Mr Speaker, in connection with the business of the House I want to announce that the Third Reading of the Transport Services Appropriation Bill, which was to have come up for discussion on Monday, 12 March, has been advanced to Thursday, 8 March. The Third Reading will be taken immediately after the Committee Stage has been disposed of.

†As agreed with the hon Whips of all the parties, 2½ hours of Government time will be made available on Monday, 27 February, for the discussion of the report of the Commission of Inquiry into the SA Council of Churches.

QUESTIONS (see “QUESTIONS AND REPLIES”)

Business suspended at 14h45 and resumed at 17h15.

Mr Speaker, I said yesterday that I thought it very unfortunate that the very first speech in this debate, that of the hon member for Yeoville, and the last, that of the hon member for Port Elizabeth Central, should be the only unpleasant speeches in the course of a protracted debate.

I have received a message from the hon member for Yeoville that he is indisposed, and I am very sorry to hear that. I hope that he will soon be feeling his own self again. I myself have a bit of a scratchy chest, but I hope my voice will last. It reminds one of Mark Twain who said, “All great men are either dead or dying, and I myself am not feeling over well”.

The hon member for Port Elizabeth Central made the extreme assertion that the administration of this Government was not clean. I challenged him last night to substantiate that statement fully. It is a very serious allegation and if he cannot substantiate it, surely he must have the decency to get up in the House and withdraw it unreservedly. We will wait and see what he does about it. I may remind the hon member that there is an Advocate-General, and that apart from the Advocate-General this House has the machinery to deal with such matters. There are select committees and the House can investigate these matters and make its own decisions on any facts he would like to bring forward.

The hon member came back to the bread price and said we did a dreadful thing by putting up the price of bread. I pointed out to him in the short time at my disposal at the time that what the Government had done was not to put up the bread price, but by granting unprecedented subsidies had prevented the bread price from rising very much higher. The increase would have been more than double the present one if it had not been for the subsidies.

*What I found surprising was that the hon member was probably in the House when the hon member for Paarl discussed the bread price and the economy in connection with the bread price. It was a wonderful speech and one which the hon member should go and study. It was one of the highlights of the debate. The hon member for Port Elizabeth Central did not understand it, or he did not want to understand it, but the fact remains that after the hon member for Paarl spoke, one would have expected any other member who subsequently spoke about the bread price to have displayed a little more expertise. However, I shall leave the matter at that. I think that what we did was absolutely reasonable. After all, we cannot ignore the market and market-related conditions, for what would become of our economy if we did?

†The hon member for Yeoville, the official Opposition’s chief spokesman on finance, has seldom if ever hit a lower note than he did in this debate. The hon member Mr Aronson accused him of being insulting. I have read his speech carefully and I agree that he was wild in his allegations; that he was reckless as to the facts; and that his assessment of the Government’s financial policy and administration was seriously fallacious. He said for example, “There would appear to be no occasions on which the Minister of Finance rises to speak that he does not give bad news for South Africa”. What does he expect me to say when there is a very grave drought? Does he expect me to say that agriculture is flourishing? The world economy, with the single exception of the United States, is floundering. Just this afternoon I had one of the leading international German bankers in my office. It would be good if members on that side of the House would listen when these authorities tell us what the world economy looks like. Does the hon member for Yeoville expect me to say that the world economy is prospering? With the gold price as it is, does he expect me to say that the gold price is flourishing? When I say these things he says that I am using them as an excuse for economic inefficiency. I will deal with that later.

I am very happy to say that I have just received this afternoon’s fixing of the gold price on the London market which is $395. That is because the dollar has declined in value during the last day or two. Whether that position will be sustained, we will have to see. If there is bad news, I have to say what it is. These are all extraneous developments and I cannot control any one of those three things, nor can any single member on that side of the House do anything about it at all. I want to remind hon members that my duty is to deal with facts. The hon member for Yeoville apparently thinks he can indulge in wonderful flights of fantasy. Where he thinks that gets him or his party, I do not know. I do not think it gets them very far at all.

*I was very pleased about and I appreciated the contributions of hon members who took the trouble to discuss the drought in a very knowledgeable and competent way. Reference was made to the dreadful drought conditions in this country, as well as to the drought aid that had been offered by the Government. Reference was also made to the flood damage, and in this connection the hon member for Umfolozi made a very fine speech. He informed us very thoroughly of the seriousness of that damage.

In my introductory speech a few days ago I referred to the extent of the assistance that was being offered. It is unprecedented in our history. The Exchequer itself has already made more than R400 million available this year, and we were very glad to be able to do so. The Land Bank, in various ways, made R2 300 million available. This was in the form of assistance to farmers and agricultural co-operatives, and there is more still to come.

But what did the hon member for Soutpansberg say? He said that the drought aid was insufficient and inadequate. [Interjections.] He referred to Soutpansberg and said that it had been inadequate there. I have certain provisional figures here, but I think that even these figures tell the story very well. They apply to the nine months from April to December last year. The long-term drought assistance plan made loans of R37 000; a subsidy on the purchase of stock-feed of R691 000; a rebate on the private transportation of stockfeed of R28 000—Railways excluded—and an incentive for stock withdrawal of R204 000 available. The long-term drought assistance plan, therefore, in aggregate amounted to R960 000 over a period of nine months. Eighty farmers were involved in this, and the average total subsidy per farmer was therefore approximately R6 300.

I also want to refer to debt consolidation. During the past three years the Agricultural Credit Board has granted 44 loans. In 1981-82 these amounted to R848 000; in 1982-83, R789 000 and in 1983-84 R3 403 000. The Land Bank granted 81 loans totalling R5 131 000. Then there is the scheme in connection with the promotion of the Density of Population in Designated Areas Act, 1983-84. This is a scheme which on 31 January 1984 had been in operation for ten months. Land purchases in terms of that Act amounted to R1 498 000. Other forms of assistance provided to ten farmers amounted to R2 341 000. This gives a total amount of R3 839 000. Let us take a quick look at irrigation now. For 1981-82 the amount involved were R50 000; for 1982-83 it was R103 000 and for nine months during 1983-84 it was R103 000.

What is therefore, to sum up, the position for Soutpansberg alone over a period of virtually nine months? Long-term drought assistance amounting to R960 000 was rendered. The debt consolidation amounted to R8 534 000. In connection with population density—I explained this—the amount came to R3 839 000. Then an amount of R103 000 for the one year only was paid out in respect of irrigation. This means a total amount of R13 436 000, or approximately R13,5 million, over nine months in one constituency. [Interjections.] I hope that the hon member for Jeppe, who has such a lot to say now, will ask the hon member for Soutpansberg to comment on this during the Third Reading debate.

†I said a moment ago that I make absolutely no apology for endeavouring to give the House the correct economic facts, whether favourable or unfavourable. I want to comment on the quality of our financial policy and financial administration in this country, because I was told I was using the unfavourable extraneous developments as an excuse for economic inefficiency. Let us look at the position. I think that the facts I am going to advance make complete nonsense of the wild allegations of economic inefficiency on the part of the Government. What has the Government achieved in the difficult conditions prevailing? Who would like to deny that the conditions are difficult today in this country, as they are in fact in virtually every country in the world?

Firstly, I could report that a deficit on the current account of the balance of payments of R3,2 billion in 1982 had been transformed into a surplus of R500 million last year. I suggest that that is not a bad achievement.

Did you achieve it?

I think we had something to do with it. I think our fiscal policy had everything to do with it. If the hon member would only take the trouble to analyse it, he might learn something.

I stated that I expected another surplus on the current account in this difficult year, 1984. I am confident of that. I stated that the 12-month rate of inflation—that is the consumer price index—had declined from 16,5% in May 1982 to 11% in December 1983. I have just today been given the latest figure. For January 1984, based on January, 1983, the figure is 10,3%. I said in the House in my speech three days ago that I thought the figure was probably nearer to 10% at this moment. The official figure is 10,3%. Many competent economists in this country say that that overstates the rate of inflation and that it is probably at least 1% to 1,5% lower. Let us, however, leave that aside. Let us make it 10,3% or 10%.

Now hon members get up in the House time and again and ask: Why can we not be like the United States, Switzerland, Germany, etc? They want to compare a developing country with the most mature developed economies in the world. Why do they not compare like with like? Why do they not compare South Africa, a developing country with the countries which until recently were held up to the rest of the world as examples of what countries should look like and how countries’ economies should look? I refer to countries like Brazil, Mexico, Indonesia, Venezuela and Nigeria. Where are they today? Their economies are flat on the ground. What are their inflation rates? Ours is 10%. Their inflation rates vary between 100% and 200% plus. Why are these things not told to the House? We are a developing country. We are providing infrastructure for the benefit of the less developed sectors of the economy and the less developed people of the country on a scale unknown in Africa. There is no country that can compare with what we are doing. If hon members opposite do not want to accept that, they should go and talk to the International Monetary Fund and the World Bank, people who know what is going on in the world, to hear what they say.

We have to provide educational facilities for these people, costing hundreds of millions of rand per year, as well as health services, roads, bridges and all kinds of other facilities. We all know that the economic return does not come at once but that it takes time. Therefore in the short run a great deal of that expenditure is inflationary. We know that, essential as it is, we have to provide substantial sums for the security services to keep this country safe. We also know that a substantial part of that expenditure in the very nature of things cannot be economically productive. It is productive in other basic essentials, but not economically. Therefore there is also an inflationary aspect involved there. And yet, despite all that, our inflation rate is 10%. I say that is a very considerable achievement. If one compares like with like there is virtually no one we can be compared with because the nearest rate of inflation to that of ours is more than 100%.

I informed the House that the rate of increase of the broad money supply, taken at a seasonally adjusted annual rate, had declined from 27% in the first half of 1983 to 8%, on an annualised rate, in the second half of the year. Among others, the hon member for Amanzimtoti said that the rate of increase of our money supply was much too high. How can one bring it down below that, especially when the velocity of the circulation of money is falling? How can one get below 8%? In fact, how can one get below 12% really? You see, Sir, we must look at these things in the proper perspective. For two years running now the Reserve Bank has had the money supply firmly under control, but there was not much credit given for that. However, the facts speak for themselves. Three or four years ago, when we had a credit ceiling, where we were going to stop the increase in the money supply physically by putting on a credit ceiling, the increase was 27%. Today we are leaving it to market orientated mechanisms, and the annualised rate for the last six months for 1983 was 8%.

And for the full 12 months?

For the full 12 months the rise was 16,5% [Interjections.] That is right. It was coming down all the time. It came down from 27%, to 21%, to 16% and then to 8%.

I disclosed that at the end of 1983 South Africa had again complied with all the so-called performance criteria agreed upon with the International Monetary Fund under our loan agreement with that fund. How many countries in the world today can lay claim to that achievement? How many countries today that have received loan financing accommodation from the IMF—and there are many of them—under various very strict conditions that applied to us too, can comply with those conditions? Literally a handful. We are one of them.

I say further in a debt-ridden world we have no debt problem. If hon members would like to recent facts, I have with me the US World and News Report in which an article appeared some three months ago under the heading “World Debt Bomb”. Let us just look at the position of ten countries in 1982, namely Brazil, Mexico, Argentine, South Korea, Venezuela, Indonesia, Turkey, Philippines, Chile and Colombia. At the end of 1982 their indebtedness to the rest of the world was $372 billion. Then, during the course of last year, all sorts of measures were taken by the world banking community and the big institutions to try to resolve this killer debt problem overhanging the world economy. They have done everything possible; yet a year later, at the end of 1983, the debt outstanding for these countries was not $372 billion but in fact $395 billion. That was the position after rescue acts had been taken on a vast scale. I can say with an absolute clear conscience that we have no debt problem in this country today. The position is completely under control.

*The hon member for Langlaagte expressed concern because our State Debt was apparently in the region of R20 or R21 billion. However, this is only one fifth of the gross domestic product. The gross domestic product is the value of our total production for one year, while the State Debt has accumulated over a period of several years, yet it is only one fifth of the gross domestic product.

†These are the things that one must talk about when one starts accusing the Government of faulty administration and economic inefficiency. These are the things that the IMF and the world banking community see and there are no better informed people in the world on the economies of the different countries than the leading international bankers, because that is their bread and butter.

The gold price has, in fact, fallen further than the oil price has. Until recently Nigeria was held up as the economic giant of Africa. In Nigeria oil means as much as gold means to us in South Africa, and how does Nigeria compare with us today? These are facts, and I am not trying to crow about it.

I maintain that we cannot talk about a debt problem in this country as the position is completely under control. The debt service ratio is a very important index. The debt service ratio of a country is the proportion that interest on the public debt bears to the value of exports in any given period. When I last heard, it was 60% in Mexico. Servicing their public debt cost 60% of the value of their exports. At the moment South Africa’s is something like 5,75%, which is one of the lowest in the world.

I stated that the cyclical downswing in the economy had bottomed out during the second quarter of 1983 and that the economy had begun to move into the early stages of a new upswing. This is incontestable. I also stated that our credit rating in the world’s capital markets had probably never been higher. In December 1983 South Africa floated a particularly successful public bond issue, which means that we put the matter before the whole world, in the full glare of publicity. We floated a DM200 million public bond issue. It was one of the most successful public bond flotations for a long time in the European capital markets. In January this year we raised in no time at all 70 million Swiss francs by way of a public bond issue, and not at 8% or 10% but in 6% interest. I want hon members to tell me when last have they seen an interest rate of 6% on an overseas loan in this country. We are at this moment negotiating further international loan transactions on highly favourable terms. In fact, it is rather embarrassing at the moment because we are receiving so many offers, and it is very difficult to know how to handle them all. Despite the extremely tight financial position we have, with one small, temporary exception, succeeded in financing all our budgetary requirements without recourse to bank credit. In other words, we have done so in a non-inflationary manner.

I said it a moment ago, but I want to repeat that the Exchequer has under these difficult circumstances provided at least R400 million in drought relief, while the Land Bank has made a total of more than R2 billion available to farmers and agricultural cooperatives. I would say that this represents good news. If we are going to talk of bad news, let us talk of the good news as well. In my view this completely refutes the unfounded and wild allegations that there is apparently something wrong with our economic efficiency and our financial administration in this country.

Several hon members—among them the hon member for Yeoville took the lead—objected to the increase in GST from 6% to 7%, and also to the fact that the increase was announced before the beginning of the parliamentary session. The increase was announced before the no-confidence debate, and I submit that hon members had the fullest opportunity of discussing it. I had to announce it at that time in order to cause it to become operative two months before the end of the financial year because we needed that extra money in the current financial year. I was not deliberately trying to bypass Parliament in any way at all. Moreover, if I had announced the increase in GST during my Second Reading speech on the Part Appropriation Bill, hon members opposite would no doubt have accused me of deliberately delaying the announcement until after the by-elections; exactly as they did in respect of the increase in the bread price. The fact is that I announced the increase when I did because it was in the national interest to do so, and not to delay it any longer. I also did it, as I have said, in order to give hon members a full opportunity of discussing the matter in the no-confidence debate as well as in this debate.

The rise in GST was essential to prevent the “deficit before borrowing” in the Budget from rising to excessive levels. I should like to know from the hon member for Yeoville and from other hon members opposite, who criticised us, wether they agree that the “deficit before borrowing” should be kept under strict control; if so, how then would they set about it? Which specific items expenditure should be reduced? [Interjections.]

Mr Speaker, now we are coming to the facts. [Interjections.] It is very easy to say, as one or two opposition newspapers have said, that we are suddenly now a free-spending Government. Let us look at the facts. [Interjections.] Let us look at the facts, Mr Speaker.

Apart from drought relief we also had to provide for a new disaster that has befallen us in the north-eastern area of the country. I am referring now to the horrific floods caused by the cyclone Domoina. Tremendous damage was caused by those floods. Must we save on that?

Now I come to a really interesting matter—defence and security services. What did the hon member for Yeoville do? He attacked me in no uncertain terms for having the presumption to say that part of the increased spending this year arose from defence expenditure. He said that for the first nine months of the financial year the figure remained within the budget, and that we had no extra spending on deference. I asked him why he did not wait till the end of the financial year. He continued, however, to attack me. Hon members can read his speech in Hansard. He went on at length to attack me, accusing me of making an emotional issue of this matter; of something which did not exist. He contended that for nine months of the year there had been no additional defence expenditure. How do the Department of Defence and the Treasury, in February or March of one year, conceivably know precisely what is going to be spent on all the manifold operations of our security services nine, 10 and even 12 months hence? Who could have foreseen the scale of the Askari operation? Nobody in this House for sure.

Are you telling us that that planning is ad hoc?

No, certainly not. The planning is spot on. When one looks at what the percentage increase is, it is clear that that is negligible. [Interjections.] We shall return to this matter when we come to the actual amounts in the Additional Appropriation next week. Perhaps some hon members will then have to swallow their words.

I want to know what we should have done. Over the last year or two, in the Public Service, we have been engaged in an extremely important exercise to try to bring the basic conditions of service of the professional categories of people into better alignment with private enterprise; not only that we can recruit some of those highly trained people, which is absolutely essential in the Public Service, but also to keep them once we have them. Should we or should we not have engaged in that exercise? It has cost us extra money this year too. It is quite impossible to give an accurate figure in this regard 12 months in advance. Should we not have made provision for improved conditions of service and additional salaries as well in respect of nurses, teachers, SATS and Post Office employees and public servants in many basic categories? Should we or should we not have done so? This is part of the so-called free spending of the Government. Hon members must answer me. Take the case of education. There is a tremendous challenge to us in this country to educate people where we are faced with a rapid population growth. There is education at school level, technical level and the higher education level and it is absolutely impossible to operate with pinpoint financial accuracy in this sphere. It is the biggest item in the Budget. That amount will be exceeded by a small amount but it is part of the excess spending. Is that right or is it wrong?

Take the case of subsidies on food and on transport for the underdeveloped sectors of the population, the lower income groups. Should they be provided or should they not? The hon member for Hillbrow, among others, said that we should not increase the bread price and that it was a terrible thing to do. This year alone we have provided for an amount of R275 million in respect of bread subsidies. Should we or should we not have done that? Should that figure have been R100 million or what should it have been? Let us hear from hon members of the Opposition. [Interjections.] If hon members opposite accept the fact that there are limits to the extent to which Government spending can be curtailed under present circumstances, difficult circumstances, how then would they prevent the deficit before borrowing from becoming altogether too large? Which taxes will have to be increased? That is the only way one can handle this deficit and keep it in check. [Interjections.] If a 1% increase in GST is such a disaster, what do those hon members then propose? Must I raise personal income tax? What taxes must I raise?

In another remarkable sally the hon member for Yeoville has already said in advance of anything I may or may not do: If you put up personal income tax it will be a disgrace. The hon member went on about this at some length. It is a completely hypothetical issue at this point but that was what he said. What taxes must be raised? Let us be specific on these issues because these are the issues that the Government and I have to face. With great respect, the hon member for Yeoville and hon members opposite have got themselves completely into a corner and they are also on the horns of a very considerable dilemma in this respect. Commenting on the rise of 1% in GST, the hon member for Yeoville in a Press interview said it should have been done in another way. When the reporter asked him in what other way it should have been done he said that the Government could borrow more. [Interjections.] The Government can borrow more! Never mind the considerable pressure already on the capital market and the very high interest rates which we are trying to curb to the best of our ability. That does not matter. Just borrow more! They all say we must not raise GST or income tax but we can borrow more. What an absolutely superficial and hopeless counsel of despair! [Interjections.] The hon member for Yeoville likes to talk about people painting themselves in to a corner and I want to say that he has really painted himself into a first class black corner now!

I want to repeat that the increase in GST was absolutely necessary in order to reduce the deficit before borrowing and therefore to prevent an inflationary rise in the money supply as well as further substantial rises in interest rates. I repeat that if the Treasury does not obtain the necessary revenue by means of measures that are not inflationary, that are in fact counter-inflationary, obviously it has to borrow money. If it borrows from the Reserve Bank or other banks, the result is excessive money creation, and that is the surest way to increase the rate of inflation. As I have just said, if it borrows too much on the capital market, that is what in fact will happen and interest rates will soar. I want to put this question to hon members opposite: Do they or do they not wish to counter inflation? This is a matter about which they wax so eloquent. They say that they want to counter it but then we must let the deficit before borrowing rise to any figure at all. That does not go down. Whom are they bluffing? On this issue they are not even bluffing the man in the street, because he sees what is happening to interest rates, if that happens.

I shall, if necessary, at some other point return to the allegation which the hon member for Yeoville made about what I had apparently said in Durban. In this regard he read from a report as follows:

That was at the time of our party congress in Durban:

I said to him straight away over the floor of the House in the no-confidence debate that that was absolutely incorrect. I never said it.

He then repeated that charge here; in other words, he did not accept my word that I did not say it. I say again I never said anything of the kind. Now the provincial secretary of the party in Natal has just informed me that my speech was taken down on tape. He has a transcription thereof and according to that record I said nothing of the kind. I hope the hon member for Yeoville will take that into account.

*I referred to a technical matter which was very important if we have to listen to the reproach that we are spending too much money. I said that as a result of the law under which we had to operate, of course, the interest of the State Debt was in fact, technically speaking, exaggerated. I said that this was the case as a result of the contents of certain legislation. The hon member for Yeoville also found fault with that. He spoke far too quickly. This is a highly technical matter, but he reacted immediately. He found fault with my explanation of why the Government’s interest payments had risen so considerably this year, and specifically with my explanation as to why the issuing of Government stock at a discount had artificially raised the interest payments during the first year. My whole point was that the increase was artificial. He asked why we could not simply amortize the discount over the full period of the loan.

The answer is that the Exchequer and Audit Act, 1975, provides inter alia that discount on a loan shall be deemed to be expenditure chargeable to the State Revenue Fund. Subsection (3) of the section concerned also provides that such expenditure shall be appropriated by law. From subsection (2)(b) it is further clear that the expenditure shall be brought into account in the financial year concerned. I say that this was an artificial increase in the amount of interest.

†I want to refer again to Government spending. The hon member for Yeoville and other hon members accuse us. They say every year the Budget is substantially exceeded. Every year the Budget is not substantially exceeded. I reject that criticism. It is common knowledge that under all governments, government spending every year exceeds the Budget estimate by a greater or lesser amount. There are always unforeseen but essential additional expenditures which have to be provided for. That is precisely why ever since we began our public administration an Additional Appropriation Bill is introduced each year. In the past the additional amounts have invariably been quite small, but last year they became bigger. Often the actual revenue receipts also exceeded the original Budget revenue estimates, but nothing is said about that. The “deficit before borrowing”—it is an extremely important indicator of financial health—did not exceed the Budget figure.

I have already indicated that the position during the current fiscal year is different. The additional amount to be appropriated will be larger than usual, but the reasons are perfectly clear. I repeat that many of them are unavoidable. Additional amounts are required, inter alia for drought and flood relief, essential defence and security expenditures, interest payments on public debt—the exaggerated amounts in this connection I have just explained—and food and transport subsidies. The hon the Minister of Transport Affairs is here and he can tell hon members how impossible it is at the beginning of the financial year to tell the Treasury what the exact amount of transport subsidies will be. One therefore budgets on a realistic basis, but invariably one finds that more is required. Is that a sign of maladministration? The relevant question to ask is whether these additional expenditures were substantially unavoidable and whether they were in the national interest or not. Taken over a longer period, however, I submit that the record clearly shows that Government spending has been kept under tight control since the middle of the seventies. Fiscal discipline has indeed been an outstanding feature of Government policy during this period, a fact which authorities like the International Monetary Fund, one of the greatest financial authorities in the world, and other highly qualified judges were quick to see. That is why our credit rating is what it is.

*A feature of the contributions to the debate by most of the Opposition members was once again the lack of positive proposals. They took the easy way out and simply made a list of the problems which the South African economy had to contend with and insinuated that the Government was responsible for those problems. They shied away from the basic causes of these problems, namely the world recession and the drop in the gold price. In a normal year gold exports represent one-half of all our exports. In addition there was the tremendous drought, which is still with us. Surely they know, and so do most South Africans, that neither the Government nor anyone else in South Africa, has control over these factors. The criterion is how the Government dealt with these problems. In this respect the facts show that the authorities, under extremely difficult circumstances, succeeded exceptionally well in keeping the South African economy strong and healthy. We are keeping a firm hand on Government expenditure. In fact, there is nothing whatsoever amiss with the control over Government expenditure.

†There have been some impressive speeches in this debate and I wish that I could refer to all of them. However, I would like to thank my hon colleagues who spoke more particularly on finance, financial policy and administration. I cannot mention all, but they include the hon members for Smith-field, Maitland, Waterkloof, Vasco, the hon member Mr Aronson, the hon member for Gezina and a few others.

*They all made excellent contributions to placing our financial situation and policy in their correct perspective, and they did so in a realistic and competent way.

†I want to refer to one or two other members. The hon member for Amanzimtoti said that South Africans are living beyond their means. Perhaps he is right, and perhaps he is not, but that was his observation. However, he then went on to imply that that was the Government’s fault. He said that we must adopt much tougher fiscal measures. I want to ask the hon member to tell us exactly what fiscal measures must be more tough than they are at the moment. Let us not talk in generalities now. When one talks of fiscal measures being tough under these conditions, one is talking about taxes. So let us hear what taxes must go up.

The hon member for Durban North made an interesting speech. Among other things, he said that we must concentrate more on a consumption tax than on a tax on income. That has very wide-reaching implications and is one of the great unsettled questions of public finance throughout the world today. But at least we have made an extremely good start by introducing GST, a consumption tax. Before that there was a complete malrelationship between direct taxes, such as income tax, and indirect taxes. The indirect taxes were much too low. I cannot give the hon member an ideal relationship, but I can say that when indirect taxes are something like 26% of the total and direct taxes are 74%, it is wrong and we have gone a long way to redress that imbalance.

The hon member for Edenvale put his case calmly and clearly. He takes trouble in order to deal with the facts. Among others, he made the point that as far as company tax was concerned, the returns were not sufficient because there were what the Americans call too many “tax expenditures” involved. The concessions involved were too great. That is a point which the Standing Commission on Tax Policy has been studying closely for several years. The hon member will remember that in my last Budget speech I referred to the fact that the decision had been taken to phase out the investment allowances over a number of years, which is a big reason for this position, and rather to push up the initial allowances on capital investments because you get some of that back at least.

Will companies be allowed to sell off their allowances to other companies?

We will go into the detail of that. I merely want to point out that the hon member made a good point but that we have been addressing ourselves to it very substantially. Unfortunately I cannot mention all the matters involved.

The hon member for Constantia urged, among other things, the privatization of what is sometimes called the para-statals, or the public utility corporations. There again the hon member will remember that in my speech during the Budget last year I made a point of this and I spoke at some length on it. The difficulty here is that, much as I would like to see it, the moment to do so has to be financially propitious. You cannot sell off a stake in the equity of those big corporations at a serious loss, as someone has to bear that loss, and that is really the problem. However, if conditions are really thriving and these corporations are financially on a good wicket, it is a matter which we will press further. It is certainly something which deserves the thorough attention of the private sector apart from the public sector.

*I have already referred to the remarks made by the hon member for Langlaagte, who thought that the State Debt was very high. I do not think so at all, but I have already replied to that.

†In conclusion I want to refer to the so-called harmonization of taxation among all the different national groups in our country. It really amounts to the equal taxation of the Black community. I think that the Government’s achievement in making this possible, in bringing the Black taxpayer within the ambit of the Income Tax Act, amounts to one of the greatest measures of tax reform in our history. Whilst it is true that a very large proportion of the Black taxpayers will benefit by this move, we believe that the whole system will be so much more efficient in the long run that in time those losses will be made good.

The hon member for Yeoville introduced a sour note, and I think it is a great pity he did so. He accused the Department of Inland Revenue of not doing sufficient to put this measure across to employees. I do not want to hold up the House. I have a long memorandum here which the Commissioner for Inland Revenue has given me as to precisely what the Department, and therefore the Government, has done to inform the Black taxpaying community in a whole variety of ways over a long period of precisely what is at stake. I think it is a most impressive statement, and I think the hon member for Yeoville should be much more careful and not raise issues like that which run counter to the facts.

I think I have still time very briefly to say something about the Land Bank. The Land Bank was finding that its chairman and managing director and its officials had to spend more and more time at the Cape, especially during sessions of Parliament. Let me say it passing that I am extremely impressed by the Land Bank Board. I take a close interest in them and visit them regularly. They are a small group of dedicated men who are doing a tremendous job for this country. They decided, after a Very careful study of the facts, to sell their residential accommodation in Pretoria and put the proceeds towards buying accommodation for the chairman and managing director and certain other officials at the Cape. The amount involved was about R500 000. The Auditor-General, perfectly within his rights, drew attention to this outlay in his report of that year. The result of that was that the matter went to the Select Committee on Public Accounts which, in its wisdom, decided to recommend that the Land Bank should sell those flats and obtain other accommodation for those officials, including their top executive officials.

The matter was referred back to the Land Bank Board and they went into the matter again very thoroughly indeed. As a result of that, the Land Bank Board decided it would sell one flat but not the other, the one which is used by the managing director and chairman and his family and, when he is not there, any senior executive officer of the Land Bank who comes to Cape Town at any time of the year. They decided to retain that and sell the other one. The negotiations are continuing. As soon as the Land Bank can obtain suitable alternative accommodation for the other officials for what one might call the second flat, that flat will be sold and those people will make use of that alternative accommodation. The Department of Community Development is being very helpful in this connection. The Land Bank Board decided not to sell the other flat which is being used, as I have said, by the chairman and managing director and his family and other senior executive officers when he is not there.

I may say that this is an autonomous board, but because the matter was raised in public, I have taken considerable trouble to go into all the facts again together with the chairman of the Land Bank and others and I am absolutely satisfied that the Land Bank is fully entitled in every respect, including financially, to adhere to the decision to keep the one flat for its senior executive officers. Last year the Financial Mail in a long list of the biggest commercial and industrial undertakings in this country listed the Land Bank as number 15. The total assets of the Land Bank are today R5 billion. I have already said what the Land Bank is doing to provide drought aid, and that without any extra staff. It is doing that work with that small hard-core of dedicated and most able people working day and night. The hon members talk of overtime, but I wish they could see the hours these people are working. I have seen it myself. The way the Land Bank is developing, I believe that within a year or two it will not be number 15 on the list of the biggest corporations, but number 10. That is as clear as daylight. I want to ask the hon members who like to be so critical of this splendid body how other chairmen and managing directors are accommodated, chairmen and managing directors of financial institutions, banks and other undertakings smaller than the Land Bank and undertakings which in my opinion do not have to deal with the crucial and critical issues of this country with which the Land Bank is dealing day and night.

In their own houses.

Are we talking about permanent or temporary residences?

I am talking about equity and fairness in debating the facts. If the hon member wants to adopt that attitude, let him go and make sure of the facts.

I know the facts.

If he has made sure of the facts and still denies that, then something seriously is wrong with his reasoning.

I think the whole thing is a scandal.

Anything that redounds to sound public administration of this country is a scandal, according to that hon member. We saw it in this debate. [Interjections.] I knew beforehand that if I was going to defend the Land Bank I was going to get that reaction. We find it in every debate.

*They are “boerehaters” from beginning to end. [Interjections.] When I break a lance for the Land Bank, the greatest friend the farming community of this country has ever had, then I have to listen to this kind of nonsense. Only a “boerehater” can adopt such an attitude. [Interjections.] I want to point out to this House that it was a fantastically good investment which the Land Bank made by purchasing those flats. I have been informed that the Land Bank will now receive not merely R250 000 for each flat, but quite possibly R400 000, which almost covers the original combined purchase price of R500 000.

Business interrupted in accordance with Standing Order No 73.

Question put: That all the words after “That” stand part of the Question.

Mr Speaker, I move:

Agreed to.

Business suspended at 18h21 and resumed at 20h00.

Evening Sitting

Mr Speaker, I move:

This Bill provides for an additional appropriation of R175,9 million for the 1983-84 financial year, which brings the expected total expenditure for the financial year to R3 134,5 million—an increase of 5,9% on the original estimate of R2 958,5 million. The additional appropriation is required for operating expenditure and additional loan redemption only. The expected capital expenditure of the Post Office for the present financial year remains within the amount of R1 020,9 million originally appropriated—it is in fact expected that that expenditure will come to approximately R5 million less than the figure mentioned.

Particulars of the additional amounts required under the various subheads of the estimates appear in the Estimates of Additional Expenditure that have been tabled. By far the greater part of the additional appropriation is being requested for staff expenses. Rounded off, the total amount required for this purpose is R133 million and I should like to give hon members a breakdown of this amount.

In the first place an amount of R38,2 million is necessary for salary improvements granted to professional and technical staff as a result of our policy of occupational differentiation with effect from 1 April 1983. Occupational differentiation for other staff that will apply with effect from 1 January 1984 entails expected further extra expenditure of R13 million in respect of the present financial year.

Secondly, the general salary increase of 12% granted to all members of the staff with effect from 1 January 1984 requires estimated additional expenditure of R20 million during this financial year.

A third important factor, that involves staff expenditure of approximately R27 million more than the amount originally budgeted for, is the expenditure on salaries that arises from a better than expected rate of recruitment, coupled with a lower than expected rate of staff losses, that resulted from the continued recessionary economic climate.

Further additional staff expenses are entailed by the higher pension fund contributions necessary as a result of the increased salary payments (R22,27 million), service bonus amounts (R7,1 million) and medical aid fund contributions (R6,19 million), as also extra housing subsidy payments, amounting to approximately R4 million, arising from a rise in the subsidy limitation that took effect on 1 April 1983 and higher interest rates introduced on 1 October 1983. Additional expenditure on other miscellaneous items comes to R3,81 million. All the extra expenditures that I have mentioned amount to approximately R142 million which, taking into account a saving of approximately R9 million on a number of other items of the relative subhead such as overtime and territorial allowances, constitutes the additional requirement of R133 million for staff expenses.

†Under the subhead “Material and Services” of the estimates and additional appropriation of R2,6 million is requested. The total additional requirement under the subhead is approximately R5,5 million, but R2,9 million of that amount is being defrayed from savings on other subheads. The largest part of the requirement is in respect of the increase, by R4,5 million, of the Post Office’s contribution for the present financial year to the firm Sames, which manufactures electronic components locally. Sames has experienced unforeseen development and technical problems that seriously affected its manufacturing process. Although the firm is now in a position to produce considerable numbers of various integrated circuits, the Post Office was, moreover, compelled to curtail its capital programmes, which resulted in a reduction of the Post Office orders placed with Sames for electronic components. This had a detrimental effect on the latter’s revenue.

For the cost of loans and interest payments an additional amount of R20,2 million is being requested. The inflow of investments to the various savings services of the Post Office during this financial year was considerably higher than originally budgeted for. It is expected that the net growth in savings services funds will come to R320 million, as against the original estimate of R50 million. The additional appropriation is necessary to provide for the resultant higher interest payments.

Finally, an additional appropriation of R20 million is requested for loan redemption. This is necessary in respect of the payment a short-term loan that was raised at the end of 1982-83 in view of uncertainty that existed about the availability of adequate savings services funds. In addition to the better than expected inflow of savings services funds to which I have referred, the expected revenue of the Post Office for the present financial year is approximately R31 million more than the amount originally budgeted for.

I am therefore glad to be able to say that no problems are foreseen in financing the additional appropriations requested in these Additional Estimates.

Mr Speaker, the official Opposition will support the appropriation of the additional funds the hon the Minister has called for in the Bill before us at the moment. We do so mainly for the reason that it is required for operating expenditure and loan redemption.

If we compare this Appropriation with that of last year, we see that the hon the Minister is asking for an additional amount of R175,9 million, while last year he actually asked for R229,5 million. The total expenditure this year will be R3 134,5 million as against R2 516 million last year. This means an increase of 5,9%, which is a substantial reduction compared to the figure of 10% he asked for last year. Moreover, capital expenditure remains in the region of R1 020 million, while the hon the Minister has now promised that capital expenditure will be reduced by R5 million less than it was last year. Curbing expenditure is a good sign and we accept that these expenses are necessary for the Post Office to continue.

I would like to now comment on some of the details and deal with the reasons the hon the Minister advanced for the amounts that have to be voted. The first item is job evaluation, which is going to cost R38,2 million, affecting the technical and professional staff. This is a good step, which means that the salaries of staff members are being placed on a reasonable level which has been worked out by a job evaluator. The job evaluation method which has been applied, is the Patterson method, which has as its basis the degree of responsibility attached to a post. A subdivision of that system has also been applied, namely Task. This method has to do with testing a man’s skill, his impact, his responsibility and his knowledge, as well as the pressure he has to work under. With these factors in mind, posts are evaluated and placed on a proper basis. This will cost an extra R38,2 million. These methods have spilled over to the clerical and administrative staff, which will cost an additional R13 million. We must bear in mind that what the hon the Minister is asking for in this Part Appropriation, is only to see him through until the end of the current financial year ending on 31 March 1984. I will come back to this point in a moment.

We also welcome the improved conditions of service, namely the 12% increase in salaries amounting to R20 million, as well as the R27 million that has to be spent because of improved recruitment. This means that fewer staff members are leaving the service and it is obvious that the policy that has been adopted, is now paying dividends. Unfortunately this also entails further responsibilities for the Post Office, for example, contributions to the pension fund totalling R22,2 million. In addition there is the thirteenth cheque, which is going to cost the Post Office R7 million, something to which the hon the Minister has also referred. The medical aid scheme contributions also amounts to an additional R6,1 million, while items under “Miscellaneous” amount to R3,8 million. These amounts total R142 million, and I may just add that we are pleased that R9 million has been saved because of the territorial allocation. I trust that now, with peace moves on the way, that this amount will increase. We must therefore consider that there are other increases amounting to R20,2 million as shown in paragraph 1.1. The interest on savings have to be paid and represents an annual recurring expenditure. Since they are only paid up to 31 March 1984, it means that R133 million plus the R20,2 million, needed to pay the interest on the additional investment, amounts to R153,2 million. It follows that if we take it for the entire year, the amount will be R612,8 million. R3 134,5 million was originally budgeted for. On this R612,8 million represents another 19,5% increase. With an eye to the implications on this increase, I want to leave this matter here for the moment.

Unfortunately I was not here last year during the discussion of the Additional Post Office Appropriation Bill, but I enjoyed reading the speech of the hon the Minister, who then had office for the first time. However, I was present when the main appropriation was discussed. In his Additional Appropriation speech the hon the Minister had one or two refreshing statements to make. He said, firstly, that we should not drag politics into Post Office budgets and the debates connected with it. We accept that, provided he does not come with political moves and the Post Office does not tap telephones, etc. We will then keep it non-political and will deal with it on its merits in the light of requirements.

The second point was an undertaking given by the hon the Minister that he would not announce tariff increases outside of this House but that he would come to this House before increasing tariffs. He would then take the House into his confidence and let the House then make a decision regarding any increases. I think the hon the Minister must be reminded that the problem with tariff increases is that previous Ministers committed themselves to giving at least three months’ notice of any tariff increase. I take it that the hon the Minister will follow that policy because any increases in tariffs have a vital effect on every business concern in South Africa. They have their own budgets and have to price their own goods and therefore have to take into consideration any tariff increases and make adjustments. This notice is therefore required by them and I trust that the hon the Minister follow the same procedure.

Having said that, I sincerely hope and trust that, in spite of the increases which we are appropriating tonight, it will not be necessary to increase tariffs in the main budget in March. The hon the Minister is curbing his expenditure by R5 million and I think we must watch expenditure and guard against unnecessary expenditure.

We must bear in mind the battle against inflation, which came up also in the debate on the Part Appropriation of the hon the Minister of Finance. The impact which inflation has on the economy was discussed. There is a need for the Government to set an example to business and to South Africa in general by curbing its own expenditures and tariffs in order to keep down inflation, which is, as was acknowledged by the hon the Prime Minister and by us all, the number one enemy in South Africa. In that regard we trust that the necessary effort will be made by the hon the Minister.

I would also like to refer to the question of savings. We are delighted that there has been an increase in savings, that the public has seen it fit to increase their savings with the Post Office. I just want to mention that, since we need the capital because the Post Office draws from Post Office savings for capital expenditure, we should reconsider the rate of interest paid on savings. On National Savings it is 9,75%, on Savings Bank savings 9,5%, on savings for an indefinite period 9,5% and on a Post Office Savings Bank Account 6,5%. Hon members will notice that all these are below the rate of inflation. Although these savings are tax-free, when one can get 18%, 19% and 21% interest with commercial banks of standing today, it still pays the investor to pay tax and get that rate of interest rather than to get a rate of interest below the inflation rate and go in for an investment which is tax-free on that basis.

The Post Office needs that revenue because it is self-financing as regards its capital requirements. We are a little bit disturbed that last year the self-financing reached a figure of only 29,3% whilst the other 70,7% was financed from loans. We need to get near to the formula of 50:50. The Post Office should have sufficient revenue to improve on that figure of 29,3% and to get nearer to 50%.

We have seen that operating expenditure rose from R820 million to R1 525 million in four years. Staff expenses doubled. Incidentally, according to the Postmaster-General’s report GST has also been a factor. I should like to know where the extra 1% GST comes in in this Additional Appropriation. Has that been catered for? I know that the extra 1% is going to cost the Post Office about R1,5 million. Has that been built into this Additional Appropriation, because the extra 1% is already in operation?

We have to tighten our belts with regard to capital expenditure. We have to set priorities when it comes to unavoidable expenditure. I am thinking particularly of expenditure such as that involved in clearing the backlog of 231 439 telephones required. These are revenue-producing and in setting priorities we need to spend the capital on that which is going to produce revenue for the department. Telephones do produce revenue and are one of the most paying services of the Post Office.

I should also like to know what the forward-planning programme of the Post Office is, if it has such a programme. Does it have a three-year plan or a five-year plan? Could the Post Office not announce even a three-year programme so that the public and the business world will know what increases to expect and will be able to balance their budgets on the basis of the amounts being estimated by the Post Office itself?

I next want to turn to the non-recurring expenditure to which the hon the Minister also referred. An amount of R4,5 million went to SA Micro-electronic Systems who, as we know, are supplying the Post Office with integrated circuits. I do not begrudge this company the extra subsidy it is receiving. My colleagues will deal in more detail with the technical side of micro-chips. However, we have trading partners in the IDC and in Siemens. I should like to know from the hon the Minister whether they, as partners to this venture, are contributing their proportionate share of the contribution required.

There is a second point arising out of this deal. The hon the Minister has explained tonight that the Post Office dropped its requirements, ie that it did not order as much and did not spend as much money as it thought it would. I want to ask whether, in turn, this company did not reduce the number of integrated circuits it manufactured. Surely it is only going to manufacture according to orders and, if we ordered less, they should not have manufactured more. I do not quite understand the position. Perhaps the hon the Minister can clarify why this subsidy is required, because we did not order more than the company thought we were going to order in the first place.

As regards the R20,2 million of non-recurring expenditure, there was an inflow of savings. We have been told that an amount of R50 million was expected whereas an amount of R320 million has flowed in. It was estimated that the public, through the various schemes to which I have referred, would save R50 million with the Post Office, but we now find that they are investing R320 million. That is marvellous. Obviously the Post Office must be very happy that so much money is now flowing towards it. However, can the hon the Minister explain why last year he budgeted for R140 million and only received R100 million? Sure, that is a drop of R40 million, but if the hon the Minister received R100 million last year, why did he only budget for R50 million this year? Surely that is gross under-budgeting in respect of investments. Nevertheless we welcome the increased flow of funds to the Post Office so that we now have to provide R20 million to pay the interest on the increased amount that has been invested with the Post Office.

Lastly, I should like to mention that this may appear to be the last Additional Appropriation Bill that will be introduced into this House only. I take it that the hon the Minister in future will also be asking for additional appropriations in the House of Representatives and in the House of Delegates and that he will require their approval. To do so he will have to meet the demands and requirements, of the Coloured and Indian communities. In that respect I think the hon the Minister will have to anticipate that the biggest requirement is going to be the installation of telephones, which is severely lacking at the moment and which will be even in greater demand in future. If that is the case and he has to get the approval of the other two Houses in future, I assume that it will be a general matter and not an own affair. I assume the hon the Minister will have to obtain their approval and cater for their needs provided he can get the additional appropriations approved. With these few words we on this side support the additional appropriation.

Mr Speaker, the hon member for Hillbrow could just as well have omitted the last item from his speech. We all know that the next Additional Appropriation will probably be introduced before three Houses of Parliament. We also know that at that stage the Coloured and Indian population groups will be able to state their own needs, and it is definitely not necessary for the hon member for Hillbrow to try to explain the needs of those two population groups to this side of the House in advance. However, I shall not pursue this matter.

We are grateful that it is possible for the official Opposition to support the Additional Appropriation this year without any reservations. Last year the support of the official Opposition was rather hesitant and there were quite a number of points of criticism. At the outset I want to congratulate the hon the Minister on the fact that the amounts being requested are relatively small. This made it virtually impossible for the official Opposition to voice any real criticism.

When judging an Additional Appropriation, one should actually do so on the basis of certain criteria, certain fundamental questions. The first question is whether the additional amounts being requested are within reasonable bounds. The hon member for Hillbrow has already pointed out that the additional amount represents only 5,9% of the total budget of the Post Office for this year, as against approximately 10% last year. I believe hon members on both sides of this House will agree that any businessman who, after making provision for normal growth in his business were to find at the end of his financial year that his budgeting for his business’s activities for that year was only 5,9% out would have every reason to feel satisfied. We on this side of the House are agreed that in this case we have a great deal to feel satisfied about.

The second question one should surely ask oneself is whether this additional expenditure could have been foreseen and therefore could have been avoided, or whether provision should have been made for those amounts in advance. If one takes into consideration that virtually 80% of the total amount being requested is for staff expenditure, and if we ascertain why the additional staff expenditure is necessary, one realizes at once that it was simply not possible to make provision for this in the Post Office Budget a year ago. The first item in the Additional Appropriation is chiefly concerned with the occupational differentiation which was introduced for professional and technical staff. The concept occupational differentiation has already been welcomed by both sides of this House on previous occasions, and we are grateful that a great deal of progress has already been made although not in all respects. In the Additional Appropriation provision is, however, now being made for further categories of occupational differentiation, but for the most part the staff of the Post Office have already benefited from this

Nor could it have been foreseen a year ago that it would be possible to grant a 12% general salary increase to Post Office staff. Nor could it have been foreseen that there would be fewer retirements. Last year the hon member for Bezuidenhout suggested that the hon the Minister ought to be in a better position to judge to what extent retirements would affect the Post Office administration during the forthcoming year. With occupational differentiation an accomplished fact this year, it was perhaps even less possible to determine in advance how many resignations there would be, because the fact that the staff knew that occupational differentiation would be introduced, and its effect when it was introduced, undoubtedly had an effect on the staff structure and the retention of staff by the Post Office. As a result it was not possible to use previous recessionary conditions as a yardstick for expected retirements and the possible success of the recruitment campaign.

The hon member for Hillbrow also referred to another unexpected success for the Post Office, namely the fact that investments in the savings bank increased from the R50 million budgeted for to R320 million. This in turn had an effect on the payment of interest, on the one hand, for which R20 million now has to be provided, while on the other hand a temporary bridging loan of R20 million had to be negotiated during the past year when the extent of the savings investments was still uncertain. In this Additional Appropriation provision is also being made for the repayment of that loan.

In other words, of the R175 million being requested here, R133 million which is the increase in staff expenditure, and the two items connected with the short-term loan and the interest on savings, which represent a further R40 million, are totally unforeseen amounts, and it was therefore impossible to make provision for them in the main budget. Therefore in respect of the second criterion as well it is quite clear why these additional amounts are now being requested.

In the third place, and in conclusion, Mr Speaker, one can ask, as a general criterion, whether this additional expenditure is in the interest of the Post Office administration as a whole; whether or not it is to the advantage of the Post Office. As a matter of fact I believe that goes without saying. I believe the fact that this staff expenditure has been incurred for the reasons set out by the hon the Minister, must convince us that this will help towards establishing a better equipped, better qualified staff structure in the Post Office.

The greater availability of loan capital in our savings bank can also facilitate matters for the Post Office in future. In view of these considerations it gives those of us on this side of the House great pleasure to support the Second Reading of this Additional Post Office Appropriation Bill.

Mr Speaker, we on this side of the House fully support the Additional Post Office Appropriation Bill. We support it because we are convinced that the Post Office has provided an excellent service during the past year. That is why we have a Budget like the one before us.

When, for example, we look at the excellent report of the Postmaster-General, we cannot help noticing what wonders have been achieved during the past year. The Post Office and its staff have certainly not been idle. That is another reason why the present proposed budget is so acceptable to us. The hard work of the staff in this regard is quite obvious, and we can also understand that much of the expenditure for which provision is being made—as was indicated by the hon the Minister, and by other hon members who have already participated in the debate—was definitely essential. There is, for example, the 12% general increase in salaries granted to the staff of the Public Service and the Post Office. The staff definitely could not have got by without this increase. We do not begrudge them this increase either. They deserve it. They also deserve all the other fringe benefits the hon the Minister referred to. These things are imperative if we want the Post Office to retain its staff. That, too, is why I am convinced that as far as this matter is concerned, things have gone very well.

When one considers what the Post Office does nowadays, many people would seem to be under the impression that as soon as the Post Office doors close at the end of the day, all work ceases. This is not true. That is, in fact, when the really big work frequently starts. That is why we are also aware that those people working behind closed doors, are doing a wonderful job. That is why we praise them and pay tribute to them; because we know what they are doing for South Africa in this regard.

As far as the expenditure on material and services is concerned, there need be no doubts or misunderstanding in this regard either. In the field of electronics we dare not take a back seat to other countries. We have to keep abreast of all the developments in this field, and it is therefore very important for the Post Office to do its duty in this regard too, and for us also to keep pace with every new development as far as strategic matters are concerned. After all, we are living in the space age.

On reading through this beautiful annual report by the Postmaster-General, one cannot help realizing what a major role the Post Office plays in our society. For that reason I want to convey my congratulations to everyone who had a share in compiling this annual report.

We also notice that recently more people have been making use of the savings services of the Post Office. This is really a wonderful thing, because every young person starting out in his career, begins saving for the future with the Post Office Savings Bank. The Post Office Savings Bank has almost become an integral part of the life of every young person. In this regard we also note that this has entailed additional income for the Post Office, because more people invested in the savings services. If this had not been the case, I believe the hon the Minister would not have been able to quote the relevant figure. For that reason I want to recommend that with an eye to the future, there should be an inquiry as to whether the interest rates for the investor making use of this savings service could not perhaps be raised. If this were the case, many more people would make use of this service. It would also mean that the Post Office could earn far more money. It is difficult to estimate this with precision. I nevertheless believe that it would be worthwhile to investigate this matter. We do not expect the hon the Minister to give us his reply to this matter today. However, we ask that he investigate it.

In conclusion, we should like to convey our profound appreciation to every employee of the Post Office, from the highest-ranking official right down to the lowest. Those people are doing wonderful work in the interests of our people and our country. We thank them most sincerely.

Mr Speaker, when we look at this additional appropriation as set out by the hon the Minister, and weigh it up in the light of the facts and the economic background against which the Post Office has to provide its services, one cannot do otherwise but understand the problems with which the management team of the Post Office has to wrestle. One cannot deny that the Post Office is wrestling with the same problems that any other large business undertaking in South Africa is faced with, bearing in mind in particular factors such as rising rates of exchange and inflation and, as the hon the Minister spelled out to us, the higher wage demands which represent a reasonably large portion of this additional appropriation.

An analysis of this additional appropriation shows us clearly that R133 million or 75% of this additional appropriation represents staff expenditure. I do not believe that anyone inside or outside this House wants to deny the staff of our Post and Telecommunications this compensation for the able and loyal service they are continuing to render.

Compared with the appropriation discussed here last year, this additional amount being budgeted for now is minimal. If one works it out percentagewise, one finds it is in the region of 6%.

We are very grateful that the management team of the Post Office are so skilful as far as the financial management of their department is concerned. We on this side of the House want to congratulate the management team because they are undoubtedly an able and resourceful team of people.

In consequence of the result of the referendum and, as the hon member for Hillbrow said, the fact that three chambers are going to decide on these budgets in Parliament in future, I want to emphasize a few points. I want to link this to the debate we held last year in connection with this budget. I maintain that it might not have been necessary for the management team of the Post Office to make this additional budget so large had it not been for our politicians, who constitute an element they have to take into consideration. Because in future they will have to take three times as many political parties into consideration as they do now, this means that three times as much criticism will be expressed, and I want to link this to the amount of R20 million appearing here in respect of the general salary increase of 12%. I do this to illustrate my point.

The hon the Minister needs that R20 million for the salary increase of 12% which the officials received from 1 January. This is equivalent to the amount used during the past year to subsidize consumers in respect of the installation of telephones. This is also a matter to which the hon member for Hill-brow has just referred. In reply to a question last year, the hon the Minister said that it cost R150 to install a telephone and that the Government therefore subsidizes installation costs to the tune of R75 per telephone. The Post Office therefore subsidized the 262 789 telephones installed this year to the tune of R19,7 million for the consumer. This was therefore a sum of money which was not collected from the consumer. I want to link this amount to the R20 million to point out that if we could have levied that amount we could immediately have covered that 12% salary increase to the officials. Then the additional appropriation would have been a little smaller than it is now.

I say this because over Christmas we saw that consumers thought nothing of paying R300 for a BMX bicycle, or in the vicinity of R50 for a video game or R1 000 for a video telex machine. If we could get rid of this senseless political criticism we encounter when we consider a budget at the beginning of the year and when political parties try to score points off each other, I think we would be helping the management team of the Post Office to draw up a far more accurate budget, with tariffs it has to charge its consumers. That is why I ask that we as politicians should learn, because in the tricameral Parliament it is going to be essential for us to learn from the lessons of an additional appropriation such as this, since in the new dispensation we are going to play an extremely important role in the application of sound financial principles, particularly when considering the budget of an independent department like the Post Office.

During budget debates one is always hearing profundities about the principle of free enterprise, but when one is discussing a department like the Post Office, which has to generate its finances from its own funds, the critics—that is, those of us in this House and people outside—forget how beneficial better salaries are in retaining expert staff. All too frequently the private sector refers to the poor salaries of officials, a factor which is supposed to lead to poor staff and therefore poor service. In order to overcome this problem, the 29% of the additional appropriation now before us will comprise the amount requested to supplement the salaries to be paid to officials after completion of the occupational differentiation investigation in terms of its findings. We are grateful that the occupational differentiation investigation has now been completed, and in cases where we have to pay certain officials more, they will now receive that money.

At the beginning of the year management was aware that these wage demands would be made, but no one knew what the extent of these demands would be. We are therefore grateful that we can now see what the size of the amount is. In future the management team will at least know how to budget for this.

We on this side of the House are grateful for the patient way in which our officials waited for this investigation to be completed. Now we can compensate them for their loyalty and patience—I believe all parties in the House will agree on this—and for the good work they do. That is why we accept this part of the additional appropriation. We consider the fact that South Africa needs a further R133 million to spend on its staff as a very good investment. We on this side of the House also believe that top wages should be paid to top officials, and in the electronic age we also believe that it is necessary for a developing country like South Africa to invest in expert Government officials, particularly in an independent department such as this. It is they who have to design, install and keep the electronic communication channels of the 20th century in working order so that the private sector can increase its productivity. We believe that only by doing these things can we assist the private sector sufficiently to enable it to function far more productively.

As I have already said, from next year there will be three times as many political parties to make the task of the Post Office management team more difficult. That is why we must now begin to take the lead in this House showing how to build the Post Office into a better department objectively and without political motives. For that reason we want to thank the two Opposition parties who have already participated in the debate for the support they have given the hon the Minister. We believe he can only benefit by this, and that is why we on this side of the House also take pleasure in supporting the Bill of the hon the Minister.

Mr Speaker, I listened with interest to the speech of the hon member for Boksburg. He certainly raised some interesting points and I hope that he does not mind if I do not follow him directly. In the course of my speech I will be dealing with some of the points he has raised.

I think this evening should be an evening for rejoicing because we have quite an event here. I see the hon the Minister is smiling and I think he knows what is coming. This is the first time in years that we have had the same Minister of Posts and Telecommunications presenting two Part Appropriations, one after the other. This hon Minister is developing an air of permanence, and I think this bodes well for the department. In the years I have been here, we have had a succession of Ministers and we on the Opposition benches have often said that it was a great pity that the Department of Posts and Telecommunications appeared to change its Minister far too often. I am not saying this with any sarcasm but I say in all sincerity that we welcome the fact that we have the same Minister presenting a Part Appropriation here tonight as we had on 23 February 1983, one day short of a calendar year.

I think it is fair to say that he has done better this year than he did last year, namely a 5,9% increase as opposed to a 10% increase last year. I would go as far as to say that I believe that the hon the Minister of Posts and Telecommunications—I am sorry to see that the hon the Minister of Finance is not here—possibly will not be with us much longer because if he goes on at this rate he should take over the portfolio of Finance. He can certainly show the hon Minister of Finance a thing or two because he has proved that the story need not be as the hon the Minister of Finance extolled to us this afternoon. This hon Minister has proved that the proof of the pudding can be in the eating. I think the hon the Minister of Finance would do well to read and to listen to the words of the hon the Minister of Posts and Telecommunications. Perhaps he should not worry so much about his political future in Natal and should worry a little more about his job.

I want now to turn to the staff. I think the hon the Minister will appreciate that it is common cause that the Post Office has always had problems competing with the private sector. This has been a problem of the Post Office as far back as we can all remember. In this budget the hon the Minister has provided for the continuation of the old theme of paying the rate for the job, and I am pleased to see that attention is being paid in this regard particularly to the rate for the job being paid to professional and technical staff. I am extremely heartened to hear the Minister say that there is a better than expected rate of recruitment coupled with a lower than expected rate of staff losses that resulted from the continued recessionary economic climate. The sting is in the tail but it is nonetheless heartening to see that there is a better than expected rate of recruitment. We trust, however, that every possible effort is going to be made to maintain the staff complement that is required to render a worthwhile and efficient postal and telecommunications service to a growing country such as ours. It is of vital importance that the closest attention be paid at this time to retaining that staff. While doing that, what is equally if not more important, is that we understand that this additional recruitment comes about because of the recessionary economic climate in which we find ourselves. We all know that. However, we must not allow ourselves to slip and we must watch productivity levels. In a recessionary climate this is something that bears watching very closely indeed as there can be a tendency for people to start slipping in respect of productivity. They become lax. As a colleague of mine said, sometimes one sees that old tendency of one chap up the pole and the other making the tea. One wonders whether the right balance is being maintained.

The hon member for Boksburg said that we must pay top salaries to top officials. This is quite right. When he uses the world “officials”, he is referring to everybody, because every person employed in the Post Office occupies an official position. I agree that “top” salaries should be paid to “top” officials and with that there should to “top” productivity. I am sure that the hon member for Boksburg will agree. I am not saying this as a matter of criticism. I am merely saying that this is something which we should watch very closely in the current economic climate, because as sure as the night follows the day, we will come out of this economic trough and we will be back in the ball game and that is the time when we will need the best from everyone on the Post Office staff.

I believe that we require a bit more explanation about SAMES. It would be in the best interest of all if the hon the Minister will give more details in his reply as to exactly how this situation developed. It should be placed on record. Those of us who sit here can possibly understand the reason for it and there are possibly some of us who have a more detailed idea of exactly how it came about. But I think that more detail should be placed on record than was given in the hon the Minister’s introductory speech.

During this debate last year I expressed alarm at the loss of savings by what I called “the most time honoured savings bank of all”. In this financial year we find a complete reversal, and I must say that to me it is more than gratifying. However, I disagree in the kindest possible way with the hon member for Hillbrow where he said that we should have higher interest rates. I don’t think we should be too quick with that and must remember that higher interest rates will cost the Post Office more money. I do believe that we should certainly monitor the market all the time, but we need not necessarily go straight into upping the interest rate. I have good reason for saying this.

I said it last year, and I want to say again, that the Post Office can never hope to or be expected to compete with building societies and the like. What has emerged, what has become obvious—it is borne out by the figures quoted here by the hon the Minister—is that the public is once more turning to saving in safety and is looking at the security of their savings. Banks and building societies have themselves to blame to a certain degree for the fact that the Post Office is enjoying these increases in savings. Constant striving between them to outsmart and outmanoeuvre each other with the tremendous high-power advertising which goes with it, will sometimes achieve exactly the opposite effect because people become suspicious and say they would rather be safe than sorry. I wonder how much of this tremendous increase can be attributed to just that factor. It is in any case good to see this and I wish the Post Office well in maintaining that growth and certainly in maintaining the level, if not the percentage increase of last year. I hope they maintain that level of savings as a percentage of the total budget.

Last year the hon the Minister quoted Confucius for my benefit because I would not call his Additional Appropriation a good budget but said it was satisfactory. He said last year:

Sir, look how well he has done! What are we to say now? Do we say that this House has a new Super Van or a new Superman? I congratulate the hon the Minister and we will support this budget.

Mr Speaker, it is gratifying to hear from the hon member for Umhlanga that his party also supports the Additional Appropriation of the Post Office. The hon the Minister referred to the additional expense involving the staff and the hon members for Umlazi and Boksburg chiefly dealt with that.

In his speech the hon the Minister also referred to Sames. The hon member for Umhlanga also asked a question about that. This evening I should like to say a few words about the technical division of the Post Office. The Post Office chiefly consists of two divisions, ie the technical division and the administrative division. As a result of technical development in South Africa, and in the world as a whole, it is of course essential for the Post Office to keep abreast in this field, and that is the reason why the Post Office focusses its attention on micro-technology which has, as far as switching apparatus is concerned, already played a very important role and will still be playing a very important role in the future.

Hence the shares that the Post Office has in Sames. By the way, Sames stands for South African Micro-electronic Systems. The factory is in Pretoria. The private sector also has shares in this venture. The Government realized that in regard to micro-electronic circuits, the so-called integrated circuits or “chips”, it is important for South Africa to be completely independent. That is why a start was made on this company in South Africa. From the very beginning we knew that the road ahead would be a difficult one because the initial market would not be very extensive, with the Post Office being the chief client for these circuits. The Post Office also subsidizes this company. What happened during the past year was that as a result of the economic slump and the reduced demand for telephones, the Post Office could not purchase all that many of these circuits from Sames. As a result of this reduction in purchases, Sames had to obtain an additional amount to balance its books.

As far back as 1978 a start was made on the Sames company, and although provision was made for the 1983-84 financial year, owing to unforeseen circumstances and technical problems, as I have explained, the subsidy fell short and its capital programme had to be augmented. South Africa is not the only country subsidizing this kind of industry. Similar industries also receive large-scale subsidies from the governments of industrial countries such as the USA, England, France and Japan. From 1979-81 figures it appears that the United Kingdom’s subsidy amounted to $330 million, that for Germany $300 million, that for France $250 million, that for Japan $250 million, that for the USA $120 million, that for Italy $90 million and that for Taiwan $50 million. In looking at our contribution in South Africa towards helping Sames in the big role it is also going to play in future technological development in the Post Office, let me say that I think it is our duty to support the company.

With these few words I should like to support the Second Reading of the Bill.

Mr Speaker, the hon member for Alberton discussed the problems of Sames. At one stage I thought he was going to say that Sames had “had its chips!” He went on to describe the amount of money that had been used by other countries to subsidize their services. $120 million in the United States’ budget, in the words of President Carter, would have been “peanuts”. I do not think that that is really the thing that we must discuss here. We must rather consider whether Sames is only capable of supplying the Post Office or whether it is also capable of supplying chips for other industries in South Africa. We have a reasonably big computer industry in South Africa and I think efforts should be made by Sames to extend its production outside the Post Office. It looks to me as if it is entirely dependent at this particular stage on the Post Office for its sales.

I was reading the other day that there appears to be a shortage of chips, strangely enough, particularly in the United States of America of all places. It seems to me if that is correct—that is according to the report in The Economist of England—then it should be possible for a certain quantity of chips of a specialized kind to be exported. I think the time has come, in order to avoid a loss, for the directors of Sames to consider making such types of chips they can manufacture available to a far larger market than the one to which they are limited at this particular time.

The question that we must ask ourselves now in the light of this appropriation is whether we are going to have tariff increases in a few weeks’ time when the Budget is presented. I hope, as the hon member for Hillbrow has said, that we are not going to have a pleasant evening this evening discussing a very good part appropriation and then in a couple of weeks’ time get a complete shock as to what is the true position in South Africa. I see the hon the Minister is smiling and I hope that is a good omen for the people of South African that things are going to go well.

I should like to deal with the question of the savings bank and the question in respect of which the Post Office is now having to pay an additional R20,2 million as interest. As the hon member for Umhlanga has said, this is a very good thing to see happening. I should like the hon the Minister to tell us how this happened. I should like particularly to know whether Telebank has not played an important role in these increased savings and if not, why not. Telebank has proved in the case of banking to be an enormous asset with regard to increasing its deposits. I should like to know from the hon the Minister how much money was received through Telebank. If one looks at the annual report of the Post Office one sees that as at 31 March 1983 the amount was only R1 million. Did the R320 million or the greater part of it come in through Telebank? With regard to Telebank I should like to say that it has proved to be a very useful operating factor, particularly in post offices where any person with a savings account can now go in and within a few moments can know what his exact balance is, as compared to a few years ago when it took weeks and weeks to write in to find out what it was all about.

Further, I should like to have more information regarding advertising. We have had some very good advertising in regard to savings, although I do not know whether the hon the Minister of Finance particularly liked the advertisement in which it was stated: Invest in Post Office savings and get a thirteenth cheque. It is true that one gets a thirteenth cheque as one does not have to pay it out.

The hon member for Umhlanga and the hon member for Hillbrow raised the question of interest rates. Unfortunately it is not the Post Office that fixes the interest rates; those are fixed by the hon the Minister of Finance. If the interest rate is going to be raised in today’s particular circumstances, I should like to know whether the hon the Minister of Posts and Telecommunications could twist the hon the Minister of Finance’s arm sufficiently to get a higher interest rate.

In these times of recession, it is very encouraging to realize that about 15% of the total savings comes from the R320 million extra that has been collected. According to an estimate I have made, the hon the Minister must have more than R2 billion in total savings, which is quite a phenomenal effort on the part of the Post Office. I should therefore like the hon the Minister to tell us what he estimates the total amount of savings will be at the end of March. It means that the Post Office savings increased by 15% to 16%.

Further, I should like to deal with the question of occupational differentiation which has been responsible for the major portion of the additional amount the hon the Minister has asked for. In times of recession, recruitment for State and semi-State organizations has always proved to be a bonanza time because circumstances in private enterprise are such that people tend to join the Public Service as jobs in the private sector are more difficult to obtain. The problem the Post Office is going to have—and this I must put to the hon the Minister—is what to do to ensure that those people will continue and stay in its employ. After all, the Post Office is devoting a tremendous amount of time, money and effort to train these people properly, and comes the time when a boom takes place—and this will come as surely as day follows night—steps will have to be taken to ensure that the members of the staff are not lured away by the private sector as was the case in the past. This applies particularly to technological firms in the same type of business as the Post Office. The problem facing the Post Office in these circumstances is how to devise a method to ensure that there is extra productivity for the occupational differentiation which has been introduced, plus the additional pay the Post Office employees have received. As the hon member for Umhlanga said, unless there is increased productivity, the hike in salaries is really inflationary. I should like the hon the Minister to tell us whether the Post Office has devised a means to ensure increased productivity. I see the hon the Minister of Internal Affairs is smiling because he has that same problem in his State administration. Has the quality of the Post Office staff improved? That is the crux of the matter, not the question of whether they receive higher pay. Has it been worthwhile introducing occupational differentiation? If it has not, all the Post Office has done is to inflate the wages of its employees. However, knowing the type of individuals who run the Post Office personnel services, I am certain that they have done something about it.

Finally, in regard to building loans, there is not the slightest doubt that legislation dealing with fringe benefits tax is going to be introduced in this House at some stage in the future. It may happen in the near future. It may even happen in the more distant future. It is, however, going to happen at some time or other, and the problem is that should the hon the Minister of Finance decide to introduce a nominal interest rate for a particular year—should the Post Office for instance grant loans at a 4% interest rate—the hon the Minister could then decide to introduce a nominal rate of interest of 10% for that particular year or the year thereafter. That would mean that 6% of interest received by the Post Office officials will be taxable; 6% which they now have as a perk. Will that not lead to problems in the hon the Minister’s department? If that should be the case, how is the hon the Minister going to overcome this problem without increasing salaries even further?

Mr Speaker, firstly just a word or two in connection with the contribution of the hon member for Bezuidenhout. He asked certain questions in connection with the productivity of the officials of the Post Office, seen in the light of the salary increases and occupational differentiation. About the question of occupational differentiation I shall be saying more at a later stage. I want to point out, however, that a few years ago this staff of the Post Office, of their own volition, decided to work half an hour longer each day than the staff of any other Government department. I do not think we can give the Post Office staff enough credit for the example they are specifically setting in the field of productivity by working half an hour longer each day than the staff of other Government departments.

Half an hour longer for tea each day.

Mr Speaker, I also want to say one or two things about a statement which … I shall be telling the Post Office what the hon member for Bezuidenhout has just said, Mr Speaker. [Interjections.]

The hon member for Nigel requested the hon the Minister to increase the Post Office Savings Bank interest rate by ½%, or at least asked that the possibility of such an increase of ½% be investigated. I want the hon member for Nigel to realize that the Post Office Savings Bank, like the Post Office itself, is a business undertaking. It is not a charitable institution.

You obviously did not understand what I said.

Well, perhaps the hon member did not express himself quite clearly. [Interjections.] Like every other banking institution, the Post Office Savings Bank will endeavour to pay the lowest possible interest rate.

That is incorrect.

You were clearly not listening when I spoke. [Interjections.]

Mr Speaker, the greatest problem South Africa has in regard to its labour force specifically lies in the fact that for many years there has been a shortage of technically trained labour in this country; so much so that the country’s growth has largely been hampered. This has, of course, also given rise to a tremendous labour turnover and to pressure being exerted for increased salaries. Employers were consistently being forced to pay higher salaries, the result being that production costs were accordingly increased. The Wiehahn Commission gave attention to this problem. This in turn led to the labour legislation passed in this House during the past two or three years. As a result the Government has been spending millions of rand annually on the technical training of people.

The State’s problem, more particularly that of the Post Office, which is largely dependent on technically trained people to carry out various tasks, lies in the very fact that there is a tremendous shortage of such workers.

A further problem is that the Post Office spends thousands upon thousands of rand on the training of technical people. As soon as the Post Office has trained its people, they are lured away by the private sector. The reason for that is obvious. The salaries of the technical staff of the Post Office have simply never been market-related salaries.

With the occupational differentiation, and the benefits to the staff that have resulted from that, this problem has been solved. The amount of R38,2 million, which comprises part of the amount of R133 million—Item 1 on the Additional Appropriation—is being employed for benefits resulting from occupational differentiation.

The tremendous benefit that has resulted from this is that for the first time—as far as can be ascertained—there have been no resignations in Post Office technical staff from 1 April 1983 until now. Not only were there no resignations, but there was an increase in staff in the technical division. The tremendous advantage of this increase in technical staff in the Post Office is that the one major complaint, heard from year to year, ie that in connection with the telephone shortage, has to a certain extent been dealt with. Unlike the problem experienced by the SATS, which must make tremendous capital investments and then wait for freight until they can make a profit on them, the benefit of this is that the Post Office is in the fortunate position that as soon as a telephone is installed—it costs R150 per telephone—it generates revenue which is inevitably of tremendous benefit to the Post Office.

Occupational differentiation costs the Post Office money. Merely in the case of this Additional Appropriation it is costing an amount of R38,2 million as far as the technical staff are concerned. It is, of course only for this one year, and in the years ahead the amount will be repeated. This expenditure, however, embodies tremendous benefits for this fine business undertaking in which intimately affects us all.

Mr Speaker, in his speech the hon member for Hercules referred to the speech of the hon member for Nigel, saying that he had not expressed himself clearly. I just want to tell the hon member for Hercules that I do not think he understands what the hon member for Nigel meant. The hon member for Nigel asked the hon the Minister for an investigation to be instituted to find out whether the interest rate paid by the Post Office Savings Bank could not be increased. If this could be done, that Post Office Savings Bank would become a more attractive proposition. No one would invest his money in the Post Office Savings Bank at 5% interest if he could get 15% elsewhere. That is where the hon member understood the matter incorrectly.

I understood it correctly. I spoke of competitive interest rates. The Post Office Savings Bank cannot pay a higher interest than any other financial institution.

The hon member for Hercules has definitely not yet determined what the interest rates of the Post Office Savings Bank are. It is true that in the past the Post Office Savings Bank tried to obtain more or less 5% of the total money flow to out financial institutions, but I do not think we are near the 5% figure at the moment. If that is not the case, I should like to know from the hon the Minister what percentage of the total amount of savings that are invested, are invested in the Post Office Savings Bank.

I want to link up with previous hon members and also express my thanks to the department and all its officials for such a brilliant annual report. This year is not the first time we have obtained such an annual report from the Post Office. I want to emphasize the fact that it is gratifying to receive a report that contains such a comprehensive spectrum of information. Over and above that, it also makes for interesting reading. This evening one can go and lie flat on one’s back in bed reading the report. It really makes interesting reading. Why is that? Well, the hon member for Hercules also referred to the fact that a few years ago the officials worked half an hour per day overtime—I think it was actually several hours per week—without any extra remuneration. Here one has a case of casting one’s bread on the waters and having it return after many years. I think it is a good thing that there were salary increases and the occupational differentiation adjustments. They were really earned.

I should like to know from the hon the Minister whether occupational differentiation has now been implemented throughout the Post Office. Are there perhaps still certain sectors in the postal service or in the telecommunications division in which it has not yet been implemented? I really do hope that it has been implemented throughout.

We are in the fortunate position of having had a staff increase. I notice from the annual report that over a period of six months there was great improvement. The period of six months covers only the first half of the year, and if the Post Office can keep that up, we shall not only succeed in retaining staff at the middle and lower levels, but what is particularly important, also the staff at the highest level, and of course the technical staff. One of the reasons why the Post Office has achieved such magnificent results in recent years is that we have not lost many of the people at the management level through retirement on pension or through their being lured away by the commercial sector. That is something we must be very grateful for.

There is something else upon which I want to focus the hon the Minister’s attention. When the budget was introduced on 15 March last year, the expected operating surplus was R185,3 million. At that stage the hon the Minister told us that the self-financing of capital works would amount to a figure of 41,5%. I know that the aim is 50:50, and it also accords with the Wiehahn Report issued at the time. That must, of course, be the Post Office’s aim at all times. If we look at the Additional Appropriation, at the figures, we notice an amount of R133 000 000 in regard to staff alone. If we add the other amounts, the total of R175,9 million, and we take all this out of current revenue, there is going to be very little left of the estimated surplus we had. What is the hon the Minister going to do in that regard? The additional revenue of R31 million will only constitute a small percentage. I do hope, however, that by 31 March of this year the revenue will be such that the self-financing percentage on capital works will not decrease so much that there is almost nothing left. Is there going to be a further reduction on the capital programme? We do not have it in front of us now, but the hon the Minister can please tell us whether it is a curtailment of capital, because that would facilitate matters. We would not like to see the Post Office’s self-financing percentage decreasing.

I should now like to refer to a few other matters, most of which have already been referred to by other hon members. The hon member for Umhlanga referred to productivity. The fact that this Additional Appropriation is so small, proves to us that a high level of productivity is being maintained in the Post Office. In this respect I want to join other hon members in paying tribute to the staff of the Post Office, not only in the telecommunications division, but also the postal services. It is a fact—and I have said this in the past—that the Post Office is one of the most important institutions in South Africa. If there are no telecommunications services, everything comes to a standstill, whether it be the Defence Force, the Police or whatever. I am afraid that the public does not always appreciate the importance of the Post Office in their lives. During the early sixties it was my privilege, as a member of the NP study group, to lodge a plea with Dr Dӧnges for the Post Office to become an independent body, and that is what happened in 1968 when the Post Office became completely independent of the Public Service. Since then it has been able to collect its own money and draw up its own budget. The Post Office made rapid strides, and as a result has meant a great deal to South Africa. The Post Office was then no longer being milked. Previously the Post Office handed over its profits to the State, and the Department of Community Development was very niggardly in its allocation of funds for the erection of post office buildings and so on. I think that today we can regard the fact that the Post Office became independent in 1968 as a brilliant step in the right direction. It greatly contributed towards putting the Post Office where it is today. The dedication of the Post Office staff also contributed greatly to this.

I want to thank the hon the Minister for this Additional Appropriation. Having said that, I want to add that the hon the Minister must just please not increase tariffs in his budget later this year. I do not want to anticipate the budget, but it has become virtually a daily occurrence, on opening the newspaper, to see that some or other tariffs have been increased. In today’s newspaper, for example, there is a report that third party insurance is being increased. The hon the Minister says that the Additional Appropriation adds only 5,9% to the original Estimates, but certain infrastructure must, in any case, be budgeted for. One must, for example, budget for the upswing in the economy. I want to ask, however, that this be done without increasing tariffs. In my opinion it can be done. In the light of this Additional Appropriation, and present circumstances, it seems to me as if it is indeed possible.

I want to conclude by saying that the CP welcomes this Additional Appropriation, particularly since it will, to a larger extent, help to look after the needs of the staff.

Mr Speaker, I should like to associate myself with what the hon member for Sunnyside has said, particularly since he has said a few positive things for a change. He referred to a few relevant matters, for example the staff increase. It is indeed true that recently the Post Office has increased its staff complement, particularly in the sphere of key personnel. Here I particularly have in mind technical staff which the Post Office is definitely going to need when an upswing in the economy comes along. It has already been said that the Post Office cannot wait until there is a demand before it starts planning for it. It must be ready to deal with the demand as soon as it occurs.

I should like to make a few remarks about the technical staff of the Post Office. Yesterday we heard of the flood-ravaged areas. It is said that the Post Office staff worked through the night for nights on end and that within a very short space of time they restored the communications systems in the areas where they had been damaged. I think that everyone in South Africa must give them a vote of thanks for such dedication. Such officials are officials one is glad to have close at hand. I want to use an expression “Follow them blindly into battle”, because I would blindly follow the Post Office’s technical staff into battle. The type of work that they do is of particular importance to South Africa and all its inhabitants. They furnish exceptional service, and we must thank them for it.

As far as tariff increases are concerned, I want to tell the hon member for Sunnyside that at the moment we are engaged in a completely different exercise. Let us cross that bridge when we get to it. Certain circumstances require certain approaches. When we discuss the Post Office Budget on a later occasion, we can discuss certain relevant matters with one another. I do not think this is the appropriate time or place to discuss tariff adjustments and so on with one another, because at this stage we do not have all the facts before us.

What we have before us is a brilliant, highly praised and controlled budget. It is always difficult to draw up a budget and, at the end of the budgetary period, still end up within the limits of that budget. Here we have a deviation of 5,9%. If one looks at the extent of the budget, one realizes that 5,9% is a very small figure. One must also look—and this has already been mentioned—at what caused this. The additional expenditure relates to aspects that could not be controlled or foreseen. These were chiefly in the sphere of staff, involving increases over which the Post Office did not have any control. Given that, we have here an exceptional achievement on the part of the Post Office management. Any management’s achievement is gauged by the extent to which it operates within the parameters of a particular budget, both income and expenditure. It is not an art to work within net profit or loss parameters if, when either the income or expenditure goes out of control, one simply supplements the one with the other. Here, however, we have two sets of data that correlate with each other, and I think we can talk here in terms of very good management, and we want to congratulate the top management of the Post Office on that achievement.

An interesting situation presents itself here, in the sense that more interest had to be paid on savings that the amount budgeted for. This resulted from the fact that more money flowed in than was expected. Many reasons have been quoted to account for this. In wanting to use a certain word, the hon member for Nigel almost made a slip. It immediately put me in mind of the situation the Post Office had landed in. He almost said “ingawes”, but then corrected himself. If he had used it in that context, it would have been fitting, because the money that came in brought “uitkomste”. In the process there was greater expenditure and the “uitkomste” gave rise to “uitgawes”. I think the Post Office has created two new words, “ingawes” and “uitkomste” on the balance sheet.

The expenditure was chiefly in the field of staff, and I just want to make one remark about that. The Post Office has approximately 90 000 people in its service. That is a formidable staff. The wage accounts runs to approximately R800 million. If we bear in mind a budget of R800 million and if we look at certain things that can happen and are beyond our control, in looking at the amount before us we can again tell the management, with a great deal of gratitude, that that, too, reflects good management and is a fine achievement. As other hon members have remarked, the management of the Post Office and the hon the Minister deserve our thanks. There is a great deal of appreciation for the way in which the hon the Minister is handling the affairs of the Post Office. The officials of the Post Office tell us he has a firm grip on the “handles” and knows what is going on in the department, and they are very grateful for that.

I want to make a few remarks about extensions in my town, Springs, for which I am very grateful.

Where is that?

It is an exceptional spot where, at one time, there were the largest number of gold mines at any one spot in the world, if the hon member for Paarl does not know that. The Post Office decided to establish a new regional office in Springs, an office that would commence operations from 1 April. Mr C J Visser, who was the regional director in Kimberley, has already been transferred there as senior regional director. He is already engaged in planning the staff situation there. There will be 206 post offices falling within the ambit of this new regional office. There will be 342 000 trunk-line telephone services, with a staff of approximately 7 700. We suspect that there are going to be a few hundred people working in this regional office. I want to tell the Post Office that the people of Springs are ready to receive those people. We are also certain that the growth taking place in the Eastern Transvaal has not gone unnoticed by the Post Office and that as a growth point in South Africa the Eastern Transvaal is so important that the Post Office is also ready, in advance, to decentralize and polish up its services to such an extent that it can provide for the new development there. It is with great expectation that we look forward, as a community, to being of service to the Post Office and also receiving its services in the Eastern Transvaal.

We have great pleasure in supporting the Additional Appropriation.

Mr Speaker, it is pleasant to be able to follow the hon member for Springs and to be able to say how nice it is to agree with all the complimentary remarks he has made about the Post Office. In the past I found myself at odds with that hon member, mainly at the hustings, but it has been pleasant this evening to be able to listen to his positive speech.

There is not much left on this bone, Sir. However, there are a couple of comments I should like to make. The first is that this debate has been conducted in a very pleasant, amiable and happy spirit. I just hope the message has got through to the hon the Minister. The main reason, no doubt, is that there have been no tariff increases. If the hon the Minister has accepted that message this evening and he comes back next month with the main Budget, again without tariff increases, he can expect it to have a similar easy passage through the House. On the other hand, he might find that he is able to come back with a reduction in tariffs. That would make him a very popular Minister indeed. Seven cents per telephone unit is like 7% GST. It is an unhappy combination of figures. If he finds that he can reduce that figure, I am sure he will be a very popular Minister indeed. He may be able to bring us some happy news later this evening when he replies to this debate.

It is a very modest additional appropriation representing, as has been said, an increase of 5.9%. It is modest compared with the current national inflation figure of more than 11%. One can say that the state of affairs in the Post Office is reasonably satisfactory. There is no doubt about that. I think it is appropriate to commend the Postmaster-General and all his staff—I repeat: all his staff—for the able and competent way in which they have managed the affairs of the Department of Posts and Telecommunications. I must say that I personally have enjoyed nothing but courtesy and assistance from members of the Postmaster-General’s staff. For this I am most grateful. That is not to say that there are no problems, but I do not believe that this is the occasion to raise those problems. We shall come back to them at a later stage.

Let me turn to the details of the Additional Appropriation. As regards the amount required for staff expenses, I too am pleased to note that the introduction of the Patterson method of job grading has been accepted. I am familiar with this method, I am satisfied that it is the most acceptable way of evaluating job performance, and I am pleased that it is being used in the Post Office. If the Post Office is to continue to be run as an efficient business, which is what we all require and want of the Post Office, it is important that we employ the most competent, efficient and reliable personnel. If for no other reason therefore it is essential that we should use an acceptable and well-tried method of job evaluation.

I should like to raise two other matters. The one has been explored in great detail, that is Sames. I must say that I an most decidedly in favour of private enterprise involvement in Post Office affairs. On two occasions last year I raised the matter of moderns. There is nothing in this Bill which makes it necessary to raise that matter again, but I made it quite clear last year that the more private enterprise involvement we have in Post Office affairs the better it would be for all involved. No doubt we will also get involved with that matter in the main budget. The reason why I say that the Post Office should become more involved with private enterprise is because of the capital demands that are made by the Post Office. They are so great that it is important that we make the utmost use of outside suppliers. Speaking of capital demands, it is pleasing to note, as many hon members have noted here this evening, the increase in the deposits in the savings department of the Post Office as this will provide a great deal of working capital for the Post Office. I simply want to say in passing that this is a most positive development.

Finally, I should like to raise one item, possibly in a lighter vein. I do not expect an answer from the hon the Minister this evening but he might do so at a later stage. He might recall that about two years ago my colleague the hon member for Houghton paid a visit to Moscow and sent a postcard to the hon the Minister of Law and Order. To my knowledge that postcard has not yet been delivered. Towards the end of last year I was in Europe. I was pleased to be in Berlin. I went across by bus to East Berlin on a day trip and I sent a number of postcards to some of my friends. I decided to send postcards to my colleagues the hon comrade for Turffontein and the hon comrade for Stilfontein. [Interjections.] To the best of my knowledge those postcards have not arrived. All I want to know is whether it is the South African Post Office or the chaps in East Berlin who do not send these postcards on.

A red letter!

Yes. The postage stamps were given to me by the courier on the bus. I did not write complimentary things about East Berlin but I was hoping that my comrades the hon member for Turffontein and the hon member for Stilfontein would receive these postcards. I hope in due course the hon the Minister will be able to tell us what happens to post from behind the iron curtain.

Finally, we support this Bill. We are happy with the performance of the Post Office and we look forward to the hon the Minister’s reply, particularly with regard to tariffs.

Mr Speaker, right at the outset I wish to express my thanks for the way in which all the hon members conducted this debate. I refer in particular to the hon member for Hillbrow, the hon member for Umlazi, the hon member for Nigel, the hon member for Boksburg, the hon member for Umhlanga, the hon member for Alberton, the hon member for Bezuidenhout, the hon member for Hercules, the hon member for Sunnyside, the hon member for Springs and the hon member for Johannesburg North.

†I must say that when I was listening to the hon member for Umhlanga I recalled the famous speech of Mark Anthony when he went to the funeral of Caesar. If hon members will allow me to adapt it somewhat, it sounded as if he had come here “to praise the Minister and not to bury him”. [Interjections.] I am grateful for all the remarks that were made.

*In particular I want to express my sincere thanks for remarks made in connection with the Postmaster-General and the staff of the Post Office. I wish to convey my personal thanks to the Postmaster-General and the three Deputy Postmasters-General who form the top management, and to the parliamentary staff who are employed in the Postmaster-General’s Office, as well as my own office staff, for the hard work they have done in the course of the year and are still doing, in drawing up this additional appropriation. I think it is as well that good things are said from time to time about a good staff and a good department. I must honestly say that I had not expected so many good things in the course of one evening, nor that the Minister, too, would sometimes be included. I do not wish to appear conceited, but the hon member for Umhlanga said that it appeared as if I was going to be here a long time. Later this year a new State President and a new Cabinet have to be chosen, and therefore it would be conceited of me to say that I would be introducing the next budget in this House. That will depend on what happens in future. What is certain, however, is that the department will continue to exist. With the present management the affairs of the Post Office will run smoothly and the other population groups will also have the opportunity to see how the department functions. The department is in fact a service department, and I think it was the hon member for Sunnyside who said that it was a happy day in 1968 when it became a business enterprise, no longer dependent on the Minister of Finance or the Department of Public Works. Since then the department has developed into a flourishing business enterprise. On a previous occasion I mentioned that the Post Office had a turnover of R10 billion per annum, and I do not believe there are many business enterprises in South Africa that could equal that. I therefore extend my cordial thanks to hon members for their contributions and also for their praise of the staff. It is praise they undoubtedly deserve.

On this occasion I should like to pay tribute to our staff in the areas where the floods took place, particularly in Natal and Eastern Transvaal, and in particular I want to thank our regional director in Natal together with his staff, because they performed wonders there. Within a few days after the disastrous floods, that caused damage to Post Office property estimated at more than R1 million, the staff there began restoring the services. Apart from the places which have recently suffered damage for the second time, the main lines were restored within a few days.

†The staff made use of a helicopter to install a cable over the Umfolozi River in an effort to establish a connection between the flood-stricken area and the rest of Natal. I wish to convey my sincere gratitude to those employees.

*I received a very civil letter of appreciation from the chairman of the ad hoc Cabinet Committee, the hon the Minister of Environment Affairs and Fisheries, which I shall pass on to the Postmaster-General who, in turn, will convey it to the staff. The hon member for Springs says that he is prepared to go to war with people of this calibre. I find that quite interesting, because at present peace is being made in various spheres. I hope, therefore, that the hon member will not have to go to war with the Post Office staff, because we sorely need them for our own work.

Before dealing with the points raised by hon members, I wish to point out that differentiation and job evaluation will be proceeded with for a time, because the hon member for Sunnyside and other hon members have asked whether differentiation and job evaluation have now been concluded has not yet been concluded, but I said in a statement that it did not matter when we disposed of job evaluation and differentiation. The staff that are eligible for this will be given the benefit of it with effect from January 1984. They will therefore be given a back payment, and accordingly the problem ought not to arise that one person is evaluated six or seven months after another employee and as a result loses seniority or money.

†We decided upon this to ensure that an employee will receive back pay from 1 January 1984 irrespective of when during the year his job evaluation is completed. We believe that this arrangement would be fair to everybody concerned, and in the meantime we need not rush matters in order to complete job evaluation before a certain date.

*There will still be considerable expenditure in this connection but that will be covered in the Main Budget.

†Once again a special word of thanks to all hon members who took part in this debate. The praise I got from the Opposition parties sounded like the kiss of death, but I take it in good spirit. They said they would keep politics out of Post Office matters if we did not bring politics into discussions regarding the Post Office. We will each do our best and watch one another carefully.

The hon member for Hillbrow and others stressed that we only need 5,9% more. However, I want to tell all the hon members who took part in this debate that one should actually analyse the R175 million.

If one then takes off the R20 million interest plus a further amount of R20 million for the redemption of loans, which we could not possibly have foreseen, we are left with R135 million. If one then takes off R133 million, which represents the actual job evaluation and increase in salaries—which we could also not have foreseen in our original budgeting—it appears that we were only R2,6 million off the mark. For this I give full credit to our financial planners. The R2,6 million relates of course to Sames. The amount of R5,9 million is also correct indeed. When one takes into account, however, the amount by which we were out in our original budgeting—I am not referring now to the unforeseen amounts—it appears that it is only a matter of R2,6 million on an amount of more than R3 000 million. For this achievement I give full credit to our financial experts and to the Postmaster-General for their exceptionally good control over the finances of the Post Office during the past financial year.

The hon member for Hillbrow, the hon member for Bezuidenhout, as well as the hon member for Johannesburg North and the hon member for Umhlanga, were all very upset when I increased tariffs last year. If I had not done that at the time the results would have been disastrous because the Post Office would have shown a deficit of between R236 million and R240 million. One cannot run a business, provide a decent service, install thousands upon thousands of new telephones each year, and then never increase tariffs in a businesslike manner. The hon member for Bezuidenhout should be able to appreciate this. He is after all a businessman who has already established viable business undertakings. He surely did not accomplish that by reducing the prices of his products in order to effect a savings. [Interjections.]

[Inaudible.]

I do not want to talk about the coming Budget now.

Why can the hon the Minister of Finance not do as well as this?

Comparisons between the hon the Minister of Finance and myself do not really impress me. His job is much different from my own. I have to run the business of the Post Office by exercising control over tariffs and also by obtaining certain loans. Furthermore I have to watch over the infrastructure of only this one department. The hon the Minister of Finance has to watch over each and every department of State, all of which are making big demands on him. He has to satisfy the needs of all those departments.

One cannot, for instance, compare the provision by the Post Office of telephone services with such major priorities as the provision of houses, hospitals, roads, etc, for all of which the hon the Minister of Finance has to bear the final responsibility. Whether hon members agreed with what the hon the Minister of Finance said here in the House this afternoon, I believe, is immaterial. I submit, however, that he was the perfect example of a man who knew exactly what he was talking about when he explained exactly how the Government was going about accomplishing the correct financial discipline. [Interjections.]

I know perfectly well that we do not have the same kind of duties to perform. One thing is quite certain, however. That is that the Post Office is financially healthy at the moment. As long as I remain in this position, I hope to maintain this healthy situation; with the assistance of course of the Postmaster-General, his deputies and the staff of the Post Office. I hope to be able to maintain this healthy state of affairs irrespective of whatever measures circumstances may compel me to take.

I also said in my Budget Speech last year that I would not increase tariffs without first putting it before Parliament. I also took the unprecedented step of telling this House exactly what I intended to do during the coming financial year. I suggest to the hon member for Hillbrow that he should read my introductory speech again. He really does not have to be a prophet. Merely by taking note of what I said then he will get a pretty good idea of what the Post Office Budget will have in store for us during the next financial year.

A number of hon members raised similar points during this debate. Without dealing with each hon member individually, safe for one or two special matters, I shall try to reply to all those points as best I can.

Firstly I should want to refer to the question of interest rates. This is a matter which we are constantly discussing with the hon the Minister of Finance and also with the Treasury.

*We are not trying to take the lead in this sphere. It is by no means our aim to acquire for ourselves the financial investments of the entire country. At present the Post Office is the holder of approximately 3,7% of the total amount of savings in the country. We are striving to reach the 5% notch. Therefore it is clear that we can never compete in this field with the building societies, banks and other financial institutions. Nor is it by any means our intention to compete with them. However, we discuss the interest rate with the hon the Minister of Finance from time to time. In fact, we are engaged in such discussions with him at the moment.

We did have problems two years ago with an unusual outflow of money from the Post Office Savings Bank. In this regard the hon member for Hillbrow wanted to know from me why we had budgeted so badly as to have made provision for a mere R50 million. The problem arose, of course, in that a difference had occurred between our interest rate and that of the building societies. As a result people withdrew their money from the Post Office Savings Bank and transferred it to the building societies. Before we were able to rectify the problem, investments in the Post Office Savings Bank dropped from R140 million to R100 million, and even lower. When we had to budget, we had not yet rectified the interest rate. We would have been very stupid to budget for a few hundred million had we realized that investments were dropping and we were close to the figure of R50 million. We then only asked for an additional amount of R50 million, but we also increased the interest rate and collected the money.

One could perhaps refer to the Post Office Savings Bank as the poor man’s bank. It is the bank for a man who invests small amounts every month and withdraws when he wants to buy something in a hurry. Such a person has no problems with regard to fixed investments. He need only bring his booklet with him and draw his money. He need not be an expert in the financial sphere, as one has to be with regard to some investments. It is said that in other countries where recessionary conditions are being experienced it was an interesting phenomenon that the less well-off man was the man who saved. It was not the man with the two motor-cars and a big house. Those people simply carried on, their standard of living remained high and their debts grew. However, the man who was worse off invested his money and that is why we have collected this amount of R320 million. As all hon members know, we are of course extremely grateful that we were able to collect that amount. At present the interest rate on Post Office Savings Bank accounts is 6,5%. As far as the savings certificates is concerned, it is 9,5% and in the case of the national savings certificates it is 9,75%.

†This is the one that is tax free. We are investigating this whole question at the moment.

Cannot you match the rate of inflation?

It is not quite as easy as that. We also have to see what other organizations are doing. In fact, the building societies are very upset that we still have this tax-free investment at 9,75%. The fact remains, however, that we only receive 3,7% of total savings which should not worry them in the least although it means a great deal to us.

*Last year during the discussion of my Vote and elsewhere I said that it was better to run this kind of undertaking by announcing a small increase every year rather than to announce no increases for four to five years and be popular whereas one’s successor has to increase tariffs. If one occupies the post, one has to do it oneself at some stage. It is simply impossible to provide the services, it is simply impossible to install 250 000 to 260 000 telephones every year, without having the money to do so. We now have the staff and we built up our work teams. We have also improved our infrastructure this year and we are engaged at present in installing 1 000 telephones every working day. We hope that this will augment our revenue considerably, and our technical people are geared to installing those additional telephones. Over a period of two years we have installed more than 500 000 telephones and we already have more than 3,5 million telephones in the country, and we are only a developing country.

†The hon member for Hillbrow mentioned the question of the two additional Houses. I do not foresee any problems in that regard. If I am still Minister at that stage I will find no problem in going to the other two Houses and explaining the Budget to them. In fact, all our staff are on a single salary scale so I do not foresee any problems when we approach the other Houses in having that factor as a bone of contention.

*I also wish to thank the hon member for Umlazi for his support. Since the hon member is also chairman of the group, I wish to thank him and his group for their assistance as well. The hon member put the three important points in regard to this Additional Appropriation very effectively and I do not wish to repeat them.

As far as the hon member for Nigel is concerned, I have already mentioned that we shall watch the interest rate. I also wish to thank the hon member for his support. I just wish to say that at one stage I heard a remark that the hon member should be reminded that it was not the CP (“KP”) that he was discussing but the PO (“PK”), the Post Office. [Interjections.] I want to thank the hon member for his contribution.

The hon member for Boksburg raised very interesting points. He made an earnest appeal for debates on the Post Office to be conducted at a high level. I thank him most sincerely for that.

†I think I have replied to most of the questions asked by the hon member for Umhlanga except possibly the Sames issue. I shall deal with this in the Main Budget. There are many things happening at the moment. Certain negotiations are being conducted and I think now is not quite the time to say anything in this connection. When we consider the Main Budget I shall devote more time to this issue.

*I am also very grateful to the hon member for Alberton who gave an explanation of Sames and brought the value of the integrated circuit and the silicon chip to the attention of this House. In fact this is the physical heart of the electronics industry, but one must have the necessary knowledge of designing, and if one has that one can do everything. That is where Sames comes into the picture.

†The hon member for Bezuidenhout also referred to Sames, but as I have already indicated we shall deal with that issue at a later stage. He made inquiries about certain amounts. The amount invested in Telebank is R9 million at the moment while the amount invested in our Savings Bank and National Savings Certificates is about R2 000 million at present. We have a continuous monitoring process as far as our productivity goes. I think the Main Budget will be the appropriate time to deal with the exact steps which we are taking with job evaluation. I think it would take too much time if I were to deal with that issue on an evening like this. As far as building loans are concerned, the hon member will realize that legislation on the payment of perks tax is not yet on the Statute Book, but the hon the Minister of Finance has already indicated that the necessary steps will be taken soon. I understood that people with incomes below certain levels will not have to pay tax on perks, but I think further discussions in this regard should rather take place when we consider the Main Budget.

*I thank the hon member for Hercules for his contribution. The hon member for Sunnyside also said a few interesting things and as he rightly pointed out, we shall not manage the 41% self-financing this year. The hon member had better listen to my Budget speech in March because in the course of my speech I shall indicate what percentage I hope to achieve. If we wish to install new services, we must have money. We cannot prune our capital programme now and if we were to prune it, I do not think there would be many hon members coming back to the House with the same majorities, whereas, some may not come back at all. Hon members who have people waiting for telephones in their constituencies who cannot guarantee those people that they will indeed receive telephones, will find that things will be difficult for them. I am grateful to the hon member for Springs for the information he provided. I could point out to him that decentralization does form part of our policy. Decentralization facilitates housing and it creates the opportunity for our staff to move out of an area like Pretoria or Johannesburg, where they are unable to obtain accommodation, to Springs, for example.

†I think I have replied to most of the questions raised by the hon member for Johannesburg North. He referred to the formula which we use in job evaluation, but I can inform him that we have experts in our department working on this in an effort to get these things properly co-ordinated. He also referred to the question of postcards posted in Moscow and East Berlin. Well, I do not know, but once the hon the Minister of Foreign Affairs has made more progress with his peace initiatives, perhaps we can ask him to take this up with Moscow to find out what has happened to the postcards. We certainly do not have them; they may be somewhere else.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr Speaker, I move:

In the Bill now before this House a number of amendments are being effected to the provisions of the Public Service Act, 1957 (Act 54 of 1957), to make provision for greater adaptability in the membership of the Commission for Administration, and to ensure that more recent information on the activities of the commission is presented in its reports to Parliament.

Without delving too far back into the past, I want to point out to hon members that section 4(2)(a) of the Public Service Act, 1957, provided upon its commencement that the commission should consist of five members. The relevant section was subsequently amended in 1970 to make provision for a commission consisting of not less than three and not more than five members. In 1976 the Act was amended once again to limit the membership of the commission to only three members.

As hon members are aware, the State President, in terms of section 5A of the Public Service Act, 1957, assigned specific matters concerning which the commission was required to make a recommendation or give a direction by proclamation to Ministers and Administrators, with effect from 1 July 1983. As was to be expected, this step had a material effect on the commission’s role and mode of operation, as well on the scope of its activities. In the first place the conferring of greater managerial independence on departments considerably reduced the number of discretionary decisions that had to be taken by the commission from day to day. The commission subsequently concentrated to a greater extent on the determination of policy and on its control functions. During 1983 four standing committees made up of departmental heads were established to assist the commission and to participate in the activities of the commission on a continuous basis. Consequently the commission will in future have an important additional source of knowledge and experience at its disposal, on a continuous basis.

The envisaged amendment as contained in clause 1(a) of the Bill seeks to ensure greater flexibility in the composition and functioning of the commission and is in keeping with the positive managerial approach which is at present being applied in the Public Service. Since the development work in connection with the integration of the commission into the new constitutional dispensation is at present in full swing and it is not possible at this early stage to determine what effect this is going to have on its functioning and the scope of its operations, it is not possible either to determine accurately at this stage what the membership of the commission will have to be. Consequently we feel that greater flexibility should be introduced and that a membership of not more than three members will provide the necessary adaptability for any set of circumstances. However, the Bill also makes provision for reducing the membership to only one member.

Clause 1, specifically paragraphs (b) to (d) of the proposed new subsection (2), and also clause 2 contain provisions aimed at continuing to vest the power to appoint a member of the commission in the State President, at making provision for a chairman of the commission if the commission consists of more than one member, at ensuring that serving members of the commission automatically become members of the reconstituted commission if the membership of the commission is reduced, and at laying down by law the quorum required for decision-making by a commission which consists of more than one member.

†While discussing the commission’s vote during the 1982 Parliamentary session, criticism was voiced, particularly by members of the official Opposition, concerning the fact that the period covered in the commission’s reports to Parliament stretched from 1 July of one year to 30 June of the following year. This resulted in the information published in these reports already being 10 months old at the time of their tabling in Parliament.

Section 6(2)(n) of the Public Service Act, 1957, is now being amended by clause 3 of the Bill under discussion to make provision for the commission’s reports to cover one calendar year. Future reports of the commission shall be laid upon the Table during the first session of Parliament after the end of the particular calendar year. The commission’s report which will be tabled during this session of Parliament will already contain particulars of matters dealt with during the year ended 31 December 1983. Understandably provision should also be made for the transition from the old to the new arrangements and this is also covered in the clause under discussion.

I trust that the provisions of the Bill under discussion, as well as the objectives which are aimed at, will be acceptable to the House.

*In conclusion, hon members will permit me to make an announcement on a matter-which is related to this Bill.

Hon members are aware that the Cabinet, in co-operation with the Commission for Administration, has launched a programme of action aimed at the reform and renewal of the Public Service. This programme, which, inter alia, contains the principle of classifying the officials into occupational groups and determining market-related remuneration, has shown itself to be a satisfactory one. As part of this programme, and with a view to the positive managerial approach which is now being adopted, the top-level structure in the Public Service was subjected to urgent scrutiny.

It is with pleasure that I am now able to announce that the Cabinet approved of a new dispensation for the top-level structure with effect from 1 January 1984. The effective implementation of the Government’s policy and state administration requires skilful and capable officials. There should be an effective and dynamic management at the helm, and for that reason the application of the new dispensation to existing office—bearers will not be automatic. Every incumbent of every managerial post on the management chart is being evaluated. Only those officials who comply with specific norms and requirements will be able to share in the benefits of the new managerial dispensation.

Furthermore, it has been decided in principle that departmental heads will in future be appointed for specific periods and will not simply stay on until retirement age. Independent investigations have shown that senior officials bear an exceptional burden of responsibility, and for this reason the Cabinet has tried, within financial limits, to bring the salaries of deserving officials closer to a market-related dispensation. At the same time, however, an attempt is being made to promote dynamic management, directed at attaining ever higher standards in Government services.

†With this announcement the programme of renewal has not been finalized. There are several aspects which are still receiving attention, amongst others:

1. (a) The early identification and selection of officers for senior management posts;
2. (b) the establishment of training and development programmes for the different levels of management;
3. (c) greater interchange of top-level personnel between Government and other sectors; and
4. (d) the extension of the principle of fixed terms of office to other management levels than that of Director-General in the Public Service.

In conclusion, I would like to inform the House that the programme of occupation specific dispensation will be continued. The future emphasis, however, will be to maintain the market-related dispensations that have been established. It will be necessary to make adjustments from time to time and it might also necessitate a realignment of structures of certain groups. This maintenance programme does not mean, however, that an entirely new deal will be forthcoming every time an investigation is undertaken. The programme for maintaining the occupation specific dispensation will obviously be influenced by the availability of funds and the demands of other national priorities on the Exchequer.

Mr Speaker, we on this side of the House will be supporting this Bill. It is a very straightforward Bill and deals with the Commission for Administration. We would like to thank the hon the Minister of having taken notice of the request which we made in the last debate on this matter, when we asked that we should be given an up-to-date report so that when we dealt with the Public Service during the Budget, we know what is happening inside a State department.

As regards the announcement made by the hon the Minister, there is not much time now to consider all the details of that. However, as the hon the Minister has announced that the basis will be one of merit and nothing else, I do not see that we can object to that particular principle.

I should like to bring one particular matter to the notice of the hon the Minister. He need not make an announcement on this today, but I think it is necessary for him to make a statement to the House or to the public regarding certain remarks made by the chairman of the Public Service Association at the last annual general meeting. This deals with the employment of Coloureds, Indians and Blacks in the Public Service. We are about to enter a new dispensation. Parliament is going to have three Houses for Whites, Coloureds and Indians respectively and the members of Parliament are going to be equal in status. In the light of this, the remarks made by the chairman of the Public Service Association require some elucidation by the hon the Minister. The chairman said:

He also said:

I want to know whether that is true or not. The chairman also stated that the Government must, as they were requested to do, state clearly their point of view in the light of the new dispensation. Then he laid down certain points of policy on which he wanted the Minister to make a statement. This is why I say that it is necessary for the hon the Minister to make this particular statement. The chairman said:

The announcement made by the hon the Minister with regard to merit covers that particular point, but I would like to know from the hon the Minister whether that applies to all persons irrespective of colour and whether there will be equal opportunity for all in the Public Service as a whole. The chairman also said that any new approach must not damage the career prospects of serving officials or in any way result in the attractiveness of the Public Service as an employer of Whites being lost. Finally he said that he believed that, if those requirements were fulfilled, the officials would be in agreement with any new dispensation. In the light of that, I think it is necessary that the hon the Minister must tell the Public Service, the public in South Africa and all the colour and ethnic groups in South Africa what the situation is going to be in the light of the new dispensation which is shortly going to come into effect.

We support the Bill.

Mr Speaker, we were grateful to learn from the hon member for Bezuidenhout that the official Opposition supports this legislation. I do want to tell him, though, that if they look around for a while in the various departments of the Public Service they will see how people of colour are already being used to serve their own people and are already occupying many positions. In any event I am certain that the hon the Minister will reply further to that point when he speaks again.

Sir, one almost feels like saying that the Public Service has arrived. With this kind of legislation and the announcement which the hon the Minister made it is very clear to me that, just as in the private sector, we are also concentrating on dynamic management principles now.

I want to compare the composition of the new commission with a private company’s board of directors, which does not need all its members present at a meeting to be able to take a decision. That of course gives the private company that absolute flexibility to carry on and accomplish quickly what it wants to accomplish. The same now applies to the commission, the membership of which is no longer being rigidly fixed. This can only help to ensure that we have more flexibility in the State machine.

In a private company one normally finds that alternate directors are appointed as replacements, one could almost say. We cannot do this in the Public Service, however, because on the Commission for Administration we need persons who are absolutely conversant with what is happening from day to day. If we were to appoint alternate members of the commission it could mean a loss of continuity.

We on this side of the House therefore gladly support this legislation.

Mr Speaker, we on this side of the House also support the statutory amendments contained in this Bill. However, I want to bring one matter to the attention of the hon the Minister. Clause 3 aims at having no more than three members for this Commission. There could be fewer, but no more than three. Clause 4 mentions that there will be three members during the period of transition. Clause 2 also mentions the possibility of three members. I have a problems in this regard, although not as regards the three members. I think there ought to be three, whatever the circumstances in the future. I think three is a very good number to serve on the Commission and to deal with the matter. If there is to be only one person, one can understand that that one person’s decision will be the operative one. If there are three people, clause 2 provides that the decision of at least two people will be operative. However, in line 30. after the first “or”, provision is made that if there are two members and one of them is absent, the decision of the remaining member will be operative. I think the hon the Minister should give his attention to this matter. I do not think it is a very sound provision that in the case where there are two people and one of them is absent, the remaining person is granted the authority and power to give a decision which will be operative and that the other person will summarily have to abide by it. We make provision that in the case of three members, at least two can make an operative decision. I think that in the case of two members, granting this particular authority to one member could possibly be an unhealthy state of affairs in view of the particular authority and power granted to such a person. I would not like to move an amendment to this legislation at this stage, but in view of what I have just said, I do just want to ask the hon the Minister to give serious attention to that particular provision in this clause.

Furthermore, I just want to say that we on this side of the House would like to reserve the right not to react this evening to the announcement the hon the Minister made. His announcement, the second half of his speech, is really detached from this particular legislation and we should like to react to it at a later stage, after we have examined the matter more closely. Suffice it to say that we support this legislation.

Mr Speaker, I must confess that, at first glance, when we looked at the first clause of the Bill, it frightened us a little. I think the hon the Minister has explained and motivated his case well in his Second Reading speech. I should also like to associate myself with the remarks made by the official Opposition regarding the calendar year in respect of the annual report. We believe this is a measure that we can support.

The hon the Minister at the end of his Second Reading speech made some rather startling announcements. I regret that there is very little time available to me to talk on that now. I am sorry that we did not know this beforehand because I think it may have influenced our decision in respect of, shall we say, an arrangement among ourselves regarding the passage of this Bill. The hon the Minister gave a Macmillan-like speech. I would venture to suggest that the winds of change are going to blow through the Civil Service. I would also suggest that it is going to blow cool for some and warm for others. I think it is to be welcomed, and I hope that it is going to introduce a spirit of competition and what one might almost call a spirit of free enterprise into our public service. However, we too should like to reserve our right to comment, probably tomorrow, on the content of the hon the Minister’s rather startling announcement. We want to study the detail of it before we enlarge on our comment. We will, however, support the Bill through all its stages this evening.

Mr Speaker, I should like to thank all parties for their support of this Bill. I realize that the announcement which I made at the end of my Second Reading speech needs to be digested for a while. Unfortunately, I found myself in the position that I had to announce it either here or by way of a Press statement, and I preferred to announce it in the House. However, I do not expect an impromptu reaction on it from hon members of the Opposition. It is true that the announcement introduces an essential change in style with regard to the top-level management of the Public Service, and I am quite happy to afford hon members of the Opposition the opportunity to consider the impact that will have. I believe that we shall have a pleasant, constructive discourse on that subject when we discuss my Vote. Nevertheless, I thank hon members for their support.

†In regard to the hon member for Bezuidenhout’s comments, I should like to point out that there is no basic discrimination between race groups built into the Public Service Act. However, I accept that a policy in this regard is extremely important, and I think that we should discuss this in detail during the discussion of my Vote. Fragmented statements at this stage may create wrong impressions, but one thing that nobody in the service of the State need fear in the new dispensation is that his job security will be affected in any way whatsoever. On the other hand, I sincerely believe that job opportunities will also be created in the new dispensation. However, I think we must discuss this in depth. I have taken careful note of the hon member’s comments and will reply to him in detail when we discuss my Vote.

*I should like to thank the hon member for Stilfontein for his contribution. As far as the remarks by the hon member for Koedoespoort are concerned, I just want to point out that it sometimes happens that a decision has to be taken very suddenly by the commission and very often formal decisions have to be taken as well. However, the hon member can rest assured that in practice, when a very momentous decision has to be taken, it will rather be kept in abeyance until the full commission is present. On the other hand, he must realize, however, that the Bill which he is supporting provides that there may be only one member present, and for that reason it is no disaster if there are two members and only one takes the decision, for in terms of the Bill such a member alone could have constituted the commission. The hon member may rest assured, however, that when there is more that one member, it is tradition and, in fact, sound management as well, that proper deliberation takes place on all matters of decisive importance.

†I think I have already replied to the hon member for Umhlanga. He stressed quite correctly, the importance of the announcement that I made in regard to the style of management in the future, and I think that an in-depth debate in this regard will be extremely enlightening to both the public and the private sector. I thank all hon members for their support of the Bill.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.