher duty was paid could also be reduced to the benefit of the consumer. My information is that this has been done in certain cases as well—not everywhere, but in certain cases. That is a matter that received immediate attention.

Then the hon. member came back to the old hardy annual of the taxation of working women, working wives.

Mr. Chairman, before the hon. the Minister leaves the question of sales tax, may I ask him a question?

I am coming back to sales tax. I want to deal with the issues raised as I have them before me. I think that the hon. member for Smithfield dealt extremely well with the question I am referring to in an earlier debate on the budget. I want to suggest to the hon. member for Yeoville that he ought to study the speech made by the hon. member for Smithfield. He quoted some excellent figures which give the lie to the argument the hon. member for Yeoville put forward here today. One must remember that there is also an official report I tabled two years ago, drawn up by the Department of Inland Revenue, and containing the comments of the Standing Commission on Tax Policy. There this matter was dealt with, I thought, rather scientifically and carefully and certain clear conclusions were arrived at which I certainly have never yet seen rejected or upset by reasoned argument. This matter is, therefore, not as simple as it might seem. I think that the hon. member for Smithfield’s speech, which appears in Hansard and in which specific cases are quoted, as well as the official reports, bear closer study before one jumps to conclusions.

I now wish to turn to the sales tax as such. Something that has been said here today is surely true, viz. that here we have a tax which, in so far as one can approve a tax, just about enjoys general approval, and not only in this country, but world-wide. We are one of the last countries in the Western World to introduce this tax. The USA, Britain, Germany and others have had it for years. Some of them have gone over to a variation of it, which they call the VAT system of taxation. VAT as it is usually applied unfortunately does have an escalation factor and that is something we want to avoid in our economy at all costs. Surely, here we have a tax that is aiming at a very substantial reform of the tax system. We are wanting to get away from the heavy incidence of direct taxes and the corresponding low incidence of indirect taxes which has emerged in this country over the last 15 to 20 years. Indeed, although I do not have the figures before me—I think I gave them in a previous debate—the relation between indirect tax and direct tax is such that indirect tax accounts for some 30% while direct tax accounts for nearly 70%. Although I cannot say today what the ideal proportion between the two would be, I can say that on the part of all authorities this is regarded as completely out of balance. Here we have a tax which, contrary to the hon. member’s arguments, has the great advantage that it brings the whole population into its network.

Including the poor.

Surely this is what a tax should aim to do. A tax is aimed to embrace the whole community where each will pay according to his ability to pay. When I say “the whole community”, I must add that, obviously, if one looks closely at the details, one can find good arguments for exempting certain things. I am not saying that there should be no exemptions. In principle, however, the great advantage of this tax is that, unlike so many other taxes, of which the classic example is the sales duty which is so selective that it contains a great defect in that respect, this sales tax embraces the lot while it contains the element that each will pay according to his means. Now the argument is suddenly put forward by the hon. member that this is taxing the poor.

That is right.

Right? It could not be more wrong. Each person, depending on his income and his habits of consumption, will buy the things that he requires in relation to his ability to pay. We are not requiring anyone to pay X rand on a particular item.

He has to eat.

Of course he has to eat but it is not only foodstuffs that are taxed. One is taxing over the whole spectrum of production.

He has to eat.

Of course he has to eat but this does not justify the outlandish comment of the hon. member—which he thinks is clever but which, in fact, has no basic substance—that it is a tax on the poor. It is absolutely unjust.

He is correct.

It is no use hurling out repetitive noises like a parrot. That does not get the argument anywhere. The fact of the matter is that everybody is saying that this gives us the opportunity to reform the tax system fundamentally for the first time in very many years. How was I able to reduce the surcharges on income tax and on company tax? How? Because of this tax, and it is levied at a rate of 4%, not 8%, as is done in one country of which I am aware overseas, and 12% in another. In our case the figure is only 4% and there are people who are saying to me today that I should have made it 5% or 6%. However, I am prepared to keep it as low as I possible can. A figure of 4% is one of the lowest in the world. I do not know of a lower rate of general sales tax than 4% and I hope we can keep it there. It is unjust to say that this is a measure for taxing the poor. I gave figures—and I want to come to this point—in my reply to the Second Reading of the budget debate. On that occasion I spoke for at least an hour and apart from the fact that I made a statement there which I read to the House in regard to another matter, for roughly three-quarters of an hour I dealt with the debate which had taken place in this House during the budget discussions. Of that time I must have spent half an hour answering the hon. member for Yeoville particularly in regard to his allegation that this measure is a way of taxing the poor. I quoted figures, chapter and verse, of authoritative surveys of the Blacks because he is trying to say we are now suddenly taxing the Blacks.

*After all, he said today that we were discriminating against the Blacks. He does not, however, refer to all those cases where Blacks with a given income pay less than a White man. He only singles out those cases where they are paying more, and then he tells the country that we are discriminating against the Blacks. This is an extremely irresponsible allegation. It is extremely irresponsible and the hon. member should realize this because it is not true. I have the figures here …

What you are saying now, is untrue and you know it.

If I have a quarter of an hour at my disposal, I shall be able to show the hon. member …

Order! The hon. member for Yeoville must withdraw those words.

I withdraw them, Mr. Chairman, but what he says, is untrue.

Mr. Chairman, what I have said, is completely correct and true.

I told you the figures were there.

Order!

Mr. Chairman, if I can only have an opportunity to say something, I want to challenge that hon. member to say that my statement is not completely correct and true. He can wait until I have said it. What am I telling him? I am telling him that where he spoke of discrimination against the Blacks in the field of taxation, he only singled out a few cases in order to support his argument while not explaining the full situation to this House. He deliberately omitted to refer to those cases where, on a given income, the Blacks pay less tax than the Whites. I am saying it now and I challenge that hon. member to say that this is untrue.

It is untrue.

If the hon. member says this, he does not know what is going on.

Look at the scales.

Does the hon. member now wish to maintain, with the facts before him with regard to the various income classifications and the tax paid by Whites and Blacks, that what I said, is incorrect?

The Blacks are only equal on the higher scales. This is so.

I shall content myself with what I have said and I shall return to it during any debate in this House.

Good.

The hon. member has blundered with regard to this whole situation. Let us look at what the Sunday Times said in this regard, for to my mind they have the final say in this case, and in any case, I cannot put it any better. In an introductory report on my Vote, the Sunday Times said the following on 2 April: “Hopeful hints in Horwood’s budget”. I wish to say at once that I read this report with great interest. It was worth reading. What did they say in this report? They said that an argument used by the hon. member for Yeoville “misses the point”, but I leave it at that. Another argument by the hon. member for Yeoville is: “We are now discriminating against the poor; this is taxing the poor.” On this statement the Sunday Times comments—

Hon. member must listen very carefully now—

†That is the point, and not whether they pay tax or not; everybody has to pay tax except those right at the bottom where, by a general convention in the capitalist or Western World, they make certain exemptions. Everybody else pays tax according to his ability to pay it. The hon. member can smile, but I think even a first-year economics student will know that. The issue is whether the people who are being taxed have an income to be taxed on. I say “yes”. If one analyses the statistics—I shall come to this a little later—of incomes in this country—one can take any period one wishes to, but let us take the most recent period because it is always the most important—and if one analyses the increase in income of the different racial groups in the last few years, one will find that the increase in Black incomes is far beyond that of anyone else. Whether one takes it in the aggregate from the national accounts or whether one takes it from authoritative surveys in given areas, both show the same thing. How can this then be a taxing of the poor when these people are far better off than they were ten years ago? Whence this sudden accusation that we are taxing the poor? Why does the hon. member for Yeoville not have a talk with the hon. member for Hillbrow, who, in this House and in this session, said that it was high time that we reduced the marginal tax rates at the top? It is in Hansard. Why does the hon. member for Yeoville not speak to him first? Why does he not answer that? The two clash head-on. The hon. member for Hillbrow cannot make that sort of statement while another hon. member of his party, the hon. member for Yeoville, comes with this type of nonsense.

What did The Argus say when I answered this particular issue at length in my answer to the Second Reading debate? The Argus had a big headline: “Horwood ignores Opposition,” something that has never yet appeared in The Argus reporting on anything that I have said or anything that others have said. The Argus Parliamentary reporting, whatever one might think of their philosophy, has by and large been unexceptional, but here they suddenly maintain that I ignored the Opposition in my reply while in fact I dealt at length with what was the whole crux of the criticism on the budget. The rest was absolute peanuts, with respect. I dealt at length with the issue that we are supposed to be taxing the poor. I quoted figures in regard to the earnings of Blacks, etc., and I came to the conclusion that on average the new sales tax would mean an increased payment by Blacks of R1,75 a month. I put that against the vast increase in their earnings over the last few years. Yet The Argus did not publish that at all. What did they do? The clear implication of the heading “Horwood ignores Opposition” was that I could not reply to that criticism. But I did. Under this headline they put a picture of the hon. member for Yeoville—he did not speak on that day at all and was not reported—to the effect that we are now taxing the poor. What does that mean? The public is being told that he said again that I was taxing the poor and that I could not answer him. That is what it means.

You have still not answered.

I think it is disgraceful. There is no justification whatever for this nonsensical argument that we are now suddenly trying to tax the poor; especially when it comes from a man who by eminence represents the one party in the country which is absolutely bound up in wealth from beginning to end.

Anyway, I propose to leave the other matters which have been raised for the moment. I shall refer to them a little bit later.

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

I shall be talking again later.

I want to ask a question concerning sales tax. [Interjections.] The hon. the Minister said he was going to answer.

Mr. Chairman, I am just wondering who is addressing the House. I want to make a short statement later on the question of the date of implementation of the new tax and also on the question of add in or add on, something which we have discussed fully in consultation with trade and industry, again recently. I shall also answer one or two other points that have arisen, but I think I ought to give some other hon. members an opportunity now.

Mr. Chairman, I have listened with great patience for nearly 51 minutes …

You are not much wiser!

I think I agree with the hon. the Minister that I am not much wiser than when the hon. the Minister started. During the course of the hon. the Minister’s reply he said that he had received a lot of criticism from the Official Opposition and he said: “What must the Government do? The PFP does not say.”

I was referring to the stimulation of the economy.

That is correct. The hon. the Minister then proceeded to take nearly 50 minutes to talk about what the hon. member for Yeoville did have to say. I should like to submit that if the hon. the Minister reads my Hansard he will see that I did say what the hon. the Minister should do. I am a bit disappointed that he did not reply to what I had to say.

I am coming to it.

It was peanuts!

Yes, he said it was peanuts. The hon. the Minister may say so as he is an economist; I am just a poor old engineer. However, one thing I do know as an engineer is that a machine, whether it is an economic machine or a physical machine, can only perform in relation to the fuel that is being put into it and in accordance with the efficiency at which that fuel is being utilized. My criticism of the hon. the Minister and his budget in my speech earlier today was that he was not using that fuel efficiently. I am disappointed that the hon. the Minister did not see fit to come back and answer on what I had to say. I sincerely hope that he does reply and I want at this stage to apologize if I am not in the House when he replies because I have a plane to catch. I should hate for The Argus again to say that Horwood ignored the Opposition, because if the hon. the Minister does not reply to what I have had to say, I say that he has ignored us.

I want to ask the hon. the Minister: Does he really believe he can lick inflation? I said during the Second Reading debate—and this party grants it to the hon. the Minister—that his first phase of reducing the deficit in the balance of payments on the current account and restricting the supply of money has been a success. However, the next phase is to reflate the economy and I should like to ask the hon. the Minister whether he believes he is going to get the necessary growth and whether he is going to get it at a lower rate of inflation.

The hon. the Minister said that he had read all sorts of reports from outside which say that this is going to be the case and that it is going to be a good budget. We in these benches do not believe this is going to be the case. We have said that what is required in the economy today is a curbing of Government expenditure, a curbing of the tremendous increase in administered prices which is this hon. Minister’s responsibility, so that there can be more money in the hands of the consumer to get the economy going again. I should like to quote from a few authorities in this field. The hon. the Minister incidentally in his speech referred to large conferences in South America, I think he said it was, where the general prognosis was that the international economy has a gloomy outlook. He went on to list all the reasons why and said that the US capital market was evidencing great uncertainty.

I should like to quote a few authorities. In To The Point of 31 March 1978 there appeared an article under the heading “Free enterprise: can it survive?” The person being interviewed was Prof. Von Hayek, a Noble Prize-winning economist. He was asked—

He replied—

In this respect I want to congratulate the hon. the Minister. He has imposed a discipline, in respect of the money supply, upon the South African economy and he has improved our balance of payments position.

I also want to quote from a “Time Essay” in Time magazine of 10 April 1978. The article is headed “Ten Ways to Cut Inflation”. It reads—

I want to say to the hon. the Minister that the next item is concerned with the first major step in reducing inflation in the United States. All I want to ask the hon. the Minister is whether he has the political will to do what this magazine is recommending for the United States which he referred to earlier and which is in a terrible state as far as the world economy is concerned. In the article it is stated that the first step in cutting inflation is to reduce the budget. I quote—

Earlier on in this debate I asked just how the hon. the Minister is permitting the capital, which is available in South Africa, to be spent at the present time. Is he applying the discipline which is required to re-establish the South African economy? In The Citizen of 18 April 1978 there appeared an article under the heading “Capital expenditure by public sector up”. I quote from it—

So while phase one of the hon. the Minister’s disciplinary action has been successful, I submit that until he comes to grips with this politically difficult nettle which he has to grasp, he is not going to have the type of reflation of the economy which we believe is required. The next way to cut inflation which Time magazine lists here is to curb regulations and to curb bureaucracy. I want to ask the hon. the Minister just how much his new sales tax system is going to add to the bureaucracy in his department and in the country as a whole. We would like to know this. Has the hon. the Minister considered the effect of this on people who invest in the share market? According to the requirements of this system individual investors are now required to complete certain forms as to their trading on the share market. They have to say what they have purchased, at what price, when, where and why they sold the shares, and so forth. How much of this has been done in the past and how much tax is this going to yield? Last year there were 340 000 transactions on the stock market, of which 85 000 were by small investors. If there is a buying and a selling it means that there are 170 000 transactions involving the small investor on the stock market. Each one of these investors now has to submit this report to the Receiver of Revenue. I have here a statement which was sent to me and which I should like to quote. It states—

I submit this to the hon. Minister for his consideration. [Time expired.]

Mr. Chairman, the hon. member became hot under the collar because the hon. the Minister did not answer him. However, the hon. the Minister saved him from a big hiding, because our financial people will laugh about what he said before. It will be better if he writes out his speeches in future so that the hon. member for Yeoville can teach him something. What are the statements which the hon. member actually made this afternoon? He gives the hon. the Minister credit for the discipline which has been exercised, for instance in combating the problem as regards the balance of payment. He also wants to know from the hon. the Minister what he is doing to combat inflation. Then, the first proposal which the hon. member makes is that there should be more money in the hands of the public. This is precisely what boosts inflation. One cannot be more stupid than that. The hon. member quoted someone saying expressly that too much money increased inflation. If there is too much money in the hands of the public, prices will be pushed up. If these balance of payment provisions are not implemented and are abandoned, we would have a tremendous influx of consumer goods from abroad, which will cause inflation to increase even more. The hon. the Minister spelled out clearly in his budget speech that he would not relax this discipline although he is stimulating the economy to a fair extent as well as encouraging growth. Why does the hon. member for Amanzimtoti read the opinions of international economists concerning America and Europe, and apply everything as is to this country? The hon. member must be realistic. When he applies them to this country, he must take into consideration the state of affairs here.

The hon. member also said this afternoon that too much capital is invested in industries, and that this creates unemployment. He asked that we should have more labour-intensive activities and fewer capital-intensive activities. I can reply to him on this. This is how this country grew in the past and pushed up its economic growth rate. A man can only produce so much, but give him a machine and one improves one’s production method. Production can be boosted in this way. Then all we need is for the people to be better trained. However, the hon. member does not consider that. He also complained that there was too much surplus capacity in the factories. This is true. It is not necessary to spend more capital. Those factories can produce further and more without further heavy capital expenditure. They have the capacity to produce, to supply goods as well as to provide more employment. The hon. member for Yeoville, of course, was very adequately dealt with by the hon. the Minister. However, I must say that it is rather strange to me that when the budget was introduced, the hon. member for Yeoville had the opportunity to criticise it. Apart from a series of questions which the hon. member asked—I am going to refer to one of them in a moment—he did nothing else whatsoever. The discussion of this Vote is intended for criticism of the policy of the hon. the Minister of Finance. Now it seems to me as if the hon. the Minister has a number of friends in the ranks of the PFP. I therefore want to advise the hon. the Minister to continue with the policy which he is following at the moment. If I am to judge by the reaction of the PFP, I conclude that the hon. the Minister’s policy is perfect and that he should continue with it. If this is in fact the opinion of the PFP, then I agree with them.

The hon. member for Yeoville had a great deal to say about the sales tax. At the time when the budget was introduced, the hon. member suggested that it was a tax which should not have been introduced. To start with he branded its introduction as a mistake, and said that nobody wanted it. However, this is where he made a mistake. I myself pointed it out to him. The hon. member subsequently ascertained that Assocom, FCI, and many others, including the Handelsinstituut, asked for it. Now the hon. member has discovered that he made a mistake. This being so, he announces this afternoon that confusion reigns about the question of whether the new tax is going to be “add-in” or “add-on”— inclusive or exclusive. I want to express myself very clearly on this matter this afternoon.

The hon. member for Yeoville is aware that a Bill—the Sales Tax Bill—was published for information and that replies and comments thereon were invited until 17 April. Now I want to ask the hon. member for Yeoville whether he made any comment or recommendation on this.

This House is the place where it must be done!

Did the hon. member for Yeoville submit his recommendations to the Secretary or did he content himself with what he had already said in this House?

This House is the place where it must be discussed!

Mr. Chairman, my conclusion is therefore that the hon. member for Yeoville did not mean it seriously. It is not his intention to be of service to South Africa. What he asks here this afternoon, amounts to one thing only. He asked what must be done. However, I am going to act responsibly and ask the hon. the Minister to see to it that the new tax be inclusive. I wonder whether the hon. member agrees with this. In doing so, I am now also advocating the official policy of the Afrikaanse Handelsinstituut. The Afrikaanse Handelsinstituut carried out a country-wide survey. I have here a telex report which sets out the official policy of the Afrikaanse Handelsinstituut. It reads as follows—

This is what they want—

This is the policy which the Afrikaanse Handelsinstituut advocates. I agree with them. Why? I want to motivate my standpoint and explain why I agree with them. We have a large group of non-Whites in South Africa. When a non-White person enters a shop, he wants to know at once what he is going to pay for a specific article. The final price must therefore be put on the article. If the new tax is applied on an inclusive basis, it is included in the selling price of an article. The relevant non-White person therefore knows at once what the article which he wants to buy, costs. If the system works the other way round, and the buyer only pays at the check-out, it may give rise to confusion. For instance, cash registers are used in our large chain stores. It is therefore very easy for them to add the 4% tax at the check-out. Businessmen in smaller businesses who cannot afford to spend large amounts, for instance R3 000, on a cash register, will find it very difficult, however. It will mean that they will first have to make calculations or perhaps consult tables. It is therefore an extremely difficult matter.

Of course, it is very important that we should not follow a dual system under any circumstances. This could give rise to malpractice in the advertising and other industries. I therefore want to ask the hon. the Minister and his department not to allow such a system. Should one specific sector, for instance the motor industry, ask to be allowed to apply the sales tax both inclusively and exclusively, however, this could be considered. Of course, it will be a big task to adjust all prices on 30 June this year. However, it only has to be done once. All prices must be revised on 30 June and the tax must be added to them. Therefore, there will only be one price on an article. Of course, large businesses will now say that this involves too much work. However, I want to draw attention to the fact that if a price increase occurs—and this is something which I have experienced myself—the large chain stores will simply put the new prices on all their articles over a weekend. That is why I do not think that this once-only task will be too great for them.

I have just one more matter to raise before my time has expired. I want to talk about Pretoria, our capital city. Pretoria is the city which accommodates several vast Government buildings. Because it accommodates the Government buildings, the provincial administration buildings and some other bodies, there are many buildings in Pretoria upon which the municipal authority of Pretoria cannot levy any rates. We know that the Government does do something. Every year —this has been the case for the past few years—an amount is set aside for Pretoria. I want to ask the hon. the Minister please to take another look at this in order to establish to what extent the public of Pretoria can be afforded some relief by doubling the amount or increasing it as the hon. the Minister may think fit. Pretoria is a beautiful city, but the inhabitants are very heavily burdened as a result of the lost revenue caused by the fact that rates cannot be levied on those buildings. I think it is a burden which should actually be carried by the whole country.

The hon. the Minister replied in full to the statements by the hon. member for Yeoville. The hon. member for Yeoville has undoubtedly already taken note of the fact that a commission has been appointed to investigate the monetary system and monetary policy of South Africa. He must now tell us why he does not want to wait until the commission under the chairmanship of Dr. G. P. C. de Kock has published its report. He finds fault with the rand/dollar link, but this is one of the very matters which is being investigated. I have the names of the members of the commission before me. They are among the best and most competent men which one could bring together in a commission like this. If the hon. member could just wait a while until the commission had published its report, he will see what a good policy and positive steps are consistently being adopted by the hon. the Minister in order to implement his financial policy for South Africa in a sound, thorough way. [Time expired.]

Mr. Chairman, I want to come back to a more specific matter. I do not consider myself competent to elaborate on the state of financial affairs and conditions in the world at such a high level, and that is why I should prefer to talk to the hon. the Minister about something more specific.

I want to talk about the Land Bank, a Government corporation which falls under the hon. the Minister. It is perhaps important to say at this stage that the Land Bank passed its 65th anniversary in South Africa at the end of 1977. One can just say that the Land Bank has rendered yeoman service to agriculture over this 65-year period, and has also played a very important role in the financing world.

A very important amendment to the legislation relating to the Land Bank was effected in 1959. That amendment empowered the Land Bank to supplement its appropriation by means of Land Bank debentures on the open capital market. The Land Bank has achieved a great deal of success in this regard and this undoubtedly proves to us that the financial and financing world have great confidence in the Land Bank and its management as regards the way in which they utilize and control capital. We must bear in mind that the capital with which the Land Bank deals, is by its nature extremely hazardous since it concerns agriculture. I therefore want to pay tribute to the Land Bank for the success it has achieved in the capital market.

At the end of last year, the loan portfolio of the Land Bank was as high as R1 800 million. This is a large amount. As far as the long-term loans are concerned, the amount came to R150 million. As regards short-term loans, it was as high as R39,9 million. Interestingly enough, unpaid debts at that stage amounted to a total of only about 2,9%. One can therefore assume that our farmers in South Africa are responsible as regards their debts. Although they are struggling and their ability to form capital is very limited at the moment, they meet their obligations towards the Land Bank.

Another point I want to make in connection with Land Bank financing involves the cooperative sphere. If there is one sector which reflects the increase in the capital intensivity of the Land Bank, it is the financing of agricultural co-operatives. Ten years ago, the turnover in regards to the financing of agricultural co-operatives amounted to R965 million, but at the end of 1977, it amounted to R3 300 million. The Land Bank’s short-term capital financing of the co-operatives amounted to R1 044 million. The Land Bank finances a total of 45% of the capital requirements of the co-operatives. This goes to show that there are large amounts of money involved here. Over the past ten years, co-operative services and the provision of operating capital to farmers has increased from R202 million to R928 million, which only goes to show that the requirements for production financing are steadily growing, precisely because agriculture is becoming very much more capital-intensive.

One aspect which must be referred to in this regard, is the tremendously high cost of replacing wasting assets. If one looks at the R39,9 million which the Land Bank has spent on medium-term financing, one finds that a large portion of it was for providing implements. I therefore want to say that the amount to which section 34 of the Act applies, may be somewhat low if one looks at the total purchases of farmers and their capital requirements as regards replacing wasting assets. I think this is one sector of the financing policy of the Land Bank which must definitely be looked at.

Now I come to another important aspect. Another reason why this tremendous volume of capital financing of co-operatives by the Land Bank took place was that the commercial banks are no longer so eager to finance agriculture because it is a hazardous type of investment. The commercial banks’ experience has been that if one finances agriculture on a short-term basis and some problem such as drought should arise, the short-term financing becomes medium-term financing, and in some cases may even become long-term financing. Of course, not any financing institution is prepared to provide money on that basis, especially not in these times.

The other reason is that the difference in interest rates resulted in a tremendous influx of financing. Financing previously done by the commercial banks, has now been transferred to agricultural co-operatives. In other words, the demand which was met by the commercial banks in the past must now be met by agricultural co-operatives. That is why we have this tremendous figure of almost R1 000 million.

I think it is perhaps essential in these times to take a further look at the requirements of agricultural financing, especially as regards the Land Bank. We are aware that the hon. the Minister made a statement here last year which indicated that as he saw it, the agricultural co-operatives would also be able to finance products and means of production. He considered this the exclusive function of an agricultural co-operative. However, the hon. the Minister said by implication that there was also a secondary sector in which the co-operatives could have a share. Since the package deal is such that co-operatives must also pay tax, it could be the function of the Land Bank to provide financing for the secondary side of the co-operatives’ activities, financing at competitive interest rates. We should like to hear more about this from the hon. the Minister. We should like to know how far this matter had already progressed, because the whole co-operative world, as I have said, the needs and the demands for capital-intensive development in agriculture, are making this type of financing more and more essential. It is not so easy for an agricultural co-operative to obtain capital. In fact it can obtain its capital from two sources only. It must borrow it from among its members or from the Land Bank. The little money which is available to it from a commercial bank, is not of very much value. The maximum dividends which an agricultural co-operative can pay on its shares, is a mere 8%. Those shares retain their nominal value. There are no possibilities for negotiation as regards the shares of agricultural co-operatives. That is why I think it is essential for us to take a look at the Land Bank’s needs as regards the financing of agriculture in particular, because agriculture itself is having great difficulty obtaining capital.

Mr. Chairman, the hon. member has put a case in respect of the Landbank and I for one have no quarrel with the case he put, except that I should like to see the consumers in the towns perhaps enjoying the same kind of facilities that many of the people in the rural areas enjoy.

I want to come back to the hon. the Minister and to what I regard as a very serious matter. I have normally debated with the hon. the Minister in a very reasonable fashion because I have a certain regard for him. That he should, however, say here that figures and facts which I have given relating to the difference between Black and White taxation are not correct and that there is no discrimination in that regard, I consider to be a very serious matter. I want to read what I said in a statement which I made as long ago as 14 April 1977—

These figures now have to be adjusted in respect of the most recent budget, but those adjustments will not really affect the principle. I challenge the hon. the Minister to make available to me and to other members of the House, at any levels he chooses, from top to bottom, the tax the White man and the Black man pays. If he does so, hon. members will find that what I have said here is correct, viz. that at the lower levels the Black man pays more and at the higher levels it is the White man who pays more. That is illogical because there are more Blacks at the lower level of taxation than there are at the higher level of taxation. That it is why it is discriminatory. When the hon. the Minister gets the figures before him and he has made them available, I expect him to be man enough to apologize in the House for having said that what I said was incorrect. I want to say to the hon. the Minister that I have regard for him. He is a man and I am quite sure that, when he sees the error of his ways, he will be big enough to do that.

I want to turn to another matter, a matter relating to the question of ministerial responsibility. I want to say here and now to the hon. the Minister—it does not apply to him only, but it applies to every single Minister in the Cabinet—that, when things go wrong it is his responsibility and not a question of blaming everything on the department. We had a classic example of this this afternoon with the hon. the Minister of Information. He put the blame for a tax on a department and blamed other people for the shortcomings that exist in a department itself. That is something that cannot be tolerated. It is something that is against the parliamentary system and something I want the hon. the Minister to respond to. He must indicate whether he …

On this issue?

No, I am coming to you in a minute.

Does it concern my department?

I am coming to your department now.

Regarding this issue?

No, I want the hon. the Minister to get up in this House and say whether he, as the Minister, accepts responsibility for what goes wrong in his department or whether he does not. That is the real issue that is going to face the public of South Africa. The issue that is, in fact, paramount now is whether Ministers can escape responsibility in these circumstances. [Interjections.] Now I come specifically to the hon. the Minister.

I do not know why.

I come specifically to the hon. the Minister because he is concerned with the Department of Customs and Excise, with the Treasury, with the Tender Board, with the Auditor-General’ s office and with the Reserve Bank. The issues that I put fairly and squarely to the hon. the Minister are those matters relating to those departments in which disclosures have been made in regard to the Department of Information. What is he doing about them? He is the hon. the Minister in charge of these specific departments, and I shall give an example.

Will you name them?

I shall name them. The first question on which I want an answer from the hon. the Minister is: What is the policy of the Department of Customs and Excise in regard to officials who go through Customs and Excise? Are they treated the same as everybody else or are there different considerations? Will he tell us precisely what has happened in the case of Dr. D. O. Rhoodie, not only in respect of this particular instance but also in respect of all the other trips he has been on. He has an obligation to tell us that.

The second matter which I want to raise with him is the question of his responsibility for the Tender Board. He, as the hon. Minister in charge of this issue, is aware of the fact that the disclosures in the Report of the Select Committee on Public Accounts make it quite clear that in the first instance the preference which is supposed to be given to South African firms has not been observed.

Not what?

Not been observed. The Tender Board regulations in regard to preference to South African concerns have not been observed. Mr. Chairman, I ask the hon. the Minister what he is doing about that. Does he accept the situation? The policy in this regard is quite clearly set out in Question 87 on page 34 of the report. Unfortunately I have too little time to quote it in full.

I then go to the next question. We have disclosures in regard to the use of foreign currency by the Department of Information. It appears that that department is able to use foreign currency as it wishes. If a South African thinks he can buy something more cheaply overseas, he is not in a position to go overseas and buy it. However, the Department of Information can say: We can do our printing more cheaply in Spain therefore we must use foreign currency at a time when this country is in a currency crisis. The issue is: What is the hon. the Minister doing about it? He is doing nothing.

What department are you talking of?

I am talking about the Department of Information.

You are talking complete nonsense!

I am not talking nonsense. Here is the document for the hon. the Minister to see.

What do you know about what I am doing?

Well, then the hon. the Minister must tell us what he is doing, because he has kept very silent. He has kept absolutely silent with regard to this vital matter. Then we have Treasury regulations which are treated with absolute contempt by officials of the Department of Information.

And I treat you with contempt!

What is the hon. the Minister doing about it? What is he doing? He is allowing the Treasury regulations to be ignored and he is allowing a deplorable state of affairs to develop in a department. We do not hear a word from the Minister who is responsible for the implementation of the Treasury regulations.

The last point I want to make is that there is a clear disclosure in this report that a department wants to throw out money before the end of the financial year so that it does not have to go back to the Treasury.

I want to ask the hon. the Minister what investigation he has done to make sure that his economic policies are not being sabotaged in this way as they have been sabotaged by the Department of Information. What is he doing to make sure that no other department does the same kind of thing? If we have a campaign in South Africa to try to save money and we have the situation where people and a department tell contractors that they have to pay money out to them so that it does not have to go back to the Treasury, that is economic sabotage. The hon. the Minister comes to the House and he does not take the first opportunity to tell us what he is doing about that. [Time expired.]

Mr. Chairman, the hon. member has the knack of abusing a specific opportunity to discuss something whilst he knows that he will have an opportunity to discuss that matter in the future. I sometimes have the impression that the more noise the hon. member for Yeoville makes, the less he has to say. While the hon. member was talking, he looked around a great deal and I had the impression that the hon. member did not actually have very much to say at that specific point in time. The hon. member accused the hon. the Minister of “allowing Treasury regulations to be ignored”. I feel the hon. member is being arrogant in accusing the hon. the Minister of something like this.

I also want to refer the hon. member back to the original comparisons which he made in connection with the taxation scales. In this regard I refer to page 18 of the published Budget speeches, where the hon. the Minister said very emphatically what the situation was and what was being done at the moment about the question of the scales. He said, inter alia, that the R2,50 for a Bantu taxpayer was being abolished and that the interdepartmental committee was investigating the matter. However, it does not suit the hon. member to pay any heed to that.

I assume that the hon. member for Yeoville also heard yesterday about the fund which the hon. member for Houghton has and if he is really so concerned about the needy, I wonder whether the hon. member would not perhaps advise the hon. member for Houghton to put her fund at the disposal of these needy people. Am I perhaps right in saying that the hon. member for Houghton belongs to the fat cat part of their party and the hon. member for Yeoville to the Mickey Mouse part?

I think the hon. member for Yeoville was being unfair this morning when he said that the Government had forgotten the 50% of the taxpayers who earn less than R5 000 per year. The hon. member also said that these people were being discriminated against in this regard. However, what is very important in this connection is that although 50% of the taxpayers in our country do in fact earn R5 000 and less, the tax which they pay is equal to only 8,65% of the total tax which is levied. The hon. member for Yeoville must tell me now: Is this taxing the poor? Ninety per cent of the taxpayers who earn up to R12 000 per annum pay approximately 52,25% of the total tax which is levied. Ten per cent of the taxpayers—this is the category which earns more than R12 000 per annum— pay 48% of the total tax. Is this taxing the poor?

Another interesting comparison which I want to make is that approximately 54% of the taxpayers over the age of 60 years have an income of less than R5 000 per year. In this category, the income of most taxpayers is between R2 000 and R3 000 per annum. As far as taxpayers under the age of 60 years are concerned, 50% of them have an income of less than R5 000 per annum, and in the same category, most incomes are also between R2 000 and R3 000 per annum. 12½% of the total number of taxpayers in our country fall in the R2 000 to R3 000 per annum income category. Therefore, the trend of the number of taxpayers in the respective age groups above and below 60 is basically the same as regards income categories.

I should also like to compare the tax position of the categories of people above 60 years and below 60 years with an annual income of up to and including R5 000. In the comparable situation between the two categories, there is in the first place, as regards the category of taxpayers above 60 years of age, an additional rebate of R700. The tax of a person above the age of 60 years who earns R3 000 per annum is R100, and that of people below the age of 60 years who earn the same amount is R187. On a salary of R4 000, the tax for those above 60 years is R200, and for those below 60 years it is R297. On a salary of R5 000, the tax for those above 60 years is R301, and for those below 60 years it is R415. Therefore, the hon. member for Yeoville should say whether he does not think that something is in fact being done by the Government for people in these income categories. In the income categories of these age groups, the tax payable is the same only when the income approaches R15 000 per annum.

In the R5 000 per annum income group—I want to refer to this category in particular— there were 128 711 taxpayers above 60 years of age on 30 September 1977. Of these taxpayers, 110 557 were married. This is the income category in which pensioners usually fall. I want to ask this afternoon that more attention should be given to those who fall in this category, especially those who are older than 60 years. There is a great deal of appreciation for the non-recurrent extraordinary additional amount of R10 million which was appropriated in the budget. The reason for this was—I quote from the budget speeches—

This allocation which has been made is another refutation of the hon. member for Yeoville’s “taxing the poor” statement.

There is a great deal of appreciation for the increase in social and civil pensions which the hon. the Minister announced. Over the past few years, property tax has been subject to substantial increases throughout. Electricity rates and other service levies have also been increased, while there have been other increases as well in the cost of living. Many of the people in this income category have their own homes today and are actually struggling to meet their obligations in order to retain these properties. We have the situation that some of these people want to sell their houses and other properties in order to supplement their income by means of interest. It is common knowledge that this is not the right time to get rid of one’s house. The pensioners cannot easily find employment at the moment in order to supplement their income.

I believe it is essential for everyone to be a home-owner with a view to creating a stable community and that is why I should like to advocate the consideration of the following few suggestions in connection with people in this category: When someone like this rents a place, I want to suggest that the rental may possibly be deducted from his taxable income. In the case of his own home or flat on which he has a bond, I feel someone like this should be entitled to deduct the interest which he pays on the bond every year from his taxable income. Thirdly, I want to suggest that someone like this should be entitled to deduct the property tax which he pays from his taxable income. I believe that we should provide the incentives, for pensioners in particular, so that we can assist them in retaining their properties.

There is no detailed information about ages in the income categories, but it would be interesting to know how many taxpayers are older than 80 years and what the total amount is which they pay in income tax. I agree with the basic principle of taxation, that the tax should be determined according to income and not age. In fact, this principle was also confirmed by the Franzsen Commission. However, I feel that if someone has reached the age of 80, he has done his share and perhaps we could make a person like this an honorary citizen of South Africa and exempt him from taxation, or allow him to pay a nominal tax only.

In conclusion, I should just like to touch on another unrelated matter about which I have received representations, and this is that the offices of the Receiver of Revenue are only open to the public in the mornings. I want to ask respectfully whether the offices could not be open to the public from 14h00 to 14h30, but not necessarily every day. I feel there is merit in the request that the office hours during which the public has access to the offices of the Receiver of Revenue should be extended. I shall appreciate it if the hon. the Minister will give attention to this matter as well. [Time expired.]

Mr. Chairman, I want to congratulate the hon. member for Klerksdorp on his speech. He provided so many facts that I think the hon. member for Yeoville could not understand much of his speech. The hon. member for Yeoville was rather bombastic today about a matter which is still being discussed and investigated by the Select Committee on Public Accounts. I wonder whether this was very decent of him. I think he actually spoke about expenditure on flights, etc. I wonder whether the hon. member’s behaviour was quite as decent as one would have expected from an hon. member.

However, there is another matter which I want to raise. It is very clear to me that the hon. member was not really speaking for the benefit of the House, but rather for the benefit of some person or persons in the public gallery. He tried to create the impression that the tax levied on Black people was being used in the interests of White South Africa. He knows very well that the yield from this taxation is given to the homeland Governments. There is therefore no real comparison between the tax which they pay and those which the Whites pay. How can he compare the two? He should know that this is the case. He tried to give the public the impression that taxes were wrongly being levied by one Government to the advantage of that Government. I hold this against him, because he should know better.

In his budget speech, the hon. the Minister summarized his entire policy in one sentence, viz. that our economic growth should be accompanied by financial discipline. I should like to say something about this. The budget has created the climate and the hon. the Minister has taken the fiscal and monetary measures to achieve this objective. However, the essence of the problem is that we are faced with an ever increasing cost of consumer goods. If economic growth is not accompanied by a levelling off of the inflation rate, we will not really achieve much, except that it may possibly have a favourable effect on our unemployment figure. Of course, this in itself is already an objective.

If the increase in prices as a result of higher production costs or an excessive protection of local industries should have a negative effect on the expenditure on consumer goods, we would not be able to maintain economic growth. Since the first phase of economic growth must necessarily be accompanied by a better utilisation of our production means, it is obvious that the unit cost must drop. I want to appeal to our industry today to pass any such drop in production cost on to the consumer, because this is bound to cause a drop in the inflation rate, which in turn will create a greater demand for goods.

Another requirement for economic growth is confidence, and I do not think that there should be any lack of confidence at the moment. In the first place, the improvement in our balance of trade and the constantly rising export figure should be a great encouragement. According to the Financial Gazette of 28 April there was an upward trend in our exports in March which brought them to a little over R550 million, while our imports dropped to R493 million. This therefore leaves a surplus of just over R57 million, or 86% higher than the surplus which we had in February.

However, there is another factor which can stimulate confidence in our economy. South Africa is an excellent investment field and this is emphasized by the actions of the Carter Administration in particular and by the methods which it is using to discourage investment in South Africa. The confidence of the foreign investor in South Africa is so great that legislation alone can prevent him from investing in our country. However, if we bear in mind that the policy of any country is ultimately determined by what is in its own interests, then I believe that we will not have any problems, even in future, with investment of foreign capital in South Africa. I believe that political occurrences in Southern Africa have had a much greater influence on the negative investment policy of countries abroad in recent years than our own policy of our economic ability.

In spite of everything which is said to the effect that we in South Africa must make concessions to attract investments from abroad and to give our friends abroad more ammunition, I feel that all the developments which have taken place as regards our sport policy as well as those in other spheres have not changed things in any way. America, which insists so strongly on “one man, one vote” for South Africa, has made much less progress over the past years than we in this country. We have already made two States independent over the past few years and there is a prospect of a third. This is where “one man, one vote” really counts. What is the actual position in America itself? In spite of their insistence on “one man, one vote” or their talk about equality, I have a document here which I have received from the American embassy. It reads—

In America, with its equality between people, there is still a “Black Caucus” after all these years.

Do you not have a “dopper” caucus as well?

The report goes on to say—

Therefore, it is very clear that America has not been able to come to terms with this question of equality between people or the reality of diversity between people. It exists in America just as it exists in South Africa and basically we have the same problem. The only difference is that we in South Africa are finding a real solution to this problem which America apparently cannot find. I believe that our policy is laying the foundation for economic growth, and for sustained economic growth; i.e. if the private sector makes full and proper use of the opportunities which are now being created in this budget. However, we must bear in mind that the ability to form capital will decrease with economic growth, as will our domestic savings, which have already reached the record amount of over R900 million. Therefore we cannot relax our attempt to obtain foreign loans for sustained growth. Since it is clearly stated in the budget that the State needs only R75 million in foreign capital for its own requirements this year, I think that there is still sufficient opportunity for us … [Time expired.]

Mr. Chairman, I merely want to respond to the hon. member for Losberg in one single sentence. The hon. member tried to draw some kind of inference that I had acted wrongly in referring to matters of the Select Committee. If he would bother to look at the record of the document, he will see that every single item I referred to is in fact in this document. This document is the report of the Select Committee which has been tabled. What the hon. member has indicated constitutes a reflection on the Chair, because, Mr. Chairman, if it were in fact still being dealt with by the Select Committee, you should have stopped me. Let me just put that simple point in perspective.

There is one other matter which arises from this Select Committee report. It is a matter which I want to raise with the hon. the Minister because it also affects his department. That is the situation in regard to the Audit staff. If the hon. the Minister will look at the report for the year 1976-’77, and if he will look at the evidence that was given by the Auditor-General before the committee— and I am referring to paragraph 59 of the report—he will see that there is a very serious position in regard to the Audit staff and that the significance is not only that the audit cannot be done. I want to refer now to question No. 65 and question No. 66, on page 19 of the report. I quote question No. 65—

The answer to this question was—

Question No. 64 reads as follows—

Now we come to question No. 66, which reads as follows—

The answer to this question was—

The significance of this—and I am sure the hon. the Minister will agree with me—is that when one has a situation, whether it is in a business or in a State department, in which the people know that the books cannot be audited and that no one is going to check up on them unless they are unlucky, the possibility of abuse is a very real one. I therefore make the appeal to the hon. the Minister that he should set as a priority the strengthening of the Auditor-General’s staff in order to enable them to do more audits and to enable them to make sure that there is the necessary safeguard so that abuse cannot creep in as it has crept into the situation of the Department of Information.

That is not true!

What does the hon. member mean when he says that it is not true? Of course it is true.

It is not true and the hon. member knows it.

If the hon. member for Parow would bother to read the report he would not make such a stupid statement. Of course, I know that as a Chief Whip he is very busy and does not have the time to read it. It is really because he is so busy that he makes such silly remarks.

You are generalizing!

The truth is that the Department of Information is in a situation as a result of not obeying the rules, as a result of ignoring the Treasury regulations to such an extent that it has affected the whole position of South Africa in the outside world. The credibility of the Department of Information is now at stake and that is why the hon. the Minister had to say this. The truth is that it is all due to the fact that people do not obey the rules. In this instance they have not obeyed the rules. That is the simple situation.

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

I do not have time to answer any questions now. [Interjections.]

No, he only wants to smear!

Then the hon. the Minister talks about the concessions that are given …

Mr. Chairman, on a point of order: Is the hon. Chief Whip allowed to say that all the hon. member for Yeoville wants to do is to “smear”? [Interjections.]

Order! I request the hon. Chief Whip to withdraw that word.

Mr. Chairman, I thought that I was not out of order. Nevertheless, I withdraw it with pleasure.

The hon. member for Yeoville may proceed.

I forgive the hon. Chief Whip. He knows not what he does. [Interjections.] I want to deal with the question of taxation.

I have spoken at some length about discrimination in taxation, etc., but there is another aspect I should like to draw the hon. the Minister’s attention to. Has it been his intention to give tax concessions to non-residents? I say this because what the hon. the Minister has done by the announcement he made in his budget speech—and perhaps he did so unknowingly—has been to reduce the withholding tax on royalties for non-South African residents from 12,9% to 12,6%. Would he therefore like to tell us what case can be made out for tax concessions on royalties to non-residents, or does he intend to amend the Income Tax Act so that there is no such concession? With great respect, I myself have very strong views about the flow of royalties out of South Africa, particularly in regard to certain performances and films, royalties which I think are, in any case, excessive. I certainly will not support a measure in terms of which a tax concession on royalties is given to non-residents in South Africa at a time when concessions are not given to people who, to my mind, are more deserving.

There is another matter I should like to deal with. I am referring to the question of inflation. The hon. the Minister spoke, a little earlier today, about the problems of inflation. With some degree of pride he referred to the fact that last month the inflation rate went down to below the two figure level, but I think it went down temporarily. I do not believe that that is a permanent state of affairs, and I therefore again want to make an appeal to the hon. the Minister today for an index-linked investment.

I want to tell the hon. the Minister about what is done in the United Kingdom where there are index-linked savings certificates which are made available, in particular, to the aged. If individuals are of a certain age they can take these out. They are for men over the age of 65 and women over the age of 60. We do not, however, have to keep to those particular age limits. They can be purchased in small units and they have a tax-free yield. They also have a bonus which is paid and they increase by the amount of the consumer price index that pertains. In this case there is a limit to the amount of the investment. In the United Kingdom there is a maximum holding limit of $500, and I want to make a plea on behalf of the elderly people in South Africa who need protection against inflation and who are not people who can make sophisticated investments. My plea is that the hon. the Minister should introduce a similar index-linked savings certificate in South Africa. I am prepared to make the certificates and the pamphlets available to the hon. the Minister if he has not yet seen them. I certainly believe that there is a very strong case to be made out for this type of investment in South Africa.

I now want to come to what the hon. member for Losberg touched upon. I specifically want to touch upon the economic development that has taken place in South Africa. I want to deal specifically with the homelands and to quote certain figures which completely contradict the case the hon. member for Losberg sought to make out. If we look at the GDPs of the homelands in South Africa, including Bophuthatswana, we find—a most remarkable situation—that the total GDP of all the homelands, excluding the Transkei, is 2,37% of the GDP of the Republic as a whole. As far as Bophuthatswana is concerned, it is 0,76%. If one therefore subtracts 0,76% from 2,37%, one finds that the GDP of all the remaining homelands in the Republic of South Africa is just over 1½) of the total. This is the most scathing of indictments of the whole of the NP’s policy because one cannot solve South Africa’s problems for 69% of the population that has only 13% of the land and less than 2% of the GDP.

That is a dangerous thing to say.

Nobody will accept that. [Interjections.] What is even worse, if one looks at the GNP …

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

No, I do not have the time. I have only one minute left. If one looks at the GNP, with kwaZulu as an example, one finds that in 1975 the GDP for kwaZulu was R180 million whilst the GNP was R790 million. That shows that the main export of the homelands—and the other pictures are the same—is, in fact, their labour. They have virtually no other exports except their labour, and this is not a viable economic proposition. [Time expired.]

Mr. Chairman, I should like to react immediately to the speech by my friend the hon. member for Sunnyside. He put questions to me which are especially concerned with compensation to municipalities in general and to Pretoria in particular. That is one of the aspects of municipal financing which is at present being investigated very thoroughly by the interdepartmental committee appointed some time ago under the chairmanship of Mr. Browne, the former Secretary for Finance. I have received a message from Mr. Browne in which he informs me that his investigation is progressing favourably. As I expected, it is a very thorough investigation. Mr. Browne expects to be able to submit his report to me before the end of the year. What we are concerned with here, is a very important matter and of course it affects other municipalities as well.

The hon. member for Klerksdorp wanted to know whether it was not possible to introduce longer hours at the offices of the Receiver of Revenue for the receipt of taxes. That is something which is considered from time to time. My information is that the volume of cash payments has declined considerably in any case, and furthermore very few payments are made during the afternoon. I shall nevertheless take up the matter with the Secretary for Inland Revenue and we shall see whether anything can be done about the matter.

†The hon. member for Amanzimtoti seems to have left. He rather took me to task because I had not commented on what he said. When I spoke the first time, however, I did say that I would not be able to deal with everything raised up to that stage. I understand he has explained why he could not be present at this moment and I fully accept his reasons. It was never my intention to disregard the points he had put to me; I was intending to deal with them at this stage.

The hon. member suggested that there was an overspending in the public sector relative to the private sector. He gave figures of capital invested per worker and he mentioned amongst other things Escom and so on. I think one ought to be very careful not to take that too far. Such a comparison of the investment of capital per worker obviously depends on the nature of the business. Some businesses are capital intensive while other are labour intensive. Some businesses are in between. Merely to give a figure like that can, in fact, be rather misleading and I think one has to use such comparisons with great caution.

The hon. member also referred to an article in Time in which apparently ten points are set out for the curbing of inflation. What interested me was that the very first point—he seemed to emphasize that point—referred to the need to curb Government spending and to lower taxes. That is precisely what we are doing. For the third year running we have held down Government expenditure to less than the level of inflation. In other words, one can say that for three years running there has been no increase in Government spending in real terms. At the same time it should be borne in mind that this year I have made concessions in income tax which is of course the most general tax. These steps were taken in order to give an injection of confidence to the economy and more particularly to give consumption a boost. So I think in regard to the first point he stressed we can say we have fully complied.

He then asked what the effect of the sales tax would be on bureaucracy, as he put it. Obviously, he was thinking of the number of people who would have to be taken on and what the cost would be of that. I can say that in order to administer this extremely comprehensive tax which in a full year, we would hope, at the present level of tax rates might bring in something like R1 000 million, the Secretary for Inland Revenue has to recruit 443 people under a deputy secretary at the top. Interestingly enough, the total cost he has budgeted for comes to less than R2,25 million. As I have indicated, that is in respect of a tax concerning which we would hope that, at a 4% rate, would bring in something like R1 000 million. So, that does not sound unreasonable to me, especially as it is a tax that requires a great deal of detailed work and inspection. These are the most important points the hon. member for Amanzimtoti raised.

I now want to come to the hon. member for Yeoville. I understand that he has to leave shortly. First of all there is the question of the reduction of the tax on royalties. The hon. member asked whether I was wishing to give tax concessions to non-residents. This reduction is due to the reduction in the rate of company tax from 43% to 42%. That is, of course, how it arises. The tax on royalties is determined at the company tax rate based on 30% of gross income from royalties paid to a foreign recipient. A reduction is therefore automatic if the company tax rate is itself reduced. That is in fact how it came about. I do not think that it makes a very big difference. I think the difference is in fact quite small.

Then the hon. member seemed rather upset that I should have accused him of all sorts of things which I do not think I really accused him of. What I drew attention to as clearly as I could was that when earlier today he called me a discriminator and used the question of the tax on Blacks as an example—he stressed that—he did not give us the full picture. That was my point. If the hon. member looks at his Hansard, I think he will see that that is so. I took notes. From the whole range of income and taxes paid, he extracted the range where the Blacks would pay more than Whites. My point was that one has to look at the whole range—I have it with me. If one looks at that, one will see that in respect of a whole number of cases the reverse applies. My point was, therefore, that one must have the full picture. I do not think the hon. member should have got quite so excited and I do not think he should have challenged me to do all sorts of things. I was not querying his good faith, but I was certainly saying that I thought he should have given us a more balanced and correct picture. That was my point.

The hon. member said I was discriminating. What we have done is that we have abolished the so-called “poll tax”, which I think many people regard as a bit of an anachronism, although in the past it served a purpose. Interestingly enough, it was a tax measure introduced in colonial days. It was not introduced by this Government; it was a colonial tax instrument which one could have found in operation all over Africa at one time. We have now abolished that and, furthermore, I am taking all sorts of measures within my financial capacity to bring relief particularly to the less privileged classes. Yet the hon. member says I am discriminating wherever possible. I do not think that that is a very fair allegation to make.

I now wish to turn to the question of the Department of Information.

*The hon. member for Yeoville hurled a number of allegations at me in this connection from many angles. I must say it has surprised me a little. I do not know what I had to do with this. It is not I who did the things which the hon. member investigated. I heard and read about these things as they were made public. How else should I know about them? The hon. member also knows that our Public Service has a tradition of integrity and honesty which has been built up over the years, a standard which can be compared with that of any country in the world. I do not think I am exaggerating when I say that. Because the hon. the Minister of Information made a brief statement to the House today and that hon. member was apparently annoyed because he thought I was accusing him of all sorts of things, he suddenly began to hurl these allegations at me. What have I to do with it.

†All I can say, Mr. Chairman, is that one must be fair. I have the utmost confidence in the Auditor-General and his whole department. I also have the utmost confidence in the Secretary to the Treasury and his whole department and also in the whole financial set-up that we have in the Government Service. I think it has maintained a remarkably high standard of competence under tremendous pressure of work. It is a very small staff in relation to what they have to do. They have a tradition of integrity which I think is second to none. The hon. member alleges that the whole question of Cabinet responsibility is at stake. I have never wished, in any way, to escape Cabinet responsibility for any decision that the Cabinet has taken, nor do I think any of my colleagues will ever dream of it. He referred to the customs and excise procedures, and I hope he was not insinuating that we give some sort of preferential treatment to certain people because they are in the Public Service.

That is the impression I got, because he was pretty excited when he said these things. I asked the Secretary for Customs and Excise to give me a written note in regard to the matter and I would like to read his note—

In other words, irrespective of whether or not he is in the Public Service—

*The hon. member will know what that means. In the customs hall there are two lanes. If one prefers to enter the red lane, it means that one has something to declare.

Then you are in the red.

Yes, one will then be in the red. But that does in fact mean that one has something worth more than R50 to declare. But if one chooses the green lane it means that one has nothing worth more than R50 to declare. I could not follow properly everything the hon. member was saying, because he was speaking very rapidly. I therefore do not know whether the hon. member was referring to what had happened to Dr. D. O. Rhoodie and whether he was asking me to say something about that.

Yes, I was.

I have nothing whatsoever to hide.

Are you laying a criminal charge?

Hon. members must just give me a chance. I want to be quite sure what the hon. member was asking of me. Was he asking me to say what actually happened in this case? I will deal with the question of laying a criminal charge although it does not rest with me at all.

Why not?

Are you not a lawyer? [Interjections.]

There is an Act of Parliament which lays down these procedures.

Give him hell! Why are you wasting your time with him?

What happened, was that Dr. Deneys Rhoodie was stopped by a senior outdoor officer of the Department of Customs and Excise in the green lane and asked whether he had anything to declare. He was then in the green lane. Goods to the value of R134 were then declared. However, the official was not satisfied and started to search Dr. Rhoodie’s baggage. Dr. Rhoodie then indicated that he had more goods to declare. A form was handed to him with the request that he should furnish a full written statement of all dutiable goods. Goods to the value of R222 were then declared. As the official was still not satisfied, he requested Dr. Rhoodie to take his baggage to the inspection room. At this stage, Dr. Rhoodie asked to see the Controller of Customs and Excise at Jan Smuts Airport. The form on which goods to the value of R222 had been declared, was shown to the controller. Dr. Rhoodie explained that there had been a misunderstanding and that he had not indicated on the form all the goods which he had already declared orally. He was then given a further opportunity to make a final written statement and then declared goods to the total value of R580. These goods included shoes, ear-rings, handbags, gloves, perfumes, cassettes, gramophone records and also certain books. After that, the baggage was thoroughly searched and apart from the declared goods, books were found which had not been declared. In respect of the goods which Dr. Rhoodie had declared, the Controller provisionally decided that he should pay the applicable duty of R356,01, and also produce an import permit in respect of the goods. The goods were then impounded pending the production of an import permit. Because the books and the periodical had not been declared, a provisional payment of R25 was deposited to cover a possible penalty, and the books and the periodical were also confiscated.

The matter is being investigated further by the Secretary for Customs and Excise and he and his officials will deal with it further. All I can say, is that the normal procedure will be followed from beginning to end, just as with anyone else in these circumstances. The Secretary for Customs and Excise will decide on the fine in the normal course of his responsibilities and functions. After that, the goods will again be taken from the storeroom and again handed to Dr. Rhoodie. The duty on the goods has already been paid. With that, the matter will have been disposed of.

What about the false declaration?

The question of whether or not the matter is to be dealt with by the Secretary for Customs and Excise, rests exclusively with the person himself. He may choose whether he wants to leave it to the department, i.e. to pay a possible penalty and the duties, or whether he wants to take the case to court, in which case criminal charges may be laid. That is how it is done.

Who decides that?

He does.

Who?

The man himself. He can choose whether he wants to be criminally prosecuted in a court of law or whether the matter should be dealt with departmentally by the Secretary of Customs and Excise.

I am talking about the false declaration that he made.

That matter may also be dealt with.

That is the criminal matter.

The matter is in the hands of the Secretary for Customs and Excise, who is acting in terms of the Act and is treating this in exactly the same way as with any other person.

The hon. member for Yeoville seemed to tackle me about tender board regulations.

*He said I was ignoring the Treasury regulations by permitting the Tender Board to refrain from giving the necessary preference to local undertakings for the printing of books for the Department of Information. What do I have to do with the Tender Board? Surely I will not interfere with the Tender Board. The Tender Board knows precisely what they must do. In any event, the matter was investigated by a Select Committee and their report was before this House. It is not a question that I failed to do my duty. How can that be? If these things have been done incorrectly, then surely the steps that have been taken in this case will follow. Why should the allegation now be made against me? As I understand it, the hon. member has also said that I did nothing to prevent the advance payment of the next year’s debts on the books of the Department of Information. He asked whether everyone was being allowed to act in that way. That is of course not the case. If there has been an irregular action in that the Treasury instructions have been ignored, the person or department responsible for that, must bear the consequences. That is precisely what is happening. I think it was extremely unfair and even irregular to drag me into this matter. What do I have to do with it? I have the utmost confidence in the Auditor-General, in the Treasury and in the State Tender Board. The procedures have been very clearly determined and laid down, and they must be complied with, otherwise such a department will face problems. We have an excellent example of that here today. I am sorry that the hon. member is now leaving the House, but I should like to say that I am really not happy about this attack on me in this connection.

Mr. Chairman, in explanation may I ask the hon. the Minister whether he would not agree that since a Minister is ultimately responsible for his department’s failure, the Minister would be responsible to Parliament in the case of his department failing to enforce a regulation? I think that was the point which the hon. member for Yeoville tried to make.

With respect, I do not think that is correct. That is a hypothetical case. Of course, I shall see that the various Treasury instructions and normal procedures are followed, but I would first have to know whether the procedures and regulations were followed or not. If they were not followed I must at least be informed. That is the position. The Treasury as such, i.e. the Minister and his senior officials, is very capable of doing that and has a very high standard by which they judge these things.

I shall not go into the foreign exchange side of things. If there are irregularities which can specifically be proved, I must obviously take note because we must try to find a way to ensure that this does not happen again, although one is here dealing with a moral hazard. My hon. friend of the law should know that a moral hazard is a case where a man behaves in a way other than he would normally and reasonably be expected to behave. I cannot possibly make provision for that.

He is still in the same job!

Order! The hon. member for Groote Schuur must contain himself.

However, I want to give the assurance to the House that if there is any doubt in anybody’s mind on these matters as far as the Treasury and the Auditor-General are concerned, they can rest assured that we shall bring our side to uphold the proper procedures and to render a proper service.

I again want to refer to the allegation that we are taxing the poor. I have just received the latest figures. I really do not think the hon. member for Yeoville should get away with his criticism that we are taxing the poor. In this regard he said—

If one looks at the whole range of taxpayers, the division of taxpayers will show that just over 49% of the tax-paying population earn less than R5 000. However, the point is that this 49% of the taxpayers contribute only 8,65% of all taxes. So, it is a question of relief in relation to the burden. One cannot leave that out of account. If one takes single taxpayers one notices that single taxpayers will benefit from tax concessions when their incomes exceed R1 950 per annum. That represents 60% of the total number of single taxpayers. I have further information at my disposal. Married taxpayers without children will benefit when their income exceeds R2 800. A married taxpayer with one child will benefit if the income exceeds R3 300. A married taxpayer with two children will benefit when the income exceeds R3 800. I say again, therefore, that it is incorrect to say that somebody with an income of less than R4 000 will not benefit. I have the figures. I might point out that the average number of children per family is 1,7, and so it is clear that a very large number of taxpayers must benefit.

I said that the poorer sections of the population had had a much bigger increase in earnings over the last so many years than the upper income groups. Let us have a look at the figures. The wages of Whites—I am excluding the agricultural sector now as I do not have the figures—did not show an increase in real terms between 1971 and 1977. In fact, there has been a very small decline in the average real wages of Whites between 1971 and 1977. Again I am excluding people connected with agriculture. If one looks at the wages of non-Whites, one will find that in real terms there has been an increase of 33% in the last six years. If one looks at the wages of non-Whites in the gold mining industry, one will find that in real terms the increase over six years has been 282%. The wages of non-Whites in mining activities other than gold mining have over the last six years increased by 259%. Senbank have made an interesting analysis of who is likely to pay this tax. They have based it on certain assumptions. On page 204 of the Financial Mail of 21 April 1978 there is a table which is headed “Who pays what slice of the new general sales tax?” Those earning less than R2 000 per annum will pay roughly 18% of this tax. Those earning between R2 000 and R6 000 per annum, will pay 31,6% according to this tabulation. Those earning more than R6 000 per annum, will pay 50,4%, more than half of this tax. I am sorry the hon. member for Yeoville is not here, because I think we must once and for all lay the bogey of his assertion that we are taxing the poor.

I want to make a statement on the new tax, but I understand there are at least two other hon. members who still want to speak and I think I should give them an opportunity.

No!

Then I am quite happy to continue. I want to refer to two questions which have been raised and on which we have been working for some time. The decisions were taken a few days ago after considerable consultation with the trade.

*It is in connection with the proposed sales tax. The proposed date for the introduction of the new sales tax which I envisaged in my budget speech, was 1 July 1978. Of course it is rapidly approaching now and although legislation in this connection has not yet been passed by Parliament and is still urgently being prepared by my department with due regard to submissions which have been received, there are nevertheless two matters in connection with the proposed tax in regard to which firm decisions must now be taken. I should like to inform the House about them. The first of these is whether the proposed system is to operate on the so-called add-in or add-on basis. After lengthy consultations and discussions, no unanimity has been reached in this connection by the business community and my department has therefore been obliged, in the light of practical considerations as well as the expressed wish of the majority of the business undertakings and industrialists, as reflected, with only one exception, through their organizations, to recommend—

1. (a) that each seller be free to choose whether he wishes to apply an add-in or add-on system in his undertaking. In broad terms, by this is meant that he will specify his prices either inclusive of the tax or without the tax, the tax then being specified separately either at the pay point or on the invoice;
2. (b) that there be prominently indicated in display windows, at cash collecting points and in advertisements reflecting prices, whether or not the prices of articles include tax;
3. (c) that a trader be prohibited from indicating or representing, directly or by implication, that he is absorbing the tax or is not imposing it; and
4. (d) that a trader may convert from the one system to the other but that, in order to avoid confusion, such conversion takes place at the commencement of a monthly accounting period.

The Department of Inland Revenue has also consulted the Consumers’ Council about the matter and has considered their objections to a free choice, i.e. confusion on the part of the buying public as a result of differing methods of price indication, but having regard to the benefits to the buying public of a system which is capable of easy administration they have nevertheless reached the conclusion that the recommended system is in the public interest.

I agree with the recommendations, and the legislation to give effect to the proposals will be prepared on that basis and submitted to Parliament for consideration.

The second matter in connection with which a considerable number of representations has been received, is the proposed date on which the tax is to come into operation. In my budget speech I announced that it was proposed that the general sales tax was to be instituted with effect from 1 July 1978. That date is the first Saturday of the month which, as we know only too well, is probably the busiest shopping day of the month while crowding is aggravated by the limited number of shopping hours. A new system usually has teething troubles and, irrespective of the system in force, confusion and disruption may nevertheless arise if its introduction occurs under great pressure.

One of the objectives which has constantly been pursued in planning the tax, has been to cause as little disruption as possible to business concerns, and to avoid inconvenience to the buying public as much as possible. With this in mind, I have agreed to postpone the effective date of the proposed general sales tax from 1 July to 3 July 1978, i.e. from the Saturday to the Monday.

It is estimated that such a postponement will result in a loss of tax amounting to R2 million, but I am confident that the economic recovery of our country during the course of the year will be vigorous enough to wipe out this loss.

I trust that this announcement will now dispel any uncertainty which may have existed about the system, and will enable vendors to plan their affairs in advance so that everything will run smoothly after the coming into operation of this tax.

I should also like to make an urgent appeal to those who are registrable as vendors, industrialists, farmers and service undertakings in terms of the Registration of Vendors Act to complete their declarations for registration purposes without delay and to send them to their respective Receivers of Revenue. This is in their own interests, and if, after the sales tax legislation has been enacted by Parliament and the system has come into force, they should find that they are adversely affected as a result of their neglect negligence, they will only have themselves to blame.

†I think I have just about come to the end of what I wanted to say. There are, however, certain other matters. The hon. member for Paarl has raised one or two matters to which we will certainly give attention. I have not specifically referred to all the matters raised by some other hon. members, although I think I have left out very few of them.

In conclusion I should just like to say that I think as far as the administration of financial policy is concerned, the last financial year has been a good and a challenging one. I think the results we have achieved under difficult conditions are encouraging for the future. It is up to us to maintain the sort of financial discipline that we have tried to maintain during the last two or three years in particular. It is also up to us to put more stress on the need for economic growth. We will watch this matter. We will watch monetary policy. We will watch the question of the credit ceiling very closely. This is something which is done from day to day by the Reserve Bank. In this respect we will also watch fiscal policy. If, after a reasonable testing period has elapsed, it should be proved that more needs to be done to give the economy a boost, we will certainly look at this extremely carefully in collaboration with those departments and with those of my colleagues who are more specifically involved.

I do not want to conclude my remarks, however, without paying tribute to all the members of the staff of the departments and the institutions residing under my broad jurisdiction as the responsible Minister. There are the four Departments: Finance, the Treasury, Inland Revenue and Customs and Excise. There is the office of the Registrar of Financial Institutions. There are the various banking institutions, like the Reserve Bank and the Land Bank.

*I am very pleased that the hon. member for Bethal referred to the Land Bank. I appreciate that. The Land Bank is an institution which does not often come under discussion here. I think that the manner in which the managing director and his staff discharge their functions is really very commendable. The aspects of policy and financing, and especially those concerning the cooperatives—this was also raised by the hon. member for Bethal—will be subjected to very careful scrutiny by us. In fact, we are at present looking into these matters again and we hope to take final decisions soon—in fact within the next week or two—on one or two of the other aspects of that so-called package. At least, I hope so. As soon as we have reached a decision in this regard I shall inform the hon. member of our decision.

†Mr. Chairman, we also have a number of standing commissions falling under Finance. We have the standing commission on tax policy, a very responsible body. Then we have the standing commission—which is really a technical committee—on banks and building societies. We also have a committee on building norms, a committee which is doing excellent work under difficult conditions. This committee, I believe, should be converted into a standing committee as soon as possible. Furthermore, we have various commissions of inquiry. I am thinking now in particular of the commission of inquiry on monetary policy and the monetary system of the country. It is headed by Dr. De Kock and we have great expectations that this particular commission will be able to solve some very difficult issues. Then there is also the commission of inquiry into exchange control measures probing the question of what to do about malpractices in that respect. This commission is headed by Mr. Justice Mostert and is making excellent progress. Then we also have an interdepartmental committee on municipal financing, a committee under the chairmanship of Mr. Gerald Browne. This committee has now reached the point where it will shortly be able to deliberate on its findings. We are also expecting great things from the inquiry undertaken by this committee.

Finally, despite the fact that the outlook for the world economy, as I tried to indicate this morning by reading from authoritative assessments of the IMF and the OECD, is gloomy and certainly not as buoyant as one would like to see—and these things spill over into other countries in one way or another—I still believe that we in this country have a great deal for which to be thankful.

I think it is up to us to maintain high standards, to work hard and, above all, to maintain our faith in our country and in our destiny. When one looks at this country and at the magnificent resources a kindly Providence has given us, one has to consider a man who is a pessimist as somebody quite remarkable. I think we should maintain a sober, sound perspective of sober optimism that all will go well. I do not think the world will go on indefinitely acting so arbitrarily, so unfairly and, indeed, in such a biased fashion as many parts of it have been acting against South Africa for some time. I am sure that should we be able to maintain our perspective, to keep cool heads and at the same time to get on with the job, things will improve for us. I see a golden future in more ways than one for South Africa.

I thank you, Sir, for the opportunity to have participated in this debate. I am glad I can end on that note.

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—

Agreed to.

The House adjourned at 17h26.