Mr Chairman, I ask for the privilege of the half-hour.

Mr Chairman, I believe there would not be many hon members in this House who would disagree that the conjuncture of political, social and economic forces is bringing about a rapid rearrangement of the cards in the South African game. Just how they will fall is anybody’s guess but I believe most people will agree that it is unlikely that this Government will continue …

Mr Chairman, on a point of order: Is the hon the Minister of Law and Order allowed to sit and read his newspaper in the Committee? [Interjections.]

Order! Nobody is allowed to read a newspaper in the Chamber. However, I did not see that the Minister of Law and Order was reading a newspaper. The hon member for Walmer may proceed.

Mr Chairman, I should like to address myself to some of the major matters with which the hon the Minister of Trade and Industry should be concerning himself today. I must examine this whole question in a matter of only 18 minutes because we in the Official Opposition have been given a ridiculously small amount of time—only 45 minutes in all—to debate the R1 billion-spending Vote of Trade and Industry.

My speech is an unrelieved condemnation in the light of the economic disaster …

Order! Hon members must please allow the hon member for Walmer to deliver his speech. There is far too much noise in the Committee. The hon member may continue.

I say my speech is an unrelieved condemnation in the light of the economic disaster into which this Government has led the country. As shadow Minister of Trade and Industry I have to ask myself, firstly, what the objectives of the hon the Minister should be for trade and industry; secondly, whether he is achieving those objectives; and, thirdly, what employers and employees in trade and industry see as the major impediments to development.

What are the objectives of the hon the Minister? These are unexceptionable, but it would be much better if they were more closely defined, and, where possible, quantified. In addition, a further departmental objective should be to achieve equality of opportunity for all races in the country’s trade and industry because it would be a tragedy if they were to throw the system of free enterprise over without giving it a proper chance.

How have we performed against the four objectives set by the department? The first of these objectives is a healthy industrial economy. One cannot describe an industrial economy as healthy when the volume of production dropped from an index of 100 in 1980 to 94,6 in 1985. There are, however, some more positive things. One of them is that we have at last reconstituted the industry’s advisory committee.

The second objective is the building of sound trade relations. Concerning this objective, I believe hon members will agree with me that our internal trade relations are characterised by boycotts and smouldering consumer anger at spiralling prices. I shall deal with the third objective, the promotion of foreign trade, elsewhere in my speech.

The fourth objective is the promotion of competitive conditions in domestic trade. In this regard, we still fail to control inflation and our cost structure is uncompetitive with that of foreign producers. On the other hand, the Competition Board’s recent movement into the area of price agreements, retail price maintenance, collusive tendering and similar practices is to be welcomed. So, too, is the reappraisal of the Trade Practices Act.

What do those in trade and industry—this is the important thing—identify as the major impediments to growth and development? They are in a quandary. No matter what commercial and industrial skills they deploy, their enterprises and indeed the whole economy are threatened with disaster that has its origins in the political, not the economic field. Businessmen are specialised creatures but they are now being forced to address problems for which they have little aptitude or inclination.

We find business leaders going off to Lusaka to discuss matters with the ANC. These businessmen are not just trendy experimentalists but are in fact people responsible for some of the country’s biggest business concerns. They do this because the Government creates no confidence that it understands that the alternative to negotiation is a particularly prolonged and beastly type of war. Assocom has employed Profs Lombard and Du Pisani to produce a constitutional memorandum. It stated that the legitimacy of the Republic depends on the urgent removal of race discrimination. Its message is that Blacks must have equal rights and that probably a federal kind of constitution is the best.

The Federated Chamber of Industries has come forward with a charter of rights and principles which conform to Western values, and supports our action programme to assist Government in its constitutional crisis. What is needed, says the Federated Chamber of Industries, is an internationally convincing and internally accepted programme of political reform. That is quite a condemnation of a Government that has been in power for 38 years.

Business leaders fill their annual reports with warnings and suggestions, but all of a political nature. It is a complete change from the way it used to be. They realise that the structures in which they live and trade are threatened with destruction because of the Government’s political input. The hon the Minister admittedly has to see that his department continues to handle the routine matters of trade and industry but these are now of secondary importance. The root cause of major problems is always at the moment political. That is why businessmen are forced to involve themselves in macro-politics.

It is in this area that we never hear of the hon the Minister. In fact, there is a strong impression that if he were to involve himself the hon the Minister of Constitutional Development and Planning or some other old Cabinet lion would rap him on the knuckles, saying: “Run away, Dawie; the grownups are busy.” [Interjections.]

What are the issues that most concern businessmen today? Firstly, there is the international credit squeeze. This did not come about for economic or ethical reasons. It was the reaction of any creditor who wonders whether his assets are safe. Bankers lost confidence in this Government’s ability to manage change towards an acceptable democratic type of constitution. They were apprehensive and these apprehensions were confirmed by the handling of township unrest, a declaration of a state of emergency and the State President’s Rubicon speech. It became apparent that the Government was managing by improvisation. Its reform strategy was more a matter of being prepared to sacrifice expendable limbs in order to retain the real core of apartheid.

The freezing of our foreign credit has left us in the position of a company whose bank decides to foreclose on it; it has been trading at a debt equity ratio of 1:1 and suddenly it is left without credit. What can that company do? Immediately all the other creditors also want their money and the company now has to pay cash on delivery for all its goods. That will blow the company—no matter how profitable it was previously—clean out of the water. That is exactly what has happened to South Africa. We had no alternative but to renege on our loans when they were called up.

There is no way in which we can grow as an economy and repay R1,5 billion per annum on those loans. The remedy is exactly the same as if we were a company. The remedy is to attend to those matters that are causing your banker concern. In this country it is reform.

The second most important issue with which businessmen must contend is disinvestment. I have the following comments to make on this belaboured subject: Firstly, this is another issue which the hon member for Houghton brought to the attention of those hon members five years before they grew aware of it. Secondly, do not send hon members of the Government overseas to try to persuade people not to disinvest. They do more harm than good and use all the wrong arguments. For example, it does not pay to tell people that it will hurt the Blacks more than the Whites when the Blacks say: “Please disinvest—we are prepared to suffer.” Here again the solution is political and local. If one succeeds in persuading Blacks that they are going to share citizenship fully, with all its rights and responsibilities, they will be as anxious to preserve jobs as the Government is.

There are many good arguments against disinvestment to prove that it is not in the interest of Blacks, but the Government does not have the credibility to promote these arguments. In fact, it does not even appear to have thought of them.

Quite correctly, business is concerned with two further aspects of disinvestment. Firstly, it takes years to get such a universal public movement going and it takes more years to reverse it. Secondly, disinvestment is a giant step forward towards an economic embargo.

I have in my possession a schedule of 65 foreign companies which have either partly or totally divested themselves of their South African assets since 1980, 52 of them within the past three years. They are a representative cross-section of manufacturing, chemical, scientific and trading companies and include some of the world’s best known corporate names. Each provided a conduit for technology, markets, capital or management skills. They represented access to a heritage of Western industrial knowledge.

It is against this background that we have to try to maintain, or rather obtain, a growth rate in GDP of 4% or 5%. It is almost impossible!

The third issue, which is a matter of life and death for hundreds of businesses, is the strategy of trade boycotts. Unlike disinvestment this is a legitimate weapon, if not applied with coercion, in the hands of people who have no civic rights. Hon members’ wives will remember that a sign which informed them, among other things, that all their requirements could be obtained from Nationalist shops was still hanging in their sitting room in 1981.

What is the message of the boycotter? The boycotter tells the White community: “You elected the Government whose policy was based on separation according to colour. We will take you at your word, and we will only buy from people of our own colour.” The boycotter says: “I believe in a non-racial society, and I believe that the people of this country are interdependent. Your Government believes otherwise—let us see if apartheid really works in practice.” The boycotter says: “If group areas are to restrict us to Black ghettos, let us at least spend our money there as well, and impoverish to some degree the Whites …”

Where are the Black ghettos? Why do you use that word? [Interjections.]

Little Soweto is one. That is what it is. New Brighton is another. I shall take the hon member there. [Interjections.] The boycotter tells the White community: “I repudiate the structures of Government which Chris Heunis hatches up for me. I will have nothing to do with them and I will resist them to the end of my strength. I will be ungovernable. You voted this Government in. You vote it out, then we can negotiate a democratic future for all South Africans.”

We have been through this process in sport, in the President’s Council, in Parliament, in local government and elsewhere. At first we exclude people of colour; then we create humiliating parodies of participation and, when these are spumed, we grovel for acceptance. The business man realises increasingly that this is political nonsense, and that this Government cannot be left to make the important decisions that affect our future on its own.

The fourth issue is manufacture. It is this sector of the economy which should have the greatest potential to generate growth, employment and exports. The performance of manufacture over the past five years is graphically illustrated by the following statistics. There are seven sectors that are used, namely textiles, motor vehicles, clothing, furniture, baking, footwear and printing. Together they account for the employment of 32% of all people in manufacture and they produce 34% of the gross value of manufacture.

The following statistics compare the 1981 situation with the 1985 situation: Employment in that sector in 1981 was 420 000, but in 1985 it had dropped to 399 000 people. The index for production volume in 1981 was 100, and today it has dropped to 82. The value of sales has dropped from R10,9 billion to R8,335 billion after adjustments by the GDP deflator. Capital investment amounted to R388 million in 1981, but has dropped to R133 million.

The producer of these figures analyses them further and points out that if employment had averaged an increase of only 2% per annum in the industry as a whole we would have had 178 000 more jobs in this sector today than we had in 1980, while we now have fewer jobs. The social and political implications of that, I believe, are obvious. The most devastating statistic of all refers to capital investment. If one takes into consideration that the average foreign currency value of the rand in 1985 was 39% of what it was in 1981, and that most plant and equipment is imported, the capital investment in 1985 was perhaps R73 million compared with the R388 million invested in 1981. Gross domestic fixed investment in real terms showed a decline for the fourth consecutive year, but the investment in manufacturing is of particular concern. At constant 1980 prices, fixed investment in manufacture in 1985 at R2 328 million was R1 354 million less than depreciation. That means that we spent more than R1 billion less than depreciation on new plant and equipment in 1985. As depreciation is based on historic values, and as the inflation index for imported plant and equipment is higher than our domestic inflation rate, it will be seen that it is not only our trading partners overseas that are disinvesting, but that we also are disinvesting in that sector of the economy where most growth is possible. High inflation, high risk and high taxation not only discourage the foreign investor but stultify local entrepreneurs as well. It can be proved that many of the companies which show profits and which are quoted on the Stock Exchange, are actually diminishing in size each year because they are not depreciating on the basis of replacement value but on the basis of historic value.

The fifth problem area is that of exports. No sector of the economy illustrates the importance of negotiating an acceptable constitution more than exports. It is a highly competitive business played against the world’s first teams and we cannot give ourselves any handicaps.

Let us start with the good news first. Our trade surplus for January and February was 24% higher than it was for the same period last year. Our business with Africa—our natural market—continues to improve. Moreover, Safto sees a significant improvement in the quality of our exports in that the value-added component is greater than it used to be. It would be foolish, however, to become euphoric as there are dangerous reefs ahead.

The boost to our exports has come at a great price. The price we have had to pay has of course been the drop in the value of the rand. We cannot continue to disinvest in plant, equipment and machinery by making inadequate provision for replacement. When we achieve further utilisation of manufactured capacity—which must happen the moment we have an upswing—we shall have to purchase plant and equipment from overseas in order to expand our capacity and also to replace that fixed capital for which we have made insufficient provision. Then our balance of payments will immediately go into deficit.

Mr Chairman, the hon member for Walmer must pardon me for a moment, since it is a matter of priority that in the few minutes at my disposal I avail myself of this opportunity, in the first place, to pay unanimous tribute to the State President, Mr P W Botha, on behalf of this side of the Committee.

Hear, hear!

The State President entered public life in service of the NP and began to devote his selfless service to South Africa 50 years ago today. After fifty years we have the privilege of thanking him today, but unfortunately I cannot do this full justice in the few minutes at my disposal. Since I also want to refer to a few other matters, I merely want to make use of this opportunity to convey our sincere thanks to the State President on behalf of every one of us on this side of the Committee for the privilege we have of trying to write the future of South Africa under his inspiring leadership. The State President must accept this word of thanks from all of us; we shall assist him as far as it is within our ability to do so.

Hear, hear!

Daan, you agree too, do you not!

Listening to the hon member for Walmer, I found it interesting to note that he had both good and bad arguments. Personally, I like the hon member very much; he is a very nice gentleman. However, my problem with him is that I think he sometimes buries his good arguments beneath his bad arguments. With regard to some of the things which he mentioned, I agree with him wholeheartedly.

Firstly, when he talks about the ridiculous amount of time allocated to them, I want to support him. I want to complain in in an even stronger tone about the time allocated to us.

As far as his arguments about this ministry and economics are concerned, I must unfortunately start differing with the hon member.

*I do not have enough time at my disposal to reply to all his arguments, and I think the hon the Minister will do so. I merely want to single out two points, however. That is why I say the hon member can make better use of his good arguments, and he did use good arguments. I want to emphasise two points.

In the first place I want to refer to his comparison of this country’s economy with economies on international level. He does not compare it, however, with comparable countries, with comparable economies, with the Third World and with the African continent, or with countries which can at least be mentioned in the same context as we can.

In the second place the hon member used the argument that “businessmen have been going to Lusaka to have discussions with the ANC because of this Government’s attitude and because of this Government’s policy.” Surely he is neglecting to tell us what those people brought back with them. What did they bring back when they came to tell us they had been there? We shall mention no names, but one of South Africa’s greatest industrialists was there. When he returned, he said those people did not understand capitalism; they did not accept it and they did not understand and accept the free market system. The hon member is undoing his own argument by not giving the full consequence of the facts to this Committee. I shall say no more about that hon member at this stage, therefore, and shall proceed at my own steam in the few minutes that remain.

Today I want to discuss the economic unrest and the necessity of a re-evaluation of our economic position and policy for the future. Just before we start getting pessimistic and hon members think I am going to follow the tendency of the hon member who spoke before me, I want to point out the plus points we had and still have in this country, and to express my confidence in the future.

In the first place I want to say that this country is a very, very rich country. Thus far no one has taken our natural resources away. We still have our minerals; no one has stolen them. We still have the best infrastructure in Africa. We still have the best and the most railway lines. We are still using the most electricity in Africa. For these reasons we are still the golden apple of Africa, which is noticed by everyone, and which the left-wing ideologies and the countries behind the Iron Curtain would so dearly like to take over. In addition, our capital resources are still completely underutilised. Capital is one of the most problematical factors today. When we take cognisance of the degree in which we still have a concealed capital potential, surely it is clear that if we were to develop those capital sources which we have not yet utilised fully, to their full extent, this can lead us to great heights which we do not even dream of today.

In the third place we are the ones who are best equipped to develop not only South Africa, but the whole of Africa. We, the Whites of South Africa, still know the other ethnic communities in this country better than any other nation in the world knows them. We still have more privileges than all other people in that we are in the best position to co-operate with people. In addition, we have the best experience.

Last but not least—what to me, is most important in this whole country—we still have the same composition of people and groups we started with in this country. We have exactly the same composition of people who made this country the star of Africa. If, therefore, we continue to build our own future here with the same dedication and the same energy and the same enthusiasm as in the past, I do not have the slightest doubt that we are still heading for a wonderful future in South Africa.

In the same way as we have experienced political unrest during the past year, we have experienced economic unrest. It may be, of course, that the two are very closely linked. Whereas we always said in the past that we needed economic stability as a prerequisite for political stability, the situation has changed now, and now political stability is a necessary prerequisite for economic stability. Although these two cannot be separated, we nevertheless have to accept that each one moves on its own level and within the scope of its own parameter. As a result, I believe it is possible—in fact very, very possible—that we should be capable of doing certain things in the sphere of trade and industry free of charge at times and sometimes at a very low cost—things which will lead to certain political implications which will have a very positive influence on South Africa.

In considering what has happened during the past year, one realises that our four greatest problems arose as a result of the wrong perception—internally and abroad— that our enemies are on the winning side. I think that perception is wrong, but certain circles hold to it nevertheless.

Secondly, to my mind the maintenance of order and justice remains a very essential prerequisite in certain circles and we shall have to ensure that it is maintained. When we take note of our situation on the Beri scale, we see that we have lost a number of points during the past few years.

The third problem—this is very important to me—is the lack of international and, what is more national confidence in the private sector. In this connection we can once again dwell on the disinvestment situation for a moment. One wonders why we are faced with this situation. I want to refer in particular to what Bishop Tutu said in Detroit in January 1986. He said he would propagate disinvestment and keep on propagating it unless South Africa complied with the following five conditions. If they did, he would regard it as progress and would stop propagating disinvestment. I quote the five conditions:

That has been done. His second condition reads:

That has been done apart from in a few exceptional cases in which they are making a substantial contribution. In general, however, this condition has been complied with. The third condition reads:

In that respect we have the State President’s unequivocal statement that he is prepared to speak to whoever is prepared to negotiate without propagating violence. An example of this is the State President’s offer to free Mandela on condition that he denounces violence. That condition has been met as well. The fourth condition is:

The fifth condition is …

Order! I am afraid I cannot permit the hon member to give the fifth condition, because his time has expired.

Mr Chairman, the two hon members who spoke before me have indicated that there are people in this Committee who have an outstanding knowledge of the economy. We cannot get away from the fact that the hon members for Walmer and Vasco revealed to us here today that they have a thorough knowledge of the economy and of the methods which are used in this country in the economic sphere and which have certainly not given the best results.

With the change-over to a new political dispensation, I said that it would not be the political dispensation that was our greatest problem, but rather the economic adjustment that went along with it. The political change-over can apparently be accepted by people, but it is not all that conspicuous if one loses followers. When the hon the Minister was working with people, losses were not immediately discernable either. In the economy, however, there is a due date, and when that date arrives, one has to pay and one has to show what one has achieved.

In the past five years things have definitely not gone well for us. The decrease in the production rate has led to the underutilisation of our production capacity, and this has resulted in cost increases. We regret having to say today that the majority of our businessmen, people in various business sectors, have abused this situation.

There has been large-scale abuse of the words of the then Minister of Economic Affairs who said one was entitled to 15% profit. The majority of these people went on with their purposeless activities and continued to take a 15% profit. They justified this by saying that one was entitled to 15%, but people who cannot make a suitable profit and employ people productively ought not to be in the business world.

If we look at what has happened recently, we see that people have started buying less as a result of a shortage of capital. The high interest rates, and particularly the general sales tax, have a very detrimental affect on anyone who has a business. He perhaps finds these days that he has a turnover of R100 000 on which he immediately has to pay R12 000, merely for having sold the goods. Unfortunately there is the problem that the person who purchase the goods is perhaps only going to pay for them in four months’ time, or perhaps does not pay at all. Businessmen then immediately tend to compensate for those losses by way of price increases. This results in the country being burdened increasingly with this problem.

The hon member for Walmer said that the amount of capital leaving the country in the form of unused machinery that is sold is phenomenal.

The political dispensation also results in tremendous labour problems, amongst which there are untimely strikes that have a very adverse affect on our economy. The structuring of our labour courts and labour legislation is such that when it comes to these strikes it is actually the developers who are the sacrificial victims. The structuring of our labour courts should be examined, and this also goes for our labour legislation, because if one goes to pieces economically one has nothing left.

Let us have a look at statistics for 1985. There has been a tremendous levelling off in commercial activities generally. From 1982 there have been a large number of bankruptcies each year. In 1982 there were 998, in 1983 there were 1 201, in 1984 there were 1 637 and in 1985 there were 3 221 bankruptcies. The rate is still increasing. This results in large-scale unemployment. It is frightening to realise that in 1985 bankruptcies increased by 100% on the previous year.

We know that this is related to disinvestment, but one has to adapt oneself. Two or three years ago we knew that we could expect a change in the economy and that there would be a shortage of capital. We nevertheless extended our labour laws, and this has painted us into an economic corner that we cannot get out of. I am speaking about increases in the status of labour, amongst other things on the mines.

What do you have against the mineworkers?

Fortunately that hon member does not understand the economy, so he now talks about mineworkers. [Interjections.]

The Black workers who are today going on strike at the mines are costing this country millions.

R68 million.

The hon member speaks of R68 million. For most people that is not very much, because they only notice the 68 and do not add the millions. [Interjections.]

The problem lies with the fact that these days our businessmen are not even sure whether they will still be living in a capitalist country under a capitalist government by this time next year. I do not want to emphasise any pessimistic aspect, but the hon the Minister must remember that the people he brings into his political dispensation will largely determine what his future policy is going to be.

It will be a Third-World dispensation.

The people of Africa are socialistically orientated, not because they prefer to be, but because their conditions of life normally lead them in that direction. Their production methods and their family and tribal customs accord with those in a socialistic dispensation. What do working-class people have to be happy about in, for example, the capitalism of our mining magnates, many of the chainstores and many of these other bodies which are nothing but exploitative capitalist institutions?

Because of their malpractices they now want to change the political orientation, and without they themselves realising it, if they do not get a Marxist State, in the long run they are going to have a socialistic State, because the future voters in the South African dispensation—according to the Government, and one takes it at its word—are going to be people of all colours. They are going to constitute a majority, so much so that they will be determining the course that is to be set for the Government and the country, whether towards capitalism or socialism.

I am prepared to bet that if we proceed with the dispensation we have at present, and with Ministers asking, from within the Cabinet, for South Africa’s mines to be nationalised, we can expect increasing pressure from these voices and we shall be heading for socialism in this country. Whether we are opposed to that or not, the average businessman in this country says that if it were not for the low value of the rand, and if he could get his capital out of this country, he would leave. [Time expired.]

Mr Chairman, our friend, the hon member for Langlaagte, is a man whom I know to have made his mark in the business world for many years now, and I do not want to argue with him. I think he made his own special contribution in his field. What he said about socialism is a fundamental problem. In this debate on the hon the Minister’s Vote it is very important for us to tell one another that the primary objective of this Government, this Minister and those who assist him is specifically to lead South Africa away from possible socialism, setting a course on which all of us can be partners in a free economy.

I should just humbly like to make one remark—I think that once one gets to these benches in Parliament, one can probably do so without being beaten to death—and that is that after twelve years I think that these ten-minute little speeches during the debates on hon Ministers’ Votes not only do an injustice to hon members who try to work hard, but also to our officials, who have worked hard throughout the year and are not given an opportunity to see how much we appreciate the fine work they are doing either, because we have too little time in which to mention the fact.

That is why I just want to say a quick thank-you to the Director-General of the Department of Trade and Industry, Mr Sarel du Plessis—he does, of course, come from a good constituency, because he is one of my voters—and his staff. Sincere thanks for the fine work they have done throughout the years and also a sincere thank-you for their lovely annual report. I also want to express my gratitude for the excellent annual reports of the Board of Trade and Industries, the Board for the Promotion of Competition, the Consumer Council, the Small Business Development Corporation and the IDC. I also want to say thank you for the news items released to us and also for the De Villiers Report. I am also extending these votes of thanks on behalf of the chairman of our group, the hon member for Vasco. Hon members have just seen how his time caught up with him, and that is why I am also extending a sincere word of thanks on his behalf from our side of the Committee.

Many people in our country are extremely pessimistic, and in the debate on this Vote today I should like to ask those of us in the business sector in South Africa, in industry, in the small business sector and throughout the country to shake off this pessimism and negativism completely. Goodness me, there is nothing in the world that can create more wonderful opportunities for mankind than initiative can! That is the truth of it. People say that at the moment politics and the economy are, in reality, so intertwined that distinguishing between politics and the economy has almost become a science. And that is true for the world as a whole.

In this country we are struggling with the problem of poverty, and we must outgrow this. Poverty is actually like a merry-go-round: It starts where it stops and it stops where it starts, and it just keeps going on and on. We must therefore help our country out of that vicious circle of poverty. We in South Africa cannot allow the steamroller of poverty to flatten our magic castles of progress. That is exactly what is happening in several places in our country.

Poverty is actually the most expensive commodity in the world. Nothing is as expensive as poverty. Educating the poor costs an alarming amount of money. The health services that have to be furnished in poverty-stricken areas are frightening. The campaigns one has to launch in the agricultural sphere and in every other sphere where conditions of poverty prevail only impoverish a country even further. That is why it is the duty of everyone in South Africa to be positive in what they say and to encourage people so that we can all join in building up this lovely country of ours.

Many people, of course, say that ours is a rich country. In a certain sense that is true, but in another sense it is quite untrue. We are rich in potential, but if we do not make use of the opportunities to utilise that raw material potential, manpower potential and all those wonderful opportunities, this country cannot but eventually be a relatively poor country with rich potential.

Today I want to say a few words about the role of the entrepreneur in the economy of this country. Eventually, when everyone has finished talking, it is the entrepreneur in the industrial sector, the commercial sector, the service sector and the informal sector who, in his humble way, is free and employs his initiative to make profitable use of every possible facet. Those are people who help to generate wealth. Those are the people who count in a country like South Africa. Those are the entrepreneurs who help to generate wealth.

We have wonderful people in various fields in South Africa. I have very often asked myself a question about certain people. They have not paid me to do so; I have never even met him. How do people like Mr Sol Kerzner or Dr Anton Rupert, in their own right, and on their own initiative, achieve the phenomenal feats in the economic development of this country? There are such people in every sphere in the country. The fact of the matter is that we need more and more such people. An entrepreneur is one who generates something, and without the entrepreneur, capital, money and labour are not worth anything at all. That means, therefore, that this hon Minister’s department revolves around the entrepreneurship of South Africa’s people.

There is great concern amongst all of us in our country about large business undertakings. I think that every hon member in this Committee should read Mr McGregor’s Who owns Whom? over and over again. Specifically in that book about large-scale monopolies it is clearly brought to the fore how, in a country like South Africa, which yearns for development, tremendous entrepreneurial talent can remain under-utilised in large comglomerates, etc. I am not saying this to be negative. The large business undertakings in our country play an important role. The fact is, however, that there are only a few people in the very top structures of large business undertakings in South Africa who can really give expression to their total initiative and potential by way of entrepreneurship. They are caught up in large organisations. The interaction between those groups and the interwoven interests help to smother entrepreneurship to a certain extent, but that is something that is very necessary in South Africa.

They are continually at odds about our national economy. Unfortunately time is now catching up with me here, but what they say is surely true. If one just looks at the latest statistics about where the economically active population of South Africa is working, in the public sector, which includes provincial administrations, local authorities, self-governing States and other bodies, one finds 39,7% of the Whites, 10% of the Coloureds, 2% of the Asians and 47,2% of the Black people.

The State has come to light with a policy of privatisation aimed at increasingly transferring people from the public sector to the private sector in an effort to generate entrepreneurship. That is a very positive thing and we express our sincere thanks for it. That move towards privatisation will, in the future, have a dynamic, direct effect on economic growth. It is a positive reaction on the part of the Government.

There are also other positive reactions. I am thinking, for example, of the Small Business Development Corporation, the deregulation campaign which a standing committee is dealing with and which we are not talking about now, training campaigns, etc. There are also many other possibilities for helping to establish undertakings in this country. About these aspects I just quickly want to express a few ideas.

On occasion, in an aircraft travelling from Cape Town to Johannesburg, I was sitting next to a big businessman from Scotland who was a renowned rugby player. He told me a story. Here was someone who came from Scotland as a businessman. He had been in South Africa for five years and he told me that when he arrived here people told him it would still be decades before we would be able to involve the Black people in South Africa in the economy. He then told me his story, and if I think of what was achieved in those hotels with that team of 14 Black people which he personally trained over a period of two years, of every piece of work they did there, let me say that there is a pool of manpower and entrepreneurship that we have neglected in this country. I therefore say thank you for the Government’s positive reaction as far as influx control is concerned and the lifting of all the other restrictions, because there we have unleashed a source of entrepreneurship for South Africa which our children will all reap the benefits of.

Let me refer to the entrepreneurial talents of women in South Africa. We are now entering a new world, a technological world in which women today—as many, many hundreds are already doing—can sit at home with a computer and make a positive contribution, both for themselves, in the small business context, or for various other organisations. My thanks for this sort of thing and for the fact that the State is increasingly encouraging such tasks. Our women are entrepreneurs of the first order, and we as Afrikaners, in particular—I am now speaking about my constituency—have entered a new world in which women, as entrepreneurs, are making a definite, positive contribution to the economy. I therefore extend my thanks for that, and I think we ought to do everything to help them. [Time expired.]

Mr Chairman, it is always very interesting to follow the hon member for Innesdal because he is always so enthusiastic. In fact, that was of course the theme of his speech—enthusiasm and initiative in business etc. Moreover, I do agree with him that that is one of the troubles in South Africa today. There is very little enthusiasm and very little initiative being shown today among the younger set of businessmen. I am sorry but I, too, have observed this tendency. However, when one stops to consider the situation in which their seniors spend half their time in this Chamber denigrating this country and its future, then of course, one is not surprised that these people are lacking in enthusiasm. I might add that so far as I personally am concerned, I have always tried to stimulate enthusiasm and faith in the future of South Africa.

In a previous speech which I made in this House not so very long ago, I said that there were three things that were essential if South Africa were to be lifted off her knees. One was that we must have a pride in our country, something which seems to be lacking today. Another was to have confidence in its future and the third, which related directly to the hon the Minister of Finance, was to ensure that if businessmen were to succeed, they would have to have some form of incentive and not have the fruits of all their hard-earned efforts going straight into the fiscal pot to be distributed without seeing the country derive the full benefit from them.

This particular Vote is an extremely important one, although it involves a relatively small figure when compared to a number of other Votes and the overall Budget. It represents, I think, something of the order of 2,8% of the Budget. However, I do not think very many people realise just how important this particular Vote is. This is the Vote which is responsible for the generation of most of the capital and most of the money that is required to run this country, and it creates jobs and keeps people in employment. It is this particular portfolio which encompasses this whole affair. I do not think people realise this or place sufficient importance on it because, as I say, they generate the businesses which create the jobs and, if people are employed, then one has less of a problem with regard to people being unhappy.

At the present moment, of course, we do have problems in South Africa. Many of the problems have been generated partly through our own fault. I know there are political problems, and I do not believe we shall resolve those political problems as far as trade and industry is concerned until we take a cold, hard look at a few points and start getting a little loyalty among South Africans in South Africa! When one gets South Africans who also start saying that people must boycott South African goods overseas and that disinvestment is a good thing—there are people who are saying that and as a result less money flows into the country—then I am afraid that is going to prevent us from making the progress that we should make. Furthermore, it will have the effect that we shall not get the enthusiasm and initiative exercised that we need to get South Africa on its feet economically.

Of course, I realise that there are a number of other reasons. I believe, for example, that many of the problems that have recently been generated can be ascribed to the fact that businessmen are going broke. I have raised this issue on a number of occasions in the House. I believe that part of the reason for that—certainly not the whole reason for it—has been that businessmen have not been encouraged to build up their own reserves, so that in the event of them wanting to expand, they could do so with their own capital and that, in the event of hard times coming, they would have a reserve which could accommodate that. I should like to make a personal observation in this regard. In 1958 this country went through a bad time too and, as a businessman, I was badly hurt. I was determined that it would never happen to me again. In spite of the system of taxation, which was not as bad then as it is now, I built up appropriate reserves so that I would not have to borrow on that basis for the purpose of expansion. I have expanded my own business interests and, when hard times have come, I have been able to cope with my own problems without having to resort to borrowing.

I mention this merely as an example but today I believe it is almost impossible to do what I was able to do 25 or 30 years ago because of the taxation system. If one does make a decent profit, then a huge slice of it is taken away from one by taxation. Furthermore, when one pays out dividends, then one pays tax again on that of money. One of our major problems is that businessmen themselves cannot generate capital and, if they do try to expand on borrowed capital and hard times then hit the country, then they get into serious trouble.

At the present moment we are working on a system of decentralisation. I think there is something of the order of R550 million on the estimates of expenditure for that particular aspect of trade progression. Frankly, I have grave reservations as to whether we are getting value for money in this regard because many of the businesses which are being set up in the decentralisation areas are merely moving employment from one part of the country to another. This, I believe, is one of our problems! If we are spending money merely to move the areas where business is being conducted—I do believe it is necessary to develop other areas for businesses—then I do not think it is a very smart thing to do. I do not think it is a very sensible merely to move businesses from one part of South Africa to another and change the areas where unemployment exists.

I am afraid this is, to a certain extent, what the present system of decentralisation is doing. Where I do find that one should give a little thought, is to the fact that in regard to all these businesses that I mentioned that have been going into liquidation lately, if half the money that has been spent on deseralisation had rather been spent on rescuing these businesses, one would have had far more people in work, and the cost would have been considerably less because it would have been in the form of loans which one would have ultimately got back. Furthermore, one would have had people in employment—many thousands of whom have been put out of work over the past year or so—who would have been taxpayers. Therefore, one way or another it would have been a far more profitable operation than, so far as I can see, than some of the decentralisation that has been encouraged.

Mr Chairman, as usual the hon member for Umbilo delivered an ordered and in general a balanced speech, which one appreciated.

It was particularly good to hear him telling us that it is necessary for us to be proud of our country, and that we should have confidence in the future. It was in such direct contrast to the negative speech by the hon member for Walmer that we really welcomed it. The hon member for Walmer is very negative, and I maintain it is exactly this sort of approach that to a large extent underlies the problems we have to combat today.

We are all concerned about the future of our country, and much is being said on the subject. At the moment the discussion revolves mainly around constitutional and political matters. The fact of the matter is, however, that we have no prospect of political stability unless it is built on a flourishing economy. No constitutional model can fully accommodate our country’s basic problems because the constitutional-political debate deals with a secondary aspect of our problems.

Our fundamental dilemma is poverty and unless we do something about that soon, it will still be with us after all people in our country have been accommodated politically, in terms of whatever model. This means that even with a perfect constitutional dispensation, we run the risk of remaining an unstable community. Therefore, the process of constitutional development must necessarily go hand in hand with the proactive implementation of a programme of economic and, linked to that, social development.

Therefore our future is basically, in all its nuances, dependent on our capacity to grow economically, and to do so satisfactorily that the whole population will benefit appreciably. It is regarding this very point that I am most deeply concerned about our future. I doubt too often the capacity and the will of our total South African community to make this challenge their own. The public sector cannot be involved in this alone; the private sector will have to be a partner. I now perceive, however, in a part of the private sector, a tendency towards exaggerated antagonism towards the public sector as a whole, even outside the Government, and a cynical scepticism regarding the future. We cannot win in this way.

I do not want to maintain that the State’s input is perfectly adequate in this connection; not at all. There are still, however, so many positive aspects that I do not have time to deal with today. Just think of the almost R200 million that was appropriated this year for the promotion of foreign trade relations and exports. This is more than 16% up on the previous year. There is also a variety of services available to the private entrepreneur—from State departments, the IDC, the SBDC, and State-subsidised training units at universities. The available State assistance programmes are comprehensive, but the Government receives little or absolutely no recognition for them.

If one reads the financial Press, particularly if one looks at publications over a period at one time, one finds that it is often nothing more than a monotonous wailing. One finds analysis after analysis of the prevailing situation, and predictions for the future, which often ultimately appear to be inaccurate and in any event do not lead to anything. All this does is to engender a depressive state of mind. One gains the impression in any event that a section of the South African business community has become trapped in a whirlpool of hopelessness from which they either cannot or perhaps do not want to escape, because they shy away from the effort it will require even to try. We cannot afford such an attitude. We have a developing country with a population that clearly lives at different levels of development. There are people in our country without a vision of the future because even the present, with all its possibilities, still lies beyond their reach. We therefore need business people that possess pioneering qualities. We need a whole new generation of entrepreneurs. Our business people must be persuaded—they should in fact persuade themselves, too—to accept the risks and the challenges of our situation.

In his book The New Venturers, John Wilson writes about the explosion of entrepreneurship in the USA over the past few years. He said it had changed the business community in that country from one that was disinclined to take risks to one “in which risk taking is rewarded, individual enterprise is admired, success is applauded and even failure is respected”.

People that have to take risks will, even with the best planning, still sometimes fail. In the USA two out of every three enterprises fail within the first five years. This has not, however, inhibited the wave of entrepreneurship there. In spite of these setbacks the small business sector in the USA today represents the fourth-largest economic power in the world as far as the gross national product is concerned. Only the USA as a whole, as well as Russia and Japan, is larger. Approximately 11 million small business enterprises are involved in a totally new industrial revolution. They are responsible for half of the gross national product there, and for 60% of all employment.

We here in South Africa, too, have an urgent need for such a spirit. What we need even more than that, however, is enterprise capital. The Americans refer to this very descriptively as “venture capital”. It has also been described as “creative capital”, as opposed to “expansion capital”. We have a large amount of investment capital in our country, but too little creative capital. The so-called institutional investors have at their disposal a large amount of money, which is frequently utilised unimaginatively. In the previous financial year our two best-known life assurance companies had a joint total of domestic premium and investment income of R4 876 million. These are outstanding enterprises and we are proud of them, but the question still arises as to whether those enormous amounts of money could not be invested to a somewhat lesser extent in share transactions, and to a somewhat greater extent as creative capital. In this way they might help to broaden not only the South African economy and its potential, but also their own prospective living-space within our society. I understand of course that it is difficult for large business enterprises to think small. We have, however, a source or channel of assistance in the form of the SBDC, which is an excellent example of an existing partnership between the private and the public sectors. They serve an identified area which is in dire need of finance. Last year there were applications for R300 million altogether. Only R40 million could be found from its own resources. With supplementary Government aid, R90 million was eventually granted to approximately 4 000 applicants. Still only one out of every five applicants could be accommodated, while two out of every four that were turned down also had merit. I feel it is a tragedy that two out of every five would-be entrepreneurs in our country—people with merit, who want to enter and help develop the free-market economy—should be disappointed.

The State has already committed itself to further aid to and support of the SBDC. The private sector simply cannot remain behind. Without their positive inputs our economy will stagnate, and their future, too, will be bleak.

I conclude with the words of one of my voters, that entrepreneur par excellence, Dr Anton Rupert. He said:

Mr Chairman, it is a pleasure for me to speak after the hon member for Stellenbosch and to congratulate him on the fine and sound ideas he advanced. In due course I should like to associate myself with those points raised by him.

During last year’s session we passed an amending Bill to promote free competition in South Africa. During the debate it was pointed out inter alia that the South African economy is actually very small when measured by Western World standards. That is why I believe we should pay much more attention in this country to the maintenance and promotion of free competition.

Our situation in South Africa, with our small economy, can easily lead to the forming of monopolies, cartels and other undesirable practices. Dr Anton Rupert discussed the advantages and disadvantages of this group forming in a lecture at the University of Pretoria on 22 August 1983. He supplied interesting figures in this connection and also advanced a few good ideas which I want to return to later.

In the meantime the Competition Board announced that it was inquiring into monopolies, cartels—cartels in particular, in fact—and other harmful practices such as business arrangements, business agreements and practices, understandings, regulation of prices, and so on. Fines of up to R100 000 and five years’ imprisonment were envisaged. It is important that the Chairman of the Competition Board stated very frankly and saliently that in his opinion cartels are always very detrimental to the public interest.

In addition it is imperative that the harmfulness of monopolies also be investigated by the Competition Board, and along with that there is the inquiry into co-operatives and marketing councils.

I believe these actions are of cardinal importance for the sake of sound business practices and also for the benefit of our whole country and all its people in all respects. Unfortunately a lot of emotion is always involved in this kind of thing. It is true, therefore, that on the one hand a damaging system can very easily be allowed to continue to exist merely because its name and address sound fine and right, whereas, on the other hand, the baby is sometimes thrown out with the bath-water. To be able to think and reason about all this in a calm and collected way, one definitely has to consider the Afrikaans picture as a whole.

A few years ago the statement was made that by 1990 the South African economy would be dominated by a total of only six corporations or large groups, of which three are insurance companies. By the end of 1982 the total assets of our 100 top industrial enterprises already amounted to R41 billion. The assets of the top 20 companies made up 61% of that. Today, of course, those assets are worth so much more.

That is not really important. The important point is the total domination of our small economy by these large groups. The matter becomes even worse if one takes into account that many of the remaining companies are dependent on or are associated with the large companies.

By the end of 1983 almost 80% of our stock exchange was already controlled by only five companies. In the 10 years up to 1980 there were almost 700 take-overs and amalgamations involving R6 billion. Since then the process has accelerated considerably. During 1981 and up to the middle of 1982, there were 111 such cases involving R4,2 billion. Our country is no exception, however. We are simply falling into step with the whole of the free Western World even if many people believe that the economies of scale are very important. On the other hand, we must remember there is also a law of diminishing returns. Perhaps the Americans have realised this truth much better than we have. Their measures are much stricter than ours. We are still mere infants in respect of such control measures.

Dr Rupert pointed out that it is often the case that private enterprise does not undertake large concerns, and which are then passed on to the Government, but as soon as the Government has got them going, there are calls for privatisation. At that stage one can or wants to take over the enterprise, because it is too large.

The Competition Board has a very sound point of departure in that they say economic concentrations of power as such need not necessarily be damaging, and that one should treat each case according to its own merit. Only when those powers and forces are abused need we take action. It is not necessary to spell out all the possible advantages and disadvantages of these concentrations of power, since we know what they are.

The only thing the consumer in South Africa wants, is for a thorough inquiry to be made and strict action to be taken where abuse exists. In addition, the consumer wants the positive promotion of small business in the informal sector. This gives us greater security in respect of competition and—this is very important—it provides us with work at a low cost. We are also creating a true and own capitalism for the small entrepreneur. I am afraid, however, that at the moment we are paying lip service to this ideal, because it so often happens when someone tries to do this, that a kind of socialistic bureaucracy bears down upon this entrepreneur.

The SBDC is concerned with this whole situation. There is an annual growth of 300 000 work-seekers in South Africa. We cannot supply the work at an average of R10 000 per work opportunity. In his annual report, Dr W B Vosloo, the managing director of the SBDC, said that since its inception three years ago, the SBDC had assisted 1 700 entrepreneurs with loans of R48,87 million, while 441 facilities to the value of more than R10 million had been established. The SBDC has also committed itself to property development to the value of R91,69 million. An amazing statistic for this relatively small undertaking is that 82 inquiries per day are dealt with while 34 entrepreneurs per day visit them to get advice. All these things are done by an organisation which has only R150 million authorised capital at its disposal. This is equal—the hon member for Stellenbosch referred to this—to about 10 days’ investment funds of our insurance companies. This also occurs while the big companies are involved in amalgamations, take-overs and what we can actually call paper transfers.

I earnestly believe the time has come for us to become serious about giving the public what is best for them. What the consumer really wants is for us to eliminate malpractices in business, for those large groups which deal with our savings and other money to fulfil their social responsibility. This is a point made by the hon member for Stellenbosch. He spoke about the social responsibility of these big companies which really, in my opinion, do not pull their weight in South Africa today in respect of development, work creation and housing. If they can do this on their own, it is a very good thing; if they want to do it through the SBDC, I believe it is even better. I am convinced, however, that it must be done.

That is why I want to plead today that we shall make entrepreneurs of our people in South Africa, no matter how small. Let us follow Taiwan’s example. Let us make it easier for our people to begin undertakings and let us protect those small entrepreneurs against these big ones, for only then will we be able to put into practice what we say all day, viz that we should like to establish and develop capitalism in this country.

Mr Chairman, the hon member for Wellington, with regard to small business development, made a strong plea for free competition. I want to associate myself with that plea, and in the course of my speech I want to come back to several of the aspects which he touched upon, especially in respect of exports.

†It is imperative for South Africa to become far more export-oriented and for us to increase our share in world trade. This is, however, not as simple as just setting up the infrastructure, producing more goods and then selling them in the world market. The basic economic principles of supply and demand will remain the deciding factor. In order to meet this we will of necessity have to be competitive insofar as quality, price and service are concerned. To achieve this we will have to ensure that, firstly, we are fully aware of international production and marketing trends and requirements, and secondly, that our internal efforts related to exports are adapted and aimed accordingly. An overview of the international situation in this sphere shows that there have been fundamental changes and, in certain respects, a total restructuring of world production and trade.

A few of the more important changes with which I believe we will have to cope in our export drive are as follows: Firstly, the very basis of the economy—specifically in developed countries such as the USA—is changing from that of an industrial society to one based on the creation and distribution of information. In the USA more than 60% of the work force is involved with information against only 13% still actively engaged in the manufacturing process. Knowledge and know-how rather than industrial production have become the fundamental ingredients for progress. The products required by these markets have changed accordingly.

Secondly, the economy is ever-increasingly becoming a global one. No country, not even the super powers, has the luxury of operating within an isolated, self-sufficient national economic system. One result of this is that production sharing—that is the production of various components in different countries—will certainly become the prevailing form of worldwide economic integration. One of the best examples of this is the motor industry where different companies own substantial shares in the producers in other countries and where they also produce components for each other.

Thirdly, there has been a fundamental shift in production methods. Automation has become vital for industries to remain competitive. The motor industry can again serve as an example. In Japan’s robot-equipped Zama plant a motorcar is manufactured in nine hours as against the 31 hours that it takes American workers. Japan and West Germany have emerged as leaders in these fields—at the expense of the USA. Of more importance to us is the fact that Third World countries, including countries such as Hong Kong, South Korea, Taiwan and others, are increasing their share in the traditional industrial production market. It is estimated that by the year 2000 these countries will manufacture as much as 30% of the world’s goods. This has obvious implications insofar as competition between these countries is concerned, as well as for ourselves.

Lastly, the protection of local industries— be it outright or in the form of Pres Reagan’s seemingly benign voluntary restraint—has become an important factor with which to cope. These changes and trends have obviously had a marked effect. From our point of view there are three very important effects.

Firstly, counter-trade transactions—barter—is becoming increasingly important. Secondly, investment by companies in other countries to enable them to continue their business there is increasing. Thirdly, the division of production processes in order for them to be continued in factories in separate countries, literally scattered across the world, is taking place. This leads to more and more global interdependence. We will have to keep all this in mind and make a careful analysis of the fields in which we will be able to play a greater role in the world market.

Internally it is vital that our economy— specifically the sector involving itself in export—as well as Government incentives offered to induce growth in exports must be geared to accommodate these changes and new circumstances. There is no magic formula to achieve this.

The popular concept of establishing export-processing zones does have merit in advancing export promotion but it cannot achieve this by itself in the South African circumstances. Whilst the basic principle of such a zone—namely that material brought in, manufactured here and then exported attracts no customs duty or tax—must form the basis of our export drive, further incentives and action should be offered to make our exporters competitive in the world market. I believe that serious consideration should be given, inter alia, to the following matters:

Wherever appropriate, raw materials should be processed as far as possible before export.

Existing industries that are engaged in exports or adaptable thereto, such as the coastal motor industry, must be concentrated on along with new industries.

Incentives offered must take into account the modern and often automated processes of foreign competitors, and therefore cannot be linked primarily to labour intensivity. It is simply myth that labour in South Africa is cheap, and it will only be in the rarest instances that export industries will be able to remain competitive while clinging to this principle. Although this is a fundamental departure from the present regional development strategy, it will have to be accepted that job opportunities offered by export industries can play only a minimal role. I have no doubt, however, that should we be able to achieve a satisfactory export situation, the jobs lost in this way will be more than compensated for by increased employment in service and other related enterprises that will build up around them.

Fourthly, incentives should further be directed towards making foreign establishment and production in South Africa advantageous. Aspects that can be looked at fruitfully are, inter alia, a reduction in all input costs to manufacturers by the removal of all duties, taxes and surcharges on machinery and materials; subsidising interest rates to maintain these at a level below those offered in other countries; all PAYE tax on manufacturing employees could be used as a direct concession to the company involved; allowing all marketing costs involved on export goods to be deducted from tax; reducing company tax; providing investment allowances on machinery and buildings; and, where necessary, allowing the free movement of the required technical personnel from countries that wish to invest.

The whole package should be made available in a declared free enterprise zone in those areas that are ideally suited to this purpose, specifically the Eastern Cape cities of East London and Port Elizabeth with their existing harbours and necessary infrastructure. In terms of the free enterprise zone concept, an area is determined wherein all rules and regulations that would normally apply to industrial establishment, production and distribution are dispensed with. An own area administration allowing quick and effective decision making—one-stop decision making—is set up. In this way, industrialists settling and operating in an area can do so with the minimum of restrictions and without time-consuming red tape.

In areas such as East London, which is adjacent to the Republic of Ciskei, a free enterprise zone coupled with co-operation projects holds exciting prospects indeed.

My plea to the hon the Minister is to further the investigation of this concept urgently, specifically at ground level, in order to determine the exact area that would be suitable for such a zone, the powers and structure of such an area administration and all other practical aspects relating to its proper functioning.

A start can be made on this virtually immediately, in view of the current reassessment of the local content requirement in the motor-manufacturing industry which forms a major part of the industries in the Eastern Cape. The establishment of free enterprise zones coupled with the export-promoting incentives that I have referred to has become a matter of urgency. The very welfare and growth of areas such as East London and Port Elizabeth are dependent on this. [Time expired.]

Mr Chairman, tomorrow, 2 May, is a historic day because the Competition Board’s general prohibition of five restrictive trade practices will then become effective.

In last year’s debate on this Vote, I expressed concern at the dramatic trend towards concentration in the control of the South African economy because I believe that concentration ratios indicate a tendency towards, or potential for, unfair domination of a market. I am still very concerned about this trend. Mr Robin McGregor’s latest figures show that four companies—Anglo-American, Old Mutual, Sanlam and Rembrandt—now control 80,4% of the JSE. He also reveals that 1 336 shareholders own more than 82,6% of the JSE. That is an alarming concentration.

I can accept that the behaviour of firms is more important than structure as such, provided that behaviour is regulated so as to ensure conditions of competition and freedom of entry into markets. In that way, undue concentration will correct itself over time. My major criticism last year, therefore, was the absence of a clearly established set of objective rules to govern the behaviour of firms in the market place. I criticised the Government for having failed to build up a body of prohibitions in terms of section 10(1)(c) of the Act.

In view of the criticism last year, and because I still believe it is vital to circumscribe the power which large combines have acquired in recent years, I therefore want to welcome warmly the Government Notice regarding the range of five new prohibitions. I should like to congratulate the Competition Board and its chairman, Dr Steph Naude, as well as the hon the Minister for this step forward. I think it is a major step forward. If these prohibitions are properly applied, there is no doubt that a new era of competitiveness in the South African economy will be ushered in, which will be a milestone in democratising our economy. To my mind the fostering of competitive individualism is crucial to shaping the character of the South African economy, just as the Sherman antitrust legislation in the United States was crucial to shaping the character of that economy.

I should, however, like to offer some constructive criticisms and comments at this stage. Firstly, I accept the provision for exemption notices insofar as it gives some flexibility to serve the public interest. It seems, though, that some exemptions are to be granted for an indefinite period and that some will be temporary exemptions. In respect of indefinite exemptions, I should like to call for the following: Firstly, the number of indefinite exemptions should be minimised. Secondly, they must be granted in the full light of public scrutiny by way of public notices. Thirdly, they must be fully motivated. Fourthly, interested parties should be able to challenge them in the public interest. I feel strongly that there must be absolutely no possibility for any suspicion that special interests have been served by these exemptions, so as to protect the credibility of the Competition Board and policy, and so as to gain wide public support for the policy.

The second category of exemptions envisaged are temporary exemptions to avoid unnecessary disruption only. I accept in principle that we do not want to turn businessmen into criminals overnight simply because of a delay in compliance, but the whole business community has had time since 4 October last year to get its house in order. If a restrictive practice is against the public interest, the Government must not permit such restrictive practice to persist for one day longer than is absolutely necessary.

Are you saying that the Argus take-over of SAAN is one of those restrictive practices?

That is another debate entirely.

I was therefore concerned to read in the Business Day of 20 April that temporary extensions may be granted for up to two years. This is too relaxed a period. Temporary extensions must be minimised, and they should be granted for no longer than six months, at a time, if necessary. However, I agree with the chairman of the board that speed is not essential to eventual success, but I should like to see a maximum sense of urgency within practical constraints. I think six-monthly extensions are enough.

Another aspect is that I believe the list of prohibitions is incomplete. There are a number of other restrictive practices outlawed in other parts of the world—I cannot mention all of them now, but the board is fully aware of them—and I believe we too should codify our law, and regulate against them in this country as well. Therefore I call upon the board to extend the list progressively, and in the meantime to use its power to undertake ad hoc investigations on a widespread and vigorous basis. The Competition Board should become known as the friend of the small businessman, and it should let it be known that it is prepared to intercede to prevent any abuse of power on the part of major firms. I must also say that the public sector’s involvement in maintaining a wide range of restrictive practices must not be allowed to continue unchallenged and unabated. The Government itself has direct control in many sectors and has sanctioned a wide range of restrictive practices. Milk is subject to collusive marketing. Bread is subject to restrictive registration. The same applies to liquor—the hon the Minister is an expert in that field! [Interjections.] Coal is subject to price control and rationalisation. Discounting the price of petrol is prohibited. Cement is subject to collusive pricing and market-sharing practices. Air transport is monopolistic. Road transport is monopolistic. Broadcasting is a complete monopoly. In all these areas the Competition Board should be pressurising for change and new entrants. If the Competition Board and this department will really get the bit between their teeth on this matter, they will make a massive contribution to the positive restructuring of the South African economy.

That leads me to the question of structural adjustment for the South African economy as a whole and the enhancement of the Republic’s competitiveness internationally. There are at least four important structural adjustments that are necessary: We must become less reliant on basic mining; the decline in the Republic’s international competetiveness must be counteracted; the performance of our manufacturing and service industries must be stepped up; a programme of import replacement must be encouraged; and our domestic market must be expanded.

Earlier this year it was announced that the Government was investigating the possibility of a comprehensive programme of assistance towards structural adjustment, and that that investigation should be completed by the end of 1988. However, it appears that there is no money or resources allocated to this vital matter this year. I have no quarrel with the investigation, but there are certain things that should be done immediately. An example is that the Government could provide seed money for a programme of market research and strategic planning, in conjunction with industrial sectors, to develop appropriate micro strategies, sector by sector. I am very concerned about the position of South Africa on the international trading scene. I grant that we are inhibited by political factors increasingly, but we are far less effective than we could and should be in promoting what I would like to refer to as “South Africa Incorporated” in the markets of the world. If we in this country were to put as much money, energy, leadership and resourcefulness into competing against the first teams of the rest of the world in the economic sphere as we do in competing with the rest of the world in some sporting spheres, we would be a much more prosperous country with economic benefits spread far more widely than is the case at present.

South Africa cannot afford to go it alone. There are people who talk about going it alone, thumbing our noses at the rest of the world and becoming a siege economy. That kind of talk is irresponsible and dangerous. If we were to go it alone and turn inwards, instead of making a maximum effort to increase our effectiveness outwards, we would open up an era of shortages, dislocations and untamed inflation, and we would further destroy the value of the rand in a very short time. To reverse such a situation would be a horrendous problem.

I therefore call upon the Government to give us a lead in this vital matter. Let us have real resources put behind structural adjustments to improve our international competitiveness. The hon the Minister should give us a commitment that greater energy and resources will be steered in this direction as a matter of urgency.

Mr Chairman, I feel that the hon member for Constantia has made a very good speech this afternoon. [Interjections.] I want to say to that hon member where he has indicated that he desires to see more competition in this country, that he desires to see the growth of more small businesses in this country, that we share in those desires. I sincerely hope that in a future debate we can debate these problems. The things he has raised are the root cause of some of the reasons why we are not getting an improved standard of living in South Africa at present. This is what I would like to discuss today, and I am sure the hon member for Constantia will be interested in what I have to say. What I have to say concerns the need to increase productivity so that the average standard of living of our South Africa population can be improved.

I am sure the hon member will be shocked to hear that the improvement in the standard of living of the average South African over the 10-year period from 1972 to 1983 was only 0,3% per annum, which is a very low figure indeed, especially when one compares it with major trading competitors of South Africa such as Taiwan which had an average annual increase in its standard of living of 6,1% during the period I have mentioned. Japan’s improvement in its standard of living was 3,2% per annum, the USA 1,2% per annum, and Kenya improved its standard of living by 0,7% per annum, which is more than double that which South Africa achieved during this period. I believe this illustrates the seriousness of our position, and one should consider our performance relative to that of the Republic of China, for example.

Taiwan is a small island with a population far smaller than our own. It has scarcely any of the natural resources which we are privileged to have in South Africa. Taiwan is in fact a major importer of South African raw materials and we, in turn, have become a major importer of Taiwanese manufactured goods.

In 1972, Taiwan’s output per capita was only 62% of that of South Africa. However, through significant increases in productivity, she managed to overtake South Africa between 1981 and 1982, and by 1983 Taiwan’s output per capita was already 15% higher than South Africa’s. One wonders what their output per capita is today, in 1986.

This is an extremely serious deterioration in South Africa’s economic competitiveness. The rate of growth in output per capita is determined firstly by the population growth, and secondly by the economic growth rate of a country. I want to recommend to the hon the Minister—although I do not have the time to go into the subject of population growth—that we should have an expansive series of TV programmes telling our people about how population growth is related to an improvement in the standard of living. We should tackle this problem.

The facts show that despite the tremendous input of resources—labour, capital, materials, energy, and so on—during the period from 1972 to 1983, the South African economy achieved an average annual growth rate of only 3% per annum. In reality, productivity is making a very small contribution to South Africa’s overall economic growth rate. In fact, during some years, productivity actually registered negative figures. I say that this is a serious situation and I hope the hon the Minister will take note of it, especially in view of the fact that productivity growth is responsible for as much as 60% of our major trading competitors’ economic growth rates in recent years. They are out-competing us, therefore, purely on a productivity basis.

The accusing finger of blame is all too often, and I believe all too easily, pointed at Government in this regard. We had a little of that from the hon member for Walmer today. Certainly the Government has made some mistakes in the past—as have we all— but the facts are that the non-agricultural sectors of our economy only managed to achieve an average annual labour productivity growth rate of 1,2% per annum over the period 1970 to 1984.

With all its technical know-how and all its management and labour training establishments, the mining and quarrying industry in South Africa—an industry which is a world leader—in reality achieved an average annual negative growth rate in labour productivity of 1,9% during each of the 14 years between 1970 and 1984. If one considers the inefficiency with which the private sector utilises our capital resources, one can only draw the conclusion that a major shake-up is required in the private sector as far as management is concerned.

Over the 14 year period to which I have referred, an average negative capital productivity growth rate of 2,7% per annum was registered. The productive use of capital in the mining and quarrying sectors actually declined by 6,8% per annum over this 14 year period. The construction industry registered a minus 6% growth rate in the productivity of their capital during this period. Manufacturing declined by an average rate of 2,8% per annum.

In these times of credit restrictions which have been placed upon South Africa and in view of the shortage of capital which we are experiencing, as well as the need for capital in order to provide the wealth to fulfil the needs of our growing population, I want to ask the hon the Minister whether we can afford to continue along this path of unproductive utilisation of our resources. Is organised commerce and industry aware of this appalling state of affairs? I want to ask the hon the Minister exactly what is being done about it.

In conclusion, in order to make some constructive observations, I want to tell the hon the Minister about a visit which I paid during the past recess to a number of industrial undertakings in my constituency. This included a tour of a plant of a manufacturer of component parts for the motor industry. In one section I observed a simple operation of the drilling of holes in this particular part of a motor car. It is an operation which I am well aware of because, as a teenager in Canada, I worked in the factory situation for two years on a trainee programme and performed a very similar operation. I observed that operation, and asked the production manager who was showing me around the plant whether he could not double the productivity of the machine by bringing about slight modifications to the drilling machine— which we discussed—which would cost a maximum of from R500 to R700. When I put it to him, he said that the hon the Minister had infact told the industry that it had to pull up its socks and that the company had got the National Productivity Institute to come and do an investigation. He said that my simple suggestion was one of the recommendations which they had made. The question I want to ask is why this management did not notice this deficiency in the first place. After all, this is an international company with international expertise at its disposal.

The next thing I noticed was that the man operating the machine, who was a strapping Zulu, was operating at a very slow pace. I asked the manager whether his company employed a piecework or incentive bonus scheme based on the production of their workers. I was told that the company did not employ that system. The reasons for this were, firstly, that the unions were against such a scheme. [Interjections.] Besides, I was told that the administration of such a scheme was considered to be not worthwhile by management. Now, for goodness’ sake, what is happening to the South African industry if this is its attitude?

I want to say that I carried a union card during the two years in which I worked in the factory in Canada. It was the card of the United Automobile Workers’ Union. The unions in Canada go for productivity through piecework and incentive bonus schemes. They accept the system because it means more money in the pocket of the worker, money with which he can buy food for his children and maintain a decent standard of living. Management there wanted these things because they resulted in a higher productivity rate from both labour and machines which meant lower unit costs and a more competitive price for the final product.

These two items alone, in my estimation, if implemented on the drilling machine I observed, could have quadrupled the productivity of both machine and worker. Could this be one of the reasons why our productivity is so low and why the cost of our component parts in the motor industry is so high? Finally, when we arrived back at the office of this production manager, I discussed with him the economies of scale which would result from exports of his factory’s products elsewhere. I was shown a map of the world which indicated all the subsidiary companies of the parent, British based, international company, and was told that the production of the South African company was limited to South Africa alone. My time has run out, but I wish to conclude by saying that I believe this situation is not in the best interests of South Africa. [Time expired.]

Mr Chairman, I am subject to the same limitation as other hon members in this Committee in the sense that we actually have very little time for the discussion of this Vote. I am grateful to the Whips for having indicated that next year it would probably be possible to set aside more time for the discussion of the Commerce and Industry Vote.

I was really very disappointed in listening to the Official Opposition’s chief spokesman this afternoon. In striking contrast to the contributions of all other hon members, the hon member for Walmer sang a song of lamentation. I know the hon member, Sir, and I like him. He is certainly capable of making a good contribution in this debate. It was, however, a real stick-in-the-mud speech that he made! [Interjections.] It was in sharp contrast to the very positive contribution, not only of the hon member for Vasco, but also of other hon members who pointed out that if we sat in this Committee in sackcloth and ashes, conveying a spirit of extreme dejection, we could not expect any improvement to the economy in South Africa.

†Enthusiasm, as the hon member for Umbilo said, is necessary in this country if we would like to inspire other people and see an economic upturn. If I have ever heard of the expression “talking the economy down”, then the hon member for Walmer certainly tried to do just that this afternoon. [Interjections.]

Perhaps I should take it as a compliment to the department, because the hon member never really arrived at the point where he criticised the department or attacked any of its policies. I appreciate that; perhaps the hon member meant it as a compliment in that there was nothing really in this department that he could find to criticise.

*Let me nevertheless tell the hon member for Walmer that it was a difficult period from an economic point of view. In 1985 we experienced one of the most difficult years in South Africa’s economic history. There was a deep recession and depression, but there is no reason for merely focussing on the negative aspects. We had a wonderful export year. One of the pleasant experiences I had in the past year or more with the Department of Commerce and Industry, was that of being able to assist exporters, under difficult circumstances, in achieving one of the best export performances in South Africa’s history.

That has contributed to the great surplus in our trade balance. Surely it is a positive sign if our export achievement for 1985 was 44% better than that of the previous year. The export figures in the first quarter of this year are still encouraging, pointing to an increase of 13,8%, as against the corresponding period in the previous year.

We have problems and there are many challenges, but at the beginning of 1986 the economic prospects are considerably better than those of the corresponding period of last year. Let us, as leaders in our respective communities, also furnish our contribution by adopting a positive frame of mind, by making a balanced contribution and by inspiring the private sector.

I just want to come back to one aspect of the speech of the hon member for Walmer. Take the pessimistic attitude the hon member adopts towards the problems of the industrial sector. Local demand is at a low ebb, of course, and consequently many of our industries have come under pressure. Notwithstanding the difficult circumstances and the fact that many industries were unfortunately compelled to lay people off, to curtail their labour force and also to take other austerity measures, the capacity utilisation percentage in the South African manufacturing industry is still exceptionally high under the circumstances.

In speaking of a utilisation factor of 85% in the textile industry, 88% in the clothing industry, 91% in the footwear industry, 91% in the paper products industry and 90% in the industrial chemicals industry—I could go on in this way—we see that this is not a completely discouraging picture. It is obviously not an ideal situation, but in several of these manufacturing sectors there were already considerable improvements in manufacturing capacity in the last quarter of 1985 and the first quarter of 1986. So there are some rays of hope; we must also be able to see those positive aspects.

I want to thank the hon member for Vasco for his contribution. He rightly pointed out that we have the human capacity in this country. We must just display the necessary willpower. Throughout history the business community in South Africa has frequently been through difficult times, but if there is a spirit of entrepreneurship, a spirit of leadership, the necessary will and enthusiasm, we will also adapt to these difficult circumstances and furnish proof of the fact that the South African economy is basically sound, as the hon member said. We have the ability, we have the people, but we must just not talk ourselves into a spirit of wretchedness.

I also want to thank the hon member for Vasco for his particular guidance as chairman of the standing committee. I want to thank him and also the hon member for Innesdal for their friendly comments about the department. The department tries to maintain the best possible links with the private sector. There is a wide network of contact and liaison mechanisms that I am not going to elaborate on at the moment. I should like to focus hon members’ attention, however, on the Department of Commerce and Industry’s news bulletin which has already elicited very good feedback and which offers us a channel with which to communicate, not only with the private sector in general, but also with selected groups in the private sector.

The hon member for Langlaagte made a few interesting remarks, and I accept the fact that the small business sector, in particular, has been hard hit by the difficult economic circumstances. The hon member highlighted high interest rates as one of the major problems. That is true, but since then the interest rates have decreased considerably, from 25% to 15%, which has surely brought relief in many spheres. Also the assistance made available to many small business undertakings by the SBDC has enabled them to survive the difficult period.

The hon member, however, did touch upon one specific matter that I should like to comment upon. The hon member left us with the suggestion that we do not know whether we will find ourselves subjected to a socialistic system in the future. If the hon member wants to suggest, by what he has said, that revolutionary forces are going to take over this country, let me just assure him that this Government’s policy is irrefutably one of free enterprise. Our whole economic policy is characterised by the promotion of free enterprise. The hon the Minister for Administration and Economic Advisory Services in the Office of the State President is responsible for a programme of privatisation, specifically to extend the role that the private sector has to play. If, however, we want to ensure the growth of confidence in the system of free enterprise, it is also necessary for us to eliminate the unnecessary economic obstacles impeding others who also want to participate in this system. Surely it is those obstacles that create mistrust in the economic system of free enterprise. It is those restrictions that result in certain groups in the South African economic sphere gaining the impression that it is only a system for Whites.

No, Sir, it is a system for everyone in South Africa. It is a system that can best develop the tremendous potential of this country. A socialist system, one of excessive control, will not enable South Africa to solve its problems. If we took the right steps, however, to develop the economic power and potential inherent in this country and to make everyone partners in an economic system of free enterprise, we could really grow, create job opportunities, increase the living standards and prove that a socialist system only appears to embody our salvation. Our true salvation lies in the optimal utilisation of the natural resources of this country. That can be done, provided the system of free enterprise is given the greatest possible opportunity to develop. I want to encourage hon members …

Order! Is the hon the Minister prepared to answer a question from the hon member for Walmer?

Mr Chairman, I have very little time at my disposal. If there is an opportunity at a later stage, I will gladly give the hon member an opportunity to put his question.

I want to advise hon members to read a book which I believe embodies a special message for South Africa. I am referring to Paul Johnson’s History of the Modern World. The fact of the matter is that it is not possible, by way of social engineering—“sosiale regulering” is the Afrikaans term—or social manipulation, to attempt to influence or direct people’s activities. Only when people get an opportunity to fully realise themselves—within an economic system too—can maximum growth and development be achieved. That is a message we would do well to convey.

That is only part of the truth.

The truth is indeed multi-faceted, and the hon member for Rissik realises that. No one ever has the whole truth. I share the hon member’s view about that. [Interjections.]

The hon member for Innesdal made a very substantial contribution and I thank him for it. I appreciate his optimism. It is true that we must develop the entrepreneur in this country. We must give him an opportunity to develop his talents by removing the restrictions I have already referred to and also by creating a climate in which he would be prepared to take risks because he knew that the rewards for doing so would be great. That is why I share the hon member’s expressed concern.

The hon member for Constantia also referred to this. We are indeed concerned about the high degree of concentration in this country. This does, however, have a long history. It is not all that easy to transform economic structures. It is not all that easy. The Competition Board is subjecting these actions to close scrutiny, and with the prohibition coming into force tomorrow we are entering upon a new era as far as competition in South Africa is concerned. Several speakers also referred to that, amongst others the hon member for Wellington in his very good speech.

It is a new era, not yet one that can transform the structures. The structures have grown historically over many years. If we create new opportunities for the small businessman and the private sector by way of privatisation, the question that arises is whether many of these large groups should not do a little privatisation as well by allocating certain activities to other participants in the economic system.

This does not detract from the fact that we also need the large groups, but I share the hon member for Wellington’s concern about the fact that if the group formation becomes too overwhelming it does, in point of fact, entail dangers for the system in which we believe. The fact of the matter is that excessive concentration destroys confidence in a system of free enterprise, promoting the fear that the small businessman will be pushed out or adversely affected. That is why it is necessary, with the means at our disposal, for us to deal with this matter very responsibly and carefully without initiating any witchhunt. We must also give the large groups, which we need in this country, every opportunity to play their role, but I also want to pose the question which the hon member for Wellington posed and which, in fact, is so frequently posed: Can these large groups not contribute to equity capital too? Can they not also—some of them do, in fact, do so—furnish a contribution, by way of the Small Business Development Corporation, towards giving the smaller entrepreneurs a chance to get on their feet?

†The hon member for Umbilo made a very good contribution. I am grateful for his remarks regarding the building up of reserves. Yes, that is certainly a valid point. The only question I would like to raise is whether, in the time of easy credit, too many businesses—especially one-man businesses— did not overborrow. Another question which arises is whether many firms were improperly geared so that when the interest rates increased they were suddenly burdened with high interest rates and were consequently unable to meet the challenges of the time. It is therefore not only a question of building up reserves. It is also a question of sound management. Sound management definitely plays an important part in enabling many companies with reserves to survive adverse economic conditions.

I would, however, like to comment in particular on one point the hon member made. He asked whether decentralisation represented value for money. It certainly is value for money because the aim of decentralisation is not only to provide financial assistance to businessmen. Its aim is not simply to finance businesses or to establish them in different areas—as the hon member said, moving labour from one area to another. No, it has nothing to do with moving labour; it is really moving jobs to where the labour is.

*In spite of the difficult economic circumstances, the decentralisation effort has done particularly well. Owing to a lack of time I am not going to burden hon members this afternoon with too many details. In the period 1 April 1985 to 31 March 1986, the latest year under review, incentives in regard to 1 243 projects in both the RSA and the national States were approved. That number of projects embodies the creation of 87 635 job opportunities and a capital investment of R1 299 million if all these industries are established.

I link up with this by stating that the policy of decentralisation aims at restoring the economic imbalance in South Africa. It is a policy of development, of upliftment, a policy focusing on people. The question now being asked in certain circles—particularly, I notice, certain Opposition circles, although it was not raised here this afternoon—is whether the decentralisation policy should not be scrapped now because influx control measures have been scrapped.

No, this policy has nothing to do with influx control. It has everything to do with the orderly development of deprived areas. [Interjections.] This policy has everything to do with the stabilisation of deprived areas. I think that the fact that the Government is pursuing its policy of decentralisation is the best possible proof of the fact that it has never been an ideologically based policy. It aims at establishing job opportunities in those parts of the country that have fallen behind in their development and economic growth.

Why?

The hon member asks “Why?” For very good reasons. [Interjections.] I have too little time to reply to such questions, but in the limited time at my disposal I should like to make one further remark about the effect of industrial development. The argument that is also frequently raised is that there are too many growth points.

Yes.

The hon member for Walmer has said it frequently.

The effect of decentralisation is diminishing because it is encouraged over such a wide field. The aim is also to promote concentrated development so that a growth effect, an agglomeration effect, can be promoted in those growth points which in turn stimulate further growth. From an analysis of the results of the first four years—ie from April 1982 to March 1986—it is interesting to see that 43% of all the development, as a result of our industrial decentralisation programme, took place at six points. They are Isithebe, Exakheni, Phuthaditjhaba, East London, Atlantis and Botshabelo. Just 12 of the development points drew 59% of the development, and the most popular 18 points drew 70% of the development. This already indicates to us that a large degree of concentrated development is taking place. Notwithstanding the shortcomings of the policy of decentralisation it is in the process of achieving success, and if I had more time today I would have liked to have given hon members more information about these results. Owing to the limited time at my disposal I should just like to make one remark about the Board of Trade and Industries.

†In the White Paper on Industrial Development Strategy it was clearly indicated that the Government attaches high priority to the stimulation and sound development of the industrial sector within the framework of the free enterprise system. Various recommendations with regard to both supply and demand factors in the domestic market are presently in the process of implementation, including the policy of tariff protection.

Following the recommendations of the Van der Horst Committee as accepted by the Government important new developments took place with regard to the procedural aspects of the implementation of the Government’s tariff protection policy. An example of this is that the Board of Trade and Industries is now in the process of being reconstituted. In this regard it gives me great pleasure to announce that the State President has approved the appointment of Dr L P McCrystal as chairman of the Board of Trade and Industries. Dr McCrystal will succeed Mr E G de Beer who acted as chairman of the board in the interim period since the relinquishing of the post by Dr Kleu in December last year. Mr De Beer will resume the post of chairman of the Decentralisation Board.

Furthermore, the staff complement has been improved considerably. It has virtually been doubled to approximately 80 professional staff members including two senior executive posts. The board is also being better equipped with technical equipment to enable it to perform its functions more efficiently.

*The staff has also been reorganised to finalise applications quickly and efficiently and also to give quick and efficient attention to matters such as techno-economic investigations, tariff investigations, the reviewing of existing tariffs, anti-dumping measures, etc. The board has therefore been reorganised with a view to the quick and efficient performance of its tasks.

The board also attaches very great value to close liaison with the private sector. In this connection the intention is to establish a standing committee consisting of representatives of the board and organised commerce and industry to consider, on a regular footing, those policy aspects affecting the implementation of tariff protection. The Board of Trade and Industries Act is also being amended to make provision for these changes, and a Bill in this connection is to be tabled in Parliament later this year.

In the time that is left I briefly want to react to the remaining speakers. The hon member for Stellenbosch made an excellent contribution, for which I thank him. He also pointed out again that if we did not address the problem of poverty and promote activities that could bring about economic growth, apart from the political problems, we would not achieve any success in this country. I fully share the hon member’s standpoint in this connection.

I have replied to the hon member for Innesdal. The hon member for Wellington, as I have already said, made a very balanced and responsible speech on the question of concentration and the promotion of competition. Tomorrow I hope to have an opportunity to respond at greater length on the steps which the Competition Board has taken and which come into effect tomorrow. This relates to the prohibition on price-fixing, cartels and so on.

It is interesting that when we speak about these things it is as if we speak with one voice. Even the hon member for Constantia made a very good speech here this afternoon on the policy of competition. I want to congratulate the hon member. Broadly speaking I agree with what he said. It was a good, balanced speech.

†I want to assure the hon member that we will certainly see to it that the exemptions are reduced to the absolute minimum. I am adamant about this. It will be fully investigated and we will publicise our findings. The ideal would be to have no exemptions, but we will certainly be firm.

This is a new measure and the industry and business sectors have had to live without it for years. Therefore, although we are going to be firm, we will nevertheless also be sympathetic. We want to give them time to adjust. I will release a Press statement tomorrow concerning the exemptions and the implementation of the notice. I can, however, assure the hon member for Constantia that the intention of the Competition Board is to become the friend, not only of the small man, but of all those who believe in fair trade practices and fair competition in this country, be they big or small.

*The hon member for East London City made a number of very positive recommendations about what could be utilised to promote our exports. Export promotion is a high priority, so much so that the department has appointed a committee under the chairmanship of Dr Kleu to review our existing export incentive measures with a view to establishing a dispensation that will be able to link up more effectively with the particular needs of the various industrial sectors.

†In that connection, the hon member for Constantia also inquired about sectoral investigations. I can assure him that sectoral investigations will be undertaken so as to design a tailor-made package for each and every sector as far as their exports are concerned.

*I want to suggest that the hon member for East London City’s recommendations also be conveyed to the Kleu Committee for further attention.

†I agree 100% with what the hon member for Amanzimtoti said. He made a very valid point about an issue of great concern to everyone, and I hope that the activities of the National Productivity Institute will contribute in some way to further improvements in productivity in this country. It is of the utmost importance that we improve productivity. Unless we do so, we will not be able to compete either domestically or internationally, and all our efforts to become an export-oriented country will be to no avail. We must get the basics right. As far as my department is concerned, we will certainly do everything possible. I intend to make a statement in this regard later. I am fully supportive of the thoughts the hon member expressed here this afternoon.

*In conclusion I should like to state that also as far as its financial contributions were concerned, the department went out its way to take action aimed at job creation. The hon member for Langlaagte referred to that. Time does not allow me to furnish particulars about what has been done in regard to our export schemes and other schemes that have had an employment-creating effect on the South African economy.

Hon members can be sure, however, that notwithstanding a difficult economic year, with its diversity of policies, the department was able to assist the industrial and commercial sectors to achieve results in various fields in spite of our difficult problems.

After the first quarter of 1986 we are at a point where the prospects are at least beginning to liven up. What we now need are not stick-in-the-mud speeches but confidence, optimism and the will to emerge from this low point in the business cycle by a process of hard work and improved productivity and by making the best possible use of the existing opportunities.

Mr Chairman, it is a great privilege to speak after the hon the Minister, and in particular to thank him for the many opportunities during the past year and also prior to that, when some of my hon colleagues and I could go with deputations, particularly from the agricultural sector, to talk to him in the interests of the large farming community of our country. I want to thank him for his insight and his ready ear, and for the time he always set aside for us. He made direct contributions to assist this very strategic industry in our country.

I agree with the hon the Minister that this is definitely not the time for stick-in-the-muds to shout the loudest in South Africa. There is a very definite change in progress in our country’s economy. The upturn has already started, and I can motivate this on the basis of innumerable requests which I am receiving from voters in my constituency— this applies particularly to this debate this afternoon and to this department and its affairs—asking to be assisted in some way or other to start small business undertakings.

This afternoon I want to say a few words about small business development, particularly in the rural areas. I thank the hon the Minister and also the hon the Deputy Minister, a very able man, for the very effective way in which they are carrying out their tasks.

In the same breath I want to say that when we look at the annual report—I think every hon member should study this annual report—we see that this is one of the busiest departments in the entire State set-up. It is also one of the departments on which the greatest demands are made as regards expertise, because they must devise plans—in difficult times too. If one compares this year’s annual report with last year’s report, one can see what progress has been made. I specifically want to thank the head of the department and his people as well as those persons who assist them for one matter in particular which they looked into and which was investigated by the President’s Council. The President’s Council published an extremely important report, namely a report on the Council for the Promotion of Small Business.

There are certain recommendations which the Cabinet is considering and which we shall take cognisance of in the near future. It has been recommended that the council be abolished and replaced by a statutory board. The primary objective is to promote small business development in South Africa. If hon members want to talk about socialisation—this afternoon we heard from some hon members that we are heading for socialisation—then this is the best medicine for anti-socialisation one can get. I gain the impression that people who complain about socialisation with regard to this department did not study the report properly.

In the second place I should like to thank the hon the Minister of Local Government, Housing and Works—I saw the hon the Minister here in the Committee a moment ago. I almost wanted to call him the father of the close corporation. That legislation came into effect in practice last year, and I cannot tell hon members how much it helped encourage economic activity in South Africa and particularly at the level where one is dealing with the small business man. In my town a farmer can, for example, use the close corporation in respect of an investment he wants to make or for a will he wants to draw up. One can think of anything on earth and one will find that the close corporation is one of the most wonderful instruments which has been placed at the disposal of the man in the street to make ends meet economically.

I should very much like to refer to the two annual reports of 1984 and 1985 in connection with the SBDC. I want to pay tribute here to its president, Dr Rupert, and also to Dr Vosloo, the managing director. History will show what the SBDC means as a counter to socialisation in South Africa. I know that these people are working overtime and are taking a great deal of trouble—the hon member for Stellenbosch and other hon members also referred to this—to go to the small businessman and help him in a particular way to generate economic activities.

One must have small business undertakings, because the large business undertaking cannot keep a country going on their own. For that reason no one will be able to show me a country which makes a living from multinational companies or large companies only, because the small undertakings form the base from which the large companies can make what I almost want to call progress by leaps and bounds.

When I mentioned the management of the SBDC, I specifically mentioned—and it gave me pleasure to do so—the northern regional management. These are the gentlemen who are at the helm there, with whom I usually deal there in the northern part of the Transvaal. They run the head information office in Johannesburg. There are also offices in Pretoria and Pietersburg. A person with a problem who applies to the SBDC for a loan, must travel to Pietersburg if he lives in that area, otherwise he must travel to Pretoria. Eventually they get their reply from Johannesburg, from the head office, in any case.

I want to make a suggestion, because practice has shown this to be the most successful way of doing things. When the SBDC receives an application, they must adopt this method. I believe that the same applies to the other regions of the country. This roundabout way of seeking assistance should not be adopted. I see in this year’s annual report published by the department, that attention is also going to be given to ways of eliminating the constraints and impediments facing a person applying for a certain loan for a certain business, so that he can make contact as soon as possible with the people who can assist him.

The method I am advocating today, has worked in the cases in which it has been applied, namely that a person from head office must go to the relevant person as soon as possible—whether these premises are in a town or in the rural areas. An on the spot investigation must be made into the viability of that organisation.

I have had wonderful experiences recently … [Interjections.] Those hon friends in the CP can go ahead and laugh. They afforded me a great deal of amusement, and I thank them very much for that.

Where is Kallie Knoetze?

Kallie has more brains and sense in his left fist than the hon member for Rissik has in his head. [Interjections.] But Kallie is not using it, because we make love, not war! [Interjections.]

Why were there so many police? To help you make love? [Interjections.]

I said that I had wonderful experiences, and I was referring to the incredible ingenuity of our people in a negative economic time such as we have experienced during the past few years as a result of droughts, depressions and other factors beyond our control. It is incredible to see how people have devised the most wonderful plans and ways of making ends meets. That is why I said that people at head office must go out to the farms.

Those fanners cannot plant tobacco on their farms any longer because there is too much chlorine. So they converted the packing sheds into a pottery workshop, for example, because that man’s wife has a particular talent. She has employed people and they are making the most wonderful artistic products you can imagine. I want to mention the name of that man and his wife today in Parliament. They are Mr Kallie Korp and his wife. The tobacco sheds have been converted into a small factory and now I want the people to go and look at it. Our application did not succeed, but we shall try again.

Another example I can mention is something I saw in one of the smaller towns in the north. [Time expired.]

Mr Chairman, I take great pleasure in following the hon member for Brits. He referred to the positive attitude which one finds among the businessmen of South Africa—also in these economic conditions. He also referred to the necessity for the development of the small businessman. It is a fact in South Africa and everywhere else in the world that the entrepreneurship of the small businessman is at the heart of every sound economy.

No one will dispute the fact that it is of the utmost importance that we must find a formula for participation in the democratic political process in South Africa. But the greatest single problem which we shall have to address seriously in this country is whether South Africa is going to succeed in accommodating its potential labour force effectively. Are we consequently going to succeed in creating sufficient employment opportunities for our growing population? What is the reality? It is so easy to become negative, as is the hon member for Walmer’s wont, but in general this debate stated on a very positive note and I should like to associate myself with this. [Interjections.]

When one looks at the available employment opportunities in South Africa, it makes one a little worried, because if one only looks at the labour situation, one sees that in 1983 there were a total of 4 955 055 employment opportunities. For the third quarter of 1985—that is almost three years later—the figure is actually slightly lower, namely 4 939 014. The fact of the matter is that 300 000 new people for whom work must be provided enter the labour market in South Africa annually.

I want to say at once that we on this side of the Committee have great appreciation for the efforts being made in this connection by the Department of Trade and Industry, as well as the Industrial Development Corporation, the Small Business Development Corporation, the Decentralisation Board, the Board of Trade and Industries, the Competition Board, the Small Business Advisory Bureau, the Council for the Promotion of Small Business and many other state organisations.

Of course the contributions by the mining industry, agriculture, the manufacturing industry, the business sector, the construction industry, as well as the state and other undertakings in the private sector, are praiseworthy and of the greatest importance. Nevertheless I want to repeat that if we cannot succeed in making every man and woman who enter the labour market in South Africa partners in the capitalistic system, we are merely creating a potential for the revolutionary forces that want to overthrow this country.

Of course it is important for us to uplift our people socio-economically and for us to provide them with education and training. We shall also have to retrain them. This is important, but without employment opportunities at the end of that situation, in my opinion South Africa is heading for one of its greatest crises.

The state is making efforts, and I only want to single out three organisations with great appreciation in this connection. The Industrial Development Corporation, to mention but one, mentions in its annual report that its advances to industry rose to R495 million, compared with the R383 million of 1984. They placed emphasis on export promotion—30% of their financing was allocated to export industries. There was continued support for regional industrial development, to which the hon the Minister referred a while ago. The IDC used 67% of its financial assistance outside the metropolitan areas. These efforts which are being made at present are really praiseworthy.

The other organisation is the Small Business Development Corporation. As regards financing under their mini-loan programme, in terms of which they allocate loans of up to R2 000 for a maximum of 24 months, they approved 1 456 applications with a capital investment of R1,4 million. Under their comprehensive assistance programme, in terms of which they lend out a maximum of R30 000, 256 applications were allocated with a capital expenditure of R2,7 million.

Their suppliers’ guarantee scheme, in terms of which up to R2 000 is lent out for a maximum period of 6 months serves to establish the creditworthiness of the small businessman as against his suppliers. In respect of their general finance programme, which involves direct financing up to a maximum of R300 000 in the form of loans, share capital, instalment sales, leases and guarantees, 1 908 applications were approved with an investment of R62,4 million. As far as their bank indemnity scheme is concerned, ie loans which they guarantee, such as the 80% scheme with a maximum of R150 000, 451 loans were allocated with a capital investment of R13,6 million.

One can carry on like this, and it makes one aware of the fact that these organisations are going out of their way to do one thing, namely to create employment opportunities in South Africa. All this is done over and above the assistance they are giving in the form of the provision of business premises, advisory services and the promotion of the interests of those people.

Let us see what the Board for the Decentralisation of Industry has been able to do. Decentralisation has always been the topic of a political argument. The Government is being accused of decentralising for purely ideological reasons. But if one looks at the results being achieved with decentralisation, I think it is clear that the opposite is true. In the year 1984-85 it was proposed to create 77 486 employment opportunities, with a proposed investment of R1 176,7 million. Decentralisation has become a success story in South Africa.

If one looks at the average distribution of the employment opportunities created, one sees that only 6 772 employment opportunities out of a total of more than 77 000 employment opportunities created in the country were in the PWV area. As a matter of fact if one compares the eight regions, the average number of employment opportunities created in the PWV area by means of decentralisation was lower than in the other areas in South Africa.

There are also organisations like the South African Development Trust, which does not fall under this department, and all the industrial development corporations in the TBVC countries and in the six self-governing states, who also help in this regard.

It is important for the White Paper on Industrial Development Strategy to be implemented without delay. In this respect I want to re-emphasise the three most important factors very clearly. We received that White Paper, but I wonder on how many shelves it has landed up without people having looked at it again. I think we would all benefit from looking at that White Paper again—particularly the private sector and the state—so that we could ascertain whether more could not be done in that regard.

As far as the three most important factors are concerned, it is important in the first place for us to retain the South African market for local manufacturers, so that we can counteract imports to South Africa. In the second place we must actively promote and expand exports. I believe that we do nowhere near enough in this country to stimulate exports. In the third place the applicable technology must be utilised in South Africa.

This is not a negative approach, but I want to express my concern about a matter regarding which I see the Industrial Development Corporation has also expressed itself as follows:

In my opinion this is really something which should be of grave concern to everyone in this country. When one reads that economists are agreed that the decline in capital investment in South Africa over the past ten year period—this is after all primarily aimed at creating employment and prosperity—represents South Africa’s most important single problem, one again realises what a counterproductive effect something like disinvestment can really have on the country’s economy.

Of course there have also been all manner of other negative influences during the past year. Not only politics has a negative effect on the economy, as the hon member for Walmer said. This country went through an oil crisis, a drought and a recession, there was the rand/dollar exchange rate which affected us, and there was the defence burden with regard to South West Africa for example. These were all things which had a negative effect on the economy of South Africa.

In conclusion I want to say that the creation of employment remains the greatest single challenge in South Africa. Everyone— those persons in the government and the private sectors—will have to give urgent attention to this.

Lastly there is something we must implement very soon—legislation in this connection will be submitted to Parliament in the near future—namely the stimulation of the informal sector in South Africa. This is a way in which one will really afford entrepreneurs the opportunity to develop, without the red tape so many of them have to deal with in the small business sector. I believe that this is one of the most important and best things ahead of us.

Mr Chairman, the hon member for Turffontein pointed out— and I agree with him—that one of the prime things that we have to do in South Africa is to create jobs. There are different ways we can go about it, and in the course of my speech I will deal with some of them.

However, as I listened to the hon members of the Government party it seemed to me as if they give South Africa a choice. That is that one can be optimistic and poor, which is what we are. I ask myself: Is the alternative that we can pessimistic but rich? If I had the choice then I would rather be pessimistic and rich than optimistic and poor.

When one has a look at the various economic development programmes one sees that they were based on the assumption that the manufacturing sector would be the dynamo that would get the South African economy going. Therefore, this sector is a very important one and the hon the Minister in fact has awesome responsibility. I think the time has come to ask how well the Government is acquitting itself of its task. The hon member for Turffontein pointed out that over a long period of time the real growth in the manufacturing sector has been low. It has been growing at 1,7% over the past ten years. That is some engine! No wonder our gross domestic product is only growing at 1,8% in real terms. We are in fact going backwards, because if one’s population grows at 2,5% and one’s economy grows at 1,8% then one is actually retrogressing.

The hon member for Turffontein pointed out the need to create jobs. When one looks at the economic development programmes one finds that they all say the way to create jobs is via the manufacturing sector. It is a little disturbing to note that, at the beginning of 1986, the manufacturing sector employed as many people as it did in 1975.

The hon the Minister said we have to be optimistic; the situation will improve. I do not share his optimism, and for one very simple reason. That is that when one looks gross domestic fixed investment by the manufacturing sector one sees that it has declined continuously since 1980. In 1985 we invested just slightly more than half of what we invested in 1980. In 1985 our gross domestic fixed investment by the manufacturing sector was less than it was in 1975.

We have to ask ourselves what was happening to the South African economy, and what was happening to the manufacturing sector. Basically what was happening to the South African economy—and particularly to the manufacturing sector—was that we were becoming less and less competitive. The hon member for Amanzimtoti pointed that out. We have to ask ourselves why that happened. I believe there are a number of reasons.

The first is that our inflation rate was too high. I can remember the previous Minister of Finance, when we complained about the inflation rate, saying: What is so wrong with an inflation rate of 14%? We know what is wrong with it. It actually makes one less competitive with one’s exports and it boosts one’s imports. The hon the Minister spoke about the improvement in the export performance. That is true, but only in monetary terms; when one looks at it in real terms, in volume terms, and one goes back to page 15 of the “Statistical/Economic Review” one sees that in volume terms the increase has not been as great.

That situation was allowed to develop from 1976 to 1983 and it was only rectified by the savage depreciation of the rand. What was the result of this poor performance of export manufacturing? The result was that we could never get the volumes of production that we needed. However, we had another problem, because not only was our manufacturing sector not exporting, but the domestic economy was also suffering. There is a tendency, particularly on the part of the Government to talk about the consumer being a spendthrift, that we spend too much. The figures actually do not show that. In 1985 we spent less as a nation on furniture, electrical appliances and motorcars than we did in 1975.

Why was the domestic economy declining, or why was it not growing as rapidly as it should have? One of the reasons was income tax. Individual tax nearly trebled between 1981 and 1986, and GST nearly quadrupled over the same period. Not only did we not benefit from exports, we also did not benefit from an expanding population. Even though our population was growing, the domestic market was not growing fast enough. What is more, we did not even benefit from urbanisation, which is how many Third World countries get their growth. When one looks at the Government’s policy it appears that they in fact achieved exactly the opposite.

The hon the Minister spoke today about the question of decentralisation, and I should like to discuss this with him because it seems to me the Government does one of two things when we have an economic problem. It issues a White Paper which is filled with good intentions that are very sound. They do not, however, execute these. The White Paper on industrial development is good. If executed in time, I am sure, it would help to rectify the problem. Alternatively, they tell us why it is beyond their power to do anything to rectify the situation. They talk of external factors. They seem so powerless to solve economic problems that one sometimes wonders why they do not abdicate officially instead of unofficially. The Government refuses to acknowledge the consequences of its own policies, and that has had a disastrous effect on the manufacturing sector.

The hon the Minister will recall the Physical Planning and Utilisation of Resources Act which, I think, was passed in 1967. There are two important stipulations in that Act. Section 3 limits the ratio of employment of Black people in the PWV area, and section 2 actually limits the extension of industrial land in that area. What did we do? The hon member for Amanzimtoti spoke about the low productivity of capital. What did we do by way of that legislation? We actually encouraged people to substitute labour with capital. That is why our productivity of capital is so low. That is why we have such a great deal of unemployment in South Africa. Even today, the cost of industrial land in the PWV area is abnormally high by world standards.

Sir, I know those stipulations have been repealed. We are, however, still paying the price for our shortsightedness. In the present Budget we continue with decentralisation for political purposes. The hon the Minister will know that spatial economists will tell us that we cannot develop more than six growth points at the same time—a maximum of six. In a country the size of South Africa one can most probably manage somewhere between two and four. The hon the Minister says we are concentrating our money. We should have a look, however. When one looks at the report of the Board for the Decentralisation of Industry it appears that from 1 April 1984 to 31 March 1985 five or more applications were approved to 54 different places. We cannot continue in that vein. If we want to decentralise we will have to concentrate on only a few places. We will have to choose them very carefully, too, because economic development tends to work on a linear basis, and the successes we have tended to accomplish in areas like Rosslyn have been because they have been an extension of the economy.

These policies we are talking about do not happen to be acts of God. These are not acts of some foreign government. These are acts of this Government. It is an attempt to take what was a dynamic economy and fit it into a stultifying political system. One need only look at this hon the Minister’s Budget Vote to find where this Government’s priorities are. R16,8 million is being spent on the encouragement of mineral beneficiation. R20,8 million is being spent on the stimulation of secondary industry. R15,9 million is being spent on small business development. R200 million is being spent on export promotion. I agree with the latter. An amount of R531 million is to be spent on the decentralisation of industry. Now, I ask the hon the Minister, given our dismal manufacturing performance over the past ten years, can we afford to continue with the decentralisation of industries? Should we not, instead of decentralising industries, spend our money on stimulating industry? If we do not get the First World sector of the economy growing we will never ever be able to solve the problems in the Third World sector of our economy. [Time expired.]

Mr Chairman, there is much in what the hon member for Edenvale says. Many of the matters he highlighted as problems in the economy are, however, very well known to us. In a debate like this one the pertinent question is not what is wrong with the economy but what we are doing about it.

When one looks at the activities of this ministry one can see—I just made a rough note—that in almost every sphere of activity where this department impacts upon the economy or vice versa, renewal is taking place. It is a time of renewal as far as competition policy is concerned. It is a time of renewal as far as consumer policy is concerned. I will come back to the question of consumer policy in a moment. There has been legislative renewal in respect of the liquor industry; the whole Liquor Act is under revision at the moment. Just today major reforms in the Board of Trade and Industries were announced. I would like to congratulate Dr Lawrence McCrystal on his appointment as the new chairman of the reformed Board of Trade and Industries. We have streamlined decentralisation policies. Our export policies are being looked at critically and on a sectoral basis by some of the most skilful people in the country. We are in fact enjoying massive successes in the entire sphere of exports at the moment. We need only look at what Safta is doing. Just look at the way they have geared themselves up. Look at the important new fields they are entering and at the new impetus they have given exports. Then, too, we should take into account that over the past few years this hon Minister has restructured the sugar industry. Moreover, new steps are being taken in regard to technology transfer. Our tax laws are being totally revised. Company law is under review, and close corporations too. I can go on in this vein, but I do not have the time. The fact of the matter is that renewal is taking place in every sphere of activity in which this department is involved.

In view of this I should like to make just a few remarks about some of the areas we are looking at at the moment and on which I do not think sufficient attention has yet been focused. One such area is consumer affairs. There is no doubt in my mind that the position in our country is unsatisfactory at the moment as far as measures aimed at consumer protection are concerned. In saying this, I do not mean to reflect adversely upon anyone who was in the past or is currently connected with consumer policy or upon the SA Co-ordinating Consumer Council. As a matter of fact, the SA Co-ordinating Consumer Council is doing very good work at the moment. Our unsatisfactory position in regard to consumer protection became quite obvious last year at the time of the Cubus debacle. There are also a number of other unsatisfactory trade practices—they are well known to all of us—currently being carried on in our country. If ever there was a country where effective consumer protection and effective consumer law is necessary, then it is this country with its First and Third World and its developed and undeveloped components.

I am delighted, therefore, that the hon the Minister referred the Trade Practices Act to the Standing Committee on Trade and Industry and that the standing committee is looking at this Act with a view to making major reforms in it. I am also delighted that our department is giving the standing committee all the support it can. I hope that what will emerge will be effective law, law that has “teeth”. While the legislation must be drafted responsibly it must also be simple, easy to understand and effective. We simply must have a statutory structure for meaningful and responsible consumer law.

As I have already said, we will give the standing committee all the support we can. I do not want to prescribe to or pre-empt the standing committee but I do feel that, in line with the Government’s attitude in respect of deregulation, we require fewer rather than more laws. So perhaps there is room for rationalisation within existing structures. Perhaps the committee can come up with something effective in this regard.

I can tell you a couple of laws you should get rid of immediately.

Well, so can I.

Well, why do you not tell us?

I can tell the hon members that if there are laws that should be got rid of and if those laws are administered by our department, then this department is busy looking at those laws with a view to reforming them. [Interjections.]

As far as the SA Co-ordinating Consumer Council is concerned, they have continued to do excellent work this year. I can give the hon members some statistics in this regard: The council dealt satisfactorily with 3 298 written and 3 493 telephonic complaints, thus saving the public a lot of money. The most important thing is that they are opening a new regional office in Durban next month. That will be a very good thing and it will create a new consumer focus in Durban and a new consumer leadership in that part of the country. They will not only protect the consumer but basically they must undertake their primary function which is to educate the public. They can do that by talking to radio personalities, newspapers and to leaders in the community and they can try to build an environmental awareness also by arranging symposia, talking to schools and so forth.

There is one other matter I would like to address myself to and that is the criticism that is often levelled at this Government that we do not liaise sufficiently with the private sector and that we do not know what we are doing. The hon members for Walmer and Edenvale implied that the Government had somehow over the past five years done damage to the economy and that we do not know what we are doing. The implication is that we have not listened to good advice; that we do not listen to good advice; that our minds are not open; and that our doors are not open.

Quite right, you are telling the truth.

That is simply not true and I want to tell that hon member he will find the truth if he looks at the facts of the matter. I had a study done recently because I wanted to make sure that we were in fact liaising and because I was concerned about the kind of criticism that we were getting for not liaising. I asked myself the following questions: Are we in fact liaising sufficiently? Is our co-operation adequately structured? Are we allowing ourselves to hear the available advice and the best advice? Are there sufficient people talking to us and we to them and are our talks sufficiently structured?

What about understanding the advice?

This department has 29 boards, councils and other bodies falling within its ambit—14 in the Trade branch and 15 in the Industry branch. There are the Competition Board, the South African Co-ordinating Consumer Council, the Estate Agents Board, the National Liquor Board, the South African Foreign Trade Association—SAFTA—the Board of Trade and Industries, the SABS, the CSIR, the IDC, the Decentralisation Board, the Standing Advisory Committee on Company Law, and so the list goes on. Through the process of statutory bodies, non-statutory bodies, committees, standing committees and liaison committees on specific subjects we find that 59% of the representatives on those committees, boards or councils are members of the private sector. Only 22,9% of the people on those boards are from the public sector while the rest are professionals and academics.

The trouble is the Ministers do not listen.

More than 14 000 people serve on this whole plethora of committees that serve at the interface between Government and the private sector.

1 400 surely.

No. There are 14 858 people. [Interjections.] All the figures are here and I can give the hon member the facts. We are going to publish them in our news bulletin soon for all to see. I say that because any criticism that somehow our doors are closed or that we are not co-operating or seeking to co-operate with the private sector is simply not true—we are doing so and our doors are indeed wide open.

The hon member for Edenvale said he would rather be pessimistic and rich and he thought that as far as growth is concerned our track record was so poor that he had no confidence for the future. He referred to the past few years …

The past 10 years.

… and pointed out how badly we had-performed. I am not saying that there is no room for improvement; we all know that there is. However, the hon member must have regard to the realities that we have had to live with over the past 10 years.

Do not make excuses.

When one compares our situation with that of Second World and Third World countries such as the oil-producing countries and sees what has happened to them, and when one looks at countries like Malaya that had a negative growth rate of almost 10% last year—we at least had a negative growth rate of ½%—and when one looks at what has happened in some of the Near Eastern, Central American and South American economies and compares that with our performance, our performance is not bad. I am not saying that there is not considerable room for improvement. I am not saying that this country has not reached a point where we are required to restructure politically, economically, socially etc. We all know that we are in the middle of an absolute transformation of our society. Anybody who cannot see that is a blind man. However, the reality is that in the midst of this transformation, given the fact that a time of reform is a time of stress, that we have come through a cataclysmic drought, that we have had a recession in the economies of our main trading partners, that our main export did fall back from its high to its low to a greater extent than the oil price did, that we do have a low-intensity war on our frontiers, and that we have had to prepare for all kinds of threats and sanctions which we would not have had to do under normal circumstances, then, taken collectively, the performance of our economy has been absolutely magnificent. [Interjections.] Oh yes!

It is no good comparing a First World country at peace and in a state of equilibrium with itself, that decided over 200 years ago what its political system would be, a country that is moving from an industrial to a post-industrial society, with a country such as ourselves with the stresses and strains that we have given our geography and demography …

And given the Nationalist Government!

No. Those hon members talk about confidence. I want to say that the State President of South Africa has shown considerable confidence. He has acted and spoken with great confidence, he has shown bold leadership in terms of the values that he has expressed from the opening of Parliament to the steps that have recently been taken, and he has acted with great self-confidence and determination.

It is true that South Africans did have and some people still do have a negative self-image of our country. However, the major reforms, the things the State President has said and done and the direction this country has been set upon should go a very long way towards improving the self-image of South Africans and therefore the self-confidence of the people of this country.

I believe that we do have spare capacity in our industries, we have modern factories, we have modern equipment in the country, we have a modern, underutilised infrastructure, interest rates are coming down, exports are growing very rapidly, there are major improvements in the whole competitive position of our economy, and there is every reason to believe that we will go from strength to strength and that this economy and this society will grow. As we resolve our political problems—we are resolving them and we will continue to resolve them—new markets will open up to us—not only in the First World countries but also in the Second and Third World countries that we have ignored for a very long time. Those are important markets to us and it is interesting that in spite of the so-called hostility over the past 12 months our trade with Africa has grown by almost 80%. As the hon member for Turffontein said, we should apply the appropriate technology in selling to the Third World countries.

*The hon member for Brits said that we had to develop the small business sector. He referred to people who were doing wonderful things in his constituency. He is quite right; if we want the country to grow and flourish we must develop the small business sector in our country.

†We all know that it is the small business sector that is the largest employer all over the world. It is also the largest employer in South Africa and it has the greatest potential for growth also in the rural areas. There is no doubt that small business development is an essential element in wealth creation in South Africa and if we do not want to be a poverty-stricken, backward society, then we have to seek the means of creating wealth.

The hon members for Amanzimtoti and Vasco, as well as several other hon members, mentioned the need to use our capital more productively. There is no doubt about the fact that one of South Africa’s main challenges is the effective use of our limited capital resources. One of the most cost-effective ways to allow one’s economy to grow is by also allowing the spontaneous growth of the informal and semi-formal sectors, and then assisting the semi-formal sector to enter the formal sector. I think the Government’s new dynamic response to the challenges of urbanisation in this country will help the informal sector enormously, and it will play a great role in South Africa’s economic development.

*The hon member for Brits also asked how the close corporations were progressing. He wanted to know whether they had struck a chord with the public and whether it had accepted this new form of business undertaking. In reply I can just give a few figures. In 1985, 15 911 new close corporations were registered or companies were converted into close corporations. In the first four months of this year nearly 4 500 new close corporations were registered and 3 717 companies converted themselves into close corporations. Consequently this is a form of business undertaking which is very popular and is growing.

Order! Hon members must speak more quietly!

It makes it easier and simpler to do business, and definitely strikes a chord with the public.

†I would like to close by thanking the senior staff of this ministry and department for their magnificent work over the past twelve months. In his remarks earlier, the hon the Minister said it had been a difficult year. There is no question about the fact that it is difficult to imagine a more difficult period than the one which South Africa has had to endure over the past year and longer. This fact has imposed enormous challenges, stresses and demands upon the staff, but they have responded magnificently. They have worked late hours and have been extremely innovative. As I said, we have been through a time of change, reform and renewal. The staff have, of course, been responsible for that renewal and change and for coping with the economic stresses our country has experienced. I would like to thank them again for what they have done, and for the skill with which they have attended to their work.

Mr Chairman, it is a great pleasure to follow the hon the Deputy Minister who made some very interesting comments on a wide range of subjects. I think it is proper that we should congratulate him on his very successful recent visit to West Germany. We believe that things went very well, and that he delivered an excellent paper at Hanover.

*I would not like to disappoint the hon the Minister and I would not like to be a stick-in-the-mud either, but it is difficult to come from Uitenhage and Port Elizabeth and then be optimistic. In the long-term optimism may possibly be appropriate, but in the short-term definitely not. [Interjections.] For that reason I find myself in the strange company of the hon members for Edenvale and Walmer in the sense that I am not very optimistic at the moment as regards the conditions in our region, because a combination of circumstances has caused the Port Elizabeth-Uitenhage area to experience a serious financial crisis.

The largest industry which is also the largest provider of employment is experiencing this crisis which has been caused by factors beyond its control. I am talking about factors like the decline in the value of the rand, the doubling of GST over the past two years and the general economic recession. Consequently sales in the motor industry are at present at the same level as the production figures for 1977, and the market share of our manufacturers had dropped to 18,6% in January. The production of motor vehicles and spares dropped by 31,6% compared with the figures for 1984.

I think that the hon the Minister can help us as far as our market share is concerned, by perhaps replacing his large motor car with one of our more economical, tasteful vehicles.

A “Tricycle”.

Or a Golf.

Yes.

The continuing unrest in our Black residential areas, together with harsh, brutal intimidation and an irresponsible trade boycott is of course weakening the image of our area further and consequently confidence is declining.

Unemployment has really reached an ominous figure. Some observers claim that there are more unemployed people in Uitenhage than people who are working. A survey and independent research have indicated that 46% of the people in the Langa-Kabah area are unemployed.

In spite of the Government’s statements, that they are well aware of this critical state of affairs and are in fact offering assistance on a very large scale, the situation is disquieting. I am referring here to the provision of employment and training projects which are of course of great assistance, but this is only emergency assistance. We also have the speeding up of the Sunday’s River scheme and other projects in our area, by means of which the Government is giving our area a dramatic injection. But this is in the long-term. In due course the Mossel Bay project will probably also have a big effect. The introduction of socio-economic programmes and the inherent growth potential of urbanisation are other factors which are going to affect growth, and consequently the creation of employment, in the long-term.

I am definitely of the opinion that the only feasible short-term solution will be the stimulation of the motor industry. This will bring quick, direct relief and will give rise to a permanent positive reaction. This is a short and medium-term investment which is in line with a general economic strategy.

Some leaders in the motor industry are known as balanced, prominent businessmen and at present they are being quoted in newspaper reports under captions like “Tax crushes car makers” in the Sunday Times of 20 April and “Searle calls for urgent Government action to boost tottering motor industry” in the Evening Post of 19 April. This appeal is based on two aspects, namely the more gradual phasing in of fringe benefits, and the lengthening of the hire-purchase repayment period. Its seems to me as if the hon the Minister of Finance does not agree with this, and consequently we shall have to do something else.

In my opinion there are other ways open to us. In this regard we must look at exports in particular. In his first speech the hon the Minister referred to the Kleu Committee. The hon member for East London City, who made a very interesting speech about exports, also referred to it. Of course we should also investigate the incentives in that sphere.

As far as I am concerned, exports seem to be the most promising sphere, because the assistance granted by the State last year has already led to significant improvements. The effect is now becoming increasingly apparent. For that reason we must keep up this momentum and consolidate it. The announcement of the Kleu Committee investigation is consequently a very positive step.

I want to ask the hon the Minister to give consideration to investigating an “export incentive area” for all industrial products. In Port Elizabeth and Uitenhage this will mean that the unutilised infrastructure—the harbour, for example—may be used more, and also that the trained labour forces which are available there will be utilised. I understand that at present a study is being undertaken by the UPE with regard to “export processing zone”. I would appreciate it if this study could be speeded up as much as possible in order to submit this report to the hon the Minister.

There are also other possibilities. I am specifically thinking of the possibility of our adapting the local content programme to the export initiatives. This will be a very big step in the right direction.

I want to ask the hon the Minister to consider taking another look at the subsidy on outgoing exports to bring us into line with East London. As far as the price of steel is concerned, I think the time has now come for us to get a stimulus from the hon the Minister.

If the statement is true that in the short and medium-term the motor industry will remain the only large provider of employment in our area, I maintain that the decentralisation strategy of the Government will have to take this into consideration. Any further disintegration of the motor industry in our area will be in direct conflict with this strategy.

The managing director of Mercedes Benz made the following statement recently:

He went on to say:

I agree that direct intervention cannot be considered by the State. On the other hand as I see matters, the Government will be compelled to give a clear indication that all further rationalisation will have to take the overall objective of the Government with regard to decentralisation into consideration. Consequently, even if the Government cannot intervene directly, all rationalisation will have to get in with the overall strategy.

The statement on rationalisation did not take a proper look at the position of the related spares industry either, because the smaller the market share of our manufacturers becomes, through rationalisation or otherwise, the more difficult it becomes for that sector to remain in this area, and this at a time when the creation of employment must receive preference and when the full implications of the relocations of the Ford Motor Company have not yet been felt.

We are very concerned about the inequality of benefits with regard to us vis-á-vis East London, and it is untrue to allege that we are only saying negative things. The city councils of Port Elizabeth, Uitenhage and Despatch, as well as organised trade and industry, are involved in an on-going programme to try to keep us going economically in that area and to stimulate us. But this is simply not enough. The urbanisation which, as a result of our size, has already gained great momentum there, will increase with the new mobility of Black people, which of course will bring the position regarding unemployment and the creation of employment even further to a head.

I concede that the problems are very complex, but as far as I am concerned the keys to the solutions still lie in the motor industry and in exports, together with a dynamic socio-economic programme of upliftment and the upgrading of Black areas. I know these matters are receiving attention, but I think it is important for us to realise that the future of our area depends on those three aspects. In my opinion the entire future of the area consequently depends on the decisions which are going to be taken by the Government in this connection in the immediate future.

Mr Chairman, I like following the hon member for Uitenhage, who highlighted the problems in his area. I sincerely hope that the days when things go better again in that area and in the motor industry in the country are not too far off.

I want to discuss the transfer of technology. I refer firstly to the White Paper on the Industrial Development Strategy in the Republic of South Africa, which was tabled in May last year. In terms of this document the Government chose not to create a new body for the transfer of technology, but decided that the CSIR, together with the Department of Trade and Industry, should take the lead in creating a mechanism for the transfer of technology in the country.

The CSIR therefore occupies a central position in discussions on the transfer of technology. To begin with, I want to air certain ideas with reference to the CSIR.

It is true that right from the outset the CSIR has attracted personnel of the highest quality, and a large pool of scientific knowledge and facilities has been built up there. There are, however, many leading engineers and entrepreneurs in the country who believe that the CSIR, in the first 40 years of its existence, has not developed according to the vision of Dr Hendrik van der Bijl. During this time the CSIR has been led by outstanding scientists, and one wants to pay tribute to them—from Dr Schonland to the brilliant Dr Garbers.

The CSIR has developed as an organisation with a scientific culture based on basic rather than applied and development-directed research. Because the culture of a large organisation changes with great difficulty, many people are sceptical as to whether the CSIR will be able to make the rapid and drastic adjustment in approach, which is necessary if it wants to fulfil its important role as an agent in transferring technology.

Research and development is a very important facet of technology transfer. I think it is necessary for one to state one’s standpoint here on the State’s intention regarding the financing of research and development.

No one disputes the freedom of a private individual—for example, a university lecturer—to choose his field and to carry out his research as he wishes. This is indeed—in the university context—part of what is known as academic freedom. That individual, however, loses his academic freedom when he participates in a research and development project that is financed by a research fund specially approved by Parliament. If Parliament approves research funds for use or distribution by a statutory organisation such as the CSIR, the intention is certainly that they may be used only for approved projects directly connected with our national priorities. In other words, it is not a question of academic freedom in that respect; one has to work on the specific projects for which the money was granted.

I should like to emphasise the standpoint that in the circumstances it is essential for us to guard jealously the utilisation of the money available for research, and also the use of high-level manpower.

When we talk about a national technological strategy, it is necessary firstly to take note of our particular circumstances, and I touched on a few points in this regard. We have many raw materials but we are a developing country and even today 80% of our exports are made up of raw materials, and 70% of our imports are made up of processed products. Secondly, we have a limited domestic market and an acute shortage of skilled manpower. Thirdly, our industry is in many respects an assembling industry and not an innovative manufacturing industry. Fourthly, as a result of the large-scale domestic assembling of equipment under licence, or the use of foreign designs, we cannot compete in the export market with products that flow from this. Fifthly, because we do not enjoy the benefits of savings by capacity increases, we cannot develop industries in the RSA in competition with established industries abroad. We can simply forget about that.

There are enough problems, but the mere fact that the Government is talking about a national technological strategy in my opinion reflects confidence in ourselves and in the future of the country. Before a technological strategy can be formulated, we have to answer certain questions clearly. The first is: How do we decide what technology to transfer? Secondly, how do we establish the technologies? Thirdly, who ought to do this? Lastly, what co-ordination and control are necessary on the part of the Government?

A most important facet of our industrial strategy must be that we should still aim to nurture a greater nationalism in South Africans as far as their buying habits are concerned. In this connection we shall have to follow the example of Japan. Although Japan does not impose import restrictions, the Japanese simply do not buy imported goods.

It is important for us to look at the domestic opportunities in the first place, and at the opportunities abroad in the second place, with a view to the establishment of industry.

We have to look at the domestic opportunities flowing from national requirements and from national priorities. We should not allow foreigners to come into our country to look around and evaluate our requirements better than we do it, because the opportunities will pass us by unused while we sit here and sleep.

A good example of a national requirement—and therefore a national opportunity—is the application of technological aids, for example, the use of the computer, television and the video machine, to deal successfully with our education problem. The situation in White education, for example, is such that just over half of the teachers are qualified to teach science and mathematics, while in Black education it is an impossible task—it seems to me that we shall simply not be able to do it—to obtain qualified teachers in terms of the requirements. We shall therefore only be able to solve the problem by making use of technological aids. Here is an opportunity, but it could slip through our fingers if we do not immediately draw up and implement a national plan. Most of the equipment—the so-called hardware—can be manufactured locally, and all the programming—the so-called software—can be developed locally. Then, however, we shall have to co-operate—the educational authorities and industry—and the Government will have to co-ordinate.

I wish to mention a second example of an opportunity that flows from a domestic requirement; the challenge of developing suitable mass housing techniques, which are so essential in the urbanisation of the Black people.

Decision-making regarding which technologies are to be established in the RSA should be market-oriented. The success of a private enterprise is linked to its choice of an attractive market segment and also to its knowledge of the products it chooses to serve those segments.

If we want to establish technology with a view to exports, I think we should begin by looking at which sectors of industry are growing fastest internationally. To illustrate the point, I shall list examples of the growth in world production of various sectors of industry from 1970 to 1984: Electronics has grown by 351%; precision instruments by 335%; chemicals by 94%; iron and steel by 31%; and textiles by 2%. One should therefore not try to compete internationally in the textile trade. In general, these statistics show that the highest growth rate appears in the high-level technology industries, such as electronics and precision instruments, to which I have just referred. Accordingly it is expected that this tendency will continue until the end of the century. Analyses reveal a very interesting pattern, and this is that the rate at which one can create job opportunities in high-level technology manufacturing industries is nine times greater than in low-level technology manufacturing industries.

I conclude with another interesting point, and this is that the productivity growth rate in the high-level technology industries is double that of low-level technology industries.

Mr Chairman, I have already spoken in the Committee this afternoon and the hon the Minister has replied to me, inter alia, on the high interest rates. I just want to tell the hon the Minister that the interest rates on existing loans, even those negotiated at the end of 1984, have not dropped. The hon the Minister of Finance said that it would be seen to that there would be a lowering of interest rates on previous loans smaller than R50 000. In any case, large amounts of money are borrowed in the business world for investments and developments, and they are still at 22% and higher.

We cannot escape the fact that our labour legislation is breaking this country economically. [Interjections.] I am talking about our labour legislation. I want to mention one example to the Committee. Say I wanted to make a labourer a partner in my business; I could be taken to court because I would then be taking the man away from a trade union. It is often the case that one would like to transfer loan accounts to a worker in one’s industry so that he may become a real part of it and will work productively, but this cannot happen.

I want to mention another example to the Committee. A man works for three to four years in one’s business—say in the clothing industry—and then becomes angry with one, and no longer wants to work on a certain machine. One decides to pay him his weekly or monthly wage in advance, and to tell him he can leave. If thereafter one wants to employ someone else to take his place, one can be taken to the industrial court, where one may sit for days and be found guilty.

With what sort of legislation are we dealing? Can we be sure that we are not ultimately going to plunge ourselves into a kind of socialism from which we shall not be able to escape? Hon members should just remember that most of the unskilled labourers that are now entering our factories and industries are not the refined workers of earlier times. I have nothing against them, and I believe that every person should have the right to sell his labour, but there is still one thing one should look at. It is very good to be optimistic, but only a fool would invest his money in an industry and refuse to see the signs that count against it.

I have always been in favour of the protection of workers, but there is no doubt that every law that gives protection to such an extent that it can be converted into a powerful political machine indicates that one is defending socialism and radicalism.

In a country such as ours with its large and difficult labour market, the department that deals with the economy ought to be the number one department. Matters concerning labour, inter alia, should definitely fall under it. There ought to be a senior Minister of the Economy, with experts from the Department of Finance and other departments working under him. Taking into account our mass of workers, that department would have to be capital-generating. It would have to provide the capital for this country. We have become bogged down by a shortage of borrowed capital. We can, however, overcome this by proper, normal labour legislation, and by converting labour into production capital by means of which people are fed.

I like hearing people say they sympathise with poor people. However, when someone refers to poverty as a merry-go-round, he definitely has the wrong idea. The poor should rather be helped. This, after all, is what humanism really amounts to. This is of course a poor form of humanism. The poor people should be afforded the opportunity to shake off their poverty. I do not believe that poverty should be encouraged by sympathy. We should not give a poor man a fish. We should rather give him a fishing rod so that he may catch his own fish.

I am therefore amazed today to see that we are abolishing influx control legislation but are still proceeding with decentralisation. I want to say, too, why I am making this statement. People believe they will be able to make a better living in the cities. Therefore, if job opportunities are decentralised to places such as East London, or wherever, it will mean that Black people, owing to political considerations, will refuse to be moved from where they find themselves at any given time. Furthermore, smaller business enterprises are of course dependent on the larger ones. Our urban complexes, moreover, are still not really flourishing economic structures. The interdependence between smaller and larger enterprises and industries can only really come into its own when much larger industries begin to co-operate with one another.

I know the hon the Minister is not responsible for every piece of existing economic legislation, but I certainly must say that I hate the fact that a piece of legislation such as this is being placed on our Statute Book. This amending legislation on trade practices embraces an amendment of the Trade Practices Act, 1976, by way of section 3 of the Trade Practices Amendment Act of 1985, which is deemed to have come into effect on 1 August 1984. Any visitor to a country, who saw legislation of this nature regarding trade practices would find it strange.

Furthermore it is stipulated in section 15A(4) of the Act, and I quote:

1. (a) pronounce upon the validity of a recommendation referred to in section 4(C)(aA) or a notice referred to in subsection (1)(a) or (b);
2. (b) make an order whereby a winding-up order or an order of sequestration referred to in subsection (3) is stayed or set aside.

What good is it if the courts in this country are subordinate to someone who could become Minister tomorrow? The present hon Minister certainly uses his powers in such a way that no one can point a finger at him, but who is the man that is going to be appointed to that post tomorrow? This legislation must be removed from the Statute Book! This kind of law is problematic and should be removed from the Statute Book. Pay out the kubus people so that we can have this legislation removed from the Statute Book.

There is another matter that is worrying me. The inspector that investigated the kubus affair was a man called D H Rheeder. I read about these things to keep abreast of them, too. In this way I discovered that the liquidator of the kubus enterprise was also a Mr D H Rheeder. Can the hon the Minister tell me whether this is the same man? If this is indeed the case it is in my opinion an unacceptable situation. How can one have an inspector investigate a matter and then make a recommendation to the Minister, and then appoint the same man as liquidator?

Furthermore, I have established that more than R2 million has been paid out to the liquidators to date. According to the Press there are kubus growers that have not yet been paid out, and they are asking that the case be finalised now, and that they be paid out. I am asking the Minister to settle this now.

One of the hon members discussed Taiwan. It has been said that in Taiwan steps have been taken to increase production. The country’s economy is dependent on labour. The labourers start work at seven o’clock in the morning. I have visited them. At ten o’clock at night I was with the lady that arranges flowers and the people that chop up and pack fish, but they did not complain. [Time expired.]

Mr Chairman, in the few minutes still at my disposal I want to respond immediately to what was said by the hon member for Langlaagte. I want to make only one thing very clear concerning the cubus matter. The liquidator is appointed by the Master of the Supreme Court and he has to act according to the liquidation laws. That is why it is not even possible for me to react to the hon member’s request that the matter be concluded. The matter is in the hands of the court and the liquidator, and must simply take its course.

Mr Chairman, may I put a question to the hon the Minister?

I have limited time, and secondly, I want to deal with the hon member’s complaint about the Trade Practices Act in the short time at my disposal. That Act is in his hands in that the Trade Practices Act was referred back to the Standing Committee on Trade and Industry, and the hon member is a member of that standing committee.

We shall fix it up there!

That is why the hon member must not complain to me about the Act. He must make his contribution in that committee so that we can get a piece of legislation here which will satisfy all of us. It is in the hon member’s hands, therefore.

As far as decentralisation is concerned, the hon member simply wants to abolish it now, just as the hon member for Edenvale, whom I shall come to now, wants to. Decentralisation has a very clear objective, viz to establish orderly development in the backward areas and to stabilise the backward or slowly growing areas.

You cannot afford that!

The hon member should take into account that with an economic policy one strives for various objectives, and that one has to determine one’s priorities. This brings me to the hon member for Edenvale. If he will give me the opportunity, I shall respond to his arguments. I could not quite determine, as far as a few points are concerned, whether he is in favour of decentralisation or wants it abolished completely. I got the impression that he does want it at a few points. This also applies to the hon member for Walmer.

In the first place there is the question as to whether decentralisation should be applied at two or three or four points. I want to ask the hon member where one should begin, in view of the fact that various national states have an urgent need for development and are experiencing massive unemployment and since there are clearly identifiable regions in South Africa where slow development takes place in the economic sphere. Where should one create decentralisation points?

There is a need for decentralisation everywhere! The idea is not to develop all the industrial development points immediately. I have already pointed out to hon members that a natural concentration takes place at some of those points. That is a good thing, but at the same time it is also necessary to stabilise other areas, and to make development possible there too.

Unfortunately, therefore, we have to strive for various objectives within an economic policy. If the hon member for Edenvale wants to read our industrial policy off from the department’s budget, I want to tell him he is doing himself an injustice. He made a good contribution here this afternoon, but one cannot determine on the basis of the department’s budget how much we spend on exports, to mention only one example. After all, the department’s export incentives are made possible by tax concessions which are not reflected in the budget. In the same way I could argue that a policy of protection contains a large degree of industrial incentive and stimulation which is not quantifiable and cannot be reflected in the budget. There are priorities, therefore, which the department is striving for in respect of the country’s prosperity, which cannot be deduced from the budget.

†The hon member’s argument is also not correct insofar as exports are concerned. Not only was there a tremendous increase of 44% in value, there was also a substantial increase in the volume of exports, even though it was certainly lower—there was an increase of, I think, 22%. I think the hon member for Edenvale should be grateful for that! I take it that the hon member is also in favour of exports and, therefore, he must not belittle what has been accomplished. I realise—and thus agree with the hon member—that the core of the problem lies in our high inflation rate which is destroying our competitiveness and the ability of industry to compete both in the domestic market and overseas. We must cure that! We must reduce our inflation rate to a more acceptable level. Unless we do that we will price ourselves out of the international market. We can then forget about exports and we will have to build ever-increasing walls of protection around this country and isolate ourselves from the international community. That we do not want to do. I therefore agree with the hon member, who made a very good contribution, but I thought I should like to deal with these few points very briefly.

*I should like to reply to the other hon members tomorrow, but I merely want to refer briefly to the hon member for Brits and to tell him that the hon the Deputy Minister has dealt with his inquiry. The hon member for Brits did not put it like that, but for the sake of clarity I want to emphasise once again that the Small Business Development Corporation is a partnership between the Government and the private sector, but in the agreement it was decided that the private sector would manage the corporation. I simply wanted to point this out once again, because it is a question which is often asked. For that reason we like to convey hints and good ideas hon members may have to that management, but the management is in the hands of the Small Business Development Corporation itself.

The hon member for Turffontein pointed out a very important aspect, viz work creation. If more time was available, I should have liked to have given him and the House an indication of the great variety of steps the Department of Trade and Industry has taken to promote provision of work.

I can only point out the decentralisation programme, and use the remaining minute to discuss it.

Order! I am afraid the hon the Minister no longer has a minute at his disposal.

Business interrupted in accordance with Standing Order No 19.

House Resumed:

Progress reported and leave granted to sit again.