Mr. Speaker. I owe the hon. Minister of Finance an apology. On Monday I said that he had under-estimated his surplus by some 1,000 per cent. I was wrong. I should have said not 1,000 per cent,

I should have said 100,000 per cent. I hope the hon. Minister will overlook my underestimating his capacity to under-estimate.

Sir, when the hon. Minister appeared before us this year, he appeared in the guise of a fisherman. He was after a big fish. He said that he was looking for a catch worthy of the most distinguished fisherman, and I noticed that when he said that he glanced first at the hon. the Prime Minister and then at the hon. the Leader of the Opposition, to see who looked more self-conscious. Having said that he proceeded to get himself thoroughly tangled up in his tackle, in a mass of metaphors, a complete over-wind, like a beginner, not like a distinguished fisherman. Then he got down to the question of his Budget and the fish that he was after, he said, was financial stability, and one wants to keep that in mind, because I think one must judge the whole of his proposals by the objective which the hon. the Minister has in view. When he got down to explaining his budget of course, we then saw the point of his fisherman’s analogy, because I must say that his explanation became more and more fishy as he went on. He started off with a glowing and I think accurate account of the internal economic position. He pointed out that the factors making for financial stability were very considerable. He referred to the balance of payment position being very favourable, to the reserves being in a strong position, to the financial liquidity being such as to be able to cope with the capital requirements of the country. He pointed out that the country was well stocked with goods, that there was full employment, that industries were expanding, and that there were favourable conditions in markets overseas for our exports, and lastly, he pointed out that so far the cost of living had risen very little, only some 1 per cent, and that there have been very few signs of a general inflation. He concluded by saying that in his opinion conditions were favourable for the continued economic growth and that expansion was likely to continue on its own momentum.

That was the picture which the hon. Minister painted that everything was set fair and, as far as he was concerned, there was only one cloud on the horizon, and that cloud was the bottleneck of skilled and semi-skilled labour. He omitted to say of course that that bottleneck was largely of the Government’s own creation, but nevertheless he did refer to it, but he dealt with it very briefly and said that the Government was coping with it, and that he hoped that it would be disposed of. I hope that somebody on his side of the House in the course of this debate will deal with it more fully because it is the one factor which at present could hold up economic growth, and not only economic growth, but it could impede the growth of our defence arrangements. Because, Sir, the days when all you had to have was a horse and a rifle are gone. To-day every man in the force has to be an expert of some sort or other, technically trained in one branch or other of the highly mechanized scientific weapons of war which we have to use, and we on this side of the House are very far from being satisfied that the manpower, our trained technical manpower, is in any way keeping up with the supply of arms to be obtained. We think that the bottleneck of skilled manpower is probably stretching very far into the armed forces at the present time. The Minister concluded by saying that the emphasis of economic and fiscal policy should now be shifted slightly from what he called the stimulation of growth to the preservation of stability. The question of course arises just what does this slight shift of emphasis involve? Of course this is where the hon. the Minister’s story starts to become slightly fishy in my opinion, because I can see another cloud which might threaten the stability of the country, and that is this Budget itself. I think that this Budget, especially if it is to be followed by others like it, certainly represents a threat to the financial stability of the country, and I shall try to explain why I think so.

I suppose the most anticipated part of the Minister’s speech was his declaration of an estimated surplus of R88,000,000 and his proposals for dealing with it. I have already said that I think he has under-estimated that surplus, but let us leave it at R88,000,000. He pointed out that the greater part of it was due to an under-estimate of income-tax amounting to R82,000,000. Here I think the Minister might have given the House some more information on the subject, because this was a new experiment and quite obviously intelligent people were going to benefit from the experience gained in putting this experiment into practice. I think in view of the very large increase in revenue which accrued from that source, the House and the country would have been interested to have from the Minister some account of what the experience has been. Has the Department, for instance, found hundreds of new taxpayers? Have they over-collected, and will they have to make a great deal of repayments, or is their machinery more efficient than they expected, and is it adequate for the task to be carried out? I think all these matters are ones on which the House and the country would have liked to have some information from the Minister. We know, of course, that we will have an Income-Tax Bill and we do not want to discuss it in too many details, but during this debate we may bring up major points on the subject in order to give the hon. the Minister time to consider them so that when the Income-Tax Bill does come before the House he will have had an opportunity to examine these points and, if necessary, to deal with them in the Bill.

I have one matter in mind which I want to raise and that is the question of the provisional taxpayer who pays three instalments, one in June, one in September and one at the end of February, and then he has to be assessed and he has to make a fourth payment if he has not paid in full. If he has paid more than he should have paid, he does not get his money back and the Government hangs on to it until the end of June, when he makes his next payment for the following year, and he is credited with it. It seems to me that there is a good case to be made out for suggesting that the provisional taxpayer might only pay two provisional payments during the year and that he should then put in his full return at the end of February and pay the balance all in one sum, and if the machinery is working properly he will get his assessment in April and pay by the end of May. That means that the Treasury will be waiting a little longer, from the end of February until the end of May, about 90 days longer, but if the taxpayer has overpaid he of course has to wait 120 days while the Government hangs on to his money without paying any interest. I think this item is one which is well worth considering, because it involves hundreds of people and a great deal of work to make those provisional payments, and it involves the Department in a good deal of book work in checking it up, etc., and provided the Department gets its money in due course, without too much delay, it seems to me that this is something which might well be considered.

However, to get back to this surplus which the Minister has, the question arises as to how the Minister deals with it. It appeared from his speech that his main concern was to dispose of it without allowing the great body of taxpayers to share in any way whatever in his good fortune. He seems to have acted on the old motto that if times are bad the people should be taxed to make up the deficiency, and if times are good, tax them still more to prevent inflation. The Minister made some peculiar remarks. He said that with a surplus of R88,000,000 in his pocket the taxpayer could not expect a repetition of last year’s largesse. Well, largesse is a form of charity. It is something to give the porter when he takes your luggage to the train, the tip. I think it is high time that the Ministers of Finance generaly should be debunked from this idea that they are philanthropists and that they are doing a charitable act when they reduce taxation as the result of the country’s prosperity which gives them large surpluses. I think the proper garb is not that of a charitable man, but that of a penitent, who is returning goods he has acquired under false pretences—call it conscience money, if you like. I think this idea of a Minister of Finance being a charitable dispenser of favours with the taxpayer’s money, which he should never have taken in the first place, is one which should be debunked as soon as possible.

But the Minister did more than that. After saying that, he went on to say that perhaps he had a few choice morsels for deserving cases, and having said that, he announced some R5,000,000 in benefits to pensioners and some R7,000,000 in taxation adjustments, mainly benefiting the higher income groups. Of course, those were welcome to the recipients, but it is only an indication of what the Minister could really do if he tried. But the fact remains that for a man earning up to R350 a month, who represents the vast bulk of the taxpayers of the country, there is nothing in this Budget whatever, and what is more, according to the Minister, he does not deserve to get anything because the Minister distributed his choice morsels to deserving cases, and as all these people have not received any choice morsels it follows that the Minister does not regard them as deserving cases.

Poor mortals!

I must say that this aspect of the Budget, apart from the financial houses and the Chambers of Commerce and the Chambers of Industry, has aroused great resentment and disappointment on the part of the great bulk of the taxpayers of the country. I only hope that this great body of taxpayers who have cheerfully paid their taxes year after year, heavy taxes, and have seen the Minister through the difficult days when things were not so good, and who helped him uncomplainingly, will take note that now that his coffers are bulging he actually says in this House that he does not consider that they deserve any consideration. I think that is a very callous and cynical remark to make, and a very unwise one, too. [Interjections.] Sir, I gather that hon. members opposite mostly belong to the higher income groups who benefit from the Budget, but as far as the balance of this surplus is concerned he puts R16,000,000 to the Loan Account and the balance of R52,000,000 goes to defence which now gets R210,000,000 this year. So the Minister has disposed of the whole of his surplus without any consideration, as far as I can see, being given to the ordinary taxpayer.

But that is not all. Apart from this Budget, the taxpayer will be called upon this year to shoulder fresh, heavy burdens. On the Loan Account there is a substantial increase of expenditure on the Orange River scheme which is now getting under way, of R14,000,000, and there is R6,000,000 for the Coloured Affairs Department, and there is a provisional sum of R20,000,000 for South West Africa, and on this point I want to ask the Minister a specific question which I hope he will reply to. He said that the Legislative Assembly of South West Africa had not yet considered the report of the Odendaal Commission, and therefore he did not want to anticipate anything they might do, but he thought it prudent to make a provisional sum of R20,000,000 available for South West. I do not want to discuss the report, but I do want to ask the Minister this: Do we understand from that that if the South West Africa Administration accepts the Odendaal Report, the Government proposes to go straight ahead with such parts of it as it thinks can be proceeded with at once? Then there is another amount of Loan Account which is substantially increased, and that is for the Bantu Trust. Last year they got R25,000,000, of which they spent only R19,000,000, but this year they are getting an extra R7,000,000, which makes it R32,000,000, plus what they did not spend last year. So whereas they only spent R19,000,000 last year, they will now have R38,000,000 to spend this year, which makes R71,000,000 on Loan Account, more or less new expenditure.

Then from revenue there is, of course, the increase in the Defence Vote amounting to R88,000,000 from revenue; it was R36,000,000 from Loan Account and an actual increase of R52,000,000; and then there is R13,000,000 as a present to the Transkei. I do not know quite what will happen to that, because it is a new Vote. I think the Minister might tell us something about it, where it is going and what control Parliament will have over it, and who will audit the expenditure of that R13,000,000, or do we just vote it in the Estimates and kiss it good-bye and hope for the best? Then there is nearly R18,000,000 for the Department of Coloured Affairs to transfer Coloured Education to the Central Government, but it is not accompanied, as far as I can see, by an equivalent reduction in the funds allocated to the province for Coloured education. Perhaps the Minister will correct me in due course, but I cannot see it. But anyway, there is a total increase in expenditure of R166,000,000, which includes what the Minister calls a normal increase of R45,000,000. Now, these are quite considerable figures and I have mentioned them because apart from the actual amounts concerned it seems to me that it gives food for very serious thought.

The defence expenditure has now reached R210,000,000, which was more than we were spending per annum during the war, and it is quite likely that it may increase. The Government this year in the Budget has now burst into activity with its Bantustan policies, amounting to some R51,000,000, and the Orange River scheme which will cost R14,000,000, and it is now launching a grandiose plan for South West Africa of R20,000,000. All these figures are going to increase every year if these plans are proceeded with as they gain momentum. The amounts voted until this year have been really only token amounts, and this is only the first serious contribution we are called upon to make, and quite clearly they are liable to increase from year to year. All this is being done, of course, to save White South Africa, but meanwhile other vital matters which are of importance to all of South Africa, as I hope to show, are falling behind. It seems to me, when I say these figures give food for serious thought, that they raise the question of real basic policy, because you cannot consider a Budget in vacuo; you have to consider the Budget and its effect on next year’s Budget and the Budget after that. It is part of the financial pattern. The question is this: Is it physically possible to place the country on a war basis, as the Government is trying to do, and at the same time to carry out economic and ideological programmes simultaneously? Is it possible—not desirable, but possible—with our limited manpower and our not unlimited financial resources, in spite of the large surplus we have this year, to arm ourselves to the teeth and simultaneously to embark upon several major schemes which, according to the Estimates we have had from time to time, will involve untold millions of rand and at the same time expand our essential services and maintain taxation at a reasonably low level? That seems to me a question which merits the serious attention of the whole House, because on the answer to it will depend not only this Budget but future budgets and, I believe, the financial stability of the country as well. In other words, does not this Budget with its enormous future expenditure which is envisaged, constitute a serious threat to the financial stability of the country in the future? South Africa is already heavily taxed. I say it is not possible with our available manpower and our financial resources to go full-steam ahead with all these projects and at the same time to provide adequately for defence and to maintain our economic growth and standards of living. The question is, which is going, to suffer? We all want to see the Orange River scheme proceeded with, and we are all willing to spend money on the development of the Bantu reserves. The only difference between us is as to how that money should be spent there. We are all willing to make our contribution to the development of South West Africa, but we have to be realistic and it seems to me that we shall have to choose and select and probably slow down on some of these schemes, or else our financial stability will certainly suffer. I believe that the strain on the economy envisaged in this Budget is too great for the country to face. What will happen next year if the Minister has not got a surplus of R100,000,000 to play with and he has to face even heavier expenditure on the Bantustans, the Orange River scheme, South West Africa and defence, plus the normal increased expenditure of R45,000,000? The Minister told us in his speech that he expected that there might be an increase of 2 per cent in his revenue. If that is true, it will scarcely cover his normal increase in expenditure. I wonder whether the Minister has thought about that? I am very much afraid he has not, and that is why I think these proposals are a threat to our financial stability and that this Budget is simply another example of year-to-year budgeting against which we have warned the Minister and his predecessors for many years. I suggest that the Minister has had his sense of perspective obscured by the size of his surplus and possibly by urgent pressure from other quarters, and that these proposals are disproportionate to the needs and the means of the country and that they should be redrafted. For instance, in redrafting them I think that in deciding how best to use the fortunate financial position in which we find ourselves today, much more attention should be given to the welfare and the needs of the people, and when I say that I am not referring merely to vast reduction of taxation. With the funds available and with prospects of revenue being buoyant for some time to come, surely now is the time to initiate policies which perhaps have not been practicable before, policies which will have the support of both sides of the House and which, if once started, will become part of the permanent structure of the country. My mind goes back to the days when we had another stroke of fortune, when we went off the gold standard and Mr. Havenga found himself with a very large surplus and he took advantage of it to establish the National Road Fund. Now the financing of that fund has been amended and the programme of road-building has been varied from time to time, but the policy was laid down then and has never been varied. Governments have carried on with it, with the result that to-day we have a system of roads for which we are very thankful.

The same will happen in regard to the Orange River scheme.

I am not belittling that scheme, but I am not discussing its merits now. There are various matters of major national importance which the Government now has the opportunity to initiate and to give a lead to the country. I want to mention a few of them to illustrate what I mean, but first let me refer to the financial side.

Defence expenditure has risen to R210,000,000. It is generally agreed that defence expenditure is priority No. 1, so do not let us have any argument about that. Defence will be discussed during this debate, but not whether we should spend the money; the question is how to find the money, and also how it is being spent. We have already warned the Minister that there is a good deal of talk about the fortunes being made by people carrying out Government contracts for the Defence Department. It has even been suggested that he ought to impose an excess profits tax on people carrying out such contracts for the Defence Department. We had experience of this during the war, and I want to warn the Minister again that with this vast sum of money which is being spent, much of it in the country, and much of it in stockpiling, it is absolutely essential that he or somebody else takes extremely severe measures to check the cost and the contract prices of all the work done for defence while the present rearmament programme is on. But in regard to the R210,000,000, we do not think there is any good reason for taking the whole of this amount from revenue, and I call the hon. the Minister to give evidence on my behalf. This is what he said last year in regard to the Defence Special Equipment Fund—

That is still the position, is it not?—

That is still the position, is it not?—

Then he goes on to say what happened in the past, and he ends up by saying—

If that was true last year, I think it is just as true this year. The Loan Account can very easily be adjusted to absorb up to R25,000,000 or R30,000,000 of the defence expenditure. The Orange River scheme may have to be slowed down.

Why?

The Bantu Trust may not require R38,000,000 this year. It has not required anything like that amount before. If the idea of setting aside a sum of money for South West Africa is to establish a principle, I do not believe that R20,000,000 is necessary for that purpose. I think half that amount would certainly meet the purpose, and I do not believe that when we come to the end of this year we shall find that the Government has spent R20,000,000 on developing South West Africa. Moreover, with the suggestions I am going to make, a good deal of this R25,000,000 to R30,000,000 with which I am dealing will probaly find its way back to Loan Account by way of the Public Debt Commissioners. I would propose that this money, the R25,000,000 or R30,000,000 which would be freed if put to Loan Account, should be used to establish funds or accounts to be augmented annually, either through statutory amounts or from surpluses, if there are any, to be used for the following purposes, and here I think I had better move my amendment because it sets out those purposes. I therefore move—

1. (a) ensure that higher and technical education in all its aspects is made more readily available;
2. (b) provide better social services and to improve the position of social pensioners, particularly the aged and infirm, by a drastic relaxation of the means test; and
3. (c) subsidize certain basic foodstuffs to a greater extent with a view to increasing local consumption, keeping food prices as low as possible and diminishing the need for exporting these products at a loss to the producer.”

These three subjects will be developed by other speakers on this side in the course of this debate, but I want to make it clear that we are not calling on the Government to defend itself. We know what it has done; it has done a good deal. We know that as far as education is concerned 75 per cent of the cost of the universities is borne by the Government; we know that they are building a new university at Port Elizabeth; we know that provision is being made for more money on the Estimates this year for bursaries for students, and we know that the Government is not deaf to these needs. But the fact remains, while we would not want to interfere with those things in the least, that there are other steps which are badly needed to make sure that we do achieve our object of seeing that we have adequate staff, properly equipped and properly trained, in order to cope with the numbers of young people whom we think ought to have much greater opportunities for technical and university education than they have at the present moment due to their financial position.

The same goes for social pensions. This Minister has been extremely sympathetic to social pensioners. I do not for one moment accuse him of lack of sympathy, but at the same time it is rather sad to think that the only people who really suffer in times of prosperity when costs tend to rise are the pensioners and the old people; everybody else benefits but not the old people and the pensioners, and so long as that position exists it is quite clear that whatever we do from year to year we are lacking in policy in dealing with the problem of the pensioners and the aged people. Thirdly, as far as foodstuffs are concerned, we know that the Government is spending something like R35,000,000 in subsidizing agricultural products, but the fact remains that there are very, very large numbers of our people who are still underfed. There is no doubt that the scheme needs renewing and stepping up. Surely there can be no question that adequate food, the full use of our manpower throughout adequate technical and scientific training and the care of our old people are basic requirements of any progressive society. I do not blame this Government in particular but it is true that on the whole there is no clear policy laid down on these matters which successive Governments can follow. They depend very largely as far as these vital subjects are concerned on annual doles, depending on how much the Minister of the day has available. Sir, I do not pretend to be an expert. I am what the Minister was a couple of years ago in his Budget speech, just a general practitioner. He has to call in experts when it comes to detail but he and, I hope, I can view the position as a whole, and I think we can see a general policy in respect of a particular subject, and I think we can assess its relative importance and relate it to the general structure of the country’s economy. I believe that the establishment of funds or accounts such as I have suggested in my amendment will in the first place create an important People’s Chapter in this Budget and also lay down an important milestone of future policies for this House and the county to follow in the future, and I believe it will also give great satisfaction to the people of the country; it would reconcile them to paying taxes because they do not mind being taxed if they know what they are paying for. Furthermore, I think it would establish a bipartisan policy on which all future Governments would build. In all those ways it would strengthen the financial stability of the country and it would strengthen the social fabric of the country upon which ultimately financial stability rests. Lastly, and incidentally I do not visualize that this money will all be spent forthwith, what I am most interested in is seeing that the policy is laid down and accepted. I think a good deal or probably the greater part of the money this year will be invested and made available to the Public Debt Commissioners and that this year, at any rate, the Minister will be no worse off.

To sum up, I think we all realize in this House that the hon. the Minister is limited in his fiscal policy by the overriding priority of defence expenditure. But quite clearly you cannot have your cake and eat it too, and a very large portion of our cake at the moment is being spent on defence. With that expenditure still rising it seems to me quite certain that rethinking is necessary in deciding on the priority and the pace at which other Government policies can be pursued, desirable though they may be and acceptable though they may or may not be to all sides of this House. Moreover, surely there is nobody in this House who will deny that some use should be made of the present opportunity to establish social policies for the people upon whom the whole country depends for its welfare and its whole future. Therefore, if the hon. the Minister is really anxious, as I am sure he is, to ensure the stability of the country’s economy he will accept my amendment in the first place. [Laughter.]

Nervous laughter.

If the hon. the Minister is really serious in wanting to catch a big fish he will grasp my amendment with both hands and hang on to it until he has landed his fish. In addition to that, in the second place, if he really wants to net his fish and land it he will take care to see that his Government faces up to the stark and staring fact, which is obvious to everybody except the Government, that the race policies which are the root cause of the present great defence programme make it absolutely necessary to revise their programme of expenditure on their ideological legislation.

I think the first thing that one can say about this speech which the hon. member for Constantia (Mr. Waterson) has just made, if one must reply to it, is that his amendment is not worth the paper on which it is typed. The amendment contains nothing but a lot of meaningless statements, and in the speech itself the hon. member said even less than he did in his amendment. In the first place he comes along with certain prophecies. The first prophecy which he makes is this; he says: “I can see another cloud threatening.” There we again have the old jeremiad that we usually get from that hon. member.

Sir, I hope in the course of this speech to draw attention to certain prophecies which the hon. member made in the past, and I am sure that after I have done so nobody in this House will ever again take any notice of predictions made by that hon. member. The hon. member says that the Minister should come to the assistance of provisional taxpayers; that instead of the February payment, which represents one-half of their tax, they should first fill in their return and pay their tax in May. The hon. member ought to know that that is unpractical. He ought to know that the whole purpose of the P.A.Y.E. system is to make people pay their income-tax in the same year in which they earn the money. Does he want to throw out our entire Budget by perhaps a few hundred million rand per annum by carrying forward one-half of the tax to the next year? Surely he knows that that is unpractical. It is in direct conflict with the principle which he himself accepted as a member of the select committee and as a member of this House.

Then the hon. member goes on to say, “The Budget constitutes a serious threat to the financial stability of the future.” I shall deal later on with the hon. member’s prophecies but I feel that there is one matter which I should take up with him immediately and that is the question of the Orange River scheme. The hon. member actually comes along here to-day and says that we must follow a policy under which less money will be spent on these vast schemes which the State proposes to undertake, even if it means that the Orange River scheme is completed at a slower tempo. But he was the man who came here last year and said to the Government, “Why do you want to take 30 years to complete this scheme; why not complete it within 10 years?” No, this only proves that the hon. member had no real criticism of the Budget; he simply sucked a lot of things out of his thumb in order to be able to say something here.

I want to congratulate the hon. the Minister on the White Paper which he issued together with the Estimates, and I want to congratulate him too on the Budget itself. Every hon. member will find it worth while to study this White Paper and to familiarize himself with its contents. I think this White Paper is a document that we will still be able to show our descendants in the future with a feeling of pride.

And also to the hon. member for Constantia who has not read it.

He would not understand it. This Budget reflects the flourishing conditions in this country; it contains practical proposals which are designed to perpetuate these flourishing conditions and to obviate inflationary trends which would have an adverse effect on these flourishing conditions.

What about the shortage of manpower?

The hon. member over there can make his own speech and then he can deal with the manpower position. Sir, we must guard against inflation which will give rise to an excessive increase in the cost of living because in that event our whole economic progress is going to be neutralized by the closing of gold mines, for example. Mr. Speaker, realism has always been one of the characteristics of all Budgets of the National Party Government up to the present moment. The signs of realism which are discernible in this Budget, having regard to the times in which we are living and the financial circumstances of this country, are very encouraging indeed. If ever there was a realistic Budget which fits in with the conditions in this country and with present-day circumstances, then it is pre-eminently this Budget, and we want to congratulate the Government on it. The prosperity that we are enjoying today needs no further stimulus; it is being carried forward by its own momentum. But what is particularly important to-day is to ensure that we do not have excessive price increases and inflation, and I think this Budget will achieve those aims. I must say that as it is the hon. the Minister’s Budget is not sailing very far from the sea of inflation.

Talking about the sea and fishing, the hon. the Minister cast his line and, stupid as they are, the United Party naturally took the bait; that is why the hon. member for Constantia comes along and says that the hon. the Minister is under-estimating his revenue for next year because he is only budgeting for a 2 per cent increase over and above this year’s revenue. But there are many things which the hon. member overlooks; he forgets that the P.A.Y.E. system has been introduced in the meantime, and he forgets that that has meant that numbers of people have had to pay two or even three times the amount of taxation which they would normally pay. I want to mention the various heads under which additional taxation has been collected. In the first place there are those persons who still had to pay taxation under the old system in respect of previous years; during the past year they had to pay taxation under the P.A.Y.E. system as well as their accumulated taxation. In the second place the P.A.Y.E. system has caught large numbers of people who never paid taxation previously and who have now been drawn into the net. Many more new taxpayers were drawn into the net than was anticipated, and this resulted in the collection of a large number of additional amounts. In the third place there were the people who earned more during the tax holiday period than their pro rata tax exemption and who had to pay income-tax on their additional earnings. This is an amount which has to be added therefore. Then there are those people who paid too much by way of monthly P.A.Y.E. instalments simply because the taxpayer is not allowed to take into account all permissible deductions in paying his monthly instalments. All these factors have to be taken into account, and when we take these factors into account, what do we find? Take the people who paid arrear taxes in the course of this year. Those people alone paid the Central Government R49,400,000. Then we can take the overpayments which the Government will have to refund this year as at least R6,000,000. That gives us a total of R55,000,000. If we add that figure to the R20,000,000 by which the Minister estimates that his revenue will increase, then the additional amount of revenue which the Minister expects to collect this year over and above last year’s figure is not R20,000,000 but actually R75,000,000. The rest of the revenue collected during the past year is of a non-recurrent nature, and that is something which the United Party should at least have realized before they made these remarks here. These facts alter the picture considerably. This is an interesting point and I hope that the hon. the Minister, in his reply to the debate, will tell us more about it and give us an analysis of the exact figures because unfortunately I do not have all the figures at my disposal. In any event this reveals a rise in revenue of a recurring nature, not of 2 per cent but of 7 per cent over and above the revenue for this financial year.

I said at the outset that I wanted to say something in connection with the United Party and more particularly in connection with the prophecies of the hon. member for Constantia. Sir, the hon. member made many predictions and each and every one of those prophecies proved to be wrong. I think the hon. member for Constantia is feeling a little sick. I want to start with a quotation from a speech made by the hon. member for Constantia in this House on 22 March 1961, a week after the announcement that South Africa was going to leave the Commonwealth upon becoming a Republic. He said, referring to the Minister of Finance: “The hon. the Minister has a notable record for being wrong.” I should like now to test the statements made by that hon. member and other United Party members since that date to see who was wrong, the Minister or the United Party. You will then see, Sir, that the record holder in that respect is really the United Party and not the hon. the Minister. Of course, it is very hard for them to admit that they have been so completely wrong because they have always prophesied nothing but sad news, as they again did here this afternoon. They have always predicted nothing but retrogression, and then when we come to the end of the period in respect of which they made their prophecy we find that we actually made progress. In the three years since South Africa became a Republic we have had many prophecies from the hon. member for Constantia. To-day again, for example, he has said that the Minister’s Estimates are poor; but when we look at the United Party’s predictions in the past he, the hon. member, is the last person who can reproach anybody else in this connection. Let us see what the hon. member for Constantia said in the Budget debate on 22 March 1961 and then again three months later on 20 June 1961. In the latter debate we had the following jewels or fantasies from the United Party; I leave the hon. member for Constantia for the time being because he is not here at the moment; he may come back in a moment to admit or deny that he said these things. Let me come first to the hon. member for Pinetown (Mr. Hopewell). I quote what the hon. member said on 20 June 1961 (Col. 8525)—

You will see therefore what a Job’s comforter he was! He went on to say—

By the way, in actual fact we closed that particular year with a surplus of more than R10,000,000. The hon. member for Benoni (Mr. Ross) also said that the next step would be devaluation, and then the hon. the Leader of the Opposition came along, and what did he say? I must say that these members all spoke after the hon. member for Constantia; his prophecies were even more Jeremiah-like. The Leader of the Opposition, after the Minister had announced the steps he was going to take in connection with exchange control, said in the course of that debate—

He might have been referring to the devaluation of the United Party.

The point is that as this country progressed more and more after we became a Republic, so the United Party lost support more and more, and the passages which I propose to quote here fully prove this. I am sorry that the hon. member for Constantia has not come back yet. Here I have a few statements that he made that I should like to quote. In March 1961, a week after we had left the Commonwealth, he had the following to say about immigration—

And here follows his prophecy—

Mr. Speaker, it was never our intention to kill immigration; that is my first reply to the hon. member. We have always encouraged immigration on a selective basis, but the United Party did just the opposite. They were not looking for immigrants; they were looking for voting cattle to white-ant the Afrikaner. We put a stop to that. Our immigration policy to-day is simply more vigorous than it was in former years; to-day we are subsidizing immigrants and during the past year more immigrants have entered this country than ever before under the United Party who attempted to recruit supporters for the United Party overseas. That is the first respect in which the prophecy of the hon. member for Constantia proved to be wrong.

As far as financial matters are concerned the hon. member for Constantia made all sorts of gloomy predictions. Sir, Job’s comforter himself could not have improved on the dire prophecies which you are about to hear! On 22 March 1961 the hon. member said—

He was referring here to our withdrawal from the Commonwealth. Then he goes on to say (Col. 3387)—

He then goes on to say—

You will recall that he moved at that time that the whole of the Budget debate should be postponed until we had clarity about the significance of our withdrawal from the Commonwealth. Then he went on to say—

He then proceeded to tell our farmers that they were going to lose their farms—

Are you reading from the Lamentations of Jeremiah?

From the lamentations of Constantia. The hon. member went on to say—

The hon. member’s difficulty is this: He warns us here to remember what he says and to-day his difficulty is that we do remember what he said. Then in the course of the same speech he went on to say—

He concluded by saying—

We then come to the debate of June 1961 after the hon. the Minister had instituted currency control, and there the hon. member moved that the House “declines to pass the second reading”—

Then in the same speech he went on to say—

Let me quote this further prediction—

That is where he started this story of devaluation, a story which was subsequently repeated by his Leader and by the hon. member for Pinetown and other hon. members on the other side.

Then we come to March 1962, a year after we had become a Republic. In the Budget debate on 26 March the hon. member for Constantia said (Col. 3157)—

Not even “retard”, Mr. Speaker, but “deter” —complete stagnation. In the same speech the hon. member goes on to say—

That is the most important part of all his prophecies, Sir, that within the context of the National Party’s policy there was no likelihood and not even a possibility of general progress in South Africa in the economic sphere.

The hon. member gave us an account of all the disasters which would overtake us and all the misery that we allegedly faced. And what are the facts? During these three years since we have become a Republic South Africa has grown more rapidly in the economic sphere than ever before. We have reached unprecedented heights. Our national income this year is going to top the R6,000,000,000 mark; the figure for internal capital formation is going to top the R1,400,000,000 mark; our gross national production amounts to R7,500,000,000; we have full employment; our standard of living is rising by 5 per cent to 6 per cent per annum; our rate of growth is the highest in the whole world and is at least on a par today with that of Japan. We are tackling huge projects, projects of such magnitude that the hon. member now wants us to apply the brake a little. Moreover, we have no headaches with regard to the financing of these projects. As against that our taxation is still the lowest in the world, namely 13.3 per cent of our net national income. In spite of that we are able to do all these things; we are able to face the world and say, “These are our results”. The only thing that the United Party have been able to say this year is that the European Common Market countries have developed more rapidly over the past 15 years than South Africa. However, I think that is a matter which has been disposed of adequately in a previous debate.

Is it any wonder then, Mr. Speaker, that this Budget has been praised so highly? Every expert who has expressed his opinion on this Budget has referred to the Budget proposals in glowing terms. We find too that the highest tributes are paid to South Africa and to her intrinsic economic strength. What is particularly gratifying is that at this moment there are no fewer than nine financial editors of foreign newspapers and financial magazines touring South Africa. These people go into raptures over our Budget proposals. I think their opinions are of the utmost importance and I want to quote one or two of them. The position in which we find ourselves is envied by almost every country in the world. The Daily Express of London says—

The Financial Times of London says—

They go on to talk about “South Africa’s surging economic expansion”. The editor, in a review of the Budget from Johannesburg, had this to say, inter alia—

And so I could go on, Mr. Speaker. I might just say in passing that even the Guardian, which is an extremely Leftist newspaper in England, has nothing but praise for this Budget. They say they are surprised that we are in a position to finance all these undertakings.

Bearing all this in mind I should like to come back now to the hon. member for Constantia and put a few questions to him. My time has almost expired. I want to ask the hon. member and his party, now that these prophecies of doom made by him have appeared to be entirely false and untrue and based purely on prejudice, whether the time has not come for him to come to his senses and to admit that we have had a sound economic growth in South Africa, that our rate of growth has been as fast as that of any country in the world, and that in addition to that we have continued to enjoy stability? Has the time not come for the United Party to admit that we have a Government whose policy has been correct throughout, and that it is not the Minister of Finance and the Government who have a record which has always proved to be wrong but in fact the United Party and the hon. member for Constantia with all their dire prophecies? You will find, Mr. Speaker, that the predictions made by him with regard to this year’s Budget are going to prove just as wrong as his prophecies proved to be in the past. Has the time not come for the United Party to admit that all their dire prophecies have been based on nothing but prejudice against the National Party? Has the time not come when they should admit that our policy is the correct policy for this country? I want to go further: Has the time not come for the hon. member for Constantia and other hon. members over there to join the hon. member for Green Point in saying, “I wonder whether I voted correctly when I voted against the Republic”?

The hon. member for Pretoria (Central) (Mr. van den Heever) did his best to criticize the arguments and the statements from this side of the House. I think it would be a kindness on our part not to try to assess what his contribution was this afternoon to the economic problems of the country. The hon. gentleman has adopted the practice of debating in retrospect. He chooses to deal with debates long past and by doing that he sets up dead ducks and then appropriately tries to shoot them down. I would commend to the hon. member to be a little bit more discerning in his research of the past because in the first place his remarks about the immigration results during the period of the United Party régime are quite wrong of course. He is quite selective, I admit, in what he chooses to quote. May I suggest to him that if he would do a little more research he will find that last year this side of the House, the hon. member for Jeppes (Dr. Cronje) in particular, warned and said that there would be an underestimate of revenue. The hon. member did deal with one aspect which is important. He seemed to recognize the dangers of inflation. But like the hon. the Minister he dropped it like a hot potato after merely mentioning it.

I think the hon. member will forgive me if I do not try to analyse in detail what his argument has been, because, as I have already said, I think it would be a kindness to him not to do so.

Having listened on Monday this week to yet another of the hon. the Minister’s balanced Budgets, I think I should tell him that I felt rather like the fellow who, on his first visit, not to the hon. Minister’s fishery, but to the zoo, exclaimed in great wonderment: What is the use of an elephant’s tail? What is the ruddy thing really for? Zoologists, I gather, are still rather puzzled about the question of the elephant’s tail. But I can assure them that they cannot possibly be as puzzled as I am about this hon. Minister’s balanced Budget. “What is the ruddy thing really for?” I ask. Sir, the one thing it never does is to balance revenue against approved expenditure. I believe some zoologists have come to the conclusion that the elephant’s tail is a sort of timekeeping device because it swings with a regular pendulum-like motion. Well, if regularity is the test, perhaps I can say that the only regular thing about the Minister’s balanced Budget that I have yet discerned, is that it always produces an outsize or overbulk surplus. For the year 1963-4 the overbulk surplus is so great as to assume elephantine proportions. That, perhaps, may account for the Minister wanting to hold on to it, as he says he intends to do. Perhaps it fascinates him to watch this surplus just as watching the elephant’s tail fascinated the fellow who went to the zoo.

I believe, however, and I am sure the hon. the Minister believes as well, that the surplus will grow in size. I think it is likely that it will be much nearer to the R100,000,000 mark by the time the year has ended. I myself think this is rather a paltry sort of fiscal trick to continue to play. But I feel sure that the Treasury must recognize that the sustained regularity with which this House is presented year by year with inaccurate and unreliable Estimates of Revenue and Expenditure does make a travesty of the financial functions of Parliament. It is also—it must also be— weakening considerably the Treasury’s own financial control. You see, Sir, the same thing is happening in Railways budgetry practice. The sum total of this is that over the six years, 1958-9 to 1963-4, the public has been mulcted or over-taxed by more than R200,000,000 by this Minister and by more than R100,000,000 by the Minister of Railways. If you put those two sums together they represent the measure and the source of the “adequate funds” from which, in terms of the amendment moved by my colleague, the hon. member for Constantia, the burden of the ordinary taxpayer in the lower and middle class income groups could have been alleviated by planned and progressive budgeting.

Let me just come back for a moment to the hon. member for Pretoria (Central). He started his criticism by saying that this amendment was not worth the paper on which it was printed. Sir, I assume he is speaking on behalf of everybody on his side of the House when he says that. It is of course a disclosure on his part that he and others on that side presumably have no sympathy at all with the small taxpayer, the social pensioner and the worthy citizen who happens to be poor, because those are the very people who are embraced in the amendment moved by this side of the House. Moreover, in the face of the current revenue surplus, be it R88,000,000 or R100,000,000, the public gets a very poor deal out of the Budget. It gets a minimal share of relief from a bulging Budget. As suggested to me, there is not even a “morsel for Gorshel” in it. The Budget is obviously designed to allay fears, i.e. for those whose fears can be allayed by the magnitude of the sum of money that is to be voted for defence. For myself my fears would have been allayed had there been less authoritarianism and more humanism in the Budget proposals. But be that as it may, Sir, it is in all respects a disappointing Budget. For the ordinary citizen, i.e. for the man and woman of modest means, with no pension to fall back on, and who has dependants to educate and to keep, there is nothing in this Budget. For them, Sir, as for Alice in not a very different authoritarian Wonderland, the rule is “jam to-morrow, jam yesterday, but never jam to-day”. No one wishes to belittle the good that has emerged from the Budget; no one wishes to belittle the relief proposed for pensioners …

I thought you said there was no good in it.

I never said so. You are wrong again. I say, no one wants to belittle the relief proposed for pensioners, the modest concessions offered to the taxpayers, and the assistance promised to the marginal mines. If the hon. member for Ceres (Mr. S. L. Muller) would listen now I do say to him that all that does not call for any eulogy of the “bedank die Minister” type. Because it would indeed have been shocking if anything less had emanated from what can be called a boomto-bombs Budget.

In order to avoid doing more for the lower and the middle class income groups the Minister tries to shield behind two false premises. Firstly, he chooses, as the hon. member for Constantia has already indicated, to burden Revenue Account with the full amount of defence expenditure, because of what he calls “changed economic circumstances”. He then goes on to say “I am sure this House will have no hesitation in furnishing the wherewithal to discourage foreign aggression”. That may sound good, Sir. But why, I ask, should the whole of the wherewithal come from Revenue Account? Last year, as my hon. friend from Constantia has already indicated, the hon. Minister went to considerable pains to explain the reason for charging a fair proportion of the costs to the Loan Account. As I see it the real reason for the change stands out a mile. Put bluntly it simply amounts to saying: Absorb the surplus and be damned to relief and concessions to the taxpayer.

Yet, Sir, the truth of the matter is that the Minister’s argument last year was perfectly sound. A large proportion of the costs defrayed from the Special Defence Equipment Account is expenditure of a capital nature and should, therefore, be met from loan funds. The hon. the Minister does not argue that truth away; he does not say that is not so. He simply changes course because of what he calls “changed economic circumstances”. To charge the whole of the defence expenditure of R210,000,000 to the Revenue Account is a misapplication of funds, it is a disregard of fiscal conscience—assuming the Minister to have such a thing—and it is a breach of a well-founded principle of public finance. When Homer nods as blatantly as this Minister has, one looks for the unexplained reason for this shift of ground. I think possibly the reason may be found in the Loan Account. Loan Account redemptions in the year 1964-5 will amount to just over R160,000,000, compared with R100,000,000 for the year 1963-4.

Is that not fine?

The hon. member for Standerton says “Is that not fine?” I think he should direct that question to the Minister because he will have to find the money to redeem the loans. It means, of course, that this large amount of loan redemption will call for a substantial refinancing programme in the coming year. That refinancing programme will apparently come at the very time when the Minister foreshadows that capital investment in the private sector of the economy may reach its zenith. You see, Sir, already the Minister is having to contemplate financing this extra R60,000,000 on short advance terms. He possibly may have to find the whole of the R60,000,000 by the issue of Treasury bills. To judge from published figures, the amount to be spent currently on the Loan Account is likely to be substantially less than the hon. the Minister has shown in his original estimates. So, taking into account this Minister’s predilection for miscalculations and high estimates on occasion, I think it is already quite clear that the balance of the Loan Account at the end of the year may well exceed the R3,000,000 which he mentions as being the starting entry for 1964-5.

None the less I wish the Treasury well, because the refinancing programme for R160,000,000, which is higher than it has been in many a year, together with the new commitments on the Loan Account which go up from R298,000,000 to R338,000,000 this year, may well be a dicey sort of matter by the time the operations fall due. I hope the hon. the Minister will give a little more consideration to this and will give the House some revised figures in regard to the Loan Account when he replies to this debate. Because, as I have said, when Homer nods one is inclined to look for the unexplained reason and certainly he nods in this instance when in the short space of 12 months he can shift his ground and charge the whole of the defence expenditure to Revenue Account.

The second bogy the hon. the Minister has raised to avoid giving adequate relief to the poor taxpayer and to the man in the modest income group is the danger of inflation. He even suggested that there may be “inflationary implications” unless the recipients of the R18,000,000 loan levy repayments reinvest in Government loans. Why he should make that suggestion I do not understand, because repayments of that kind will be well distributed throughout the whole of the year and the amount itself will accordingly be widely dispersed over a large number of recipients. But on the other hand I can understand the Minister’s desire to seek an escape route, because such inflationary tendencies as are presently in sight have all been brought about by the Government’s restrictive controls, by the resultant shortages and bottlenecks they have created and by the amount of unproductive spending to which the Government is committed, particularly under the Defence Vote.

That brings me to a remarkable bit of inconsistency in the presentation of the Budget this year. Members may recollect, as my hon. colleague from Constantia has pointed out, that the Minister chose to lay emphasis on the stability of the economy as the main theme of his Budget. Stability, he claimed, was one of the two main objects for economic progress at present. I agree with him but the Government fails to practise what the hon. the Minister preaches in this House. The irony of the situation, which makes a mockery of the Minister’s plea, is that this House was obliged to consider in Committee the Bantu Laws Amendment Bill immediately after the Minister had spoken in such admirable terms about the need for having economic stability. Sir, I do not intend to discuss the Bill and to raise the arguments advanced during its consideration. I think it will suffice for my purpose to say that what that measure is designed for is to restrict the entry and to control the employment and the residence of African or Bantu persons in what are to be designated as prescribed areas. In practice it will admittedly operate mainly in those parts of the country where the economy is dynamic and where labour is most in demand. I think it is also fair to say that racial ideology takes precedence over economic efficiency in its concept.

Order! Order! The hon. member is going too far.

I accept your ruling, Sir.

As I have said, the irony is that this particular Bill was the one which the House was obliged to deal with in detail immediately after the Minister had made his Budget speech. To create a labour pool under bureaucratic control hardly seems to me to be the best way to bring stability to economic progress, particularly at a time when labour shortages are already the impeding obstacle to such progress. What it amounts to in practice is simply that it is putting the horse behind the cart and thus adding to the hazards of industrial development. And in the result it will be trade and industry that is being put into the cart. Things may, however, end better than authoritarianism is presently planning. I would remind the House of the wise words of Robert Burns when he spoke about the plans of mice and men going wrong. In present context Burns would doubtlessly have put it this way: “The best laid schemes of rats and Nats, gang aft a-gley”. For, Sir, had Burns himself been here to-day, he too would have sensed that the real saving grace at the present time is that the laws of economics are usually stronger than the man-made laws of Governments. Material well-being is a modifying force, and in the minds of men and women material welfare will inevitably count for more than political opportunism. Boom conditions, Sir, are already an embarrassment to the Government. The hon. the Minister’s Budget address and the inconsistencies to which I have referred, establish that. Nothing therefore is more likely to dissipate the hon. the Prime Minister’s mirage philosophy of “poor but White” and to erode the shackles of authoritarian rigidity so quickly and completely as a prolonged upsurge in the economy. If that should happen, Sir, then the rule of sanity in fiscal matters may still recover from the onslaughts that they have received from this hon. Minister.

Finally, I would like to support the argument of the hon. member for Constantia about P.A.Y.E. I was under the impression that placing the main burden of tax collection under the system of P.A.Y.E. upon employers would save work for the Department. That obviously is not the case. There has been substantial increase in personnel. I think the figure was given at something like 117 units. Now P.A.Y.E., whatever else it has done, has increased very considerably the paperwork of the Department, of the employers and of the taxpayers. Moreover the requirement for the provisional taxpayer to make three payments, the last of which is at the end of February, does place upon him an intolerable burden. It is in fact quite impracticable to expect him to make a proper estimate of income before the year has ended. In any case February is an odd month of the year and certainly a very odd month in which to try and finalize accounts. But the burden is made worse, as my hon. friend has pointed out, because immediately after 29 February, the provisional taxpayer is obliged to complete the normal income-tax form. That again involves more work, more paperwork, more reckoning and yet another struggle with an unduly complicated official form. I think the hon. Minister should give consideration to the suggestion that has been made that there should be some revision, for practical reasons, in regard to the system of P.A.Y.E. and to the obligation which rests upon the provisional payer to pay three times, the last of which to be made not later than 29 February, actually before the tax-year has ended.

I think one can already make the final analysis of the debate, although it has just started. The final analysis is simply this: The Opposition are embarrassed, because they hardly know what to say about this Budget; and if they do not know what to say, it may be that we also are somewhat embarrassed, for how can we now reply to an attack which has not been made and which cannot be made? But if they are in a quandary, we are not in one, for we can still always say what a good Budget this is, even if they are unwilling to discuss it.

Before doing that, I should like to pay the hon. member for Constantia (Mr. Waterson) the compliment of replying specifically to two charges he has laid against this Government. I am doing this very directly now, because I shall not be able to do so in the course of my speech. The hon. member has pointed out to the House, and accused the Minister of it, that the country has been over-taxed. If that is so, then we are not aware of it, and if the hon. member is saying that seriously, then he has not read the White Paper. If he is serious, then surely he has not remembered the ordinary precepts of ordinary public finance and economy he learned in his youth. When he refers to the White Paper—and I should like to associate myself with the hon. member for Pretoria (Central) (Mr. van den Heever) where he congratulated the Department and the Minister on the White Paper; it has made it very much easier for us to reply to such a debate—I should like to say this: According to the ordinary rules of taxation, the incidence of taxation—whether it is heavy or whether it is light—is always measured as a percentage of the net national income. We have already debated this matter very fully in this House, and therefore I shall not go into it again, but when the hon. member refers to the White Paper at page 22, he will find that the tax burden or the tax incidence as a percentage of the net national income in 1954 was 14.5; in 1961 it was 12.9 and in 1962 it was 13.3 and the estimate for 1963-4 (this is my own estimate)—and you may now write it down there and see next year whether I was wrong—is plus/minus 13 per cent; the following year it will be less for several reasons I need not enumerate now. However, the value of these data becomes apparent only when one knows that a tax burden becomes too heavy when one approaches the point of 25 per cent as a percentage of the net national income. If we were to add the taxes levied by the divisional councils and municipalities and other minor bodies which may levy taxes, we shall still have a 10 per cent tolerance. In view of this, the hon. member for Constantia must not expect us to take him seriously when he comes along here with his sweeping statements.

The hon. member for Constantia further asked that we should adopt policies acceptable in all quarters. But we are doing so. Does the Opposition object to the Orange River project? Do they object to us pursuing the policy of developing that scheme? They are not. No, one of them urged it very strongly; all of them are in favour of it. Did they object to the development of the key industries such as Sasol and Foskor and the entire complex at Phalaborwa? Not at all. Have they any objection to the assistance we are giving the gold mines in this Budget? Not at all. The only point on which we shall never be in agreement is …

What about the ordinary man?

I am saying to the hon. member for Yeoville that the only point on which we shall never agree is on the racial policy to be pursued in our country, for they are standing at the one pole and we are at the other, and from this point of view it is a joke to say that we should adopt a policy which is acceptable to both sides.

I have given the hon. member for Constantia a very direct reply, and I think I owe it to the hon. member for Port Elizabeth (South) (Mr. Plewman) that I should say something in reply to his speech. At the outset I should like to give him full marks for his knowledge of English literature. We had all kinds of quotations from him, and they made his speech sound nice, adorned with all the requisite embellishments. I do not wish to use a poetic metaphor, but nevertheless I should like to say candidly that he reminded me of the stars shining at night. They shine very brightly when there are no clouds in the sky and when it is dark, but the light they produce is very poor. The hon. member started off with a zoological quotation I did not comprehend fully, for I am rather ill-informed as regards zoology. But if the hon. member has such a great complaint against the surpluses, then surely he must also have a complaint against the tax burden, and I have already dealt with that. I shall reply to the other points he made during the course of my speech.

I said we are not inarticulate and without expression on the virtues of the Budget. If I were to examine the Budget from the scientific point of view, I say a Budget is the first comment on the management and the stewardship of a Government, in the same way that a translation is the first comment on the book. Firstly, a Budget should comment favourably upon whether it is a cautious policy a Government is pursuing; secondly it has to comment favourably on the question whether all the components of the national economy have received their share of the prosperity when there has been prosperity; thirdly, it should comment favourably upon the question whether the available funds and credit have been employed in the service of the nation; in other words, to use more technical language, the fiscal and monetary policy of the Government must be such that the money and credit inventory has served the nation well; fourthly, and particularly in modern times (and I should like to say this particularly with reference to the speech of the hon. member for Port Elizabeth (South) who referred to inflation here), the Budget should comment favourably on the question whether the Government has offered the necessary resistance to inflationary tendencies which appear from time to time in the modern economy.

And whether there is something for the ordinary man.

Fifthly, the Budget should comment favourably on the question whether the Government has succeeded in establishing labour tranquillity; sixth, it should comment favourably upon whether the Government has given an account of its stewardship by providing for elementary national needs. When I say elementary national needs I mean national security such as defence; education of all kinds; national health and cultural life; and seventh; the Budget should comment favourably upon whether the Government has seriously developed the resources of the country.

If I were to deal with every one of these seven points, we would be here till the end of next week. Even if the Opposition were to bear with me, my own side would not tolerate me. For that reason I shall deal with them superficially only. But I should like to make one general submission in respect of all these seven points, and that is that this Government has shown, in respect of every one of these seven points, that it has eminently acquitted itself of its task. I should like to congratulate the Government on that, the whole Government. I should like to congratulate the Minister on having stated it so briefly in such a fine way. The first thing that strikes one in this Budget is that it shows workmanship; it is evidence of a Minister who knows what he is doing and what he wants and what the country wants; it also testifies to a sound appreciation by the other Departments of what the country can do and what it cannot do. Let us analyse it. With reference to the first point, nobody can say this is not a cautious Budget.

Not at all.

Of course it is a cautious Budget. We could have squandered all the money, but who will say that we are wasting the money when we are spending it on an improvement of social and other pensions, as we are doing here? Now the hon. member for Constantia comes along with his motion and he says that we should provide better pensions. But we are doing so already, and we are doing it within the means of the country. What is more, a large proportion of those surpluses, as well as of the Loan Account is being used to prolong the lives of the mines. Just think of the economic consequences flowing from that? Is that wasting money? I think the hon. member for Yeoville must admit that it is not. If he were to consider merely how many ounces of gold that is going to produce, how many thousands of ounces of gold, he ought to know that for the next period it is going to benefit us to the extent of at least R31,000,000. Is that wasting money to make an investment to secure that return?

Then I should like to ask whether it is wasting money to spend it on defence? This brings me to a point I did not intend raising at all, but which I shall have to raise now as a result of the attack of the two hon. members opposite who stated that we were spending too much on defence. They say it is our fault, because of our policies, that the amount is so big. But we are living in dangerous times, There is not a single nation which is not living in dangerous times. We are too. If anybody says we are not living in dangerous times in this country, I should like to ask him what we have in South Africa that fate should guarantee our security, that other countries do not have so that fate will guarantee their safety also?

We have spent this amount on defence and achieved one great result; it is not a result reported in the Press; it is an effect one becomes aware of when one keeps one’s ear to the ground, and when one listens to what people are thinking and saying; it is an impression one gathers when one listens to the gossip about us overseas. One thing is abundantly clear, and that is that a will to resist foreign interference has grown in our Republic. I should like to say this to the hon. member for Transkeian Territories in particular. Even in his own area there has developed a will to resist foreign interference. By that appropriation for defence and other appropriations the Government has aroused a will to resist in our country. There was a time when hon. members opposite told us of the numerous people who were departing from this country just to escape from this danger spot. All of them are returning, not because they found things so bad elsewhere (many of them in fact did) but because they felt that a will to resist had been roused here and they wanted to participate in that; they are happy about it; it links them with the national sentiment of the country.

They did not leave the country in 1948.

When we spend money on national security, for defence, then it is proof of what the Government is taking upon itself in its stewardship. Whilst on this point, I could as well mention another one, namely education. We do not have the time to deal fully with this now. However, if we were to take the Education, Arts and Science Vote to-day, and consider the appropriation to our universities, and if we add what the provinces are spending on education and what the Department of Bantu Education is spending, and what is being spent on Coloured education, it will be seen that provision is being made for the infra-structure of the future. It is true, there are snags in the building industry. Criticism of this should have been levelled at us ten years ago, not now. The cause arose ten years ago. All of us must share the blame for not having had the vision at the time to foresee what is needed to-day. But hon. members did not quarrel with us at that time about this. Do you know, Sir, what they were fighting us on? They were arguing about integration and about equality and about “one man one vote”.

And about immigration.

I revert to the first point. This Budget testifies to great caution. You will notice that from the figures I gave the House just now, namely the figures on page 22; the taxation expressed as a percentage of the national income; you also notice that from the relationship of the public debt as a percentage of the national income. Ten years ago the extent of the public debt, expressed as a percentage of the national income, was 61.7 per cent; now it is 55 per cent, and that in spite of its having increased. That merely shows how carefully this Government sets about things, and that is the reply to the hon. member for Port Elizabeth (South). Why should we make the proportion greater, when we manage to find the money in another way?

Now I come to the second point. The Budget has to comment upon this question: Whether the fiscal and monetary policy of the country was such that it made money and credit available to the nation. Once again I should like to refer to this White Paper. I must say this White Paper afforded me great pleasure. It has not been drafted as a propaganda paper, as the hon. member seems to think. It is based upon figures which have been published. In the olden days I had to burn the midnight oil to tell the hon. member for Transkeian Territories something; now the Department has done it for me; it makes it much easier for me. If you look at that table, you will see that the rates of interest the man in the street has to pay when he buys a house or a motor-car or other consumer goods, or a refrigerator or what have you, have been low. The minimum rates within the past 14 years have been 5 per cent; they have risen to 6 per cent for building societies; they are almost the lowest in the world. I do not have all the figures here now, but I can assure the House that it is very low. The latest figure is 6.5. Interest rates at commercial banks, the minimum rates on overdrafts, are exceptionally low. It varies at commercial banks. It depends on the risk and the creditworthiness of the client, but the minimum does not even amount to half of what is regarded in our country as usury. It can be seen from the middle column. The same table is exceptionally interesting for another reason too, because it shows how easy it is for the Government to combat inflationary tendencies. One of the ways of combating inflationary tendencies is to increase the rates of interest. The reserve bank does that. If one looks at the rates of the Reserve Bank, one will see it is 4 per cent, and less than 4 per cent—at one time it was 5 per cent. There is plenty of room left for the Reserve Bank to move about in, in order to combat inflationary tendencies by making money more expensive so that people can buy less.

I now come to the next point, and that is whether this Budget proves that all components within the national economy have enjoyed reasonable prosperity. Once again the White Paper gives us the answer to this. The more one looks at a table, the more wonderful it becomes, for every time one sees more in it. If one looks at agriculture, the first table there, one sees there has been an absolute increase in the share that has gone to agriculture. There is an absolute increase, although a percentage decrease. If hon. members had studied the White Paper, which I seriously doubt, they would already have said that the farmers did not receive their share of the increase in the national income. But then it would have been a case of figures do not lie, but liars do figure, as the old saying goes. What happened there—and I wish to anticipate it—is that the population increase in the sectors of agriculture and forestry has been transferred (according to the statistics) to industry and commerce and to the “others” mentioned here. The others, according to statistical terminology, are really the “services”. In addition agriculture really has to contend with surpluses except for a few products. So it does not attract the capital and the people. But if one glances at the other sections, you see a constant or a very steady increase. Look at mining. One finds that during the past ten years it rose from 13 to 14, and returned to 13.1 again, about where we started. That is a steady part of the national income they received. The services and industries show a great increase. Why? Because they had to intercept the part of the population coming from elsewhere. This reflects some retrogression for commerce, but I doubt whether the figure is quite correct. I have good reason for saying that, which I shall not give the House now. An interesting figure is that services have gone ahead to such a great extent, that is to say the professions and the people drawing salaries. They have received their big share. It is an interesting figure because it is related to another matter concerning the Budget, and that is whether the Government is ensuring labour tranquillity in this country. The Government has seen to that, and has set an example by raising people’s salaries before they make organized wage demands, and cause a rumpus in the country. That is what appears from the figures. When I subject the Budget to these tests I have dealt with briefly, it fulfils its task to a great extent.

Now I should like to deal with another point. I have said that the Budget must prove whether the Government has taken the necessary steps to combat inflation. Let us recall what happened this year. We passed an Act to institute price control when it becomes necessary. That is to say, we can protect the public when there is a scarcity of goods. We are doing the right thing in the whole of our administration by instituting price control when necessary, and we also have the courage to do so if it becomes necessary. But the latest example came in the Budget when the Minister announced that there would be a considerable relaxation of import control, and we read in the papers this morning that the Minister of Economic Affairs has announced that he will relax import control. Why? Because he wishes to increase the quantity of consumer goods in the country in order that he may be able to reduce the price levels, so that there will not be inflation. If we look at the cost-of-living index (also in the White Paper) we see how successfully this has been done. During the past ten years prices have risen, if one takes 1953 as the basis. This appears on page 13. But one can take it that all the economists in the world admit that there has to be a rise in the price index. It is normal. A normal increase is from 1 per cent to a maximum of 2 per cent per annum. That is what we have had. During the ten years from 1953 to 1963 there has been a steady and normal increase; not excessive, but normal. The Budget shows that also. It has been devised in such a way that there will be no unnecessary inflationary tendencies or unduly high prices, save in one respect, and that we cannot be blamed for, and that is in the building sector. There we have a snag which originated, as I said just now, in the facts prevailing ten years ago. I shall not discuss labour tranquillity, but I think that when we look at the Budget as a whole, it is admirable and the Government should be praised for it.

I should like to mention only one more act. If we look at the White Paper once again, we see how the State, during the recent years of surpluses, years in which it did not reduce taxes and did not waste money—if we look at the results of that policy, we see a gradual increase in the primary capital investments. I wish to refer to one only, namely the electricity supply. Electricity rose from 110 to 210. It has doubled. The same thing happened in the case of many other things, save in the case of base metals—and that is the only criticism of the Budget I have. Whereas we had a summit in 1959-60, production has remained the same. I think that is a matter to which the hon. the Minister could devote some attention. That could safely be stimulated.

Mr. Speaker, I have tried to test the Budget scientifically and the conclusion I have arrived at is that this Budget proves that the Government has done its work admirably not only during this year, but during all the other previous ten years that I have been a member of this House.

I want to correct one statement made by the hon. member who has just sat down, and that was when he suggested that both the hon. member for Constantia (Mr. Waterson) and the hon. member for Port Elizabeth (South) (Mr. Plewman) criticized the amount set aside in the Budget for defence. Neither of them criticized the amount; they criticized the way it was treated and said that portion of it should go to Loan Account. When the hon. member suggested that they criticized the amount, he put words into their mouths that they did not use, and I think I should correct that at this stage.

Both the hon. member who has just spoken and the hon. member for Pretoria (Central) (Mr. van den Heever) spoke about various features of the Budget. They have forgotten the one essential of the Budget, and that is what every taxpayer looks at when he knows that the Minister of Finance is going to make his Budget speech. As soon as the voter and the taxpayer know that Budget day is coming, they await it with interest, and when it is all over they put a very plain question: What is in this Budget for me? I know that two speakers have already indicated that commerce and industry and mining and the social pensioners may have something to thank the Minister for, but what does the ordinary man, the man in the lower and middle income groups, get from this Budget? What of the man with an income of less than R4,600 per annum? They include all the top men in the Minister’s Department. The typist who typed the Budget speech got nothing out of this Budget. All she knew was that there was a surplus of R88,000,000, but there was no tax relief for her. Let us look at the posts in the Minister’s Department. For the business economist there is provision for R4,500 a year. He got no tax relief. The professional officer at R3,480 got no relief. The professional adviser at R3,720 and the principal administrative officer got nothing, and so we can go down the line, and none of them got anything from this Minister. Even the driver who drove the Minister on Budget day gets nothing from this Budget. Sir, there are over 1,000,000 forgotten people in this Budget. For the tax year ended 31 March 1963 there were 1,077,553 taxpayers. Of these, 1,016,738 fall into the category earning under R4,600 per annum. Those with incomes less than that are over a million, and yet these 1,000,000 people who were over-taxed to get this surplus of R88,000,000 get nothing out of this Budget. They get no choice morsels, and they do not deserve them, according to the Minister, as the hon. member for Constantia has pointed out, and this charge made by the hon. member for Constantia has not been met by either the hon. member for Pretoria (Central) (Mr. van den Heever) or the hon. member for Standerton (Dr. Coertze). Now, the hon. member for Pretoria (Central) represents a working area. I wonder how his speech will go down in his constituency?

This surplus will amount to more than R88,000,000. The Minister knows that the equipment he has in his office has not been capable of handling all the work assigned to it. He knows that there is a limitation of storage capacity for equipment and that the equipment is inadequate and that it is necessary to purchase other equipment. If he reads the report of the Secretary for Inland Revenue, he will see that it says that the statistical data were extracted faster than in the past, but he says that the equipment is functioning satisfactorily but it does not have the capacity to handle the increased work load due to the steady expansion of income-tax registers throughout the Republic without resorting to shift work and extensive overtime. This data processing equipment, when it was first ordered, came later than was anticipated, and when it was installed it was found incapable of doing the job as rapidly as possible, and finally when the assessments were issued they were presented in such a form that they were misleading to the taxpayer. The Minister will know that the attention of his Department has been drawn to the way in which the assessments were presented, in that when the assessments were issued to the taxpayer in 1963 they showed the amount of the assessment less the amount paid and the deduction included the provisional payment, and the taxpayer was told to pay the net figure, but that was a mistake, as the Department found out afterwards. But there were many taxpayers who paid the net figure after deducting the provisional payments. Therefore we have every reason to believe that as the Department is catching up with this there will be a considerable amount coming forward in February and March because the Minister’s Department’s report indicated that this equipment would be functioning fully in February and March, and that they expect that they will collect this revenue which has been under-collected in the past and they will not be surprised if the surplus at the end of the year is over R100,000,000. I want to take this opportunity of warning the Minister of the possible risk he is taking with his present computer equipment. The whole of the computer equipment for his Department is centralized and is barely adequate to perform the task necessary for the making of assessments and for doing the necessary statistical work for all the taxpayers of South Africa. If anything should go wrong with this equipment, or if it breaks down, there is no stand-by equipment. To-day you are centralizing all the machinery in one central office I do not criticize that; I think it is the modern trend, but I want to impress upon the Minister that this equipment is of a highly technical nature. The number of people in this country who are trained in this field is very limited. Very little of the equipment is made in this country, most of it being imported, and already the equipment the Minister has in his Department is working to full capacity, and if there is a major breakdown it will affect the whole of the fiscal collecting arrangements of the country. Therefore I think it is essential that the Minister should have stand-by equipment. I think it is a matter which the Minister should consider very seriously, because already he has found that the equipment in his Department cannot cope with the work.

I now come to budget relief. No reference has been made by the two former speakers to the way in which relief should be given. Should not our aim in our fiscal policy be to encourage family life? The Minister’s Budget proposals only provide for those who are buying houses, but the family man, particularly the one earning less than R4,600 a year, gets nothing. Surely the Minister could have given relief by way of increased family allowances, increased children’s allowances, or even an education allowance. Reference was made in the past to an education allowance and the Minister has already indicated that we are short of technical people. Should not some encouragement be given to parents to keep their children at school longer so that they can get technical education and advanced university education? One of the biggest difficulties for the person in the middle income group is that in many cases they can afford the fees but they cannot afford the boarding fees if their children go to university. Such parents should be encouraged to give their children more advanced education by giving them some tax relief, because what we need desperately is some more trained people. But the whole question of education will be developed at a later stage. The Minister has done nothing to give relief to these people for this purpose.

The Minister warned us against inflation and inflation is felt very sharply by these people earning less than R4,600 a year. The Minister talked about the sharks of inflation. There are sharks of inflation. Anyone who comes from Natal knows that sharks are the wolves of the sea and they are always hungry, and the sharks of inflation are being felt particularly by the lower and middle income groups. One of the principal things contributing to inflation is the defence expenditure, because that expenditure is not productive, and while we are not criticizing the amount of defence expenditure, I do urge upon the Minister the necessity for keeping a very tight control on the way it is spent. The Minister knows what happened in the war years. Defence expenditure is expenditure of a special nature. Orders are given out to local firms at prices which the Department considers are reasonable. Anybody with any knowledge of war supplies and the technique of war production knows that as people become more competent in making these goods, the costs go down.

I know from my experience as an investigating officer in the last war that in many instances when the orders were first given out, e.g. for armoured cars, and for the provision of sponge rubber inside them to protect the men, the cost of the first orders was very high, but the Department which placed the orders was under the impression that the figures were reasonable. It was only after subsequent cost investigations, and when the firms concerned found that by improved techniques and by the introduction of jigs and tools that they were able to cut down the cost considerably, that it was realized that prices could be reduced considerably while still giving the manufacturer a fair profit. When we see the millions of rand that are being spent, I suggest to the Minister that the time may be ripe for him to go into the question, when placing defence orders, of investigating costs and taking powers to control profits for these defence supplies. The last speaker referred to price control. Anyone who knows anything about defence requirements knows that in many cases when equipment is wanted urgently and at short notice price and profit margins go by the board and nothing stands in the way of getting the job done. We saw an illustration of that only recently in the expenditure of another Government Department in the Transkei. They wanted to put up the new Transkei parliamentary buildings and the contract was awarded on the basis of cost plus 20 per cent. I would like the Minister to make some inquiries as to what some of the men are getting on that job. The sky was the limit. They paid a man any price in order to get that parliamentary building finished in time for the opening. I ask the Minister to have a look at the cost of that job. That is just an illustration of what can take place when the Government says it wants equipment urgently. I suggest that when dealing with defence expenditure and defence equipment which is held for an emergency which we hope may never happen, it is essential that there should not only be adequate cost control to ensure that efficiency is maintained but that costs come down as much as possible; but it is also essential that the articles purchased should be stored properly so that they will not deteriorate unduly. I hope the Minister realizes that the inflationary effect of defence expenditure can be such that persons who get orders for defence supplies, particularly if there is no control, can offer wages to persons in ordinary industry and attract them away from those industries to do this work, and that in turn helps to spiral costs because there is lack of control at the centre. The Minister in other countries of the world is often referred to as the “Treasurer”, and as such he is responsible for the proper supervision of the money spent by the Government. I hope that he will exercise proper control in respect of defence expenditure and see to it that the possibilities of inflation are kept down to the minimum.

But we do not only find inflationary tendencies in regard to defence expenditure. Only recently the mining industry indicated that they were concerned with rising costs. Mr. Hamilton, the President of the Association of Mine Managers, said—

We have seen a further inflationary spiral in rents. Rents have risen and already in this Session the Minister of Housing has had to take steps to control rents. Largely due to the fact that the Government did not anticipate the need and did not provide for housing, and the Budget shows that there was an under-expenditure on housing, that was a contributory factor to the present housing shortage and the inflationary effect of rising rents. It is the ordinary man who feels the rise in rents most, because it takes a bigger proportion of his income and leaves less for the other necessities of life. One finds rents in Johannesburg and Durban increasing up to 30 per cent, and therefore one is concerned for the ordinary man when there is such inflation, in spite of the attempts made by the Minister to gloss it over. Following the shortage of housing, we have the increase in building costs. Building costs have gone up 15 per cent. There is a shortage of timber and skilled labour. May I suggest here that the skilled labour position might be improved if we had a change in Government policy in regard to job reservation and if we try to use more of our non-Whites to build houses. The Master Builders’ Association made reference to that at their recent congress and I suggest that with the abandonment of job reservation we could do a lot towards cutting down this spiral of costs, and if we abandon job reservation we could perhaps make up the shortage of 28,000 houses which is the latest figure. There are some of our people who have to live in hotels and we know that many hotels in recent months have had to put up their tariffs due to the increased cost of food and other services, and the increased cost of labour particularly in the large towns because their employees have to live out and are not allowed, in terms of Government policy, to live on the hotel premises. There was also an increase in transport costs, which put up the costs of the hotels and consequently the tariffs which the public must pay.

Another matter which leads to inflation and increased costs is this cheque levy of 2c. I hope the Minister will use his influence with the banks there. It was interesting to read in the Cape Argus a statement by the Chief Accountant of one of our commercial banks, in which he attempted to justify the imposition of this levy on all cheques. Of course it was nonsense, because that same bank in its public figures showed that for the year 1963 its profits were R5,876,938, compared with R4,919,836 the previous year, an increase of R1,000,000 in the same year that they were asking for this special cheque levy. I hope the Minister will discourage this because this cost is being passed all down the line, and I come back to my old friend, the man in the lower and middle income groups who has to pay that levy whenever he gets his salary cheque or goes to the building society. In many cases this cost is passed on to the man who is least able to bear it. There is a long list of increases, a steady erosion of inflation, which is taking place. We find no attempt by the Minister to give relief to these people in the lower income groups who are feeling the pinch as the result of rising costs. I do not propose to deal with the whole question of shirts. As the Minister knows, as the result of Government policy the price of shirts has been increased in this country because the Government provides special duties to help special people who like the Government, and the public pays, the Minister smiles …

I am smiling at the contradictions in your arguments.

The Minister is looking after big business and he is not interested in the ordinary man. The Minister’s logic is not very good. He was not a great success in the Department where he had to display his legal knowledge, and he has not made a better job of the Department of Finance. We have had an increase in freight rates of per cent on our exports and of course import rates will follow. We have had the suggestion that coal will go up soon. So there is a long list of increased prices. There is a cure for inflation. That advice was given to the Minister only recently in the Financial Mail of 14 February, when they said—

What is essential is to increase productivity and to educate our people to be more efficient. If we increase education we could have more skilled people, because every skilled person has three or four unskilled persons behind him. There is no point in talking about prosperity as couched in the grandiose terminology of high finance. The Minister is trying to impress big business, but translated into the language of the ordinary household budget it Becomes practically meaningless; until some of this prosperity percolates to the ordinary salaried man so that he can see a balance of payments on his monthly budget, boom talk will mean precisely nothing to him. The Budget gave the Minister a great opportunity to do something constructive instead of which he has proved hesitant and irresolute. South Africa continues to be isolated from the outside world and the ordinary man is kept isolated from the national prosperity.

I hope that the Opposition will not object when I say that they are being very unfair to us. If hon. members expect us to reply to what they say then I think they should make the debate more interesting for us, and if they agree with the Government, they do it in a different way from the way in which they have done to-day, namely by not advancing any arguments for us to refute. It is too much like a Committee Stage when hon. members stand up here and try to keep the debate going by raising such matters as accounting machines which may be out of order or the question of the duty on cheques and other topics. I want to express the hope that hon. members opposite will advance stronger arguments than they have advanced up to the present. We have not been able to ascertain the attitude adopted by hon. members opposite from what they have said up to the present. I really think that we must see what has been said up to the present by Opposition members in this debate against the background of the whole complex of the standpoint of the Opposition and the points they have raised in a number of debates that we have had up to the present—the consensus of opinion of the Opposition in regard to the more important matters. Mr. Speaker, I am sure you will permit me to act as the old man acted who gave a certain little boy a smack each time the boy passed him. When the little boy’s mother asked the old man why he hit the child, he replied: I must give him a slap because he is full of devilment. While he was speaking, the little boy again came past and the old man again gave him a few smacks. The boy’s mother then said: Now you are being very unfair; he did nothing wrong at all. The old man’s reply was: Yes, but I am hitting him for what he is going to do. Mr. Speaker, I hope that you will allow me to view the Opposition in the same light.

Two things have become apparent from the actions of the Opposition in debates on economic and financial matters up to the present. In the first instance they have refused, and have consistently refused, to recognize as a fact the economic upsurge in the country, but furthermore, they have also refused to acknowledge the fundamental reason for this economic upsurge and economic growth in South Africa— the good financial management of this Government and, even more so, the political security which this Government has established by means of its policy and which has created a climate in which this growth has been able to take place. That has been the one attitude adopted by the Opposition up to the present, but a second and important attitude adopted by the Opposition has also been that, in their view, all the shortcomings of the Government can be traced back to the basic difference of opinion the Opposition has with the Government—the fact that it will not permit or promote economic integration in South Africa in the economic sphere. I think the attitude adopted by the Opposition up to the present has been based on these two points.

But this Government is assisting economic integration.

I am coming to that. The hon. member must first give me an opportunity. Up to the present the Opposition have admitted that we have had an economic upsurge in this country over the past 12 or 18 months, but the Opposition have also adopted the attitude that we have been impeding the economic growth of South Africa for 15 years. This is an unfair attitude but it has been their attitude. The hon. member for Jeppes (Dr. Cronje) went even further. He said that it made no difference how well our economic growth and prosperity compared with the economic growth of any other country in the world; he said that the important point to his way of thinking was that we had the potential to do better. The hon. member applied a test in order to support this statement of his. I want to say that this test is not only unscientific but I think the hon. member is also being unfair. The whole trend of the speeches of the hon. member for Constantia up to the present has been that the present economic upsurge in the country is not due to the actions of this Government but to wool, to gold, to sugar, to defence expenditure and even to the P.A.Y.E. system of income-tax collection which have created the climate and the possibilities in South Africa for this present prosperity. The hon. member has given the credit for our economic development to all these factors, with the exclusion of the Government, and I want to come back to this point in a moment.

I want to address a few words now to the hon. member for Yeoville (Mr. S. J. M. Steyn). The hon. member tried to take this argument even further. He took his feeling of fairness towards South Africa even further and he said that the economic upsurge in South Africa was due chiefly not to the initiative, the capital and the knowledge of the White man but to Black labour in South Africa. He contends that this one factor is responsible for the economic growth in South Africa. The Opposition are seeking all sorts of reasons for our present economic prosperity but they refuse to acknowledge the actual source of the development that has taken place over the past 15 years. Here I want to make my first point and that is that over the past 15 years we have experienced economic growth in the country. This in itself is not so important but what is of importance is the fact that we have experienced a growth under circumstances and in a sector in which growth has been extremely difficult. That is the most important point. We have grown in the industrial sector and in order to experience this growth in the industrial sector it has been necessary to have not only very good State planning and guidance in the first instance but, on the other hand, the greatest confidence in State policy, otherwise this growth in the industrial sector could not have been possible.

In mentioning this matter, I want to ask you, Sir, to permit me to quote a few statistics. I say we have experienced growth in the economic sphere in the past years; the fact that we have experienced this growth is not important of itself but that what is of importance is to know how and where we have experienced this growth. In order to support this statement I want to quote the gross national production figures from 1925 to 1963. I want to refer here to the three sectors of our economy and, in the first instance, to agriculture and forestry and related activities whose contribution to our gross national production dropped from 21.6 per cent to 10.4 per cent during this period. On the other hand we had the mines whose contribution to the gross national production dropped from 16.9 per cent to 13.1 per cent during this same period from 1925 to 1963. But as far as industry was concerned we experienced an increase from 11.9 per cent to 25.5 per cent during this period and in this fact lies the key to the point I want to make— that this growth did not take place in the extractive industries or in the primary industries; it took place in a sector which required the greatest measure of planning and guidance, otherwise this development could not have taken place. Our economic history has been a history of economic growth in the sphere of mining and agriculture for many years, but these have been sectors in which capital and the necessary knowledge have been present. These have been sectors in which we have had occupation—where we have had people to develop these industries. Knowledge and occupation are the two reasons why it has been possible for these two specific factors to find a place in our economy. But there are two aspects which we must consider in connection with our entry into the industrial sector. This had to be done within a short period of time and it had to be done efficiently. The industrial sector had to deal with many difficulties and I want to mention these three basic problems. Before I develop my argument, I should like to make a further comparison. I want particularly to address the following remarks to hon. members of the Opposition who like to draw comparisons between South Africa and other countries. As far as I know, we have never had a debate in this country in which South Africa has not been compared with countries in Europe. We have always said that that is an unfair comparison, in the first instance because Europe had in recent years had to grow from nothing, because it had been reduced to rubble, to where it is to-day, with American assistance. But besides this fact there are also other factors which hold good there and which do not hold good here. But even though this is an unfair comparison I am still prepared to analyse it. I am prepared to compare South Africa with Europe in the first instance. The figures that I have here have been reduced to the real national production, in other words, the most realistic figure that one can use when comparing the economies of various countries. South Africa’s real national production figure rose from 100 in 1953 to 162 in 1963. I have already said that it is not fair to compare South Africa with Europe but I nevertheless want to mention two countries in Europe which are most comparable with South Africa.

In the first place I want to mention Holland. Each of the two countries has more or less the same number of inhabitants; neither of the two countries was reduced to rubble in the war and each has a reasonably stable economy. I have already said that South Africa improved from an index figure of 100 to 162. Over this same period, the growth in Holland increased from 100 to 158. Take Italy. In Italy, the growth increased from 100 to 169. I am prepared to consider another two countries which can actually be compared with South Africa because as far as density of population, resources and the nature of their industries are concerned, they are comparable with us. I want to take Australia and New Zealand, both members of the Commonwealth. These are two countries, particularly Australia, which are continually being held up to us as examples. We are continually being told that Australia has received so many hundreds of thousands of immigrants while we have received very few only. If Australia is an example of what large-scale immigration can do to a country, then I take it that it will not be unfair to compare South Africa with Australia. In Australia the real national production increased from 100 to 141 from 1953 to 1963. In New Zealand, the real national production increased from 100 to 133. In other words, we can apply this test to those countries with which South Africa is comparable and when we do we find that we compare very favourably indeed. I want now to come to the hon. member for Yeoville (Mr. S. J. M. Steyn), who told us during a previous debate that we should take South America as an example. I think he mentioned South America in another connection.

As an example of a multi-racial country.

Yes, quite right. I shall return to that argument later on but I want to discuss this matter with him in regard to the economic aspect only. Let us see what the position in the South American countries is. I want to mention some of the most flourishing South American countries. Take a country like the Argentine. The Argentine cuts a tragic figure in comparison with South Africa. Argentine’s real national production did not grow from 100 to 162, but from 100 to 116. Her real national production figure remained virtually static. But I am prepared to take another South American country as an example, a country like Brazil, a country which is extremely rich in raw materials, a country into which America has poured money. In Brazil over the same period the figure rose from 100 to 135. But take Venezuela, a poor country with only a few inhabitants, a country which has nothing besides oil, and which became wealthy overnight. Take away their oil and the country will be worth nothing to-morrow. The real national production figure for Venezuela jumped from 100 to 180, just slightly more than the growth in the Republic. I mention this figure in order to strengthen the argument I want to advance in a moment. I say that we must be competitive in order to handle this industrial growth that we are experiencing. In the first instance, we did not have the knowledge, the proficiency and the experience which other countries had. The Republic of South Africa did not have the knowledge, the experience and the capital upon which other countries could rely. The Republic of South Africa, in other words, did not have an industrial background on which to build, and that fact makes our growth in the industrial sphere even more remarkable. The fact that we have been able to withstand foreign competition speaks volumes for the Republic of South Africa but I say that this could only happen because the Government played an active part in that regard. This growth did not arise of its own accord; it came about as a result of the protective policy of the Government, its selectively protective policy, notwithstanding the leeway that we had to make up, to enable the metallurgical industry, the canning industry and the textile industry to go from strength to strength. But in the second instance it was necessary to make the necessary capital available and to give the necessary guidance to build up these large industrial complexes having a cumulative force—the industrial complex of Sasol and Iscor and Foscor and the textile industry as well. But hon. members opposite have always adopted a negative attitude in regard to our policy of protection and our policy of the initiating of industries like Sasol and Iscor. The Opposition have always opposed us in this regard. I do not think it is necessary for me to prove this statement; hon. members of the Opposition will agree that this has been their attitude. This break-through in the industrial sector under the protective policy of the Government speaks volumes for the formidable role that the Government has played in this regard and also the formidable role that has been played by the Opposition because the Opposition has constantly opposed the actions of this Government.

A second important obstacle had to be overcome in the break-through in the industrial sector. This second important difficulty that we experienced was a lack of trained technical know-how, a lack of management ability, a lack of manpower and so forth. It is true that we in the Republic of South Africa did not have experience and an industrial background to draw upon and to build upon. We had to do three things simultaneously, and I hope that the Opposition will acknowledge this fact. We had to make a break-through in the most difficult economic sector, the industrial sector, and we had at the same time to tackle the stage of investigation and the stage of production. All this took place during the space of a few years, relatively speaking. Seen against this background therefore it is unfair of the hon. member for Jeppes to speak about a potential that we could have reached and which we have not reached. There was a third problem that we had to deal with in this industrial development. This third problem springs from the unique nature of the composition of our population. We must not forget that we had to make this break-through into the industrial sector even though four-fifths of the people of this country were unable to make a contribution either in regard to knowledge or ability or capital. What was more, we had to carry that four-fifths of the population with us in this project. And so it is unfair to compare South Africa with European countries. When we do compare South Africa with South American countries, which are comparable with South Africa as far as the composition of the population is concerned, South Africa compares very favourably as far as her achievements are concerned. The problem of providing ourselves with management and technical ability in the meantime was not divorced from other population problems that we had because we had at the same time to supply sufficient manpower in order also to make possible the administrative and economic development of that four-fifths of the population of this country. To my mind our greatest achievement does not lie in the fact that we succeeded in doing all these things but to my mind it lies in the fact that we were able to succeed in such a way that it was not necessary for us to develop South Africa in such a way as to jeopardize the safety of the White man in South Africa. We could have done a number of things to jeopardize the position of the White man during this whole process of industrialization. Potentially therefore we could have done a number of things, but if we had done what we could potentially do—what we are urged to do by the Opposition every day—what would the position have been to-day? There were three things that we could do. We could in the first place have made use of the assistance of foreign countries for the development of South Africa. We could have made use of this foreign assistance of which other countries have made use but which has meant a direct say and interference on the part of the foreign countries supplying that assistance. We did not make use of that assistance but if we had we would have jeopardized the position of the White man. On the other hand we could also have followed the advice of the Opposition on the home front. Their advice was that we could solve our problems in the economic sphere by opening our doors economically. But if we had opened our doors we would also have had the tensions that would have accompanied a step of that nature. We have had examples of countries in Africa which had opened their doors under similar circumstances and where this has resulted in all sorts of tensions being created. One example that I want to mention here is the copper mines of Northern Rhodesia. We know what it meant to them to open their doors. But we could have done a third thing. We could have allowed, as we were urged to do by the Opposition, the Bantu areas to be developed by means of White capital and by so doing made the Bantu forfeit their right to future development. But if we had done these things, we would have created the tensions that would have accompanied them; we would have been accused of economic imperialism, an accusation that we are already hearing in African countries to-day. Our great achievement is therefore that we have been able to achieve what we have achieved without jeopardizing the safety of the White man in South Africa.

I want to make a second point and that is that the size of the achievement of South Africa is to be found in the fact that we have been able to do what we have done in the face of so much opposition. Allow me to mention a few of the obstacles that were placed in our path. The Republic of South Africa developed from her own resources. The capital which she attracted from other countries was not capital that was given to us; it was capital that was invested profitably here. People invested capital here in their own interest and not to help us. What we did to help ourselves we had to do out of our own resources. We encountered innumerable obstacles and I want to mention a few of these. I also want to refer to the question of the setting up of an infra-structure, in order to make it possible further to develop this large country of ours which was, comparatively speaking undeveloped. We had a few industrial complexes far removed from one another; we had a backlog in the services that had to be provided and without which industrial development could not take place. In order to do these things an infra-structure had to be set up and this infra-structure was not set up by industry; it was set up by the Government of this country. Without that infra-structure this industrial development could not have taken place. There were a few things that the Government had to do before this economic development could take place.

In the first place I want to mention education, because education is one of the factors in this infra-structure. In 1948, an amount of R6,900,000 was spent on education; I am speaking now about capital investment in order to make facilities available. In 1958 this figure had risen to R24,000,000—almost four times what it was in 1948. I want to mention another factor—the carrying capacity of the Railways. This infra-structure would not have been successful without the transport factor. I do not want to weary hon. members by mentioning many figures but I just want to say that as far as passenger coaches were concerned, the number of units were increased from 4,865 to 6,695 but load capacity was increased from 1,735,444 to 3,351,684.

Another part of the infra-structure is the communications system. The number of telephone connections in South Africa increased from 318,000 to slightly less than a million— the figure trebled itself within a short period. I want to mention a final example in connection with the quantity of electrical power generated. During this same period the amount of power generated increased from 10,000,000 units to 26,000,000 units, an increase of 160 per cent. I mention these matters in order to show what we had to do before this economic development could take place. We first had to set up this infra-structure. We had many other things against us; we had the gold price against us. As far as the gold price is concerned, we must remember that since 1933 the price of gold has been fixed at $35, and we must remember that over the past 15 years the cost of crushing ore has increased from R2.70 to R5.18 per ton. The cost has increased but the cost of the final product has not increased. What do hon. members think would happen to the economy of any country in the world if that country experienced only a rise in the cost of its most important product and no increase in the price of the final product at all? The marginal mines alone are producing R72,000,000 worth of gold at a cost of R70,000,000. These were all problems with which we had to deal. But I also want to refer to the rate of exchange. We had to make a break-through into the industrial sector notwithstanding a rate of exchange that was unfavourable to us. Because our main exports were raw materials and because the prices of raw materials remained very constant although industrial prices rose, it meant that we were able to buy less and less with the money which we obtained from our exports. In other words, the rate of exchange was anything but conducive to our industrial development, and in spite of this fact we still made the break-through we did.

But there are also other factors that I can mention such as the extensiveness of our country. We must remember that we have a transport problem to cope with as compared with other countries. We have to provide transport facilities over a distance of thousands of miles. We are not a small country like Holland where one town is close to another. We have had to take this adverse transport factor into consideration and at the same time be competitive in the industrial sphere. In spite of this disadvantageous transport factor the Republic of South Africa was able to make a break-through in the difficult industrial sector on a competitive basis. I can also mention the fact that we had to make a break-through into the commercial sphere in competition with vested trade interests. That was a problem that we had to overcome and which we were able to overcome. We had another problem to cope with. We did not have integrated industries as was the case in Europe, industries which were complementary to one another and which came into being because of one another. Every country needs integrated industries. We had that problem too and we simply had to overcome it. Only now are we in the position where we have a Sasol and an Iscor and where, for the first time, we are following the idea of the integration of industries. But here too we had to compete on a world market. [Time limit.]

The hon. member for Soutpansberg (Mr. S. P. Botha) has dealt in detail with the economic development of South Africa; he has drawn comparisons between South Africa and other parts of the world; he has dealt with the problems we have to face in this country and so forth. I am sure he will forgive me if I do not follow him because during the time at my disposal I should like to deal with the Budget. I would like to suggest to him, however, that had the economy of this country not been burdened with some of the present policies of this Government we might have advanced very much further.

Mr. Speaker, in introducing this Budget of lost opportunities, the hon. the Minister of Finance said the following—

Sir, I find it very easy to understand why the hon. the Minister was not at all surprised. Because in 1960-1 he anticipated a surplus of R280,000. He ended up with a surplus of R41,900,000. In 1961-2 he anticipated a surplus of R255,000 and he ended up with a surplus of R16,676,000; in 1962-3 he was a little pessimistic and he played for a draw—no surplus and no deficit—and he ended up with a surplus of R32,000,000. So when he budgets for a surplus of R100,000 and achieves R88,000,000, surely there is no need for the Minister to be surprised. It is perfectly natural, it is normal. The same picture follows through on the Loan Account. At the end of March 1961 we had a balance on Loan Account of R38,000,000; in 1962 a balance of R45,000,000; in 1963, again a balance of R45,000,000. And now the Minister estimates a balance of R3,000,000. How far that will be correct or not, time will show. The same picture of inaccurate budgeting follows right through to the loan appropriations. In 1959-60 the appropriation was R291,000,000 and R23,000,000 was surrendered. In 1960-1 R265,000,000 and R73,000,000 was surrendered; in 1961-2 R236,000,000 and R42,600,000 surrendered in 1962-3 R231,000,000 and nearly R20,000,000 surrendered. When we look at the details of some of these surrenders they are very interesting. Some of them I suppose, by the hon. the Minister’s standards, are quite reasonable: Public Works only surrendered 13 per cent of its Vote; Water Affairs surrendered 22 per cent of its Vote; Agricultural Technical Services surrendered 50 per cent of its Vote; Transport surrendered 80 per cent; Immigration surrendered 60 per cent. This state of affairs is nothing new. A typical example is referred to in the 5th Report of the Select Committee on Public Accounts for 1963 on page XI. These remarks refer particularly to Loan Vote A but they are equally applicable to any other Department of State where there have been these enormous and unnecessary Loan Vote surrenders. The Select Committee on Public Accounts deals with certain excesses and surrenders and then says that R26,000,000 odd was surrendered in respect of Loan Vote A. That represented 22 per cent of the total appropriation of R119,000,000 odd and they say that of the former amount of R26,000,000 odd R25,831,180 was “in respect of a saving on sub-head I—Transfer of Moneys from the Consolidated Revenue Fund to the Railway and Harbour Fund for Capital Expenditure on Railways and Harbours”. They go on to tell us that—

But this is the important part of these comments—

You will see, Mr. Speaker, how dangerous the effect of the policy of the hon. the Minister of Finance can be to the economic stability of the country. Because what really is the hon. Minister’s fiscal policy? It is (1) to over-provide on Loan Account; (2) to grossly underestimate his surplus on Revenue Account, and thus heavily over-tax the poor taxpayer, and then when he has achieved a huge surplus of R88,000,000 to throw a few sprats to a few chosen taxpayers to the extent of a miserable R13,000,000-odd.

I would like the hon. the Minister to tell this House, following the points raised by the hon. member for Pinetown (Mr. Hopewell), how many people in South Africa are going to benefit from the largesse of the hon. Minister of Finance? I doubt if it is 10 per cent of the European population, Sir, and it is certainly very, very much less of a percentage of the entire population.

While the Minister has been able to show some alleviation in certain vital respects the Budget itself has failed on many points. First of all—this has already been said but it must be repeated—assistance to the needy is just about nil. And this is a Budget which aims at a well-ordered system. In fact, any Budget, in that context, should not forget the people who in any civilized country are entitled to the benefits of that system. It is a good, safe financial Budget, I am the first person to admit that, except in one or two regards which I shall deal with presently. But as a social Budget it is appalling. Much of the expenditure which the Minister has allowed can create very dangerous inflationary trends. The hon. member for Standerton (Dr. Coertze) who I am sorry to see is not in the House, said among other things, that the entire Budget policy of the Government over the last few years has been to conform to a pattern. He said that it had also been utilized for the education and the development of the non-Europeans. I want to ask the Minister what money has been set aside, in terms of his surplus and in terms of his income, for non-European education? The amount that is provided is going to advance the education of the non-Whites to a very limited extent. Funds for Coloured education now go to the central administration of Coloured Affairs and they certainly will not stretch for greater educational ends. On the Bantu education side the expenditure is pegged to the earnings of the Bantu, which we know are rising too slowly to make any material difference to the funds that are going to be available for Bantu education, particularly after certain deductions that are finding their way to the Transkei.

In addition to the educational matters dealt with by the hon. member for Constantia, here was a golden opportunity also to do something more for the education of our Bantu people. Because those are the things that produce results, Sir. What about the malnutrition situation? The Budget fails to take any cognizance of this vital question at all. We know what has been happening in certain parts of the country regarding malnutrition. I do not propose to deal with it in detail because other speakers will. But we know there has been near starvation and we also know that R1,000,000 given by the hon. the Minister towards the purchase of foodstuffs for these starving people could have meant a full belly for many an African in this country and that R3,000,000 per year for a protein and vitamin diet could have wiped out malnutrition almost completely in a single province. The hon. the Minister provides for very large subsidies in the case of mealies but what has he done for the under-nourished?

Mr. Speaker, I think the vital problem is this: If the Minister wants to invest in the future of this country he has to spend some more money on two essential factors. One is on the marketing situation in this country. What is happening? The food marketing costs are too high and the buying power of the masses is too low. If the Minister wants to make a real investment I would suggest that he constructs a Budget that will provide money for a complete overhaul of our food distributive system. Agricultural marketing has got to be equipped with certain weapons to be successful. We have got to be able to manage surpluses which we do not seem to be able to do. The hon. the Minister can take a leaf out of the book of the United States of America where money and ways are provided to manage those surpluses. The Minister should also make some endeavour to promote the sale of nutritious foodstuffs to that section of the population who are finding it difficult to purchase them. The entire system of marketing and distribution requires overhauling. We need to iron out our surpluses; we need to develop a maximum domestic market for the farmers so that this country can really prosper in the true sense of the word.

The hon. the Minister has once again taken upon himself the mantle of our friend Walter Mitty who on this occasion has gone fishing. I think it will be wise to take a look to see how successful his fishing expedition has been.

The hon. the Minister in framing his Budget has been duly apprehensive of, and I quote.

The sharks of inflation that infest the economic seas to snatch away the prosperity and stability that is on the hook.

He said that was one of his main problems, the problem of inflation. I think the hon. Minister knows that there are many kinds of sharks. It seems to me he has not sufficiently differentiated between demand inflation caused by too much money chasing too few goods and the inflation caused by a shortage of labour and the pressure of too much money being available. Because it is quite clear, Sir, that demand inflation is relatively light. Using the Minister’s own facts what do we find? We find that “although personal consumption has increased by 1(H per cent, inventories continue to rise and the country is well stocked in most types of goods. The physical volume of manufacturing has increased by 12½ per cent; employment has increased by 6.8 per cent and that consumer prices have increased by only 1 per cent”. Then the Minister went on to tell us “there is no sign of general demand inflation. Indeed the steadiness of the price level, both wholesale and retail, has been remarkable”. Then we were told “that the production of South African industry is doubtless still capable of further expansion”. Here I want to refer to the statement released by the hon. the Prime Minister after the meeting of the Economic Advisory Council on 13 August 1963, on the prevailing economic conditions, because what they said was this—

Now, Sir, what does this statement really mean? Firstly, that part of our growth over the past year has been due to using previously surplus capacity; secondly, that further investment in business enterprise is necessary and, thirdly, that purchasing power is necessary to sustain the rising rate of expansion. This is all the more necessary, Sir, when you remember that the exports of manufactured goods over the last year dropped, for the period 1 January to 31 August 1963, by R12,000,000. Then the Minister went on to tell us that—

I have dealt at some length with the hon. the Minister’s speech because it seems to me that he himself has made it quite clear that the shark of inflation he has to fear is not that of demand inflation and that not only could he, but he should have, returned to the taxpayer some of the money he took from them unnecessarily last year.

I want to quote from the Chairman’s speech of Union Acceptances Limited. He said this—

Apart from the socio-economic considerations, a consistent and long-term improvement in real consumption standards is essential for the widening of the internal market and the encouragement of employment and private investment.

In the present South African context there would not appear to be any justification as yet for slowing down consumption in an attempt to contain the inflationary pressures that are becoming apparent in certain sectors of the economy.

“Certain sectors” are, of course, the operative words. This is dated 11 March 1964.

Has not the hon. the Minister aggravated the position further by utilizing revenue funds for defence which should rightly have come out of loan funds? We know that the balance of payment position is perfectly satisfactory, that our foreign reserves are high and, as the hon. Minister said, in equilibrium. We also know that the pressure of money can be the main cause of a type of inflation, particularly when taken in conjunction with a shortage of skilled labour. And the hon. the Minister is well aware of these things. He told us that he had allowed the financial banks and financial institutions to transmit R51,000,000 overseas on short-term loan. He also told us that he, the Reserve Bank or the Government had R12,000,000 overseas to take care of future commitments. He also told us that he had not touched the revolving credit he had from the United States and Germany. When he told us about these things, the phrase he used was, that he had done so to “mop up excess liquidity”. Quite right, Mr. Speaker; there is a pressure of money in the country. And the hon. the Minister took these steps to mop up the liquidity. But he obviously has not mopped it up altogether because he himself says “the capital market has ample funds available”. The Minister, in his Budget proposals, is clearly moving in the wrong direction. When he uses revenue funds for capital purposes by burdening Revenue Account with the whole of the Defence Vote he is not only denying the taxpayer some of the benefits and some of the reliefs to which he is entitled but he has also made his attack on inflation in the wrong place. What he should have done in my opinion was not to draw funds from the Revenue Account but to draw funds from the loan sector where the pressure is greatest. What is the position? There is no demand inflation and R30,000,000 or R40,000,000 or R50,000,000 relief in the hands of the small man would go into consumer goods, would go to keep the economy ticking over, would take care of the expansion which is still necessary. But that has not been done. Instead the hon. the Minister has denied that money to that sector and he has left it in the loan sector so that pressure there continues to be greater than ever. Whereas had he utilized the loan sector that amount of investment money would have come off the market, which is what the Minister has been trying to do in other ways; he has allowed people to send it overseas, he has sent it overseas, he has been trying to avoid this pressure of money. I believe that had the Minister judged properly where the inflationary tendencies were, that would have been the sector he would have tackled; he would have given the poor taxpayer some relief because his demand inflation is very limited and not likely to grow. The growth of the inflation is likely to come from the over-burden of money and that the Minister has not dealt with at all. He has unfortunately fished in the wrong pool. This has had the effect that the poor taxpayer, whom we have heard about so much this afternoon, has really got very little from this Budget.

I think the position of the man in the street is best summed up in a leader in the Natal Mercury of 6 March headed “Boom for Whom”? in which they said—

When politicians rhapsodise that South Africa “has never had it so good” as insistently as they have done lately, they invite the retort that for most people it isn’t all that good.

Mr. Speaker, that is the gravamen of our attack on this Budget, that for the man in the street little or nothing has been done. The Government is getting tardy in regard to the man in the street, Sir. Some three weeks ago, a colleague of the hon. Minister of Finance, the hon. Minister of Railways, got up in this House and told us we were going to have a reduction in petrol. Where is that reduction in petrol? When is it coming? All we know is this that when the hon. the Minister of Finance or the hon. the Minister of Railways tells us in this House on a Monday that there was going to be an increase in taxation or there is going to be an increase in railway rates those increases are in force before we leave this House. But what happens when we are going to get a reduction? I would ask the Minister of Finance not only to consider some reductions for the poor taxpayer of this country but to have a chat with his colleague, the Minister of Railways, and ask him please to implement the promises which have already been made.

If I were asked to summarize the feelings of the man in the street to this Budget, I would do so in the words of Isaiah—

There is just one other aspect I want to deal with. It is something that has already been touched on, and that is the question of P.A.Y.E. I was utterly amazed that, after our discussions on P.A.Y.E. last year, the hon. the Minister should have come to this House presented us with a Budget showing a surplus of R88,000,000, and told us nothing of the affect of P.A.Y.E. We have had statements from time to time by officials of the Department and by odd persons here and there of what is happening about P.A.Y.E. But P.A.Y.E. and its affect on the general Budget is important and we want to know what is happening. We have read, for example …

Why is there a Committee Stage?

It is far too important for the Committee Stage and I shall explain to the Minister …

Try to learn the first principles of parliamentary procedure.

It is very important. We are dealing with the question of general taxation. I want the hon. the Minister to tell us what his income would have been had it not been for the increase of tax income he has had through P.A.Y.E. This has nothing to do with parliamentary procedure; it has nothing to do with the Committee Stage. It has to do with the amount of income the Minister shows in his Estimates. We are told that thousands and thousands of people have been enmeshed in P.A.Y.E. The hon. Minister is keeping it a great secret. Because if that is the case then there should have been an automatic tax relief, because if tens of thousands of people are now paying taxes who did not pay tax before, surely we are entitled to benefit: We have been paying tax for those people for many years and now we at least should have the relief which is engendered by the fact that these people are now paying tax, but we have been told nothing about that, we have been told nothing about the effect of P.A.Y.E. There is another aspect of P.A.Y.E. which we will discuss with the hon. Minister in the Committee Stage, but on the fundamental question, viz., what has the system of P.A.Y.E. meant in so far as tax collection is concerned, I think this is the time when the hon. the Minister should tell us something about it.

Perhaps I did not want to lead you into a trap.

The hon. Minister has now ceased to be a fisherman and has now become a big-game hunter and he is going out with his traps. I want to tell the hon. Minister that we do not fall into his traps quite so easily.

I listened attentively this afternoon to the speeches coming from the opposite side of the House, and also to the speech of the hon. member for Parktown (Mr. Emdin), and I cannot but come under the impression that the Opposition finds itself in a very unenviable position. They are now expected to criticize a budget with which one can find very little fault, a budget which is evidence of the viability of the economy of the country and one in which the Minister succeeded in a masterly fashion in utilizing the surpluses in such a way that it will ensure the growth and stability of the country. In my opinion he has succeeded in pruning a little the economic tree which had really begun to grow too luxuriantly, so that it can bear fruit of a better quality. Now we expected the Opposition to come with reasonable, constructive and sober criticism. The other speakers have already adequately replied to the criticism which has been voiced so far. The hon. member who has just resumed his seat raised a few matters to which I want to refer briefly.

The first matter he mentioned is that under a United Party Government the economic prosperity and progress in our country would have been much greater than is the case at present. That is an argument we have already heard before from the hon. member for Jeppes (Dr. Cronje). It is nothing new. But the fact is that if the policy favoured by the United Party had been followed there would have been so much uncertainty in regard to the safety of the country that there could have been no question of greater economic prosperity than that which we to-day have under the present Government.

I have said that this is a good and sound Budget, and even the hon. member for Parktown was forced to admit that from a financial point of view this is a good Budget. He referred to the lower income groups to whom no taxation concessions were made, but surely the idea was not to grant taxation concessions to all income groups. The object was only to remove anomalies in regard to supertax. That is really why the concessions were made. But those hon. members will not convince anybody with this story of theirs.

We have viewed with satisfaction this afternoon the ineffectual attempts made to expose the shortcomings in this Budget, because in the final result this Budget with all its shortcomings and all its merits remains the responsibility of the Government, and it is the fruit of the policy followed by this Government. I well remember how the Opposition on previous occasions strongly criticized the policies adopted by this Government, and I remember how they predicted that economically the country was facing a catastrophe, and it is a good thing that one should from time to time be reminded of one’s mistakes, and I am glad that the hon. member for Pretoria (Central) to-day very effectively pointed out the faults made by the Opposition in the past. But in this connection I should also like to drag in the Leader of the Opposition and to remind him of his sins. Not long ago the hon. the Leader of the Opposition said the following in an interview he granted to the Press—

That disaster from which South Africa had to be saved is this splendid and wonderful Budget. Well, if that is the disaster from which South Africa had to be saved, we might as well have more of these disasters. But even the newspapers supporting the United Party, and which were used as the media for inciting feelings against the Government, said in their headlines—

That is how they carried on. But the hon. the Leader of the Opposition on a later occasion, when we became a Republic and after we had left the Commonwealth, made a very important statement which proved to have been quite a wrong prophecy. He said, according to Hansard—

History has proved that that is true, but the hon. the Leader of the Opposition continued to say this—

Sir, he continued—

Those were the wise words of the hon. the Leader of the Opposition. What has happened to his predictions? What was the result of our becoming a Republic and of our leaving the Commonwealth? The result of it all was in the first place that to-day we can submit a Budget to this House which is proof of the prosperity in the country, which is evidence of the flexibility of the economy of the country, a Budget which with its concessions and judicious use of surpluses will ensure stability for our country in future. Where now is this so-called shock to capital, and where has confidence been undermined? Let us investigate to what extent capital has been frightened away and confidence in our economy has been undermined. What has actually happened? It was interesting to read in the Burger only this morning what was said in a UN report about South Africa. It appeared under the heading, “Investors’ confidence restored after Sharpeville”. The report states—

This is what this UN report stated. But what about capital investment in South Africa? Foreign investments in South Africa at the end of 1962 amounted to R3,016,000,000. In the past British companies provided the major portion of these investments. Last year they confirmed their confidence in the economy of our country by increasing their investments by more than R200,000,000. But also the United States and other countries found the Republic to be an equally attractive field for investment. According to statistics, United States investments in the Republic at present amount to more than R400,000,000, i.e. approximately one-third of its total investments in the whole of Africa.

Now, one asks oneself why such investments are made in the Republic, in view of the fact that they condemn our racial policy and that from time to time the United Party voices certain doubts in regard to the stability of our economy? The fact is that the average dividend return on investments in South Africa offers them the highest rate of interest in the world. It gives them an average rate of interest of 12.6 per cent on their investments. Whereas American companies on an average earn 12.6 per cent interest on their direct investments in South Africa, their investments in Western Europe earn them only 6.6 per cent, in South America 2.9 per cent, and an average of 5.5 per cent over the whole world. That is the incentive for these investments, and the reason for their confidence in our economy. The White Paper tells us, further, that the United Kingdom is still our best client, in spite of the fact that we left the Commonwealth. As much as 30.7 per cent of our exports went to the United Kingdom, and 29.7 per cent of our imports came from the United Kingdom. Figures issued by the British Department of Trade tell the story that Britain’s exports to South Africa last year increased by R100,000,000, and her imports from South Africa during the same period increased by more than R23,000,000. According to the White Paper, our imports from the U.S.A. decreased from 19.2 per cent in 1952 to 17.7 per cent in 1963, but as against that our exports increased from 8 per cent in 1952 to 8.9 per cent in 1963. Now one asks oneself why that is so. In this regard I want to quote from a leading article in Tegniek—

In this regard it is interesting also to read what is stated in this UN report—

Measured by the yardstick of revenue derived from foreign investments, South Africa’s attraction for foreign investors is quite understandable. In recent years it has paid out an average annual amount of between R166,000,000 and R200,000,000 on investments.

That is what even UN must have done. It is undoubtedly true that our strong economy is the anchor to which our safety is linked, and this article states that it is due to “good business and not sympathy”. And indeed that is a fact which the United Party and UN have never borne in mind. It remains a hard fact in the financial world that sentiment, sympathy and ideological standpoints amount to very little. What is of importance is profits and dividends. That is the real reason why our trade with the United Kingdom and the U.S.A. has steadily increased, in spite of boycotts and the strongest condemnation of our racial policy. I ask myself whether the Opposition realizes that the sound economy of our country is our strongest bulwark against aggression and interference from outside. It is interesting in this regard to read what the financial editor of the London Guardian writes. He writes to his paper from lohannesburg—

Our sound economic position provides us not only with the means to defend ourselves and to strengthen our defence, but the fact that the Western world has acquired an interest in our economy, an interest which is of great importance, an interest which is such that they will feel morally obliged to defend it means that they cannot afford to throw it to the wolves. These facts give the lie to the criticism of the Opposition. No wonder that the electorate no longer has any confidence in them, no longer takes notice of their wild predictions, and to an increasing extent is trying to find other political homes. As usual, the criticism of hon. members opposite is again meaningless and without substance, and the future will again reveal how unfounded their statements and allegations were.

I wish to conclude by congratulating the hon. the Minister on his Budget. I cannot do so better than by quoting the significant comment of one of the newspapers—

The hon. member for Welkom (Mr. H. J. van Wyk) sang the praises of the Government in connection with the sound economy of our country very highly indeed. He was hardly able to maintain this song of praise to the end of his speech. On two occasions this afternoon, by the hon. member for Soutpansberg (Mr. S. P. Botha) and also by the hon. member who has just sat down, we have been told that the Opposition are not prepared to give this Government credit for what it has done in this Budget in order to bolster up the economy of the country. Of course we want to give the Government credit for the fact that in this Budget it has, in its own opinion, done the best it could do, and we want to render to Caesar what is Caesar’s. But we do not want to render more to Caesar than Caesar deserves, because not even the Bible expects that of us. When I say that we do not want to give the Government more credit than is due to it, I want to add that it would be a poor Government which in a country having the raw materials that our country has and having the possibilities that our country has could not present a Budget like this one.

What did you do in your time?

You said that the country would go bankrupt.

Now the hon. member for Welkom says that if the Opposition had been in power there would have been so much uncertainty in regard to the safety of the country that we would have suffered economically. On what grounds does he say this?

On the grounds of your policy.

On what grounds does he contend that if the United Party had been in power foreign investors would have found the country so much less safe than it is at the moment and would therefore not have invested their capital in this country? Does the hon. member contend that if we had still been a member of the Commonwealth our trade with foreign countries would not have been as extensive as it is now and that Britain would not have bought as much from and sold as much to us as is the case now? I have never heard a more stupid contention in all my life —that if South Africa had still been a member of the Commonwealth and the irritating things that are done by this Government had not been done, the country would have been less safe and that investors would have been less inclined to invest their money! This country with her gold and precious stones and riches would then have been less safe for investors! Surely not!

I did not know that you wanted South Africa to remain a member of the Commonwealth.

The hon. member for Welkom asked whether the United Party did not know that a sound economy was the best bulwark against Communism. Mr. Speaker, that is what we have consistently said. We were the first to say so. We have stated consistently that a sound economy, sounder even than is the case to-day, is the best bulwark one can have against Communism, and we are always saying that the more we do to isolate ourselves and to alienate ourselves from White civilization the more harm we are doing ourselves and the more we are undermining this bulwark against Communism. If there is anyone who wants to contradict me in this I want him to tell me on what grounds he refutes this statement. Is there really anyone on the other side of the House who will contend that if a country follows a policy which alienates it from its Western friends, to such an extent that they no longer feel inclined to support that country on any occasion at all, that that country will promote its trade and increase its safety in that way? It is unavoidable that our economy must be affected in the long run.

Are you referring to Nkrumah?

Does the hon. member for Somerset East (Mr. Vosloo) contend that if we isolate ourselves we will be better off The hon. member for Soutpansberg mentioned a number of figures here. I am sorry that he is not here now. He spoke about the real national production and how it had increased in South Africa in comparison with the position in Australia. He said that it had increased here from 100 to 160 and only from 100 to 140 in Australia. Does the hon. member not realize that Australia has undertaken a very comprehensive immigration programme? When immigrants arrive in that country they are of course not yet fully productive. It takes them years to adapt themselves to the economy of the country. For this reason the real national production there cannot be as large as is the case in a country which does not have such a vast immigration programme. I want to put this question to the hon. member for Somerset East. Which would he rather have had, a real national production which rose from 100 to 140 and which brought 1,500,000 White immigrants to the country, or a real national production which rose from 100 to 160 with only 60,000 immigrants over the last ten years? This side of the House blames the Government for the fact that no matter how they may boast about the sound economic position in the country, about which we are just as pleased as they are, they can never contend that if they had followed a positive and permanent immigration policy over the past 10 or 15 years and if the number of White citizens in this country had increased by 500,000 or even perhaps by 1,000,000 instead of 60,000, that the position in our country would have been inherently less sound economically and that the country would not have been far safer for the White man to live in. That is the guarantee for the survival of the White man in our country—the number of Whites we can get to strengthen our numbers here, not the number of non-Whites we can drive away.

I want to confine myself more to the third leg of our amendment, which deals with agricultural matters. The amendment states that we refuse to approve the Budget—

I hope the House will be patient with me if I discuss the broad agricultural policy for a moment before discussing the subsidization of the consumer mentioned in the amendment. I want to say that there is probably not one single member of this House, whether he is a farmer or not, who does not think sympathetically and sorrowfully of the farmers who are now experiencing a drought, a drastic drought. With the exception of the East Coast and part of the Transvaal, the whole country has since the beginning of April last year been in the throes of a drought the like of which we have seldom experienced before. I do not want to discuss this matter in detail—the effect that it may have upon our production not only as far as maize is concerned but also as far as dairy products and groundnuts and similar products are concerned, the tremendous losses that the country will suffer in this regard. There is no doubt but that the farmers are not sharing in the prosperity being experienced by the country at the moment.

What about the wool prices?

The farmers are not sharing in the prosperity that the country is experiencing to-day. “The reason for the deterioration in the relative importance of the agricultural sector is the drop in the prices of agricultural products in relation to the general price level. Apparently the demand for agricultural products has not increased as swiftly as the demands for other goods and services.” I quote this from the Annual Report of the Department of Agricultural Economics and Marketing. If farming was a profitable profession to-day, we would not be losing farmers at the rate of 2,000 to 3,000 per annum and 20,000 people would not have left the land over the past ten years. Let me quote now from the Burger of 27 November 1963 (translation)—

This is what Mr. S. J. J. de Swardt, Secretary for Agricultural Economics and Marketing, said when he addressed the Chamber of Commerce at Benoni. Now if the Secretary for Agricultural Economics and Marketing issues a warning of this nature, should we not take notice of it? When we know that with the exception of a few products which are fetching good prices on the international market things are not going so well with agriculture, when we consider the fact that the drought is slowly crippling the country, it is stupid to argue that things are going well with agriculture. Fortunately, things are going well with the wool farmers and would have gone even better with them if they had more wool to shear. The wool farmer receives a better price for his product; we admit this and we are grateful for it. But heaven alone knows what the drought is going to do to the flocks of the wool farmers over the next few months. We hope it will rain soon.

I want to discuss another point in connection with agriculture and that is the fact that production rose by 6 per cent from 1957-8 while consumption has remained fairly static since 1952. It is particularly noticeable that consumption did not increase at anything like the rate at which production increased.

May I ask a question? I want to ask the hon. member whether he believes that production rose but that consumption did not increase and that the price level did not rise either? If this is so, does he suggest a general increase in prices as far as all agricultural products are concerned or what solution can he offer in this regard?

If the hon. member will exercise a little patience he will hear my suggestions. We have repeatedly stated that he and his side of the House do not have an agricultural policy. I want to tell him something this afternoon. I have already said that production increased while consumption remained static and this resulted in increased exports which had to be subsidized. [Interjection.]

Order! The hon. member has asked his question and he must be satisfied.

What agriculture in this country needs most of all is that the basic shortcomings in the agricultural industry should be recognized and rectified. It is in connection with these basic shortcomings that I want to address the House this afternoon in order to see whether something cannot be done to remedy this position. It is not necessary to say that agricultural production in America and practically throughout Europe is subsidized far more than in this country. I am not making a plea for producer subsidies. We must approach this matter from a completely different angle, and this is also my reply to the question put to me by the hon. member. I am not going to advocate higher prices but I want to make a plea for lower production costs in order to make cheaper food available to the consumer.

I want to start with the basic agricultural product. You may tell me, Sir, that I do not know as much about this product as I ought to know, but I know enough about it to know that it is a basic foodstuff. I am talking about maize. We are sorry that our maize crop this year will not be anywhere near the size of last year’s crop. We know that last year we exported about 30,000,000 bags. We also know that the board paid levies amounting to more than R11,000,000 for the export of 29,000,000 bags in 1962 and that the board expects to pay R4,700,000 for exports in 1963-4. I want to say that if part of the exports and part of this subsidy could be used to subsidize local consumption, this country would be in a far better position because maize would be cheaper to the consumer. Maize is a staple food of man and beast and if we make more of the export maize available here in the country, we will in the first instance be able to improve the condition of our livestock. If this is done it will also improve the quality of the meat that we export thus reducing the losses that are incurred in this regard. We slaughtered 1,250,000 oxen at an average weight of 350 lbs. each. The picture would have been a completely different one if we had used maize as a cattle feed. Hon. members must not tell me that we cannot use maize as a cattle feed on its own; it is the basic ingredient of any concentrated feed for any animals, cattle, sheep or poultry. If we had made maize available at export prices we could have used the same subsidy to subsidize local consumption and we will then have been able in the first instance to improve the quality of our slaughter stock and secondly, we would have increased our dairy production.

I want to discuss the question of dairy products for a moment. We have nothing but the highest praise for the Dairy Board for having succeeded in increasing the consumption of dairy products in the country to such an extent by means of the publicity and advertising that they have done in this regard. I should also like to read this quotation from the Report of the Dairy Board (translation)—

We have nothing but the highest praise for them in that they had the courage of their convictions to tackle promotional projects and publicity campaigns of this nature for their products. But in doing so, we also want to tell the Government immediately that it lags so far behind in connection with the promotion projects which it should do as a Government to promote the consumption of South Africa’s own agricultural products and is leaving this work to the boards to such an extent that it does not know whether it is coming or going in connection with advertising work. The Government does no advertising work, or hardly any, in order to assist producers. To my way of thinking it is not of very great importance whether maize is used to increase egg production, dairy production or meat production. Apart from maize we also have bran and oil cake in our own country, both of which are ingredients of this concentrated feed. All these products that I have just mentioned are being exported at a loss.

Only the surplus. Nobody prevents you from using it.

We are exporting no less than 15 per cent of the eggs produced in this country and the loss on those exports amounted to R1,100,000 in 1962-3. I ask myself what has already been done by way of promotional projects amongst the less-privileged groups, even among the Bantu, in order to encourage the consumption of these products. Rather let us use this amount of R1,200,000 which we are losing on the export of eggs to pay for these promotion projects and to enable us to make eggs available to these people more cheaply. I want to come back now to the point that I made earlier, on —that we ought to follow a policy of subsidizing various foodstuffs in order to increase our internal consumption. What we are losing to-day on the export of certain foodstuffs should rather be used to make those foodstuffs available more cheaply in this country as food for man and beast. The Government would then be doing its duty towards the less-privileged people and the lower income groups without having to place a large sum of money on the Estimates for this purpose. We can find no provision in this wonderful Budget for this work of promotion and publicity amongst the less privileged and lower income groups in this country. The farmers are experiencing difficult times and they have to export their surplus products at a loss. The boards and the farmers themselves have to subsidize the export of these products instead of using the funds that they have established for the purpose for which those funds are intended—to promote the consumption of agricultural products. Mr. Speaker, this Government must also ensure that the lower-paid groups especially the Bantu, receive higher wages. In this way we shall be able to expand our local market for agricultural products considerably. But no provision is being made in this regard in this wonderful Budget, even though there is this large surplus. For this reason we cannot support the motion of the hon. the Minister and we are going to vote for the amendment.

The hon. member for East London (City) (Dr. Moolman) asked what the Government had done to increase the wages of the less-privileged groups in the country, particularly the Bantu workers. Of course, it would be very easy for me to ask the hon. member what he himself had done in that regard, but I shall not do so. What I do want to tell him is that this Government has ensured by means of its careful planning over the past years that every man in this country who wants to work is able to do so, therefore able to look after himself and his family and that is far more important than it is to continue to give the taxpayer more and more.

The tone of this debate has rather surprised me this afternoon because, as we all know, the United Party used to be the party which always looked after the interests of the wealthy, but now it has suddenly emerged as the champion of the poor taxpayer. The hon. member for Constantia (Mr. Waterson) went further; the hon. member for Pinetown (Mr. Hopewell) went even further and the hon. member for Partown (Mr. Emdin) went even further still. The hon. member for Pinetown said: “The ordinary taxpayer, the man in the middle and the lower income groups involuntarily asks himself, ‘What am I getting out of this Budget?’” The hon. member for Parktown put it slightly differently when he said: “How many people benefit from this Budget?” Hon. members on that side all emphasize that this Budget does nothing for the less-privileged persons or for the taxpayers in the lower and middle income groups. Mr. Speaker it is very easy of course in a case of this kind to try to play upon the sentiments of those groups. It is very easy to climb onto a soap-box and to say that the Government is treating those people unjustly, but the fact is that by means of the planning of the hon. the Minister of Finance, assisted by the whole Cabinet, this Government has succeeded in giving the economy of this country such an impetus that everyone who wants to work is able to do so and to make a reasonable living. Much has been made of the benefits which the higher income groups will derive from this Budget while the whole purpose of this change is simply to rectify an anomaly in our tax structure. When we look at the tax rates under the so-called block system which we have had over the past few years, we find that before the introduction of these new proposals the increase in the rate of taxation in respect of the income groups earning R600 to R1,000, R1,000 to R1,200 and R1,200 to R4,000, never amounted to more than 1 per cent or at most 2 per cent, while the increase in the case of the income group earning R4,600 to R5,000 was 10 per cent. In the case of the next group the scale of taxation rose by 9 per cent, and in the case of the next group by a further 8 per cent. Thereafter, in the higher income groups earning R8,000 to R10,000, the percentage increase is once again much lower. In the case of the income group earning R7,000 to R8,000 the increase in tax is only 2 per cent. In the next income group there is an increase of 4 per cent and eventually, in the case of the income group earning from R10,000 to R12,000, the increase is only 1 per cent. It is perfectly clear that this position is extremely anomalous. At the start the curve is very slight; it then rises suddenly and then when we come to the highest income groups, the curve falls sharply. All that the hon. the Minister is doing by means of these changes is to make the curve more gradual. There is no question of special preference being given to the higher income groups. Indeed, the highest income groups are given no preference at all. It is the middle income groups who are being given this preference. Because of the depreciation in the value of our money I from year to year, people who formerly fell into the lower income group now find themselves in the middle income group and these are the people who deserve decent treatment.

When I analyse this Budget of the hon. the Minister of Finance, it is perfectly clear to me that the Financial Times of London is quite correct—and the Financial Times is certainly no admirer of this Government! It is quite correct in saying—

It goes on to say—

That is to say, South Africa can rightly claim to be called the wonder of the Western world. The Financial Times goes on to describe Dr. Dönges’s Budget as—

I think they could also have added that it will make the Opposition in South Africa envious. The hon. the Minister of Finance certainly does not control the whole economy of the country but by means of his financial policy he can do a great deal to guide our economy along the desired lines. That is precisely what this Government has done over the past five or six years through its Minister of Finance. Sir, the hon. the Minister of Finance has planned and worked since 1959 for the prosperous position in which we find ourselves to-day. It is quite true that many factors have played their part in this but his planning and financial policy have by no means played the smallest part. Since 1959 he has given our economy an injection every single year.

I want to remind you again, Mr. Speaker, of his Budget of 1959 in which he stimulated our economy by allowing a depreciation of 2 per cent per annum on factory buildings and an initial machinery allowance of 20 per cent. In the next year, in 1960, he allowed a tax rebate of 10 per cent on the cost of buildings over and above the initial allowance of 2 per cent. In this way he has stimulated our econonomy each year. In 1961, for example, the initial investment allowance was extended to include other industries—for example, service industries like hotels. He has given this stimulus to our economy every single year and this year we are reaping the fruits of that planning and of the stimuli provided by the Minister.

Last year he realized that the purchase of consumer goods also needed a stimulus and he therefore devised plans to stimulate private spending. The result was that expenditure on personal consumer goods increased in 1963 to R4,300,000, an increase of 10½ per cent over the figure for 1962. Our gross national production has increased by leaps and bounds as a result of this series of economic injections since 1959. In 1962 our gross national production amounted to R6,068,000,000, and by 1963 it had risen to R6,679,000,000, an increase of 10 per cent. Manufacturing in particular was given a great impetus. Look how manufacturing increased. Physical production increased by 12.9 per cent in the past year— this is without taking into consideration any appreciation in value. This percentage is therefore not a true reflection of the increase.

We have now reached the stage where our economic growth can look after itself. Because the hon. the Minister of Finance is an extremely capable financial manager, his watchword now will be “stability” whereas in the past few years it has been “growth”. This Budget is a masterpiece of economic insight and financial vision. During the past few years when the hon. the Minister of Finance has announced his plans from time to time to stimulate our economy the Opposition have smiled derisively, but that derisive smile was wiped off their faces when they saw the results of those plans.

I have every confidence that the measures taken by the hon. the Minister of Finance to promote permanent financial stability in this country will be just as successful as the measures that were taken to promote growth in this country over the past few years. With such a large surplus at his disposal he was probably greatly tempted to do what has been suggested by hon. members of the Opposition. I am sure that the temptation to be popular and to make all kinds of concessions to taxpayers was very strong because, after all, that is the way to win popularity.