Mr. Chairman, may I ask for the privilege of the half an hour? Last night the hon. the Minister of Finance, speaking from his usual seat, made what might be described as a minor Budget speech “out of the blue”. In a short 20 minutes he produced some R58,000,000 and he disposed of it in a very cursory manner, in a manner which embodies certain important new principles. In doing so he said he was happy and thankful to be able to make the statement. I must say he did not look very happy and thankful to me. He looked distinctly embarrassed and if it were possible for this Minister to do so, I would say he looked thoroughly ashamed of himself. And he might well be, Sir. This was a very important statement. It showed every sign of hasty drafting, presumably in order to enable the hon. the Minister to make the statement when his Vote came before this Committee. As I have said it was made towards the end of the proceedings last night. The hon. the Minister was kind enough to let me have a copy for which I thank him, but most members had no opportunity of reading the statement, let alone considering it, until they saw it in the newspapers this morning. Most members are busy during the morning with select committees and other work. Yet they are now expected to debate this subject in a disjointed debate which normally takes place on the Minister’s Vote.

Mr. Chairman, I say this method of handling the question is simply paying lip-service to Parliament. It is not fair towards Parliament to adopt this method. And I say further —I am sorry to have to say this—that it is typical of the level to which the standard of public administration has fallen under this Government. I think we are entitled to protest and protest very strongly against this method of handling the country’s finances. Admitting, as we do, that this is a difficult year for budgeting, largely due to the new system of income-tax collection, I think there is no doubt about it but that the proper course for the hon. the Minister to have adopted would have been for him to have made the statement—which is quite unprecedented, as far as I know, in the history of Parliament—and then to have told us that he would see to it that time was in due course made available for a proper debate to take place when the whole matter could be discussed in a proper way. However, the hon. the Minister did not see fit to do that. We therefore have to deal with the facts as they are. The difficulty, of course, when I say we must deal with the facts as they are, is that when it comes to dealing with this Minister, you never know what the facts are. The facts we were given last night were quite different from the facts we were given a month ago. When we come to the end of this Session I would not be surprised if we had even a third set of facts laid before us, also, I have no doubt, with gratitude and thankfulness on the part of the Minister.

Well, Sir, the hon. Minister made his statement. He dealt first with the question of the non-resident shareholders about whom he had spoken in the Budget debate. He told us that he was ending the system which was in existence and that he was going to introduce another system. Those proposals which he put forward last night will be dealt with by another hon. member. He told us that he did not want to close the door. Well, Sir, he may not have closed the door, but it looks to me as if he has done everything but lock it as far as the non-resident shareholder is concerned, and we will have more to say about that in the course of this debate.

He then dealt with a small point in regard to travellers and the South African Reserve Bank notes they may take with them. He has reduced that amount to R20 but has left the total amount the same. I think that will be welcomed by travellers, because for one reason and another South African notes are not becoming any more welcome than they used to be as exchange in other parts of the world, and travellers will only be too pleased to carry other currency with them in the countries to which they are travelling.

But, Sir, the hon. the Minister only gave as reason for this change that the carrying of South African Reserve Bank notes was being abused. I think he might have enlarged on that, because on the face of it I do not quite see what abuse can be made by a man who takes 20 R2 notes away with him. I think the hon. the Minister might have enlightened us when he told us that he was making this change. But, Sir, it was on a par with the whole statement which to a large extent was superficial in the extreme.

Then the Minister came to this question of his surplus. A month ago, the Minister told us that he had a surplus of R88,000,000, and we told him then that we doubted very much whether he was accurate and that we thought that he was under-estimating. Now in a month’s time he has found another R40,000,000, and his surplus is now R128,000,000. The R40,000,000 is made up of R20,000,000 largely unexpected income-tax receipts and R20,000,000 under-spending, of which the great bulk is on defence. Now, Mr. Chairman, it strains my credulity to the utmost limit to believe that the hon. Minister in the middle of March did not know that the Defence Department was going to underspend its allocations by something like R15,000,000. However, he told us that he did not know it. A month ago he estimated that he would balance his Budget. He estimated his revenue would be something like R1,019,000,000. A month later, now, he says that he thinks it will be R18,000,000 more. In other words, within a month the hon. the Minister gets up and confesses to miscalculations in the course of a month of no less than R58,000,000. I say that estimates such as this and figures such as this put before the House are simply reducing Budget statements to a farce and they make the hon. Minister’s figures completely unreliable. The hon. Minister in the course of his statement referred to certain non-recurrent items. It was not quite clear to me why he referred to them. He said that, in 1963-4 there was a collection of arrear income-tax in respect of the previous year of R55,000,000 and that for the coming year he estimated that that would not be R55,000,000 but would only be R28,000,000. In other words, that there would be R27,000,000 less to be collected in back income-tax than last year. He also said that he estimated that there would have to be a refund of some R6,000,000 to taxpayers who had over-paid their income-tax. That makes R33,000,000. I wonder—perhaps the hon. the Minister will tell us—did he allow for these figures when he made his estimates in March? Because if he did not do so, why did he not do it? He must have known in March, he must have had a very good idea that there would be a drop in the arrear income-tax and he must have had some idea of what he would have to repay in over-paid income-tax. If he did not take that into account in his estimates, why did he not? And if he did, and I assume he did, I do not quite see why he found it necessary to refer to them in his statement last night. But, Sir, if he did not take them into his estimates, then surely they have to be taken into account now, which would reduce the R58,000,000 which he so gleefully disposed of last night by the R33,000,000, bringing it down to about R25,000,000. Unless of course the hon. Minister knows perfectly well that he is already grossly under-estimating his revenue for the coming year. It may well be so. Because we have reached the stage with the hon. the Minister that we feel that no reliance whatever can be placed on any figures that he places before the House for our consideration. The hon. Minister is wallowing really in a sea of the taxpayers’ money to such an extent that he seems to be quite at a loss to keep proper track of it. The hon. Minister says that he has R58,000,000 to dispose of. That includes, a remarkable thing, R18,000,000 which he has not got yet, and so we have the remarkable feature in regard to this statement that the hon. the Minister is actually disposing of next year’s surplus in this year’s Budget. I have never heard of such a thing before, and one can only imagine that the hon. Minister knows perfectly well from the figures at his disposal that the R18,000,000 which he is adding now is only a drop in the ocean of what he expects to have at the end of next February. In any case it is quite irregular budgeting. At a time like this when the hon. Minister cannot claim that he is scraping the bottom of the bucket to balance things, it is quite irregular for him to come along now— on his Vote, not in the Budget debate—and announce that he is allocating and disposing of next year’s surplus. I have never heard of such a thing.

When it comes to the R58,000,000, the hon. Minister says that the main thing is that the taxpayer must not get any of it. That would be very wrong. That would lead to inflation. Therefore in the taxpayer’s own interest it is the Minister’s sacred duty to see that none of this vast sum finds its way back to the taxpayer. But he does say that sooner or later even he will be compelled to give some of it back. So he says he is going to hold it in trust for the taxpayers. Of course the question arises as to how far can the taxpayer trust the Minister in view of his past record in handling their money. However, the hon. the Minister says that he is going to hold this money in trust. He has been holding their money in trust for a number of years now and they have not seen much of it back, and how much of this they will see back one does not know. This is a very important new principle in budgeting as far as the House is concerned, and in adopting the principle of establishing reserve funds out of surpluses, the Minister is really accepting the principle which was put forward for the first time with great emphasis by this side of the House during the Budget debate. He is accepting our principle which we put forward of using some of the surplus money to establish funds to shape permanent policy of the future. The Minister did not have the courtesy to say that he was accepting our suggestions, but that in effect is what he has done. But of course he has not applied the principle in the way in which we wanted it applied. Our plea was for the funds to be established to benefit the people; we wanted the funds established to promote higher education and all that goes with it; we wanted them established to form a basis for a steady improvement in social pensions and social services; we wanted them established to enlarge the system of subsidizing certain essential foodstuffs. That is still our opinion, and indeed, everything that the hon. Minister said yesterday to my mind reinforces and confirms all the arguments which were put forward on this side of the House during the Budget debate. But instead of accepting our proposals which we believe were sound and in the public interest, the Minister has taken this step in his fear, one might almost say his panic, of what may be in store for our country as a result of the policies of this Government. He has lost sight of the people of the country, he has lost sight of the needs of the people of the country, the people upon whom ultimately the very existence and security and welfare of the country must depend, much more than upon the financial measures which are being taken by the Government at the present time in regard to protecting this country.

The Minister says that as a start he is taking R20,000,000 to establish a taxation reserve account, a sort of an equalization fund, which may not be used for three or four years, but which in due course may come in useful to save him from having to increase taxation. Some cynic has already dubbed this fund “the general election taxation reserve fund”.

Are you already looking for excuses?

There is no doubt about it that any Government with a huge taxation reserve fund like this in its hand, will be tempted to use that fund just before an election …

To do what?

To use that fund.

What for?

The other side of the House seems to be rather taken with the idea. They are all making suggestions now as to how the money should be used already. I am not suggesting any irregular practice. I am perfectly certain that whatever the hon. Minister of Finance does will be covered by the heavy cloak of legality, that we can be quite sure of, whatever the political morality may be. The temptation is there, and we have not noticed that the present Government is particularly cast-iron when it comes to resisting temptation in regard to matters which benefit themselves, politically I mean.

The second reserve fund is one of R20,000,000—the Special Defence Equipment Account. It is difficult to believe that in the course of a month the Minister finds that he wants another R20,000,000 for defence, and it looks very much as if he has been casting around as to what on earth to do with the R20,000,000 to avoid giving any of it back by way of a reduction in taxation.

The next one is R15,000,000 for the development of strategic natural resources, particularly oil. That is all right. The last two will appear on the Supplementary Estimates, I understand.

The next one is a smaller one: R750,000 to buy land for the building of homes for aged people. That is all right. I must say that a sum of R750,000 for aged people does not compare very well with the R1,000,000 that has already been spent on houses for Commissioners-General in the Bantu areas. Then there is a couple of million rand to raise dam walls in the Northern Transvaal. One cannot help wondering why that was not done last month in the Budget. Have the dam walls become more urgent in the course of the last month? He had plenty of money a month ago. We do not object to that money being spent at all, but if the farmers, who have been grossly neglected in the last two Budgets, really deserve consideration one wonders why this is only put in as an afterthought when the Minister discovers that he has the extra money.

The next point is: How is the Minister going to deal with all this hard cash, because it is hard cash he has got, it is not just money in the air, he has got it in the bank, it is there. What is he going to do with it? It is not going to be spent this year. He says some of it may not be spent for three or four years. Is the hon. Minister going to be free to deal with it, to dish it out as he thinks fit, or is he going to put it in a stocking, like the French peasant, and hide it under his bed until the crisis arises and he has to pull it out? What parliamentary approval, if any, will he require before dipping into these funds and using them? Or is this all we are going to hear of it? A ten-minute speech from the Minister saying that he is taking R45,000,000 to put in reserve funds which over the next three or four years he will dish out as he feels inclined? Is that all we are going to hear about it? I think the hon. Minister will see that when an important new principle like this is introduced, we are entitled to have a full statement from him and a fully worked out scheme and plan as to how this thing is going to be dealt with, and not just a hasty few words at the end of a long day’s work in Parliament. If the hon. the Minister is going to give this money to the Public Debt Commissioners, they will presumably put it into Loan Account, and if it goes to Loan Account that will upset the whole of the hon. Minister’s Loan Estimates, and if that is the case, if the hon. Minister says that this money is going to be placed with the Public Debt Commissioners, then I suggest that this House should ask for a completely revised Loan Estimates, because the present ones will be quite unrealistic, almost as unrealistic as his whole Budget was a month ago.

Mr. Chairman, it all boils down to this: The Minister has, quite apart from the method of introducing it into this House, to which I referred with disapproval, the Minister has R128,000,000 of revenue and another R18,000,000 from the revenue which he expects to have as a surplus for the coming year—he has got R146,000,000, nearly R150,000,000 of the taxpayers’ money, which he did not ask for, which he did not require for servicing the country according to the Estimates which he put last year and this year in front of the House, and not a penny of it has gone back particularly to the men, that large class of people earning about R150 a month, and less. In our opinion the Budget itself in that respect was a shocking one, and this second Budget makes the Minister’s attitude entirely indefensible, and whereas after the last Budget speech, the Minister may have had some shattered rags of political respectability still clinging to his shoulders, I think he has lost even those in the speech he made last night.

The hon. member for Constantia (Mr. Waterson) amazes one, but not in regard to what he has to say. We are quite used to his making these irresponsible statements on occasion because he is so bitter that one gains the impression that it is a child in Std. I who is speaking. I want to tell the hon. member that he is so embittered and so annoyed because things are going well with the country. He is one of those who made certain prophecies to which I referred on a previous occasion. I referred to his prophecy that things would go very badly with us in the economic sphere. I want to remind him of one thing that he said. This is what he said two years ago (translation)—

The late Mr. Bruckner de Villiers, who was a member of this House for many years, always said, if something that he had tried proved a failure, that they had overturned his apple-cart. But this hon. member’s apple-cart has not been overturned; a train has reduced it to matchwood and he will never be able to repair it again because the prophecies that he made here in regard to what would happen all proved to be completely false. The prophecies which the hon. member made in regard to what would happen under this Government can never be fulfilled. And because the hon. member is now so annoyed about these matters, he makes statements of this nature. For example, he asked what the hon. the Minister was going to do with this surplus money. He asked how the money was going to be used in the meanwhile. He asked whether the hon. the Minister was going to put it into a stocking; he wanted to know what he was going to do with it. I do not know whether that hon. member still has one of those stockings which one wears with those queer trousers when one represents one’s country in England but if he has, he may just as well lend it to the hon. the Minister who may be able to make use of it for this purpose! But it is ridiculous for the person who is the main speaker of the Opposition in this debate to ask whether the hon. the Minister is going to put this money into a stocking. He knows very well that all public money is dealt with in only one way and that is the way laid down in the Treasury regulations. The hon. member should not say such stupid things and then still try to give the impression that he will one day make a capable Minister of Finance.

The hon. member said another strange thing in connection with this money. He said that the hon. the Minister wanted at this stage to make use of the possible surplus in the present financial year. He is only making about R18,000,000 of that sum available for distribution now. But that is a strange remark to hear from a person like the hon. member who earlier in the Session told us that the hon. the Minister estimated his revenue at too low a figure! The amount of R18,000,000 by which the hon. the Minister has increased his estimate of revenue for this year is not money for next year but for this year which started on 1 April. How, then, can the hon. member speak about a surplus for next year which the hon. the Minister wants to use at this stage? This is current revenue which is going to be used to cover current expenditure. I hope that the hon. member understands the position now.

In his annoyance the hon. member has complained that hon. members have not had the opportunity of studying the important statement which the hon. the Minister made yesterday. But what is there in that statement which is unintelligible? We are not all like the hon. member for Wynberg (Mrs. Taylor) who said that it was “rubbish”. We understand what is going on.

When did I say that?

The hon. member sat there muttering to herself and said it was “rubbish”. You know, Mr. Chairman, the hon. member for Wynberg must remember this one thing: A large number of ex-M.P.C.s have come cackling into this House and before they have known what has happened, they have found themselves minus their tail feathers!

The hon. member for Constantia was sharply critical because the hon. the Minister’s estimate was not quite correct. I want to remind him of one thing. Every State undertaking and every business makes an estimate of its revenue and expenditure but it does not only make this estimate of the cash which it receives and the cash which it spends; it also makes an estimate of the commitments which it has incurred and of the amounts which are still due to it but which it has not yet received. Because of these facts, a business can balance its books. But the State does not do this. The State only includes revenue which it has actually received. For this reason it is so much more difficult for the State to make an accurate estimate of its revenue; it cannot estimate that there is, for example, an amount of R50,000,000 in taxes outstanding; it can only include the amount which has actually been collected as at 31 March. Similarly, it cannot take into consideration the fact that it should have paid its accounts on 31 March; it has not paid these accounts simply because the goods have not been delivered. It cannot make an estimate of these things and reflect the estimate in its books because it only works on a cash basis. This factor makes things very difficult for the State. I have often wondered whether it is fair to expect the State to make accurate estimates of its revenue and expenditure each year, having regard to these uncertain factors. No commercial undertaking works on this basis. But then we have people from the commercial world standing up in this House and expecting the State to balance its accounts just as well as a business undertaking can do so. Hon. members must take that point into consideration. If they do, they will not make such a fuss about nothing. It was quite natural for the Department of Defence to place an order for a large quantity of stores but because those stores were delivered a few days too late, they could not be paid for on 31 March. There is nothing unusual about that. We have to deal with this sort of thing every year on the select committee. We again had cases this year of persons who delivered goods too soon with the result that those goods had to be paid for towards the end of March before the end of the financial year and we had to vote that money as unauthorized expenditure. We may have similar cases again next year. These are things which simply cannot be helped. Does the hon. member want the Department of Defence to have to come along and say: The financial year ends to-morrow or the next day and we have not yet received these goods but nevertheless we shall pay for them in advance? If they were to do this, they would certainly fall foul of the Auditor-General and the control that is exercised over finances by this House. This is something which we simply cannot allow to happen. This fact accounts for an amount of R20,000,000 because R20,000,000 less was spent on defence. It is very clear in connection with the revenue figure that the P.A.Y.E. system of income-tax collection was a completely unknown factor; income-tax made up 80 per cent of this additional revenue. Anybody who tries to tell me that he is able to estimate correctly what the revenue will be up to the last day of March is talking nonsense. He cannot do so. Once this system has been in operation for a year or two, it may perhaps be possible for one to make a reasonably accurate estimate of what the revenue should be. But to tell me now that those hon. members could have made a better estimate than the estimate that was made is the most arrant nonsense. Of course, we are all curious about that amount of R20,000,000 which the hon. the Minister is now setting aside as a tax reserve. I do not think that there is any secret in regard to the way I feel about this sort of thing. I would have said: Pay that amount into Loan Account, and be done with it. If this were done, it would not be necessary for us to borrow so much money in the future. In practice this money is going to be used to obviate the need for our having to borrow it. That is why it serves that purpose instead of being refunded to the taxpayers. I would have preferred it had there been no intention of refunding this amount to the taxpayers at some stage in the future. [Time limit.]

The hon. member for Pretoria (Central) (Mr. van den Heever) comes to the defence of the Minister by saying that this surplus can happen in the best conducted of Governments. First of all, we do not think that R128,000,000 is such a small miscalculation, and secondly, of course we realize that you can never accurately balance your income and expenditure, but if we look at the record of this Minister over the last four or five years he persistently underestimates income and overestimates expenditure, and that is the criticism voiced by the hon. member for Constantia (Mr. Waterson). I think at the time of the Budget the Minister was presented with a wonderful opportunity, with a booming economy and a large and unexpected surplus and a very comfortable balance of payments really to introduce an imaginative and constructive Budget which was aimed at strengthening our economy and improving the welfare of the people of South Africa, a Budget which would, in making use of the room for manoeuvring with which circumstances presented him, would on the one hand have given considerable relief to the underprivileged sections of the population by increasing food subsidies and increasing the pensions of many pensioners who are existing on a miserable pension, and by increasing the very low salaries paid in so many Government Departments, and in that way setting an example to the other sectors of the economy; and, furthermore, by reducing the cost of living by means of some indirect tax cuts. That was the suggestion we made to the Minister at the time he introduced his Budget. And a Budget which on the other hand would ensure our future economic growth and social development by further improving the educational facilities for all sections of the people, and a Budget which aimed at spreading skills amongst all sections of our population. I would have thought that seldom in our history has a Minister of Finance had such a wonderful opportunity of really presenting an imaginative and constructive Budget aimed at all these things I have mentioned, particularly by improving the opportunity of our people to attain skills, which in the end, as the Minister himself is now beginning to realize, is the bottleneck in our economic growth, the lack of skill. On the other hand he should have given assistance to so many sections of our population who are under-privileged and are struggling to exist, despite this boom. At the time of the Budget the Minister rejected our appeals. Now, with this further unexpected surplus of R40,000,000 plus the R18,000,000 which he now expects to be the surplus for the next financial year, the Minister has had a further opportunity to do something worth while for the country and its people, and again he has largely missed his opportunity, and I think this time with far less excuse because, after all, he did have the advantage of our advice at the time he made his Budget speech. As the hon. member for Constantia has indicated, he has in a very indirect and devious manner accepted some of our proposals, but unfortunately far too little.

What does the Minister in fact do with this additional surplus of his? To a large extent he is merely trying to do what the hon. member for Constantia suggested. If he had been a private person he would have put it in a stocking and hidden it under the mattress. But of course it is not so easy for a Government to do that, and the Minister can correct me if I am wrong because he was very sketchy on this particular aspect, but it appeared to me that he wanted to take this extra money which has become available out of circulation because he says he does not want to increase the demand on our economy for commodities and services, but he has not told us how he will do it. I may be wrong, but I think he told us his purpose was to freeze this money by excluding it from the demand side of the economy.

His purpose is, as he stated at the time of the Budget, that he fears inflation; he fears that if we increase the demand for services and commodities it might lead to inflation. The Minister always adopts the attitude that his Budget is so nicely balanced between the forces of inflation and deflation that the slightest deviation from that might lead either to inflation or deflation, but then, of course, we get the spectacle that after a month he finds that his Estimates are so utterly wrong that his surplus is R40,000,000 greater. In a way that shows how spurious the argument is that the Minister knows best in his endeavour to balance the forces of inflation and deflation. Take the sum of R40,000,000. If this is put into the pockets of the taxpayers, of the lower income groups, directly or indirectly, along the lines we have already suggested, it will make a tremendous difference to them. On the other hand, it can hardly affect the national income. We must regard this R40,000,000 as against a gross national profit of nearly R6,000,000,000, and therefore the Minister can surely afford to take a small gamble like that, which might give considerable relief to certain sections of the population, and he cannot really say that it will lead to inflation. That is his first fallacy.

His second fallacy is, of course, that he always seems to think that the only way of fighting inflation is by cutting down the demand for services and commodities. Surely he must be aware that the Budget can equally well be used to increase production, and that is another way of fighting inflation. The only way of fighting inflation is not always just to cut down on demand; you can also have a Budget which increases production, unless of course the Minister thinks that our factories are so fully stretched out already that it is impossible to increase production further, which I do not accept. [Interjection.] I can give one example of how it can help the country, and that is by increasing the educational standards and the skills and removing the restrictions imposed on the economy. Take job reservation, which the Government is so keen on. It is one of the most restrictive forces of our economy.

Do you require money for that?

You are talking absolute nonsense.

The other fallacy the Minister labours under is that he seems to regard extra expenditure as being per se inflationary, but surely it is very important what forms that extra expenditure takes. As we pointed out to him during the Budget debate, if one stimulates the production of foodstuffs it cannot possibly be inflationary for the simple reason that it is the one industry, leaving out the present drought conditions which are not permanent, where we have excess capacity. But surely if the Minister increases food subsidies it would greatly assist the poorer people and it could not possibly be inflationary. Apart from that, it would go some way to cure the malady from which the whole of agriculture is suffering at present, because food production has increased faster than consumption during the past decade. Surely any budget which aims at increasing food consumption cannot really be of an inflationary nature.[Time limit.]

The debate has hardly started, yet it is very clear from the speeches of the hon. members for Constantia and Jeppes that the United Party is absolutely sick as a result of the speech made by the Minister of Finance, and we can notice that from the complaints raised here. Both hon. members blame the Minister for being a poor arithmetician. I say the Opposition are sick because things are going so well with the country, and because the Minister is spending this money on such good things.

Shame on you!

The hon. member will get her chance. The hon. member for Constantia complains further that he received this information so late, hut the Session is not over yet, and there is plenty of time for him to make ten-minute speeches on the Estimates; there are 100 hours, and if he really thinks the Minister is wrong, his own party will give him an opportunity to speak. But he also complains that the Minister took only ten minutes to make the speech in which he announced all these millions. Apparently he wanted us to arrange a big Christmas tree with many little lights, and to bring the Minister here as Father Christmas with his grey beard, and then the Minister had to make a half-hour speech. [Interjection.] I think the hon. member for Constantia feels somewhat uneasy because he was somewhat ridiculous last night, but it is his own fault.

However, do hon. members opposite now have any objections to the objects to which this money is being appropriated? They did not say a word about it. They do not praise the Minister, nor do they condemn him.

We do not know on what the money is to be spent.

In the first place the Minister is earmarking R6,000,000 for refunds to taxpayers who paid too much tax because the calculations were not correct. Now the hon. member accuses the Minister of being a poor arithmetician, but the income-tax returns had to be in on 28 February. Should he have known it on 1 March? Do the hon. members want the Minister to be a prophet, or an electronic machine that knows the answer before you have asked the question? Next, money is being spent on the development of strategic resources. Do they have any objections to that? Are they perhaps afraid that with the assistance the Minister is now making available, we may perhaps find oil sooner than otherwise, and that the boycotts will not be the success the boycotters are hoping it will be? I thought the hon. member for Constantia would praisethe Minister, but he remained completely silent and blamed the Minister for not having had this knowledge at the time of his Budget speech, and that in spite of the fact that the Minister has given us a very good reason for it, and a reason of which the hon. member has been fully aware. The hon. member served with me on the select committee which urged the pay-as-you-earn system and put it into operation, and one of the reasons Mr. Wells gave us was that there are many people who fell outside the fiscal net and we wanted to catch them in the net. We asked him how many of those he thought there were, and he said he had no idea; and how could he have known it, because they are the very people who escaped? But now they are in the net and what they are paying is much more than Mr. Wells or the Minister or the hon. member or I thought it would be. Mr. Wells said he thought the amount lost might be R14,000,000, but it could also be R7,000,000, and the hon. member for Constantia did not say that he doubted that figure. Instead of being glad that it is very much more than he himself thought, he blames the Minister for not knowing it.

Then one of the most scandalous things he did was to insinuate that this money which is being set aside as a safeguarding fund to safeguard the taxpayer against increased taxes, may become a general election fund. He says: “It will be vested with all the legalities, irrespective of what you can say about the morality of the case.” Is he looking for excuses now already as to why his party will lose the next election? He thinks we are going to corrupt the electorate. Does he not think that is an insult to the voters? [Interjection.] The point is that the taxpayers know that there is a safeguarding fund for them, and that means that the Government will be so much more popular also.

The hon. member for Jeppes complains that this money is not being returned to the taxpayers, particularly those in the lower income groups. But let us analyse this. The Minister is faced with this problem: He may return the money; then he puts it back into circulation and then it will promote inflation. Therefore he is unwilling to do that. What must he do then? [Interjection.] I shall come back to both points raised by the hon. member for Jeppes, but I should like first of all to mention these preliminary points so that even he will be able to understand it. The Minister wants to fight inflation. At the commencement of the Session, the Minister of Economic Affairs warned us that we should be careful so as not to head for an inflationary period and destroy our own prosperity. Now the hon. member for Jeppes says that there are more ways of fighting inflation than to curb consumption; he says we must stimulate production. I feel like laughing when a knowledgeable person like the hon. member makes such a statement. What is he doing? He says you must attend to the training of people. But how long does that take? You can only promote production when you remove the snags—and at the present time that is the shortage of trained people—and by improving the infra-structure. But it does not take you nine months to the next Budget; it takes years, while we have to act now. In these Estimates that aspect has already been dealt with sufficiency with the means at our disposal. It is no use spending more money if you do not have more people to train. That is what the hon. member for Jeppes suppresses, when he says production must be stimulated—I agree it is an effective means to combat inflation, but then he must not say we must improve the infra-structure when he knows that that improvement can only be effected over a period of years. If he had said that we should spend a little more on immigration so that more skilled people can come into the country, he might have had a point. But then he mumbled something about job reservation. I cannot understand what relevancy job reservation has to this, or how it can stimulate production. What is the relevancy of that really? I repeat that the hon. members opposite are absolutely sick on account of these Estimates. They were sick at the beginning already, and now they are still sicker. [Time limit.]

The hon. member for Standerton (Dr. Coertze), like other hon. members opposite, was so full of praise for the Minister that he quite missed the point. We are not concerned with the well-being of the Minister, but with his incompetence in presenting the facts to Parliament. We are more concerned with the expediency with which he introduces new fiscal principles in order to avoid facing the facts. I rise to support the hon. member for Constantia (Mr. Waterson) when he says that the Minister’s statement last night was tantamount to trifling with Parliament. The Minister has treated last year’s Budget and the one for the current year as if they were a sort of puzzle which you can work out with matchsticks. But as so often happens with such puzzles, the Minister’s matchsticks have got unstuck, and what we are witnessing to-day is a bit of political Micawberism. This Minister is playing for time with his ill-gotten surplus in the hope that something will turn up.

To do what?

That is what the Minister should tell us. I cannot imagine a clearer instance of making a travesty of the financial functions of Parliament than the way in which the Minister introduced this matter. As the hon. member for Constantia rightly said, it is a scandalous way of dealing with the subject which affects the country so seriously as the appropriation of tax revenues not merely for one year but for two years. What an extraordinary situation we find ourselves in when Parliament is being asked to appropriate in advance a surplus which as yet does not exist? The Minister no longer even has regard to the necessity of observing the parliamentary convention of appropriating money for a single year. What the Minister does is to anticipate an additional R40,000,000 surplus for 1963-4 and then he has another bite at the surplus cherry for 1964-5, which he now estimates at R18,000,000. And then quite casually the Minister lumps the two figures together and proceeds to do two things. Firstly, he asks Parliament to appropriate R58,000,000 in a sort of fancy-free way. I hope the hon. member for Pretoria (Central) has now grasped the point that the Minister is asking Parliament to appropriate R58,000,000, namely a R40,000,000 surplus which is in cash and an R18,000,000 surplus which does not exist at all. We are now appropriating the surplus for two years; R20,000,000 has to go into the Defence Special Equipment Fund, R20,000,000 and R15,000,000 respectively into two new funds and the balance of R3,000,000 goes to three different objects. This is obviously a case of the Minister coming to Parliament with a haphazard and hasty proposal of how to dispose of excess tax revenue which has become an embarrassment to the Government. The hon. member for Pretoria (Central) was simply proving the point made by the hon. member for Constantia that the Estimates annually presented to Parliament are inaccurate and unreliable, and they are becoming increasingly more so.

The second thing that the Minister has done is this. Starting as he does with money in the Consolidated Revenue Fund, he sets about creating what can very aptly be called an unconsolidated revenue fund, with bits and pieces of money derived from the public scattered around in a number of special accounts.

That was the suggestion of the hon. member for Constantia.

No, it was not. There was no suggestion that there should be an unconsolidated revenue fund with money scattered about in a variety of accounts. The hon. member for Constantia made it perfectly clear that what he was asking for was that there should be a little bit more vision in using this surplus money which had fallen into the hon. the Minister’s hands and that he should look to the future and deal with the money in the appropriate way through Parliament. Sir, as the hon. member for Constantia has rightly said, these bits and pieces of money— quite a substantial amount in actual cash— will now not be subject to the ordinary fiscal controls and presumably they will be dished out by various departments without any sort of parliamentary supervision at all. That in itself, I think, is an exceedingly serious situation and I hope the hon. the Minister will be able to give us some reassurance that he was mistaken in the way he handled this matter last evening.

I spoke of the hon. the Minister having a second bite at the surplus cherry of 1964-5, but that is too elegant a term to describe the treatment which the 1963-4 surplus is receiving at the hands of the hon. the Minister. In the case of the 1963-4 surplus the Minister treats the taxpayers’ money as if it is simply there as a coco-nut-shy. He has already had three shots at this coco-nut. Originally the surplus was about R100,000. On 16 March last it had grown to R88,000,000; yesterday it had grown to R128,000,000. The Minister is quite obviously reserving unto himself another throw at the coco-nut, because on 31 March 1964 the Minister had a bulging exchequer account with a credit balance of R122,000,000. According to the hon. the Minister’s own statement no more than R3,000,000 of that amount can consist of surplus loan funds, so he already had in cash just over R120,000,000 in the exchequer account. That figure, of course, does not take into account the amounts which are to be surrendered as surplus issued to the various Departments and which will soon find their way back into the exchequer account. So the final surplus should be considerably higher than R128,000,000. Sir, I said during the Budget debate that I believed and that I was sure the Minister also believed that his surplus would be considerably higher than the R88,000,000. I say again that by the time the accounts are closed in respect of 1963-4 the surplus will be bigger than the Minister has just indicated. If that does not happen to be the case I will be mighty surprised and even mighty suspicious. [Time limit.]

Sir, why are hon. members opposite so annoyed with the hon. the Minister? They are annoyed with the hon. the Minister because he has made a slight miscalculation, on the one hand in regard to revenue and on the other hand in regard to expenditure. The two reasons for this miscalculation are obvious. It is very clear that under the P.A.Y.E. system of income-tax collection it is impossible to ascertain with any degree of accuracy what the revenue will be and as far as these large defence contracts are concerned, one can never be sure that one will have to pay over the money before a certain date. When we consider these two factors, we find that they account for 90 per cent of this so-called miscalculation. But the problem of the Opposition is not that the hon. the Minister has miscalculated; the problem of the Opposition is that they have miscalculated to such an extent. On the one hand the hon. the Minister has miscalculated to the extent of a few million rand but on the other hand, the difficulty of the Opposition and particularly the hon. member for Constantia (Mr, Waterson), is that they have miscalculated completely as far as the economy of this country is concerned, and this also holds good for the hon. member for Jeppes (Mr. Cronje). They expected seven lean years; not only did they expect these seven lean years but they predicted seven lean years. They predicted that our economy would not be able to withstand the shock of our becoming a Republic. They were the people who said that our economy would never be able to withstand the shock of our leaving the Commonwealth; they were the people who said that our economy would not be able to withstand the shock of world hostility; they were the people who predicted that our banks would close; they were the people who predicted bankruptcy and who at one stage wailed about the large numbers of people who would be summonsed because they would not be able to pay their debts. They were relying on an economic disaster in South Africa; they were relying on seven lean years and the prosperity which we are enjoying now because of the sound policy of this Government has caught them completely on the wrong foot. It has not been the hon. the Minister who has been caught unprepared; it appears to me that if the hon. the Minister made one mistake it was to pay too much attention to the predictions of the Opposition in regard to our economy. After all those predictions of the Opposition, the hon. the Minister himself did not expect such prosperity as we have now! And so it was not the hon. the Minister who was guilty of miscalculating; it was the Opposition who were guilty of miscalculating. They anticipated misery in this country; they expected an increase in taxation; they expected shortages; they expected unemployment and now that their prophesies have not been fulfilled they have been thrown into such confusion that they have made a great fuss here about the question of R40,000,000, 90 per cent of which can be accounted for in two ways which should even be clear to a school-child. Take the question of defence contracts. Mr. Chairman, how much are we spending on defence? When one miscalculates to the extent of R18,000,000 which cannot be paid out before 28 February then to my mind this is an absolute triviality, and that miscalculation is responsible for 90 per cent of the difference in the expenditure figure.

An amount of R20,000,000 more than the hon. the Minister anticipated has been collected under the P.A.Y.E. system and these two factors together explain the miscalculation on the part of the hon. the Minister. Is it really necessary to make such a fuss in this regard? What the Opposition now wants is that this money should be given back to the public, without regard to the consequences of such an action. All this money has again to be put back into circulation, whether it causes inflation or not.

The hon. member for Jeppes says that one way of combating inflation is to abolish job reservation. I shall really be pleased if he will devote ten minutes of his time to explaining that statement of his to us. What money will an action of this kind keep out of circulation? What goods will it produce? All that it will do will be to place the worker in an impossible position. The hon. member is supposed to be an economist but he tells us that we can combat inflation by abolishing job reservation! The hon. member for Standerton (Dr. Coertze) put the position very clearly. The Opposition have criticized the Government. Do they object to the way in which this surplus is going to be spent? Do they object to the tax reserve fund? I agree with the hon. member for Pretoria (Central) (Mr. van den Heever); I am not overenthusiastic about the idea of a tax reserve fund because all that we are doing is to notify the public that we shall repay this money to them at a later stage. I fully agree with the hon. member that if that money were to be paid over to Loan Funds we would be able to make very good use of it. But because the hon. the Minister has established this that money will eventually find its way back into their pockets: either next year, the year after that or the following year, according to the economic position of the country.

Do the Opposition object to the money that is being set aside for the development of strategic resources? Do they object to the fact that money is being set aside to help us to discover oil in South Africa as soon as possible? Do they object to the fact that money is going to be voted to purchase land for oldage homes? Do they object to the fact that an amount of R250,000 is being voted for the purchase of art treasures for our country? Do they object to the fact that money is being voted in order to combat the extremely critical drought conditions in the Northern Transvaal? What actually is their objection? The objection of the hon. member for Constantia is that the Government will continue to build up this tax reserve fund so that shortly before the election they will be able to announce a very great reduction in taxation. But the hon. member knows that that does not form part of the record of this Government. May I remind him of this record? Let me remind him of the way in which the United Party pestered the hon. the Minister of Transport to increase the wages of railway workers just before the last election. They will remember the reply which the hon. the Minister gave them. The hon. the Minister said that he refused even to discuss the question of railway workers’ wages before the election. He said that he would discuss this matter after the election. He did not want to do what the hon. member for Constantia has just accused us of doing. He did not want to bribe these people before an election. Who are the people who try to bribe the voters before an election? It is that party with all the promises that they make. They say: We promise reduced taxes; we promise higher wages and increased pensions. They made so many promises before the last election that the hon. the Minister of Lands said that after going through the full list of promises he had found that there was only one promise which they had not made and that was to reduce the period of pregnancy from nine to seven months! That is the record of the United Party and now the hon. member for Constantia has come forward with the ridiculous statement that this tax reserve fund has been established with the purpose of bribing the voters before an election! Sir, it gave me great pleasure this morning to read about the additional funds which the hon. the Minister has at his disposal. It gave me great pleasure when I realized how sensibly he was going to use that money: that he was not going to spend it lavishly but that he was going to use the amount of R40,000,000 in this sensible way, and I wondered what the reaction of the Opposition would be. We have now had exactly the reaction that we anticipated—a listless, unenthusiastic reaction. They are disappointed because their prophecies in reeard to economic disasters have not been fulfilled; that the seven lean years have not come to pass but that we are enjoying seven of the most prosperous years that this country has ever experienced.

I should like to be able to follow the hon. member for Vereeniging (Mr. B. Coetzee) in what he has assumed is a third Appropriation debate, and I hope that the hon. the Minister of Finance when he intervenes in this debate will indicate that he is going to give us an opportunity to have a full-dress debate on this third Appropriation he has introduced.

Sir, I wish to confine myself now to one aspect of his statement last night, the aspect in which he dealt with the blocked rand account. Before discussing the blocked rand account I want to say that the hon. the Minister introduced this change in a very clumsy manner. When one introduces a change in finance it is essential to inspire confidence, and not to say, as he did in his Budget speech, that the system at present in vogue will cease forthwith, on the date of his speech. To say that the details of the other plan would follow in due course, whereas the details are not ready yet, is not calculated to inspire confidence either in South Africa or overseas. I think it was essential to say in the Budget speech that “the present three-year 3½ percent scheme will be suspended and I will now outline a new scheme”. Sir, what is the problem that confronts the hon. the Minister in dealing with blocked rands? It is the anomaly that here we have a country which politically has lost the confidence of the world but which economically has the full confidence of the people in the country. We all have confidence in South Africa; we may not have confidence in the Government, but we have confidence in South Africa, as a country, and in its people. Sir, I believe that money talks and money talks in a language that everyone can understand. I have worked out the prices of the shares of five companies in a miniature Dow-Jones scheme this morning. I took the prices of shares on the London exchange, including gold-mining and finance shares. The prices in London are 20 per cent below the prices in South Africa or a little more than 20 per cent—not quite 21 per cent but just over 20 per cent. Why is that? Because people in London do not think that our assets are worth as much as we think they are, and therefore they would like to sell in the Johannesburg market and transfer their money to London. Some people have been doing this. They have been buying shares in London and selling them here. The hon. the Minister decided two years ago that he would deal with this problem and assist the investor. He did it in this way: He said: “If you are not a resident of this country and you sell your shares in Johannesburg, then you can invest the proceeds in these non-resident bonds over a period of five years, draw a fifth of your capital every year and get 5 per cent on your money.” Sir, I liked the plan. I told people overseas who wished to realize their assets in this country to accept it; I told them that it was a constructive scheme and that I welcomed it. The Minister was afraid that his scheme would be too acceptable, so he said, “I will earmark R20,000,000 for the first year and the maximum is going to be R50,000,000.” But the investors did not take R20,000,000 after his Budget speech two years ago. How much did they take in the 1962-3 year, in the course of 12 months? They took only R13,552,000 blocked rand bonds, so in last year’s Budget speech the Minister said in effect, “The mixture will be as before, the scheme can continue.” After the scheme had continued for another five months last year, the money that bad been expatriated, that had been taken out of the country, was only R4,500,000. The Minister then introduced a more generous scheme; he said, “I will now make it not five years with a fifth repaid every year, but I will now make it three years at 3½ per cent.” What was the result? It was more popular—not because the rate of interest was better but because the period was shorter, and the man who had little confidence in South Africa went for this system. Under the five-year scheme we attracted the man who liked South Africa and who had confidence in the country as we have. Well, the Minister introduced the three-year 3½ per cent scheme, and what was the result? It resulted in the withdrawal of only R25,500,000, according to this White Paper. (By the way, this White Paper on the Budget is a very fine publication and is most useful to us.) Altogether then last year the amount was R30,000,000 and together with the previous year R43,500,000. In other words, we have not reached the orginal R50,000,000 yet, while the Minister now comes along with another R40,000,000 that he has to play with. Sir, there is no danger in the blocked rand scheme as it is. Somebody has panicked. I see no reason why the Minister should change it. Apparently people in London have been making money, so the Minister has brought out a new scheme. It may be a good scheme for the financial investment companies, for the banks, and for the professional arbitragist, but it is not a good scheme for Mr. John Smith who sells his house in Johannesburg and would like to have his money in London. He will be fleeced under this scheme.

Sir, I want to try to give the Minister some advice with regard to this scheme. I should like to put forward something constructive to help him because I realize that it is a problem. Sir, there are two factors involved in this blocked rand scheme. There is the time factor and there is the interest factor. In the case of the five-year plan the time factor was rather long; although the interest factor was right, it did not appeal to the overseas investor. In the second case the time factor was short and that appealed to the people overseas. You have a time factor and an interest factor and you can use the two together. If you do not like five years at 5 per cent with a fifth every year and you prefer the three years at 31 per cent with a third every year, what about four years at 4 per cent with a quarter every year? In other words, the Minister is free at any time during the course of his financial year to issue a proclamation saying, “I am now changing the scheme; I am introducing a new scheme.” But, Sir, not this scheme, not this clumsy piece of work whereby we have reduced this scheme to the level of making an application for ordinary Treasury bonds. We do not want that sort of thing for the public; it is a thing for the financial people, as I have said.

Now, Sir, let us look at the scheme which is now being proposed. If a man invests R100 blocked rand in these new bonds, at the end of five years he will get his R100 back without interest, but if he invests R100 for five years at 5 per cent, with interest added annually, he will get R128 or more. The proposed plan is not an investment at all; the time factor is wrong. The only way in which people can make money in this scheme is in the tender. And who is going to tender? Not the small man. The small man has not got the money to tender for treasury bonds and he does not tender to-day as the hon. the Minister knows. He depends on the big financial institutions. I am concerned with the ordinary man who sells a hundred shares in Johannesburg or the man in London to-day who has shares on the Johannesburg register. It may be a deceased estate, or he may be giving the money away, or he may even want to leave the money over there. If he sells he says, “I am prepared to wait three years or four years or five years if I can get a bit back every year.” That is the man we are thinking of. Sir, I think this is a bad scheme. I cannot condemn it too strongly, and I would suggest that the hon. the Minister should get some of us to meet to see whether we cannot get something better. Carry on with the present scheme, although it is rather popular at the moment, but this is what I want to say to the hon. the Minister: At present finance companies can deal in securities without paying market security tax but the ordinary investor on the Stock Exchange has to pay brokerage and market security tax. I think that if the Minister would insist that finance companies should be treated like the ordinary private investor he would not have so much of this trouble. He is playing right into the hands of the big man and he is neglecting John Smith who wants to sell a couple of hundred shares on the Johannesburg market.

I shall try to reply to the hon. member for Kensington (Mr, Moore) in connection with the matter which he raised here although I will admit that he knows a great deal about this subject, probably far more than I do. I want to remind the hon. member that this scheme was introduced in June 1961 at a stage when currency control was applied so strictly that people were not able to sell their shares here on a large scale and take their money out of the country. The hon. member made a plea here to-day for the small investor. I want to point out to him that any foreign investor on a small scale who held shares in any South African undertaking in South Africa in June 1961 can sell those shares on the London market to-day for more than he paid for those shares in June 1961. The small investor can lose no money, nor will he under this scheme. But the hon. member for Kensington—I hope he will pardon me for saying so—made a plea here this afternoon for speculation in regard to the scheme that was introduced at the time. The hon. member even told us that he had worked out this morning that the prices of a certain group of South African shares on the London market were 21 per cent lower than the prices of those same shares on the Johannesburg market.

A trifle less than 21 per cent.

Very well, let us say 20 per cent. What do these large investors do who speculate under this scheme introduced by the hon. the Minister? They buy a number of South African shares from foreign investors on the London market and sell those shares on the Johannesburg Stock Exchange the next day for 20 per cent more than they paid for the shares on the London market. They make an immediate profit of 20 per cent, or so it appears to me, and they then invest that money in this scheme. They receive 3½ per cent interest on that money and they take that money out of the country each year. That is why, in my opinion, this scheme has expanded so much over the past year. The hon. member did not tell the Committee for how many months the scheme was in operation in the first year when the amount was only R13,500,000. I do not believe that the scheme was in operation for the full 12 months. But in any case, the fact that the amount of money required for expatriation increased from R13,500,000 to R25,000,000 during the past year is, in my opinion, due to the fact that financially powerful groups made a business of this scheme which the hon. the Minister introduced to assist the bona fide investor to get his money out of South Africa over a period. For that reason I think that the hon. the Minister is acting quite correctly and sensibly. Any person who participated in this scheme enjoyed the advantage in the first place of being able to obtain more for shares in South Africa than he paid for those shares on the London market, and as a business man he will know that when tenders are called for, he will have to tender in such a way that when he is able to take out his money after three years, the full amount of his investment, interest free, it will still prove to be a profitable transaction. For that reason I think that the matter will right itself, not by way of interest as the hon. member suggested, but by way of the tender prices which will generally be offered to the State and in the tender prices which the Treasury will be compelled to accept and maintain. I am not going to express an opinion in regard to the term mentioned by the hon. member. The hon. member has told us that the new term will be five years. If this will enable the scheme to work well and if our currency position can carry it, then I too can see nothing wrong in the hon. the Minister again changing it to three years at a later stage. But for the reasons I have mentioned here I have no doubt that the hon. the Minister is going about matters correctly in this regard.

I now want to revert to the argument that was advanced in this debate by, amongst others, the hon. member for Constantia (Mr. Waterson). The hon. the Minister made his Budget speech in this House on 16 March. The financial year ended on 31 March. I am quite able to understand that it was only after this date that the hon. the Minister discovered that he had R20,000,000 more than he had budgeted for on 16 March. It appeared after 31 March that he had an additional R20,000,000 in revenue. Of that amount of R20,000,000, R16,000,000 was in respect of additional taxes which were collected. This was due to two reasons. The one was that it was difficult to estimate in advance the amount of taxation that would be collected under the P.A.Y.E. system and the other was that in the previous financial year an amount of R55,000,000 had been collected in taxes which were payable in respect of previous years. When one considers these facts then it abapears to me as though this figure of R16,000,000 is not particularly high. In the speech which the hon. the Minister made here last night he said that this was not yet the final figure. When the hon. the Minister discovered this and when he discovered that there was an additional amount of R20,000,000 which had not been spent—an amount of R15,000,000 was in respect of large defence contracts—he took this Committee into his confidence on the first occasion that presented itself. But let us imagine that the hon. the Minister had not made this figure known to us at this stage; what would the Opposition have said then? One can just imagine how they would have taken him to task. The hon. the Minister has laid his cards on the table for us on this the first opportunity that has presented itself, in order to make these figures available to us, and he has informed us that we can now discuss this matter. I cannot see where the hon. the Minister has acted wrongly and I want to congratulate him on the way in which he is using this money. I can find no fault with his actions in this regard at all. I am very satisfied with the establishment of this tax reserve fund. I take it that this money will be paid over to the Public Debt Commissioners although it is money that has been earmarked and which will stay there; it is money that will find its way back into the pockets of the taxpayers as and when this becomes necessary.

If time permits I want to say further that what the hon. the Minister has done in allocating these funds, this extra amount of R40,000,000, fits in perfectly, I think, with what he helped in his Budget. He presented us with a Budget which was one of stability and growth. The hon. the Minister cannot destroy in ten minutes all the good work that he has done in his Budget. This prosperity that we are enjoying, and which the Opposition are enjoying with us and which they want to maintain, as we do, can easily be destroyed if we encourage inflationary tendencies in our economy in any way. Hon. members know we must all be very careful in this connection. Our economy is strong enough; things are going reasonably well with all sections of our population; justice is being done to everyone in the economic and financial spheres. I think that the hon. the Minister is correct in keeping this money out of the financial stream and in not wanting to expose our economy to danger. To judge from the arguments advanced by the Opposition here to-day, it appears to me that they are advocating exactly the opposite.

I shall deal with some remarks of previous speakers during the course of my speech. During the Budget debate I said this was a good Budget financially but that as a social Budget it was appalling. I want to retract both those statements, Sir. In the light of what the hon. the Minister told us last night I now say that as a financial Budget it is appalling and as a social measure it is a blot on the good name of South Africa.

A year ago this side of the House took the hon. the Minister to task in regard to the incorrect budgeting on the Loan Votes and the amounts that were surrendered under those Votes, particularly Railways. In reply this was what the hon. the Minister of Finance said—

I want to ask the hon. the Minister this: When is he going to produce a Budget that is a Budget and not a conglomeration of figures? When is he going to introduce into his Department these better measures of financial control which he suggests the Minister of Railways should adopt, so that we will not have a situation where, five weeks after the Budget, the hon. the Minister tells us that his surplus has increased by 50 per cent. The Minister of Finance tells us that the Minister of Railways has put his Budget out of joint by excessive borrowings under his Loan Account. What does the hon. the Minister of Finance say about his own budgeting? How much is he himself putting the Revenue Budget out of joint? Perhaps he will be good enough to tell us that. If I were not talking kindly to the hon. the Minister, as the Treasury does to the other hon. Ministers, I think it would be reasonable to say that the hon. the Minister appears to have very little knowledge of what is going on in the financial affairs of the country. He knows so little about what is going on that five weeks after the introduction of his Budget he has to produce another Budget. As the hon. member for Constantia (Mr. Waterson) rightly said, that is something that has never been heard of in the annals of this country.

Some hon. members on the Government side tried to contrast the situation between private business and the Government and they dealt with P.A.Y.E. The hon. member for Pretoria (Central) (Mr. van den Heever) asked how the Minister could be expected to know what was happening when in a business you dealt with revenue and expenditure, whereas in the case of the Government they only dealt with cash. Well, I think the hon. member for Pretoria (Central), who is chairman of the Select Committee on Public Accounts, should know that in any business, unless you run a cash Budget and that cash Budget is fairly accurate, something is going to go wrong with the business. I would like to know what the position would be if any accountant, handling a cash Budget, said to any organization in March: “Your surplus is going to be R88,000,000” and at the end of April turned round and said: “You have a surplus of R120,000,000.” I know somebody would be fired and very promptly too.

The second point was that on account of P.A.Y.E. we did not really know what was going on. I think it is time we got P.A.Y.E. into its correct perspective in regard to budgeting. P.A.Y.E. has now been in existence since 1 March 1963. It is now April 1964. At the moment, if P.A.Y.E. is working, the hon. the Minister and his Department should know every single taxpayer in the Republic of South Africa and what his approximate tax obligation is—something a Minister has not known since Union. Every single P.A.Y.E. taxpayer, who has his P.A.Y.E. payment deducted at source, is now registered with the hon. Minister’s Department. Every person who is a provisional taxpayer has already declared to the Department what his income is going to be. Why this mystery? Why suddenly, because of P.A.Y.E., do we not know what the income is going to be? Never in the history of the fiscus in this country has the Department had such an amount of information regarding the taxpayer. We have to advise the Department all the time, long before our final tax is due. To come along now and say “I have found another R40,000,000, partly through non-expenditure, but over R20,000,000 due to taxation because of P.A.Y.E.” is utter nonsense to me. Because the hon. the Minister has more information to-day than he has ever had before. If he cannot budget within reasonable proportions with the information now available then heaven help us, because we shall have a repetition of this every year.

When we discussed the Budget we told the Minister that certain things should be done. He has now done certain things in this subsidiary Budget—I think it can be called that. He is providing R2,000,000 presumably to ease the famine situation in the Northern Transvaal; R750,000 for the old aged and R250,000 for works of art. But, Sir, these requirements were no less urgent five weeks ago than they are to-day. Is the hon. Minister introducing a new process into this House, that at the time of the Votes he will have a second Budget and then Additional Estimates? Are we changing the whole procedure in this House? The hon. the Minister now finds himself with R58,000,000 to spare. Again he sees no benefit whatsoever in spending it on, the uplift of the under-privileged peoples. He sees no benefit whatsoever in making any other allocation, apart from famine, to combat malnutrition in this country. He sees no benefit whatsoever in making any further provision for the education of the people, including the Bantu. He will not realize that if people are properly fed and educated they can contribute something. Why he will not see it I do not know. Maybe he considers that spending money to combat malnutrition and spending money on education can cause inflation, but I find it difficult to see how. Maybe the Minister adopts the attitude that if you feed people you will make them strong and healthy, and that if you educate them and you increase their buying power, in time to come, they will create a demand and demands create inflation. Because if it is not that, Sir, it is difficult to understand how the Minister, with his enormous surpluses, surpluses which he tucks away and which are not going to help him in regard to inflation, as the hon. members for Constantia and Jeppes have already pointed out, because the money is already there, can refuse to spend on things which will help to uplift the poor and underprivileged people of this country so that they can become a vital factor in our economy without increasing the danger of inflation. What is the position, Mr. Chairman? Is it that the hon. the Minister is afraid to do anything for the people who are not European because that will be anti-apartheid? Is he afraid, with a surplus of R150,000,000, to help those people who are in most need of help? What is the reason? The reason seems to be this. Sir: That the hon. the Minister, in following the dictum that “taxation should be for the common good” is following the policy of the Government and qualifying it with the fact that “common good” is to be conditioned by apartheid.

Sir. I think it is quite obvious that hon. members opposite are grievously disappointed, disappointed at the extent of South Africa’s prosperity. In their chagrin I shall probably find the excuse for their offensiveness. I recently saw three statements which were probably beyond the comprehension of hon. members opposite. The one statement said that South Africa had the most dynamic economy in the world. That was said by Mr. Marais of the Trust Bank. There was a second statement by Mr. Atkinson that South Africa had the strongest economy in the world. The third statement appeared in the Guardian. The financial editor of the Guardian said the world title for economic miracle-maker belonged to South Africa. These are the things which the Opposition have apparently failed to grasp. I am now charged with not having succeeded in estimating to the full the miracle that is taking place; I should have prevented this big surplus. If that is the charge against me I plead guilty. What is more, I hope I shall continue to be guilty of rather underestimating the progress of South Africa to the extent to which I have done, not to the extent to which hon. members opposite have continually been doing. Did anybody anticipate last year that there would be an increase of 10 per cent in the gross national product? The Research Bureau at Stellenbosch never anticipated that. Could anybody opposite tell me last year that we would have that increase of 10 per cent? I have sinned in the best of company—not that their company is so very good—but in the best of company, in the company of people who make it their business of forecasting conditions. Nobody anticipated this marvellous growth, this buoyancy of South Africa’s economy. What is the result of that? Of course, the result of that buoyancy is that our computations for the year ending 31 March are wrong. There has been an underestimate. But is that so tragically sad? Should we not rather be very happy? I would have been sad had I overestimated and if I had had to come to this House and confessed to a deficit. I would have been unhappy if the national production, instead of having risen by 10 per cent, had only risen by 2 per cent. Those are the things that would have made me unhappy. Hon. gentlemen opposite are clearly upset. Their sense of fairness and of justice has left them completely. The accuracy one would expect in people who deal with these matters is not present at all. They assume that we are going to ignore all financial practices and procedures. I think it was the hon. member for Port Elizabeth (South) (Mr. Plewman) who said we were appropriating R58,000,000. Those were his words.

I did not say that.

The hon. member for Constantia said it was not fair towards Parliament. Is it not fair to Parliament if I come at the earliest opportunity and inform Parliament of the additional surplus? Not only that, but inform them about my suggestions for disposing of that surplus? This is not yet the disposal. These funds that are to be established require statutes. Hon. members will be given the opportunity to discuss how the money in those funds are to be applied when those statutes are submitted to this House. We have not yet reached that stage. But I am accused of being unfair because I am now giving hon. members opposite an opportunity of discussing my plans on two occasions. The money that does not go into funds will appear in the Supplementary Estimates and hon. members will then have an opportunity, when the Supplementary Estimates are discussed, of finding out any further particulars. I have taken them into my confidence and that is the thanks I get. The difficulty is that things are going too well with South Africa to the liking of the Opposition. I am sorry to see that the hon. member for Constantia has fallen from grace. I do not know whether his second state is not worse than his first. When speaking about the South African notes for travellers, and that only R20 instead of R100 will now be allowed, he suggested that that showed that South African notes were not so popular! If the hon. member had only reasoned with himself he would have realized that those South African notes were so popular that abuse took place and that we were trying to stop that abuse. If I were to tell hon. members the number of notes that are brought back from overseas they would realize what I am talking about. But that is typical of the United Party. The first conclusion the hon. member draws is that our rand notes are so unpopular that I have to reduce the supply that can be taken out of the country. It is the very opposite.

I did not say that at all.

The hon. member asked whether I had allowed for the R55,000,000 which is non-recurrent. Had he only listened to my Budget speech he would have known that an amount of R49,000,000 was due to collections before P.A.Y.E. A certain amount came into the Treasury as a result of the tax holiday, a holiday which everybody thought would not yield any income at all. We allowed two-thirds of the tax income of the previous year for those eight months but the proportion was much higher. Taxpayers earned much more than two-thirds of what they had earned during the previous 12 months. We did not anticipate this amount. In respect of the pre-1962 tax arrears, plus the eight months of 1963, an amount of R49,000,000 was collected. I think that was given during the course of the Budget debate. Except for R6,000,000 we did allow for the other amounts. Why I said a certain amount was non-recurrent was because I took that amount into account in formulating the Estimates for the new year. I have already said in my main Budget speech that we must not run away with the idea that we will get all that money this year again. I allowed for it. Because of this amount that has come into the Treasury during this last month I have to reappraise my Estimates for 1964-5. The repayments have already been taken into account. I doubt very much whether we thought it would be as high as this R6,000,000, but good lock to the taxpayers who are going to get that.

The hon. member for Constantia now says I am already disposing of this additional R18,000,000 in respect of which I have found it necessary to make this additional estimate by reason of the fact that my Estimates for 1964-5 were based on the collections for 1963-4. Now that the actual income is higher my Estimates for the new year must naturally also be higher. Had I had those figures at the time, I would have disposed of the R18,000,000 as part of the R1,000,000,000-odd that I did “dispose” of. But it is quite wrong to say that I have “disposed” of it before I have received it. This is the anticipated income for 1964-5. The whole object of your Budget is to show how you are going to spend the money you anticipate to receive. That is why we have a Committee of Supply and a Committee of Ways and Means. But the hon. member says I am already “disposing” of it, as he calls it. If he says that, then it is disposed of in exactly the same way as the rest of the income of plus/minus R1,000,000,000 is disposed of in the main Budget. We have not got that money in our pocket yet either but we anticipate that we will be able to collect that money. The only thing we are now doing is to add a further R18,000,000 to that amount. I either have to show at the end of 1964-5 whatever surplus I have plus R18,000,000 or I have to make suggestions as to the disposal of that additional amount.

In regard to the Revenue Reserve Fund which the hon. member has criticized, that will, of course, not become a standing institution in our public financial set-up. But we are faced with a particular problem here, namely, that we have this money, money we want to give to the taxpayers.

But if we give it to the taxpayers at this stage we endanger the economy. So we are keeping it in trust. That is the object of this fund, but that does not mean that this will be a permanent fund into which money will be voted every year. That is not the idea. We are dealing with a special windfall. We are going to keep that money in the Treasury until such time as the fiscal and economic conditions of the country allow us to pay it out to the taxpayers, either by way of tax concessions or by not raising taxes as high as they would have had to be raised otherwise. As I have said this Reserve Fund will be fully explained when the statute, which will establish it, is laid before the House.

The hon. member has also criticized the use we may make of this R20,000,000 in the Reserve Fund. He said we would not be able to resist the political temptation to spend that money for political purposes. Mr. Chairman, I do not think the United Party has been very successful in resisting the temptation to catch votes by any means. The hon. member for Vereeniging (Mr. B. Coetzee) has already referred to all the promises made by the United Party in order to catch votes. If they say we will use this money in the same way as they would have done it, I say it is sheer impertinence for them to say that. The insinuation made by the hon. member is one that could only have been made by a party who probably would do so if they were in my position to-day. I shall certainly not attempt to buy votes at the expense of the stability of the economy of my country. The suggestions those hon. members have made in this very debate are just blatant vote-catching. They are doing that and they are doing that at the expense of the economy of the country. They are not worried about that, however. The hon. member for Jeppes said we should not do anything to stimulate inflation; that we should not do anything to stimulate the demand for goods and services, but that if we spent this money to subsidize food, the poor people would get the benefit of the lower prices, and that the demand for food was not an inflationary demand. That is quite true at the first stage, but when the money comes into the hands of the producers then there will be a stimulation of the demand for goods and services. This will be money in circulation at the second stage; when once it comes into the hands of the producers, they are going to spend it; the farmers are going to spend it, they are not going to sit on it, and then you will have more money in circulation and you will fan the fires of inflation again. But these hon. members are apparently not concerned about that.

We are concerned about the poor farmers.

The hon. member for Port Elizabeth (South) (Mr. Plewman) said that this is really an unconsolidated revenue account that I am proposing. I take it he was referring to the two funds that I am establishing. He said it was not consolidation at all, but only unconsolidation. But if the hon. member will refer to the suggestion made by his financial leader, the hon. member for Constantia in the Budget debate, he will find that one of the constructive suggestions (as I called it)—I discarded it for other reasons—was that I should put part of the surplus into two separate special funds, the one for social services and pensions and the other for food subsidies. I rejected that because I said that these are ordinary matters to be dealt with under the ordinary Budget and that there was no call for the institution of separate funds. But here we are doing something quite different. Here we have a temporary fund just to keep the money in trust until such time as we can safely, and without sacrificing the stability of our economy, return that money to the taxpayer. I want to point out that it is not only the R20,000,000 in the Taxation Reserve Fund which has the effect of keeping the money in trust, but the R20,000,000 that is paid into the Special Defence Equipment Account has the same effect. If that money is there and available when next year’s Estimates are framed, then the demand on the Exchequer next year will be so much less, and it will mean that we have pro tanto that amount available for distribution in whatever way we feel is suitable at that time. And the R15,000,000 in the Special Development Fund for strategic natural resources is a different type of fund. That particular fund may and will indirectly help the taxpayer but it will not be returned to him directly in the same way as the other two funds. I want to ask hon. members opposite whether they are against this special fund for the development of our strategic natural resources because that is the only form in which the money is not being returned or kept in trust for the taxpayer.

The hon. member for Parktown (Mr. Emdin) also spoke here as a very great authority and he said that the difficulty with the Minister is that he does not know what is going on. One wonders whether the hon. member for Parktown is aware of what is going on with the P.A.Y.E. system. He tells me that the Treasury has now more information than ever before. That is the gentleman who accuses me that I do not know what is going on. Sir, in the old days when we as a Treasury had to estimate the income for the next year as far as income-tax and company tax were concerned, we based in March our figures on actual income for the year ended 30 June previously. Now when I estimate the income in March, I have got to estimate what will be the income for the year ending on 28 February, next year. And let me say that these incomes can fluctuate. The last month accounts to a large extent for the increased income and in that month the increase was R20,000,000. It shows how delicately the income-tax return can be a reflection of the actual incomes. In other words, if in the course of this year for which I have made my calculations there is any kind of reason for incomes to go lower than I anticipated, it will be immediately reflected in the income-tax returns. It is not now as if it were a thing of the past, when my only calculation was how much of the arrear taxation could I also recover and what are the resources of the Department of Inland Revenue for gathering those reservoirs of income-tax which have not yet been paid. Now I have got to estimate what is going to be the income of individuals and companies over a period 12 months hence. But yet this hon. member says that now I have much more information than I had ever before. I have just given you, Mr. Chairman, this one example to show that it is sometimes very dangerous to have a little knowledge.

The hon. member for Kensington (Mr. Moore) dealt with another matter, that is the non-resident bonds. I think the hon. member is aware that not long ago an economist pointed out that the scheme that we had then actually meant that you could get a 10 per cent return on gilt-edged. And who got that return? When we instituted these schemes, we had in mind to help the people who had invested in shares and whose shares had dropped in June 1961. We said we wanted to help those people to recover whatever losses they had suffered here. The facts are now that I do not think there is any single share that even on the London Market is not higher now than it was before June 1961, a few months before the balance of payments crisis. So they are no longer a matter of concern. There may be people who still have their money here, people who are genuine investors. But what has happened, is that this scheme was an irresistible temptation for the speculator. The speculator said: Here is a glorious chance. I have never had any money in South Africa. I am now going to buy on the London Market and I am going to sell on the Johannesburg Market. I am going to invest in this way and I will get a 10 per cent return. That is our problem. How can we help the genuine man without stimulating speculation as this last scheme has done?

I told you.

No, what the hon. member has suggested is not the way. We have considered that scheme. The Reserve Bank has gone into all possible schemes and we have evolved this scheme, and let me say that these are the figures of the returns now: Assuming a floor price of 90, and assuming the five years, and assuming the margin of 20 per cent, which is the position now, then the net yield to investors, after deducting expenses such as brokerage of 2½ per cent in London and 1¼ per cent in Johannesburg, will approximate 6 per cent. Even under this scheme you are going to get gilt-edged at 6 per cent. That is why we have had these fluctuations, and therefore we say make it a tender price every month—the tender price will take these fluctuations between Johannesburg and London into consideration.

Who will tender?

Even the speculator can tender now. We do not mind. But in order to help the small man we have said that where the minimum amount before was R2,000, we are now going to reduce it to R1,000. It is difficult to give all the particulars now. The prospectus is in the course of preparation and when the prospectus is out, hon. members will have a better opportunity to judge the position. I said at the end of my statement that the scheme we have now is subject to modifications in the light of circumstances, but we do not want to make it as favourable as the last one so as to create an undue temptation for the speculator. We do not mind a little temptation, but not too much. He might be like Oscar Wilde who said that he succumbed to everything except temptation, —they may succumb also to temptation!

The hon. Minister of Finance has made statements here this afternoon which amazed me and which I think will amaze South Africa. The hon. Minister said that we on this side of the House, or those members who have spoken in the debate thus far, are disappointed because things are going too well for South Africa. But then the Minister also said that they are grievously disappointed at the prosperity in South Africa. I have told the hon. Minister before, and I am going to tell him again that South Africa is not a prosperous country because the people in South Africa are not prosperous. Although South Africa has a lot of money, it is not prosperous because it cannot be prosperous until the people are prosperous, and the people of South Africa are not prosperous; the Coloured people of South Africa are not prosperous.

Where are they more prosperous than in our country? [Interjections.]

Whenever a member who represents the Coloured people gets up, we have this kind of jeers and interjections. But the Coloured people will know what interest members opposite have in their prosperity. I want to come to the Minister. The Minister made another statement which was so amazing that I could hardly believe my ears; that a Minister of his intelligence could make such a statement in reply to the hon. member for Jeppes (Mr. Cronje). Apparently the hon. member for Jeppes asked why the Minister did not give the people food. The Minister replied “Oh no, we cannot give them food because the more food they eat, the more the farmer will produce and the more money the farmer will get for his produce and the more he will spend”. What is the natural deduction? Let there rather be starvation in South Africa than to have inflation. What an astounding statement to make! Let me just read to you from one letter to show the hon. the Minister what the position is in regard to some people. I received a letter a day or two ago and they write to me because they cannot get any satisfaction from the Nationalist Senators who are supposed to represent them. Let me ask the hon. the Minister whether it is not better to invest his money in the best investment in South Africa. Do you know what is the best investment for South Africa? Not a reserve fund, not to put your millions in cold storage. Your best investment is the Coloured people. South Africa will get big dividends; the greatest dividends on the investment which they will make in the Coloured people, rather than to put the money into cold storage. But let me read this to the hon. the Minister—

On a wage of how much, Mr. Minister? On a wage of R26 a month. Now the Minister says: “Do not pay that man more money, do not give him any more food, because the more food he eats, the more money the farmers will make.” You have to keep them on these starvation salaries and wages. And these wages are paid by a Government Department. It is now to remain at the lowest minimum for fear that inflation may come. Why don’t you teach the farmers, Mr. Minister, to save in times of prosperity? They do not save their money, because, Mr. Minister, as soon as this unfortunate scourge (drought) hits South Africa and there is a severe drought, you say: “Do not worry, here is R2,000,000 for you.” According to this morning’s Cape Times R2,000,000 is made available for the farmers for drought relief. I do not mind that. But what I do object to is that instead of increasing the wages of the Coloured people, the money is put into cold storage. I want to quote another case before I proceed. The other case is that of a person in Grade II at Rondebosch depot with 21 years of experience. This postman has been serving as delivery man all round, at Athlone, and at present at Grassy Park. He is a man who is married with nine children and he lives at Steenberg Housing Scheme. Two of his children are at school at Kimberley. What do you think this man is getting? After 21 years of service het gets R54.

Order! I want to point out to the hon. member that the House is in Committee and this is not a continuation of the Budget debate.

Yes, Sir, but I want to tell the hon. Minister how he should spend the money.

The hon. member cannot go too far.

Yes, Sir, I will abide by your ruling, but I am sure you will allow me to point out that instead of putting the R20,000,000 into cold storage that money should go to pay higher wages and better salaries.

Order! The hon. member must discuss that under another Vote. The hon. member may discuss the Minister’s policy and the administration of his Department, and I have allowed a wide discussion also of the statement made.

I bow to your ruling, and I would like to keep within the limits of your ruling, but I protest in the strongest terms against the expenditure of R250,000 to buy art treasures before provision is made for food for the people. I would rather see the R250,000 spent on food and Better wages for people than on art treasures. During the war, I think, there was an expression “Guns before butter”. That was in wartime, but now I want to tell the hon. Minister: Food and better wages and better housing before objects of art. If the hon. Minister wants to spend R250,000 on this, then he must first make provision for the necessities of life for the people. I have no objection to the spending of this money on this laudable object. And by the way, the hon. Minister is going to spend money in the interest of old age people. Will the hon. Minister tell me by way of interjection whether this money will also be for Coloured old age people? The hon. Minister does not answer. Does this include Coloured people as well? Why cannot the hon. Minister tell me? But it seems to me that the hon. Minister has forgotten about the 5,000,000 hearts that must beat as one. [Time limit.]

One is really surprised at the remarks and observations made by the hon. member for Boland (Mr. Barnett). The hon. member has developed the characteristic of standing up in this House and saying the most irresponsible things and making the most irresponsible statements. All he does is to make derogatory remarks about the Ministers of the Republic.

That is not true.

It is true and the hon. member cannot deny it. The hon. member appreciates nothing that is done by the present Government for the Coloureds in the Republic. I challenge the hon. member to compare the position of the Coloureds in the Republic of South Africa with conditions anywhere on the Continent of Africa.

Order! The hon. member must confine himself to the Vote.

The hon. member appreciates nothing that is done by the Government.

I challenge the hon. member to say that to the Coloureds.

I shall accept the hon. member’s challenge. I am not afraid of appearing on a public platform with him.

When we consider the statement of the hon. the Minister of Finance we can only describe it as being fantastic. The economic growth in the Republic is absolutely amazing. We all welcome the steps which the hon. the Minister has taken in connection with this surplus that he now has, a surplus that has arisen as a result of the system which we have introduced and, as the hon. the Minister has clearly told us, we have this surplus because a certain amount of money was not spent. I do not approve of the actions of the hon. member for Parktown (Mr. Emdin) who as a member of the Provincial Council of the Transvaal was one of the main critics as far as provincial estimates were concerned. I just want to refer to the remarks he made in connection with the statement of the hon. the Minister. He said that it was: “Financially appalling; socially a blot on the name of South Africa”. We cannot permit statements of this nature to go unanswered. What does he mean when he says that this statement of the hon. the Minister of Finance is “financially appalling”? Is he simply trying to make cheap propaganda? Is this another attempt to give the impression outside that the financial policy of this Government is in such poor hands and that the hon. the Minister does not know what to do? The hon. member also said: “The Minister should apply better measures of financial control”. That is a very irresponsible statement to make. The hon. member knows that the control over our finance is in the best hands possible. What is he trying to achieve by making irresponsible statements of this nature? And when he speaks of “socially a blot on the name of South Africa” what does he actually mean? Is it not a shameful thing that the hon. member should use expressions of this nature, knowing what is being done for the inhabitants of the Republic irrespective of their colour? The hon. member contended that this money could have been spent in a far better fashion. He said that we should have spent it on education. The hon. member who was, with me, a member of the Provincial Council of the Transvaal for many years, is acquainted with the poor record of the United Party in the sphere of educational facilities and he knows that it was the present Government which provided the educational facilities which our children are enjoying to-day. In the past our children had to travel from Brakpan and from Springs to Benoni to attend high school but now we have a high school in every suburb. There is no longer the necessity to spend so much additional money on education. South Africa has complied with her needs as far as education is concerned.

Order! The hon. member must confine himself to the Vote.

An amount of R15,000,000 is being voted here in order, amongst other things, to assist low-grade mines. The amount of R15,000,000 is to be used for the special development of strategic natural resources and in his statement the hon. the Minister also said that the mines producing low grade ore would also benefit from this fund. This is a large amount and we hope and trust that special attention will be given to the East Rand. Some mines on the East Rand have already closed down and others will close down shortly. We hope therefore that the hon. the Minister will assist them when they experience difficulties in regard to water and give them a sympathetic hearing when they approach him in regard to their other problems. We hope that the hon. the Minister will help us; we hope that a large portion of this amount will be made available to meet the urgent needs of some of those mines. They must be enabled to overcome their water problems so that they can continue to produce and provide employment for their workers.

I think the Minister’s reply shows quite clearly that I was perfectly justified in the remarks I made in opening the debate this afternoon, because he has replied merely on the points I raised, and he has shown quite clearly that I was right when I said that this very important statement has been very superficially drafted before it was made to this House, because the reply the Minister gave, whilst one may or may not agree with its contents, at any rate gives more information than was contained in the statement. I still maintain, despite the Minister’s statement, that he is appropriating part of this year’s revenue before he has got it. He is proposing to appropriate R58,000,000. He tells us that some of it will be dealt with in the Supplementary Estimates and some will be dealt with by statute. But he is appropriating R58,000,000, comprised of R40,000,000 surplus from last year and R18,000,000 which, as the result of increased revenue last year, has caused him to revise his Estimate of revenue for the current year. The R18,000,000 he is appropriating is part of this year’s revenue. I say that is perfectly wrong and I hope it will never be done again. [Interjections.] You make your appropriation at the end of the year when you have got your money.

At the end of the year?

He budget-id for a balanced Budget, but now he tells us that he will have a surplus of R18,000,000, so he will take that money and apply it for certain purposes, for certain funds, and I say it is premature to do that because he has not got the money yet. However, I do not think we can take that matter any further.

The hon. the Minister asked me specifically whether we were opposed to his proposed fund for developing strategic natural resources. Of course we are not opposed to it, but whether it is necessary to establish a permanent fund for that purpose is another question; or whether an annual appropriation should be made, as is done in many other cases is a matter for argument. But the principle of the Government making money available for research, particularly in regard to oil, is of course one which we support.

But I want to raise another matter, arising out of a question asked by the hon. member for Hospital (Mr. Gorshel) a week ago in this House. He dealt with the complaints in a recent publication about the activities and the alleged negligence of a senior official in the Minister’s Department in respect of the affairs of a certain company. I think the Minister replied that he had ordered an inquiry to be made into the allegations by the Head of his Department, as to whether these allegations were justified or not. These allegations were made by a reputable, responsible non-political journal, which is not given to making wild statements, and if this were a first reference to this business I think the Minister’s statement would have been acceptable, but of course that is not so. This matter has been talked about for over two years. It was actually raised in this House over a year ago, and whatever the reason may be, the fact is that there are thousands of people in this country, most of them not very well off, who have lost their money owing to the activities of certain financial institutions. These institutions are under the control of the Government, and once the Government takes control of anything that control carries with it a measure of responsibility, and ultimately of ministerial responsibility. The Minister is responsible for the activities of his officials in the long run. The Minister has known for two years that there was uneasiness in respect of this particular registrar and his activities, and that his competence was being questioned, and last year it was actually raised in this House. Therefore, for the Minister to say now that he is having the matter inquired into is really not good enough. I think this is a very serious matter indeed, for which the Minister will have to accept responsibility, and I think the Minister should tell us in detail his side of the story. I do not think it is fair to make any charges against the Minister or to attack him without asking him to give us his side of the story over the last two years. What has he done to satisfy himself that this particular branch of his Department was being efficiently run and that there are no grounds of complaint in regard to the manner in which this matter was being handled? I think he owes it to himself to give us the whole story. I cannot saj that the Minister has just ignored it and has done nothing, but on the fact of it at the moment we do not know. On the face of it, the Minister will face a charge of neglect of duty, and a very serious charge too, but I do not think we should even think of making that charge without asking the Minister to give us his side of the question, and I think we should leave it at that in order to give the Minister an opportunity to tell us exactly what his side of the picture is before we form any final opinion.

The poor attempt of the Opposition to attack these Estimates seems much more like the attempt of a honeybee that launches an attack when it has already lost its sting. The attempt of the hon. member for Constantia reminds me still more of the attack of a water bearer bee which has no sting at all. The Opposition cannot get past the fact that the announcement of this extra surplus of R40,000,000 once again emphasizes how thoroughly sound the position of the country is, and the attempt of the Opposition will make no impression on the electorate or on overseas investors, to deter them. In any case, this is one matter in respect of which I do not believe they will have any success in their attempt to sow evil overseas. The R18,000,000 more from taxation also confirms the growing tempo of our economy. There is no sign of a declining tendency. Indeed, it merely shows greater stability, which will instil greater internal and external confidence. I particularly welcome the underestimation of revenue. As in the case of a farmer or a businessman, it is much better to under-estimate his profit than to over-estimate. Such a windfall is really beyond all criticism and ought to be accepted with gratitude. The well-planned appropriation of this surplus deserves special mention. There is R20,000,000 extra for defence. As the threats of the Africa countries to attack us increase, it becomes more and more essential to strengthen our defences.

Order! That cannot be discussed now.

I do not propose to elaborate upon it; I am merely mentioning it because it is of vital importance. The R20,000,000 which is set aside in a special taxation account is something we never expected. It really is too good to be true. The R15,000,000 for the development of natural resources and strategic resources, and the R250,000 for better accommodation for our aged people, all of these bear testimony of well-considered appropriation of this windfall. But I should like to refer particularly to the R2,000,000 which is made available for assistance to farmers in the north-west Transvaal, particularly to provide water. The economy of the farming community in those parts has been ruined and the drought erosion has not only destroyed the surface, but has also very adversely affected the security position of many farmers.

Order! That is not relevant now.

Then I should like to express my thanks and appreciation to the Minister, as a representative of a north-western Transvaal constituency, for earmarking that amount specially for raising the dam walls which will satisfy a great need and will provide employment to farmers who are compelled in consequence of the drought, to leave their farms temporarily …

Order!

The Minister told us a few moments ago about some of the difficulties he had in estimating his revenue and the difficulty of estimating the collections under P.A.Y.E. He was so determined to prove how difficult it was that it was quite clear that we can expect in future that the Minister will introduce any Estimates with the proviso that these can be easily 50 per cent out. Surely if the Minister is to be taken at his word, it is clear that he cannot give us any useful Estimates at all, but that we can expect a 50 per cent error, because that is what he has given us this year. It is quite clear that we can regard the Minister’s Department not as a Department which estimates, but as one which guesses future results. For the Minister to suggest that we criticize his errors because we have no confidence in the future of the country is nonsensical.

The Minister has provision on the Estimates for some R106,000 for the control of financial institutions. I want to carry that a step further than the remarks made by the hon. member for Constantia, and ask what control is there of financial institutions, how effective is that control, and how much reliance can we place on that control? We can place very little reliance on the Minister’s Estimates, but how much reliance can we place on this control of financial institutions? The financial journals refer, as far back as 1961, to certain financial institutions which were not giving the public what the public were entitled to expect. Further disclosures were made in 1962, and again in 1963, and in 1964. I expect the hon. member for Hospital will follow the matter up in greater detail, but the public is entitled to expect the Minister to tell us to what extent the control of financial institutions is efficient and to what extent the Department is efficient, and to what extent the people can rely on certificates issued by that Department, or is this title, Controller of Financial Institutions, a misnomer? Unless the country can expect adequate financial control, the country can only be suspicious of all financial institutions, and we do not want to get to that position. There will always be certain organizations for people who will try to get rich at the country’s expense. If the good name of South African financial institutions is to be maintained, the number of institutions which are suspect must be reduced to a minimum. I do not think anyone will deny that there have been far too many disclosures in recent years for the Minister to accept the position with equanimity. He has this Department and we are entitled to expect the Minister to give us substantial information, either now or later, so that the country can be reassured that there is adequate supervision by his Department. The people who are affected are in many cases the small investors who can ill afford to suffer losses. In one particular banking institution which failed I know of many people who put their life savings into this institution and up to now have not received a cent. Surely the country must be protected, and surely one must have further reassurance from the Minister that when disclosures are made, particularly when there is delay in filing documents, the official or the Department concerned should be on its guard. One of the biggest difficulties with financial institutions which are not successful is the efforts on the part of those in charge to try to gain time, and one of the ways of doing that is to ask the Department for an extension of time. The Department may in the initial stages grant the extension of time in all good faith, expecting that the institution wants time to get its records up to date. But all too frequently institutions do not get their records up to date because they are in financial difficulty and they are hoping to stall for time in order to put their affairs in order. These gentlemen who operate in this way are quite frequently inveterate optimists who hope that by their speculations they will be able to get sufficient money to put their house in order. They are very similar to the man who steals money and then goes to the races hoping to win enough to repay the stolen money. These gentlemen who have financial institutions which start in many cases with inadequate capital make very generous promises to the public and then, when they are unable to fulfil their promises, they hope to put their affairs in order by gaining time to start on some other venture, and to gain time they ask the Department concerned for an extension of time. I think it is high time that this Department should regain the confidence of the public, so that the public may realize that the Controller of Financial Institutions is a controller and not just a Public Service Department concerned with receiving forms and filing them. It should be an effective and efficient Department and it should be vigilant at all times to ensure the public is protected. We appreciate that it cannot give 100 per cent guarantee, but it is very necessary that the Minister should at the earliest opportunity give the country the assurance that there is adequate control of these institutions so that the confidence of the public can be restored in our financial institutions. I hope that during the course of this debate the Minister will give us more information than he has given in the past, because it is badly needed by the country to reassure it.

Sir, is it your ruling that at this stage we cannot discuss the principle of the spending of this surplus?

I want to say this for the information of the Committee. The House is now in Committee. During the discussion in Committee on Treasury Vote the hon. the Minister made a statement in connection with an additional amount of revenue. He also gave the House an indication of the manner in which this money would eventually be spent. I have allowed hon. members a great deal of latitude in discussing his proposals. These proposals have been widely discussed but the actual stage at which these proposals will be before the Committee will be when the Supplementary Estimates are before the Committee. Accordingly I rule that at this stage hon. members may not discuss the details of the proposals.

May I not even discuss the principle?

The hon. member may continue. I shall call him to order if I think he is going too far.

I do not want to reply to the accusation in regard to incompetence. It is a strange experience to be present in this House when the hon. the Minister announces a large surplus, larger than even he expected, and not to find one single hon. member opposite who has the courtesy to say thank vou. I prefer not to discuss that matter. The hon. the Minister now finds himself in a unique position in that he no longer has any problem in regard to the collection of funds to pay his normal accounts. His problem is more how to spend the surplus. The easiest way in which to spend a surplus of this nature is to give it back in the form of a reduction in taxation to the people who are responsible for it. But it is very difficult to reach the poor people by this means. The hon. the Minister mentioned the possibility of inflation if he were to do this, and there he has a point. It is a generally accepted fact that the ordinary man in the street is not as enthusiastic about spending his money on capital investments as he is about spending his money recklessly on consumer goods. We now come to the question of the spending of the surplus by the hon. the Minister. I know I cannot go into details in this regard but I hope you will permit me, Mr. Chairman, to say a few words in connection with this special development account. I simply cannot understand why the hon. the Minister is prepared, as it were, to put R20,000,000 into a money-box for future use and yet is only making an amount of R15,000,000 available for this account. If I may be permitted to make a suggestion, I think that he should at least add half of the amount of R20,000,000 to this fund amount of R15,000,000. I think that is a very original and good idea to establish a development fund of this nature and included in this idea I should like to see consideration being given not only the things mentioned here by the hon. the Minister—the prospecting for oil and other strategic minerals—but also to a great problem in the sphere of farming.

Order! The hon. member can raise that matter at a later stage.

The appropriation of R58,000,000, which is derived from the surplus in the past year and an expected surplus for the current year, has been dealt with by the hon. member for Constantia. I do not want to pursue the matter except to say that if the Minister’s contention now is that the R18,000,000 is not an expected surplus but part of the revenues for the year, then I assume that he will table revised Estimates of revenue and make the information available to the House in that way. I make that inquiry because quite obviously the Estimates presented to us do not conform with what the Minister is now telling us is going to be the position.

The second point is this: The Minister, both in his statement and his reply, has dealt exclusively with the revenue side of the Budget figures, but it is quite obvious of course that the changed situation on the revenue figures will also radically affect the loan proposals. In the first place more money will be available for investment in the form of trust or reserve funds in the hands of the Government. Therefore when the Minister gave us details in his Budget speech as to how he was going to raise his loan funds to meet his expenditure for the year, it is obvious that some revision will have to be made there because the money for local investment must automatically go up. Presumably the need to raise loans from an external source might fall away, but it is obvious that some revision of the details given to the House now becomes necessary and I assume that the hon. the Minister will do so.

Then I also wish to refer to the serious allegations which are contained in the Financial Mail of 17 April of this year in regard to alleged irregularities on the part of a senior officer in an important branch of the Minister’s Department in regard to certain financial institutions that come under the surveillance of that officer in his official capacity. Sir, I do not intend to go into detail. The hon. member for Constantia has put certain questions to the Minister, and had the Minister risen to reply to those I would have left the matter there. But I think I should draw attention to the fact that the matter was raised in his House the year before last; that the Minister was warned that there were rumours and suspicions of irregular conduct and of neglect and dereliction of duty on the part of an officer of his Department.

Irregular conduct?

I shall say irregularities and neglect and dereliction of duty on the part of an officer of his Department. I myself pointed out to the hon. the Minister at the time that a clear responsibility rested on him to intervene in this matter. I said that the Minister owed a duty to the public to remedy irregularities if the rumours and suspicions were well-founded or alternatively it was his duty to protect the official concerned if the rumours and suspicions were unfounded. The furthest that the hon. the Minister would go at the time was this—and I quote from Hansard of 18 April 1962 (Col. 4229)—

Quite apart from the inquiry which the Minister said he had instituted, in reply to the question of the hon. member for Hospital (Mr. Gorshel), I think it is clear from what I have read to the Minister that he owes the House an explanation as to what earlier inquiries he made and with what result. On the face of it, the inquiry seems to have been inadequate; since the unfortunate results disclosed in the article to which reference has been made have meanwhile taken place. I say therefore that the hon. the Minister should inform this Committee quite clearly what the results of his previous inquiries were, and how far they went.

The last two speakers were the first speakers on the Opposition side to express some criticism of the Estimates or to make recommendations. It was a shocking thing to my mind to see the way in which previous speakers on the Opposition side did not try to criticize the policy of the hon. the Minister but to stir up racial unrest.

I want to come back now to the remarks of the hon. member who has just sat down. But before I do so I want to mention a few points under the policy of the hon. the Minister. On 16 March this year the hon. the Minister told us that it was his policy to maintain stability and to encourage the private sector. I would like to know from the Opposition what is wrong with this policy of the hon. the Minister of encouraging the private sector. Why is it wrong? I want to ask the hon. member for Constantia (Mr. Waterson) what fault he has to find with the fact that the hon. the Minister has encouraged and further consolidated the private sector and has maintained stability in this regard.

The statement has been made here this afternoon, particularly by the hon. member for Boland (Mr. Barnett), that South Africa is not a prosperous country. The hon. member further remarked that the Coloureds were being treated very shabbily indeed. I think that the hon. the Minister is following a very sound policy—that every population group in South Africa, White and non-White, in his own sphere …

Order! The hon. member is now continuing the Budget debate.

I shall abide by your ruling, Sir. I just wanted to explain how the policy of the hon. the Minister was being adapted in this regard.

I want to refer now to the remarks of the hon. member opposite in connection with financial institutions. I think that the hon. member expressed a great deal of very unjust criticism here. If there is anything wrong in the hon. the Minister’s Department I shall certainly be one of the first persons to say that something should be done about it. There are a number of these financial institutions. This particular Registrar controls banks, building societies, pension funds, insurance companies, trust funds and so forth. The hon. member knows that there have been a few persons over the past few years who have gone out of their way to defraud these financial institutions, if I might express myself in that way. The hon. member knows that legislation was passed in this House to set up an inspectorate and if it had not been for the timely action of the hon. the Minister and his Department, we would have had chaos in this sphere to-day. I think that the hon. the Minister and his Department merit great praise for the steps which they have taken. During the past recess my own firm investigated a financial institution about which there were certain rumours. Timely action was taken before anything could happen. Surely the Opposition know that the small staff of this Department which controls financial institutions cannot do all that work; nor is it their function to do audits. They are not members of the hoards of directors of these financial institutions and the hon. member knows it. Their only function is to exercise control generally and to indicate policy. But they have to take action where things go wrong and that was why that inspectorate was established. I want the hon. member to tell me when the Department and the hon. the Minister have omitted to take action when things have gone wrong. The people who have been guilty of these offences have been brought to trial; some of them have already been sentenced and others have still to be tried. What more could the Department and the Minister have done at the stage when those matters were brought to light than to follow up the rumours and prosecute the offenders and prevent the same sort of thing happening in the future? Sir, when things go wrong, the Opposition can criticize but they must not be unreasonable and unfair. I think that the Opposition are simply trying to avoid one important fact and that is that under this hon. Minister we are experiencing prosperity the like of which is unknown in the history of any country in the world.

The matter which has been raised by my colleagues, the hon. members for Constantia, Pinetown and Port Elizabeth (South), arose out of the question which I put to the hon. the Minister of Finance on 21 April and which he answered in the following terms. I asked him—

To which the hon. the Minister replied—

Sir, a similar matter was raised in 1962 by the hon. member for Parktown (Mr. Emdin) and also by the hon. member for Port Elizabeth (South) and again last year, as has been indicated by the hon. member concerned, and I think in fairness to the Committee and in order to refresh the memory of the Minister, I want to give him a very brief timetable of the events in certain financial circles in South Africa, which makes a very sorry tale indeed. Briefly, in 1961 Unitas, a depositreceiving institution, went down the drain, as the saying goes. In 1961 again the South African Board of Executors disappeared, and of course in each and every case these institutions are wiped out and so are the ordinary members of the public who had entrusted their money to them. In 1961 there was the South African Reinsurance Corporation and the Provident Assurance Corporation which came to the brink of disaster, and they had to be rescued by Mr. Aubrey Cramer of Auto Protection, who figures much more largely, if not fortunately, in the latter part of the story. In 1962 the Union Guarantee Life Fund had to be closed and the short-term business transferred to Mr. Cramer. In 1962 there was the collapse of the British and Overseas Insurance Company. Then again in 1962 the Farmer’s Bank crashed involving about four other deposit-receiving institutions, including the Trans-Africa Credit and Savings Bank. In 1963 came the liquidation of the Johannesburg Insurance Company, the African Horizon Insurance Company and the Pinnacle Insurance Company. Again in 1963 there was the collapse of the Capital Building Society. In 1964 there came the liquidation of the Provident Assurance, Auto Protection and Yeoman Insurance Companies, about which there is this article on which I based my question to the hon. the Minister some days ago, and which I now propose to read out to the extent that my time will permit, because it seems to be singularly well informed, detailed and authoritative. In the Financial Mail of 17 April 1964 under the heading “Resign!” the editorial states as follows—

The story begins with Auto Protection, which entered the insurance field at the end of 1956, at which time Cramer was already well known in the insurance world and to Mr. de Villiers. When in 1959 he received financial statements from Auto Protection for the year 1958, Mr. de Villiers saw that the company had already lost R68,000 of its R70,000 paid-up capital—leaving R2,000. Later he discovered that even this painted too rosy a picture; in fact the company had under-calculated claims intimated to it during 1958 by R46,000. This discovery he made in 1960, when the 1959 statements became available. About then Auto Protection decided not to increase its Third Party premiums, which provided much of its income, although the great majority of insurance companies were doing so. The redeeming feature, such as it was, was that the 1959 results had been satisfactory—on paper,—providing capital and revenue reserves of about R101,000.

What the Registrar did is on record. He wrote to Auto Protection on 11 November 1960 …

Sir, I ask the hon. the Minister to mark that date with some care—

For R2 he bought this insurance company from Panigel—

We say that he erred again in June 1961 when he allowed Auto Protection to take over the struggling S.A. Reinsurance Corporation from Panigel; which it did for R2 and a promise to raise the equity of S.A.R.C. by R375,000. We say that he failed a fourth time in neglecting to obtain cast-iron guarantees that Cramer or Auto Protection had, or would raise, new money from outside the group to pour into S.A.R.C. In fact the “new money” so employed turned out to be the premium income of Auto Protection policy-holders.

I would ask the hon. the Minister again to mark that carefully—

Towards the end of 1961 Mr. de Villiers received the 1960 statements of Auto Protection. Then on 28 October, and a few days before he heard for the first time of Auto Protection’s “investment” in S.A.R.C., he wrote: “… this office is deeply distressed at the company’s precarious financial position …”. And he concluded: … it is imperative that … the paid-up capital be increased to at least R500,000 which increase should be effected not later than 31 December 1961”. The paid-up capital then stood at R190,000. It was October 1961. On 3 November, Mr. de Villiers learned about Auto Protection’s “investment” in S.A.R.C. [Time limit.]

I rise to reply to the questions which have been raised here in regard to an official in one of my Departments. I must say at once that I do not think this is the correct way to bring charges against an official and to have it thrashed out across the floor of the House. When this matter was raised originally by way of a question, it was obvious that the charges which were referred to in the article read out by the hon. member for Hospital (Mr. Gorshel) were charges of inefficiency, that is to say, that the official concerned had failed to take timeous action in certain specified cases. I want to point out in passing that there have also been charges of proposing to take action too quickly. As I have said before, it is always a very difficult matter for a person in the position of the Registrar of Financial Institutions to know when to act. It is very easy after the event to set ourselves up as Judges, but one of his prime duties is to protect the deposits of the public or the premiums paid by policy-holders into a fund. If he has reason to suspect that anything is wrong with that fund it is not his prime duty to see himself that the fund is liquidated or put under judicial management at once. His prime duty, as I see it, or at any rate one of his main duties is to protect the money of people who have already paid over moneys to the institution concerned. In other words, if there is any prospect of nursing that sick institution back to health, it is his duty to do that nursing. He may err in the way he does it—that is human —but I make these remarks to show that it is extremely difficult to put yourself in the position of that official. I have to give my permission before application is made for a company to be placed under liquidation or under judicial management, and there have been occasions when, after having gone through the papers, I have not been quite happy and further steps have been taken and in the end no application has been made for liquidation. Unless I take it upon myself to go into every detail of the administration of the Department, I have to accept the facts which are placed before me by my official. I must say that my experience has been that his facts have never been questioned, and that is borne out by the fact that where he has applied for an institution to be placed under under judicial management, the application has usually been granted. He may err perhaps in his timing, but as I say it is very difficult to put yourself in the position of a man who holds that position and to say, “I would have come to this conclusion”, or “I would have come to that conclusion”. In my reply to the question of the hon. member for Hospital I stated, as the charge was one of inefficiency, that there are provisions in the Public Service Act dealing with charges of inefficiency, and that I would ask the head of the Department, who is the responsible person in terms of the Public Service Act, to consider whether there was a prima facie case for invoking the provisions of the Public Service Act. The head of the Department is at present engaged on this task and to that extent therefore the matter is sub judice. As yet I have had no report and I will certainly not be a party to condemning an official on a newspaper report which contains certain facts but perhaps not all the facts; I do not know. I think one’s sense of fairness revolts against dealing with a matter such as this across the floor of the House. I said that I would make a statement in due course, if necessary, after I had received the necessary information.

That is as far as this particular case is concerned. Then I was asked by the hon. member for Pinetown and also by the hon. member for Constantia what protection there was for policy-holders and depositors in these institutions. I have made it perfectly clear from time to time that the fact that a particular financial institution has not yet been called to account by the office of the Director of Financial Institutions, is no guarantee to the public that they can invest their money with that institution. Under the law as it stood, before we introduced certain changes in 1962, the difficulty was that one did not learn the truth soon enough because institutions did not present their papers in proper time and in some cases asked for an extension of time to submit their papers. In 1962 therefore we introduced the Financial Institutions Inspections Act. You do not want to cast a shadow over the institution which you are going to investigate. Under the old procedure, once you had decided on an inspection, you were to a certain extent already damaging the institution and endangering the money of depositors or policy-holders. That is why we introduced this new procedure two years ago with the passing of the Inspections Act, which provided for a system of inspections. We are giving our attention at the present moment to a further safeguard. I think this particular measure, the Investment of Funds Bill, is at present being dealt with by a select committee. We are now trying to get away from the ordinary procedures of the past under which we sought to make the institution watertight. The various acts laid down the minimum standards of security which have to be complied with, but if there is dishonesty the investor is still not safeguarded. In the new Bill which is now being considered by a select committee we want to pin the responsibility on an individual; we want to be able to get hold of the responsible individual without necessarily damaging the institution as such. The hon. member has asked me what steps we have taken to protect the public. Let me assure hon. members that many of these companies which have been mentioned here got into trouble long before we had this new procedure, before 1962. It was because we realized the inadequacy of the then existing law that we took the first step in 1962 and we are taking a second step now. When I introduced the Inspections Bill in this House I made it quite clear that members of the public must not be lulled into a false sense of security; that they must not think that the Government would now be able to guarantee the safety of their deposits. I said at the time that if the mere fact that there was a certain measure of control led the public to believe that their investments were safe, it might be better even to discard every form of control but that I hope that that would not be necessary. I still think the office performs a very useful function and that we should rather try to find further methods to prevent the abuse of trust funds in the hands of companies. As I have said, many of these failures arose from actions taken by institutions before the new safeguards were imposed.

I think hon. members will agree that it is very difficult to judge exactly what is the right time to intervene, unless you have an inspectorate to see whether there has been any culpable negligence or whether it has merely been an error of judgment. I am certainly not prepared to make any statement with the information at my disposal, although I accept full ministerial responsibility. But I want to see whether there was any reason for me to alter my opinion, and to say that there was negligence of inefficiency. To my mind the approach was correct and that is to protect as far as you can existing investors, protect their trust moneys as long as you possibly can. It is sometimes very difficult to decide how to do that. The Angel Gabriel may sometimes err in his judgment but that does not absolve him from his duty to do his best under the circumstances.

I shall wait until I get the report from the head of the Department to see whether there is any reason to take this matter any further in terms of the Public Service Act.

The hon. member for Port Elizabeth (South) has asked me about the estimates of revenue: he wanted to know whether it would be necessary to have new estimates of revenue. I understand it has never been the practice to Table revised estimates of revenue. But I do not think there is any reason why we should not do so. I shall consider that. The financing of the Loan Account will be affected to a certain extent by the new proposals but the main lines of financing will remain unchanged. By borrowing less overseas is one of the ways in which a change can be effected or in some other way. But at the moment I am not in a position to say exactly in what way we shall see to it that the Loan Account is in order.

Mr. Chairman, in charging us, as the hon. the Minister has done, with being unfair towards an official by discussing certain matters across the floor of he House I would say to him, with great respect, that he has been singularly unfair to us on this side of the House. This matter does not explicitly arise out of a recent event or particularly out of this editorial in the Financial Mail. It arises firstly clearly out of the points which have been raised with the hon. the Minister in 1962 and in 1963 by hon. members on this side of the House. The effect of what the hon. the Minister has said to us this afternoon in regard to the investigation, etc., is no improvement, as it were, on what he said in reply to the hon. member for Port Elizabeth (South) last year when he said—

Sir, this was one year and 11 days ago. With due respect to the hon. the Minister, how long does he expect us, who believe we have a certain duty to the public of South Africa, to wait until he has disposed of rumours? Surely he cannot take umbrage when we raise the same sort of matter, and when the rumour has ceased to be a rumour and has become an unfortunate and accomplished fact. Surely he cannot take umbrage at that. The Minister says: To know how to act is very easy after the event. But the allegation in this article is that the official concerned—against whom personally I have no grievance whatsoever, I do not know the gentleman—knew and therefore could have acted, if not in 1958, then in 1959, and if not in 1959 then in 1960—and we are now in 1964!

Furthermore, Mr. Chairman, when the hon. the Minister says it is one of his duties to protect those people who have already invested in that institution, that is precisely the duty we believe is laid upon all of us in this House, upon us on this side. We are trying to protect the people who have invested and who are investing in existing institutions. We are not merely raising this as an academic debating matter. The Minister himself has admitted that there was something wrong in the system of control, and that there have been improvements. But even since those improvements in 1962 it is apparently still possible, two years after the new system has been introduced, to conduct the affairs of certain institutions in such an extraordinary way. Where the individual members of the public believe they are protected—I do not think many of them believe their investment is guaranteed by the Government—by the supervisory control of the Minister’s Department, they have a right to expect that control to be exercised with immediacy, rather than after the event. We are now, of course, talking about “after the event” as far as a dozen institutions are concerned.

The Minister said that as the charge, in terms of the reply he gave me, was one of inefficiency he had undertaken to do certain things. With respect to the hon. Minister, he said nothing about “inefficiency”. I cannot find that word in his reply. He said “with due regard to the chief purpose of the official’s office …” I read the question to begin with, and remind him that his reply was: “Whether or not there appears to have been any negligence or dereliction of duty …” Not a word about “inefficiency”. Sir, I do not want to split hairs about the meaning of words, but there is a certain distinction between dereliction of duty and negligence on the one hand, and inefficiency on the other. A man can be very efficient, he can be the most efficient man in the world, but he can still neglect his duty. Surely tihe hon. Minister will not disagree with that. Therefore, Sir, in all these circumstances, I am obliged, despite, or rather, because of what the hon. Minister has said, to refer again to this editorial in the Financial Mail, and to pick up the threads where I left them at the end of my last speech—

That is over a year ago—

This is 12 December 1961—not “after the event”—

Not inefficient, but negligent—

They did not write that in 1961 but in 1964.

I appreciate that,—

At the time we said …

“We” is the Financial Mail—

“That the management of Auto Protection was beyond reproach”—and that includes Mr. Aubrey Morris Cramer—

This was in May 1962. At its cut-price rates Auto Protection had just reaped a rich harvest of third party premiums. The paid-up capital still stood at R190,000.

The point is, Sir, that hundreds of thousands of rand were being taken from the public at this time—

In August 1962 Mr. de Villiers finally took a step. Inspectors were appointed with the Minister’s consent, and in November he had a “supplementary report” which told him that R540,000 of premiums received during 1961 had been used to settle claims arising from insurance cover granted for previous years. Auto Protection’s capital still stood at R190,000. We say that if Mr. de Villiers was doing his job he would have taken steps immediately to divest Auto Protection of its management. Mr. de Villiers did nothing so drastic. He waited until March 1963. He then went to court applying for liquidation, but prepared to withdraw if Auto Protection’s capital was increased by R485,000. However, to the relief of Mr. Cramer, the Registrar settled for injection of only R110,000 of new capital, along with the undertaking that Auto Protection would drop third party insurance and reinsurance, “on the basis of the certified information furnished to him … by Price Waterhouse & Company”, the Auto Protection auditors.

We say that he had no business to make such a compromise in the circumstances, and put at risk the public’s money which Auto Protection would continue to solicit.

After that Auto Protection went on advertising for every kind of premium income except Third Party, and the Registrar was prepared to support an application to court that all the information supporting the application for liquidation was to be kept secret by order of court, notwithstanding the fact that the public was entitled to the warning which publication then of the court record would have given.

As it was subsequently given, on an order of the court. [Time limit.]

I wish to raise certain matters under the Minister’s policy. I hope he will give due consideration to what I have to say before he introduces his Income-Tax Bill later in the Session. The first point I want to touch upon I have touched on before and that is the relief given to American South African Investment Trust Company whose income is exempt from (tax and which has special arrangements with the Government in regard to file repatriation of its capital. Last year in February the Minister told me, in reply to a question, that the amount covered by the Reserve Bank guarantee to this company, was R35,000,000. He refused to tell me what amount of tax it had been exempted from. Sir, if you think back you will remember that this exemption provision was brought into the Act a few years ago with the idea of encouraging foreign capital to come to South Africa when our reserves were very low. This side of the House was vehemently opposed to this provision but our protestations had no effect whatsoever. The taxation benefit this company has is of very great dimensions. This is a matter of policy. The Minister’s policy is not to tax it.

Order! I am not so sure that the hon. member can discuss that question at this stage. The hon. member should discuss taxation proposals when the House is in Committee of Ways and Means.

Mr. Chairman, I am discussing an exemption from taxation and the policy of the Minister in regard to this particular matter.

I am afraid the hon. member cannot proceed with that. The hon. member must not think that he can discuss anything under the broad heading “policy of the Minister”.

I am not trying to take advantage, Sir. I thought this would be the correct time to raise this particularly in view of what I am going to say next. I am trying to make a point. Sir, you must remember that we had a statement last night which has rather altered the course of the whole debate. I am not going to refer to that statement, so I hope you will let me make the point I wish to make.

The hon. member may proceed and I shall see whether he is in order.

The taxation benefit this company enjoys is a very large amount.

On what date was that tax exemption given?

I do not know. The Minister will know better than I do.

Was it confirmed by an Act of Parliament?

I think it is in the Income-Tax Act.

Order! Is the hon. member pleading for an alteration to an Act?

No, Sir, I am raising this as a matter of policy. I cannot raise this when the Income-Tax Act comes up. I am asking the Minister, as a matter of policy, to consider this matter because it affects the finances of the country to a very large extent. It is no use my raising this when the Minister introduces his Income-Tax Bill.

It involves amendment to the Act; that is what it boils down to.

I want the Minister to consider that, Sir.

Order! I am afraid the hon. member cannot proceed along those lines.

Very well, Sir. There have been very large surpluses. Last year I raised the position of deserted wives who, under the P.A.Y.E. system, were having a certain amount deducted from their income at source for income-tax purposes. That amount is then credited to their husbands’ taxation, because they are responsible, under the Act, for the taxation on their and their wives’ income jointly. I pleaded with the Minister last year about this matter. I told him there were thousands of women who found themselves in this position and that they should receive assistance. They should be assisted … Am I in trouble again, Sir?

The hon. member should raise that under the Income-Tax Act, or he should have raised it in the Budget debate.

In that case, Sir, I do not suppose you will allow me to speak about children’s allowances either.

Mr. Chairman, I am sorry that this matter has become what the Americans call a “cliff hanger”. But I must go on— Episode Three …

When Mr. de Villiers acted again it was February 1964. He acted with Mr. Cramer’s support (Financial Mail, 21 February) requesting a moratorium for Auto Protection “necessary to enable it to regain a liquid position.”

From his petition the public still knew nothing of the previous history of Auto Protection, and …

This was in 1964, Sir—

Five years after his attention was first drawn, on his own showing, to certain things that were wrong with the company, he says he was “very much in the dark” as to the company’s financial position—

We say that there is no stronger indictment of Mr. de Villier’s dereliction of duty than this fact: That it took an officer of the court only six weeks to discover and act on information which the Registrar (despite all his powers of investigation and inspection) claimed to be quite ignorant of, as recently as a month before.

I hope the Minister has taken note of this—

That is the Yeoman Insurance Company—

Mr. de Villiers was asked to explain his attitude to Yeoman before the parliamentary Select Committee on May 15. Fantastic as it seems now, this is what he said: “Yeoman undertakes very little Third Party insurance … Yeoman is one of the outstanding features in Provident as far as covering Provident’s policyholders is concerned …”

Mr. de Villiers explained before the Select Committee on that day that Auto Protection sank money into Provident, on the strength of a pledge of the Yeoman shares. He obviously gave the impression they were good security. Yet last month Mr. de Villiers came to court claiming that Yeoman was insolvent. At the same time he stated that Yeoman had been reinsuring 50 per cent of its risks with Auto Protection. We say this was contrary to the order of court governing Auto Protection. We say that Yeoman was in a parlous state long before Mr. de Villiers acted against it. We say that if Mr. de Villiers was worth his salt he would have known that, and would have taken effective action.

In August we said that Mr. de Villiers was a capable official. That judgment we now withdraw. We say that his bungling of the Cramer empire may well cost South Africans millions of rand. It has certainly harmed South Africa’s reputation in international insurance circles. We say Mr. de Villiers must now resign.

I say again, Sir: This is a sorry tale. To summarize the end of the story, as it were, the affairs of Auto Protection, its satellites, its subsidiaries and interlocking companies about which, according to this editorial article, Mr. de Villiers was well informed, here is the time table—

Now, Sir, if this is not a matter which cries out for a judicial commission of inquiry, then I do not know what does! Surely there are no political connotations about it. This is a matter, firstly, of the protection of the ordinary person whom, the Minister says, he wishes to protect. Secondly, it is a question of the good reputation of South Africa’s financial structure and of those particular and peculiar institutions which fall under the guidance and the control of the Registrar. I can assure the hon. the Minister that the reputable companies, and the reputable persons who conduct those reputable companies, are extremely dissatisfied and worried by the lack of action in respect of certain facts and certain matters which were known, and, in other cases, should or could have been known to the authorities. Some of the disrepute which has rightly redounded, if I may use that word, to the discredit of companies which have already disappeared or are about to disappear, is rubbing off on the reputable and well-established and honourable organization. This is a serious matter. My colleagues on this side are not concerned—I am not concerned—with anything in the nature of an attack on an official. I said so before, and I say so again. But this matter was raised with the Minister in 1962, and it was again raised last year. In each case he said in effect: Leave it to me; I am going into it. And when we raise it in 1964, the Minister takes umbrage! He said to-day that it is easy to be wise after the event. I only wish that those people who had lost these millions to which the articles refer—in fact it is true—had had the opportunity of being wise before and during the event! And they could possibly have been, had the hon. the Minister done what he said he would do in 1962, and what he said again last year he would do.

That has been done.

Well, Mr. Chairman, if that has been done then there is something rotten in the State of Denmark—not to be confused with South Africa.

The rumours you referred to in 1962 were investigated and nothing was disclosed. The present allegations are not the same as those previously referred to by hon. members opposite.

Be that as it may, Sir, with due respect to the Minister, does the Minister know what Mr. de Villiers said when the inspectors finally investigated in 1962? Does he know what their verdict was? He said—

His inspectors said so. [Time limit.]

During the Budget debate we voted a very large sum of money for the Transkei Government, R13,000,000, and that may be only the beginning; we do not know how far that is going to go. We asked during the Budget debate whether that was the last we were going to hear of that money and what kind of control there was going to be over the spending of it. I want to have clarity on this point from the hon. Minister, if he can give me the information, as to just what information Parliament is going to have as to how large sums of money like these which are handed over to this Transkei Government are dealt with. Clause 58 of the Transkei Constitution Act of 1963 provides—

The whole long clause, that I do not pretend to understand, it is most involved, seems to indicate that the Controller and Auditor-General will audit the affairs of the Transkeian Legislative Assembly but that he will report not to our Parliament but to the Transkeian Parliament, and naturally his report will not come before our Select Committee on Public Accounts.

Order! The hon. member must raise this under Vote No. 25.

Sir, this is a matter of policy, and this is a perfectly new thing. We want to know how the Minister is going to deal with this.

Provision is made in the Estimates under another Vote and the hon. the Minister responsible for that Vote will tell the hon. member how it is to be dealt with.

On a point of order, Vote No. 17 comes under the heading of this Minister and that is the Audit Vote, and I think the point on which the hon. member wanted your ruling was whether it is competent for him to discuss the audit and audit control in respect of a matter which involves the expenditure of public funds? The hon. member is concerned not so much with the question of the spending of money but of audit control.

This amount is being voted under the Department of Bantu Administration, and once it has been voted there is no audit.

On a point of order. Sir, I think you are wrong. If I may quote from the Transkei Constitution Act, it says—

Then the hon. member must discuss it under Vote No. 17.

In reply to the interjection by the hon. Minister of Finance, I would like to remind him that when that investigation which was made with his consent by the inspectors appointed by the Registrar was finally undertaken in August 1962 it was undertaken because the Registrar then had reason to believe that Auto Protection had failed to make adquate provision in its 1961 statements for its insurance liabilities, that the paid up capital had not been increased and that insurance premiums had been used to meet the capital requirements of the South African Reinsurance Corporation bought by Auto Protection in 1961.

The auditors who undertook this investigation, Messrs. Deloitte, Plender, Griffiths, Annan & Co., reported to the Registrar who then said—

The Registrar calculated that R539,193 of the premiums received during 1961 was used to honour claims in respect of risks assumed before 1 January 1961. Much the same thing happened in 1962. Then the statement continues—

I digress for a moment to say that in reputable financial circles this is unheard of A company loses its entire paid-up capital! The public is heavily involved, and yet the whole matter is very much sub rosa. It continues—

The Registrar explained that the purpose of the proposed increase of capital, by R485,000 was to make good the under-calculated provision of liabilities to policy holders (R110,000) and to replace R375,000 worth of premiums used by Auto Protection to increase the paid-up capital of another insurance company (the South African Reinsurance Corporation). He added that depending on the results of an investigation which was being conducted into the affairs of S.A.R.C. it might be necessary for him to insist on a further increase in the paid-up capital of Auto Protection.

Then the Registrar summed up the inspectors’ findings and the facts as follows—

Auto Protection’s resources are inadequate to assume any further insurance risks, the capital never having been increased beyond R190,000; the premium structure of the company is uneconomical, this despite the increase in premiums in 1959-60.

In view of the resultant risks run by the company’s existing policy-holders and the public in general, it is desirable and indeed essential that the respondent should not be allowed to assume any further insurance risks, at least until its paid-up capital has been increased by at least R485,000. That the liabilities of the company, bearing in mind its liability for claims and its liability in respect of unexpired risks, exceeds its assets, the company’s situation not having improved since the figures referred to above were furnished, and it is just and equitable that the company be wound up; and If further premiums are collected they will be utilized to a considerable extent to pay claims in respect of past risks, and a wholly inadequate provision will exist for claims for the risks assumed in return for such premiums.

That was the finding of the inspectors and in turn of the Registrar on this company. The principal of the company, Mr. Cramer, was known to the Registrar since 1956 and there was considerable negotiation and personal discussion by way of interview, correspondence ad nauseam, etc., and that was the verdict on Mr. Cramer and his Auto Protection Company in 1962. When we talk about this today, in 1964, I suggest to the Minister with deference that far from taking offence, as he seemed to do earlier on, and trying to accuse us of unjustly attacking an official, he might with some propriety and truth have said to this side: “I thank you for raising this matter and for reminding me once again, as you did in 1962 and 1963, that it is essential for me as the Minister to keep an eye on activities of this nature and to see that my Registrar also keeps an eye on them, and I am grateful to the Opposition for the impartial way in which they have dealt with this matter.” That, I think, would have been a more becoming reaction, than to say that we are trying to discredit or attack an official. I ask the Minister again regardless of any investigation which is being undertaken in terms of the Public Service Act—and that is clearly a domestic matter within the Public Service— does the Minister not feel, honestly, that this is a matter which should be ventilated in public before a judicial commission? It does not involve a few people only, but literally thousands of people who have lost millions of rand through no fault of their own because they quite properly felt that they had a measure of protection.

[Inaudible.!

We cannot hear a word.

I think I heard the greater part of what the Minister said, that he would await the investigation under the Public Service Act.

I said I would suggest that instead of everybody now making charges based on newspaper reports, it would be better to do what I propose doing, and that is to ask the Head of the Department to see whether there is any prima facie case for dealing with the matter in terms of the Public Service Act.

Now, may I ask the hon. the Minister two questions. Firstly, can he give the Committee any idea as to when he is likely to be able to make a statement in regard to the investigation which has been undertaken; and, secondly, whether in the light of that investigation, depending on the circumstances, he would then be prepared to consider appointing a judicial commission, and furthermore, whether he will not agree that when he refers to newspaper reports— and I take that to mean that there is not sufficient evidence or that the newspaper or newspapers concerned cannot be believed, which is an allegation we hear very often— he has himself from time to time quoted from the same journal, the Financial Mail, with great approval, and has held it up as an authoritative and impartial commentator on financial affairs?

Yes, but that certainly does not mean that I underwrite every statement made in this paper.

I just wanted to make sure that the Minister did not regard this matter as one of those things which we are often told by hon. members on the Government side should not be believed because it comes from the “Engelse pers”!

It is just ex parte at the moment.

Very well, then I leave it to the Minister’s good judgment to decide what he is going to do, and I sincerely hope that during the course of the discussion in this Committee he will answer the questions I put to him.

Vote put and agreed to.

On Revenue Vote No. 12,—“Provincial Administrations”, R152,952,000,

I would like to ask the hon. the Minister of Finance, in view of the tremendous surplus which has accrued to his coffers, particularly the extra surplus, whether he will not consider giving the provincial administrations some of that money. The provincial administrations can do something extremely useful with that money, and they could probably make some reductions in taxation which would be of direct benefit to large numbers of people in the tax groups who are feeling the pinch at the present time. While on the subject of the provincial administrations may I say that it has been a matter of concern to many people as to when we are going to have some constructive approach, arising out of the report of the Schumann Commission as well as the investigations of the Borckenhagen Commission which has been sitting for some years, to the financial relationships between the local authorities and the provinces and between the provinces and the Central Government. It would appear to me that the time has arrived when the hon. the Minister of Finance, with the large surplus at his disposal, might apply his mind to the question of giving a new deal to the provinces, because we believe that the provinces fulfil a very useful function and that they carry out their job satisfactorily, that they spend their money wisely and that there are competent people in control of the finances of the provinces. It has always been a sore point with the provincial administrations that there seems to be such a lack of sympathy that the Provincial Administrators always have to go cap in hand to the Government to ask for money. I quote as an example how for many years efforts were made by the Cape Provincial Administration to extend the educational facilities of the Coloured people in the Cape Province in particular; long controversies raged and many sad and unkind things were said, mostly that the Central Government had not provided the money. Strangely enough, I see that the Estimates this year are reduced by R6,000,000, which I take it is due to the fact that Coloured education is going to be transferred to the Department of Coloured Affairs. As I said earlier on in another debate, nearly R18,000,000 was found for Coloured education. The provincial system as we have it is a useful one, and I think the hon. the Minister of Finance could devote his attention to this matter with constructive results. Let us take the question of personal tax, for example. Here we have one matter in which direct relief could be given to large numbers of people if the Minister of Finance would make the money available. Then there is the question of the companies tax, which is a very small portion of the Republic’s companies tax. Here again, if the Minister of Finance would provide the money immediate relief could be given, in a very effective way, to large numbers of people. There is also the question of motor licences, a portion of which might also be given to the provinces, when one bears in mind the large sum of money which accrues to the Treasury from direct taxation on the business community of this country. I want to go further and say that the Minister should also look at one or two other things so that the Administrators of the provinces might fulfil their rightful function and conduct the affairs of local authorities. Because of the laws imposed by the Central Government—I refer in particular to things like housing and Bantu administration, which are passing from the control of local authorities—the local authorities are responsible for the financial aspects …

Order! I think the hon. member is now going beyond the scope of this Vote.

Sir, I am pleading with the hon. the Minister of Finance to give us some more money so that these things can be done. I am only making a statement; I am not making a proposal. I am just making a statement as to the position that actually exists, because once these Estimates have been passed, another 12 months will pass before we deal with the next Estimates and in the meantime the provinces have no money. I feel therefore that this is the place to state the case for the provinces which do not seem to have too many defenders in the problems that face them. I quote as an example matters which were within the purview of the provinces and which were taken away from them. There are financial considerations involved there; I refer to housing in particular. Surely this must be the place to talk to the hon. the Minister about these matters. If I cannot discuss it here, under what Vote could I discuss it?

Order! The hon. member cannot discuss all provincial matters under this Vote.

No, I am not discussing all provincial matters.

Order! Housing definitely cannot be discussed under this Vote.

I hesitate to argue with you, Sir, but may I put it to you this way: Provision is made in this Vote for the salaries of the Administrators and for the money voted to the provinces by the Central Government. The money that is voted to the provinces by the Central Government is not identifiable in any particular Vote in the provincial records. They get an amount of money which is handed to them in one lump sum. Surely if there are problems affecting the provinces to put before the Government, this is the place to do so. If I am not correct in saying that, Sir, I ask you to allow a little latitude so that we can ventilate these matters here.

The hon. member may continue but I must ask him not to cover too wide a field. If the hon. member’s contention were correct he would be able to discuss all provincial matters under this Vote, which he certainly cannot do.

The point is that the provinces are enabled under the legislation to levy certain taxes. Any shortfall in the revenue of the province is made good by the Central Government. Surely, if the Central Government is the body handing out the money, then the provinces must have somebody here who can put forward their case and say that they need more money, not from the point of view of the Administrator as such but from the point of view of the provincial taxpayers, who vote for both members of the Provincial Council and members of this House.

Order! The hon. member may continue but he may not discuss all provincial matters.

The point I am trying to make is that the Provincial Administrations do not get a big enough subsidy from the Government.

Order! I am not prepared to argue wth the hon. member. The hon. member must abide by my ruling.

The amount paid to the provinces is fixed by statute. It is not an amount that one can change from time to time; it is an amount which is paid in terms of a formula which is embodied in a law. I just want to say to the hon. member that the provinces will also benefit by the very high income derived from income-tax and companies tax, because they get 30 per cent or 33 per cent of the revenue that we obtain, and we collect it for them. The higher our income is from these sources the more the provinces will get.

I thank the hon. the Minister for that explanation. Perhaps in view of this tremendous inflow of money into the coffers of the Treasury the time has come to amend the Act. That is why I am trying to make a case that perhaps the present formula is wrong.

Order! The hon. member cannot propose an amendment of the statute.

No, I am suggesting to the hon. the Minister that this is the time when I should be able to put forward the plea that an amendment is perhaps necessary.

Order! That will require new legislation and the hon. member cannot discuss that.

I realize that my scope is somewhat limited now, Sir. But I have made the case of the provinces. I want to ask the Minister when consultations take place affecting the provinces and their powers, and when dealing with financial aspects, he will deal with the impact on local authorities which automatically flows from the decisions taken by the Administrators on the advice or on the recommendation of the Ministers of the State. As I have said I would like to know what has happened to the Schumann Commission. As far as I remember the only report was in connection with Coloured education. [Time limit.]

Vote put and agreed to.

On Revenue Vote No. 16,—“Customs and Excise”, R7,095,000,

I should like to know from the Minister what his policy is in regard to customs matters and whether ex gratia payments cannot be made available. Mr. Chairman, you will remember that last year we raised the question of duty on second-hand cars which were imported from overseas. The previous position was that if a car had been used for up to six months it was regarded as a second-hand car. The Act was then changed and a car which had been used for two months became a second-hand car. The hon. the Minister gave us certain information regarding the effect of the new duties in which he told us that in regard to a small car the difference in cutsoms duty would be R12, in the case of a car of the value of R700 it would be R17, on a medium-sized car of, say, R800 the difference would be R20; in the case of a car valued at R1,200 the difference would be R30 and so on, up to a luxury car with a f.o.b. value of R3,000 and more, where the difference would be R75. It appeared that the maximum additional duty a person would have to pay under any circumstances would be R75. But the position works out very differently in practice. I understand from certain information that has been given to me, that for example, Sir, in respect of a Wolseley 6/110, the additional duty is not R75 but R370. In other words the estimated duty was R762 and the actual duty R1,254. In regard to a Fiat Family Sedan the additional tax was R268 and not R75. I know of cases of actual importation of motor cars where the difference in duty goes up to as much as R380. That is in the case of a Citroen Comfort Brake. I believe these facts are known to the Department. And what I want to know from the hon. the Minister is, how is it that this error in the computation of these additional duties arose and whether, in view of the fact that these additional duties are so far in excess of the figures the Minister gave us last year and on which people naturally operated, he would be prepared to consider ex gratia payments in respect of these excess duties.

The payments are in terms of the Act.

They are in terms of the Act, but can I ask the hon. the Minister one question before I sit down, if he will reply to me: Was the information he gave us last year correct in that the maximum additional duty would be R75.

I have this information: Certain cars were adversely affected because of the groups of duty. We have administered the measure in such a way that cars were not put in higher groups as a result of the measure. Particulars should be furnished for investigation. If the hon. member will give me the particulars I shall get the Department to investigate them.

Thank you, Sir.

Vote put and agreed to.

When the business of the House was suspended I was putting a point to the hon. the Minister in respect of the amount of money which we have voted for the Transkeian Government, and I pointed out that under Clause 58 of the Transkei Constitution Act it is provided that the Auditor-General will audit all the accounts of the Transkeian Authority. It is a most involved clause, but as I read it, the Auditor-General will report to the Transkeian Parliament and not to us, and therefore we shall have no jurisdiction over the matter. But in the same way that the provincial Auditor-General’s reports are tabled in this House for the information of members, I feel that, considering that year after year we are going to vote very large sums of money, at any rate for some time to come, to the Transkeian Government, we should have the reports of the Auditor-General tabled in this House so that when it comes to voting money year after year to the Transkeian Government, this House should be informed through the Auditor-General’s report on the way the money is being handled and spent in the Transkei. I want to ask the hon. the Minister whether he can give us the assurance that when the Controller and Auditor-General, an official of his Department carries out the audit in the Transkei and reports to the Transkeian Parliament, a copy of his report will be laid on the Table of the House here for our information?

The hon. member is quite right that the amounts are voted in terms of the Transkei Constitution Act and they are then spent by the Government of the Transkei. The Auditor-General of the Republic has to audit those accounts, and naturally the auditing is for the purposes of the Transkeian Government. I think that is common cause. Now the hon. member wants to know whether those reports of the Controller and Auditor-General will be laid on the Table here, obviously not for reference to our Public Accounts Committee but for the information of members and he quotes the analogy of the Provincial Councils. All I can say is that on the face of it it seems to be so, but there may be constitutional issues involved. After all, it is not a province, and I do not want to give any assurance that that is the position. All that I undertake to do is to institute inquiries to find out what the legal position is, and at a later stage I shall be able to give the hon. member the information. At the moment I do not want to commit myself in any way.

Will the hon. the Minister give us the assurance that the position of the Bantu Education Account will also be investigated in the same way?

There is no separate Bantu Education Account for the Transkei.

There is not, but I want to know whether money that is to be spent on the Bantu Education Account in respect of the Transkei will be investigated in a similar way so that we can have clarity on the matter.

The hon. Minister has informed us that R750,000 will be provided for housing for the aged. This statement came as a surprise to most of us, and the hon. the Minister was very brief in his explanation as to how the R750,000 would be used and could be applied for.

Order! The committee is now discussing Vote No. 17.

I move—

This is a short Bill and a commendable measure in that it is an enabling law which will make it permissible for a Provincial Administration to acquire small pieces of land of little value which may abut onto a public road. Sir, the measure specifically refers to public roads which are not declared national roads. There is a separate Act dealing with a somewhat similar situation in regard to the acquisition of land abutting onto national roads. As I indicated at the second reading, the measure has the support of this side for the House. Sub-section (2) also provides for the forfeiture of land by means of a process of expropriation. In principle there is no objection to such a step in appropriate cases, but I think members realize that expropriation is an extreme measure which should only be applied in extreme circumstances. The hon. Deputy Minister at the second reading of the Bill gave the House the assurance that extreme caution would be exercised by provincial administrations concerned before the expropriation powers are exercised. We naturally accept the assurance of the hon. Deputy Minister. But during the second reading I raised the practice of having patchwork legislation of this kind, and I asked for some assurance from the Government, firstly that there would be a calling of a halt to such patchwork legislation dealing with the expropriation of land and, secondly, that appropriate steps would be taken to consolidate the law relating to expropriation. I am afraid, however, that the hon. Deputy Minister rather missed the point that I had made. I had merely sought from him that there should be representation to the appropriate Minister concerned to respond to the request which was made to him. As I say, the hon. Deputy Minister rather overlooked that aspect of the matter. I realize that he is dealing with a specific measure and that the general question of expropriation of land becomes the responsibility of some other Minister. My request was to him that appropriate steps should be taken to meet the question that I raised with him, and at this third reading of the Bill, I repeat that question and request to the hon. the Deputy Minister.

Firstly, in regard to the question of “patchwork legislation” to which the hon. member referred, I just want to say that this is a matter which is not actually relevant to this specific discussion. If the hon. member wants to discuss the principle of the matter then I suggest that he does so under the relevant Vote or by way of a motion. We are dealing here with a measure which has been introduced at the request of the provincial executive committees to deal with a specific matter. The principle in connection with expropriation is already embodied in legislation which was passed by this Parliament a few years ago. This principle of expropriation is already embodied in our legislation dealing with national roads. From this it is clear that Parliament approved of this principle some years ago in the case of certain urgent matters, so the insertion of that principle in this measure is nothing unusual. It is simply a continuation of a principle that has already been accepted. I can only repeat the assurance that this power of expropriation will be exercised with the utmost caution and care and in such a way that there will be no unnecessary interference with the interests of private bodies.

Motion put and agreed to.

Bill read a Third Time.

I move—

At the second reading stage and subsequently at the Committee Stage we assisted in the passage of this Bill, because we realize that it is a difficult Bill in the sense that “vocational education” cannot easily be defined. The hon. Deputy Minister co-operated by deleting what we regard as a very controversial clause, Clause 12. Looking into the future I think we have learned something from the passage of this Bill, that the relations between the Central Government and the provinces in regard to the definition of vocational education should be more clearly defined. I think it is exceedingly difficulty to-day to say where the functions of the provinces end, and where the functions of the Central Administration begin. If there is one lesson we have learned in addition to the details of this Bill, it is the need for the hon. the Minister to make an investigation into the relationship between the Central Government and the provinces on this question of vocational education.

I appreciate the idea expressed by the hon. member. This is an important and real matter, a matter which is receiving the attention of the Education Council. The Education Council is at present investigating the entire question of vocational education in all its ramifications and I trust that when this council submits its report and recommendations in this connection, they will be of considerable assistance to this House.

Motion put and agreed to.

Bill read a Third Time.

I move—

May I say immediately that this is a completely uncontentious measure and I hope there will be no opposition to it.

When the State took over the control of the University College of Fort Hare, it acted in terms of Act No. 64 of 1959 which provided that all moneys and other assets belonging to the old council must be transferred to the Central Government and that the Bantu Education Account must be credited with those funds which were then to be used at Fort Hare, or, as the Act read, at any institution which may take the place of Fort Hare for the purposes for which those specific funds had been made available to the previous council and in terms of the conditions governing the donations. Hon. members will understand that over the course of the years the old college received various donations some of which were to be used specifically for bursaries. A large number of the gifts and donations—and therefore the assets which they possessed—were donations which were made with the specific purpose of making bursaries available to students. After the new Council of Fort Hare had taken over under the control of my Department it continued to receive donations and the anomalous position has now arisen that donations which were received for bursaries prior to 1960 had to be paid into the Bantu Education Account of the Central Government but donations which were received for bursaries after 1960 can be administered by the new council. If the position remains as it is, it will therefore mean that there will be a duplication and that there will be two administrations controlling these busary funds. Then there is this further consideration that we gradually want to make these university colleges more independent and entrust more and more responsibilities to them. That is why we feel that it was wrong to transfer to the Central Government the funds which they had at their disposal, particularly funds which had been made available to them for bursary purposes, and we now want to return these funds to the College council. We cannot do this in terms of the provisions of the Act as it stands and that is why it is necessary for us to amend the Act so as to enable us to transfer to the new council some of the funds, over which the old council had jurisdiction, instead of depositing it into Bantu Education Account.

There is only one problem and that is that all the funds were not made available for bursary and similar purposes falling within the present jurisdiction of the council. There are also other funds which were made available specifically for the maintenance of buildings for example, or the construction of new buildings. As hon. members know, my Department itself is responsible for the maintenance of these buildings out of moneys voted by Parliament. In consultation with the Treasury and after long negotiations with the Auditor-General. we have agreed to a formula in terms of which my Department will consult with the Treasury in regard to the funds which the University Council will be able to retain and the funds which will have to be paid over to Bantu Education Account. The intention is that the funds which are made available specifically for building purposes will be paid over to my Department, that is to say, to Bantu Education Account, because my Department is responsible for the buildings, but that other funds which fall within the jurisdiction of the council, such as bursary funds and so forth, will be controlled by the council. It was because we were thinking along these lines right from the beginning and because we thought that it was possible even under the old Act to arrange the distribution of funds simply by way of parliamentary appropriation that the funds were never paid over but were retained by the Council of the University College of Fort Hare. We have now discovered that this cannot simply be done by way of parliamentary appropriation and that it can only be done by amending the Act. That is why we are now asking that the Act be amended with retrospective effect to the date of the take-over so that bursary funds and so forth which can be administered by the council will remain under the control of the council and be administered by the council; only funds agreed upon by my Department in consultation with the Treasury will then be paid over to the Central Government and to Bantu Education Account. I think hon. members will agree with this provision. It is designed to give university colleges greater indepedence and more control and that is the direction in which we want to move. I may just mention that as far as the granting of bursaries is concerned we feel that to a large extent the authority ought to rest in the hands of the Bantu Advisory Council of the University College itself. We feel that the function should be performed not by the White Control Council but by the Bantu Advisory Council. They are already doing so in certain cases and where they are not performing this function yet we hope they will do so in the near future. The granting of bursaries is one of the functions which will fall within their jurisdiction.

I want to thank the hon. Minister for the introduction and his explanation of this Bill. It is a serious matter when one deals with trust funds, and in this case we are dealing with trust funds. When I refer to the original board, the original council, I shall refer to the “college council”, the council in existence before it was taken over by the Bantu Education Department, and when I refer to “council” and not to “college council”, it is the present council that is operating to-day. The position seems to be here that the College Council of Fort Hare, before control was taken over by the Central Government, was a body that was to some extent independent, an autonomous body, and they controlled certain funds. Throughout the years money had been made available to them, as the hon. Minister has explained, chiefly for two purposes: (1) For bursaries, for scholarships and (2) for building improvements and the extension of the premises at Fort Hare. With the changeover apparently the matter was not properly settled at the time, and we are now asked to condone what has happened in the interim period from 1959 to to-day. Now I want to ask the hon. Minister for one or two explanations. This Bill is a one-clause Bill dealing only with the simple matter referred to by the hon. Minister, and I am dealing now with (2)bis (b) which states—

The essential thing is that we want an assurance that the original purpose for which the money was granted, donated, will be observed in spending the money. That is the first point. Then we come to paragraph (c)—

Now when it refers to “any other university college which may be established in its stead”, I should like to have clarity on this point: Does this mean only the present college Fort Hare, or may it include the three Bantu university colleges?

Fort Hare only.

I thank the hon. Minister for that assurance. Then the second point is this, the amount of money that the Minister may decide shall be paid into the Bantu Education Account. I should like to have that defined in the Bill if possible. Money that has been donated for bursaries should be under the control of this new council, just as it was under the control of the college council originally. But the money that was donated for buildings and the extension of the University College of Fort Hare, as we knew it, should now be under the control of the Minister. I think that would be reasonable. I don’t know what the hon. Minister’s reaction to that is, but I do not think the Minister should be left to determine what moneys should go to the Bantu Education Account and which money should fall under the control of the council. Moneys for bursaries, scholarships, donated for the education of students as individuals should be under the control of that council, whatever council happens to be there. That is our submission.

The explanation which the hon. Minister for Bantu Education gave by way of interjection, in reply to the hon. member for Kensington on the question of whether the money referred to in (c) could only be applied for the purposes of the particular university college which one might call the successor to the University College of Fort Hare, indicates that there is, I think, some conflict between that and (b), because the money referred to in (b), moneys transferred to the Council in terms of paragraph (a), these moneys shall, “subject to the provisions of paragraph (c)—there is a qualification in (c) to which the hon. member for Kensington drew attention—be applied by it for the particular purpose for which it had been collected, acquired etc.”. Therefore I fail to understand why in that case (c) is necessary—why it is necessary for the hon. the Minister of Bantu Education to reserve unto himself the right to, shall I say, resile from the contract which he has undertaken in terms of (b) and say that “such portion of the said moneys”, in (b), which he has already said can only be applied to the “successor” of the university college, why such portion shall be used, even in consultation with the Minister of Finance, for “any other university college which may be established in its stead”. I do not want to pursue this until such time as the hon. the Minister, by explanation rather than interjection, will make it clear why this apparent conflict does arise.

I just want to tell the hon. member for Kensington (Mr. Moore) that the assurance which he asked for in respect of the provision in (2)bis (b)—that in the funds that are retained by the council shall be used in terms of the provisions of the original donations statute— is included in the Bill. The new council may not use any fund for a purpose other than the specific purpose for which it has been donated. That is why the proposed sub-section (2)bis (b) provides—

In other words, they have to keep to that. If they do not do so, they will be breaking the law. So it is not necessary to give any assurance in this regard. The Bill provides specifically that they must use it for that particular purpose.

It appears to me that hon. members have a problem in regard to paragraph (c). In the first place I want to make it clear that the words in the English text “or any other university college which may be established in its stead” only constitute a covering provision in the event of, at some or other stage, the University College of Fort Hare ceasing to exist and, as one must reasonably accept, something else being established in its stead. We do not foresee anything of this nature happening at present; it is only a covering provision to determine Fort Hare’s successor if Fort Hare ceases to exist. Then the institution that is set up in its place will be the hereditary successor to Fort Hare. That is what those last few words mean. The question now arises as to why paragraph (c) is necessary. Why do we have the proviso in (c)? In actual fact the intention of paragraph (c) is that the present council should not receive all the funds but that some of the funds must in terms of the original provision still be paid over to Bantu Education Account. The funds which will have to be paid over in this way will only be those funds which refer to the upkeep or construction of buildings.

Can it not be laid down in the Bill?

That is what we wanted to do but after discussions with the Treasury and the Auditor-General it was found that it was extremely difficult to do so because some of the donations were made for both purposes. We must now negotiate in regard to the portion to be retained by the council and the portion to be paid over to Bantu Education Account. We have not yet reached finality in this regard. We cannot insert a specific provision here because there is uncertainty in regard to some of the funds, and it is difficult to state it clearly in legal language. That is why we have agreed that I shall determine this in consultation with the Minister of Finance. The intention is that the Treasury, together with my Department and the Auditor-General, will investigate the funds and then make a distribution. We must bear in mind that funds which are used for bursaries remain under the control of the council and funds which are intended for building purposes must be paid over to my Department because everything in connection with the construction and the upkeep of buildings is done departmentally by the building teams of my Department and must accordingly be paid for out of the usual sum voted by Parliament for this purpose. It would be undesirable to have dual control because a university college cannot maintain its own building and maintenance staff; it will not pay them. But because of the many activities of the Department of Bantu Education, I can keep building teams occupied economically in certain areas, teams which at the same time are also responsible for construction and maintenance work at university colleges. Because we make use almost exclusively of Bantu artisans, except in the supervisory posts, we can do this work more cheaply than the P.W.D. can do it. That is why it is to our advantage to do this work departmentally because we can do it so much cheaper, even more cheaply than the council of a university college. That is why we have the provision to the effect that the money which is required for this purpose should be paid over to my Department—because we can do this work more easily and more cheaply. But I want to repeat that the reason why it is framed in this way is because finality has not yet been reached between the Treasury, the Auditor-General and my Department in regard to where we should draw the line as far as these funds are concerned. There are some funds which are intended partly for bursaries and partly for building purposes and we still have to decide how they can best be spent. This is being done in consultation with the Treasury and the Auditor-General. I do not decide on my own; I decide in consultation with the Minister of Finance, who is the Minister responsible for the Treasury, and the Auditor-General. They are all brought into the picture. Moreover, the intention is—and it is embodied in this provision—that the money which is paid over to Bantu Education Account must also be spent in accordance with the original donation statutes. For example, I cannot use money which is intended for building expansion to establish a new faculty; I can only use that money for the purpose for which it has been donated. So, it is not only an assurance, it is also a legal provision. The funds which remain under the control of the council and the funds which are paid over to my account must be used in accordance with the provisions of the donation. It is not possible to draw a definite dividing line in this regard. We have been trying to finalize this matter now with the Treasury and the Auditor-General for about two years but it has still not been finalized. However, they have now agreed in principle that if this principle is accepted by Parliament, they will make the final distribution.

The hon. member also wanted to know what had happened in the meantime. Since 1959 the allocation of bursaries has been in the hands of the college council of Fort Hare and not of my Department because I delegated that power to them. But in actual fact—and this is where the problem has arisen—the Auditor-General holds the view that this money should specifically be voted by Parliament for this purpose. Up to the present we have been able to rectify matters by means of the funds which have been voted for our use. In actual fact, however, these funds are still under the control of the council of Fort Hare and have not yet been paid over. They will only be paid over once this Bill has been passed and a distribution has been made. Once this has been done, the procedure that we have been following since that time will be given the force of law.

Motion put and agreed to.

Bill read a Second Time.

I move—

This Bill is a purely administrative measure which I do not think ought to present hon. members with any problem. As a result of the obsolete nature of some of the old Acts which we have to deal with, it may be difficult for hon. members to understand what the position is if they read the Bill on its own, and that is why I have furnished hon. members with a short explanatory memorandum in order to assist them.

Perhaps I should explain briefly that the Bill, which consists of only 3 clauses, contains the following provisions. Firstly it is the practice not to register marriages between Indian boys under the age of 18 years and girls under the age of 16 years, but the legal sanction for the non-registration of these juvenile marriages lapsed when Act No. 8 of 1935 was repealed in 1962 without corresponding provision having been made for the registration of Indian marriages in the Marriage Act of 1961. In other words, the provision which formerly existed was unfortunately lost sight of with the passing of the Marriage Act of 1961 and therefore lapsed, and all that we are doing now is to restore the status quo and to legalize the practice which we have been following departmentally and that is not to register these child marriages, with the proviso that the Minister can give his permission for such marriages to be registered in exceptional cases, just as is the case of juvenile marriages between people of the other races.

As far as Clause 2 is concerned I want to make it clear that the existing regulations in regard to repatriation are adequate in all respects and it is by no means the intention to issue other or new or amended regulations. But these regulations owe their origin to an Act of 1927 which is administered by the Department of the Interior and only one or two sections of which are still in operation. In other words, this is an Act which is gradually disappearing from the Statute Book. The power to promulgate regulations was provided for in the Act of 1927 because that provision was erroneously omitted from the original Act of 1914. The purpose of this clause is to retain the power to make regulations and to provide for this power in an Act which is administered by the Department of Indian Affairs. In this way we ensure that the existing regulations do not become invalid when the remaining Sections of the Act of 1927 are repealed in the near future, as it is anticipated they will be. That is the only intention of this provision and I hope the position is clear.

As far as Clause 3 is concerned, the Natal Act, Act No. 25 of 1891, provided that under certain circumstances a magistrate could dissolve a marriage enforced into between “immigrant Indians” or their descendants. Hon. members will know that for practical purposes the “immigrant Indians” were the Indian workers who were brought to Natal under contract, but these Indians, of course, were not the only Indians who came to South Africa; there were also the “passenger Indians”. There has been so much intermingling and inter-marriage between passenger Indians and immigrant Indians over the course of the years that it has become impossible to distinguish between a passenger Indian and an immigrant Indian, and the old Natal legislation dealing with marriages and divorces was therefore amended last year by means of the Indian Laws Amendment Act in such a way as to remove the legal difference between passenger Indians and immigrant Indians all marriages contracted and all divorces granted in terms of Act No. 25 of 1891 were legalized. But it has come to light since then that in a few cases magistrates have incorrectly applied the provisions of the Act of 1891 to dissolve marriages registered in terms of Act No. 22 of 1914. The object of this clause is simply to legalize the dissolution of such marriages where they were dissolved by magistrates in all good faith.

Hon. members will see therefore that this Bill contains purely administrative provisions. The Bill was submitted to the Indian Council which expressed its approval of these provisions. There has been no opposition to this Bill. The provisions of this Bill have been known for some time and no protests have been received and indeed, I do not think there can be any objection to these provisions.

I want to say in the first place that we are very grateful to the hon. the Minister for producing an explanatory memorandum in connection with the Bill. I hope that is a practice which will catch on among the hon. gentlemen who sit on the Treasury benches, especially in relation to Bills of this nature. The Minister has given a very fair and good explanation of what this Bill does, but it deals with a matter about which of course there is no clarity whatever, and there never has been any clarity about it, as I shall demonstrate, and that is the relationship in Natal between passenger Indians and immigrant Indians and their marriage laws and the different laws relating to the passenger Indians and to the immigrant Indians, and the whole question as to who is in fact a passenger Indian and who is an immigrant Indian, the reason for the lack of clarity being of course that there has been intermarriage between them. Certainly last year we had laws relating to marriage and status affecting these people which were different if you were the descendant of an immigrant Indian and different if you were the descendant of a passenger Indian. That position existed up to last year. This is what happened. We thought last year that we had taken these differences away, but as the Minister has indicated, Clause 3 of this Bill is something which we overlooked. In regard to Clause 1, the Minister said unfortunately this was something which escaped us last year, but the White Paper which the Minister has produced says that the proposed new section has been necessitated by the discovery that neither the Indians Relief Act of 1914 nor any other existing law places restrictions on the age at which Indians may register unions contracted under the tenets of the Indian religion. I must say it is remarkable that it has taken all this time since 1914 for this to be discovered.

It just shows what a good administration there is now.

As I shall indicate, the attitude appears to have changed in this clause, but in the next clause it does not appear to have changed so much. But while the White Paper seems to indicate that child marriages amongst Indians have ceased, I am sure the Minister will be the first to concede that in fact this clause will not stop child marriages amongst Indians. All that this clause provides is that if an Indian in Natal wishes to register a valid marriage, then he may not do so unless certain conditions relating to the marriages of White persons in terms of the ordinary marriage laws of this country are complied with. It is provided that certain sections of the Marriage Act shall mutatis mutandis apply. The first one is in Section 24, which says that minors may not marry except with the written consent of their parents. Then there is Section 25, which also relates to consent. Section 26 prohibits marriages of males under 18 and females under 16 without the permission of the Minister, and it is provided that the Minister is no longer the Minister of the Interior but will now be the Minister of Indian Affairs. Then Section 27 relates to proof of age. This is only in relation to a valid marriage. In other words, you may, if you are a Hindu, contract a marriage if you are a girl of 12 and a boy of 14. The Minister knows that these marriages are arranged and are contracted among the Indian population of Natal. These are the arranged marriages according to Indian rites. All that the first clause says is that these persons may not register their marriage unless they are of a certain age, unless the Minister gives his consent. But nothing in this clause prevents the marriage and the cohabitation of children, of a girl of 12 and a boy of 14. I take those two ages as the age of puberty in our law, but at those ages they can marry according to their custom and they may cohabit, but they may not register the marriage. That is all the clause says. So one wonders whether one should allow these marriages, because that is in effect what they are; whether one could allow cohabitation and consummation of a union between a 12-year-old girl and a 14-year-old boy. I hope the hon. member for Durban (Central) (Dr. Radford) will be able to deal with this matter because it falls peculiarly within his knowledge, but I do not think this really meets the trouble that exists in relation to these people.

Everything you say can be said in connection with polygamy.

Yes, but there is one great distinction. Polygamy is illegal in South Africa. If you are already married, you commit bigamy if you marry someone else, except if you are a Native.

Only if it is registered.

Order! May we share in this debate?

It is true, as the Minister says, that it has to be registered first, but then I do not believe that a White girl or a White boy would be entitled to register something which is a putative marriage and live together, with the law taking no notice of it at all, or the law saying, as it does here for the first time since 1914, that you may only register your marriage, and your union will only be recognized as valid if you are of a certain age. What I want to ask the Minister is whether he is really going far enough? Is he really getting to the root of the problem? I do not think he is, because if one gets down to the root of the problem the question of consent and the prohibition of marriages under a certain age comes into it. That is something we provided for ourselves.

The reasons for our laws are of such universal and good application in relation to the laws of nature that surely if they are good for us they must also be good for the Indians of Natal. But When I speak of the attitude we have to adopt towards the Indian people of Natal, Clause 2 does not really cast a shadow on it but it leaves one looking for some breath while one goes on to the next thought which this Government has in relation to the Indians.

Clause 2 deals with the question of the return of Indians to India, and possibly also it includes the return to Pakistan. The Minister is now to take over the administration of the return of Indians to India or to Pakistan in terms of the old Indian laws, in terms of the 1914 legislation. It was provided in that legislation that any Indian wishing to go back to India could be given a free passage, and all that this clause does is to allow the Minister to make regulations relating to the form of request and generally for the better carrying out of the objects of that section. I wonder whether the Minister would indicate whether in fact he has in mind any sort of change in the form of request which was required by the Department of the Interior.

No.

Then the Minister is merely transferring this to his Department. But I wonder whether he would indicate to us how many people have in the past used these facilities to be returned to India on a free passage and whether he expects that in future any persons will make use of it.

Then we come to Clause 3, which deals with this most extraordinary legal question we have in Natal, the question of Indian immigrants and passenger Indians. It is most extraordinary, and it goes back a long way, that we have two classes of Indians. Up to last year we had Indians of two different classes of different status. They are the passenger Indians, who paid their own passage to come to Natal, and who were treated on a different basis, together with their descendants, from the basis on which the immigrant or indentured Indians were treated. They were indentured for labour in Natal (and they have a different status from the passenger Indians who paid their passage to come to Natal) to work mostly on the sugar estates. The Minister has now discovered another flaw in the law we passed last year. Last year we all hoped that we had once and for all sorted out the question of the passenger Indians and the immigrant Indians. It should be appreciated that the difficulty we have is not just whether a person is a passenger or an immigrant Indian, but to decide whether any Indian in Natal to-day is the descendant of an immigrant or of a passenger Indian, or both. What happens when a passenger Indian marries an immigrant Indian? The answer is not very simple. He is not allowed to marry an immigrant Indian in certain circumstances, and so you have to look at the circumstances and you have to decide whether he was married in the normal way, and when that marriage was dissolved, if it was dissolved by the right court, and whether the children are the children of a proper marriage or not of a proper marriage. And whether the status of the child is that of the mother or father. When I say this I am being very realistic, because it is almost impossible in Natal for an Indian to know whether his parents were, or ought to have been, married according to the law relating to the immigrant Indian or the law relating to the passenger Indian, and those laws are different. If you contract a marriage before the Protector and you fall into the one class, then your marriage is not a marriage, whereas if you think that you fall into the other class and you get married before a magistrate, and the magistrate thinks that you are in fact a member of that class, your marriage might still be invalid. So this is the difficulty an Indian has in relation to his children and in relation to their parents—or did, until last year. They did not know until last year whether in fact they were the descendants of immigrants or passengers.

Last year we passed an Act which said that all this nonsense was to end and that there would be no distinction between passenger Indians and immigrant Indians. I must say that I was most surprised when I looked at this Bill and found that Clause 3 now provides that any marriage between an Indian male and an Indian female which purports to have been dissolved by an order of any magistrate in terms of Section 74 of the Indian Immigration Law of 1891—that, of course, relates to the Indian immigrants—shall, except where such order has been reversed on appeal to the Supreme Court, be deemed to have been correctly dissolved with effect from the date stated in that order. Now, quite obviously, the law we passed last year did not clear up all the difficulties that we had in this regard. How is it that we now have to decide that marriages which have been dissolved by order of the magistrate in relation to people who thought that they were of that class which could have their marriages dissolved by a magistrate— remembering that the passenger Indians could only have their marriage dissolved by the Surname Court, but that we now find that we did not last year clear up the laws relating to these people. I think it is a great pity that we do not once and for all look into the laws relating to the immigrants and the passenger Indians.

During the last recess I had occasion to appear in the Appellate Division in relation to exactly the same sort of thing. I want to quote from the judgment in this case of Pillai V. Pillai, reported in 1963. Vol. 4 of the S.A.L.R. The judgment, which was delivered by Ogilvie Thompson, J.A., says this on page 841—

(That is the judgment in the court a quo in Natal)

How many of these cases will fall to be looked upon by the Appellate Division or by any other court in this way? The situation we had in regard to these people was quite ludicrous, it is still quite ludicrous that in 1964 we find ourselves with a clause such as Clause 3.

I want to say at once that I appreciate the Minister’s difficulty. I appreciate the difficulties of anyone who tries to unravel the laws of marriage relating to the passenger Indians and the immigrant Indians in Natal. I do not envy the Minister his task. I should like to support this statement with a quotation from this same judgment. The honourable Judge, quoting the judgment of Mr. Justice Milne in Cross v. Cross, 1955, said—

(this is where you determine whether a person is in the one or in the other class)

Now, Sir, you will appreciate how difficult it is to determine whether or not there has been an admixture of blood when we are dealing with people who happened to have come to South Africa, the one paving his own passage and the other indentured. In the same judgment—and this is what I should like to bring to the Minister’s attention—one finds another point. It must be remembered that this relates to a situation which existed before the appeal was heard and before we passed our law last year.

You are just displaying your knowledge of …

Order! The hon. member can continue with his speech.

May I. Mr. Sneaker, just say how encouraged I am that the hon. member really thinks that I know what I am talking about. Now, what I should like to bring to the attention of the hon. the Minister is to be found in the footnote to this judgment. As I said, it arose in relation to a situation which we thought we had cured last year under the Indian Laws Amendment Bill.

Now, the one question on which the Appellate Division did not decide is to be found in the second paragraph of the head note to the decision from which I have quoted and which reads—

Now, Sir, this is, I believe, precisely what we are dealing with in Clause 3 of this Bill. In this clause we are dealing with the question of the validity of a marriage contracted in terms of the provisions of Law 25 of 1891. I should like to ask the Minister whether or not this Bill stems from this judgment. If not, the hon. the Minister, I must say, has been more circumspect than I thought he had been.

At any rate, I believe this entire situation is now being highlighted by this Bill. The whole position in Natal in relation to Indian marriages, and the relationship between passenger and immigrant Indians, is one to which we must put an end once and for all. Otherwise we are going to have more cases like that of Pillai v. Pillai and we are going to have more disputes in the courts. The hon. the Minister knows that the national sport, one might say, of the Indian population, is litigation. So we are bound to have more of it in relation to this subject, and this will go on and on until a proper investigation into the relationship between these people and into the laws on the Statute Book of Natal relating to Indians has been carried out. It is the policy of the Government that the Indians are a permanent part of our community and, consequently, I hope the hon. the Minister will take the warnings which flow from this Bill as his cue to have a proper investigation carried out.

I am sure that all of us, after having listened to the hon. member for Durban (North) (Mr. M. L. Mitchell) know all there is to know about the difference between passenger and immigrant Indians. The hon. Minister comes from a Natal town and I spent my childhood there. Natal has a fair number of Indians. Nevertheless, I fear that the Minister is somewhat of an innocent at large when he considers he can deal with Indian habits, religion and Indian thought by means of the simple legalities which we in the Western world understand. I myself have had a long experience with Indians. When I was a boy, my father had six indentured Indian males and two females. The rules which were issued by the Natal Government at that time laid down that while the males could be given a dormitory in which to sleep, every indentured female had to be given a room to herself. I remember very well that we in the family never quite knew who the husband was of each of these women. They changed husbands from time to time. The only control we could exercise was to allow only our own indentured Indian males upon the property thereby limiting the Indian females in their choice to one of the six. It was, what one might say, closed circuit.

I say no White South African can possibly understand the Indian mind. By this I do not mean to say that the Indian mind is tortuous because it may be that to the Indian our minds are tortuous. I do say, however, that the Indian mind is different. When I look at the galaxy of talent in the official bays over there at the back of the Chamber and see that they all have white skins, then I tremble for the prospects of this Minister because until such time as he is able to recruit into his Department a fair number of Indians, until such time is he going to flounder more and more in difficulties connected with an understanding of the Indian mind. Let me say that the Minister probably has the most difficult portfolio of all in the Government and that he has not the slightest prospect of making a success thereof although his effort might be as good as that of anybody else. In other words, I do not wish to cast the slightest doubt on his ability …

Order! But what has that got to do with the Bill?

I am trying to show. Sir, that the hon. the Minister with this Bill is trying to solve a problem which is insoluble. In this Bill he does not prevent child marriages. What he does is merely to prevent such marriages being regarded as valid. Now, all of us coming from that portion of Natal where the Indian mostly lives, know that child marriages do take place. We know that marriages of elderly men and of youth with very young girls are not uncommon. I would not say these are frequent but anyhow it is not so uncommon for us doctors to be faced with the problem of having a girl of 12 years or so coming to a hospital in order to have a baby. This presents certain grave medical difficulties and I feel also that it is the duty of the Minister to take steps for the protection of these girls. He is not doing it in this Bill.

May I, Sir, if you have not yet heard of it, remind you of the famous experiment which was carried out by the Canadian Government. They felt they should improve the quality of the country’s cattle. Consequently they crossed a buffalo bull with a jersey cow but they encountered grave difficulties with parturition. And let me remind you, Sir, that this function is much more difficult in a human being than it is with a four-footed animal. Anyhow, these difficulties they encountered were so grave that nearly all the cows died in labour. In the circumstances, they had to consider solving the problem in a different way, i.e. by using buffalo cows with a jersey bull. That proved to be all right but the difficulty they then had to face was to get enough cows.

Now, a similar problem arises with these Indian children who get married, because they are in fact children.

Order! Is the hon. member not now treading on too delicate ground? What has it to do with the Bill?

No, Sir, I am choosing my words with care and I am, furthermore, talking to adults.

Order! The hon. member should not deviate so far from the Bill.

I hope I am not doing that, Sir. I only want to point out that it is not uncommon for us who work in hospitals with Indians to find that we have to deal with young girls whose babies have to be delivered by caesarean section. Although this is not a particularly bad method, it is not natural. It is hard luck on a young girl to be faced with this problem at such an early age. We must remember that the Indian matures at a very much earlier age than the Whites. The problem of child marriages is not met by the hon. the Minister in his Bill. He thinks he is settling it, but he is not, and the problem remains unsolved. The problem of child marriages still exists. If the hon. the Minister wants to deal with Indians effectively he ought to go to India and live there for a couple of years. Then he might learn something about them because the Indian has curious rituals particularly in connection with motherhood. Do you know, Sir, that there are universities in India, universities of good standing, where no midwifery is taught to students. This they do on the grounds that according to them no man should be present when a woman gives birth to a baby. There are universities like that. As a matter of fact, we had in the past to stop exchanging students with some of them because with these it is a religious belief that it is wrong for men to be present when a woman is having a baby. So how can we allow an Indian doctor to come here if he had never been taught midwifery? This is the sort of thing the hon. the Minister is up against. I am sure his officials have not thought of this particular complication. They have not had sufficient experience of Indians, and although they may in time learn something, they will never learn enough. So, for that matter, will none of us.

Consequently I plead with the hon. the Minister to take into his Department as many educated Indians—and there are many of them —as he can possibly take. He must do that because Indians are the only people who understand Indians. No White man can understand the Indian mind and especially when the Indian is talking English, because he does not mean what we think he means by saying a certain thing. For instance: If you start an argument with an Indian and carry on that argument until eight at night hoping to be paid your fee and he tells you that he will bring it to you to-morrow morning at eight, he does not mean that to-morrow morning at eight he will bring you your fee, but that to-morrow morning he will start arguing again! The hon. the Minister is a very innocent man and has still a very long way to go.

I cannot, Sir, but agree with the hon. member for Durban (Central) (Dr. Radford) when he said the hon. the Minister was an innocent man. Although this is a real compliment to anybody these days, that is not the point. If I understand the Minister correctly, then in the course of the speech by the hon. member for Durban (North) (Mr. M. L. Mitchell) he confirmed, by way of interjection, that under this legislation it was possible for a boy of 14 to cohabit with a girl of 12.

No, I did not.

Well, then we must all have got the wrong impression on this side.

There are our general immorality laws against that sort of thing. In terms of these laws nobody can cohabit with a girl under 16.

In the circumstances I shall not pursue this point. I was, however, under the impression that by way of comment or an interjection, in reply to a point made by the hon. member for Durban (North) while speaking, the Minister gave us to understand that such a thing was possible, and consequently it was my intention to tell him what he told me just now, i.e. that there is a law against that. In the light of that, and since legislation has now been brought forward, one wonders why there is any real objection to lining up the laws governing, for example, the marriage customs of Indians—the Minister now also has, so he says, the co-operation of the Indian Council—with those of the general laws governing the whole community.

That is exactly what I am doing here.

But it has already been pointed out by two other hon. members on this side that that is not what he is really doing.

Order! That is a point which can be further discussed in committee.

I accept that, Mr. Speaker. May I now draw attention to Clause 3? In regard to the position of Indians generally, the Minister has allowed his Department to publish a booklet called “Indian South Africans”, about which more will be heard in other contexts later. Let me say that the Minister and the Government have gone out of their way to say that whereas Indians have certain cultural customs distinctly their own, they are now a permanent part of the South African population, and consequently it will be expected of them that they will gradually be integrated into our legal system so that the laws governing other sections of the community will, to the greatest possible extent, also cover the Indians. Now, if I may put it to the hon. the Minister, I should like to point out that however much the existing position is being changed by means of this Bill,—a position which, he said, existed for 50 years,—little attempt seems to be made to carry out the major objective which, as I have understood it from this publication, is to recognize the separateness, as it were, of the Indian community for cultural purposes and for no other. The hon. the Minister seems to be satisfied with what he has set out to do, but I hope he will explain to the House these discrepancies to which we on this side have so far drawn attention. I know, Sir, there are hon. members on that side of the House who claim an intimate acquaintance with Natal and the affairs of the Indian people of that province. I sincerely hope they, too, will come forward and express their views on this Bill. Up till now it has seemed to me that apart from the hon. the Minister, no member on the other side has even done as much as to set eyes on this Bill.

Order! Yes, but that has nothing to do with the Bill.

Then I shall leave that point there, Sir, and thank you for your indulgence.

I want to deal with the most important arguments that have been advanced by hon. members opposite, but before I do so I want to deal with the hon. member for Hospital (Mr. Gorshel) who has just sat down and who alleged towards the end of his speech that we had issued a brochure recently in which we indicated that it was our intention eventually to place the Indians in South Africa under the same judicial system as that applicable particularly to the Whites. He said that that intention was not being given effect to in this Bill. But that is what precisely we did last year! If the hon. member will cast his mind back to the work that we did here last year, he will remember that as far as our marriage laws are concerned, we placed the Indians under the same system as that applicable to Whites. This was done last year. What we have in mind with Clause 3—and this is also my reply to the hon. member for Durban (North) (Mr. M. L. Mitchell)—is not to overcome any new situation, a situation which has arisen because of the fact that the legislation of last year was inadequate. Indeed, the legislation of last year adequately covers the position. Subsequently, however, we found that magistrates, in Natal particularly, had given wrong judgments in the past under a certain Act when in point of fact those judgments should have been given under another Act. They gave these wrong judgments as the result of an incorrect approach adopted in a particular handbook used by lawyers. These wrong judgments came to our notice not as the result of the case of Pillay vs. Pillay but as the result of a previous case. We then found that a number of magistrates had made use of a certain legal handbook in according to which they thought that they had the right to dissolve certain marriages when in point of fact they were not empowered to do so in terms of that specific Act. All that we are doing here is to give the force of law to the dissolution of marriages which were dissolved in terms of a certain law, when they should have been dissolved in fact in terms of another law. It is clear therefore that there was no defect in the legislation of last year, but we have since discovered that certain magistrates acted wrongly, and we are simply rectifying the position here.

I come now to the misgivings expressed by hon. members opposite about this Bill, misgivings that is to say, that we are not going far enough in Clause 1 because we ought to forbid child marriages in the case of Indians since it is wrong to allow children under the age of 18 years in the case of boys and 16 years in the case of girls to live together. While I do not want to cross swords with the hon. member for Durban (Central) (Dr. Radford) as far as a knowledge of the Indians is concerned, or as far as my innocence or ignorance in this matter is concerned, I do want to tell him what he apparently does not know and that is that more than 50 per cent of the officials in my Department are Indians. In addition to that I now have at my disposal, for the first time, the advice of a council consisting of leading Indians, amongst whom there is a well-known Indian doctor whom I am sure the hon. member knows well. I therefore have at my disposal the advice of the Indians themselves, something which has never been available to former Ministers who have had to deal with the Indians. I say, therefore that while I do not want to pit my knowledge against that of the hon. member, I can pit against his knowledge the experience of a Department which consists for the greater part of Indians, as well as the advice which I receive from the Indians themselves through the Council.

One must remember that it is not easy to change a national groups’ traditional faith and way of life by a single stroke of the pen or a single legal provision. I asked the hon. member for Durban (North) just now by way of interjection whether the remarks which he had made in regard to child marriage did not apply equally to polygamy. He then said that polygamy was not allowed. That is so, but in spite of this fact there are nevertheless Indians who practice polygamy.

So do the Bantu.

Yes, the Bantu do so as well. But this is not something which one can rectify by a stroke of the pen or by a legal provision. It is something which must be abolished gradually. It takes time to teach these people a different way of life. The same thing applies to child marriages. I differ from the hon. members who say that this Bill does not go far enough. If hon. members study Act 8 of 1935, that is to say, the Marriage Amendment Act, they will notice that marriages between boys under 18 years of age and girls under 16 cannot be registered. This provision was unfortunately repealed by the Marriage Act of 1961 and all we are doing now is to put this provision into effect again as far as the Indians are concerned. In any case, we have not registered such marriages in the meantime but that has been done purely in terms of an administrative decision. This does not mean, however, that the parties to such marriages can simply live together even though their marriage has not been registered. We have the general laws of the country which prohibit cohabitation with a girl under the age of 16 years. The problem, however, is that it is sometimes difficult to implement these laws. It is not always possible to trace these people. The practice amongst Indians is for child marriages to be arranged at a very early age in conformity with the Indian faith; these marriages are sometimes arranged when the parties to the marriage are only 3 years old. This does not mean that these children live together from that day onward. In practice this only happens at a later stage. We do not prohibit the arrangement of such marriages in the future. Indeed, this is part of the Indan faith although it is anticipated that in time to come this practice will gradually die out. All we are doing here is to provide that such marriages cannot be registered. According to their own evidence the Indian community themselves, in the process of adopting a Western way of life, are getting away from these practices, with the result that fewer and fewer child marriages are being arranged now-a-days. More and more it is becoming a question of “marry whom you please” as in the case of the White community.

Let me repeat that with this provision we are simply maintaining the position which has obtained for years and that is that a marriage between a boy under the age of 18 and a girl under the age of 16 years will not be registered without special approval. If the marriage is not registered, they cannot live together and have children. If they do live together, they contravene the laws relating to immorality. I admit that it is difficult for the police to prosecute in every case. Nevertheless, this practice remains illegal. The problem is that we are dealing here with a religious group with a particular way of life and it is necessary to treat them carefully. This can only be a gradual process. In this respect the hon. member for Durban (Central) was quite right in saying that we Westerners cannot always understand the Indian simply because his way of life is completely different to ours. But I still maintain that gradually the Indian is more and more accepting our way of life.

It will take a thousand years before that process has been completed.

No, I do not think so. It is perhaps because I am younger than that hon. member that I am more optimistic! I want to say that I do not think it is necessary to insert a provision in this Bill specifically to prohibit cohabitation. As I have already said, there are other legal provisions to prevent that. The problem is simply now to apply this provision effectively. In other words, it is a practical and not a legal problem.

The hon. member for Durban (North) also asked me whether it was our intention under Clause 2 to make new regulations in connection with the repatriation of Indians. In my introductory speech I said quite clearly that it was not our intention. All that is being done here is that we are now assuming this power because this provision is virtually the only remaining provision of an old law. This particular law of 1927 was administered by another department and I am merely taking over the authority to enable those regulations to remain in force. The intention therefore is not to make new regulations. We want the scheme to continue because it is part of an agreement which was entered into in 1914 and also because we do not want to take away any of their privileges. There are cases in which Indians elect to be repatriated. For example, 12 were repatriated in this way in 1963. An amount of R6,000 has been included in the Estimates this year for this purpose. We are therefore continuing with the scheme on a voluntary basis for the sake of those who want to make use of it. We do not intend to introduce any new principles.

Motion put and agreed to.

Bill read a second time.

This clause repeals Section 10 of the Act. This section is, in my opinion, quite harmless. As a matter of fact it is useful. Can the hon. the Minister explain why he goes to the trouble of repealing it?

The deletion of Section 10 flows from the insertion of paragraphs 4 and 5 in the First Schedule which in terms of Clause 31 is substituted for the First Schedule to the principal Act. The provisions of Section 10 therefore become redundant, hence the deletion of this section.

Clause put and agreed to.

On Clause 7,

As I mentioned in the second reading this clause is very difficult to understand. The cylinder of platinum iridium kept by the Council of Scientific and Industrial Research must, I presume, conform completely with the international kilogram. It is inconceivable that we in this country, with the resources that we have, should use a national standard based on an international standard and yet not have it correct. I therefore cannot see the necessity of sub-section (2) of this clause. Why should the value of the national standard kilogram in relation to the international prototype kilogram be the value assigned to it from time to time by the Minister by notice in the Gazette. It must correspond and if it does not it must be made to correspond. I should like to have the Minister’s explanation.

The hon. member for Durban (Central) (Dr. Radford) is a scientific idealist. He wants to know why our own national standard is not absolutely the equivalent to the international kilogram. Let me tell him that the difference between the international kilogram and our own is 1/183,000,000th. Perhaps the hon. member with his scientific backeround will be able to grasp what 1/183,000,000th of a gram means! I do not have the knowledge to enable me to appreciate the difference! There is so little difference that for the purposes of this Act the position can remain as it is. it is scientifically impossible to make that small adjustment to our own kilogram in order to make the two absolutely equal. We are following the policy followed by every other country and that is to recognize that difference for practical purposes. Scientists are aware of the difference and in practice they take it into account.

Who measured the difference?

Clause put and agreed to.

On Clause 18,

I appreciate the intention of this amendment which is mainly to ensure equality of control over imported packed commodities vis-à-vis locally packed products. I should like to refer to the actual Section 30 of the Act. In his second reading speech the hon. the Minister dealt with the intention of the amendment Bill. He said that one of the intentions was the protection of the buying public and that further amendments had been brought about to overcome administrative and technical difficulties which the Department of Assize had experienced in the implementation of the Act as it stood. I think the Act is a little broader in the sense that it not only protects the buying public but the consumer public.

I want to refer two practices which have developed, apparently through custom and use, which I believe fall within the purview of Section 30 of the Act. I refer in the first instance to provincial bodies, possibly State bodies and possibly certain municipal bodies who, in the past, do not seem to have been regarded as falling within the intention of Section 30 and who seem to have enjoyed an exemption which is not present in that particular Section. I would like to deal in some detail with this aspect as far as provincial bodies are concerned. I recently visited a provincial medical store. One of the objects of a provincial medical store is apparently the manufacture of medicine, medicine which is distributed to various organizations which fall under the control of a provincial department. These medicines are at present being manufactured with scales, weights and measures which do not have to be assized. I believe it is not in the public interest that medicines which can contain habit-forming drugs, poisons or potentially harmful drugs should be made available to the public on the basis that the instruments used in their manufacture are not assized. nor are the weights and nor are the measures. I realize this is not a direct transaction to the public but if one follows the path of these medicines after they have been manufactured one finds that they are put into smaller containers; they are then distributed to hospitals, clinics etc., and they find their way to out-patient departments. They are subsequently put into smaller bottles in terms of doctors’ wishes for their respective patients and ultimately supplied to the public. Under present conditions the public is called upon to make payment for these; in many cases it is a direct payment. I was very surprised to see that in these particular organizations, although the Act, in my opinion, makes it quite clear that all scales, weights and measures should be …

Order! This amendment refers to the marking of products.

I appreciate that. Sir. I am referring to an aspect of the section in the Act itself. …

Order! The hon. member must confine himself to the amendment.

Sir, I am referring to this matter because I believe it is dealt with in the clause as such.

Order! I am afraid the hon. member cannot continue on those lines. He must confine himself to the question of the marking of products.

Mr. Chairman, may I suggest to you that the hon. member is trying to show that the mark which shows that the article weighs a certain volume is not adequate. …

Order! The hon. member is wrong. This amendment deals solely with the question of marking.

Clause put and agreed to.

On Clause 25,

I wonder if the hon. the Deputy Minister would explain sub-section (c) which reads—

1. (i) in respect of the sale of beer, wine or other intoxicating liquor in quantities of one quart, one pint, one half-pint, or one-sixth, one-twelfth or one-twenty-fourth of a gallon, etc.

Will the Deputy Minister explain to us why it is possible for beer and wine to be sold in bottles marked in fluid ounces—12 fluid ounces in the case of beer and, I think, 23½ fluid ounces in the case of a wine. In terms of the law should this not be sold in a fraction of a gallon?

The Act lays down the weight and it also lays down what a gallon or a litre is. It is now converted to cubic capacity. In other words, where it is stated on a bottle that the weight is so much it is not strictly in accordance with the Act but the Act lays down the length and it also lays down how the cubic capacity must be determined although it is not converted to pints, etc. The Schedule lays down how the weight must be determined, how the length must be determined and how the capacity must be determined. Schedule III lays down how the capacity must be determined according to the Act.

I accept what the hon. the Deputy Minister has said but that is no reply to my question. My question is this: If we are defining the quantity in terms of a gallon, I quite accept what he says about a litre. What I am anxious to know is why it should be defined in another English measure, called fluid ounces …

Order! The hon. member must look at the amendment. It only refers to “holding such quantities”.

Why are our bottles marked “fluid ounces”?

Order! The amendment does not deal with that aspect. It deals with the aspect “holding such quantities”.

Clause put and agreed to.

On the Schedule,

This Schedule is puzzling because it uses different standards for the same thing. It says: “The litre, being the volume occupied by one kilogram of distilled water, etc.” That is a measure of capacity or volume. Item 5 refers to the measurement of cubic content. To my mind the words “cubic content” and “capacity” or “volume” are the same. We are now being given two different standards, because a cubic metre of water, at its maximum density and at standard atmospheric pressure, will not weigh one kilogram. That is the problem, Sir, which I do not think has been met. I think the hon. the Minister should explain this to us. So many different terms are used, like, “The gallon, being the volume occupied by ten pounds weight … per millimetre”. They refer to a millimetre and a cubic metre which are different standards. They don’t correspond. Had they corresponded there would not have been any need for the litre. It is because they don’t correspond that the weight of the water in the litre and the weight of the water in the cubic metre are not correct. The cubic centimetre and the millimetre are not the same thing and they should be so. I should like the hon. the Deputy Minister to explain to us because he evidently has a very good knowledge of fine differences. He appreciates, for instance, the difference between our kilogram and the kilogram at Sevres. He explained that to me in millionths. That also applies to the millimetre and the cubic centimetre. The Minister should explain to me why he has adopted two standards which do not correspond accurately.

Sir, I think the hon. member for Durban (Central) (Dr. Radford) has put up a very strong argument …

Order! I take it the hon. member proposes to discuss the basic unit of measurement of weight?

What I propose to discuss. Sir, is the apparent contradiction in 3 of the Schedule and 5. In 3 they speak of “measurement of capacity (or volume)” and they refer to “the litre, being the volume occupied by one kilogram of distilled water at its maximum density and under standard atmospheric pressure”. That is understood; it is 4° centigrade and 760 millimetres. That is understood; that is the national definition. But in addition to that under 5 they refer to “measurement of cubic content”. In the case of 5 (b) the position is rather different but I think (a) should be explained. I do not expect the hon. the Deputy Minister to be able to give us the details but I would ask him to give it to us at the third reading.

The hon. member for Durban (Central) (Dr. Radford) said I knew the difference between our kilogram and the international one, which is a very small difference. I can only assure him that I know it because of the fact that he raised it in the House earlier.

He has referred to the litre. The litre is derived from a measure of weight, namelv, that of the kilogram, as he has stated. A gallon is partly derived from the litre as both are capacity measures. The cubic metre is the measurement of cubic content which is nowhere in the Bill or present Act defined in relation to capacity measure. Therefore, the two systems have no legal relationship. All scientists are no doubt aware of the slight difference between the litre and the cubic decimetre and will certainly not base accurate measurements on straightforward conversion without taking the error between the two into consideration. Although the Weights and Measures Act defines the basic units of measurement it is an Act dealing mainly with measurement in trade and for this purpose the difference between the litre and the cubic decimetre can, for all practical purposes, be ignored, as is done in all other countries.

The hon. the Minister has given us a prepared answer which confirms what I have said. But he did not tell us why it was necessary to use two measures which do not correspond. It was not necessary to use these measures in the past and it is not necessary to bring them in now. If the hon. the Minister had, for instance, kept his measurement of area and spoken only of a square metre or a square yard and had omitted the cubic metre and referred his measurement of volume and capacity only to the litre I would have understood it. But he is deliberately going to use a cubic metre when it is falling into disuse.

Why worry, a tot of whisky will remain just the same.

I don’t drink whisky. I drink my drink in larger quantities—water.

Schedule put and agreed to.

Title of the Bill put and agreed to.

House Resumed:

Bill reported without amendment.

This clause provides for the deletion in the definition of “works”, of paragraphs (g), (h), (j) and (k), i.e., the distribution and transmitting of any form of power. I think it is quite correct that those four sub-paragraphs should be deleted. But I am at a loss to understand why paragraph (i), which also deals with the distribution and the transmitting of any form of power, is deliberately allowed to remain. I think it would be interesting to this Committee to know why the Minister has seen fit to leave (i) in the principal Act, and to delete the four other paragraphs, although they are of an identical nature.

Order! Paragraph (i) is not under discussion. It is not being amended. This clause deals with the deletion of “works” in paragraphs (g), (h), (i) and (k). The hon. member must confine himself to those four paragraphs.

With respect. Sir, I am asking whether the Minister cannot delete (i) as well; what is the reason for retaining it?

That is not before the Committee.

Clause put and agreed to.

On Clause 2,

This clause refers to supervision over all mines, works and machinery by certain officials, namely, the Government mining engineer, the deputy-Government mining engineers, assistant Government mining engineers, inspectors of mines, inspectors of machinery. They are given authority to exercise supervision over all mines, works and machinery. But the following words are added:“ … and other officers appointed by the State President …”. I think it would be useful for this Committee to know from the Minister who these other officials to be appointed by the State President can be, and what their functions will be in the supervision of mines. Could the hon. the Deputy Minister tell us what he has in mind in this regard?

The intention here is simply to make provision for the appointment of more officials if it becomes necessary to do so under extraordinary circumstances. There may be occasions when the available officials are fully occupied and where it will become necessary to appoint additional persons without delay under special circumstances.

Arising from the Deputy Minister’s explanation does he not feel that by introducing persons, other than officers of the Government Mining Engineer’s Department, he is derogating from the authority and from the possible efficiency of the working of the Government Mining Engineer and his Department? One is jealous of the authority the Government Mining Engineer should have at all times in exercising supervision over mines and works. In view of the explanation of the hon. the Deputy Minister, I am afraid of introducing into this organization, people and officials from other departments. This can cause conflict and disharmony in a very important Government Department which is dealing with the safety of roughly 55,000 White workers and approximately 400,000 Bantu workers. We had the experience a couple of years ago where outside people were brought into the Government Mining Engineer’s Department. They were extraneous, from a technical point of view, to that Department. That caused a lot of friction and disharmony, and eventually gave rise to the appointment of a commission of inquiry.

I suggest to the hon. the Deputy Minister that he does not introduce into this Department “any other officials” as suggested in this particular Clause, but that it should be left specifically to the Government Mining Engineer, the Deputy Government Mining Engineer, the Assistant Government Mining Engineer, inspectors of mines and inspectors of machinery. I foresee that it can once again, as in the past, have unfavourable repercussions on the efficient working of the Government Mining Engineer’s Department. I would ask the hon. the Deputy Minister to give this suggestion his favourable consideration.

I have explained the circumstances under which this can happen. In the normal course of events there will be sufficient people to do the work but extraordinary circumstances may arise in which the number of people appointed may prove to be inadequate. It is only in those circumstances that these people will be asked to assist.

Clause put and agreed to.

On Clause 3,

This clause, which establishes a mine safety committee, is possibly the most important clause in the whole Bill. I am really surprised, I am shocked, I am disgusted, to see that there is only one member on the Government benches from the Witwatersrand present, to take part in this debate and to look after the safety of the miners on the Witwatersrand. Of 18 Government Witwatersrand members only one is present. …

Order! The hon. member must discuss the clause.

Why should they be here if they support the Bill?

Perhaps we can improve this Bill.

I represent a Witwatersrand constituency and I know what is in the Bill.

Perhaps, after listening to the debate, the hon. the Minister of Transport may be able to make representations for the improvement of the Bill! Surely, Sir, we on this side of the House are entitled to put forward our point of view, make representations on this particular clause, and the Bill as a whole, and show where it can be improved. Surely, Sir, we are entitled to enter into debate with Government representatives of Witwatersrand constituencies on the other side of the House, who should show some interest in the welfare of their constituents.

You can talk to me. I am one of them.

I am very pleased that I have the ear of the hon. the Minister and I hope he will support me in some of the representations I intend making in regard to this particular clause.

There is one very important aspect of this clause which I hope the hon. the Deputy Minister will consider favourably. This mine safety committee is to consist of ten members. The members shall be the Government Mining Engineer, the Deputy Government Mining Engineer, the chief inspector of machinery (i.e. three individuals from the Government side) three representatives of the owner’s of mines, three representatives of the daily paid workers, and one representative of the officials associations. In the first instance, I should like to say that I think this representation of three for the daily-paid workers, and one for the officials, is out of proportion. I say that for this reason: There are approximately 30,259 daily-paid workers on the mines; there are 24,699 officials. There is only a difference of approximately 5,000 between the employees and the officials. To give the daily-paid workers three representatives as against one to the officials is disproportionate, I think. Furthermore, you must also keep in mind that as far as officials are concerned, you have the mine-surface officials association and the underground officials association. Those are two separate organizations. Each one of them is really entitled to representation. If we are going to keep ten members on this committee, I suggest that there should be two to represent the daily-paid workers and two to represent the officials, one representing the surface officials and the other the underground officials. That is my first plea on behalf of the officials.

When it comes to mine safety, Sir, it is the officials, both underground and on the surface, who really make the most valuable contribution in educating the employees as to safety on the mines. They are the authorities, they are the experts. I am not decrying the role of the daily-paid workers in that regard, but I feel that on a representative committee of this nature, we must in terms of their numbers give at least equal representation to the officials. If the Minister must have three persons to represent the daily-paid underground workers, I would like to suggest to him to give serious consideration to a form of representation for the Bantu underground workers as well. There are approximately 400,000 Bantu workers on the gold mines. We know that, tragically enough, when an accident does take place it is usually the Bantu workers who are affected, injured, and possibly killed, in greater numbers than the Whites. I think that if we could make a gesture to the Bantu workers by providing that one of the three representatives of the daily-paid workers should be appointed in the manner prescribed in the Bill, as a White representative, to look after the interests and the welfare of the Bantu underground workers, it would be much appreciated. I think it will be a wonderful gesture to the role the Bantu have played in the development of the gold mines of this country. I feel that if, God forbid, there should be an accident and people are killed, and if the representative of those Bantu workers can make contact with the bereaved families and minister to their wants, the goodwill and the co-operation that will be built up between the Whites and Bantu workers on the mines, will be of inestimable value to the gold mining industry and to the economic development of the country as a whole.

Business interrupted to report progress. House Resumed:

Progress reported.