I desire, as briefly as I can, to review the financial position for the current year. The original estimates of revenue and expenditure for 1928 ’29 practically showed equilibrium, and hon. members will remember that the sum estimated at £1,250,000 (representing the amount of the 1927-’28 surplus, after applying half a million to debt redemption), was carried forward in order to make it possible to make substantial remissions of taxation. These remissions of taxation are estimated at £1,273,000 for the full year, and £1,065,000 for the financial year. Hon. members will remember these remissions were customs dues for a full year, £503,000, and for the financial year, £425,000; income tax, for a full year, £770,000, and for the financial year £640,000, making totals of tax reductions of £1,273,000 for the full year and £1,065,000 for the financial year. In regard to income tax, hon. members will remember it was decided to make a reduction of 20 per cent, on the general tax (excluding that payable by gold and diamond mining companies), and it was to be in force for one year only in terms of our income tax legislation. It was expected that the year would close with a small surplus, which would be absorbed by the surrenders of revenue falling into the succeeding year. I was especially cautious in making my estimates of revenue for the current year because there were factors which necessitated caution. The first was the drought which, in the past year, had assumed very serious dimensions, as was expected; secondly, the reduction, I may say the certainty of a large reduction, in the production of alluvial diamonds. That necessarily had to result in decreased consumption. Thirdly, there was the great uncertainty regarding the state of the diamond market. For this last reason I did not think it desirable to include in my estimates of revenue in respect of the State diggings more than sufficient to cancel the cost of establishing the diggings, and the winning of the stones. It was estimated that the cost of starting these diggings and the expenditure for that year would amount to £90,000, and we only made provision for a corresponding amount of revenue for that year. The results of the year have been remarkable, for while the drought continued and there was a large reduction in the production of diamonds (if we except the production of the State diggings), and the production and exports remained approximately at the 1927 level—hon. members will see later on that there was only a very small increase on our exports for the year— there was, on the other hand, a very great increase in importations. Hon. members will see later on that it amounted to no less than £5,000,000 increase over the previous year, with the result that the revenue from customs, after allowing for the reductions in duty made last year, will exceed the estimate by £1,225,000. The excise revenue will exceed the estimate by £90,000, income tax by £455,000, and death duties by £150,000. Then there is a large increase of mining revenue in respect of diamonds. There was a great improvement, no doubt largely due to appreciation of the steps the Government had taken, and were taking, to keep the production and sales within reasonable bounds. The result has been an increase, or, rather, an excess, of nearly £800,000 in receipts from diamonds over the estimate, of which the production of the State alluvial diggings accounts for nearly £600,000. I shall refer to the results of the working of these diggings later on. The variations in respect of other heads of revenue were inconsiderable, and call for no special comment, nor need I refer to the additional expenditure which a few weeks ago was fully explained by me to the House, when the Estimates were before hon. members.

The position, therefore, is that the revenue for the year, including reparation receipts of £110,000, will be in the neighbourhood of £30,500,000, and the expenditure, allowing for surrenders of grants, will be £28,800,000, giving a surplus on the year’s working of £1,700,000, which with the balance of £1,290,000 brought forward from the previous year, will give a credit balance on revenue account of some £3,000,000 at the close of the current financial year.

This revenue balance I propose to dispose of by allotting £350,000 to debt redemption, and so making the contribution from revenue for this purpose for the current year £1,000,000, exclusive of the reparation receipts of £110,000, which, automatically, is applied to this purpose by law. The remaining £2,650,000 I propose to transfer to loan account for capital expenditure generally. Now as regards the Loan Account, we expect to spend approximately during the year £11,750,000 against the appropriation of £12,750,000. This expenditure during the past year has been met as follows: we had a credit balance on Loan Account at March 31st, 1928, £1,987,000; during the year we had receipts from mining leases £1,626,000; we have a new item, receipts from State diggings, £1,993,000; other loan receipts, £1,084,000; and finally we have the proceeds of the 4£ per cent, local loan, £5,155.000, making a total of £11,845,000; so at the close of the year we should end with a small credit balance on the Loan Account. The receipts from mining leases, bewaarplaatse and other loan recoveries will be very much what we expected, but the addition to the receipts of nearly £2,000,000 from state diggings have enabled us to meet capital expenditure without borrowing anything like as much as we anticipated, and avoided borrowing oversea. That is a very gratifying fact, that we have been able in the past financial year to finance a very large loan programme entirely on the resources of South Africa. A local loan was issued at 94 per cent., bearing interest at 4½ per cent, and redeemable in 1953, yielding £4 15s. 9. per cent, as an immediate return and £4 18s. 6d. per cent on a redemption basis. The net proceeds of this loan, allowing for discount and the costs of raising are £5,155,000. I must admit at once that the support accorded to this loan by the public and insurance companies and so forth was disappointing. The Public Debt Commissioner’s requirements for investment purposes was so great that the total amount of the loan was made up to £5,500,000 and so we actually got all we wanted, and I have no occasion to regret the experiment I made.

During the period this Government has been in office, nearly £61,000,000 has been spent on Loan Account, and I think it might be of interest to the House if I give the principal items on which this money has been spent during the five year period; railways and harbours capital £26,000,000; land and agricultural bank capital £3,675,000; electricity supply commission capital £7,281,000; loans to provinces for capital expenditure, £4,331,000; loans to provinces for deficits on revenue accounts, £1,021,000; loans to universities and colleges £1,440,000; housing loans, £1,378,000; telegraph and telephone construction, £2,656,000; public works £2,413,000; land settlements, £3,169,000; irrigation, £1,405,000; forestry, £1,039,000; drought distress relief (advances), £978,000: relief of unemployment (labour department’s schemes), £430,000; besides other items too numerous to mention here. The funds from which this expenditure has been met have been obtained from the credit balance on Loan Account on April 1st, 1924 of £5,087,000; subscriptions due on loan raised in 1923-’24 £1,129,000; loans raised less loans repaid (five years) £40,200,000; recoveries of advances made from loan funds, £3,968,000: receipts from mining leases and so forth, £8,426,000; receipts from state diggings, £1,993,000, making a total of £60,803,000. Hon. members will appreciate from the figures I will give later on how the receipts from mining leases, bewaarplaats, sales of Crown lands, and state mining during 1924-1929 (£10,420,000) have a very important effect on our public debt. They have enabled the Government to devote the moneys obtained from the loans raised solely to capital works returning full interest on the money spent, and have allowed of schemes of development to be embarked upon which the Government otherwise might have hesitated to undertake from borrowed moneys. The assets created from this free money have earned a substantial measure of interest and the burden upon the taxpayer has thereby been lessened in respect of the unproductive portion of the public debt. The public debt at the close of the year will amount to approximately £243,460,000. being an increase during the year of £4,540,000.

The Public Debt Commissioners have purchased and cancelled debt to the amount of £960,000. During the period 1924 to 1929, while the capital expenditure has amounted to nearly £61,000,000, the public debt will have been increased only by £35.240,000, the net borrowings being £40,200,000 and the purchases and cancellations £4,960,000. The funds for the redemption of debt have been derived from the following—custodian of enemy property, £2,048,000; revenue, £2,308,000; reparation moneys, £543,000; and miscellaneous receipts, £72,000; a total of £4,971,000. The sinking funds have increased in nominal value from £14,459,000 at 31st March, 1924, to £19,393,000 at 31st March, 1928, and £20,152,000 at 31st March, 1929, the net debts at the respective dates being £193,773,000,£219,533,000 and £223,225,000. Applying the usual test, namely, the proportion of the interest charge which is recovered from the objects of capital expenditure and the proportion which falls on the taxpayer, it will be found that the unproductive part of the debt amounts to 18.1 per cent., or approximately £44,000,000 at 31st March, 1929. This figure compares with a figure of 49½ millions a year ago, and with a figure of some 58½ millions at the end of March, 1924. The reduction effected in the current year is due to the large amount of free money which has been applied to capital expenditure, and to the fact that the bulk of the capital moneys issued to the Electricity Commission are now fully interest-bearing. The figure at March, 1924, is inflated owing to the fact that (a) the Loan Account and the debt at that date were financing a revenue deficit of nearly £2,000,000; (b) the liability to the Custodian, subsequently cancelled, of over a million was included in the debt. If one looks forward one year from date one may anticipate that the unproductive portion of the debt at the close of 1929-’30 will work out at some £38,000,000 owing to the effect of the interest-free money, which will accrue to the loan account during the coming year if my proposals are carried out. Before leaving the subject of debt and capital expenditure, I should like to emphasize once more the very satisfactory position we are in at the present time through having large sums available for capital expenditure from sources other than borrowed money.

In addition to the usual handsome contribution to the loan account from gold-mining leases of some £1.600,000, and other loan receipts of some £1,100,000, there will again be some £2,000,000 from sales of Government diamonds, and there will be some £2,650,000 from revenue balances (surplus transferred), so that the greater part of the money required for capital expenditure next year will be available without recourse to borrowing. The accrual of these large amounts of free money enables us to contemplate with more equanimity capital expenditure on a considerable scale, which is not directly reproductive. I am not tabling estimates of expenditure from loan account for the coming year, because it is useless settling on a programme now which could not be voted, and it might be subject to considerable alteration when the time for voting it arrives. No expenditure on new services can be incurred pending the voting of the year’s programme of expenditure, but work will, of course, be continued out of funds provided by the part appropriation for works in progress and continuing loan services. I should, however, like to mention that we contemplate making a substantial contribution to the provinces for road construction, the idea being to make a sum of £1,000,000 available to the provinces in addition to the ordinary provision for capital expenditure over the next three years. The grants from this sum will not bear interest or be repayable, but they will have to be spent on a road construction programme to be approved by the Union Government.

We also propose to initiate new irrigation works, and to expand the boring programme to a very great extent. The first step is to increase greatly the number of drills, and on that we have already made a start. We propose, moreover, to modify the present financial arrangements regarding boring considerably, with a view to making them more satisfactory to the farmer by enabling him to obtain from the Land Bank the necessary funds on loan on easy terms repayable over a long period. These proposals regarding the initiation of new irrigation works, and in regard to boring, are at present being worked out by departments and will be incorporated in the loan estimates.

I promised the House the other day that I would give it particulars of the results of the working of the State diggings in Namaqualand. I will do so now, and the more readily because I am given to understand, on the best authority, that the market will welcome a statement of the facts so far as they are ascertainable at the present time (in view of the extravagant rumours that have been current, from time to time, as to the value of the diamonds recovered by the Government). The expenses of the State diggings from their inception in May last to the 31st March will be £105,000, of which sum £45,000 or £50,000 may be classed as capital or initial expenditure. We shall have sold up to the 31st of this month 205,000 carats for £2,450,000, or an average of £11 19s. per carat, and we shall have in hand at the close of the month approximately 395,000 carats, which it is fairly safe to say are worth in the neighbourhood of £4,000,000. The total production has been approximately 600,000 carats, worth about six and a half millions. A close valuation is not made until the stones are put up in parcels for disposal, and, having regard to the fluctuations in prices, any estimate of value must necessarily be a rough one. The receipts for the current financial year, namely, £2,450,000, will be allocated in terms of the law as follows: firstly, to reimbursement of expenditure, £105,000; secondly, as to 15 per cent, of the balance or £352,000 in revenue (this being the equivalent of the amount which would be collected by way of income tax from a private owner) and, thirdly, as to the remaining £1,993,000 to the loan account. In addition, the diamond export duty will have benefited to the extent of some £220,000 on shipments of these stones during the financial year. I need hardly say that the Government, in disposing of the produce of the Namaqualand diggings, has been, and will continue to be, extremely careful to avoid jeopardizing the position of the great mining producers of diamonds, or the alluvial diggers. Self-interest in the shape of its predominating interest in the Premier Mine, which has been a fruitful source of revenue over a long period of years, and its care for the interests of the communities which have grown up around, and are dependent upon the mines, as well as the interests of the alluvial diggers, are a sufficient guarantee that the Government will use the greatest discretion in dealing with this matter. These results I submit are a complete vindication of the Government’s policy, a policy which was initiated in order to preserve for the inhabitants of this country the whole of the wonderful mineral wealth of that area, and a policy initiated in the face of strenuous opposition of the Hon. members opposite. I now pass on to give to the House some particulars in regard to agricultural and industrial production for the present year.

Unfortunately drought conditions continue to prevail in a number of districts, notably Namaqualand, Calvinia, aVn Rhynsdorp, Laingsburg, Prince Albert and the adjoining areas, also in Oudtshoorn and Calitzdorp. The effects have been extremely serious, and many persons have been reduced to poverty. In addition to steps taken to relieve immediate distress, the Government is contemplating measures for the rehabilitation of the agricultural industry in these areas, as it is certain that without some form of Government assistance, the rural inhabitants of these areas will never be able to restore their position. The continuance of drought conditions naturally puts restocking out of the question at present as a remedy. In other parts of the country than those I have mentioned, and notably in the fruit areas of the Western Province, the rainfall has been inadequate, and this, coupled with the prevalence of dry, hot winds, has unfavourably affected the fruit crops. Despite these setbacks, our agriculture is, on the whole, progressing steadily. The position regarding wool remains good, and we may look to increased production of this staple commodity owing to the increase in the number of woolled sheep.

As regards maize, last season’s crop was considerably better than that of the preceding season, and the preliminary estimate of this season’s yield is 20,000,000 bags. This estimate must be taken with reserve as unfavourable conditions in the meantime make it doubtful. The area planted is considerably greater than that of last year, and our farmers are using more fertilizers. Serious consideration is being given by the Minister of Agriculture to the question of putting the dairy and cattle industries on a proper footing, and a commission was recently sent to the Argentine to examine the position there. The Minister is also lending assistance in the matter of finding a satisfactory market for tobacco overseas.

With regard to industrial development, there has been a further gratifying increase in employment in the secondary industries of the Union of 14 per cent, in the number of Europeans and about 9 per cent, in the number of non-Europeans during the period of three years and four months from July. 1925, to November, 1928. This increase of 14 per cent, in European employment refers merely to those factories which were in existence in July, 1925. The increase in the total population of the Union during that period was hardly 7 per cent., or only one-half of the increase in European employment in factories which were in existence when the new tariff came into force. As regards non-European employees, there was also a substantial increase, though appreciably less than in the case of European employment, and this is also fully in accordance with the Government’s policy of protection. Secondary industries are expected to provide more work for non-Europeans as well as Europeans, but more rapidly in the case of the latter. Taking the year 1928, there was an increase of 4 per cent, in European employment in the existing factories, while the number of new premises registered for manufacturing purposes was 623. As regards the future, there are strong grounds for expecting considerable industrial expansion. Various developments which the Government had for several years endeavoured to bring about are only now coming to fruition. For example, the customs duties on cotton blankets and baking powder were raised in 1925 with the express purpose of inducing some of the overseas manufacturers concerned to establish themselves in the Union, and during the four years which have elapsed, the manufacture of these articles has been taken up in earnest by a few local firms. It is only now that the world’s largest manufacturer of baking powder, and one of the principal manufacturers of cotton blankets in Europe have definitely decided to erect large factories in the Union, not only for the manufacture of these articles, but also for various allied products, and not only for the Union, but also for the neighbouring territories—and in the case of baking powder, even for the East.

Moreover, the preliminary steps for the manufacture on a large scale of iron and steel and products thereof, and also of ferro-manganese, have been taken in hand, whilst everything possible is being done, through the proposed establishment of a Fuel Research Institute, and in other ways, to promote the extraction of oil from our vast resources of cheap coal. The diamond-cutting industry, which has also been taken up in real earnest, as a result of further inducements furnished by this Government, bids fair to become an important source of European employment. In connection with the industrial development, it may be mentioned here that the highly satisfactory advance in recent years has been achieved along with substantial improvements in wages and other labour conditions in several of our largest industries, either under the Wage Act or under the Industrial Conciliation Act. For example, the clothing and sweet-making industries show large increases in European employment since 1925 of 68 per cent, and 53 per cent, respectively. Moreover, industrial council agreements have been introduced in the printing, leather and furniture industries, all of which have undergone considerable expansion during the past four years.

With regard to the contention of the Opposition that the rate or level of customs taxation has been raised from 12.6 per cent, in 1924 to 13,3 per cent, in 1927, it must be stressed that the rise in the proportion of customs revenue to the value of imported merchandise by no means proves that the ordinary consumer has been called upon to bear an increased customs burden. The increase is attributable to an increase in the duties on articles of luxury and other articles which are equally suitable for special taxation through the customs tariff. Whereas the increase in the total value of merchandise imported into the Union in 1927 compared with 1924 was only 16.2 per cent., there was an increase of 41 per cent, in the case of motor-cars and parts thereof, 100 per cent, in the imports of petrol, and 140 per cent, in the imports of tyres and tubes. These three items account for an increase of £550,000 in customs revenue over and above the average increase of 16 per cent., and that excess amount by itself would be sufficient to raise the average rate of customs duty from 12.6 per cent, to 13.3 per cent. Moreover, in respect of jewellery, gold and silver plate, clocks and watches, fancy goods, etc., there was an increase of 21 per cent, between 1924 and 1927, i.e., about 5 per cent, more than the average increase. On the whole, therefore, although increased protective duties have been imposed on a large number of articles, the general position of the poorer, as distinguished from the wealthier, consumers has been considerably improved since 1924. In fact, the revision of the tariff in 1925 was designed in no small way to shift a part of the burden from the poor to the rich, and since that time various reductions in duties have been brought about mainly with a view to reducing the cost of living to the ordinary consumer.

The number of awards made to the 23rd February, 1929, was 33,000, and the estimated number to be made to the 31st ultimo, 2,700; a total of 35,700, which is made up of 25,000 whites at the maximum of £30 per annum— £750,000; 2,100 whites at an average of £20 per annum—£42,000; 8,300 coloured at the maximum of £18 per annum—£150,000; 300 coloured at an average of £10 per annum—£3,000; total, £945,000. One-fourth of this sum is £236,000, which is accordingly the liability for the first quarter of 1929. It is unlikely, however, that all payments will be made by the 31st of this month, so that there will be a carry-over into next year, and the provision of £225,000 will probably suffice for 1928-’29. For 1929-’30 it is expected that the net increase will be 4 per cent, on the 1928-’29 position, so that the provision required, including the small carry-over, will not be very far short of £1,000,000. As far as possible oudstryders’ pensions have been transferred to old age pensions. Some of them will, however, not be qualified for old age pensions, and will have to be dealt with under the existing head. A number of cases have come to light where persons, though they have lived in South Africa for many years, have not been naturalized and are still aliens. There are some very hard cases amongst them of aged persons who have given good service to this country in their time, and I am sure that Parliament will endorse my proposal to deal with these cases by means of a Governor-General’s warrant, pending provision being made for them by amendment of the Old Age Pensions Act, or other legislative authority.

It has been decided to co-operate with his Majesty’s Government in the United Kingdom in connection with a scheme which has been proposed for the establishment of a regular weekly air service for passengers and mails between England and the Union via Egypt, with stoppages at several points between Alexandria and Cape Town. The journey will occupy about 12 days. Details of the scheme have yet to be arranged, but sufficient preliminary work has been done to justify the hope that in about two years’ time South Africa may be the first dominion to be linked to London and Europe by air. A considerable subsidy will be necessary for a period of five years. Great Britain proposes to finance the scheme to the extent of more than half the subsidy required. Contributions will be made by the Sudan, Kenya, Uganda, Tanganyika and the Union, and it is hoped to obtain contributions from other African territories concerned.

I will now give to the House a few figures in regard to our trade and production in 1928. The total value of all exports in 1928 was £96.800,000 compared with £96,200,000 in 1927, an increase of £600,000 only. The principal increases on the 1927 export values were as follows: Maize, £2,252,000; hides and skins, £863,000; gold, £521,000; sugar, £206,000. The principal reductions were as follows: Diamonds, £3,400,000; wool, £267,000. The maize exports reached £3,932,000, and reflect a good season, but one which falls short of the record season of 1925 by £1,500,000. The increased value of hides and skins exported is due entirely to higher prices. The sugar exports increased from 60,000 tons in 1927 to 84,000 tons valued at £990,000 in 1928; practically the whole of this was shipped to the United Kingdom. The whole of the export cannot be regarded as a surplus production since 14,000 tons of sugar were imported into the Union from Mozambique and the United States of America. The quantity of wool exported during the twelve months was less than in the preceding year, but I think this reduction is due to shipping arrangements rather than a reduced production. The price realized was appreciably better in 1928 than in 1927. The exports of fruit were satisfactory on the whole, a reduction in the export of citrus fruits being offset by an increase in the export of deciduous fruits, while exports of dried fruit, notably raisins, showed a large increase. I shall refer briefly to the mineral production later.

The imports of merchandise were £79,000,000 or £5,000,000 more than in 1927, an increase of just under 7 per cent. In addition, Government stores to the value of £3,600,000 were imported, compared with £3,300,000 in 1927. The number of motor-cars imported again shows an increase of 1,272 (from 17,025 in 1927 to 18,297 in 1928), and the number of motor-car chassis imported for assembling have increased by 50 per cent., from 4,702 in 1927 to 7,194 in 1928. There was again a large increase in the quantity of motor spirit imported, viz., 1,312,227 gallons (from 37,794,584 gallons in 1927 to 49,106,811 gallons in 1928). There were satisfactory increases in the quantities of agricultural machinery and implements and of fertilizers imported. Trade with neighbouring states has continued to improve, and reached £5,200,000 or £400,000 more than in 1927. Union manufactures account for £2,500,000 of this trade.

The principal feature of the statistics of mineral production for the year 1928 is the large reduction which has taken place in the production and sale of diamonds, other than the Namaqualand stones, as compared with 1927. The production of mine stones fell by 131,000 carats and £577,000 value, while the production of alluvial stones fell by 1,110,000 carats and £2,787,000 value, a total reduction of £3,364,000 value. The sales corresponded roughly with the production. The average value of mine stones was considerably lower in 1928 than in 1927, while the average value of alluvial stones increased slightly. The production of gold increased by nearly £1,000.000 to just on £44,000,000, and the production of platinum increased by nearly £100,000 to £241,000.

Asbestos again shows an increase, reaching £400,000 in value. Other changes in mineral production were not material. The decrease in production for the year, excepting Namaqualand diamond production, was £2,383,000. I hope the House will appreciate the difference between the production of the State diggings and the production of ordinary alluvial diggings in economic results. The former has been produced at a trifling cost, and the proceeds have been sufficient to cover expenditure which would have been incurred in any event, and would otherwise have been provided for by borrowing. The proceeds of the latter, on the other hand, go into circulation and are spent very rapidly, so stimulating business and trade, and indirectly producing revenue to the state.

I now come to revenue and expenditure for 1929-’30. In framing estimates of revenue for the coming year, I propose to allow for normal increases under various heads, with the exception of customs and excise duties. In the case of customs duties, I propose to allow for a reduction of £500,000 on the collections for the current year, and to put the revenue for next year at £8,800,000. I feel that the importations for last year have been rather on the high side, and we cannot lose sight of the fact that, although our export figures show a slight increase, there has been this remarkable increase in our imports, and one cannot help having a suspicion that we have not only been over-importing, but that a large proportion of the population are actually living beyond their means, and it is not safe to assume that this rate of importation will continue. In the case of excise duties, I am allowing for a small reduction of £35,000. On the basis of these reduced figures for customs and excise, and allowing for normal expansion under other heads of revenue and a definite improvement in diamond revenue, and allowing for sales of stones from the State diggings of £2,500,000— approximately the amount of this year’s sales— the revenue for the year is estimated to be £31,063,000, including £100,000 for reparations receipts which, in terms of the law, is applicable to debt redemption, and has been included in the estimates of expenditure. The expenditure, according to the estimates laid on the Table, will be £29,697,000.

It will probably be necessary to submit supplementary estimates for some £250,000, as experience is showing that the provision for old age pensions is not quite adequate, and there will probably be additional charges on revenue account in respect of relief of distress and in respect of boring, which, as I have explained, the Government intends to expand substantially. Accordingly, I put the figure for expenditure at approximately £29,950,000, giving a surplus for the coming year of £1,113,000.

The figures for revenue include an estimate for income tax based on the full amount payable, that is to say, they do not allow for the rebate of 20 per cent, granted last year in respect of the 1928 tax. That rebate will, however, be continued, involving a surrender of £800,000. In addition, I propose the following concessions in respect of income tax—(a) an increase of the allowance for children from £60 to £75, and the raising of the age limit from 18 to 21 years without any qualification. This involves a surrender of £60,000 for a full year. (b) The treatment of widows and widowers as married persons for the purposes of abatement. This, I am sure, will remove a long standing grievance and will only involve a surrender of £20,000 for a full year.

(c) The allowance to farmers of the following items of capital expenditure incurred in the year of assessment as a deduction on income account, namely, (1) expenditure on buildings used in connection with farming operations other than those used for domestic purposes; (2) expenditure on dipping tanks, dams, boreholes and fences; (3) expenditure on the prevention of soil erosion and the eradication of prickly pear and other noxious weeds. These allowances involve a surrender of £80,000 for a full year, (d) The total cost of these income tax concessions for a full year is £170,000, of which £140,000 will fall in the next financial year. But if you add the 20 per cent, rebate, the surrender of income tax amounts, accordingly, to £940,000.

Regarding customs duties, I propose a number of reductions of duty on articles of household, personal and industrial use, which are not produced in the Union, and, in some cases, abolition of the present duty. These articles, the duties on which I propose to reduce, comprise woven piece goods, goods made of silk, artificial silk and linen; underclothing, except shirts and knitted wear. (I except shirts because they are already made here, and knitted goods, because we hope they will shortly be made here.) Then we have carpets and floor coverings, gas and electrical cooking, heating and cleaning apparatus. The articles the duties on which I propose to abolish are threads and yarns, trek chains and chains for hauling and fittings for these and power paraffin. The total amount to be surrendered in respect of customs duties on the above articles and some others is about £231,000. This is another concession to that deserving individual—the agricultural farmer. The total amount surrendered is £231,000.

I am also proposing to rebate the excise duty of 1s. per hundred pounds on sugar in respect of sugar used for manufacturing purposes in the Union. This will assist the manufacturer of jams, canned fruits, confectionery and condensed milk, and involves a surrender of £16.000. I propose to reduce the duty on spirits of whatever description used by public hospitals to 7s. 6d. per gallon, which is the rate of duty on spirits used for industrial purposes. This will involve a surrender of £15,000. The amount to be surrendered in respect of customs and excise is about £262,000 for a full year, and £172,000 for the period of this financial year during which the reductions will be in operation. The effect of these surrenders of revenue will be to absorb the whole of the surplus of £1,113,000 shown by the estimates. That finishes the financial statement, and I wish to make only a few concluding remarks. The present financial year will bring to a close five years of responsibility borne by me for the finances of the country. Who can deny that the public are justified in looking back with substantial satisfaction at what has taken place during that period? From the time the Government has taken office there has been a forward and an upword movement, and every year has shown South African industry, commerce and finance in a more favourable position than ever before. There is a general spirit of contentment and optimism prevailing. It has been my constant aim to maintain the finances in a position calculated to strengthen the economic resources of the country. I have always sought to check expenditure involving extravagance wherever that was found in the administrative services of the country, without adopting a penurious and cheese-paring policy and a refusal to supply public needs. Our unproductive debt has been largely reduced with a consequent easing of the interest burden on the people. The national credit has been strengthened. To this regular and successive surpluses have contributed.

Although the annual expenditure has had to be increased by a comparatively large figure to supply the needs of our developing country, the revenue has been more than sufficient, without resorting to an increase of taxation. On the contrary, six successive tax reductions have left in the pockets of the people a sum of approximately £6,000,000 sterling, which would have been payable if our taxation Acts in 1924 had been taken unamended. 25,000 people have been relieved of all direct Union taxation, and the liability of 60.000 other people has been reduced. This reduction of taxation means more income in the hands of the people and helps to provide funds for the building-up of the capital of the country and also to increase its productive capacity. It is not my desire to claim any special credit for the result which has been achieved beyond to mention the undisputed fact of a wise Government policy being predominant. Whatever criticisms may be levelled, the satisfactory position of the country and the sound position of its finances are a sufficient answer and proof.

On the motion of Mr. Duncan, debate adjourned; to be resumed on 18th March.