Mr. Chairman, there is a very obvious resemblance between the upswing in the economy and the upswing in the performance of the NP in Swellendam. [Interjections.] I therefore wish to endorse what the hon. member for Parktown has said, namely that there is a very obvious connection between politics and the economy. That connection is also very obvious in the latest election result

Japie is not listening.

It is true that fewer people voted for the party of the hon. member for Park-town than for the other Opposition party, but I can imagine two types of funeral: One is a cremation and the other is a funeral in the ordinary sense of the word. That is why the hon. member for Durban Point is wearing such a pretty flower. [Interjections.]

This flower is the token of a new beginning. [Interjections.]

It is very obvious that as far as the NRP is concerned, the election result is of merely historic interest and establishes no claim to nor significance for the future. [Interjections.]

[Inaudible.]

Having dealt with the by-election in Swellendam, I now wish to address myself to the hon. member for Parktown. I wish to subscribe to a specific point he has made, a point I wish to take further this afternoon, viz. that it is not possible to separate the economy and politics. We are living in a time in which national objectives are being discussed to an increasing extent In fact, it is being emphasized that our country, just like other countries, should really have a clearly defined strategy. It is equally plain that in the formulation and implementation of such strategy it is not possible to separate the various bases on which a State functions, that is to say, the military or the security base, the economical, the political and the psychological, from one another. It appears to me, however, that for the purposes of this debate, at least, we should deal in the first place with the national objectives a country strives to achieve, and with what we in this country, too, strive to achieve. It seems to me it would be meaningless—in fact absolutely senseless—if we were to plan a strategy or a method without obtaining clarity for ourselves on what we have in mind for our country and on what national objectives our country wishes to pursue.

I wish to start with the NP and its national objectives for the country. If time permits, I should like to reflect on what methods can be employed to achieve these objectives. It seems to me the only and the best way to find out about the national objectives the NP pursues, is to look at its statements of purpose and its programme of principles. Apart from the recognition of the supreme authority of the Creator over the destinies of peoples and countries, there is one paramount national objective that is respected in the programme of principles of the NP. The NP sets itself the objective of the welfare of South Africa and her people. It sets itself the task of promoting and protecting this in so far as the promotion and the protection thereof can be achieved by political means.

The second important statement of purpose—by the way, it is with regard to this statement of purpose that we are often being accused of the opposite—is that it is a national objective which we pursue, and which we most probably have in common with other political parties, that there should be fair and equal treatment of all the population groups of our country and also an impartial upholding of their rights and privileges.

There is also a third objective, namely to realize that we have to defend the sovereignty of our State in all respects and under all circumstances, and this national objective does not only include the physical protection of the State. It also includes the protection of this country’s power of decision on its own destiny. Pursuant to this, we need to strengthen the economy of this country. It also means that we have to pursue justice and equity in this country, realizing that this can only be done when a climate of order and stability prevails.

With these national objectives in mind, I just wish to dwell briefly on the interdependence of the various fields I have referred to. What I wish to emphasize, is how essential it is that we in this country should pursue a national strategy and implement this effectively if we want to ward off the coordinated onslaught against our country, an onslaught being waged against us in the economic, political and psychological fields, and it is essential that we should understand what means we have at our disposal to ward off this onslaught.

†Before going into any detail about the role the economy has to play in the formulation and implementation of this national strategy, I should like to emphasize that there is a very strong and important interaction between the economic aspects of a national strategy and the political, psychological and the military aspects.

*It seems to me to be self-evident that we shall have to proceed from one fundamental postulate, namely that in the modern economy there can be no question of proper functioning unless this can take place in an atmosphere and climate of the maintenance of law and order. This cannot take place properly unless there is proper protection of the borders of the country against external action. It seems to me to be self-evident, in an economic system such as ours which is mainly attributable to the endeavours of entrepreneurs in the private sector, that business confidence is an essential prerequisite to investment and production if this is to take place at a proper rate.

Naturally, the economy has to provide a satisfactory level of employment opportunities and improve the living conditions of people. Once again it is true that increasing unemployment and unfulfilled justifiable expectations would undermine the political stability of the country. In the second place, it is just as important that the economy should be used for the utilization of its capacity to produce. If, then, it cannot produce in our country, it should use its capacity to make it possible for us to obtain what we need for the maintenance of the staff of the security services. This means, of course, that we shall have to identify our objectives, and I think it is important that these objectives should be a reflection of what we expect for our own country and her people. An important point I wish to emphasize, is the interdependence of the various fields. It is not a recent phenomenon that a country uses its economy as a power base or as a lever in pursuing its political, military and other strategic objectives. This is not only a phenomenon in the present-day world. In fact, it is something that is centuries old.

I wish to remind hon. members briefly of the great success with which economic warfare was applied by various countries during the Second World War. To sum up in this regard, I wish to state that the Second World War was, to a great extent, a watershed which caused both the rules of the game and the players participating in the game, to assume new forms. Two of the major trends immediately after the war were undoubtedly the beginning of the cold war and the beginning of the decolonization, also on our own continent. During the 1960s and at the time of the Cuban crisis, the Soviet Union realized, and rightly so, that here great military build-up alone could not achieve her global strategy for world domination, but that a strong economy was another keystone for obtaining world power. During the succeeding period of relaxation, the Soviet Union set itself the task of obtaining as much as possible in goods, services and technology from the Western world. In that, too, she has succeeded.

In a much wider sense, too, economic matters, quite often coloured by politics and ideology, have been enjoying an increasing pre-eminence in international forums. In this, the UN in particular plays a leading role. As I see things in this particular connection, the struggle between East and West and the confrontation between rich and poor has become much more subtle and more sophisticated in the present time. The use of economic power or the lack thereof has become a much more important factor in the international power struggle.

Once again I wish to state that the economy can only really flourish when there is political stability. I am now in possession of the second proof that such an element of political stability that can form the basis of economic revival in a country, does exist in South Africa. Beaufort West affords us the second set of evidence in this regard. [Interjections.] Since I am a greater authority on politics than the hon. member for Durban Point, I am even deriving a material gain from the announcement I am now going to make. In the by-election in Beaufort West, the NP drew 5 013 votes and the NRP 1 542. That gives the NP a majority of 3 471. [Interjections.]

Order!

I wish to emphasize that, since I cannot discuss the economy of our country except against the background of the scene being referred to.

Order! Hon. members must not be so loud in their enjoyment. [Interjections.]

Sir, permit me to state that you visibly share in the enjoyment of the hon. members.

Although a full-scale war, whether conventional or otherwise, is perhaps not a possibility in the near future, we should not labour under the delusion that the international objectives have changed. The fact is that the game has changed, that the rules have changed; but the players remain the same and the objectives also remain the same.

From the point of view of my responsibility, I ask: Where does South Africa stand in the picture I am trying to paint? On the one hand, whether we like it or not, we are involved in the struggle between East and West On the other hand, we have to appreciate that we are involved in the struggle in the sense that we have very important natural resources that are regarded as vital to the West In this sense the fact that we are richly endowed with natural resources, is to our distinct advantage. On the other hand the East, and more particularly the Soviet Union, regards the acquisition of control over these natural resources as an instrument whereby to obtain a stranglehold on the powerful economies of the industrial countries of the West Let us have no doubt about that: The grievances or alleged grievances that certain Black States nurse against South Africa, supply the Soviet Union with a pretence for making her presence in Africa felt. In other words, the rich natural resources which we possess and which, on the one hand, are an asset to us, are on the other hand, also a Naboth’s vineyard to other people.

Let me dispose of this aspect by stating that there will be very little argument about the interdependence of the various fields I have referred to. In the nature of things it is my responsibility to emphasize the economic field, since that is my responsibility. I do not wish to underestimate the importance of preparedness and readiness in other fields, but it is my firm conviction that if we wish to succeed in the formulation of a national strategy, there is a specific prerequisite, namely that the key to the successful accomplishment and implementation of those objectives is the measure of success achieved in maintaining a formula for satisfying the political aspirations of all inhabitants of the country. The history of the most recent past has shown us, if we did not previously realize it, that uncertainty in respect of the political future of the country and uncertainty in respect of stability, effectively undermines the confidence of investors in one’s country. It is always difficult to single out one field in a series of related fields as the most important. I think, however, that there should be one dominant objective in the country, namely to create a political climate—not only in South Africa but in Southern Africa—in which the various nations and national groups and communities can live in peace and prosperity.

Having dealt with the general statement of national objectives, I wish to narrow the field further for the purposes of the debate, and ask: what are the long-term economic objectives we are pursuing in the country, and how can these objectives and their realization be used as a powerful element in a total national strategy? In this regard I wish to associate myself with various hon. members who have dealt with this. I wish to repeat—I am doing so since I should like to discuss this—that broadly speaking, the economic objectives we are pursuing for the country in the long term, in terms of importance, are the following: The maintenance of a satisfactory economic growth rate in terms of the production potential of our country; the creation of sufficient employment opportunities; an acceptable distribution of the national income; an acceptable geographical distribution of economic activities; the improvement of the social welfare of the entire population; and a sufficient ability to defend ourselves against foreign economic and political influences. The hon. member for Parktown has dealt with our economic objectives in this particular regard, and I do not think I am doing him an injustice in stating that his objectives in the long term are in accordance with what I have just stated. We therefore do not differ with each other on this particular point. Although I fully agree with him on the identification of objectives, I cannot necessarily agree with his influences. As far as our long-term economic objectives are concerned, we are in agreement as regards a higher economic growth rate and having to seek the highest possible level of employment, namely the creation of employment opportunities. I agree with the hon. member in respect of a socially acceptable distribution of income as an important long-term objective of our economic policy. That is related to political stability. I think we should obtain clarity on what we understand by this, since I maintain that the greatest measure of confusion exists on this concept on the part of people who pretend that they can speak on the subject with authority. Evidently the standpoint of the hon. member in this regard is different from mine.

†I would like to refer to what he said in his speech yesterday. He spoke about an equitable and acceptable division of national income. He was pleading for a redistribution of wealth.

*There is a fundamental difference between the approach of the hon. member and the approach of us on this side of this House. Some people mean by this the redistribution of existing wealth, by taking away from one and giving to the other. I wish to emphasize that this is definitely not what the Government understands by this concept. What we understand by this concept is that as far as possible there should be equal opportunities for every person to increase his own income to the best of his ability. This means, on the one hand, that we should remove unnecessary and unjustified prohibitions and handicaps that prevent people from fully exploiting their abilities to their own benefit and to the benefit of the country. On the other hand, this statement implies that we should take positive steps by means of education and training to enable people to develop their abilities to the fullest extent. In this regard I wish to refer to the excellent testimonial the hon. member for Walmer has given for what has been accomplished in South Africa in respect of education and training. If all countries were to emulate the South African standard with regard to the extent, quality and standard of education and planning, Africa would be a much happier continent to live in. It is in view of this that the Riekert Commission and the Wiehahn Commission have made their recommendations and it is in this light that the Government views those recommendations. Let there be no doubt about that. South Africa’s ability to cope with the future and her ability for survival are going to be dependent upon the utilization of the abilities of all her people.

I have already indicated that a White Paper is being prepared on the Riekert Report and when this is available, it will be fully discussed once it has been tabled. I wish to make one important point in this regard, namely that the Riekert report and the Wiehahn report do not purport or try to purport to be aimed at removing the differences between the population groups. I wish to repeat that the recommendations in these two reports do not try to purport to remove the differences between the various population groups. What they do, however, is to recommend that the prohibitions and the handicaps that might exist in the labour field, should be removed so that people can render their optimum performance. In dealing with this matter now, I wish to refer to the very valid argument the hon. member for Bloemfontein North has advanced with regard to wages and productivity. In the light of what I have just stated and in the light of the exceptional contribution by the hon. member yesterday, it should be clear that the Government’s manner of striving to achieve an acceptable division of income, means that opportunities are to be created for all population groups and that people are to be equipped to increase their productivity so that everyone can increase his relative level of income without harm to the economy of the country. I wish to raise a second matter in this regard. What is important, is that many of the people in the country who have rendered lip-service to the general call for the wage gap to be eliminated altogether, have subsequently, when they became economically active, made good the increased wages by employing fewer people. Furthermore, the same people who rendered lip service to the elimination of the wage gap in various fields, have employed machinery instead of people. In this way we are creating structural unemployment that will have an influence on the stability of the country in every field. Let us be frank with one another today. In terms of the Industrial Conciliation Act, there is surely no colour-based determining factor in respect of the wages of workers. I wish to postulate that in that specific case certain population groups are being paid more than others, notwithstanding the provisions of the Act What does that mean? It means they reject the principle of the free economy, namely to compensate people in accordance with production and not in accordance with the group to which they belong. I wish to stress this fact In the second place I wish to state—I shall deal with this again later on—that there is nobody who does not believe that export promotion and export performance should be high priority objectives in South Africa, but that also means that South Africa should be able to compete with other countries—the hon. member for Parktown advocates that—and that the combination of cost inputs in the production should be more or less equal to or even lower than those of other countries, or else, as a result of the distances, we shall not be able to compete in those markets. For that reason I wish to sound a warning. Whilst I endorse the desirability of an acceptable level of the gross national income, I wish to sound a warning that we should not lose sight of the historical connection nor our national objective in a larger definition, as I have tried to indicate today.

There is yet another long-term objective of the economic policy of the Government, and that is an acceptable geographical distribution of economic activities throughout the country—and I wish to emphasize that—with due regard to our political objectives, which require that the political autonomy and independence of States, including our own Black States, should be given effect to in the economic sphere. This objective—and I wish to emphasize this once again—should be pursued as far as possible without detriment to the economic growth rate, because without an economic growth rate at a satisfactory level, we do not achieve decentralization and we do not achieve the other objectives I have referred to, but we rather reduce the political options we have in South Africa The Riekert Commission has made recommendations on these matters and, without anticipating the Government’s decisions in this particular regard, I wish to state as my own opinion that in any case there is a need for serious reflection on the way in which greater momentum can be afforded the decentralization efforts within the framework of the other needs of our country. My thanks to the hon. member for Klip River in this particular regard. He has apologized for not being able to be here today.

In dealing with the Government’s short-term economic objectives I wish to state, in the first place, that in the nature of things these are reflected in the budget proposals of the hon. the Minister of Finance. I am going to deal with them very briefly.

†To begin with I should like to point out that although the budget was necessarily, as a budget must be, directed at the short-term, its general approach is perfectly consistent with the longer-term economic objectives which I have been discussing this afternoon. This is particularly true in regard to the objective of moving towards a higher economic rate of growth and the other important intention stated in the budget of allowing the private sector both to take a lead in the present revival and to enhance its relative contribution over the longer term. In this regard the points made by the hon. member for Amanzimtoti about the role of the public corporation require attention. We are all aware of the tendency during the 1970s to which he referred, namely to increase the share of the corporations in our total domestic pattern. That, he said, went too wide. I do not argue with the hon. member about this. The hon. member for Walmer referred to the same problem. However, there is one important factor that one should not lose sight of, because if one does, one loses perspective, and then comes to the wrong conclusion. During the period to which the hon. member referred private investment was in any event flagging. By simple arithmetic the share of the public corporations had to rise, except that their investment was also cut back severely by the Government. How many hon. members of all the parties have not on various occasions pleaded for the State to take action in a time of a down-turn in the economic cycle? In fact, how many people have not pleaded that the State should spend anti-cyclically to ensure an adequate rate of growth? I think the hon. member will agree that if essential large-scale investment in the public sector must be made—and nobody disputes that they are to be made—they must be made during a period of general slackness in the economy. Nevertheless, the Government recognizes the need to reduce the relative claim of the public sector on our financial resources. Besides the work that has been done by the Advisory Committee on State Competition in this regard, the hon. the Minister of Finance indicated quite clearly that the grounds which have been set by the Priorities Committee relate to this particular subject.

*The hon. member for Parktown has also raised the question of foreign capital. If I understood him correctly, the point he advanced in this regard was that we need a certain amount of foreign investment if we are to achieve the growth rate that is essential in view of the population growth. In this regard I wish to state that I subscribe to the general view that a net inflow of foreign capital is important to South Africa. This is important for economic reasons, but also for international political reasons. But let us make no mistake: No country wishes to have its economy dominated by foreign capital and investment Nevertheless, in these times, foreign investment is a guarantee against action against us by other countries.

Where a man’s wealth is…

Of course, that is so. Now I wish to make another point and I should be pleased if the hon. member for Parktown would express his agreement if he agrees with me. In respect of our future planning, it would be wise for us in South Africa to be conservative in estimating what we can obtain from abroad, because I think we should prevent a repetition of what has happened during the past few years. I think we should be conservative in our planning and assumptions in respect of the availability of foreign capital. I do not wish to create the impression that South Africa is altogether dependent upon foreign countries. The fact is that even without a major inflow of foreign capital during the next ten years, we can nevertheless ensure a reasonable level of economic growth and activity. The precondition for this is that our export performance should be strong and should improve. High priority is being given to the promotion of exports. I shall come back to this later on. If we look at the situation in general, it is a fact that over the years and decades there have been efforts to isolate South Africa economically, and that steps have been taken to break off our trade connections. But the fact is that in this year, 1979, South Africa has trade connections with many more countries than was the case 10 years ago.

Hear, hear!

In Africa and the islands around Africa, South Africa has trade connections with more countries than before. What does that mean? That means, not that we are not vulnerable, but that we are indeed important. In my discussion of this facet, it is most essential that debating on South Africa in this House should be characterized by the confidence we ourselves have in our country. It should be characterized not merely by the confidence we ourselves have in our country in the economic field, but also by confidence we have in our country’s ability to solve its own problems. It should be characterized by an explicit will to solve the problems, and that will can never be better manifested than by appreciating and realizing that although our objectives remain the same, the instruments and methods we are employing today have to be different from those of the past.

Hear, hear!

Unless we appreciate and understand that, nothing will come of our national objectives. Then the formulation of a national strategy becomes a hollow sound to people who do not want to hear.

†I now come to the question of the purchasing power of Blacks. The hon. member made a very valid point in this regard, and I agree with him. I also agree that that can be a major source of economic growth. However, it is also evident that we have been succeeding, in an increasing way, to increase the share of national income with other groups. The hon. member related this to the recommendation by the Riekert Commission on free trade areas. I do not want to anticipate discussions on that report in this House. However, I should just like to point out that the commission itself did not recommend totally open trading areas, but only that areas be specifically demarcated as free trading areas within the different group areas. I do not want to take this further this afternoon because the matter will be discussed before long, after which a decision will be taken in this particular regard.

*What I do wish to state, is that if we—and all of us subscribe to that—really wish to make the free economic system function and if it is to enable us to generate the wealth we need for the attainment of our other objectives, the accession of all population groups to trade and industry will be essential.

†If I may just take this further, I would like to come back to the Riekert Report and to the question of equal opportunities. I think it is very important that we should get clarity also on this point. Of course, as I have stated on many occasions, one of our major economic objectives should be the attainment of equal economic opportunities for everyone. However, on this issue we should get clarity as to what we understand under this term. We surely cannot mean that there should not be any income inequality. If this is what we mean by this term, it would in fact also mean that there would be no way in rewarding people in proportion to their own actual contribution to the economy.

This contribution of the individual, and therefore the reward to which he is entitled, depends on his own abilities and on the opportunities that are open for him to use these abilities. Therefore it seems to me that when discussing this, we should rather work towards the reduction of the unjustifiable inequalities and concentrate our efforts on the aspects of ability and opportunity. I do not think hon. members will disagree with me when I say that as far as ensuring equal opportunities is concerned, surely the most effective way of doing this is by promoting competition. However, I want to make a second observation in this regard. Although we have different population groups, I am sure that South Africa only has one economic system. This is indivisible. If anybody is under the impression that this is not so, he must shed this fallacy because it is not true.

That is a change.

Well, change is the only constant factor in life. [Interjections.] Let me say to the hon. member for Amanzimtoti that the only changes that have ever taken place in this country took place under the guidance of this Government. [Interjections.] However, having said this, it does not mean that there is no justification for taking specific measures in the economic field, measures aimed at specific communities or specific population groups.

*I just wish to explain that. Notwithstanding the fact that we have only one single economic system, a system that is indivisible, this cannot mean or ever imply that we shall not take specific steps to render additional assistance to specific population groups vis-á-vis other population groups.

†The reason why I say this is because we have a recognized set of historical facts to deal with. Firstly, I submit we have to recognize that the different population groups in South Africa, because of historical reasons, have been exposed to the modern market economy for varying lengths of time, and have different backgrounds of education, customs, etc. It is, for example, not only justified, I submit, but also obligatory and essential, that specific positive measures should be taken to equip some of our population groups better than they are equipped at present, to equip them better so that they can participate in the economic life of our country. If we are not prepared to accept this, the inequalities will increase.

*The question I am raising again, therefore, is whether the institution of a Coloured Development Corporation is not an element of a positive step to enable the population group it has to serve, to participate more effectively in economic life? Is the establishment of an Indian Development Corporation not a positive step whereby that population group would be enabled to put up a better performance than in the past in their participation in the industrial sector of our economy? I believe hon. members will agree with me on this.

†However, on the other side it will also be necessary to take protective action and protective measures when a given community cannot yet compete in open competition. None of these measures need be permanent, but can be withdrawn once the circumstances that led to them in the first place have changed in such a way that open competition would no longer have adverse results for that given community. Let us test this statement in practice. The announcements made by the hon. the Minister of Labour in accepting the Wiehahn Report relate to this very subject with which I am dealing. It is the best example, I think, of what I am trying to say.

*It seems to me that for the purposes of the future at least, we should confine ourselves specifically to the short-term objectives we wish to pursue, not in isolation from the longterm objectives, but as an important subdivision thereof. Confining myself to the economic field for the moment, it appears to me that what we have to do in the years ahead, is to ensure that the private sector be afforded more and more opportunity of expanding in order to effectively utilize the infrastructure created by the public sector during the first half of the 1970’s and to effect a reversal of the trend towards greater capital intensity which set in during those years. I think it is now time for us to discuss that as well. This movement, the structural change towards capital intensity, is ascribable to the reasons I have referred to this afternoon.

I think steps taken by the State have been partially responsible for that. I am not saying that those measures were unnecessary, because I do not want a wrong inference to be drawn. What happened? When unrest occurred in the cities, what did industrialists do? I am not blaming them. They found that a machine did not stay away from work. As I say, I am not blaming them. The fact remains, however, that this has created structural problems in the field of labour. It is true that there have also been benefits but I am now dealing with only one facet of the matter. As a result of the implementation of section 3 of the Physical Planning and Utilization of Resources Act, which quite rightly imposed a limitation on employment in the metropolitan areas, people who wanted to expand but were not prepared to decentralize, resorted to capital expansion. We must appreciate this if we wish to find the answers to the economic leg of our strategy.

I now come to a second point. This was raised by the hon. member for Klip River as well. One question comes very prominently to the fore. Has a major part of the decentralization concessions we introduced with a view to a more balanced and geographical distribution of economic activities, not also had the result that our industrial expansion has become capital-intensive, or at least more capital-intensive than they should be under our circumstances? These are the facts of the matter. To a great extent the concessions are being utilized for capital investment instead of for the creation of further employment opportunities.

If we want a total strategy, we need to look at every component of the strategy, and I intend doing that. I think that over and above the industrial strategy we are investigating, it may therefore become necessary to have a look at more specific facets. We shall have to take a penetrating look at them before we can bring the national objectives and practice closer together and not allow them to move apart, as can happen so often. Pursuant to what I have just said in connection with capital-intensity, this entails that both the capital expenditure and the current expenditure of the public sector would still have to be kept in check for a further number of years if necessary. As far as specific incentives are concerned, the emphasis will from now on have to be placed on the promotion of exports or the substitution of imports, but on such a selective basis that we would be able to do this competitively and achieve the very best for our country in this regard. I think this approach offers an opportunity for the ingenuity of the private sector of our country. I concede that in this respect the State also has a task in South Africa. We have to appreciate that; we have no alternative.

Let us look at the political aspects now, since we shall not be able to overlook them if we wish to be effective. Developments at home and abroad have had an effect on our ability to pursue the economic approach I have referred to. The time is now long overdue for the apologists of human rights to realize that human rights also include the right to be fed and to be educated. They do not entail only political rights. They should know that their actions, under the cloak of the promotion of the rights of people, are having exactly the opposite effect and are often making it impossible for us to achieve the national objectives I have referred to. Let us differ in this House on the methods to be employed. Let us differ with one another on how best to achieve a specific objective, but let us realize certain things.

[Inaudible.]

If I am now stealing the hon. member’s clothes—I suppose one can accept this hypothesis for the sake of the argument—why does he not move in under the same blanket with us? However, I do not wish to quarrel with him.

As a result of foreign pressure we have now have to lend priority to certain things that would normally enjoy no priority at all. As a result of that, South Africa must now give a high priority to the defence of her borders in terms of military capacity. Are we having to do this as a result of what is happening in South Africa, or is it on account of what is being planned against us? That is something we have to appreciate.

It is also true that as a result of those factors we cannot always achieve the objective of a limitation of public spending. As a result of that, we have to utilize R3 246 million from the total available capital pool to extend the capacity of Sasol. Is this as a result of action within our borders, or is this as a result of actions beyond them? When will all of us get the message, regardless of our differences, that the achievement of the objective of a distribution of income, the achievement of the objective of an improvement of living standards and the fulfilment of an improvement in educational standards, are being hampered by action from outside? I am sick and tired of people who, under the cloak of humanitarian motives, are impoverishing people in Africa.

Let me say here and now for the edification of our business people that as far as our export promotion is concerned, we naturally have to consider the nature of the political action from outside and endeavour to ascertain what effect political action will have on our success. When I say this, I say at the same time that it is a matter of a high priority that we should devote more attention to export promotion in South Africa. Owing to the fact that this can create employment opportunities? Yes, but also owing to the fact that this has to earn foreign exchange for us with which to pay for other commodities we have to purchase. In this regard our country has an immense capacity. I plead that we should realize this.

I thank the hon. member for Potgietersrus for his contribution. A new note is now audible in the debate on economic affairs. We have learned something that was still foreign only very recently. That is that even if it were possible, it is in any event not desirable that we should play off the various sectors in our economic life against one another.

Agriculture is an important sector in the economic life of the country. What is more, since the agricultural sector has no control over the climate within which it has to operate, and since South Africa is, by all standards, not a richly endowed agricultural country, agriculture has to be accorded special treatment by the State. And an even more important reason why agriculture should enjoy special treatment, is that it supplies the most basic requirements. In this regard we must make no mistake: The bargaining power of food is a powerful weapon in the hands of any country. There is a further reason why the agricultural sector is important It is that industrial development, to the extent we can achieve it effectively, is dependent upon the processing of raw materials we obtain from the soil by means of our primary industries—agriculture and mining. In considering the export performance, one observes that the export of agricultural products, both primary and processed, is one of the major single export items. We should have no doubt about that. On the other hand, agriculture is dependent upon the other sectors of the economy, upon industry in particular for its own capacity and production, and upon commerce for its sales. We can build up a mighty combination if we realize that it is not only self-interest that is important, * but collective interest in the economy of the country. I therefore share the sentiments of the hon. members in respect of the special role of agriculture.

The hon. member has asked me whether we could not make special concessions to agriculture in respect of the supply of electric power. There was a time when agriculture’s major point of criticism levelled was that we were not progressing fast enough in providing them with Escom power. Hon. members will recall this. But what has happened? Here is yet another structural change that has taken place in the economy. In the same way as in the rest of the world, the cost of all forms of energy has rocketed in South Africa as well, and this has become a permanent element of our production costs. Nobody regrets this more than I do, and if we want to succeed in combating of inflation—and that is a high priority—we need to realize that the cost of energy is one of the most important inputs we should look into. My standpoint in this regard is that if a case could be made—and hon. members will appreciate that I am not dealing with the merits of the matter—for special treatment of agriculture in respect of power costs, it would be necessary for the State to go into the matter in depth.

I also wish to state that we should adopt as sympathetic an approach to agriculture as possible. It is always a substantial economic problem to convey power over such vast distances at tariffs that make it possible to produce profitably. I think it is important that in respect of the planning of agriculture and with what we envisage for agriculture, we should identify all the fields in which it is possible for the State to assist agriculture. I have already pointed out the reasons for this. However, this cannot be the responsibility of institutions; this has to be the responsibility of the State itself.

The hon. member also referred to the question of border farms. I do not wish to say too much about that, since the hon. member will realize that this is a sensitive matter. However, I do wish to state that everything that is in the national interest is being done to promote the optimum occupation of the outlying farms and that this is already receiving the urgent attention of an interdepartmental committee. The supply of electric power to these areas will, in my view, also necessarily have to receive the attention of the committee. I trust the hon. member is satisfied with that.

Then, as is expected of a good member of Parliament, the hon. member also advocated the provision of power stations in the far Northern Transvaal. At one stage, installations for the supply of power were so unpopular that I thought no one would ask to have one in his area However, let me state in all seriousness that there are many factors that play a part when a decision as to where a power station has to be built, must be taken. In the nature of things, for various reasons—including strategic reasons—Escom wants to build power stations in various parts of the country. They have realized for several years already that the Northern Transvaal has a strong claim to a coal-fired thermal power station. Here I can give the hon. member good news. Tenders for coal for the next power station in Ihlanga are at present being checked. Escom advises me that for the first time, an offer has been made from the Northern Transvaal in this particular regard. The hon. member must now join with me in hoping that it will not be confined to an offer, but that it will also go further. I trust that I have thereby answered the hon. member.

†I now come to the hon. member for Amanzimtoti. He demanded—if I understood him correctly—a greater measure of control over State corporations in this country. He indicated that he had reservations about the efficiency of these public corporations. I see the hon. member again nods in agreement. As a general statement I think it is an unfair allegation. I have no quarrel whatsoever with the notion that the public sector should not be expanded at the expense of the private sector, and the hon. member wants more control over the State corporations to ensure that this does not happen. I may agree with this. I not only propound this policy myself, but have also put it into practice, and I think the hon. member will agree with this. The private sector has over many years consistently requested participation in the activities of State corporations, or their transfer, wholly or in part, to the private sector. They have the chance in respect of the development of a diesel engine manufacturing process at Atlantis. They have the chance to make a contribution towards the production of energy for South Africa by participation in the Sasol group. I would seriously hope that this cry has not been an empty one and that the private sector would anticipate, firstly, the philosophical reason to reduce the State’s activity and to increase the activity of the private sector and, secondly, because I believe the private sector has a contribution to make towards the production of energy in South Africa.

Mr. Chairman, may I ask the hon. the Minister exactly what share the private sector is going to be offered in the State corporations, and if it is going to be as small a share as was offered in the case of Iscor, is his offer not going to fall on infertile ground?

It is impossible to give a general answer to that question. I have indicated that as far as the Sasol group of companies are concerned, there will be an issue during June this year. The board is working on that at the moment, and I cannot anticipate what share will be available to be taken up by the public. I am, however, talking in terms of principle. It is a fallacy to argue that the public corporations are controlled by the public sector. The boards of directors of these corporations are appointed from the private sector.

But they have no financial stake in it

That is not the point which I am arguing at the moment

That is the principle.

I am arguing about the question of management Can the hon. members not understand this?

We are talking about free enterprise.

Will the hon. member please give me a chance? The hon. member put a question to me, and if he is not prepared to listen quietly I will not reply to it.

The corporations are administered—and I am now talking about the accusation of inefficiency—by a board of directors which, in most cases, entirely consists of eminent business people from the private sector. I laud them for the services which they render and resent the accusation that they are inefficient. It is always difficult to measure relative efficiency, but if one compares the performance of, for instance, Iscor with the performance of other primary steel producers operating under similar circumstances elsewhere in the world one will find—this is not my verdict—that Iscor’s performance compares well with the best in the world. This has been proved by an investigation undertaken by the National Productivity Institute in co-operation with Iscor. As far as Escom is concerned, the Board of Trade and Industry has highlighted certain shortcomings in the implementation of Escom’s budgeting and costing systems. I do not want to prejudge decisions on this report—and I ask hon. members also to refrain from it—but it does not justify the conclusion that the corporation is ineffective. The fact is that Escom’s tariffs are still of the lowest in the world. That speaks for itself. In the light of these considerations I do not regard greater control by the State over the State corporations being called for, but I want to say that in all fairness I intend bringing about certain changes in respect of the method by which tariff changes are introduced by Escom. I do not propose to go into detail at this stage and I ask hon. members to accept that, but I intend, firstly, increasing the number of members on the Electricity Control Board and, secondly, providing it with specialized staff which will enable it to perform all the control functions specified by law and to monitor tariff increases proposed by Escom to recover the costs outlined in the Act. After the report of the Board of Trade and Industry was submitted, I refrained from commenting on the report because I thought it was appropriate that all sectors in the private sector should be given the opportunity to comment on the report. Secondly, I thought that it was fair that Escom should be afforded the opportunity of submitting their own comment on the report. Thirdly, I thought it was only fair that a final decision should be taken only after all the representations and comments have been received. I think this is a sound principle. I had instructed the Board of Trade and Industry to investigate the tariff structure of Escom. There are many fathers to this thought.

*There is one point I have to make. I should be neglecting my duty if I were not to make this point It is very important that we should understand this. During the ’sixties and in the beginning of the ’seventies, a period in which we maintained a high level of economic activity and there was a flow of capital from abroad, there was one sound business principle which we failed to appreciate with regard to Escom, too, and that is that an undertaking of this nature should itself generate part of its capital requirements from its own revenue. The fact is that the tremendous increase in electricity tariffs in 1976 and 1977 was attributable, apart from cost increases in general, to the fact that the flow of capital from abroad had dried up. However, our obligations did not stop. Escom had to fulfil its obligations. The State could not allocate funds for that. The State has never lent or given Escom any money. When their source of capital dried up, there remained only one principal source, namely their own resources, and therefore they had to increase their own tariffs to find capital to meet their obligations. I just wish to state that when we criticize—and I am not denying anybody this right—we should view matters in perspective and take into account the circumstances that have resulted in certain things.

†As hon. members are aware, the Act provides for the State President to approve all contributions to the Capital Development Fund. I do not intend to dispense with this Fund. I do not want to make the same mistake twice.

Surely they are taking too big a share?

We shall argue that point in a moment. Please give me a chance. Let me say in all fairness that I do not believe that the hon. member is qualified to make that statement

That might be your opinion. I shall put mine in due course.

I do not think the hon. member can do it, because I do not think he has studied the workings of that council in detail. I am not accusing the hon. member. I am only pleading that we should get together to discuss this matter rationally. That is all I am asking. I submit, and all hon. members agree with me, that it provides an essential need in the present circumstances, and it should be retained. The procedure, however, will be modified to the extent that the proposals of Escom for future contributions to the Capital Development Fund will have to be submitted to the official committee which has been established to determine capital priorities before the State President’s approval is sought. I think that is only fair. Having said this, I wish to appeal to hon. members to assist me in this regard and to give us a chance to get down to all the facts.

What assistance do you want?

The only assistance that I want is that I do not want everybody to react on this, because I have asked Escom not to react. Otherwise we shall get a completely one-sided picture, and I do not think that is fair.

*I now turn to the hon. member for Stilfontein. This hon. member held an important speech last night and I do not think we understood it properly. It compels me to discuss our oil supply situation. Let me say with all due responsibility, and I request hon. members’ co-operation in this regard, that the more immediate problem we are struggling with, is that we have not succeeded in obtaining a regular, permanent source of crude oil. That entails that the major portion of our requirements has to be satisfied by cargo offers. The price of cargo offers is at present between $8 and $10 (USA) higher than the official price-fixings of most oil-producing countries, and the prices are still showing an upward trend. In the second place, as hon. members are perhaps aware, purchases on the basis of cargo offers are being hampered—and I wish to repeat this, because this is an important point I wish to drive home—by go-betweens who are making capital out of the world’s shortage of oil and are trying to steal a march on consumers in the purchase of every cargo offer of crude oil. And apart from the fact that they are not supplying oil to us, they are boosting the prices sky high. That type of fortune-hunter—that is all they are—also operates from South Africa, and whereas they often, apparently, believe in good faith that they can serve the interests of South Africa by seeking an oil market in the short term, they are making my task and that of my department exceedingly difficult, for it does not help to force up prices sky high, since experience has shown—and I emphasize this—that none of the so-called assured oil supplies can ever be achieved on that basis.

I wish to tell these well-meaning people that it is not their function to go and seek oil. They must please not try to help us. They are harming our country. I wish to make an earnest appeal to these people to keep out of this highly speculative and complex trade. I do not think they are equipped to handle it. As regards the availability and the further acquisition of supplies, the flow of oil to South Africa is irregular and uncertain. Mr. Chairman, up to now we have succeeded in supplying the needs of motorists and avoiding drastic steps such as rationing. However there is already doubt on the part of some of the oil companies as to whether they will be able to supply the total normal requirements of their clients during the next month or two. It may happen that certain companies will have to impose restrictions on their own clients from time to time, despite their efforts to obtain crude oil even at a high price.

Of course, not all doors are closed to South Africa in respect of oil. Close attention is being given to methods of ensuring long-term supplies, but unfortunately no definite indication can be given at this stage. Only time will tell whether the country will have to continue to rely chiefly on cargo offers. Finally, I have no alternative but to sound a warning in this regard. Exceptional difficulties are being experienced in obtaining reasonably adequate oil supplies at prices we have hitherto regarded as reasonable. But let me state, and here I associate myself with the hon. members, that despite all my pleas, we are not getting the reaction from the consumers that we ought to get in the current situation. As a result, the levy on petroleum products is fast becoming totally inadequate in view of the increases in the price of crude oil. We are ourselves instrumental in this. We are bidding against one another. Unless the upward trend of the prices of cargo offers reaches a turning point soon, and/or a regular source of supply can be developed, we shall have very little alternative but to impose restrictions on consumption, or else to increase the prices of the products, or to do both.

Mr. Chairman, and here I wish to endorse the view of the hon. member for Stilfontein: The least consumers can do is to discipline themselves and observe the speed limits. Nothing more is expected of them. The time for warnings is running out. We cannot allow the prosperity of the country to disappear through the carburettors of motor-cars.

Mr. Speaker, the hon. the Minister has covered a very wide range of subjects and I hope hon. members will forgive me if I do not, in the very short time that I have in comparison with his time, try to cover all the subjects that the hon. the Minister has covered.

I would in the first place like to suggest that what the hon. the Minister has said, set in the whole background of this parliamentary session, has made the 1979 session one which will probably be shown to have resulted in very important permanent changes, both in direction and tempo, of the South African economy. There is very little doubt that this is a very significant session of Parliament in this respect. The De Kock Commission, the first report of the Wiehahn Commission, the announcement of the investigation into the consolidation of the homelands, the investigations into urban Blacks, the new approaches adopted by the Minister of Plural Relations and now the report of the Riekert Commission, all set in this context of which the hon. the Minister has been talking, show that this is a very significant time for the economy of the South Africa we live in. Together they demonstrate a process which, we believe, is not only desirable and necessary, but one which, once embarked upon, is irreversible and will in fact accelerate. It could very easily be said that this picture is not complete, that more can be done than that recommended in the reports that are before us, and that in themselves these reports do not offer complete solutions. But not to welcome these reports and these steps fully and generously and to seek to minimize their significance, would not only be ungracious, but would demonstrate a lack of appreciation of their significance for the future of South Africa. No one, whether in South Africa or abroad, should underestimate their significance or regard the steps they recommend as merely palliative or cosmetic. They are not. We believe they are meaningful steps. They will not be easy to implement, because on the one hand one is going to have those with extreme radical opinions for whom it is not enough, and on the other hand those with extreme conservative opinions for whom it is going to be too much. Bearing those two extremes in mind, it seems to me that in the short term the matter is going to be that much more difficult to cope with, and really delicate handling from the side of the Government is likely to be required here. However, we believe that South Africans as a whole should, and I believe do, welcome the steps which have been taken in this regard and which have been announced in these reports.

If I may I should like to deal with two specific aspects of the Riekert Commission report winch particularly relate to this portfolio. The first one concerns the free trade areas. The Government has committed itself on this issue, and the hon. the Minister has spoken about it repeatedly during this session, as has his colleague, the hon. the Minister of Finance. They have committed themselves to the free-enterprise system. In its finding the commission says, and I quote—

and we know what Act he is referring to—

That is what the commission says. I take the nodding of the hon. the Minister to mean that he agrees with that finding. I hope so, in any case.

No, I agree that you quoted correctly.

Oh, well I wish the hon. the Minister would agree with the finding. It is our submission that central business areas cater for all the groups in respect of services and purchases. To restrict traders to one group is patently an encroachment upon this principle of free enterprise. That is why we welcome the recommendation. It does not go as far as we would like it to go, but certainly it is a step in the right direction, so we do not want to be nit-picking or carping about it. We are very pleased about it.

We also need to look at the situation of the people—and the hon. the Minister touched upon this—who, by reason of their history, are unable to compete in the free market. I am more than pleased to see that it is not only we who contend—if I understood the hon. the Minister correctly he agrees—that the Government has a duty to assist in restoring the equality of bargaining power in the community.

I concede that point

Thank you. One should therefore see from the Government comprehensive proposals which would enable a strong entrepreneurial class to be built up in those communities in which it does not presently exist What is significant is that the inquiries that we have had so far have dealt with discrimination in labour. However, they have not dealt with another aspect of the free-enterprise system, viz. the ways and means for the whole community to participate in the entrepreneurial and capital side of the free-enterprise system. I appeal to the hon. the Minister…

I just want to indicate that I have already conceded the point that certain committees deserve special protective measures, on the one hand, and positive measures to assist them on the other.

Fine. However, what I should like to see from the hon. the Minister—his having conceded that point—is that, having now dealt with the labour side of the issue, we in fact have a commission in terms of which we investigate how there can be true participation on the entrepreneurial and capital side. It is only in the two cases that I am going to mention that the Riekert Commission deals with the capital side of the issue. Opening up facilities, as is suggested, in the central business areas, is fine and we support it I do not want to be carping about it. However, it is not enough to open up the facilities. One also has to enable the people to enter them. The hon. the Minister will remember a well-known legal maxim about the law being open to everyone. It was a well-known English judge who said that the law is available to everyone in exactly the same way as accommodation in the Ritz Hotel. Not everybody can enter if he has not got the qualifications, the ability and the means to do so.

There are very real structural problems in relation to that side of the economy for the Blacks, Coloureds and Indians. We must not see Black people as only employees and workers. We need to see them as employers and capitalists if the whole system is to work in South Africa. There are analyses that have been carried out regarding the problems which the Black entrepreneur has in relation, not only to laws but also to licensing, staff, capital, hostile environments, credit and all sorts of matters which act as a constraint. I believe that the next inquiry should be in this direction.

Then the hon. the Minister dealt with the recommendations which deal with the Environment Planning Act.

However, before I come to this, I should perhaps refer to another point. This is a personal matter in relation to this whole concept of opening business areas, a matter which is fairly close to my heart. Bearing in mind the history of lawyers, and particularly of advocates, who have wanted to avoid discrimination and who have wanted to have their colleagues with them in the central business areas, I hope that this recommendation will mean that within the shortest time possible we will have these restrictions removed, particularly the restriction on lawyers who want to practise in a central business area.

I now come to the Environment Planning Act. In this respect the concept of decentralization is not one which we find at all repugnant. Decentralization, for good economic reasons, is in fact desirable. However, with South Africa’s major unemployment problem, with the high cost of creating new jobs, with the Republic’s limited capital resources, it is significant that the commission makes the statement that because of the increase in unemployment among Blacks, particularly juveniles, “the creation of job opportunities should have just as high a priority as the decentralization of industry”. I suggest to the hon. the Minister—and I do so with great respect—that when he talks about the political ideology which is behind decentralization, the necessity of creating jobs and the danger of unemployment are so great that his political ideology has to take a backseat.

I should like to appeal to the Government to look at the situation again, to create the jobs that are needed at the lowest cost and in places where they can best be created, which means where the labour is present.

It is very important that it should be done where the labour is present

Yes, that is correct. We therefore welcome the recommendations to amend the Environmental Planning Act We hope that that amending legislation will be introduced still during this present session of Parliament.

South Africa needs industrial expansion, and to our minds all the unnecessary restrictions on this development needs to be removed because it is in the national interest to do so.

The other matter with which I should like to deal is the question of the consumer. So far in this debate virtually nothing has been said about this. One of the functions of this hon. Minister is to protect the consumer. I believe I would be failing in my duty if I did not indicate to the hon. the Minister that there is serious concern in the minds of many people that consumer interests are not being adequately protected. Inflation is running at an utterly unacceptable rate in South Africa. There are four issues I should like to raise with the hon. the Minister. Firstly, I want to ask him whether the Government is not contributing to the acceleration of inflation by way of its handling of Government administered prices? [Time expired.]

Mr. Chairman, I cannot really criticize the very fiery speech by the hon. member for Yeoville. There is only one little comment which I should like to pass. That is that I believe he is a bit old-fashioned.

*After all, people say that the good things in life take a long time in coming, but are the more enduring for all that.

Make haste slowly, Harry.

Therefore the hon. member for Yeoville should not be in such a hurry. The good things will come.

The second remark I should like to make, is this. I believe that South Africa and this Parliament can count itself exceptionally fortunate to have a Minister of Economic Affairs of the calibre of the present hon. Minister. [Interjections.] I have often said in the past that the hon. member for Yeoville has the special ability to approach a problem judiciously. He approaches a problem from all sides. On the one side he is the angel’s advocate, on the other, the devil’s.

That is because he is not a Nationalist.

Then he comes forward with findings which really cannot be doubted. He gave an exposition of economic policy which no other party has the ability to put forward. This I say with great respect.

But I want to discuss something else. It often happens that decisions on economic affairs are dominated by political factors and objectives, rather than economic factors. I can think of many examples, but I am only going to mention a few. Overseas investors in South Africa are being discouraged by their Government spokesmen from investing in South Africa. They are even being influenced to withdraw their investments in South Africa. Such discouragement is not based on economic factors. After all, South Africa offers one of the best fields of investment in the world, apart from Swellendam as a field of investment for the PFP, of course. This is being done by other countries purely for political reasons, and with the aim of using the economy as a political lever. But South Africa is indebted to those overseas companies that have invested in our country, and are still doing so, because they can withstand and ward off pressure being exercised by the Government They are following a wise policy, to their own advantage as well as that of South Africa and its people. It is particularly to the advantage of the less well-off section of our population, a section which is dependent on the employment opportunities being offered by those overseas investment companies. Strangely enough it is, in fact, hostile overseas opinion which professes to seek to help the less well-off, while the withdrawal of investments causes those very people to go hungry. South Africa needs food and not rifles, and this is where we in South Africa differ from overseas bodies that give guns to the less well-off, hungry people with which to kill other people, whereas what they really need is food and economic aid.

Another example is the economic boycotts being applied by certain countries. Boycotts have never had an economic foundation, because boycotts are not to the advantage of the boycotter, nor to those boycotted. I shall indicate at a later stage why I am emphasizing this aspect to such an extent. I can furnish examples to illustrate that South Africa has never believed in economic boycotts, notwithstanding the ideology of the country with which it does business. The outstanding example is probably Mozambique, with which we have commercial ties, both to their advantage and ours, irrespective of the fact that our respective ideologies are poles apart. One also has appreciation for Dr. Kaunda of Zambia. At first he, too, tried to beat the political drum, and close the rail connection between his country and South Africa But the rail connections were reopened, to the advantage of both countries.

Not only South Africa, but the whole of Africa, must realize that the struggle for Africa’s favour is not in the interests of Africa. It is in the interests of those—both in the East and in the West—that seek Africa’s favour. They are not concerned about the prosperity of the Africans. When I say “Africans” I do not mean Afrikaners. I mean all the inhabitants of the continent of Africa. Those people have their eye on the strategic raw materials in the soil of Africa. This is true in the case of Southern Africa in particular.

On behalf of this House I should very much like to appeal to the states and peoples of Southern Africa to see to it that those of us who possess those resources should join forces so that we can speak with one voice and negotiate our assets on a co-ordinated basis with other nations in other parts of the world. This is not a new phenomenon in the world. This immediately calls to mind the EEC and Opec countries who promote and protect their interests jointly. I should like to appeal to the Southern African states and governments to join forces and organize themselves into an economic power unit of Southern Africa.

The recent efforts—still being maintained—of the hon. the Minister of Economic Affairs as well as the hon. the Minister of Foreign Affairs to bring about that very aim, viz. greater economic cooperation in Southern Africa, are to be welcomed. In order to achieve this fine ideal, I want to suggest that an organization be established to take the matter further. The organization I visualize is a Southern African foundation for the promotion of economic cooperation. Such a foundation can combine and co-ordinate forces and know-how. Market research, geological research and many other types of research could be undertaken. Such a foundation should have enough funds to achieve its objective. As a starting amount I have the sum of R1 billion, i.e. R1 000 million, in mind. Each member of such a foundation can contribute to it in accordance with its ability.

I want to emphasize that the private sector, too, has a very important part to play here. As hon. members know, the private sector in South Africa is very sophisticated. It possesses powerful brain power and financial muscle and must be involved in this. The foundation I have in mind must not be controlled by politics, but must be economically controlled in the interests of the countries it represents. Such a Southern Africa economic unit has been pursued for a very long time now. I think that the time is now more than ripe for it. South Africa can set the world an example of decision-taking based on pure economic reasons and not on political reasons. This must be our new Southern Africa economic philosophy. We must help one another to help ourselves to help others. We must roll up our sleeves, set to work and say: To the devil with the whole world that seeks our downfall—we in Southern Africa can stand on our own two feet.

Mr. Chairman, I do not want to react to the hon. member’s speech, except to say that he expressed a few very interesting ideas here. I want to raise a few ideas on a specific matter, i.e. the Koeberg nuclear power station which happens to be situated along the west coast of our country in my constituency. I am doing so with particular reference to all the emotion generated by the Harrisburg affair. Let me say at once that I actually rose to advocate, in spite of all the emotion which was stirred up, that in our long-term planning in respect of our power supply in the Western Cape we should give immediate consideration to establishing a second nuclear power station next to this one as soon as possible. I am speaking more specifically now from the point of view of long-term planning. Escom already owns the farm Kleine Springfontein situated alongside this power station.

Allow me to motivate my case. Since the provisional planning and, at a later stage, the construction of the centre on the farm Duinefontein along the west coast, it has been my experience that nuclear energy arouses a great variety of emotions in various people. In the first place there are those who enthusiastically accept nuclear energy as the greatest technological breakthrough man has ever made. When Escom established an imaginative and colourful energy information centre at this nuclear project recently to provide information on nuclear energy in the Western Cape in particular, it was significant that this centre was visited by more than 2 000 tourists over a very short period. Recently the number of visitors has risen steadily. Consequently there is a special interest in this particular project. This was so even before the events at Harrisburg. The first fact that struck me as a layman during my visit to this centre was that the present share of electricity in the total consumer pattern in South Africa already amounts to approximately 20%, and that it will amount to approximately 40% by the end of this century. On the other hand it is true that many people are opposed to the construction of such nuclear reactors. No one is more aware than I—in whose constituency this project is situated—of how true this is. The recent events at Harrisburg, in America, disturbed people and led to their emphasizing the negative aspects of such a nuclear reactor. Since my constituency is intimately affected by this project—particularly at Melkbosch-strand, where at present Escom has built 285 houses for Whites in the vicinity of this specific project—I, as a layman tried to acquaint myself with the facts concerning the utilization of nuclear energy. As far as nuclear science is concerned, I am of course a complete layman. A few truths with regard to the utilization of atomic energy got through to me. Firstly, humanity is today being asked very emphatically to adapt its approach to its own use of energy.

Hon. members have just listened to the speech made by the hon. the Minister. He is in the centre of this crisis in our own country. Secondly, between the extreme poles of the rejection of nuclear energy and the application of utilization of nuclear energy, there is no objective appreciation for this particular technology. Since the first nuclear power station was built at Calder Hall in 1956, not a single person has died of radiation. In fact, in spite of all the emotion which was aroused by the events at Harrisburg at 4 o’clock in the afternoon of 28 March, it is true that on 1 April President Carter and his wife were present in the control room concerned, and except for a radiation meter, which they wore, along with the customary rubber boots required for this specific area, the President and his wife were not even wearing protective clothing or any form of special covering.

Thirdly, highly civilized countries in Europe are becoming more and more nuclear energy conscious—if I may put it that way. In Western Europe the French are today taking the lead in the use of nuclear energy in order to escape the clutches of the oil sheiks. Last year France had 14 nuclear power stations, and West Germany 15. At this point in time West Germany generates 8 570 megawatt, as against the 6 550 megawatts of France. But the race between these two countries has changed drastically within the space of a year. While three of the 12 nuclear power stations which were under construction in West Germany, are being delayed—owing to differences in opinion on this situation, please note—the French are working on 28 new nuclear power stations in France. According to scientific calculations, by 1985 the French will be saving approximately 45 million tons of crude oil by means of nuclear energy. Calculated at the present rate, this will afford relief amounting to almost R8 milliard to this country’s balance of payments. In 1977 there were already 71 nuclear energy projects in operation in America. A further 89 are being built at present, and 42 new ones are being planned.

These few remarks bring me to the situation in the Western Cape, with regard to the energy supply in future, something to which the hon. the Minister also referred in part. If I think about this in a level-headed way, I think that in our planning for the future we should build a second nuclear power station next to the present one. As I indicated at the beginning of my speech, Escom already owns the farm Kleine Springfontein just next to Duinefontein. I think it is here that South Africa’s second nuclear power station should be built in the long term. Why do I argue in this way? At present electricity is being supplied to the Western Cape over three very long supply lines from the north. Any further electricity which will be required by the Western Cape, over and above the power which the Koeberg nuclear power station will be able to generate, will once again necessitate an additional supply line from the north within the following 10 to 12 years. We are living in extremely dangerous times today. The vulnerability of these supply lines from the north to the Western Cape, which is dependent on those supply lines for its energy supply, could create an alarmingly dangerous situation. I think this is something which we shall have to face up to squarely in view of the situation in the Western Cape. If the three supply lines from the north were to be damaged today, for example by an earthquake, the Western Cape would be dependent for its energy supply on three coal-fired power stations, one oil combustion installation in Table Bay and one gas turbine. If these supply lines were to stop functioning, it would mean that the Western Cape, according to scientific calculation, would at once experience a shortage of 300 MW.

In the third place, South Africa will of necessity have to give further attention to its key staff, that are necessary for the utilization of atomic energy. The education, health and experience of these people are important to the Atomic Energy Board. In future it will be essential that this staff be supplemented and that the scope of their knowledge be broadened. This can happen only with the building of a second nuclear project here in the Western Cape. [Time expired.]

Mr. Chairman, unlike hon. members of the PFP I feel I should start my speech by congratulating the NP on their wins in the two by-elections. This is more attributable to their well-oiled political machine in the Cape Province than to a genuine belief in their policies and actions. [Interjections.] However, there is another result of this election which is important. We in these benches believe that these two by-elections are positive proof of the growth of the NRP, because had we stood in these two constituencies in November 1977, I doubt whether we would have got 1 500 votes in Swellendam and 500 votes in Beaufort West. [Interjections.] In the last year and a half since that election we in these benches have established our name, our identity and our policy. I believe our performance in Swellendam and Beaufort West has shown that the NRP is growing in strength every day. This will also be borne out by our performance in the South Coast constituency in particular. It is interesting to note that in these two by-elections the NRP has had no less than 4 183 votes cast for it. In comparison to this, the official Opposition, the PFP, has only polled 378 votes. It is interesting to note that the PFP would still have lost its deposit in the election in Swellendam if there had been a provision that a party would lose its deposit if it could not poll one-fifth of the votes cast for the party that came second.

However, to get back to the Economic Affairs Vote, I want to make three points to the hon. the Minister of Economic Affairs, because I made them to the hon. the Minister of Plural Relations and Development and he agreed with every single one of these points. The points I want to raise relate to East London. I asked him first of all to discuss with the hon. the Minister of Economic Affairs whether we could not turn Berlin and East London in general into an export process zone, and we are still waiting for the hon. the Minister’s comment on the McCarthy Commission and I hope it will be forthcoming soon. Secondly, failing this, I asked for more concessions for the East London area, for Berlin particularly.

Did you ask my hon. colleague that?

Yes.

What did he say?

He said “Yes”.

Why ask me then?

Because the hon. the Minister of Economic Affairs has to implement it It is not up to the hon. the Minister of Plural Relations and Development. He is prepared to co-operate, but the question is whether the hon. the Minister of Economic Affairs is prepared to do so. The third point I put to him, to which he also replied in the affirmative, was that if the first two alternatives could not be implemented, the Berlin industrial area should be sold to the Ciskei, because employment is necessary and the Berlin industrial area would not encompass residential areas. It is purely an industrial area. Mdantzane and Potsdam would remain the areas for the dormitory suburbs. Again the hon. the Minister said “Yes” to this. I want to tell the hon. the Minister that East London has had enough knocks this session. We had nice words from the hon. the Prime Minister, but the hon. the Minister of Transport took away the Road Transportation Board offices from East London and the hon. the Minister of Tourism is apparently cutting East London off the tourist map by having a Cape coastal area that he is going to advertise without including East London in that area. It is to be an area running from the Western Province to Port Elizabeth. We want words not deeds. [Interjections.] I beg your pardon, we want deeds not words.

I also wish to react to the Board of Trade and Industries’ report on Escom. In my view this report has brought to light glaring inefficiencies and the exposure of a situation which is operating against the national interest. Here are some of the facts. Escom’s tariff rate increase from 1967 to 1977 was 10,8%, as compared with a wholesale price index of 9,4% and a consumer price index of 7,9%. But in the years from 1974 to 1977 their increases were respectively 5,2%, 16,5%, 30,3% and 48,2%, a tragic state of affairs for the consumer of electricity. My time is running short so I am going to skip quite a bit. The indicators in the report clearly show that there has been a decrease in the productivity of capital over the past two years. In 1976 Escom overcharged on depreciation, thus directly affecting consumer rates. In 1976 this amounted to R7,3 million—I quote this from the report—and in 1977 the estimate is in excess of R20 million. Their planning and financial controls were totally inadequate. Up to 1977 the budget was done on an annual basis, as were comparisons which were only done seven months or more after the financial year-end. This, in my view, is a terrible situation, as any company executive will tell you. They only appointed a budget controller from the 1977 financial year onwards. As yet, however, no budget mannual has been compiled, despite a centralized computer accounting system. In capital their Capital Development Fund jumped from 5,5% of total costs to 25,8% in 1977. In 1975 their earnings, as a percentage of average equity rose to 59,1% when looked at on a normal business basis. That is a wonderful investment I should like to have some companies that could make 59,1% in a fixed market such as Escom has. According to their projected balance sheet, by 1985 their equity will represent 57,2% of their total assets which again, in my view, is far too high. In America private enterprise has an average equity of 30% of total assets.

What do you suggest it should be?

What I suggest, if the hon. the Minister wants to know, is that we should not have internal policies which cause us not to be able to borrow from foreign investors, but which cause us to have to plough in too much from our own resources from within this economy.

That is a stupid argument

Will the hon. the Minister please give me time to develop my point? I believe the situation in Escom needs to be more thoroughly investigated than the hon. the Minister has already indicated in his speech here this afternoon. I want to echo the cry of the Board of Trade and Industry for a full-scale productivity investigation to be launched. I would go further and call for a full-scale investigation into all aspects, an investigation which should endeavour to establish whether there has in fact been any wasteful expenditure within Escom in the past, either in terms of capital or running costs because if there has been, they should attempt to recover it.

Mr. Chairman, I want to raise another point in regard to Escom, and that is how it affects the Border Undertaking, where the tariff rates are unbelievably high. The cost of transmission to the Border area is part of this factor. I want to point out to the hon. the Minister that, in the case of an undertaking situated in the eastern Transvaal consuming a certain amount of electricity, while the output is increased because of the feed-off to the Border undertaking, the Transvaal undertaking gets the benefit of the lower production cost because of the greater output, whereas the Border undertaking has to pay the transmission costs as well. The net result is that, as regards Border Undertaking, many people are finding that it would pay them to produce their own electricity, to have their own generating plant; that it would be cheaper to do this than to buy electricity from Escom. However, they are not allowed to do it.

Johannesburg tried.

The hon. member says Johannesburg tried. Do you know, Sir, that with regard to the Border Undertakings the charges of Escom are R100 for every approximately R62 charged in the Transvaal? The charges in the Border area are a tremendous amount higher and the result on industry has been a very sad one. I can take the hon. the Minister right now to an industry in our area who want to expand, which would create extra job opportunities for Blacks, but who are having to seriously reconsider this expansion because of the high estimated cost of Escom power for the extra machinery they will be using in this expansion programme of theirs. [Time expired.]

Mr. Chairman, with a representative such as East London has in the hon. member for East London North, it truly does not need enemies. He said that he advocated certain matters with the hon. the Minister of Plural Relations and Development and that the replies he received from the Minister were all in the affirmative. That is correct: The hon. the Minister did so in a good spirit of co-operation, because he wants to help East London as far as possible. In his third question the hon. member said that the Berlin border area should be incorporated in the Ciskei. The hon. Minister never meant that he agreed that this could, in fact, be done. The Minister also issued such a statement last night which appeared today in the East London Daily Dispatch. The hon. member for East London North can read it in the newspaper tomorrow. It was not the hon. the Minister’s intention. If the hon. member advocated that the Berlin border area should be incorporated in the Ciskei, then he is apparently forgetting that there are many people who invested their money there and established industries there because they preferred to operate as a border industry than to be a homeland industry. Is that member willing to buy out those people now? He wants us to take R6 million from the State and to give it to the Ciskei so that they can buy out Berlin. Mr. Chairman, I should rather like to ask the hon. the Minister to help East London, since they borrowed R6 million from the State in order to develop Berlin, on which amount they have to pay 2% interest until the end of this year. From next year they will have to pay an amount of R118 616 during the first year, and an amount of R879 627 by the year 1989. This is a vast amount of money which East London and its taxpayers cannot afford.

I should like to know from the hon. the Minister whether we cannot write off the amount, whether we cannot help East London by remitting this debt of theirs. After all, it is not so large an amount that the Government cannot afford it, and it would help East London and would assist in getting the Berlin border area off the ground. If we cannot do this, I want to advocate that we grant them a further extension as far as the repayment of the interest and capital redemption are concerned. Instead of their repayments beginning next year—they are paying off at a rate which varies between 7,25% and 11%—we should grant them an extension for a further period of five years. This will mean that instead of beginning to pay off next year, they will only begin to do so in 1985. But I want to emphasize that the hon. the Minister and his department should very carefully consider, for the sake of South Africa, devising a plan to relieve East London of the heavy burden it has to carry.

Mr. Chairman, I shall not react to the remarks and requests of the hon. member who has just resumed his seat Since the hon. member for Parktown discussed a subject last night which I should also like to raise, viz. an analysis of the economic philosophy and situation, I want to confine myself to certain remarks made by the hon. member with reference to a speech made by Dr. Brand on a previous occasion. I also want to associate myself with the standpoints put by the hon. the Minister of Economic Affairs this afternoon. He gave prominence to certain policy statements in a brilliant way.

All of the various factors being discussed under this Vote, as a whole form a contribution to the development of our economic prosperity. In this regard the hon. the Minister discussed the interdependence of the various fields, and that is why it is desirable to examine, as the hon. member for Parktown did last night, to look at the overall picture in order to identify the challenges, to point out the restricting factors and suggest solutions.

I differ from the hon. member as far as the identification of the challenges are concerned. The challenges are unemployment, the narrowing of the so-called wealth gap and international situations. We are probably all in agreement that these are some of the problem areas. The difference that there may be between him and me, lies in the reply to the question: What do we mean by this terminology? I think the hon. the Minister pointed out the difference very well, particularly as far as the so-called “redistribution of wealth” is concerned. But I am not going to elaborate on that. Nor do I differ with the hon. member à la dr. Brand, on the restricting factors, viz. the Black man’s shortage of skills in particular and the availability or otherwise of trained manpower in general.

We are geared to a growth programme and the budget does indeed do a great deal to enable this requirement to be met Nor do I differ from the hon. member when he says that we also have problems with the financing of economic growth. But I am not going to elaborate on that either.

The hon. member went on to say that there is no business confidence in South Africa. He said that the lack of business confidence could principally be attributed to interference on the part of the State. As far as this is concerned, I think he is making a very big mistake, because I do not find a lack of confidence. If business confidence is being impaired by the regulating function of the State, I think the time has arrived for the businessmen of South Africa to have their heads read, because the regulating function of the State is one of those inherent facets of our economic activities in South Africa which we cannot manage without. After all, business enterprises—the whole economy of South Africa—needs discipline, and if discipline is not applied, it will be found that the so-called wealth gap will, in fact, grow wider. The wealth gap to which the hon. member referred, can only be eliminated by means of regulation. As a solution the hon. member consequently proposed elimination of the colour bar. In a certain sense the State is moving away from discrimination, as is clearly seen from what we have read in the reports of the Wiehahn and Riekert Commissions.

However, I do not believe that the idea cherished by the hon. member is applicable. What he had in mind, is a multiracial structure in a unitary state. On the other hand the process of the liberating of peoples, and the process of economic interdependence is the actual method which should be adopted. If the hon. member’s premise is correct, viz. that our economic solution lies in the elimination of all differentiation, surely it also follows that all countries that do not have discrimination, should be great economic giants. Of course this is not the case.

The retention of White involvement, and consequently the protection of White rights and security, is for the moment a prerequisite for economic prosperity, and has, of course, been to a great extent in the past, before the Government’s multinational policy took shape. That is why several of the laws which the Riekert Commission has now recommended be abolished, were indeed essential in the past. This brings me to a provisional critical survey of the Riekert Commission report, without detracting from the many positive aspects it contains. I regard the report as one of the most remarkable documents of our time. The report will, in the nature of its scope, its intricacy and the implications of its application, have to be studied very thoroughly. Before a final evaluation can be done of it, we shall have to examine it very critically.

It represents a great deal of new ideas in regard to a great diversity of matters in connection with Black manpower and the economic utilization of our manpower. In spite of the fact that the hon. the Minister, on behalf of the Government, announced that he accepts the spirit of the principles and the recommendations contained in it, I just want to point out that the recommendations in the report are of such a drastic nature that I myself accept it with certain reservations.

Now we are hearing the voice of Andries Treurnicht again.

Of course I have no fault to find with the general tenor of the report, although it contains certain contradictions, with regard to the Group Areas Act in particular. There are also still many facets of our multiracial structure on which the commission did not comment Of course I accept that this was not contained in the terms of reference of the commission.

It is Andries Treurnicht who is speaking now.

I want to make it very clear to the hon. member for Yeoville that I accept the principle of the elimination of discrimination. But I accept it on the sole condition that, as it is contained in the report, it will not disturb the good order—in the field of industry in particular—that it should not be conducive to dispossession or to unfair competition either, should not cause a labour influx—particularly not in conflict with the Group Areas Act—that it should not cause urban congestion, and that it should not prejudice homeland development. After all, homeland development remains the foundation of our political philosophy. The laws being proposed to be deleted were promulgated in another period, in other circumstances and with a specific purpose which applied in a specific period in history. The summary deletion of certain laws, without putting something concrete in their place, will, however, of necessity cause certain vacuums. I believe, for example, that the commission did not pay sufficient attention to the problems of rural labour. Nor was sufficient attention paid to the position of the so-called labour farms and the regional labour problems being experienced by our farmers either, as well as to certain practices in the rural areas which used to work well.

The total abolition of the labour control boards must not be implemented before it is possible to put something concrete in their place. We know that there are many farmers that are rather wilful. This applies to White as well as non-White farmers. There are White and Indian farmers who, in a certain sense, farm with Black people. For example, they allow Black people to pay to stay on their farms. In this respect we also regard share-cropping as an undesirable practice which could perhaps be re-introduced. This is only reconcilable with the commission’s recommendations if something else can be found to put in its place. [Time expired.]

Mr. Chairman, the hon. member for Newcastle advanced sound arguments to which I am not going to react now. I cannot take it amiss of hon. members if they are now beginning to become very tired of listening to the problems of the border area of the Eastern Cape. But I shall not hesitate to discuss the economic problems of that border area. Because I jointly accepted the problems of the border area as a challenge, I have a seat in this House. Secondly, I shall discuss those problems because people are now looking at me with an expression in their eyes of “produce; deliver the goods”.

The hon. the Minister of Economic Affairs is obviously aware of the thirst of the Berlin/ King William’s Town/Stutterheim area for the establishment of industries. As we have just heard, the Government lent the municipality of East London more than R6 million for the creation of an infrastructure for Berlin. The hon. the Minister himself requested the University of Port Elizabeth to carry out a study of the matters preventing an industrial revival taking place. I want to say thank you for the special concessions made to industries in the decentralized area of Stutterheim and for the loyal co-operation we are receiving from the hon. the Minister.

We delivered the goods in Stutterheim.

On close examination, everything possible has been done for the entrepreneur in the border area. He just has to come. Only the initiative is lacking. Once an entrepreneur has taken the initiative, all aids, advice and leadership are also obtainable on request. One may rightly ask: Why does the entrepreneur not come to the fore? Why does he not show up there? It is my considered opinion that the entrepreneur does not simply come to an area, but that he has to be fetched, that he has to be recruited. The complex has to be sold to him. Eminent economists and industrial promoters share this view with me. What we require, is officers to recruit entrepreneur, development officers or officers to look for entrepreneurs, if one wants to describe them as such. Let us have no illusions on this score, let us not quarrel about it: The absence of such people and the absence of entrepreneurs in the said area is a proved fact. My standpoint is—and the hon. the Minister will agree with me—that this task of the recruitment of entrepreneurs lies on the level of municipal activities.

Having said this, I want to point out that neither the municipality of East London, nor the municipality of King William’s Town nor the municipality of Stutterheim has the machinery to introduce such activities. They do not have the money to effect this, and the mechanics of their city councils are not geared in this way. Consequently there can be no movement in this respect. But it is essential that there be movement. Movement must come rapidly, and momentum must be built up rapidly. I do not want to repeat the reason for this. A few days ago, in the discussion on the Plural Relations and Development Vote, noises were made about hunger, revolution, poverty and impatience. These noises we had to hear, completely deprived us of our sleep.

I want to address a request to the hon. the Minister. I do not want to shift a burden on to his shoulders, but I am convinced that the proposal has merit and that it will work. I want to propose that the IDC, or any of the auxiliary arms of the Ministry of Economic Affairs, appoint a recruiter of entrepreneurs in the service of the municipalities of Stutterheim, King William’s Town and East London for a period of, say, two years, to recruit entrepreneurs for these municipalities. Therefore I am asking the hon. the Minister to make such a person available by way of an experiment. He will be surprised at the results which will be achieved. There is such a person whom I could recommend. He is a middle-aged, energetic economist, who, till very recently, was the economic adviser of one of our Black States. At present he is engaged in the matter of establishing industries in another Black State, one situated very close to the Border area.

South Africans who recruited many entrepreneurs abroad to invest millions of rands in capital in South Africa and in our Black States, told me that they agreed with me that the Border area was viable, but that the task should be undertaken in the way I have just proposed. Consequently I want to ask the hon. the Minister to recommend to the Cabinet that such a recruiter of entrepreneurs be seconded to the service of the three aforementioned municipalities for a period of two years. He must be remunerated well, say, a remuneration of approximately R10 000…

Must I pay him?

I am coming to that. Let us pay him R10 000 for every R1 million in capital which is invested, with a low investment of, say, R5 000 per employment opportunity. Within a period of two years such a person can instil new life into the economy of the Border area. One additional employee of the State in the Border area will probably not cause the rates of taxation to be changed. Consequently I am making an appeal for the Border area of the Eastern Cape as well as the Ciskei and the whole of the Eastern Cape. I am making this appeal on behalf of the Cape, because if we have employment opportunities, we shall possibly be able to accommodate the people of Crossroads as well.

Mr. Chairman, the hon. member must please excuse me for not following up on his argument because I should like to deal with some slightly different matters. Before I discuss the plight of the consumer, however, I should like to deal very briefly with what the hon. member for Newcastle said. I regret that he introduced a discordant note in regard to the recommendations of the Riekert Commission. I am more than concerned about the fact that the commission’s findings are already under attack, without people perhaps fully realizing and fully having studied the recommendations and their implications. The hon. member for Newcastle will forgive me if I say that I prefer the approach of the hon. the Minister to the recommendations of the Riekert Commission. He has told us that in broad principle they are acceptable and that a White Paper will be tabled in due course. However, I regret that such important recommendations as those of the Riekert Commission already find themselves under attack in this House at this particular juncture.

I now want to come back to the plight of the consumer to which I referred a little earlier in another speech. I must say that I am a little disturbed that there are people who become upset when one mentions the plight of the consumer in this House. I want to say that if I am a lone voice fighting for the consumer, that voice also expresses the views of those who sit with me in these benches, because we shall speak up for the consumer, regardless of the mocking that comes from the NP benches. I want to repeat to the hon. the Minister that inflation is running at an utterly unacceptable high rate. The question I posed to him was whether the Government is not contributing to the acceleration of price rises with its handling of Government-administered prices. Perhaps even the Escom issue is relevant to this issue of Government-administered prices.

The second question I want to ask the hon. the Minister is whether he considers all the price increases in the private sector to be justified. I believe that in many cases prices are not being increased because of increases in costs, but because of inflationary expectations or, in some cases, by exploitation techniques. We talk about the free-market mechanism, but I have to ask the hon. the Minister whether the free market mechanism is working, bearing in mind the size of the market in South Africa and the semi-monopolistic situations which exist in regard to certain products, both imported and local.

Quite obviously the answer to your question is “No”. That is why I have introduced a Bill to that effect.

That is the point, but the hon. the Minister has to take some action to stop inflation being taken advantage of and being accelerated by these practices. I want to say that to my mind the increased profits shown by many concerns are not due to increased turn-overs, increases in volume or greater efficiency, but are solely due to increased mark-ups. This is being passed on to the consumer at a time when the consumer cannot afford it. I do not suggest price freezes or controls, but there is little doubt that in many cases, in the economy today, the consumer is being exploited. There is no question about it.

What do you suggest?

I want to put a further question to the hon. the Minister. Is he satisfied that the mechanisms and organizations for consumer protection are adequate and that they are functioning in the desired manner? We believe that they are not and that we need to do more to give teeth to consumer organizations and to mechanisms which are designed to protect the consumer. The consumer continues to be exploited, and in inflationary times it becomes even worse. We make a plea today for stronger action to combat inflation and to fight exploitation.

I want to touch upon another matter in relation to exports. When the hon. the Minister spoke a little earlier about the need for South Africa to export, the need for incentives in respect of exports and the importance of exports to South Africa, no one in this House disagreed with him. We actually believe, however, that some of the incentive schemes need revision. I believe the hon. the Minister is going to attend to that, and I hope he will say something more about that a little later on.

There is another matter to which I want to draw the hon. the Minister’s attention. The supply of strategic minerals to the Western powers is one of the factors which South Africa uses as a bargaining factor in international politics. It is indeed becoming an increasingly important bargaining factor in international politics. How often has it not been stressed by hon. members in Government benches, and others, how important our mineral resources are to the West! And they are indeed important to the West This is used by South Africans as a counter-argument to threats of sanctions, and correctly so. However, the result of this situation has been that various countries have been and are still making an assessment of their needs for strategic metals and other materials, of their reliance on imports, particularly on imports from South Africa, of the availability of alternative sources of supply and of the desirability of stock-piling in anticipation of possible trade boycotts and sanctions that may be applied against South Africa. We in these benches believe in free trade. We are against any form of boycott or sanction and we do not believe that South Africa should take counter-measures which will evoke that kind of action. We should never be the first to act in this regard. We must not give excuses for unjustified actions against the Republic. I say all this as a preface to what I am going to say. I pose the question—an important and delicate question—without pretending to give the complete answer. Should the Republic permit the export of strategic substances which are in short supply in world markets, not for current use by our trading partners, but for the purpose of stock-piling to enable some countries at some unknown future date to participate in trade boycotts against South Africa? In other words, the question I ask the hon. the Minister is whether it is right that we should allow people to buy our goods not merely for current use, but in actual fact to overbuy them in order to put them aside and stock-pile them so that in due course they will more easily be able to participate in sanctions against the Republic. I believe that the Government should carefully study this position.

It is being studied.

I think it should equip itself with the information, it should watch the stock-piling and take steps, without disrupting trade or antagonizing friends, to preserve South Africa’s bargaining power.

It is being studied.

I am very pleased to hear that, because while the matter is delicate, it cannot be ignored. Trade is a two-way deal. It should always be kept that way. We do not want sanctions, we do not want boycotts, but we do not want people to use our own products eventually and be able to use them successfully in order to do harm to the Republic.

Mr. Chairman, the hon. member for Yeoville acted very irresponsibly in regard to the last matter he raised. He raised a very delicate matter and to my mind he should rather have discussed it privately with the hon. the Minister. One must be careful with these delicate things. I think, however, that he, I and everyone for that matter can accept that the Government also realizes what its responsibilities are in this regard and will act in such a way that the interests of South Africa will not be harmed.

I have another bone to pick with the hon. member about the credit he gave himself of being, in his own words “a lone voice in protecting the consumer”.

That did not bring him any votes in Swellendam.

Who has spoken about the consumer on your side? Not one!

Swellendam showed us that they are not interested in that “lone fighter”. The hon. member for Yeoville is a good South African, but he should now stop telling the world at large via his Press that his group are the only people who have the interests of South Africa at heart. Why is this party in power? The reason is because the general public realizes that this party does precisely what that hon. member wants to give himself credit for. However, I do not want to turn this debate into a political debate.

I have listened carefully to what the hon. member for East London North said. I am holding a report which was published by the Bureau for Economic Research of the University of Stellenbosch, which deals with the economic situation in the Western Cape. All we want to say is thank you very much to the hon. the Minister and his department for ordering this investigation. I shall not suggest that the Western Cape is a backward area, for it is a part of the world which is too beautiful to be backward. I do want to say, however, that there are entrepreneurs in the Western Cape who have the expertise, the inclination and the will to do things, not only in the interests of the Western Cape, but of the whole of South Africa as well. Therefore I thank the hon. the Minister and his department for this investigation they are now undertaking into possible strategies for the development of the Western Cape.

I want to raise a matter with the hon. the Minister by way of a question. It deals with the supplying of fuel. The hon. the Minister discussed it with us very seriously earlier this afternoon, and made a very urgent appeal to the consumer. Now I want to ask whether the hon. the Minister can tell us what his official view is on the manufacture of ethanol from agricultural products, which could perhaps help to supplement our available supplies. I am no chemist, but there are people who say that one could mix ethanol with diesel or with petrol in order to supplement our available supply. I ask what the official view is, because there are people in South Africa who are of the opinion that one can derive a fuel source from it and simultaneously increase our agricultural production if certain agricultural crops could be used for the manufacture of ethanol. I am referring to responsible scientists—I do not want to mention their names—who are of the opinion that if an ethanol programme could be coupled with intelligent agricultural planning, particularly in our homelands, those homelands could become more self-supporting and self-sufficient in respect of food products. Secondly, they are of the opinion that the food problems could be solved to a large extent and, thirdly, that it could create considerable employment opportunities. It is therefore interesting to me to read such a report and I shall let the matter rest with the question, if whether the hon. the Minister could tell us what his department’s views in regard to this matter are.

In conclusion, I should like to refer to the subject of increased production, the inputs, the productivity capacity and achievements. If someone has already discussed this, I apologize, because I was unable to be here yesterday.

You did a good job yesterday.

Thank you. I have in my hand the report of the National Productivity Institute. I read things in it which upset me. I should like to mention a few points from it so that we can see whether we can help each other here too. Like other hon. members, I say that South Africa badly needs a rising growth rate. South Africa needs prosperity and a strong economy. That is why it is important for us to discuss it. The employee should increase his input, but it is in fact the employer who should motivate the employee to produce a bigger production input in respect of his daily task. Inter alia, I read in the report—that is what is so disturbing—that a mere 1% increase in productivity would have made a total contribution of R296 million towards the real domestic product of South Africa in 1977. An increase of 1% in production input would have led to a one percentage drop in the inflation rate. Then follows the disturbing statement that we shall find it increasingly difficult in future to compete with our trade partners because our production inputs are poor in relation with those of other countries. Since 1975, the wages per employee have increased by between 11% and 17% per annum, but the production per employee has decreased at an average rate of approximately 2% per annum. Should we now blame only the employee for this, or should we also ask what contribution the employer has made to increased productivity when he granted wage increases to narrow the wage gap to help defray an increase in the cost of living, or when he—as the hon. member for Yeoville said just now—tried to offset his weakened profit capacity and position by way of inflationary price increases? Then I ask what the employer, inter alia, is doing to involve his employees in an all-out attempt to increase production inputs by means of better administration, sound staff relationships, sound motivation projects and improved opportunities for promotion, I think it is unnecessary to say that all of us—employer, employee and all authorities—should be more aware of this. We are continuously talking about all the other problems we are experiencing in the country. I should rather say that if we as South Africans, and this includes the White man, the Coloured man and the Black man, do not make a real attempt to boost this production input record of ours, we are in danger of being ousted from the competing world market. We are then in danger of creating an inflation rate which will cause consumer prices to be double every three or four years and also, of having to make continual wage and salary adjustments. That will have a paralysing, demoralizing and negative effect on our country’s economy.

The Chairman of the Westinghouse Electric Corporation, Robert E. Kirby, asked in an article—

[Time expired.]

Mr. Chairman, I think that the hon. member for Yeoville today very aptly passed judgment on himself and his party when he said that this will stand out in the future as one of the most important parliamentary sessions in our history. He went on to mention a long list of very important topics of debate in this session. I think every hon. member in this House, thinking today of what has happened so far in this session, will realize and remember that the official Opposition has squandered the time allocated to them in this House instead of contributing constructively to all these pertinent questions which the hon. member for Yeoville himself mentioned. They indeed wasted an squandered their time by conducting a useless debate on the Information scandal. [Interjections.]

*Before exchanging a few other ideas, I want to say very sincerely to the hon. the Minister of Economic Affairs today that I think it has seldom happened in the past that a meeting has had the benefit of such an excellent exposition of economic-political philosophy as we have had today. I think that this speech he made today—and I do not say it to flatter him, but because I am sure that the test of the time will prove it to be so—will stand out as a reference speech. It will often be read by people who will want to acquaint themselves with this subject. I think that he had a message today for those people who want to live by ideology alone. He told them that they will not live by ideology alone, but will also take cognizance of the economic realities. He also had a message for the people who want to live by economy alone, and told them that they will not live by economy alone, but will take cognizance of political realities and will build their economy within the frame of reference which their political realities afford them. For that he deserves the praise and the appreciation of this House. [Interjections.]

I should also like to exchange a few ideas with regard to our trade account, the excellent trade surplus we in South Africa have been able to achieve over the past few years. Primarily, it enabled us to adopt a policy of growth with discipline last year, so that this year we were able to institute a policy of growth from position of strength. The primary strength which enabled us to do so, was the fine surplus on our trade balance. This was brought about by, on the one hand, the massive increase in our exports, and on the other hand, by the reduction of our imports. Now, however, we are in danger of having a drastic increase in the demand for imported capital and other goods if, as is expected, we have an upswing in fixed investment during the second half of this year. Therefore we should be very careful not to lose this fine weapon we hold, a weapon which will enable us to make our country economically strong, by unnecessarily importing more than will be absolutely essential at that stage. Moreover, we can prepare ourselves at this stage to pay for the essential imports, by means of a sustained export effort, as can clearly be seen from the amounts set aside in the budget for the purpose of export promotion.

We have often in the past talked about import replacement. The hon. the Minister also discussed it today. It is no simple matter, because South Africa, as far as important replacement is concerned, has taken the typical course of a developing country. In fact, by the end of the ’fifties we had completely exhausted the first phase of import replacement when we had already begun to manufacture in South Africa all those things which required a low standard of refinement and investment and for which a market existed which could be easily exploited. All that remained were intermediate products, particularly capital products.

When we look at our list of imports, we have to notice that there are still quite a few categories of capital goods and intermediate products, a large percentage of our requirements of which we still have to import from abroad, in spite of the tremendous progress we have made. Therefore, when we talk about import replacement, we are really talking about a very difficult subject, because we are at the level where major capital investments are necessary, that level at which we are dealing with a highly refined market, a market which will also require a high degree of technological skill.

Of course, it is also a very limited market.

It is indeed a very limited market in South Africa. Unfortunately, it is a fact—and this is not a reproach against the private sector—that the private sector in South Africa recently searched its own heart by means of an investigation and made a very important discovery with regard to the marketing of locally manufactured capital goods. Before dealing with their report, I just want to point out that in his doctoral thesis, Dr. Hennie Dekker of the University of Pretoria came to the conclusion as far back as 1974 that enterprises which manufacture capital goods in South Africa, are not very concerned about the marketing of their products.

These factual findings of his have been substantiated by the report to which I have already referred and which was drawn up after an investigation by Seifsa, the FCI and the Affikaanse Handelsinstituut. According to the report, many enterprises in South Africa that manufacture capital goods do not even make an advance estimate of their marketing in order to draw up a marketing budget for themselves. The result is that not even potential consumers in South Africa are properly acquainted with their product. Furthermore, it was found in the report mentioned—this even applies to Government buyers—that buyers in South Africa often do not even take the trouble to establish whether the capital goods involved are may be available in South Africa. However, it is also true that if an enterprise does its planning in advance, it will know what it is going to need in future. If he does so, there is sufficient time for the buyer to, perhaps, place his order in South Africa. If that does not happen, and if there is insufficient planning—crisis planning or crisis management—as is found in the case of some enterprises, that particular enterprise will be obliged to order something from abroad, because of short delivery. However, the private sector is giving serious attention to this. I believe that we should all be pleased to note that.

As far as the maintenance of our favourable position with regard to our trade balance is concerned, it is most essential that we should take cognizance of the fact that we cannot expect a dramatic short-term effect in the field of import replacement We therefore have to turn to the export market In the past we have encountered an inertia among manufacturers as far as exporting is concerned. Fortunately they have sought markets abroad recently, after faring somewhat badly due to the collapse of the local market. If they had not done that many of them would have gone under and would never have been in the export market. In other words, there were exporters who did not concern themselves about the export market because of the convenient market available here. It can only be hoped that they will not give up their export market at this stage, when there are promising signs that the local market is going to recover strongly, but instead will extend it As a result of the fact that the local market is improving, their marginal unit cost is now decreasing and therefore they are now in an even better position to compete in the overseas markets by pegging the cost at which they offer their products. The essential need for exports shows very clearly the importance of the high productivity and low costs we have in any event to strive for in our country.

It is a fact that low costs do not mean low wages. Low costs mean high productivity. Low costs mean that one does not put more money in one’s pocket than one has in fact earned. If we do not strive for low costs in South Africa within that framework, we are going to lose our export market, because we have the additional drawback of long distances. Therefore I am excited by the new labour deal we are heading for. If we could exploit our labour to the optimum, we would improve our economic position inside the country as well as abroad. No good employee has ever lost his job yet. Neither will a good employee, regardless of his colour, lose his job in future. Wronged people and those who are really less privileged, are the people who need the protection of the law. Leadswingers, however, do not deserve the protection of the law. I think that if we can get rid of the leadswingers in our economy, we shall be able to deal inflation a blow and make ourselves economically much stronger, thus enabling us to give effect to our long-term political aims.

Mr. Chairman, it seems that there is one thing everybody in the House is agreed upon, and that is that the hon. the Minister has made a very important speech this afternoon. I say this in all sincerity. I agree that this is an extremely important speech he has made; and we welcome it, might I say. I should like to say, however, that this is part of the administering of the last rites of the NP’s apartheid philosophy. [Interjections.] What we see happening in this House in the latter part of this session is the burying of the NP’s old apartheid economic policy. As the hon. member who has just sat down said, the hon. the Minister is now facing the economic realities of South Africa. We welcome it, Sir. I only wish they had faced them years ago.

There is also another reality the hon. member for Florida also referred to, and that is the political reality of South Africa. I am sincerely hoping that, within a year or so, say by the time we come back to the House next year, we will go through a similar process of administering the last rites to the apartheid political policies of the Government. I wonder whether hon. members on that side really understand what they are talking about when they say they believe in apartheid. Have they ever read some of Dr. Verwoerd’s speeches? I recommend them to read a book called Apartheid and Racial Partnership in Southern Africa. Dr. Verwoerd said that apartheid is a direction, the ultimate consequence of which is total separation in all spheres. I can give all the Hansard references in which he proceeded to say that there will be total separation in the economic spheres. That is why we have all the legislation the Government is now going to change. Now all these hon. members who still believe in apartheid say this is the greatest thing that has happened in South Africa. He went further and said that there would be total separation in the political sphere and that that was why there were going to be sovereign independent Black States in South Africa It also went on to the bio-genetical sphere. It is there for everybody to read and history will judge the NP accordingly. As a result of that philosophy in the bio-genetical sphere, we had the Mixed Marriages Act, the Immorality Act and all the others. We are extremely pleased to see that the Government is changing. It is a pity that they did not start to change years ago, because it would have saved South Africa thousands of millions of rand and a lot of bitterness and problems. If that had happened, we might have had many more friends in the world than we have today.

I should like to get back to what the hon. the Minister said about the gross and the net domestic investment. I agree with the hon. the Minister that the economy does follow a cyclical pattern, but he tried to justify expenditure on Escom and other State corporations by saying that the private sector was feeling the squeeze and the economy needed some stimulation.

I spoke about the management and not the principle.

I want to ask the hon. the Minister to look at page 97 of the report of the Board of Trade and Industry. There he will see that the amount of investment capital, under the item “Tariff and income retained” is going to increase from R522 million in 1978 to R898 million next year, to R1 264 million in 1982 and to a massive R2 183 million by 1985. I want to put it to the hon. the Minister that this is a tremendous amount of money which he is taking out of the consumer’s pocket in the form of electricity tariffs, to be retained for capital expenditure. As I have said, by 1985 the figure will be R2 183 million. Over this period the total amount is R10 314 million on just one State corporation. I should like to put it to the hon. the Minister that he must have another look at this, just as some years ago we put it to the hon. the Minister of Transport in respect of the Railway budget and I am pleased to see that he too, in due course, had to face the economic realities of his capital expenditure programme.

The hon. the Minister said that he was talking about principle. I was pleased to note in his speech earlier on that he said that he and the Government are now committed to the private sector, to the free-enterprise system.

I did not say “now”. I have always been committed to this.

“Always”, he says, Mr. Chairman. Then he went on to talk about an engine plant and Sasol 2 in which he hoped the private sector would invest He hoped the private sector would participate in these State corporations. I want to ask the hon. the Minister: What sort of principles are these that he is talking about? When we talk about the private sector in the economy, we talk about people who invest money in businesses which they themselves control, operate and benefit from. If one looks at the Iscor legislation, which was passed years ago, one sees that certain amounts of shares were allocated to…

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

No, I do not have much time at my disposal. With respect, the hon. the Minister spoke for an hour and a quarter while I have only ten minutes. The few shares in Iscor may have been taken up by the private sector, but who are these people? Are they the entrepreneurs? It may be a few financial institutions or pension funds that have a few shares in Iscor. I want to ask the hon. the Minister what entrepreneur is going to invest in an engine plant which is going to be managed and controlled by a State body or board?

In all fairness, where did you get the idea that the private sector could not get the controlling interest in the engine plant?

Ah, I am very pleased to hear that. But, does the same apply to Sasol 2, because the hon. the Minister mentioned both these projects. The hon. the Minister talks about principle, but surely the principle must apply all the way through. If he is to be consistent, it must apply to Iscor, Sasol 2, the engine plant and Escom. I think the hon. the Minister should look at what we have tried to indicate today. I am sure that the people in his department who read Hansard will take a good look at this.

In the few minutes I have left I should like to appeal to the hon. the Minister to ask his department and Escom to have another look at the rural electrification programme. I was rather perturbed to hear from my bench-mate that if he was allowed to purchase electricity from Queenstown, under their contract with Escom, it would cost him a lot less than he would have to pay Escom. This would only require taking the transmission lines across one neighbour’s farm. It seems incredible that a farmer, because he is just a few kilometres or so beyond a limited distance, has to pay such a vast amount to buy his electricity direct from Escom, whereas he could get it a lot cheaper if he bought it via the municipality of Queenstown. I want to suggest to the hon. the Minister that Escom should look at what has happened in the United States, where the power companies sell electricity to farmers’ co-operatives. This is a new thought. The farmers form a cooperative for the purchase of electric power. They erect and maintain their own transmission lines.

A farmer is resourceful.

Yes, a farmer is resourceful. That is right. This then is what has happened in the United States. The result of this is cheaper electricity for the farmer. I am a farmer. I have five extension lines on my farm and for each I have to pay the same extension charge, in spite of the fact that they are extensions of the same line that runs right through the middle of my farm. However, if I want to put in an additional pumping unit, I have to install a separate transformer and pay exactly the same extension charge that I had to pay years ago when that main line was first laid on.

You have not done very badly for yourself under those “very bad” circumstances.

I do all right because I am an entrepreneur and a businessman. The very point I am trying to make to the hon. the Minister is that he needs a little more of these ideas in the running of State corporations in order for them to be a real asset to both the nation and the entrepreneur and businessman and not a possible burden—I would not say they are parasites; that would be unfair—on the private sector. I appeal to the hon. the Minister to consider this.

Mr. Chairman, it was interesting to listen to the hon. member for Umhlatuzana.

Amanzimtoti.

I apologize to the hon. member for Umhlatuzana. I think if he had made a speech, it would have been of a better quality, especially as far as the political aspects are concerned.

The hon. member for Amanzimtoti said that next year we would witness the “last rites of the political future of the NP”. I want to tell him that the basic difference between the Government and the Opposition parties were shown up by the by-elections in Swellendam and Beaufort West The NRP is a party that feels optimistic and happy—their leader even walked around today with a flower in his buttonhole—if they have lost well, while the NP, on the contrary, can only feel happy and govern when we are successful. The same difference exists between us and the official Opposition.

In economic language it means “growth from strength”.

We grow from strength, and they grow towards greater losses. The difference between us and the official Opposition is that we try to see the country in its economic, political and other facets as an entity, and try to create a future which will ensure the welfare of all our people—the hon. the Minister once again indicated ideological and future policies today—while the official Opposition has a fragmented view of it and is opportunistic. With that they always try to attract a few votes.

All the members of the HNP voted for the Progs.

Even if the supporters of the HNP vote for them, the result will always be the same as that of the by-elections that have just taken place. The voters of South Africa will not be misled by the façade presented by either the official Opposition or the NRP. They will ensure that they always keep the right party in power, as they have done once again, and as they will do in future.

I should like to associate myself with the hon. the Minister. I am glad that he spoke about a few facets today and could make them clear to us.

The first matter I want to touch upon is decentralization. We are particularly glad that the hon. the Minister spoke specifically about the situation in the Western Cape, because it means a lot to us. With regard to the Western Cape and the question of decentralization I should like to refer to the annual report of the Handelsinstituut and the congress agenda in which a point is made in regard to urban growth and development I quote—

To my mind this is one of the justifications, as the hon. the Minister said today, for the policy of decentralization that he advocates. To us in the Western Cape this is an idea which we want to endorse very strongly and we ask that it be developed as much as possible. South Africa has already made great progress not only in the economic sense, but also in the socio-economic sense. I want to point out that we are slowly receiving recognition on an international level for what we have already done. The hon. member for Rondebosch quoted the other day from a report on “A symposium on the reduction of housing costs held in Salvador, Brazil, and a study tour of selected cities in South America”. I should now like to quote from the report the city engineer of Cape Town made when he returned from the tour. He said—

This indicates once again that South Africa and the present Government is far ahead of the world as far as economic development is concerned.

I want to agree with the idea of the hon. member for Parktown, i.e. the question of a total economic strategy. I think the hon. the Minister explained it to us here this afternoon, and he convinced me that South Africa’s total economic strategy is in good hands. But I want to point out to the hon. member for Parktown that as far as I am concerned, I believe that a total economic strategy also means the co-operation of the Opposition in this country. Then I want to say specifically to that hon. member that he can be reproached for not having done more for the creation of a total economic strategy for this country. Therefore the arguments he mentioned here today are suspect, for it was stated here last year, and it is on record, that at some stage or other the hon. member dissuaded foreign investors from investing in this country. It is still on record. He never repudiated it.

I have repudiated it, and that is also in the records of this House. I do not know where you were at that stage.

If he did repudiate it, it was done, as usual, through the Press, on the sporting pages or the centre pages.

Go and read Hansard. [Interjections.]

Another aspect I should like to touch upon is the question of productivity. As far as productivity is concerned, I agree with hon. members who stated that we cannot rely solely on the profit motive, hard work, long hours or whatever in this country, but that we shall have to try to attain greater productivity in order to be more competitive. Therefore I should like to make a suggestion to the hon. the Minister today. In order to achieve greater productivity, I believe that we shall have to motivate all our people—White, Brown, and Black—to be South Africans. We must explain to them what the problems and the challenges for this country are and we must get everyone to realize that we have to look for our salvation and future in this country. Bearing that in mind, I believe it is necessary for every person to respect the other person’s language, culture, morals and everything that goes with them. We as South Africans must be proud. A few years ago the following appeal was made at the Jewish congress—

I think we should say this once again to our people so that they can become conscious of their identity again.

Mr. Chairman, then there is a last point on which I should like to make an appeal to the hon. the Minister. In this regard I am referring to the interim report of the Bureau for Economic Research of the University of Stellenbosch with regard to the Economic Potential of the Western Cape—Probable Strategies for Development. The report was commissioned by and compiled for the Secretary for Industries. In chapter III, page 31 of the report the appointment of a regional development advisory committee for the Western Cape is, inter alia, recommended. The problems have now been identified and the future is spelt out for us in this excellent report. I now want to request the hon. member to give his attention to this matter immediately and to consider the appointment of such a committee.

Mr. Chairman, yesterday during this debate on economic affairs the hon. member for Amanzimtoti and the hon. member for Parktown once again delighted in what they regarded as the failure of Government policy. It is interesting—the hon. the Minister also referred to this—that politics and economics are very closely interwoven. In fact, the economy is central to all facets of human society in South Africa. We have never denied that It is interesting to see how those hon. members, when they speak in a debate on economic affairs, simply cannot resist the temptation of fastening upon the Wiehahn and Riekert Reports to suggest on the basis of those reports together with certain Government standpoints concerning labour, that the Government’s policy has collapsed completely. The hon. member for Amanzimtoti said last night that nails were being driven into the coffin of apartheid. As far as we are concerned, we do not speak of apartheid. Neither they, nor anyone in Southern Africa, nor anyone in the world, will ever be able to destroy the living reality of separate co-existence. One cannot get that into a coffin, because it is alive, it has vitality, it is the reality of the peaceful coexistence of people.

I do not like flattery, but I should like to thank the hon. the Minister and his department for having impressed the reality and values of economic development on the entire population of South Africa in recent years. It is important for all our people to understand what is involved. We must not do what the hon. member for Yeoville does, the hon. member who made the ridiculous statement today that we were not looking after the lot of the consumer. We have been trying for quite a number of years, under the guidance of the hon. the Minister—his department is doing this in an excellent way and we shall continue to do so—to inform the consumers of South Africa of the reasons as to why consumer prices increase so that the consumers who are affected by the trends for prices to increase may know what role they have to play in order to protect themselves and to know that the main component of all price increases in every sector of the economy is the labour component It does not matter from what angle one looks at this, the labour component and the scarcity value of certain raw materials are the two basic reasons for price increases. If we can make the consumers realize this, we can also tell the consumer that we can try to reduce our prices by making a greater effort. We can also tell the consumer that the inherent nature of our economic system is such that prices have to increase. Every entrepreneur, no matter where he is, bargains for the maximum profit he is able to achieve. That is the reality of our system. On the other hand, every employee, wherever he finds himself, also bargains for the maximum personal benefit he is able to derive from his training, qualifications and dedication. This is a sound free-market mechanism. I want to ask the hon. member for Parktown whether he agrees with the hon. member for Yeoville when the hon. member for Yeoville accuses us of being the body responsible for the large price increases.

Of course I agree with him.

The hon. member agrees. Mr. Chairman, the hon. member for Parktown is a man who is fully acquainted with the economic realities and he definitely knows that price increases must not be controlled by a government How can those hon. members say on the one hand that we are responsible for price increases and then say on the other hand that we must not interfere with the free-market mechanism. Surely that is foolishness; it is not consistent The fact of the matter is that the Government has committed itself not to interfere with price increases and price control. We shall not do so now and we shall not do so tomorrow. We believe in the sound working of the free-market mechanism as the major and most effective protector of every consumer in South Africa against price increases.

When we look at the consumer price index and the rise in the consumer price index with regard to the various listed items over the past number of years, I should like to ask the hon. the Minister and his department please to give specific attention to the reasons for the more rapid rise in the consumer price index over the past five years with regard to food than with regard to other items such as clothing, transport and housing. Over the past five years the total consumer price index rose by an average of 14% annually. As far as food was concerned, however, it rose by 15%. Now, if we go further back in the past and take a longer period into account we note the same trend. It is a fact that we had to contend with restricting economic factors in the years 1974 and 1975, factors which exercised an influence on price increases, in addition to many other factors. However, it is also a fact that the majority of consumers in South Africa is seriously concerned—and rightly so in many respects—because food prices as such increase more rapidly than prices as a whole. It is true that the price of food is affected by all the other factors which result in price increases. In this regard I refer to the enormous increase in the price of crude oil, to labour and to the problems with which the agricultural industry has had to control. If one looks at the full picture, it is clear when we come to food prices, that the producers as such have not been benefitting to such a larger extent that that may be suggested as the explanation for the increase in food prices.

It would appear as though cost-increasing factors are present in the distribution and packaging sectors of the food industry which may bear looking into. I do not want to suggest that the price increases can be avoided by doing so. If the hon. the Minister and his department give urgent attention to this matter and if we can launch a comprehensive information campaign in South Africa in order to educate and inform our people as to the reasons why prices increase as well as to educate them about the extent to which they themselves can be of assistance in an attempt to keep prices low and to reduce them, especially by means of competition and by laying less claim to too high wages, I am convinced that we shall be doing a great deal to help the consumers.

In the few minutes still at my disposal, I should like to tell hon. members opposite that the economy of South Africa is an instrument with which we have to affect for ourselves peaceful co-existence in Southern Africa. I have already said this, but I want to say it once again with responsibility, that for as long as the Black States in Southern Africa remain poor appendages of a rich South Africa, for as long as the Black townships around our White cities are poor appendages of rich White cities and for as long as the Black or Brown person sees himself as a poor appendage of a relatively rich White person, for as long shall we face a conflict potential which we cannot afford. [Interjections.] They have to help, because to mobilize the economy in South Africa and to ensure that those things do not remain as they are, we need confidence. We are not going to create confidence by disparaging one another, but we shall create it only through a common idealism which will give investors confidence to invest and consumers the desire to spend and to enjoy. This is what we need in South Africa. For that we need a team effort in the whole of Southern Africa which reaches even further than just our White community.

We should not come forward with the type of argument of the hon. member for Yeoville, viz., that our people are having such a hard time. I want to make the statement—and I shall be glad if the hon. the Minister, since he has mentioned this before, will elaborate on this on some occasion, even if it is not in the course of this debate—that we as Whites in South Africa should perhaps ask ourselves whether a perpetual and increasing luxury existence which too many of us have, is in the interest of the type of economic development we need. In saying this I am not trying to preach that everyone in South Africa should be equal. On the contrary, I believe that the entrepreneur should reap the fruits of his initiative and talents. However, I get the impression that there are still too many of our people who are so impressed by their own personal luxury existence that they have no idea of how necessary it is for especially entrepreneurs in this country, more than in any other country in the world, to invest on every possible occasion so that we may be able to endeavour to solve our unemployment problem and other problems with which we have to contend.

I believe, that with the economic policy of this Government as basis and the idealism which we have in respect of the great, Southern Africa of tomorrow, also in the economic sphere, we shall be able to deal with the major problems of unemployment, and all the problems resulting from that, and with the problem of growth in a way which will be in the interest of peaceful co-existence of all the people of Southern Africa. [Time expired.]

Mr. Chairman, I just wish to address a few words to various hon. members on the Government side. The hon. member for Vasco is not here at the moment. However, I recommend him to go and read his Hansard. For this purpose he can begin with col. 279 of last year’s Hansard. The hon. member for Newcastle was speaking about confidence, or lack of confidence, on the part of the business community in South Africa. He said that if there was a lack of confidence among businessmen, they should “have their heads read”. If this is the case, the hon. the Prime Minister’s Economic Adviser should also have his head read. After all, these are the very words he used in this connection. He said—

The hon. member for Innesdal accused me, as well as the hon. member for Amanzimtoti, of revelling in the failure of the Government’s policy. Well, I am not so much concerned about whether the Government’s policy is a failure or not. What is important and what I am concerned about is that true national unity should be achieved in South Africa, and that it should be based on full participation by all South Africans in all sectors, in our economic, political and social life. What I am revelling in—if I am revelling in anything at all at the moment—is the fact that it begins to appear that at last, after having moved in the opposite direction all these years, we are now beginning to move in the right direction. [Interjections.]

†Mr. Chairman, I want to refer again to broad economic policy themes. However, there are two specific matters which, I believe, require to be raised in this debate. This is the last opportunity I have of doing that, and I hope the hon. the Minister will refer to them in his reply. The first matter relates to a footnote which appears on the balance sheet of the Fisheries Development Corporation of South Africa. It starts by saying that the corporation is involved in complex litigation in the Supreme Court in a number of different pending actions. References are made to these actions and we are told that the FDC is claiming something less than R1 million from the bankrupt estate of Ifcor, and that there are counterclaims against the FDC totalling about R3,5 million.

Now, I am aware that the hearings in certain of these cases are in progress at the moment. For that reason I am not going to pursue this issue. However, I hope the hon. the Minister will give us whatever information he can.

The other matter to which I want to refer is that of the recent court actions surrounding Empisal and Royal Holdings, actions in which the hon. the Minister and his department became involved. There are two points here which I see as essentially separate, both of which, however, require replies. The one is that, in some extraordinary way, the hon. the Minister’s department, with his own formal backing, took action under the wrong section of the Companies Act. They purported to issue a notice to freeze the assets of the said companies under section 254, whereas it can only be done under section 256 after section 254 has been invoked. In this instance section 254 has not been invoked. In this way they caused themselves to get into trouble and they had costs awarded against them, I believe, on a higher scale.

Another issue—to my mind an even more interesting issue—is why the hon. the Minister saw fit to get involved at all. I believe this is what he should explain to the House. There has been speculation in the Press about the reason for his doing that. I will not repeat that speculation here. I simply ask him to inform us in his reply to the debate. We want to know what this was all about and what he was intending to do.

Now, to return to the broad questions of policy, I also have a bone to pick with the Government There are only a few hon. members left in this House, who can remember the speech which occasioned a great deal of comment and excitement at the time, the speech delivered by Prof. Sakkies Fourie, way back in the fifties, when he said in this House that economic integration must inevitably lead to political integration. That set the tone for the economic debates during the ensuing two or three years or more. Many hon. members will remember that By and large the reaction from the Government side of the House to that proposition of Prof. Fourie’s was that economic integration would lead to political integration as night follows day, and that therefore they would never have economic integration, but move away from it instead, and move the Black people back to the homelands, and so forth—the whole paraphernalia of separate development. It is time to refer again to the debate of more than 20 years ago, because what we have been hearing from the Government today is the final and full acceptance of the fact of economic integration in South Africa. The hon. the Minister has said that there is one indivisible economic system, and he is absolutely right. That is the case, and the thrust of the recommendations of the Wiehahn report in particular, and the recommendations of the Riekert report to some extent, is that in that one indivisible economic unit every worker has the right of association, the right to bargain and the right to make himself felt and exert his part in decision-making in the economy of the country. I prophesy that in the medium term we shall find that we cannot give workers these rights in industrial matters and withhold from them the equivalent rights in political matters. That is the importance of the reports of these two commissions and that is why the hon. member for Innesdal thought he detected that I was enjoying myself. That is why what is happening in South Africa at present is important.

I want to turn to another matter, one which I raised earlier and to which various other members have referred, and that is what I called the closing of the wealth gap, but to which hon. members on the Government side, for reasons best known to themselves, like to call the redistribution of wealth in South Africa. Hon. members on the other side of the House have referred to what I said not in the sense of rejecting it, but always with some sense of discomfort in handling the concept. We should therefore be a little more clearer on what we are talking about The hon. the Minister said we cannot expect that there should be no income inequalities. Of course we cannot expect that there can be no income inequalities. I do not even think there are no income inequalities behind the Iron Curtain. It is certainly the last thing we as protagonists of the free enterprise system want.

*There is no country in the world in which there is not a difference between the wages of skilled and unskilled workers. As far as I know, the ratio between the two is about 2½ to 1 in most advanced countries.

My quarrel is not with you. My quarrel is with the policy interpretation of your colleagues.

If the hon. the Minister has no quarrel with me, I am glad, but I do have certain points I wish to make.

I have said that in the most developed countries, the ratio between skilled and unskilled workers is about 2½ to 1. In South Africa, the ratio—it varies from one industry to another—is 4, 5, 6, or a much higher figure, to 1. I am talking about narrowing that gap. It is true that the vast majority of the skilled workers are Whites and that the vast majority of the unskilled workers are Blacks or Coloureds. This only makes the situation so much more dangerous. But this is not the crux of the matter. What is economically unsound is the fact that the gap between wages for skilled and unskilled workers is much too big. I am talking about the narrowing of the wealth gap and hon. members opposite are talking about the redistribution of wealth.

Someone has asked whether we mean that the assets and the property of certain people should be taken away and simply given to other people. No. We mean that Government policy in respect of taxation on the one hand and the provision of services on the other hand should be such that in the course of time, the under-privileged people will be offered an opportunity to advance until they are able to reach a position closer to that of the wealthy. The hon. the Minister referred to the fact that the Industrial Conciliation Act does not determine wages according to colour. That is so. The Industrial Conciliation Act certainly does not determine wages according to colour, but what it does do is to define an employee in terms of colour for the purposes of that Act. The Black man is excluded from the definition, and in this way, the Black man is deprived of the bargaining power which the other workers have. In this respect, the Industrial Conciliation Act contributes to the wide wage gap. We would like it to be removed. It now seems that it is in fact to be removed to a large extent, and we express some satisfaction on that score. Hon. members—not the hon. the Minister—blamed me for having quoted at length from a recent speech by Dr. Brand in my introductory speech to this debate. Hon. member were really most flattering to me by saying that they would have preferred to hear my own ideas. I wish to conclude by saying that one does not come here to hear one’s own ideas or voice or merely for party political gain, but to make a modest contribution in an attempt to ensure that there will be justice for all the race groups in South Africa, a justice which has been largely absent up to now. [Time expired.]

Mr. Chairman, I very greatly appreciate the contributions made by all the hon. members who participated in this debate. I should also like to record my thanks for the level on which this debate was conducted. Although there may be fundamental differences between us, I think that we were able at least to keep our debating on a meaningful level.

I also wish to express my great appreciation towards the officials of my department. I want to say that the recession over the past four years has been the longest and deepest recession the country has experienced since the Second World War. Naturally, the task of the Government departments has been much more difficult because of the circumstances in which they had to work. One does not have an opportunity to thank them every day, so I should like to take this opportunity of thanking them publicly for their loyalty and work. In this spirit I associate myself with the remarks made by the hon. member for Walmer in his speech yesterday.

I shall deal with the various aspects raised by hon. members together, where they have a bearing on one another, rather than to react to the speeches of individual hon. members. I want to refer, firstly, to an important matter raised by the hon. member for Florida and other hon. members, and that is our foreign trade relations. By way of introduction, I want to say that our growth expectation, economically speaking, will to a large extent depend on the extent to which we are able to penetrate, retain and expand foreign markets. However, I think that in our efforts, we should also look at the continent we live on, because to a large extent, the success we achieve with regard to co-operation in any sphere, more specifically the important economic sphere, holds the key to our ability to participate more fully in the international world outside Africa itself. Having said this, I should like to convey a very positive factual message to hon. members in this connection. It relates to a broader community context in Southern Africa. In the past year, South Africa has expanded and constantly scrutinized its attempts to strengthen its economic and trade relations with its neighbouring countries. Apart from the existing customs union agreement with Botswana, Lesotho and Swaziland, as well as the economic agreements with the Transkei and Bophuthatswana, agreements which basically and in practice amount to the participation of these two countries in the customs union agreement, the South African Government has had talks with representatives of other neighbouring States with a view to closer economic co-operation. The entire concept—the hon. the Prime Minister also referred to it—of a constellation of States in Southern Africa has a bearing on this. Such an idea is also supported, I believe, by the geographic situation of the countries, the integrated transport and communications networks, the history of economic interdependence of the countries, the availability of a large variety of natural resources and the availability of technological expertise to develop all the resources. In this connection I wish to say that it is wrong always to proceed from the point of view that the responsibility for cooperation between States is the responsibility of the Government. In my opinion, there is an enormous need for organized co-operation between the business communities of the various African countries. It is a fact that where political considerations and Governments often place obstacles in the way of the activities and business enterprises of the inhabitants of their countries, the inhabitants of those countries, the businessmen themselves, have an enormous responsibility to break down those political restrictions and remove the prejudices. There is a practical need for a chamber of commerce for Southern Africa, and I think it should consist of representatives of the business communities. The Government has already decided that if the business community wants to take the initiative in this particular connection, it will support such an enterprise financially and otherwise. The concept of Government support for inter-state chambers of commerce is a well-known and accepted one in Europe and other industrial countries of the world. I think they can perform a basic function in this particular connection. In the second place, it is very important to note that there is an idea, and that it is gaining ground, that Africa itself, in the light of its specific position as a producer of primary products—through mining and agriculture—should seriously consider rationalizing its marketing abroad, and this has a bearing on a total action from Southern Africa, even if this has to be on the basis of a pool marketing system of its products. This would bring about a situation—and I want to emphasize this—where the great industrial countries of the world could not exploit Africa for their own ends.

Business interrupted in accordance with Standing Order No. 22.

House Resumed:

Progress reported and leave granted to sit again.