Mr. Speaker, no doubt, since the adjournment of the House for the Easter recess the hon. the Minister of Finance has received some degree of satisfaction from the praise accorded him from some quarters for his budget. I have just two publications here. On the front page of one of these is a smiling photograph of a very satisfied hon. Minister saying: “My best yet!” The second one has become a little confused. It says: “The Horwood chop.” I do not know who was being chopped, but it seems to indicate again the smile on the face of the hon. the Minister about the very fine budget he believes he presented.

Whether this budget is regarded as good or bad, actually depends on who one is. It also depends on whether one looks at it in the short term or in the long term.

[Inaudible.]

Upside-down, as the hon. the Minister is with some of his pensions proposals, I would not interject if I were him. I would be ashamed and hide my head under the table. [Interjections.] The real issue is that the money is available, and the question was how this money should be used. The Government has the power to use the money in order to plan as it chooses. The question to which we have to find an answer is: Has that power been used correctly, and if not, how should it have been used?

There is no doubt that 1980 could have been the year of the golden opportunity budget. Instead it turned out to be the budget of lost opportunities. [Interjections.] Short-term considerations have, in the hon. the Minister’s projections, overshadowed the long-term interest. The issue is not prosperity for some today—and I stress the word “some”—but security for all tomorrow—and I stress the word “all”. This is what the Government has in fact failed to implement in this budget. We wanted a budget, and we believe all South Africans wanted a budget that would be equitable in its application to all South Africans, so that all would get a fair deal under this budget.

If we look at what the main trend of the budget is we see that it is personal tax concessions. They are the main hallmark of this budget. What do the figures show? The latest figures, which were furnished during this session of Parliament and which relate to 1978, show that South Africa has less than 2 million White, Coloured and Asiatic taxpayers, and of these in the year in question, about half—to be exact, 49,39%—earned R5 000 per year or less. The question which we ask of the hon. the Minister is: How does this budget help that man? How does this budget help the man who for example lives on R50 a week, or even less? What does it do for the man to whom a few rand a month on GST, on food and other essentials make a meaningful difference?

The man your party never sees.

The man our party never sees? The party in which we are represents that man and fights for him, and we are … [Interjections.] I venture to suggest that if the hon. the Minister had the interests of that man at heart, he would not have presented his budget in this particular form. [Interjections.] The question whether this is a good budget is not what these financial papers write. The question is: What does the man in the lower income group say? What does the man in the lower income group say about this budget? What does the pensioner say about this budget? What does the person who saves for his old age, and has saved, say about this budget? What does the married woman say about this budget? What do the people with large families say about this budget? [Interjections.] That is the test, the real test of whether this budget has succeeded or has failed.

While we appreciate that the hon. the Minister wishes to encourage growth, and while there are increases in some items of expenditure and some forms of tax relief, which we welcome, we regard the budget as being in many respects patchwork and a failure to tackle courageously the real problems facing the country and to assist in more meaningful fashion those most deserving of help—all of which is possible because it is at a time when the resources are available to the Government and to the hon. the Minister. Therefore I should like to take the opportunity at this stage of my speech of moving the following amendment to the budget—

1. (1) to formulate and implement a plan to ensure the long-term security and prosperity of all the people of South Africa;
2. (2) to ensure that the degree of skills needed for proper growth of the economy and to avoid bottlenecks, is acquired by the labour force;
3. (3) to take adequate steps to combat inflation;
4. (4) to have due regard for the needs of the aged;
5. (5) to ensure proper development of agriculture;
6. (6) to take adequate steps against both rural and urban poverty and to provide social services on a scale sufficient to relieve tensions which threaten the stability of our society;
7. (7) to give adequate protection to the community against crime; and
8. (8) to give the leadership which is required to solve the social, economic and political problems facing the Republic.”.

And nine?

Nine is the doctor’s favourite, which is what the hon. member for Rissik needs. [Interjections.] There is little doubt that the last of these, the lack of leadership which has been shown in these times of crisis, is the crucial one which we will have to debate at some length in the days that lie ahead.

The budget has, as the hon. the Minister has stressed, greater economic growth as its major target. Increased prosperity, it is argued, will have beneficial side-effects for all. Increased consumer demand is desired; so greater disposable income is sought to be created by tax concessions. This demand will call for greater production, which, in turn, will create more jobs. This is a laudable object, one with which one cannot quarrel. But can the budget achieve these stated objectives? Are there not constraints with which the hon. the Minister has failed to deal to the extent that the hon. the Minister could have had different policies to deal with them?

First and foremost, any upsurge in the economy is certain to be the increased demand for skilled labour. The skills are not there in the quantity required in South Africa. The failure to ensure over years that there is adequate training to create skilled labour and that such training is preceded by an appropriate level of schooling, will now come home to roost again. Bottlenecks are likely to occur with all the consequences as demonstrated during previous upswings. While the existence of the problem is recognized, there are decades of neglect which cannot be removed overnight, certainly not at the pace envisaged by the budget.

Let me give an example. The Department of Education and Training is planning twelve new Black technical institutions in the so-called White areas in addition to the two existing ones. Those are to be erected, it is said, in the next four or six years. What an indictment of the past and what a failure to appreciate the urgency of the problem. If one reads of the problems encountered by employers seeking to implement in-work training schemes and other difficulties, it is apparent that a real sense of urgency does not appear to have penetrated neither the Government nor the bureaucracy.

If we examine the manpower position, then it is obvious that a further constraint on growth has been the Government’s failure to pre-plan adequately, let alone decades of neglect in dealing with the labour laws, the Planning Act and education and training generally. This particular upswing has been two years in coming, and the hon. the Minister’s own utterances in previous budget speeches show that, while the upswing was desired, it was not being adequately pre-planned by the Government. The question must be asked: What if the demand materializes which is hoped for? Can local industry cope with it? Many activities are already at previous historic capacity highs, particularly in the fields of furniture, textiles and food. Inventories are also generally low, and if these are built up, how will demand be met? Expansion of productive capacity takes time and in the meantime demand is likely to be met from imports, and with high overseas inflation rates this will certainly not assist the combating of local inflation.

Who wrote that speech?

A very good writer, I may tell you.

The second restraint on growth is the high prevailing rate of inflation. Increased purchasing power should buy more goods, not the same quantity of goods at increased prices. This reduces consumer demand in real terms and brings with it inflationary expectations, and so fears for the future which inhibit spending. Inflation is destabilizing, it certainly causes tension. The changes in relative prices and incomes and its operation as a redistributor of wealth, all militate against the desired degree of growth.

There is no doubt—and we indict the hon. the Minister on this—that he has not done enough in this budget to combat inflation. The high degree of liquidity must be considered together with the desire the hon. the Minister has expressed to control the money supply. The lifting of the import surcharge is really the one meaningful anti-inflationary measure, but unfortunately this is now likely to be offset by higher prices of imports due to levels of inflation in the economies of our trading partners. The hon. the Minister cannot ignore the social effects of inflation. Higher food prices, e.g. the higher price of bread, we have already dealt with and we have already indicted him. This is no doubt to be followed by increases in the maize price shortly, and all of this causes hardship and destabilization. What is significant is that our call for increased food subsidies is now being echoed in top business circles. Let me quote the chairman of Tiger Oats—

What is your maize price?

He continued—

So if a man in such a position, in such a business, a man who certainly cannot be described as a socialist, a social democrat, a do-gooder, or anything like that, makes that demand, can the call for increased food subsidies be resisted by this Government?

There are other people, however, who are hard hit by inflation. I am referring to retired persons. They are the ones who lose most as a result of inflation. Anyone who lives, directly or indirectly, on fixed-interest securities, is hit hardest by inflation. By law the hon. the Minister compels pension and retirement annuity funds to place the major portion of their investments in such fixed-interest securities, and he has not announced any changes in the form of investments that these Funds have to make. He compels people to invest in this manner, but then does nothing to assist them when they find themselves in this inflationary plight. There is no doubt that it is not only those people, but also people who are themselves dependent on bank and building society investments, who are the ones who have been hardest hit by inflation. What has this budget done for such people? Their incomes have decreased, their capital has been eroded, inflation has taken its toll and the hon. the Minister has resisted all calls for forms of investment to assist them. The system of indexed bonds he has rejected out of hand. All of these demands to do something for these people who require assistance from the Government have fallen on deaf ears. All the hon. the Minister has done is to move in reverse, taking the tax concession that subscription shares in building societies have had and reducing it to a level of only R50 000 per family, as opposed to R150 000 per individual. That is what the hon. the Minister has done to help the saver in South Africa.

Let me now come to the question of encouraging the creation of jobs and encouraging investment. Let me say at once that this budget contains no specific incentives to invest in productive activity. All the hon. the Minister has done is to rely on tax concessions to seek to bring that about. There are no additional allowances for new machinery and no allowances for the creation of new jobs, and I submit that existing allowances, by comparison with those for other countries, appear totally inadequate. It is obvious that under today’s inflationary conditions replacement costs have escalated way beyond the level for which allowances are given.

If we bear in mind the low level of private domestic fixed investment, which decreased by 6,2% in 1977 and 4,5% in 1978 and remained at the 1978 level in 1979, it is clear that beyond the stimulation of demand, which it is hoped will stimulate private fixed investment, the hon. the Minister should have done more in this budget.

There are some constraints on growth which the hon. the Minister has no control over. The economies of our main trading partners are in relatively bad shape. Unemployment, inflation and little, if any, real growth in the current year are the characteristics of the economies of those countries. Commodity prices are in a dubious state. Instability in the Middle East, the period preceding the United States Presidential election, the ending of the Tito era in Yugoslavia, the unsolved Afghanistan situation and the genocide in Indo-China all add up to a very uncertain situation in the world as a whole, a situation which will undoubtedly affect our relations with those trading partners.

So, too, our own political situation must be borne in mind. The unresolved South West Africa/Namibia position, the ever present threat of sanctions, urban and rural terror, difficult and long borders and the unstable situation in urban areas are ever-present factors that have to be dealt with and borne in mind in an assessment of the economy.

When we look at the situation as it is, let us view some of the realities relating to our economy. Firstly the real disposable income for Whites has been dropping for some years, and the rate of increase for Blacks has dramatically slowed down. The increase in the number of economically active persons in South Africa is such that a thousand new jobs must be created every day for the next 10 years. We are not, however, unique in this, because population growth, particularly in Third World countries, has made job creation a priority. It is estimated that the world will need 1 billion new jobs by the year 2000, a seemingly impossible task.

We in South Africa cannot, however, regard our task as impossible, as we have a unique situation in that there are political and social consequences from a race point of view which have to be borne in mind if the jobs are in fact not created. Even with an average growth rate of 5% per annum over the next seven years, we are likely to end the period with 1,5 million unemployed. Again a problem not unique to South Africa is the high degree of unemployment among young Blacks in South Africa. The problem of young Black unemployed because of occupational preferences, the seeking of jobs with higher income and status, and the lack of vocational training are all serious matters in a potentially unstable situation. The question that needs to be asked is whether the traditional method of job creation merely by stimulation of the economy and creating demand is adequate and will operate sufficiently speedily to meet our peculiar situation.

Economic growth as such is to us not as important as economic growth in the right sectors. Capital spending is not as important as capital investment and investment in capital-intensive activities is not as important as investment in labour-intensive activities.

What are the right sectors? Can you tell us?

The sectors—and I am coming to them in a moment—are those which are labour intensive and which will create the required jobs for the people.

The country needs more people in jobs and increased real disposable income in the hands of those who presently have the least. To this end I want to ask the hon. the Minister whether we do not need more planning, not just by the State but by the State working together with the private sector representing both capital and labour in order to achieve this end. As a result of such a joint effort we could ensure that the most cost-efficient methods of job creation are followed, free from the constraints of ideology. There is little doubt that the binding of the Government to an ideology has cost the country dear in so far as the creation of jobs is concerned. Now that the Government has accepted the concept of one economy, it should be possible for it to work together with private enterprise to evolve means of solving this problem.

To this end I should like to suggest to the hon. the Minister that we should have an on-going commission consisting of the best brains in business and industry, free from political shackles, whose object would be to eliminate poverty and create incentive and opportunity in our economy for all our people. Such a commission could set us on a road to a solution of our economic problems. This would be a logical follow-up to the hon. the Prime Minister’s Carlton conference. It could tackle the problems of rural poverty, the creation of small local labour-intensive industries using locally available materials and catering for local demands. It could study the small-scale labour-intensive activities of Taiwan. It could evolve real means of bringing the Black man into the entrepreneurial side of the free enterprise system. It could deal with land utilization, which is a major African issue. If survival is an issue for all of us in South Africa, then the best brains representative of us all should participate in its solution, regardless of politics or colour. This would be no mere economic advisory committee to meet occasionally and express opinions, but an active on-going non-political body seeking solutions on a non-political and non-race basis.

The PFP has a commission.

Yes, the PFP have it, but we are not yet the Government. So my hon. friend must be a little patient.

The first and last legs of my amendment, to which I have drawn attention, are I believe the greatest indictments of the Government. South Africa has demonstrated its economic potential and our economic position owes most to two factors, viz. the gold price and exports generally. Our mineral wealth and the increased gold price owe nothing to Government policy. They are there without the Government and they are the main contributors to the country’s economic strength which has enabled problems to be tackled and solved.

We are repeatedly told of “a total strategy”. But I ask the question today, and I hope there will be an answer in this debate: Where is that strategy? What is that strategy? We have no overall economic plan, no stated objectives in regard to wealth and income gaps, no stated objectives in regard to the quality of life or equality of opportunity. What we do have is a hotch-potch of ad hoc decisions, pious sentiments and endeavours to satisfy periodic reactionary demands. In the 1980s we see South Africa on the edge of a volcano and the much vaunted total strategy sounds like an empty-sounding drum. South Africa has borders that stretch for thousands of kilometres across a continent from ocean to ocean, with countries which can potentially give rise to hostile incursions, and these borders are defended by a very thin brown line of young men. There have been discoveries of arms cachás; there have been the attacks of urban terrorists and articles have appeared, for example by the South African Foundation, which talked about the possibility of successful revolution in South Africa. We have increased defence expenditure year after year. Surely it should now dawn on somebody in power that defence expenditure required for the successful defence of South Africa also involves much more money for education, for housing, for social services and for the creation of jobs, as well as money for arms. This is defence expenditure in the true sense of the word in the war in which South Africa is already engaged.

In this budget the greatest omission in this plan for the future is the failure to show us that there is a foundation for an economic order which can satisfy aspirations and the failure to give an indication of true concern for the underprivileged people of South Africa.

You are a real pessimist!

I should specifically like to ask, and perhaps that vociferous agriculturist over there might answer it: What kind of society does the Government wish to see in South Africa? What is the end of the road going to be? What in fact is the plan? What is South Africa going to be like in the years that lie ahead? Has the Government a plan for change in a meaningful fashion? Or, and I ask this deliberately, is there only going to be change within the framework of separate development and will there only be change under pressure? Will there only be that form of change? The hon. the Minister of Agriculture is very silent now. Perhaps he will answer the question.

I am not reading the speech.

Is the confusion in regard to what kind of change there is going to be in South Africa ever going to be clarified? Because the difficulty that the Government has is that it does not know itself whether it is following the path which is being set by the hon. the Minister of Public Works or whether it is following the path which is being set by the hon. the Minister of Co-operation and Development? They do not know it themselves. Nobody in the whole Government knows where they are going. So how can we know where they are going? All of them find themselves in a dissatisfied position and their followers do not know which way they are turning and do not know in fact what is going to happen.

I want to ask a further question. Everybody has talked about change and everybody has talked about things that are going to be different. I therefore ask the hon. the Minister of Co-operation and Development: Has anybody really yet felt the impact of change? Can anybody tell me that the Black man has actually felt that his daily life has been affected by the changes that the Government is bringing about? Has it happened? I asked the hon. the Minister before the presentation of the budget, and the hon. the Minister did not react, for some dramatic act, an act, for example, on pensions, which would bring home to the Black man that he was now tasting the fruits of reform, the fruits of the pretty words that have been used. It is quite clear that there has to be tangible results of this process of reform and those tangible results must be seen to be the result of a period of negotiation. The moderate leaders must be able to deliver the fruits of change if they are to have the support of their people. By not allowing them to deliver these fruits of change, the Government is, in fact, destroying the credibility of those very moderate leaders, because the truth is that there are leaders who differ from those moderate leaders and who are sitting in Dar-es-Salaam and Maputo and elsewhere holding out promises of things that are to happen and prepared to step into the breach if the moderates are unable to deliver the goods. Whether those leaders elsewhere can or cannot deliver the goods is irrelevant; the fact is that people will be made to believe that they can deliver the goods. The appeal that I am making to the Government today is for some real, dramatic gesture to make the Black man see, in his ordinary, daily life, that negotiation does pay and that reform has come and is coming. That is what we need in South Africa.

I should like to ask another question, viz. whether the Government and the followers of the Government really appreciate the problems that are facing our country, and whether the Government is really willing to come to grips with this problem. With a view to all the sentiments with regard to human dignity that are being expressed in this House and elsewhere all the time from all kinds of sources from the Government, I took last Sunday’s newspaper in order to assess what the real position was. [Interjections.] I took Rapport, which is the NP’s own newspaper, and all instances appear in one issue of one newspaper that supports the Government. Firstly, the headline: “Nasionale Party or Zeerust wil poskantoor apart he.” It reads—

That is the Nationalist Party branch which is active. Where is the NP member of Parliament for that area? That is highly interesting. The Jacobsdal branch is in his constituency, and I quote—

*I want him to give attention to this matter today. He must get up and say whether he wants that to be an open post office or not, whether it should have separate facilities or not. [Interjections.]

†That is just one thing, however. This is one action by the NP to improve race relations in one issue of one newspaper. For the second I should like to read again from the same newspaper. We are now talking about Ennerdale, which is a new village which has been opened for Coloureds and which is situated halfway between Johannesburg and Vereeniging. I am not quoting from the Sunday Times or the Sunday Express. I am not quoting from anything which is antagonistic towards the NP. This is the newspaper which supports the NP. I quote—

*This is how it works in the case of group areas—

Then they quote the Director-General of Community Development—

†This we find in the same newspaper to improve race relations in South Africa. However, that is not enough. A third report in the same newspaper reads as follows—

I wonder what the hon. member for Rissik, in whose constituency this happened, thinks of this? Does the hon. the Minister of Public Works approve of the fact that these two Coloured students are not allowed to ride on this bus? [Interjections.] The hon. the Prime Minister is laughing. He has reason to laugh. I have now quoted the third instance in the same issue of this newspaper of how the NP is going about to improve race relations and now come to the cherry on the top. It is contained in the same issue of this newspaper. The report is headed “Treurnicht staan vas” and reads as follows—

*What does the hon. the Prime Minister say about this? Are you still laughing?

I am laughing at you and your antics.

The report continues—

†We were told of a magnificent coming together and of peace-making and of love between the hon. the Prime Minister and the hon. the Minister of Public Works. Recently, at Stellenbosch, the hon. the Prime Minister said that he and the hon. the Minister of Public Works were going to work together on the 12 principles. What he does not know is that he has a 13th principle, and that is unlucky for the hon. the Prime Minister. That is the truth.

Why do you not read the whole speech?

The tragedy is …

Mr. Speaker, on a point of order: The hon. member must quote the hon. the Minister of Public Works correctly. The hon. the Minister said that he fully subscribed to the policy of the hon. the Prime Minister. [Interjections.]

Mr. Speaker, it would appear to me as though the hon. the Minister of Agriculture reads a different newspaper to the rest of South Africa. Surely the matter is perfectly clear. If the hon. the Minister wishes, I shall quote some more from the report. The hon. the Minister of Public Works said—

When is the hon. the Minister going to leave? Why does he not leave? [Interjections.]

†The truth is …

[Inaudible.]

I am prepared to listen to the hon. the Prime Minister at any time. I am prepared to give him a chance.

Read one sentence more. [Interjections.]

Order!

I put it to the hon. the Prime Minister that the truth is that he cannot remove the hon. the Minister of Public Works from the Cabinet. He is not tough enough; he does not have the strength to do it; he is unable to do it. That is why he is landed with “ ’n klip in die maag”, and it is going to remain there. [Interjections.] I would have imagined that the hon. the Prime Minister would have learnt from a former hon. Leader of the Opposition, Sir De Villiers Graaff, but he is now making the identical mistake and he will have to pay for it. If the hon. the Prime Minister does not like Rapport, let me refer him to last night’s television interview with our ambassador to the Netherlands. What did he say? He said that the biggest obstacle overseas is the people in the Government who, when the hon. the Prime Minister speaks, speak with a different voice. The whole of South Africa knew that he was referring to the hon. the Minister of Public Works. That is the harm that has been done to South Africa by the presence of that hon. Minister in the hon. the Prime Minister’s Cabinet, and that is the problem that has to be faced. The question is—and it is back to the same old story—that the hon. the Prime Minister is making the same mistake the previous Prime Minister made, and that one cannot effect changes to save South Africa when one is trying to preserve the unity of the NP. The judgment history will make on the Government and these leaders in respect of this particular issue will be quite clear.

However, let me deal with another matter. The hon. the Prime Minister has accepted the reality that there is a common economic system in South Africa. People of all races are going to have to work together on the factory floor and on the shop floor in order to create the goods and render the services which South Africa needs. The building workers move is another step in that direction, and we welcome it. However, a common economic system cannot be treated in isolation; it has political and social implications. Working together creates contact and association which cannot be cut off artificially. There will be common aspirations as to the quality of life, and this will become more obvious as mobility within labour, both vertically and horizontally, accelerates. World conditions indicate that there is a close correlation between labour associations and politically associated groups, particularly as labour groups, irrespective of colour, tend to realize that they have common economic objectives. This will have to be appreciated in the creation of some form of political accommodation.

One thing is very clear, and that is that the present Government under the hon. the Prime Minister is allowing the present political situation to drift along. If that is allowed to drift along in the present unitary system, in which there is majority rule for Whites and minority rule in respect of the rest, all that is going to happen in South Africa is that the roles are going to be reversed and majority rule will become an irreversible pattern. Much as words such as “federation” and “confederation” are anathema to the hon. the Prime Minister, there will be no possibility of avoiding majority rule unless the foundations for federation and confederations are laid now.

I want to deal with another matter, one which is perhaps not directly related to the budget, and that is the question of law and order. Wherever we go today, we hear expressions of concern over the crime rate. Increased crime is a symptom of destabilization. Everywhere in South Africa today the subjects of conversation are assaults, muggings, burglaries, robberies, rapes and murders and worse.

Who incites these things?

There are areas in the big cities where crime takes place in broad daylight, while nobody interferes or does anything about it. There are areas adjacent to major hotels in our major cities where it is dangerous for even tourists to walk around. Our elderly people are the ones who are most concerned. This fear of crime is not unique to Whites; it also exists amongst the Black population. Gang warfare, extortion and protection rackets make the lives of people in urban townships miserable. What is even more important, is that respect for the law enforcement agencies is lost as a result of it. On this first day of the budget debate, I want to take the opportunity to stress the urgency and importance of one matter to the hon. the Minister of Police. We need to have more policemen on the beat. We need more concentration on real crime and less concern about technical and ideological offences. Our people require protection and are entitled to it.

There are a couple of other things with which one should perhaps deal. I should like to refer very briefly to a comment which the Director of the Free Market Foundation made on the budget—

This raises a very important issue and one on which we should be quite clear on the Government’s position.

We believe in an incentive economic system. We believe that growth is best generated through private initiative. One also accepts, however, that while people should be required to provide for their old age and for their misfortune, this can only be achieved in an ideal world, but we are not living in an ideal world. We choose to believe in a caring society and if free enterprise is to have a chance of long-term survival in South Africa, social services must be provided not only on a reasonable level, but also on an equal level to all the people of South Africa.

The wealth gaps which exist in this country can only be bridged if the State is prepared to take fundamental action in certain of these spheres: Education and training to ensure equality of opportunity; health and hospital services for those whose means do not permit private practitioners and private facilities; accommodation for those to whom private enterprise cannot or will not provide accommodation at reasonable levels; unemployment benefits to those willing to work but unable to obtain work; and pension benefits to those who, due to infirmity or age, are unable to earn their keep.

The method of providing these, the form and the level, can be debated, but the fact that they must be provided is to us a fundamental in a society which wants to solve its social and economic problems. The epithets of “socialists” and “welfare States” are irrelevant. What the issue is whether people are going to help preserve a society which also cares for those people in that society.

The final minutes I have available bring me to the lot of the pensioners who I think have had a raw deal in this budget. [Interjections.] The increase in social pensions has been demonstrated to be inadequate. It is not even equivalent to the inflation rate, so that in real purchasing power there has been no improvement. Due to the phasing out of rent control, many pensioners will have to pass their increases straight on to their landlords. Increases in basic foodstuffs and everything else will take what the landlords do not take.

The gap between the pensions of the different race groups is in fact not being closed. In absolute terms it is actually increasing. I have indicated that a dramatic gesture in this regard would have been appropriate and would have done much good for all of us.

The changes in the means test which we have called for are totally inadequate. The amount allowed for free assistance has been increased from R9 800 to R10 200, which means that the maximum means limit will be increased from R34 400 to R34 800; in other words, by R400 since 1972. This means an increase of 1,16% over eight years or 0,145% per annum. What kind of increase is that? During the same period we have had inflation rates which have averaged more than 11%. The free income has been increased from R984 to R1 392, an increase of 41,68% since 1972, meaning an annual increase of 5,18% or one half of the inflation rate. The true effect of the means test has been that there are fewer people who qualify for an old age or some other social pension. This is demonstrated by a decline from 137 949 in 1978 to 137 760 in 1979. If the means test had kept up with inflation since 1972, the income limit would have been R1 868 and the asset limit R68 000.

I make the appeal, even at this late hour, that something more should be done for our pensioners.

Mr. Speaker, on this occasion, before I react to what the hon. member for Yeoville said, I beg leave to congratulate Dr. De Loor on his promotion to Director-General of Finance. I know he deserves it. I also know that in the position in which he will serve, he will be of great value to us in future. We extend our very sincere congratulations to him.

Hear, hear!

Mr. Speaker, we have experienced a remarkable first speech from an hon. member of the Opposition in this Second Reading debate here today. As the hon. member for Paarl rightly pointed out, it was one of the only occasions which he could recall on which the first speaker on the Opposition side in a budget debate had hardly begun his financial analyses when he ran away from them and ventured into the political sphere. [Interjections.]

His reaction was the greatest compliment to the hon. the Minister.

He is a real Hertzogite. [Interjections.]

During the Easter Recess I thought that the hon. member for Yeoville might have certain problems when he entered this debate today. In any event, he did not receive much support for his criticism from the public media. At the outset of his speech he was right in saying that we should not pay any heed to the newspapers, but that we should take cognizance of what the real situation is, of what the long-term effect of the budget is going to be. When the newspapers write in a positive vein, the hon. member for Yeoville does not want to take any notice of them. But when it suits him he uses nonsensical newspaper reports on the political situation in South Africa in an effort to strengthen his debating arguments. That is of course for want of discourse.

The hon. member for Yeoville stated very emphatically that we should say where we are going with South Africa. He tried to indicate that there was a so-called division in the ranks of the NP. But what is the position in his party? What is the position in the ranks of the official Opposition? What kind of society do they foresee for the future? No one knows where the hon. member for Yeoville finds himself in regard to certain political questions and the approach of his party affiliates to those questions. I think it would also be a good thing if he told us whether the hon. member for Pinelands and he are on the same road. I think it would be a good thing if he would tell us whether the hon. member for Pinelands and their leader and he hold the same view on the release of Nelson Mandela. [Interjections.] It would be a good thing if the hon. the Leader of the Opposition would tell us whether the hon. member for Pinelands and he are ad idem on the course which a student organization such as Nusas is following.

I want to know from the hon. member for Pinelands whether he is aware of certain literature … Now the hon. member for Pinelands is not listening again. [Interjections.] I want to know from the hon. member whether he is aware …

I have been speaking with the hon. the Minister. I had no time to listen to you.

Is the hon. member for Pinelands aware of reading matter such as this which I now hold in my hand? The title is “Omkeer”. It is reading matter in which students are being incited to refrain from doing compulsory military service. [Interjections.] Is the hon. member for Pinelands aware of this? Is the hon. the Leader of the Opposition prepared to speak out against this kind of reading matter with which young South Africans are being fed? [Interjections.]

It is banned stuff. You should not have it with you. [Interjections.]

In this debate the Opposition will have to tell us where they are going with the youth of South Africa. We need the loyalty of every young man in South Africa. However, I am not all that certain whether the youth is receiving the right guidance from the hon. Opposition. But I shall prefer to leave the matter at that now.

The hon. member for Yeoville said: “The Government fails to give leadership in various directions.” He also said that the question of leadership “would be the main issue in this debate”. In the course of my speech I shall give attention to all the aspects which the hon. member touched on. I want to point out that in the second paragraph of the programme of principles of the NP the following is stated, and I am pointing it out with reference to the statement made by the hon. member for Yeoville on leadership in the NP—

This is stated right at the outset of the NP’s programme of principles, and the NP has constantly, over a period of 32 years, been striving to achieve this goal. It has provided guidance, and in spite of many problems and obstacles which were placed in its way and in spite of adverse world economic trends and, last but not least, in spite of former Oppositions and the present Opposition, the South African economy today is in an extremely strong position and shines like a bright star in the international economic firmament. But now the hon. member for Yeoville comes to this House and says that the Government did not provide guidance. How can an economy develop as ours has developed without the correct guidance from the authorities?

You are not responsible for it. It was in spite of the Government.

Providence has been good to us in providing us with natural resources and human material, but it was the task of the NP to utilize that which was put at its disposal with prudence, skill and judgment to the benefit of South Africa. I am convinced that the international community will take cognizance of the strength of the South African economy. I am convinced that it will definitely get through to them that this is, inter alia, the result of a stable and sensible Government. In fact, a tree is known by its fruit. I am also convinced that the present position of the South African economy and the financial planning of the hon. the Minister of Finance, together with the policy laid down by the hon. the Prime Minister, form one of the strongest bulwarks against the aggressive onslaught of Marxism on South Africa. But now the hon. member for Yeoville comes to this House and says that we do not have a total strategy against Marxism.

That is correct, no counter-strategy.

The hon. member for Yeoville said that the budget did not reflect a total strategy. That is incorrect. The budget does testify to an economic strategy as part of a total strategy. Surely that is as clear as daylight.

The hon. the Minister displayed a certain measure of daring with this budget, for which he is being criticized in some circles. I am astonished that the hon. member for Yeoville did not perceive this, because I think the hon. member searched through the Press media for criticism and found very little. But there were some people who had reservations about the daring displayed by the hon. the Minister. In the development process of South Africa it was fitting to display a certain measure of daring at this juncture. As N.P. van Wyk Louw put it—

That is true. In terms of the big countries of the world, South Africa is relatively small and we have a developing and growing economy which is subject to certain constraints. That is why we should display a certain measure of daring at this juncture at which we find ourselves. The growth process, which had already commenced, needed to receive a strong stimulus because, as Haibelan put it—

†May I add that we cannot afford to have the expansion process interrupted now. The growth of the South African economy is of vital importance at this stage. Let me quote the Financial Mail of 4 April on this. On balance, in the Financial Mail’s view—

It goes on to say—

*This is the type of comment to which the hon. member for Yeoville does not want to listen. What does the same quotation go on to say? I quote—

Consequently if that hon. member says that this budget is not benefiting the poor, he is making a very big mistake. In reality I think the passage which I have just quoted sums up the opinion of the general public on the budget. In his initial, brief reaction to the budget, the hon. member for Yeoville said that the budget should be examined in the light of what it implied for the future of South Africa, and that they intended to consider it in that light in the debate.

He also indicated his dissatisfaction at the increase in the bread price. But let me quote what the Sunday Times had to say in this connection—

And the newspaper making this comment is a newspaper which in fact is not normally very friendly to the Government. Naturally this kind of comment does not suit the Opposition at this stage, and that is why they want to ignore it.

†Further along in the same article the following appears—

This is the hon. member for Yeoville and his colleagues—

This is in perfect harmony with the piece I quoted earlier from the Financial Mail.

*I do not wish to become bogged down in the bread issue. But while we are dealing with it, let us dispose of it now. It is true that the matter was raised by the Opposition and that there is a certain measure of unhappiness over the bread price. The bread price cannot be dissociated from the wheat price. Now, it is true that for years South Africa was not self-sufficient as far as its wheat production was concerned. This was as a result of climatical and other circumstances which prevailed in the country. To encourage and to stabilize the industry, a system of cost plus entrepreneur’s remuneration was adopted. In recent times, as a result of the use of better varieties and methods of cultivation an effort to make the country self-sufficient was successful, but at high production costs. This is an important statement which should be communicated to the public, for it is good that the public should understand the problems we have with the food situation.

For a few years we even had surpluses which had to be exported at a loss, and consequently the old principle of production costs plus entrepreneur’s remuneration could hardly be retained. Producers therefore had to sacrifice part of their entrepreneur’s remuneration. The industry found itself in a complete financial crisis. Last year the wheat price had to be raised drastically, i.e. by 36%, so that farmers could carry on with their production, production which is of national importance because wheat is a strategic product. With wheat production it is not possible to rely on imports. The Government felt that the 36% increase could not be recovered in full from the consumer in the form of an increased bread price. What happened then? An additional subsidy of R45 million, plus a further R2 million at a later stage, was paid by the Government to keep the bread price constant up to 1 April of this year. At present a brown loaf is being subsidized by 14c and a white loaf by 9c. The total subsidy amounts to R90 million, plus the additional R51 million for which the hon. the Minister is making provision; a total of R141 million therefore. As the hon. the Minister said, if the price had not been adjusted, the total subsidy would have amounted to R220 million. How far can one go in this direction?

You are making a very boring speech. [Interjections.]

The next question which arises is this: What can one buy in this country for 20c which one cannot consume? Only bread!

During the past two weeks I have been going about among the public a little, and I want to say that I heard very few complaints or comments on the bread price. Our bread is really cheap. People are wasting it. I should like to quote Mr. Tony Bloom of Premier Milling in this connection. This also has a bearing on the whole question of food subsidies—

I agree with him on that point—

The hon. member for Mooi River will agree with me entirely when I agree with Mr. Bloom—

This is very important. We are already experiencing this—

This is very important. That fact of the matter is that the total amount of food subsidies has escalated to R221 million for 1980-’81, which is an increase of 28% in one year. Could one expect more without experiencing a certain distortion in the economy? I do not think so.

Mr. Tony Bloom went on to say—

However, we cannot have unlimited subsidies. That is the point. While I am dealing with this principle stated by Mr. Bloom, there is another matter which he also touched on. The same report went on to state—

I think this matter has been debated many times. If I remember correctly, organized commerce recommended, with the commencement of this tax, that no exceptions be made. The administration of a differentiated tax would become simply impossible. It would be wrong to exempt luxury food from tax. Let us take the bread situation. Should one exempt bread rolls from general sales tax? Surely that would be wrong. How is one ultimately going to differentiate and how is one going to administer this system. In any event, the South African general sales tax, compared to that in most other countries, is extremely low.

I notice that a terrific fuss is now being kicked up in the English-language Press over expected increases in the food prices. Therefore I want to state candidly that the sooner South Africa and its people realize that we are engaged in a struggle for survival in this country and that the physical presence of food is more important than what it costs, the better for us. Of course we can expect food prices to rise, as they are doing in every other country in the world, but where in the world is the food basket cheaper than in South Africa?

An important feature of this budget is that it places the onus for development on the private sector. When the Government decided to stimulate the economy it had two alternatives. In the first place it could have initiated major and extensive development schemes itself, or it could have allowed the private sector to come into its own, as is the policy of the Government in any case. Previous upturn phases in this country, and particularly the last one in the South African economy, were always characterized by massive spending by the authorities. The reason for this was apparently that the private sector of the South African economy did not have the capital means with which to initiate large-scale projects. That might have been the case, but now the situation is different.

The private sector possesses the skill and the necessary capital to bring about the upswing in the growth which we are waiting for. A large amount of liquidity is still idle and waiting for practical utilization. An excellent feature of this budget is consequently the incentive to the private sector and the curtailment of Government spending. As the hon. the Minister said in his Second Reading speech, this policy of curbing Government spending and simultaneously encouraging economic growth in the private sector, is in perfect harmony with the total economic strategy of the Government and with the initiative of the hon. the Prime Minister on the constellation of States in Southern Africa.

Then the hon. member for Yeoville claims that there is no total strategy in the budget. The hon. the Prime Minister himself stated this categorically when he addressed business leaders in the Carlton Hotel in Johannesburg on 22 November. On that occasion the hon. the Minister also said—

Now the hon. member for Yeoville is saying that we should consult the private sector. He is behind the times. He does not know what is happening. We are already consulting the private sector. This is the approach of this Government. The Government was and is prepared to listen to the private sector.

For a long time voices were raised from the Afrikaans Handelsinstituut and other organizations saying that the Government, through its tax structure, was imposing restrictions on private initiative. We listened to them. The hon. the Minister is now affording general tax relief. Companies are being afforded relief in the sense that the loan levy applicable to them is being abolished. This, together with the existing series of concessions, such as initial allowances, and investment, exporters, training, and housing allowances, etc., ought to enable the private sector to do the necessary investment.

But one should not consider this budget insulation. One should also examine it in the light of previous budgets—the past two budgets—in which provision was made at that stage already for quite a number of stimulatory measures. The question is whether these were used correctly. Mr. Aubrey Dickman, the chief economist of Anglo American, said—and I think the hon. member for Yeoville ought to know him—

That is what is so important, viz. a redistribution of income from the State to the private sector. This does not encourage inflation. It is merely a shifting of funds from the one sector to the other and one may accept the word of the economists for this. It is not inflationary. The tax concessions to the amount of R1 510 million, are waiting to be utilized. The ball is in the private sector’s court.

Although the public media and the businessmen have great praise for the budget, there is nevertheless a measure of anxiety over the inflation bogy and the availability of skilled manpower. The hon. member for Yeoville mentioned this. However, that hon. member now says that the hon. the Minister should have done far more to combat inflation. But he did not suggest what the hon. the Minister should have done. He did not tell us that the hon. the Minister should have done this, that or the other to combat inflation. He himself does not know what to do about inflation. When he presented his Second Reading speech, the hon. the Minister expressed his concern over the inflation situation. All of us are concerned about the inflation situation. President Carter is concerned about the inflation problem; and I think he is quite considerably concerned about it. At the same time, the hon. the Minister expressed his concern over the inflation situation, he also devoted attention to certain measures.

There are quite a number of highlights in this budget in so far as the inflation situation is concerned. The general fear of demand inflation which could arise as a result of excessive liquidity is counteracted by the fact that, as a result of the surplus on the balance of payments, there is considerable margin for the supplementation of stocks by importers. Consequently stock shortages should not arise soon, because there is still a considerable measure of surplus capacity that first has to be utilized.

I now wish to raise a very important matter here, viz. the full utilization of our capital assets. Every day it grieves me to see machinery and equipment to the value of millions of rands standing idle from 4.30 p.m. to 8 a.m. Why cannot this machinery work double shifts? In that case one would have a much better utilization of capital expenditure, and it would not be inflationary. In fact it would be anti-inflationary. We shall really have to do something about learning to work. It may also be argued that the fact that we have a single shift economy goes hand in hand with the manpower factor, which I mentioned a minute ago. But we shall have to look into this.

The other important highlight in connection with inflation is the strength of the rand which has already appreciated by an average of 7,3% against the other currencies since January 1979. This upward tendancy will continue even further. The abolition of the 7,5% surcharge will have an effect on prices. There is still discipline in regard to the course taken by the money supply. Moreover the relaxation of exchange control will also entail that excessive liquidity will be curbed. [Time expired.]

Mr. Speaker, the hon. member for Malmesbury probably took great pleasure in defending a budget such as this one and in warding off the attacks of the hon. member for Yeoville. It appears to me that he enjoyed it. The hon. member began his speech by wishing Dr. De Loor every success, and I want to associate myself with that. We also want to wish Dr. De Loor every success. He has occupied a very important position and he will henceforth occupy an even more important one. We wish to express the hope that he will be very successful. I think we are very fortunate in South Africa in having people of such an outstanding calibre to occupy positions such as these.

The hon. member asked what kind of society we had in mind if we were to adopt a critical attitude towards the budget introduced by the hon. the Minister. We shall spell out the attitude of the NRP to the hon. member in the course of the debate. He also spoke about the guidance which the NP has provided over the past 32 years. It is very easy to provide guidance if one is constantly changing one’s policy. Anyone can adapt himself to new circumstances.

Except Andries.

Yes. The hon. member also spoke about Providence which had made everything so easy for the NP. It seems to me that Providence is again persuading the NP to adapt itself, to take new steps to adapt itself to changed circumstances.

The hon. member also spoke about a total strategy. I want to tell him that it is urgently necessary in this country today that the NP should provide guidance once and for all. They must take up a definite standpoint and they must put that standpoint into practice. There is talk about change within the ranks of the NP. There is constant talk about change, but nothing is being done about it.

†I want to tell the hon. member that the greatest problem that we have today is that the NP in an attempt to implement change will not take the first step. The first step is always the most difficult. Once they have taken that first step, other things will flow from it, but the governing party is sitting absolutely hide-down. It cannot make a decision and carry it through. That is the problem which we have in South Africa today.

The hon. member for Malmesbury, as well as the hon. member for Yeoville, asked what this budget did for the man in the street and for the poor. I want to discuss the answer to this question this afternoon. I think this budget does what the hon. the Minister was attempting to do. How does one benefit the poor in an economy that has experienced a recession but where there are indications that things are beginning to move again? One benefit the poor by creating work opportunities. One benefits the poor by getting the economy moving again so that more and more people can be brought into the economy and become economically active. Given the society that we have—I refer particularly to the Black society with the extended family where each wage earner is somebody on whom other people depend—the quickest way of benefiting the entire community, particularly the poor, is to create work opportunities. I think that is what the hon. the Minister has tried to do, and I think it would be churlish if we as a party, we as a Parliament, did not recognize that there have been innovations and that the hon. the Minister has taken steps which are designed to give a new shape to the economy. I welcome most particularly the attitude that the hon. the Minister has adopted of limiting the growth in the Government sector to an absolute zero in real terms.

*In this connection I must tell the hon. member for Malmesbury that he had a very easy task today. However, I sympathized with my dear old friend, the hon. member for Schweizer-Reneke, who had to battle for so many years to defend other budgets. As against this, the hon. member for Malmesbury was in a more fortunate position.

†In the budget the hon. the Minister has attempted to limit State expenditure and he has exercised a measure of discipline which one can only say is the right step to control Government expenditure in favour of the private sector. I make no bones about it when I say that the private sector is the sector of the economy which is going to bring the Black population into the total system in South Africa, which is the absolute foundation for the total strategy everybody is talking about.

I want to say to the hon. the Minister that I welcome the changes he has proposed in the tax structure. There are certain things, however, which I find puzzling and which I want to bring to the attention of the hon. the Minister. Firstly, I want to refer to the question of tax on fringe benefits. One can attack the budget for being a rich man’s budget, but I prefer to regard the budget as one which gives an incentive to that small group of people who are the motivators in the economy, the people who will get things going. It is that category of person who benefits from fringe benefits. In cutting tax in an attempt to motivate further that small group of people and then to announce that on 1 March 1981 he will tax fringe benefits, the hon. the Minister will, as it appears to me, on 1 March 1981 simply be setting the clock back to today, because he will be taxing precisely the group of people who have attempted to avoid the heavy taxes which the Government has imposed in the past by resorting to fringe benefits. What is the purpose of the hon. the Minister’s exercise in cutting tax this year and then proposing to tax fringe benefits unless he has further cuts in tax rates in the next budget in mind? I ask this because there is no point whatsoever in cutting tax so as to give people an incentive to get them moving and producing and to make it more rewarding for them to produce and then to introduce the taxing of fringe benefits, unless he has in mind a cut in the tax rate, perhaps down to a maximum of 40% or something like that, in the next budget.

The hon. member for Yeoville mentioned the taxation of subscription shares in building societies. I am absolutely unable to understand the hon. the Minister’s motivation in this respect. After all, he does not need any further income from taxation. He is by this merely upsetting the entire building society movement. He is upsetting what has always been regarded as a totally legitimate investment, and he has done it in a most casual and off-hand manner and totally unmotivated.

With their consent?

No, not with their consent.

I think the hon. the Minister could have motivated the change and could have said a great deal more about it. Instead he simply announced that because it appeared that it was out of proportion to other tax-free concessions, he was going to cut it drastically. It is indeed a very severe cut. If a married couple where each one has invested R150 000 in subscription shares, is now reduced to a simple tax-paying unit of R50 000 a tremendous amount of money is going to be dumped on the market. What will be happening to that money in the hon. the Minister’s opinion? It may be that the building societies will be able to persuade people to leave their money in the building societies so that it can be used for legitimate purposes, but it may also be used for something else. It may perhaps be invested on the Stock Exchange or somewhere else. I cannot understand the hon. the Minister’s motivation and I think he should say a great deal more about it.

I want to ask the hon. the Minister another question. It seems to me a complete anomaly that the hon. the Minister, whose business it is to collect funds, tax revenue, for the State, should in the past have encouraged tax-free investments. I think it is time that we ask the Standing Committee on Taxation to have a look at the whole idea of tax-free investments. Why is it necessary to have tax-free investments at all? Something which to my mind would be far better and much easier to administer, would be a simple tax formula whereby taxes is levied at such a rate that the upper categories of taxpayers would not have to resort to this kind of investment. They resort to fringe benefits and tax-free investments only because they seek to avoid the unduly high level of taxation. The return on one’s investments is so limited by taxation that people look for any other sort of investment they can get in order to realize a return which is of real benefit to them. I think it will make a great deal of sense in our economy and in our country if we simply abolish the entire system of tax-free investments and the whole business of fringe benefits and instead levy tax at a realistic rate which will not be punitive to people in the upper tax brackets. I want to suggest to the hon. the Minister that he ought to have a look at that because I think it is something which may well be looked at and investigated from the point of view of incentives and maintaining incentives for people in the upper brackets.

The hon. the Minister said his policy was a policy of growth through strength. I think we have a reasonably strong currency and our economy is picking up in the face of world recession. The hon. member for Yeoville has dealt with this. I think we are extremely fortunate that we shall be the object of investment and interest from countries overseas because in the Western World we are the only country today which is still growing in a realistic manner. Our economic impetus is our greatest weapon. There is no doubt about it.

The full utilization of all our resources, including manpower, is a factor which the Government should do something about. The Government has not paid the necessary attention to it and it has not given any indication that it is really taking the basic decision to remove the restrictions which have been placed in the way of Black labour, in the way of training and in the way of Blacks benefiting from the free enterprise system. They must be involved in the free enterprise system because such involvement will ultimately be the greatest protection.

In order to give point to my argument, I move as a further amendment—

1. (1) to involve private enterprise in solving the Black housing problem;
2. (2) to adopt a realistic approach to the consolidation of the homelands;
3. (3) to provide real incentives for training Black manpower and thus involve Blacks in the free enterprise system;
4. (4) to provide a comprehensive programme for the adequate care of the aged; and
5. (5) to provide a real foundation for a total strategy designed to safeguard all South Africans from Communist aggression.”.

You have said nothing about the farmers.

The hon. member says I have said nothing about the farmers, but I want to assure him that I shall deal with them during the course of my speech.

The budget emphasizes and underlines one basic thing. It is time that everybody in this House should accept and acknowledge it and all the consequences which flow from it. I refer to the fact that the economy in South Africa is one and indivisible. There is no way in which we are going to be able to create separate economies and maintain separate systems of economic development in homelands or anywhere else. There is one system and one economy which is indivisible.

Within the relative gradations of White affluence and Black poverty there are certain areas that stand out as being areas of what I call great needs. They need urgent attention. Let me put it to the hon. the Minister that the quickest way to a realistic sharing of wealth in South Africa is through Black involvement in a free enterprise system. It is also the most efficient way of doing it. Everybody is talking about the sharing of wealth. I think the question of how we do it has become a real concept in South Africa. There are two schools of thought. The one is the socialist school which thinks it can be achieved by taxation. They feel that one can distribute wealth by social advantages coming through the hands of the Government. Like we, others too believe that by the involvement of the total population in the free enterprise system, one will most quickly and most efficiently integrate into the main stream of economic life that group of people who require help.

I have already said that so many times Government policy has stood in the way and still trembles today on the brink of change. Decisions need taking and obviously not only the hon. the Minister has to take decisions but the whole Cabinet, the whole of the party on the other side too has to be involved in taking the decisions. It is not just the hon. the Minister who knows what has to be done. He has to be one of the motivators, because this budget is the moving force, the motivating factor in the Government’s policy. Whatever that policy is, it is the budget which has to give it expression. The budget has to make it work. The budget provides the money to make it work. If the hon. the Minister sees anything in the policy of the Government which is hindering the free flow of economic strength here in South Africa, he of all hon. Minister is the number one who has to stand up to be counted and to point out the specific areas where change has to be effected. Before any other member of the Cabinet it is his prime responsibility.

I now wish to talk about one of the gravest problems we face in South Africa today. That is rural poverty in the homelands. I cannot stress this enough. The shop window of the Government is the homeland areas. We have there areas which are nothing but sinks of poverty.

Hear, hear!

There is no evidence in this budget that the Government is seeing this as a problem in which it is involved, a problem about which it has to do something and for which it has to provide funds of a realistic and meaningful order. I believe that the homeland situation, as it is today under the policy of the Government, which puts forward the homelands as the ultimate political solution between Black and White, has led to certain things. There are distortions of population. One finds there a mere subsistence living. The homelands have become sinks of poverty, as I have already said, and they are even today the most dubious in their status within South Africa and beyond our borders. I believe that consolidation into really viable political entities is an impossible myth. Surely, it is time that we should realize this. It is an absolutely impossible myth, even in the terms of current Government thinking.

What the Government has to do is to create real, viable and independent States which can participate in the constellation of States envisaged by the hon. the Prime Minister. I should like to put it to the hon. the Minister of Finance that this is now the last vestige of the late Dr. Verwoerd’s legacy to South Africa. I should say that Dr. Verwoerd’s legacy to South Africa is one of unmitigated disaster.

Hear, hear!

It is one of absolutely unmitigated disaster. The whole of his thinking is something which has turned out to be—as many realize—an impossible failure. It cannot be carried out in practical terms.

We must look at what we have done. Let us take, for instance, the sport policy of the Government. We all remember Dr. Verwoerd’s memorable speech at Loskop Dam. What has become of the sport policy he expounded there? Where is it today? It is gone. It will never come back again. It is gone, and every living person in South Africa blesses and thanks the Lord that that is so. [Interjections.] There may, however, be some hon. members on the Government side, especially those who used to belong to the ASB—the Andries, Sybrand and Braam party—who regret that that should ever have happened.

Loskop Dam has been enlarged and is now running over. You should rather talk about that. [Interjections.]

The hon. member for Malmesbury spoke about the homeland policy of the Government and said that homeland development should be funded by capital generated within the homelands. That was also Dr. Verwoerd’s big idea. Where has it gone? It is finished. It does not exist anymore. Even the whole idea of job reservation has gone overboard. There is not a single hon. member opposite who can deny this. It is gone. Why then are we still tied to this idea of consolidation as being the ultimate political solution between Black and White in South Africa? Why is the hon. the Minister providing millions upon millions of rand for this specific matter as though it is going to become a real political solution, which it is not going to become? There is no chance whatsoever that that is going to be the case. The costs that have to be borne are out of all proportion to the limited funds we have in South Africa for development. It is a totally inefficient way of using our resources. I think it is time the hon. the Minister should speak up about this and should tell us whether he believes this thing can possibly work and what the costs are going to be. He should tell us how he sees this developing in the future.

I should like to make a suggestion to the hon. the Minister. I should like to suggest to him that there is an alternative. There is another approach which will involve White South Africa and Black South Africa in a co-operation effort which can only be of the most immense benefit to every single person living in South Africa. I would suggest to the hon. the Minister that he complete the 1936 purchases and then recognize that as being as far as we can go or need to go at this stage in the consolidation process, because there are certain positive objectives in the Government’s policy. They have created separate Government areas which can be valuable links in the chain for setting up a federal-confederal approach. We cannot get away from it. Those are real Governments of real territories, governing real groups of people.

The positive alternative approach to consolidation is confederation which involves a real sharing in decision-making and in the wealth of South Africa. I would put it to the hon. the Minister that there is a quid pro quo. Rather use the millions of rand spent on buying White-owned farms, in the homeland areas in a programme of real rural reform in order to create viable farming units which will give those areas a real economic base, because they have got no economic base. It is not enough for the hon. the Minister or any hon. member on the other side to say that it is not our concern and that it is a matter for the homeland Governments. The reason why we have got to care is that those areas are ultimately going to remain part of the economic system in South Africa and we cannot allow them to remain poverty-stricken. Surely, money which is being used today to buy White-owned farms and money which is used in moving Black populations to achieve ephemeral ideals would be better spent on sheer, practical, day-to-day objectives after negotiations through the tribal system which pertains in the homeland areas, through the chiefs and headmen, in order to establish areas of secure tenure, whether it be by means of quitrent or however, so that Black people can farm those areas, have security of tenure for their properties and generate the capital and wealth which those areas so badly need. I think it is terribly important that we should realize that a fundamental change is required in the attitude of Black people with regard to ground. This is what is so important. We cannot continue any longer buying ground and handing it over to Black homelands unless it is going to be used on the totally different basis of a totally different mental attitude. I believe it is far easier for us as a Government, as White people, in consultation with the rulers and the people with authority in the homeland areas to initiate a programme of rural reform in those areas to eliminate poverty and to keep as many of those people there as possible in order to make them a viable economic unit within certain limits while at the same time they will still share in the overall wealth of South Africa as part of a confederal area. I want to make it quite clear that together with that goes administrative consolidation if necessary, viz. rounding off corners and straightening out boundaries and this kind of thing, and the ability of Black people to buy farms in White areas should they be farmers who wish to farm in those areas.

You are coming right.

Mr. Speaker, we have said this for years. [Interjections.] The whole of the Natal Agricultural Union has been involved in a debate on this matter over a long time. [Interjections.]

I want to make the point that consolidation, as I see it, is already a failure. The hon. the Minister, as a Natal man, will know—and I know that in his heart of hearts he agrees with me—that the consolidation of kwaZulu into one or even two viable areas in Natal is impossible. I want to say straight out to the hon. the Minister that worse things can happen to the people of Natal than to have a condominium through which the NRP and Inkatha through Chief Buthelezi administer the province of Natal. There are a lot worse things than that which could happen. It might well be that in that sort of situation a new direction with new co-operation can be given to South Africa, which this country so dearly needs.

If the Nats got in there would be pandemonium.

The budget is a social instrument I want to talk about the attitude of the hon. the Minister towards the redistribution of wealth, and I would like to talk just for a moment about the gold tax formula. I put it to the hon. the Minister that the formula is based upon certain variables and it is designed to give the hon. the Ministers department a certain amount of income. At any normal time it would operate at a reasonable level and draw, from the Government mining houses, a reasonable amount of funds which would be sufficient for the needs of the State. In the situation we are in now, however, let me suggest that a formula that might have worked at a price of $35 per ounce, does not necessarily work at the current price of c5q400, $480 or $530 per ounce. What we are getting is a situation in which the tax rendered or produced by this formula is, in fact, far more than the State needs. Then the question of the redistribution of wealth comes in. Is it still right to continue creaming off an amount of money in excess of what the Government wants? I quote from last year’s report what was said by the chairman of Anglo-American Corporation:

Of some R155 million accruing to the Anglo-American Corporation from the Free State mines …

That was last year—

In the situation we found ourselves in last year, and in previous years, that might well have been necessary, but let me suggest that there might well be a cut-off point beyond which the State does not need to go, and that that money might be left, for development purposes or something like that, in the hands of the mining companies themselves, because I do not see it as being in the interests of the State, the Government or the Ministers specifically, to have excess funds coming in. This is only a temptation to spend the money this way or that way, and this would militate against what we are trying to get at, and that is to have private enterprise as the dominant element in our society.

The hon. member for Malmesbury raised the question of the bread price. I have gone on record as saying that I would have liked to have seen the total increase in the bread price subsidized for this year. The hon. the Minister has said that an amount of R224 million would be involved. So that might well be a pipe-dream, I do not know. If it is going to cost us R224 million, it might be too much. I agree with the hon. member for Malmesbury that the farmers have to get a realistic price.

Hear, hear!

That came just in time! I have lodged earlier pleas, and I do so again, for those hon. Ministers to put their heads together and identify input costs that can be reduced. Last year, in this House, I moved that the 7½% surcharge on imported tractors should be abolished, and every hon. member on that side voted against it.

How did the hon. the Minister of Agriculture vote?

He was on my side, but he did not say a word. I knew he was on my side, but he would not say anything. Now, however, the hon. the Minister has abolished that surcharge.

He should have done it last year.

Why did he not do it last year? In this House I moved an amendment to abolish it in order to benefit the farmers. [Interjections.] The point I want to make is that I gave that as an instance of input costs being reduced. I agree with the hon. member for Malmesbury that there is no way for us to subsidize the total increase in the maize price and the bread price, because to do that would cost us far too much money. What we have to do, however, is to look at this from the input side, and I am absolutely convinced that there is a very wide field in which the hon. the Minister can make moves to bring down the input costs to the farming community and thereby reduce the food price. What I find absolutely incredible, however, is that there should have been a proposal from the hon. the Minister to cut the maize subsidy by R10 million. Then, by an additional estimate, he seeks to restore the cut. The hon. the Minister did not motivate this and the hon. the Minister of Agriculture has not said a word about it. In a situation such as the one in which we find ourselves now, how can the hon. the Minister cut R10 million from the maize subsidy? It is unthinkable, it is absolutely ludicrous, for a Minister to take action of that sort. Then I am only referring to the present price of maize. The hon. the Minister has what the price of maize is going to be next season under his hat. I think I have a pretty shrewd idea what it is going to be too.

Take a guess.

I think the hon. the Minister is going to make the price of maize R120 per ton. [Interjections.] That is what I think. We shall, however, see.

The hon. the Minister of Finance has cut taxes in order to give members of the public more money in their pockets. Why, however, does he not cut the input cost to farmers in order to allow the farmers more cash in their pockets and to benefit the public across the board? Why does he not do this by creating a situation in which the farmers can maximize the cut by way of the efficiency with which they produce?

The hon. the Minister must not wait until next year.

He must do it now.

Mr. Speaker … [Time expired.]

Mr. Speaker, it is interesting that the first two Opposition speakers on finance said virtually nothing about finance as such but only tried to play politics. I find it interesting that the hon. member for Mooi River of all people referred to the problem in the NP, because I think that if there is a party that really has problems, it is the NRP. Look at where their members are sitting. Where is the hon. member for Pietermaritzburg South sitting? Where is the hon. member for East London North sitting? That party has been reduced to a small portion of Natal. I want to predict today that they will disappear completely from the political scene at the next election. The hon. member for Mooi River has already moved from Mooi River. I understand he is staying in the Cape and wants to go fishing. I want to predict that the hon. member for Durban Point and the hon. member for Durban Central will go on pension. The younger members will have to decide one way or the other since they do not qualify for a pension at this stage. Most probably they will go either to the Progs or disappear completely from the political scene.

You are too dumb to be stupid.

I also find it interesting that the hon. member for Mooi River anticipated the question of fringe benefits. This is not under discussion this year. I want to quote to him what Dr. Anton Rupert said—after all, he is a person of whom one can take notice. I quote from Die Volksblad of 10 September 1979—

He said—

As I say, we are, however, anticipating this. Possibly the hon. member will not even be here next year to debate this matter with us.

Furthermore it is also interesting to me that …

Do you agree or not?

I know that the hon. member advocates the abolition of the surcharge every year. The hon. the Minister abolished it this year, but what does the hon. member do? He does not say thank you. He reproaches the Minister for not having done so last year.

That is correct.

I want to say with due respect that the official Opposition’s amendment is ridiculous. If the hon. member for Yeoville understood the budget he would see that what his party is asking for in its amendment has already been achieved by the budget, as I shall indicate in my speech. The hon. member also referred to inflation and I shall come back to that in my speech too.

There is probably no one in this country who has not benefited from the budget, something which seldom happens. When the budget is viewed as a whole, one realizes that virtually all groups of society will benefit from it. This applies not only to the payers of income tax and loan levies, pensioners, farmers, the aged, public servants, home owners and small businessmen but to virtually all consumers. The hon. the Minister not only announced sweeping tax reforms but also put his hand deep into his pocket to give everyone his share. This is really a golden budget such as South Africa has probably never previously experienced, and is unsurpassed in South African history. I doubt whether any country in the world would be in a position to give comparable relief to its taxpayers in the economic climate of today.

I should like to summarize the principal characteristics of this budget as follows: A record amount of R2 346 million for defence purposes—an increase of 13%; the abolition of the loan levy in respect of individuals and companies which will cost the State R651 million; sweeping reforms and relief in respect of income tax amounting to R600 million, with an average reduction of approximately 30%; tax relief of R55 million to Blacks; a reduction in estate duty; the revision of transfer duties; the total abolition of the surcharge on imports; relief to the value of R28 million to working married women; relief to employers providing housing; the deduction for the physically disabled increased and beneficial adjustments made in respect of lump-sum payments. In other words, this means total tax concessions of R1 560 million to all taxpayers in the 1980-’81 tax year. However, the hon. the Minister went further and effected improvements amounting to R480 million in the salaries and conditions of service of all public servants, the largest amount that has yet been allocated for this purpose in a South African budget. In addition, he also increased social and civil pensions by amounts of R55 million and R40 million, respectively; and increased food subsidies by 28,5%—from R172 million to R221 million; and R225 million has been appropriated for the National Housing Fund, an increase of 20,2%. There are also special benefits for Blacks such as an amount for low interest rate loans of R12 million, and there is the further amount of R4 million to improve housing facilities and living conditions in the Black urban areas. There is also an increase of 33% in the expenditure on education and training, and the hon. member for Yeoville must take note of this. A further R25 million is being allocated to homeland development, and now the hon. member for Mooi River must listen to this. R89 million is being allocated to the consolidation of the Black States—an increase of 41%. R22 million is being allocated to financial aid to border farmers and R10 million for the assistance of small entrepreneurs, as well as a provisional amount of R12 million for local authorities. These then are the benefits contained in this budget.

The most sensitive announcement was probably the one about the increased price of bread. The hon. member for Malmesbury and other hon. members have already referred to this. Of course, such increases are never popular. Although the hon. the Minister made out a very strong case as to why this increase was inevitable, the official Opposition in particular and its Press and hangers-on, for the want of other points of criticism, tried to make capital out of this announcement by stating, inter alia, that the increase in the price of bread was shocking, and that the effect this price rise would have on the average Black household was indescribable. The Rand Daily Mail even went so far as to say in a report—

According to The Argus of 27 March 1980, the Rev. Hendrickse said, and I quote—

Can you believe it! To make such a fuss about the price of bread in such an emotional way is to try to get in a few low political blows. After all, the Government has not only taken; it has given much more, as I have already indicated here. However, what are the facts in connection with the price of bread? The hon. member for Malmesbury has already elaborated on this but I want to refer to another point of view. The bread subsidy for this year has been increased by R51 million. As the hon. member has already rightly said, the price of bread has been kept constant for two years now and an amount of R220 million would be necessary to continue to keep it constant this year.

The price of brown bread is now being subsidized by 14 cents per loaf, i.e. 41% of the price of brown bread is at present being subsidized. Do those people who are now so shocked and indignant want us to subsidize the price of brown bread completely? Income tax for Blacks has been lowered by 20% and the ceiling for the payment of taxes by Blacks has been increased considerably to R1 800 per annum. The amounts that are being appropriated for the improvement of the quality of life of the Black man, as I have already indicated, total to a considerable sum; in fact, it is more than enough to make rightist White politicians complain that once again too much is being done for the Blacks. However, let us analyse this on the basis of a report in The Cape Times of 27 March 1980, to see what the actual effect of this increased price of bread will be in practice. I quote—

In other words, the average Black family consisting of six persons will have to pay R1,45 more per month for brown bread. Therefore, in actual fact, the increased price of bread means that each person will have to pay 25 cents per month more for his bread requirements. In the light of this analysis the whole fuss and palaver about the increase in the price of bread has been one of the most miserable failures of the official Opposition and one of the biggest farces ever to have taken place.

However, a budget is not simply an exercise in accounting to balance expenditure and revenue. It is one of the most important instruments to regulate a country’s economy. Thus it is important to note the effect this budget will have on the country’s economy. The events of the past year, in conjunction with the favourable effect of the financial policy of growth from strength, have not only increased the underlying strength of the South African economy but have also brought about an accelerated economic growth. However, there is a need for an accelerated and constant increase in real economic activities, for example, production, the provision of employment and investment. That is why the fundamental goal of our economic policy should be geared to ensuring that South Africa will be in a position to utilize its full growth potential in 1980 by means of a policy of greater and accelerated growth from greater strength. While the whole world has resigned itself to the fact that it is faced by an inevitable recession, the hon. the Minister has presented us with a growth budget in which a special opportunity has been created for the private sector. It is true that this is to a large extent the result of the increase in the price of gold but I do maintain however, that the Government’s systematic, careful policy over the past years has provided a firm foundation which can also be built on in the future. This budget is not only a step in the direction of the ideal system of taxation but also an attempt to ensure constant growth and a sound South African economy. That is why this growth is not being stimulated by large-scale public spending but by the creation of opportunities for the private sector by means of which the Government has re-affirmed its confidence in private enterprise. The hon. the Minister will, by means of his seven-point plan, curb inflation which will naturally increase in a period of growth. Since the ball is principally in the court of private enterprise, the key word remains productivity, on which I placed special emphasis in my speech during the part appropriation debate. For the benefit of the hon. member for Yeoville in particular, I want now to quote what experts in the field of inflation are saying at this stage. I quote from the Sunday Times of 13 January 1980—

They then go on to give us the reasons for this—

What does Prof. J. A. Lombard, Professor of Economics at the University of Pretoria say? I quote from Rapport of 30 March 1980 in which he is reported as having said the following—

This is identical to what I quoted from the Sunday Times.

With an additional amount of more than R1 500 million in the taxpayer’s pocket after this budget, businessmen and industrialists have to consider possible extensions and investments so that they can capitalize fully on the anticipated revival in consumer spending. This means golden opportunities for South African commerce and industry on the basis of increased volume and turnover. The significance of private consumer spending lies in the fact that it is the most important spending component of the gross domestic product. Thus last year’s private consumer spending amounted to R22 055 000 which constituted 55% of the spending on the gross domestic product. Owing to its dominating influence the course of private consumer spending consequently dictates to a large extent the course of the overall economy. If private consumption increases strongly, this leads not only to a greater demand for end products, services and goods, but also increasingly to a greater demand for intermediate goods and services. It is obvious that this can be a strong growth stimulus because industrialists will be in a position to install additional capacity in such a climate.

Over the past few years South Africa’s economy has made a poor showing, principally owing to slow private consumer spending, and so the past three years have shown an annual increase of only 1,3% which is only approximately half of the increase in the population growth. There is no doubt that an increase in the real take-home income of households is at present an important precondition before an increase in the volume of private consumer spending can be anticipated. The Government has also been fully aware of this and that is why this positive action has followed by means of which the private consumer will now be enabled to spend more. However, at the same time I want to warn that this should be planned spending in order to avoid sudden demand inflation. The Government itself sets the example of circumspection.

The thought on which I want to conclude is that the axis around which everything will revolve principally, during this revival phase is the prosperity that can be achieved by curbing the country’s price rises. It cannot be denied that South Africa will experience problems if we allow a situation to arise in which inflation is encouraged as a result of a stronger demand for goods and services, while the problem continues to be aggravated by cost pressure factors. In my opinion the major challenge facing us is to avoid or neutralize to a large extent such a dangerous state of affairs. With the announcement of his seven-point plan to curb inflation the hon. the Minister has demonstrated that the chief goal of the Government’s economic policy is to regard the curbing of the inflation rate as being just as important as the promotion of production, the provision of employment and investment. For that reason I believe that economic growth will rise above these problems and that we can face this year with the greatest confidence.

Mr. Speaker, the hon. member for Smithfield made certain statements about the budget. In the course of my speech I shall refer to those statements.

The hon. member dealt with the price of bread as well. We agree with the hon. member that the Government should do everything possible to strengthen private enterprise.

†The hon. member for Mooi River queried the reduction on subscription shares from R150 000 to R50 000. I understood the hon. member for Florida to have interjected that it was done in agreement with the Association of Building Societies. I want to tell the hon. member for Florida that he is mistaken. The Association of Building Societies is totally opposed to this reduction. I want to quote to him from a statement by the president of the Association of Building Societies, a statement reported by the Evening Post of 2 April 1980 as follows—

He then said that of course it would put pressure on building society funds and perhaps also increase the mortgage rates. I therefore think that there is no doubt about it that the Association of Building Societies is most unhappy about the situation. I hope the hon. the Minister will still consult them in regard to this matter.

The hon. member for Yeoville used phrases like “the hon. the Minister should be ashamed”, “the budget is a failure” and “bad planning”. He must have spoken with his tongue in his cheek about the budget planning, because according to the Financial Mail dated 21 March 1980 he is at present chairing a PFP commission on comprehensive economic planning that expects to take 18 months before coming up with the answers. Despite the urgency of the situation the PFP is hobbling along without, according to this article, a comprehensive economic policy.

What is your policy?

Our policy is well known. We state it in every debate. [Interjections.] The delay of 18 months is obviously due to the fact that the PFP has a great deal of dissension in its own ranks.

The hon. member for Yeoville quite correctly referred to the question of law and order. I think it is important that we in Parliament should know where the PFP, as the official Opposition, stands in regard to law and order. We should also like to know who actually controls the PFP. That is the most important question. We have seen the role the Marxists have played in Africa. We have seen the role the Russians have played in Afghanistan. The hon. member for Houghton believes in the concept that a Communist Party can operate in South Africa provided it operates within the law. It is obvious, however, that in a short space of time it will create chaos.

I should like to ask the hon. member for Pinelands whether he agrees with the hon. member for Houghton in connection with a Communist Party operating within the law in South Africa.

Go on with your speech. I shall make my own speech. [Interjections.]

I believe we may assume that the hon. member for Pinelands agrees with the hon. member for Houghton, or else he should deny it.

You are a political scavenger.

It seems as though the hon. member for Pinelands agrees with the hon. member for Houghton. [Interjections.] I want to ask the hon. member for Pinelands a direct question. Will he sign a petition for the release of Nelson Mandela?

Will you sign it?

I shall not sign it. [Interjections.] The hon. member for Pinelands does not want to answer my question, but the answer is quite obvious. [Interjections.] I should also like to know whether the hon. member for Houghton will sign such a petition.

Sure, she would.

The hon. member for Houghton will also sign it. [Interjections.]

And you say you will not sign it?

No, I will not sign it. [Interjections.]

Order! Did the hon. member for Pinelands say the hon. member for Walmer was a political scavenger?

Yes, Sir.

The hon. member must withdraw that.

Mr. Speaker, I withdraw it. [Interjections.]

But the hon. member for Walmer is a boring little man. [Interjections.]

Mr. Speaker, the hon. member for Parktown has found it so boring here that he is even planning to leave this House soon. [Interjections.]

Order!

In the past the hon. member for Houghton used to welcome President Carter’s interference in the domestic affairs of South Africa. Does the hon. member for Pinelands support her in this? Does he agree with the hon. member for Houghton that President Carter should interfere in the domestic affairs of South Africa?

Mind your own business. [Interjections.]

Mr. Speaker, that is the policy of the PFP: “Mind your own business.” [Interjections.] In order to establish what the philosophy of the PFP really is I should like to ask the hon. member for Bezuidenhout whether he supports the concept of the Communist Party operating in South Africa within the limits of the law. I should also like to know whether he will sign a petition for the release of Nelson Mandela. The hon. member for Bezuidenhout will not agree with this philosophy of the hon. member for Houghton or with that of the hon. member for Pinelands. That is why he was chopped at last year’s congress of his party. He was actually chopped by the hon. member for Pinelands. [Interjections.] The hon. member for Yeoville was chopped for exactly the same reason.

Is this your application speech to the NP?

Mr. Speaker, the hon. member for East London North should not talk. He is a man who resigned from his party and undertook to resign his seat. He is, however, still sitting here in this House. [Interjections.] The hon. member for Bezuidenhout and the hon. member for Yeoville gave the PFP a cloack of respectability in the eyes of many of the less extreme voters during the last election. Now that those two hon. members have served their purpose they are both axed from the hierarchy of the PFP.

Why do you not speak Afrikaans? You will then not sound so silly.

Therefore, in that respect the Houghton clique still leads the PFP. [Interjections.] Hon. members of the PFP are actually experts in in-fighting, and the fact that the hon. member for Bezuidenhout was the spiritual father of the young Turks brought about that once they were expelled from the old United Party he managed with some very fancy footwork to dissociate himself from them. That is why it is so surprising that the hon. member for Bezuidenhout and the hon. member for Yeoville, with all their experience in in-fighting, allowed themselves to be ousted by the PFP hierarchy.

Speaking about law and order I should like to make a special appeal to the hon. the Minister of Police, who is in the House now. I should like him to see to it that police reinforcements are provided in Walmer, because there is an enormous upsurge in the crime rate in that area. This is a matter of extreme urgency.

Before dealing with the budget itself …

Oh, you are going to deal with that after all.

Before dealing with the budget itself it is interesting to look at the man behind the budget. In the 1976 budget the general view was that the hon. the Minister had shown political courage, and subsequent budgets revealed that he knew where he was going and how he intended to achieve his goals. There is no doubt that we are fortunate in having a man of his calibre in the driver’s seat. [Interjections.] Hon. members of the PFP obviously do not agree with me, judged by the remarks they have made.

They do not count in any event.

It is interesting to note what a newspaper, which is very closely associated with the PFP, has to say, a newspaper which can rightly be termed an anti-Government newspaper. I quote from the Sunday Times of 13 April 1980, from an article by Stephen Orpen. This is what he says—

Then he says—

The Financial Mail of 28 March 1980 is critical of certain aspects of the budget. Bearing in mind that no one can claim that the Financial Mail is a pro-Government publication, it should be placed on record what they had to say about the hon. the Minister of Finance—

The Financial Mail commended him for showing great political courage. The quotation continues—

We have often disagreed with the hon. the Minister in the past and no doubt will often do so in the future. However, wherever one meets people in commerce and industry they are of one mind that we have a very competent Minister of Finance. I make that specific point because there are hon. members who have made personal attacks on him in the past in a manner which leaves me in no doubt that they begrudge the hon. the Minister his success. We congratulate the hon. the Minister on being awarded an honorary doctorate by the finest university in South Africa, namely the University of Port Elizabeth. The hon. the Minister is served by most outstanding officials and I want to tell him that it is at all times a pleasure to deal with the officials of his department. We take this opportunity to welcome Dr. De Loor to the post of Director-General and wish him every success in his most important post. The hon. the Minister is fortunate in having a man of the calibre of Dr. De Loor at his right hand. Mr. Du Plessis has moved from the Treasury to become Director-General of another department and we also wish him well. We will miss his regular appearances before us in the Select Committee on Public Accounts but no doubt we will have him before us in the Select Committee again when he accounts for the doings of his new department. We welcome the fact that IMF officials have presented us with a report which reflects the health of the South African economy.

There are approximately five million children of all races at school in South Africa. That is an enormous number of children and is equal to the total population of Denmark. Approximately only 20% are White, and it requires an enormous expenditure on our infrastructure of schools, hostels, colleges, technical schools, universities, etc., to ensure that all the children realize their full potential. I believe that this budget is in many respects laying the foundation for improving the quality of life of all South Africans. In spending a vast amount on the infrastructure to ensure the education of five million children it must be accepted that the logical consequence of Government policy is to ensure that the quality of life of, and the opportunities in every respect for these people will be tremendously improved.

A constituent of mine remarked that the hon. the Minister of Finance will become known as the Marie Antoinette of South African politics. She said, “Give the people cake.” The hon. the Minister gave many people cake when they actually wanted bread.

Hallo, Gorgeous!

We welcome all of the many concessions, but we are disappointed with certain aspects, e.g. the 4c increase in the price of brown bread. In view of the vast concessions given by the hon. the Minister we would like to appeal to all the people who have people in their employ who cannot afford the increase in the price of bread to give those people a specific increase of 84c per week, which means one is subsidizing the purchase of three loaves of brown bread per day at the increased price.

In view of the importance of our exports and in order to encourage expansion in industry we were hoping for further incentives to exporters. We understand that the exporters have made further representations to the hon. the Minister and we hope that the hon. the Minister will seriously consider giving further concessions to the exporters of South Africa because the hon. the Minister obviously knows the value of the foreign exchange which they earn for South Africa.

We are pleased to see from the newspaper reports that we are going to market gold at our convenience. It may be remembered that in the part appropriation debate we said that we felt that the present marketing of the Kruger rand should continue but our new gold should be kept off the market as far as possible. We trust that the hon. the Minister will listen to a few suggestions and perhaps consider them.

In the first place, when we need liquidity can we not pledge some gold as collateral for medium-term loans or, alternatively, where institutions abroad and locally are over-liquid, is it not worth forming a consortium and allowing them on the formula basis to buy gold? The Government must, in turn, have the option to buy it back over longer or shorter periods. If the consortium received a reasonable return on the money invested, the effect would be that we would not have to sell our life-blood on the open market unless the price suited us. The International Monetary Fund will obviously stop selling gold during 1980, Russia is selling gold directly to the oil-rich countries and America will not rush into sales in the very near future.

This leaves South Africa as the only major supplier of new gold to the market, and we believe that that free market should be kept as short as possible of new South African gold. The revenue from gold was R1 630 million more than was estimated for the past year. It is obvious that the hon. the Minister must estimate on the conservative side, because if he over-estimates he will be spending money that he does not have. We mentioned, in a previous debate, that if we must be ultraconservative we would opt for $350 per ounce, but if we were merely being conservative we would opt for $400 per ounce on which to base the budget. We think that the hon. the Minister will probably be ultraconservative and go for the $350 per ounce on which he has based the budget. We would like him to give us a hint, however, and tell us if we are far off the mark, or if he cannot give us a hint, can he not tell us approximately what the position is in that regard?

There has been a tendency for private business enterprise not to keep pace with its share of the gross domestic fixed investment. In 1946 private business enterprise was responsible for 63% of the gross domestic fixed investment. This declined gradually to 46% in 1977. The share of public authorities and public corporations, taken together, increased from 37% in 1946 to 54% in 1977. This is a disturbing trend, and that is why we welcome the commitment to the free-enterprise system and small business, as set out in the budget. The Government has provisionally set aside a sum of R10 million, but I hope that the Government will realize that it has hopelessly underestimated. We should like to ask the hon. the Minister to have this matter investigated in depth, in consultation with the FCI, the IDC, Assocom, the Handelsinstituut and other bodies. This is a matter of the utmost importance when one bears in mind that it appears that 90% of individual concerns in Austria, Belgium, Denmark, Japan, Norway, Switzerland and Sweden employ fewer than 50 persons. 95% of concerns in the USA can be called small concerns although they are responsible for 43% of the gross national product of the USA. It can therefore be seen how important and urgent this investigation in depth will be as far as South Africa is concerned, and I should therefore like to appeal to the hon. the Minister to seriously consider having this investigation conducted.

The placing of Sasol shares was a step in the right direction, and the Government should encourage other corporations and departments to follow the same trend. In the placing of Sasol shares there was, however, in my view, one mistake made. The placing for the public should have been done first, and then the placing for the institutions, because the institutions got a far better deal than did the man in the street. If the placing for the public had been done first, the institutions could have subscribed to the balance.

The amount allocated for housing is R225,2 million. That is 20,2% more than last year. If one takes cost escalations into account, however, one sees that the extra 20% is virtually absorbed in its entirety. In addition we did have, last year, the benefit of the special R250 million. This has now fallen away. This means that unless the hon. the Minister comes to terms with the building society movement, we would be spending less money and building fewer houses this year. The Government must guarantee that portion of the mortgage burden of the National Housing Fund, and the building society movement, upon receipt of a guarantee, should be able to advance substantial funds to the lower income groups. If the hon. the Minister can succeed in releasing the funds tied up in the National Housing Fund by guaranteeing the loans to the building societies, an enormous amount of money would be released again and then we would be able to spend far more money on housing than we would otherwise have been able to spend. Housing is absolutely vital. Last year, in the budget debate, I dealt with the absolute necessity of clearing the backlog. I estimated then that we would need R1 000 million, and I should like the hon. the Minister to consider approaching a consortium of lenders, overseas and locally, to lend this money to us. This amount is required for Black, Coloured and Indian housing and would draw no adverse criticism as it would be used to improve the quality of life for all races if this money were advanced to South Africa in the form of a foreign or local loan.

We welcome the relaxation of the means test and the increase to pensioners. We will have to agree to differ as we felt that the hon. the Minister should have done better in regard to both. We are still perturbed about people on fixed incomes. Incomes from building society movements and from participation bond schemes have dropped. In addition, on the reduced incomes they are faced with ever increasing costs. The position of these people must be alleviated by, for example, if a means limit is set, giving them exemption from paying rates on their homes or alternatively giving them a subsidy towards their flats as was done a few years ago. In fact, the Department of Community Development used to give a 2% subsidy in regard to certain homes. That subsidy was subsequently suspended. I think it used to cost the Government something like R15 million per year. I suggest this should also be done in respect of those people living in flats for whom the means test has been set.

We welcome the R12 million set aside in respect of decisions that may be taken flowing from the Committee of Inquiry into the Finances of Local Authorities. This is a most urgent matter, as ever increasing rates burden ratepayers to such an extent that the position has become absolutely impossible. I do not want to anticipate the findings of the committee, but if the Government and the provinces paid rates on the buildings owned by them throughout South Africa, this would certainly be a major alleviation to local authorities. I urge the hon. the Minister to ensure that local authorities are assisted as a matter of urgency. Some are presently considering their budgets and they are talking about raises in the rates income that will make it impossible for the ordinary person owning a house to continue in that house. It will be remembered that year after year we have asked the hon. the Minister to remove the surcharge. The hon. the Minister did reduce it and this year removed it at a cost of R260 million. It seems that all come to those who wait if they are prepared to wait long enough.

I did reduce it though.

Yes, I know. It was reduced from 15 to 12½ and then to 7½, but we waited a long time to have it completely eliminated. We hope, naturally, that the effects of this will be passed on to the consumer.

We welcome all the efforts to reduce the wage gap and the increases to the Public Service. We naturally hope that this will serve as an incentive to even greater productivity. Whilst we do not know what the exact increases are, we sincerely hope that they will stop resignations from the Public Service in certain very vital sectors where up till now we have had many resignations.

Inflation and unemployment are two particular problems to which the hon. the Minister and his department will have to give very close attention. Our present rate of inflation is far too high. We hope that the investigation we have suggested into the establishment of small business enterprises will lead to the position being alleviated as regards unemployment.

South Africa, together with other States, must take the lead in Southern Africa to establish an African economic community in Africa. The economic community can vastly improve the situation in the entire Southern Africa. If the States of Africa were to work together collectively, each individual State would improve its own economic position. Africa has far greater needs than military hardware. It has needs in the fields of health services, infrastructure, economic development, agricultural development, transportation, food, etc. Private enterprise has an enormous role to play and if the West wishes to retain its sphere of influence in this continent it will encourage and assist in this development.

The main problem is to retain our political stability. If all hearts beat as one in the interests of South Africa, no external force can ever divide us and South Africa can go into the ’80s in the knowledge that there is a place in the sun for all its people. The White people have to find each other as a matter of urgency, as it is very difficult to reach an accommodation with other groups if we are still squabbling amongst ourselves. We have special situations in Rhodesia, Angola, South West Africa, Mozambique, etc. Young South Africans have made the supreme sacrifice. Is it too much to ask that their sacrifice should not be in vain? The hon. the Prime Minister has given a lead and gained approval last year for his direction amongst business leaders, the majority of whom are not Government supporters.

The Opposition are either going to have an important role to play or they will find they have no role at all. Every important decision by political parties must be taken on merit and not merely as part of some cheap political stunt. The SAP has assessed the budget on the merits of the situation and have come to the conclusion that whilst it is a budget we could in a very large measure support, there are matters that perturb us, matters which I have mentioned already, and in the circumstances I should like to move as a further amendment—

1. (1) investigate further ways and means of increasing the share of private business enterprise in the gross domestic fixed investment;
2. (2) take more active steps to combat inflation and will grant the further subsidies required to ensure that essential foodstuffs are within the reach of all South Africans;
3. (3) tax married women separately and thereby promote productivity;
4. (4) investigate in depth ways and means of further promoting exports of South African products; and
5. (5) undertake a special investigation

Mr. Speaker, I have a great deal of appreciation for much of what the hon. member for Walmer said here this afternoon.

With enemies like him you do not need friends.

The hon. member put some very relevant questions to the PFP and that is why such noises are coming from that side. I think this debate gives the official Opposition an opportunity to answer these questions in full, because I think South Africa wants to know where it stands in regard to the official Opposition on some of these topical questions. For instance, there is the question of where they stand with regard to certain organizations in South Africa, organizations which in my opinion contain subversive elements. I think this debate gives the official Opposition an opportunity to furnish a sound reply to this question. My appreciation also goes to the hon. member for Walmer for the words of appreciation that he expressed towards the hon. the Prime Minister. This is greatly appreciated.

Unfortunately, the hon. member for Yeoville is not here now, but I do not think it is necessary for him to reply to this now. There is ample opportunity for him to reply to it in due course. He is considered to be something of a financial authority. What really amazed me this afternoon, is that in such an important budget as this, this hon. member did not devote even half of his time to discussing the financial aspects of this budget. In my opinion, the matters that he did in fact mention, do not touch on more than one or two of the basic, cardinal premises with regard to financing in South Africa. I do not know whether this is due to the fact that the hon. member became somewhat flurried due to the criticism levelled at him in recent times because it seems to me that the hon. member got the fright of his life when the hon. the Minister of Finance took him to task in the Third Reading of the Part Appropriation Bill on his standpoints on the so-called “social democracy”. Following that, we had the hysterical reaction to this matter in the Financial Mail. However, what bothers me, is that the hon. member did not come to the cardinal premises of the budget. Like everything else in the world, no budget is perfect. This budget is not perfect either. However, if I listen to the speeches which were made here this afternoon and to the criticism levelled by the Opposition, then one must say that this budget has to be practically perfect.

If we really want to conduct a meaningful debate on this budget, instead of trying to steal a political march upon one another and to question a few of the cardinal premises, I should say that the first aspect—and the hon. member for Walmer has referred to it for the first time now—is the gold price basis which the hon. the Minister of Finance used to determine this budget. We are not going to tell him this, but I think that the hon. member for Yeoville could at least have speculated about it a little if he had really wanted to debate the principle and points of departure of this budget in a meaningful way. Secondly, since everyone is emphasizing free enterprise now, it could have been asked what relationship exists between the funds that were allocated for essential expenditure and services of the State within the framework of its functions and the funds that were allocated for purely socio-economic considerations, i.e. the relationship between the administrative task and the social task. The emphasis has in fact shifted from the one to the other, particularly since so much is being said about a movement towards socialism and on the other hand, the promotion of the free enterprise system. The hon. Opposition will agree that it is progressively becoming one of the most important questions of the future, when a budget is drawn up, to know where to draw the line with regard to social services and national services. If there is no limit, we are forced to begin to follow the path of socialism. However, the irony of the matter is that the hon. Opposition is continually trying to promote the free enterprise system, but on the other hand it is placing the Government under increasing pressure, as was the case once again this afternoon, to provide more and more social and national services without indicating precisely how these are to be financed or spelling out the implications thereof. These two concepts are poised in a delicate balance, and to my mind, with this budget the hon. the Minister of Finance has succeeded in maintaining this very delicate balance extremely well, as he has done in previous budgets. So many adjectives have seldom been used before in the commentary of both friend and foe in lauding this budget and paying tribute to one of the most remarkable Ministers of Finance that we have ever had. I quote from the Sunday Times—

However, if one listens to the hon. Opposition, particularly to the hon. member for Yeoville, one can simply throw up one’s hands in despair and ask: “Can’t you give the devil his due?”

A budget affords the hon. the Minister the opportunity of achieving certain objectives by means of fiscal and monetary measures. If we look at the objectives which the hon. the Minister has in mind with this budget, we can definitely discuss this budget in a meaningful way. The first of these objectives is whether the hon. the Minister has voted adequate funds for creating an efficient national administration. The second is the extent to which he has assured the security of our country and its people. Thirdly, we must look at the extent to which he has improved the standard of living of our people by means of the economic growth which he has created, through tax concessions, combating inflation, creating an infrastructure, pensions and social services, etc. Then we can also look at the extent to which the skills and spiritual assets of our people are promoted by this budget. The latter obviously enjoys high priority, in spite of what the hon. member for Yeoville said. However, if the hon. member for Yeoville wants to question this, I think he must say that the sum is too small, and if he says this, he must also say what additional amount has to be spent and where the funds must come from. Then we will be able to discuss this aspect in a meaningful manner.

Consequently, when we discuss this budget, it is appropriate for us to compare it to these objectives in order to determine whether it answers to them. We must also determine whether it complies with another very important prerequisite, viz. whether it inspires confidence, because stimulatory measures as such are not adequate for ensuring economic growth. The people must also have confidence in this regard.

Therefore, the first facet that we want to look at, is whether the Government has in fact ensured that the country will be properly administered. As far as this matter is concerned, it is not necessary to quote figures in order to substantiate it. The policy of financial discipline that has been maintained by the hon. the Minister for several years already, the Government’s rationalization programme and the new State structures that have been created, are already adequate proof in themselves that the Government has made great progress in its attempts to make the administration of the country as efficient as possible. Government expenditure is still being curtailed very efficiently without forfeiting efficient Government administration.

The next objective, the great task and unquestionable function of the State is, as I have already said, to provide security. The generous budget for defence, the improvement of the police services and the improvement of police salaries will contribute considerably towards improved efficiency in the coming year, and towards realizing this important objective. To be sure, this matter remains one of the most important functions of the State, because a collapse of security invariably leads to chaos. Disturbing our peace and order could affect not only our physical security, but also our economic security in a very serious way.

Furthermore we want to look at the extent to which the budget is improving the standard of living in South Africa. In the course of the following few weeks we are most probably going to spend more time debating this specific objective of the budget than any other matter. Although it is an important matter, to my mind it is not the most important. It is a fait accompli that we cannot argue away, that the standard of living of all our population groups in South Africa remains comparatively one of the highest in the world, taking into account the fact that we are dealing with different communities. The communities that are comparable with those of the First World, most probably enjoy the highest standard of living in the world. The standard of living of the communities that are comparable with the Third World, is much higher than those of the rest of Africa and many other countries of the world, in spite of almost four years of recession which we experienced, when standards of living dropped slightly. It is true that the real income did in fact drop slightly during the years 1972, 1975, 1976, 1977 and 1978. Consequently, to compare the present budget with figures from 1972 and then to try to allege, as some financial writers have done, that the tax concessions are merely a “phantom relief’, is quite ridiculous. Fortunately, the hon. member for Yeoville did not say this. Even if their figures are correct—which I seriously doubt—the hon. the Minister cannot be expected to make good the backlog with regard to the years that I mentioned here, within the space of one year. However, this is exactly what the medical profession did, and that is why I, as a medical practitioner, took exception to the fact that they tried to make good their backlog in one fell swoop, not because they did not deserve it—in fact they definitely deserved it—but for the sake of the economic progress and economic abilities of South Africa, one is obliged to condemn such matters.

Since last year, the standard of living of all peoples is on the increase once again. The tax concessions last year contributed largely to this. The considerable economic growth has improved as a result of last year’s moderately stimulating budget, and we can look forward with a great deal of expectation to a possible growth rate of 5% or 6% this year. This is a very important aspect for the ordinary man when hon. members of the other side of the House ask what advantage the budget has for John Citizen. Furthermore, it is true that this budget is being financed in a non-inflationary manner to a large extent. The abolition of the loan levy and of surcharges on imported goods must invariably contribute towards the further improvement of the standard of living of all the peoples and will combat inflation even more.

It seems to me as if the people who are talking about a “phantom relief of tax”, did not even take the trouble to read carefully through the extensive tax reform plan which the Government has announced, a plan which constitutes part of the budget. Without going into detail, I want to allege that the budget has succeeded par excellence in achieving the objective of improving the standard of living of all our people. It has been said that an astronomical amount of more than R1 000 million is supposedly being used to pay for separate development or ideologies, but this is absolute nonsense, because this money that is being provided by the budget, is in fact going to be used for the upliftment of our Black people. The people of South Africa will not be fooled by such statements. We must not underestimate their intelligence.

Now I want to ask whether the time has not come for the Opposition and the Press in South Africa to reflect a little. Instead of continually prescribing to the Black man, the Coloured and the Indian what they should complain about, they must also show those people what their responsibilities are. I have never yet heard the hon. member for Sandton doing so. After all, the Whites in South Africa cannot carry the largest portion of the financial burden in South Africa for ever. To tell the truth, so much has never yet been done by so few for so many people in South Africa as the Whites in South Africa have done. The time has come for us to proclaim this. Why do the people of colour in South Africa not have their own mutual aid movements, their own socio-economic upliftment programmes? There are many opportunities that have been created for them, which remain unused or are abused. Surely one attains one’s full human dignity only when one behaves in such a way as to command respect. Some of my best friends are Black people, people for whom I have a great deal of respect because they really behave like adult, civilized people. There is a large backlog, but a tremendous amount of progress is being made, and we must recognize this, as far as this budget is concerned too. In fact, this budget is creating greater opportunities for all the non-White population groups through incentives such as housing benefits, educational benefits, new employment opportunities that are being created and the lower taxes to which the hon. member for Smithfield referred. They must seize these and utilize them, not only for their own prosperity, but also for the sake of the prosperity of South Africa. Has the time not also come for the official Opposition to spell out to the non-White nations where everything is coming from? After all, the prosperity of the Whites and the monied non-Whites in South Africa did not drop from the skies. It was created through hard work and intensive planning accompanied by great risks. In the process, several had to pay the price of failure. The prosperity of the “haves” can only be ensured by effort and initiative and not by sharing these things. Unprecedented opportunities are being offered to the so-called “have-nots” by this budget, by means of the development schemes, training facilities and funds that are being budgeted for. We can definitely not deny this.

However, let us consider this budget against the economic background. Let us look at this budget against the background of the economic climate and the new confidence that has been created, confidence which, as I have already said, is an absolutely essential prerequisite for a continued economic growth process. As a result of the measures in last year’s budget, there was a gradual, further economic boom, and consumer expenditure was approximately 4% higher during the last quarter of 1979. Manufacturing production was approximately 9% higher than during the previous year, and it stretched across a very much wider front than before. The total growth rate was in fact very close to the goal which the hon. the Minister of Finance had set. In last year’s budget debate, we were told by the official Opposition that the stimulating measures with regard to the budget were inadequate. However, the hon. the Minister has achieved all his objectives, and even surpassed them in some places. It seems to me as if hon. members of the Opposition are not very good prophets.

Personal saving during the first three quarters of the financial year did in fact increase considerably and consumer expenditure dropped somewhat. However, now the climate is right for giving greater momentum to this budget, and also to provide greater momentum to the growth rate. The confidence to do so has definitely been created too. We can also expect the total real expenditure in our economy this year will probably show practically one of the sharpest increases in recent years. This is also a matter that dropped somewhat over the past year. At this stage the danger of demand inflation is not so great. Fixed investments, however, dropped considerably last year, chiefly due to the fact that the manufacturing industry had a considerable reserve capacity. Consequently, it is essential and necessary for fixed investment to be given considerable momentum now. If production is not maintained in the manufacturing sector, we may definitely be forced into a situation of demand inflation in due course. Current general Government expenditure is not expected to show much of an increase, particularly not in view of the budget before us and the quality of financial discipline which the Government has followed.

Consequently, the duty of the private sector is becoming even greater. It ought to strengthen its share in the economy, and once again this emphasizes the importance of the free enterprise system. However, it is becoming more essential than ever before not only for us to promote the system of free enterprise further, but that we should also propagate the system actively, particularly in view of the increasing ideological battle against socialism.

In this regard I should like to request the hon. Opposition not to place the hon. the Minister of Finance under any further pressure by means of protest gatherings like the one being organized by the hon. member for Hillbrow, and by making unrealistic demands for social pensions and national services that the country cannot afford. Hon. members of the Opposition must realize what the financial implications thereof are, although they are simply seeing the political advantage at this stage. Apart from the fact that in this way we will be heading for a welfare State, which will inevitably bring about an economic recession, as is the case in Britain, in doing so we are also creating a spirit and climate of “Oh, why should I make an effort and why should I make plans for my old age? The State will see to it.” This could have drastic consequences for our economy.

In conclusion, I should like to mention once again the remarkable ability of the hon. the Minister of Finance, who like a prophet of old, correctly predicted some of our economic trends with absolute accuracy years ago. Do hon. members still recall how the Opposition laughed at him when he predicted the present gold price with absolute accuracy years ago? We reached that gold price this year. At the time, however, hon. members of the Opposition laughed at him. Do hon. members still recall the criticism levelled at him when he spelt out his policy of financial discipline? Were the sacrifices during the years of recession not worthwhile, particularly in view of the fruits which we are gathering now? Today the rand is practically stronger than ever before thanks to the fact that the hon. the Minister repaired the basis of our economy by means of measures to repair the balance of payments. This is a fact, even without the gold bonanza. We pay tribute to a man upon whom we were able to depend in the very difficult years which have now passed. We thank him for a budget which has the potential for transporting us to even greater economic heights during the coming year.

Mr. Speaker, the hon. member for Malmesbury has already pointed out, with reference to an interjection I made, that this has been a very strange first day of a budget debate because the very first official Opposition spokesman spoke far more politics than finance in the course of his speech. This is the biggest tribute the hon. member could pay the hon. the Minister of Finance because the budget submitted to the House by the hon. the Minister is so sound that the hon. member preferred to talk politics.

He does that badly too.

May I, then, congratulate the hon. the Minister of Finance sincerely on having submitted so sound a budget to this House this year.

This budget, of course, incorporates an overall tax reform structure, but I shall come back to that later. To begin with, I want to deal with the hon. member for Yeoville, since I cannot deal with the hon. member for Newcastle at the moment, because he does not expect me to attack him about what he said. Indeed, I agree wholeheartedly with what the hon. member said. Accordingly I shall come back to the chief spokesman of the official Opposition, the hon. member for Yeoville, and the amendment he moved.

In my opinion it was very weak.

The hon. member for Yeoville moved—

That is point number one. If that is not a dangerous statement to make, then I do not know what a dangerous statement is. I am not alone in saying this. The hon. member for Yeoville showed the House two periodicals. The second one he discussed was, of course, the treatment of the budget by the Financial Mail immediately after the budget speech, when they had not yet had time to give due consideration to the budget. A week later this edition of the Financial Mail appeared—this the hon. member for Yeoville did not show the House—and in the very first sentence the editor states—

Not only is it becoming “dangerously widespread”, but it is also dangerous, and not only for the economy of the country, but also for its stability, if this statement is publicized and spread throughout the world by the official Opposition and its Press. It is an extremely dangerous statement. Accordingly, I want to felicitate the hon. the Minister of Finance and the Government as a whole on the fact that they have come forward with an entirely new approach, an approach which, I want to say in all humility, I have been advocating for years. I have always said that the way to help the poor, the unemployed or lesser privileged is not to pay them alms. The way to help them is to stimulate the free economy in such a way that the entrepreneur will have the fullest opportunity to create employment opportunities. When the Government has stimulated the private entrepreneur to create employment opportunities, it has done what it can to solve the problems of the lesser privileged, because one will never help a lesser privileged person merely by giving him alms. By doing so one makes of him a hopeless creature.

Give him a line and a hook, not a fish.

Then you would make him a Prog.

Accordingly I am grateful for the fact that the basic philosophy of this budget is: Improve the individual position of the entrepreneur and you improve the position of the masses. How often have I not advocated this in this House. Only two years ago I referred to the situation in so many of the countries of Africa where the people simply adopt a mendicant attitude, and they make matters so difficult for the entrepreneur that he packs up and leaves. Then one has unemployment and famine, and then South Africa has to provide its neighbouring States with food. If we want this country to go under, we must take note of what the hon. member for Yeoville asked for this afternoon in the first leg of his amendment. The basic philosophy of this budget is to enable the entrepreneur to create employment opportunities so that the lesser privileged person can help himself, because a person or a nation that does not help itself, is beyond salvation. He must help himself.

Moreover the hon. the Minister is also maintaining the golden mean between growth stimulation for the entrepreneur and the economy on the one hand, and on the other, aid to those who are hard-hit by the high rate of inflation. Incidentally, it is a rate of inflation for which this Government is not responsible. The citizens who are hardest hit are those retired persons whose cause I have so often championed in this House. Accordingly, it is fitting that I should convey thanks at this point to the hon. the Minister for having granted considerable assistance in this budget to the retired person and the older civil pensioners, who are very hard-hit by the high rate of inflation. I am very grateful to the hon. the Minister and to the Government as a whole for the fact that something really exceptional is now being done in regard to the position of the retired people and the older civil pensioners.

Of great importance, too, is the fact that the means test is being adjusted. This is of the utmost importance. I say in all humility that it is something I have been advocating for many years that we should never increase social pensions without an accompanying increase in the means test, because what happens if one simply increases social pensions from year to year without adjusting the means test? Before this budget, a person with an income of his own amounting to R984, received no contribution from the State. Accordingly he had to get by on his own income of R984. But the social pensioner has not received R984 from the State over the past year—I am not referring to what he has himself, but to what he has received from the State. It was not R984, which the retired person with his own means has to come out on: He received R1 164 from the State. Is that fair, is that conducive to a nation’s sense of thrift, when a person who has not made provision for his old age gets R1 164 from the State, while the man who has himself made provision for an income for his old age, only gets R984 to live on? Once again I wish to convey my sincere thanks to the hon. the Minister for having rectified this matter, too, because now a person will not be excluded from receiving Government aid if he has an income of his own of R984, but only when he has an income of R1 392. This represents a substantial improvement for the person who has provided for his old age himself. However, I want to plead once again that we should not always stick to this amount of R1 392, but instead, that every time there is an increase in civil pensions, there should also be an increase in the means test. If this is not done, the man who has not himself provided for his old age is accorded better treatment than the person who has himself made provision for his old age. What then becomes of a nation’s sense of thrift?

The hon. member for Yeoville and other members of the official Opposition have so often referred sneeringly to the “gold bonanza” and talked about how this should be utilized on behalf of the nation as a whole. There is just one remark I want to make about this. It is true that as the hon. member for Yeoville said this afternoon, the Government did not increase the gold price and the price of minerals. What the Government did do, however—and this is important—was to come forward with legislation in 1968 by means of which the marginal gold mines were assisted to remain in operation. Since 1968 an amount of R185 405 million has been paid to these marginal mines to keep them going. As soon as they close, they fill with water and then it costs an enormous sum to put them into operation again. The R185 million spent on the marginal gold mines by the Government since 1968 can only be termed an outstanding investment. Now the hon. members talk about a “gold bonanza”. How much of that “gold bonanza” is the result of this sound investment made in 1968 and in subsequent years by the Government? The gold tax has amounted to R646 million over the past year, and for the new tax year it is estimated at R1 850 million—ten times as much as the Government pumped into our marginal gold mines by way of investment. Therefore, although it is true that, as the hon. member for Yeoville said, the Government did not increase the gold price, the Government took a wise step and can therefore claim credit for what it did in 1968 and subsequently with regard to this “gold bonanza”. We really have a very far-sighted Government.

I also wish to say something about the stabilization account, into which R39 million is being paid in terms of this budget. I should of course have liked to see a far greater amount being made available, but in this budget it was necessary to stimulate the economy, and accordingly we cannot hold or keep back a larger sum than R39 million to deposit in our Stabilization Account. However, I want to ask that if we have another good year such as this, as we expect to have in the current year, we should plough a far larger amount into the Stabilization Account next year to provide for the hard times that lie ahead. The dilemma of a Minister of Finance occurs every time the economy slows down, when it is in its lowest phase.

Government expenditure does not drop at such a period because the State cannot simply reduce the salaries of Public Servants. However, the State has to obtain more revenue from other sources, because due to the stagnation of the economy the State does not obtain the revenue it expects. Then the State has to have a very strong Stabilization Account so that it does not need to increase taxes while in that trough. When the economy is already in a trough, and on top of that, the hon. the Minister of Finance needs to increase taxes, what becomes of the economy? I therefore say that it was quite correct that we did not put more in the Stabilization Account this year, because we had to stimulate the economy. However, if we have another such year, we must pump a vastly increased sum into that Stabilization Account to provide for the hard times that will return. Just as we are now on the crest of the wave, we shall be down in the trough again, simply because that is how the capitalist economy works.

Then I want to say something about the tax concessions announced by the hon. the Minister, which he is investigating with a view to other educational institutions apart from universities and technical colleges, for example, training colleges and so on. I welcome this statement of intention by the hon. the Minister. I greatly welcome it, because there are other institutions and other bodies, too, that can be investigated, for example welfare organizations, but then I want to apply two criteria to be taken into account in awarding tax concessions to the taxpayer when he makes donations to universities and other educational institutions, for example, welfare institutions. The one criterion I want to apply is that it should have the effect that the State need pay less to those institutions; in other words, the tax concessions granted to the individual taxpayer by the State must have the effect that the State itself need not pay as much, because those institutions will then receive more from the individual and company taxpayer. The second criterion I want to apply is that those institutions should equip the citizens of the country to earn more, and by so doing to become bigger taxpayers. If these two criteria are applied and the answer is positive, then I want to put it to the hon. the Minister for his favourable consideration that he should in fact give effect to these proposals.

In conclusion, I have great pleasure in lending my full support to this budget.

Mr. Speaker, the hon. member for Paarl will perhaps excuse me for not joining the choir singing paeans of praise about the so-called ability of the hon. the Minister of Finance.

I am not particularly impressed by the budget the hon. the Minister has submitted to this House. The reason is that I have studied the budget against the background of the expectations created by the Prime Minister. I seek in the budget a basic plan to create the funds for the implementation of the reforms, the changes and the improvements held out as a prospect by the Prime Minister. This budget of the hon. the Minister of Finance is not really an exclusively financial process; it should really have been that of the Prime Minister and the NP Government—a financial plan they submit to this House and to South Africa. In such a plan they would have to expound clearly what steps they envisage over the next few years, how they are going to see to it that those steps are taken efficiently and successfully, and how finance will be provided for their implementation.

The second half of this parliamentary session of 1980 is the period in which the eyes of the whole world, and not only South Africa, are going to be on the Prime Minister, because through his statements over the past few months the Prime Minister has created great expectations. He has generated interest, excitement and enthusiasm, not only in the ranks of his own party but among various groups in South Africa and abroad. People have listened to what he has said and have formed the impression that the NP in South Africa now has a Prime Minister who is going to take positive action to bring about changes in South Africa. Through his statements the Prime Minister has caused this spirit to develop and has created this image of change in South Africa. It was this Prime Minister who said that we would have to change or perish. He spoke about the vital need to prevent a revolution.

He spoke about the removal of unnecessary discrimination. When the hon. the Minister of Public Works objected to the participation in Craven Week of a Coloured school team, the Prime Minister immediately joined battle and intimated that he would not tolerate that. He used the word “lepers” and asked whether the other groups in South Africa were lepers, since we did not want to come into contact with them.

The Prime Minister spoke about a total onslaught against South Africa. He also discussed the need to create a national strategy to counter that total onslaught. The Prime Minister stressed the fact that it was vital to have the loyalty of all South Africans so that they should participate in that national strategy, in order that the total onslaught on South Africa could be countered. All those things that were said by the Prime Minister and repeated by some of his “verligte” colleagues, created expectations among groups both in South Africa and abroad.

After the events of the past few months the hon. the Prime Minister and the Government must now see to it that these expectations are fulfilled and that the undertakings given are honoured. The deeds of the Prime Minister and the Government are now to be tested against the yardstick of his statements over the past few months. [Interjections.]

There is one aspect of these tests which I want to mention briefly, and that is that the time-table for change is going to be decisive in South Africa as regards preventing violence and ensuring the success of these changes. It will also determine whether we can expect a peaceful and stable final process after these changes have been brought about. I think that the words of a former Rhodesian Cabinet Minister, an Afrikaner, in this regard could perhaps bear repeating here. He spoke about the people who wanted a war in Rhodesia and who waged that war. He also spoke about the mistaken belief that political problems of the nature we are experiencing in South Africa today can be solved by means of a military process. Rapport of 23 March 1980 reports inter alia as follows—

The position is, quite simply, that those in South Africa—the Prime Minister also referred to certain people and groups in South Africa, and I think that he was perhaps referring even to groups within the NP—who want to shoot and make war and try to find a military solution to the problems, should take note of the experience in Rhodesia, where it was not possible to find a military solution and where it was found after the war had been concluded that the Whites were in a far weaker position than had been the case formerly. Rapport goes on to say—

Therein lies a very clear lesson for us all. The Prime Minister and some of his colleagues realize that steps must be taken which will clash with the prejudices and conceptions of the past, steps which will perhaps be painful, which will be difficult and which will cause disruption within the ranks of his party, but such steps must be taken and they must be taken promptly because the opportunity to do so may pass sooner than we realize at this stage. According to the report in Rapport, Mr. Cronjé added the following—

That is also a major mistake of the NP. We saw it in the election of 1977, and if we are going to have an election this year or next year, we shall again see the Government lacking the courage to tell the voters of South Africa clearly, openly and honestly that they will have to accept radical changes and that the system in South Africa will have to change radically and drastically. However this is something that is absolutely vital. It takes courage, but it is something that the Government will have to do.

The report in Rapport also mentions the following—

We, and South Africa as a whole, appeal to the Government not, in Heaven’s name, to wait until it is too late in South Africa, because at the moment there is every indication that in order to preserve and uphold the unity within its own ranks, the Government is not prepared to continue effecting changes rapidly, and that as a result the Government is going to wait until it is too late in South Africa to bring about changes effectively and successfully.

There is another warning that I want to level at the Government and the Prime Minister. The Prime Minister took upon himself the leadership of the NP and of South Africa at a difficult period. The Government was in the midst of tremendous problems and at that stage it was difficult for the Prime Minister to move, but those problems are now behind us, and towards the end of last year the Prime Minister enjoyed tremendously high prestige within and outside South Africa. There were even people outside South Africa who firmly believed that it would be P. W. Botha who, through his leadership, would lead South Africa, which was on the threshold of violent solutions which would be found for its problems, out of a dangerous situation by means of a process of peaceful change whereby South Africa’s problems would be solved. At the end of last year he enjoyed a large measure of prestige, but because since that time he has not been as good as his word and has not acted effectively to give effect to the undertakings he made, there has been a clear decline in confidence in the hon. the Prime Minister’s ability and intention to bring about change in South Africa. That is why the hon. the Prime Minister must now move fast, and that is why he must see to it that his credibility is not affected as a result of the actions of other members of his Cabinet. The hon. the Prime Minister must not undermine his credibility by saying in public that there are no differences in principle between him and the hon. the Minister of Public Works. He is dealing his own image a deadly blow, because if there are no differences in principle between the hon. the Prime Minister and the hon. the Minister of Public Works, there is no hope that the hon. the Prime Minister will bring about changes which are essential in South Africa if the situation is to be saved. The hon. the Prime Minister cannot say on the one hand that he stands by the principles expounded by the hon. the Minister of Cooperation and Development at Palm Springs and then, on the other hand, say that there are no differences in principle between him and the hon. the Minister of Public Works. [Interjections.] They can laugh if they want to, but I know that when one is very embarrassed, one laughs a hollow (“holle”) laugh such as that we have just heard from that side of the House.

You are going to run (“hol”) before you laugh.

The Prime Minister must be careful and set out his own principles and policy clearly, frankly and unambiguously. He must say that he does not agree with the hon. the Minister of Public Works and that he will not tolerate the direction followed by the hon. the Minister of Public Works. If the hon. the Prime Minister is unable to maintain his credibility as Prime Minister, it will be impossible for him to take the lead in South Africa and to effect the changes which are essential.

I now want to put a few questions—I am sorry that the hon. the Prime Minister is not present—concerning the hon. the Prime Minister’s 12-point plan. Any other hon. Minister who is going to speak in this debate—perhaps the hon. the Minister of Police—could perhaps give some attention to a few of the questions I should like to ask.

Why should I give attention to you?

I should like to be clear on what the Government means when it speaks about vertical differentiation, because that sounds to us as if the Government is talking about apartheid, separate development, the policy of the Government up to now, and is intimating thereby that it does not intend to bring about fundamental change in regard to the old policy of separate development. In this regard I want to quote the following—

“Division of power” is one idea. Then they say “joint responsibility”, but is that not sharing of power? Is that not “die deel van mag”? Are there not two contradictory points in this specific point?

May we make the following appeal to the Government? The Government has the next two months to take steps in South Africa to honour the undertakings of the Prime Minister and to place South Africa on a new road. If the Government does not do so, the disillusionment will be so great that neither the Government nor South Africa will get over it.

Mr. Speaker, I wish to tell the hon. member for Bryanston candidly that none of us on this side of the House, and certainly no member of the general public, were impressed by the transparent attempt he made this afternoon to involve the hon. the Prime Minister in the type of gossip which Progs indulge in over their cocktails. This side of the House was sincere in what it presented to the electorate in its election manifesto; it has received a definite mandate from the electorate, and will carry out this mandate and will not change it before it goes to the voters again. That is the commission entrusted to this side of the House, and we are carrying it out. No interpretation by that side of the House, nor by the Press nor by anybody else of the so-called undertakings in respect of certain changes will be carried out unless the electorate of South Africa has been duly consulted. It is not surprising that this hon. member has such a loose tongue about this type of thing, because when he and I came to this House in 1974, he was a member of the United Party. In no time at all the hon. member had changed from a Young Turk into a member of the Reform Party, which had principles that were entirely different from those of the UP.

He was a traitor.

Before the hon. member’s constituents could say Jack Robinson, he was a prog. The political integrity of this side of the House is way above the type of political expediency to which these people resort. [Interjections.]

Order! Did the hon. member for Von Brandis say the hon. member for Bryanston was a traitor?

I say that the hon. member was a traitor to the old UP.

The hon. member must withdraw that.

I withdraw it.

Mr. Speaker, the hon. member for Bryanston spoke of “expectations”; but of course, expectations have been created. However, these are realistic expectations as embodied in the 12-point plan of the hon. the Prime Minister. This 12-point plan was enthusiastically adopted at every congress of the NP last year. Every expectation which logically emanates from that, is one which this side of the House will do its best to actualize. However, the interpretation which the hon. member for Bryanston, his colleagues and other people are giving to the so-called expectations created by this side of the House, is a mere pipe-dream and a transparent attempt to score a few political points.

I should like to say a few words to the hon. member for Yeoville. I cannot understand why the hon. member should always find himself out of step with eminent economists and financial commentators by, for example, branding the budget as “patchwork” and as a “budget of lost opportunity”. I think the hon. member would regret it if, in the business circles in which he moves from time to time, he were to pass this type of judgment on a budget which has been adjudged by every single person of note throughout the country to be an excellent budget not only for South Africa, but also in terms of economic conditions prevailing throughout the world today.

Surely you do not believe that yourself.

There is one particular matter which the hon. member for Yeoville and his colleagues drag across the floor of the House like a red herring in every debate. I think it is absolutely scandalous that the question of the care of the aged should become a political football in every debate in which the hon. member has anything to say. [Interjections.] I wish to put a straightforward question to the hon. member: Is the hon. member an advocate of a welfare state? Yes or no? [Interjections.] The hon. member is refusing to answer me. If the hon. member is an advocate of a welfare state, every person in the House and every member of the general public should know that the hon. member for Yeoville is an advocate of a welfare state …

We have a welfare state already.

In a welfare State, the taxes would simply have to be increased to cope with the pension demands and the care of elderly people on the scale suggested by the hon. member.

Harry is a socialist.

If the hon. member says he is not an advocate of a welfare state, then he must be in full agreement with us on our philosophical approach to the care of the aged. [Interjections.] I think if the hon. member for Yeoville would show other people the courtesy which he often vociferously demands, we should be able to make a little more progress with a debate in this House. If, then, the hon. member for Yeoville and his party agree with us that we do not wish to create a welfare state in South Africa, I wish to ask him: Why have he and his colleagues never made an appeal from this House to the people of South Africa to make provision for their old age themselves? Why not? Why should members on this side of the House be branded as callous rogues and bullies who are oppressing elderly people, because that is exactly what they are alleging? [Interjections.] I challenge the hon. member today to prove that there is anybody in this House who begrudges the elderly people, the aged people, the senior citizens of our country, what they are receiving today. I think one could state categorically that every person in this House would go out of his way to give our elderly people more than it was possible to give them in this budget. That is the attitude with which this side of the House approaches the budget and which this side of the House also adopts towards the care of our senior citizens.

If, then, they agree with us that we should not turn this country into a welfare state, I think the hon. member for Yeoville should tell us so today. The hon. member should tell us where, in a balanced budget such as this, one should effect reductions to make provision for bigger pensions, because after all, if we wish to give our senior citizens more, we would have to effect reductions elsewhere. Should there be a reduction in respect of education? Then the hon. member should tell the electorate that he wishes to deprive them of educational facilities to give our senior citizens more. Should less be given to the Black people? Then the hon. member should mount a platform and tell all and sundry that he is going to effect reductions in that respect. Or what is even worse: Is it in respect of defence that the hon. member wishes to effect a reduction? Does he wish to effect a reduction in respect of defence to satisfy other emotional feelings in respect of all the demands he made on the budget? [Interjections.] The truth of the matter is that somebody would have to pay for that. Either we would have to pay higher taxes, or there would have to be reductions to amounts already appropriated in the budget. If it is the idea, then, that there should be reductions, the hon. member should quantify this and after having quantified by how much he is going to reduce each category, he must state how much he thinks is sufficient to give to our elderly people. How much would be sufficient? After all, it is a bottomless pit. At some point or another one has to make a decision in terms of one’s philosophical approach, and state: That is how far my means allow me to care for our aged, and this year I can only go so far.

Mr. Speaker, may I ask a question?

No, I am not going to reply to a question now. Wait until tomorrow. It is an indisputable fact that the record of this side of the House in regard to the care of the aged is beyond reproach. Viewed over a period, the graph indicating the increase in pensions rises far more steeply than the increase in the consumer price index; in other words, over a long period people have indeed derived benefits that were more than sufficient to offset the effect of inflation. What is more the hon. the Minister gave everyone a bonus last year, when he was able to do so, just as he is again doing now. I think it is a disgraceful thing in political practice in South Africa to discuss this matter in this House in this way. I think the responsibility now rests with the Opposition to tell us what their philosophical approach is with regard to the care of pensioners, and if they agree with us or differ with us with regard to the various philosophies, we can debate the implications.