I move—

That the Bill be now read a third time.

When this matter was discussed in the Committee of the whole House, certain points were put to the hon. the Minister relating to the complete exclusion of all persons studying at the Inns of Court to be barristers of Great Britain and Scotland and Ireland. The Bill completely excludes these persons, not only those who in the future may pursue such a course of study, as we understand it, but it excludes also those persons who are at present studying at these Inns of Court and who, having no notice of this Bill, could be adversely affected. The hon. the Minister has undertaken to give consideration to these suggestions, then to move suitable amendments in Another Place if they can be devised. Sir, we only dealt with a few of them, but since the Committee Stage of this Bill further aspects have come to our notice, particularly one relating to the attitude of the medical profession towards professional qualifications obtained at oversea universities. We hope that the hon. the Minister will have regard to these as well and that he will find time to deal with these and to discuss them with the General Bar Council. My colleague, the hon. member for Durban (Central) (Dr. Radford), will indicate to the hon. the Minister exactly what sort of ideas we have in mind in this regard.

In the medical profession, contrary to what is thought by some Ministers in the Cabinet, or at least one, there is a very liberal outlook as to the type of qualification that is necessary in the medical profession. Our outlook in the medical profession is not quite so narrow as it has to be in the legal profession. Members of the legal profession do not have quite the same continental outlook that we have. We have found that it is a good thing to have men of the profession educated in as many countries as possible; we believe that we should get all the different points of view, and special provision is therefore made for South African citizens by birth to go to any recognized medical school in the world. Before he goes, of course, he informs the Medical Council that he wishes to go to a certain school of medicine; the medical council will then, in its wisdom, vet the school as far as it is possible to do so and give its consent. The result of this is that there are in South Africa to-day men who studied at nearly all the great medical schools of the world. I would suggest to the hon. the Minister that he should see whether it is not possible for him to give effect to a similar liberal point of view in regard to those aspects of law which are not narrowed down to the special statutes of this country.

As I told the hon. member for Durban (North) (Mr. M. L. Mitchell) earlier, I have noted his attitude. Since then another hon. member has also discussed this matter with me in connection with a personal case and I can only tell hon. members once again that I hope to be able to communicate telephonically with the Bar Council during the course of the day and to discuss the matter with them as well as with my Department. I shall consider the representations made by hon. members as favourably as possible. I am not concerned with the position of foreigners because I have no obligation towards them, but I do have an obligation towards those South African citizens who may possibly be affected by this Bill and who have obtained certain vested rights in this connection. After having obtained all the information which I hope to obtain to-day I shall discuss the matter again with the hon. member for Durban (North) and other hon. members who have discussed the matter with me, and if I find it necessary and desirable to do so I shall move an amendment in the Other Place to give effect to the hon. member’s request.

Motion put and agreed to.

Bill read a third time.

I move—

That the House go into Committee of Ways and Means on taxation proposals.

House in Committee:

Proposals on customs and excise duties:

I move—

That, subject to the provisions of an Act to be passed during the present Session of Parliament—

1. (A) the provisions of a proposed Customs and Excise Bill to provide for the levying of customs and excise duties, the prohibition and control of the importation or manufacture of certain goods and for matters incidental thereto, laid upon the Table of the House of Assembly to-day, be substituted for the provisions of the Customs Act, 1955, and of the Excise Act, 1956;
2. (B) the anti-dumping duties imposed by the Minister from time to time by notice in the Gazette under the provisions of the Customs Act, 1955, be incorporated in the said proposed Customs and Excise Bill in the form of the proposed Schedule No. 2 laid upon the Table of the House of Assembly to-day;
3. (C) the customs duty on the following goods which are at present admitted free of duty or at reduced rates of duty in the circumstances or for the purposes or uses stated hereunder, be increased to the same level of duty otherwise applicable to similar goods and that a rebate of duty to the extent of the increase in duty be provided for in respect of such goods when entered in the circumstances or for the purposes or uses aforementioned:

1. (D) the customs duty on the following goods be adjusted in the manner indicated below to facilitate transposition of the provisions in question to the customs tariff based on the Brussels Tariff Nomenclature to be incorporated in the said proposed Customs and Excise Bill:
   1. (1) When goods in retail packings are dutiable by weight, assessment of duty shall be based on the retail legal weight of such goods except where otherwise provided;
   2. (2) Amendment of the duty formula in respect of active yeast in a form other than dried or compressed yeast and in respect of all inactive yeast from various rated duties based on solid content to a duty of 5% ad valorem;
   3. (3) Increase of the duty of 27 ½c per 100 lb. provided for under tariff item 35(4)(e) (ii) in respect of ground or prepared leguminous seeds not being beans, lentils, maple peas or garden peas, to 37 ½c per 100 lb.;
   4. (4)Amendment of the duty formula in respect of liquid medicinal preparations, essences, syrups and tinctures, including those made from wine—
      1. (a) classified under tariff item 50 (d) (i) of a strength between 3 per cent and 100 per cent proof spirit, from 25% ad valorem or 385c per imperial gallon to 25% ad valorem or 656c per gallon absolute alcohol, whichever duty is the greater in each case; and
      2. (b) classified under tariff item 50 (d) (iii), containing more than 50 per cent by weight of propyl alcohol, from 25% ad valorem or 375c per imperial gallon plus 27 ½c per imperial gallon for each multiple of 5 per cent or part thereof in excess of 50 per cent by weight of alcohol to 25% ad valorem or 650c per gallon, whichever duty is the greater in each case;
   5. (5) Amendment of the duty formula in respect of collodion and iodiser classified under tariff item 50 (e) from 375c per imperial proof gallon to 10% ad valorem;
   6. (6) Amendment of the duty formula in respect of propyl alcohol classified under tariff items 50 (i) (i) and (ii), from 375c per imperial gallon plus 27 ½c per imperial gallon for each multiple of 5 per cent or part thereof in excess of 50 per cent by weight of alcohol, to 650c per gallon;
   7. (7) Increase of the duty from 25% ad valorem or 2c per square yard provided for under tariff item 63 (6) (ii), in respect of mats and matting of coir, sisal and similar hard vegetable fibres not being pile fabrics to 25% ad valorem or 2½c per square yard, whichever duty is the greater in each case;
   8. (8) Increase of the duty in respect of knitted openwork fabrics classified under tariff item 71, to the same level as the duties on knitted fabrics classified under tariff items 76 (7) (a) and (b), 78 (6) (e) (i). (ii) and (iii), 78 (7) (b) (ii) and 80 (4) (b);
   9. (9) Increase of the duty in respect of canvas piece goods of more than 10 ounces in weight per square yard whether or not painted or surface coated, classified under tariff items 75 (1) (a), (6) and (d) to the same level as the duty in respect of coated or impregnated fabrics classified under tariff item 72 (a);
   10. (10) Increase of the duties in respect of all fabrics containing in their composition any fibres in respect of which no single fibre taken separately exceeds 50 per cent by weight, classified under tariff items 80 (4), 80 (5), 80 (6) and 80 (7) to the same level as the duties in respect of fabrics provided for under items 76, 77 and 78, when predominantly constructed of cotton, wool and man-made fibres, respectively;
   11. (11) Amendment of the duty formula of 2½c per gross provided for under tariff item 98 in respect of crown corks and similar stoppers, not being screw stoppers and swing stoppers, to 5% ad valorem;
   12. (12) Increase of the duty in respect of unspecified lamp ware classified under tariff item 116 (g) from 15% ad valorem to 20% ad valorem;
   13. (13) Amendment of the duty formula in respect of rails and sleepers, not made of wood, for tramway construction, classified under tariff item 148 (2) from 3% ad valorem to 50c per 2,000 lb.;
   14. (14) Amendment of the duty formula in respect of empty glass milk bottles classified under tariff items 160 (c) (i), (ii) and (iii) from 7½c, 10c and 15c per gross, depending on the capacity of the bottles, to 15% ad valorem;
   15. (15) Amendment of the duty formula of 20% ad valorem provided for under tariff item 171 (h) (ii) in respect of mirrors with a free-on-board price between 10c and 12½c to 20% ad valorem or 2½c each, whichever duty is the greater;
   16. (16) Amendment of the duty formula in respect of sweet dishes and ash trays of china, earthenware or porcelain classified under tariff items 172 (c) (ii) and 308 (6) from 20% ad valorem or 50% ad valorem with a minimum of 30c each to 585c per 100 lb. with a maximum of 20% ad valorem or 1000c per 100 lb. when imported from most favoured nation countries and from other countries, respectively;
   17. (17) Amendment of the duty formula in respect of floor tiles prepared on a base of paper or paperboard, with or without a coating of linoleum compound classified under tariff item 186 (d) (ii) from 20% ad valorem to 20% ad valorem or 5c per square yard, whichever duty is the greater;
   18. (18) Increase of the duty from free provided for under tariff item 194 in respect of manganese resinate, to 15% ad valorem-,
   19. (19) Amendment of the duty formula of 20% ad valorem provided for under tariff item 200 (/) in respect of mineral oil not being hydraulic transmission fluids, paraffin, crude, insulating, gas, diesel or furnace oil, technical white oil or partly refined petroleum oil (including topped crudes) to 12083c per 1,000 gallons;
   20. (20) Amendment of the duty formula in respect of rubber pneumatic tyre covers and tubes, new or second-hand or used, classified under tariff item 260 (a) (i), (ii), (iii), 260 (b) (i) or (ii) when imported (one for each running and spare wheel) with motor vehicles, metal frames of trailers, and chassis referred to in the abovementioned items, to the same level as the duties levied on such motor vehicles, metal frames of trailers, and chassis;
   21. (21) Increase of the duty from 5% ad valorem provided for under tariff item 271 (5) in respect of hubs, rims, spokes, felloes, shafts, tentbows and poles, cut or fashioned, but not finished and not being for wagons and carts commonly used for the conveyance of goods, to 20% ad valorem-,
   22. (22) Increase of the duty from free provided for under tariff items 282 (1) (a) (i) and 282 (1) (b) (i) in respect of certain multi-walled paper bags to the same level as the duty in respect of paper bags of kraft, imitation kraft or semi-chemical paper classified under tariff items 282 (1) (a) (ii) and 282 (1) (b) (ii);
   23. (23) Amendment of the duty formula of 20% ad valorem in respect of printed, ruled, lithographed or embossed pocket diaries, letter-copying books, pin tickets and envelopes classified under tariff items 296 (d) (i), 296 (d) (ii) and 296 (e) to 20% ad valorem or 5c per lb., whichever duty is the greater;
2. (E) notwithstanding the provisions of Section 80 of the Customs Act, 1955, and of Section 9 of the Excise Act, 1956, the proposals contained in paragraphs (A), (B), (C) and (D) above, be not effective until the date of commencement of an Act incorporating the said proposals.

The proposals printed in the Order Paper are not taxation proposals in the usual sense of the word. They represent that part of the proposed Customs and Excise Bill which is required by the Standing Orders of the House to be considered in Committee of Ways and Means.

In the first place all provisions which have a direct bearing on the levying of customs and excise duties are required to be submitted to Committee of Ways and Means. It has been found to be more convenient to submit the full text of the proposed Bill to the Committee so that it can be dealt with as a whole.

The second portion included in the proposals is Schedule No. 2 which contains the anti-dumping duties. These duties have hitherto been imposed by notice in the Gazette but since 1959 the policy of showing all duties in one document has been followed for the convenience of the public. The anti-dumping duties have not conformed to this policy and the present position is not satisfactory in many respects. The anti-dumping duties in force at present will now be incorporated in the proposed Bill as Schedule No. 2. The Minister will be empowered to amend the Schedule on the recommendation of the Board of Trade and Industries and the amendments will be submitted to Parliament annually for approval. The benefits will be that anti-dumping duties will be found in one place in a logically arranged schedule which will always be up-to-date. At present several Government Notices have to be referred to in order to ascertain the position in regard to a particular commodity.

The proposals also refer to certain goods which appear in the tariff schedule at reduced rates of duty or free of duty when imported or used for particular purposes. These items are left-overs from the more care free days when the Customs Act had only one Schedule.

The Brussels Tariff Nomenclature rightly does not recognize end use as a criterion for distinguishing between like commodities in the tariff schedule and the items in question will be transferred to the Rebate Schedules where rebates of duty will be provided to the full extent of the privileges presently enjoyed. In so far as the tariff schedule is concerned, this transfer represents a theoretical increase in duty and the details are required to be submitted to Committee of Ways and Means. In Schedule I, in other words, there will be an increase of duty, but the rebates in the rebates schedules will rectify the whole position and there is no actual increase, but because there is this theoretical increase in Schedule I, it has to be brought before the Committee of Ways and Means.

Mr. Speaker, the proposals finally refer to certain commodities in respect of which duty adjustments had to be made to make transposition to the Brussels Tariff Nomenclature possible, but only those cases where an increase of duty, even if it is only theoretical, or a change in duty formula is involved, are included in the proposals to comply with the requirements of the Standing Rules and Orders. In most cases duties have been adjusted downwards where adjustments could not be avoided.

In many cases, however, there are practically no importations of the goods in question, or an adjustment of the rated duty of a duty formula would not affect the position because prices are so high that only the ad valorem rate of the formula applies. In other cases there were considerations which prevented downward adjustment of the duties.

Mr. Speaker, I shall deal more fully with the general principles of the Bill at the second-reading stage when the Bill as a whole will be available. I would like to state at this stage, however, that the proposals here concerned will not come into operation immediately as is normally the case. In addition, the Bill includes a provision which empowers the Minister to adjust genuine mistakes by notice in the Gazette provided such adjustments are later submitted to Parliament for approval. It has furthermore been decided to postpone the date of commencement of the Bill until the regulations have been published and details of the change-over have been worked out. The public will therefore have an opportunity of getting acquainted with any new provisions before they are put into operation.

The public has reacted well to the invitation to comment on the draft Bill published for information during January and their representations have been taken into consideration as far as it was possible to do so. It is not expected that serious mistakes will come to light when the Bill is brought into operation and if any mistake is detected later, it can be adjusted immediately.

Sir, we have the Ways and Means proposal this year on the instalment system. When the Minister introduced his Budget it was immediately followed by his customary resolution that the Committee go into Ways and Means, and he then Tabled his Ways and Means proposal; that was the first instalment. Later on we got another instalment and now we have this one. I hope that in the future the Minister will be able to avoid this. We realize that there are special circumstances in view of the fact that there are major alterations to the Customs and Excise Bill and that this is therefore necessary. We hope that in future the Minister will not give us Ways and Means on the instalment system. I hope we shall know what all the taxation proposals are when he introduces his Budget. It is most unsatisfactory, particularly at this time of the Session, to try to deal with this in detail. In the course of his statement the Minister said that in many cases these would not result in an increase in duty. A day or two ago the Minister gave us explanatory notes dealing with the proposals and he also made one of his senior officials available to us, an official who was very helpful. We greatly appreciate that. At this time of the Session it is impossible to test the effect of the various proposals. The Minister says they will not result in an increase in duty because there is provision for rebates. Unless we have the opportunity of contacting the interests concerned to find out whether their possible objections have been fully met we cannot say with any degree of confidence that that statement can be accepted by us. We are in this position of having to accept the Minister’s assurance that the persons concerned are in no way prejudiced. It is going to take some time before the persons concerned will fully appreciate the significance of these new proposals as they affect their particular businesses. The Minister published the proposed Bill for general information last January. All persons concerned were given the opportunity of objecting or making further proposals. During the past six months various people have had the opportunity of coming to the Minister’s Department and giving the Department the benefit of their advice and comments. The Minister will know from experience that the actual test will come, not as a result of the publication in the Gazette of a long schedule for general information, but when these duties are applied. It is when the shoe pinches that the person concerned decides whether it is a pair of shoes suitable for him and not when he sees the shoes in the shop window. For that reason I think the test will come when these proposals are applied.

I do not propose to take up the time of the Committee at this stage; we shall have time to go further into this matter when the Bill is discussed. I do hope, however, that in future, when the Minister publishes his Budget proposals if he has any idea that further proposals are coming, he will indicate that at the time. We had the first instalment in March; this is the third and I hope the last instalment of Ways and Means proposals. I appreciate what the Minister has said namely that there are special considerations having regard to the complete revision of the Schedule to comply with the Brussels Nomenclature but I think it is essential that should the Minister have material alterations for consideration in future those should be indicated at the time when he makes his Budget speech. If he is not in a position to do so when he makes his Budget speech to give details he should indicate that that is his first instalment and that a second, third and perhaps a fourth instalment is to come. The country will then be warned; the Opposition will be warned and we shall not have proposals of this kind placed on the Order Paper, as they were, on 9 June to be considered a day or two later. We are not opposed to these proposals, Sir, at this stage. But we shall deal with them in greater detail when the Bill is before us. I do suggest to the Minister that he should realize that, while we have his assurance that the objections of the parties concerned have been considered, it would have been much better had we had an opportunity of contacting the parties concerned to see whether their objections had been met. I know the parties concerned have seen the Minister’s Department but it is possible that there are many people who do not know how these proposals will affect them, people who are in business in a big way, people who have the staff available to go through this long Schedule to see how the proposals affect their particular interests. I am quite certain the Minister has not studied this in detail—he leaves that to his Department. Outside the Minister I doubt whether there is anybody on the Government side who knows anything about this at all.

I want to give my wholehearted support to the suggestion that it will never again be necessary to have Ways and Means proposals in instalments.

You feel guilty, do you?

I am expressing the hope that it will not again be necessary in my time to have a transposition to a Brussels Nomenclature or any other nomenclature! It is all part of that process. We must realize that it is not in order to get additional revenue. The whole object is to serve the convenience of the public. The whole object is to cut out all the unnecessary administrative work and unnecessary wastage of labour. We are trying to give the interested parties something, which was and still is very intricate, in a more palatable form, in a more understandable form, a form in which they can digest it quickly. The idea is that the whole Bill with the Schedules, which will ultimately be presented, will be printed in one volume of the Statutes. It will be a convenient handbook for those who are interested.

We tried to reach all the interested parties by publication of this Bill in January; we had discussions with interested parties. Their comments have been carefully considered. But there is also a certain measure of elasticity in this Bill. I agree with the hon. member for Pinetown (Mr. Hopewell) that the test of this Bill will be in its application. If there are any difficulties in its working, we shall not be without remedy. It will not be necessary for us to wait till the next session of Parliament to make an amendment. There is provision to remedy those defects. I think the Department deserves to be congratulated on the way in which they have tackled this job which is a job of tremendous proportions. They have tried to make the task of the people who have to do with imports much easier than it used to be. After all, our whole economic development has been tremendous. When you compare the imports of to-day with those of ten or 20 years ago, you appreciate how tremendously our imports have risen. It is not only that our imports have increased in volume, but the pattern of imports has also changed considerably. We are mostly importing capital goods, and not so much consumer goods. The whole tendency in the world to-day is to get rid as far as possible or to reduce duty on consumer goods. In the case of South Africa, which is a developing country, capital goods, from the nature of things, have never been subject to any tariffs. As I say, the whole pattern has changed, and we have been trying to keep abreast of that change. That pattern is still changing; it is changing every day. We have provided means which will enable us to keep abreast of those changes. I think the hon. member for Pinetown and other members will agree with me that the Department of Customs and Excise have done a very good job indeed.

I agree with the Minister that the Department of Customs and Excise…

Order! I want to point out to the hon. member for Pinetown that he should not state any objections now. He should have stated his objections when the Speaker was in the Chair. I think he must leave it at that.

I do not wish to state objections, Sir. I just want to say that I appreciate the work the Department has done. I agree with the Minister’s observations in that regard.

I want to deal with the first two items on page 606, Tariff Items 1 (d) (i) and (2) ex 1 (e) just for the sake of the record. Both these proposals provide for duties on the importation of thoroughbred horses in the case of 1 (d) (i), and pedigree cattle, sheep and goats for breeding purposes in the case of (2) ex 1 (e). The Minister indicated earlier that there was provision in the Bill still to come before us for a system of rebates. While these items indicate at first glance that duties will be imposed where the persons concerned are registered breeders, they will be able to apply for a rebate as provided for in the Bill, provided they can satisfy the Department of Customs and Excise that the animals concerned are imported for breeding purposes. I should like the Minister to clear that up for the record.

Paragraph (c) says “and that a rebate of duty to the extent of the increase in duty be provided for in respect of such goods…." So provision is already made for that. In other words, whenever there is an increase in duty in the tariff section, i.e. Schedule I, we have automatically, to the extent of that increase, provided for a rebate in the various rebate schedules. If there is anything that has escaped our notice, of course, we shall be able to adjust that.

Motion put and agreed to.

This clause seeks to amend Section 4 of the principal Act which deals with the objects of the council and with the functions it is expected to carry out generally. Broadly this is a very big improvement on the original Act. I wish to confine my remarks to sub-section (2) of this clause. The powers of the council are extended and fundamentally we have no objection to that. But we believe that in respect of the provisions of sub-section (c) where, if authorized by the Minister, the council can co-operate with certain authorities fulfilling certain functions (I wish to refer to one in particular, namely, the training of craftsmen and skilled artisans) it is insufficient that the council should only co-operate with scientific societies or technical authorities. As far as I can see the only educational authority concerned in the training of craftsmen and skilled artisans are the technical colleges, I cannot think of any others. We know the extreme manpower shortage industry is suffering from to-day. I think the council itself, in developing new technological processes, could make a very useful contribution towards training craftsmen and skilled artisans at a greater pace than we are at the present moment. Under our existing industrial legislation those primarily concerned with the training of skilled artisans are the industries themselves, employee organizations and particularly the apprenticeship boards. This clause empowers the Minister to authorize the council to conduct investigations and to co-operate to the fullest extent possible with those authorities in order to achieve the ends for which this sub-section has been inserted in the Bill. I would ask the Minister that as employer and employee organizations have the final say in the training of skilled artisans he should empower the council as well to co-operate with those bodies which are primarily concerned with the training of skilled artisans, in other words, those who deal with the apprenticeship of skilled artisans. Quite obviously it would be impossible to write into this Bill that the council can only cooperate with an apprenticeship committee. What I suggest to the Minister is that he should also have this permissive power to authorize the council to consult with employer and employee organizations. I therefore wish to move—

I am not moving the amendment on the Order Paper because the law advisers feel that it will be more appropriate to add these words after the word “Republic" than as it appears in my amendment. The sub-section will then read—

I hope the Minister will see his way clear to accept this amendment.

I have had the opportunity of consulting the C.S.I.R. on this proposed amendment. They have no objection and I therefore accept it.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

On Clause 3,

I move as an amendment—

To add the following as a paragraph (b) at the end of the proposed new sub-section (4):

I wish to explain that I welcome the new principle established by this clause by which the existing provisions of Section 11 of the 1962 Act are considerably widened to the advantage of the inventor, because previously under the Scientific Research Council Act of 1962 the patent rights of discoveries and inventions by officers and employees of the C.S.I.R. or persons receiving grants or bursaries from the C.S.I.R. vested in the council; they were the property of the C.S.I.R. Clause 3 now widens the rights of the inventor. The patent rights in respect of a discovery or an invention or an improvement are now the property of the inventor and the C.S.I.R. can negotiate to purchase such a right from that person if it so desires or if the person himself or herself so desires.

But Clause 3 (4) (i) provides that the invention must not have been made during the course of working for the C.S.I.R. by the inventor in time during which he has been employed by the C.S.I.R. or be connected with knowledge he has obtained by working for the C.S.I.R.; knowledge he might have utilized for his own invention. The whole decision as to whether the time or knowledge utilized for this invention was connected with the inventor’s C.S.I.R. work is governed by the words “in the opinion of the Minister”. Here I feel it is better to leave the unfettered right of the Minister, i.e. “in the opinion of the Minister" as it stands in the clause, to make the decision without inserting the extra words “after consultation with the C.S.I.R.”. The words “in the opinion of the Minister" signify that the Minister will apply his mind to the problem before forming an opinion and the Minister must no doubt, in any case, consult with the C.S.I.R. before forming a decision because the C.S.I.R. is the interested body. The C.S.I.R. will bring the inventor’s case to the Minister’s notice in the first case for a decision. I feel it is better for the inventor for the Minister’s opinion to be independent. I understand that the C.S.I.R. concur in this.

I feel there is an important omission in this clause and that is a right of appeal for the inventor. The inventor may wish to appeal against what he considers an unsatisfactory decision. In his second-reading speech the Minister referred to the simple case of a typist inventing a knitting machine while in the service of the C.S.I.R. and negotiating with the C.S.I.R. as to the purchase of the patent or not. I would like to remind the Minister that there will be very much more complicated cases than this. A scientist or a chemist in the employ of the C.S.I.R. may not invent another radar surveying instruments such as the tellurometer or something of that nature, but he might well be working on fuel and invent a new valve for a motor-car. In that case it might be a very difficult task indeed to decide whether the knowledge obtained by working for the C.S.I.R. resulted in this invention or not. In cases where the Minister’s decision might go against the inventor and the inventor might feel aggrieved, I feel very strongly that the inventor and his intellectual property should be protected by giving him a right of appeal to a suitable court of jurisdiction provided such an appeal or application is made within 30 days of the Minister’s decision as laid down in Clause 3. I think the request for the addition of this amendment is a legitimate request and it will protect the scientist and his invention. In these days of grave manpower shortage the acceptance of this amendment will guard not only against any dissatisfaction on the part of the inventor in being deprived of the benefit of his brain-child, but will also prevent any loss of valuable staff, through dissatisfaction, or resignations from the C.S.I.R. I draw the Minister’s attention to the Exchequer and Audit Act of 1956, Section 18 (2), which has a similar provision. I would ask the hon. the Minister very seriously to consider the acceptance of this amendment which will improve this clause which is already improving the 1962 Act.

I wish to support the request of the hon. member for Johannesburg (North) (Mrs. Weiss). This is a very important appeal. We are dealing here with the imponderables, the thoughts of human beings, with inspirations which come to people at odd times, inspirations which may perhaps change the whole outlook of a country. Discoveries such as penicillin, for example, which was observed by Fleming for many years but not given the importance that it should have had until he happened to run into another man who discussed it with him. This sort of thing, particularly in scientific discoveries, is fraught with great difficulty. It is not only the financial benefit from an invention, but the benefit from a thought. It will not be easy for the C.S.I.R., nor even for the Minister, not even, for that matter, for a court to come to conclusions as to who really had the original thought. We have the case of the frog test for pregnancy in which there is still a dispute as to whether Hogben thought of it first or whether Schwegman, a worker in his department, thought of it first. We in the profession do not think Hogben deserves the credit, but nevertheless he still claims it. Things like that could affect scientists and professional men very much. It may mean the difference between a man getting great prestige from a thought which was somebody else’s thought and in that way obtaining a professorship or some other post which he would not otherwise have obtained. It is difficult to decide as to whose brain-child it is; who gave birth to this thought. In many instances these may only be improvements to laboratory instruments, but nevertheless they are of value in the question of prestige and not only prestige, of course, but in the question of finance. The ordinary person usually thinks about the financial gain involved but there are more things than that; there are things more important than financial gain. There is personal recognition; there is the satisfaction of knowing that your colleagues and other people in your own particular circle appreciate what you have done. It is not right that this type of decision should not be open to appeal. I hope the Minister will try to meet us in this respect by accepting the amendment.

Both the previous speakers have put very strong cases for the acceptance of the amendment. The purpose of the legislation we are dealing with is to preserve the right of the individual to claim the protection and the benefit of his own invention. The registration of a patent is a very valuable statutory protection and that protection should not be denied to any individual merely because he happens to be an employee of the S.C.I.R. The amending provision makes the Minister the person to examine the facts and to determine whether or not the employee has established that he is entitled to the benefit of his invention and that he is entitled to the protection which the law of patents gives him. As I say, someone must determine the facts of the matter, and I think it is perfectly right that the person to determine the facts at issue should in the first instance be the Minister. But no one, not even a Minister, is infallible. Rather than that you should be left with a disgruntled and dissatisfied official or that you might be left with a wrong decision, it is in the Minister’s interest, and certainly in the council’s interest, that the individual concerned should be able to submit his dissatisfaction by way of appeal to a completely independent body, such as a court is. The court is the established body in our constitutional arrangements to give a final determination in such cases and to settle the facts. I would therefore appeal to the hon. Minister to accept the amendment.

Clause 3 proposes to amend Section 7 of the existing Act of 1962. Now we find that the wording of Section 11 in the existing Act is identical with Section 11 of the 1945 Act. Since the beginning this restriction has been placed on employees of the C.S.I.R. and at the time when the original Act was passed the Opposition was responsible for it and they therefore accepted the principle that the S.C.I.R. employees had no right to their inventions. I think all hon. members agree that the proposed amendment is an improvement, and it is in fact a concession to the employees and the bursary holders of the C.S.I.R. In order to obviate court proceedings, which I do not think will ever take place in this connection, the present clause is specifically worded in such a manner that the Minister is the deciding authority, as it could be embarrassing to the C.S.I.R. to perform the role of a Judge on matters concerning itself and where it has an interest in the matter. Furthermore the procedure to be followed in terms of the clause as it is now worded will bring it into line with that employed in the Public Service, where the Public Service Commission is a recommending authority and the Minister of the Department concerned, the deciding authority. But in any case, the amendment proposed by the hon. member for Johannesburg (North) (Mrs. Weiss) was discussed with the law advisers. They pointed out that the proposed paragraph is quite unnecessary as any person who is not satisfied with a decision will in any case have a right to appeal to a court of law in terms of the common law. A dissatisfied employee will have that right in terms of the common law to go to court. So there is no restriction as far as that is concerned, and under the circumstances I regret that I cannot accept the amendment.

I accept what the hon. Minister has said, viz. that this clause is an improvement in that it widens the existing Section 11 under the 1962 Act. But I feel that while the inventor himself or herself might have the right of appeal outside this particular Act, I would prefer to see the appeal inserted in this clause as it stands, and while I accept the hon. Minister’s assurance, I would still like this clause to be amended.

I want to support the hon. member for Johannesburg (North) (Mrs. Weiss). The moral effect on the workers will be salutary. We have these workers of the C.S.I.R., some of whom spend their lives in the clouds. They don’t think in terms of courts. They don’t realize when they are discussing things that perhaps they should hide them under their hat and not tell anybody just as prepared speeches in this House. They discuss their thoughts freely. The man for instance who invented rustless steel let it be known, he discussed what he had discovered in Sheffield for quite six months, and that is why he made very little money out of it. Other people made the money. Similarly the man who discovered how to treble the production of penicillin had previously worked in a brewery and he knew how to get things to ferment rapidly. But he did not make anything of it, because somebody else saw him doing it and patented it. That sort of thing happens among scientific people, among people who don’t think of hiding anything they know. In medicine it is considered most unethical to hide anything you know. But that does not hold good in other professions, and therefore I think the hon. Minister and the Scientific Research Council should realize that perhaps they should take extra care, and also the man who does discuss these things would at least see it in the legislation and it would give him moral support.

I am not going to argue that it is possible in common law for such a man to appeal. I don’t know. I am completely innocent of that sort of knowledge. Nevertheless, I must say that this is something which goes beyond the ordinary things of life, it is something which deals with people who perhaps are geniuses and who will starve because they did not know that this was in the law. I think the hon. Minister would be well advised to do what we suggest, to restore confidence in workers in that institution.

I am very sorry that the hon. the Minister has not seen fit to accept the amendment. He rather surprises me that he should really confuse the procedure of review with the right of appeal. I accept that the legal advisers are sound draftsmen, but this is the Legislative Chamber and when a case is made out for a change in the legislation, I would have hoped that the hon. Minister would have applied his mind to it independently, and I should have hoped that he was capable of doing so. Because in this case arguments have been advanced on this side of the House to protect the individual. It is quite wrong to say that the C.S.I.R. is itself involved in legislation. There has to be a determination of facts, and we on this side of the House admitted the first determination should be in the hands of the Minister. It is a conventional method, and I have no distrust in him. But the individual concerned might have distrust and might be dissatisfied. Therefore to adopt what is a fair and a just method and making provision for appeal to a court is invaluable. I believe that there is another side to this issue and I think I should mention it. I don’t believe that the right of appeal will be exercised in many cases; I believe it will be exercised in very few cases. But I do know this that because that right of appeal is there, the Minister concerned, whoever he may be, will be more careful than ever. He will always endeavour to be fair and to make quite certain that the individual has no justified grievance and will not therefore have reason to use the additional escape line. I think reasonable arguments have been put to the hon. the Minister and I hope he will reconsider the matter and accept the amendment.

We are in full agreement as to the right these employees should have to appeal. There is no difference in our approach. The only difference is this that whereas he has the right in terms of the common law, we see no necessity to insert this amendment.

Not of appeal. Review, yes.

He has the right of appeal. I stated that in my opening remarks.

Explain it to us then.

I did explain it. The hon. member apparently did not listen. I explained that he had the right under the common law to appeal. I said: “In any case the amendment proposed by the hon. member has been discussed with the law advisers. They pointed out that the proposed paragraph is quite unnecessary, as any person who is not satisfied with a decision will in any case have the right of appeal to a court of law in terms of the common law." So he has the right to do so. Why should it then be inserted in this Act? There is no necessity whatsoever for it. The hon. member said that I should not follow the advice of the legal advisers.

I did not say so.

That I should make my own decision. Being a legal man myself, I prefer the advice of the law advisers to the advice of the hon. member.

Surely how can it be a right of appeal if there is only a right of review? The hon. Minister should realize that the onus on a person who takes a decision like this on review is far greater than when it is a question of appeal. It would not be simply a question of proving a fact. He will have to prove more than a fact. He will also have to prove that the C.S.I.R. in using its discretion did so not in a bona fide manner. So it is a much heavier onus. The hon. Minister says that there is an ordinary right of appeal and not only simply a right of review as the clause stands at the moment. What we are trying to do is to place it beyond doubt that there will be an ordinary right of appeal, and not only a right of review.

Amendment proposed by Mrs. Weiss, put and negatived.

Clause, as printed, put and agreed to.

On Clause 4,

This clause deals with the financing of the council and it is an improve on the original Act. There is one provision which I think should receive further consideration from the hon. Minister, and that is subsection (5) which provides that the council may invest any unexpended portion of its moneys. There is no qualification whatsoever. I am sure that the hon. Minister of Finance would not approve of this provision as it now stands, and I would like therefore to move the same amendment that I moved to the other Bill which was under consideration yesterday, and which is in keeping with one or two other measures which have still to come before the House for consideration. There should be a measure of control as far as the council’s right is concerned to invest any of its unexpended funds. I wish therefore to move—

I am prepared to accept the amendment.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

Remaining Clauses and Title of the Bill put and agreed to.

House Resumed:

Bill reported with amendments.

I move—

This Bill is the usual omnibus Pension Bill which is introduced practically every year. Hon. members have been furnished with a memorandum dealing with the Bill. All the proposals contained in the Bill are dealt with in the memorandum and I trust that hon. members, particularly those who take a great interest in pension matters, have carefully read the memorandum. I do not propose therefore to explain the various provisions of the Bill at any length. There are one or two matters, however, to which I want to refer just briefly. The first is the question of concessions to war and social pensioners.

One of the most important aims of the Bill is to give effect to the concessions announced in the Budget Speech by the Minister of Finance in respect of war and social pensioners. Twenty-two of the 33 clauses of the Bill deal with these concessions or amendments connected with them.

Provision is made in Clauses 2 and 11 for the payment of a bonus in respect of the supplementary or alternative pensions received by certain war pensioners whereas the amendments which are being made in Clauses 5 and 11, with one exception, will have the effect of increasing the attendant’s allowance, which is at present payable to certain war pensioners, by 20 per cent.

The attendant’s allowance of R120 per annum which is payable to certain non-White volunteers of World War I, is not being increased because it is equivalent at the present time to the increased attendant’s allowance which will be payable, in terms of the amendments contained in Clause 5, to non-White volunteers of World War II.

The cost of concessions to war pensioners will be R300,000.

As hon. members know, it is proposed to pay the special allowance which is at present payable only to certain social pensioners, to all those who are not receiving it at the present time. The cost of this concession will be R3,230,200.

Over and above his basic pension such a pensioner will then receive an additional pension, a bonus and a special allowance. It has been decided, however, to consolidate these additional benefits and to call the consolidated amount an allowance.

It has also been decided, with effect from 1 April 1965, to increase the total amount of the benefits payable to Indians up to the amount payable to Coloureds. The means limitation which is applicable to Indians will naturally be increased accordingly. These decisions are given effect to in the amendments contained in Clauses 13 to 25 (inclusive).

This Bill also amends certain provisions of the Government Services Pensions Act. These amendments are being brought about after consultation with the Public Service Commission and the Treasury and meet with their approval.

The amendment contained in Clause 7 is of an administrative nature. If, for example, a teacher who is serving under a provincial administration is transferred to the public service and elects to have his previous service counted as pensionable service for the purposes of the Public Service Pension Fund, the amount which has to be deposited into the Public Service Pension Fund has to be calculated. These calculations include the calculation of compound interest over many years; they are intricate and take up a great deal of time.

Tests have shown that it is feasible to introduce a much shorter and simpler method of calculating the interest, a method which gives the same results. By substituting the simple formula which is contained in the new paragraph (c) of sub-section (2) of Section 26 of the Government Services Pensions Act for the present time-consuming method of calculating interest, we will bring about a saving of time and staff.

Then we come to Clause 8. If a person in the employ of a provincial education department or the Railway Administration is transferred to the Public Service after 24 June 1955, he only has the right to retire on pension on reaching the age of 65 years in spite of the fact that in terms of the Act which governs his pension rights in the relevant province or in the Railway Administration he had the right to retire at an earlier age (in most cases 60 years in the case of men and 55 years in the case of women).

A public servant who was appointed in the Public Service before 24 June 1955, had the right, however, to retire on pension at any time after reaching the age of 60 years in the case of a male or 55 years in the case of a female.

It is now proposed to grant this right also to officials who are transferred provided they commenced their uninterrupted pensionable service in the employ of the authority concerned before 24 June 1955, and provided their period of service is recognized as pensionable service for the purposes of the Public Service Pension Fund.

In terms of the provisions of the Acts referred to in sub-clause (1) of Clause 31 members of the Public Service and certain Government pension funds have to retire on pension with effect from the day on which they reach the “pensionable age”. Since the birthdays of most of these members do not fall on the 1st day of a calendar month, their salaries, pension contributions, average pensionable earnings, etc., have to be calculated for fractions of a month.

In order to obviate this cumbersome method and to facilitate the calculations it is now provided in Clause 31 that if such members reach pensionable age after the 1st day of a calendar month, they have to retire from the service with effect from the 1st day of the next calendar month.

On this side of the House we naturally welcome anything which will help, even in a small way, the widows and pensioners and other humble people in the country. We would naturally have hoped that more relief would have been given, but on the whole we feel that fairly generous relief has been brought to these people. That it could be greater, I don’t think even the hon. Minister would deny. Nevertheless we will support this measure. We appreciate particularly the removal of the existing injustice to the widows of Parliamentary members who died before receiving their pension. We welcome also the adjustment in respect of the Indians. We feel that there never was any real justification for a difference between the Indians and the Coloureds. That is all to the good. We also feel that the clearing up of the somewhat mixed outlook of those people of retiring age has been arranged and put in good order. I personally would have hoped, and still hope that in the future the hon. Minister will make some provision by which people over 65 may continue their work without sacrificing pensions, or even getting an increase of pensions.

To what age?

To the age that they can work and render service.

Who is going to determine that?

That is not very difficult to do for a kind employer, and also if the work is accommodated to the individual. But that is a long story, how we should employ the aged. What we should appreciate, and particularly the hon. Minister’s Department should appreciate, is that the age to which men can work, and work well, provided it is adapted to their peculiar circumstances, is unlimited almost. I have seen carpenters of over 70 doing excellent work, highly skilled men. It is not unusual now for people of 70 to work in offices where they have worked for years, provided the responsibility is taken off their shoulders. I am not suggesting that a head of a civil service department on pension should remain working until he is 70 as head but he could quite easily serve very usefully after giving up his post as head of the department (as secretary of the department for instance) as a skilled and reliable and responsible clerk, knowing everything about the job. There is no loss of prestige in ceasing to be the head of a department under those circumstances. It is for this hon. Minister to persuade his colleagues that men can be relieved of responsibility but allowed to carry on to do high-grade work in a department. We must get away from this thought that a man is as old as the number of his birthdays. That is a primitive idea. People who study age and health have long ceased to consider that one can arrive at any reasonable conclusion by adding up the number of birthdays a man has had. In many cases we know of men who have deliberately deceived their employers about their birthdays. Some people, when they get to 60, start to count backwards, particularly women. Now how can the employer, especially the State-employer, just merely judge on that? Even birth certificates get lost occasionally. I am pleased to have had the interruption so that I had an opportunity of drawing the attention of the hon. Minister to this problem, that he must try now that he has got to 65 to forget about 65 and he must try to instil into the Public Service and into the Cabinet the thought that a man should be allowed to work as long as he is able and willing to work. We support the Bill.

The hon. member for Durban (Central) (Dr. Radford) has indicated that this side of the House is supporting the Bill, but I think we should state that in spite of the fact that there are certain aspects of this Bill which we welcome, such as the concession to military pensioners and civil pensioners and administrative improvements and improvements in regard to the Indian social pensioner, who as from 1 April 1965 will be paid at the same rate as the Coloured pensioner, there is still some criticism I wish to voice. We on this side are keenly disappointed in certain aspects of the Bill. Firstly, the provisions in the Bill which embody the proposals made by the Minister of Finance in the Budget debate mean that there is still a large section of social pensioners who receive nothing whatever in terms of this Bill. The total number of social pensioners of all races is 523,000. In terms of this Bill, over 250,000 pensioners will receive no benefits whatsoever. I feel that although the Minister of Social Welfare is responsible for this Bill, he is in the hands of the Minister of Finance, but I must say that we are keenly disappointed in that particular provision.

The other aspects which cover a large portion of this Bill, from Clause 13 to Clause 25 inclusive, deal with the consolidation of the various amounts which make up the pension. In terms of the principal Act, the basic pension for a White person is R144 per annum, plus an additional amount of R84 p.a., plus a bonus of R66 p.a., and a special allowance of R30 p.a. which was granted last year. All those amounts have now been consolidated in terms of this Bill to an allowance of R180 p.a., which is applicable to the old-age pensioner, the war veteran, the blind and the person drawing a disability grant. I believe that a golden opportunity has been lost by the Minister to give a concession in regard to the means test when he consolidated these amounts. When his Vote was discussed earlier this Session, the Minister indicated a degree of sympathy for those persons who had made contributions in the past towards their financial independence in their old age. I then thought the opportunity would be taken to bring about an easing of the means test. By the mere consolidation of these amounts, no benefits at all will be extended to those persons who just fail to qualify for the old-age pension. I would like to indicate how this could be brought about by a slight adjustment of the provisions in Clauses 13 to 25.

The income that is permitted to a person applying for an old-age pension is based on the basic pension of R144 p.a. The law provides that up to R180 p.a. no deduction is made, but over and above that, for every R12 or portion thereof, R12 per annum is deducted from the basic pension of R144. The effect is that from the R180 per annum the basic pension is progressively reduced until the person’s income reaches R312 p.a. Over and above that amount that person is disentitled to receive any pension whatsoever. Therefore I suggest that the Minister should give consideration to this, and rather than to consolidate all those additional amounts into the amount of R180 per annum, the previous amount of R84 additional pension should be consolidated with the basic pension, which will mean that the basic pension will be R228 p.a. If the basic pension is increased to that amount, even applying the present system of the means test, of deducting R12 p.a. for the portion over and above the R180 p.a. which is allowed, it will mean that a person will be able to receive as income from other sources an amount of up to R396 p.a. before being disentitled to any pension. I believe that the present system which limits a person’s ability to earn or to receive income from any other source up to R26 per annum is totally inadequate in the present circumstances. This is not a vast relaxation of the means test, but it would mean that a person could earn up to R33 per month before being disentitled to any pension. I feel that this opportunity should be taken at this stage by the Minister. It will be a concession to those persons who at present just fail to qualify for a pension. I have quoted in the past cases where persons who are in employment and under 70 years of age, and therefore the amount they receive as remuneration is taken into account, some of them in part-time employment—in one particular case to which I drew the Minister’s attention the person received 50c a week increase due to a wage determination, and that 50c disentitled her to the minimum pension she was then drawing. This aspect will also affect the minimum pension. I particularly mention this point because under the present system if a person qualifies for the minimum basic pension of R12 a month he is then entitled to the additional amounts, the allowances, amounting to R180. Therefore the minimum pension is R192 per annum or R16 a month. So this person who fails by 50c a week to qualify for a pension in fact loses R16 a month, which is the minimum pension to which she was entitled. Therefore the partial consolidation of that additional pension with the basic pension, bringing it to R228 per annum, would have the effect of easing off the degree of difference between the person who fails to qualify and the person who just qualifies, and the effect will then be that they would qualify for a basic minimum pension of R12 a month and an allowance of R96 p.a., giving him R108 p.a., or R9 a month. I feel that the easing off in regard to the means test is a vitally important matter and the Minister indeed has a golden opportunity in terms of this Bill, whilst consolidating the additional amounts and the bonuses permitted, to allow for a partial addition to be made to the basic pension and thereby reducing this allowance. Instead of it being R180 per annum, it will be a consolidated allowance of R96 p.a.

I should further like to indicate another advantage that will be gained by adjusting the position as I have suggested, and that is in regard to the assets that are permitted and the property that is permitted. I know that the Minister is sympathetic in this regard. He said that the matter was receiving attention. Here, too, I believe there is an opportunity which will affect that position, and which would put into effect that sympathy by granting something at this particular stage to those particular persons.

The whole basis of the means test directly affects the position in regard to the property and assets a person is permitted to have so as to qualify for a maximum pension, and is then decreased to an amount where they qualify for the minimum pension of R12 p.a. plus the R180 allowance. The basis of calculation in regard to the assets shows that this figure can also be increased and, indeed, it would be considerably increased should the amount of the allowance of R84 p.a. be incorporated to bring the basic pension up to R228 p.a. At present the position is that up to R2,400, unencumbered assets are permitted to a married person before any deduction is made from the basic pension. Thereafter, without wanting to weary the House with the formula applied of 2½ per cent of the amount over and above that R2,400, it then tails off until an amount is reached, I think, of R7,650 for a married person, and, after reaching that amount, they are then not entitled to any pension whatever, and that amount is merely an asset, and does not take into account income from any other source. It is merely based on the person’s assets, which invariably is a property, and they have no income from any other source. If one increases the basic pension to R228 p.a., it will mean that you still take into account the amount of free assets permitted to R2,400, and it would mean that a married souple would then have assets up to R 11,000 before they would be completely disentitled to any pension. At R11,000 per annum that amount is now R8,600 in excess of the permitted amount of R2,400, and, based on the calculation of the 2½ per cent, it will mean that it will bring about a reduction of the basic pension suggested by me of R228 to R216, and thereby the person would qualify for the minimum pension of R12 per annum, plus an allowance of R96 per annum, bringing it to R108 per annum or R9 a month minimum pension. I think that, in view of the fact that we have had a great deal of talk in regard to the economic prosperity of the country, that this was a magnificent opportunity for the Minister to make a concession to those persons who are particularly hard pressed by living costs and who just fail to qualify for a pension. Whenever we set a ceiling in regard to the means test, there will always be hard luck cases which just fail to qualify. But I believe that, by this system of merely consolidating the allowances and leaving the basic pension untouched, no effort whatsoever has been made to ease the position for those persons who just fail to qualify in terms of the present means test. I believe that asking for the amount of R84 per annum not to be consolidated in the allowance, but to be brought into the basic pension, would alleviate the financial plight of many thousands of persons who are struggling to exist, who are living in a property of their own which they have paid for over perhaps 30 or 40 years, an unencumbered asset which is preventing them from qualifying for a pension due to the increases that have taken place in the municipal valuations of those properties, and that those persons who are failing to qualify for any pension should be entitled to a small amount of pension which will be of great assistance to them in bringing about a happier state of affairs in the evening of their lives. I do not think this is an unreasonable request, and I hope that the Minister will give his careful consideration to reviewing the position as contained in Clauses 13 to 25. Unfortunately, in the Committee Stage I will not be permitted to move amendments in this regard because it will mean increased expenditure. Therefore, I hope that the Minister will give consideration to this suggestion and perhaps see his way clear to bring about this alleviation for those persons who we believe deserve some assistance to alleviate their present position.

The other aspect I would like to deal with is incorporated in this block of clauses, and it is the question of the special allowance. Naturally, we are pleased that this amount is incorporated in the new consolidated allowance, which will mean that all social pensioners will benefit from that special allowance. We have discovered, and the Government has discovered, that administratively it was not possible to carry out the intention of the Pension Laws Amendment Act last year which introduced this new system of a special allowance. It caused a great deal of heartache to a large number of persons, who thought they would qualify for that allowance, but failed to qualify. I am afraid there is going to be a good deal of heartache on the part of those person who received the special allowance last year, and who will receive absolutely nothing in terms of this Bill now before us.

The question of the racial ratios is another matter to which, I think, the Minister should have given further consideration. We welcome the provision whereby, under the present system, where the ratio is 12 for Whites, six for Coloureds, five for the Indians and two for the Bantu, that the Indian is now being brought into line with the Coloured, and will now receive half of what the White pensioner receives, instead of five-twelfths as before. But the aspect in regard to the Bantu pensioner has remained virtually unchanged in this Bill. We find that a special allowance of R5.10 per annum which is granted to the Bantu is now incorporated in their allowance, which will mean an increase of R5.10 for the Bantu pensioner, and that is on the same basis for the city Bantu, the town Bantu and the rural Bantu. All of them are classified the same and receive an increase of R5.10. But the system of having three different amounts for the three categories of Bantu has remained unchanged in terms of the basic pension, and I would like to suggest that the Minister could have given some consideration, if he did not wish entirely to abolish the differentiation between those three categories, to bring the rural pensioner into line with the town Bantu, and the town Bantu into line with the city Bantu; in other words, to have two categories. At one time there was differentiation between the White pensioners in terms of rural and urban pensioners, but that was abolished and they were all brought into line. But in regard to the Bantu pensioner, I cannot see why there should be a difference between the pension of the town Bantu and the city Bantu. That is why I should like to see the Minister consolidate those amounts to bring the town Bantu into line with the city Bantu. After all, their rate of pension is exceedingly low. Even after taking into account the increases and the allowance granted in this Bill, the rural Bantu will only receive R2.95 a month, the town Bantu R3.45, and the city Bantu R3.95. I consider that the pension of the rural Bantu of R2.95 a month is exceedingly low, and I do not think it would threaten the economy in any way if we were to bring the rural Bantu into line with the amount paid to the town Bantu, and to increase it from R2.95 to R3.45, and to increase the pension of the town Bantu from R3.45 to R3.95. These items affect the every-day lives of over 500,000 inhabitants of this country. Although I realize that the Minister’s sympathy is with these people, and that he wishes to extend further benefits to them, I know that his hands are tied by the Minister of Finance, but at the same time there are the aspects I have outlined, whereby the basic pension could be increased, which, I think, would bring about a far fairer and more just system in regard to those persons who now just fail to qualify for a pension. I hope the Minister will consider these suggestions.

This House decided last year that the period of service of ex-members of the Executive Committee of a Provincial Council would count for pension purposes and it was decided that two years’ service in a provincial council would count as one years’ service in the House of Assembly or the Senate. Former Executive Committee members of both parties then made representations to the Minister asking that a year’s service in the Provincial Council should count as a year’s service in the House of Assembly or in the Senate. The Minister was unable to accept our proposals because he said that members of the Executive Committees had made no contribution towards the additional pension received by them over and above that paid to Provincial Council members. We realized at once that our case was weak and we therefore did not press our representations; we accepted that position. But it seems to me that the Minister is now departing from that principle in Clause 30. I do not know whether I am reading the clause correctly. It refers to service in the Legislative Assembly of South West Africa. According to the White Paper they will now be able to link up their period of service in the Legislative Assembly with their period of service in this House. The White Paper says that they could not do so previously in view of the fact that they paid no contributions in respect of their period of service as members of the Legislative Assembly. It seems to me that the Minister is now departing from the principle that if you have paid no contributions towards a higher pension you cannot get a higher pension; he now allows them to link up their period of service there with their period of service in this House. If I am correct in saying that the Minister is departing from that principle I want to ask him whether he will not re-consider the question, if not in this measure then at some time in the future, of allowing members who have served on the Executive Committees of the various provinces to link up their period of service as Executive Committee members with their period of service in this House on the basis of one year for one year’s service as a member of an Executive Committee instead of two years for one year’s service in this House.

I am glad the hon. the Minister of Defence is here to-day, because I want to mention a matter which I have raised time and time again. In terms of the War Pensions Act, any widow married later than ten years after the volunteer was discharged, and any child born ten years after his discharge, does not qualify for the allowances provided for those who were married or born before the expiration of ten years. None of our old Commonwealth partners have this provision any more. The South African Legion, together with the National War Fund, investigated the financial aspect of this and traced 77 cases including 33 deceased volunteers affected by the ten-year time limit. The investigation further showed that ten widows and 125 children were not considered to be widows and children under this Act. The Legion and I have tried for years to have this injustice removed, and I state definitely that the financial burden on the State cannot be the cause of the refusal. It has been calculated by the Legion and the War Fund that the amount will not exceed R23,840 p.a., should these ten women and 125 children be brought within the purview of the Act and given the maximum benefits. But they are denied these benefits on no grounds whatever, except that it will cost the country R23,000 p.a., and that is scandalous, especially with the surplus we have.

Why I said I was glad that the Minister of Defence was here is that I brought this to his notice before and I presume that he has tried but failed to get an alteration made to the Act in this, regard. The War Pensions Act applies to all the boys who are now being trained, and the effect of this ten-year time limit is that these lads of 18, 19 and 20, ten years after they are discharged, if they are casualties, will get nothing, and you read every day about accidents, shooting accidents or motor accidents which are bound to happen when thousands of men are in camp together. There will be an enormous number of casualties before we get rid of this present mobilization in the country, and every one of those boys, if he is disabled, or if a child is born ten years after his discharge, will get no allowance. These are war disabilities because we are in a cold war, and if the man marries ten years after his discharge his widow will not get a pension, nor will any children get any allowances. I hope that the Minister of Defence will use his influence with the Minister of Finance to get this injustice remedied.

I can only say, with reference to the speech of the hon. member for Benoni (Mr. Ross), that I can understand why he becomes rather annoyed whenever he discusses this matter while I remain cool whenever I reply to him. But surely the hon. member cannot discuss this matter here.

Order! If the hon. member cannot discuss it, then the hon. the Minister cannot discuss it either.

I just want to tell the hon. member that provision cannot be made for it in this Bill; I have repeatedly given the reasons.

I can only say to the hon. member for Vereeniging that in principle there is no difference between the two groups, the South West Africa Executive Committee and the other executive committees in the Republic. We are simply bringing about an amendment here in connection with the position of people who served there at a time when there was no obligation upon them to contribute. They are simply being given the opportunity to make a choice. They were unable to make a choice in terms of the law as it stood.

The hon. member for Umbilo (Mr. Oldfield) put forward certain proposals here. I invited hon. members earlier this Session to put forward proposals and the hon. member for Umbilo has now done so; he also put forward certain proposals on previous occasions. Sir, I can assure hon. members that I read all their speeches in Hansard and that I take notice of the proposals put forward by them. I want to go further and ask hon. members who are interested to put forward proposals in writing; we shall then take notice of them when we consider new measures in this connection. I am not suggesting that all those proposals will be accepted. The hon. member for Umbilo has proposed that we should increase the pensions of the Bantu but that is really a matter for the Minister of Bantu Administration. I merely want to deal with the principle involved. The hon. member has pleaded that the principle of differentiating between the pensions paid to Bantu in their urban areas and Bantu in the rural areas should be restored. This is one of the matters in regard to which we had difficulties for many years. We then did away with the system of differentiating between rural areas, towns and cities and introduced the present uniform system. Many people benefited as a result of this change. It became very much easier to deal with the position administratively because under the former system people were continually shifting between the rural areas, the towns and the cities and it was impossible to keep a check. The result was that overpayments were made from time to time where people shifted from a city, for example, to a town. We then decided to do away with this differentiation and hon. members of the Opposition agreed with me in principle. Surely the hon. member does not want us to go back to the old position again.

The hon. member for Umbilo said that he was “keenly disappointed in this Bill”.

With that aspect of the Bill where the allowances are consolidated.

The hon. member gave the impression that he was keenly disappointed at the Bill as a whole.

No, I did not say so.

I am glad to have the hon. member’s assurance that he only wished to draw my attention to certain aspects of the Bill. As I have said before, I shall give my attention to every suggestion put forward by hon. members because, as I have said before, social welfare and pensions can never be static; changes constantly have to be made. I think I compared the position with Shelley’s cloud; it is ever-changing. As far as specific suggestions are concerned, I can tell the hon. member that we are investigating the position.

We are investigating the possibility of bringing about amendments in connection with the question of home ownership. As I have said before, people who own their own homes have made a contribution to their security in their old age by saving their money. This matter is being investigated to see to what extent recognition can be given to the contribution made by such a person towards security for himself in his old age as against the other person who made no provision for his old age.

Another matter which is already under consideration is the question mentioned here by the hon. member for Durban (Central) (Dr. Radford), and that is the question of the aged. I have already announced that we are investigating this question because I agree with his statement “that a man is not as old as the number of his birthdays”. That is an undisputable truth. There are some people who are reasonably old in terms of years but who are still fit, and then there are people who are reasonably young in terms of years but who are old. Not all old people are equally old. Take my hon. colleague, for example, who sits behind me, the hon. the Minister of Defence. We are both 55 but I am much younger than he is! The fact of the matter is that one gets many people who are well in their 60s who are still able to do reasonably good work.

What about Oom Piet?

I am talking about people who are reasonably strong even though they are a bit old in terms of years. I am only mentioning examples but apparently the hon. member over there does not like to be mentioned as an example. Sir, I have already said that we are considering this matter. We are having discussions with the Ministers concerned with whom this matter first has to be discussed. I want to ask hon. members to remember one thing and that is that we are dealing here with human beings. Every change which is brought about affects human beings. The hon. member for Umbilo referred here to the change which we brought about last year in respect of special pensions. Hon. members on both sides of the House came to me and said that we should never have made that change, and we then rectified the position. The position is simply that this change led to administrative difficulties and hon. members themselves had difficulties in their own constituencies as the result of this change. They went back to their constituencies and, perhaps they did not understand the position quite correctly, gave the impression to their constituents that they would all receive this allowance of R2.50. The matter is now being rectified in this Bill, and it would be wrong to go and do the wrong thing again. One might compare this with the cogs of a wheel; all the cogs have to work smoothly.

I want to thank hon. members for their support of the measures contained in this Bill. They are measures which deserve the support of hon. members. I know that they meet with the approval of the whole country. They are unusual measures involving the expenditure of very large sums of money to meet the needs of the less-privileged people in our country.

May I just add this: Whatever one does or does not do in connection with pensions, hon. members always come along with the story that the Minister of Finance should have made more money available.

I want to reiterate what I said in the Other Place the other day and that is, present company excluded, that any fool can always ask for more money to be voted.

May I ask the hon. the Minister a question.

I hope the hon. member is not going to ask for more!

Does the hon. the Minister believe that social pensioners deserve more?

I have replied to this question on a number of occasions in the past.

*I have said repeatedly that our idea in South Africa is not that the State alone is responsible for making provision for people in need. I have already reported on the conditions in Europe; I pointed out that even in those countries where there were contributory pension schemes, where the people themselves contributed, they received more or less the same pensions as our people here, comparatively speaking. I said that where we were able to do so we would always make a contribution, but I pointed out that we must take the whole population along with us; that we must also call upon the children to make their contribution in caring for their needy parents.

We must not adopt the attitude that the responsibility rests entirely on the shoulders of the State, because we would then be a welfare State and we are not a welfare State. I have already given hon. members a summary of increases which have been granted from time to time in past years. The hon. member over there admitted here on a previous occasion that many improvements had been brought about; he said that he did not suggest that nothing had been done, but he felt that too little was being done.

Sir, I think I have dealt with all the aspects which have been touched upon here. I say again that I view this whole matter with the greatest sympathy. I am always prepared to listen to suggestions made by hon. members with a view to bringing about improvements, but we must always take into account what the State can afford.

Motion put and agreed to.

Bill read a second time.

I move—

That the Bill be now read a second time.

Mr. Speaker, this Bill introduces certain amendments to the Revenue laws, namely the Transfer Duty Act, the Estate Duty Act, the Licences Act and the Stamp Duties Act. The most important amendments consist partly of the concessions in respect of transfer duties and estate duty announced by me in my Budget speech, and partly of the provisions giving effect to the two taxation proposals relative to estate duty and licences respectively already approved by the House in Committee of Ways and Means. The first of the last-mentioned two amendments relate to premiums paid for shares in family companies and aims at closing a loophole for avoiding estate duty. The second one concerns the liability for bankers’ licences and seeks to eliminate the doubt and uncertainty existing at the present time. The other amendments made in the Bill are of a purely textual nature and do not require any particular attention.

As the subject of these important amendments have already been mentioned in this House on previous occasions, I need not deal with it fully in my speech. Apart from that, all the amendments are explained in the explanatory memorandum I have made available to hon. members. I am quite prepared to reply to any questions there may be, but these are the main provisions of the Bill before us now.

The Minister has said that this Bill deals largely with administrative matters and gives effect to some of the proposals which he made in his Budget speech.

But we would like to know why in certain clauses of the Bill the word “rand" is used and the word “pound" in other clauses. Clause 4, for example, provides that—

But when we come to Clause 9 of the Bill we find that the words “five thousand" are being replaced by the words “seven thousand five hundred pounds”. Then again Clause 14 provides for the deletion of “five thousand pounds" and the substitution of “six thousand two hundred and fifty pounds”.

[Inaudible.]

Sir, I do not need any interjection from the hon. member for Pretoria (Central) (Mr. Van den Heever) and I wish he would wait until I have completed my argument before he makes quite unnecessary interjections. The original Bill referred to “pounds" and therefore the word “pound" is being retained in bringing about these amendments, but I think that since we now have the decimal system and the main unit of our currency, is the rand, we should take the opportunity of bringing our legislation up to date. In Clause 4 we have taken that opportunity of correcting the position and substituting R50 for £25. Surely to be consistent we should have adopted the same policy throughout. I suggest that next year when the Minister again introduces a Bill of this kind he will take the opportunity to bring the legislation up to date. I appreciate that the original measure referred to “pounds" but I think in providing for additional rebates or additional duties, the Minister should take the opportunity of tidying up the Bill and using the recognized currency of the country.

I should like to take this opportunity of drawing the Minister’s attention to Clause 14 which deals with estate duty and provides for an increase in the rebate of duty from £5,000 to £6,250 in respect of estate duty, and I would like to know from the Minister why he did not consider making a similar concession as far as donations are concerned. Where a parent provides for a legacy for a child, provision is made for an increase in the rebate from £5,000 to £6,250, and since the estate duty is tied up with the donations tax, I wonder why the donations duty rebate has been allowed to remain unchanged whereas the rebate in the case of estate duty has been increased. It does seem inconsistent, in making allowance for an increased rebate in respect of every child as far as estate duty is concerned, not to make a similar allowance in the donations tax. I think this is a matter which should receive the Minister’s consideration because in the past the rebates of duty in the case of the donations tax and the estate duty tax have been on the same scale. I suggest that this matter should be considered by the hon. the Minister when next he amends the Bill governing the donations tax.

The hon. the Minister claimed in his Budget Speech that the transfer duty rates were not high. But, Sir, that claim is not correct. They are almost colossal, if I may use that word, in comparison with the transfer duty rates in Great Britain. Last year at the annual meeting of the United Building Society, the chairman gave certain figures showing the difference between transfer duties paid in this country and those paid in Britain, and he deplored the effect of the very high transfer duties in this country on the man having to buy a house for the first time, particularly the young man, or for that matter on anybody buying a house. He gave the following facts and figures after pointing out that in Britain there was a stamp duty which only came into effect when the purchase price exceeded R9,000. In Britain the transfer duty and stamps on a house the purchase price of which is from R4,000 to R8,000 would be nil, but the transfer duty and stamps on a house costing R4,000 in South Africa would be R131; on a house costing R6,000 the costs would be R196; on a house costing R8,000 the cost would be R266. From R 10,000 upwards the following are the comparative figures: On R10,000 R50 in Britain, R341 in South Africa; on R12,000 R60 in Britain, R436 in South Africa; on R14,000 R140 in Britain, R531 in South Africa; on R 16,000 R160 in Britain and R626 in South Africa. That roughly gives us the range of figures under which the Minister is granting certain rebates under this Bill. The South African figures which I have given are the figures which applied before the Minister made the reductions now under discussion in this Bill.

Let me now give the figures showing the new scales after the passing of this Bill: On a house costing R5,000 the costs in South Africa were R150; they will now be R50; in Britain the cost would be nil. On a house costing R10,000 the duty in South Africa was R300 plus R61 in stamps; the transfer duty will now be R150 plus R41 in stamps; in Britain the cost would be R50. In the case of a house costing R 15,000 the transfer duty in South Africa was R500 plus R60 in stamps, and the transfer duty will now be R334 plus stamps after the passing of this Bill. In Britain the cost would be R150. The total cost to the buyer on a house costing R 15,000 will still be the best part of R400.

On the face of it these new concessions look substantial but, of course, they are only substantial in comparison with the original colossally high figures. Before continuing I want to give a brief history of these duties in South Africa. In 1949 the transfer duty was 2 per cent; in 1951 it was increased to 3 per cent; in 1953 it was increased to 4 per cent, with 3 per cent on the first £3,500 (R7,000); the 1954 Act contained the proviso that on so much of the said value as does not exceed £5,000 the duty shall be 3 per cent.

Now I come back to the Minister’s Budget Speech in this regard. He said that although these rates were not high they may still represent a substantial addition to the cash resources required by, for example, a young man setting up house for the first time. I have said, before, Sir, that our current rates are iniquitously high. To the man who can afford only a R5,000 house, up to now he has been paying the Government R150 for the privilege of being a good citizen and owning his own property, and I suggest that house ownership is one of the signs of good citizenship. The Minister says that that figure was not high! Sir, I ask you to compare these figures with the charges in Britain. On a house costing R5,000 the buyer now gets a substantial reduction but he still has to pay R50, and the Minister had a surplus of nearly R 150,000,000 this year. He had a surplus in 1962-3 and many surpluses before that. I suggest to him that he should give further relief as far as this duty is concerned. Sir, very few white-collar workers buy houses for R5,000 in the towns. A man who works in an office in a town is very lucky if he can get a house for under R 10,000. The duty on this figure was R300 plus stamps and will now be R150 plus stamps. I suggest that that is still far too high and that the Minister should give consideration to the question of giving further relief to these white-collar workers. The Minister complacently and smugly says that the charges in past years were not high. How the Minister was ever informed that the charges were not high I do not know; they were outstandingly high. I could almost call his statement cynical. I do not know whether he himself included that sentence in his Budget Speech or whether it was put there by somebody else. Sir, this Government apparently has forgotten, if it ever knew, how hard a young man has to struggle and save to get together the deposit for his own home, and transfer duty in the past, high as it was, was one of the chief difficulties which faced the young buyer. I hope that the Minister has no idea of a “Strydfonds" for distributing largesse before the next election and that he will really get down to a practical consideration of the effect of transfer duty on a young man who wants to buy a house to raise a family. I say that in the case of the man in the middle-income group and the white-collar worker in particular there should be at best a token payment and no more. The so-called boom has never reached the white-collar worker and never will reach him. All he has at the moment is slightly better security of tenure in his job; that is all the boom has done for him. I think this plea is well-founded and should receive the hon. the Minister’s serious consideration.

In conclusion I would like to add my voice to that of the hon. member for Pinetown (Mr. Hopewell). I think it was just an oversight that the increase in the rebate for children under estate duty was not extended to the donations tax as well.

The first point raised by the hon. member for Pinetown (Mr. Hopewell) in regard to the use of the words “rand" and “pound" is really a matter for the legal draftsmen. The law advisers, as the hon. member knows, have to deal with the form of these various amendments and I presume that they were guided by the particular term used in the Act which is being amended. We are dealing with four Acts here, and I think they used the appropriate term to fit in with the word used in the Act which is being amended. I presume that that is the reason. I do not think that it was an oversight on their part, as the hon. member suggested.

As far as the increase in the rebate on estate duty are concerned, the hon. member has said that the rebate on donations tax has not been increased accordingly, but the rebate for estate duty purposes has no real connection with the exemption limit for the purposes of the donations tax. It was purely fortuitous that the two amounts were the same previously.

They were always very closely related.

But there is no real connection between the two. They are not so closely related that for any fluctuation in the one there must be a corresponding fluctuation in the other. There is no question of an oversight; it was simply felt that it was not necessary to make a change here.

The hon. member for Benoni (Mr. Ross) complained about the high transfer duties, particularly compared with those payable in Great Britain. I have not been able to compare our figures with those of Great Britain but I accept his statement that our transfer duties are higher than those in Great Britain. At any rate, here we are reducing the transfer duties and I should have imagined that he would have welcomed this step! After all, an amount of R3,700,000 is involved in this concession! It is quite a considerable concession. I admit that it is not on the same basis as the tax in Great Britain, but on the other hand the hon. member must also take into consideration the general pattern of taxation in Great Britain. There are many taxes which are much lower in South Africa than they are in Britain. He must remember that if I make further concessions, over and above the concessions provided for here, I will have to increase some other tax in order to find the money which is given away as a concession here. I can very easily afford to come to the basis of Great Britain as far as transfer duty is concerned if I followed the pattern of Great Britain in the case of company taxation for instance or in the case of personal taxation.

What has that to do with a young man trying to buy a house?

It is no use comparing one individual part of the taxation system in one country with that of another country. There is only one proper basis, if you want to compare the level of taxation in one country with that in another country, and that is the percentage of taxation in terms of the national income. I think if the hon. member were to apply that basis he would see that South Africa is very lucky indeed. I don’t know the precise figures but as far as I can remember, and subject to correction, the direct and indirect taxation in South Africa amount to only about 13.5 per cent of the national income whereas the corresponding figure in Great Britain is well over 20 per cent.

What about the benefits they get in Great Britain; it is a welfare state?

That is true; there are benefits which we do not give here and I am very thankful that we do not. But money has to be found to compensate for all these little gifts; we can’t get away from that. At any rate, Sir, the only point that has been made is that the particular tax in regard to transfer duty is very high. One example has been given. I am quite sure that there are other countries with which our transfer duties will compare very favourably. I have not the figures at the moment but I shall see to it that I have them during the Third Reading. Not that it carries the argument any further, Mr. Chairman. Because it still does not give you the general picture of what the level of taxation is in other directions.

Those are the only points raised and I therefore move accordingly.

Motion put and agreed to.

Bill read a second time.

I move—

That the Bill be now read a second time.

Mr. Speaker, as is customary the Finance Bill is introduced to give effect to certain budgetary proposals and to deal with miscellaneous matters affecting either the Consolidated Revenue Fund or the Railway and Harbour Fund where such matters could not more appropriately be included in other legislation. I do not consider it necessary that I should go into each clause as the various provisions are explained in the White Paper which hon. members have before them.

I would, however, like to give more information regarding the necessity for the further borrowing powers requested in Clause 18. Hon. members will recollect that in last year’s Finance Bill provision was included for an increase in the State President’s excess borrowing powers from R30,000,000 to R60,000,000 and I mentioned in my second-reading speech in support of the Bill that one of the reasons for the increase in the borrowing powers was that it was necessary from time to time, in the interests of financial stability, to make available more Government stocks to the money and capital markets in order to cope with conditions of excess liquidity and unsound fluctuations in rates of interest.

We are again asking that the State President’s borrowing powers be increased but no limit is now being placed on the amount and to make matters clear it is perhaps advisable to recapitulate and for me to mention the purposes of these powers.

Sections 2 and 3 of the General Loans Act empower the State President to borrow a maximum of R60,000,000 over and above such sums as may, in addition to the amount at the credit of or accruing to the loan account, be required to defray authorized loan expenditure.

The objects of the measure of latitude allowed, are fourfold. First, it creates accommodation for unforeseen increased receipts on loan account. Secondly, it enables the Treasury to avail itself of opportunities when foreign funds are offered on favourable terms, and in amounts in excess of the immediate needs of the loan account. It also allows the Treasury a measure of freedom—with a view to saving interest charges or for the purpose of sound public debt management—to enter into loans when interest rates are favourable in anticipation of expenditure to be met in a future financial year. Fourthly, as I have already mentioned, it enables the Treasury to pursue financial stability and, generally, to exercise better control over monetary conditions, by making Government securities available to the capital and money markets in amounts in excess of the Exchequer’s needs.

All these objects, excepting the fourth, directly relate to the financing of the Government’s loan account expenditure. The law quite properly provides, therefore, that funds raised for these purposes should accrue to the credit of the Consolidated Revenue Fund to be used only for defraying authorized expenditure.

The fourth function, however, is entirely unconnected with the Government’s loan programme and the financing thereof. In essence it concerns the utilization of a fiscal measure for the proper regulation of conditions in the monetary field, and to retain in the Consolidated Revenue Fund the proceeds of borrowings raised for this purpose would merely lead to obscure the true state of affairs in the Government’s financial accounts. In other words, it is merely an instrument to apply fiscal policy and to control monetary conditions.

Two further considerations have to be taken into account.

Funds withdrawn by the Government from the normal money supply for the sake of financial stability should obviously not be permitted to revert to the available supply as long as the conditions, sought to be corrected, continue. In other words, such funds require to be sterilized for the time being. Meanwhile, of course, the State has to meet interest charges on such borrowings. In order to reduce this interest burden it is desirable that the relative funds be temporarily invested in such a way that they will not add to the domestic money supply. Sterilization could be achieved by retaining the funds in the Exchequer Account at the Reserve Bank, but the bank is precluded by law from paying interest on deposits. The obvious solution appears to be the establishment of a special account by the Reserve Bank into which these funds could be deposited. The bank, as the Treasury’s agent, will manage these funds and, in consultation with the Treasury, invest them abroad in approved securities. In this way it should be possible to exercise control over factors which, by causing an undue increase in the money supply, might tend to disturb domestic financial stability.

The disrupting forces which it is sought to control may at times assume abnormal proportions. An increase in the price of gold, for example, may bring about conditions in the face of which it might be necessary to resort to large-scale mopping-up and sterilization operations. It is deemed necessary, therefore, that in execution of this function the Treasury should not be hampered by prescribed limits to its borrowing powers, and that it should be authorized to take, in consultation with the Reserve Bank, the necessary stabilizing action to the full extent dictated by the economic conditions prevailing at the time.

I hope I have clearly stated the necessity for these further most essential borrowing powers and that I have the support of this hon. House.

If there are any questions regarding the other clauses I shall be pleased to answer them.

Sir, we support the second reading of the Bill. While we accept the Minister’s lengthy explanation, he will realize that a new principle is being established in Clause 18 in giving the Treasury, with the Reserve Bank as its agent, power to invest funds overseas. I hope we will have the assurance from the hon. the Minister that when that is done information will be made available to this House when the Minister introduces his next Budget. We also wish to have the assurance that he will indicate the extent to which he has utilized the powers given in this clause to invest money in other countries. As the Minister knows, there are some countries which are unfriendly towards us and I cannot imagine that he will invest money in such countries. But there may be countries who are friendly towards us at the moment, but who, some time in the future, as a result of the policies of this Government, may adopt an unfriendly attitude. It will be very embarrassing to us to find that we had invested funds overseas in all good faith and that, as a result of a change in the political power—I do not want to mention any countries—in those countries there was a hostile attitude towards South Africa and that those funds were blocked. That danger exists. I hope the Minister will bear that in mind and that he will give us an assurance that not only will adequate steps be taken so that those funds could be released and transferred in an emergency as soon as possible but also that the country will be given the information from time to time as to the extent to which funds are invested overseas.

We may have one or two comments to make during the Committee Stage, Sir, on Clause 4 dealing with the discharge of the Group Areas Board from liability up to a substantial amount. We should like to have an explanation on that in the Committee Stage. We shall also have something to say on Clause 5, where provision is made for guarantees in respect of loans made by hotels. I hope the Minister will be able to give us adequate explanations during the Committee Stage under those two clauses.

I want to give an undertaking that I shall, once a year, publish a statement in regard to the extent to which we have made use of this power. As the hon. member has mentioned, there may be a political upheaval in a country or even an economic upheaval, but, in conjunction with the Reserve Bank, I think we shall be able to take the necessary steps to safeguard the money we are allowed to invest under Clause 18. In the normal course of events, the Reserve Bank has to keep considerable amounts abroad, and it may be that they will be able to accommodate us in this way that they send out our money and not their’s. But that is a detail of administration on which I am not prepared to say anything at the moment.

Motion put and agreed to.

Bill read a second time.

Business suspended at 12.45 p.m. and resumed at 2.20 p.m.

Afternoon Sitting

I move—

That the Bill be now read a second time.

Mr. Speaker, the object of this Bill is to give effect to the proposal made by me in Committee of Supply during the discussion of the Treasury Vote, to establish a special account in which a portion of the surplus of 1963-4 may be held in trust for the taxpayer.

How much is the surplus?

I shall explain. The money in this account will be set aside and at a later stage, when the economic and fiscal conditions permit, will be returned to the taxpayer by transferring it to the Consolidated Revenue Account to defray expenditure on revenue account, expenditure duly approved by Parliament. By so doing either taxes could be reduced or an increase of taxation could be partly or wholly avoided. As I explained in Committee of Supply, I cannot say when this will occur now; it may be in a year’s time or it may be later, but it will be at a time when the money can be released without increasing the danger of inflation. It must not be released at a stage when it may weaken the anti-inflationary measures.

In the meantime the Bill provides that the account will be administered by the Secretary to the Treasury, and that the moneys shall be invested with the Public Debt Commissioners.

I have made provision in the Finance Bill for the transfer of R20,000,000 from the Consolidated Revenue Fund (that is to say, from the surplus for 1963-4) to the new account.

I asked the hon. the Minister by way of interjection how much the surplus was. He said he would tell me but I did not hear him do so.

The figures are still the same; I am sorry. We have no newer figures than those I gave at that stage.

So we are still working on a surplus of R 128,000.000. The Minister has introduced his Bill in a few hurried words. It sounds a very innocent little Bill. In fact it sounds almost philanthropic the way he puts it. The Minister, in effect says: “Let us put a little bit away for a rainy day and sooner or later when the rainy day comes the taxpayer will reap the benefit." But I do not think the Bill is really as simple as all that. We on this side of the House will have quite something to say about it.

Sir, the principle of establishing a fund or funds for the benefit of people who need help was our idea. It was an idea put forward by us during the Budget debate. We suggested that such funds might be established in regard to certain aspects of higher education and social services and food subsidies, etc. Our idea was rejected out of hand by the hon. the Minister.

The hon. the Minister is now accepting our principle in this Bill. He is establishing a fund from some of the surplus revenue and he is seeking to apply it in the direction where, in our opinion, it will do the least good; certainly in a direction where it is the least urgent. What is the position to-day? It is quite unprecedented in the history of this country. The hon. the Minister says in effect: “I budgeted last year for a balanced Budget but thanks to buoyant revenue and the unexpected working of the new income-tax system my estimates have gone completely haywire. The result is that I have been landed with R 128,000,000 which I had not asked for, which I did not need, which I do not really know what to do with but I have to do something about it." This Bill is asking us to become his accomplices in tucking away R20.000.000 of what I regard as his ill-gotten gains for some ill-defined future proposals. I say “ill-defined" because this certainly is not an economy measure. Clause 2 of the Bill gives the Minister very wide powers for spending this money when he feels like it. It says that the Minister may use it at such times as the Minister of Finance may determine, to be appropriated by Parliament, to meet expenditure on “services normally charged to the Revenue Account”. Well, Sir, all services are normally charged to the Revenue Account. Those words only mean that the hon. Minister has R20,000,000 at his disposal to credit the Revenue Account in any one year, or at any time that he thinks fit. The temptation to spend is going to be greater no less by reason of the fact that he has got his R20,000,000 tucked away in a safe corner where, if necessary, he can lay his hands on it. When he is drafting his Estimates for a year, say next year, and when the demands that are going to be made on him by his various colleagues are as usual much greater than he likes, and when he sends them back to the Departments, as always happens, and then tells them that they must cut them down, they are all going to come back at him and say: “What about the R20,000,000 you have got tucked away; our need is so great; can’t you draw on that?" And. Sir, I think that it is going to make it much harder for the hon. Minister to resist the pressure which comes every year on the Minister of Finance than that it was before to keep a close eye, a watchful eye on public expenditure. That’s why of course, as I have said before, people cynically are saying that this fund might really be called “the Election Year Taxation Reserve Bill”, because one can see the pressure that is going to be brought on the hon. Minister to spend that money shortly before an election. And the pressure will be perfectly human. I do not blame people for trying to exercise that pressure. But I am sorry for the Minister in having to resist that pressure, and I must add that I am rather doubtful as to his ability to resist it.

I want to make our position quite clear in this matter. We think that as far as this unhappy episode is concerned—and it is an unhappy episode for the taxpayer not to be able to have any idea how much reliance he can place upon Treasury Estimates; when he is asked to pay so much in taxation not to have any idea of how much reliance he can place upon the Estimates upon which his taxation is based—it is a very unhappy position indeed for the taxpayer to be in. We contend on this side of the House that having regard to what has happened, at least some of this vast sum which has come into the Minister’s hands should be used to reduce taxation, and that some of it should be returned to the owners of the money in the form of carefully selected reduction in taxation. Because, Sir, there are people who need relief now, not in five years’ time, perhaps. There are people who need relief now. We were discussing a Bill this morning and one of my colleagues pointed out that there are 500,000-odd people in this country receiving social pensions, quite apart from other people receiving pensions from other sources. He also pointed out that as far as pension relief this year is concerned only approximately half of the 500,000 were receiving any relief at all in this Budget. Surely it is clear that there are hundreds of thousands of people in this country who are sorely in need at the present time of some assistance to meet present-day conditions. I want to say quite frankly that I think not to give some such relief is a crime against the people, and it is a crime which we on this side of the House are not prepared to be an accessory to, either before the fact or after the fact, and we shall make our position quite clear to the country during the recess.

You are very welcome.

Yes, Mr. Speaker, hon. members opposite will have to think very hard to find a story with which to meet their constituents in this regard. They will have to think very hard to get a story which their constituents are going to swallow. You have got to bear in mind, Sir, that this R20,000,000 is only a fraction of the total amount involved, the rest of it being allocated for purposes on which it certainly will not be spent during the current year. Whilst in principle the purpose may be unexceptionable, the amounts which are being allocated to those accounts are quite clearly mainly devices to avoid any reduction in taxation.

When you talk like this, you are met in hushed words by the word “inflation”, and I think that the word “inflation" is being used by the hon. the Minister as a sort of shibboleth at the present moment to cover up a multitude of sins. Real inflation is caused by a demand for goods exceeding the supply, but when goods are in free supply, you will not get inflation—competition keeps the prices down. The chief contributor to real inflation to-day of course is the Government. The Government is spending vast sums of money. They may be justified, but they are spending vast sums of money, and that undoubtedly means a certain increase in prices. They are not only doing that, but they are causing inflation by some of the protective import duties which they are placing on articles and things which are only produced to an extent of about 20 per cent in respect of the country’s requirements and the other 80 per cent still having to be imported. So do not let the hon. Minister come to us and talking about us being in favour of inflation. If any serious inflation is being caused, it is being caused by the Government. But apart from that, prices are increasing. Since the hon. Minister introduced his Budget, cheese, milk, butter, beef, mutton have all gone up in price, as also clothing and furniture. We are told that telephones are going to be doubled in the near future; we are told that it has been recommended by a Government commission, the Schumann Commission, that suburban railway fares should be increased by 25 per cent. All these things add up to increase the monthly budget, not in respect of luxuries but of essentials for the ordinary man who to-day has to live on a very tight budget and to whom, R2 or R3 a month is a serious matter, a really serious matter, quite apart from the social pensioners to whom I referred. Is it any wonder, Sir, that wherever you go in the country to-day and you have a meeting—hon. members opposite of course have been noticeably lax in visiting their constituencies during the Session, and I do not blame them either, but they will have to go back to their constituencies and they will be asked the same questions, and the questions they will be asked is: “Where is this boom? Where is this universal prosperity? What has happened to this enormous surplus? What are we getting out of it? We have not noticed any of it”. It reminds me of a story which I heard years ago. I was at a meeting with a Cabinet Minister of my own party. He was a well-to-do elderly gentleman, and he was saying what a good Government it was and how everything was going well, and he was minimizing the effect of the cost of living. When he sat down a lady in the audience got up and said she would like a question. She said: “I would like to ask Mr. So-and-So what his butcher’s bill was last month?”. My Cabinet Minister took his cigar out of his mouth and he smiled, and said, “I am afraid I cannot answer that question, because I do not really know as I did not pay it”. The lady said: “No, Sir, I thought he did not, because if he did, he would not have talked such damn nonsense about the cost of living”. I think, that the hon. Minister has not realized, or his colleagues have not told him, the extent to which a number of people in this country to-day are just struggling to maintain their existing standard of living.

Is that why you want to pump in more money to have more inflation?

I am not talking about the hon. member for Vereeniging (Mr. B. Coetzee). We all know the Spartan standard of living that he lives on. He would like to reduce all the pensioners to his miserable standard of living, I presume. He would very much like to live on R30 a month, would he not?

Since the Budget was introduced, our feelings on the subject and our case for some relief to people, to the family man of moderate means and to the social pensioners in particular, with small fixed incomes, has been strengthened by three things. First of all the crying need to ease the burden of these increased prices, the increasing prices of the essentials of life on the shoulders of these people who really cannot afford it, secondly, the fact that the declared surplus has increased from R80,000,000 to R120,000,000 since the Budget was introduced, and thirdly, that the provinces, with surplus revenue, have all not hesitated to reduce taxes. I know the hon. Minister read a short homily to the Administrators on their wickedness last week. I can only suggest to the hon. Minister that perhaps his Administrators are more in touch with, the man in the street and with the needs of the people than the hon. Minister. They do not live on the Olympian Heights of the Cabinet. They have to mix with the people. And they have not hesitated within their means to give some relief, be it only a few shillings a month, in some form or other, to the taxpayers of their provinces. Why cannot the Minister do the same? To me the case for some relief is quite unanswerable. The Minister’s attitude seems to be, as also the attitude of hon. members opposite, because I have not seen a single one throughout all our financial debates, getting up to speak a word for the great mass of the people who are in difficulties to-day, not one of them; all they do is to thank the Minister, and in effect they say “I am all right, Jack, why should I worry?”. It is a most deplorable state of affairs that we have got into in this country when the Government should have this enormous sum of money at its disposal, knowing that vast numbers of our people are having increasing difficulties in meeting their daily needs, and they refuse to give one single cent of that to ease their lot slightly.

Waterson the defender of the poor!

Has the hon. Minister no heart at all? I know his colleague, the Minister of Social Welfare, said to-day that he was sympathetic with regard to the pensioners. I could wish that the hon. Minister of Finance was as sympathetic as that. But we have tried to make some impression on his heart. I do not know whether he has got one at all. At the same time I do comfort myself with the idea that however wicked he has been, it is never too late to repent, and I am going to offer the hon. Minister and I am going to offer the hon. members opposite an opportunity to encourage the Minister and to assure him that they will support him if he sees the light. I am going to offer him a last opportunity to do the right thing by the people by moving the following amendment …

To abdicate my responsibility.

The hon. Minister talks about abdicating his responsibility. Our argument is that he has been abdicating his responsibility over the whole of this business. He has not faced up to his responsibilities. What are his responsibilities? To look after the public purse, and to look after the welfare of the people. What is he doing to look after the welfare of the people at the present time? He says to half the people in this country: “You can starve to-day, but in five years time you may get a small relief in your income, tax”.

Who is starving?

I am not suggesting that the hon. member for Vereeniging is starving, but if he will go back to his constituents …

It seems to me that you are doing very well.

Mr. Speaker, this House is very fortunate. We are very fortunate indeed. I am not pleading for members of this House. I am pleading for the constituents of the hon. member for Vereeniging for whom he seems to care nothing. I propose to move the following amendment—

It seems to me we again are dealing with a little cheap politicking to-day, the cheapest one can have in South Africa at the present time. Before I come to the hon. member for Constantia (Mr. Waterson) I just want to say to the hon. member for Wynberg (Mrs. Taylor) that she sits there shouting at us here “You are robbing the poor people”. Mr. Speaker, under the proposal made by the United Party in connection with the taxation legislation, more would in fact have been given to the rich people than to the poor people. So she should rather keep quiet as far as that is concerned. She is not dealing with Blikkiesdorp here; she is in the House of Assembly.

What surprises me is that the hon. member for Constantia less than two or three hours ago permitted a provision to be passed here in another Bill, without striking a blow, without saying a word, a provision which provides as follows: That from the surplus revenue of last year, there shall be paid into the Tax Reserve Account an amount of R20,000,000. The hon. member for Constantia and the other hon. members opposite voted for that hardly two hours ago without striking a blow, but here they come along now and make a tremendous fuss about the legislation which establishes the Tax Reserve Fund. How must we understand such people?

The hon. member for Constantia had much to say about inflation and all kinds of things in connection with it, and he tried to minimize inflationary tendencies in the country. But the hon. member ought to adopt a more responsible attitude here in this House. As the hon. the Minister of Finance has said on a previous occasion, it was pure frivolity when the hon. member for Pinetown (Mr. Hopewell) was discussing this self-same matter. In this Bill passed by us two hours ago there was a very important clause, Clause 18, in terms of which we empowered the Government to borrow money without restriction on the South African market and to withdraw it from circulation in order to prevent inflation. The hon. member permitted that to pass without striking a blow, less than two hours ago. They give the Government unrestricted power to withdraw from the money market of South Africa whatever may be necessary to prevent inflation, and here they come along now and say that inflation is not a great factor. How must we understand these people? Clause 18 to which I have just referred, together with the legislation in connection with the banks which we have passed, and together with this manner of regulating the Revenue and Expenditure account of the country as provided for in this Bill, all these constitute one of the most important milestones on the road towards creating order in South Africa’s economy and to establishing stability, and because it means stability we must welcome this measure. The hon. member made an insinuation which in my view is not worthy of him, and that is that the Government will use this money to distribute presents among the electorate when there is an election. I think that is a little unworthy of a person who aspires, although it is a hopeless aspiration, to become Minister of Finance some day. It is somewhat beneath him to make such an insinuation. What is the true position in connection with the objects of this fund? It is not to take the money one day and distribute it among the voters. The object is to enable the Government to reduce taxation when the national finances require that more money should be put into circulation because a firmer position develops on the money market, and there is a reason to make money more freely available and to put more money into circulation. In the same way that the Railways have a Rates Stabilization Fund, we are creating a Tax Stabilization Fund. For the Railways it is highly commended here every year that they have such a Rates Stabilization Fund. In fact, I do not think there is anyone in this House who can imagine a position where the Railways will not have such a fund. But where it is now being done in connection with the current revenue account, it suddenly becomes an iniquitous thing. Do you know what the real object is of the debate the hon. members wish to provoke, apart from the illogical attitude where less than two hours ago they already approved the amount without striking a blow, and without a discussion, while they now come along here with a great objection on principle against the whole matter? In regard to the tendency in the economic sphere I just wish to say this, that it is not only in South Africa where it is found that after boom conditions there is a set-back and that after boom conditions it becomes necessary to inject new life into the economy. It is not only in South Africa that during boom conditions one must be careful not to let the boom become too great, and that a little of the buoyancy should be taken out of the economy. That applies to all modern countries. Not so long ago, during the past four or five years, England had a surplus of £580,000,000, and the Minister of Finance of Britain then came along and said: “We are in danger of having inflation and I will increase taxation to the tune of a further £200,000,000”. That is an example of one country among many other countries who have taken this step with a view to combating inflation. And the Labour Party of England did not say that the British Government was now robbing the poor people. They supported that measure and it was passed by the British Parliament without a division.

Have you now become so fond of England?

Even if we were to become ever so much fonder of England, we shall never fawn upon them to the extent that the hon. member for Drakensberg does.

What about our welfare services?

I admit that much remains to be done in respect of social welfare services in South Africa, but when the hon. members opposite had to move an amendment in connection with income tax a week or two ago, they did not ask for more welfare services, but they asked for a rebate of income tax, which is not for the poor man; they asked for a flat 5 per cent rebate “one horse one rabbit”. That is what they asked for. Now the hon. member comes and talks about welfare services. Why did she not insist upon it then? I hear the hon. member for East London (City) muttering. The ex-O.B. General must leave me at peace while we are discussing matters of which he knows nothing.

I should like to conclude by saying that I am very sorry the United Party is adopting this attitude on the measure and that they want to close their eyes to the possibility of inflation, and the very grave danger of inflation which exists in South Africa. Every chairman of a company who has addressed a meeting during the last few months has warned against inflation because there is too much purchasing power for too little goods.

And too few people.

The hon. member says there are too few people. How many children does she have? She cannot increase the population within 24 hours to such an extent that the position will change. The fact of the matter is that we have too much purchasing power for the quantity of goods that can be purchased, and if we are not careful it will cause inflation, which will cause much more misery. Now, I think we must reject the whole United Party attitude as a little piece of pure propaganda. I should like to say to the hon. member for Constantia we are perfectly capable of looking after our constituencies and he need not tell us what to do. Not a single member of the United Party will dare fight a single one of us at the next election, because he knows he will get a sound thrashing.

When the hon. member for Pretoria (Central) (Mr. van den Heever) was able to get away from his private debate with the hon. member for Wynberg (Mrs. Taylor), I rather understood him to say that we must have this fund in order to have financial stability and to guard against inflation. The amendment which was moved by the hon. member for Constantia (Mr. Waterson) has of course given him an opportunity to be a convert now to the granting of relief to the poorer members of the community. I remember the hon. member’s attitude only a few days ago when an amendment was moved from this side of the House asking that the income-tax rebate should be increased from 5 per cent to 10 per cent. He then suggested that if this side of the House had asked for relief for the poor people he could have seen sense in their amendment and might have supported it. But the opportunity to do so arises again to-day and I therefore invite him to support it.

Coming back to the Bill before us, let me say at the outset that we are concerned here not with a sum of money the Government got by a windfall, has on hand and now has to dispose of in some equitable and appropriate way in the interests of the taxpayer. On the contrary, we are concerned here with the salting away, or the tucking away, as the hon. member for Constantia put it, by the Government of a considerable sum of money mulcted from the taxpayers in a single tax year. The tucking away is going to be made, as the hon. member for Constantia has indicated, for some undefined purpose. The Minister’s proposition savours very much of a pocket-picking manoeuvre on the part of the fiscus, which this House is now asked to dignify with the cloak of respectability by creating a statutory fund into which to tuck away not all but a considerable part of the excess taxation paid by the taxpayer last year. The Minister, in doing so, has chosen to ignore one of the golden rules of budgetary practice. Instead of following the salutary rule of leaving the largest possible proportion of the national income in private hands for the development and expansion of private enterprise and the creation by that means of more prosperity and more and new avenues of employment, the Minister chooses to ignore this rule. Contrary-wise as ever, the Minister persists in the unsound expedient of taking in taxes from individuals and companies and from the gold mining industry far more money than the Government can put to good and proper use during the year in carrying into effect any well-planned programme. The Minister’s budgetary habit of over-estimating expenditure and underestimating revenue has gone on for so long now that he as the fiscus has completely over-reached himself to the extent of taking away from the taxpayer nearly R 130,000,000 more than the Government has planned to spend in 1963-4. Of that, R20,000,000 is now to be transferred to this new account as a sort of nest-egg, but for what purpose? That remains the 64 million-dollar question. I hope the hon. the Minister or hon. members opposite will be able to answer that question a little more specifically.

What makes the amendment moved by the hon. member for Constantia even more significant is that the revised Revenue Estimates for 1964-5 were tabled only a few days ago by the Minister and show another substantial increase in the expected revenue receipts for the current year. This document is innocently called the “Second and final print of estimated revenue received during the year ended 31 March 1965." It might be the final print, but I am quite sure it is not the final story, because the Minister’s predilection for under-estimating revenue is so well known that I have little doubt that this aspect of financial administration this year will come up again. The over-all increase in revenue in excess of the previous year’s estimates is now reflected as R141,000.000 instead of R 131,000.000 provided for in the Estimates tabled when the Minister delivered his budget proposals as recently as 16 March. In other words, before the Session has even ended the House and the public are being told that revenue recoveries will be much higher than was originally estimated. Most of the added R 10,000,000 which is expected to accrue to the Revenue Accounts will come from the normal income tax payers. Why I mention the significance of these figures is because I regard the whole proceeding as a figure-free presentation of budgetary proposals, in which nothing is being done on the lines that the hon. member for Pretoria-Central indicated that he would support. I think the figures reveal pre-eminently the determination on the part of this Minister and the Cabinet to withhold legitimate and well-deserved tax relief from the middle and lower income groups, i.e. from those persons who find it difficult to make ends meet because of the high cost of living and the Government’s inability to keep down the dangers of creeping inflation.

Do you want to give the republic more money?

I will come to that.

You will not.

I am coming to it now. This suggested pumping of more money into the economy is just words. Any argument advanced that if you give tax relief it will lead to inflation is completely fallacious in present circumstances. What the Minister is in effect doing is to take spending power away from the private sector and to transfer it to the public sector. The R20,000,000 which will be assigned to this fund will not be there for the purpose of being hoarded by the Government, nor will it be there for what the Minister has now thought of as the means of lending money to other countries and so keeping down liquidity and the flow of money to the market here. That will not take place. It is simply a shifting of spending power from one sector of the economy to the other. Once this money finds its way into this new account, it will then find its way into Loan Funds and so it will simply continue on its happy way of entering the money market and increasing the spending power of the Government. This matter of overtaxing and then tucking away money is very cold comfort to the taxpayer. It rather brings to memory the story which is told of the African taxpayer in one of the newly independent African states who also thought that once freedom had come they would be happier, but he was soon disillusioned in that regard and the conclusion he came to was this: “All them Government men, they eat money”. He was speaking without knowing very much about what is happening in this part of Africa, because this Government certainly has a remarkable spending appetite, as we all know. I find little difference, therefore, in the reason given by the Minister for holding on to the present taxation levels from that which was given by his colleague the Minister of Justice to justify his holding on to despotic powers granted to him under recent legislation by saying “he does not know what will turn up”. The hon. member for Constantia is correct. The need for relief is here now. It may not be there necessarily in five years’ time. It is here now and the Government has failed badly in its budgetary arrangements. It indicates, of course, that what the Government is committed to today is simply a policy of despair, and this manoeuvre of tucking away the money mulcted from the taxpayer for what is called a rainy day is a very clear indication of the straits to which this policy of despair has come.

I think what we have seen here this afternoon is really the beginning of the campaign for the next provincial election, and we have also had the battle cry on which the Opposition is going to tackle the election. They are now going to tell the people that they are suffering great hardships. That is quite in accordance with the attitude of their financial leader, the hon. member for Constantia (Mr. Waterson). He has considered that the last election in England was won by Mr. Macmillan by saying; “You have never had it so good”. Being the great-great-grandson of the prophet Jeremiah, he thought he should change it and now he wants to go into the election with the cry: “You have never had it so bad”. But they have taken a tremendous task upon themselves, because they have to go to the electorate and convince the electorate that they are suffering great hardship. To convince a person who has enough food to eat, who has a comfortable house in which to live, and who has employment, that he is having a terribly bad time is going to be difficult.

The hon. member for Constantia says we are very loth to meet the electorate, but we are not the ones who are loth to meet the electorate; they are the ones. I wish they would go and meet the electorate once again. Not so long ago we had a by-election at Vanderbijlpark, a workers’ constituency, where the hon. member could have told the people: “You have never had it so bad" and “You cannot make ends meet”. We put up a candidate but we are still waiting for them to go and meet the voters. Now there is a by-election at Mossel Bay. Unfortunately the election at Vanderbijlpark and that at Beaufort West have passed.

Tell us about Ixopo.

There you will not fight against the National Party but against the Progressives. But there is an election at Mossel Bay in the offing. Is he going to tell the people there are many farmers and workers who are having a terribly bad time? Are they not going to put up a candidate there? But when I made a friendly interjection, kind-hearted fellow that I am, he told me: You are enjoying yourself, but what about your voters? I should like to invite the hon. member for Constantia to come and spend a week-end with me. He does not play golf.

I do play golf.

Still better. We will make it a golfing week-end, and I shall arrange a meeting and a braaivleis, and those people “who cannot make ends meet" will pay for the braaivleis. Then he can meet the voters there. Those are the poor people, workers, the ordinary working-class. They are the type of people for whom he has now pleaded. I then want him to tell them how badly things are going with them and how the financial measures of the Government have failed, and I promise him he will have a peaceful time, and on his departure I am sure he will be much more optimistic than he is now.

What is the position to-day? As I told the hon. member for Jeppes previously, the trouble with the Opposition is that the boom has caught up with them. There is hardly any unemployment. The hon. member refers to “starving people”. He must tell me who is starving. Of course some people do have a more difficult time than others, but surely that is so always. But what does he wish to do with the R20,000,000 the Minister now proposes to put into the Reserve Fund? Does he wish to distribute it, and if so, to whom? The fact of the matter is that our economy is sound, as sound as it has never been before. We do not have unemployment. The people have sufficient money to purchase food and clothing and dwellings. Immigrants are flowing into the country, but he complains because the Minister wishes to credit R20,000,000 to a reserve fund. But in the same breath while he is complaining of what a hard time people are having of it, the hon. member for Port Elizabeth (South) (Mr. Plewman) who follows him does not talk about that or about unemployment. He does not complain about lack of money, but about an excessive cost of living. He says it is constantly rising. Cost of living can only rise constantly when more and more money pursues less and less goods, and the hon. member for Constantia knows this, for he is a competent economist. The fact is that all the people in South Africa at the present moment are well looked after, and this is not the time to pump more money into the economy, because if that is done there will be the danger of inflation. The hon. member for Port Elizabeth (South) says what the Minister is doing here is “salting away by the Government of the money of the taxpayers" but what is wrong with that? I should like to call the hon. member for Kensington (Mr. Moore) as a witness. He is one of the people who believe, quite wrongly, that the ordinary companies should not build up reserves; they must not plough back money. I am sorry if I misunderstood him, but he and I had a private discussion the other day and he said all the money of a company belongs to the shareholders. That is one way of looking at things, that when a firm makes profits it must pay back the whole of those profits to the shareholders.

May I help you by saying what I actually said?

Order! No.

I am sorry for the hon. member because I am much kinder to him than you are, Sir. But that is purely a matter of financing. Why do companies not distribute all their profits? Why do they earn 20 per cent and distribute only 4 per cent? It is for very good reasons. It is in order to build up a strong firm with big reserves so that when the lean years come along they may be able to use that money, or when there is an opportunity for development they can use that money. In my view it would be the very height of folly for any firm to distribute all its profits in the form of dividends. To-day we have the same position in this country. We have a lot of money and there is no great need, in spite of all the squealing on that side of the House. One might perhaps increase the old age pension a little and relax the means test, but it is a question of retaining the balance. We have that enor mous surplus and the Minister says he wants to credit a portion of it to the reserve fund. This is the sound principle adopted by all companies, and the Railways too in the form of the Rates Equalization Fund. You have a sounder position in the economy, so that in the one year you do not have to have high taxation and in the next year low taxation again. You try to have a position where you know more or less what your taxation will amount to. The hon. member for Constantia objected most vehemently to that. He says the poor taxpayer never knows what the surplus or the deficit is going to be. But the taxpayer is not interested in that. He merely wants to know more or less what taxes he has to pay so that he may make his arrangements. The man who has to pay railway rates is in the same boat. The businessman does not want the Minister of Railways to put up his tariffs by 10 per cent in one year, because then he cannot arrange his affairs. Therefore you have the Rates Equalization Fund so that he will always know more or less that for the ensuing few years he must pay so much in rail tariffs, and when costs rise a little, they are defrayed from the fund.

Do you regard it as sound financial policy for the Government always to deposit money in the reserve fund in future?

I do not think it is a bad idea. It is a novel idea, but I do not think it is a bad idea. You now have a large sum of money and you have to decide what to do with it. What can you do with it? You may pump it back into the private sector or you may control it judiciously so that it does not flow back injudiciously into the private sector. As long as the money is in the hands of the Government, it can regulate the flow of it, but we know, do we not, that when that money is placed in the hands of 1,000,000 taxpayers, there is no control over it. A wise taxpayer like I am will invest it, but an unwise man will not do so. If you permit that money to get out of your hands, and if you pump it back into a buoyant economy such as we have today, you are tempting the people to spend the money on things they do not need. Therefore I should like to congratulate the hon. the Minister of Finance. I think he has taken a very courageous step here. That money is not required in the private sector, because there is no unemployment. You judge your economy by only one criterion, and that is unemployment. When there is full employment, it is not necessary to say you have to pump a lot of money into the stream so that the people may again become prosperous, because they do not become more prosperous. They spend the money unwisely. [Interjection.] The hon. member for Drakensberg is faring so well that she is driving a Cadillac, while I am driving a Volkswagen. If the Minister had taken a little more money from her, she might have been travelling in the Volkswagen with me and then we might perhaps have had a pleasant time. [Interjections.] It is purely a financial fact that if you give people more money than they need for their necessaries of life, then they spend that surplus money; some spend it wisely and others again spend it unwisely, and here you really have the basis of the whole question whether you are going to have inflation and whether you are not going to have inflation. So I wish to heartily support this Bill. I should like to congratulate the hon. the Minister of Finance on a wholly original and courageous step taken by him here. I think he is going to find that this step will in future be the basis of a much sounder financial policy in South Africa.

The hon. member for Vereeniging (Mr. B. Coetzee) has made a statement this afternoon which I believe is important and should be high-lighted, not because it was made by the hon. member for Vereeniging but because hon. members on the Government side applauded that statement. The hon. member for Vereeniging said that you must give people just enough money to exist.

I did not.

Yes, the hon. member said, “Jy moet hulle gee net wat hulle nodig het om te bestaan”.

You must not give them anything; they must earn their money.

He said, “Give the people more money than they need and they will waste it." Sir, who is the hon. member for Vereeniging to decide what people need? He said that there was nobody in his constituency in need.

I did not say that.

The hon. member did say it.

Do not talk such nonsense. There is full employment.

The hon. member for Vereeniging said that the people did not need this money; that the people in his constituency were not in need. Now he back-pedals and says that there is full employment, just as he backpedalled a moment ago on another statement. [Interjections.]

On a point of order, is the hon. member for Ventersdorp (Mr. Greyling) entitled to call the hon. member for Durban (Point) (Mr. Raw) a “twister"?

I said that he was a “twisser"; in other words, that he quarrels unnecessarily.

Order! Did the hon. member say that the hon. member for Durban-Point was “twisting"?

I said: “Jy twis; jy is ’n twisser.”

On a point of order, Sir, the hon. member clearly said “you are a twister”.

He was speaking Afrikaans.

Sir, I was speaking in Afrikaans and I specifically used the word “twisser”.

Sir, I treat the running commentary which we are accustomed to from that hon. member with the contempt it deserves.

Which he deserves.

I do not think he knows in any case what language he is speaking, let alone what he is talking about. The hon. member for Vereeniging now admits that there are people in need in his constituency. Now that we pin them down he says, “Of course, there are people in need in my constituency”.

I can look after the people in my constituency; why do you worry about them?

He admits that there are people in need but he is not prepared to support us when we want to help those people in need. He is prepared to leave them to continue in need, to continue in want. Let me ask the hon. member how many wives are working in his constituency.

Many.

He admits that the wives in his constituency are being forced to go to work so that the family can exist. The White children of Vereeniging are being left in the hands of Black nursemaids so that the wives may go and work in order to make ends meet in their family. The hon. member admits that there are many wives who work in his constituency.

As a matter of fact all the wives in my constituency work.

The hon. member thinks that this; is a joke. He thinks it is a joke that the mothers of South Africa should have to work to balance the family budget; that they should have to leave their children in the hands of nursemaids while they go out to earn a few extra rand so that they can pay the bills at the end of the month. I would like to ask the hon. member for Vereeniging how many people in his constituency are in debt and how much they owe. I would like to see one constituency in South Africa where people are not in debt with the rising cost of living which the families of South Africa are unable to meet. Yet this hon. member, in the name of the Government, this expert on economics, has the nerve to stand up in this House and say that people do not need help; that you cannot give people more than they need just to subsist because they will waste it. That is what the hon. member said.

Do not talk nonsense.

That is what he said and South Africa will remember what he said. I remember how confident he was in 1948 when the needs of the people were also sometimes forgotten. To-day he forgets that he represents a Party elected by the people and he is treating those people with the typical contempt with which this Government treats all the people of South Africa. Our protest is not only a protest against the theft of this money from the people of South Africa …

Order! The hon. member is going too far now.

I withdraw that, Sir. Our protest is not only against the appropriation of money which belongs to the people of South Africa, it is a protest also against the attitude of this Government that it governs for the benefit of South Africa and it does not matter about the people. They do not care what happens to the people who have to struggle as long as they are able to maintain their political power. They are suffering from the delusion of power, the delusion that they are South Africa, and they forget the fundamental truth that this Parliament is the voice of the people in South Africa, of all parties and all classes and all economic strata. Because they are happy, because they live comfortably, because in Vereeniging there are a few Defence contracts which are creating extra employment and because the people in Vereeniging are working overtime …

Plenty of overtime.

Yes, the hon. member admits that they are working plenty of overtime; the wives are working and the men are working overtime in order to meet their day to day requirements; because that is the situation they close their eyes to the needs of those who are not in the fortunate position that they can work overtime or that their wives can go and work. Sir, all we ask for in our amendment is that this money be given back to those who need it, not to the hon. member for Vereeniging. We do not want him to get a single penny out of it. In fact it would be a very good thing if he made a gesture and gave some of his income to the people in his constituency whom he is not prepared to help by supporting us. He refuses to support us in asking for Government assistance.

I do not want to buy my votes.

All we are asking is that those who need help should be given assistance. Sir, in every constituency in South Africa, with perhaps a few exceptions, there are hundreds of people and in some cases thousands of people who are living on the bread-line or below the bread-line.

What percentage is rich?

I do not know what the hon. member means. Government members only seem to be concerned with the rich man. We are not concerned in this debate with the rich man; we are concerned with the poor man, with the pensioner who has to live on R30 per month, who has to live in a hotel. The hon. member can pick up a newspaper every day and he will see stories of the tragedy of people who cannot exist. Only this morning there was an appeal to people to provide tents to house some of the old-age pensioners who had to give up their flats in Durban because they could not afford to pay for them. That appeared in Wednesday’s newspaper which I received this morning. [Interjection.] Sir, the hon. member does not believe it. I ask him whether he could live on R30 per month.

Yes.

The hon. member says he can. I ask him to state in the name of the Nationalist Party Government that he regards R30 per month as a living income for human beings in South Africa. He said that he could live on R30 per month. I want him to state now that the Nationalist Party accepts R30 per month as a decent living standard for the people of South Africa.

For whom?

For Whites and non-Whites. Sir, now hon. members opposite are silent. The hon. member knows that he dare not say it.

How much do you want to give them?

We say that the pension which is paid to the aged of South Africa is a disgrace. Here we have people who served South Africa during the whole of their working lifetime and now they have to live in poverty.

How much did you pay them?

I ask the hon. member how much money was worth when we were in power. Here we have an opportunity to help these people; we have money to spare, money which the Minister cannot spend; it is spare money, and the Minister is putting it away in a kitty for a rainy day or probably for an election day, as the hon. member for Constantia (Mr. Waterson) said. The money is there; you do not have to tax anyone extra to get the money; it is available, and I ask the hon. member for Vereeniging by what right he denies that money to the people who need it.

The United Party Government paid a certain amount to the old-age pensioner. There was not a single year during which they had a deficit; they always had a surplus. Why did they not pay that money out to the old-age pensioner?

The surplus was not large enough. We never took money and put it in a reserve account. We never had money which we could spare to put into a reserve account, but those pensions were nevertheless increased from time to time. We did everything we could to help those people. Sir, here we have money available to help these people; we are not asking for it to be squandered; we are not asking for a spending spree; we are asking that those who need assistance should be helped, and not one member on that side has the guts to support us in this plea. No, they will sit back because the Minister has said that he wants to keep this money for a rainy day. Not one of them will get up and support us. They have not got the courage to get up and fight for people in need in South Africa. I challenge any member on that side to say that he regards the present old-age pension in South Africa as a living pension. Did the hon. the Minister say that he regards it as a decent pension?

I said that this was not a welfare State.

No, it is not a welfare State but here we have a surplus over and above even what this Government can spend—and heaven knows they have never been in trouble in wasting the money of the taxpayer of South Africa; they have always managed before to get rid of the taxpayer’s money, usefully and uselessly, but here we have a surplus which even they, with their inefficiency cannot dispose of. Even with the shambles that exists in the Government administration they cannot spend this money, either usefully or uselessly; it is lying there idle and the Minister denies it to the people. Why? Because it is not a welfare State. Sir, we are not asking for a welfare State; we are asking for a little humanity, for a little sympathy for the people in need, for a little recognition that this Government is not the dominant dictator of South Africa but that this Government is the servant of the people. That money belongs to the people and it should be given back to them. When we make that appeal to the Government, when we ask Government members to support us, what do we get? We get shouts that it is not necessary, shouts that there is no poverty and then back-pedalling; we get claims that you cannot give people more than they need just to exist because they would waste the money and then you would have inflation; we get claims that if you gave them this money they would spend it on Cadillacs. But there hon. members sit, every one of them having people in their constituency in desperate want at this moment, every one of them having hundreds of people in their constituency at this moment who cannot go out and buy a pint of milk because they do not have the money. At this stage of the month those people have no money left to buy luxuries of any kind and they barely have enough to subsist. In spite of that Government members refuse to assist us in this plea to spend what is not wanted for any other purpose on a purpose of which South Africa could be proud.

We bear the responsibility.

Sir, I am noting these comments and I hope that the constituents of these hon. members will note them too. That hon. member is only interested in the political platform; he is not interested in the welfare of the people; he is only interested in whether he can get enough votes to get back into power.

And you?

I am interested because in my own constituency there is poverty and tragedy. I wonder if that hon. member has ever watched the queue of old people when pensions are paid out at the end of the month; I wonder whether he has ever stood in the unemployment queue. No, as long as he can get enough votes to be returned to this House he does not care a dam what happens to the poorer people, and all members on that side are the same.

What about the food queues when you were in power?

Yes, there have been food queues, but to-day we have people in need and it is possible for us to meet that need. The Minister cannot by the wildest stretch of imagination claim that it would cause inflation if he were to use this money which he is now salting away for a rainy day or for an election. He cannot claim that if he were to use it to help the needy in South Africa it would do any harm whatsoever to South Africa; it could only do good, not only to those whom he helped but it could do good to the overall welfare of the country. South Africa could then hold up its head in pride instead of having to bow its head in shame when it sees the conditions under which some of its people have to live. Sir, we on this side of the House are not going to sit silent while the money of the people is taken from them unnecessarily and while the Government refuses to do this small thing for which we ask in the name of those who need help from the Government which is able to give that help, a Government which refuses to help them only because of obstinacy and for no other reason. We will refuse to support this measure until we get an assurance from the Government that this money will be used to help those in need.

The hon. member for Durban (Point) (Mr. Raw) did his best to make a political speech on a financial measure. He did not get down to the true merits of the Bill before the House at all. He tried his best to use political arguments and to sow political confusion.

Is it politics to help the poor people?

Permit me to analyse some of the arguments of the hon. member. The hon. member said: “We are not concerned with the rich people”. He was not in the House the other day when we had a motion for the House to go into Committee of Ways and Means and when his party moved an amendment. He says his party is not worried about the rich people, and I wonder in any case what the rich people of South Africa will say about that; I wonder whether they will believe him and I wonder in any case whether he believes himself, because surely any political party is there at least to look after the interests of the entire population and not the interests of a part of the population only. But the hon. member rose here to-day and said: “We do not care one iota for a part of our people; we are not concerned with the rich people”. The other day we were dealing with the motion for the House to go into Committee of Ways and Means, and during that debate we also dealt with the schedules, the whole scale of taxes. The Party of that hon. member then had the very finest opportunity to move an amendment and they did move an amendment. Was there a single word in that amendment about the pensioner? Not a single word. What did they propose in their amendment in connection with the scale of income-tax? Their proposal was that there should be a rebate of 5 per cent to all taxpayers, from top to bottom, and who would have benefited most from that proposal? It would have been the rich people for whom the United Party, according to that hon. member, do not care one iota. The hon. member will not take it amiss of me if I say under these circumstances, that there are serious weakneses and mistakes in his whole argument. The hon. member referred to old age pensioners. In passing I should like to point out that all these matters were threshed out during the Budget debate; the question of education was threshed out because the Opposition referred to it in their amendment; the question of concessions to pensioners was dealt with: food subsidies were dealt with. Hon. members from this side of the House came along with proof that this Government is not indifferent to the less privileged people; that this Government does not take second place to the Opposition at least by one half an inch in its desire to improve the position of our indigent people. If the United Party is prepared to go to the electorate with these matters, we are prepared to submit to the voters the record of this Government as shown in the Budget debate. The hon. member made a fuss here to-day on the old age pensioners and on the R30 they are receiving. Why does the hon. member then not have the courage to say what the minimum is on which these people can exist? What is the figure the hon. member had in mind—R200 per month, R150 per month or R100 per month? Is he prepared to say that every pensioner should receive R100 per month? No, the hon. member does not propose that because if he were to move that, then he must tell us where South Africa is to get that money from in the future. He merely came here to make some political propaganda with a view to the ensuing provincial council election.

The hon. member used some other arguments here which in my view did not have any substance either. For instance, he mentioned wives who are working. But surely that is no criterion. We find this phenomenon of working wives throughout the world.

Is it a good thing?

In my opinion it is not a good thing, as a general rule. There is a large percentage of wives working because they like to work, not because they need the money so much. There is a percentage of our wives who work because the family needs the money; that I do not deny. But if the hon. member wants to convince us that that argument has some substance, he will have to show us what percentage of wives are working because they have to work.

Then the hon. member says there are people in his constituency who are in debt. But has there ever been a time in the history of our country, and has there ever been a country in the whole world where people have not been in debt? There are people in the higher income groups who are in debt, who have considerably more debts than the people in the lower income groups. If one regards the matter in that light, then surely it is no argument, because you can give people more money and then they buy more and they fall deeper and deeper into debt. Taken by itself that is no argument therefore.

Then the hon. member referred to “appropriation of money belonging to the people of South Africa”. Surely the whole salary and the whole private income of the hon. member is his money; it is nobody else’s money, but it is a principle of our modern democracy that the State has the power to take a portion of that money. The State has the right to appropriate part of the money of any citizen of the country. The question is just what portion that must be? So I merely wish to tell the hon. member that we have the interests of our people at heart and in this respect we do not take second place to them.

But I should like to take up another point, with the Opposition, and I am sorry the hon. member for Constantia (Mr. Waterson) is not here now. The hon. member for Durban (Point) said: “We never took money and put it into a reserve account”. Now I am not alleging that they did in fact do so, but was that hon. member not present in the House during the Budget debate this year? I should like to quote what the hon. member for Constantia said during that debate. The hon. member proposed an amendment. I have specially sent for the English Hansard, and I should like to quote what he said during that debate when he urged the establishment of reserve funds. Is the hon. member not aware of it then? The hon. member for Constantia said this: (Col. 3288)—

You will recall, Mr. Speaker, that the Opposition were urging us not to finance from reveue account certain expenditure such as e.g. the expenditure on Defence Account; they urged that we should borrow a portion of that, and he used these words—

And he then moved his amendment. But he continued and in column 3290 he said this—

And now the hon. members for Durban (Point) and Pinetown (Mr. Hopewell) must listen carefully—

That was during the month of March, Mr. Speaker. The Opposition were at that time very heartily in favour of a tax reserve account. They then said this money must be invested with the Public Debt Commissioners and that the major part thereof should not be paid out to the public. They said it should be kept as a nest-egg for the lean years in future.

The hon. member for Port Elizabeth (South) (Mr. Plewman) says that this measure will cause inflation. He says what is the difference—"you are just shifting the volume of money" from the private sector to the public sector. And here the hon. member for Constantia is pleading for it himself. I should like to put it thus; We have the R20,000,000 in question here today. Suppose you have loan estimates of R 100,000,000 and you were to make this R20,000,000 available there. Then surely the loan account does not become R 120.000,000. The Minister’s estimates of expenditure on loan account surely remains exactly what it was in March, namely R 100,000,000. If everything is spent, R 100,000,000 will be spent on loan account. In terms of the proposal of the United Party. R20.000.000 more will be spent because it will be placed in the hands of the public, but under the policy of the Minister the total amount spent will not increase. It is not a case of “just shifting"; it is a case of R20,000,000 more or less which will be spent. That is my reply to the hon. member for Port Elizabeth (South).

I should like to conclude by saying that it is my honest conviction that the greatest favour we can do this country at the present stage is to give the country a stable economy, a stable economy ensuring full employment. I could also quote what the hon. member for Constantia said during the current year in his budget speech, namely how well things are going in the country in every respect. He confirmed everything the hon. the Minister had said. He also used the words “full employment”. What more does any person in this country desire than to be able to say: I have a decent job where I can earn money to support for my wife and my children. This Government has given the country stability and the basis for progress. The Government has given the country a responsible Budget. We are not indifferent to the less privileged people of our country, but we have an absolute duty to South Africa. South Africa will not be able to overcome its problems, South Africa will not overcome this time in which we are moving, if it is unable to maintain this absolutely sound economy. The Opposition have repeatedly shown us that they are prepared to play with policies which will infinitely strengthen the inflationary tendencies in our economy, and which could if need be let them get out of control. The public and the people will not accept that. The public are prepared to stand by the conservative stable policy of gradual progress offered to South Africa by this Minister by means of his budgets, and to which this Bill offers a significant contribution.

The hon. member for Queenstown (Mr. Loots) seems to turn a blind eye to the difficulties of the vast mass of the people of this country. After listening to the hon. Minister and members opposite it becomes increasingly obvious that there is little hope of any relief for those persons who deserve relief at the present time. If you think of it, Sir, that in a time of prosperity the hon. Minister of Finance says he is unable to spend more in regard to social services and the social pensioner because that may cause inflation. The excuse in times of financial stringency will naturally be that the country cannot afford to spend more on that section of the community. So as I see the position it is this: As long as this Minister occupies the portfolio of Minister of Finance and as long as this Government is in power there is very little hope indeed of achieving anything as regards relief for those persons concerned.

The hon. member for Queenstown posed various questions regarding social services and pensions. I might mention to him that we have on several occasions throughout the course of this Session put forward our point of view in this regard by means of private motions. We have also said that when a National Contributory Pension Scheme is introduced one day it will be possible to pay a pension of R40 per month and to abolish or relax the means test in certain instances. I do not think I need labour that point any further as we have made our policy perfectly clear in that regard.

Another aspect is the economic prosperity in South Africa. It was surprising to read in the Daily News of the 5th of this month that 21,300 civil summonses had been issued during the first five months of this year and that this figure was 2,000 more than for the corresponding period last year. It is obvious, therefore, that the degree of prosperity which is claimed by the Government is not filtering through to the ordinary man in the street. A large number of these people are finding it increasingly difficult to survive increases in the cost of living from time to time. With these increases in the cost of living those persons, who are living on fixed incomes and both civil and social pensioners, only have one alternative and that is to reduce their standard of living if they do not receive any further relief from the Minister of Finance. Unfortunately, with the increasing costs, particularly of the necessities of life such as shelter, food and clothing, these people are having to economize in many instances on food. For the benefit of the hon. member for Vereeniging (Mr. B. Coetzee) I wish to draw his attention to the fact that there is still a vast degree of malnutrition in South Africa. That incidence of malnutrition is brought about and aggravated every time there is an increase in the cost of living. These people only have one avenue in which to economize and that is to economize on food. If the hon. member for Vereeniging were to visit a large non-European hospital in Durban he would see the enormous amount of work which has to be undertaken at a considerable cost. The cost is something like R3 per day to treat and cure cases of kwashiorkor and malnutrition. The prevalence of that disease could be so easily countered by an additional expenditure of only lc per day by the Government on the subsidization of foodstuffs for those persons who are suffering from advanced stages of malnutrition. The attitude adopted by some hon. members opposite is no more than a callous disregard of the actual realities in South Africa to-day in regard to the living conditions of a large section of our community of all races. That is why I believe it is wrong in principle that we should pass a Bill which is going to establish a fund which I understand will be in the region of R20,000,000 to start off with. That is virtually putting money in cold storage, money which belongs to the taxpayer. It leaves me cold, Sir, as to how the Government can justify putting this money into cold storage when there are so many avenues of relief that can be afforded to the community. I do hope that the hon. the Minister, in considering this over-all principle of having this money in cold storage, will realize that it belongs to the people and must be spent for the benefit of the people. This step, which we are told is a step in the direction of decreasing the possibilities of inflation, is one which I think deserves some scrutiny. We find that the Government is extravagant in certain instances. It is spending vast sums on other projects; they are even spending large sums on houses for Cabinet Ministers. Surely that is more inflationary than spending something on people who require that money in order to live and keeping that money in circulations by having it spent on food, clothing and accommodation. We are now asked to pass a Bill in this House whereby a large section of the Minister’s surplus will be placed in cold storage.

On a previous occasion during this Session I raised the question of relief to those persons who were considered deserving of relief. I refer to the fact that of the 523,000 social pensioners, according to figures supplied to me by the responsible Minister concerned, some 274,000 have already received the special allowance which was provided for last year and who will consequently not receive a single cent of that surplus this year. Last year when the Minister made an additional allowance of R30 per annum available to social White pensioners and lower amounts to non-White pensioners, he said this—

The point is that the Minister recognized the fact that there were those persons who deserved additional relief. What has happened this year, Sir? We have a far bigger surplus than we had last year and those very persons whom the Minister considered to be in the greatest need are the people who are being completely and utterly ignored as far as this year is concerned. Instead we find that R20,000,000 is being put in cold storage. How much would it have cost for some relief to have been given to all 523,000 social pensioners? If we merely allowed an amount of R3.50 per month more to all social pensioners it would have meant that those 274,000 persons would also have shared to some extent in the prosperity that was prevailing in this country, because they in turn would have received some increase. It would only have been a small amount. In fact, the White pensioner would have received an extra R1 per month. Can the hon. the Minister quite honestly and truthfully say that that would have caused any degree of inflation? The Minister has every right to ask what would it cost. I have taken the trouble to calculate what the cost would be. From an analysis of all the figures made available during the Minister’s Budget debate, it would appear that if R3.50 per month were granted to the social White pensioner the over-all cost to the State would be some R5,902,400. The Minister allowed for an amount of R3,450,000 in his Budget. So it would have meant an extra cost of R2,452,400. I believe that an amount of less than R2,500,000, an amount which would have been gratefully received and which is urgently required by these people, would not possibly have increased the danger of inflation. I believe the Minister, in the face of that risk, has been over-cautious in not allowing a more liberal amount in the form of relief to these people. Instead the excuse is advanced that that may cause inflation. As I have said, Mr. Speaker, it leaves me stone cold. If R20,000,000 in cold storage will prevent inflation how will R2.500,000 spent on granting relief to those persons, who are struggling to exist under the present increasing cost of living, seriously affect the economy? One can only come to one conclusion, Sir, and that is that the Government has no regard for the welfare of these people at the present time. That is the difficulty which faces the country; that is the difficulty the country is faced with in this particular Bill. We find that instead of money being paid over to persons who desperately need it it is being placed in cold storage.

Surely we have to take the non-White population into account. As I said earlier the hon. member for Vereeniging and others do not seem to believe that there is such a thing as malnutrition in this country. On the question of malnutrition the Government has to a certain extent acknowledged the fact that it can be prevented, and that it is cheaper to prevent it than to cure it, by making certain limited funds available to local authorities for the distribution of skimmed powdered milk. But that is hopelessly inadequate at the present time. This whole scheme requires to be enormously expanded so as to counter this problem of malnutrition. If we are unable to tackle these problems adequately at times when there is prosperity in the country when are we going to tackle them in a realistic manner? Surely, Sir, now is the time to tackle these problems. The hon. the Minister referred to a welfare State. We on this side of the House have never advocated a welfare State. But we believe that the rights of the people, the rights of the poorer and the lower income groups who are to-day struggling to exist, should be looked after by the Minister. We believe they deserve more relief from him. I hope the Minister will realize that this money is urgently required in various avenueis. I have merely shown one particular avenue where that relief can be given and I believe that is a vital avenue in the community of South Africa. There are perhaps many other avenues where this can be done. My plea to the hon. the Minister, therefore, is not to allow R20,000,000 to stand in cold storage in a tax reserve account but to give it to the poeple who deserve and require that relief.

It is very clear to me that the Opposition are merely politicking. After the speech of the hon. member for Umbilo (Mr. Oldfield) I am more convinced that this debate is only being conducted in order to catch votes. The hon. member for Umbilo in the course of his speech said that the Government works on the assumption that if concessions were to be made to welfare pensioners, it would promote inflation. He says furthermore that when things go badly with the country, it will be argued again that the country will not be able to afford it.

I should like to tell the hon. member for Umbilo at the outset that this side of the House need not take second place to that side of the House for one moment as regards the pleas we made in the past for the less privileged persons in this country. The object of this Bill is lost sight of completely, Mr. Speaker. I am sorry to say that I think the Opposition are deliberately losing sight of the true object of this Bill. Provision is made here for the establishment of a tax reserve account. We have had pleas for concessions to the middle income groups, to social pensioners, etc. But we should approach the matter from this angle, Sir: The fact that we are living during times of unprecedented economic prosperity cannot be argued away; our country has a buoyant economy. It is a very elementary principle to provide during the days of plenty for the lean years. That is exactly what the Government is doing now. The Government now credits an amount of R20,000,000 to a reesrve fund so that it can be used in the days when the State may perhaps not be able to afford spending it, when economically things are not going so well.

It is argued that we have unlawfully taken money out of the pockets of the taxpayers, money we are unwilling to return to them. But this is not true, Sir. This money which has been taken out of the pockets of the taxpayers is not being used by the Minister of Finance for his own purposes, but it is now deposited to a reserve account to be spent in the interests of the taxpayer, when things may not be going so well with the country. For that reason provision is made that certain sums of money in the account, and dates fixed by the Minister, may be transferred to the Consolidated Revenue Fund to be appropriated by Parliament to meet expenditure on services which normally constitute a charge upon the revenue account.

I just want to tell the hon. member for Umbilo that provision is made for guaranteeing to the pensioner his pension in the days when the country may not be quite as prosperous as it is to-day. If circumstances require it then, it will not be necessary to reduce those pensions, but it may even also be possible to increase it. The Opposition now want to distribute those surpluses in the way any poor businessman would do. But the Government is keeping it in reserve as a nest-egg for the lean years.

This money is not going to lie there without earning interest. I am glad to see that provision is made for any balance to be invested with the Public Debt Commissioners, including interest from investments. This money will increase and it may be possible that we may even be able also to give some tax relief in the event of things not going as well with the country as they are to-day. So this money is being used in the way that any sound business would run it. I support this Bill wholeheartedly.

The hon. member who has just sat down obviously has not very much confidence in the future of this country. He reminds me of what the hon. member for Umbilo (Mr. Oldfield) has said about the way the Minister is handling the affairs of the pensioners. The hon. member for Umbilo said that when times were not so good the Government said it could not afford to give the pensioners any more and when things were very good the Government had to be cautious of inflation. In other words there will never be anything for the pensioners. The hon. member for Welkom (Mr. H. J. van Wyk) advocated that the Government must now provide a sinking fund for the future. Surely the position is that taxation is adapted to the conditions of the country. The Minister will now have a sort of tax equalization reserve fund! The Minister has said he has ideas of using this R20,000,000 for the benefit of income-tax payers in the future. I think he will do this; but this is the right time from my own point of view. But I as a taxpayer do not want any benefit in the future. I want these poor unfortunates who should have help to have help now. That is the attitude of our party.

Mr. Speaker, the hon. Minister of Finance is wallowing in money. That money came from us, from the taxpayers. There is a surplus of R 148,000,000 this year, which looks as if it will finish up at R 150.000.000, notwithstanding the colossal expenditure on defence at a rate now exceeding what it was in the war years. The Minister said his main justification for re fusing to give more relief to those who were entitled to it was his fear of inflation. Sir, a little extra spending capacity in the hands of the man in the street does not bring inflation, in any event this Government has always contended that it has the question of inflation well in hand. What has happened to the man in the street, the middle-income group and the chap below him, in the last few years? As the hon. member for Constantia (Mr. Waterson) said what happened was this: The price of milk has gone up, the price of butter, cheese, meat, shirts, furniture, etc., has gone up, particularly recently. But the poor chap in the middleincome group and the chap below him must not take any notice of this! He and his wife and children must sit back and smile while the Government salts away tens of millions of rand for future taxpayers to be used just before an election! I say that I object to this most strongly. I want to make a few suggestions as to how this money could be better applied in the interests of the people of this country without bringing any fear of inflation.

Firstly, I should like to point out to the hon. the Minister that the primary rebate for married taxpayers was R62 in 1948-51 and is still R62 in 1964. If this could not easily be doubled without bringing inflation I would be surprised. Secondly. I should like to point out that the child rebate for 1948-51 was R20 and in 1963-4 it is R34 with a couple of extra rand for additional children. That is a miserable R14 increase. And I must remind you, Sir, that our currency was devalued by 40 per cent in 1949. This R14 is the only increase given to the married man to help him to bring up his family. If the hon. the Minister wants to query my figures I can tell him that my authority is the report of the Secretary for Inland Revenue.

I now want to speak in support of my colleague, the hon. member for Umbilo. Every year the question of the means test for old-age pensioners crops up and the Minister for Social Welfare fobs us off with honeyed words and a possible increase of a few miserable shillings increase in the pension. I want to point out that it is a well-known theory that the cost of social pensions should relate to some degree to the gross national product which is referred to by the Minister in his Budget sneech every year.

In recent years the gross national product has increased enormously and I want to remind the hon. the Minister of some figures of which he knows, to prove that the increase in social pensions has certainly not kept pace as it should have. I have taken out our national gross product figure since 1957-8 from Budget speeches, and also the amounts provided for expenditure on war veterans, blind, old age pensions and disability grants. I will not give the figures for each year, Sir, but I just want to compare the figures for 1957 with those given this year. In 1957 the gross national product was given as R3,400,000,000 and in 1963 it was given as R6,679,000,000—an increase of no less than 94 per cent. This is a figure for which we obviously are all very grateful. The provision for old age pensions etc. was approximately R39,000,000 in 1957 and R51,459,000 in the recent estimates —an increase of 33 per cent. That is one-third of the increase in the gross national product. I have a recollection that the hon. Minister—I think it was in his Budget Speech—said that he was providing roughly R3,500,000 for assistance to social pensioners. At that time he was under the impression that his surplus was going to be R80,000,000. The surplus has since increased officially to R128,000,000, and we all know that it will probably be R 150,000,000. I want to suggest that in view of the tremendous increase in the surplus, now is the time to bring his better feelings into play. I do not want to juggle with figures, but I say definitely again that they prove that the old age pensions are not keeping pace with what the country can afford and what the aged should receive. It is common cause that the means test should be relaxed, relaxed considerably, and these figures prove that a reasonable relaxation will not put any undue burden on the country’s finances. In 1962 certain figures that I came across show that there were about 87,000 White old-age pensioners, and their pensions averaged R268 per year in those days. The figures have changed a little bit, but not to any great extent. I ask for more than my hon. colleague for Umbilo. I say that an extra R10 a month would certainly not cause any bend or break in our country’s finances, or bring about any undue inflation. I accept that any relaxation in the means test will bring about an increase in the number of pensioners. That argument is always given to us by the Minister of Social Welfare, but I think there is a good case to be made out for this relaxation of the means test. The hon. Minister should remember that he has had a yearly tremendous surplus for many years. I said before that I appreciate the official attitude towards the relaxation of the means test in that it will in most cases be of benefit to the heirs only. But I repeat what I have said before, that no insuperable difficulty prevents providing that over the last years of a pensioner’s life any payments received by him from the State should be a first charge on his estate, subject to his estate being protected up to the amount to which it is now protected, and it is time that this proposal be thoroughly investigated by the hon. Minister, because it might get him out of some of the difficulties he sees.

I want to put another suggestion to the hon. Minister. I suggest that this amount of his surplus that he wants to put to reserve, to be used for the benefit of all of us at some later stage, could be better used towards helping that large number of women who are now paying tax under the new PAYE system, whose husbands have deserted them, and single women, and men too who are keeping an aged parent. Last year I pointed out to the Minister that under the PAYE system a married woman who is working and whose husband has deserted her, is having deductions made from her pay, which deductions in turn are taken off the husband’s liability to tax on the joint income, to his benefit. Now the National Council of Women and several other bodies have told me that there are a considerable number of such cases, and I do suggest that they have more call on this colossal surplus than posterity. I think they are entitled to say with all solemnity: What has posterity done for them? They should be helped at this time, not in a few years time, and the little bit of assistance that they will get will not cause any inflation whatsoever. I am dealing here mainly with women whose husbands have deserted them and have disappeared. There are many of them. The National Council of Women here and in Johannesburg has told me that there are many cases. The Department is under an oath of secrecy and gives no help to such a woman in tracing her husband, and she has deducted from her pay some tax payment which he should have borne. Now sooner than put this money to reserve, I say that her case should be dealt with. I dwelt on this at some length last year, and I do not want to do that again, but I want to join this with another factor which I consider unjust and in respect of which I think this money could well be utilized. Mr. Speaker, single men and single women who are the sole support of a parent are taxed as single and given a small rebate. I want to quote from a letter of an old lady of 81 which was handed over to me by the hon. member for Wynberg (Mrs. Taylor). She says—

Order! Are we having that debate all over again?

No, Sir, I am only asking that this tax reserve should be utilized for relief in certain directions, and I thought this was a very good direction where relief could be granted.

The hon. member must not go too far.

I have finished with the case of the old lady of 81. I do not think she has any cause to say to posterity that posterity has done anything for her or for her daughter.

It has previously been said that the so-called boom has not reached the man in the street, nor the social or other pensioners, and to leave them unhelped after plundering the taxpayer is not right.

I would like to remind the hon. Minister that the War Pensions Act applies now to our boys who are being trained …

Order! The hon. member has debated that this morning.

Mr. Speaker, this is a different speech. I want to bring to the Minister’s notice, and this is a most important point, that we are getting casualties, although theoretically we are at peace. Casualties always occur in very great numbers when men are brought together in camps, and under our present War Pensions Act, if a man gets married 10 years after his discharge he is not entitled to the benefits that come to a married man and he is not entitled to the children’s allowances that would come to a man who was married within 10 years of discharge. It seems to have missed somewhere that this is going to apply to our boys being trained now. It can’t possibly cost the hon. Minister much, because it has been calculated in respect of those who remained over from the last war that it would cost the Government R26,000 a year. This is a matter that the hon. Minister must look into, and in this reserve of his I think he should put a little bit aside for relief in these cases that are going to arise.

Then I come to the death duties and donations tax. Death duties brought in R3,000,000 in 1952, or 1.1 per cent of the inland revenue collected, and in 1963 it brought in another R3,000,000 which amounted then to 0.7 per cent of the inland revenue. The donations tax brought in R62,000 odd in 1958, shown in the inland revenue report as 0.0 of inland revenue collected and R 162,000 in 1962, also shown as 0.0. Mr. Speaker, if the hon. Minister removed these two taxes entirely, there is not a shadow of doubt that it would be a great encouragement to people to bring capital into this country. Sooner than put away money to reserve, to give back to me just before the next election, let it go now for that purpose. I do not want any money back, nor does anybody on this side. We would sooner have the money utilized now for the benefit of the people who should have it.

It is quite obvious from what I have said that I am going to vote in favour of the amendment.

When the hon. member for Constantia (Mr. Waterson) was making his speech here, he said: (and this was repeated by the hon. member for Durban (Point) (Mr. Raw) also): “This Government has a remarkable appetite for spending money”.

Hear, hear!

Well, I have never seen such an appetite for spending money as we have witnessed in this House this afternoon. And you know it is only 1964. There are nearly two years before the next election. Next year there is to be only a small provincial election, and we are already hearing one election speech after another on that side. Let us hear now how they wish to spend this money which in terms of this Bill is to be partly placed in a savings account, if I may call it that, to provide for the days when we shall need it. The hon. member for Constantia began by saying that the money could have been spent on food subsidies. That is the tenor also of the speeches always made by the hon. member for Port Elizabeth (West) (Mr. Streicher) and the hon. member for Cape Town Gardens (Mr. Connan). They want greater food subsidies, thereby to wipe out this credit balance, the surplus we have. Then he said also that more social services should be provided, and more facilities for higher education should be created. Then the hon. member for Umbilo (Mr. Oldfield) came along. He wants to alter the means test, and then he also wishes to increase Bantu pensions. But I think the man who surpassed them all is the hon. member for Benoni (Mr. Ross). Such an appetite for spending money as he has I have never seen before. He began this morning already and he repeated it this afternoon. He wants to give the children of veterans higher allowances. Then he wants to reduce estate duty. Well, I agree with him there, that it would be very useful. I wonder whether I should not have supported him there. But then he wants transfer duties reduced, particularly for the white-collar group, the people who buy properties for more than R 15,000.

Order! The hon. member must not reply to the speech made by the hon. member for Benoni this morning.

He said that this morning, Sir, but he repeated it this afternoon and he said the same thing last year and the previous year. I am merely replying to the part he repeated this afternoon. He says the same thing every year. Then the hon. member wants to help the wives who have been deserted by their husbands. He furthermore wants to assist the people who have to support others, and they must get a special tax rebate. He also wants to give unmarried women a special rebate. The hon. member has numerous ways in which he wants to distribute this surplus.

All of them better than this measure.

I must say I am surprised at the appetite he has revealed, and now he says all of them are better ways than what we are doing with this measure. In other words, he does not want to save. He does not want to pursue the Joseph’s policy of saving during the fat years for the lean years. No, when he has the money, he wants to distribute it. No, on the opposite side there are people with a tremendous appetite for spending money. And then the hon. member says further “The money should be given to those poor unfortunate people outside”, “The poor unfortunate taxpayers”. The hon. member for Wynberg, who is not present now, by way of interjection this afternoon repeatedly referred to the poor people we must meet now instead of depositing this amount in a reserve account. The Opposition proposed last week that the taxpayers should receive an extra 5 per cent tax relief. Those are the poor people they want to assist now. I have inquired into how we will be able to affect the poor people. I looked at the scale for people earning R2,400 per annum. These are people who receive a salary of R200 per month and who have to pay R176 tax per annum. If you were to give those people a tax relief of 5 per cent, it would mean that whereas they are presently paying R9.21 per month, they will not save more than 50c per month. The hon. members seem surprised. They have apparently not yet considered the implications of this matter. And the people earning R2,400 per annum are not the poorest class in my opinion either. The people who really have difficulty are those who earn less than that, that is to say, there will hardly be any saving for them monthly. But let us take the people earning R5,000 per annum, that is to say, about R430 per month, and who have to pay R33 per month income tax. That is the white-collar group for whom the hon. member for Benoni is pleading so. Those people will save approximately R1.65 per month, while they are earning R430 per month. They are now the “poor unfortunates”.

Nonsense!

I am glad the hon. member realizes now that his whole plea was nonsense, as well as the policy of his Party in thinking that they will help the poor people in this way. I say they do not want to reach the poor people outside. Their motive is to get at the voters for the next election. They consider they will be able to make an impression on the voters in this way. The people they might be able to reach, the poor unfortunates, are the people who earn R18,000 per annum, about R1,500 per month, people paying R461 per month in income-tax. Those people will save R23 per month, and they will save the considerable amount of R276 per annum. Those are the “poor unfortunates" who will get a share worth mentioning of such tax relief as is proposed by the United Party—the man earning R18,000 or more per annum.

No, these speeches of the hon. members have been made with a view to seeing whether they can make an impression upon the electorate, and to come and tell us here that the people outside are having such a thin time, people who do not have the wherewithal to provide for necessaries of life. But the hon. members are knocking down their own arguments, as the hon. member for Benoni did when he gave us the figures of how the gross national income has increased during recent years, and when he himself proved that our gross national income has risen by 94 per cent. Now I should like to ask what has become of the national income? Are the people outside not the ones who have earned it? Did they not get it at their disposal? And then the hon. member comes along and he surpasses the hon. member for Umbilo. Whereas the hon. member for Umbilo desired to have some relaxation of the means test, the hon. member for Benoni comes along and says that an increase of R10 per month per pensioner will not do our national economy any harm.

Mr. ROSS; Quite correct.

R10 per month. He took the figure of R3.000,000 per annum given to him by the Minister as the additional amount involved in paying the latest increase in pensions, and then the increase is from R1 to R2 per month. It costs nearly R3,000,000 per annum. But the hon. member wants to increase the pensions by R10 per month. Does the hon. member have any idea what this will amount to?

I mentioned R87,000.

I could not hear the hon. member, and maybe it is as well. No, the hon. members are not making any impression on anybody, and they certainly will not make any impression on the electorate with this. What the electorate of South Africa desire is a stable government with a stable financial policy under which taxation also will be stable, and if there is one thing that satisfies a taxpayer and a voter, then it is that he knows that when he is earning R2,400 per annum, he has to pay R176 income-tax on that if he has no children, and who knows that if things were to deteriorate, which may automatically also cause his income to drop possibly, and which will cause his income-tax to drop, that there will then be a reserve which has been established by a stable government which will prevent a demand for higher percentage of income-tax upon him. It is no use the hon. members of the Opposition suggesting that we are establishing this nest-egg to make concessions in the year before the election. I agree with the hon. member for Vereeniging where he said that this is a very nice new method and he believes that in future it will be developed and that it will be capable of being of great benefit to our country. And if things go as well with us next year as during the past year, and if our national income were again to rise and there is a further great surplus, we could perhaps deposit in this account a further amount next year. Because we are aware that as surely as day follows night, so surely do droughts follow good seasons, and equally surely times of less prosperity follow times of prosperity. We know that, do we not? Why should we not build up a reserve account in times of prosperity? It reminds me of the most childish example we could use. We teach our little children that when we give them something they can dispose of, they should spend as little as possible of it, and we buy them a little savings box and tell them to put into that box the amount they have over. It is such a nice thing to teach one’s children. Is it not nice too that the State also comes along with this exemplary action?

Yes.

I am pleased the hon. member for Drakensberg (Mrs. S. M. van Niekerk) agrees with me for once.

No, I do not agree with your conclusions at all.

It is a fine idea where the State sets the example to provide for the future now while things are going well, now that there is a surplus, and not to heed the tremendous appetite of the hon. members opposite, to distribute copiously to all, but to save up a little for the more difficult times. If methods are sought for distributing, we of course know of many methods too. Surely you know that when one has a little money in one’s, pocket, how many friends one has who are usually busy advising one how to spend that money. But look out for the day when you have no money, then friends are scarce and then they have no advice to offer you on how to get hold of some money.

No, we on this side of the House will not act in an irresponsible manner. We shall look after the pensioners. When times become more difficult and if the cost of living increases further and if there are further large surpluses, this Government will look after them as they have done in the past, and where relief can be given, relief will be given as has been done during the past years. But to carry on recklessly with the finances of South Africa—this Government will not be party to that.

The hon. member for Somerset East (Mr. Vosloo) has apparently not listened to what has been put forward from this side of the House. In the first place we never pleaded for tax, relaxation for people earning R18.000 and R5,000.

A reduction of 5 per cent all round.

We spoke of the underprivileged people. There is no mention whatsoever of 5 per cent in to-day’s amendment. I think the hon. member now proves what I say that he has not been listening to our arguments.

The trouble is that you tried to forget what you did last week.

The hon. member seems to be under the impression that this is a sort of Savings Act, that this Act enables the State to save R20,000,000 of the surplus that the hon. the Minister of Finance finds he has. If he will read the Bill carefully, he will find that that is one thing the Bill does not do. This is not a savings Bill at all. What does the Bill propose? It provides for the establishment of a Tax Reserve Account, and then it says—

Once it is transferred to the Consolidated Revenue Fund, it is spent by the Government. I admit that the hon. Minister probably has no intention of spending it this year. But let us come to the third clause of the Bill—

Is that an act of saving? What do the Public Debt Commissioners do with those moneys?

You do not read the predominant words “to be appropriated by Parliament”.

I am talking of the R20,000,000 that you intend to put into this account at the moment. What do you do with the R20,000,000? It is invested with the Public Debt Commissioners. What do the Public Debt Commissioners do again. They lend it to the Government and then the Government spends it again. Where is the act of saving. It is on this fallacy that I think the hon. Minister is also defending this Bill, and certainly the hon. member for Pretoria (Central) (Mr. Van den Heever) and various other speakers. They think this is an act of saving. All this Bill really does is to put this money in the Account. We say that it should be left in the hands of the taxpayers. But this Bill is saying: No, the taxpayers cannot spend that money, the Government must spend it. There is no act of saving here. I am afraid the previous speakers misunderstood this Bill completely. This money is simply being channelled through the Public Debt Commissioners so that the Government can use it for its loan expenditure. That is what it amounts to, unless the Minister can tell us how he will sterilize it. The Minister’s whole speech is based on the assumption that R20,000,000 will be taken out of the demand side of the economy, but if he lends it to the Public Debt Commissioners and they again lend it to the Government to spend, how does he succeed in doing that? Then all that is achieved is that instead of the taxpayers getting some of the money back, the Government will spend it for them.

What is wrong with that?

Surely if the Minister is afraid of giving this R20,000,000 to the people of South Africa in the way suggested by us because he thinks it will lead to inflation, he has another remedy. He can simply postpone R20,000,000 of his capital expenditure. Surely of the vast amount of loan expenditure that he intends spending in the next year there must be R20,000,000 worth that can be postponed.

My next point is this. Does the Minister seriously suggest that an extra R20,000,000 of expenditure in the country will cause inflation? Surely this figure must be seen against the gross national product of over R6,000,000,000. Is the Minister so certain that he balances things so finely that R20,000,000 will make the difference between inflation and deflation? I cannot believe that, if one takes into account that year after year he makes delicate calculations as to what his surplus will be, and then he finds that he has R 128,000,000 more. If he made his calculations a year ago to balance the forces of inflation and deflation so nicely in his Budget, and he now finds that he has R 128,000,000 more, we should have had a period of deflation. But R20,000,000 here or there simply does not matter when your national income is of this order. It is infinitesimal from the point of view of inflation in the country, but of course it is not infinitesimal from the point of view of the under-privileged for whom we are pleading this afternoon. It is very important to them. R5,000,000 to the old-age pensioners is very important to them. A total expenditure of R20,000,000 on the underprivileged classes can make a tremendous difference to them and to their welfare, and it will have no effect on inflation, particularly if one takes into account that expenditure of this order on the under-privileged might very well lead to higher productivity.

But there is something more specific to which I should like to draw the Minister’s attention, and I want to ask him whether he can possibly see any inflationary dangers in this. I refer to children’s allowances under the Income Tax Act. The Minister knows that the Government appointed a Commission to inquire into family allowances in 1961, and they reported on 9 December 1961. The terms of reference of this Commission are set out in paragraph 3—

That was the main term of reference. They made numerous suggestions as to how this could be brought about, and they dealt in particular with the Income Tax Act, and in paragraph 325 they said—

Then they argue the point further, that in fact the present system discriminates against the bigger families, and they recommend that the Government should do something about it. On 17 March 1964 more than two years after this Commission reported, the hon. member for Berea asked a question in this House of the Minister of Finance, whether any recommendation of this Committee of Investigation into family allowances had been considered and given effect to by the Government, and if so, what financial benefit has been derived from it by taxpayers in each year since 1962. The answer was that it had been considered, but that no effect had been given to it. In other words, the Government has done nothing about these recommendations. Surely the Minister must agree with me that if one thing is important in this country, it is to have a rapidly increasing White population. It took us years and years to convince the Government of the importance of immigration. How many more years will it take us to convince them of the importance of making it possible for people to have large White families? If this is the way the Government treats their own Commission’s recommendations, by taking no action at all, it is all the more remarkable if one takes into consideration what countries like France and the United Kingdom do to encourage larger families. Surely the matter is even more urgent here than in those countries. The Government always insists that it is the champion of White civilization in this country, and surely White civilization can only exist on the basis of White numbers and a rapidly increasing White population. Does the Minister want to tell me that if more generous allowance is made in our Income Tax Act for big families it can possibly lead to inflation? The only inflation I can see it leading to is family inflation, and surely the Minister does not think that is undesirable.

On your own definition it puts money into the spending stream.

Yes, but surely one must weigh up everything. Is the Minister more afraid of a little price inflation than he is of family inflation? You always have to weigh up advantages against disadvantages. But I have already said that I do not think even an extra R20,000,000 devoted to the lower income groups and for the encouragements of larger families can possibly have an inflationary effect in this country. The Minister cannot calculate the forces of inflation and deflation as accurately as that. If you have overriding social considerations like this, surely it is worth taking some steps about it. Now I must ask him another question. If one cannot grant family allowances at this stage of our prosperity, when will the time arise for it? Surely we have become an infinitely richer society in the last 10 years. The hon. member for Benoni (Mr. Ross) has already shown to what a small measure family allowances have in fact been improved. Surely this is one of the things one would expect the Government to do something about, and not to use this bogy of inflation all the time. I have never heard the Minister use the argument of inflation when it comes to Defence expenditure, for instance. Does he want to say that defence expenditure merits a higher order of priority than family allowances? Where will the Defence Force come from if you do not have people? In regard to this specific question I have raised here, I do not suppose the Minister has any time to do anything about it this year, but I trust that by next year he will take positive steps and act on it.

It was very interesting today to listen to the way in which the two politcal parties put their policies against each other. What became clear to me in regard to the policy of the United Party was that it was a case of let us drink and be merry, for tomorrow we die. That is the spirit of their whole approach to the problems of South Africa. That is how they think and plan for the future. As against that, we have the National Party with its policy, well planned, conservative, putting South Africa’s interests first, and we say: “Ek sal lewe. ek sal sterwe. ek vir jou. Suid-Afrika." It is interesting to me that the hon. member for Jeppe (Dr. Cronje) really devoted the whole of his speech just to family allowances. We know that the end of the financial year is approaching for his companies and then he will have to tell a story different from the one he generally tells in this House. He also says that over the past ten years South Africa was so prosperous. How do I now understand the hon. member? Because we hear every day how badly things are going under the Nationalist Government and how, for the past 15 years, we have been on the verge of insolvency. No. I think those hon. members should be a little more consistent.

I want to come to the hon. member for Constantia (Mr. Waterson). He said that this R20,000,000 was intended for “an ill-defined purpose”. What is his motive? He said that this reserve was intended for an election, but the National Party does not do that sort of thing. We do not buy votes, as the hon. member for Durban (Point) (Mr. Raw) insinuated. We fight on the basis of policy and we fight honestly and cleanly. Let the hon. member for Constantia tell us where the funds of the Trust Fund they had in 1948 came from, that R2,000,000? We know what went on behind the scenes!

Order! The hon. member must not deviate so much.

The hon. member for Constantia said we were afraid of inflation, and then he said that this Government caused inflation, but then the hon. member for Port Elizabeth (South) (Mr. Plewman) says just the opposite. They should be a little more consistent and their statements should be well founded. The hon. member for Umbilo (Mr. Oldfield) says that the Government could have done much more for the pensioners and could have paid them R3,50 a month. It is a pity he is not here, but the sum he made is quite wrong. He talks about R2,000,000, but I have worked it out that R3.50 a month amounts to R42 a year and there are 500,000 pensioners, and that makes it R21,000,000 a year. If we use this R 20,000,000 of the reserve fund to grant such an allowance, the hon. member must realize that in future that allowance will have to be granted every year, and where will the money come from to pay it every year, apart from the other improvements which the Government is continuously making? We see that in the Estimates this year there is R89,000,000 for social pensions, and to that we can still add the R40,000,000 paid by way of subsidies, and just those two items already amount to R 130.000,000. That is almost one-fifth of our Budget. Does the Opposition want to tell us that this is not sufficient under the circumstances? We do not say that it is completely adequate and improvements will be made. Now I should like to have the attention of the hon. member for Durban (Point). When has the Minister ever said that we regard R30 a month as sufficient for a man to live on? Now he gives no reply, because he is in a quandary. The Minister of Social Welfare and Pensions stated it very clearly last year. He said this pension was not given for a man to live on; it was just a contribution towards the aged who needed it. The Minister said a man must save for his old age and it is the duty of the children to look after their parents, but where they fail to do so the State must and will render assistance, and it does so. We are already paying about R90,000,000 for pensions, apart from the subsidies. Is that not a great contribution by the Government? But the Opposition does not appreciate it and does not realize the magnitude of the problem.

I ask myself why the Opposition to-day is so concerned about this R20,000,000 which is to be put into the reserve fund. It is not a very large amount in comparison with our total budget or our national income of about R6,000,000,000, but the Opposition does not want the Government to put aside this little nest-egg to be used wherever necessary in order to exercise monetary control. Why may the Minister not do so? There are also other things, such as the setbacks suffered by the people in the Northern Transvaal. The Opposition would very much like to see that the Government does not assist those people because then they can again say throughout the country that the Government is doing nothing or that it should have made plans beforehand. I am sure that next year they will accuse us of not having made plans. They are also afraid that this fund will be used by the Government to stimulate the prosperity we already have and also other sectors of the economy which need it and which should be encouraged. They are afraid the Government will stimulate our economy and so build up a prosperous economy. They are not honest in what they say. They say one thing but mean another.

I want to come back to the point raised by the hon. member for Durban (Point) in regard to married women who have to work. Since when has it been a shame for a woman to work?

It is a disgrace that it is necessary.

Every day we hear appeals that more use should be made of women and old people as the result of the shortage of manpower. It is not wrong for women to work. Where they can do so, it is only right. Our women do not want to be idle and do nothing. In certain respects they render voluntary services to South Africa for which they are not compensated and we all appreciate that. Where the Opposition pleads for increased pensions and says that there are so many people who are finding things difficult, the question is why there is a certain group of old people who find things difficult. It is really the sins of the Opposition which are coming to the fore today. If the United Party, when it was in power, had governed better …

Order! The hon. member is now going too far. This is not a general budget debate.

These people who are finding things difficult to-day would have been better off if earlier in their lives there had been better opportunities for employment. Therefore I say that if the Opposition had not been sitting here with a guilty conscience they would not have made such proposals.

I want to conclude by saying that we are grateful to the Minister for having introduced this legislation and for establishing a reserve fund. Any undertaking worth its salt creates reserve funds for the future, and if we as a State do not also reveal that far-sightedness in making provision for the future, we cannot say that we are a good Government, but we are a good Government which makes provision for the future, and that is why we are making this provision.

The hon. member for Sunnyside (Mr. Van Zyl) asks why we are so concerned with this Bill and object to it so strenuously. The reason is very simple. It is because in our opinion nothing worse could have been done with this excess R20,000,000 than what the Minister is doing with it. It has become quite clear from the speeches made here what the real purpose of this Bill is. The Minister is saying to the taxpayers: You paid me too much last year, but because of my fear of inflation I am sorry I cannot return to you what has been overpaid and instead I will take this R20,000,000 and put it into cold storage and at some date in the indeterminable future I will give it back to you indirectly; when I find that I might have to tax you additionally I will not do that but will use this reserve fund instead. There are two principles inherent in this proposition which require careful analysis. The first principle is that in a time of possible inflation caused by prosperity, are the under-privileged people of a country to be almost completely ignored? Are the rich to get richer while the poor remain poor? Are the underfed to remain underfed and the under-educated to remain under-educated, and are those who live on or below the breadline to continue their struggle for existence? And all this is to be done in the name of inflation. The Minister knows quite well that he is armed with many other weapons to combat inflation other than by putting this R20,000,000 into a reserve fund. He has complete control of our monetary system. He can make it easier or harder to get money. Through his colleague he has complete control of our imports. He can allow more goods to come in or keep more goods out. The whole thing is in his own hands, and yet since the Budget we have had constant emphasis on one factor only, and that is inflation. Even if we accept the thesis that if we get any relief from direct taxation it will lead to inflation, surely there are dozens of alternatives by which the Minister can give some relief to the poorer sections of the community. We knowzthat the Minister has made certain concessions this year to the middle and lower income groups, but except for pensions the poorer sections of the community have had absolutely nothing. But what is worse is that the Minister has taken few, if any, positive steps to utilize his surplus on a basis of long-term planning. He has kept away almost entirely from any solution to our problem of the under-privileged. Sir, you will know better than anybody else that some 4,000 years ago Joseph in Egypt was the first one to propound the economic theory that …

Order! The hon. member is going too far back now.

Joseph?

Yes. He is one of the best-known figures in the House to-day.

He prepared in times of plenty for times of shortages and he knew there were many ways of doing so. Simply to take your reserves and put them away for a rainy day is a bad thing. It is like putting your money in a sock and putting it under the bed, like these Bantu the Minister of Bantu Administration is always telling us about. The Minister is taking the money and sticking it under the bed. It earns nothing and creates nothing and you put your wealth to its minimum use, and when the time comes when you need this money again, what have you got? You have the original fund and nothing further. But if you put your reserves to work so that in bad times you will have accumulated something, then you derive the benefit of it. In this way you increase the real value of your basic investment, and instead of having this little fund to call on when he needs it he will have a permanent nest-egg which he has built up by putting his money to work. Instead of a one-shot relief, you have then built up a permanent source of benefit to the country.

I have mentioned under-nourishment and the under-privileged people. Surely the Minister will agree that there are large sections of undernourished people in this country, and we are suffering from the effects of under nourishment. Anybody in industry will tell you that we are unable to get the maximum productivity out of labour that is under-nourished; and undernourished does not mean underfed, but bad eating habits. I think the Minister will agree that it would be a very sound investment to take some of his surplus and to put it not only into sufficient food for everyone, but to see that everyone has the right kind of food. In order to do this, one must examine the question scientifically and that takes money, and I should like to recommend to the Minister that he uses some of this money to examine that situation and also our marketing system of which we had a glaring example the other day, when one day there were literally oranges to burn and the next day the orange surplus suddenly disappeared. Sir, we have had continuous crises in this country in regard to basic foodstuffs and they should be properly investigated. The same principle applies to education. If we are going to utilize the peoples of this country to the full we have to see that they are properly educated, and we expect the Bantu to be educated from the Bantu Education Fund. The sooner we realize in this country that the education of the Bantu is the responsibility of the people …

Order! The hon. member must come back to the Bill now.

There is another principle inherent in this Bill and that is that taxation should be levied for the benefit of those who pay it. I want to ask the hon. the Minister this question: What if the economy of this country continues to be buoyant for the next 10 years? What does he propose to do? Is the hon. the Minister going to take R20,000,000 each year and put it in Taxation Reserve Account and build up R 100,000,000 at the end of five years in his Taxation Reserve Account? Or if it goes on for 20 years, as we all hope it will, what is he going to do? Because you start this kind of budgeting there is no knowing where it is going to end because you do not know where to draw the line. Last year the hon. the Minister gave the taxpayers a reduction of five per cent. If he had used this R20,000,000 he could have given us a reduction of nearly 20 per cent. What is he going to do in future years if the economy of the country continues to be buoyant? Sir, even if the hon. the Minister is worried about inflation there are many other things he could have done with this R20,000,000 to assist those people who are in want. He has been told by many hon. members on this side that he should have given some reduction in taxation, but there is another approach which has nothing to do with inflation, and that is to take this opportunity for long-term planning. We have from time to time in this House had discussions about medical aid funds, about a contributory pension fund and about assistance in home-building. What on earth have those plans to do with inflation? The hon. the Minister could on a long-term basis have provided all these things for which we have been asking for years without its having any inflationary effect whatsoever on the country. Sir, we are sorry that the hon. the Minister has been so conservative in his attitude. We had hoped that he would be a little more far-sighted and a little more dynamic, but we can still hope, because he has this fund of R20,000,000. Quite obviously when he got it this year he did not know what to do with it so he decided to put it to Reserve Account, but he will still have this Reserve Account next year, sb I hope that during the year he will sit down with his advisers in the Cabinet and plan how this amount of money can be spent, because undoubtedly the worst thing to do with it is to let it lie and almost rot in this tax reserve account.

Sir, apparently hon. members on the Government side have lost interest in the Tax Reserve Account. I am not surprised because whatever has been said on that side has been in the nature of an argument that could not be sustained for very long, and that is why one might say that they have practically quit on the job. But I would like to take up the last speaker on the Government side and that is the hon. member for Sunnyside (Mr. Van Zyl). The hon. member almost complained about the fact that we were concerned about “die volk daar buite”, the taxpayer. He said, “what are you so concerned about; why are vou worrying about them?" That was the burden of his speech. Well, Sir, I want to say to you that I do not think “die volk daar buite”, the taxpayers, will be heard to complain about the Opposition’s concern for them and for their finances and their economic position, but they may well be heard to complain of the curse of complacency that has settled like a pall over the Government. They cannot get away from their complacency, from their belief that all the things they do are perfect, are fool-proof, and that there is nothing that one can say in criticism of it. I will give you an example. Sir.

They are out of touch with their constituents.

There you have the hon. member for Sunnyside who talks about old-age pensions, which obviously come into this argument, and he says in effect that these people are not really entitled to a pension at all; he says that they get it through what he calls the “goedgesindheid van die Regering”. They get R25 per month through the “goedgesindheid van die Regering”. Sir, have you ever heard such an argument? I believe that the hon. gentleman is an actuary and an accountant, and therefore a man of figures—if not letters—and he tells us that the old-age pension in South Africa is not a right, as I in my ignorance, always thought it was, but that it is given by the good grace of the Government. Sir, to hear him tell of it, you would think that members of the Cabinet, plus a few well-meaning friends on their side, got together once a year and out of their private resources and out of their private pockets, they clubbed together in order to keep the 87,000 White old-age pensioners; that is the gist of the argument!

May I ask the hon. member a question? Was the old-age pension of R9 per month which the United Party Government gave the aged a right, or was it also due to the good grace of the Government?

The answer is a simple one. At the time when we were giving that pension, smaller than it is to-day, we were not at the same time socking away R20,000,000 in a tax reserve account, and if the hon. member will go into the Budgets of those years, he will find that according to the economy of the country …

I do not think the hon. member need worry to go too deeply into that interjection.

Very well, Sir. The essence of the hon. Minister’s statement is, “I must take this R20,000,000 out of circulation in the interests not only of the country, but of the individual taxpayer”. I think the hon. member for Constantia (Mr. Waterson) summed it up very aptly when he said that the intention of the Minister was to put aside something for a rainy day. I propose to demonstrate that right now it is not only raining, it is pouring, as far as a large sector of our economy and the greater part of our population are concerned. In fact it reminds me of a little jingle that some of my small children sing; I do not know it in full, but it runs something like this, “It’s raining, it’s pouring, the old man is snoring”. As far as certain taxpayers and individuals in this country are concerned, it is not only raining and pouring but the old man, being the Government, is snoring; it is fast asleep, as far as the needs of some of our people are concerned. Sir, this morning I got the very latest monthly Bulletin of Statistics, for May 1964, and being issued by the Bureau, a Government Department, I hope that nobody will accuse the compilers—or me—of distorting the facts or the figures. Here on page 62, under the heading of “Internal Trade”, is the record of civil cases recorded and summonses issued for debt. Remember, Sir, that the hon. the Minister’s argument is that we are on a wave of prosperity; in fact, we are in danger of being engulfed by too much money—all of us —and now he is rushing into the boiling surf to rescue us from this disaster. In January 1963 the total number of cases recorded and summonses issued for debt was 40,795. Therefore, with the boom which has been going on since 1963 it is reasonable to expect that the population as a whole would have been able to meet its obligations better, and therefore in such a way that it would reduce this figure of civil summonses but, no, Sir, it has gone up from 40,795 to 41,092 in January 1964. There, Sir, is one indicator of the “prosperity" of the average individual. I know that members of the Cabinet are not being sued for civil debt, for the grocery or the butchery account, but members of the public are, and this is an indicator of their so-called prosperity and of the way the boom has affected them. Take another aspect of the matter: the amount involved in civil judgments for debt in January 1963 was R 1,708,502. Again, you would think that in view of the affluence of our society this figure would have been reduced, but we find that in January 1964 it had gone up to R 1,798,658.

May I ask you a question?

Yes! No, I am sorry. Mr. Speaker has just told me not to answer “interjections”. I am sorry, Sir, I am just a sucker for interjections!

Order! The hon. member must proceed.

The civil cases recorded in specific magisterial districts are very significant, and I will take the two with which I am concerned, because for some time of the year I am in Cape Town and for some time of the year I am in Johannesburg. In January, 1963, the figure for the Cape Peninsula was 3.890 that is, the number of civil cases recorded in the magistrate’s courts in the Cape Peninsula. You would think that the figure would be reduced in January, 1964, because we are on a wave of prosperity, but we find that in January, 1964 the figure was 3,929. Take the position in Johannesburg. There, we do things in greater style. In January. 1963, we had 7,409 cases recorded in our magistrates’ courts, and in January 1964, instead of having gone down, it had gone up to 7,817. You will find that every statistic in this document, every indicator that the reasonable man would look for in these statistics to investigate exactly how the boom (which undoubtedly exists in volume, in terms of a national movement in the economy) has affected the individual, belies the statement that the average taxpayer has benefited.

In conclusion, I want to point to the con, sumer price index and the cost of living, which is very relevant when one argues that the man in the street does not require any reduction in the burden of taxation by way of the remission of this R20,000,000 which the Minister is putting away in his own private Fort Knox. In January 1963, the cost of living in Cape Town was 107.1, and you must remember, Sir, that this is based on an index of 100 for 1958. It has not gone down—in January 1964 it had gone up to 108.5. On the Witwatersrand it was 106.0 in January 1963, and in January 1964 it had gone up to 106.5 Obviously I have not got the time to go through all the figures, but this document proves that whereas, on the one hand, we can show an outward picture, a sort of perimeter picture, of economic advancement and prosperity, inside that beautiful State, like the State of Denmark, there is something that is rotten, and that is the difficulty of the individual, the difficulty of the man in the street, the difficulty of the old-age pensioner and the indigent, the difficulty of people in our various race groups who, contrary to what the hon. member for Vereeniging said, still go hungry, or cannot make ends meet. We are faced with the fact that there is a famine in the Northern Transvaal about which the Government has to do something despite the dispute between me and the Minister of Bantu Administration; we are faced with the fact that 86,000 Coloured school children are being fed everyday by the Peninsula schoolfeeding scheme; we are faced with the fact that in Natal there are many Indians who do require more food than they can get, although they work everyday. All these things point to the fact that the Government and the Minister are not correct in their assumption that this R20,000,000 would create inflation, and should be withheld from the people who provided that money. We, the Opposition, have demonstrated very clearly that we have a far better case than the Government—our case for the R20,000,000—without any danger of inflation being given to those who need a few rand or a few cents per month, than for it all to be put away to rot in a Tax Reserve Account for years, or even to accumulate there.

There are one or two questions I would like to put to the hon. the Minister. The Minister has been helped by one or two of his leading front-benchers in this debate, and the extraordinary suggestion has been made by the hon. member for Vereeniging (Mr. B. Coetzee) that it is a good thing to have a tax reserve account as part of the permanent financial policy. If the Minister approves of what the hon. member for Vereeniging said, I would like to know why the Minister did not make that statement when he introduced his Budget. The Minister in introducing his Budget made no mention of a Tax Reserve Account. As we understand the budgeting procedure it is this: The Minister makes his Budget Speech and in his Budget Speech he indicates what he estimates his total expenditure to be; he then estimates what his total revenue is likely to be and then he tells us the story that he expects income to balance expenditure. We know that the Minister is frequently wrong. We know that this year he was wrong to the tune of some R80,000,000; he found that a mistake had been made; he had underestimated his revenue, and his surplus was R128,000,000. But if the hon. member for Vereeniging is right then the Minister, when he comes with his Budget Speech next year, will have to tell us what he estimates his revenue to be, what he estimates his expenditure to be and what amount he proposes to put to reserve. We would like to know whether the new fiscal policy is to be to provide a regular amount for reserve. I think the hon. the Minister should say so if that is the intention, otherwise he should repudiate the hon. member for Vereeniging. This is the first time we have had a Bill of this kind before us. The Minister attempted during the course of the debate, by way of interjection when speaking to the hon. member for Jeppe (Dr. Cronje), to suggest that the hon. member for Jeppe did not understand this Bill. I hope the Minister will make it clear to us in the course of his reply what he intends to do because this Bill, as far as we are concerned, is quite clear. It proposes to put amounts into Reserve Account and when he transfers sums into Reserve Account he is either going to hand them over for expenditure or give them to the Public Debt Commissioners and the Public Debt Commissioners will of course, hand them back to the Government. That is what this Bill says.

I want to deal with a further argument which has been advanced during the course of the debate, namely, that of the financial expert from Pretoria (Central) (Mr. van den Heever). He suggested that when we criticized this taxation reserve and said it should be given to the people it would create inflation. He then made the extraordinary suggestion that there was too much money chasing too few goods and that was causing inflation. But the hon. member for Pretoria (Central) knows betters than that. The kind of inflation we are having is not that too much money is chasing too few goods— there are plenty of goods—but too much money chasing too few jobs. That is the kind of inflation we are having to-day. And one of the principal culprits in this regard are the Government’s spending Departments themselves. I will not go into that because that is outside the scope of this Bill.

I want to ask the Minister how he calculates inflation? According to the latest bulletin of the Reserve Bank the gross national product is R6,679,000.000. Is the Minister so skilful and able that he can calculate that if another R8,000,000 or R10,000,000 of R20,000,000 were put into general circulation it would cause inflation? He chided me the other day when I suggested tax reduction. He said that I should know better; that I should know that R8,000,000 would cause inflation. If the Minister is so meticulous in his ability to calculate when inflation can be introduced and when not then I cannot understand why he cannot calculate his Budget better. Surely if the Minister can calculate exactly when additional funds will cause inflation or not he can calculate his Budget more accurately than to show a surplus of R128,000,000. Surely if he can make such blunders in calculating his Budget surplus as to tell us in the course of his Budget speech that he is going to balance his Budget and then confront us with R88,000,000 at the end of the year and in addition find that he has an additional R40,000,000 when he announces his Budget proposals, surely he cannot pretend to convince us that any remission we ask for will cause inflation. Sir, we are getting rather impatient with this Minister in the figures that he gives us. Must we expect him in future to say: “This is my Budget, errors and omissions excepted; this is the best estimate I have at the moment; I shall let you have something better later on"? Because it is quite clear that he is very wide of the mark.

Order! Those remarks should have been made during the Budget debate.

Sir, when the Minister made his Budget speech he did not deal with the question of this reserve. It was only when he found himself with an additional surplus that he came with this tax reserve. There was no reference to that reserve in this Budget proposals. Tt was only when he found he had made a mistake, when he found he had an extra R40,000.000 that he came with this tax reserve. What I would like to put to the Minister, when he eives me the courtesy of a hearing, is this: Will his future fiscal policy be to indicate in his Budget statement, not only his expenditure, not only his anticipated revenue, but the amount he intends to put away to reserve?

Mr. Speaker, as was correctly stated at one stage, this was a repetition of the debate on the motion to go into Committee of Supply. As always happens when one has one large sum of money, there are many people who want to advise one as to how to spend it. I am very grateful, on behalf of the State, for all the suggestions made. But I wonder whether hon. members have considered what it would mean if I were to give heed to all those suggestions? Last week the request was made that we should increase the rebate tax by five ner cent, which would amount to R8.000,000. The suggestions this afternoon varied from granting rebates for children, to married women, and from old-age pensions to housing and family allowances. I think if you add it all together, Sir, you will find that it amounts to at least another R 100,000,000. I made a quick calculation, and if one wants to give assistance to those people which will be of any value at all, it will cost at least R100,000,000. That is just a sign of the irresponsibility of hon. members opposite. This was a golden opportunity for them to make a little cheap political capital, and they seized it with both hands. If ever there was a blatant attempt to make political propaganda, it was this attempt made this afternoon. If any hon. member still had any doubt that this was designed as propaganda, then he certainly did not listen to the speech of the hon. member for Durban (Point) (Mr. Raw). The speech of that hon. member was the height of irresponsibility. He seized this opportunity with both hands!

I want to say immediately that as far as the poor people of this country are concerned, the pensioners, in this Government they have a sympathetic Government such as they have never had before. Anyone listening to this debate would have thought that not a single cent was being given in this Budget to the old-age and other pensioners. They forget that in the case of pensions an amount of R5,100,000 of that surplus was set aside for that purpose. There is the assistance to small house owners of R3,700,000 which I mentioned earlier. The Budget does not consist only of what is said in the Budget speech; it consists of the Estimates of Expenditure submitted to the House. If one considers what this Government has spent on social services, one will see a picture different from the one conjured up while listening to this debate. People with any knowledge will realize immediately that the picture is quite different. Of every rand we are spending in this year 1964-5, we are spending 38.5 cents on social services. That is the highest individual sector of expenditure. In the case of the safeguarding of the country, we are spending 26.8 cents out of every rand we spend. In the case of the general administration of the country we are spending only 7.7 cents out of every rand. You see, therefore, Sir, that ample provision is made. Nor is it a provision which is stagnant. In this budget more than R40,000,000 is being devoted to all the various forms of social pensions. I do not say that is enough. If one has children and one would like to give them more, it depends on one’s means. One must also ensure that one does not endanger one’s future. It is no good giving them what one would like to give them and what one thinks they deserve; one cannot give everybody what they deserve. One simply has not the means to do it. One can only try to give as much as one can afford from time to time with an eye to two things, firstly with an eve to one’s means, and secondly with an eye to the safety of one’s own financial future. That is all one can give, however much one may love one’s children. One cannot give them more than that without endangering their own future. And that is what this Government has done. I have said that to some extent it was risky to devote any money to tax relief, but if I now want to give it I will give it to the extent that I think is safe. I have given the pensioners as much as I could safely give, but that is not the impression one gets from listening to this debate. One gained the impression that nothing was being done for the poor pensioner. That is just politicking. This is the forerunner to the Provincial election. I was surprised to see these new stars in the financial firmament, stars which I had never before noticed in a financial debate! They saw an opportunity to make political capital and they grasped at it. I think this will convince the people where their real interests lie. It is not a question of words, but of deeds, and not deeds only in one year, but over a period. In the past five years in which I have been Minister of Finance, over R25,000,000 has been devoted to pensions alone. We found the money; there were years when things did not go so well. That does not mean at all that this money we are now putting in the reserve fund cannot also be used, when it is possible to do so with safety, for the benefit of the pensioners. If it is necessary and if we can afford it, we will let that money flow into the stream of spending in terms of one or other of the sound suggestions made from all sides. But I would be unworthy of my position if I were now to endanger the financial stability of this country just because I wished to gain votes for my party next year. I asked myself what is in the interest not only of the taxpayer, but also of every citizen of South Africa? The replies to that are very clear to me, namely that it is in his primary interest that we should maintain financial stability. When I look at those countries which have also in recent years experienced financial prosperity, and I see what their position is to-day, it is a warning to me that we should not weaken the anti-inflationary powers. As it is, there are always attacks being made on those powers and attempts are always being made to undermine those powers. However, I do not want us to do anything fiscally which will harm the foundations on which our whole financial stability and economic prosperity rest.

The hon. member for Constantia spoke about increasing prices. That is precisely my point. There we have the danger signs. Rising prices are usually the precursor to the depreciation of our currency. I have figures here which indicate to what extent the currency of various countries has depreciated. For South Africa it was one per cent for the period 1961-2. Together with a few other countries where the depreciation was also one per cent, we therefore have the lowest depreciation figure in the world, except Venezuela, where the percentage is even lower. But we share this one per cent depreciation with countries like Belgium, United States of America, Canada and Ceylon. Where too much money is spent, it encourages increased prices. And the hon. member still asks that I should make available money, while he complains about increasing prices! I must now make even more money available, while the natural consequence will be for prices to increase still further. We know that is the continuous spiral we always get, the pernicious spiral of higher wages and higher prices. That is how it goes on and on.

Now I am being asked—because that is all this politicking amounts to—to abdicate from my duty in maintaining the integrity and the safety of our currency and promoting our financial stability; because that is my duty, to promote our financial stability as much as possible and to stop the slightest signs of inflation in so far as that can be done by fiscal measures. I must do so, so that I will not later be compelled to take more drastic steps. That is what is being done in countries like France, Italy and others to-day. There to-day they have to take very drastic steps just because they were not cautious enough in the beginning. It is said that only small amounts are involved here and that they can therefore not have any great influence in this respect, but it nevertheless means being added to the stream. If one brings together all the small amounts, one gets a big stream and the stream which is already there is increased. When I originally tabled my Budget proposals I pointed out that these were my difficulties. I was, however, prepared to a certain extent to take a risk because I thought that there were a few deserving cases where I could grant concessions without running too great a risk. But if I have to take it further I will run the risk of the stream becoming too great, and that I am not prepared to do. I shall relinquish all my responsibilities before I do that.

So much for the general field of discussion. I now come to the specific proposals which were made. There is not much to be said for the merits of these proposals.

Before you leave the general points, may I just ask you to explain to the House what you are going to do with the surplus of R128,000.000. What are you going to do with it if you do not spend it?

I shall say what I will do with it …

Order! That is not relevant now. What is relevant is the Bill now before the House.

I can, however, tell the hon. member what will be done with the R20,000,000. The only point of substance raised in this regard was raised, inter alia, by the hon. member for Jeppes, who said that this money was in fact still going to be pumped into the stream, although it would be spent by the Government and not by the private sector. I shall deal with that argument later. In regard to the idea of having a reserve fund of this nature, I want to point out immediately that I stated very clearly when I made the proposal here that it was not meant to be a permanent part of our machinery, but that the object of it was to combat extraordinary circumstances. We have had a windfall here. It is fairly large, and for the reasons I have mentioned we cannot spend it all. In those circumstances, circumstances which will probably not be repeated again, I proposed that a taxation reserve fund be established. But, as I say it is not my intention to make this a permanent part of our financial structure. I do not expect that we will again have similar circumstances, but if such circumstances should again rise the fund may be continued. Then it can perhaps be utilized in another way. But under the present circumstances it is not my intention that this reserve fund should be a permanent part of our financial structure. Now I am surprised that the idea of a reserve fund, which is intended possibly to grant relief in future, is not approved by the Opposition. To a large extent the father of that idea is actually the hon. member for Constantia. He suggested that we should establish two trust funds, the one for education and the other for social services! As the hon. member for Queenstown has said, that means that the money will not be spent this year. When the hon. member therefore made this suggestion, he was still convinced that the money should not be spent this year. Since then, however, he has been influenced by his wild men and now he says it must be spent this year! I should like to know what the difference is between the fund I propose here and the funds suggested by the hon. member. There is a difference only in one respect. In the one case the money is in advance coupled with education and social services, while in the other case Parliament, which in the final result must vote everything, has greater freedom to assist where there is the greatest need. The basic idea is the same in regard to both suggestions, and therefore I cannot understand why the Opposition now objects. It is simply incomprehensible to me.

I agree with the hon. member—it is proved by this debate this afternoon—that such a fund will always expose the Minister of Finance to a certain amount of pressure, because everybody will want to come to the manger to eat. This afternoon’s debate has already shown what pressure there will be! I know the hon. member had in mind pressure from his colleagues. But I think I will be able to control the pressure exerted by my colleagues because they are reasonable people …

Show me one!

… but I will experience pressure from the Opposition members, who will be irresponsible! In fact, we have seen that here this afternoon. That is therefore my real difficulty. In any case. I am glad to hear that the hon. member for Constantia is prepared to support me in opposing any pressure which may be exerted, not only from this side but also from the opposite side.

He also said that the Government was busy “spending vast sums of money”. But does he object to that? When we were in Committee of Supply, he surely did not object to any of the expenditure. Now he evidently wants to object to this expenditure. We are all sorry about the recent increase there has been in certain prices, but at the same time we must remember that the main reason for the rise in the price index during the last month was due to an increase in food prices. Now I want to ask the Opposition whether they are opposed to the recent increase in prices of farm products to the producer?

What did we get?

They must now tell us that we should not have granted those increases; We weighed the position carefully and acted cautiously, but we nevertheless felt that this was something that had to be done.

I now want to come to the only real substantial point which has been made in regard to this reserve fund. The hon. member for Port Elizabeth (South), supported to a certain extent by the hon. member for Jeppe, said that this money, going into the fund, which will be in the care of the public debt commissioners, will be used for financing the loan account. If that were done, they said, we would again be putting money into the spending stream which would in effect be the same as putting it into the hands of the taxpayers themselves. That I think was the argument of these hon. members. Now, I want to say that it is not intended to use this money for financing the loan account so long as the danger of inflation persists. In other words, the local borrowing envisaged for the financing of the loan account will not be reduced simply because of the availability of the tax reserve account money through the public debt commissioners. The latter money will be carried forward from year to year as a credit balance in the loan account, unless and until it is considered safe and desirable either to use it to meet expenditure on loan account or to transfer it to the Consolidated Revenue Fund to meet expenditure on Revenue Account as provided in Clause 2, or to give any tax relief. In some respects it might have been preferable to provide that the money in the Tax Reserve Account should be treated in the same way as the special borrowing provided for in Clause 18 of the Finance Bill I presented this morning, i.e. deposited in a special account in the Reserve Bank completely outside the Exchequer Account. It was, however, decided not to adopt this course, for two reasons. Firstly, in Clause 18 of the Finance Bill Parliament is asked to grant the Government under certain conditions unlimited additional borrowing powers. It is only right that moneys borrowed under this provision should clearly be ineligible to meet Government expenditure, not only now but fn the future. In the case of the Tax Reserve Account, on the other hand, only such moneys as are appropriated by Parliament for the purpose plus the interest earned will be credited to the account, so that Parliament maintains control over the size of the account. Secondly, it is desirable to retain a measure of flexibility so that the money in the Tax Reserve Account can be used to finance the Loan Account if economic conditions should change and this becomes desirable. If, e.g., the country should during a Parliamentary recess suddenly be faced with an economic recession and great stringency in the local capital market, it may well be desirable to reduce the State’s borrowings in the local market and to utilize the funds in the account, but normally I do not anticipate that this will happen. The interest earned will be credited to the account because it is the taxpayers’ money and they are entitled to the interest thereon. In the case of the special borrowings under Clause 18 of the Finance Bill, however, the money is borrowed by the State, not to meet State expenditure but to absorb excess liquidity. The State must pay interest on these borrowings and it is fair that the interest earned through the investment of these funds should be credited to the Consolidated Revenue Fund. What else could be done with it?

I think I have now dealt with all the points. That is the only argument of substance that has been used, and it is based on the wrong premise. As I have now shown, and I hope that in the light of this hon. members opposite will ultimately see the light.

What are the Public Debt Commissioners going to do with that money?

I have just explained it. We will not use it. It may be that we will use part of it through the Reserve Bank for financing outside the country, as in South West Africa, but we do not propose to use it for our own loan expenditure.

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

Upon which the House divided:

Ayes—63: Bekker, H. T. van G.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Coertze, L. I.; Coetzee, B.; Cruywagen, W. A.; Dônges, T. E.; Faurie, W. H.; Fouché, J. J. (Sr.); Frank, S.; Froneman,G. Ayes —63: Bekker, H. T. van G.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Coertze, L. I.; Coetzee, B.; Cruywagen, W. A.; Dônges, T. E.; Faurie, W. H.; Fouché, J. J. (Sr.); Frank, S.; Froneman, G.F. van L.; Greyling, J. C.; Haak, J. F. W.; Hiemstra, E. C. A.; Jonker, A. H.; Keyter, H. C. A.; Kotze, G. P.; Kotzé, S. F.; Labuschagne, J. S.; Loots, J. J.; Luttig, H. G.; Malan, A. I.; Maree, G. de K. Ayes —63: Bekker, H. T. van G.; Bekker, M. J. H.; Bezuidenhout, G. P. C.; Bootha, L. J. C.; Botha, M. C.; Botha, P. W.; Coertze, L. I.; Coetzee, B.; Cruywagen, W. A.; Dônges, T. E.; Faurie, W. H.; Fouché, J. J. (Sr.); Frank, S.; Froneman, G. Martins, H. E.; Meyer, T.; Mostert, D. J. J.; Mulder, C. P.: Nel, J. A. F.; Niemand, F. J.; Odell, H. G. O.; Otto, J. C.; Pelser, P. C.; Rall, J. J.; Rall, J. W.; Sadie, N. C. van R.; Schlebusch, A. L. Schlebusch, J. A.; Schoeman, J. C. B.; Stander, A. H.; Steyn, J. H.; Uys, D. C. H. van den Berg, G. P.; van den Berg, M. J.; van den Heever, D. J. G.; van der Ahee. H. H.; van der Spuy, J. P.; van der Walt, B. J.; van Eeden, F. J.; van Rensburg, M. C. G. J.; van Wyk, G. H.; van Wyk, H. J.; van Zyl, J. J. B.; Venter, W. L. D. M.; Verwoerd, H. F.; Viljoen, M.; von Moltke, J. von S.; Vosloo, A. H.; Wentzel, J. J.

Tellers: D. J. Potgieter and P. S. van der Merwe.

Noes —42: Basson, J. D. du P.; Bowker, T. B.; Bronkhorst, H. J.; Cadman, R. M.; Connan, J. M.; Cronje, F. J. C.; Dodds, P. R.; Durrant, R. B.; Eden, G. S.; Emdin, S.; Field. A. N.; Gay, L. C.; Gorshel, A.; Graaff, de V.; Hickman, T.; Higgerty, J. W.; Hourquebie, R. G. L.; Hughes, T. G.; Lewis, H.; Malan, E. G.; Miller, H.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Oldfield, G. N.; Plewman, R. P.; Radford, A.; Raw, W. V.; Ross, D. G.; Steyn, S. J. M.; Streicher, D. M.; Taurog, L. Thompson, J. O. N.; Timoney, H. M. van der Byl, P.; van Niekerk, S. M.; Warren, C. M.; Waterson, S. F.; Weiss, U. M.; Wood, L. F.

Tellers: N. G. Eaton and A. Hopewell.