Mr Speaker, I move:

Agreed to.

Mr Speaker, as I said on Wednesday of last week, the results of the SATS operations for last year are indeed encouraging. As a result of this improvement the SATS are no less than R623 million better off than they expected to be. This result, against the negative growth of 1983, is frankly impressive, and I believe it is a credit to the General Manager. Although, I must confess, I have always believed it is infinitely preferable to take over an organization at a low point and to be able to build it up from there I believe Dr Grové has indeed had that advantage. I believe though that from now on, to be able to achieve such improved results is going to be considerably more difficult. This, however, is not to say that there is still not considerable room for such improvement, and I am sure that many areas in which such improvement is possible have already been identified by the top management.

One reason for the difference between the budget and the actual result could of course have been inaccuracies in drafting the budget. I believe that, perhaps to a limited extent, this also played a part. The increase in the Railway revenue of 5,7%—or virtually R253 million—was, for example, a very large factor in the improved results. I am of the opinion that this could happen again this coming year. It could well happen that this year’s Railway Budget in terms of revenue is too low, and that there should be an improvement. I shall spell that out somewhat later.

When one looks at the results of last year in more detail it becomes apparent that the harbour services of South Africa, as well as the pipeline services, subsidized Railways to a very, very large extent, and to a smaller extent they also subsidized our Airways. Having said this, in order to show the direction in which we intend to debate this Appropriation, I wish to move as an amendment:

1. (1) the increase of tariffs, and particularly the increase of fares for third-class passengers, and the inevitable effect thereof on the inflation rate;
2. (2) the failure of the South African Transport Services to arrive at a longterm arrangement with the Treasury in regard to uneconomic passenger services; and
3. (3) the excessive protection against private enterprise given to the South African Transport Services by the Government, resulting in unfair competition.”.

Sir, the single largest reason for the loss of the SA Railways is their passenger services. Yet this loss has to be carried because it is the Government’s own actions which have created this desperate need for transportation. In Western Europe the labourer lives close to his place of work but here, by law, we find exactly the opposite. The poorest labour section of the community is moved to a considerable distance from their place of employment, and thus has to be transported at a less than economic fare. Mitchell’s Plain which was created out of the agony of District Six, here in Cape Town, is one example, as is Mdantsane, at a distance of about 20 km from East London. This policy is still being applied and the announced intention of moving the inhabitants of Guguletu and Langa to Khayelitsha makes one believe in the old saying that those the Gods want to destroy they first make mad. Yet the cross subsidization continues. The Johannesburg motoring public in other words pays increasingly for the losses on commuting services.

I should like to turn now to the SA Airways because I said last year that I believed that the Budget of SAA was most unsatisfactory. I also said I believed it should be handled in a more businesslike approach. In the event I am happy to see that instead of losing R120 million, which was the loss budgeted for, we only lost R22,7 million on SA Airways. I do nevertheless believe that that loss is most unsatisfactory, and that in view of a steadily increasing pattern of announcements by overseas airlines of profits being achieved, our results should be better. We have after all in SAA the advantage of an absolute internal monoploly. We have the further advantage of little or no cut-rate competition on international routes. We have also of course, as is the case with Railway passenger services, no disadvantage of having to run routes for socio-economic reasons.

As against this, we do of course have the disadvantage of having to fly around the bulge of Africa to Europe. If one considers fare increases, then from October 1981 air fares have gone up by a massive 127%; in other words an air fare that cost R100 in October 1981 on SAA, will on 1 April this year cost no less than R227. If this is not adding to the inflation rate, I certainly do not know what is. Yet, despite this we still lose R22,7 million. In fact the losses of the SAA over the last five years amount to no less than R272 million. I believe it is time we did better.

To turn now to the Budget for this year, Mr Speaker, I must say that I find it unrealistic in certain respects, and as a result I believe that the increase in fares is far too high, and perhaps even totally unnecessary. The increase will undoubtedly add to the inflation rate, and the cost to the poor, on top of the increase in GST, in the prices of bread and sugar and now in the price of milk, could result in great hardship. Those on fixed incomes, such as pensioners, will also suffer. I still find it difficult to believe that third-class main line fares will go up by 17,5% after they were increased by 10% only last August, yet first class fares go up by only 7,5% and they were not increased last August at all.

When one looks at this Budget, one finds that Railway revenue makes up almost 75% of overall revenue. The hon the Minister tells us that this budget has been prepared against a real growth estimate for the economy of 2%. This compares with a drop in excess of 3,5% last year. On top of that 2% increase we are looking at increased tariffs of 9,5%. Working on the supposition that Railways can better their position in terms of goods transported by 2% and will add an additional 9,5%, we find that revenue for 1983-84 amounting to R4 528 million should grow to R5 057 million in the coming year, if one has the same degree of productivity and efficiency. Yet the Budget is only for R4 921 million. When one considers the improvements that are likely in exports of minerals and ore, when one looks at the figures for the SATS between 1981-82 and 1982-83, we find that the traffic in these ores dropped by no less than 41,51% between those two years. That business should return, and it is very possible that it could start returning in this current year. However, even if we discount it, if we simply take the 2% and the 9,5% increase in fares, we should show at least another R136 million in additional revenue for the Railways of this country.

Let us now take a look at expenditure. We know that there has been a 12% increase in staff salaries and we also know that there is an inflation rate in this country of 10,3%—that was the last figure I saw. It is certainly lower than 12%. However, for the Railways of this country the budgeted expense has increased by 12,35% which is higher than the increase in salaries and the inflation rate, and the overall SATS expenditure budget has increased by 11,88%. If Dr Grové is able to continue to rationalize the employment numbers—I certainly believe that there is scope for further rationalization and I am not suggesting that the hon the Minister should do it in any other way than it was done over the past 18 months—and if we continue to apply business methods and principles and also—to which the hon the Minister has already committed himself—undertake a further inspection of uneconomic areas of operation and uneconomic lines, then I believe that the expenditure budget is once again too high. It is my opinion, therefore, that with the increase in tariffs as announced, the SATS should have budgeted in 1984-85 with the increase in tariffs for a surplus of in excess of R100 million as compared with a deficit which is in excess of R100 million. I think it becomes apparent that the increase in tariffs could at least have been halved.

In terms of this Budget, there is another factor to which I wish to draw the hon the Minister’s attention and that is the additional depreciation caused as a result of calculating depreciation on two bases—firstly the depreciation on original value and secondly, the higher replacement cost. When one looks at the Auditor-General’s report for 1982-83 one finds that an amount of R385 million was charged to Revenue for depreciation on original cost and a further amount of R472 million was charged because of higher replacement value; in other words, a total of R857 million the higher replacement value component of which was 55%. The total depreciation for the year in the Budget we are considering now amounts to R945 million. If the ratio has remained the same, then of that amount R519 million has been deducted from the profits of the SATS which would not have been allowed in a normal business undertaking for tax purposes, yet for tariff increase purposes it is taken into account by the SATS and as a result our fares go up considerably.

The inflation rate as a result of these increases will without doubt be strongly inflationary. This is not just my thought. If one looks at the comments on the hon the Minister’s Budget, which have appeared over the last few days, one finds for instance that the chief economist of the University of Stellenbosch, Dr Stuart, has said that the entire economy would be affected. He said that costs in commerce and industry would rise and that these would be passed on to the consumer. The chief economist of Volkskas has said that the higher tariffs would unavoidably be inflationary. If one listened to the Transport Consultative Committee’s Chairman Mr Masson, one would hear that he said that the increase in tariffs for services already profitable for cross-subsidization was nothing less than a tax on commerce and industry.

I contend that since 1980 the SATS tariff increases have exceeded the inflation rate. I know that the hon the Minister said that over the last 10 years they had not exceeded the growth in the CPI, but let us look at the position since 1980 and let us look at the increases since 1980, and we see that a very different pattern arises. In fact as much as 4% of South Africa’s inflation rate could be directly caused by SATS. It is high time that these increases were brought under control.

If one looks at the Capital Account for last year, one is sorry to see that the amount was exceeded by R48 million. It is not a big figure percentagewise but the vast majority of this—I think all but R3 million—was the take-over of guaranteed lines. I should like the hon the Minister to tell us a little more about this take-over of guaranteed lines and why and how it happened. Why was it not budgeted for in that particular financial year?

As regards the Budget for the coming year, I think Management is due for praise in restricting it to R1 750 million. If one looks at the past history, I believe that is a very realistic figure. I certainly hope that they can achieve it, and I am certainly not unhappy about the amount of money budgeted to be spent. I confess, however, that I would prefer to see something like 35% to 40% of those funds funded from the source of depreciation rather than the amount that is funded at the moment. If one looks at R945 million out of R1 750 million, one finds that more than 50% of the capital expenditure of the SATS is funded by funds coming from revenue because of depreciation.

Just to be parochial for a moment in terms of the Capital Budget, may I ask whether perhaps the hon the Minister could tell us about the electrification of the lines to East London and to Port Elizabeth. This was announced two years ago, but last year it was announced that they would be delayed because of the restriction on spending. Perhaps the hon the Minister could tell us a little more about those matters at this stage.

I should now like to refer to two matters of a more general nature. The first relates to the SA Airways which has turned 50 this year, and 50 years of vigorous growth it has been. Surely, SA Airways is now of age. Surely, it can now be cut loose from the apron strings of the SATS. Does it still need to be under the overall control of the General Manager and the SATS Board? I do not believe so. On the one hand you have an organization which has to perform socio-economic services within the borders of the Republic and on the other hand an organization that can circle the globe in the time a train takes from Cape Town to Durban. The staffing requirements are totally different. The SAA pilot, the engine driver, the air hostess and the Railway steward have different needs. In fact, they could not be more different. Yet we persist in a system which was perhaps logical 50 years ago but is no longer so today. One must ask this question: Are we not running SAA with a Railway mentality? Surely it is possible, even likely, that SAA on its own could improve financially as an organization. I would suggest to the hon the Minister that he considers setting up a committee to investigate this aspect. It should be a committee which is representative of the public and the private sectors and which has representatives on it of the transport services of SATS and of SAA staff associations, such as the Pilots’ Association. This committee should investigate all aspects of the desirability of divorcing SAA from SATS and whether it should emerge as an organization like SATS and submit a budget to Parliament every year or whether it should take the form of a State corporation, such as Escom or Iscor. Who knows what such a move could lead to? Of course one would hope that it would lead to improved profitability. Perhaps it could eventually lead to the sale of shares in SAA to the public. That would result in reducing the public debt and the cost of serving that debt and it would create a further outlet for investment by the South African investing public. A board drawn from the private sector as well as the public sector, might bring about improved efficiency. Privatization seems to be working well in the UK and I understand that British Air is now a candidate for privatization there. Such a move here would, I believe, hold advantages for SAA as well as for South Africa.

The second general aspect I should like to raise concerns a more businesslike approach to SATS instead of a State-protection approach.

Put more simply: Does the consumer use SATS because he has no alternative, or because he actually wants to? At the moment there is still too much stick and not enough carrot. The hon the Minister gave us a warning of this some time ago, actually in his Budget Speech of 1982. He then said:

Now, Sir, if one competes with the private sector on an equal footing—well and good. However, the way in which it is being done leaves room for improvement. The private haulier right round the country is irritated beyond measure by bureaucratic obstacles. Permits are difficult and sometimes even impossible to obtain. There are constant delays and legal advice is sometimes needed to prepare these applications. Expense is therefore the order of the day. Most intercity express hauliers are today operating only because of a Supreme Court injunction, and yet they fulfil a very definite consumer need and are as a result well supported. Now, Sir, as a result of this policy the Minister was able to announce that his road transportation goods service increased by 18,7%, and this in a period of economic downturn. Furthermore, it was directly at the expense of the private sector and, what is more, in the Budget for 1984-85 it is budgeted that it will rise another 15,8%.

I should like to go back to what the hon the Minister said in the past. In 1982 he said that it was imperative that:

In 1983 he referred to the same recommendations and said that those recommendations “be afforded early attention. My colleague the Minister of Finance and I are presently negotiating.” Now, in 1984, we are back to square one. Speaking of the socio-economic services, he says: “This matter is at present receiving the attention of the committee of investigation into the capital requirements and financing policy of the SATS under the chairmanship of Professor Franzen.” For two years the hon the Minister has told us that he was working with the Minister of Finance on the recommendations of Prof Franzen, but now he tells us that there is another committee of investigation under the chairmanship of the same man and that he is waiting for the report. Surely it is time we got off our butts and did something to end cross-subsidization and the inevitable consequences of this system.

As an example, I can mention that I was told last year by Marmion Marsh, that it was cheaper to ship certain classes of goods from New York to Cape Town than to rail them from Kimberley to Cape Town. I have also heard that wood for fruit boxes imported to Cape Town from the USA is cheaper than to buy the equivalent material in Natal and Rail it to Cape Town. I use these purely as examples, but just think of the results this can have with regard to the inflation rate.

Talking of cross-subsidization, pipeline charges in the last two years have increased by 18,3% last year and another 10,3% this year. Profits are budgeted to increase to R213 million, or 43% higher than they were last year. That subsidizes the other uneconomic services. In addition, high tariffs have to be paid for the railage of manufactured goods in order to subsidize passenger services. Inevitably exports suffer. They also suffer because of higher harbour charges. One notes that harbour charges are going up 11,3% this year, while it is already a profitable service.

For all this I do not necessarily blame the SATS. They are patently embarked on a far more business-like approach. I believe the blame lies squarely at the Government’s door. They have committed themselves to a stronger free market system; yet they continue to regulate transport even more strictly than before. In the words of Charles Hamersma, an economist of the Standard Bank, “regulations are the cause of, rather than the solution to the transport sector’s problems”. The Government says one thing, and does another. It talks of free enterprise, but then follows a Karl Marx communistic principle of trying to keep transport in the hands of the State. This Government’s commitment to free enterprise will be seen more clearly in its actions with regard to transport over the next two years than in any amount of fine speeches.

Mr Speaker, we have already congratulated the hon member for Port Elizabeth Central on his appointment as chief spokesman of the PFP on transport affairs. The hon member made a few remarks at the beginning of the debate on Wednesday, but he was very careful this afternoon not to examine those remarks too closely. On that occasion he said that there were actually two aspects of the Budget which interested him. The first aspect was the fact that the SATS was managed according to business principles. He congratulated the hon the Minister and the management on having been able to convert a deficit of more than R600 million into a deficit of only R11 million. The hon member also said that there was another aspect which should be mentioned, namely the political aspect, or the tariff increases. So the hon member was in favour of the business aspect and the changes which had been introduced, as well as the exceptionally good process of management which had been followed, but the political aspect, namely the increase in tariffs, should not have happened, according to him.

It was interesting today to note once again that the hon member did not say a word—as far as I can recall—about the fact that there had been salary and wage increases for the employees. These increases amounted to 12% in the case of salaried workers and 12% in respect of pensioners, if the 2% statutory increase is included. I now want to know from the hon member whether he and his party are only in favour of the good business management which there has been and whether they disapprove of the tariff increases which have been introduced. One cannot have good management and a reduction in staff such as we have had over the past few years. There were no salary or wage adjustments for SATS employees last year. Increases cannot be granted unless the tariffs are also increased. The hon member and his party owe us an explanation of whether or not they are in favour of salary and wage increases. I find it strange that the hon member should concentrate only on the increased tariffs, while omitting to say anything about the improved conditions of service which have been created for the employees of the SATS.

The hon member said that there had been an enormous increase in air fares. This is correct, but he must bear in mind, in drawing a comparison with 1981—the reports of the SATS are chock-a-block with figures—that the expenditure of the Airways was more than R600 million in 1980, and that it is now nearing R1 000 million. The hon member also omitted to say that the present number of aircraft was 42. A large number of aircraft have been bought. Nor did the hon member mention the fact that our aircraft had been equipped with the latest fuelsaving machinery. He did not say a word about that. He only looked at the enormous expenses that had been incurred since 1981. This is true, but a much better service has also been provided, and larger amounts of money have been invested in the Airways than in 1981. So there is not a great disparity between the position in 1981 and the present position.

The hon member has moved an amendment and has said that his party is particularly dissatisfied with the increase of tariffs, especially the increase of fares for third-class passengers. This is a hackneyed argument which I had hoped the hon member would have discarded by now. The hon member for Berea regularly used that argument. The hon member said again today that as a result of the Government’s policy, non-White workers now had to live 15 km and even 30 km from their places of work. Now I want to tell the hon gentleman that people, White, Coloured and Black, are living further and further away from their places of work as a result of normal development. Once and for all, the hon member should grasp the fact that the more development and urbanization there are, the greater the distance will be between people’s homes and their places of work and the factories. We shall simply have to provide for the fact that the labour force is going to live ever further away from its places of work. What is important, however, is whether we are making sufficient provision to enable those people to travel to their places of work easily and comfortably. The hon member says that it is an enormous increase for the third-class passengers. However, the figures available to me show that the total revenue from passenger traffic is only a little over R300 million. The rest is contributed by the State. However, there are 722 million passengers—first-class, second-class, on main-line trains and on suburban trains—who make a contribution of just over R300 million. On average, therefore, the South African passenger does not even spend 50 cents on a train journey. However, than hon gentleman says that this is an enormous increase and that it will have an enormous effect on the inflation rate. He must bear in mind, though, that it is not such an enormous expense for the man who has to travel. That is why I am quoting these figures to him.

I should also like to convey our congratulations to the hon the Minister on this Budget of his. He has repeatedly shown that he is an outstanding businessman. He has a very good understanding of what a profit and loss account should look like. He also knows very well what a balance sheet should look like. Apart from displaying these obvious characteristics of a good businessman, he has been able to use his insight and experience to give his management the necessary support for the economising, marketing and management strategies which have been implemented by the SATS recently. We also wish to congratulate Dr Grové on his impressive achievement in his first year as General Manager, with the aid of his management team, where they have converted an anticipated deficit of R634 million into a deficit of only R11 million. It must have taken powerful teamwork to achieve this. A considerable effort on their part must have been required to motivate and inspire every official of the SATS to such an extent. A great deal of midnight oil must have been burnt, and one sincerely appreciates the sacrifice made in this connection by the SATS staff. The fact that they have managed to do this also proves the status of the top management in the eyes of the staff. What is also important is that the planning board of the SATS has shown that it is not possible to plan for expansion only. When everything is going well, when the emphasis is on expansion and when boom conditions prevail in the economy, then planning is a pleasure and a source of great excitement and satisfaction. However, when there is an economic recession and when the revenue drops and stringent financial discipline has to be applied, the task is no longer so easy. The people responsible for the planning of the SATS seem to be people who have both feet firmly on the ground. Because of the economic recession, in this country as well as abroad—this is actually the biggest single factor which has given rise to the decline in revenue—action has to be taken over a very wide front to keep the SATS viable. Since the second half of 1982 in particular, systematic action has been taken to limit the effect of the economic recession on the SATS. It would be extremely foolish to proceed with a capital expansion programme, for example, when recessionary clouds are appearing on the horizon. On the other hand, the capital development had to be brought down gradually to a more realistic level, so that it would not cause even more disruption in the South African economy. Orders for capital requirements such as railway steel, wagons and coaches cannot be cancelled overnight, after all. Many projects were carried out while others were not.

It is also necessary to give proper consideration to the revival which will come sooner or later. When it comes, the SATS must not be caught unprepared, with obsolete rolling stock or a shortage of trained staff. It must be clear to any reasonable person what a tightrope the management of the SATS have to walk under such circumstances. On the one had, it is necessary to economize because of the recession, and on the other hand, there must be essential, planned expenditure with a view to the revival. Able management means better control, better savings and a better marketing strategy in any business enterprise. The same applies to the SATS. One can never emphasize these aspects strongly enough.

One wishes to commend the management of the SATS for the attention which they are increasingly giving to the utilization and development of their manpower. The objective seems to be to limit the establishment to approximately 230 000 without dismissing any staff and without sacrificing any efficiency in the services of the SATS. In this respect, too, a considerable amount of money has already been saved. It was not possible to grant any increases last year. This year, however, it could not be postponed again. The pensioners, too, had to receive the necessary adjustments. We on this side of the House are grateful for this, because contented employees are willing employees. The reduced staff, who now have a greater burden resting on their shoulders, must receive fair compensation, and I believe that they do receive fair compensation in terms of this Budget.

†What is encouraging is the success obtained in identifying employees with a special talent for management. Apart from in-service training these men can follow courses in management at technikons. This will ensure that the emphasis placed on management will not lose its momentum. Also Blacks, Coloureds and Indians who have the ability are trained to enhance their talents in the semi-skilled and supervisory fields. If managers are not born they can at least be trained. But even a born manager will be able to do his work better if he is properly trained, and I think that is the approach of the SATS. Thousands of employees have already been selected for this purpose and are undergoing the necessary training. In one of its many publications the SATS stated that the emphasis is on achieving both efficiency and effectiveness, defined more or less: efficiency as doing the right thing and effectiveness as doing it right.

It really bears no repetition to state that the SATS are not getting their fair share of the market. This is both a fact and a problem. The hon member for Port Elizabeth Central also said the SATS are trying to keep the transport industry for themselves, but it is an amazing situation that instead of having 51% of the share of the transport industry as the SATS had a few years ago, they now have only approximately 33% or 35%. How can it then be said that the SATS aim to keep the transport industry for themselves? To maintain transport services in the remotest parts of South Africa and at the same time build further infrastructures and then to watch your share of the market declining, is an unhappy and very worrying feature for management. Therefore everything is being done to regain lost ground, and once a fair percentage of the transport industry has been regained, the profitability of SATS should increase.

It is a feature of this Budget that the aggressive marketing actions of the SATS should help to bring about an increase in profitability, and I should like to mention a few of these actions, actions which the hon the Minister also referred to in his Budget speech.

*He referred, for example, to the fast freight deliveries and overnight services which are now available at the current commodity rates and will help to render a better service to clients.

†Furthermore, mini-containers are being introduced to transport small consignments. Consignments for different clients are at present being transported in the same container, although it is a stipulation that such consignments must go to the same delivery and destination stations.

*The hon the Minister also mentioned the Metroblitz which had been introduced for fast passenger transportation between Johannesburg and Pretoria. It is true, of course, that expenditure has gone up, but on the other hand, services have been improved. The TranSit coaches on the Trans-Natal trains are very luxurious and similar to the facilities on aircraft. Once again, this means better service. Then there is the Durban Daylight Sitter for the convenience of the nature-lover, and the tourist pass which is to be introduced shortly in order to attract more tourists. There are the compartments that are hired out to 2,5 passengers, but into which one can then fit as many people as one likes. Trains are now also being hired out for the holding of conferences; the 40%-off card for the elderly is being very successfully utilized and the Airways is also offering more concessions to attract passengers. In addition, the unutilized capacity can now be filled by servicemen, who get a discount of 40% instead of 30%, and then there are the late night flights, on which there is a 50% reduction in air fare.

However, these things completely escaped the attention of the hon member for Port Elizabeth Central. He did not notice them at all. All he noticed were the increased tariffs. He sees all the negative things, but the positive things in the Budget are completely lost on him. [Interjections.] Persons over the age of 60 years can now also fly at 40% less outside peak periods.

†Despite these highly commendable marketing methods in order to attract more passengers and also more goods and freight, the socio-economic services rendered by the SATS again offset the possibility of a real recovery. Over a period of 10 years we have had a cumulative loss on passenger services which amounted to approximately R2 300 million after compensation by the Government. In the current financial year that amount is R750 million.

*We are grateful for the assistance rendered by the Government. The amount in this connection is almost R600 million. This is the amount which the hon the Minister of Finance has to provide. However, it is still not enough to wipe out the enormous loss of the SATS.

†The hon the Minister mentioned in his Second Reading speech that we also suffered losses in South West Africa. We are losing on uneconomic branch lines, for example, an amount of approximately R134 million. We are also losing on the transportation of uneconomic goods an amount of approximately R107 million.

*This is simply not good enough, Mr Speaker. It calls for further adjustments, of course, and if all these obstacles could have been overcome, we would have had a considerable surplus today. However, some favourable signs can be observed which give one hope for the future. One of these is the encouraging sign that there should be a significant improvement in world trade later this year. Another very good sign is in fact the understanding and perseverance with which the staff and the management of the SATS are doing everything in their power to render a better service to the public. Moreover, Mr Speaker, the time required for conveying passengers and goods from one place to another is getting shorter and shorter. Even for the fun-seeker, it is becoming more and more pleasant to make use of these services. A further good sign is in fact that we do wish to eliminate uneconomic services. The final sign which is of importance is the fact that the cost of items which cannot be controlled, such as fuel and electricity, is once again offset by fuel-saving machinery and a better control system for trains.

Whereas on the one hand, the SATS is suffering losses because of costs beyond its control, therefore, the Administration is trying, on the other hand, to place the transport services on a sounder footing and to increase their vitality by means of improved methods. Therefore I take pleasure in supporting the Second Reading of this Transport Services Appropriation Bill.

Mr Speaker, to begin with I should like to congratulate the hon member for Port Elizabeth Central on his appointment as his party’s chief spokesman on the South African Transport Services.

In reply to the speech of the hon member for Port Elizabeth Central the hon member for De Kuilen referred to certain aspects on which I am in agreement with him; inter alia, the problem of the natural movement which takes place when urbanization occurs and when industrial development is established. That is when the situation arises that residential areas are established further and further away from the central areas. This is true of course.

Another statement which the hon member for De Kuilen made in reply to the hon member for Port Elizabeth Central was in connection with the fact that at the moment the SA Airways was providing a better service. In this regard I also agree whole-heartedly with the hon member. I just wonder whether in the process—I am referring to the SA Airways—we always remember our highly qualified pilots, these extremely capable people, probably the most capable in any airline in the world, and whether we are making adequate provision for them in their conditions of service. I should like to ask the hon the Minister for special attention to be given to these people.

Successive operating losses during 1982-83 and 1983-84 and the budgeted loss of R102 million for 1984-85 are causing great concern. No industry can continue to sell its product at lower than cost without disastrous consequences for that industry. The result of this would be that consumers of the SATS would be paying less than the actual cost of rail transport during such a period. This means that a portion of those costs is constantly being carried forward for future consumers. It is understandable that commerce and industry, which are concerned with showing a profit, would for the most part be satisfied with such an approach. It would also seem to suit our country under the present circumstances in which we are dealing with tight economic conditions. However, it is not possible to continue indefinitely with such a policy, and at some stage or another an adjustment will have to be made in order to eliminate this accumulated loss. The hon the Minister or his successor will probably do this by means of abnormally large tariff adjustments but I believe it would be better for each period to bear the burden of its own transgressions rather than carrying it forward into the future. I therefore maintain that each period should bear the burden of its own transgressions and that it should be transferred to the future. I am therefore of the opinion that we cannot delay the adjustment any further. We would appreciate it if the hon the Minister could indicate how the losses for the said financial years were or will be financed. Since the hon the Minister would seem to have another approach, we should also like to know what his views on deficit budgeting are and how and when he intends to eliminate the accumulated loss.

I should also like to say a few words about the proposed tariff increases in April 1984. On the grounds of my remark in connection with the accumulated losses the CP, too, cannot approve of the step of recovering only a portion of the expected deficit for 1984-85 by means of a tariff adjustment. The remaining portion, namely R106 million, the hon the Minister considers to be the contribution of the SATS towards keeping the inflation rate as low as possible. I should like to know in what non-inflationistic way the hon the Minister is going to finance the deficit of R106 million and, what is more, what the effect of such a step is going to be on the account of the SATS.

If the hon the Minister were to argue that he would do this by way of further economy measures, I want to argue that it was not necessary to budget for this deficit because it should already have been incorporated into the Budget. In his budget speech the hon the Minister ascribed the improvement of R623 million in the budget results of working for 1983-84 mainly to staff reductions and better utilization of material, equipment and money. However, he omitted to mention the fact that at least R205 million was derived from revenue. According to the information in the Green Book it would seem that almost R182 million of this amount was owing to an increase in railway passenger revenue, and surely Parliament is entitled to know what this means. That is why I feel the hon the Minister will inform the House about this matter in his reply.

Cognizance has been taken of various kinds of remedial actions taken by management to improve the organization. It would be enlightening or at least interesting to know what improvements the various kinds of action, for example the increase in the market share and express freight, brought about in the results of working. I am particularly interested to know what improvement was brought about by the improvements to the passenger services.

We are dealing here with a branch of the SATS on which tremendous losses are being suffered. Although the comfort of passengers is also important to the CP and receives constant attention, it is essential for money and resources utilized in this regard to be economically justified. It should not contribute to words worsening the results of working of this service, which is also heavily or partially subsidized by the State.

A reduction of 37 000 in staff numbers since June 1982 is an impressive figure and we should like to congratulate the SATS on this achievement. What we in the CP are very glad about is the fact that a method was adopted which made this reduction possible, without summarily dismissing any staff. However, I am concerned about the imposition of an additional workload on some sections without any additional remuneration having been paid. The Railway-worker is basically conservative in his outlook and took the security which the organization offered him into consideration when he entered the service.

The summary dismissal of staff would send shock waves through the organization and for that reason I hope that this will never be necessary. It should be noted that the decrease in traffic during this period was considerable and that this contributed partially to the saving in staff. The hon the Minister also mentioned this in his Budget speech. Therefore the achievement as far as staff savings is concerned will only be tested during the first strong upswing in traffic. If the number of employees can then be reduced even further and stabilized at a lower level the management of the SATS will rise even further in our party’s estimation. I am also grateful that I am able to express thanks on behalf of the staff for the salary increase in January. Of course we are aware that this increase was not sufficient compensation for the backlog which the staff was experiencing at that stage owing to inflation. But our experience in the past has been that the people of the SATS were prepared to work harder and to maintain a high level of productivity, and I believe that they will again be prepared to make their contribution to combating inflation. As a matter of fact, I hope that others will emulate the staff of the SATS in this regard.

It is a pity that every time salary adjustments are made they are proclaimed from the rooftops. As far as I am concerned it will be a glad day when, as is the case with private organizations, salary adjustments can be determined and approved by Management solely on merit. We are grateful that the pensions of pensioners have been timeously adjusted. In this regard we are thinking particularly of those people who have been on pension for some time now and simply could not manage to make ends meet any longer. They are still having a hard time now, and if there is still money available somewhere in the kitty to improve the lot of these people, they will be very grateful. They are really battling. I am appealing to the hon the Minister, if possible, to give this matter more thought and to see whether a further contribution cannot be given to these people.

In a period in which the SATS experienced operating deficits and one in which loans were not always easy to raise, the good sense inherent in the decision taken a few years ago to make pension fund money available for housing is only now being fully appreciated. If this had not been done, I am sure far less money could have been made available for staff housing during the current financial year. But it is gratifying that in the 1983-84 financial year R161 million could be made available from these funds for the purchase and construction of houses.

In his Budget speech the hon the Minister expressed his concern regarding the safety of passengers and the property of clients of the SATS. We share his concern. However, we also want to add the staff of the SATS to this category. I hope that the measures being taken to protect the staff will not only be maintained, but will also be intensified, depending on the circumstances. Conditions on our trains and at certain stations in our country are changing. The SATS will have to adapt its protective measures to these changes.

On behalf of the CP I should like to express my thanks and appreciation to the General Manager and his staff and all the employees of the SATS for their dedicated service and spirit of sacrifice in the interests of the Republic of South Africa. The hon the Minister is a reasonable person who is trying to do his best in these difficult circumstances. We for our part also wish to convey our thanks to him for this.

Mr Speaker, I think that hon member for De Aar made a relatively good speech. In reality, he expressed very little criticism and one could agree with much of what he said.

I wish to point out that in my opinion there has been a much better relationship between the pilots of the SA Airways than there was previously. I am afraid that the reservation the hon member expressed in this regard does not hold water. I believe that a very sound and pleasant spirit is prevalent amongst them today and that all their problems have been settled amicably by the new Management. I was not quite sure whether by criticizing the provision of uneconomic services, the hon member wanted to imply that he felt the tariffs should have been increased, since there is no other way of making up the deficit that by increasing tariffs.

I share the hon member’s concern about people who lose their jobs. However, the SATS sees to it that no one is dismissed from his post if he does good work. Every person who does his share is kept in service. Every post in the SATS is thoroughly evaluated, and provision is made in this system for every employee to be compensated accordingly. I think this is an excellent system. The staff of the SATS are indeed prepared to work harder. They still vote Nationalist, for it is the NP that has seen to the welfare of these people over many years. For example, there is no better housing scheme in South Africa than the one made available by the SATS to its employees. I feel that the approximately 250 000 people who work for the SATS are happy people, and that we can depend on them for this very reason. I should like to turn briefly to the hon member for Port Elizabeth Central, with whom my benchmate has already dealt very thoroughly. I really feel it is an insult when the hon member says that the SA Airways is controlled and managed with a so-called “Railway mentality”, as he put it. I do not know what he means by that, but I believe that it is a slap in the face and I do not think that the Management of the SATS deserves something of that nature. I could elaborate on why those increases had to be affected, but I shall leave it at that for the present. I now want to refer to only one aspect, viz the situation that has developed, and is still developing, in other countries over the past few years. The Government and the SATS are always being accused of wanting everything for themselves and not wanting to give private initiative a chance. What are the facts, however? Over the past few years international airlines have incurred losses of millions of rand as a result of the same problems we have to deal with. These are problems such as the high price of fuel and the general world recession. What was the result? Certain overseas airlines were compelled to sell their assets, and many others do not have sufficient funds available to replace obsolete and worn-out equipment.

What is the position in South Africa, however? When there is an upswing, and we know there will be one, the SA Airways will be ready immediately to exploit the benefits of such an upswing, since the SA Airways has built up well in advance a fleet of aircraft which is amongst the best in the world. I do not think I am exaggerating when I say that it is the very best in the world. We have the most modern aircraft for both domestic and overseas flights. In contrast, many airlines in other countries have gone under because they could not continue to exist if they did not receive considerable assistance from their various Governments.

My time is relatively limited and I therefore want to hurry. I want to devote my speech mainly to the SA Airways. Before I come to that, however, I once again want to single out one matter concerning the SATS. That is the role the SATS has played in the past in creating and maintaining sound relations with our neighbouring states. At present there are very promising signs that the initiatives of that time are bearing fruit. Good neighbourliness is in the interest of us all. Over many years it was practically only the SATS that had contact with some of our neighbouring countries and states. The decisive role the SATS played in the then Rhodesia, which is now Zimbabwe, and in Mozambique—for example, the maintenance of the railway line, as well as the control of the harbour and providing staff and infrastructure, really provides sufficient data for a comprehensive speech. However, I am not going to elaborated on that any further now. Over the years when difficult situations arose and things were not going well, the SATS succeeded in opening the path to the hearts of these countries bordering South Africa, and in keeping them open. Although I do not want to expect too much, I believe that when the history of this period is written one day, it will be proven that the initiatives taken by the SATS will have played a very valuable role in this respect. I wish to quote briefly from the brochure of the SATS “SA Transport Services on the move in a nation on the move”. It states:

It is the kind of approach and action that has reduced a budgetary deficit of R634 million to R11 million. Surely that is an achievement. Surely that speaks of planning. It is proof of the implementation of business principles at the highest level. Given the present situation in our country, as well as the present world situation, the hon the Minister has indeed introduced a fine Budget. Hon members would agree with me that it is a fine Budget. I want to congratulate the hon the Minister on it. However, I also want to congratulate the General Manager and his entire management team and thank them for the devoted service they give the SATS. South Africa is indebted to every member of the SATS from the highest to the lowest level. This Budget and what has been achieved, is the result of a team effort by motivated male and female staff.

I believe that the hon the Minister himself has played a very important role in creating this spirit and attitude. I know the hon the Minister. He goes out of his way to motivate our people. One notices this, too. When one comes to a counter, one is greeted with a friendly smile. These people are prepared to speak to one, when one makes a telephone call as well. There has been a change, and there is a new spirit prevalent. I believe that the hon the Minister, the General Manager and his staff are responsible for creating this new spirit. Consequently, I believe that a fine future awaits the SATS.

I do not wish to elaborate on the Metro-blitz now. I had the privilege of travelling on it. We have seen the new generation of train system of which the passenger capacity is 15% higher. My hon benchmate, the hon member for De Kuilen, has already mentioned the other methods being used. I just want to emphasize once again that the tourist pass is making an important contribution to earning foreign exchange for us. This is a matter we have pleaded for a long time and I am very pleased that the hon the Minister was able to give it to us this time. I also associate myself with the gratitude of our senior citizens, members of the Defence Force, etcetera. All these things have contributed to making a fine future possible for the Railways. However, I would not be doing justice to this debate if on this occasion I did not congratulate Mr Gert van der Veer, who was appointed the new Assistant General Manager of the SA Airways with effect from 1 October 1983. It is already clear to all of us that in him we have a young, motivated, dynamic and enthusiastic leader who, with his competent and inspired staff, will take the SAA to even greater heights over the next 50 years of its existence. I wish him every success on the road ahead.

The South African Airways celebrated its fiftieth anniversary on 1 February 1984. I think it is fitting that I refer to these years today as the 50 golden years. I also wish to express the hope that the next 50 years will also be golden years. I have no doubt about that. In order to achieve this, the SAA has competent and dedicated staff and the most modern fleet of jet aircraft with the very best equipment. The SAA also has a fleet of aircraft provided with fuel-saving equipment. I am referring here to the latest addition, the 747 SUD which is equipped with the most modern jet engines and which has the lowest fuel consumption of any aircraft flying between London and Jan Smuts Airport, Kempton Park. [Interjections.] The Super B aircraft also have new engines, whilst all aircraft used for overseas flights can now fly non stop to London. Add to this our excellent safety record and high level of technical skill, and this provides us with a sound base for the next 50 years.

If we cast our minds back we see that South Africa experienced one of its worst droughts ever in 1933, and in 1934 we found ourselves in the throes of a dreadful depression. We were experiencing the history leading up to the Second World War. It was under these circumstances that Union Airways was forced to the brink of bankruptcy and the Government of the day realized that that service had become indispensable and consequently decided to take over Union Airways. Thus the SAA came into being. I shall not have sufficient time to give a proper account of the highlights of the past 50 years.

A great deal has already been written about this, but for the record I think it is as well to point out once again that we in South Africa had someone by the name of Goodman Household, whose escapades are perhaps not so well-known. Although he is not known to the outside world, it is claimed that he was the first person in the history of aviation to execute a controlled heavier-than-air-flight. Assisted by his brother Archer and a few Zulu servants, Goodman Household’s flight was launched from the top of the 1 000 ft Karkloofkrans. It is claimed that he glided 200 to 300 feet above the ground until his frail craft hit a tree and he landed in a lake, craft and all. Of course, his poor mother was afraid that he would incur the wrath of the Almighty by indulging in these supernatural activities, and consequently she persuaded him to give up his exploits, and thus they ended. There are many other very interesting stories to be told about the general development of aviation, but the most important event in the development of commercial aviation was the establishment of Union Airways under the leadership of the well-known Alistair Miller. Commercial Aviation originated on 26 August 1929—apparently it was on a Monday—when he set out in his small Gipsey Moth from Maitland here in Cape Town to Port Elizabeth with a precious cargo of five mail-bags that had to be delivered. This is how it originated and it was the forerunner of the gigantic present-day SA Airways. From 1929 to 1934 the pilots of Union Airways bravely transported passengers and mail between the main centres of the then Union of South Africa. Misfortune, financial problems and failures impeded their efforts, however, and forced Union Airways into bankruptcy. The then Government began to realize that air transport had become a very important way of life in South Africa and, as I have already said, it took over all the assets and liabilities of Union Airways on 1 February 1934. This is how the SA Airways came into being.

It was a small beginning, however. One thing led to another, and there was great disappointment when the entire fleet of South African aircraft, which consisted of 18 Junkers, at the time, as well as the entire air crew and ground staff were made available to the military forces as a defence wing when the Second World War broke out in 1939. Only in 1944 were a number of Lockheed Lodestars that had already been ordered by the SA Airways before the outbreak of the war, delivered, and the domestic services could be resumed.

The next important event was when the Springbok service, using an Avro York aircraft, was introduced in co-operation with BOAC on 10 November 1945. Passenger reservations were already so heavy at that stage that on 8 June 1946 the SA Airways decided to introduce a Skymaster service between Johannesburg and London via Nairobi. The purchase of an additional three Sky-masters enabled the SA Airways to replace all the Yorks with Skymasters. Towards the end of 1947 the fleet was extended by 41 aircraft, viz seven Skymasters, eight Vikings, five Dakotas, 19 Lodestars and two Doves. This was one of the highlights in the history of the development of the SA Airways.

The year 1948 was characterized by the introduction of the first air-freight service, and in 1950 the Constellations were put into operation, which improved our air service even further. In 1956 the SA Airways once again made history by becoming the first airline outside the USA to put into operation a Douglas DC-7B aircraft, the fastest known commercial aircraft with reciprocating engines.

The SAA also put a DC-7B aircraft into operation in 1957 in order to extend its participation in the Wallaby service to Australia. In 1960—that was not so long ago—the SAA began maintaining the Springbok routes to Europe and the United Kingdom with its Boeing 707 aircraft. This was a far-reaching development in the field of civil aviation. At that time the 32 365 passengers initially conveyed suddenly increased to 50 802. That was an increase of 57%. The number of passengers being conveyed today is more than 400 000 per annum.

Despite all this progress, the SAA also had serious problems. I think the SAA reached the greatest milestone in its history in August 1963. After the SAA had been prohibited from flying via its earlier routes over the territories of a number of states in Africa, with only a few hours’ warning, and without any delays, or without even a single flight being cancelled, it established an entirely new route to Europe around the West Coast of Africa. Since then, the flights of the SAA still travel this route around the Bulge of Africa to Europe.

Mr Speaker, I am being notified that my time has expired. I shall therefore conclude by pointing out that the SATS has a promising future. I believe it is no longer a question of conveying people from point A to point B; it is increasingly becoming a case of people having to be brought together between point A and point B. As I see it, that is the role the SAA will have to play in the future. I therefore wish to congratulate the SAA on its achievements thus far, and I also wish them everything of the best for the future.

Mr Speaker, the hon member for Kempton Park has surely spread his wings wide this afternoon. He orded his speech by referring to the 1983 annual report of the SATS, from which he quoted in respect of the history of the SA Airways. I do wonder, however, whether he is aware of the fact that one of the pioneers of Union Airways to whom he referred, namely a certain Major Miller, was, in fact, the very same Major Miller was also the member of Parliament for Durban Point for a period of something like five years.

Prior to that the hon member referred to the brochure published by the SATS, entitled “Nation on the move”. I want to put it to the hon member that we in these benches agree wholeheartedly with the sentiments which he expressed when he said that the SATS should be a business orientated organization. I do believe, Mr Speaker, that one of the main functions of this debate is indeed to try to ensure that exactly this takes place. Speaking about brochures and SATS publications, Mr Speaker, I should also like to thank the hon the Minister on behalf of myself and my party for the copies of the reports which have been submitted to us. I have heard very favourable comments about the quality of those publications. They certainly do assist us in discussing this Budget. I therefore thank the hon the Minister very much for them.

I should also like to congratulate the hon member for Port Elizabeth Central on his maiden speech as chief spokesman on transport affairs—in this Budget—for the PFP. I do, however, want to refer briefly to a statement he made earlier, when he said that he felt it was wrong that the tariffs for third-class passenger fares should be increased by 17,5%, while the increase in respect of first-class tariffs was only 7,5%. We do have a dilemma in this respect. I should like to refer the hon member for Port Elizabeth Central to something said in the course of a debate on the subject of inflation, which took place here in the House on 25 February 1983. There it was clearly stated that during the period 1970 to 1979, the real purchasing power of the Whites had decreased by 1,3% whereas the actual purchasing power or real income of Coloureds had increased by an overall 10,9%, of Asians by 28,3% and Blacks, a massive 52%. The dilemma we find ourselves in, Sir, is that on the one hand we politicians constantly talk about narrowing the wage gap, which we are in fact doing according to the facts, and on the other hand we have a person like the hon member for Port Elizabeth Central wanting to increase the subsidy gap between first class and third class passengers. One cannot have it both ways.

Which way do you want it?

We want it to be equitable. We want a closing of the wage gap and we want the removal of subsidies as and where it is possible to do so. We do not want an increase in subsidies as and where it is not desirable.

Having said that, I want to congratulate the hon the Minister and the staff of the SATS on their remarkable performance during the past year which has been referred to by a number of hon members this afternoon. I should like the hon the Minister and the General Manager to know just how much we in these benches appreciate the effort that has been made over the past year because South Africa is at the present time locked in a desperate struggle against inflation. We all know that this struggle requires a very tight control of the money supply, an increased work effort on the part of all and constant vigilance against waste and inefficiency. I believe that the staff of the SATS can be justifiably proud of their performance over the past year. I am sure that every hon member in this House will join me in congratulating Dr Grové and requesting him to convey our congratulations, best wishes and appreciation to all the members of his staff for the effort that they have made.

In congratulating the hon the Minister on his performance—I shall refer to his working accounts later on—there is a major aspect of transport policy on which I intend to elaborate at a later stage during my speech. With that in mind, I wish at this stage to move the following further amendment:

1. (1) eliminate cross-subsidization within the tariff structure of the South African Transport Services by clearly identifying and costing all socio-economic services and having them subsidized through the State Revenue Account;
2. (2) clearly identify and determine the cost of the use of the South African Transport Services’ rail and air services by free pass and concession holders in order to institute a system of accounting whereby these costs are correctly allocated to the relevant authority;
3. (3) delay any amendment to the Road Transportation Act which affect the relative competitiveness of the South African Transport Services and the private road hauliers until such time as the report of the National Transport Policy Study of the National Transport Commission on this matter has been made available, and
4. (4) re-examine the profitability, ownership and utilization of all capital assets of the South African Transport Services.”.

I was most interested to know just how this success story of reducing the deficit came about and just where the SATS were able to concentrate their efforts in order to reduce the huge estimated deficit of R634 million. We must remember that this deficit was reduced to R11 million. When one studies the results of the past year one finds that the turnaround came about as a result of major changes in the estimated figures in three major areas, firstly, in revenue—this was referred to by the hon member for Port Elizabeth Central—secondly, in financing costs and thirdly, in operating costs. One finds that despite the recession revenue actually increased by R205 million. If I wanted to be unkind at this stage I suppose I could say that the hon the Minister was weak at budgeting and estimating in the first instance. However, I intend to be rather constructive and positive here today and prefer to say that this just emphasizes what most entrepreneurs know instinctively. There is nothing more powerful in putting economic life into a business than a strong and positive and growing cash flow. The increase in revenue over the estimate amounted to 32% of the improvement in the finances in respect of deficit.

The other interesting fact as far as I was concerned was the reduction in financing costs. This amounted to R169 million or 27,3% of the improvement on the deficit. The hon the Minister is fully aware—I am quite sure hon members on those benches are also fully aware—that for many years now I had emphasized the extremely adverse effect that financing costs are having on the overall operating costs of the SATS. I am firmly of the conviction that because we live in a financially precarious world today, we have to be constantly vigilant against over-capitalization. In South Africa today, indeed throughout the world, ownership costs—those are depreciation costs and financing costs—are crippling if not even bankrupting not only individuals but also large corporations and indeed even nations are going under today because of over-capitalization. If one studies the working results, one finds that last year depreciation costs cost the SATS R844 million and financing costs cost R991 million. These two figures amount to 13,1% and 15,4% of the total expenditure respectively. The total is R1 835 million or 28,4% of the total expenditure. This was spent on ownership costs.

I appreciate that some of the replacement cost depreciation has boosted the Capital Revenue Fund. Another thing I have noticed, is that the Reserve Funds—Revenue Reserve and Capital Reserve Funds—are growing, but be that as it may, I still believe that we must not lose sight of the economic realities of too heavy ownership costs. They place a heavy burden not only on the SATS but indeed on the entire economy.

The third area which contributed to the reduction in the deficit was the operating costs, and here we find a saving of R244 million or 39% of the total deficit reduction. The hon the Minister will appreciate that we do not have all the details concerning all the figures but there is little doubt that a large slice of this saving was due to the reduction in staff by 37 000. In the 1983 report of the SATS Board it is clearly stated that during the 1983 calendar year the cut-back in staff resulted in a 5,7% saving in the labour costs.

As remarkable as these labour savings have been, I want to tell the hon the Minister that if he really wants to do as he stated in his Budget Speech, that he believes that competition “is a fundamental requirement for conducting a sound business”, then I believe that he still has an awful long way to go in trimming his work force into that lean and hungry team which I believe is required if he is going to take on the private sector in the road transport industry in South Africa.

If it is equal competition.

I shall come to equal competition.

In fact, if I was to sound a sour note in this regard as far as the savings are concerned, it would be that I believe that the hon the Minister could have done an awful lot better in reducing actual operating costs; in other words, both his labour and material costs. The R244 million saving in this connection to which I have referred represents only 3,8% of the total Budget. The SATS Board’s report says that it represented for the 1983 calendar year a 5,7% reduction in the cost of labour and only a 3,3% reduction in the material cost savings. I believe that the hon the Minister could have done an awful lot better, especially, as I say, if he is serious when he talks about cutting back and cancelling certain uneconomic train services. I want to tell him that we shall support him 100% when it comes to streamlining the SATS even if it means shutting down uneconomic services. We support him in this because this is where the biggest and the most effective saving can be made at a very fast rate. Secondly, we support him because it will place him in a far better position to compete with the private sector.

In the past I spent a lot of time on capital, but I do not intend to do this today other than to point out to the hon the Minister that out of 725 items in the Brown Book, only three, namely items 91, 566 and 571, which deal with improvements to the Wit-bank-Richards Bay railway line, electric locomotives and goods rolling stock, account for R610 million, which is more than a third of his total capital budget. In the times we find ourselves in today, I wonder whether it is not possible for the hon the Minister to have achieved a saving here or a deferment of this expenditure for a period to ease us through this difficult phase.

I now wish to refer to the working estimates for the coming year and the fact that the hon the Minister has seen fit to raise tariffs by an average of 9,4%. We have heard members of the official-Opposition-saying that it is a pity that he has had to do this, and I agree. One notes from page 10 of his estimates that revenue is estimated to increase by R672 100 000, or 10,4%. One can assume from this that the tariff increase will account for 9,4% of this increase, which means that additional traffic will account for about 1% of the increase. I believe that the hon the Minister could have been more optimistic as far as the increase in traffic in the coming year is concerned. He told us in his Budget speech that there was an 8,4% decrease in rail tonnage moved last year. If in 1984-85 we were just to return to the tonnage railed in 1982-83, I estimate that there will be an increase in revenue of approximately R380 million, which is more than half the increase being budgeted for. I therefore do not believe that it was necessary to increase tariffs. I say this not only because I believe that the hon the Minister could have gambled a bit on an increase in the volume of traffic, but also for two other reasons.

Firstly, I believe he could have achieved a further reduction in expenditure. If one studies his estimates, one finds that he is budgeting for an increase in financing costs of R129 million. Last year he achieved a saving of R169 million in respect of financing costs on a total capital budget which was only R64 million less than what he had originally budgeted for, a capital expenditure which is equal to what he is budgeting for during the coming year. As I have said, we do not have all the figures at our disposal, but I would like to know the reasons why financing costs have increased to such an extent this year.

If one studies the operating expenditure, excluding depreciation, the Minister is budgeting for an increase of R507 million, which is an increase of 11,5%. Last year he achieved a decrease of R244 million, which was a 3,8% saving. I want to ask the hon the Minister what is happening with his plans for economizing. If one studies the estimates of working expenditure and the hon the Minister’s accompanying memorandum, one reads over and over again that increased labour costs are responsible for these increases. I believe this is very sad indeed, because it basically means that after one good year of economizing, the hon the Minister has now given up and is resting on his laurels. I hate to think of it, but in the process he may be sliding back into the old spiral of increasing costs.

The second reason why I feel the hon the Minister could have gambled by not raising tariffs is because I estimate that the 9,4% increase in tariffs will bring in R607 million. If I am correct, and since we know that last year the hon the Minister budgeted for a deficit of R634 million—here I am inclined to disagree with the hon member for De Aar about deficit budgeting in this instance—I want to ask why the hon the Minister did not do so again this year. He should have kept the tariffs down and in the process have struck a major blow against inflation.

I now want to return to my amendment. The first leg of my amendment concerns the removal of cross-subsidization and the imposition of State subsidies. The Minister is fully aware of the views of the NRP as far as cross-subsidization is concerned. We believe that this is not only discriminatory; it also results in a major distortion of values throughout our economy. I believe that pipelines, harbour and the so-called high rated traffic are considered the mild cows of transport services. That is to say that these services are milked by imposing tariffs far higher than the actual operating costs. This is done to enable a cross-subsidization of the so-called socio-economic service. What is the net result of this? Fuel prices are raised well above the actual real cost because the pipeline charges are so high, with the result that anyone who uses fuel, from road users to farmers and industrialists, are burdened with an additional tax, because that is what it is in reality—an additional tax to subsidize other services.

Similarly high harbour dues and rates have lost business for our ship repair industry. I raised this in a debate last year. We have priced ourselves out of the international market and ships pass our ports to go to Europe to get work done more cheaply than here because of the high harbour dues.

The high tariffs of the so-called high-rated rail traffic has resulted in the very business on which the hon the Minister depends, going to the private road hauliers. The hon the Minister is fully aware—and I am sure he agrees with me in principle—that we should straighten out this matter once and for all. We cannot afford to delay it any longer. The hon the Minister knows after all that the principle of the State subsidizing socio-economic services has been accepted, and I say that we should get on with it, I want to add that if the hon the Minister really believes that there must be equal competition between the SATS and the private sector, then this matter has to be put right.

This raises the second part of my amendment, namely the question of free passes and the concession-holders. I believe that some straight talking should be done here as I tried to do last year.

In his Budget speech the hon the Minister said that competition is a fundamental requirement for conducting sound business. I agree with him entirely, but this being so how can he justify writing into his expenditure account the cost of all the free travel which is being allowed on both trains and in the air to a great variety of people, not only the employees and pensioners of the SATS, but also to other people? There is no way that this can be looked upon as a socio-economic service. The hon the Minister also said in his speech that all parties rendering services should be able to compete on equal terms and went on to say:

I believe that the hon the Minister has stuck his neck out in this particular regard because the Road Transportation Act discriminates against the private road hauliers. I think I am justified to say that he had audacity to make such a statement. It is after all the Road Transportation Act which protects the SATS and discriminates against the private road hauliers. It is this Act which enables the hon the Minister to harass some hauliers and to put stumbling blocks in the way of the efficient operation of some of their fleets. It is in fact this Act which causes some vehicles to run empty on certain legs. I can go on and on with this but I do not have the time to say more now except that the cost of implementation of this Act, both to the Government, the country and the haulage industry itself, is enormous. It is this Act which stands in the way of a truly economic and competitive transport industry in South Africa. I want to make my position quite clear on this. I was on the commission—along with other members here—that drafted this Act and I can sympathize with the hon the Minister in his problems to a certain degree. But times are changing. Progress has been made such as the subsidization of socio-economic services and even greater progress will be made if the hon the Minister acts on the first two legs of my amendment. Put these things in order and the need for many of the discriminatory measures contained in the Act today will, I believe, fall away. However, it is not only the Act that results in unfair competition. What about the rebates in favour of the SATS which the SATS enjoys, tax and duty rebates on tyres, fuel, spares, vehicles, etc? I believe that all these matters must be sorted out, and the people to do it, I believe, are members of the National Transport Policy Commission, to which I have referred in the third leg of my amendment. Therefore, I say to the hon the Minister, as I plead in my amendment, that he must please not introduce any amendments to the Road Transportation Act which will discriminate further against the private sector until the commission’s findings have been made known. That is my appeal to the hon the Minister. I know that the private sector has also directed an appeal to him.

The fourth leg of my amendment concerns the assets of the SATS. My time has almost expired, but, to put it simply, we should like a re-examination of all the assets with a view to maximizing their utilization and profitability. What is more, if they do not fit into the management-orientated SATS to which hon members have referred, then I believe the hon the Minister should shed them. He should then try to realize the capital involved and re-employ it elsewhere on a far more profitable basis. We were discussing old Railway houses in a management committee just this morning. I have raised this matter before and have been told the SATS cannot sell all of them. However, the hon member for Mooi River would be only too pleased to buy one that stands on the border of his farm. We also heard of someone else who is trying to buy one but is not allowed to do so.

How many farmers are there who are so fortunate?

In Natal we are good farmers.

Sir, I submit my amendment for consideration. [Interjections.]

Mr Speaker, as we listened to the speakers of the various Opposition parties, one thing became quite clear, namely that if the hon the Minister and the SATS were to meet all the demands and were to satisfy them, it would require the patience of Job, the wisdom of Solomon, the age of Methuselah and all the golden years of South Africa.

“The SATS is a State business enterprise. It must earn all its own revenue and cover all its working expenditure through the revenue earned. It must also maintain and replace all its assets and arrange the loan funds which are required to improve and extend its infrastructure.” This is a verbatim quote from the first paragraph of the General Manager’s review in the annual report. This is and remains the ideal of the SATS, but in practice it does not work quite like this. If the SATS had operated strictly according to business principles, it would not have found it necessary to budget for a deficit of R620 million in the coming year. The tariff increases, averaging 9,4%, will only realize R514 million. The SATS will, therefore, still be in the red by approximately R106 million. During the past year a deficit of R634 million was budgeted for. However, there was a reduction in staff, a reduction of 37 000 staff members. Then there was a curtailment overtime and Sunday time; better utilization of material and equipment; underspending on investments, together with strategic decision-making and dynamic management aimed at ensuring that every member of the staff knew exactly what was expected of him; and better training. As far as better training is concerned, to date no fewer than 3 000 managers at various levels have been identified and trained. This led to greater productivity. An organization can never spend too much time or money on this. This new strategic management by objectives had a great deal to do with the SATS having been able to reduce an estimated deficit of R634 million to a deficit of R11 million. This is indeed a remarkable achievement. In this connection I want to associate myself with other hon members and say that one can never praise the hon the Minister, the Board of the SATS and Dr Grové and his top management in particular, too highly. Even the Opposition parties praised the top management.

This was achieved during the most difficult times which South Africa has experienced for several decades. One thinks here of the oppressive drought which led to our having to import millions of tons of maize, whereas we used to be a maize exporting country. As a result of the tremendous recession in the countries of our trading partners, our exports of ore and minerals were 41,51% lower in 1982-83 than in 1981-82, or put another way, 8,6 million tons less was exported than in the previous year. If a significant economic upswing were to occur in the countries of our trading partners and we could therefore export to our full capacity again, I foresee the possibility of a repetition of the past year’s success. However, if that is not the case, I want to say in advance that further tariff increases will be unavoidable in the next budget.

The SATS has a very proud record, but it also has a history, dating from the ’thirties, of being a “welfare organization”. When the Afrikaner was absolutely impoverished it was the SATS which reached out a helping hand and provided work for thousands of people. In this way the SATS made a major contribution towards enabling the Afrikaner to develop a strong middle class, whose children were able to develop further. Today we need only look at most leaders in all spheres of our national life. Somewhere in their lives the SATS played a role. Today the SATS is still a welfare organization. That is why I said at the outset that it remains the endeavour of the SATS to operate according to strict business principles, but this does not always work out in practice.

Let us consider for a moment the socioeconomic services that are provided by the SATS. A loss of R750 million was shown on socio-economic suburban train services. The loss on uneconomic freight services was R107 million, on branch lines R134 million and on transport services in South West Africa R90 million. This represents a total loss of R1 081 million. I have only mentioned the losses on the four most important components of the SATS.

The criticism levelled by the official Opposition is that the tariff increase for third class passengers is disproportionately high in comparison with those for first-class and second-class passengers. However, the fact remains that the SATS is going to suffer a loss of R750 million on that service, and no organization can bear such an annually increasingly loss. It has to be recovered somewhere. I want to make it clear that I am strongly in favour of this class of passenger being subject to an annual tariff adjustment. When I say this, I am not being unsympathetic towards the passengers in this category. The obvious solution would seem to be to adjust the tariff structure drastically by basing it on competitive or cost principles. However, such a step would adversely affect the competitiveness and the profitability of the mining, industrial and agricultural sectors. This is another direct quote from the annual report. The answer is, therefore, obvious, but at the expense of what? At the expense of mining, industries and agriculture. Or the Minister of Finance will have to allocate a larger subsidy to the SATS every year. This is not a sound business principle either, because the Minister of Finance has to obtain the money for those subsidies somewhere, from me and from others as taxpayers, from mining and other industries. When you therefore afford protection on the one hand, you have to deprive people of things on the other. Without the Government subsidy, though, the SATS would have experienced tremendous and insurmountable problems.

In the 1982-83 financial year the subsidy on socio-economic suburban train services was R340 million, and in the 1983-84 financial year the subsidy was R605 million, an increase of almost 100%. At some stage or other the socio-economic train-user will therefore have to realize that other people will not be able to continue paying for his transportation, and that he will have to pay more for it. In this regard the official Opposition could make a major contribution by creating a climate so that an annual tariff increase will be considered normal by this category of train passengers.

Thirty-one per cent in one year is a little bit excessive.

I could perhaps agree with the hon member that it is a severe increase within one year, and that is why I say he and his party could make a major contribution by creating a climate in which these passengers would expect to pay an annual increase in transport costs.

Mr Speaker, may I put a question?

Sir, my time is limited. I cannot reply to questions now.

In conclusion, I also want to pay tribute to the SA Airways and I want to associate myself with the hon member for Kempton Park, who congratulated the SAA on the commemoration of its 50th anniversary. The first commercial air service was introduced in 1929 as a private company with Maj A M Miller as director. On 1 February 1934 the SATS took over Union Airways, as Maj Miller’s company was known. At that stage the Airways consisted of three Junkers F.13 and one Junkers W.34 aircraft. From this small and modest beginning the SA Airways grew to a modern giant, which today has 15 Boeing 747, 19 Boeing 737 and seven Airbus A300 aircraft, with scheduled daily and weekly flights to virtually every city in the Western world, even Taipei and Hong Kong, and which conveyed almost 4 million passengers during the past year.

The hon member for Kempton Park also referred to the safety record of the SA Airways, and perhaps I should just emphasize this. The greatest disaster in the history of the SA Airways took place on 20 April 1968 when a Boeing 707 crashed near Windhoek, killing 111 people. Since that disaster approximately 1 245 million hours have been flown without an accident. This is indeed a remarkable achievement for any airline in the world.

In the estimates for the 1984-85 financial year a deficit of approximately R3,5 million is being budgeted for, and I am utterly convinced that if the economic circumstances change and improve, the deficit will be eliminated during the present financial year.

In conclusion, I want to ask the hon the Minister to take active steps against passengers who arrive late at the airport. Time is money for the Airways, as it is for any businessman, and in my opinion it happens all too frequently that departure times are delayed by a passenger not arriving on time. I feel that that passenger should be fined in some or other way, because when a punitive measure applies, every passenger will ensure that he arrives on time for his flight.

Once again I want to congratulate the SA Airways, and the other sectors of the SATS, on a wonderful year. We hope and trust that an equally good year lies ahead, and we look forward to next year’s budget.

Mr Speaker, I just want to assure the hon member for Kimberley South briefly that he cannot rely on the support of the official Opposition for a regular increase in the tariff for third class passengers.

Why not?

I shall tell hon members why in a moment. [Interjections.] The fact is the Government have moved Black people out of our cities for ideological reasons. This is the reason why they now live so far from their places of employment. [Interjections.] Why should they pay the price of the Government’s ideology? [Interjections.]

While I am at it I want to warn the hon member for Kimberley South that increases in transport tariffs have been used for too long to achieve political objectives. The reason for this is that Black people do not have proper channels through which they may put their political points of view. If the Government continues to increase tariffs, problems are sure to emerge. I must say that if I were a Black man who had to move from Langa to Khayelitsha I would be very, very angry about it. [Interjections.] I would be very, very angry because the Government decided that I had to go and five far away along the western coast. [Interjections.]

Order!

Mr Speaker, of course it is true that other people, too, five far away from their places of employment. There are people, for example, who have to travel two hours to their places of employment in New York every day. There are people who work in Johannesburg and five in Pretoria. However, they do it by their own free choice. It is not something which is being imposed on them by a Government for which they did not even vote themselves. [Interjections.] That is what is important in this case, Mr Speaker.

†Mr Speaker, I should like to deal briefly with the question of staff and the entrenchment of staff. Before doing that, however, I should like to tell the House what a pleasure it always is to receive the General Manager’s annual report. Although we do not have the opportunity of dealing with it, I must point out that the SATS fulfil a vital function in the field of engineering and technical skills. When one skims through this report one can only be impressed by what one learns from it in connection with the skills and abilities of the engineering workshops and other technical branches of the SATS, such as electronics and communications. There are, however, a number of interesting facts which are clear from the annual report of the SATS.

One issue which I should like to have clarified by the hon the Minister is the following. He tells us that he has reduced the number of staff members by 31 000 during the last year. Now, that is a substantial reduction if we take into account that the SATS have a staff complement of 272 000. He also says that no permanent employee has been dismissed. If one looks, however, at the make up of the staff component—and I do not want to go into detail now on the actual figures—it does appear that 15% of the Black staff members have been retrenched. I must add though that I believe the General Manager of the SATS should leave politics out of the picture. In the annual report we see references throughout to “employees from the Black peoples of South Africa”. The General Manager would save us a lot of time if he would refrain from that. We do not distinguish between Afrikaans and English-speaking White people among the employees of the SATS. Why then should he distinguish among Venda, Xhosa and Zulu, etc? We should merely refer to White or Black people, everybody will know whom we are talking about. Obviously most of the Black staff members in the Eastern Cape are Xhosa-speaking. [Interjections.]

What I believe the hon the Minister must explain to us is how by reducing the Black staff complement by 15% he has managed actually not to dismiss permanent employees. Simply looking at the numbers of casuals and the numbers of graded staff, it seems to me that he must have.

On page 62 of the General Manager’s report, I believe we have the key to an important aspect of the SATS. It is my view that the SATS employees are among the best paid people in South Africa. Not only are they well paid, they also have very substantial fringe benefits. When one looks at the indexed wage increases on page 62, one sees that wages have more than kept pace with inflation and have moved up dramatically. I believe that this is due to two reasons. Firstly, the staff associations, particularly the White staff associations, are doing a good job. However, the White Railway employee has a very substantial political leverage because of his vote in certain important constituencies. We have already heard hon members of the CP rumbling and seen the hon the Minister turn grey when they do it because the hon the Minister knows that the CP wants to use White railwaymen for political purposes. As a result the White railwayman has been able to organize, which is absolutely correct because it is a free world, a very good deal for himself. However, I also believe that the hon the Minister has become the major stumbling block in the Cabinet to the introduction of a fringe benefit tax because the hon the Minister knows how important these fringe benefits are to his Railway employees. He is determined to resist that tax and will only let it be introduced over his dead body. During the past year alone R279 million in housing assistance was made available to Whites. When we look at the balance sheet we find that the SATS’s investment in housing, substantially White housing, was a staggering R1 217 million. That makes the SATS one of the biggest building societies in this country. I do not object to this but I believe that it needs to be applied evenly in respect of all employees of the SATS.

According to the Brown Book, the Government will be spending an amount of some R214 million on Black hostels over a number of years. This is the amount that has been budgeted for. Some of it has already been spent and some has still to be spent. This is the amount that has been spent up to the present on building hostels for Black employees namely, inter alia, R58 million at Umlazi, R92 million at New Canada, R17 million at New Brighton and, I am pleased to see, R28 million at Plessislaer at Pietermaritzburg. When one visits these hostels—and I have visited two or three of them—one finds them to be magnificent. Nobody can deny that the new hostels provide superb accommodation. However, what concerns me is that according to the previous General Manager to whom I put the question, the cost is some R6 000 per person for these new hostels. That money could easily be invested, certainly in Natal, in family housing. I know that in transport services anywhere in the world there will be a measure of hostel accommodation because one may well want certain key staff close or accessible to or living in a railway suburb where they can be called upon in an emergency. However, I do not believe that these tens of thousands of Black staff need to be housed in single hostels. The Government is very keen on providing more housing and I believe that the hon the Minister ought to reconsider his housing policy in regard to Black staff because it seems to me as though it is being misapplied.

There was an interesting development in the General Manager’s report. Often these quiet little things signal a few changes in South Africa. The English and Afrikaans versions of this report were also quite interesting. I am not sure whether they think that the English version is for overseas consumption and the Afrikaans one for internal consumption. That section of the report deals with personnel representation. We must congratulate them on the fact that the Black Staff Association is now a member of the Federal Council of Staff Associations. For that we can in a large measure thank the trade union movement in the Port Elizabeth area which brought pressure to bear on the SATS. [Interjections.] We in the PFP believe very strongly in the right of employees to organize and to represent themselves, and in healthy, sensible discussion. What is interesting in the English and Afrikaans versions is that the English version talks about “trade unions”, while the Afrikaans version talks about “staff associations”. I think I know what the difference is between a trade union and a staff association, but it is interesting that the English version talks about “trade unions” but the Afrikaans version does not. It does not use the term “vakverenigings” but the term “personeelverenigings”.

I want to congratulate the hon the Minister, but I hope that the Black Staff Association is going to bring strong pressure to bear on the SATS Management for improving its members’ conditions. First of all I believe that they should push hard for the Conditions of Employment (SATS) Act, portions of which we opposed so strongly when it passed through Parliament last year, to be applied more even-handedly and non-racially. I think they have to work for a more equitable status for themselves in relation to other members of the SATS—more opportunities in apprenticeship training, more opportunities in jobs such as driving of locomotives and so on so that jobs in the SATS are allocated on the basis of opportunity and ability and not on any racial basis.

I now want to talk briefly about the permanent way and tarred roads because to me this is an essential aspect of the whole costing structure and the arguments of the SATS. The General Manager pointed out that the Railway’s share of the total market in transport in February 1983 was only 32,3% whereas in 1976 it was 41,2%. The problem which we have in trying to work out responsibility for financing concerns the cost of a permanent way and the cost of a road. I know that the SATS financial boffins always say that the permanent way is their expense, they have to build it and they have to maintain it, but the tarred roads are used by everybody. I hope the hon the Minister does not adopt that attitude, but perhaps that is one of the thoughts behind toll roads. He says he is going to make the chaps pay for using the roads. I am sure, however, that he does not wear that cap when he is in the Ministry of Transport Affairs.

I believe that we have to appreciate that the tarred road, the improved highway, is here to stay. In some way or other the SATS will have to learn to live with the fact that they have to build and maintain the permanent way and keep it in safe and secure condition while the tarred roads are constantly increasing. This is not something that the SATS should moan about; it is a problem which has to be resolved. The SATS have the opportunity to use faster trains, longer trains, more efficient services and heavier bulk and they can exploit what the Juggernauts which use the tarred roads cannot handle. I do not think it helps to complain about that.

There is one last point on the permanent way. I believe that our permanent way has lost a great deal through becoming so highly mechanized. Anybody who sees the new computer signal devices, the way in which the trains are now controlled from one central area, will of course be impressed when he goes into the big TV rooms and sees the screens and the red and green buttons and flashing lights. However, when one actually visits the smaller station at 2 am in the morning, there is not a soul to be seen. There is still a signalling-box there where one usually found the man on duty, the station foreman, and maybe could even have got a cup of coffee from him, but nowadays the whole place is boarded up and the windows are dirty and dusty. I think it is a shame that we are modernizing so much and that perhaps we are moving too fast in trying to compete with the Swiss and the Germans and are forgetting that, after all, we are living in Africa and that the creation of jobs, even if they are not such well-paid jobs, can be an important factor, apart from the romantic aspect of having our little stations alive with a few lights at night instead of having high speed trains whooshing through under a hidden hand behind a computer a long way off in a high-rise building in a major city.

Mr Speaker, we are asking the Opposition not only for understanding and insight, but also for constructive criticism. The Opposition must realize that it is in the interests of each and every person in South Africa …

What does Jaap say?

I am coming to him in a moment. Even at this stage, however, I can tell the CP that Jaap is very angry with them. The SATS must be equipped to meet the transport needs of all sectors of the South African economy. If it cannot do so, the economy will decline, South Africa will go downhill and, in the long run we will all be adversely affected. We are all dependent on the SATS each day, and that is why it needs the loyalty, support, understanding and positive inputs of every hon member. That is why it is our heart-felt wish that the SATS’ future should be just as rosy, if not rosier. Against this background I want to evaluate the position of the SATS on the basis of four major groupings. Firstly I want to look at the vague, unscientific old criticism repeatedly levelled by the Opposition. Secondly I want to speak about factors over which the SATS has no control. Thirdly I want to speak about the positive steps the SATS repeatedly takes, in accordance with its management philosophy, to combat its problems. Fifthly I want to take a brief look at its achievements, which can serve as motivation for the future.

I should like to quote what the hon member for Langlaagte said in Hansard on 8 March 1982, column 2353, when he was still very close to us—about two weeks away. Then he was essentially still an NP member, and a responsible one. Now, however, he is in essence an HNP supporter and afraid of Jaap Marais. The hon member for Brakpan asked me what Jaap had to say, and hon members will know that I repeatedly put this question to the CP. Jaap hangs like a sword over their heads. He gave them Soutpansberg in the by-election, but now the CP denies this. At the time the hon member for Langlaagte said the following:

Of Dr Loubser, Dr Grové and the SATS personnel he says that they “are performing an excellent task in South Africa”. I want the hon member for Langlaagte to bear that in mind, and this also goes for the hon member for Lichtenburg who, by way of an interjection, said that the hon the Minister should not be given a vote of thanks.

We are not prophets, and neither is the SATS. We cannot predict the gold price, the state of affairs in agriculture, droughts or the recession. Nor can we precisely predict the rate of change, in this rapidly changing world in which we are living, so as to make it possible to do the most precise advance planning possible. It is becoming increasingly difficult.

We have again seen the hon member for Pietermaritzburg North committing himself to vague and unfounded criticism of the Government’s so-called apartheid policy. It is, of course, a general characteristic of members of the Opposition not to be constructive, but rather negatively orientated. They used terms without spelling them out clearly.

I have looked at the PFP’s past utterances and they teem with such generalities. Thus on 2 March 1983, in column 2087 of Hansard, the hon member for Berea speaks about:

In column 2425 he speaks of “financial disasters” and in column 2427 of the “sorry financial mess” that Dr Grové inherited, but shortly before that they were praising Dr Loubscher. There are other points of criticism, for example inadequate planning, but they make suggestions for solving the problem. There is also talk of “unnecessary and wasteful expenditure”, but they give no example of this. He also spoke of the burden of uneconomic passenger services supposedly caused by the political and racial policies of the Government.

Here, just in passing, I want to put a question to the hon member for Pietermaritzburg North. Is there a so-called policy of apartheid in the other countries of the world where the airways and railway undertakings incur losses? Other concepts that are used, are “lack of a general transport strategy”, “inadequate efficiency levels in the industry” and “the time taken up in the transportation of containers”. Those are the main reasons—so they say—why consumers are converting to road transport. Mention is also made of the inability of the SATS management to administer the SATS in accordance with sound business principles, and so they go on.

A classic example of their criticism is that levelled by the then member for Orange Grove on 10 March 1980, column 2355 of Hansard. He said:

He went on to say:

I want to ask the PFP what would have happened if we had followed that advice. Mr Laker’s airline is now bankrupt; ours is still in existence. I want to ask hon members of the official Opposition, before they criticize, to realize that there are certain basic factors over which the SATS has no control. Only if they realize that, could their criticism possibly be worth anything.

Owing to a lack of time I want to mention a few factors, in summary form, over which the SATS has no control whatsoever. I am thinking of factors such as the world recession, the drought, the decrease of local production and the consequent decrease in goods traffic, less freight in the harbours, unlawful competition by road hauliers, the low gold price, the poor demand for export goods, increasing interest rates, the SATS’s sensitivity to fluctuations in the business cycle and the higher—and also unpredictability—of fuel prices. I want to elaborate on this. The expenditure on aircraft fuel makes up 35% of the SAA’s operating expenditure. That came about during the fuel crisis of 1973-74 and not as a result of any policy of apartheid. The SAA held intensive negotiations with fuel companies and fuel-saving aircraft were purchased. Modifications to jet engines also save fuel. A system was also introduced of refueling at airports offering competitive prices. There is no short-term solution for this. The war between Iraq and Iran also gives rise to higher prices.

Another problem involves peak hours. An example of this is the fact that during peak hours 250 000 passengers are transported from Soweto. What is ironic is that from six o’clock to 8.30 in the morning the trains are running full-steam, but they then lie idle until five p.m. The capital investment involved in this causes costs to skyrocket. Then there are also the goods service that virtually come to a standstill during peak hours when a large number of suburban passenger trains have to run. The long-term solution is staggered working hours. A climate must be created for their eventual introduction in South Africa one day.

The SATS is also subject to cost increases because of its being a large-scale consumer of production inputs, for example, electricity, steel and many others. Then we have the unutilized harbours. Four to five years ago our harbours were full to overflowing. Then the criticism was that the facilities were inadequate. So millions of rand were spent, but suddenly there was no more traffic—also because of the policy of apartheid? Yet the modern harbours with their containerization facilities and modern cranes are still waiting for traffic, and the Government’s political policies have nothing whatsoever to do with this.

A further problem is the fact that the existing tariff structure—as the hon member for Kimberley South has indicated—cannot immediately be converted into a cost-based tariff structure. Then there are the staff shortages in certain grades and in certain areas, for example technicians, semi-skilled workers and management personnel and, as far as areas are concerned, the PWV and rural areas. This is the result of the industrial development in the PWV area and the depopulation of the rural areas. Those are problems that cannot be sold in the short-term either.

Then there are also the socio-economic services that the SATS must furnish at a great loss. In many cases it is the only organization providing transport services to remote parts of the country. Then the hon member for Port Elizabeth Central compares us to West Germany. One cannot, however, compare South Africa, with its great distances, to West Germany which is a small country with between 190 million and 200 million people. The Winburg district in the Free State is larger than Holland, and Holland has the benefit of millions of passengers in a small country, not a country of great distances like South Africa.

Another factor is reconciling infrastructure and facilities with the traffic fluctuations, as determined by economic cycles. Another socio-economic service that creates a financial problem is that of departmental housing. The rental for departmental housing is not economic. During the 1982-83 financial year the cost of departmental housing amounted to R77 million as against a return of R11, 8 million. This means that expenditure exceeded revenue by an amount of R65 million. I do not think there is any hon member who wants us to increase the rental for the people concerned, because that is part of their conditions of service.

The philosophy underlying any transport system in the world should simply be to transport loads in the most efficient, most economical and quickest way possible. That is why SATS is continually engaged in renewal and is continually introducing new methods. In its annual report the SATS loudly and clearly formulates its objective as follows:

In accordance with this philosophy the SATS adopted positive measures to achieve its objectives. I want to point to a few. There are the high-speed trains, the rationalization of passenger services, computerized reservation systems, incentive schemes, aggressive marketing, the development of container terminals, overnight train services, new works at harbours and the construction of new lines. To reduce the cost of electrical energy, power factor correction equipment and energy control equipment is being installed wherever this is justified. Specifications for induction furnaces, for use in the foundry in Bloemfontein, includes equipment to control and to limit the maximum demand, thereby reducing the cost of electrical energy by approximately R100 000 per year. There are the new generation train sets, technological developments such as air-brakes, alternating current electrification, etc. Since 1975 the provision and development of manpower has been tackled on a more regulated and scientific basis by means of management development centre techniques and management training. The SATS is the biggest undertaking in South Africa to employ these techniques and is one of the few undertakings in the world that has designed a follow-up centre and put this into operation. In recent years the SATS has also made great strides in its handling of the energy crisis. An electrification programme was embarked upon, resulting in the total increase in track kilometres from 9 849 in 1973 to 15 428 at present. At present 72% of the total traffic, expressed in gross ton kilometres, is being handled by way of electric traction power. If this traffic had had to be handled by diesel traction power, it would have cost approximately R500 million per year, a large percentage of which would have been foreign exchange.

Another achievement in recent years involved the additions to the harbours at Richards Bay and Saldanha and the construction of the railway line between Saldanha and Sishen. When one visits that area, as our study group did in January, one is made to realize what a tremendous project it is, not only its establishment, but also the continual maintenance and the brilliant solutions presented, from time to time, for the maintenance of the facilities.

One can also think of the technical achievements of the SATS. On a rail gauge of 1 065 mm we in South Africa achieve more than some countries with a gauge of 1 435 mm. Our lines carry much heavier loads than those of other countries with the same gauge.

There was also the problem of eliminating delays in goods traffic as a result of traffic congestion on the railway lines, particularly in the Witwatersrand area. This was done by building Sentrarand, a marshalling yard. That in itself is also a unique achievement. One can also refer to the various uses of computers, also in regard to the sophisticated signalling systems.

Great strides were also made in the field of containerization. Ten years ago the Government took the big step of deciding that the time had come for a changeover to full-scale containerization. Quick action had to be taken. Special terminals were provided in record time at three harbours, Durban, Cape Town and Port Elizabeth. The facilities there are amongst the best in the world. The handling rate for containers in South Africa does not take second place even when compared with the best in the world.

In the field of management training the SATS is also a world-leader. A group of officials of the CSIR recently investigated world-wide developments in the computer field, and after having investigated the SATS system they came to the conclusion that the SATS approach was unique in the computer and personnel field and that the SATS could definitely be regarded as a leader in this sphere. Representatives of other organizations from all over the world have come to obtain information here from the SATS.

I therefore do not have the slightest doubt that the SATS is capable of providing an efficient transport service that can meet the overall transport needs of the country, not only today, but also in the future.

Mr Speaker, I was very pleased to hear the hon member for Bloemfontein East at the end of his speech getting a bit more cheerful and finding things about SATS about which he was proud. I found the first half of his speech most astonishing. Firstly, he used a number of rather dated quotations. In essence, what he was saying was that SATS may be in rather a mess, but apartheid was not to blame for all its problems. I thought that was rather astonishing, coming from an hon member on that side of the House. For example he mentioned numerous factors which he felt SATS had no control over and therefore, by implication, resulted in inaccurate planning and budgeting. Obviously, most of the factors which he mentioned SATS itself does not have any control over, but that does not mean to say that it cannot take them into account or at least forecast with greater accuracy what is likely to happen in those spheres. For example, he mentioned the gold price. This is obviously something that no-one can predict with accuracy. There is much talk about a drop in the gold price and the higher the gold price, the better it is for South Africa. However, in rand terms we know that within the last year or so the drop in gold price has been far less dramatic than the normal drop in the dollar price. The effect on the economy as such is therefore not nearly as dramatic as some hon members on that side of the House are trying to make out in their efforts to excuse the Government from a variety of sins.

Secondly, I come to the question of inflation. SATS may operate autonomously in certain respects, but they are not 100 miles away from the control of the Government, which has been the primary cause of inflation in this country for nearly a decade. SATS themselves, as my hon colleague pointed out this afternoon, certainly do have a blameless record in that regard.

International recession is another example mentioned, but this is something that every business has to try to forecast and take into account. Individual businesses throughout the world do not have control over international recessions or economic fluctuations, but in their planning they have to try to make sensible forecasts and be as flexible as possible. It is just not good enough merely to say time and again that because all these factors that exist in world are in some cases beyond the control of a particular government or in particular SATS in this case, one can excuse almost any errors in budgeting. I do not accept that as being valid.

The hon member mentioned Soweto as another example. He referred to the problem of the large numbers of trains that Soweto be used during peak hours while there is very little rail transport required in between. Of course that is correct, but that is nothing new to Soweto or to South Africa; indeed, it is nothing new anywhere in the world. The whole problem of peak hour traffic and the movement of people is something that has to be handled, and I agree with the hon member that one has to look at various solutions. However, one cannot try to excuse any elements of bad performance merely by suggesting that this is an unavoidable factor that has fallen upon the shoulders of the SATS and that it is a grave misfortune over which they have no control and about which they can do nothing.

I should like to turn briefly to a point made by the hon member for Amanzimtoti earlier today. The hon member for Pietermaritzburg North has already referred to it but I should like to touch on one other aspect. It is the question of third class fares, the fact that they have to be subsidized and that SATS nevertheless show a big loss on them. The hon member for Pietermaritzburg North made the point that the people generally have been forced to live in areas far away from their work and that they should therefore not be required to pay for that fact. When talking about wage gaps and standards of living, the hon member for Amanzimtoti quoted some figures from Hansard which I do not have to hand. However, I should like to sound a warning because I think it is another element in economic debate in South Africa that is often abused. People look at a wage gap at the average level of wages in real terms—often they do not even bother to look in real terms by adjusting for inflation—and see that there have been considerable increases in the wages of Black workers, and that is generally correct. However, they ignore the fact that that does not necessarily mean increases in the average standard of living or the average real income of the individual; in other words, in the per capita income. One cannot look at the wage levels and at the same time ignore the growing unemployment or the fact that people are being sent back to their homelands and then not included in the statistics. All these factors have to be borne in mind. It is often very blandly used as a justification for increases in bread prices or in the price of any other item for which the consumer has to pay.

Surely that applies to everybody.

Yes, it does, but when one talks about increasing standards of living, one cannot just look at the increases in wages, even in real terms. One has to look at the real income per capita and see where those changes have come about. That is the only point I am making.

I was referring to your reference to the bread price.

In those debates it is of course also quoted—often erroneously—in this House. One thing the hon member for Bloemfontein East said, with which I do agree—and I should like to comment on it briefly—is the importance of profitability for SATS. In achieving that one should bear in mind the fact that it is greatly affected by the optimum utilization of capital equipment and of investment in fixed assets of SATS. I have been pleased to see during recent years—and particularly during the past year—the initiatives taken by SATS with a view to increasing the utilization of its capital equipment by way of trying to encourage people to travel by air. I do welcome these attempts. Only time will tell how successful they have been, both in terms of their attractiveness to the passenger and also in terms of their financial success.

Among those concessions that have been worked out in the past year are some concessions to assist families to travel on our airlines. However, I should like to touch on a further aspect, and I would appreciate it if the hon the Minister would be prepared to give this matter some thought. One has the slightly strange situation that children under the age of 12 years, children who take the same seating accommodation as any adult, who eat the same food …

Do they get food?

Well, if they do get any food at all. I think that is a very relevant point. Whatever food or refreshments they are given during the flight, children and adults receive exactly the same. Children are not served with liquor but I do not think that is a major factor in this regard. If children travel unaccompanied they are even a bigger cause of trouble for the airlines than an adult passenger. Despite all of this, however, children pay only half price. The moment a child reaches the age of 12 he pays the full price of course. There has been no change. That child still occupies the same seat and consumes the same food and refreshments as adults. Although they are not served with liquor they pay the full fare.

There may well be historic reasons for this state of affairs. I do not know those reasons. I would also imagine that there are international norms that are laid down by Iata in connection with international flights. It is obvious, however, that whether a child is under the age of 12 years or beyond that age, that child is still dependent on his parents or guardian for his air fare. He has not yet become a wage earner in his own right. I am interested in hearing the hon the Minister’s comments on the historic background of this. Nevertheless I should like him to express his opinion too on the possibility of extending this concession, either on an age basis, or if that is not considered practical, on any other practical basis, to fulltime scholars and/or students.

One accepts that wherever concessions are made and wherever lines are drawn there is invariably an element of arbitrariness. It does not, however, seem to me to make a great deal of sense to allow a child under the age of 12 years to travel half price, and then, the moment he turns 12, to make his parents pay the full price. I should like the hon the Minister to give his suggestion some thought.

The second point I wish to raise, is the question of the safety of the public. This is a matter of great concern amongst large numbers of people in our society. Another hon member of this party will deal with some of the major issues in this regard later in this debate. Therefore I wish to limit myself to one particular aspect. That is the question of subways on suburban railway lines, with particular reference to the Cape Peninsula.

Subways are unlikely ever to become particularly attractive places. Today they are viewed by the community with considerable apprehension—especially women of all ages, children and aged people who have come to fear subways. Subways are feared by many. People fear muggings, assaults and harassments.

By whom?

By criminal elements.

Who are they?

I say they are criminal elements.

What are you driving at?

The hon member is obviously waiting for me to classify these criminal elements into race groups. However, I must disappoint him because they do not fall into any particular race group.

Have you had a look at the statistics?

Mr Speaker, I find it absolutely astonishing that in this year of 1984 when we are supposed to having a new dispensation and when we are going to have Coloured and Indian Ministers and members of this Parliament, those two hon members can sit there and suggest that the most important thing to discuss in regard to the problem of safety in subways is the race of the people who may or may not commit the crimes. [Interjections.] I think that the race of such people is quite irrelevant. I think those two hon members are being unbelievably racialistic and I find it absolutely amazing that they can act in that way at this time. Of course, when their remarks are reported in the Press, they will talk about the PFP or the CP giving South Africa a bad name. [Interjections.] I believe the hon the Deputy Minister of Environment Affairs and Fisheries made a similar remark about subways although I did not hear it. [Interjections.] It is absolutely astonishing.

As I had said, subways are feared by many people because of the muggings, assaults and harassments that take place there, and something must be done about it. This matter is complicated by divided responsibility. In the southern suburbs of Cape Town, for example, as I understand it, the subways at railways stations are the responsibility of SATS and the Railway Police. However, the minute one moves away from a railway station, the responsibility for the cleanliness of that subway devolves upon the municipality and, in relation to crime and the maintenance of law and order in those subways, the SA Police. I think that that is the position as it stands which does complicate matters to some extent.

When one looks at the railway line through the southern suburbs of Cape Town, one finds that it does not follow a natural division. It may follow a logical route for a railway line but it does not follow a natural division of the community. In fact it splits neighbourhoods down the middle. The result is that people are forced to cross the railway line whether they are using trains or not. People are obliged to cross the railway line simply in the course of their everyday activities. I am not criticizing SATS in this regard. I merely mention this as a matter of fact. In order to get where they are going, people are having continually to cross these railway lines. I believe that SATS have the responsibility to ensure that people can cross railway lines safely. Something will have to be done about this. Sometimes SATS have a direct responsibility at the stations and sometimes I believe their responsibility is indirect. Where they do not have direct responsibility they should co-ordinate the activities of the other authorities. I should like the hon the Minister to investigate this matter and, if necessary, call a meeting of the relevant authorities and try to get something done to bring about an improvement of the situation.

Mr Speaker, I have listened attentively to the hon member for Cape Town Gardens. He devoted the greater part of his speech to criticizing the remarks of previous speakers. In particular, he referred to the increase in the tariff of third-class passengers and he made the point that we must not only think of salary increases, but also of the income per capita. Perhaps the hon member could tell me whether the income per capita of the Blacks in this country has not gone up. I do not understand the hon member’s argument in that connection.

The hon member also referred to children under the age of 12 years travelling with the SA Airways. I do not believe that his point is valid. Our flights are very seldom so fully booked that we cannot allow children that discount. Furthermore, I would say that in doing this, we are enabling the father and mother to take the child along at a reasonable cost.

The last point which the hon member made, the one about the subways and the safety of the public, is a very valid one, in my opinion, and I believe that the hon the Minister will reply to him in full on that. I believe that this matter will be investigated.

I found it very interesting to listen to the hon member for Cape Town Gardens, because his speech was in sharp contrast with those of the other two hon members of the official Opposition. On the one hand, we had the new spokesman—I want to congratulate him on his appointment in that capacity—and on the other hand, we saw the aspiring official spokesman breathing down his neck. I do not think the hon member for Pietermaritzburg North did his party or the SATS a favour by the performance he gave this afternoon.

It makes me think of a beautiful flower growing in the veld. A bee approaches the flower and extracts the most delicious nectar from it, but the same flower is approached by a spider, who extracts poison from it. We heard a great deal of poison from the hon member for Pietermaritzburg North this afternoon. [Interjections.] I shall come back later to the spokesman of the official Opposition.

The SATS Budget which was submitted to this House by the hon the Minister last week testifies to an outstanding achievement, seen against the background of poor economic conditions in this country and elsewhere in the world as a result of the world recession which is still continuing. Since the SATS Budget can have a material effect on the country’s economy in general, the Budget was awaited with great interest. I believe that everyone was very pleasantly surprised by a balanced and well-considered budget. When we think of last year’s budget, especially of the large deficit which was budgeted for on that occasion, and if we also bear in mind the fact that economic conditions have deteriorated rather than improved, as a result, among other things, of the most extensive and lengthy drought in the history of South Africa, and of factors such as the relatively low gold price—there I differ with the hon member for Cape Town Gardens, who says that it does not have a material effect—the high inflation rate, the continued world recession and an unfavourable exchange rate, no-one could have imagined that we would get off so lightly this year.

I have called the Budget an achievement, but what is the essence of this achievement? It lies not only in the Budget for the coming financial year, but also, and especially, in the specific measures that have been taken to conclude the previous financial year in such a way that the present Budget is made possible. I would attribute this mainly to the following three factors: Firstly, outstanding managerial skill and planning; secondly, sustained financial discipline at all levels; and, thirdly, the continual endeavour of the SATS to achieve greater efficiency and productivity.

Of course, we are in the privileged position of having a Minister at the head of the SATS who is qualified for his task. [Interjections.] With him, we have a General Manager and his managerial team, all of them people who refuse to give up when the going gets tough, realistic, practical people, who have both feet firmly on the ground, as the hon member for De Kuilen said, and who live in close contact with their fellow-men. It is an able and dynamic managerial team in respect of which we know that under more favourable circumstances, the SATS will perform superbly again and will be and remain a dynamic force in our economy. On this point, I should also like to refer to the Board of the SATS and to thank its members for the fine annual report they have submitted to us. When we examine that annual report more carefully, we see that the Board of the SATS has worked very hard indeed over the past year, and we want to convey our sincere thanks to them for their great contribution. I also want to place on record today the fact that the General Manager, Dr Bart Grové, has already proved, after his first full year in office, that the great trust that was reposed in him when he was appointed was fully justified. The same applies to all the top officials and the senior staff members of the SATS. We are dealing here with people who possess specialized knowledge, expertise, a dynamic approach and motivation which compare with the very best in the public and private sectors in South Africa. It is clear to any observer that the officials of the SATS come from the same mould. These are people who work together in a team, and this team will produce good results for the SATS and the South African public in future.

It has often been said in the past, and it remains true, that the SATS forms the artery of the country’s economy. The SATS is and remains the greatest single indispensable facet of the economic and social infrastructure of our country. Just as people in high positions get the most criticism, the SATS inevitably comes in for a great deal of criticism, and in most cases this criticism is unjustified and unsympathetic. That is why it happens only too often that people are thoughtlessly unfair or even naïve in their criticism, as we have heard once again today from some members of the official Opposition. It is an annual phenomenon that some Opposition members seize upon this matter to derive a little cheap party political gain from it. This year has been no exception, of course. The official Opposition’s new spokesman on transport affairs, the hon member for Port Elizabeth Central, put his foot in it right at the start. We were not surprised, because we know that the hon member likes to be a little dramatic and theatrical. He is under the illusion that everyone listens to him.

†The hon member made a certain remark here this afternoon, and has been taken to task for it by the hon member for Kempton Park. He spoke about a “railway mentality”. I think he should take the first opportunity to say exactly what he meant by it, or otherwise to apologize for that rather degrading remark.

What is degrading about it? I will tell you exactly what I said.

Mr Speaker … [Interjections.] The hon member must please be quiet now. He will have the opportunity for making his apology during the Committee Stage.

*The SATS is a business enterprise of the State and should therefore be operated according to the accepted norms and practices of sound business principles, as it in fact is. Furthermore, it is a fact that the operating results of the SATS will always reflect the level and the state of the national economy. Unlike businesses in the private sector, the SATS, as an organization which serves the public, is subject to severe restrictions, with the result that it does not enjoy all the entrepeneural freedom which exists in the private sector. I want to emphasize this aspect and I want to go so far as to say that the SATS is the milch-cow of the South African economy, because it is committed to the provision of essential but unprofitable services without which a normal and healthy economy could not exist.

Reference has been made this afternoon to unprofitable services. We may ask ourselves what the position of the SATS as a business enterprise would have been if it had not had to provide those services. These facts are very often ignored by the critics in their comments. The hon member for Kimberley South referred to the loss on the provision of socio-economic services, uneconomic passenger services, the operation of uneconomic branch lines, the loss on the SWA services, etc. These are only a few examples, but they do illustrate the extent of the problem.

I want to refer to another problem with which we are faced, and which is at the moment receiving the serious attention of the Management of the SATS, a problem which has an adverse effect on the revenue of the transport services, especially when the economy is sluggish and weak. It concerns the whole question of road competition, which has increased to such an extent that the SATS’ share of the market is only 32,3% at present. One must remember that the cream has already skimmed off by the other transport media. This brings us back to the milch-cow idea which I expressed earlier. The SATS is expected to compete with the other transport media with regard to cost and service, but at the same time it has to bear the burden of these uneconomic services. This is a very worrying situation, and the hon member for Port Elizabeth Central said that we should abolish the protection. In this connection I seriously disagree with the hon member.

In the annual report—and I want to thank the hon the Minister and the General Manager for a well-produced annual report—the General Manager gives an excellent explanation of the philosophy of the SATS in this connection. I know that other hon members will have more to say about this, so I shall not go into the matter any further.

In spite of all the factors which have had a negative effect on the financial position of the SATS, it has succeeded, through financial discipline and active economizing measures, in achieving an impressive result by converting an expected deficit of R634 million into a loss of only R11 million. This is an achievement which certainly cannot be allowed to pass without comment and which deserves the highest praise. Apart from the financial discipline and the remedial action taken, it testifies in particular to greater efficiency and operating productivity.

We were glad to learn earlier this year that an amout of approximately R380 million had been used to grant a 12% increase to SATS officials. We really hope that more money will become available so that the gap which has arisen between the salaries of the SATS employees and staff in other parts of the public sector can be bridged as soon as possible.

Further remedial actions to which the hon the Minister referred, actions aimed at increasing the declining share of the SATS, include the sustained improvement of service by means of a client-orientated approach and more effective marketing techniques. In this connection, an enormous amount is being accomplished by the training and improved utilization of staff, as well as the coordination and streamlining of services. This will place the SATS in a much more favourable competitive position, thus enabling it to obtain its rightful share of the market. Many things are being done to bring about a better relationship between the SATS and its clients, and in the course of these efforts, a much better image of the SATS is being projected every day. I am sure that this will produce the desired results in future.

As far as the tariff increases are concerned, it is my opinion, too, that the increases are entirely justified under the present circumstances. Against the background of rising prices of almost all commodities in the country, these increases were fair and should not necessarily affect inflation rate. If tariffs had been increased with a view to wiping out the expected deficit entirely, one cannot imagine the predicament in which we would have found ourselves when it came to drafting the next budget.

Allow me, Sir, to make a few final remarks about the SA Airways. I want to join other hon members in congratulating the SAA on its 50th anniversary. The SAA is and remains the pride of South Africa, and it is second to no other service in the world in any facet of aviation which it operates. On the contrary, with regard to flying ability, safety in the air, maintenance, cabin service and the general operation of the service, I believe that many airlines all over the world would be only too glad to learn from the South Africans how to operate an airline. Unfortunately, time does not allow me to do so, but I should very much have liked to say more about the pioneers of aviation. This has already been done by some other hon members. However, we pay tribute today to them and to all who came after them, with the result that the flying springbok is today represented in 54 countries beyond the borders of South Africa and last year conveyed just under 4 million passengers on its domestic and foreign flights. We salute the SAA and we wish it well on the road that lies ahead. I also want to convey my sincere congratulations to Mr Van der Veen. We believe and trust that he will also keep the flying springbok in the air with good results in future.

We thank the hon the Minister for a very balanced budget and I support his proposals in this connection.

Mr Speaker, the hon member for Kroonstad will pardon me for not reacting to his speech, since I only have a short time at my disposal and I should like to touch on a few matters of my own. The CP will always hold the view that praise should be given where praise is due and that criticism should be expressed when it is warranted, because we believe that is right. Therefore, when the hon the Minister deserves praise we shall praise him, and we shall also thank him and his staff. However, when we believe that criticism should be expressed, they will have to take it in the spirit in which it is given. That is what we are here for. The SATS does not only belong to us in this House, but is a matter for the whole of South Africa.

We must also take cognizance of the sharp criticism expressed by certain newspapers and businessmen. Surely that is clear. I should just like to quote from the leader in Die Vaderland of 2 March under the headline “Troostelose begroting”:

The article concludes as follows:

Are you quoting from Die Patriot now?

No, I am quoting from the hon the Minister’s newspaper, Die Vaderland. [Interjections.] I believe that the hon the Minister will accept this in the right spirit, coming from a newspaper that is one of his most ardent supporters. We are living in extremely serious times, and to keep our heads above water today is not very easy. Ultimately it will be the man in the street who is going to pay the most for everything. It is true that at present South Africa is suffering its most serious drought ever. It is also true that at present we are experiencing a recession, coupled with inflation, which is also the most serious ever. The hon member for Kimberley South referred in his speech to the early ’thirties when we struggled bitterly in this country and when as a people we came through that tremendous crisis. As a result of that hardship, we have taken decades to recover. With the problems being experienced in the economy at present, and as a result of the drought as well, it is our most fervent prayer that we will be spared those things. People can be torn away from their properties and this could contribute to feeding a monster that will live off the people in the future.

For example, one could think of the poor white question in the ’thirties. The hon member for Kimberley South quite justifiably referred to this. We who are grey at the temples will know about that. I can understand that there are many hon members in this House who are very young and who have no recollection of those years.

The SATS and its staff sacrificed a great deal in those difficult years. We are also aware of the cultural organization, the ATKV, which they established, and of what that organization has done. If there are officials in South Africa who are not ashamed to stand in the front line for their country, they are the officials of the SATS and the officials of South Africa as a whole. [Interjections.] I am mentioning these things because they are important.

I am an optimist. I believe that it is going to rain again and I believe that the economy will recover. However, let us not make it even more difficult for our people by taxing them heavily. As it is, prices are increasing by leaps and bounds. Prices are simply soaring. The purchasing power of the rand is becoming increasingly less. What I find alarming, is that it is the poor man who will feel it the most. The prices of luxury articles are also increasing, but when someone purchases luxury articles he alone is to blame if there are problems. It is he who was injudicious and he cannot blame anyone for that. However, food comes first on everyone’s list of necessities. One can do without many things, but not without food. It is therefore important that we give attention to this matter. Food is indispensable. The price of foodstuffs is going to be affected drastically by this budget. These tariff increases, which, in my opinion, are too drastic, are going to result in a chain reaction. No-one can disagree with me on that score. It is the simple truth. The transport tariffs for livestock have increased by 9,8% and this will necessarily affect the price of meat. In general, transport tariffs are increasing by an average of 9,4%. Harbour tariffs are increasing by an average of 11,3%, and cargo and cartage service tariffs by an average of 8,7%. So much for cargo. The tariff for general cartage services is also being increased by 8%. If it is less than a ton, the increase is 10%. Why is this the case if it is less than a ton? Surely we must also think of the small businessman and not always only of the big ones! Coal tariffs have increased by up to 16%, and winter is around the corner. The rail cartage on goods in the lower class has increased by an average of 15,2%. The tariffs for the transportation of mail and parcels are being increased by 15%, and this is necessarily going to affect the Post Office Budget considerably. We must realize that the Post Office Budget still has to be introduced, and that Budget is going to be affected by this. Passenger fares on trains have also been increased. A great deal has already been said about this. The fare on domestic flights has been increased, but what is to be welcomed in this regard, is the increase from 30% to 40% in the travelling concession for national servicemen. We are pleased that this concession is being granted, and we are grateful for this. We appreciate it. We are also grateful for the concession to our senior citizens, but I do just want to point out that most of our aged who are old age pensioners are already living below the breadline, and I therefore fervently hope that they will be in a position to utilize this concession. Under the present circumstances I wonder whether they will be able to visit a seaside resort for a weekend, or whether they will ever be able to make use of the lower flight tariffs since, as I have said, many of them are already living below the breadline. Fortunately there are those amongst the aged who, for example, can still be accommodated in an old age home or in a subeconomical housing scheme, but not everyone is that fortunate. Not all the elderly have children who look after them, and I hope from the bottom of my heart that those people in particular will be able to make use of those concessions. That is my fervent hope, but I doubt whether that will, in fact, be the case.

We are grateful that the staff of the SATS have been given a salary increase of 12%, since they should not have to stand back for the rest of the officials in South Africa. It is men and women of this calibre who have often got the job done in the past, and they will do so again in the future. We need have no doubt about that; they will do so. [Interjections.]

We are also grateful for the annual statutory adjustment to pension annuities which were increased by 10% from January 1984, since it has often happened in the past—and I have come across this myself—that someone who receives a civil or a Railway pension is disqualified from receiving an old-age pension because his pension annuity falls just above the fixed scale. I think there will be an improvement now, and we say thank you for this as well, for we are grateful. We will express gratitude where gratitude is due, but we are also going to express criticism where necessary.

We have taken cognizance of the saving campaign by top management, and I wish to assure Dr Grové and his officials that we have taken note of it. We are aware of what has been accomplished in one year, but I believe that someone who can achieve so much in one year, will do even better this year. Dr Grové knows that this House is grateful for what he has done, and if he can save even more in the future, it will not be necessary to increase tariffs again, since deficits can be prevented in that way. Taking into account the fact that there will be a saving of approximately R623 million, one wonders whether the tariff increases that were announced were not too drastic, and I ask the hon the Minister please to reconsider, since I believe that something can be done about that.

Certain tariffs were already increased from 28 December 1983, and I refer in this regard to tariff increases under Notice No 48: “Summary of alterations.” Inter alia, it is announced in the circular that the changes were applicable from 28 December 1983.

I just want to refer here to a few agricultural commodities. Dipping fluid appeared under tariff 7 at first. From 28 December last year, however, it appeared under tariff 6—a more expensive tariff. Insect poison was also increased from tariff 7 to tariff 6, as were weedkillers, fungicides, disinfectants and ant poison. This list of tariffs goes on for many pages. Vegetables—frozen and other—are also in a different tariff class now; a more expensive tariff class. Jelly, jam and chocolate are also subject to a higher tariff. Of course, I do not have a great deal of sympathy with people who purchase large quantities of chocolate; it is a luxury. According to this list, jam, oysters, pickled olives, aba-lone, powders for the prevention of scabies, etcetera, are also in a higher tariff class. Then there is also seed inoculants, fruit squash, syrup, grapes, etcetera, as well as fruit cordials and mineral water, cordials, fruit sugar, tinned sweetcorn, tomato juice, tomato drinks, fruit, more fruit, vinegar, and so on. [Interjections.] These increases already came into effect on 28 December last year. Today it is already 5 March, and there will be more increases on 1 April this year.

Now I should like to ask the hon the Minister whether the tariffs on these commodities are going to be increased again. We must bear in mind that they were increased very recently. I also want to refer to the circular that has a bearing on this, in fact, to pages 10, 11 and 12 of that circular.

Furthermore, I wish to ask whether Notice No 48—“Summary of alterations”—is the only notice whereby tariff increases have been effected during the past year by pushing up tariff qualifications. That is my first question to the hon the Minister.

My second question is as follows: Is it the intention that the articles mentioned, the tariffs of which were increased on 28 December last year, are going to be increased again with effect from 1 April this year?

This brings me to my third question to the hon the Minister. How much of the R623 million was recovered by way of tariff increases over the past year?

Before I proceed, Mr Speaker, I should like to move as a further amendment:

1. (1) active steps will be taken to cease introducing budgets that provide for a deficit and to wipe out the accumulated loss suffered by the SA Transport Services;
2. (2) the House of Assembly will retain authority over all legislation affecting the SA Transport Services within the area of jurisdiction of the White Republic of South Africa;
3. (3) a Coloured person or an Indian will not be appointed as Minister, Deputy Minister, or a member of the Board, of the SA Transport Services;
4. (4) the White worker in the SA Transport Services will be protected;
5. (5) the necessary segregation measures will be taken to prevent crowding-out at stations and on premises of the SA Transport Services;
6. (6) racial mixing on trains and at public holiday resorts of the SA Transport Services will be prevented; and
7. (7) high priority will be accorded to the provision, maintenance and improvement of services conveying commuters to and from places of employment.”.

Now I also have pleasure in bringing up the following matter. Recently we saw on television what a certain official of the SATS has accomplished. I am referring to Dr Herbert Scheffel, a man who I believe is probably the person in South Africa who has done the most for the SATS in the field of inventions this decade. If we read what Dr Scheffel has done in this regard, we have no choice but to realize that what he has invented will bring about a revolution as regards speed, as well as the protection of train wheels and rails. His invention is going to save our country millions of rand in the future. I want to tell the hon the Minister that I am honestly convinced that such a person ought to be given an award, and nothing less than the DMS. I think there are many people who have been given the DMS who are far less deserving of it than Dr Scheffel. Dr Scheffel deserves a very high award for this exceptional invention, for there are people all over the world today who are interested in that invention. If we read the pamphlet which is available, we know that the name of Dr Scheffel will live on long after a great many things have gone.

Mr Speaker, it is with mixed feelings that I now take the floor just after the hon member for Nigel has spoken. The hon member, at one stage, quoted from Die Vaderland, and at a later stage also spoke of certain toxic substances. I just want to tell the hon member that one can sometimes also read published articles in a newspaper that are a deadly poison, reports not actually based on facts. That is why I do not allow myself to be influenced by any newspaper whatsoever. No newspaper has ever done my thinking for me. I think for myself. [Interjections.]

Hon members may laugh at me if they want to, but I have my own personality and am my own man. I also grew up in hard times and know what hardship is. I still remember the days when, after writing my matriculation examination, I did not have the money to study further. I remember the days when the SA Railways gave me a chance in life and I also remember how I was victimized by the old South African Party. I still remember many things. I remember, too, how I had to walk three or four kilometres every morning in Johannesburg because I could not afford a bicycle.

In my career I have worked in livestock offices, on coalfields and in many other places. I did so as an Afrikaner, and was also a member of the Spoorbond and ATKV. So hon members do not have to tell me anything about that.

I am glad, however, that the hon member referred to the question of increased living costs and hardship. We all know that people suffer hardships. But why blame the hon the Minister and the Railways for this? The hon member wanted an award conferred on Dr Scheffel, but why did the hon member also hit out at the SATS as if it were responsible for the inflationary spiral that is assuming ever increasing proportions? People are also being exploited. If those hon members would do what I do and give people time to get their wits back, they would quickly discover that the problem does not lie with the SATS and the Government, but with other people. I do not think that hon member should lay all his complaints at the door of the SATS.

The hon member also referred to Dr Scheffel. I say that he deserves all the credit and gratitude possible. I am also glad, for the hon member’s sake, that it was in his constituency that the Union Carriage and Wagon Works manufactured the Blue Train. They also do a lot of other work for the SATS and have thousands of people in their employ.

The amendment moved by the hon member is unfortunately, as far as I am concerned, a sort of second inflation speech that he made. It is very complicated, but I hope to refer to it in the course of my speech.

Today I want to speak about our transport diplomacy that can play a role in our present negotiations. In my view we give too much thought to the economic field where certain business principles apply. That is quite right, but there is also the political sphere, ie that of diplomacy. That is the field of the possible, where one eventually has to tie in diplomacy with the business side of things. That is what is happening at the moment. It is happening in our midst. It is in the process of happening under the guidance of the hon the Minister of Foreign Affairs, the hon the Minister of Defence and the hon the Minister of Law and Order. The most important link, however, is still our transport, and here the hon the Minister of Transport Affairs also plays a role. Transport makes it possible for us to link up with one another. Against the background of international conditions, it is also necessary for us to look at people’s national interests. We must eventually determine what role transport can play so that one can develop the proper diplomatic view of things, estimate the correct time for dealing with certain matters, a sound judgment and a common goal.

We have a unique geographic position. Show me one country, even in Africa, where there is a system of transport spread over as wide an area as in South Africa. Show me a country that is as self-sufficient as South Africa, when it comes to food, minerals and other raw materials. To the world we display technological and industrial expertise. We are highly regarded from the military point of view. We have inherent on strength and qualities that speak volumes. We know the aspirations of peoples, but we also know their fears. In this respect South Africa’s communication system, its transport system, plays an important role.

How can we promote common interests? How can we achieve co-operation? How can we avoid confrontation? How can we ensure stability? How can we use transport to cement ties of friendship? How can we open doors to Africa? It is specifically in this connection that the transport services’ infrastructure is a forceful element in negotiations. It could even become the most powerful link on the diplomatic front.

We do not have navigable rivers, but we have a railway network with people at the helm who can play a key role. It is indeed so wonderful that it was the Voortrekkers who forged the link with Maputo for us so that we could obtain our own harbour. Paul Kruger found access to the sea indispensable because an open railway to the sea guaranteed the independence of the Boer Republics. The new initiatives we are now dealing with therefore have their origins way back in our history.

The erstwhile South African Republic had its eyes constantly fixed on the Indian Ocean, where today the greatest amount of communist infiltration and Marxism is to be found. Paul Kruger went to Delagoa Bay and Piet Retief wanted to go to Port Natal. Paul Kruger prepared the way for us, and that is why we can say today that it was the erstwhile South African Republic that concluded the first diplomatic treaty with Portugal. Rhodes quickly tried to build a railway line from the Free State border to Johannesburg, but then Paul Kruger came to light with another alternative that resulted in another system being designed for South Africa.

Rhodes dreamed of a railway line from the Cape to Cairo, and his object was to establish, in Southern Africa, a confederation of states under the British flag. He wanted to unite all the states in Southern Africa under the British flag, and for this purpose he even obtained the support of the Afrikanerbond and Jan Hofmeyer. When Rhodes saw his plans threatened by Delagoa Bay he even treid to purchase Delagoa Bay, but could not succeed in doing so. Rhodes then established a railway line right into the Lower Congo.

Those are matters of particular importance to us today when we think in terms of economic co-operation in Southern Africa. There is no comparison between our transport system and that of any other State in Southern Africa. This achievement is also unequalled throughout the world.

Mr Speaker, may I put a very simple question to the hon member?

No, Sir, the hon member may not; my time is very limited and I still have quite a bit I want to say.

Our surface area is a mere 3,4% of the total surface area of Africa, but with our railway lines stretching over a distance of 24 500 km we control 25% of Africa’s 93 000 km of railway lines. We handle two thirds of all the loads transported by rail in Africa.

Our transport system covers our entire country and its coastal area and handles the road, rail, air and sea traffic. When one takes a look at the rail system, one notices a strange phenomenon. Colonial powers such as Britain and France only built a few railway lines from the harbours to the production areas. We in South Africa, however, have a proper railway network unparalleled in South Africa.

As far as co-operation with states in Africa is concerned, I still remember the days when the harbour at East London was under-utilized. An agreement was subsequently concluded with Zambia in terms of which fertilizer was imported for Zambia through the East London harbour, with up to two trains per day, fully loaded with fertilizer, travelling to Zambia. At the time South Africa supplied Zambia with fertilizer during its planting season. Maize to the value of R5,5 million—or in other words 3,5 million bags—was transported to Zambia to avert a famine there. On their return journeys these trains brought copper from Zambia to East London for export. Three hundred thousand tons of copper were exported through East London annually.

I think the way in which the SATS built up better relations with its diplomatic offensive must have melted Pres Kaunda’s heart, whatever his ties with South West Africa may have been. To use the English term, we did not grant “foreign aid”. It was a business transaction to the benefit of both countries. Zambia paid for the maize and for the transportation of the fertilizer and the copper, while South Africa in turn repaired Zambia’s locomotives. At the time the SATS made 2 000 wagons available for the transport of goods to Zambia and Zaire. The mineral-rich Zaire permitted the flow of strategic minerals like copper and cobalt which the West needed very badly at the time. In turn we could supply them with food and mining equipment. We furnished equipment to the tune of more than R24 million, including electrical equipment for a hydro-electric project in Africa.

I also want to refer to the East African Railways, which is no more. The airways in that part of the world also collapsed. At the time there was talk of establishing an African Union of Railways. This project did not work out as planned either. It was felt, however, that in the railway sphere there should be co-ordination in Africa. Railway lines would have to be improved and there would have to be quicker and safer transportation of passengers and goods. Training centres for personnel, however, also had to be established. The relevant countries were to have come together to purchase material at economic prices.

It could not be done, however, because the railway system in the countries of Africa were so divergent in nature. There are, for example, nine different rail gauges in Africa, whilst we in South Africa use only two different gauges. The total length of railway lines in Africa is 93 000 kilometres. In my opinion Africa must accept the realities of the situation and have fewer ideological obsessions. By means of our transport system South Africa must make the countries of Africa aware of the fact that we have no imperialistic objectives. That is one of the reasons why the Tanzam railway line failed.

Another aspect I want to mention is that of the 16 countries south of the Equator, 10 have no trading ports, whilst the sub-continent as a whole has 15 recognized harbours, six of which are situated in the RSA and South West Africa. We nevertheless have a good 47% of the commercial harbours on the sub-continent. It has been calculated that our six harbours are more than 300% more efficient than all the other harbours. I had the privilege of going on tours to the harbours at Saldanha and Richards Bay and saw what good harbours they are. Luxury passenger liners are also now returning to South Africa to undertake trips along our coast. When relations with Mozambique have been placed on a friendlier footing I foresee flourishing tourist activity in Maputo once again. South Africans will then again go there by train and in luxury liners.

South Africa has also introduced airline flights to Botswana, Lesotho, Swaziland, Zambia, Malawi and Mauritius. These are but a few examples of how the SATS has extended its services. As far as Mozambique is concerned, I just want to add that the SATS assisted that country in those dangerous times when no one wanted anything to do with Mozambique. In this connection I want to pay tribute to the Minister and the top management of the SATS for seeing their way clear to doing this. The Van Schoor instruments provided security there. We supplied them with train control, locomotives, wagons, passenger coaches and equipment for wagons and locomotives. In spite of deep-rooted ideological differences the SATS entered into relations with neighbouring states. Maputo is still the nearest harbour to the Witwatersrand and the Vaal Triangle. At the time the railways spent R70 million to improve the carrying capacity of the railway line to Maputo. The eventual carrying capacity from the RSA to Maputo was 2 668 000 tons, while 946 000 tons was transported from Mozambique to the RSA. The Durban harbour was also aided by virtue of having to handle more than two-thirds of the transport and the loads carried.

Mozambique is dependent on the rail transport between the two countries. Technical and financial channels must be opened up for them and sound relations must be built up with them. In contrast to the imperial policy adopted by Rhodes, our transport strategy can bring a new concept to Black Africa, ie a vision of progress in a stable subcontinent where relations and common interests could play the chief role without interference in the government of any state.

It is this diplomacy, this transport diplomacy, that will really make South Africa a part of Africa. There is nothing new in Africa. Throughout the centuries we have been part of Africa and by means of our transport Africa is being saved from a languishing death. In the difficult years ahead we shall eventually be giving this offensive all our support. Thanks to the hon Minister of Transport Affairs, the top management of the SATS and the wonderful personnel that we have, we shall eventually establish this peace offensive by way of our transport system.

Mr Speaker, I just want to refer briefly to the amendment moved by the hon member for Nigel. He said that the CP would not support the budget unless and until the hon the Minister ceased budgeting for a deficit. In the nature of the matter this implies that it is necessary to budget for a surplus, and in order to achieve this there must be increases in tariffs. If I heard the hon member for Nigel correctly, he attacked the hon the Minister and this side of the House for the very reason that tariffs had been increased. Therefore he has come up with an absurd proposal in his amendment by saying that it i necessary to budget for a surplus. This makes no sense; just as they make no sense politically.

The Government and the NP have often shown in the past that in handling a budget, what is virtually impossible can be achieved. Thus the hon the Minister and the management of the SATS succeeded in reducing the working deficit of R634 million for which provision was made in the budget for this financial year, to an expected deficit of R11 million. Do hon members fully realize what an achievement this is, and the almost impossible demands the industry has been set to accomplish this? Together with other speakers on this side of the House I wish to convey my cordial congratulations to everyone who had a share in this fine achievement. At a later stage I shall come back to the congratulations and expressions of gratitude. The annual report of the SATS reflects the economy measures adopted to achieve this goal. I shall sum them up briefly: Firstly it is a matter of a reduction in staff; secondly, the rescheduling of the flights of the SA Airways and the elimination of certain uneconomic train services; thirdly, the improvement of the service in order to obtain a larger share of the available market; fourthly, the curtailment of overtime and Sunday time; and fifthly, the postponement, where possible, of capital projects. All these were practical and practicable methods of achieving a positive saving. Nor were these efforts without result. Let us take a brief look at the influence these measures had on the eventual results. First is the saving in the field of manpower, the drop in the number of staff. I wish to state clearly once again that this is not a matter of paying off or discharging permanent workers and officials of the SATS. Unfortunately an Afrikaans-language newspaper carried a headline which could have created the impression that permanent officials had been paid off. The reduction in the number of 257 000 in December 1982 to 242 000 in December 1983, viz a reduction of 15 000, was achieved by not filling vacant posts and by making less use of temporary workers. This resulted in a considerable saving in the salary and wage account, but also meant that the available staff, available officials and workers, had to play their part to a greater extent. When an establishment is reduced by approximately 6%, as occurred in this case in the course of the year, the remaining workers have to increase their effectiveness by 6% to perform the same amount of work. Accordingly it is only logical to infer that the staff of the SATS have necessarily increased their productivity. They must necessarily have worked harder. As far as their programme of work is concerned, the staff must necessarily have effected certain adjustments to make this achievement possible. Therefore it is appropriate to take this opportunity to thank all the officials for having assisted in this way in getting the work done. Not only did they increase productivity in a responsible way; they also, through their various trade unions, showed the utmost responsibility with regard to salary and wage demands. Therefore the role played by the officials must not be underestimated. South Africa is grateful for such positive and praiseworthy action.

Then, too, overtime and Sunday time was eliminated as far as possible. This necessarily entailed a loss of income for the officials. I am told that a substantial amount is involved. This, too, was accepted by the officials with the greatest responsibility. Moreover, when the management appealed to its officials to improve the quality of service to the consumer they immediately fell in with that. A marketing strategy was developed which has been implemented to very good effect.

I now wish to dwell briefly on the influence that the increase in tariffs will have on the economy. It must be recognized that an increase in tariffs will necessarily have a detrimental effect on the inflation rate. We do not wish to dispute that. In the struggle to reduce the rate of inflation, any increase in tariffs has a negative influence. We recognize that in this regard I agree with the hon member for Port Elizabeth Central. However, to say that the increase is catastrophic and will have a detrimental effect, is to make an over-simplified assumption.

To begin with, let us look at the increase in tariffs in goods traffic, that is to say, the conveyance of consumer goods. It is probably the case that in the free market system one can expect a trader to pass on to the consumer the increase caused by tariffs. The consumer is expected to absorb the increase. That is probably the norm, but I wish to make an appeal here today for the retailer, the distributor, the middleman, not to use this increase to increase prices more than is required by the increased railage tariffs. An increase of 10% in railage tariffs does not signify for the retailer an increase of 10% in the price of his article. Railage costs are only one of the components of the cost package of the article, and do not constitute the total cost.

Let us briefly consider a few examples in this regards. I am going to refer to three examples. As far as tariff class 3 is concerned, it costs 3,38 cents at present to convey a unit of floor polish from Johannesburg to Bethlehem. The increase from 1 April will mean a rise of only 0,27 cents per unit. Let us also consider an example in tariff class 6. To convey 900 grams of tinned jam from Paarl to Johannesburg at present costs 13,25 cents, as against the increased cost of 14,68 cents from 1 April. Therefore this represents an increase of 1,43 cents per tin. In tariff class 13, bricks are at present being conveyed from Stellenbosch to De Aar at R25,20 per thousand kg. After 1 April this will cost R29,10. This represents an increase of only R3,90 per 1 000 kg over that distance. Therefore it is clear that the increase in tariffs will not have a substantial influence on the price of consumer goods. I wish to make a plea today to the retailer in particular to show the greatest degree of responsibility this year and only to pass on the actual transport costs to the consumer, rather than use the tariff increases to increase the price of his goods for the sake of the higher profit margin. The consumer has appreciation for the retailer who tries to offer his goods at competitive discount prices. Healthy competition among the large chain stores has developed and is growing in intensity. Doublepage advertisements appear in our newspapers every day to bring this to the attention of the consumer. These are advertisements that cost up to R2 000 per insertion. One has to assume that these costs, too, are passed on to the consumer. Therefore, my appeal to the retailer is not to use the increase in railage tariffs to justify these costs.

As far as the general increase in goods tariffs is concerned, it is illuminating that the hon the Minister has further narrowed the gap between the high-rated and low-rated traffic. This is in accordance with the principle of phasing out subsidized tariffs and services. I am aware that transport services regularly effects a reclassification of goods in the various tariff classes, but I should like to hear from the hon the Minister when last this matter underwent a thorough review. Is the SATS still satisfied that the classification of goods in the 15 classes is in accordance with the value of the goods? Does the principle of what the traffic can bear, still apply? If it appears to be obsolete, I should like to hear from the hon the Minister whether this is not the right time to have the tariff scales investigated in depth, perhaps by way of a departmental inquiry or, if necessary, by a select committee or a commission. Whereas we have placed ourselves on the road of the elimination of uneconomic activities and the phasing out of subsidization, I am of the opinion that the matter of tariff scales ought now to be duly investigated. I refer here to what the hon the Minister said in his budget speech when he referred to goods tariffs, viz that certain structural changes in regard to goods tariffs by rail were imperative.

Also as regards passenger transport and the associated tariff increase, the principle has been accepted that the tariffs of the most uneconomic and of the subsidized services have to some extent been accepted. Unfortunately the fact is that it is the less well-off people who are most affected by this increase. Third-class tariffs are increasing by 17,5%. This represents a considerable increase for these people and may have an influence on the use of third-class tariffs, because it is for the most part the third-class commuter who is affected by this. The commuter must get to work in one way or another, and the most widely used method of transport is either train or bus transport, and we must not make matters more and more difficult for him by way of our tariff structure. The State cannot indefinitely accept the responsibility of bearing the burden of cheap tariffs alone because all that means is that it must be recovered from the taxpayer. Just as in the case of accommodation, the employer will have to accept increased responsibility in this regard as well. Accordingly it is with gratitude that one detects that there is already a considerable degree of understanding in this regard. The contribution of the employer with regard to the transport costs of his employee must not, however, form part of the salary or wage pattern, but must be given to him separately so that he may understand and appreciate it.