Mr Chairman, I ask for the privilege of the half-hour.

First of all I would like on behalf of the official Opposition to thank Dr Tjaart du Plessis for the courtesy and co-operation he has always shown us. We wish him a long, happy and well-deserved retirement. At the same time I would like to welcome Mr Sarel du Plessis the new Director-General of the department. We look forward to many years of co-operation with one another. Let me tell him that if we can be of any assistance to him he only has to ask. He is shouldering a tremendous responsibility in taking over this department because while there are various political solutions the various political parties would like to apply to the economy in South Africa it is common cause that our political options do not stand a ghost of a chance unless we maintain a strong and viable economy. Unfortunately it does not follow that those who realize that our economy must be keep strong also understand what is necessary to keep the economy strong nor do they necessarily understand what type of interference is damaging to an economy. The economy must generate for all the groups in this country growth, jobs, wealth and the contrast between our system and rival systems that is necessary for stability to be maintained.

The activities covered by the portfolio of Industry and Commerce account for slightly in excess of 40% of the gross domestic product, which is six times that of agriculture and nearly four times that of mining. This is not only an important sector in the economy; in a real sense it is the economy. This places an awesome responsibility on the shoulders of this hon Minister because on the success which he has in running this department, our future depends. However, our economy will not achieve what we expect of it if we continue as we are.

Let us examine the situation. If we are to keep unemployment at present levels, we need an average growth rate in the GDP of approximately 5% per annum. For the last five years we have averaged barely more than 1%. Is there any hope of improving this situation? The Kleu report states:

One should bear in mind that the EDP postulated a growth rate of approximately 5% per annum. Over the last 10 years, from 1973 to 1983, we have averaged only 2,6%. With 300 000 new work seekers each year we are in the centre of an unemployment explosion right now. The hard truth is that there is no hope of achieving an average growth rate of 5% per annum and no hope of reducing the unemployment figure.

The next matter I want to refer to is exports. Mr Ted Pavitt, chairman of Gencor and president of the SA Foundation, spoke at the annual meeting of the foundation recently and cautioned against over-confidence in strategic minerals. He said that strong arguments suggest a future decline in the relative importance of minerals. He also stressed the importance of foreign trade to South Africa.

The next matter I want to refer to is agriculture. Our agriculture has to cope with an erratic climate and poor soil, it yields grudgingly and unpredictably. We are inexorably brought back to the Kleu conclusion that it is a dire necessity that we build up the export of manufactured goods in this country. How have we fared in the export of our merchandise? By 1983 exports of merchandise, at R5,2 billion measured in 1980 prices, had slumped by half in four years. This is a developing crisis, and nobody can shrug off its consequences. The Kleu report states that international trade is of exceptional importance to South Africa. Imports and exports, including gold, have averaged between 60% and 70% of the GDP per annum since 1974. He also states that bearing the development requirements of the country in mind, South Africa has no choice other than to develop its foreign trade in manufactured goods.

In other words, with exports unresponsive, consumers over-borrowed, agriculture on its knees, a depreciated rand, balance of payment problems and endemic inflation we have a situation that requires purposeful action now. The hon the Minister is faced with the task of creating a national industrial strategy at a time of traumatic readjustments in the pattern of world trade. There is no proven course for him to follow. We need this strategy urgently. But what has been done?

The Kleu study group was in 1977 given the task of producing a strategy. It took them an unbelievable six years to produce their report. This is an indictment in itself and indicates that any sense of urgency was entirely lacking. The Government’s reaction was to appear in the form of a White Paper. It was first hoped that this would be ready by the end of 1983, then in February this year and I am not sure when this is now expected. Perhaps the hon the Minister can tell us. Certain matters concerning protection have been referred to the Van der Horst Committee. It is a powerful committee, but could these things not have been referred to it 15 months ago? As so frequently happens, the Government is faced with daily decisions that pre-empt the findings of its own committees. Conflicting messages then go out to the private sector that create uncertainty and compound risk. Nothing is more conducive to the negating of important investment decisions than the climate that is thus created. Does the Government thinks that the newly industrialized countries are sitting back and waiting while we dilly-dally?

This is an appropriate place to say something about protection. Is the Government, having gone overboard with the wrong type of protection, now swinging to the opposite extreme? There is almost no exporting manufacturer in South Africa that could exist without some measure of protection. The free trade doctrine was admirably successful when it was promoted by Western countries 30 to 40 years ago, when they had a monopoly of industrial power. It meant that the rules of the game were decided by the strong. However, things have changed. The newly industrialized countries have used the West’s free trade doctrine to market their goods, but their own economies have been purposefully managed and remain largely closed. The older industrialized countries are increasingly turning from the doctrine of comparative advantage as to who should produce what and where. It is manifestly ridiculous, for example, for the United States to buy cars, videos, computers and textiles from Japan, Taiwan and Korea just because they can be produced there cheaper and possibly better. This ignores strategic considerations, gross national product and balance of payments, employment, the technological race, as well as numerous other issues. The Western industrialized countries are consequently forced to look at bilateral trade agreements by-passing GATT, voluntary restraints, protection, research funding, soft loans for modernization and high technology production, and increased Government involvement with private enterprise. The moral of the story is that one cannot play the free trade game with people who do not also play the same game. The struggle for world markets is a contest between the “A-teams”. We must create some talented and experienced body, drawn from the public and private sectors, which will co-ordinate and implement our industrial strategy. It will have to look very different from the Board of Trade and Industry.

Order! I am sorry to interrupt the hon member but his time has expired. [Interjections.]

Mr Chairman, on a point of order: May I point out that the hon member asked for the privilege of the half-hour?

No, I did not hear it. [Interjections.]

Mr Chairman, on a point of order: The hon member did ask for the privilege of the half-hour. [Interjections.]

That was the very first thing he said.

Order! In view of the weight of the evidence I am prepared to allow the hon member to carry on with his speech. I tender my apologies for interrupting him.

Sir, that nearly ruined the economy!

We will have to spend money and the time of our most able people analysing the economy industry by industry. We have to decide where to allocate and how to marshal our limited resources. [Interjections.] We will also have to decide the role of Government in a process of unparalleled industrial adjustment. Does our recent record give any reason for hope that we know what is required? I think not, Mr Chairman! Trade is now international and fiercely competitive. If we are to survive we must make the best of all our assets. We cannot compromise. We cannot muddle industrial strategy with ideological vision.

In this regard I want to say a few words about the policy of decentralization of industry. It is common knowledge that I have the gravest reservations about this policy. These reservations stem primarily from two factors: Firstly, the admitted ideological motivation of this policy and, secondly, the principle of a graded scale of incentives, with the maximum incentives available to those who establish themselves in the most unsuitable places.

Let us forget for a moment all arguments of right and wrong. In the fiercely competitive world that I have described, with the handicaps that we carry in the form of a limited domestic market, low education and training standards and an uncompetitive technology, can we afford to distribute our industry other than to the best advantage? The Government acknowledges agglomeration advantages, but it insists on working against them. It acknowledges the advantages of the free market system and then flagrantly interferes with its mechanisms.

Let us accept that the PWV area will grow due to all its natural advantages into a region of over-concentration. Then surely there should be only one set of incentives for industry to move from any specified area of over-concentration. This would keep interference with market mechanisms at a minimum and industry would be established where it had maximum comparative advantages. The Government cannot make these decisions for industry. The country will end up with an enormous bill for the establishment of industry in a random scatter which augments its natural handicaps and renders it increasingly uncompetitive. [Interjections.] Decentralized industry will also be in a position to demand continuous hand-outs from the Government and the Government will be in no position to refuse them.

Just look at what is happening at the moment. We were told last year that 777 applications for decentralization concessions had been approved. These have been strewn throughout the land in 127 different places. Mr Chairman, if there is anybody on that side of the House who has ever tried to manufacture something where his location gives him even a 5% disadvantage, he will know what an impossible situation it is. While he loses money, his competitor continues to make a profit. He goes bankrupt whilst his competitor’s business grows.

All the indications are that something is rotten in the domain of the Board for the decentralization of industry. Take for instance its failure to produce a report in time for this debate. The decentralization programme accounts for over 40% of the hon the Minister’s budget. It is equivalent to the chairman of a major public company attending his annual general meeting without any audited accounts. The board’s report for 1982-83 gave particulars of 777 successful decentralization applicants. We were given the number, location, jobs created, size of investment and classification in great detail. Presumably the 1983 and 1984 budgets must have been prepared using this information. However, by referring to the hon the Minister’s answer to my recent question, No 871, hon members will see that neither he nor his department know how many of these 777 applicants have moved, are moving, are producing or have withdrawn their applications. Nor do they know how many of the approximately 63 000 jobs have been created, nor how much of the R2 339 million to be invested has materialized.

The board’s report of a year ago states that reports on results achieved will be regularly submitted, but two years after the first applications were approved, the hon the Minister has no information available. How can he then maintain that this programme is under control, or how can we have any confidence in the figures that are presented to us?

The hon the Minister and the hon the Prime Minister have proclaimed that this scheme is a success on the basis of successful applications. I warned at the time that this was a naive and childish approach, that an industry was only successful after it was decentralized and producing a genuine profit. However, without bothering to add up the results already achieved, we are told that in the nine months to December 1983, 816 applications were approved. Yet, according to an answer to a question, economic viability studies had apparently not even been undertaken on the previous applications. It is impossible to deal adequately with the complex policy of decentralization in the time available, but I believe that I have substantiated that there is reason for real apprehension and I want to ask the hon the Minister, firstly, to have the whole basis of differential incentives reviewed as a matter of national urgency. I believe the problem lies basically there. The differential basis of those incentives is what is distorting the subsequent location of industries. Secondly, he should submit a full report on the operation of the decentralization scheme, giving results actually achieved to date in detail. This should show results achieved, against the claims that were made at the time applications for decentralization benefits were approved.

Mr Chairman, the hon member for Walmer posed certain questions to the hon the Minister which I presume he will deal with at the appropriate time. However, I wish to draw the attention to only two of the numerous points he made.

Firstly, he said that we need a growth rate of 5% per year, but that we are achieving a growth rate of only 2% to 3%. He forgets that this is being done at a time when the world economy is going through a recession, and he forgot to compare us with the international situation, in respect of which we are not doing so badly. Secondly, as far as decentralization is concerned, he forgot to state that we are the leaders in the international situation. He should read what a certain professor at Harvard said in a article in “Dialogue”. He will see that at the moment we are followed by the United States and France and that we are in fact the leaders in this regard.

I wish to draw attention to the annual report of the Director-General, Dr Du Plessis, for 1983, and to compliment him on it. I want to quote the following from it:

I extend my compliments and congratulations to him in this respect.

*Since we are now taking leave of him, we wish to thank him very sincerely for the years of pleasant and good co-operation we experienced. We extend our compliments to him for the services he rendered and wish him and his family a pleasant rest. However, we do hope that he will not rest all the time and do nothing else, because a person with his capabilities should not relax completely. In any event, he is still too active and will only get up to mischief if all he does is rest.

I should like to refer to the provision of liquor to the Black liquor market. As long ago as 1980 it was decided to privatize the liquor outlets of Administration Boards. I should like to ask what the present situation is. In the Sunday Express of 29 April 1984 a report appeared under the headline “Soweto to fight Cabinet liquor move in court action”. The facts are known to the hon the Minister, but I should like to ask him what his reaction to this is, particularly since it is now being suggested that Whites are using Blacks as a front to enter this market. I am referring in particular to the Wits Student operation in this connection.

Another related aspect is the question of the legalization of shebeens. We know that there are at least 2 000 of them in Soweto. The hon the Minister has already been invited to open their annual congress. The point is that they supply a deficiency in their community. They exist, and cannot be wished out of existence. They cannot be eliminated by police action either. My question is whether it would not be better to legalize and then control and supervise them. Certain basic guidelines can then be laid down as a point of departure.

I should also like to refer to the question of export promotion, and here I concur to a certain extent with what the hon member for Walmer said. I want to ask the hon the Minister to take another overall look at exports and to identify the sectors that are able to compete on an international level, or compete productively if they receive the necessary support at the outset.

My recommendation, or suggestion, is that only those who can be trained to compete internationally should receive incentives and not those who cannot, and that we should cease to nourish and keep alive by artificial means those firms that cannot compete and are unproductive. I just want to add that strategic industries should be excluded from this. However, we should be careful that the word “strategic” is not misused or too widely interpreted.

On the other hand we should not overreact to possible boycotts or extortion. Trade, particularly international trade, has always found a way to open locked doors without keys.

In addition I just want to point out—and I think the hon member for Walmer agrees with me to some extent in this connection— that the world trend, in spite of all the fine and pious words spoken in public, is increasingly to curtail free trade by roundabout methods, for example secret subsidies and the GATT agreements. In this connection Governments are applying protectionism and incentive measures to an ever-increasing extent.

We, in South Africa are of course at a further disadvantage in the sense that political nuances and innuendos are an additional factor which play a part in our case, unlike most other countries. We must take cognizance of these facts, and I think that we in our turn should play precisely the same game against others with the rules that are being used against us, but always from the point of view that South Africa’s interests must at all times come first. I think that that is the hon the Minister’s point of departure as well. That is why I extend my thanks and appreciation for the appointment of the Van den Horst Committee.

In this connection I should like to refer to the herculean task which the hon the Minister and his department have already performed in respect of the identification of existing industrial problems. I think that the culmination of all these efforts is to a large extent illustrated by the Kleu report that was tabled and in which an industrial strategy was set out. This is the third attempt in our history to devise such a strategy. Nothing came of the previous two. I hope that this time something will in fact come of it.

Secondly, we have the Steenkamp report on the clothing and textile industry; the President’s Council report in respect of measures that have a restrictive effect on the free market; and also the Strydom report. These are monumental efforts containing a great deal of factual material. The success or downfall of our country and its people depends on whether or not we use it. We should please not allow dust to accumulate on these reports through lack of use. If we do use them, however, we can be successful.

Our industries must help to cope with the doubling of the South African population over the next 16 years. I believe that our industries are the only factor that can save us in this connection. The basic structures have already been created, for example the Development Bank, the decentralization campaign and the SBDC. Those structures already exist. The right climate has also been created by means of the Carlton, Good Hope and anti-inflation conferences. All that is needed is follow-up operations and development.

In this connection I want to address a request to the hon the Minister. Since these initiatives and basic principles have been accepted by the hon the Prime Minister and these inputs have already been made, I want to ask the hon the Minister please to give consideration to the establishment of an industrial committee by means of which the Minister and his department can take the private sector along with them on this road of development and planning. The industrial committee could for example consist of ten members representing inter alia the AHI, FCI, Assocom, the Tourist Board, Nafcoc, etc. Those members could then meet once a month to hold discussions with the Minister and/or the Deputy Minister. It need have no statutory status or statutory-executive powers. On one afternoon a month the members could discuss any problems with the Minister and/or the Deputy Minister. This would afford the hon the Minister an opportunity to discuss any matters with them in respect of which he wanted to send out feelers.

In this way any problems they might have could immediately be conveyed to the Minister and his department. I want to ask the hon the Minister not to reject this suggestion out of hand. I think that something similar is already being done in one or two of the developed countries in the world, with great results. I think that we could do the same thing in South Africa without creating another commission, or giving legal status to this body. It would merely be a discussion forum in order to ensure inter-action between private enterprise and the Minister and his department on a regular and open basis. I want to ask the hon the Minister please to consider this. It could be a beneficial exercise.

Mr Chairman, I should like to bring a very important matter in the agricultural lime industry to the attention of the hon the Minister. In the first place I take it that the hon the Minister is aware that the use of agricultural lime is constantly increasing, and that this commodity is therefore becoming increasingly important in agriculture itself. Owing to the increased utilization of nitrogen, soil acidity is increasing, and the only answer to this problem is of course agricultural lime. Furthermore, I want to put it to the hon the Minister that in the past a healthy situation always prevailed in this industry, in the sense that there was keen competition. A number of agricultural lime processors are distributed throughout the country, most of them in the important marketing areas. The capacity of these vested interests amounts to approximately 4 million tons per annum, while the highest consumption to date amounted to 2 million tons. Consequently there is a reserve capacity.

This year, as a result of the drought, there has been a tremendous falling off in the demand for agricultural lime. The reason for this is of course that people cannot afford it. The industry has of course felt this decline in demand very acutely, and under these circumstances an undertaking by the name of Spitskalk made its appearance in the trade. That undertaking sells agricultural lime at prices which are such that not a single other existing undertaking can compete with them. The other undertakings in this industry are consequently being squeezed right out of the market. The rest of the agricultural lime industry is facing total downfall.

Now, the fact of the matter is that the Spitskalk undertaking is at established at Nebo, in Lebowa. Naturally we are great advocates of decentralization, but them it should not threaten an existing industry. Besides, the money which is applied should be applied beneficially as far as the entire industry is concerned. Spitkalk’s source has been known since the early sixties. In 1972, however, the industry itself abandoned that source as being uneconomic because it was too far away from the market. The fact of the matter is that it is not a major source.

If the rest of the agricultural lime industry were to collapse now, this single undertaking would not in future be able to meet the needs of the country. This of course has a tremendously dangerous implications for agriculture. The position at present is at follows: Enquiries which I made revealed that the Spitskalk undertaking found itself in this privileged position as a result of the concessions, loans and rebates granted to it. This would seem to me to have occurred in complete conflict with the policy of decentralization. In the first place this is a mining industry, and it is therefore locality-bound. It does not qualify for all these rebates and concessions which it obtained. In the second place it is a highly capital intensive industry; a fact which to a large extent disqualifies it for concessions and rebates. In the third place existing interests were not taken into consideration.

Certain information has now come to light, and I should like the hon the Minister to tell us whether it is correct or not. It is being alleged that that undertaking obtained a loan of R2 million from the Mining Corporation. It is also being alleged that that same undertaking received R200 000 from the Lebowa Development Corporation, and that the Lebowa Development Corporation took over this initial loan from the Mining Corporation, while the undertaking received an additional transport rebate, amounting to approximately R8 per ton. This is an extremely disturbing phenomenon. After all, we are now talking about a locality bound industry. Moreover, the mining of lime forms only a very small part of the actual expenditure. The mining costs amount to only approximately R6 per ton, while it is the transportation which entails heavy expenditure. We can therefore understand that if the transportation of one large industry such as this is subsidized, that industry’s competitors have no chance whatsoever of competing. What is more, that undertaking does not qualify at all in this case for a transport rebate because it is a locality-bound undertaking, and a mining industry to boot.

Furthermore, the policy, I think, is that the entrepreneur must provide 50% of the capital, of which 35% must be own capital and 15% may be borrowed capital, and in addition the corporation may provide a further 50% of the operating capital. That did not happen in this case. The capital was predominantly provided by the corporation itself, and the own capital provided was minimal. This specific undertaking is so labour intensive—very few employment opportunities are created by this industry—that every employment opportunity created costs R70 000 per annum.

Capital intensive.

Yes, I beg your pardon, capital intensive. It is so capital intensive that it costs R70 000 per annum to create one employment opportunity.

I know that an investigation is in progress. I do not want to hear about the investigation because I know about it. I should like to hear from the hon the Minister to what extent the facts which I have now mentioned to him are correct or incorrect. We want to get the correct facts in this connection. I also want to ask the hon the Minister to give immediate attention to this matter, because if this industry should collapse the effects on agriculture could be catastrophic. The hon the Minister himself knows what kind of situation the grain farmers of South Africa find themselves in today. When conditions improve in future, we will need lime, and we do not want this industry to be jeopardized now. The industry is well-distributed throughout the country because there are people operating in all the production areas of this country. Suddenly we now have a group of people here who are far away from the marketing area and who drive past the existing institutions and deliver their lime to the processors at very low prices. That is why I want to ask the hon the Minister to have this matter investigated immediately and to rectify the situation. Now is the time to apply lime. In September the ploughing season is over and then it will be too late. We welcome any concession that will make things easier for agricultural but if the hon the Minister does wish to do something, he should not subsidize the producer of lime but rather the consumer of lime, namely the farmer. Then he would be subsidizing the right man, while if they were allocated to the processor of lime, there is no certainty that it will reach its destination. This would enable people to compete with one another in areas where duplication occurs, and that subsidy would not necessarily reach the consumer of lime, namely the food producer, thus enabling him to produce cheaper food.

I therefore want to ask the hon the Minister to have this matter investigated very earnestly and speedily and to give us the information during this debate because it will be easy for him to do so. He can very easily establish what loans, concessions, rebates, etc. were granted to this firm and give us that information, and he will be able to act immediately to prevent a disaster from occurring in this industry. I say again that if the hon the Minister should be considering a subsidy, then that subsidy should be paid to the producer and not to the people in the manufacturing industry, for then that subsidy would not attain its correct object.

Mr Chairman, I do not want to reply to what the hon member for Lichtenburg said, because I think that is something that falls within the ambit of the hon the Minister himself.

As politicians each of us has come across the proverbial salesman who comes round to one’s home wanting to sell one a vacuum cleaner. One’s first difficulty lies in keeping him out of the house. One’s second difficulty, if he does happen to get in, lies in having to listen to him, and the third difficulty lies in having to tell him that one does not want a vacuum cleaner. Today I want to try to sell that proverbial vacuum cleaner to the hon the Minister. I know the hon the Minister is perhaps not going to open the door, and perhaps he is not going to want to listen to me for very long. I think, however, that within the next 10 years time the hon the Minister will be telephoning me asking: Albert, where is that vacuum cleaner of yours now?

The argument I want to present on this occasion, by way of a suggestion for the hon the Minister’s consideration, is that since we are now entering upon a new dispensation, and are engaged in a process of rationalization as far as the State machine is concerned, we must urgently investigate whether it is not necessary or desirable to establish a Ministry of Technology and Research in South Africa. There is no doubt about it. Every newspaper we pick up, every magazine we read, and some of the best books in the world being published at present, deal with the subject of the impact of the technological revolution in which mankind now finds itself generally, but also specifically in the fields of economics and industry. Let me briefly refer to the book by John Naisbitt, from which I should like to quote this brief passage:

This is true of any change that takes mankind by storm: It takes one a long time, after one is into something, to realize what hit one.

All of us who concern ourselves, in any field, with the impact of technology on our lives, realize that we are indeed dealing with a revolution equal to the industrial revolution of old. Actually much greater than the well-known industrial revolution. I read the latest annual report of the CSIR with great attentiveness. I should like to say that the introductory remarks of the president of the CSIR also dealt beautifully with the subject. I should like to motivate the establishment of such a department or Ministry of Technology and Research. I think that in the administration of the country in future one must consistently face up to the overall impact of technology on everything in the country and the possibilities this embodies. There is no doubt about it. Documents from the USA, from Europe and from the EEC, and articles written by scientists and by administrative and other experts all indicate that the countries which are not keeping the pace in the technological race throughout the world, countries which cannot adapt their industrial sectors in time, fall by the wayside, for example as far as international price competitiveness is concerned.

I have here an article that appeared in the periodical High Technology, an article in which a leading former economist of the World Bank says that one of the biggest problems the USA is struggling with is that of having to compete with countries like Japan which, to a very large extent, makes use of highly technologically manufactured articles of top quality. I also have here an article from the German Tribune which refers to an announcement made last year in the Bundestag in which the west German Government expressly stated repeatedly that it was absolutely resolved, in regard to technology in general—here reference was made, for example, to robot technology and bio-technology—to give absolute preference to research that has to be done and the practical utilization of research results.

Let us take a closer look at South Africa and our overall economy. We know and realize that the future impact of technology is going to be dramatic. Within the next 20 years the newspaper industry will, for example, be radically affected by the impact of technology. One will be able to press a button in one’s home to get news on one’s television screen. This could result in the existence of certain daily newspapers no longer being necessary.

One can also look at the professional sector. Last week I had the privilege of seeing the so-called CAD—or “computer-aided design”—in action. It is astoundig to see a single person, with the aid of a single computer, doing the work of an architect, and engineer and a draftsman, to see him designing a large building, as it were, and analysing its weaknesses. Within a few minutes he does work that would keep other people busy for hours, days or months. There is no doubt that computer technology is also, for example, going to have a dramatic impact in the professional sphere. There is no single industry today that is not already, in some or other way, making use of computer technology to increase production.

In suggesting that we consider having a Ministry or a Department of Technology, I am doing so, firstly, because we are living in a world in which, in the sphere of industry, one can no longer compete if one is not a highly technological country. Competition without the use of the maximum possible technological aids is simply becoming increasingly impossible. The foremost countries in the world—and this one could advance as a second point—prove to us how they achieve optimum economic development whereby everyone is benefited, from the fact that they already, to a large extent, make use of technology. Let us look at our position in Africa. It is said that we must guard against having unemployment. All research points to the fact—and all experts state—that the greater use of technology does not necessarily result in more people being jobless. It is merely a shift from the industrial sector to the so-called information sector and new sectors that come into being. Looking at our position in Africa, I believe that with the better application of suitable technology we can dramatically improve people’s living standards, and this also applies to remote rural areas. Let me refer here, for example to the photo-voltaic cells that can, even in the veld, be employed to generate electric power for engines to pump water. Let me also refer to a simple apparaties for water purification enabling a quite ordinary person in the remote, primitive area to purify his domestic water, thereby improving his living conditions owing to the elimination of certain disease conditions, for example. The overall economy would benefit by it. There is also, for example, apparatus already on the market in Africa enabling people with a small stove and a few pieces of newspaper to generate the same amount of energy as they previously generated with a large mass of wood which, since it needs to be removed from the cycle of nature, leads to environmental collapse.

Just look, too, at office automation. In our State organizations we could achieve a dramatic improvement in productivity, by eliminating a tremendous amount of unnecessary work, if we were to employ the modern aids that are already available in the sphere of office automation. Think, for example, of the modem telephone apparatus that is available, apparatus with a memory catering for up to 50 telephone calls. One sits in one’s office and the telephone apparatus makes the calls for you as you require them. This gives us one example of what office automation can do for us.

Let me sum up. If we take into account our lack of entrepreneurial talent, our lack of trained manpower and our relative lack of capital, South Africa is pre-eminently a country that should be in the forefront when it comes to the optimum use of available technology so that we in this country, with its big problems, can have all possible technological aids percolating from the top downwards, ie from management level downwards, and not vice versa. [Time expired.]

Mr Chairman, at the outset I should like to add my good wishes to those already expressed to Dr Du Plessis on his coming retirement. I should like to thank him for the courtesies which he showed not only to myself but also to my colleagues in my party. I sincerely hope that he will enjoy many years of happy retirement.

I have listened with great interest to what the hon member for Innesdal had to say. I agree with the hon member that high technology and research findings are going to play an extremely important role in future. As a matter of fact, they do so today. That is certainly the main reason why the highly industrialized nations have prospered to the extent that they have over the last decade. In South Africa I believe we have to set certain priorities. Everything has a value and very often the value one places upon something depends upon the circumstances in which one finds oneself. In South Africa I believe that we have a combination of a First and a Third World economy and as such we have to be very careful that we do not lean too heavily on over-mechanization and over-computerization. It was only yesterday that the hon the Minister of Agriculture made an appeal to farmers to reconsider the degree to which they are mechanizing their operations so as to try to provide more employment for the labour force. [Interjections.] If the hon member for Innesdal reads my speech of two or three years ago during this particular debate about what happened in the sugar industry. He will see that by partially mechanising cane harvesting we were able to improve productivity considerably yet still retain hand labour to actually cut the sugar cane. By using what has been termed intermediate technology, our manual cane cutters are to day earning income equivalent to what industrial labour in the nearby small industrial areas are earning. Nevertheless I agree with the hon member that a certain amount of research needs to be done and the findings thereof applied in practice. This applies especially to certain operations, for example management, where ever farmers today are using micro-computers to keep farm records and to assist with bookkeeping and other tasks. However, when it comes to other areas, I believe one should be careful not to over-mechanize as we still have a vast pool of labour to employ.

As the hon member for Walmer said, this hon Minister heads a very important department. Industry and commerce are responsible for 40% of the GDP. Along with our mining and agricultural industry, industry and commerce are the wealth producing sectors of South Africa, and as such they are the core of our economy. These are the areas where the greatest emphasis should be put in order to get our economy going.

At present the department has a staff of 1 330. There are, however, close to 400 vacancies. The budget of the department is approximately R571 million and it administers some 42 separate Acts. Therefore, this hon Minister with his department, along with its control over State corporations, such as boards, councils and research institutions, have extremely important duties which are tied up to the economic well-being of South Africa.

It is because of this that the hon the Minister should consider reviewing his department’s role in the light of the present economic circumstances in South Africa. In days gone by this department was called the Department of Economic Affairs and if it is indeed the duty of this department to look after the economic well-being of South Africa, I regret to say that it is failing, as it has failed over the past few years.

We often hear, for example, from the hon members for Walmer and others, of the need for an increase in the gross domestic product, a real increase of 5% per annum. This figure was set by the hon the Prime Minister’s economic development programme. It was very clearly stated that if this growth rate was not achieved by the turn of the century, South Africa would not be able to provide the standard of living for our growing population. The hon member for South Coast gave some very good statistics during the debate on health and Welfare earlier this week on the rate of the population growth in South Africa. He appealed for greater emphasis on family planning in order to be of assistance in achieving the economic well-being which we desire for all our people.

However, the statistical report of the hon the Minister of Finance, which was tabled with his Budget, states that over the last 10 years the GDP per capita in South Africa has declined from R1 042 to R1 012. These figures are very clear. It means that on average South Africans are becoming poorer. I want to advance the same argument that I put during the Finance Vote, namely that the standard of living of the lower income groups, the Blacks, Indian and Coloured groups, has improved. There is no doubt about that. There has been a redistribution of wealth during the past few years. The standard of living of people in the upper classes has also improved. The people who have lost out are those in the middle income group, mainly the Whites. They are the ones who are suffering, especially those living on fixed incomes such as pensions, etc.

If one studies this report one finds that the tax burden on people has grown. On page 10 it is stated:

The report also shows that personal savings are dropping. Therefore I put it to the hon the Minister that South Africa at the present time is not economically well off. We have a problem and we have to make sure that we try to correct it.

Recently in Cape Town there was the Carnegie Conference. Over the last few days two articles appeared in The Argus which I believe are worth reading. The first article was under the heading “State welfare spending will not end poverty”. Incidentally, these two articles were written jointly by Prof Brian Kantor and Prof Herbert Grubel of the University of Cape Town. They made it very clear in the first article that Government spending on welfare projects will not solve the problem of poverty. The second article was headed “The answer to poverty is raised productivity”. This is also the appeal I make to the hon the Minister. In the article it is stated that it is only through increasing the productivity of people through the free enterprise system, by removing a lot of the restrictions which Government controls and regulations place on entrepreneurs, that one can get an economy such as our going in order to produce the wealth to overcome the poverty problem. I found the article very interesting. I want to briefly quote from it, as follows:

If the Ciskei can get rid of these laws, then why can we in South Africa also not do the same? I want to say to the hon the Minister that I believe that he has made a start. He has deregulated and decontrolled certain industries. I am thinking of the fertilizer industry and the sugar industry, where he has removed the so-called transport subsidy or refund, which has led to far more competition in the field of transportation of cane. Also before the House now we have the Close Corporations Bill. [Time expired.]

Mr Chairman, I was astounded to hear the attack which the hon member for Walmer and also the hon member for Amanzimtoti made on the hon the Minister in regard to the poor position in which our industries ostensibly found themselves. On the other hand, when I see in the Reserve Bank Bulletin what profits were built up during the past few years, I am even more astonished. There is no comparison whatsoever between the profitability of our industries and the profitability of industries in other countries. I do not think that our industries, relatively speaking, had such a difficult time as some industries in other countries did. I think the hon member for Walmer’s patrons probably exerted a little pressure on him to come here and ask for protection. Judging from the Business Times, Business Week and Financial Mail, it seems to me that this is being done against the normal run of affairs. It astonishes me that the hon member should come here and ask in principle for greater protection for our industries. He is therefore asking for increased State interference. Just a little further on in his speech, however, he attacked the concept of decentralization because it allegedly meant State interference. I cannot understand how the one thing can mean State interference and the other not, how the one can be good and the other bad.

We must think about an industrial strategy. I must admit that certain newspapers have recently been making a pretty strong attack on the idea of an industrial strategy for South Africa. There was an attack on the whole issue of State intervention in the industrial sector. To my mind there was an excessive tendency to promote the free market philosophy—which of course cannot always be clearly defined—at all costs. It is being said that our monetary policy should be more market-oriented and I support this idea. It is being said that we should curtail Government spending. It is being said that we should allow the market to determine prices and allocate resources. It is being said that the State does not have the knowledge to determine in which industries investments should be made or which industries should be developed and decentralized. It is being said that by obtaining industrial development by means of protection, the agricultural and mining industries are being harmed, those industries which employ the most people and which are also the largest exporters. If we consider all these points, we come to the conclusion that South Africa should not have an industrial strategy.

A measure of criticism was also levelled at the recommendations in the Kleu Report, and at others which might be contained in the White Paper. But we must be realistic. We can talk about a total free market philosophy, but we must consider the concept in its real meaning, and in this connection the concept of workable competition is important. We must take the country’s circumstances into consideration—monetary, fiscal and commercial—and under commercial I include an industrial strategy.

We would do well to look at other countries such as the USA, Germany and Japan for a while. Japan, for example, has for 200 years been importing Western technology from behind tariff walls. Not many years ago tariff protection on certain synthetic chemicals in the USA was still more than 40%. It was only after the Kennedy rounds that a tariff protection began to abate, but I can assure hon members that no major South African contractor, such as LTA or Concor, will easily obtain contracts in the USA, because local industries, in the main, receive preference.

We can also consider our own history and begin in 1925, when the National Party Government introduced tariff protection. In the period between 1925 and 1934 we had a development of our semi-durable consumer products. After that the Holloway Committee was appointed under the United Party Government, which broke everything down again, because this committee was opposed to the protection of industries. In the post-war years, round about 1960, we had people like Dr S P Du T Viljoen and Dr Kuschke who did pioneering work for South Africa and who, for example, introduced the policy of import replacement. It was also during that period that the automobile and textile industries developed. Recently I asked one of the automobile companies to provide me with their motor vehicle prices, compared to overseas prices, and I was surprised to discover that quite a number of motor vehicles on the local market today are being sold at lower prices that those in their country of origin. I do not want to mention the makes, because then I would be advertising them.

Does that include tax?

No. Those are the wholesale prices. In the ’seventies we began to promote the manufacture of military equipment, and this had an exceptional effect on the engineering industry. Since 1925, therefore, the National Party Government has adopted an industrial strategy which is aimed at developing our own industries. I remember when we established Iscor Mr Mushet of the then United Party rose to his feet and said: “But surely you cannot manufacture iron and steel in South Africa; the furnaces are going to burst. You should rather import it from Britain.”

However, we come now to the next round, a difficult round, because we have utilized import replacement to the maximum. We are now entering a new phase in which we have to concentrate on exports, but we also have to establish where we can allow import replacement to take place. If more industries have to be established, we must not be afraid. I think there have even been attacks by Opposition members on Atlantis Diesel. It so happens that I spoke to the Atlantis people recently, and I was told that they would soon make the grade in respect of heavy duty Diesel machinery with the minimum of protection. We must remember that we made a mistake when we announced it, because automobile companies then began to import on a tremendous scale. After that we had the drought and the recession. We must be careful not to confuse industrial protection and the problems of our industries with competition under normal circumstances and competition in a period of recession. Although we are perhaps not achieving success now, we must not cease to assist our industries. We must consider the long-term position. We must accept that our industries are competing on a small market and that they cannot apply mass production techniques to the same extent as industries in other countries. We must also remember that our industries are the employers of our semi-skilled and skilled labour. As our non-Whites undergo better training, we shall have to create employment opportunities for them. Our agriculture and mining industries are basically confined to the employment of unskilled labour. However, we do have the minerals which we can process. It is being said that up to the end of this century we need three more Sasols and we should therefore not put a stop to the expansion of industries. We should not be discouraged by what has happened to our ferrous alloy industries during the period of recession. It is very important if we wish to export our industrial strategy—and here I include decentralization because it is an aspect which is also being examined in other Western countries—that we should implement the recommendations contained in the De Lange Report as quickly as possible. Training within the company is of the utmost importance. I want to associate myself with the hon member for Innesdal by saying that the CSIR concentrate its research on helping our industries to solve the specific kind of problems they have to contend with.

South Africa has a future, but we should not become discouraged by what has happened during a period of recession. Our industries and our leaders have already achieved an enormous amount. As far as industries are concerned we have a short history. I know that in the White Paper which will follow the Kleu report, clear guidelines will be set out to develop our industries further, with moderate protective measures to protect our industries, but serious steps must be taken against dumping by certain countries that wish to offload their surplus capacity on us.

Mr Chairman, the hon member for Waterkloof spoke about an industrial strategy and to some extent attacked us on this side of the House for apparently disagreeing with him, because, he says on the one hand the hon member for Walmer speaks about the protection of industries, while on the other hand he is against decentralization. The fundamental difference between this side of the House and the NP is that we want an industrial strategy which is based upon sound economic grounds and not one which is based upon ideological concepts related to race separation, apartheid or whatever you want to call it. As far as we are concerned, we have never opposed decentralization, but are opposed to decentralization when there is no adequate economic ground for it, when it is done for an ideological reason. The fundamental reality of South Africa is, and the hon the Minister knows that this is so, that we have to create jobs, as has been pointed out by the hon member for Walmer and by my hon colleague in the NRP. We tried to persuade the hon the Minister of Finance, but what does this Government do? It is busy trying to create taxation which is going to prohibit the creation of jobs in the areas where it is cheapest and easiest to do it. That is the dilemma and the problem the hon member for Waterkloof has. The hon member talks about the fact that one has to encourage South African industry. Certainly, but he should listen to the hon the Minister of Finance and this hon Minister who say that protection is out and that they are going to do it all by way of tariff barriers from now on. The hon member knows, even if his ministerial colleagues do not, that you cannot do it all by imposing tariff barriers. That is the reality of the economic situation. One cannot do it. South Africa in fact has a mixed economy. Nobody is going to suggest that there should never be government interference. Nobody is going to suggest that this is going to be anything but a mixed economy in the future. Anybody who dreams that it is going to be anything else is living in a fool’s paradise. What we have to consider, however, is that, if greater purchasing power is created for the local population and if people are given jobs, they will have money to spend and there will be industries to create the products on which they are going to spend that money. The hon the Minister should not only look towards the export market, but he should also look towards the generation of an internal market because in that way he will also help to solve some of the political problems in South Africa.

In the few minutes at my disposal I want to raise another subject, a subject I consider to be very important. I think that 1984 is going to be known as the year of consumer anger. It will be known as such not merely because GST has been increased, although that really was the last straw, the straw that broke the camel’s back as far as consumers are concerned. GST has been raised twice within a year. In addition we have had an increase in ad valorem duties this year. We find that the consumer is in fact taking a back seat in everything the Government is doing. The consumer is regarded as the person who can be drained of money. He is the man who has to pay more and more by way of taxation levied by this Government. Whenever the Government now looks for money, it turns to the consumer. The hon the Minister is now completely against price control, but in view of the fact that GST is again being increased, I want to ask him whether he is going to keep a watchful eye open to see whether the decreases in respect of essential foodstuffs are going to be passed on to the consumer or whether they are again going to go into the pockets of the businessman as happens so often.

Speaking of the businessman and the way in which the consumer is treated, I want to deal with just one aspect of that. I have never suggested that all businessmen are dishonest—far from it. Let us, however, look at what is happening in business as demonstrated by statistics that are available. As I understand it, the annual report indicates that the Trade Inspection Branch inspected some 52 000 businesses and found some 6 400 contraventions. That means that an irregularity was found in almost one in eight businesses inspected. In other words, in 12½% of businesses an irregularity was found. When it comes to prepacked items, almost 15% were found to be faulty. In many cases, as is pointed out in the report, it was a question of short-measure packages and these related to basic foodstuffs. If we find that in one of eight businesses inspected and that in respect of 15% of prepacked goods the consumer is being had, something is wrong and has to be put right. One of the tragedies of this whole matter is that the whole atmosphere in South Africa at the moment is one in which this Minister, the Prime Minister and all his colleagues surround themselves with businessmen in South Africa. We are living in an atmosphere in which they are associating themselves with the capital side of the economy. I do not see pictures of this Minister or the Prime Minister surrounded by the workers and consumers of South Africa. When I look at the commissions that are appointed …

You say tariff protection is not enough. Are you then still pleading for the consumers?

Sure! I want jobs created in South Africa. The hon the Minister apparently wants to maintain a situation in which the workers will not have jobs. His job is to protect the prices. However, the image created in South Africa is one of the worker and the consumer being neglected. I can give the hon the Minister example after example of that. When the hon the Minister appoints a commission, whom does he appoint? Does he appoint the representatives of trade unions of consumers? Occasionally he does appoint the odd one; that is true. I can, however, quote example after example of cases in which the accent is placed on the capital side of the economy and not on the consumer side or on the worker side of the economy. There are so many examples of this, Mr Chairman, that I do not even know where to begin to quote them. Let us take, for example, the amount of money that is given to the SA Co-ordinating Consumer Council. That is a miserable R836 000. If we look at the Trade Practices Advisory Committee, for which I for one had great hopes, we note how many examples there are of what is actually being done. There are indeed very few examples. Very little is really being done in this respect.

Let us also look at the inside trading on the Stock Exchange. We have a law, which, I believe, is utterly inefficient. It allows a man to get away in the most remarkable circumstances. I am referring here to a man whose son happened to buy shares completely independent of the knowledge which his father had as a member of the board of the company. Why? That is because in terms of our law it is indeed not an offence to receive inside information; it is only an offence to give inside information. Furthermore we can take the whole question of the peddling of investments. In this respect I need only refer to some agricultural investments that are being peddled around. I can give specific examples in this respect. There is no protection for the consumer against this kind of thing being foisted on him by clever marketing, by clever advertising, and I have to state here that what worries me is that whereas we have a mixed economy, an economy which should in fact improve the living standards of all the people of the country, the real situation is that the consumer is neglected. I plead, as I have pleaded before and as I will continue to plead, that we should have a Minister of Consumer Affairs. Until such time as there is a Minister of Consumer Affairs this whole situation will never be put right.

There are lobbies in this House. There is a lobby for tobacco, I heard yesterday. There are lobbies for liquor, for farming, and all sorts of funny lobbies, I hear. However, I am part of a consumer lobby, and I think we are in a minority here. We in these benches believe that we should protect the consumer. We do want indeed to protect the consumer. We demand the protection of the consumer. It is indeed the consumer who is the neglected person in South Africa. It is the consumer who has in fact become the milk cow of the hon the Minister of Finance, and who is not protected adequately by legislation and by the people who should be made available in order to see to it that the consumer gets a square deal in the economy of the country.

Mr Chairman, I rise to address you on a question of privilege, if I may, in terms of Standing Order No 106(a). May I address you?

Order! Standing Order No 106 reads as follows:

1. (a) to call attention to a point of order or a question of privilege;
2. (b) to call attention to the absence of a quorum;
3. (c) to call attention to the presence of strangers; or
4. (d) to move the closure.

The hon Chief Whip may address me.

Mr Chairman, earlier this afternoon, when the Chairman was in the Chair, and after the hon member for Walmer had been speaking for 10 minutes, the Chairman called him to order and told him that his time had expired. The hon member for Walmer then stated that he had at the outset of his speech requested the privilege of the half-hour. The Chairman indicated that he had not done so. At least eight or 10 hon members on this side of the House, however, then confirmed that the hon member for Walmer had in fact asked for the privilege of the half-hour.

I understood now that at that particular moment, when the Chairman said that in view of the weight of the evidence he was prepared to accept the word of the hon member for Walmer, the hon member for Umhlanga, who was then sitting on the Government side, said to the Chairman: “You are quite right”.

I have since ascertained from the Editor of Hansard that the hon member for Walmer had in fact asked, right at the beginning of his speech, to be granted the privilege of the half-hour. All I asked of you, Sir, is to ask the hon member for Umhlanga whether he made that remark and, if so, whether he intended casting any aspersion on the veracity of the statements of the hon members who had indicated that the hon member for Walmer had in fact asked for the privilege of the half hour.

Is the hon member for Umhlanga prepared to explain what he said?

Mr Chairman, I am afraid I find myself somewhat amazed, confused and amused by what has just been said. I was in fact sitting over there when this took place. However, if I said: “You are quite right”, I was not referring to the Chair because I was having a conversation with the Chief Government Whip. I was not referring to the Chair or to any ruling the chairman may have given at that stage. I repeat, I find myself quite confused by all this.

May I address you on this point, Sir? I actually witnessed the hon member for Umhlanga, who was sitting across the aisle from the hon Chief Government Whip, turn specifically to the Chairman and, looking at him, say: “You were quite right” or “You were quite correct” or words of that nature.

Mr Chairman, now that you have resumed the Chair, I should like to address you on this matter. I am purported to have said “You are quite correct.” If so, what was I saying it about? What was I saying “You are quite correct” about? If I was saying that you were quite correct in allowing the hon member for Walmer to continue his speech, what difference does it make? I fail to understand what this is all about.

Mr Chairman, I am grateful to you for returning to take the Chair. You may recall, Sir, that you said that in view of the weight of the evidence you were prepared to accept the fact that the hon member for Walmer had asked for the privilege of the half-hour. If the hon member for Umhlanga used the words: “You were correct” or “You were quite right” immediately thereafter, it could only have been in the context of the situation where you had just previously indicated that as far as you were concerned the hon member for Walmer had not asked for the privilege of the half hour.

Mr Chairman, what I in fact said was: “You have the right”, and I still say that I was correct in saying that because you, as chairman, have the right to decide whether or not an hon member is granted the privilege of the half-hour. Quite frankly, I was not listening to the hon member but this is the context in which I used these words—and I do not think that I was the only one who expressed this opinion— that had the hon member for Walmer asked for the privilege of the half hour, it was your right to acknowledge whether or not you would grant that privilege. That was the reason why I said: “You have the right”, meaning that you as Chairman have the right to accede to such a request or not. That was specifically what I was referring to.

Order! Does the hon Chief Whip of the official Opposition wish to address me further on this matter?

Mr Chairman, I have heard the explanation of the hon member for Umhlanga, I accept it and I withdraw my question on a possible breach of privilege.

I must say that I interpreted the remark by the hon member for Umhlanga as he explained it, viz that the Chairman, in terms of Standing Order 76, has the right to grant such a privilege. I am sorry if it caused hon members a problem, but I assumed that the hon member for Walmer did request the privilege of the half hour, and that we could therefore regard the matter as settled.

Mr Chairman, I would rather not request the privilege of the half-hour, because apparently this can cause quite a few problems.

I listened attentively to the hon member for Yeoville and enjoyed his speech. I want to say, however, that the hon member’s allegations gave one to understand very clearly that he was actually playing a political game. He posed here as the great champion of the consumers. We are all concerned about the interests of the consumer, but of course the hon member knows that, numerically speaking, consumers far outstrip businessmen. He also said that the Government was the businessman’s friend in this country. I think the hon member is a little unhappy about the fact that there is such a good understanding, such a positive attitude, between the important businessmen of this country and the Government. That is a positive development.

Why do you not want it for the consumer?

The hon member is hankering back to the days when, on the Opposition side, the so-called “fat cats” were bosom buddies with the extensive economic interests in this country. I think we should rather let all the groups work together in the best interests of the country. We should rather leave aside whatever politics is involved in that.

The NP has forgotten about the workers.

That story about the NP having forgotten about the workers is the biggest lot of nonsense, because deeds speak louder than the stories the PFP tells. The actions of the Government prove, after all, that the Government takes an interest in the workers. [Interjections.]

Order!

Sir, I would have liked to talk at greater length with the hon member for Yeoville, but a few minutes I have available in which to say what I want to say, are running out.

As far as the hon the Minister’s department is concerned, I briefly want to refer to one of its overall and most important objectives. I am referring to the promotion and maintenance of a sound and vital industrial set-up and the promotion of foreign trade. In carrying out its function, policy in regard to industrial development is co-ordinated.

Previous speakers have referred to the importance to industry of the research sector and technology, and therefore I shall not discuss those aspects any further. The fact that scientific and technological knowledge must effectively be conveyed to industry cannot be over-emphasized. Scientific research and industry must be allies. If we were to underestimate that standpoint, we would have to pay the price.

As far as the export trade is concerned, the following: The 36 foreign trade offices situated in 27 countries promote trade with those countries. I trust that the peace initiatives we have seen recently will give rise to the utilization of the trade potential of neighbouring countries in Africa. During 1983, 155 applications for the establishment of industries were approved, involving a total capital outlay of R403 million and the creation of 7 320 new job opportunities.

I briefly want to refer to the Kleu report to which other hon members also referred The hon the Minister appointed the study group on industrial development strategy, its terms of reference being to reformulate South Africa’s industrial development strategy and to suggest adjustments that have to be made to overcome certain problems. The study group did a thorough job and has already made certain recommendations in its report.

The hon member referred to the time it took them to draw up the report. I agree that it took a long time. Therefore it should be a thorough piece or work.

As a result of that the hon the Minister established the Industrial Advisory committee to do further research and then prepare a White Paper to give substance to the policy framework for the strategy. The committee will now process the material in the Kleu Report and produce a useful White Paper. I cannot, in this brief period of time, fully discuss the recommendations of this committee, but I do briefly want to refer to certain guidelines focused on by the study group.

The report’s proposed strategy embodies broad statements of policy, but specific industrial sectors do not receive any guidelines towards purposeful action. The economic achievements of industry must be improved upon by, amongst other things, the better utilization of technology and by increasing the productivity of all the resources in industry, particularly those of capital and labour. Agriculture and mining must be developed to their optimum potential. A more balanced promotion of exports together with import replacement, must be pursued. Exports will have to play a greater role than in the past, with the benefits that will entail. A concerted decentralization effort must be launched on a regional basis to obtain better geographic distribution. Effective tariff protection must continue to be applied and we must pursue a more outgoing trade policy to keep abreast of the rules of the game as they change from time to time. The State’s most important contribution must be that of furnishing continual orientational planning and of informing industry about that. There are also other recommendations, but what I have presented here forms more or less the gist of the recommendations.

I want to refer to certain aspects of these recommendations. Industry is one of the most important sectors of the South African economy and must therefore be given continual attention. Excessive protection will not, however, be in the interests of industry. Competition is important. Since industry is one of the most important sectors in our economy and also a stable supplier of work, it is necessary for the authorities to give it their constant attention. The hon. member for Yeoville tried to imply that in giving attention to commerce and industry. The Government was supposedly hostile to the consumer. That is absolute nonsense.

Excessive protection of industries must, however, be avoided because it is not in their interest. Competition hones them down to a fine point, enabling them to hold their own in the race for international markets. Moderate and selective protection is indeed justified in certain cases. The cost of protection could even exceed the benefit to a specific industry, and that is something we must guard against. In making that statement, I am excluding strategic industries.

There are many factors influencing the export trade, amongst other variations in the exchange rate, dumping and certain factors causing temporary disruption in industry, for which temporary measures must be adopted. If trade conditions were to be monitored, speedy action could be of great value. There ought to be an expert organization focusing its attention on the constant analysis of conditions and then also taking the necessary steps.

The extraordinary attention given to industry from every quarter, inter alia by the hon the Minister and the department, the private sector and planning bodies, creates justified expectations of a growing industrial sector in the South African economy. [Time expired.]

Mr Chairman, the hon member for Yeoville expressed his concern about the position of the consumer. I agree wholeheartedly with the hon member. But we are all concerned about the consumer. If the hon member is trying to create the impression that the Government is not interested in the consumer, or is not concerned about the situation in which the consumer finds himself, he is quite wrong. Who is the consumer? We are all consumers, whether we are politicians, economists, in commerce or whatever. We are all consumers. Nor does this only apply to the Whites.

[Inaudible.]

It also applies to the Blacks, Coloureds and Indians. [Interjections.]

[Inaudible.]

The hon member for Yeoville must not fight with me like that. I do, after all, agree with him. The hon member is concerned about the position of the consumer in the light of the 10% increase in GST. Let me agree with him wholeheartedly that GST should not be levied on basic foodstuffs. I think the Consumer Council has a very important role to play.

And the Minister.

Of course. The Consumer Council is under the ministerial wing. I think it is a good thing, in this debate, to focus specifically on the functions of the Consumer Council.

In previous debates we have frequently pointed out specifically that all consumers have been hit by the levelling off in the economy over the past few years. It has also been mentioned that consumers continually have to adjust to the decreasing value of their money. In the past decade or two the consumers were accustomed to continual increases in their standard of living, whilst now they have to curtail their expenditure and see to it that they live within their means. They must learn not to try, by way of excessive credit, to maintain unjustifiably high living standards. If one looks at the number of court cases and prosecutions these days as a result of debt, one sees that the Consumer Council, under the jurisdiction of the hon the Minister, has a very extensive task to perform in educating the public.

Earlier on, during the discussion of the Finance Vote, I referred to the serious consequences and implications for the consumer inherent in the present so-called banking war. I would also very much like the Consumer Council to give attention to that matter. At present there is tremendous competition between the banks. These days one cannot open a newspaper without seeing a full-page colour advertisement for some or other bank. We all know what such an advertisement costs.

Mr Chairman, may I ask the hon member a question?

Unfortunately I have very little time at my disposal. Astronomical amounts are spent on these advertisements, which simply invite the consumer to accept more credit than he ought to. He is completely stupefied by the offers of easy credit. I have previously pointed out that the number of court cases has increased by 54%. Hire purchase debt has increased by 66% to a total amount of R7 billion. Sir, do you know what the present-day hire purchase interest rate is? It is 26%. And the consumer concludes such contracts. He is simply stupefied by the easy credit.

Let us have a look at credit cards. They are absolutely manna from heaven for the irresponsible consumer. I think the consumer must simply have a certain ceiling imposed so that he will live within his means. How does one do that?

Let us look at an aspect such as hire purchase. I think that the Consumer Council, together with the hon the Minister and the hon the Minister of Finance, should give serious attention to the possibility of increasing hire purchase deposits and reducing the periods of repayment.

Why does your Government not do anything?

I am, after all, asking the Government to do something, and I am sure the Government will listen. [Interjections.]

Order! I have only given the hon member for Paarl the floor and would be glad if hon members would allow him to make his own speech.

I want to refer to the question of control boards. In recent times a great deal has been said about control boards, and there has been a great deal of criticism from that side of the House implying that control—although they did not object to it in principle—increased the price of a product to the consumer. In this connection I would like to bring it to the hon the Minister’s attention that in the majority of the 21 control boards, if not in all, there are representatives of the consumers.

Yes, but what kind of representatives?

Mr Chairman, the hon member for Melrose is obviously …

Mr Chairman, on a point of order: I am the hon member for Bezuidenhout and not for Melrose. [Interjections.]

Order! I would be glad if the hon member would refer to the hon member for Bezuidenhout as “the hon member for Bezuidenhout” and not as “the hon member for Melrose”. [Interjections.]

Mr Chairman, even though the control boards were reduced in size in 1978, with a small number of consumer representatives thereby falling by the way-side, I want to suggest that serious consideration be given to having more consumer representatives on the control boards. It has been my experience that those people work very well together, and if they are there from the very outset they even understand the price adjustment mechanism and then co-operate too.

In the few minutes still left to me I should very much like to refer to another problem that we are faced with in the economy, and that is the ever-insidious efforts of radicals, particularly in the USA, to bring about the disinvestment of American interests in South Africa. This has again been given a boost by the submission, to the American Congress, of certain amendments to the Export Administration Act. One is concerned at the fact that Congress has already accepted an amendment relating to a prohibition on new investments in South Africa, and we can only hope that both the Senate and the President will again, as in the past, block this from going through.

If one were to look at what people like Harold Wolfe, Solarz and Jesse Jackson had to say about this, one’s heart would just shrivel up, because there is surely not the slightest doubt that what those people profess to be in the interests of South Africa will in no way be in the interests of the Black people whom they supposedly care about. Let us look at what a person like Chief Buthelezi or Dr Sam Motsuenyane, has to say. If one take their views into consideration, there is surely not the slightest doubt that they should be listening to those people rather than to the people in America who, for their own, personal selfish gain, want to support these efforts in America.

It is with a very great deal of appreciation that I took note of the work of the American Chamber of Commerce in South Africa, and also of a recent publication in connection with its activities. There are approximately 350 American companies operating in South Africa, with approximately 120 000 employees in their employ. In addition there are 6 000 other American companies that trade with South Africa. The majority of those companies, at the present time, adhere to the provisions of the Sullivan code. There are also approximately 100 German companies, operating in South Africa, which subscribe to the EEC code. I have no objection to the provisions of these codes, but I then ask myself whether it is right for the Americans and the Germans to apply double standards, because when it comes to other investments they do not apply the same codes. [Time expired.]

Mr Chairman, having known the hon member for Paarl for some years, I am inclined to accept that he is indeed interested in economic and consumer issues, but I doubt very much whether the majority of the hon members in his party share that interest. I wonder how many hon members noticed that during the speech of the hon member for Welkom, for a brief shining moment, the total Opposition actually outnumbered Government members in the House by 17 to 16.

I would like to raise two questions with the hon the Minister this afternoon. Firstly, I want to ask him if he can spell out the implications of the change that has taken place whereby the SFFA has now come under the IDC. There has been very little said about this and it would be interesting to know, particularly in view of the fact that the SFFA has had a controversial recent history, the extent to which this hon Minister and his department are controlling the affairs of the SFFA or whether it still falls under the Department of Mineral and Energy Affairs, and if so, how it is working. It seems to be an extraordinary situation.

The main matter I wish to raise, and which was also touched on by the hon member for Waterkloof, is Atlantis Diesel Engines. In the latest report of the IDC there is one paragraph on the subject, which is a generally optimistic paragraph, although I understand that this company has experienced some technical problems which are not mentioned here. There is one disturbing sentence in this paragraph, which reads as follows:

I think this single sentence contains a great deal of which this Committee and the public should take account of. It seems to me that the time has come to ask some very hard questions about the economic viability and the implications of the whole ADE project. I think the South African economy in general and certain strategic industries in particular, namely the agricultural sector, the road transportation sector, the industrial sector and the construction sector, have lost out economically considerably in four major ways. Firstly, the losses which ADE have been generating for some years now, and will continue to generate, are being borne in a hidden way by their customers. Secondly, these operating losses come on top of what was already a higher unit price for AD engines, and this was inherent in the scheme from the very beginning even at projected more favourable levels of production. On the basis of the most optimistic projections it was going to cost more. A third factor is that the customers of ADE have had to bear a considerable retooling and re-engineering cost. From my own investigations this figure has been penal. It has not been disclosed, but it is being carried by these sectors, particularly the original equipment manufacturing sector, and it amounts to an enormous amount of money. Finally, to add insult to injury, it would appear that the cost of spares being sold by ADE for their engines is higher than the cost of the equivalent spares available elsewhere. I would like to quote the publication SA Road Transportation which cites figures for various items. They say that an engine block from a specified manufacturer costs R3 128, and that ADE’s equivalent cost R3 797, R699 or 21½% more. Another example taken from this list would be end bearings. The comparative manufacturer was charging R8,02 and ADE R19,88, an increase of R11,86 or 148%. If these figures are indeed correct and indicative of a general trend, then it seems to be an exploitation of the situation of dominant supplier, which was a danger which was warned about at the beginning of this project and which was pooh-poohed at the time. The point is that if you combine all these extra costs, you reach the very alarming conclusion that ADE has cost its customers and thereby the country, a penal amount of money in extra input costs, which because they had to be passed on in various ways to the consumer in general, have obviously had a considerable inflationary effect on the South African economy as a whole. This particular magazine refers to ADE as a giant leech on the South African economy. It therefore seems to me that the time has come to conduct a full reassessment of the viability and structuring of the ADE project. It will be recalled that the original motivation for the project was political and strategic. It was felt at that time that South Africa must achieve self-sufficiency in the production of diesel engines at almost any cost. It was also felt that ADE should provide a stimulus for the economy of the Western Cape and a focal point for growth at Atlantis. At the time the economic justification was based on an annual production of 50 000 engines which was apparently believed achievable by 1985. Now, with the benefit of hindsight, these objectives and assumptions seem highly questionable. Firstly, self-sufficiency has not been achieved. I believe that ADE has achieved a local content by value of about 70% the highest on a particular engine being about 80%, and that its objective is a local content by value of 100% on the engine, but excluding the fuel injector, the turbo-charging equipment and in some cases the block, because they state that in these cases the items are cheaper to import and they do not have the technical ability to produce them locally on a remotely economically viable basis. If this is correct, the critical question must be asked why it is strategically acceptable to import bits of engines rather than whole engines. If self-sufficiency is only partly achieveable, then it is actually not really achieveable at all. Moreover, if it is only party achieveable at an enormous oncost affecting inputs throughout the economy and involving inflationary forced expenditure on the part of important sectors of our commerce, agriculture and industry, why are we proceeding with the objective of only partial self-sufficiency? This is a question that strikes at the roots of the viability of the ADE project. It needs to be debated and replied to.

The project has of course created jobs in Atlantis, but it has in a sense substituted jobs in other parts of the economy. If the Government maintain they have created jobs in Atlantis, what has happened to jobs in other sectors of the economy that have been affected? What has happened, for example, to the jobs that were in existence in Blackheath at another local motor-manufacturing company?

A further question that must be asked is whether there is any prospect of ADE achieving viable economic levels of production in the forseeable future. They say they were aiming at 50 000 units. However, we believe they are producing only 30 000 units and now they are nibbling at other small sectors, for example big V-engines, in respect of which the throughput is between 750 and 2 000 per annum. That will in no way get them close to the 50 000 break-even projection at which I believe they have been aiming.

In the light of all these considerations, I should like to direct an appeal to the hon the Minister to conduct a through re-assessment of the entire ADE project. He said, in answer to a question of mine in the House earlier this year, that he does not monitor the situation at Atlantis, but he simply keeps himself informed from time to time. I do not think that is an adequate response. I think that the Government should take the situation by the scruff of the neck and re-assess its fundamental assumptions, its current performance and its forward plans. I believe that this should be an independent inquiry which should involve practical business men from the private sector in order to come up with really relevant and useful recommendations. The economic ripple-effects of ADE are very important and I believe it is vital that the assumptions, objectives and strategies in respect of ADE should be critically reviewed at this time.

Mr Chairman, I have often heard the hon member making ridiculous statements here in the House, but I must say that some of the statements he made this afternoon were far more ridiculous than any he ever made in the past. Let me refer, for example, to his introductory words about quite a few members on this side of the House being absent at a certain stage, indicating our lack of interest in the economy of the country. If that argument of his is correct, I really do not know what to think. I returned a few moments ago from the Standing Committee, in which the Agriculture Vote is being discussed today. When I left there were only two hon members of the PFP present. Does that mean, therefore, that the PFP does not give a damn for agriculture? That is surely a ridiculous statement that the hon member for Constantia made. Now he is waving at me. It almost looks like a Volkswag salute. That just shows what he thinks of this. [Interjections.]

The hon member for Constantia also alleged that ADE was saddled with complete over-production; that they had completely over-estimated commercially. Does the hon member know that at present South Africa is experiencing one of the most serious droughts in its history? Does he know how many tractors agriculture could afford to purchase this year? Do all these things simply pass him by? Are they in no way relevant as far as he is concerned? I do not want to allege that ADE can be freed of all blame. That is not the case at all. There is no undertaking in South Africa that does not make mistakes too. The kind of statement the hon member has just made, however, implying that ADE had completely over-estimated the commercial situation and was consequently saddled with tremendous over-production, is surely completely ridiculous. At present the conditions prevailing in South Africa are, after all, beyond the control of anyone in South Africa, including ADE. Does the hon member not take these things into consideration? It seems to me he takes no notice of them Mr Chairman.

Now, however, I briefly want to refer to the question of decentralization. At the start let me convey my thanks to the NP Government for the initiative it displayed in regard to decentralization in South Africa. I know, of course, that both the hon member for Walmer and the hon member for Houghton find decentralization hard to digest. They are not really interested—so it seems to me—in South Africa’s optimum economic capability being developed and in development in South Africa being distributed geographically, as far as possible, so that we can achieve that objective. [Interjections.] For them the solution lies in the concentration of economic activities. They have said as much on more than one occasion in the past. The hon member for Houghton said again just the other day. She said the PFP’s endeavour was to bring about a concentration of economic activities and that this would solve South Africa’s problems.

Let me now just take this opportunity to boast a little. Before doing so, however, I just first want to refer to the Decentralization Board and to Mr Dougie de Beer, its chairman. I want to convey my heart-felt thanks for that board’s competent assistance to industrialists who appeal to them for help. We really do appreciate it very much. When I say I want of boast a little, it is actually my home town, Bloemfontein, that I want to boast about. We have said that we do not expect charity from the Government, but that we just want to be placed in a position to help ourselves.

We seized upon the decentralization benefits that were announced and tried to make optimum use of them. That was all the incentive we needed in order to help ourselves. Allow me, Mr Chairman, to quote a few figures in this regard. Bloemfontein was the growth point that was second only to one other in the establishment of new industries, of course with the assistance of decentralization incentives. This was the case, in spite of the fact that we were only third on the incentive category scale. Since these benefits were introduced on 1 April 1922, and up to the end of the next financial year—in other words, up to 31 March 1983—only 18 applications were received, creating 784 new job opportunities. This also meant a capital investment of R8,7 million.

Then we began with the active marketing of Bloemfontein as a growth point. It was not, of course, merely a question of Bloemfontein itself. I shall be referring to this again at a later stage. In the succeeding nine months, by way of a co-ordinated marketing programme, we dealt with 46 applications, creating almost 2 000 job opportunities, and also entailing an investment of R21,7 million. So after we began with an active marketing campaign, the applications, the job opportunities that were created and the capital invested virtually increased fourfold, that is if one extended the figures to cover a full year.

That did not, of course, simply happen of its own accord. The Bloemfontein Development Foundation took the initiative by way of an imaginative advertising campaign. That advertising campaign will, of course, have to be maintained if we want to continue utilizing these benefits with a view to the comprehensive marketing of the development potential of that region.

I also want to make what I consider to be a very important statement, and that is that the growth points identified in the Republic have no chance whatsoever of developing on their own and in isolation. Those growth points will fully have to take into account the growth potential of the relevant regions in which they are situated when it comes to determining the development strategy there and when it comes to marketing the growth potential of the relevant areas. In this connection I have in mind, for example, Region C in the Free State where, situated close together, we have the three growth points of Bloemfontein, Botshabelo and Selosesha. What I am saying is that not one of these three growth points can be optimally developed without also bearing in mind the potential of the other two growth points and also that of the rest of the region. In that area we shall duly be taking this standpoint into consideration, and also the fact that development will have to take place in a regional context.

I also want to say a few words about the idea of protection. In this connection I want to associate myself with what the hon member for Constantia said. After the Carlton and Good Hope Conferences a kind of free-market psychosis began developing in South Africa. No one should try backing down by saying that we no longer endorse a free market economy. We shall, however, have to bear the reality in mind that in any capitalistic country there has to be a certain measure of interference on the part of any Government. A point is reached, in a complete free-market situation, where one encounters the so-called “ugly face of capitalism”, for example the formation of monopolies. This can only be controlled if the State exercises a certain measure of control over, it. What I am therefore saying is that in certain cases protection is indeed necessary. This is definitely the case in certain strategic instances where the overall economy of the country could be paralysed if, for example, international boycotts were implemented. The case of fuel is a good example. I think that any responsible Government would have to guard against its country becoming the rubbish-dump of over-production, a situation that could develop as the result of the socio-economic objectives of other Governments, for example full employment, etc, with goods in such a country then simply being dumped in another country. No self-respecting country anywhere in the world could tolerate anything like that.

We also know, for example, that the agricultural sector—as in all economies in the world—also needs control measures as a result of the fact that of all the sectors of the economy it is least able to control its supply and demand situation. We regard it as important, in fact essential, to keep the agricultural industry on its feet, but in the agricultural industry we have also accepted the challenge of moving as closely as possible to the ideal of the free-market system.

Control must never be allowed to protect inefficiency. Out very endeavour is competition, which is the cornerstone of the free market system. That is what we must strive for. Entrepreneurs who cannot compete, will simply have to accept the fact that they will need to be replaced by other entrepreneurs who will, in fact, be able to compete in the relevant market situation. Present-day public criticism focuses on the contention that the protection industry in South Africa and free market objectives are haphazardly played off, one against the other. In the past few weeks, in the chemical industry, one found quite a few control measures being abolished. In the rubber industry, however, certain additional control measures were imposed. This kind of situation is a little confusing to the public and criticism is expressed about it. I think it is essential for the hon the Minister to make use of the opportunity to spread out the necessary guidelines in terms of which exceptions will be made and what protection will be granted. Then we shall be certain of greater peace prevailing in our economy.

Mr Chairman, I also want to turn to Dr Du Plessis and thank him for the years he worked in this department and as such also for South Africa. We thank him most sincerely for that service; it does not go unnoticed.

I should like to refer to the hon member for Waterkloof who has just said that the industries in South Africa did not fare badly at all, but actually very well; better than in other countries. I want to refer to the hon member to the Budget speech of the hon the Minister of Finance in which he made it quite clear that the expected revenue of all companies—excluding mining companies— would be R1 200 million lower than the previous year. This represents a 30% decrease. If one considers this, it is shocking. It is really shocking to realize that our industries—all industries are after all companies—are not faring that well. It is after all not true that only the commercial companies fared badly.

The hon member for Paarl asked that more be done in regard to the Consumer Council. I want to associate myself wholeheartedly with his plea.

As the hon member for Yeoville said, it is true that the consumers in this country are having an extremely hard time. From one day to the next there are price increases, and if the price increases do not come quickly enough, the hon the Minister of Finance levies an additional 3% general sales tax. When one discusses the revenue of companies, one must also bear in mind the increase from 46,2% to 50%. The drop in revenue is therefore far greater than 30%

You agree with Harry.

I suppose that hon member agrees with the ANC. It seems like it to me.

Order! The hon member may not say that about another member.

Sir, I withdraw that remark. I just want to tell the hon member that he is always very quick to pass remarks, but he is going to get himself into trouble before long.

I want to make an appeal to the hon the Minister on another matter. It has to do with small businesses. A special amount of R7 million has been set aside for small businesses and this represents an increase of R290 000. As we see it, the aim is to assist small businessmen. There is a sector of small businesses in this country, however, that is having a very hard time. In this regard I am referring to the drought-stricken areas. It is true that the Government and the hon the Minister of Agriculture are going to the assistance of the farmers there, but what about the small businesses in those areas? They are the people who gave the farmers credit, over and above the credit given to the farmers by the banks, the Land Bank and Agricultural Credit. I want to ask the hon the Minister what he is going to do to assist the small businesses in those areas. Assistance is being given, but far more should be done.

Those traders should be kept in those rural communities, in those small towns. They take care of the farming community and provide them with all the necessities of life. They also enable those areas to have schools, to have rail links and to make use of post office services. We have already found that post offices are being closed down in those areas. The hon the Minister of Transport has also suspended certain train services because they were no longer economic. Those people cannot simply throw in the towel and move elsewhere. Once they have left they are gone for good. We should also see them in a security context, they form part of the security structure, and we have to keep them in the rural areas. I should like to hear from the hon the Minister to what extent he can do something about this.

I also want to refer to the industrial development strategy. The hon member for Welkom referred to this and quoted at some length from the Kleu Report. The Government should produce a White Paper. It is all very well for certain things to be contained in the report, but they have not yet been laid down as the policy. This does not tell us what the hon the Minister is going to do. Does the hon the Minister want to wait until the new dispensation is in force before he publishes the White Paper so that the other two population groups can also say how and in what direction? Is the hon the Minister going to have that White Paper published soon? I want to ask that that White Paper be published as soon as possible because it is essential to South Africa—to the traders, the industrialists, to South Africa as a whole.

I shall discuss tourism later; this will suffice for now.

Mr Chairman, as one could have expected, the hon member for Sunnyside made some disparaging remarks about the new dispensation again. I think we should pay about as much attention to his speech as to his own party, because I see only one member of that party in the House.

I should also like to make one remark about the official Opposition’s attitude to regional development. Their basic objection to the regional development strategy—although they do not want to say so in so many words—is that it is actually based on ideology rather than on economic principles. This is of course a misrepresentation, and they know it. However, I understand the dilemma in which the PFP finds itself. Their support was initially limited to the metropolitan areas, and therefore it was necessary for them to argue against regional development and to butter up their voters. In the light of the new realism in South Africa, they now find that this support is also disappearing, and on the one hand they are getting more and more desperate to win back their voters, while on the other hand they cannot be too explicit about it, because that would lose them what little support they may have anywhere in the rural areas. The hon members for Walmer and Port Elizabeth Central have only to ask the hon member for Albany whether he agrees with them about regional development.

The object of the Government’s regional development strategy is to bring about a more even geographic distribution of economic development in order to give everyone an equal opportunity to share in the country’s prosperity and to give everyone a place in the sun. Industrial development is of course an important component of this strategy, as will be clear from the particulars which the hon the Minister will probably furnish to us later with regard to development in this area. However, we must not forget that agricultural and mining development form an integral part of the strategy. All these components must be developed in a properly co-ordinated way, so that they may supplement one another, if the full potential of the strategy is to be realized. I believe that this strategy and the economic development which it will bring about will lay the foundation for the peaceful development of Southern Africa, and the importance of this cannot be over-emphasized.

What is equally true, in the light of the fact that 1 000 jobs will have to be created each day for the next 16 years to ensure full employment by the year 2000, is that this strategy alone will never be able to solve the unemployment problem. The solution to this problem lies in full economic development together with a realistic demographic development. If the population increase cannot be limited to what the country is realistically able to support—which can be done if the general population plan their families properly, thereby reducing the enormous influx into the labour market—an unemployment crisis will be unavoidable.

†Closely related to the strain which an unchecked population explosion will place on industry, is its implications for the provision of the necessary manpower to fulfil industrial development needs. It has been said, and rightly so, that it is not the market or the demand which will determine the level of business and industrial activity in the second half of this decade, but the restrictions imposed on manufacturing and on the service industries by the shortage of adequately educated, trained and skilled manpower. This will in turn cause a limitation to total employment.

Most unemployed people in the world, and also in the Republic, are uneducated with little or no schooling and are mainly unskilled, and these people cannot create job opportunities for others. The ratio of unskilled to skilled persons in South African industries gives reason for concern, being at 42 unskilled to one skilled. Compared with Japan’s 16 unskilled to every skilled person and the United State’s six skilled to every one unskilled employee this has serious consequences for our development. Unless we can manage to reduce the number of unskilled and increase the number of educated and trained people, the necessary productivity for achieving our potential of becoming one of the great industrial countries in the world cannot be realized.

*The lack of properly trained manpower is indeed the greatest inhibiting factor with regard to the successful implementation of the regional development strategy. I want to advocate, therefore, that technical training in particular should be regarded and developed as an integral part of the strategy on a decentralized basis. Facilities similar to those at Visa University should be created, so that extramural study and training can be made much more widely available.

Furthermore, I should like to refer to a few other aspects relating to regional development. Although considerable success is being achieved, as has already been said, a problem which is being experienced in practice is the fact that regional development advisory committees have no budget or staff of their own. This complicates the necessary follow-up work in connection with projects, and research undertaken by the committees to ascertain the needs, power, etc, of a particular region, is also adversely affected. At the moment, this work is being financed from their own pockets, at great expense and with great sacrifice, by the persons serving on the committees. I want to make an urgent request that the committees should be provided with the necessary secretariat and funds by the State.

Another important aspect of regional development which should be borne in mind is the fact that the South African market is limited. If we want to achieve and maintain maximum development and productivity, therefore, markets will have to be created abroad. I want to agree with the hon member for Vasco and to say that the misconception which often exists, ie that export is actually the magic formula for the solution of all our problems and that we can go right on producing because the foreign market is so easily accessible, should be removed. The fact is that the international market is extremely competitive and that countries with highly specialized and atomised industries are already operating in this sphere. We shall have to compete with them in respect of price, quality and marketing.

In my opinion, the implications of this for our industrialists who want to enter the export market are the following:

Firstly, that maximum production effectiveness will have to be sought. This will mean that in many cases, it will be necessary to automize rather than to concentrate mainly on the creation of job opportunities. If exports flourish, the service sector will compensate for the loss of jobs as a result of mechanization. In addition, there is great scope in domestic activities, in the building industry, for example, where it is possible to concentrate on the creation of jobs.

Secondly, we shall have to concentrate on the manufacture of products from raw materials which we can provide and which are in short supply on the international market. Maximum processing of, for example, agricultural products and minerals before export seems to be the obvious solution.

Thirdly, locality-bound industries involved in the processing of these locally obtained raw materials, such as those that manufacture cement from limestone, for example, should also qualify for regional development benefits.

Fourthly, the maximum of R7 million should be abandoned in the granting of decentralization benefits in appropriate cases. It will often be found in the international market that the bigger industrial groups have a much better chance of competing than the small industrialist.

In the fifth place, export-orientated industries should be protected against disruptive competition while they are in the process of establishing themselves, enabling them to build up expertise and productivity and to operate from a sound domestic base when they enter the international market.

Finally, the export process should be co-ordinated in its entirely on the basis of a long-term strategy with full co-operation between the Government, industry and the capital and labour markets.

I do not doubt for a moment that the regional development strategy is the foundation and indeed the only way in which Southern African can be developed to its maximum potential. However, it is essential that this strategy be adapted from time to time in the light of technological and other developments, not only in South Africa, but in the international sphere as well.

Mr Chairman, I am rising at this stage to deal with a few general matters. Later I shall refer in greater detail to matters raised by hon members.

In the first place I should like to associate myself with those hon members who conveyed a message of appreciation to Dr Tjaart du Plessis, who is to retire from the service of the State at the end of June. He has had a long and successful career in the service of the State. He was appointed at a very youthful age as department head of the then Department of Statistics, a department which he expanded in able fashion. About four years ago he was appointed Director General of the new Department of Industries, Commerce and Tourism, and was set the difficult task of uniting three separate departments within one department. Dr Du Plessis achieved signal success in the task of uniting the staff and creating a strong spirit of harmony and purposefulness in the department. In the relatively short time that he was Director General and head of the department he succeeded, by way of the activities of the department, in effectively promoting the Government’s policy of free enterprise and a market-oriented economy. The department will sorely miss the skills of Dr Du Plessis, because as an economist and expert he is a man of stature. Although he is now retiring as the most senior Director General, I am grateful to be able to mention that he has indicated that his services will still from time to time be available to the State, which will be able to utilize his expertise in this way.

On behalf of the Government and, I believe, all hon members of this House, I wish to convey our best wishes to Dr and Mrs Du Plessis for the years that lie ahead. I do not doubt that whereas he may be dreaming now of a peaceful time on a little farm—the ideal of every public servant—it will not be long before we see him actively involved in the economic scene once again.

At this point, Mr Chairman, I should also just like to extend a very brief word of welcome to Dr Du Plessis’s successor, Mr Sarel du Plessis. We are really being overwhelmed by Du Plessis’, Sir. I believe that the department is exceptionally fortunate to have a man of the calibre of Mr Sarel du Plessis to succeed Dr du Plessis. The department feels specially honoured to be so highly rated as to have as Director General, in the place of Dr Du Plessis, a Director General who has already shown his worth in a different sphere, a man of exceptional ability. [Interjections.] I have no doubt that Mr Sarel du Plessis will be able to rely on the full support of the department.

At this point I should like to make a brief announcement about small industries and an incentive scheme which has been drawn up for the small and informal sector.

†In view of the important role played by small business undertakings in the country’s economic development, not only with regard to the creation of employment opportunities but also as an instrument to identify and cultivate entrepreneurial skills in the process of economic development, the South African Government has for many years been bent on improving the position of small business undertakings. For example, the Small Business Advisory Bureau was established in 1970 with the aid of State funds to provide training and a practical consultation service to small business undertakings. Then, in 1981, the Small Business Development Corporation was established as a joint venture between the State and the private sector to provide financial and other aid to small business undertakings. Until that time such aid had been provided by certain other development corporations. In addition the Council for the Promotion of Small Business was appointed by the Government in 1981 with the task, among others, of making recommendations in regard to the appropriation of available funds to institutions providing training as well as guidance and advice to small business undertakings.

With the implementation on 1 April 1982 of the new incentive scheme for regional industrial development, the regional development authorities—the Decentralization Board and its counterparts in the independent national states—were instructed to investigate and submit recommendations on ways and means of extending the incentive measures to small industries and to the informal sector.

Pursuant to this investigation, a number of guidelines and procedures in respect of incentives to small industries has now been approved. Investigations to formulate a co-ordinated programme of small business development generally for the RSA, Transkei, Bophuthatswana, Venda and Ciskei are still under way. In terms of the abovementioned guidelines and procedures, a clear distinction is drawn between small industries which are able to comply with all the prescribed requirements and procedures necessary to qualify for the payment of standard concessions set out in the manual on the new industrial incentives scheme implemented on 1 April 1982, and small industries which, by the nature of their operations, are unable to satisfy the prescribed requirements and procedures. The standard package of concessions will be granted to the former group, those who can meet the requirements. The latter group of industries, which brings us to the informal sector as well, will be eligible for a simplified package of concessions, which consists of a special tax-free cash wage incentive, as well as standard long-term incentives. These industries must, inter alia, have a total capital investment of less than R50 000 each, excluding land and buildings, and each must itself provide a minimum of 10% of its capital investment requirements, which may include cash, machinery, tools and stock.

The simplified tax-free cash wage incentive will be payable quarterly with effect from the beginning of the month following the month in which the application for assistance has been approved by the regional development authority, and will be payable for a maximum period of seven years.

Full details of the guidelines and procedures in respect of the incentives for small industries are contained in the annexure, which I will make available to the Press. I am not going to spend more time on the details. These guidelines and procedures, as well as the application form, will be incorporated in the next reprint of the manual.

*Apart from these additional incentive measures which are being made available for small businessmen, including those in the informal sector, I should like to refer to another very important sector of the economy. This is a sector which indirect reference was made this afternoon when the hon member for Innesdal discussed technology. This sector has to do with the electronics industry.

The importance of the electronics industry, particularly after the arrival of the silicon integrated circuit, can rightly be described as the second industrial revolution in the world of today. This industry is exceptionally strategic, and without a well-developed electronics industry, any developing country would be exposed and, at a time of economic boycott, development in such a country would come to a standstill. Apart from the obvious impact of the electronics industry on a sophisticated armaments system, it is also the heart of the entire modern telecommunications network. It is already central to banking, and public administration, and very few industries would be able to function effectively without it today.

The importance of electronics was emphasized recently by the National Economic Development Office of the British Government, when the following was stated in a publication by this institution:

Increasing automatization of information technology, the entertainment world, television, videos, computers, pocket computers, electronic games and so on, is also responsible for many new industries that are replacing traditional industries on a large scale, particularly in developing countries. It is also of importance to mention that although in the majority of system applications, electronics represents a relatively small cost input, its impact on the performance and cost of the entire system is disproportionately high. The electronics aspect, although a minor cost element, is therefore of the utmost importance for the development of integrated systems, even in the case of systems in the consumer sphere, such as television and similar consumer items. Therefore it will come as no surprise that the electronics industry is today the most rapidly developing industry in the world, a branch of industry which, at the present growth rate, and measured in terms of gross turnover, will be the biggest single industrial sector in the world by 1990. Even in 1982 the industry was comparable with the total textile and iron and steel production of the EEC countries.

The South African electronics industry is growing by about 20% per annum and ought to amount to approximately 2 800 million in 1984, of which military equipment will represent 10%, industrial electronics 20%, consumer goods 22%, data processing equipment 22% and telecommunications equipment 26%. Government bodies are jointly responsible for more than 40% of the total purchasing power in respect of electronics in South Africa, or 50% excluding consumer goods; that is to say, a massive R1,1 billion in 1983. At this stage, 50% of the purchases by State bodies already have a relatively high level of local content, in certain instances as high as 75%, although it is a recognized fact that the greater part of our electronic components are still imported. Good progress has already been made by the Department of Posts and Telecommunications and Armscor in establishing a comprehensive assembly industry by way of purposeful local content schemes. However, to a large extent electronic products and systems are still being manufactured under licence, and the industry is still characterized by a high level of overseas expertise and dependence. Only 20% of the purchases by State bodies have a relatively high local design content, and two thirds have no local design content whatsoever. Therefore South Africa is still largely dependent on imports for a strategic product and a product which is increasingly becoming one of major importance in the industrial development of the country as well.

Accordingly the Government has decided to formulate the policy with regard to the electronics industry which will enable the industry to develop locally into a vital and competitive industry. One of the most important reasons for the low local design content is the increasing trend world-wide to make use of silicon in the design of electronic systems. After assembly in the tiny casings, the circuits are often sensitive and complete systems on their own. With this increasing integration of silicon, the circuit in silicon and the resultant shift from systems design to component design, the South African industry is in danger of suffering from a steadily declining added value on its production and of becoming steadily more dependent on imported expertise and components. The development of the electronics industry is exceptionally capital-intensive, and due to the rapid rate of development and innovation in the industry, this industrial sector is often unable to make ends meet without State aid, particularly in its early years. The majority of other developed countries are already taking purposeful steps to promote the electronics industry, and vast sums are being contributed every year by governments to support the electronics industry. The Republic of South Africa cannot stand aloof in this regard and will, therefore, also have to take positive steps to enable its own industry to survive despite growing international competition and, in addition, to enable it to develop on a sound basis to that development can be assured and promoted in the rest of the national economy as well. The world electronics industry can be simplistically regarded as consisting of a limited number of large enterprises that dominate the industry as regards the most important products, eg telephone exchanges and computers, as well as a large number of small enterprizes specializing in innovations in respect of specific products, and often in single product lines. Such small undertakings select small segments of the industry. As a rule it is very difficult to compete with the major enterprises on a direct basis, particularly in view of their comprehensive international presence which gives them the ability to develop technology very rapidly and, by dominating the industry, to achieve spare capacity. On the other hand it is these same series of main products that provide the base load and form the basis from which technological and labour development takes place in the electronics industry. They comprise the important marketing area for a series of secondary industries that provide them with components, subsystems and services.

In the light of these facts the Government has decided to promote the electronics industry in the Republic of South Africa inter alia by way of rationalization and by utilizing the purchasing power of the State with regard to these series of main products, which over a period of years amounts to considerable volumes, in such a way as to give the industry the base load, from which basis the private industry will be able to develop its own singular strategy for the industry in general, as well as the international industry. Therefore the Cabinet has approved an electronics strategy for the Republic of South Africa which will be based on the following major aspects.

In the first place the purchasing power of the State will be mobilized by firm undertakings from the Government bodies in question to commit themselves to a stepped-up programme of consumption of domestically-produced material and domestically-produced design when they purchase their electronics requirements, by way of a uniform preference policy in this regard. In the second place the resources of the Republic of South Africa as regards the design and manufacture of electronic systems will be extended. In the initial stage this will, where necessary, be done with State aid. In this regard, Sames, which is well-known to hon members of this House, and which manufactures integrated circuits in Pretoria, is being expanded to adapt to the requirements of the industry in the Republic of South Africa and to keep pace with it. Moreover, a circuit development centre will be founded with the co-operation of the IDC and several enterprises in the private sector which jointly represent more than two-thirds of the industry in South Africa. This will be done with a view to promoting, as rapidly as possible, the domestic design capacity. Discussions with these private sector enterprises have already been conducted and they have intimated their preparedness to participate in such an undertaking. The implementation of this strategy will entail ongoing liaison among the various Government bodies, particularly as regards their planning and buying policy. Accordingly it has been decided to establish without delay a non-statutory standing committee for the furtherance of the electronics industry in the Republic of South Africa. Initially this will for the most part be confined to liaison among the various Government bodies and the private sector in order to ensure the continuance of the strategy mentioned. In due course, however, the standing committee may be expanded to provide for the broader needs of the electronics industry. Members of the committee will be senior representatives with knowledge of electronics, who will be appointed from the ranks of the Department of Posts and Telecommunications, the SA Transport Services, the Department of Industries and Commerce, Escom, Armscor, the CSIR, the SABC, the IDC and NuCor. The committee will be under the chairmanship of Mr W C van der Merwe, General Manager of the IDC. Initially, private industry will not have a permanent representative on the committee, but will be consulted as required and may also be co-opted. Moreover, the committee has been directed, as a first and important charge, to give immediate attention to considering ways in which the private sector can be involved in the activities of the committee. The Department of Industries and Commerce, under which the committee falls, will provide the secretariat. Apart from Mr Van der Merwe, the other members of the committee are: Dr T Verster of the CSIR; Mr C G Badenhorst of the Department of Transport Affairs; Mr D G H Mills of the SABC; Mr E Stacey of the Department of Posts and Telecommunications; Mr D H Botha of Armscor; Mr J H P Harmse of Escom; Dr W P Gertenbach of the Atomic Energy Corporation and Dr C F Boyce.

I do not doubt that this development is an important step in the right direction towards laying a solid foundation for the development of the electronics industry in South Africa. This will also impart a stimulus to the industry which at this stage has already progressed considerably but which, due to the tremendously competitive situation in the electronics world, is finding it difficult to keep abreast of technological development in order to provide the base load which will enable them to be innovative in other spheres as well. I believe that this can only be to the benefit of South Africa’s industry.

Although I intend replying to hon members in more detail at a later stage, I do just wish to associate myself with a few remarks already made here this afternoon. I want to deal here and now with the question of protection, to which the hon member for Walmer and other hon members have referred, and I have a few remarks to make in this regard.

Hon members of the Committee will recall that we discussed the issue of protection last year as well. Under discussion in that debate were, particularly, allegations that the Government was over-protecting the industrial sector to the detriment of other sectors, particularly the agricultural sector. From the same quarter from which we have now had criticism of the present policy of protection, we heard voices raised last year to the effect that by way of its protection policy the Government was harming agriculture. Hon members need only peruse the speech by the hon member for Albany in this regard. The hon member for Walmer has now also heard in the Press that some people are saying that the Government is now following a free market policy which is exposing industry in South Africa to competition and thereby subjecting it to possible harm. Of course, it is very easy to jump on the bandwagon as far as such stories are concerned. If it suits one, one is in favour of something, and if it does not, one is opposed to it. Such equivocation will not help hon members of the official Opposition.

In the first instance, I just wish to say that there is not a free market in South Africa. There is no absolutely free market, nor is the Government in favour of that. It is not feasible, and it is not desirable either.

What does the constitution say about that?

Mr Chairman, the hon member for Constantia knows little about the economy and should rather refrain from saying anything about it. The constitution refers to effective competition, and that is a cornerstone of our economic policy. I should like to exchange ideas about that with the hon member. I believe that we ought to have a considerable degree of unanimity in this Committee as to the vital need for healthy and effective competition. The free market as such certainly does not exist in South Africa. We have a mixed system in which the State must seek to pursue the overall economic objectives in harmonious co-operation with the private sector and to realize them in the interests of everyone in the country, economic objectives such as growth, provision of employment and a better distribution of prosperity. All these overall objectives must be achieved by way of various instruments of policy. These instruments of policy include, inter alia, the question of protection.

The hon member for Waterkloof referred to the history of the growth of industrial development in South Africa from 1924 by virtue of a policy of protection of industry. Last year in the discussion of this Vote I argued that protection was justified and necessary. I stand by those standpoints.

We on this side of the House recognize and accept that the South African economy and industry cannot get by without protection. Therefore it is not true that industry is being delivered up to foreign competition. Nor is it true, as the hon member for Yeoville alleges, that tariff measures are ineffective and inadequate. The fact is that industrial development in South Africa is impossible without protection. We believe that that protection is most effectively provided by the customs tariff. The reasons for this are obvious. The customs tariff—to link up with what the hon member for Constantia had to say—makes competition possible, because notwithstanding the fact that it puts local industries in an advantageous position, it still, in exceptional circumstances, makes imports possible. It enables the industry, or compels the industry, to keep up its level of productivity because it knows that if ever it were to fall behind with its productivity, it would be in danger of competing with imported products. What is still more important is that it is market-related. If I were to sum up our economic system in South Africa, then, apart from saying that it is a mixed system, I should say that I advocate an economic policy of free enterprize and a market-related economy. We should like to incorporate the disciplines of the market in our economy.

One of those disciplines is sound competition, that discipline which constantly obliges the industrialist or entrepreneur to display the greatest possible degree of productivity and efficiency, that discipline that urges him to be innovative, to introduce new technologies. The hon member for Innesdal referred to technology. If an industrialist or entrepreneur does not have to improve under pressure of competition, to keep his product on the market, then he will not, after all, incur unnecessary expenditure and effort. Therefore the system of protection by tariffs is an advantageous one.

What is more, it eliminates much administrative red tape. It obviates the need for determining by way of administrative control what kind of commodity is to be imported, etcetera. Therefore it prevents many abuses and even malpractices in that it replaces administrative control by a market-oriented system. What is till more important is that this system is in line with our international agreements.

It is also often argued in this House that as a trading country, South Africa must be particularly careful to handle its international commitments with great circumspection. In many respects South Africa is a small country, but as a trading country we are rated as one of the biggest in the world. Indeed, in total imports and exports South Africa is at present sixteenth on the list of world trading countries. This is so because we are pre-eminently an exporting country and, as a developing country, also an importing country. Our total imports and exports comprise 60% of our gross domestic product. Therefore we are exposed to the international community and for that reason international trade agreements are of considerable importance to us. We have today links through GATT with 42 countries in which we enjoy most-favoured-nation treatment for our products. We are not only admitted to those markets, but also receive most-favoured-nation treatment as regards our products in those countries. It is often argued that we live in a world of protectionism and that all countries are trying not to import more. That is true, but we have access to the markets of the most important trading countries in the world on a preferential basis. Therefore it is necessary that we act with considerable circumspection as far as our international trade commitments are concerned.

I wish to refer to a few aspects of protection. As in many spheres of life, the key word here is balance. It is not merely a question of saying “yes” or “no” to protection, but one of obtaining the right balance, the right “mix” of protection. In the first instance I just point out that our industries are indeed protected and that this protection is not inconsiderable. The study group on industrial strategy—the Kleu Committee—carried out a survey two years ago to indicate the level of protection for the various product groups. They furnished the mode, or the rate which occurs most often—not the average—in a specific product group, as well as the highest rate in that group. Raw materials have a mode of 10,1% with a top rate, in respect of certain raw materials, of 22,6% protection; semi-processed products have a mode of 27,9% with a top rate of 34,3%; finished products have a mode of 25,1% and a top rate of 49,1% and capital goods, a mode of 21,6% with a top rate of 31%. I believe that these levels of protection are necessary and justified to keep our industrial sector strong and vital. However, we must retain our sense of the overall perspective.

By far the most important market for South African exporters in general is the European market, the EEC countries. Our products are admitted there at most-favoured-nation tariffs. Let us consider the position in the EEC, and I quote from European File, the EEC publication, in which they refer to tariffs and protection:

We still enjoy preferential tariffs. South African industries therefore enjoy high levels of protection because we are in a special position with a small market. It is impossible to achieve economy of scale in all respects.

On analysis of the applications recommended by the Board of Trade and Industries over the past year and approved by the Minister, it is interesting to note that the trend over the years has consistently been towards more protection. An analysis of applications submitted to the board over the past twelve years indicates that the board approved approximately 62,4% of the applications for increased protection and rejected a mere 37,4%. Over the past 12 years, therefore, the trend has been to grant increased protection.

Moreover, local manufacturers enjoy preferential treatment as far as tender procedures are concerned. This preference can very from 4% to 14%, and even higher in many other instances. To that one can add that many industries in South Africa enjoy indirect forms of protection such as limited licensing, local content and even standard specifications which often make it difficult for imports to enter the country.

I am not unaware of the criticism that is expressed from time to time of the way the Government deals with applications, with reference to apparent delays that occur in respect of investigations into protection. It seems to me as if the implementation of the policy has created more problems, in the minds of certain members of the private sector, than the principles of the policy. Therefore, in order to eliminate all doubt and in order to consider afresh the effectiveness of our system, I have appointed a committee under the chairmanship of Dr Van der Horst, on which leading members of the private sector are also represented.

How many members representing the consumer and members from the private sector serve on that committee?

A short time ago the hon member tried to advance the argument that tariff protection was inadequate because there were other forms of protection as well. The task of this committee is to consider whether tariff protection can be implemented effectively, whether it leads to effective protection of those industries for which protection is justified.

The hon member now wishes to discuss the position of the consumer. Later, in reacting to speeches by hon members, I shall refer to that in more detail. I want to say to him that as far as investigations by the board are concerned, any agency or person is free to state his standpoint and explain why he feels that a specific application for a tariff is not justified. I should welcome it if consumer organizations, organized consumers or individual consumers would take that opportunity to submit reasons to the board as to why the application for protection submitted by a specific industry should not be granted.

As far as the industries are concerned, I should like to make one final remark. It is of the utmost importance that South Africa should have a healthy and vital industrial sector. The hon member for Walmer referred to that.

†I fully agree with the hon member. It is of the greatest importance for future growth and job creation, but then we must also have an efficient industry. If our industry is inefficient we will neither be able to compete in the local market nor will we be competitive in the international market. In that way we will not be able to create the jobs that we are all so eagerly pleading for. We must therefore have an efficient, lean and hungry industry. Unless we allow them to measure themselves against the cold winds of international competition, unless we introduce the discipline of the market also to those industries, they will never become efficient.

*Also of importance—I have said this repeatedly, and what is more, we do this with great care and circumspection—is that we have no wish to see competition from abroad disrupting industry in South Africa. Therefore we ensure as far as possible that in exceptional cases, where it appears to be necessary to deal with a matter by way of permit control, this is done. What is more, we impose the necessary anti-dumping measures. The board goes out of its way not only to agree to tariff measures but also to impose formula duties which establish a ground price in order to exclude competition at unrealistic prices from the South African market. I therefore believe that we have the arsenal of instruments necessary to give our industries effective control.

It is striking that notwithstanding the recessionary conditions in recent times, our industries have done not at all badly. One of the important yardsticks whereby to assess the state of affairs in industry is surely to a large extent the production capacity being maintained. The hon member for Constantia referred to ADE. I shall discuss that matter with him later. As the hon member Dr Odendaal rightly remarked, the problem of ADE coincided to a large extent with a market which, due to the drought and other circumstances, simply collapsed. The agricultural industry stopped buying more tractors. As against an average of 15 000 tractors per annum, in 1983 only 7 000 were bought, and there is no indication that that figure is going to be much higher this year. However, I shall deal with that later. The utilization of the capacity of ADE was therefore exceptionally low, but notwithstanding those problems ADE predicts that it is going to break even this year. Notwithstanding the most difficult circumstances an industry could encounter, they envisage breaking even this year, and that will not happen at the cost that the hon member wanted to suggest here, but at a premium.

[Inaudible.]

That hon member had so much to say about ADE, but did he take any trouble to ascertain what the exact facts in regard to ADE are? Last year we requested the Bureau for Political and Economic Analysis of the University of Pretoria to carry out an in-depth investigation into the effect of protection on, inter alia, agriculture. They came back and said that the introduction and phasing in of ADE had entailed a cost of approximately 16% for agriculture. Is the hon member aware that ADE did not increase its engine prices for 18 months and that they wanted to have an increase of 4% on the Perkins engine this year, but at our request and after discussions, they decided not to increase the price of their engines this year? Therefore, if there is an increase in the price of tractors this year it will not be the fault of ADE.

The hon member has distracted me from my argument somewhat, because what I wanted to emphasize here, was that South African industry, although hindered by difficult economic circumstances and under pressure from recessionary conditions, has nevertheless enjoyed high levels of factory utilization. The first three quarters of 1983 can be regarded as the real low point of the recession. Hon members will recall that by the end of last year there was a slight upturn in consumer expenditure, but the first three quarters could, in a certain sense, be regarded as the most difficult phase of the recession. If we compare those utilization figures for the first three quarters of 1983 with the period between 1981 and 1982, which represented a boom period in the South Africa economy, it is remarkable that production capacity has remained exceptionally high. I selected a few sensitive areas and I shall give hon members the figures for 1980, 1981 and the first three quarters of 1983, for which the figures are available. They are figures provided by the National Productivity Institute, figures which are recognized by industrialists in general as very reliable: Manufacturing in general: 88,5%, 89,9% and 84%, and hon members must bear in mind that we take 90% as absolute full capacity; textiles, which are an exceptionally sensitive area: 92,9%, 91,6% and 83,7%—still sound, therefore; the clothing industry: 91,6%, 92,8% and 88,1%, footwear: 93,3%, 96,3% and 89,9%; paper and pulp products: 93,4%, 94,5% and 92%, etcetra. I could continue in this vein, Sir.

I do not wish to contend that these industrial sectors have not also had a difficult time; all I ask is that in arguing about these matters we display great responsibility and balance. I am not accusing the hon member for Walmer of anything, but I believe that we as politicians owe it to the industry not to try, either here or anywhere else, to latch onto arguments for the purpose of short-term political gain. After all, it is in the interests of all of us that industrial development in South Africa should increase. It is also in the interests of all of us that we provide protection in such a way that it will help us to promote competition and keep inflation within bounds as far as possible. An interesting aspect in the field of imports to which I should like to refer briefly is that in the latest edition of Fokus op ekonomiese kernvrae, No 34, which focussed on strength in the market economy, the following interesting conclusions are drawn:

Therefore imports have a healthy function in any economy. We simply have to give them the opportunity to play a role in the right context.

Time is limited, and I do not wish to dwell for long on the question of regional development. Various speakers have referred here to regional development. In a previous debate I crossed swords with the hon member for Walmer on the issue of regional development. It is perhaps as well to say, somewhat unwillingly, that one is in favour of regional development if it is based on economic grounds, but I want to ask the hon member for Yeoville in what respect the policy of regional development being implemented by the Government is not based on good, sound economic principles. To allow regional development to take place, specific norms surely have to be laid down. We in South Africa have specified the following norms: The special Constellation Committee, then under the chairmanship of Dr De Kock, did not merely say that we should develop certain regions. It was ascertained on a basis of purely economic criteria what regions should be developed and at what level or at what rate incentives should be allocated.

Without any ideological basis?

The ideological obsession is not on this side of the House, but on that side of the House. The PFP wants to read ideological motives into everything. The hon member for Yeoville must give me a chance to say what I want to say. He may then feel a little differently about the matter. I do not ask him to abandon his standpoint entirely, but he should give me a chance first.

The three criteria applied are, in the first place, the need for creation of employment, based on the level of unemployment in a region; in the second place, the need to increase the average level of income of the population and, in the third place, the potential of the point in question to meet the development need of the local community.

Nothing about competitors.

Right at the beginning of his speech the hon member for Walmer emphasized the need for growth and job creation. That was the main theme of his speech. I agree with him.

You cannot do it by impoverishing yourself.

Of course we are not impoverishing ourselves The principle of regional development is based on sound economic principles. Let me not quote what the Special Constellation Committee has to say on the subject, but what a person has said who may have more impact or influence on the hon member, namely Prof Jill Nattrass of the University of Natal, who conducted a similar study to determine the need for regional development and to establish regional priorities in regions and in subsections of regions. She decided on three criteria, namely employment needs, social stress and overall priority ranking. It is interesting to note that her results coincide very much with the present policy of the Government. [Interjections.] It coincides in the sense that Region D enjoys priority in that its development needs are by far the most urgent.

You only agree on this point, I hope.

On this point, certainly. However, are we not talking about purely economic matters? [Interjections.] Fine. It is only those with an ideological approach who are more concerned about other motives.

If you were to follow her, we would have few problems with you.

Sir, that hon member will never agree with her because he does not support a philosophy of free enterprise and a market-related economy.

He is a socialist.

Yes; not so long ago the hon member was advocating price control and interference in the economy, and he argued that the Government should accept a greater degree of involvement in order to protect the consumer. [Interjections.] I could refer hon members again, as I did last time, to a very interesting White Paper tabled in the British Parliament in December last year on this very subject, viz regional development.

†Permit me, Sir, to quote just one or two sentences from what The Financial Guardian had to say about this White Paper. It is very interesting to note the many similarities between the regional development scheme introduced in the British Parliament and the scheme we are at present implementing in South Africa. The reason for the regional development scheme in the UK, according to Mr Norman Tebbitt, the Minister of Industries, is that it is a—

Yes, but can we afford it?

Exactly! Let us look at the financial side of it. It is interesting to note that as regards the United Kingdom—

Those are enormous amounts and in the UK they still regard it as necessary to update this policy and to continue to implement it. So, Sir, in South Africa, with its tremendous imbalances, it is imperative that we should continue with a policy of regional development to redress the imbalances in the country and to try to achieve a better spread of economic development.

*The hon member also referred in a less than friendly way to the Decentralization Board. Due to limited time I do not wish to react to everything in detail. To begin with, however, I want to say to the hon member that as far as reporting is concerned, the Decentralization Board is bound by its financial year. The year starts on 1 April, and for that reason it can only be submitted in report from after the year has ended on 31 March, the details processed and statistics made available. I do expect sympathy from the hon member and other hon members—I think that is no more than right—for a body of officials who work under great pressure to deal as effectively as possible with a large number of applications that stream in every day.

I very often receive enquiries from people who become impatient, after 14 days or even a week, about an application they have submitted to which they have not yet received any reaction. Last year applications from more than 350 people were received every month from the eight regions. The extent of the claims is enormous, and each of them requires thorough investigation of the relevant details. We are working here with Government money. Therefore approval cannot be granted to claims without further ado. The staff of the Decentralization Board is going to be expanded. In the meantime we are using the existing staff to deal with the most essential work first. Reports are important, too. Reports to this House are of considerable importance. We try to submit them in good time in all cases, as hon members will also note in the case of our annual report, which was not only delivered on time this year but is also billingual. Last year the hon member for Port Elizabeth Central took it amiss of us that the annual report was only available in Afrikaans. That was because we were, in fact, trying to table it as soon as possible. Our other reports, too, find their way to the Table of this House so that hon members can have sufficient opportunity to prepare themselves for debates in this House.

The reports of the Decentralization Board are also available. Unfortunately they are not yet in their final form and cannot therefore be tabled yet. However, I have with me the final statistics relating to the two years since the scheme was introduced. I can confirm that the extremely encouraging trend we detected in the first year has in fact persisted in the subsequent year. Therefore the hon member can, if he likes, make sneering reference to the 777 applications approved last year that we supposedly hear nothing more about.

We are working on a scheme such that we shall eventually be able to check precisely which of the approved applications have been set in operation, and which are receiving payments. We are working on such a system at the moment. However, the hon member should also understand that last year alone, approval was granted in respect of 777 applications. However, several of those approved cases entail further planning before such an industry could come into full operation. That does not mean, therefore, that all 777 will ultimately be productive. I concede at once that there are indeed those which eventually, due to other considerations, may not get so far as to tackle the new extension, or the new establishment. However, it is to be hoped that as soon as possible in the coming year we shall be able to state which of these applications ultimately becomes a reality.

One need only speak to the relevant people in the regions in which some of these applications have been approved. Hon members can do so in their own regions. For example, in East London they can visit some of the regions in which some of these industries have been established. There they will see how much activity, how much development and how much growth is occurring there.

The hon member Dr Odendaal has just referred to Bloemfontein. Hon members can also go and see what is going on in that region. In East London a totally different spirit prevails. People are remarking that this policy is already having very good results after scarcely two years. Moreover, it is a great pleasure for me to announce that in the period 1 April 1983 to 31 March 1984, altogether 1 190 applications were approved, whereas another 176 applications have had to stand over until more information has been obtained. The 1 190 applications that have been approved represent a total capital investment of R1 206 million. Therefore, if we compare this with the previous year’s figure, it is clear that the momentum is steadily increasing.

It may interest hon members to hear that Region D, at East London, appears to be the most popular industrial development point for the year. From the total of 1 190 approved applications, 76, or 6,4%, come from East London.

The industrial development point which comes next after East London is Region C, at Bloemfontein, where 72% of the total number of applications have been approved. The hon member Dr Odendaal apologized for his absence. He is in the Senate Chamber. However, I wish to point out briefly that what really determines the success of Bloemfontein is largely the way in which the local authority, the development and publicity association, has taken a hand and is making the most of the incentive measures at its disposal. The same applies to East London, and I can mention other examples as well. Ultimately, this is still a partnership between the State, the local authority, the inhabitants and the industrialists, with a view to creating a climate of confidence in a region and an industrial development so that proper development can take place. Additional results have been achieved at Phudadijava, 58; Atlantis, 56; Pietersburg, 48; George, 44; and Isetebe, 43. There is a considerable variety of applicants, but it is interesting that there are a variety of foreign investors, too—60 of them—that are coming to promote industrial development in South Africa with a total capital investment of R89 million. This includes many countries. Applications have been received from the United Kingdom, Israel, Italy, Zimbabwe, Hong Kong, West Germany, Taiwan, the USA, Peru, Belgium and Australia. This is a considerable variety of countries, and in my opinion this also attests to the confidence that foreign businessmen have in the economic potential of South Africa.

It is also of interest that for the most part these applications are representative of the smaller industries. Seventy-eight per cent of all applications represent an investment of less than R1 million. Therefore the aim of encouraging the smaller industrialist is also being achieved.

I now come to one final remark. The argument advanced by the hon member for Walmer to the effect that in fact we now want to hinder industrial development in the metropolizes so that this development can get off the ground, is not true either. We recognize that there is a natural increase in our metropolizes which must be accommodated by industrial development, and that will continue to be the case. The vast majority of applications approved over the past two years do not represent transfers. They represent expansions of existing industries or entirely new establishments. Therefore this does not represent a draining of the metropolizes; it is the establishment of new development growth.

When one looks at development in South Africa, I think it is imperative that we set aside our differences as regards the extent to which ideological elements may or may not be present. I think that this effort to achieve sustained development deserves the wholehearted support of all of us. We should rather use the debate to differ on the detail of this scheme. I want to say to the hon members of the Opposition that we are open to good arguments. We are open to persuasion if adjustments have to be effected. Indeed, we are now evaluating the whole scheme after two years to see whether our objective has been achieved, or whether the scheme requires certain adjustments and adaptations. Let us rather cross swords with one another within that context; if we do so, then I believe that this debate can also make a positive contribution to industrial development in South Africa.

Later I shall deal in greater detail with standpoints put forward by hon members.

Mr Chairman, I want to tell the hon the Minister that we in this party are 100% behind him when he says that South Africa must have an extremely healthy industrial sector. I want to tell him further that we are also 100% behind the decentralization of industry. I say that because we know that there are tremendous resources spread throughout our country which need to be developed, especially human resources. We believe that these should be developed close to the place of residence of those people wherever possible. Therefore we support him completely with certain reservations which I am going to mention to him in the short ime at my disposal.

The hon the Minister spoke for well over an hour and covered four broad fields. He spoke about the need for the development of small industries, and we were pleased to hear some of the concessions that he announced for the promotion of small businesses especially among the Black population. He also spoke of the need for an electronics industry, and we agree with this as well. There is a need for an industry of this nature especially in view of the development that the electronics industry has undergone throughout the world over the past decade or two. The hon the Minister also spoke about tariff protection at great length and we are grateful for the thoughts that he left with us in this regard. Finally, he spoke about the decentralization of industries.

In relation to tariff protection, I think the hon the Minister put the matter in a nutshell when he said that there had to be a balance between the tariff protection and incentives to industry. We agree with him in this regard. He also said that the discipline needed to make our local industries more productive must be applied through greater competition. In recent times we have seen what happened in this regard to an industry that previously enjoyed a large degree of protection namely the fertilizer industry.

It is interesting to note that about a year or two ago urea could be landed in South Africa at R186 per ton delivered to the South African fertilizer companies. It was then sold to retailers at R284 per ton who in their turn sold it to the farmer at R340 per ton. This was a mark-up of nearly 100% on the landed cost of the urea. This is something we have to guard against because this was a protected industry. Since the hon the Minister removed price control on fertilizer at the beginning of the year I know that the farmers in this Committee are aware of the drop in urea prices. There is now far greater competition among the companies, and they are now talking about delivering the urea to the farmer’s door at a better price than was being charged a year or so ago. Therefore, there needs to be this discipline of competition, and we certainly believe that the hon the Minister has taken some significant steps recently in this regard by removing price control from certain products.

The point I want to make is that I believe that a large number of our industries and companies look virtually solely at the domestic market for their sales. Very few really look to the export market for the future expansion needed to ensure the long-term profitability of their companies. I was interested to hear the hon the Minister say that a large number of companies are running at a very high capacity, even at this stage where we are experiencing a recession. Surely this must mean that there is a greater potential for production in the particular industry. I believe that there should be greater emphasis on export promotion, and I want to repeat the point I put to the hon the Minister earlier this session namely that I believe that some of our industries are being prejudiced by the dumping on the international market of certain raw materials. In this regard I mentioned the case of South African paper being sold at international prices, which are way below South African prices and then exported to the Far East where it is used for the production of printed books. South Africa then re-imports these books in competition with our local publishers who have had to pay the South African price for their paper. I think that this is a matter that should be investigated. I asked then whether we could not perhaps allow our local manufacturers to purchase that raw material at the export price provided the product they produced from it was exported in manufactured form.

I was interested to read on page 16 of the annual report of the department about the sugar industry, the industry in which I am involved. I notice here that the export of sugar and preparations of sugar containing more than 50% sugar by mass had increased by 233% in one year, in other words, from a value of R643 000 to R2,139 million. What I would imagine is happening here is that manufacturers using sugar as a raw material are now exporting these products and, in so doing, are raising the domestic sugar consumption which is sold at a far better price than the world sugar price at the present time. While I am discussing sugar—and let me declare my interests, I am a sugar farmer—I would like to know from the hon the Minister whether he has had any negotiations or discussions with the hon the Minister of Finance regarding the removal of GST on sugar. I cannot understand the logic of the Government. When the sugar industry is faced with rising costs of between 12% and 15% per annum, this hon Minister says to the industry that he can only allow the price of sugar to be increased by 7,5%. Sugar, he says, is a basic and high energy foodstuff and is consumed by all people. Yet when it comes to the question of GST, we are told that sugar is a luxury.

An increase of 10% was granted this year.

An increase of 7,5% was granted last year and 10% this year. But the sugar industry is slowly getting deeper and deeper into debt and the hon the Minister knows it. The debt was R232 million at the end of last season and this will increase by a further R100 million by the end of this season, or even more unless something dramatic happen to the world price. I wonder how far this borrowing can be pushed.

There is another matter which I would like to raise with the hon the Minister. It is an inquiry which has been made to one of my colleagues, namely the matter of credit cards and the commission charged on them by the banking sector. I think this matter will fall under the subject of trade practices. It has come to our attention that banks charge a 5% commission, which one would imagine is an administrative charge, but this is not just charged on the purchase price of an article, but also on GST. The question being asked is whether this is fair to the trader. A trader might have quite a large turnover and banks charge him a 5% commission on products which he sells as well as a 5% commission on GST which goes to the Receiver of Revenue. Perhaps the hon the Minister can look at this matter and tell us what his views are in this regard. I have my own view on this, but I will be very interested indeed to hear the hon the Minister’s view as to whether he believes this is an unfair trade practice where banks benefit from GST.

I should like to associate myself, in part, with the hon member for Amanzimtoti and with other hon members, and in particular with the first part of the hon the Minister’s speech which concerned the free-market system. Proceeding from that, I also want to refer to productivity.

Nowadays the general clamour seems to be in favour of the so-called free-market system, particularly after the Government quite rightly committed itself to moving increasingly in that direction. On the other hand there are still a large number of operators advocating protection. There are also many theorists, for example economists, who advocate overall theories which, according to them, would be in the general interests of the country. I feel, however, that we seldom look deeply enough into the realities of various sectors. Of course, there have to be overall guidelines for a country, particularly a country like South Africa.

One does wonder to what extent support for a specific school of thought is influenced by self-interest. If it is said that control is sometimes necessary and even indispensable, and also that a free market is frequently not free, that it frequently gives rise to concentrations of power which, in fact, results in that particular sector ceasing to be free and the professions, trade-unions and interest groups frequently protect themselves to such an extent that their own group ceases to be free within the so-called free-market system, in a nut-shell this means that free competition is a wonderful ideal which is misused by all and sundry to promote their own interests.

The question that arises is whether we should occupy ourselves with theories on control or free markets, or whether we should not rather get back to the foundation or basis of everything, viz productivity or the efficient utilization of all production factors. In this regard man plays the dominating role through his own labour and through his manipulation of all other inputs. It is unfortunate that nowadays for this labour, the most important production factor, people demand a salary or wage which is commensurate with their needs rather than their merits. I feel this is the fundamental characteristic of unproductiveness or inefficiency. Unfortunately nowadays people move so frequently from one job to another for larger salaries. No one, of course, begrudges them a higher income. As a matter of fact, the opposite is true, but as long as this tendency exists, without productivity being increased accordingly, we are feeding the flames of inflation.

An equally alarming tendency nowadays is to pay fewer individual workers an increasing amount of money. We believe, bluffing ourselves, that by doing this we are increasing productivity because workers are compelled to work harder owing to the fact that there are queues of unemployed standing outside the factory gates—and then finally we still pat ourselves on the back and criticize other sectors, for example agriculture, for keeping thousands of workers in service, although in terms of a far lower wage structure. In the process, and as a result of this injudicious behaviour and cost increases, we are pricing ourselves out of world markets. When all is said and done we are extremely pleased with ourselves because we are now moving towards being categorized as a developed Western country. We forget, however, that we are in fact an African country, a country which is still moving out of the Third World.

Because we so frequently slavishly import Western norms, in the long run we find that everything does not work out as we would like it to, and then the State is approached for protection. Admittedly there are sectors where protection is necessary, particularly where local products have to compete with a surplus of dumped imported products. It remains the duty of the State, however, as the only responsible body, to intervene when individual interests are in conflict with national interests. The hon the Minister also mentioned that in the way we think of this we must maintain a balance.

If we return to the actual debate, the question that arises is whether or not we are really striving for a free-market system. Do we not merely agree with the Government’s declared policy of striving for a free-market system as long as it suits us? Do we always see ourselves as a part of the overall South African economy? One wonders. The moment control suits us better, we approach the Government for assistance. Let us advocate a balanced view in this connection. Let us move closer to a more open economy, because this is the actual foundation-stone of the capitalistic system. Let us also realize that a Government advocating such a system also has to afford protection where necessary. South Africa, with its particular population composition, with its unique climatic conditions and its remote regions, requires a different approach to a purely First-World approach. As a result protection will always be necessary. May I, however, ask that we never use protection to protect and promote inefficiency. Let us stop focusing exclusively on and pushing up salaries merely because we are competing with each other for the too few trained people available.

By training sufficient people of all population groups—and I want to emphasize all population groups—and paying them what they are worth, we shall definitely be moving closer to this freer economy we advocate. In this process let us allow people to operate on their own initiative as small entrepreneurs, as is the case in a country like Taiwan. Let us stop forcing First World standards, with all their restrictions, down the throats of everyone willing to try. In this way we shall have more real, sound competition and consequently greater productivity. Then the eventual debate will no longer be about control or a free-market system, but about what should be done in South Africa to achieve the highest possible degree of productivity.

Mr Chairman, as I have only a few minutes at my disposal it is not my intention to react to what the hon member for Wellington has said.

The hon the Minister in his announcement earlier today spoke about the small business sector, and one welcomes the concessions. He pointed out how important the small business sector is to South Africa, and I think that is generally accepted. The hon the Minister gave two reasons for its importance. The first is the creation of job opportunities, and obviously this is an important point. I should, however, direct his attention to a report which is published by the Council for the Promotion of Small Business. They have looked at the aspect of job creation by small businesses in South Africa, and they make the point that it is perhaps not as successful as it is in some other countries. This is obviously something that we have to look at. Unfortunately I have not seen the Focus report but only newspaper reports on it. However, one of the points they make is that the record of big business in South Africa in creating new job opportunities has not been as successful as one would like it to be.

The second point that the hon the Minister made, and which I agree with, is the need to extend the entrepreneurial class in South Africa, and particularly in regard to the Blacks. If we want the Blacks to support the free enterprise system or the free market system, we obviously have to allow them to enjoy some of those benefits. This report in fact points out a number of restrictions on Black businessmen and I hope that some action will be taken in this regard as soon as possible. [Interjections.]

The report concentrated on the legal restrictions in the development of small businesses. I want to refer to the normal business risks and to make one or two specific recommendations. It is well known that small businesses have a very high failure rate. Many of them should never ever have been started in the first instance, as they are not viable. That is, however, not my concern. My concern is those businesses that are potentially viable but fail and they reasons why they fail. Research done in the USA indicates that most small businesses fail for the following reasons, and these are taken from the experience of the Service Corps of Retired Executives in the USA which helps small businessmen. They listed nine reasons, which are: Lack of business records, lack of business experience, insufficient stock turnover, poor methods of debt collection, not watching stock shrinkage, poor stock control, lack of finances—it is interesting that that only came as number seven—improper systems of marking up and lack of sales.

Mr Chairman, we are addressing ourselves to some of these problems. For example, through the Small Business Development Corporation we are tackling the question of finance. It seems to me that a lot of the problems that small business face relate to insufficient education and knowledge of certain basic managerial skills. The hon the Minister will see that on page 42 of the report I have referred to earlier, they make the point, and this relates to White small businesses and the major problem areas. They state that the lack of management expertise is the greatest single factor leading to the failure of small businesses.

I am talking of the very basic sort of concepts, for example the control and managing of working capital, the management and control of stocks and good methods of debt collection. These are problems that can be addressed by training. However, the problem is that small businessmen do not have the time or the money to attend seminars. If one is running a small business, one very seldom can take off two or three days to attend a seminar. I would therefore ask the hon the Minister, via the Council for Promotion of Small Businesses, to look at the possibility of developing a series of training films on such subjects geared specifically to the South African situation. I have seen very good films related to the American or the United Kingdom situation, but South Africans and particularly Black South Africans have tremendous difficulty in relating to those. The terminology is different and the setting is different.

I know that the department subsidizes the South African film industry and I am sure that training films are not nearly as glamorous as box office hits, but in the long run I believe that they can make a greater contribution to the welfare of South Africa. Training films allow the transferring of important concepts in a very memorable manner. The other important thing is that it is time-efficient. The third thing is that it allows the small business man to actually use it when it is convenient for him. He can get his people together, a staff of four of five, and over lunch or after work they can actually look at the film and then discuss it. I believe that a series of well-produced films on basic business skills could be of tremendous help in overcoming the lack of managerial knowledge faced by many small businesses and which often leads to their eventual failure.

Mr Chairman, the hon member for Edenvale will pardon me if I do not pursue the subject of his speech. In the few minutes at my disposal I should like to confine my attention to the industrial development of Region D, particularly that of the Port Elizabeth-Uitenhage metropolis.

As is generally known, there has been concern for many years about the limited industrial development in the Port Elizabeth-Uitenhage area. There has also been concern about this area relying too heavily on the motor manufacturing industry and related industries. Over the years various reports of investigations have identified certain problem areas, as well as the importance of diversifying industrial activities. Bearing these problems in mind, the Government granted the Port Elizabeth-Uitenhage area limited concessions in terms of its regional industrial incentive scheme, for example, a 20% rail rebate on outgoing goods, the electricity subsidy and a training allowance. Despite these limited concessions, industrialists and other organizations feel that the area finds itself in a weaker position, competitively speaking, in attracting industries than, for example, East London and Pietermaritzburg, which have package concessions, ie a whole series of concessions which contain long and short-term benefits.

One of these benefits which could have an adverse effect on the manufacturing industry in the Port Elizabeth-Uitenhage metropolis is the 5% preferential tender which is applicable at present with regard to Pietermaritzburg, Kimberley and Bloemfontein. This could have an adverse effect on a manufacturer in Port Elizabeth who, for example, has to supply the Municipality of Port Elizabeth with goods in competition with Kimberley, Bloemfontein or Pietermaritzburg, which have a preferential tender.

It was a joyous occasion when Port Elizabeth was granted the electricity subsidy. This subsidy meant that consumers in the Port Elizabeth-Uitenhage area would pay the same for electricity as consumers in the Eastern Transvaal. This subsidy means a cash payment of R16 million per annum to the consumers of electricity in the Port Elizabeth-Uitenhage area, which at that time meant a discount of approximately 16% on the electricity accounts of all consumers in that area. This subsidy was welcomed by every consumer of electricity. Personally, I think that the idea at that time was to make the subsidy applicable only to industries, thereby stimulating industrial growth. However, it was made applicable to all consumers, including household consumers. Although it is a large annual amount, it is distributed over a very large area and approximately 70 000 consumers benefit from it. It therefore has very little effect on any industrial development. Industrialists and other organizations are of the opinion that this subsidy should be converted into other concessions to bring the Port Elizabeth-Uitenhage area more in line with Pietermaritzburg as far as concessions are concerned. However, I want to issue a warning that one does not easily part with something for which one has made representations and fought for so long. The existing industrialists in Port Elizabeth still have an electricity subsidy of 46%, which must be very valuable to them. I am afraid that if the subsidy had to be taken away from the household consumer now after two years, it would mean an immediate increase of approximately 16% to 18% in his electricity account, something which would upset household consumers. I hope and trust that the Government and the Decentralization Board will be able to work something out in order to meet this metropolis halfway without upsetting the electricity subsidy. I understand that the regional development advisory committee for Region D has addressed comprehensive representations to the Decentralization Board concerning concessions equal to those of Pietermaritzburg.

On this occasion I should like to pay tribute to the regional development advisory committee for Region D. It is a committee that works extremely hard for the development of that region. They also hold regular talks with Transkei and Ciskei. I also want to mention the special co-operation between this committee and the chairman of the Decentralization Board.

Having said all that, and having asked for further assistance for this region, I must immediately add that the Almighty helps those who help themselves. I want to appeal to the industrialists of this metropolis, as well as to leaders in other fields not always to tell the rest of the country how bad things are in that area, whilst things are not really that bad. The regional development committee is very positive about the future of that area and industrialists must follow their example, since there is so much in this area we could introduce and sell to the rest of the country. Port Elizabeth as such is ideally suited to the development of small industries. Two years ago I pleaded for a large industrial park in the northern part of Port Elizabeth. The Minister, and even the SBDC were very interested, but the application for rezoning of the land by the town council unfortunately did not come about. If we think of all the motor car factories in Port Elizabeth, if we think of all the training facilities they have to train fitters and turners, instrument makers, panel beaters, etc, if we consider that they need spare parts for their motor cars and that those spare parts could be manufactured locally by small factories, the people in the motor industry are really the ones who should encourage others to start factories of their own. In so doing they would be making it possible for themselves to obtain all their spare parts locally. In addition, there are many manufacturing processes in respect of which people simply cannot obtain a small factory. If these people were given the opportunity, they would be able to create the employment opportunities we so desperately need. I am convinced that the SBDC would be prepared to assist, just as they have recently assisted in erecting factory units at Kwa Zakhele, one of the Black areas in Port Elizabeth. If we were to give these people, the Black people, 12 months, it would be interesting to see how many employment opportunities they will have created for their own people.

The Port Elizabeth-Uitenhage metropolis has an excellent future, in my opinion. We have cheap industrial land, plenty of water, cheap electricity, plenty of labour and one of the best cities in which to live with facilities that could be compared to the best in the country. Now I could be asked: If you have everything, why has there been no large-scale industrial development? The answer is simple. We are far from the large markets. Raw material is transported by rail and the transport costs are extremely high. Processed products also have to be transported to the market by rail. The Government could possibly assist in this regard. However, what is much more important is the fact that the people of the area must market the area themselves and make every effort to establish small industries, particularly in the northern areas where many entrepreneurs are sitting and waiting for an opportunity to manufacture goods themselves and to create employment opportunities. My message to the people of that metropolis this evening is the following: “Be proud of the region. We have a great deal to be grateful for. Be positive about the future of the region. That region has fantastic prospects. We must tell the rest of the country that it is a paradise for tourists, but also that it is a place where any new industrialist can establish himself successfully and where he and his employees can live happily.”

Mr Chairman, I take pleasure in being given the opportunity to speak after the hon member for Algoa. Before associating myself with him in pursuing his theme by referring briefly to regional development, there is another aspect I should very much like to bring to the attention of hon members.

On 4 April this year Iscor celebrated its fiftieth year of production. As the largest producer of steel in South Africa, Iscor at present produces 75% of the country’s steel requirements on a fully integrated basis. Iscor exports steel to 60 countries, and is regarded as the fifteenth largest producer of steel in the Free World.

In approximately 1901 a certain S L Green produced the first pig-iron at Sweet Waters, near Pietermaritzburg. It was the first pigiron to be produced commercially in South Africa, and consequently, it could be pointed to as the first milestone in the development of this industry. Due to concern about the piling up of scrap iron in the Railway workshops the next important development was that the Government called for tenders to smelt it electrically. The successful tenderer was unable to meet his commitment, however, and the contract was consequently taken over by the very famous Sammy Marks.

In 1911 Marks established the Union Steel Corporation of South Africa, Limited, generally known as Usco, which is still one of the major steel producers in this country. However, there was one person who was not in favour of these developments. He was not in favour of processing iron and scrap iron into steel because, in his opinion, the establishment of a steel industry based on the country’s natural resources would be delayed. This man was Cornells F Delfos, who obtained a concession in 1916 to mine ironore in the area around Pretoria. In 1918 a blast-furnace, which was built under his supervision, was put into operation. The success he achieved, together with a similar effort by Sammy Marks in Vereeniging, convinced Delfos that it was viable for South Africa to have its own steel industry.

Delfos searched in vain overseas for capital to establish such an industry, and eventually he turned to the Government for a State-aided industry. It was already clear when the Pact Government came to power in 1924 that a policy of greater protection for South African industries was being advocated. The declared policy of Government elicited tremendous opposition from the pro-British South African party, particularly when it became clear in 1927 that the Government was determined to establish a State-aided iron and steel industry. It was clear that the pursuit of an autonomous South African iron and steel industry would not be approached as a national matter, but that it was in fact becoming a party-political point of dispute.

In March 1927 the Bill for an iron and steel industry was passed by the House of Assembly, but the Senate rejected it. However, the then Prime Minister, Gen J B M Hertzog, was determined to go ahead with the legislation. Consequently, he called for an extraordinary Parliamentary session in October 1927. Although Opposition arguments concerning government property, the nationalization of industries and the socialist policy of industrial development were reiterated, the House of Assembly approved the Bill, but it was referred to a select committee by the Senate.

On 23 March 1928 the Bill was again rejected by the Senate. However, the Government was more determined than ever to have the Bill passed, and on 30 March 1928 the Bill was approved during a joint sitting of both Houses of Parliament. During that sitting the keen sense of humour and satire of the famous C J Langenhoven once again came to the fore. Unfortunately, I do not have the time now to quote extensively from his speeches. I shall therefore only read the following, which has a bearing on the select committee. I quote from Hansard, 29 March 1928, in which Senator Langenhoven said the following:

On 5 June 1928 the South African Iron and Steel Industrial Corporation Ltd, better known as Iscor, was established. Construction of the plant in Pretoria commenced in 1930, and the plants’ production units came into operation at the beginning of 1934, with the first steel being poured from an open ore-furnace on 4 April of that year. It was also in that year that the then Prime Minister, General Hertzog, uttered the following prophetic words:

The Strategic value of Iscor to South Africa is apparent from the extensive use of Iscor’s products in the public sector, agriculture, secondary industry, the mining industry, the national electricity network, posts and telecommunications, transport services and the manufacturing of arms. Iscor steel has played no mean role in making a country that has to face arms boycotts independent of overseas countries in that regard.

Over the past 10 years, ie from 1974 to 1983, the net sales value of the corporation’s products increased from R445 million to R2 000 million and the capital used increased from R1 350 million to R3 400 million. This trade by Iscor with its approximately 2 300 direct clients and approximately 9 000 suppliers is an important factor in the country’s economy. The corporation’s present approximately 60 000 employees also contribute a significant sum to the national income.

On behalf of this side of the House I want to congratulate the Chairman, the Board of Directors, the Managing Director and the management, as well as every worker of Iscor on their jubilee celebrations. A word of special thanks and appreciation goes to the ordinary worker, the person who has made his contribution day and night over the years. [Interjections.]

In conclusion, I want to say a few words about the Newcastle Works which has been in production for 10 years this year. With the historical course of events it is clear that Iscor is a typical example of an undertaking where the State has taken the initiative for its establishment and development to the benefit of the infrastructure of the country as a whole. With the establishment of the Newcastle Works the decision was not taken exclusively on a purely economic basis. I refer here to the announcement of the Minister of Economic Affairs on 16 May 1969, Hansard, col 6133, and I quote:

From this announcement it is clear that with the establishment of the Newcastle Works there were other inputs that played an important role in the decision-making process. It could justifiably be argued that if the decision were to have been based on purely economic principles alone which were cost-conscious and profit-motivated, the third works of Iscor would not necessarily have been established at Newcastle. However, the fact is that the third works were, in fact, established at Newcastle.

Since the trend is now developing, and Iscor is changing its approach, viz to take actions based purely on business principles—I have no problem with that—the question that has to be addressed is what effect this change in Iscor’s policy is having on a community and a region. I should like the hon the Minister and the Government to consider the possibility of establishing what these effects are, since the success of the decentralization policy of the Government could also possibly be jeopardized. My observation is that it has far-reaching consequences and that it is of fundamental importance to the Government to address this problem urgently so that corrective decisions can be taken timeously.

In conclusion: If I were asked what the possible solution is, I would make a strong plea for the possible drastic reduction in the number for growth points in the country and that Newcastle should in fact be one of those growth points.

Mr Chairman, the hon member for Newcastle has patently made a great study of Iscor. Perhaps I could add a little to what he said and say that I hope that, in its 51st year Iscor will return to profit and continue in profit thereafter.

Last year in this debate I raised two matters, and I am still waiting for proper replies to those two matters. The first matter was the question of the stockpiling of strategic supplies. The hon the Minister said last year that he would have the allegations which had received prominence in the Sunday Press investigated, and I should like to ask him whether he can tell us whether the system has been tightened up or changed in any way, and whether any abuse was established; if so, what abuse?

The second matter that I raised was the need for the reduction in the number of regulations which the hon the Minister also said that he was investigating. We are aware of the Close Corporations Bill, and we welcome the reduction in the number of regulations that this particular Bill will mean for close corporations. However, we also think that there should be a reduction in the number of regulations that ordinary companies have to comply with to conduct their business, and I hope that the hon the Minister intends reducing the number of regulations that are very often irksome and cost business a great deal of time.

The main topic of my speech this evening that I wish to bring to the hon the Minister’s attention is the industrial position in Port Elizabeth. The hon member for Algoa has also discussed this matter, and I want to echo his plea to the hon the Minister that if we are going to give Port Elizabeth additional industrial incentives, let it not be at the expense of the man in the street in Port Elizabeth who will consequently be deprived of an electricity subsidy.

Unemployment in the Port Elizabeth/Uitenhage area is a most serious problem, and the extent of the problem has been illustrated by a recent White Paper. This gives the Port Elizabeth unemployment figure as 14,9%, and this was the highest in the country as reported in that White Paper. In January of this year registered unemployment was 10 644 which was the highest ever. This represented as increase of 54,6% over the figure for December and was no less than 31% higher than in January 1983. On top of this, there is the unemployment of Blacks who are not registered unemployed. This figure is put officially at some 60 000, and is probably far higher. This Government has accepted Region D as a first priority, yet they themselves neglect it. Public sector spending in Region D at R402,1 million places us sixth out of eight regions. Over the past three years 2,14% of total public sector spending was spent in Port Elizabeth/Uitenhage in 1982, 2,35% in 1983 and 2,77% in 1984.

The decentralization picture is as bad. Port Elizabeth is a metropolis but, unlike other metropolises, has no nearby deconcentration point from which it can expect spinoffs. Cape Town, for example, has Atlantis. Secondly, some 200 miles away the finest incentives available anywhere are being paid. This unequal situation must have the effect of wooing away from Port Elizabeth industrialists who might have established themselves in the area. Port Elizabeth’s share of the cake, Sir, has dropped. Its GDP share dropped by 10% from 1970 to 1975. Unfortunately, the latest figures are not available. Over this same period of time, the GDP of Pietermaritzburg, for example, increased by more than 11%.

All this has led to Port Elizabeth’s current mayor to state that Port Elizabeth is being ripped off by the Government’s decentralization policy, and he is correct. For your information, Sir, the mayor concerned spent many years as the director of the Midland Chamber of Industries, and does know what he is talking about. We need better incentives for the area. In May 1983—just one year ago—the hon the Minister said that there was to be a review of Port Elizabeth benefits. However, we are still waiting to hear what the result of that review is. When something good does happen to Port Elizabeth such as Escom’s announced move of its head office from East London to Port Elizabeth thus bringing many jobs, what happens? The hon the Minister steps in and freezes the decision. Therefore the so-called metropolitan advantage is upset by the Government itself. I believe the hon the Minister should talk to the hon the Minister of Mineral and Energy Affairs and allow this move to Port Elizabeth.

The Government should also accede to Port Elizabeth’s rightful claim to become the regional capital of the Eastern Cape. There are prospects, such as the replanning of the small boat harbour, the Fish River development and the medical faculty at the University of Port Elizabeth, but nothing happens. It is time that it did. We have a harbour, a vast pool of labour, excellent water supplies, a well-developed infrastructure as well as a much envied lifestyle in the area. We need a new deal for Port Elizabeth.

Mr Chairman, firstly, the hon member for Port Elizabeth Central put certain questions to the hon the Minister and secondly, he made a plea for development in the Port Elizabeth area. I cannot argue with him about that. I myself was born in Port Elizabeth and I therefore wish to support his plea in the interests of the area.

I want to refer to the question of the formation of groups, or economic concentration. However, before doing so, I wish to express a word of gratitude on behalf of this side of the House to the retiring chairman of the Competition Board, Dr Mouton. We want to thank him for the service he has rendered in that capacity in the past. We want to congratulate his successor, Dr S J Naude, who has occupied the post officially from 1 May, most sincerely and wish him every success.

From 1983 until now the formation of groups has often been in the news for various reasons. There has been a relatively high incidence of amalgamations and take-overs in the South African economy recently. That is to be expected, particularly at a time of recession in the economy when some companies are struggling and tend to go under, whilst others are placed in a position where they can effect a take-over. This has resulted in a great deal being said about this subject in recent times. There are many protagonists and antagonists who have expressed their opinions on this subject. People in large companies tend to be is favour of the formation of groups to a greater extent. In contrast, the antagonists are the smaller companies and some of the media.

I have read up a little on this subject. The report of the Competition Board gives a very sound perspective with regard to the premises of the board itself, as well as of the department concerning this matter. The hon the Minister himself had a very comprehensive article on the subject published a while ago. As I have already said, there are divergent opinions on this subject. When one begins to read up on this subject, one reaches the conclusion that the antagonists of the formation of groups on a more frequent basis, of economic concentration, often base their arguments on ignorance. The formation of groups is often erroneously seen only as a scapegoat, whilst the benefits are often overlooked. Group information and economic concentration offer certain advantages, but also certain disadvantages. To judge purely superficially, it would seem to me that there are more advantages attached to this than disadvantages. I do not have the time to weigh up the advantages and disadvantages now. Nor do I think it is relevant here. What is relevant, is to analyse the concept of group formation and then to reach certain conclusions with regard to the concept’s right to exist in the South African economy. It is far more important to analyse that. Once again, however, I do not have the time to make a comprehensive analysis.

Without advancing all the arguments in this regard, I have reached the conclusion that the formation of groups is a necessary element in any developed economy. It is unavoidable. It has always been present in the South African economy, and it is a characteristic of Western economies and the capitalist system. It is part of the process of free competition. We tell people to compete with one another. However, we must then bear the consequences of that competition. Then we must also accept that if a company achieve success in this process of free competition, it must be rewarded. Inter alia, success means that a company is expanding due to natural growth, but also due to the fact that it is taking over other companies. This means that it causes other companies to go under in this process of competition, this race, and it is therefore in a position to take them over because they are weaker competitors. This is a characteristic of the system of free competition. We must therefore accept its existence in a free economic system. We cannot adopt the premise that group formation per se is wrong, or that it is a bad thing. We should rather accept the consequences of the free enterprise system, with reference to this particular aspect as well. That is why I say that it is part of the modern economic structure. We should therefore rather confine ourselves to the question of how we should deal with the formation of groups. The question is not whether we are for or against it.

I should like to single out a few points in this regard. Of course, one must at all times warn against excessive concentrations which could lead to the abuse of power in the economy. This is the disadvantageous element which unfortunately is sometimes confused with the concept as such. There are specific examples of the abuse of power in the process of economic group formation, and they are often directly linked to the concept. In other words, the excessive use of power by large groups is wrong. We must guard against that.

The second point I want to make in this regard and which we should always be aware of, is that free competition as such should never suffer as a result of the formation of groups, or economic concentration. Free competition must therefore always be accessible to the small man, in order to enable him to enter a particular market. He must at all times be in a position to participate in that free competition. It must therefore never place him in a position where he is excluded from that competition.

One must also guard against the lack of efficiency and productivity. In this regard it is unfortunately the case that bureaucratic trends easily come to the fore in the larger groups and this could lead to a lack of efficiency and productivity. What could also happen is that a kind of self-satisfaction could set in, which would ultimately lead to the abuse of power by the group. These are the things we must guard against. As long as a group is large and it concentrates on efficiency and productivity, and as long as it does not prejudice the process of free competition, we cannot be opposed to it.

In this regard I should like to agree with what has already been said about this matter. The hon the Minister also emphasized this point in his article. I am referring to the fact that conduct as such is probably the most important factor that should be looked at in dealing with this “position of power” in which management in a large company might find itself. The conduct it displays is probably the most important thing. If its premise is to flatten everything in its path, then we obviously have a problem. In this respect, however, it is also important to note that in terms of present legislation the onus in respect of conduct rests with the large group to prove that its conduct is not of such a nature that it places restrictive practices on other competitors. Only if the board finds that its actions are not contrary to public interest, is its conduct condoned. I think that is right, and I can find no fault with that. As regards the market structure as such, or the process of acquisition, the onus is different, viz that the board can only advise that action be taken if it can be proved that it is contrary to the interests of the public. The process of acquisition or take-over therefore continues until the contrary has been proven, and then the onus is on the board. Inter alia, the Competition Board has been instructed to investigate this particular aspect. [Time expired.]

Mr Chairman, I should like to compliment the hon member for Johannesburg West on his speech. I believe the hon the Minister will react to it later, although I shall be dealing with a few aspects of it during the course of my speech.

Before I come to the subject in regard to which I should like to furnish the hon member for Yeoville with a reply, and also those other hon members who discussed the same subject, namely the interests of the consumer as well as the role of the Government, I just want to say that it is a privilege for me to work in this department under the hon the Minister, and I should like to convey my appreciation to him.

I should also like to join the hon the Minister and other hon members in conveying my cordial thanks to the Director General, Dr Du Plessis, who will be retiring soon. I was accorded an exceptionally cordial welcome to the department by him, and received nothing but loyal co-operation from him throughout. On behalf of my wife and myself I should like to express our appreciation to him and his wife for their good friendship, and we wish them everything of the best. I should also like to convey my appreciation for the co-operation on the part of the officials of the department. From them I have been receiving only the most loyal co-operation throughout. I should also like to congratulate the new Director General, Mr Sarel du Plessis, and welcome him to our department.

Mr Chairman, the hon member for Yeoville tendered his apologies for not being able to be here this evening. This afternoon he became very worked up, posing as the great champion of the consumers in our country. In fact, the hon member becomes quite wild when he talks about the consumer and about the alleged negation of the interests of the consumer on the part of the Government. According to his unrevised Hansard, the hon member inter alia: “We find that the consumer is in fact taking a back seat in everything the Government is doing”.

Hear, hear!

I heard the hon member for Johannesburg North say: “Hear, hear”, and since he is standing in for the hon member for Yeoville this evening, I shall also indicate to him in the course of my speech what the Government is in fact doing for the consumer. If he looks at this year’s Budget, he will see for example that there is a direct subsidy of R120 million on bread. That goes to the consumer.

It has always been there.

According to the hon member for Bezuidenhout it is nothing. I take cognizance of the hon member’s wisdom on this point. [Interjections.] In addition to that there is a subsidy of R40 million on maize products. This already gives us a total of R160 million in the form of subsidies. These products and other basic products are shortly going to be exempted from the 7% sales tax, which also represents a direct financial benefit to the consumer. [Interjections.] The hon member for Yeoville and the Opposition will not therefore be albe to outbid us when it comes to promoting the interests of the consumer.

This afternoon the hon member for Paarl also spoke about the Consumer Council and certain aspects pertaining to consumers. He made a very good speech, and in the course of my speech I shall furnish certain replies, while the hon the Minister will react to other aspects of the hon member’s speech.

The declared policy of the Government is the endorsement of the principles of a free-market system. Consequently the Government wants to intervene as little as possible in the market mechanism of supply and demand of goods and services. The ideal situation in such a system would be that the decision-making rests with every individual. The manufacturer decides which goods and services, in what quantity and for whom and at what prices he produces those goods and services of his. The distributor, in turn, decides which goods and services, in what quantity, for whom and at what prices he wishes to deliver them to his clients. The consumer decides which goods and services, in what quantity, from whom and at what prices he wishes to purchase them.

On the face of it this would appear to be an effective system because every individual will be free to act in his own discretion and in his own interests. It would imply, however, that in such a system equal bargaining power existed between the various contracting parties in the market for goods and services. It would also be supposed that the consumer would be properly informed about his choices in the market and that he was capable of taking rational decisions.

Unfortunately such an ideal system does not exist, because there are material differences in the bargaining power of the individual consumer when pitted against other interest groups in the market for goods and services. That is why the Government sees it as its function to maintain and promote conditions of healthy competition, in which each participant in the economic process will be able to play his rightful part. With this object in mind, the Government frequently acts as arbiter when differences arise between the various parties in the market.

As far as possible, moral persuasion to voluntary co-operation in the best interests of all parties is used as far as possible. In this process an appeal is made to the social co-responsibility of each sector of the national economy. Everyone has a particular role to play. The industrialist or the producer in regard to the creation of employment opportunities, which contributes to the general development of the country. Their motive is entrepreneurial profit. The distributor of goods endeavours to cut down his distribution costs to the minimum so that he can charge competitive prices for his goods and services. The consumer also has a responsibility to buy judiciously and consume sparingly so that he can appropriate to himself the benefits of competition in the market.

It is a fact that the South African market is relatively small, even fragmented, and this entails that there is a tendency to a concentration of economic power, something to which the hon member for Johannesburg North also referred. This concentration of power also stems from an attempt on the part of the manufacturers or the distributors of goods and services to utilize the scale benefits of wholesale production and mass distribution. In so far as this development leads to greater rationalization and lower prices to the consumer, it is not per se undesirable. The Competition Board was established for the very purpose of keeping an eye on restrictive trade practices or economic concentrations of power that are not in the national interests.

The Government places a very high premium on attempts on the part of organized commerce and industry to persuade their members to endorse ethical codes of business principles on a voluntary basis, but despite these ethical codes a need for specific legislation nevertheless exists, legislation containing elements of structuring and mutual regulation and the protection of the consumer.

The hon member for Yeoville—and the hon member for Johannesburg North should also take note of this—will find, if he inquires into the matter, that there are approximately 30 laws regulating numerous actions affecting the consumer, with a view to his protection, for example laws ensuring the quantity and standard of goods supplied to the consumer, laws affecting the distribution of products, laws pertaining to the prices of products, and so on. I want to refer to a few of these laws relating to the activities of the department.

In the first place there is the Trade Practices Act, which makes provision for a trade practices advisory committee which continuously institutes investigations into alleged undesirable trade practices and which advises the Government on the possible prohibition of such practices, or their regulation.

There is the Estate Agents Act, which established a board that has to ensure that the twofold purpose of the Act is implemented, ie firstly to protect the public inter alia by means of the fidelity guarantee fund and, secondly, to regulate the estate agents industry on a sound basis.

Thirdly, there is the Credit Agreements Act, containing considerably wider powers than the old Act, to regulate matters pertaining to the sale of movable goods on instalment, as well as the hiring out of such goods. A very important provision contained in the new Act is the so-called “cooling off” period, which gives the purchaser the right, under certain circumstances, to cancel the agreements within five days.

Next there is Alienation of Land Act, which contains drastic measures to protect the purchasers of immovable property against financial losses such as those which occurred fairly generally in the early ’seventies when several large property developers went bankrupt. Here, too, the main object of the Bill is to ensure that the purchasers of immovable property receive transfer of what they purchased. Surely this is a consumer measure in the best interests of the consumer.

Then there is the Price Control Act. With a few exceptions, price control has virtually been lifted, but general price control measures to protect the consumers, such as those in respect of the marking of prices on goods, the issue and retention of invoices and the regulation of lay-by transactions have still been retained.

There is the Property Time-sharing Control Act, which seeks to protect the interests of people who invest large sums of money in the purchase of occupational rights for a certain period, primarily for holiday purposes.

I have already referred to the Maintenance and Promotion of Competition Act. There is also the Trade Metrology Act. This is a very important measure. The hon member for Yeoville referred to it this afternoon, and I wish to deal with specific aspects of this legislation just now. This Act provides for regular inspections and testing of prototypes of any new or amended model of a measuring instrument, in order to ensure that it complies with the prescribed standards of reliability and accuracy.

In this Act provision is also made for the appointment of inspectors to carry out the necessary inspection. This Act was also amended in the House of Assembly this year to make the task of inspectors easier, so that they can take effective action against offenders. In this way I can also refer to the Travel Agents Act, which also contains an important element of consumer protection. I could also mention the Tour Guides Act, as well as the Share Blocks Control Act. Consequently it is the aim of this Government to apply consumer protection in all these fields as well.

In a certain sense the hon member for Yeoville referred almost disparagingly to the question of trade inspections. Those inspections concentrate primarily on the protection of the consumer in commercial transactions and the encouragement of fair competition among traders and industrialists. These officers have to discharge their functions in accordance inter alia with the Price Control Act, the Credit Agreements Act, the Trade Practices Act, the Measuring Units and National Measuring Standards Act and the Trade Metrology Act.

The hon member referred to the annual report and the number of inspections carried out. I am not going to repeat the figures now, but what is important is that the earnest intention of the Government to ensure the effective application of trade inspections is inter alia apparent from the fact that in this year’s Budget there is an increase of R1 581 000, compared with the previous year. This year more than R4 million is being provided for trade inspections. I am grateful to be able to say that it was possible to introduce improved conditions of service for trade metrologists and trade inspectors. In addition it was possible to enlarge the establishment of the Trade Inspections Branch with an additional 190 posts, of which 69 have already been filled. It ought therefore to be possible to carry out more inspections in future, particularly if it is possible to fill the available posts. In this respect as well, the interests of the consumer are indeed being furthered. Nevertheless, the hon member for Yeoville alleges that nothing is being done in this respect.

One thing is as plain as a pikestaff, of course, and that is that not one of the sectors of the economy can function in isolation. The actions of manufacturers in regard to the availability, the variety and the prices of goods, affect both the distributing sector as well as the consumer, and of course the opposite is also true. Consequently there is a clear interdependence among the respective sectors, which makes it essential that their apparently divergent interests be reconciled.

This brings me more specifically to the functions of the Consumer Council in the present set-up, to which the hon member for Paarl also referred. I should like to congratulate the Consumer Council on its annual report. It is clear that the Consumer Council, with the money at its disposal, is doing great work. What is important is that initiative is being displayed in serving the interests of the consumer, and that the council is generating money to expand its activities, and consequently is not merely relying on or resigning itself to the money it receives from the State. I am aware that the Consumer Council is at present engaged in evaluating its methods and the success it has achieved thus far, and also in reflecting on how it should set about its task in future. To my way of thinking the general objective of the Consumer Council is that it should perform a co-ordinating function and that in the process it should establish continuous contact with all consumer-orientated institutions and also use them to arouse a greater awareness among consumers everywhere in the country. The point of departure should be to make consumers aware of their rights and obligations in the economic system, particularly since the Government wishes to intervene as little as possible with the consumer’s freedom of choice in this system.

Furthermore, I should like to refer to the recent report of the Committee for Economic Affairs of the President’s Council in connection with measures that have a restrictive effect on the free-market oriented system in South Africa. I am convinced that the hon member for Yeoville is also aware of this report. Consequently I request the hon member for Johannesburg North also to make a thorough study of this report. The hon member for Port Elizabeth Central should do himself a favour as well by studying the report of the President’s Council’s Economic Committee.

One of the terms of reference of that committee was to advise the State President in regard to measures having a restrictive effect on the effective functioning of the free-market oriented economic system, having regard to the plural population structure of the Republic of South Africa, and also having regard to the limitations mentioned below, more specifically (a) actions by means of which the functioning of and benefits attaching to the free market system could be more widely publicized to the benefit of the less refined consumer in particular; (b) actions by means of which consumer guidance and advice could be conveyed more effectively to the less well-informed consumers in particular. The role of the South African Co-ordinating Consumer’s Council and other consumer oriented organizations in this connection ought to be considered. That is part of the terms of reference.

With this inquiry the Government is demonstrating once again that it is in earnest with regard to the position of the consumer and the improvement of that position. I should like to submit that in my opinion this is an excellent report. Consequently I urge hon members once again to make a thorough study of the report. At the same time, however, I should also like to point out that trade and industry itself should give serious consideration to this record, particularly the structural factors and practical problems with which consumers have to contend; particularly, too, the less refined consumer.

Important findings and recommendations are made in this report, and the Co-ordinating Consumer Council is already giving its concentrated attention to the proposals, which are also being studied and considered further in co-operation with the department. I should like to refer to only a few of the findings. The first finding here is that the Consumer Council plays an extremely part in cultivating sound relations in the market for goods and services by means of programmes which are not only aimed at resolving consumer complaints, but also at building up a properly informed consumer corps that is aware of its rights as well as its obligations in the free market system so that they can appropriate for themselves the benefits inherent in the free market system.

The recommendation is that more funds should be placed at the disposal of the South African Co-ordinating Consumer Council, inter alia, from the following sources: Firstly an increase in the annual grant which it receives from the Department of Industries and Commerce, and secondly the generation of its own sources of financing inter alia, by raising funds from the affiliated organizations of the South African National Consumers Union.

The grants to the Consumer Council in the present Budget amounts to R836 000 this year, an increase of R234 000 over that of the previous year. This afternoon the hon member for Yeoville again spoke disparagingly of this amount, as he did in the discussion of the Vote last year. A considerably higher grant has been made. I am not suggesting that it is sufficient. In fact, one would like to see far more money being made available for this work, but the fact remains that the position of the Consumer Council should be regarded with understanding, for in order to launch its education and information campaign on a large-scale among the less sophisticated consumers in particular, the Consumer Council requires more funds.

As far as the second aspect of the recommendation is concerned, I can say that the council is already, in a discretionary way, making use of private sponsorships for specific projects. It should be possible to make further use of this source of funds without jeopardizing the image and credibility of the council as a protector of consumer interests. The council is giving thorough attention to the further utilization of this source of finance.

The second recommendation is that the greatest need for consumer-orientated information exists among the less sophisticated consumers among all population groups. The recommendation is that the council should decentralize its functions to a greater extent by appointing and training honorary or part-time consumer officers and by establishing more branches, preferably in all the main centres.

The Consumer Council has already received approval in principle from the Government to establish regional offices in the principal centres of this country. The first regional office has been opened in Bellville, and meritorious work is already being done in that area. The establishment of further regional offices is an important development, and the Government is in favour of such regional offices.

As for the appointment of honorary or part-time consumer officers, this is a matter which is being investigated by the council. The principal problem in this respect will similarly centre around the availability of funds, and a committee of the council is at present giving thorough attention to the possibilities of introducing such a scheme. This investigation will naturally take existing organizations in the field of consumer affairs into consideration. I can also mention that we in the department are also considering the possibilities in this respect.

Thirdly the committee found, in its own words:

It is recommended that consumer-oriented publications and programmes in all the media should be encouraged to a greater extent than is being done at present, and that consumer-oriented programmes of the SABC should receive even more attention.

The Consumer Council has an exceptionally good understanding with the media, and liaison occurs on a daily basis. So, too, we find that the council’s media awards, which take place annually, have already become well-attended functions, and that this popularity of the awards is continuing to generate competition among the media to publish consumer-oriented reports.

This evening I should like to convey my appreciation to the media which are effectively promoting the interests of the consumer, particularly by means of information and guidance. I should like to refer with great appreciation to a single example, namely to the regular consumer supplement—I think it is in the Monday edition of Beeid—in which I think a valuable service is being rendered to the consumer.

The Consumer Council and the department are giving thorough attention to these proposals to try their best to develop an informed consumer corps, particularly in respect of the less sophisticated consumers. It is the object of the Government and the department to keep on promoting orderly and fair trade.

Mr Chairman, I request the privilege of the half hour.

I listened with great interest to the speech of the hon the Deputy Minister in which he dealt with all the laws applying to consumers. While it is perfectly true that these laws are in existence, the problem is—and I intend dealing with this matter when I deal with the Department of Tourism—that although these laws are in existence, they are not carried out. It is the duty of the hon the Minister and the hon the Deputy Minister to ensure that these laws are carried out. It is no good their just being on the Statute Book.

The Travel Agents and Travel Agencies Act, No 58 of 1983, which was one of the Acts mentioned by the hon the Deputy Minister, has now come into operation, and the members of the board have been appointed. The Act was promulgated in October 1983 but it would appear as though very little progress has been made to date. I paid a personal visit to their new headquarters in Johannesburg a week ago which revealed empty offices. One of their main tasks will be to provide definitive categories of travel agents under section 13 of the Act. The purpose of the Act is to provide the travelling public with financial security—this was one of the aspects mentioned by the hon the Deputy Minister—in respect of the trust accounts that have to be prepared in terms of the Act.

Up to the present nothing has been done in respect of this important aspect of the Act. It would appear that individuals belonging to particular professions such as ministers of religion, schoolteachers and others, who wish to be registered even though they have no offices, cannot function as travel agents and are therefore no more than tour guides without any financial security.

I want now to deal with the question of trust accounts. During the passage of the Bill I repeatedly asked the hon the Minister to allow the board to choose alternatively between trust accounts and an insurance scheme. I believe that representations have been made to the board for an insurance scheme to replace the trust scheme as laid down in the Act. In terms of the Act there can be no financial inspection of any agency as such. On the other hand, in terms of the insurance scheme, which is a voluntary scheme run by the travel agents themselves, it is necessary that there be a financial inspection of each and every travel agency. The insurance company inspects the book of all travel agents who participate in the insurance scheme. I believe that the travel agents have retained this insurance scheme which now has public protection up to an amount of R5 million. I should like to ask the hon the Minister whether it is his intention to insist on trust accounts. If so, he should enforce the insurance scheme until such time as insurance accounts come into operation. However, very little seems to have been done.

Moreover, there is at present no indication in regard to what the fees of the board are going to be for members who become travel agents because the categories of travel agents have not yet even been laid down. I also believe that a person from the South African Transport Services who would have been an ideal person to appoint as manager of the board because of his wide IATA experience was prevented from applying because of departmental pressure in regard to the loss of certain benefits. I believe that the tourist industry will be the poorer for this decision.

I want to deal now with the educational qualifications of travel agents. One of the basic requirements for travel agents is to lay down some basis of educational qualifications. There must be improved professionalism in this industry. The Universal Federation of Travel Agents’ Associations, Uftaa, with its headquarters in Brussels, has developed a travel industry training board which holds examinations annually for its diplomas. It has two examinations annually, a preliminary and an advanced examination, which entitle the holder to be known as an international travel counsellor. These examinations are held in March and October, and a certain correspondence college in South Africa provides the necessary notes for these particular courses and examinations. The Association of South African Travel Agents have established an institute of travel management at great cost to themselves. The new board should take this facet over and should be utilizing the work done up to the present as a basis for establishing educational standards for travel agents who can then render a service to the traveller and help him to map out his tour to wherever he intends to go.

It is essential that no further time should be lost. However, at the rate it is taking for the board to be established, it will take light years to institute these examinations. At present the technicons in Johannesburg and Durban have courses graded by Asata. However, as these courses do not carry any legal authority—only the board can do this—they serve little or no purpose.

I want to refer to another Act which the hon the Deputy Minister dealt with, namely the Tour Guides Act of 1978. This Act falls under the aegis of the South African Tourism Board as constituted by Act 100 of 1983. Since the establishment of the Tourism Board, I have reason to believe that the committee responsible for this particular Act has not even met once. What is the purpose of legislation if it is ignored.

The crying need for qualified tour guides has been expressed time and time again. What is more important, is that their services should be compulsory for organized tours. Unless this is done, there is little or no financial incentive for people to qualify as tour guides. Israel is a shining example of qualified tour guides having been specifically trained by government controlled educational organizations both theoretically and on the ground.

Another aspect which I would like to deal with is road transportation for tourists. I hope the hon the Minister of Transport Affairs is also listening. This is an important aspect in the development of tourism for the future of South Africa, and we are indebted to the Knobel Commission Report of the Department of Transport Affairs. There is some very interesting information in this particular report. In South Africa only 30%, or 120 buses in all, are real touring coaches. The number of operators in South Africa is approximately 125, but only two operators, one public and one private, operate 75% of the tourist business. There are two types of tours, namely scheduled and chartered tours. The scheduled tours are unfortunately mainly to the Kruger National Park, Hluhluwe, Durban, the Natal coast, the coast from Durban to Cape Town and the Cape Peninsula. Publicity material on scheduled tours is not freely available and the quality of coach tours leaves much to be desired. I am not referring to the coaches of the SA Transport Services only but to tour bus operators as a whole.

I want to quote from the Knobel Commission’s report:

There are far too many untrained and unsatisfactory tour guides being employed. The Knobel Commission maintains that a registered and trained tour guide is a great asset to any operator and attracts more business. The bus driver cannot be expected to be a tour guide and, when he is driving in heavy traffic, he cannot be expected to give a commentary at the same time. By the time he wants to point to something, he has already passed it as he has to concentrate on the traffic around him. Tour programs are largely stereotyped and few new routes are developed or existing routes modified. Tour route research is completely lacking and I hope the Tourism Board will investigate this matter.

You are making a good speech.

Thank you, I always try. It is the second time the hon the Minister has complimented me.

I would like now to deal with the question of stopping places in South Africa where the various tour vehicles stop. Rest facilities are often lacking. There may be at airports, hotels, places of interest, in customs areas, at museums, galleries and shopping centres. Many refreshment points and resting places along the roadside have inadequate toilet facilities and are often most unhygienic. The versatility of tour coaches means that there should be close collaboration between the Tourism Board and the Department of Transport Affairs on the requirements of adequate tour coaches. I believe that the Tourism Board and the Department of Transport Affairs should together present a White Paper on the Knobel Commission’s report.

Finally, I should like to deal with an organization called the Universal Federation of Travel Agents’ Associations, Uftaa. This is a world federation of every national travel association of every country in the world ranging from the USA to Russia and from Japan to South Africa. It is a travel agents’ world organization, and it is travel agents who influence tourists to visit certain countries. Uftaa holds an annual convention in a different country every year. This year it is being held in New Delhi, India. I believe that the incoming president, who has a particular affinity for South Africa, is very keen to hold the 1985 annual convention in South Africa in October next year. As the delegates will number some thousands, Durban seems likely to be the most suitable venue for such a large convention. [Interjections.] That is what I have been told. A few years ago, the social side of travel agents—Skol—held its convention in Johannesburg. The SA Travel Agents Association and Satour are members of Uftaa. Satour has always advertised at the trade fair which is held in conjunction with the annual convention.

Uftaa negotiates on equal terms with international associations representing airlines such as Iata, to which SA Airways belong, hoteliers such as IHA, to which the Federation of SA Hoteliers belong, and the railways, such as the IUR, to which the SATS belong. It works on a global basis to standardize vocational training courses for travel agents—I have discussed that before—and it is at present considering introducing a standard data processing system for worldwide booking of travel, airways and accommodation. It is a highly influential body. I want to appeal to the hon the Minister—I hope he will listen to what I have to say—not to miss this opportunity to have thousands of travel agents from all over the world in South Africa in 1985 if they wish to hold their convention here. It will require a modicum of financial support, which can be taken out of the advertising budget for tourism. It is customary for the Minister of Tourism of the host country to provide and host a banquet. The national and other air carriers will have to provide the usual 75% rebate—the hon the Minister of Transport Affairs knows that—as well as 25 first class air tickets. The host city—this applies to Durban—usually provides a day bus tour during the convention. A certain amount of entertainment also has to be provided.

The hon the Minister must take note that all the Eastern Bloc countries belong to Uftaa, and Uftaa lays down as a principle that there must be no visa restrictions in respect of any travel agent wishing to attend. This should present no problem because I believe that it is now common practice for all international conventions in South Africa to have no restriction. The hon the Minister must ensure that the hon the Minister of Internal Affairs gives his blessing to this soon.

In the light of the Nkomati Agreement the time is now ripe for a flood of foreign tourists to visit Southern Africa. I hope the hon the Minister will give this his blessing so that a decision can be taken when the next convention is held in New Delhi from 22 to 26 October this year. If acceptable, just imagine the Tourism Board and Satour making a presentation at this convention in New Delhi on the last meeting day to inform delegates from all over the world how welcome they will be in South Africa in 1985, and screening a film showing what a wonderful country we have to offer the tourists of the world! Such an advertising opportunity should not be lost as it is seldom available. All that is needed is the hon the Minister’s consent.

Mr Chairman, the hon member for Bezuidenhout must pardon me if I do refer directly to him in my speech, since my time is very limited. I want to speak about tourism, tourism with regard to a small, but very unique, part of the Western Cape, more or less in the vicinity of Wellington, Paarl, Franschhoek and Stellenbosch. This is an area with no exploitable minerals, with practically fully developed agricultural prospects and with limited industrial potential. However, it is an area with a unique character; an area which is a national asset and which we should guard jealously. The problem we are being confronted with here is how we can preserve this national asset and at the same time prevent the area from stagnating economically. There is only one answer. The asset as such must be marketed, and this can only be done in one way, viz by promoting tourism. There is no doubt that we have something to market. The scenery is breathtaking, and the early history of South Africa is physically visible. We have a wide variety of monuments and museums, and, of course, we make some of the best wine in the world. [Interjections.] If this is not a package that can attract the South African and the international travelling community, nothing will. All that is necessary is that that package should be properly marketed. I have a feeling that we are not doing this properly, and I shall give a few reasons for my saying this.

To begin with, many people in the area are apparently under the impression that the attractions I have just mentioned are so obvious that they need no marketing. In a certain sense this is true, of course. That is why we have tourists in any case, even though we do not do much to attract them, and even though we do not always treat them well enough once they are there. However, the point is that this area’s share in the industry is certainly not enough to ensure a future based on tourism. The towns I spoke of will have to launch joint and separate marketing campaigns, and they will have to be purposeful and co-ordinated campaigns. Local authorities will have to realize their responsibility in this regard and the community as a whole will have to be involved, to a much greater extent than has been the case thus far.

The industry will also have to be supported by a proper infrastructure, and I shall quote just a few random examples to illustrate what I mean. Some of these towns are often viewed on foot, and this is the best way of doing so. However, there are practically no easily accessible cloakroom and rest room facilities for the tourists, and they often have to use the facilities of cafés. This is simply not good enough, Sir, and it proves that we in this area are by no means market-orientated as far as tourism is concerned as yet. The local authorities concerned therefore have an enormous task in this field. This area is also hopelessly lacking in good hotel and other overnight facilities, and the result is that none of these towns has a truly independent tourist industry as yet. The tourists stay in Cape Town and visit the surrounding towns on a daily basis. The local authorities, as well as the communities, have a tremendous task as regards marketing, and there is also a task for the private entrepreneur as regards the provision of accommodation.

Another matter I am concerned about is the old question of tourist guides. The hon member for Bezuidenhout also referred to this. Each of the towns I have mentioned has dedicated, knowledgeable people who are prepared to accompany visitors and to inform them properly and meaningfully either free of charge or for a small fee. However, the tourist bus companies come there and do not make use of these people; consequently, we are served by guides from elsewhere. Often they are immigrants, and very often they have to drive the bus as well. We believe that those people are not fully equipped to market our area, since it is an area for which one must have a particular feel. This is a sore point about which people have been unhappy for a long time, and I therefore want to ask whether, like in many European cities, we cannot compel the tourist bus company to make use of local guides.

One of the factors that makes this area unique is our viticulture, our viniculture, our wine culture, and many people visit us for this reason. Ninety-three per cent of all visitors to this area ask questions about some aspects or another of wine. Of course, the private sector has a great deal to offer in this regard. There are many wine-cellars, brandy-cellars, a brandy museum, two wine museums, a vineyard hiking trail for those who are active enough for this kind of thing, and two wine routes. All these facilities are of an excellent quality. The industry on which our area is economically based, has truly done its share in this regard. However, we are experiencing a problem and it is a problem in regard to which the hon the Minister can assist us. If a tourist were to walk through any of the towns I have mentioned on any day, particularly on a Saturday afternoon, he would not even realize that he is in a winegrowing area. He would have nowhere where he could taste and discuss the wines of the area, unless he had time to drive out to one of the farms on the wine route. If he is a tourist who only has enough time to visit the town, that tourist does not experience the true nature of the area in which he finds himself. I now want to ask the hon the Minister whether we cannot do something about this. I think we can. For example, could we not approach the hon the Minister to create a special licence in terms of which towns in this area could create their own facilities where the visitor could enjoy a glass of local wine? The whole area also produces a wide variety of excellent cheeses, which could be offered along with the wine. There could even be a restriction that nothing that is not of local origin will be on offer. What I have in mind is that these particular wine regions that receive many tourists should be assessed by their own criteria when it comes to introducing their products, when it comes to introducing a particular culture, a particular way of life that is unique to that area. I am convinced that something of that nature would not give rise to abuse. The community itself is proud of its culture and would see to it that such a concession promotes the image they would like to project. To achieve this objective, such licences could be issued to organizations such as publicity associations, for example, that are active in the region and which comply with specific requirements. These people never have enough money to do their work and with this we could also create the opportunity for them to earn an income which they could use for further marketing.

I could still say a great deal about this subject, since it is a wide subject we in our area are enthusiastic about, but suffice it to say that there is a great deal of potential. According to projections, up to 1 million tourists could be received in this area by the year 2000, and if we really want these people there and we are serious about this, we will have to begin planning and working now. All of us, viz the local communities, the businessmen, the local authorities, as well as central Government, will have to play a role, and I hope that the Minister will give us a hearing in this regard.

Mr Chairman, we must realize once and for all that tourism is one of the largest industries in any country. For a country like Spain tourism is one of its largest sources of revenue. We in South Africa should also endeavour to expand this industry. In 1981 we earned foreign exchange to the value of R550 million from the tourists who visited this country. South African tourists abroad spent R708 million in the same year, however, and in reality South Africa therefore suffered a loss of R158 million. In 1982 the amount increased handsomely and the amount spent here by tourists was R650 million, while South African tourists spent R812 million overseas, a difference of R162 million. The question which now arises is what we can do and what we must do to turn this ratio around so that we receive more than we spend.

This year the hon the Minister allocated the sum of R17 146 000 to the SA Tourism Board. May we ask the hon the Minister whether matters have improved under the new tourism Board? The activities of the Tourism Branch of the department have now been transferred to that body—we passed the relevant Act last year. To what extent has this been successful and what are the hon the Minister and the department doing to ensure that matters improve for South Africa?

Tourism is not only a means of earning money. It should also be seen in the light of the fact that the overseas tourist who comes to this country can in fact be an ambassador for South Africa when he returns home. The tourist must therefore be received in South Africa in such a way in that even if he does not remain here and become a South African, he will make propaganda for us abroad.

I want to congratulate the department on a very short, concise and businesslike annual report. I think it is a good piece of work. On page 27 of the report there is a list of exhibitions which were held. We see there that the exhibition in Thessalonika was visited by 1 million people. If South Africa has a good pavilion there, those people can only have good things to say about South Africa. Are purposeful attempts made at those exhibitions to attract more people to South Africa or are they merely intended to advertise products? Sometimes advertising and propaganda are only taken to a certain point. This can always be improved and made more effective.

Tell us about the Skilpad (Tortoise) exhibition.

Sir, how can an hon member’s brain function at such a low level when one is talking about something worthwhile? But I suppose one cannot expect anything better from that hon member. [Interjections.] He is not capable of anything better than that. The NP have, however, become Afrikaner haters. One may not say anything good about one’s people; one may not promote one’s country, for then they become cynical. This applies to that hon member in particular. That is how we have come to know him.

The exhibition in Chile was visited by 800 000 people. That is a fair amount of people. Now I want to ask the hon the Minister, what more is being done about films, for example. In previous years the Department of Information made great use of films which were screened at schools, universities and these exhibitions. During the past few years however, we have, seen nothing further along these lines. Has this idea been ditched? This is one of the methods which can be used. One can achieve a great deal with a decent film.

Then there is the matter of international conferences. Reference has already been made to them. We must try to have far more and larger international conferences held in South Africa. We are going to attract people in that way. As far as publicity is concerned, there are many ways of doing this. Advertisements in newspapers do not always produce the best results. I think that if information documents can be distributed this could work very well. I feel the hon the Minister should also think along those lines. To what extent are the SAA and other transport services being used to build up South Africa’s reputation as far as tourism in South Africa is concerned?

I see that the department is going to participate in 11 exhibitions next year. In conclusion I want to ask what we should also participate in exhibitions in the USA and not only in exhibitions in our countries of origin, in Canada and in South America. I hope that more will be done in this regard. I want to wish the Tourism Branch everything of the best for the future.

Mr Chairman, the hon member for Sunnyside is a political tourist. He must therefore forgive me if I do not follow him in his ramblings. [Interjections.]

The establishment of the SA Tourist Board on 1 October 1983 was undoubtedly a milestone in the field of tourism in South Africa. The head-office of this board is housed in the Menlyn Park office block in the Pretoria East constituency. As the MP for Pretoria East I should sincerely like to welcome the chairman, Mr Danie Hough, and his Board. May their sojourn be pleasant and prosperous in that five star constituency.

Marie van Zyl also lives there.

Yes, and Carel Boshoff is also a voter there. [Interjections.]

Mr Chairman, that is indeed true. One does however, find all manner of guests even in the best hotels. But as long as they are paying guests, everything is fine. [Interjections.]

The tourist industry in South Africa only got into its stride during the past century, after steam-boats, cars and aeroplanes came on the scene. At the moment we are experiencing a tourism explosion. It is expected that by 1990 tourism will be the largest industry in the world. It is estimated that 600 million people will then be part of the international tourist scene.

In South Africa tourism is also growing at a dramatic rate. In the 15 years between 1966 and 1981 the number of foreign tourists to South Africa grew from 77 224 to 446 107. In 1983 the estimated overseas tourist revenue from the public was R750 million. The hon member for Sunnyside also indicated how much money our tourists spent abroad.

I would like to quote an overseas expert on tourism, Lord Hirshfield. He visited the Republic of South Africa in July of last year, and in newspaper interviews he made certain important remarks about tourism in South Africa. In the first place he said that he was very impressed with the South African Government’s policy on overseas tourism. That is, of course, a feather in the cap of the hon the Minister and his department. He was also of the opinion that South Africa was on the eve of a major upsurge in international tourism and that large investments could be expected in South Africa in the years abroad.

Lord Hirshfield also made a third very important and apposite remark, however, with which I should like to associate myself this evening. This concerns the importance of reliable statistics with regard to all aspects of domestic tourism. He said that before investors from abroad invested in South Africa, they would first have to be informed about all aspects of the industry.

I should like to associate myself with Lord Hirshfield’s emphasis on the importance of statistical data. In the first place reliable up-to-date information is necessary with regard to matters such as the country of origin of overseas visitors, the purpose of their visits, the modes of transport they would like to make use of here and the kind of accommodation they require.

I believe that we can only plan purposefully for the expected upsurge in domestic tourism if reliable information is available with regard to the spectrum of needs of the domestic tourist.

As an example of such statistics I want to refer to statistical particulars in connection with tourists and others making use of rural hotels. I have been told that between 70% and 80% of the people making use of rural hotels are commercial travellers. Ten per cent of them are contract workers and only 3% of them are genuine tourists. The others are casual visitors. From this one can deduce that we are not succeeding in attracting tourists to the South African rural areas at all. One is justified in asking whether adequate accommodation for tourists is available in the rural areas. For example, when my family and I travel between Cape Town and Pretoria by car, in the old tradition common to farming stock we leave early in the morning. My wife packs a food-basket and we simply travel straight from point A to point B without stopping anywhere along the way. Very few people stay in hotels and motels at their own expense. Only people traveling as employees of organizations usually stay in this fairly expensive accommodation.

I greatly appreciate the benefits inherent in our system of hotel grading. I maintain however, that with this system we have only made provision for the higher bracket, and that this system has also contributed greatly to the high cost structure. I am convinced that the average tourist does not necessarily want to spend his money on an expensive hotel room, but would far rather spend it on getting to know the country he is visiting. I am convinced that we shall have to give attention to cheaper overnight accommodation, and the European pension or Gasthaus is, in my opinion, a very good example for us.

Reliable statistics will also assist the standards Branch of the tourism Board in adjusting the star-grading system of hotels. One can, for example, ask whether it is realistic to continue to demand 24-hour room-service in a five star hotel, when statistics show that only 5% of visitors ever make use of this service. This means for example, that one has 2,5 staff members per guest or visitor in such a hotel.

I also want to refer to the requirements for one-star hotels. They have to meet 71 basic requirements. For example, they must be able to offer light refreshments for at least 16 hours a day. The question that arises is whether a guest really expects this service or whether he would not be satisfied with less at a lower tariff.

Our one-star hotels in South Africa are excellent. The one-star hotel, however, finds itself in a tremendous dilemma today because it is extremely dependent on liquor sales. According to an analysis by the Bureau for economic Analysis at the University of Pretoria 1982, one-star hotels earned 55,6% of their revenue from off-sales and 18,9% from the bar. In total liquor sales therefore represented 74,5% of their revenue. Accommodation only contributed 11% and meals 11,7% of the revenue.

Tax concessions with regard to the erection of new hotels have led to investors preferring to erect more expensive hotels than one-star hotels. Since May 1981 the write-off period for capital expenditure on a five-star hotel has been 10 years, on a two-star hotel 20 years and on a one-star hotel 25 years. I should like to ask the hon the Minister to give attention to incentives for lower-grade hotels.

A very important matter the Tourism Board will have to give attention to is the provision of facilities for tourists of colour in South Africa. Various authorities will have to take a co-ordinated look at certain provisions concerning land utilization and zoning.

In conclusion I believe that in the field of tourism there is great potential for interstate co-operation in South Africa. The marketing of package tours, including visits to various states, is an exciting possibility that should be followed up now.

Mr chairman, I should like to refer the hon the Minister to Satour’s annual report for the year ended 31 December 1982. I think it is regrettable that here in May 1984, we only have a report which is now nearly 16 months old to review because it has not been possible have one prepared and printed for the year 1983. I understand that this is due to the establishment of the South African Tourism Board last year, so regrettably. I had to study the 1982 report to get some indication as to how South African tourism is progressing.

It has been said that tourism is a very big industry, and from the figures given by the hon member for Sunnyside it is clear that South Africa is losing out on its balance of trade as far as tourism is concerned. For instance, on the figures given, we are running at a deficit of about R160 million a year. I believe that the nation should do something about that.

I notice on page 7 of this Satour report that despite the world decline in tourism—in fact the World Tourist Organization estimated that international toursim declined by 1,3% during 1982—in South Africa the number of tourist visiting South Africa actually increased by 2%. Having said that and considering the deficit in our balance of tourist trade, I would say that South Africa has a tremendous potential in tourism, something which should be exploited by South Africa as much as possible.

Recently Sir Peter Masefield, who is the deputy chairman of British Caledonian Airways and was formerly chief executive of the British European Airways, visited South Africa and addressed the symposium held by the Tourist Association of South Africa. There listed three essential components for a tourist industry. The first one was good marketing, the second was good travel arrangements with enough capacity at fares competitive with those over similar distances elsewhere, and thirdly, good accommodation on arrival with a range of small and medium sized hotels in addition to large hotels of a major chain.

As far as good marketing is concerned, I was very interested to read in this report what Satour has been doing in various parts of the world. There is a list here of all their offices and there is also an indication of the number of visitors from each of a large number of countries. It is interesting to note that nearly 30% of all foreign tourist to South Africa come from the United Kingdom with the United States second and Germany third. Therefore we know clearly where our tourist potential lies.

On page 18 of this report there is a list of the various promotional efforts on the part of Satour. I want to put it to the hon the Minister that if we are going to have a report of this nature issued, one would like to think that the figures contained in it made sense. However, under Appendix D, there is a list of film and television screenings to which I believe the hon member for Sunnyside also referred. I am referring now to those screened in New York, Los Angeles and Chicago. A distinction is also drawn between television and film screenings. These figures show that there were 8 342 film screenings with an estimated audience of some 403 000 which gives an average audience of 48 per screening. It goes on to list television screenings and there we find that as far as Madrid is concerned, there were three television screenings with an estimated audience of 38 million. As far as the United States of America is concerned, the report states that there were 16 246 television screenings with an estimated audience of 36 million or an average of 2 222 per screening. These figures just do not add up, and I want this fact to the hon the Minister’s attention. Having pinpointed this little difficulty here, I just want to say that I am appreciative of this report and that it is clear from what is being done that there is a very large promotional effort being applied on the part of Satour.

The second point listed by Sir Peter was that there should be good flight arrangements with enough capacity at fares competitive with those over similar distances elsewhere. In this regard I feel that the hon the Minister must speak to the hon the Minister of Transport Affairs because I do think that the time has come when South African Airways have got to provide services other than the scheduled flights that we have between South Africa and Europe and other countries. With the type of aircraft we have today, wide-bodied aircraft with a very high fuel economy, there should be greater emphasis on charter and inclusive tourist services operating as non-scheduled services. This is something which South African Airways has refused even to consider. I appeal to the hon the Minister to talk to the hon the Minister of Transport Affairs in this regard. The potential of tourism from overseas is so great that I believe it is imperative that we make use of the facility of the South African Airways to bring more tourists to South Africa.

The third point was the matter of good hotels. In this regard I agree with the views of the hon member for Pretoria East that there is a great need for the improvement of hotel accommodation, especially in our rural areas. I also want to lodge a complaint. Last year I stayed at a hotel in northern Zululand and I believe it was a total rip-off. The hotel is one of a national hotel chain and the tariff charged was R122 a night for two for dinner, bed and breakfast. We stayed in a rondavel with a thatched roof and with wattle poles supporting the roof. There was no bath— only a shower. While it is a very nice hotel it is certainly not worth R122 a night which is what one expects to pay in a five star hotel in a major city. More competition is probably needed in that area which one hopes will reduce the tariffs charged.

I want now to refer to certain matters which were raised by the hon members for Bezuidenhout and Stellenbosch. The hon member for Bezuidenhout referred to the international convention of travel agents which is to be held in South Africa next year. I want to tell him that as long ago as 1974 an international sugar technologist congress was held in Durban. I am happy to report that there was no difficulty experienced with having people from communist countries, for example Cuba, as well as with people of all race groups attending. There were approximately 600 delegates from many nations at that congress and the Congress organizing committee had 100% co-operation from all government departments involved. What concerns me, is that the hon member believes that the hon the Minister should now set aside some of his Department’s money to finance this conference. Surely the SA Tourist Association should finance this conference. Does the hon member want GST to be increased still further to enable the hon the Minister to finance this conference?

The hon member for Stellenbosch said that the Tourism Board should promote the Western Province. I want to put it to him that it is the duty of the local community, the Chamber of Commerce, the Hotel Association or the Afrikaanse Handelsinstituut to promote their own areas. They are closest to what a particular area has to offer and they should get off their backsides and promote their own areas. South Africa has many beautiful places for overseas visitors and it behoves all of us to look at the potential of our own areas.

In many instances it is simple things that appeal to a visitor and which leave a lasting and pleasant impression. Many years ago I visited a town in Texas and I overparked my vehicle, which had a Canadian licence plate. I received a parking ticket and on the back of the ticket was printed:

I rushed off to this place and it happened to be a tourist bureau. There an attractive young lady took my 5 cents after spending some time telling me of what the town had to offer the tourist. I believe more South African towns can follow this example. [Time expired.]

Mr Chairman, it gives me pleasure to speak after the hon member for Amanzimtoti. I agree with him that local bodies should market their own areas. I now want to market the Western Cape and he should therefore sit still and listen.

The Cape of Good Hope was described more than 400 years ago by the world-famous traveller, Sir Francis Drake as:

This is still true today. The Western Cape, with its metropolitan city, Cape Town, and imposing Table Mountain, lies at the southernmost tip of Africa. It is both the mother city and the legislative capital of South Africa, and this is where Parliament meets for six months every year, in case hon members did not know.

The possibility of establishing a half-way station between Europe and India at the Cape was realized when the Dutch commander, Jan van Riebeeck, sailed into Table Bay harbour with a fleet of three sailing ships in 1952 … [Interjections.] … in 1652. I was only three centuries out! To this day the Dutch, German, French, Malayan and subsequent British influence can be seen in the composite charm of our historic houses, architectural building styles, place names and traditions. This is an area of boundless beauty and splendour and attracts many visitors from all parts of South Africa and abroad. The lack of minerals, plentiful in other parts of South Africa, is compensated for in the Western Cape by fertile agricultural land and mountainous regions with abundant water. There are exploitable minerals here, and these include phosphate, kaolin and silica. There are also deposits of lime, gypsum and salt. Building materials such as building stone, clay for bricks and sand are in sufficient supply to meet the needs of the building industry.

A great diversity of intensive agricultural activities—for example the cultivation of vineyards, wheat and fruit—form the basis of the secondary industrial activities in the area, such as the wine, canning and milling industries. The cultivation of vegetables for the metropolitan areas takes place throughout the region. Large dairy and poultry farming activities complete this part of agriculture.

The fishing industry is firmly established with adequate facilities for the canning industry, particularly along the West Coast. It is claimed that the production of pelagic fish, lobster and shellfish has reached its peak. The extension of South Africa’s coastline from 12 to 200 nautical miles has, however, increased the potential of the deep-sea resources.

As a result of the high rainfall in the mountains of the Western Cape—Sir, just listen to it pelting down!—this winter rainfall region is assured of permanent and reliable water resources. The Western Cape has a large, established, stable and relatively sophisticated skilled and semi-skilled labour force and a good reserve of trainable people. They are here, they are skilful and they enjoy life.

The population of the Western Cape is located in three main regions. In the first place there is the Peninsula with its enormous population constituting almost two-thirds of the total population of the Western Cape. Then there is also the peripheral area which accommodates 14% of the population while the extensive interior accommodates only 23% of the population. The majority of these people live in Malmesbury, Worcester and Caledon.

Where is that?

That is where I come from. The present concessions granted by the Decentralization Board for economic and special industrial development in areas such as Atlantis, Vredenburg-Saldanha, Malmesbury and Worcester are aimed at ensuring a more even distribution of the additional industries in the area.

The association for the promotion of economic growth in the Western Cape, Wesgro, supports this economic policy of the Government wholeheartedly and is determined to obtain more concessions for more areas in the Western Cape owing to the area’s unique economic and population structure and its geographic position in Southern Africa.

The Western Cape has a strongly developed physical infrastructure to support present and future developments. This infrastructure is constantly expanding and adjusting to meet the growing needs of the area and the remainder of the country. The vast transport network links the area by sea with the furthest corners of the earth, by rail with all parts of the sub-continent, by express passenger and freight services with the gold-mining and industrial metropolis of the Witwatersrand, and by a modern network of freeways with its hinterland and the interior.

Table Bay harbour is the most important harbour in the region and can accommodate the biggest ships, while Saldanha Bay on the West coast is also developing rapidly.

The manufacturing industry plays an important role in respect of future employment in the area. The most important branches of this industry that are of importance to the Western Cape are, inter alia, clothing, leather goods, printing and publishing, liquor, tobacco, shoes, plastic goods, furniture and food. The position of the steel industry in the Western Cape is noticeably weak, and major developments can still be expected in this field. Of significance is the fact that the secondary industrial sector is not only showing the most rapid growth, but is also the sector with the strongest growth in employment.

Water is supplied to the primary metropolitan areas by the City Council of Cape Town, while smaller local authorities provide their own water. Electricity in the region is mainly provided by Escom. Koeberg, South Africa’s first nuclear power station, will be completed in the near future.

The Western Cape, with its three universities, is also a centre of higher education. Because the Western Cape is in the heart of the world’s most beautiful scenery, there are many tourist attractions along the coast and in the interior. The hon member for Stellenbosch boasted about his area, but if one wants to see something really beautiful, one should pay a visit to the open-air museum in Worcester. There farming methods and practices of the past have been revived, and there one can also see how those people lived in the old days. [Interjections.] In addition the Western Cape is also the permanent home of the Currie Cup.

I am convinced that although the positive economic prosperity of one area in the Western Cape undoubtedly benefits the region as a whole, a balanced, general growth has to be the eventual goal, whether it be in the field of commerce, industry or tourism. That is why the Western Cape welcomes all investors who have the insight to realize that this is an exciting area with excellent opportunities. The Western Cape has wonderful landscapes, attractive traditions and outstanding potential. Mr Chairman, the Western Cape has everything any investor or tourist could wish for. No one need be disappointed.

Mr Chairman, it is appropriate that the hon member for Worcester should extol the beauties and attractions of the Western Cape because that could indeed help to attract tourists to this part of the country. I am concerned with tourism and want to devote the few minutes at my disposal to that aspect. The hon member for Amanzimtoti was making a good speech in regard to tourism until he got into the speedwobble of politics concerning GST. However, I do not want to pursue that aspect.

You just like spending.

I would like to play games with that hon member, but I do not have the time.

You will lose.

No, we always win. [Interjections.]

I want to talk about the question of charters as I look upon them as being of great importance. The hon the Minister is aware That I raised this matter during the Transport Vote, but unfortunately the Minister of Transport Affairs did not understand what I was getting at. He responded by saying that concessions applied to groups of foreigners exactly the same as they do for South Africans. However, I was not talking about groups. I meant charters, and I hope the hon the Minister will apply his mind to that and that he understands the difference.

My contention is that charter operators, both local and overseas, should be allowed, indeed encouraged to bring plane-loads of tourists into South Africa. It does not follow that this will necessarily mean that all passengers would have travelled on the SA Airways or their pool partners. Some might have, but the great majority would not have and will only visit South Africa in the event of them being able to purchase cheaper tickets on charter flights. Consequently operators should therefore not be seen to be directly in competition with and a threat to South African Airways. There are other considerations that have to be taken into account. The single most important factor is that tourists bring hard cash into this country, badly needed foreign exchange. If the Minister regards tourists simply as passengers on a South African Airways aircraft, then I am afraid he and I view the problem from a different perspective. A great influx of foreign tourists arriving on charter will help to stimulate the tourist industry in South Africa. It will stimulate private enterprise to construct the facilities needed to accommodate the many tourists who would arrive on charter flights. Surely this can only be of benefit to the South African economy and provide a welcome lift in these days of financial stringency. If charter groups are accepted, the critical point is that South Africa will become available to a great many foreigners. This can only be done by allowing charter operators, who can provide much cheaper air fares, to be allowed to operate in South Africa. I hope the Minister will give this matter his careful attention.

One small further point, which I do not have time to develop, relates to facilities being made available for Black tourists. There is a vast untapped market waiting to be exploited, and one wonders what is being done to meet the demands of this section of the population. One wonders what is being done to develop hotels, resorts and transport facilities at a cost which the Black community will be able to afford. It should be appreciated that this is not only an economic need but also a social need, and I hope that the Minister will give it his attention in due time.

Mr Chairman, at the end of the day’s debate I should like to thank all hon members for their contributions. On the whole, members of all parties have made very positive contributions. Unfortunately, it is not possible for me, in the 35 minutes available to me tonight, to reply in detail again, to the questions and remarks of about 28 speakers. The mere logistics of 28 speakers in 35 minutes show that it is obviously impossible to reply to all speeches in detail. Nevertheless, I shall try to deal briefly and concisely with as many of the speeches as possible, and if I am unable to reply to some hon members in the time available to me, I shall let them have my reply in writing or in some other way.

†The hon member for Walmer made enquiries regarding the White Paper and he intimated that nothing was being done to draw up an industrial strategy or to publish anything in that regard. Last year during the discussion of my Vote I announced the appointment of an industrial advisory committee and I gave the names of the members of that committee. The function of the committee was to advise me on the drawing up of a White Paper on industrial strategy. The Industrial Advisory Committee consists of members of the various bodies involved in industry. They are members of organized industry in general, for example, the Afrikaanse Handelsinstituut, the FCI, Assocom, Seifsa, the Motor Industries Federation, the IDC, etc. During the past year the committee met almost every month and we have now completed most of our work. At the moment we are busy with the final drafting of the White Paper. It will take some time to finalize the White Paper and to have it printed, but we have certainly made substantial progress in this respect. The hon member also asked for the appointment of a talented and experienced body to implement industrial policy, but we have the Industrial Advisory Committee and in the White Paper I hope to make a recommendation as to the continuation of this committee and in respect of its future composition. We are therefore dealing with the matters raised by the hon member.

*The hon member for Vasco referred, among other things, to liquor matters, and asked questions about the controversy and dispute in the Press about liquor outlets being made available in Black areas. I want to deal with this matter briefly. I think it is an important matter and there seems to be confusion about some of its aspects. As hon members know, the Government decided in 1980 that it was desirable that the liquor trade in Black residential areas should be placed in the hands of Black entrepreneurs or Black businessmen. The Minister concerned made a statement here in Parliament on that occasion to which I do not wish to refer at this stage.

There are several practical and other reasons why the desired progress has not been made in this respect over the years. One of the major problems was that for very good reasons, the administration boards did not have adequate sources of revenue, and therefore did not see their way clear to transferring their liquor interests at an earlier stage. Meanwhile, however, the Liquor Board was recommending both on-consumption and off-consumption licences in cases where there was no problem with regard to the zoning of premises, and the result was that by 31 December 1983, a total number of 398 licensed premises for on-consumption and 286 licensed premises for off-consumption were being operated exclusively for Blacks all over the country. I think this represents quite remarkable progress over the past four years.

The granting of licences to Black entrepreneurs resulted in greater competition, and contributed to a considerable decline in the turnover of many of the former monopolies. In one case that was pointed out to me, the turnover of a particular off-consumption business had dropped from R90 000 a month to R9 000 a month.

In 1983, the Administration Boards decided in principle to dispose of their liquor interests. Tenders were called for and some of these outlets have already been sold, but there are also problems in this connection, including financing problems, and it seems to me that managerial expertise is also a major stumbling block.

In an attempt to remedy the situation, especially in connection with financing, the hon the Minister of Co-operation and Development decided to allow the 51%:49% partnerships in order to acquire the liquor interests of the Administration Boards—now called Development Boards—as well. Now a specific case has been mentioned in the Press where two Black directors who are supposed to hold 51% of the shares are packing crates in the storeroom, while the person who holds 49% of the shares is standing at the till. I want to state unequivocally in this connection that it is the firm intention of the Government to place the liquor trade in the Black areas in the hands of Black entrepreneurs and that the Government intends to see to it that ownership remains in the hands of these people. The 51%:49% partnership arrangement should not be used to circumvent the Government’s declared intention in this connection. I want to remind interested parties of the fact that we have warned in the past that financial institutions will be able to share in this as sponsors and minority shareholders for an interim period only. I also warned at the opening of the Gilbeys plant in Durban last year that producers, producer-wholesalers and brewers would not be allowed to acquire financial interests in such liquor businesses in any way.

Another aspect which I should like to clarify, especially in the light of these newspaper reports, relates to the forming of monopolies.

The chairman of the Liquor Board has sounded a warning on more than one occasion against the forming of monopolies in these areas by the new shareholders. I should like to endorse his remarks, therefore. It has come to my attention—hon members have probably seen it in the newspapers too—that a certain company is promising prospective shareholders that they can share in:

It would appear, therefore, that the company concerned has a monopoly in mind here. If this is in fact the case, I want to warn in advance that this will not be allowed.

In spite of all the problems that have been experienced, with the licensing of centres for on-consumption as well, good progress has nevertheless been made. The licensing of centres for on-consumption—these are the so-called shebeens—has also been delayed because of problems experienced with the zoning and rezoning of residential sites. In this connection, too, good progress is now being made, however, and 27 of Soweto’s shebeens were licensed for on-consumption during the past week. In addition, there are quite a number in the planning phase. I understand that the hon the Deputy Minister has already received more than 20 fresh applications. Moreover, even more applications are being processed at the moment. I do believe, therefore, that in spite of certain problems, we are in fact making good progress in this connection.

The hon member also referred to a possible differentiated system of export incentives. All I want to say in reply to this is that I believe this idea does have some merit.

The hon member for Lichtenburg referred to problems in connection with the Spitskalk company. In the first place, the hon member referred to an investment which had allegedly been made by the Lebowa Development Corporation in the mining activities of the company concerned. The Lebowa Development Corporation does not fall under my jurisdiction. The Decentralization Board has no control over the viability of that industry, or over its financing. The Decentralization Board is already involved in the granting of a transport rebate for lime exports. That concession was not granted with regard to any mining activities of the company, but is only related to the company’s manufacturing activities. Now I also want to point out that that industry has a capacity of only about 200 000 tons of lime, while the total trade involves an amount of more than 4 million tons. It is unlikely, therefore, that that industry could have any disruptive effect on the trade.

In addition, that industry has to contend with certain drawbacks as far as its situation is concerned. The hon member conceded this. He himself said that in this particular case, the lime had to be transported over a long distance. It is even transported past other producers, so the manufacturer is at a disadvantage compared to them. However, the processing industries are being investigated, and the man who complained to the hon member for Lichtenburg should be told by the hon member himself that it is actually his duty to furnish the relevant information to the Decentralization Board, so that this investigation may be expedited. I suspect that the reason for this delay lies in the very fact that information is not promptly provided to the Decentralization Board by lime producers.

Now the hon member has confused me a little. He said that that manufacturer was actually undermining other manufacturers in his vicinity in that he was conveying his lime past those other manufacturers with the aid of a 50% transport concession. So he is operating his business at a lower cost than the other producers are able to do. In the same breath, however, the hon member says that we should grant a similar concession to the farmers because they do not enjoy the benefit of that producer’s concession. If that producer’s price is lower, surely the farmers do in fact share in that benefit. Therefore, with regard to the processing industries—of which the lime industry is one—I may state that the matter is being investigated. Those lime industries which have, in fact, submitted applications to the Decentralization Board should simply furnish the necessary information to the board as soon as possible so that their applications may be promptly dealt with.

Mr Speaker, may I please ask a question?

If it is a short one.

What is the nature and extent of the transport rebate applicable to that lime?

There is a transport rebate of 50%; in other words, it is not a specific amount; it depends on the distance and the cost of transportation.

The hon member for Innesdal made a very interesting speech about technology. I agree wholeheartedly with the hon member. In fact, this must have been apparent from my remarks on the electronics industry, which had a bearing on what he said. The Government is giving very serious attention to a technology policy as a component of our industrial strategy. The Study Group on Industrial Strategy, the so-called Kleu report, also refers to what they call “riglyne ten opsigte van die algemene tegnologiese beleid”, on page 109. The important aspects are identified here as well. I do not have time now to deal with this matter in detail, but if the hon member would read this, he would also realize that the report strongly emphasizes the importance of technological innovation and development. This matter will be further discussed in the White Paper which will be available to us in the months to come.

However, I want to tell the hon member that I disagree with him about the establishment of a department. I do not believe that the multiplication of departments will necessarily promote the aims of the Government. Whether in the field of tourism or of consumer protection, it is more important that the State should rationalize its activities so that it may pursue its objectives in the most effective way.

It is also interesting, however, that it is not only a question of basic research as far as technology is concerned. We have an enormous reservoir of technology in South Africa. The CSIR has indicated, for example, that it has a pool of technological expertise available to it. To a large extent, however, the problem lies in the marketing of that technology. Therefore we hope to take steps to enable the CSIR and other organizations to convey their technology to industry more effectively, so that it may be applied in the appropriate fields.

†The hon member for Amanzimtoti discussed economic affairs. He spoke about the responsibilities of the department and the importance of its work. I agree with the hon member but economic affairs certainly covers a much wider field than just that, for example, manpower, finance and mineral and energy affairs. All these ministries and their responsible Ministers have a very important role to play in regard to the economic policy of South Africa. In many ways the Department of Industries and Trade has a line function. We do not have so much to do with planning and the monetary side of things. These aspects fall under the hon the Minister of Finance. Nevertheless we are trying within our own sphere of influence to work towards the general objectives of economic growth and the creation of employment and, where necessary, we liaise with the various departments. It is also true that even in drafting an industrial strategy it is very difficult not to overlap into areas falling under other departments and ministries.

The hon member also referred to the removal of obstacles in the path of the business community. I think the hon the Deputy Minister referred to the report of the President’s Council in this regard. Many of those recommendations are already being implemented and the others are being studied with a view to their implementation.

The hon member also asked me to approach the hon the Minister of Finance to exempt sugar from GST. In this first instance I do not think it is the right approach to try to solve the structural problems of an industry by removing GST. I am well aware of the problems experienced by the sugar industry. The hon member is a sugar man and he will know that we are working closely together with the industry to see in which way one can try to overcome the difficulties. The removal of GST, however, is not going to solve the problems of the industry.

Although this falls under the hon the Minister of Finance, I may point out that it is the Government’s aim to remove GST from basic foodstuffs. Sugar is important, but surely it is not a basic foodstuff. There are many people in South Africa who do not use ordinary sugar. They may take in sugar in other forms, but they do not use it in their tea or coffee. I am sure the hon member is aware of that. The principle is that GST is to be removed from basic foodstuffs, and the moment one classifies sugar as a basic foodstuff, many other commodities can also claim to fall within that category. I think the hon member can certainly debate this matter as well as the question of credit cards with the hon the Minister of Finance since both these matters fall under that hon Minister.

*I have already referred to the hon member for Waterkloof, who drew attention to the fact that industrial development would also have to be promoted by a combination of import replacement and export promotion. The hon member for Welkom has apologized for not being able to be here at the moment.

The hon member for Paarl suggested that we should use the trade practices legislation as a monetary measure in order to increase the deposits and to reduce the periods of payment. At one stage, consideration was given to the idea of using this instrument to restrict credit, but one should bear in mind that it does involve a very selective form of credit control. We could perhaps make use of better measures, such as the sales duty which has just been introduced by the hon the Minister of Finance, as well as the increased GST, measures which have a more inhibiting effect on consumer credit. We must also bear in mind that when one makes use of these measures, there must at least be a strong demand for the commodities which would be affected by them. In most cases, the initial upswing in consumer expenditure towards the end of 1983 has levelled off, and it is clear that especially in respect of consumer goods which would be affected by such restrictions, the demand is not very strong. We have considered it, therefore, but I do not think it is a measure to which any further consideration can be given at this stage.

The hon member for Constantia is not here at the moment. The hon member Dr Odendaal has apologized for his absence. He emphasized the importance of regional development, and I have already conveyed my appreciation to the Bloemfontein Publicity Association as well as other members of that community for the positive way in which they have marketed Bloemfontein as a growth point, which is reflected in the 78 new industrial developments which have been approved there.

The hon member for Sunnyside talked about the development of small business and asked what we could do for the small businesses situated in the areas where the drought had had a major effect on the farming community. It is not possible to render aid in connection with drought conditions through the Small Business Development Corporation as such, but the considerable assistance which is being rendered to the farmers themselves in those areas does filter through to the business community as well. The trader also benefits by it, and I believe that it will have a positive effect in that community as a whole.

The hon member also referred to the amount which appears in the Budget in respect of small businesses. I want to point out to him that in actual fact it is far more, namely R5 million, because the R5 million announced by the hon the Minister of Finance in his Budget is not yet reflected in the statements.

The hon member for East London City referred to the regional development advisory committees and requested that attention should be given to the funding of these committees. The hon member should raise this matter under the vote of the hon the Minister of Constitutional Development and Planning, because it actually falls under him. As far as locality-bound industries are concerned, the Decentralization Board has conducted a very thorough investigation, and proposals in this connection have been submitted to the Government at the moment. However, I must point out to the hon member that financial conditions are tight at the moment. Any increase in decentralization aid would naturally mean that more funds would have to be obtained. But the proposals have been submitted to the Government and careful attention will be given to them in the course of the next few weeks. The hon member also referred to the limit of R7 million on the interest subsidy. Together with all the other existing measures, this aspect will also be reconsidered and reassessed.

The hon member for Wellington made a positive speech about the free market system and pointed out that it should be combined with the necessary control and protection. This idea is in line with the remarks I made earlier this afternoon in pleading for a balanced approach. We do not have a free market, but we do have free enterprise and a market-related economy. We try to incorporate the disciplines of the market into our economic policy, so that productivity may be promoted in this way as well, as the hon member advocated.

†The hon member for Edenvale made some positive remarks regarding small businesses, particularly the question of training people in small firms.

*I shall refer it to the Council for the Promotion of Small Business, which can then refer it either to the Small Business Advisory Bureau at Potchefstroom or to the various institutions financed by them.

The hon members for Algoa and Port Elizabeth Central referred to the Port Elizabeth/Uitenhage area. The hon members are aware of the fact that in-depth discussions are held between the regional development advisory committees and the Decentralization Board. Just as we review other parts of the country from time to time and evaluate them in terms of development potential, the position of this area, too, is again being investigated at the moment in the light of the recommendations and proposals of the regional development advisory committees. One of the proposals is that the implementation of the measures which have already been granted to Port Elizabeth should be examined on a more cost-effective basis. The hon member said that the power subsidy was R16 million and that it could perhaps be better utilized, but that it should not be taken away. I want to point out that the Port Eliza-beth/Uitenhage area does receive concessions. We are not unaware of the problems which exist in that area. That is the reason for the attention which is being given in other spheres to difficulties which are being experienced in the area. In this connection I also want to refer to the Rive Report. We are giving attention to this situation, therefore, and I want to thank the hon member for the positive spirit which he displayed. The Port Elizabeth/Uitenhage area has other assets as well. It has a harbour; it is a university city, and as far as entertainment, sports facilities and several other aspects are concerned, it is a city which has many advantages to offer prospective industrialists. In addition, they receive other concessions over and above the power subsidy, for example, an export rebate. These are probably not sufficient to make possible the kind of development to which the hon member referred, but I believe that positive marketing can nevertheless do a great deal to improve the position of the Port Elizabeth/Uitenhage area. Therefore I want to assure the hon member that we are taking a good look at the current problems which exist there and that we shall examine all the aspects very thoroughly during the next few weeks.

The hon member for Newcastle talked about Iscor, and his words came straight from his heart. Not only are the Iscor works in Newcastle situated in his constituency; the hon member has also come a long way with that organization. I take pleasure in associating myself with the thanks and appreciation which he conveyed to the employees of Iscor on the occasion of the fiftieth anniversary of Iscor.

†I come now to the hon member for Port Elizabeth Central. I have already referred to the Port Elizabeth/Uitenhage question. The hon member also inquired about stockpiling and asked whether the system was being investigated. I do not know whether the hon member is a member of the Select Committee on Public Accounts.

No, I am not.

Let me then say first of all that we have investigated the matter thoroughly. We have also approached the newspaper who made the allegations. They could not furnish us with any information but we nevertheless continued the investigation. A thorough investigation was made. I have the report available. We did not find any malpractices. The administrative procedures were nevertheless updated and improved. We have rationalized the whole control system, and the Director-General also appeared before the select committee on 20 March 1984 where specific inquiries were made regarding this matter. I think it was deal with to the satisfaction of the Auditor-General.

*I do not want to say very much about the remarks made by the hon member for Johannesburg West. I believe that he argued convincingly that effective competition was important and that one of the most important requirements for this was freedom of entry to the market. A point which I do want to make in this connection is that it is so often said that 80% of the business interests in South Africa are in the hands of conglomerates. This is true if one uses the Johannesburg Stock Exchange as a criterion, but after all, the control of economic progress and power lies mostly in the control of real wealth. If this real wealth is regarded as the fixed assets in South Africa, it is interesting that Fokus indicates that the conglomerates actually own only 16% of the real wealth in South Africa. We do need the big as well as the small entrepreneur in South Africa, but we strongly believe that excessive concentration which is not in the public interest should be counteracted and prevented. I want to leave the matter at that now, although much more could undoubtedly be said about it.

In the very short time I have left, I should like to come to tourism.

†The hon member for Bezuidenhout referred to the Knobel Commission. I can tell him that the Tourism Board has taken note of the findings of the Knobel Commission on the problems experienced by tour operators, and that its chairman will chair a meeting called by Satsa on 11 June 1984 to discuss the proposals.

Regarding the Uftaa invitation, the members of Uftaa were severely critical of the association’s last congress held in Spain in November 1983. I am informed that the attendance was down from 1 200 delegates to fewer than 800. The executive director of the Tourism Board reports that the future of the Uftaa congress is in fact in jeopardy. The New Delhi convention could well decide its future. The anticipated cost is more than R0,5 million. A count of worthwhile agents—I mean worthwhile for South Africa—at the congress in Spain was fewer than 100. The proposal would thus appear not to be cost effective. The board was so disappointed with its participation in the trade fair at the congress in Spain that it will not participate again in the near future. The executive director of the Tourism Board will attend the Delhi meeting if he is able to get a visa, and will report to the board on future actions in regard to what the hon member proposed.

The hon member referred to the Travel Agents Board. This is a statutory board and it must advise the Minister. I feel, however, that one should not be critical to that extent. The board was only established last year and has only had a few months in which to operate. I do not know exactly where they stand, but I am sure that in view of the responsible membership of the board, they will in due course advise the Minister and also make recommendations regarding the trust accounts etc.

*The hon member for Stellenbosch asked us to help him to make the fine product of Stellenbosch available, not only on the estates, but in the town itself. It is already possible to do it in this way by means of the wine house licence, but something substantial has to be served along with the liquid refreshment. The hon member referred to cheese, and I got the impression that he was hoping that it could be done in that way, but I am sure we can go into it in greater detail at a later stage.

The hon member for Sunnyside referred to shows, films, international conferences and advertisements. My reply to his questions is very positive. I do not have time to give him all the particulars now, but I shall let him have them. However, we are making use of all those instruments to promote South Africa.

I can assure the hon member for Pretoria East that attention is already being given to the uneconomic services, and proposals in this connection will soon be submitted to the SA Tourism Board. The fact is that there is a shortage of two-, three-and four-star hotels, but as in other fields, it is a question of supply and demand in the hotel industry as well. In fact, the hon member pointed this out himself. If we all travel through the rural areas and never spend the night there, no such accommodation will be provided there. In so far as problems may exist in the two-and three-star hotels and incentives have to be provided, this is a matter which certainly merits attention.

†The hon member for Amanzimtoti referred to the promotion and marketing of the private sector, and I agree 100% with him on that score. I must apologize for the fact that the report of the board could not be tabled this year, but this was due to reorganization. However, I am sure that once everything has settled down, the board will by next year be able to table its report by April or May. Mr Spencer Thomas, the managing director, is here and I am sure that he has taken note of what the hon member said in that regard.

*The hon member for Worcester was so eloquent in his praise of the fairest Cape of all that I cannot improve on what he said.

†In conclusion, the hon member for Johannesburg North spoke about charter flights or cheaper flights. We will support him all the way in this regard but I think he should approach the Minister of Transport Affairs on this matter. It is however, not a case of the SA Airways simply being stubborn and not being prepared to do their share. The number of tourists from the USA, for example, increased quite dramatically during the past year, and I am informed that this was also due to a special air fare of $999 introduced by the SA Airways. They are therefore working in close liaison with the SA Tourism Board and as a matter of fact Mr Van Veen serves on the board. There is thus immediate contact between the various interested parties in the SA Tourism Board, and I am sure that the hon member’s remarks in this respect will also be conveyed to the board.

*Once again, Mr Chairman, I thank all the hon members for their contributions. If I have not succeeded in answering all questions, I shall be glad to do so later in writing.

Vote agreed to.

Business interrupted in accordance with Standing Order No 22.