I want to refer firstly to item H, “Financial Assistance to Public Servants in connection with Medical Expenses”. Last year the amount voted was R500,000. That amount has now been increased by R533,000, which brings the amount to be voted this year to R1,033,000. What is the reason for this sudden jump? I have heard of no epidemic among civil servants nor of any other reason for this increase, and I should like to know what the reason is for this sudden development requiring the expenditure of an additional R½ million. Then I want to refer to the report of the Public Service Commission at page 3 where the question of the salaries of male nurses is dealt with. This is the latest report, the report foR1964. The Public Service Commission fixed the salaries of male nurses on various grounds and they gave their reasons, one reason being that these salaries will serve as a reasonable remuneraton and “will at the same time serve as an incentive to join and progress within the nursing service”. Sir, that may have been their idea, but the net result as far as the recruitment of male nurses is concerned has been disastrous. It is almost impossible now to get male nurses to enter the mental health service because the male nurse is required to have matriculation and yet the ordinary clerks in the office who also have matriculation are paid higher salaries and enjoy higher status and they rather tend to look down upon male nurses as manual labourers. The result is that very few recruits have been found for the mental health services. Then I also want to refer to the curious double-speaking of the Public Service Commission. The Cape Argus of 18th February of this year mentions “the Cabinet’s anxiety over laxity, delays and dishonesty in the Public Service” and says—

The report then goes on to enlarge upon this. The paper refers to a renewed call by the Public Service Commission at the instance of the Cabinet. Sir, let us now turn to the same paper published on the 25th, seven days later. This is what the report says—

Here we have the Cabinet on the one hand telling the Public Service Commission that they are unhappy about this matter. The Public Service Commission responded by making a public apneal and seven days later the Chairman of the Public Service Commission publishes a denial. What are we to believe?

They have no confidence in the Cabinet.

That is exactly what it is. The Chairman of the Public Service Commission proceeds to carry out the instructions of the Cabinet, and a week later he repudiates them and says that they are talking nonsense. What are we to believe? How much faith can we have in the Public Service in these circumstances?

The last time we listened to hon. members of the Opposition discussing the Public Service Commission they reminded me of Twiggy, especially in her mini. In actual fact she has nothing to show, and then she shows it. The hon. members of the Opposition are just the same; they have nothing to say, and then they say it.

I just want to refer briefly to a few things which the hon. member for Pinetown mentioned when he discussed work simplification schemes, for which a nominal amount of R100 has been provided. He then elaborated on that in order to show that the Public Service Commission actually were not interested at all in any particular expansion and adaptation of the Public Service as part of our machinery of state in a modern society. It seems to me as though the hon. member does not really understand what it means if a nominal amount of only R100 is asked for on a Vote. I think his knowledge is very rudimentary and I trust that it will eventually develop into something better. He spoke of typewriters and so forth, and now it so happens that the whole question of the replacement of old types of typewriters by new types is something which forms a very small subdivision of the whole machinery of state. Matters such as the reproduction of documents, mechanization, the training of programmers, the standardization of letters and many other things have already been done in the Public Service for a very long time. In the various Departments there are approximately 300 posts for work study officers under the supervision of the Inspectorate of the Public Service Commission who pay very careful attention to these matters and who see to it that the Public Service keeps abreast of the latest developments. But I want to leave these matters at that and express a few thoughts in respect of the financial assistance rendered to public servants in connection with medical expenses.

The amount allocated this year is twice as much as that of last year, and this doubling of the amount has a definite history, of which I want to give a brief account this afternoon. Prior to 1955 there were two medical schemes for public servants, membership of which was completely optional. Firstly there was the Civil Service Medical Benefit Association and secondly the Post Office Medical Aid Society. These medical schemes functioned without any State aid. In March, 1955, however, a scheme was announced by the Government in terms of which the State could grant financial assistance to public servants in respect of medical and dental services, to a maximum of R200,000. The per capita distribution was R16 for persons who had dependants and R8 for those who did not. At that stage already the State had very clearly accepted the principle of rendering financial assistance for this purpose to the extent to which it was capable of doing so. In 1961 that maximum was increased to R240,000. In 1963 the principle of a compulsory medical scheme was accepted. Here I refer to section 26 (3) bis of the Public Service Act. In 1965 State aid was increased to a per capita amount of R24 for everyone, that is to say, both for those who had dependants and for those who had no dependants, while no restriction was placed on the maximum contribution by the State. Although all medical costs could not be covered by this amount, it was generally accepted as a very generous contribution.

A favourable adjustment could then also be made in respect of the contributions of members, while improved benefits, such as the inclusion of prescriptions, could be made available. The latest development we had this year when we discussed the amendment of certain sections of the Public Service Act and we were able to pay attention to the introduction of a compulsory scheme by providing that the existing medical aid societies could be used for the purpose of implementing the compulsory scheme. This assistance rendered by the State is the most effective method which any employer can apply to improve the conditions of service of his employees. That in itself is proof of the fact that this Government not only realizes the importance of the Public Service in the whole framework of our machinery of state, but also has the interests of every public servant at heart, and that in its approach not only in respect of the Public Service but also in respect of every public servant it acts in such a way that it will cause the very least disruption as far as the rest of the community is concerned. That is why I feel at this stage that when we come to discuss the Public Service Commission Vote once a year we should, and this applies particularly to the Opposition, show much more responsibility, insight and knowledge, because only then can we really do justice to the Public Service and its officials. I also want to avail myself of this opportunity to express my sincere thanks and appreciation to the entire staff of the Public Service Commission, who meticulously and with insight see to it that our State machinery functions well.

Capt. W. J. B. SMITH: Apart from the hon. member for Rissik’s criticism of the United Party, I want to inform him that we, too, on this side of the House show our responsibility when we come to the House, and I wish to assure him that I myself, and certainly all my colleagues here, appreciate the very wonderful job that the Public Service Commission does sometimes under very adverse conditions.

This afternoon I want to speak about equal pay for our women employees. Women have always battled for their rights, and here I wish to quote an article in the Daily News during April, 1967, headed “Equal Pay Battle Continues”. This is an address by a guest speaker to the Professional Women’s Annual General Meeting—

Sir, when you read that, have women not the right to claim equal pay with their male counterparts? The women I especially wish to plead for are breadwinners, widows and divorcees with children, and women with dependants, very often an invalid husband. They have an extra burden on their shoulders. Very often they have to employ an additional servant to look after the children when they are at work. But let us compare the private sector with the Government sector.

Commercial banks to-day boast of their women tellers and their senior women clerks who come into contact with the public. They go so far as to say that their clientele prefers women tellers and women clerks to deal with. If they do that job, why are they not paid the same salaries as the men? Building societies and insurance companies also boast about their position in the financial world. They say they are one of the big three or one of the leading five or one of the most important seven. I say they have the right to boast because they play a very important part in the country’s economic and financial structure. Their financial foundations have been built and still rest on the availability of manpower. At present, subject to correction, I think they must be employing a ratio of three women to one man. Yet women are paid less. Therefore I ask: Is that not exploitation of the labour market? One senior lady whom I know in one financial house had to train a new manager, a young man who had arrived to take the place of a senior man. Whilst she trained him to become her boss he was drawing R50 per month more than she was. and when he was appointed as manager his salary ran riot amongst the noughts.

It is stated that in South Africa only 18 per cent of our women are economically employed—a figure which is one of the lowest in the western world. Even in the London stock exchange they are to-day surrendering one of their most cherished traditions and women are now being allowed to become members of that wonderful institution. As one of the members of the Exchange said, “If a woman can do a job as well as a man why should she be kept out? It seems a little stupid.” The last reason which this institution gave to keep women out was that there were no “facilities” there for women. I wonder what is meant by “facilities”, because one would imagine that such an important institution would have hundreds of lady clerks, and surely they have “facilities” for those women?

But the public service, the Government sector also boast about our women employees. I have here a copy of the Agricultural News dated 6th January, 1967, in which it is stated that “Mevrou … van Ingenieursdienste, Departement van Landbou-tegniese Dienste, het onlangs 30 jaar diens in die Departement voltooi …” Just think of the 30 years during which that lady has given loyal service to the public service. Is she not entitled to the same pay as her male counterpart?

I was one of the fortunate members—and if I remember correctly, Sir, so were you—of a party that visited that famous Government Department in Pretoria during the last recess. We saw millions of files; we saw hundreds of capable girls; we saw ladies in charge of various Departments. Looking at them one could clearly see that they had given the best of their lives to the civil service. Are those women not entitled to the same salary that the men get in that same Department?

I say that charity begins at home. Therefore let us, the official sector, pay our women the salaries that they are entitled to, and I am quite certain that the private sector will follow suit. In conclusion I say that the present system is outdated, outmoded, and out of tune in this changing world.

Mr. Chairman, I believe the hon. member for Pietermaritzburg (City) was quite sincere in his plea. Moreover, I do not believe he actually had the ulterior motive of drawing a few votes from the fairer sex at the next election. What the hon. member said here, namely that women play a special role in economic life, is most important. It is true. But I just want to tell the hon. member, in view of the fact that he pleaded for women who are the only breadwinners of a family, that in all departments of the Public Service, and elsewhere, special concessions are made to the woman who is the only breadwinner of a family. I think the hon. member should also know that.

I want to talk about the bursary scheme of the Public Service. I am particularly pleased to see that in these Estimates an amount of R300.000 is appropriated for the Public Service Bursary Scheme—an increase of R18,000 on last year’s appropriation. This bursary scheme was established in 1956, and its initial object was to train people for professional categories in the Public Service. The scheme was subsequently expanded to include those who wanted to qualify for the administrative and clerical sections. From 1956 to the end of 1965—figures for the subsequent period are not yet available—2,517 bursaries were granted for study at South African universities and elsewhere. I should think that by the end of 1966 the figure must have reached, 2,800. As I have just said, the latest figures in this regard are not yet available. These figures do not include the bursaries made available by the Department of Agricultural Technical Services in co-operation with various boards of control. By the end of 1965, 536 of these bursaries had been granted, of which 105 were made available for overseas studies.

We also know that the conditions attaching to the bursaries were that if the successful recipient of the bursary remained in the service of the State for a certain period, he did not have to repay that bursary. In the recent past the scheme was expanded to provide for ordinary loans. I am quite certain that many of the hon. members are not aware of this expansion of the scheme. In effect this means that the successful applicants will be required, in the case of loans, to enter into contracts with the Public Service Commission to take up employment with the State after having completed their courses successfully and to repay 40 per cent of the loans at 6 per cent interest a year, calculated as from the first day of the month following the month in which their studies were completed, and to redeem the remaining 60 per cent through service. I say this is an important step forward and one is very pleased about it. I feel that this arrangement will encourage many prospective students. We know that the Public Service bursaries were initially awarded mainly to the intelligent student and intelligent pupil who had gained special academic achievements. It is also understandable that that should have been the criterion for selection, and that it should be the basis for awarding bursaries. I think it is in fact the most objective basis. I want to say, however, that it should not be the only basis. Where two applicants are more or less equal, additional information is also taken into consideration, for example evidence appearing in testimonials, etc. In the past, however, the average pupil could not compete with his more intelligent peer as far as academic achievements were concerned. Now, I say that this type of pupil, the good average pupil, is frequently the hard worker and also has certain qualities, which I want to call personality qualities, which may be better than those of his more intelligent peer. I want to refer to three qualities in particular, namely tenacity, industry and dedication. This less-gifted person knows in advance that if he goes to university, he has to work harder than the more gifted student, and for that reason he sometimes fares much better than the highly intelligent student. This type of person is also the one who will be a special asset to the Public Service. Now I want to ask that if it is possible —and I appreciate that it is a difficult basis to go by—these factors should also be taken into consideration by the selection committee when applications are received for bursaries.

This new scheme, in terms of which only 40 per cent is repaid at a rate of interest of 6 per cent, certainly offers a golden opportunity to many people who could not get bursaries previously. I now want to ask, and to plead with the hon. the Minister, that even that remaining 40 per cent should also be free of interest in cases where the recipient of the bursary fulfils his contract and remains in the Public Service. Then I also want to ask that the amount which is not utilized—a great deal of the amount is not utilized for bursaries because applications are perhaps not made in certain specific categories—should be deposited in a bursary fund. I do not know whether that is done at present, but if it is not done this amount should be deposited in a bursary fund in order that it may be utilized again during the following year. It is also my hope that this progressive appropriation of R18,000 this year will be maintained every year. Finally I want to ask that the amounts which are repaid in respect of loans should be re-invested in a bursary fund. When persons who fail to honour their contracts are penalized and have to make contributions as a result, these contributions should also be deposited in the bursary fund.

I just want to raise a final point. As one of the representatives of a Pretoria constituency here in the House of Assembly, I want to associate myself with what was said by the hon. member for Rissik, namely that we should like to express our gratitude to the public servants who work so faithfully and keep the vast machinery of the Public Service going. In particular I want to convey my gratitude to the group of session officials who come to Cape Town every year for the Parliamentary session. We know that it is a great sacrifice these people are making, and I think that all of us, and also the public outside, should convey our gratitude to them in particular.

Mr. Chairman, following what was said by the previous speaker on this side of the House, there are three matters I should like to discuss. The first—with direct reference to the previous speaker—relates to the Parliamentary staff from Pretoria who perform session service here. I think we all agree that these officials perform an exceptionally fine task here in our public administration, and we are proud of the loyal and able way in which they perform their duties. According to my information an average of 425 session officials from Pretoria, Pretoria District and Johannesburg serve here annually. As a rule this figure includes slightly less than 100, Railways officials. Of the purely Public Service officials from Pretoria and the Pretoria District constituency, for example, there were 211 married officials and 147 unmarried officials here in 1965. Together with the families of the married officials, this means 700 additional inhabitants per session in Cape Town for more than half a year. In view of the excellent facilities of Acacia Park, I think the married officials are fairly contented and that they can make ends meet on the sessional allowance of R4 a day, although I do not think they can cut their cloth very generously either. But I want to make a plea for the unmarried officials. On their allowance of R2.70 a day they find it difficult to make ends meet financially. Here in Cape Town they usually have to rely on hotel or boarding house accommodation and in virtually all cases they also have to pay full holiday rates and at the same time maintain a household in Pretoria, no matter how modest. In this regard it is particularly the young female officials, with their relatively low salaries, who are hard hit. I should like to request that the Public Service Commission should inquire into proper housing facilities and a larger allowance for these Parliamentary officials.

Secondly, it is a fact that the family lives of the officials are disrupted by their moving to and from Cape Town every year. In Pretoria they often neglect their houses and gardens, to such an extent that upon promotion and completion of a session term they simply have to sell their houses in Pretoria or Lyttelton, because it is not a paying proposition to repair them. Now the idea has arisen—and I may say frankly that it originated among the wives of the Parliamentary officials in my constituency —that the State should establish something similar to Acacia Park in Pretoria as well, a place to which even Acacia Park’s little school may be transferred in the recess, in order that the children may there complete their school year with their classmates and teachers. It is a fact that the children, large and small, of these session officials, are those who are most subject to the difficult adjustments involved in the annual move between these two cities, a thousand miles apart. If session officials could live in such a place in the vicinity of Pretoria there would be no need for them to buy houses early in their careers, and upon completion of their session service, which in certain cases lasts from ten to 20 years, they could then buy themselves new houses. However, I am merely putting this up for consideration. As regards officialdom in general, we can only note with the greatest appreciation that in these times of inflation the Association of Public Servants is not pressing for higher salaries. This attitude on the part of that Association is most responsible. As a result of high rates of interest on housing loans, however, many officials find it hard to balance their budgets, even if the term is further extended. In all seriousness and despite all arguments to the contrary, I want to suggest that this Committee and the Public Service Commission should consider the establishment by the State of its own housing fund for direct financing of housing for public servants, and that the powerful Public Service Pension Fund, which has been built up mainly by contributions made by the officials themselves, should be used as a financial support. On 31st March, 1966, the assets of this Fund totalled R265 million. Its average annual income is approximately R49 million and the net addition to the Fund R36 million a year. It would seem to me that if the R18 a year contributed by the officials as their half of the contribution could be used for this purpose, it will serve a most useful purpose. At present many good officials are drawn out of the Public Service purely because some private firm offers them a higher salary and also the attraction of housing facilities. Positive planning of housing in the Public Service can only be conducive to greater stability in the officialdom.

Finally, I want to mention something which irked me when I was an official in the Department of which the hon. the Minister who is present here to-day was in charge at the time. When I had to leave home on official duty it never seemed right to me that the junior officials who accompanied me should receive a smaller travel and subsistence allowance than I received and in addition be required to ask for a receipt for every cup of tea or coffee in order to claim reimbursement upon their return. On the R3.50 and the R3.10 a day received by this group, the low-ranking officials, as travel and subsistence allowances, present-day hotel tariffs make it impossible for them to make ends meet. I make an urgent plea for these officials, that the Public Service Commission should attend to their representations as well.

Mr. Chairman, in view of the fact that Dr. Dirk Steyn, Chairman of the Public Service Commission, is to retire from the service on pension at the end of January, 1968, I think that this is an appropriate occasion to convey to him the gratitude not only of this House but also of the country for the services which he has rendered. The approach towards life, the career, and the studies of Dr. Steyn are a model for, and are in certain respects unique in the South African Public Service. He began his career almost a half century ago in a magistrate’s office in a country town. At a relatively young age he already had various periods of service as magistrate in all four provinces behind him. His juristic achievements quickly drew attention to him and at the age of 45 years he was appointed as Deputy Secretary of Justice. This appointment drew more specific attention to his organizational and managerial abilities, as well as to his perseverance, and scarcely two years later he was promoted to Secretary of the Public Service Commission. On 1st January, 1957, he became member of the Commission, and within a year he was appointed to his present post as Chairman of the Public Service Commission. During Dr. Steyn’s period of service on the Commission the Public Service experienced an unprecedented period of progress in the field of administrative theory and practice, efficient staff administration and intensive research. The concept and field of study of “Public Administration” was endowed with new significance and it came as no surprise when the University of South Africa decided in 1965 to bestow on Dr. Steyn an honorary doctor’s degree in administration in recognition of his comprehensive achievements.

His entire career has been marked by numerous programmes and schemes and this is an opportune moment for referring to only a few of them, which were piloted through by his instrumentality and under his guidance. In the first place there was training. After a preliminary investigation into training requirements in the Public Service in 1952, a training division was established in 1956, which initially concentrated on bursaries and training for technicians. Subsequently the scheme was expanded and formal training courses in approximately 30 technical and five administrative directions were established. In addition almost 3,100 bursaries for studies both local and overseas were granted. Inspection activities and the application of various work and method techniques are to-day being carried out on a scientific basis. The course for work study officers is unique in this country, and assistance with the training of work study officers is also being rendered to semi-State institutions, local authorities and neighbouring states. The improved working techniques also include operational measurement and analysis, time and movement studies, and mechanization. In 1953 a start was made with the consolidation of the cost of living allowance with basic wages and in 1958 it was taken further to form the present basis on which salaries in the Public Service are modelled to-day. The system of consolidated salaries, which in essence means stability for employer and employee, is also being adhered to by a great many leading employers in the country. Various staff development schemes were carried out in terms of which promotion according to merit and salary increases according to achievements, acknowledgement for academic qualifications, etc., have been introduced. The tightening up of general conditions of service included inter alia the revision of Public Service legislation and regulations, the improvement of pension benefits, the introduction of housing and medical schemes, a vacation saving bonus and a new salary structure.

Bearing in mind the general development and concomitant labour problems of the postwar years, the point of departure of all the schemes which were introduced under the guidance of Dr. Steyn was to ensure the maximum efficiency. He never allowed himself to be guided by the sensational or the sporadic, but on the contrary put into operation schemes the value of which is quite probably not being fully realized even at this stage. Outside the Public Service his encouragement also contributed to the effective establishment of academic subjects of study in the field of public administration. Apart from the influence which the Public Service schemes had on outside bodies, it also played an important part in the establishment of the South African Institute for Public Administration, of which he was also the chairman. The saving in money and manpower which his proposals and schemes have already resulted in in the public sector, is of inestimable value. It was not only on the executive and managerial level that he achieved great heights. I can also confidently state that as a person he is going to leave ineradicable, a lasting impression. As a person he was always humble, accessible and approachable, regardless of who approached him or what the scope of the problem was. During his years, particularly where he had to give the lead, we entered a new era in the Public Service to which a different significance was attached to good and sound human relationships, not only between staff, but also for the promotion of good relation with the public.

In addition he was endowed with untiring zeal and a persistence which was contagious. These qualities not only helped him to progress from the most humble to the highest post in the South African Public Service, but was characteristic of the monumental work which he did in the interests of the Public Service, the officials and the country. Since I have thanked him and expressed my appreciation— also, I believe, on behalf of this House in general—I also want to wish him good health and every success for the years which still lie ahead.

Mr. Chairman, the hon. member for Pine-town, who introduced the debate on this Vote, put a few questions to me. I shall devote most attention to the most important one, which was: What is being done, and what has already been done by the Public Service, to promote greater efficiency and productivity? I think that it must be clear to the hon. member from the tribute which I have just paid to Dr. Steyn that things have happened in the Public Service over the past years, and that the development of the Public Service has kept pace with the requirements of the times, and also that the Public Service is making use of the modern facilities, the modern knowledge and modern practices which are being applied in the private sector. I want to give more details in regard to training in the Public Service. In respect of training the fundamental aim is to obtain the maximum utilization of staff, and in addition to that to try and ensure better service. The better equipped one is for one’s task and the more knowledge one has in regard to that task, the more work will one be able to do. This is the case practically throughout the world. I want to refer briefly to the training facilities which have been introduced in the Public Service. I want to refer in the first instance to bursaries not only for local study, but also for study abroad. From the introduction of the bursary scheme in 1955 up to 1966 more than 3,000 bursaries for post-matriculation studies in a variety of subjects have been offered. In 1957 a four year course for the training of technicians was commenced, and to-day technical training in almost 30 different directions is being provided. In the past five years, up to the end of 1966, 708 officers have obtained the National Diploma for Technicians, while a further 364 post office technicians have obtained the National Certificate for Telecommuncation Technicians. The courses for technicians have since 1959 been followed by diploma courses in tax assessment work, accounting and auditing, and registration of deeds, and in 1965, the latest addition, i.e. the diploma in Public Administration was introduced. In 1966, in one year alone, 742 officers entered for the Diploma in Public Administration. I think that we may regard that as particularly encouraging. Apart from these diploma courses the following general or special courses are being offered by the training division of the Public Service Commission: Inaugural training for officers who are entrusted with supervisory functions, a course which has been attended by 7,094 officers since 1957. Managerial training: A course in modern managerial techinques for senior staff has been introduced which was attended during 1966 by 362 officers. Training in operational study: Since 1965 810 officers have been admitted to 62 courses. These courses are chiefly intended for persons who want to become operational study officers in the various departments. Apart from the training which is undertaken or directly controlled by the Public Service Commission, there is also a scheme under the guidance of the Public Service Commission in terms of which Departments can provide separate training in the activities of their own and various other Departments.

I come now to the question of inspection, if one wants to increase the productivity, the operational ability, of people in such a service and one wants to provide them with a more thorough grounding for the task which they have to perform, then it follows that there will be inspections and supervision, and for that reason it forms an important second leg of the new developments in the Public Service. In 1965 a programme was drawn up which was aimed at undertaking, during the next five years, inspections at all departments and branch offices. During 1966 57 of the inspections were completed while 65 general inspections had been planned for 1967. Apart from regular inspections which are aimed primarily at achieving more efficient organization and the proper utilization of staff, brief reference can be made to results which the following operational study inspections revealed, and here I am now going to publish important figures because the hon. member also referred to the economic justification for increased efficiency and higher productivity. Mechanical investigation: In 1966 336 of these investigations were carried out which lead to an estimated capital saving, in one year, of R56,000 and a recurring saving of R54,000. Since a start was made with mechanization investigations in 1962, recurring savings of almost R154,000 per year have been brought about. Work study investigations, under the guidance of the inspectorate of the Public Service Commission, began on a small scale in the departments in 1954. The true value of that in the Public Service is almost undeterminable, but it is nevertheless interesting to note the following determinable savings which were brought about up to the end of 1965: 2,762 posts were abolished as a result of the investigations and the introduction of improved operational methods, while the creation of a further 2,390 posts was prevented. Very conservatively calculated, this meant a saving of approximately R5 million in monetary terms. Investigations into the more efficient utilization of accommodation led to a capital saving of R9,300,000, while the recurring savings amounted to approximately R154,000. The estimated, capital and annual recurring savings on equipment and stores amounted to R4,800,000 and R2,200,000 per annum respectively. In short it can be said that for every man-year which has been spent on work study, 47 posts, R12,800 in respect of capital, and approximately R2,000 in recurring savings per annum have been accomplished up to the end of 1965. I am mentioning these figures because the Public Service is one of the most important sectors in our entire political economy. It is a service which must keep pace with the most modern developments. If the members and the chairman of the Public Service Commission are not people with insight and with drive and initiative, then I am afraid we would not have been able to boast of such an efficient Public Service as we are able to boast of to-day.

The hon. member for Durban (Central) mentioned the fact that something had appeared in the newspaper in regard to Government officials who were found guilty by the courts, in a case which is still sub judice because judgment has not been finally passed yet, of corruption or embezzlement of funds or dishonesty. This is unfortunately the case. But human integrity and human honesty of factors which always play a role in any organization, whether it be a private or a Government organization, and are factors which determine to what extent offences of this nature will take place. I want to go so far as to say that percentage-wise there are more people in the medical profession, of which the hon. member is a member and of which I have a very high opinion, who commit these kind of infringements than there are in the Public Service. A report recently appeared in the newspaper.

May I ask the hon. the Minister where he gets authority for his statement that there are more rogues among doctors than among civil servants?

I have no authority for that, but after all we all read the newspapers and we know what is happening. It is not that I want to belittle medical practitioners as such. The point I want to make is that even people who are bound by a high ethical code and who exercise such a noble profession, do the wrong things, and that even amongst them one finds a percentage who are not so elevated that they cannot make themselves guilty of a lack of integrity and morality. But a finger will always be pointed at the Public Service, apparently because hon. members on the opposite side in particular think that every misdemeanour within the Public Service is in fact the sin of the Government and a misdemeanour against the National Party Government. That is why I mentioned it.

Recently I saw in the newspaper a report about malpractices which had been disclosed in the non-White Affairs Section of the Johannesburg City Council. According to this report a Bantu employee of the Municipality had been appropriating the registration fees of day-labourers for himself for almost eight years. I say that this phenomenon occurs both within and outside the Public Service and that it has nothing whatsoever to do with salaries, it is a question of human integrity. I am not mentioning this because I want to indemnify Public Service officials, those who commit such misdemeanours; we all disapprove, but we must not always be making a scapegoat of officials and implying that they are the only people who commit misdeeds. That is all I wanted to say.

What have you done with the official at Paarl?

The officials who are found guilty in this way, are punished under the Public Service Act, quite apart from the penalties which the court may impose as a result of criminal offences. I then come to the hon. member for Rissik.

You have not answered his question yet.

Did you put the question to me, or did the hon. member for Durban (Central) do so? Are you the Chief Whip? Are you going to determine what I shall say and when I shall reply to a question? I think it is high time, Mr. Chairman, that the hon. member for Umlazi should not regard himself as the man in this House and dictate to me or to any other Minister what his attitude should be. I will not be dictated to by the hon. member. [Interjections.]

On a point of order, may the hon. the Minister say to you, Sir, that it is time that you should not regard yourself as being the most important man in this House?

Order! That is not a point of order.

On a point of order, Sir, the hon. member for Durban (North) is putting a point of order.

It is not a point of order to ask me whether I regard myself as being the most important man in the House. The hon. the Minister may continue.

The hon. member for Rissik spoke with great praise of the medical aid schemes, and he thanked the State for the improvement which there had been, and for the gradual increase in Government contributions until we ultimately reached the point where we all knew where we were, a scheme which was both an attractive one and a reassurance to Government officials. This is associated with the question which the hon. member for Durban (Central) put to me, i.e. why there had been this great increase in expenditure. The great increase here is as a result of the fact that the State contributes a fixed amount per capita to officials who are members of that medical aid scheme, i.e. R24 per year per member. Because so many members have joined these medical aid schemes on a voluntary basis during the past few years, after they had realized the value of doing so, we have had this increased provision in the Estimates.

The hon. member for Pietermaritzburg (City) made a plea here. I want to congratulate him on his speech, but that speech should really have been made outside this House and not on my Vote, because his complaints for the most part had nothing to do with the Public Service but dealt with the private sector, because the main principle he pleaded for in his speech, i.e. that there should be equal pay for equal work and equal qualifications, is a principle which has already been in operation in all divisions of the Public Service since 1st January, 1966. It is not, as the hon. member for Koedoespoort said, applicable in respect only of women who are the only breadwinners in the home; it has been generally applicable for more than a year within the Public Service, i.e. that the same salary is paid for equal qualifications and the same work, irrespective of whether a man or woman does the work. I want to tell the hon. member that he can have this confirmed by the hon. member for Wynberg. She has already thanked the Department and myself for this accommodation by the Public Service. In other words, the Public Service and the State as such have in fact set an example here to the private sector which I hope the hon. member will now bring home in no uncertain terms to the private sector, and say to them: The example has been set; do thou likewise. [Interjection.] It can also be brought home to the hon. the Minister of Railways, as the hon. member is suggesting, but he says he only uses men, and uses women by way of exception.

The hon. member for Pretoria (District) pleaded for higher allowances for Government officials who are away from their homes, or travelling. This is a matter which the Cabinet recently considered, but it decided, in the present circumstances, to make no changes to the position, because it would once again have a chain reaction in the Service. Since we have announced salary increases last year for both Railway and Public Service staff which cost millions of rand we have now decided not to touch this matter, because the Public Service regulations provide that under specific circumstances officials who cannot come out on their daily allowance can make application for it to be supplemented. The hon. member knows what I am talking about. But I am afraid that for the present we shall have to leave things as they are for the sake of the country as a whole. It is not because we have no sympathy. We also do not deny that Government officials, under certain circumstances, cannot come out on that allowance which they receive because of absence from their homes. We admit that that is the case. But provision for extraordinary circumstances does exist, and we cannot tamper with it now.

I think I have dealt with all the points which hon. members on the opposite side have raised and I therefore want to content myself with this.

Vote put and agreed to.

Revenue Vote 12.—“Government Printing Works, R5,800,000”.

Mr. Chairman, the matter which I wish to raise with the hon. the Minister is the matter of the prolific and prodigious publication which is South Africa’s annual “best seller”, namely the Government Gazette. I am encouraged to talk about it because of the negotiations that are now going on to publish the statutes in a better and a different form, to consolidate them, and to provide for any man who wishes to see what a statute says an easy reference to the statute and its amendments.

What I want to say is that it seems to me the time has arrived when we must look not just to the proper publication of statutes bur also to the great body of law which is contained in the Government Gazette. I think that it is fair to say that most of the real law which affects the individual, the industrialist, all enterprises, and all labour concerns is contained in the Government Gazette. But I think that we are rapidly approaching the stage where the maxim that “Ignorance of the law is no excuse” is not necessarily true any more if the law is a notice which has been published in the Government Gazette.

We have a Government Gazette which is difficult to bind; it is impossible to place on most of the book-shelves, and when it is bound and placed on a book-shelf it contains at least four times the material that is required for permanent records. Furthermore, one finds it quite impossible more and more to discover what the law is relating to whichever subject one wishes to deal with. My plea is that the Government Gazette and especially the regulations which are really the laws which the statutes empower the various departments to make, should be of a smaller and a more practical size. They should be compact. I think that perhaps the Printer should also provide binders of a decent normal size in which these regulations can be put in a loose-leaf form. They should be printed for binding in such a book. They should also be printed separately—each regulation for each department should be separate. They should moreover be in different issues. If the matter of expense does not warrant this procedure then they should be in such a form that one can take out those aspects and those departments that are required.

Here I have one example. It is Government Gazette No. 1716 of 21st April. We find on the first page a proclamation under the Sea Fisheries Act. On the same page we find a series of regulations—-which are in fact laws —starting half-way down the page under the heading of “The Department of Agricultural Credit and Land Tenure”. When one has finished with those regulations one finds on page 5, half-way down the page again, a new set of regulations of “The Department of Agricultural Economics and Marketing”. Again these are laws, amending regulations that are already there. If one goes on through the Gazette one finds a schedule of the Department of Inland Revenue relating to the regulations under the Income Tax Act. On the last page one finds some notice by the Minister of Labour relating to the Apprenticeship Act.

Now, Sir, it is quite impossible to discover where these things are. One has to look through every page of every Government Gazette. Apart from anything else, with these changing regulations published in one Gazette in one form in the way they are, it is becoming impossible to know when the regulations have been amended and when they have not. In 1949, as recently as that, an accused person was convicted under a regulation which had in fact been repealed. It was somewhat impossible for the magistrate in fact to discover this because of the limited facilities at his dispoal and he could not go through every Gazette to see whether that regulation had, in fact, been repealed. Fortunately the matter went on automatic review to the Supreme Court and the conviction and sentence were set aside on the basis that the regulation under which he was charged had in fact been repealed, because the Supreme Court had the facilities to discover these things.

Order! Should this matter not be raised under the Justice Vote?

No, Sir—I am talking about the manner of printing, the form in which the Government Gazette is printed.

The hon. member may continue.

The other thing which I wish to point out is that all of these regulations are printed indiscriminately. One finds one department’s regulation on one side of the page and another department’s regulations on the other side of the page. It is quite simple, I submit, to provide that all these regulations—in other words, the laws which apply to various people—should be printed, as I say, on different sides and should be printed department by department. If my suggestions are adopted one will then be able to file the Gazettes in separate, normal compartments; one will be able to discover exactly what the law is from time to time in relation to that department’s matters. As I say, that is an impossible task at the moment; it is impossible for trained lawyers. There was recently a case which went to the Appellate Division, and with judges looking at the matter, with all the facilities at their disposal, plus eminent counsel on both sides, the case was argued on the basis that the law was as published in certain regulations some 40 years earlier. No-one knew, until after the case, that those regulations had in fact been repealed 27 years later. One cannot blame them for not knowing that: It was almost impossible for them to have known.

But, Sir, if these suggestions, which I put forward very earnestly, are adopted, then one will be able to determine if, for instance, a matter concerns a particular industry, a certain branch of commerce, or whatever it is, exactly what the law is in that regard. It does not help to-day to know what the statutes of the Republic are. All the statutes that are passed provide the power to make regulations, which are the effective “teeth” of that legislation. That is to be found in the Gazette, if one can find it. I can see no reason why the subscribers to the Gazette should not be entitled to subscribe to a particular section, for instance to the Department of Commerce, the Department of Labour, or whatever it is that is one’s particular field. Most important of all is that one will not miss a notice, that one will know what the law is because one will know where to go and look for it, instead of looking for it in this wide jungle of regulations mixed up with Government notices, mixed up with court notices, mixed up with insolvency notices, mixed up with everything else that one can think of. If one goes into a library one sees the incredibly big shelves that have to be provided to put them on. I ask you, Sir, to try and find your way through them, although they provide an index, and find out whether a regulation has, in fact, been amended, let alone what the law is in relation to a particular matter. If you can, Sir, “You are a better man than I am, Gunga Din.”

Sir, I think that this will pave the way— and I think this is the only way in which this can be done—for a gradual republication and codification of all the regulations as is at present contemplated with the statutes of the Republic. I earnestly put this forward as a suggestion which not only is practical but without which it will be impossible for those persons, which is everybody, effected by the regulations in the Gazette to know where they stand, and which will provide us, perhaps, with a chance to codify these matters, to consolidate them and thus to determine once and for all just what the law is in any particular field.

Mr. Chairman, I should also like to ask for an improvement. This concerns the question of whether the Government Printer cannot print reports submitted to Parliament in one or two standard forms. I do not think it is necessary for me to explain too much to the hon. the Minister, because he himself is a member of this House. If we look at the various departmental reports which are Tabled here every year, we find that it is indeed a case of “the long and the short and the tall”—all possible sizes, lengths and widths. Reports of one and the same department frequently differ in size from year to year. There are members who keep these reports in their shelves for reference purposes.! think it will therefore be to the convenience of both this hon. House and the secretariat that has to bind these books every year if the Government Printer will give attention to the format in which these publications are delivered to us. In my view there should be only two standards as regards the form of departmental reports—the large blue books, and then the form in which select committee reports appear. Another aspect relating to the departmental reports: Some of them are beautifully illustrated, but I have nevertheless wondered whether this is necessary in the case of a report to Parliament. I can understand that the documents sent abroad by the Department of Information, for example, must make an attractive impression and that it may therefore be necessary to illustrate them copiously. A report to Parliament, on the other hand, need not be propagandistic but only factual. Illustrations should be introduced only with the object of illustrating the text—nothing more. Another small improvement I want to suggest is that the title and date of the publication should also be printed on its back. This is not being done at the moment, with the result that members who have been in Parliament for many years have hundreds of blue books on their shelves. As a result one frequently has to go through a whole set of books to find a particular report. I must say that in general the Government Printer produces neat work. It is clear, legible—in brief, good printing. If the few small improvements I have suggested could be effected, we should be completely satisfied.

I have listened attentively to the positive approach, criticizm and suggestions of the two hon. members on the opposite side. I think they are making one mistake, however, and that is that they are forgetting that the contents of these publications are not the responsibility of the Government Printer. He is concerned only with the publication of the matter submitted to him. Therefore he cannot change the contents. If hon. members should therefore like to see greater uniformity in this regard, they should bring it to the attention of each department individually. However, I shall bring the points raised here specifically to the attention of the Government Printer with a view to seeing to what extent it may be practicable to effect improvements. Of course it is not possible for me to say at this stage that we shall or shall not do this—nor do hon. members expect me to do so. But I shall bring it to his attention and I presume that if improvements can be made, those improvements which are easiest will first be made and the more difficult improvements later. The hon. member for Durban (North) complained that the matter published in the Government Gazette was printed in a jumble. One moment one sees agriculture and the next justice, then agricultural economics, etc. Of course the Government Printer is not concerned with the question of which Government Departments should receive priority, but I agree with the hon. member that there should be somewhat more of a chronological order in order that the contents of the Government Gazette may catch the eye of the reader more readily. But as I said, I shall bring all these suggestions to the attention of the Government Printer— I hope to good effect.

Vote put and agreed to.

Revenue Vote 16.—“Treasury, R1,576,000”, and Loan Vote A.—“Miscellaneous Loans and Services, R209,660,000”:

Mr. Chairman, as you and I know, the discussion on this Vote is limited in scope as well as in time. Therefore I should like to confine myself only to one aspect of the policy of the hon. the Minister of Finance under this Vote. The main problem of the Minister is how to curb and if possible how to stop inflation. I think that is clear. As a matter of fact, in every speech that he makes he sallies forth like a modern St. George intent on slaying the dragon of inflation or, at any rate, put him into chains so that he will do no more harm. One can use all the usual legal terms, all the technical terms and all the economic terms, whereas as far as the ordinary man is concerned—which means the entire population of the country—the obvious barometer indicating the depreciation of the rand or otherwise, although I think “or otherwise” is just wishful thinking, is the cost-of-living index. Towards the end of last year the cost-of-living index figures were static and people were hopeful that the maximum had perhaps been reached. However, last week we saw the March figures showing that the index is moving upwards again and for the first time has exceeded 120 points compared with 100 points in 1958. Since the Minister’s last declaration in this House, some five weeks ago, several things have transpired. I think it is rieht that we should ask him this afternoon to tell us how he views these things from the point of view of his battle against inflation and from the point of view of his efforts to keep prices down and to maintain the value and purchasing power of the rand.

The first item I should like to mention is the price of sugar. Since the hon. the Minister spoke in this House the price of sugar has been increased by 1 cent per pound. That may not sound very much but it means R20 a ton and when we realize that the country consumes about 600,000 tons per year it means, according to a rough calculation, some extra R12 million plus the profit of the very wide range of manufacturers of products for which large quantities of sugar are needed. Whatever that may be, R12 million must come out of the pocket of the consumer during the coming year. This must have an effect on household budgets and, consequently, on the cost of living. The second thing one notices is that customs duties are continuing to be applied to a great extent from time to time. The last occasion was on 14th April, when there were seven pages of them in the Gazette. They were mostly in respect of textiles and household goods. I do not know whether those increases in duty have all been approved or recommended by the Board of Trade or not. We were told last year that duties were being imposed, which had actually not been approved by the Board of Trade. The latest increases are nearly all on household goods and articles for everyday use. I shall quote just one. I can quote many, but I shall mention only one. I see that there is a new duty of R6 on sewing machines. A sewing machine is not a luxury. It is an essential, especially for the middle and lower income groups, where the housewife has to have a sewing machine, for obvious reasons. A R6 duty is a very high figure for sewing machines. Most of them still have to be imported. I do not know whether the hon. the Minister can tell us whether there are sufficient factories in this country to supply the needs of the country. Personally I doubt it. All these duties are passed on to the consumer. There were statements in the Press, after the last batch of duties, that the price of shirts might be increased by 12½ cents, for instance. All these increases will be passed on to the consumer. It must have an effect on the cost of living for the ordinary man. On the other hand, the pressure for higher wages is obviously increasing. Coal-miners have received considerable increases. In the last few days 22,000 coal-miners were given substantial increases. I am not discussing the rights or wrongs of this matter. I am just mentioning it as a fact. I am told that these increases will entail something like R9½ million. We know that the transport workers, the distributive workers and other large bodies of workers are pressing hard for increased wages. Pesumably, in the course of this year, some of their demands are likely to be met. All this means is that there will be what the economist calls increased demand inflation. In a report recently published by the Bureau of Statistics, this observation is made:

In other words, these increased wages, for the most part, will be spent, increasing demand and pressure for the goods that are available. One cause of inflation, and one of the Minister’s problems, has undoubtedly been the shortage of labour. In the last few days we have had the head of a Government Department making a speech in which he warned people and warned the country that he expected, and that they should expect, the shortage of labour to become worse and more acute. All these factors tend towards inflation. They all affect inflation and the cost of living. In the middle ages the kings of Europe were very proud of having another title, namely “the protector of the poor”. I think that if the hon. the Minister would regard himself as the protector of the poor and consider this aspect of the matter, he would see another aspect of the problem which he is up against. [Time expired.]

Mr. Chairman, the hon. member is correct, of course. The inflationary pressure that has arisen in this country has all kinds of outgrowths, and one of these is the natural urge of people to keep abreast and then demand higher wages. The danger is that if such a situation continues, demands for higher wages, if acceded to, become a permanent feature of the economy. Once one reaches this stage, one has reached a very dangerous stage, for as in the case of many other rights one cannot grant a person something and then take it away. Once a wage has been granted, one cannot afterwards withdraw it. The danger attaching to this is that as a result of a general costs structure which this increases, South Africa may jeopardise its competitive ability as an export country. This is a very important danger which is threatening us, and it is therefore important that this situation should be brought under control as soon as possible. I do not think we gain anything by coming here every few weeks with examples of pressure existing in the economy. These things happen, and it is also true that when there is inflationary pressure the prices of some of the various items will be inclined to rise. This is a natural phenomenon. I think what is in fact most important is that we should try to ascertain now, after the hon. the Minister’s Budget, whether there are in fact indications that the situation which had arisen and which was dangerous is being brought under control. To us that is important. It is very difficult to find definite indications after such a short period. All we can do is to make deductions from specific indications; it is still too early to be very definite about it, but what is pleasing is that there is a definite indication that certain indicators tend to show that the situation is declining and is easing the strong pressure which existed. I think we should be very grateful for that.

The problem we have wrestled with in recent times is the quantity of money which exerted upwards pressure and caused this situation. If people have a great deal of money, they want to spend it in some way or other. In course of time the tendency arose that the public did not place any value on money; for that reason they did not try to get high interest. They tried to protect the money by investing it in something which could show growth. Furthermore, we have seen signs of a general attitude, that the public no longer cared what interest they paid on purchases of everyday commodities. This is the dangerous situation that has developed among the public and that is actually a psychological situation. In South Africa we have millions of people who show tremendous faith in the economy of the country. We can be very grateful that we have an economy which is strong enough to be able to resist the pressure. Let us consider some of the indications. The first indication I want to mention is the availability of money and near-money. I just want to point out that according to the Reserve Bank’s brief summary of the financial position in its latest bulletin, there has in fact been a considerable decrease. Compared with December, 1966, there has been a decrease of almost R100 million; there is R97.6 million less in the hands of the public. That is an important indication and one for which we should be grateful, because this decrease in money, although it will not happen immediately, will make its effect noticeable in due course, because the demand resulting from it must also show a reduction. If one reads this in conjunction with the latest opinion given by the Economic Bureau at Stellenbosch, which has just reached me, it is striking that these gentlemen who sound the financial situation every few months and who give us the benefit of their opinion, indicate that the public, commerce and industry, anticipate a levelling off. From the psychological point of view, I think this is a pointer in the right direction. The opinion given by commerce and industry themselves in recent times indicates that the percentage of them who anticipate that the rate of economic expansion will rise has decreased from 15 per cent to 2 per cent as compared with last year. In industry itself, the percentage anticipating expansion has decreased from 40 per cent to 23 per cent. In the case of the retail trade there is a similar decrease. As regards the motor trade, which is a most important indicator, there is a decrease from 35 per cent to 5 per cent. Here we have an indication that there has been a change in the economic climate, which caused us some concern. This data indicates that the public does feel that the Minister is succeeding in his endeavours. Mr. Chairman, I said we should draw deductions from indications available to us. The grey market is also drying up. Last week the Reserve Bank’s reserves in South Africa sank to R454 million. This decrease in Reserve Bank reserves may also have a dangerous angle, because the money that used to be there has been spent somewhere. It is suspected that it may now be hoarded in greater supplies, but if the demand is declining, it is an indication that we may be satisfied that the situation is gradually entering the climate South Africa would like to see. Only last week the hon. the Minister warned that if the situation did not come under control he would not hesitate to take further action. I believe the hon. the Minister is adopting the correct attitude, and I think the country as such should be warned that we intend getting the situation under control. [Time expired.]

I am glad that the hon. member for Soutpansberg gave us an optimistic view of the future. I hope he is right. He has quoted the latest opinion survey of the Stellenbosch Bureau, and a very interesting survey it is, but at the same time it is a limited sample and one has to bear in mind what happened last year. Neither the Stellenbosch Bureau nor anybody else at this time last year foresaw the sudden burst of expansion and activity which took place in the second half of the year. The large increases in wages which are coming about now and which look like coming about increasingly in the next few months, are in themselves a deterrent to a slowing down in the spending of the country, and this might easily confound the expectations of the gentlemen of the Stellenbosch Bureau who expressed their views as to what they thought was going to happen, but the hon. member may be right. What I am trying to do, Sir, is to point out just what is happening and how it is likely to hit the ordinary man.

Sir, I do not for one moment doubt the good intentions of the hon. the Minister. I am quite sure that St. George is determined to slay his dragon even if it is proving to be very reluctant to be slain. I am sure that the Minister is determined to do it and I wish him luck; the whole country is behind him. The hon. member for Soutpansberg rather suggested that it was no good raising these questions every few weeks, but I venture to disagree with him. I think the more facts we have, as long as they are facts, and the franker people can be on this subject, the more public opinion is likely to be behind the hon. the Minister in what he is trying to do because so many people do not realize just what the problems are. For instance, it seems to me that until the hon. the Minister has won his battle against inflation, and until the position is stabilized, the cost of living is bound to continue to rise. Under present conditions, as I see things at present, I think the country may well expect an over-all increase of 3 per cent or 4 per cent in the cost of living in the course of 1967. I wonder what the hon. the Minister thinks about that? If he disagrees with me I hope he will take the opportunity of saying so and satisfy me and the country that I am quite wrong. I hope I am wrong.

But on the other hand, if he agrees that so long as inflation is still being fought and is still not completely subdued and so long as the economy of the country continues to expand—and nobody is suggesting that it should stand still—the cost of living is going to increase, albeit not by as much as it did in 1965-’66, then I want to know what the hon. the Minister’s policy is going to be in regard to the thousands and thousands of families who at the present moment are struggling to keep going and to whom every increase of 1 per cent in the cost of living is a matter of very serious consequence.

The Bureau of Statistics made a family survey last year comprising 5,000 families. Incidentally, the only information we have on the subject we gleaned from a Press interview given by an official of the Bureau of Statistics. I have not seen the whole report. I have endeavoured to obtain a copy from the Department of Planning, but they have not seen one either, and what is more, they did not know anything about the interview which had been given by the official of the Bureau of Statistics. The only information we have is from the Press summary, which this official gave some weeks ago.

I think a report of this importance should be made available to Parliament before interviews are given to the Press and opinions are expressed by Government officials. Just to give one example from that summary, which I suppose is correct, they pointed out that taking Cape Town families earning an average of R1,660 a year, on an average those families were spending R1.860 per annum, i.e. R150 per year more than they were earning. The breakdown of that expenditure does not disclose any great luxuries or extravagances, although I have no doubt that it includes minor extravagances of which everybody is guilty; but on the whole, the expenditure seems to have gone on food, clothes, books, etc. It indicates—and there are many thousands of families in the country earning less than R1,660 a year—how frightfully important every point increase in the cost of living and of essential services is. If the Minister agrees with me that it is not due to his handling of the situation but simply due to the facts of life in which we find ourselves at the moment, he will also agree that the cost of living is likely to increase during this year by another 2 per cent to 3 per cent. What steps does the Government propose to take to try to protect, at any rate, those lower income groups who are suffering now and who will suffer very much more if I am right in my contention?

It was not my intention to tell the hon. member that he should express no criticism whatsoever, but I do not think we gain anything by discussing what is happening every few weeks. I think we know that, and I think we should look somewhat ahead and give an indication of how we think a contribution may be made towards getting the situation under control. It is true that there is always some inflation present in a developing and growing economy. If it comes to a standstill there is stagnation. The question is just at what rate it should take place. We now hear that the indicators to which I referred a moment ago suggest that we are probably in the final phase of the economic boom, and there is the hope that it will decline to such an extent that the rate at which the developments are taking place will be within our economic range. That is what is important.

I said something in connection with the survey by the Bureau at Stellenbosch. In my view the sales of motor vehicles are still too high. The March sales of motor cars in South Africa were the second highest in our history. What applies to motor cars also applies to a large extent to other durable consumer goods. But the fact that there is still so much activity in commerce may be an indication that our hire-purchase terms are too easy. I want to suggest that the operation of hire purchase in South Africa at present should be examined. I believe it is too easy to obtain money to buy durable consumer goods. I believe it is too easy to buy motor cars, and I think this is a matter which should be investigated.

I also want to make some observations with regard to the position of the building societies. The building societies perform a most important function in South Africa. It is true that in recent years the State has intervened to help people who cannot acquire a house very easily, and large numbers of houses have thus been made available to the lower income groups. But the fact remains that the private sector still has a most important function to fulfil in the field of housing, and we should help it to be able to fulfil that function to the best of its ability. As a result of the strong occupation of the banking sector, and actually of the entire monetary sector in South Africa, it has become more and more difficult for specialized institutions to obtain the necessary funds. The building societies is one sector which has experienced hard times in recent years. But I think South Africa owes a great deal to the building societies for the fact that they were prepared, in spite of having to pay interest at high rates, to tighten their belts and that they were prepared to act as thriftily as possible, and even to draw on their reserves, instead of shifting it onto the public. What they have done is an example to the whole country.

I regret that all sectors of the economy have not followed this example and also made concessions, particularly as regards the percentage profits they took. They could help to bring down the cost of living. I think this is an example which may well be followed. The building societies afford an opportunity to people to whom they lend money to build a house, but have we not reached the stage where we should see to it that the building societies do not merely give a house, but a home?

To give a home means that the building societies should go further than merely giving a man the shell. Has the time not come for the building societies to get the opportunity to provide for all the requirements of every family, for example a refrigerator and the essential furniture, more cheaply and more easily than a house-owner can obtain them at the moment? I feel this is an extension we may fruitfully consider. I am not prescribing to the Minister; I am merely asking. We should bear in mind that a house is an expensive thing, but once one starts buying the accessories one easily pays 20 per cent or more in interest. I am convinced that the building societies will be able to find a reasonable formula to finance the man in the street much more cheaply, in order that he may have a home and not merely a house. The building societies can make a contribution, particularly in these times, to keep the cost of living down, and will enable the man in the street to acquire the essentials he needs to settle down properly in his home. I want to convey my gratitude to this institution, which has set such a valuable example in recent times to keep the cost of living down.

The last speaker referred to the building societies and the important role they play in our financial structure. During the course of my remarks I will deal with that. I think the hon. the Minister will agree with me that one matter which should have attention is the pattern of interest rates. Let me say at the outset that I am not advocating that the Minister should peg rates of interest. I think he should leave it to the free market, but I think it is advisable that we should get an idea of what has happened in recent years. The total deposits held by commercial banks, building societies and deposit-receiving institutions have shown a considerable increase in the last ten years, but over that period the pattern has changed. I have a table here, which I do not have the time to read in full, which shows that in March, 1955, the commercial banks held 66 per cent of the total, but by March, 1965, they held only 58.9 per cent.

Building societies in March, 1955, had 28.3 per cent of the total but by March, 1965, it had decreased to 21.2 per cent. Other institutions—and I presume it was the other institutions to which the hon. member for Soutpansberg was referring—held in March, 1955, 5.5 per cent of the total which had increased by March, 1965, to 19.9 per cent. The summary of this position is as follows. The percentage increase in deposits of commercial banks between 1955 and 1965 was 108. Building societies showed a 76 per cent increase over the same period, whilst the figure for other deposit receiving institutions over the same period was 832 per cent increase. The whole pattern has changed, and having regard to the remarks made by the hon. member for Soutpansberg, I would point out to him that since 1965 building societies have been subjected to restrictions imposed by the amendments to the Building Societies Act. The Minister’s predecessor introduced those amendments and I am wondering whether it was wise to make that alteration. These restrictions included the reduction of the maximum savings account balance for individuals from R10,000 to R6.000 and the prohibition of limited liability companies, both public and private companies from placing savings with these societies. The result is that the building societies have less to lend and the building societies are competing with the other institutions. This increase in building society rates has had an effect on the ordinary man.

Let us take the case of the ordinary man who borrows R5,000 from a building society. Formerly he paid 6½ per cent per annum interest, and to-day it has gone up to 8½ per cent. If he is going to pay his bond off in 20 years’ time then, at 6½ per cent, he would have to pay a monthly instalment of R37.28. But on 8½ per cent his instalment would have to be increased and it would amount to R43.50, in other words, an increase of R6.22 per month if he is going to pay it off in 20 years. Over the period of 20 years this increase of two per cent means that the ordinary man would have to pay R1,224 more than he would have paid under the lower rate of interest. That is part of the price he has to pay for the increased interest rates. It is interesting to find this interest pattern showing an upward trend when the other day there was a Press announcement that, following President Johnson’s request for cheaper money, banks in the U.S.A. last week announced reduced rates. The prime rate went down to 5½ per cent in most cases from 5¾ to 6 per cent. The heavy demand for credit in last year’s booming economy sent the rate up from an average of 4½ per cent to 6 per cent. I quote from a newspaper cutting—

—that was the Wednesday before 25th March—

There were no regulations, no restrictions: The Ministers merely talked and that was the result.

Now, against that background I wish to draw the Minister’s attention to a speech he made recently as reported on 22nd April. The report says that the Minister said the following inter alia when addressing the Association of Banking Institutions—

With that I agree, Mr. Chairman. The report went on to say—

The warning was to banks and building societies. Now, we should like to know how far this warning goes, because there are other institutions. I am reminded of this when I read a report, also published on the same day, of remarks made by Dr. Rissik. According to the report he said the following—

What I want to know from the Minister, who has just recently taken over this portfolio, is this. General warnings have been given but they have only been of a general nature. Naturally financial institutions who are lending money for consumer durables are anxious when statements are made by a person such as the Governor of the Reserve Bank; they are concerned when general remarks are made by the hon. the Minister; when warnings are given that people may get their fingers burnt. What we are concerned about is that the ordinary man in the street is not the person who is going to get hit. We should like to know from the Minister what is his general attitude as regards interest rates. Does he intend doing anything about it, or does he think that this should be left to the free market and that the matter will be settled by the process of supply and demand in the free market? Does he think that the rates of interest will continue spiralling until they reach the limits of the usury rates? Or does the Minister contemplate raising the usury rates? These are all factors which must be taken into consideration because some of the interest rates now being asked come very near to the usury rates. I know that the Minister has a committee going into this matter. The whole effect of any decisions taken can affect these various institutions. It can also have an effect on the ordinary buying public, on commerce and industries, and it can also have an effect on the ordinary man who has to balance his budget and who may, as a result of the re-organization or the change in attitude, finds that he is actually the man who has to suffer. It is true that sooner or later some form of discipline will have to come. The point is this: Is the hon. the Minister going to exert the discipline or is he going to leave it to the free market to do so? When does the Minister expect to be in a position to contain this very difficult problem? General remarks have been made about this problem, and I think that it is time the public had a clear indication as to the Minister’s policy. [Time expired.]

Mr. Chairman, we have seen the interesting phenomenon that the hon. member for Constantia spoke about the problems of inflation and the disadvantages it presents to our population, whereas immediately afterwards the hon. member for Pinetown spoke about the high rates of interest and the disadvantages attaching to them. I hope the two hon. members appreciate that no country has every succeeded in giving its population the best of both worlds simultaneously. I do not want to discuss the high rates of interest, because I presume the hon. the Minister will want to say something about that himself. But I just want to say this: The current high rates of interest are a result of the large demand for money on the one hand and the scarcity of goods on the other hand. Throughout the years it has always been apparent that the increasing and decreasing of rates of interest is an important deflationary or inflationary measure. In our case high rates of interest are a deflationary measure. If one wishes to combat inflation one cannot expect to do so with low rates of interest. One of the important measures adopted in Western countries is high rates of interest. Experience has shown that the free fluctuation of rates of interest is one of the important means employed to keep that problem in check. It is not clear to me whether the hon. member for Pine town advocates fixing the rates of interest.

I do not.

*Dr. A. J. VISSER: Then that is right. I hope the hon. member appreciates the relation between the two, namely high cost of living and the question of high rates of interest, because this is an important means employed by us to combat inflation. High rates of interest is an automatic regulator in the economy to provide a certain measure of economic stability. I hope hon. members appreciate that the decrease in our reserves is a most essential and an interesting development and that it is an encouraging phenomenon in our fight against inflation. In other words, it has the result that there is less money in the country, and we want less money in the country because there is too much money for the available goods. Why is there such a high demand for money?

Where is the money?

I have shown you where the money is. The money is in the country at the Reserve Bank and other banks, and in circulation in the country. The demand for money is still increasing. According to commercial bank advances, for example, it increased from R1,170 million in December to R1,192 million in January and R1,218 million in February, and it is still increasing. That increase is an indication that there is over-optimism and over-expectation on the part of the public and the investors. At the same time it is also significant that the quantity of money and quasi-money is decreasing. It decreased for the first time in February, when it was almost R40 million less than in January of this year. I am also glad that the hon. member for Constantia admitted that it is still too soon to say which way the economy is heading. It may be that this tendency towards high rates of interest is the final convulsions of inflation, but unfortunately there are what we may call cross-winds. Some winds blow in the direction of inflation and others blow in the direction of deflation. It then depends on which wind is the stronger. This year, for example, we expect a large agricultural crop. There are also higher wages, which are actually the result of months and years of negotiations, and for that reason it is so difficult to tell exactly, until such time as all the indicators show which way the economy is going. We can at least say that there are indications that the tempo of increase is levelling off. This will have an important effect. I should like to tell you how the Government is handling this matter. Here I have a cutting from The Star of 19th April, 1967. This news report says the following—

He praised the Government, because it is dealing with a delicate situation, particularly when one reaches the watershed between inflation and deflation. Then it is essential that one should handle it with a sensitive hand if one does not want trouble on one side or the other.

I should like to refer the Committee to another matter which I consider important and which one should not lose sight of. One hears a great deal about the increase in costs, but it is to-day accepted that the consumers’ index has certain inherent shortcomings. It is not always an exact reflection of the actual state of affairs. To substantiate this I want to quote to you from a report published by the International Labour Office in 1966, namely Prices, Wages and Incomes Policies. They say the following, inter alia—

Then they say—

This is an important point. If one studies small increases or decreases in the cost of living, one should take this into consideration and not attach too much value to a small increase. This does not mean that the Government is not aware of the problem of the rapid inflation that has taken place, particularly in the past two years. If small increases occur in future, however, one need not necessarily be alarmed about them.

I should like to come back to the last point, namely the question of import tariffs. The hon. member for Constantia said that the Government was dealing with the problem of inflation, but nevertheless increased certain import rates. Now I want to ask the hon. member whether he, when he was the Minister, was not confronted by the same problem. Surely we cannot bring the economy to a standstill. When there is unfair competition from abroad or when the tariffs are too low, we cannot tell industry that those which are already in existence may just as well go under. Surely we cannot do that. We have never had stagnation in this country, not even under the Government of that side of the House. We cannot say that we shall increase no more import tariffs. That is unthinkable. It takes years to build up an industry. The Government does not render assistance to industries that do not have a long-term future. Before the Government Tenders assistance to an industry, it finds out whether that industry has viability. [Time expired.]

Mr. Chairman, I should like to draw attention to two inter-related trends which are developing in the financial world at the present time. They are in my opinion unhealthy trends. They are unhealthy to the economy and they are in addition prejudicial to the registered commercial banks. The first relates to another aspect of the competition for deposit funds, to which the hon. member for Pinetown has already referred. It concerns the fact that large amounts of deposit funds are leaving the registered commercial banks to go to other deposit-receiving institutions. If this comes about as a result of fair competition, one can have no objections. Fair competition between these various institutions would in fact be welcomed. However, as I shall show, in my opinion the cause of this trend away from the commercial banks is due to a situation which is unfair to the commercial banks. The fact that this trend, this syphoning off of deposit funds from commercial banks to other deposit-receiving institutions, has reached a stage where it is causing concern, is clear from the fact that, as reported in the South African Financial Gazette of 7th April, a top level meeting of South Africa’s leading commercial banks was convened by the Reserve Bank in Pretoria recently to discuss what was described by the Financial Gazette as “the threat of a new battle to attract deposits”. I, should like to read to the Committee two passages from the report in the Financial Gazette. The first reads as follows:

A little further on the report reads—

I want to draw attention particularly to the final paragraph, reading as follows—

Indeed, this is exactly what is happening and happening to a very great extent. Institutions, such as the Trust Bank, hire-purchase finance institutions, and others, are not subject to the same restrictions in regard to the giving of credit, to the giving of loans, as are the registered commercial banks. These have to bring their overdrafts down to 7½ per cent below their March, 1965, figure by September of this year. That is how I understand the position. But these other institutions are not subject to the same restrictions and as a result of that they are in a position to advance money to individuals and to companies in very considerable amounts. The total amount is, I believe, a very large one—to an extent, at any rate, which is defeating the credit squeeze which the Government has been trying to impose upon the country with a view to curb inflation. Many persons who are turned away by the ordinary commercial banks when they come for overdrafts are just going around the corner to institutions such as the Trust Bank and are there able to get fairly freely the loan facilities which they are not able to get from registered commercial banks. But in addition to defeating the credit squeeze and the curbing of inflation it is prejudicial to the commercial banks because they lose customers to these other institutions and losing them, in my opinion, through unfair means—because they labour under certain restrictions, restrictions to which these other institutions are not subjected. The excessive granting of credit is, of course, undoubtedly one of the most important causes of the persistent inflation which South Africa has been experiencing now for some time. This has been stated by economists and because it is a fact I need not quote their opinions at length. Therefore I believe the Government ought to give its attention to this situation which has been developing and in terms of which these institutions are in a position to grant what under present inflationary conditions are excessive amounts of credit. Therefore I would urge that the Minister should give his attention to these trends which are developing and indicate to this House what his attitude is to these trends.

In the first place I want to tell the hon. member for Constantia that we are pleased to see him back in the House and also to see him take part in this debate. He, the hon. member for Pinetown and the hon. member for Musgrave, together with some hon. members on this side of the House, mentioned some important points with regard to financial policy and particularly with regard to inflation, cost of living, the inter-relation of banking institutions, building societies, rates of interest, etc. In the course of my observations I shall try to reply to all the questions. If you will permit me, Mr. Chairman, I should like to deal with these points on a broader basis than that on which the hon. members did so. I appreciate the questions put by hon. members and the spirit in which they were put. They are all fair and justified questions. All these questions arise from the financial atmosphere in which we are living at present—an atmosphere of inflationary conditions, conditions we have been experiencing in South Africa for the past number of years. As a Government we admit that we are living in a period of inflation, but it is not only we who are living under such conditions—so are other Western countries. In referring to other Western countries I am not suggesting that we should always have regard to other countries. I do so, however, just to demonstrate that this problem of inflation is one of the most difficult and persistent problems governments can be faced with. Other countries which are much older, stronger and more experienced than South Africa have struggled just as much as we have in recent years, and we are only a young and developing country. Cost of living, to which the hon. member for Constantia referred, is only one of the symptoms of what we call inflation. Similarly, rates of interest, competition between banking institutions and difficulties experienced by building societies are all symptoms of this one great disease—the disease of inflation. As a Government we are aware of these problems. In recent years we have taken steps which I do not want to mention again on this occasion, and if these monetary and fiscal measures we have taken are not adequate, we shall take further measures as circumstances require. The crux of the problem confronting us and the problems raised here by hon. members, is the fact that there has been overspending in South Africa, overspending both in the capital and consumer fields. We have had tremendous development here in South Africa, tremendous capital investment, and this capital investment was financed to a large extent from banking credit; it was financed in an inflationary fashion, and as a result of this financing of capital investment money came into circulation and into the hands of the consumer and the consumer gained purchasing power, and this increasing circulation of money, which came to exceed the supply of goods and services, caused what we call inflation.

This inflation has produced certain problems. In the first place the hon. member for Constantia referred to the problem of the cost of living. I know that this is a great problem. I cannot assure the hon. member for Constantia or any other hon. member that in the months ahead or in the year ahead the cost of living will not increase any further. In fact, in the past there have been few periods in our history in which the cost of living did not rise, but I do want to say this for the hon. member’s consolation: He mentioned the cost-of-living index figures. If one adjusts the cost-of-living index figure according to seasons, one gets a somewhat more satisfactory picture; one will then find that from February to March this year there was no increase; one will then find, if one adjusts the figures according to seasons, that between October last year and March of this year the figure increased by 1.2 points, or by 1 per cent in five months. If we take the last six months in respect of which we have figures available, we find that the cost-of-living index figure increased by 2.7 per cent annually. In other words, there is already a slight indication of a decrease in the index figure. We cannot say that this tendency will in fact continue and that nothing will happen in future to force up the index figure again, but we do have the satisfaction that it appears as though the strongly rising tempo is now going to level off, which we hope will continue in future. I want to add that simultaneously with the increase in the cost-of-living index figure there has also been a consistent improvement in the real income of our people, and that wages in most sectors of our industrial life increased more rapidly than the cost-of-living index figure. We do have some cause for satisfaction, therefore, and the picture as regards cost of living is not as dark as it was painted by the hon. member.

The hon. member spoke about sugar prices. Sugar prices are a factor in the increase in the cost of living; we concede that; it is one of the cross-winds of which the hon. member for Florida spoke. In all the means and powers we as a Government employ to combat inflation there will always be contrary factors to make our task more difficult. It is a struggle between powers which are anti-inflationary, on the one hand, and on the other hand, powers which arise continually and which are inflationary. As the hon. member in fairness asked me a question about the increased sugar price, he will have to tell me what alternative measure the Government should have taken, because if the sugar price had not been increased the sugar industry would have been ruined to a large extent. We were confronted by the problem that the sugar industry, which has been and still is of great value to our country, either had to be allowed to go under, so to speak, or else to take heavy punishment, or that we had to increase the price of sugar. It was said that we should not have increased the price; that we should have subsidized the sugar price. I know it was not the hon. member who said that, but there were persons who suggested that in the Press. It would only have meant, of course, that the taxpayer would have had to pay more in the form of taxes instead of paying a higher price for sugar.

The hon. member for Constantia spoke about import tariffs and asked whether the recent announcement of new import tariffs was made with the knowledge or approval of the Board of Trade and Industries. I can reassure the hon. member that the latest increases were all made on the recommendation of the Board of Trade and Industries. The hon. member will remember, because he held the portfolio of Economic Affairs in former years, that all protection by means of customs tariffs does not necessarily give rise to cost increases, that the protection is there largely to preserve the market for the local manufacturer, and if one preserves and expands the market for the local manufacturer and consequently gets a larger volume—the economies of scale—one is thereby enabled to produce the article concerned more cheaply, even under protection. The hon. member for Constantia also referred to possible wage increases. It is true that if all the wage increases which are so often mooted became a reality it would prove a hard blow to us in our fight against inflation, and for that very reason we should be all the more determined to ensure that the means which are now in fact employed in the fight against inflation are made as effective as possible and are made effective as soon as possible in order to reduce the cost of living, and thus try to prevent a future increase in salaries and wages.

The hon. member for Pinetown referred to the building societies. Similar points were raised by the hon. members for Musgrave and Soutpansberg. I think I should just deal briefly with that point. This question of building societies and their difficulties as regards deposit rates and rates of interest is an outgrowth of the problem of inflation that we are facing at present. The changes in the Building Societies Act and the restrictions imposed on building societies several years ago were the result of a study by a technical committee whose recommendations were accepted, but the present difficulties of the building societies are not primarily that changes were made with regard to what they may accept as deposits. The difficulties of the building societies and of the commercial banks, to which the hon. member for Musgrave referred to-day, are in a different field altogether, and that is that at present, as a result of the Government’s fight against inflation, there has been a decrease in funds available for lending. There can be no doubt about this. The money in circulation has become less. It has become less for various reasons. It has become less as a result of the restrictions placed on the lending ability of banks; it has become less as a result of fiscal policy, through the withdrawal of money from circulation to the Exchequer; it has become less as a result of an unfavourable balance of payments, as a result of higher imports, and the quantity of money in circulation has decreased. That is one side of the matter. That financial institutions are at present competing to attract deposits and that that competition is becoming stronger and stronger, is attributable, on the one hand, to the fact that the quantity of money competed for has become less, for understandable reasons. On the other hand the reduction in the volume of money has not decreased the demand for money very much, and now one finds that on the one hand there is still a stronger demand for funds, and on the other hand a decreased volume, a lower supply of funds. Surely it is an established economic law that when demand and supply are opposed and the demand remains strong while the supply decreases the price of that article must rise, and that in this case the price of money, as expressed in terms of interest, must rise. The competition to which the hon. member for Musgrave referred, as a result of which the commercial banks and the building societies would lose more and more money, is not due to the fact that that money is now going to other banks in the first place; to a large extent it is due to the fact that money is at present becoming scarcer and dearer. In this respect the current high rates of interest are a symptom of inflation, but at the same time they are also a remedy against inflation; it is the fever which may later break, and the higher the rates of interest rise, the stronger their anti-inflationary pressure becomes. In fact, I think the time will come when the measures we have taken and may still take will have the effect of reducing the demand for money, and if the demand for money decreases, obviously rates of interest will also fall again. Our present problem is that our fight against inflation is hampered by many factors. I do not want to go too far into this, but there are certain institutions in this country that make their existence from inflation. I want to refer briefly to the so-called unit trusts which constantly refer to inflation in their advertisements. They trade on inflation. Some of them give misleading information to the public by coupling the growth rate we expect in the long run and inflation, as well as increases in the price of shares. They draw a portion of the funds away from the commercial banks and the building societies. We are having trouble with over-optimism among many of our people, who are prepared to pay high prices for money because they believe that the current prosperity will continue at the same high tempo. For this reason it is necessary that we should warn our people that this high growth-rate will not continue, that the cycle may be reversed, as has happened in other countries.

The hon. member for Pinetown referred to the lower rates of interest already prevailing in America, Britain and West Germany. That is true, but in some of those countries the down-swing in the economic cycle was more rapid than had been expected, so that the state is now using low rates of interest to stimulate the economy once again. I think that ‘ may happen in our case as well. Our people are over-optimistic—I am not speaking of the long term but of the short and medium term —-and for that reason they are prepared to pay higher prices for money. Once a down-swing starts, it may happen very rapidly, much more rapidly than they ever expected, and then the state will not do anything to check that downswing quickly.

The hon. member for Pinetown and other hon. members referred to banking institutions and asked why I had warned only certain banks about the high deposit rates. No, I am sorry if the hon. member misunderstood. My speech was directed at all banking institutions. It was made before an association representing all banking institutions, the commercial banks, the saving banks, the hire-purchase banks and all of them, and it is a warning which is also directed at all deposit-taking institutions I also want to add this: The hon. member for Pinetown quoted figures to demonstrate how the share of commercial banks and building societies in the total funds-holding had decreased in recent times. The reason for that is that South Africa has grown and that a multitude of other financial institutions have been established in the meanwhile. The hon. member is well aware of how South Africa’s money market has expanded in recent years, and that a large number of new institutions, which were unknown 10 oR15 years ago, have come into being, and that they have attracted a portion of the available money, that in consequence the proportionate share of the banks and the building societies in the total money market has decreased, but that it is still a very high share.

I want to conclude by replying to another question put to me by the hon. member for Pinetown with regard to deposit-rate control. He asked whether we should control it, in view of the high rates of interest. I want to tell him that in my view deposit-rate control would be the wrong means to employ under the prevailing circumstances, that one will not succeed in achieving one’s object by means of it. because high rates of interest is a symptom of a disease. The disease must be cured, not the symptom. Nor will deposit-rate control help the commercial banks and the building societies. It will not cause more funds to flow to those institutions. On the contrary, there is the danger that through deposit-rate control one might force funds to the other institutions, outside that sphere, and that the commercial banks and the building societies will get less money. And once one has introduced that control, one will have to exert more and more control, until eventually one has not only abandoned the principle of private initiative completely but also has to control virtually every financial transaction between one man and another, which will be hopelessly unsatisfactory. Under the prevailing circumstances, therefore, I am not in favour of such a policy. The building societies and the banks are in fact losing money, for the reasons I have given. I am in sympathy with the building societies, considering the important function they fulfil in providing houses. The hon. member for Soutpansberg suggested some methods we could employ to combat this evil. I just want to inform you that we are now working on certain plans. The building societies are holding discussions among themselves and submit certain proposals to us, which we are considering. We do not want to take precipitate action because we are forced to do so at a time of crisis, but we are holding discussions with them on certain methods which may perhaps expand their activities and which may relieve their plight. We are considering the financial set-up from other angles as well. It may be that I shall yet introduce certain proposals in this House to solve this problem of rates of interest and the available funds of certain institutions. I think I have now replied to all the questions.

Votes put and agreed to.

Revenue Vote 17, — “Public Debt, R96,935,000”.

I just want to inform the House that the hon. the Deputy Minister will take charge of Votes 17, 18 and 20.

When we had the Budget Debate in 1966, the hon. the Minister of Finance announced that in order to counter inflationary tendencies he would encourage savings by improving the facilities offered by the Post Office. He also told us that a special savings campaign would be launched in that year. I had occasion to refer to this savings campaign, in an earlier debate in this House, as the best-kept secret since World War II. I was very pleased to hear the hon. the Minister of Finance in his Budget Speech this year tell us that the terms now being offered by the State would attract considerably more money if the facilities were to become better known, and that he would give his personal attention to the matter. I hope the hon. the Minister will have more success than his predecessor, because what have we had up to now, as far as I know? We have had a number of so-called advertisements appearing in the Government Gazette, “Buy National Savings Certificates”, but what they are they do not tell you. There is another one, “Use the Post Office Savings Bank”, and this one is particularly good compared to the others because it is readable. On the opposite page there is another one, “Use the Post Office Savings Bank”, and even with my glasses on I cannot read it because the print is so small. Sir, if this is the way one goes about getting the public to invest in Government stocks then we are going the wrong way about it. Now I must admit and I am very pleased to see that there are two very well designed posters in very good colour which are now being displayed in the Post Offices. One advertises the 4½per cent savings bank account and the other advertises the new 6 per cent savings bonds. They are both first-class posters.

The Minister is in a most wonderful position. He has the best possible commodity to sell; he is selling tax relief. What better can you have to sell than tax relief? He is selling to the taxpayer, who can afford it, something for nothing. This is what a commercial traveller would refer to as “What a line!”. But the public has to be told what the value of this product is that the Minister is selling, because it is not generally known that a taxpayer to-day can earn approximately R3,600 per annum free of tax by making investments with the State. That is what he has to be told, because the position is this. On the Post Office savings bank you can earn R200 per annum free of tax. On the Savings Bank certificates you can earn R400 per annum free of tax. In National Savings Certificates you can earn approximately R675 per annum free of tax. In Treasury bonds you can earn R1,000 per annum free of tax, and in savings bonds, on the compound system, you can earn R1,340 per annum free of tax. You can therefore earn up to R3,600 per annum free of tax if, of course, you have the funds to invest. This is what the Minister has to sell.

Now, what does this mean to the taxpayer? Just let me take one or two examples. I take the case of a married man in the Transvaal with two children who invests in some of these securities which are tax-free. The tables I have include the 5 per cent savings levy; I have not excluded it because the amount is infinitesimal. If a man’s income is R8,000 per annum, his tax is normally R1,482.80. If R1,000 of this income is received in tax-free interest, the taxpayer saves R432 per annum. If R2,000 of this income is received in tax-free interest, he saves R824 per annum, and if R3,000 of this income is received in tax-free interest, he saves R1,094. That is a considerable amount. If the taxpayer, again a married man in the Transvaal with two children, has an income of R20,000, he normally pays R8,400 per annum in tax. If R1,000 of this is tax-free through investing in these State bonds, etc., he saves himself R675 per annum. If R2,000 of this income is tax-free, he saves himself R1,350 per annum. If R3,000 of his income is free, he saves himself R1,985 per annum, and if he goes up to the maximum, R3,600, which is received tax-free, he saves something of the order of R2,360 per annum. But the Minister rightly said in his Budget Speech that you can have a product to sell but it is not really saleable unless people know it can be bought, and I want to tell the Minister that we on this side subscribe entirely to the point of view that these facilities which are being offered to the public, basically to curb inflation, must be sold. He will have our full support in anything he will do to bring these matters to the notice of the public. I think the way it has to be done is that the public will know that it will save money. It is not even much good saying, “Buy tax-free interest bonds”, because to the average person this means nothing. He has to know, and visually know, that if he makes an investment in tax-free bonds, in the savings bank or the Post Office, he can, if his income is so much, save so much; and if you give one or two examples you will find that the public will begin to know what this means. Now, if this question of getting funds from the public to invest in these bonds is as important as it would appear to be—and we subscribe to it—I wonder whether the Minister should not give some consideration to getting an outside firm to assist him in his campaign.

There are specialists readily available. The Minister as he has told us this afternoon, has competition because the financial institutions are inserting enormous advertisements in practically every paper in the country. I suppose other hon. members, like myself, get inundated every week by pamphlets from one bank or another telling us what the interest rates offered are. The hon. the Minister has got competition and I hope that he will give thought to going to the proper people to enable him to launch a first-class campaign for the best commodity that has ever been offered for sale in this country, for there is no better commodity than that the hon. the Minister has to offer.

There is just one other matter I. want to refer to. In the post office savings account system, if one deposits money after the second day of the month no interest is paid until the following month. If one withdraws within two days of the end of the month, one receives interest for the full month. Now, to the average man in the street, looking at the two days at the beginning and the two days at the end of the month, this might appear to balance. But, of course, in fact they do not, because if one deposits one’s money on the third of the month one gets no interest until the end of that month, which means that if it is a 31-day month, the interest will be lost for 28 days. On the other hand, if money is withdrawn two days before the end of the month, the Government very graciously pays interest for an extra two days. With the competition that there is to-day for funds, where a man can go to any deposit institution, deposit money and get interest on the daily balance, which I know is not free of tax, I think the hon. the Minister should consider payment of interest on saving accounts from date of deposit until date of withdrawal.

Mr. Chairman, it is hardly necessary for me to reply to what the hon. member has just said. He started off by saying that the hon. the Minister had made the statement here earlier this year that he would give his attention to this matter. The hon. member went on to make quite a constructive speech by making suggestions as to how that was to be effected. The words used by the hon. the Minister earlier this year in his Budget Speech were the following—

In spite of the favourable terms offered to the public, it is evidently true that the public has not made full-scale use of the facilities as regards the buying of Government stock or bonds. In 1966 the total amount invested, by the public in ordinary Government stock or National Savings Certificates, Treasury bonds and Post Office investments, represented only 9 per cent of the total amount of public debts. The corresponding percentage in the U.S.A. is 23 per cent and in Canada 29 per cent. In comparison with the relevant figures of these two countries, it is therefore quite clear that a great deal more can be done in South Africa.

The hon. member referred chiefly to the higher income groups, but to a large extent these facilities have also been established for the lower income groups, in whose case the advantages of rebates on income tax, to which the hon. member referred, naturally do not have such a large effect. Nevertheless the total amount of investments by the lower income groups in South Africa in this particular field of investment may amount to a substantial amount. One readily admits that the point mentioned by the hon. member, particularly the tax relief which may be obtained from this form of investment, ought to have strong appeal for investments of this nature to be made. As I said a moment ago, this naturally applies more particularly in respect of the higher income groups and not in respect of the lower income groups.

Various facilities have been made available to the public to invest its money in Government investments—I do not want to go into details now—but the public does not make so much use of them as we should like it to do. I recently received certain particulars in this connection which struck me. and consequently I appreciate the fact that hon. members pleaded here for an attempt to be made to draw more savings in this direction. The hon. member made particular reference to the question of publicity; he said that the facilities which had been made available should be advertised properly so that the public might know what they would benefit from making use of this form of investment. That is one factor, an important one. But, Sir, I also think that the present system is quite outdated. I think if the system of investment, as it always used to be, can be streamlined by the Post Office, if we can make it easier and simpler for the man in the street to deposit and withdraw money, such investments would also be much more attractive than they are at present. My personal opinion is that the present system is outdated. The hon. member may rest assured that every effort will be made to improve this position.

Has the hon. the Deputy Minister thought about enclosing with the income tax assessment a pamphlet explaining the advantages of investing in these, namely a reduction in income tax?

I think that is indeed a suggestion to be considered.

Vote put and agreed to.

Revenue Vote 18—“Provincial Administrations, R189,049,000”, put and agreed to.

Revenue Vote 20—“South African Mint, R698,000”.

Mr. Chairman, I will not take up much time. I want to renew a discussion which I had last year with the hon. the Minister’s predecessor. The first point I want to refer to is the quotation of prices throughout South Africa, especially in print. We discussed it last year and I suggested—as I intend suggesting to the Minister now—that all prices in South Africa should be quoted in rands. I have no objection to sterling or dollars or any other currency—even Portuguese currency—being added afterwards, but the first price quoted should be in rands. It has been suggested that that would make it difficult for example to sell cattle or bloodstock, where they quote in guineas or pounds but I do not think that is a serious difficulty. There is no reason why they should not use the guineas and pounds, if they wish, when they are selling, but when the price is finally quoted, when it is printed, when it is arrived at, it should be arrived at in rands first, and after that they can quote any currency they like. I mentioned the case last year of the custom at international airports. I mentioned Frankfurt. In Frankfurt the price of any article is quoted in Deutsche mark and then afterwards in dollars and after that in sterling. Three prices are given, but the first price is Deutsche mark. For that reason I would suggest that the time has now arrived for steps to be taken in this matter. Our public have been very wonderful; they have helped us with the decimalization of our coinage. I think the time has now arrived to make that the custom throughout South Africa. I do not know how it should be done, but I think that is the way to approach it.

By legislation?

No. I do not think that would be necessary. But, if necessary, it will have to be done by legislation, but it might be possible to have it done without legislation by making an appeal. We should try that.

The other point which I wish to raise is the minting of the new silver rand coin. I hope that in minting these coins there will be an adequate supply, because when the first silver rand coins were minted last year, as hon. members know, it was very difficult to get a silver rand: They had disappeared. Within a few weeks the silver rand was worth R1.25. I do not know what it is worth now. The Van Riebeeck coin was worth R1.25; it is now worth probably a good deal more. In other words, the numismatists, the collectors, seized on these coins knowing that they would be valuable. It is a very beautiful coin and for that reason they were very popular. I have heard of people who collected 100 of them and are holding them for a while so that they can sell them at much higher prices when there is a demand for them. So, in introducing new coins I should like to ask, first of all, for an adequate supply. If there is an adequate supply they will not increase in value rapidly. This is my first point. My second point is that having issued these coins we should make sure that there are sufficient of them for the public. By bringing this new issue out so early we are making the original one much more valuable. I think that is unfortunate. You see, Sir, the coins minted last year disappeared. Had we minted an adequate supply of the old ones and then brought in the new ones we have now—in other words, the Van Riebeeck coin last year and the Verwoerd coin coming after it—there would not have been this hoarding of the original coin. The hon. the Deputy Minister should give this consideration. I think it is important. I do not know what those coins are worth now, I believe somewhere in the vicinity of R1.40. So, if I happened to have some I would not sell them now because they will probably be worth a lot more after a lapse of time.

I should like to address an appeal to the hon. the Deputy Minister for the retention of the R2 note. I asked the hon. the Minister a question in February this year inquiring from him whether it was the intention to withdraw this note from circulation and if so, when. The reply was that they were, in fact, to be withdrawn, although gradually, and that no new issues would take place. A further question to the Minister inquiring whether there has been any representation about this matter elicited “No” for an answer. As these notes are beginning to disappear from circulation there are many people—individuals and firms—that are beginning to have second thoughts about the desirability of this particular form of currency being withdrawn from circulation. From reports in the Press it is clear that there has been a good deal of comment on this matter, comment which is fairly widespread. An important body which commented on this was Assocom, a body which represents all chambers of commerce in the country. According to a report which appeared a few days ago in the local Press, at an executive meeting of Assocom held in Johannesburg a decision favouring the retention of the R2 note was taken—it should be retained but made smaller. This decision was taken by an executive consisting of 85 men representing various sections of the community throughout the Republic. The Chamber of Commerce of Bloemfontein issued a unanimous appeal, a strong appeal to the S.A. Reserve Bank for retention of this note. The spokesman on behalf of the Bloemfontein chamber indicated that it was causing local businessmen a great deal of inconvenience to know that the R2 note was going to be withdrawn. From Durban we have had a report—subsequent to the Minister’s answer to me—to the effect that “If ever the decimalization Board made things difficult for us, it was when taking this decision”. In the same report it is claimed that 99 per cent of cashiers objected to the withdrawal of this note. In addition a supermarket accountant was quoted as saying that this was the most useful note of the lot. There was too big a difference, he said, between the R1 note and the R5 note. There should be something in between. A bank teller was reported as having said that the R2 note saved them a lot of trouble. A similar attitude was taken up in a sub-editorial of the Durban Daily News of the 23rd February. In this subeditorial an interesting suggestion was put forward. In the first place it suggested that there should be more rather than fewer denominations because “Their presence creates a series of psychological barriers to shopkeepers and helps keep prices down”. They asked, what will happen to the magic R1.95 price? They went on to state unequivocally that the R2 note would contribute to checking inflation. A survey was conducted by a certain chamber of commerce and from the replies received it appears that 80 per cent were in favour of the retention of this note. If one takes a cross section of people one meets in ordinary life— as I have made it my business to do—it becomes apparent that there is an overwhelming body of opinion favouring the retention of this note, for the convenience especially of the small man. I have spoken to dealers, to waiters, to wine stewards and I have consulted garages and service stations. Many shops dealing mostly in small sales feel that the R2 note is something we should consider retaining. In many instances the average sale in small businesses is below R1 and it is the experience that often a R5 note is tendered in payment. That means, because there will no longer be a R2 note, four single R1 notes will have to be given in change in each case. Here I must say that smaller businesses are finding it a problem to keep up with the demands for R1 notes. When one comes to the question of counting four single notes or two notes, as the case would be if the R2 note is retained, there is an increased possibility for errors. Another thing which is going to affect the people, particularly those who have to deal with wage packets of people with low earnings is the fact that they are going to find that where they have to pay out an amount ending in a “9”—such as R9, R19 —it will be necessary to use four notes instead of two as hitherto.

I know it has been suggested that the figure 2 does not fit in conveniently with decimalization as such where the relationship should be 1-5-10 and so on. But we already have the position where we have a ½c, a 2c and a 20c coin. So, I submit that it would be worth while to consider retaining the R2 note on the basis that its size can be smaller. It would fit in conveniently between the R1 and R5 notes.

I have one further small request. That is that attention should be given to the similarity in size between the 20c and the 50c coin. Particularly the older people experience difficulty, and especially those who have difficulty with their vision. It is known that in many cases mistakes have been made by tendering a 50c piece for a 20c piece—to their loss. I believe that if there were a greater difference in size between these two coins the possibility of error would be reduced. My colleague next to me suggests drilling a hole through one of the coins. I do not know whether that is acceptable to the Minister although I know in certain other countries some such practice is adopted. If there were a greater difference in size between these two coins it would also be of assistance to the non-Whites. They have adapted themselves readily and quickly to the new decimal system of coinage but anything that can be done to eliminate mistakes is worthy of consideration. So, I trust the hon. the Minister will give sympathetic consideration to the plea I made here this afternoon.

The hon. member for Kensington asked, in the first place, that where prices were quoted, such prices were to be quoted in rands. I take it that the hon. member was not directing an appeal at this House or at the Minister, because the hon. member has grave doubts about the taking of official steps in this regard. In other words, I think what the hon. member is really contemplating is that an appeal should be directed at the public. I think it may be a good idea to encourage and inform the public not to show any interest in something if it is advertised in anything but rands. I do not know what other steps the hon. member thinks may possibly be taken. I agree wholeheartedly that the time has arrived for our prices to be quoted in rands and cents, but at this stage one naturally hesitates to say that legislation will have to be passed to prevent people from not doing so. Consequently I agree that an appeal should rather be directed at the public to make use of the new and not the old system.

As regards the second matter raised by the hon. member for Kensington, namely the question of the R1 silver coins, I may inform the hon. member that two million of these silver coins were minted in 1966. I have been informed that it has since been considered to mint more coins, but that there has been no demand for them. Possibly the hon. member does not agree with that statement. We leave it at that.

Then they have been minted twice.

I was referring to 1966. In 1966 two million silver coins were minted. The hon. member requested that a sufficient number of new R1 silver coins were to be minted to satisfy the requirements of the public. I may just inform him that under the programme foR1967-’68 five million of these silver coins will be minted. The hon. member may perhaps agree with me that that is a reasonable quantity under the circumstances.

As regards the hon. member for Berea, I just want to say the following. He first referred to the R2 notes and expressed the opinion that a need existed for the retention of the R2 notes. I should have liked to have had the opinion of the hon. member for Kensington on the representations made by the hon. member for Berea.

Shall I address the Committee again?

Mr. Chairman, 1 watched the hon. member’s face and it seemed to me as if he did not agree with the idea; nor do I for the same reason. The hon. member is a very strong supporter, as was evident from his plea here this afternoon, of the total rejection of the old system and the introduction of the new; We should only operate in terms of rands and cents and nothing else. In order to effect that I have always deemed the elimination of the pound note, as it used to be, essential. It does not help if we now call it a R2 note. It is still the pound note of old. It should be completely withdrawn from circulation, because the pound used to be the unit whereas the rand is the present unit. A different consideration applies now and we leave it at that. I think the hon. member for Kensington will agree with me that that consideration is quite decisive. I should like to tell the hon. member, however, that since the R10, R5 and R1 notes have been put into circulation there has been a decrease in the demand for R2 notes. These new notes were put into circulation as the other notes became worn and were withdrawn from circulation. Consequently there was a quantity of R2 notes which had never been in use. The Reserve Bank did in fact offer these R2 notes for use to the commercial banks, Government Departments and the Railways. Thereupon these organizations stated that there was no demand for R2 notes. The Railways have since informed the Reserve Bank that they were prepared to assist and would use some of the R2 notes, not so much because there was a demand for them but because they had to be used up. All these circumstances show very clearly that there is no demand for R2 notes at present and that they may be withdrawn, from circulation.

The hon. member objected. Well then, two wrongs do not make a right. The hon. member said that there ought to be a note between the R1 and the R5 notes. Throughout the years we have never had any note between the £1 and £5 notes. We have never felt any need for something in between. Well, as I have said, two wrongs do not make a right. It may be so that there has been some need but we never learnt about that need. Consequently it is my personal opinion that no need exists for the retention of the R2 note seeing that we do have a R1 note and a R5 note.

As regards the difference in size between the 20c and 50c coins, I honestly think that the hon. member over-emphasized this point because there is a large difference. As a matter of fact, I may inform the hon. member that the sizes and designs of these coins were referred to the South African National Council for the Blind to enable those people to feel whether the difference in size was sufficient to enable the blind to distinguish between the coins. They, in fact, had no objections to the sizes of the 20c and 50c coins and were of the opinion that those sizes would cause no confusion. I know where the difficulty may perhaps come in. It is because the 50c coin looks like the old half a crown. People have not entirely forgotten the size of the old half a crown. That factor may cause some confusion, but I honestly believe that as we become more accustomed to the new coins there will no longer be any confusion.

Vote put and agreed to.

Revenue Vote 21—“Inland Revenue,

R6,100,000”.

I wish to raise a certain matter with the hon. the Minister which is of quite a serious nature. It refers to his action, through the Commissioner of Inland Revenue, in deciding that uniforms of postal workers and other employees in the Government Service will in future have to be taken into account for income tax purposes. This is a matter which affects not thousands, but tens of thousands of tax payers throughout this country. I have not got all the particulars in regard to all the Government departments, but I do have them in regard to the postal department. This decision that he has taken to tax the uniforms of the ordinary Post Office worker will affect the large general division of the Post Office workers. In particular it will affect the major section of these 24,000 and more workers. I regard this as an indefensible decision. I would even call it a cruel decision, As far as I know, it is the first time that the uniform of a postal worker and possibly, as I shall later on ask the hon. the Minister, of a Railway worker and workers of that nature in the Government service has been taxed. I regard it as more than cruel; it is petty. We know how the hon. the Minister’s predecessor was one year a fisherman, one year a tailor and another a cook. If the hon. the Minister does this sort of thing to the ordinary man, the hardworking man, in his own employ, he will have the reputation and he will come to this House with the reputation of being the modern Scrooge. We have not seen anything like this before. How petty can one get in matters such as these?

I think that the Postal Association is to be congratulated on having taken the matter up immediately. There may have been developments in regard to this matter and the hon, the Minister might have some news for us, news of a good nature. I trust that this will be the case. I know that the Association has either seen him or approached the Commissioner of Inland Revenue. I do not know whether they have approached the hon. the Minister of Posts and Telegraphs because they have probably given up hope in regard to him. This sort of thing is not done in regard to uniforms issued to petrol pump attendants or the working overalls issued to ordinary workers. Why, we in this very House would never be so mean as to see that it applied to our own uniformed staff. I do not think that it applies to the Army or the Navy, namely that their uniforms are taxed. It would be an outrageous thing if it were so, and I sincerely hope that that is not the case. I want to ask the hon. the Minister what the extent of this decision is which has been taken by him through the Commissioner of Inland Revenue. What steps has he taken to alleviate the position in this regard? I want to know in particular whether this affects the Railways as well There are thousands of uniformed Railway workers. Must their uniforms be taxed in future, something unheard of in the past?

I sincerely trust that it will not be the case with our Police and I hope that there will be some assurance from the Minister in this regard. On the other hand I hope that there will be an indication of a firm policy in regard to this matter. Does it affect the Railway Police, the ordinary Police, or the customs and excise men who have to wear uniforms? I repeat that it is petty and an outrageous step that has been taken. I am basing my knowledge on representations which were made, as I read in the Postal Journal, to the hon. the Minister and the Commissioner of Inland Revenue. The uniform of a postal official is an essential part of his equipment like the tools of a working man. You do not tax that sort of thing and tell the employee that it must be included in his income tax returns, even if he does get an allowance and even if those uniforms are paid for.

These uniforms are not issued to postal workers because they necessarily want them. They are issued as a public service for the public’s safety. Imagine what would happen if our postal delivery men were not to wear uniforms and that anybody in ordinary clothes could go and deliver letters. We would have an impossible situation. It is a public service that is being performed. Why should they pay tax for a service which is being performed and should be performed by the Government for the public? Think of the inconvenience that is going to be caused for the Department of Inland Revenue. These postal workers will be under the p.a.y.e. system and will regularly every month be paying their income tax deductions. They will demand the right to ask that those uniforms are issued to them on time, and that they fit well and that they are available at all times. Otherwise I am sure we are going to get the position where you will find these workers writing to the Department of Inland Revenue and demanding refunds for the period in which they had inadequate uniforms or no uniforms at all. Mr. Chairman, you can imagine the unsatisfactory state of affairs that can arise from this petty decision. I am not saying that a large amount is involved. We all know that these workers in the employ of the Government are sadly underpaid but with the rising cost of living where every cent in the income of an ordinary working man counts, why be the Scrooge? Why be so petty? Why have a measure such as this, which is utterly indefensible? It is heartless and it is going to affect tens of thousands of people and their families throughout this country. Why was it done, I am not allowed to advocate legislation, but if the solution is that we must have legislation, I trust that the hon. the Minister will apply his mind to this particular matter. There are tens of thousands of people who are suffering because of the high cost of living. What are they going to do now after this heartless decision? We demand that the hon. the Minister should go back to the former position and see that those uniforms of employees of the Government are not taxed.

Mr. Chairman, I do not want to follow the course taken by the hon. member who has just resumed his seat. [Interjections.] It is obvious that hon. members of the Opposition do not have something to talk about. They are searching for something to say. I should like to bring to the notice of the hon. the Minister a matter which affects the parents of students, namely students who are receiving bursaries and bursary loans. When a student receives a bursary and derives from that an income to the amount of R240 per year, it is not, for the purposes of taxation, regarded as income for that student or his parents. In other words, it is tax-free up to that amount. However, when that amount is exceeded, it is in fact taken into account as far as the parent is concerned. There are cases where a student receives a bursary for a certain amount. It is regarded as a donation. It is a real income for that student. It is not repayable. However, that student may also avail himself of loans which are eventually, upon the completion of his studies, repayable with interest. For income-tax purposes that loan is also being regarded as real income. Because of that the parent of that student may not lay any claim to exemption in respect of that amount.

Are your facts correct?

Yes, my facts are correct. I have dealt with such cases, where all the money taken together—including bursaries and loans—amounted to more than R240. I am cordially bringing this to the notice of the hon. the Minister. This is perhaps an anomaly which exists in our legislation. I feel that this is a matter to which the required attention can be given, because, after all, the difference between a bursary and a loan is very obvious. A loan has to be paid back eventually.

I also want to avail myself of this opportunity to bring to the notice of the hon. The Minister the position of part-time students. There is, for instance, the part-time student who works for his own living and already earns an income as a result of his work. At the same time he is incurring expenses for the purpose of improving his qualifications for his career in life. He is not in the fortunate position of the full-time student whose parents receive exemption for an amount of R240. He cannot set off his tuition fees for income-tax purposes at all. After all, one does feel that he is incurring a real expense so as to improve his qualifications, to earn more and to be a greater asset to the State.

Mr. Chairman, there are one or two matters I should like to raise with the hon. the Minister. The first is the question of the annual report of the Secretary for Inland Revenue. This year we had the report for the period 1963 to 1965. I hope that next year, when we come to this debate, we will have an up to date report. It is very important that these reports should be made available to us before the Votes come before the House.

The second matter is that I should like the hon. the Minister to make a statement on the question of the loan levy credits due to taxpayers, about which there has been a considerable amount of discussion in the Press lately. To date, as I understand it, no taxpayer has had any acknowledgment whatsoever that he has lent the State any money. In terms of the Income Tax Act the loan levy has to be paid at the same time as the taxpayer’s normal tax. The P.A.Y.E. tables in volume 4, which are applicable, make provision for the loan levy to be paid simultaneously with the normal tax payment. What we have in effect is, that when a provisional taxpayer makes his tax payment twice a year, part of the payment is for his normal tax and part of his payment is for the loan to the State.

The same is the case with the P.A.Y.E. payer because each month he is paying not only his proportion of the normal tax but he is paying his proportion to the State of his liability for the savings levy. The receipt that a provisional taxpayer receives from the Receiver of Revenue and which includes the amount of the loan levy that he has paid, is for one amount only. There is no indication whatsoever on this receipt that a portion of the payment made by him is actually in respect of the loan levy, and the same applies to an employee’s tax certificate, that an employee who pays P.A.Y.E. gets from his employer, because there is only one amount shown on his certificate under the heading “Employee’s tax deducted”, so in neither case does the tax-payer receive any acknowledgment of the fact that he has paid part of the loan levy. The reason for this is fairly simple because in effect there is no such thing as a loan levy. It is actually an additional tax which in terms of the Income Tax Act is refundable by the State to the taxpayer at some unknown future date. There are two matters therefore which I hope the hon. the Minister will clarify. The first is that a taxpayer should be given an acknowledgment of the amount of his loan to the State by way of a loan levy; he must have some evidence that the loan has been made, and there is certainly no reason why this acknowledgment cannot be given at the time when the individual taxpayer is finally assessed for the year. One would have liked an acknowledgment to be given as and when the loan levy is paid proportionately, but one realizes that there are some problems in this connection, particularly in regard to the P.A.Y.E. system where it is the employer in effect who issues the tax receipt and not the Receiver of Revenue, but at least at the end of the year when the position between the taxpayer and the fiscus is finalized there should be an acknowledgment and I hope the Minister will tell us that this is to be the case.

The second aspect is that there should be automatic repayment of the levy when the date for repayment is fixed. Sir, I have said that the loan levy is really a tax which is refundable and I am sure the hon. the Minister will subscribe to the point of view that where taxation is refundable it should be automatic. As far as loan levies of the past are concerned, they were levied in the days when the taxpayer paid his tax once a year, and when he paid his tax he got a receipt for that portion of the payment which represented the loan. He therefore had a document which told him what amount was due to him, where he could cash it and when he could cash it; he knew where he stood, but under the new system of provisional taxpayers and P.A.Y.E. the position has changed entirely. There will be many taxpayers who will be completely unaware of the fact that a tax refund is due to them, and unless the refund is automatic a great number of taxpayers are going to suffer to the benefit of the State. Sir, what actually is the position? After all, the taxpayer—the P.A.Y.E. taxpayer for example—will be making an automatic payment once a month for a minimum period of seven years. He will get so used to making this payment that after seven years he will have forgotten completely that part of what he has paid represents a loan levy; he will regard it as his normal tax payment, and unless the refund is automatic he is going to suffer very considerably. I hope that the hon. the Minister will be able to tell us that it is his policy to make the refund of these amounts an automatic matter. He has a computer at his disposal now and there is no problem involved.

Then I want to mention two other small matters which are nevertheless important. In the P.A.Y.E. form that is issued, there has been one error now for two issues and one error for one issue. I am quoting from the Accountant of December, 1966 where it is pointed out that the tax tables are wrong in that the rates shown are not correct. Sir, anybody can make a mistake but what perturbs me is that this article says—

Sir, I do not believe that that is the sort of reply, if that was the reply, that should be given to a responsible person, such as an accountant, who has to deal with these matters every day. I have no objection to the fact that there was a mistake; it is unfortunate but we all make mistakes, but when mistakes are pointed out I do not think the reply should be that only a few taxpayers are affected and that in any case that you do not have to use the tax tables if you do not want to do so; you can work out the tax for yourself.

The other matter is perhaps a more important one and that has to do with the question of previous assessments. This is a letter which appeared in the Taxpayer of November, 1966—

The hon. the Minister will know that it is no longer the immediate preceding year; it is now the latest tax year preceding the current year in respect of which an assessment has been issued not less than fourteen days before the date on which such estimate is submitted. This can be very material when a taxpayer assesses his taxable income and pays his provisional tax because if he is working on his last assessment he may be in one position and if he is working on the previous year’s assessment he might be in an entirely different position. I hope that the hon. the Minister will see that in the next issue, presumably for 1968, of the form I.R.P.12, this will be corrected so that the taxpayer, when he goes to this document, which incidentally is very useful in its preamble—I am ashamed to say that I have referred to it frequently—will be able to see what his rights are and what protection he has. [Time expired.]

I should just like to reply to the matter that was raised by the hon. member for Parktown in regard to the loan levy. I am doing so because I think that, strictly speaking, this matter should rather be discussed under Public Debt, since it is a loan which the Government has to refund to the taxpayer, and it is in fact in regard to this very refund that the hon. member for Parktown made several remarks here. That is why I just want to furnish a brief explanation in connection with the loan levy. The Income Tax Act which makes provision for this, provides, inter alia, that the Minister of Finance has to fix a date not later than 28th February, 1973, and 28th February, 1974, in respect of the respective loan levies for the years 1966 and 1967. In other words, the date on which the refund has to be made, can be announced by the Minister, but it should not be later than the dates I mentioned here in respect of loan levies for the two respective years. This implies, of course, that within seven years from the end of the financial year in question, the Minister has to make the announcement that that loan levy is refundable. That is what the Income Tax Act lays down. The Act provides further that the Secretary for Inland Revenue is obliged to issue a statement to a person who has paid the levy. The Income Tax Act provides further that this statement has to be issued at any time during the period in which the loan levy is applicable. Then it is provided further that the State President may by proclamation announce a date after which the loan levy will no longer be payable; in other words, a date after the expiry of the last day of the year of assessment in question, and as from that date the loan levy will no longer be payable. In the past this period was fixed at two years. The hon. member may perhaps be thinking of provisional taxpayers—and he has also referred to them —where income tax is being deducted from the monthly salary. In those cases it may be different, but in many cases the tax assessment, the final assessment, is only being issued a considerable time after the end of the financial year. It stands to reason, therefore, that statements in respect of these loan levies can only be issued after the assessment has been submitted and taxes have been paid. Furthermore it is also clear that, if it is done immediately, or shortly after the end of the financial year, circumstances may necessitate subsequent changes in statements. Accordingly we feel that it is advisable that these statements which are being sent to persons who paid loan levies, should in any event not be issued until the expiry of two years after the end of that financial year. So much for these loan levies. Perhaps the hon. the Minister can add something to that.

I am very sorry that the hon. member for Orange Grove has to some extent exaggerated the whole point of uniforms and clothing. The hon. member accuses me of being cruel and petty. Those were the words he used, but Ministers also have to obey the law. This item of uniform or clothing issued to an employee is taxable income for the employee, and this has been confirmed by the courts, because it means a saving to the employee.

Why do you not change the law?

We are not supposed to talk about changing the law in Committee. In any case, what we have done in the past is simply to apply the law as was laid down by the courts. This practice had not been followed very consistently in the past. It was only when we applied the P.A.Y.E. system of taxation that it was brought to light that many employees did not disclose the fact that they received free uniforms. Employees, on the other hand, deducted the cost of the uniforms as an expense. In that way they saved taxes. If we want to amend the whole situation, the only thing to do will be to amend the law. But at present we are simply applying the law as it stands and as it has been confirmed by the courts. So I hope that the hon. member will not accuse me again of being cruel and petty when we simply apply the law as it stands. But, as I say, we are going into the whole matter at present with the Commissioner for Inland Revenue. There are different shades and forms of uniforms and clothing. Some uniforms could be worn under all circumstances and some could not, and one has to apply this thing very circumspectly. Certain employers do not supply uniforms, but they pay a clothing allowance, which may be free of income tax or not. So there are quite a number of problems connected with the matter and it is not so easy as the hon. member thinks. In any case, it is not a case of being cruel or petty but merely a matter of applying the law as it stands.

*The hon. member for Stellenbosch asked me about students and their loans and bursaries. As the position is at the moment, R240 is permissible. Where a student receives such a loan, he is no longer completely dependent upon his parents, and then the parent is no longer completely responsible for that student, because the student himself has obtained part of his income. It is for that reason that we cannot accommodate him fully as regards all his expenses, but only to an amount of R240. The hon. member also asked that we should accommodate part-time students as regards their expenses in connection with their studies, but the cost of studies has always been regarded as an expense of a private nature for everybody. Even parents cannot, within certain limits, deduct the costs of the studies of their children from their income. We can only grant a rebate in that respect. Therefore we cannot comply with that request by deducting, for income-tax purposes, the cost incurred by extra-mural students.

What about study loans?

No, we say study loans up to an amount of R240 per annum.

I am not referring to bursaries, but to loans. Apparently loans are being taxed.

Loans up to R240. Previously it was different, but last year, I think, a change was effected so that an amount of up to R240 may be deducted from the income of the parent.

†The hon. member for Parktown has mentioned a few matters here in regard to the savings certificates which the hon. member for Ceres has already replied to. I can assure the hon. member that the payment will be automatic. In regard to the tax tables, I can tell the hon. member that we will look into the matter. I do not think this is very important; it is an administrative matter, but we will look into it and rectify it if possible.

There is a matter which is not clear to me. The hon. member for Stellenbosch stated very clearly that if a student receives study loans which were repayable, then they were taxable.

The hon. the Minister has already replied to that, but you did not listen.

No, I did listen, but I cannot believe that to be the case, and I should like clarity in regard to the matter. Can it happen that if a person has a temporary use of money for a special purpose it is taxed as income? I should very much like to have clarity in regard to that matter, particularly because I also want to draw the hon. the Minister’s attention to another phenomenon. A study bursary which, according to the Minister, is in fact taxable, is often subject to a condition. That condition is that the student, after the completion of his studies, must work for a certain period of time for the organization granting him the bursary. That is what happens particularly in the case of teachers in all four provinces. It happens particularly in the case of women that they have to give up their teaching career, perhaps because they are expecting a baby, and resign from the service. Then that bursary has to be repaid, but in the meantime they have paid tax on it. There is no question of their being able to receive a repayment from the Department of the Interior for what appeared to be a bursary but is now in reality a loan. I should like to know what the policy is in regard to this matter and what can be done to put this matter right.

Then I should also like to protest strongly against the interpretation of the Act with which we are dealing at the moment where the Department of Inland Revenue has decided that uniforms and the issuing of uniforms will be taxable. The Minister himself has admitted that he has not always taxed uniforms and that it is a new phenomenon. In other words, it is an interpretation of the Department.

Order! The hon. member is now criticizing a court judgment. It was a court judgment and the Minister said so.

Mr. Chairman, then I want to know why the court judgment has not been applied consistently. Why are there hundreds of cases where people received a grant for uniforms and other grants as part of their remuneration, grants which were necessary in the public interest for the completion of work, which were not taxed? Where is the line going to be drawn now? I want an explanation in regard to this court judgment which I do not know about. I should like to know more about the court judgment itself. Where is the line going to be drawn? There are hundreds of officials who, for the purpose of doing their work, receive certain instruments and certain means of enabling them to do their work. Is all this going to be taxable now? Is the clerk in an office who received free paper and ink now going to be taxed on it, because to a postman his uniform, and particularly his shoes, are as important as the ink and the paper which the clerk uses? What is going to happen now in the case of a journalist working on his own and under contract who now has to supply his own paper and typewriter, etc.? Is he going to receive rebates, whereas the journalist working for a newspaper or a magazine who used to receive all those things free, is going to be taxed on it? The Minister is creating for himself an impossible situation and the court is creating an impossible situation. I want to know how the hon. the Minister is going to interpret that court judgment? Because what is right for the postman and the railwaymar must also be right for everyone who receives certain things which are essential for the performance of his work. Or is the uniform of the postman less essential than the paper and ink of the clerk? It is an impossible situation and I should like the Minister to give us more information in this regard. In particular I want him to tell us what the gist of the court judgment was. Where did the judgment suddenly come from and how did it arise? We have no knowledge of the court judgment. In what year was the judgment given?

Mr. Chairman, I should just like to return to the question of study loans and bursaries. It seems to me there is a misunderstanding on this score. These or other loans are not taxable. Even bursaries are not taxable. I told the hon. member that exemption was granted last year as far as bursaries were concerned. The misunderstanding seems to be in connection with the R240 per year. The question is: When is a student dependent upon his parents? It could be interpreted to mean that if he has received RIO and used that money for his studies then he is no longer a 100 per cent dependent upon his parents. That is why it has now been stipulated that he can receive up to R240 per year and still be regarded as a dependant of his parents.

Does that apply to a bursary or to a loan?

Yes. He is then still a dependant and the parent is in that sense still entitled to accommodation under the Act.

In regard to the other difficult matter which was raised, i.e. in respect of the uniforms, I just want to tell the hon. member that I agree with him in regard to this question.

When was the court judgment given?

I shall be able to ascertain that.

May I ask the hon. the Minister whether he told the Chairman that there had been a court judgment?

The Minister did tell the Committee.

I did tell the Committee. There was a court judgment. That is the information which I received from my Department. I cannot give you the date of the court judgment now. It happened quite a few years ago. There was a court judgment and hon. members will understand that a Department has to work in terms of that court judgment, whether they like it or not. I want to tell hon. members that we can go into this whole question. We are not advocating or opposing changes in legislation in this Committee. It is a situation in which we have found ourselves, and one which my Department does not like.

What about the years during which it was not done?

It was not done because these matters were not brought to light to such an extent. As a matter of fact it was only with the application of the L.B.S. scheme that more attention began to be focussed upon this matter. Then it was more strictly applied. It is not something we like. Without proposing or making propaganda for legislative amendments, I just want to tell the hon. member that it is a matter which we will go into during the recess. I shall give my personal attention to the matter.

Why during the recess? Why not at once?

We can do it at once.

I just want to state very briefly that I am not at all satisfied with the reply of the hon. the Minister. Over the years and in the past income tax has never been imposed in respect of uniforms received by Post Office and Railway staff. There is therefore no reason why it should be done now. The hon. the Minister spoke about a court judgment in this regard. I want to ask him specifically: Was it a court judgment which also mentioned the uniforms of Government officials and Government servants? That is the important point. Anybody in the service of the Government performs a public service. It is not that the Post Office workers do not want uniforms. They can do without them, but they have to wear them. It is done for the protection of the public, just as in the case of Railwaymen. The hon. the Minister of Transport is sitting there. The hon. the Minister of Posts and Telegraphs is sitting there at the back. They represent tens of thousands of workers. Do they know that the Commissioner of Inland Revenue has decided that those uniform grants must be taxed? Surely something can be done about the matter. I want to make this plea to the hon. the Minister: If this was not done in the past and it was legal, let him continue to do so now. Do not tax them now. Changes can subsequently be made in any legislation.

I just want to tell the hon. member what I said just now, i.e. that we will go into this matter immediately. We will see what we can do to bring about alleviation in terms of present legislation.

Vote put and agreed to.

Revenue Vote 22,—“Customs and Excise, R9,300,000”, put and agreed to.

Revenue Vote 23,—“Audit, R1,368,000”:

Mr. Chairman, allow me, while this Vote is being discussed, to refer to the impending retirement of Mr. I. T. Meyer, the Controller and Auditor-General, in January, 1968. Mr. Meyer joined the Public Service on 9th March, 1922, and upon his retirement he will have served the State for almost 46 years. By means of extra-mural study he improved his qualifications for the career he had chosen and obtained the degrees B.Com. and LL.B. Upon his retirement he will be able to look back over a very long and successful period of service. He was employed in various Departments and amongst other things he was for eight years Assistent Secretary in the former High Commissioner’s office in London. In 1950 he became Deputy Secretary to the Treasury and in 1954 he was promoted to Secretary to the Treasury. Since 1st December, 1962, he has held the very important post of Controller and Auditor-General. Hon. members, and in particular those who have served on the Select Committees on Public Accounts and Railways during this period, will agree with me that Mr. Meyer performed the duties as Controller and Auditor-General which had been imposed upon him by the Audit and Exchequer Act in an absolutely first-rate way in every respect, and did so in spite of the fact that his Department was often, during that period, faced with a serious shortage of staff. I should like on my own behalf, and on behalf of the Department, and particularly on behalf of the Government, to express my sincere appreciation for the valuable and efficient services which Mr. Meyer has rendered. Through his zeal, dedication and loyalty he has set a very high standard of service which is worthy of being emulated by everyone who is called upon to serve the State. I think that we can also, on behalf of the entire House, convey our gratitude and appreciation to Mr. Meyer for his long and faithful service. We wish him and Mrs. Meyer a well-earned rest.

I should like to concur wholeheartedly with the remarks made by the hon. the Minister in regard to Mr. Meyer who is going to retire. Unfortunately the hon. member for Queenstown, chairman of the Select Committee on Public Accounts, cannot be present here to-day, owing to unavoidable circumstances, and he has asked me to convey on his behalf and on behalf of the entire Committee a word of gratitude, appreciation and to pay tribute to Mr. Meyer. The office of Controller and Auditor-General makes exceptional demands in respect of efficiency, dedication, fairness and judgment on the incumbent of this important post. Mr. Meyer has met these requirements in every respect. We have always found him to be fair and sympathetic in regard to the problems of the accounting officers of the various Government Departments, as well as towards the responsible officers of control boards, and others. But he was also unrelenting when it came to proper financial control and accounting for public money. An exceptional characteristic of Mr. Meyer was that he always honoured parliamentary control over Government expenditure as an unassailable principle. He set only the highest standards for himself and for all who worked with him. Nevertheless he led and did not drive. He obtained co-operation on the grounds of his politeness and on the grounds of the example he set. The hon. member for Queenstown, as chairman of the Select Committee on Public Accounts, has asked me to thank Mr. Meyer on behalf of all the members of that Committee for fruitful and pleasant co-operation, and to wish Mr. Meyer, when, as the Lord wills, he retires in January, a happy and prosperous rest.

We on this side of the House should like to associate ourselves with the tributes paid by the Minister to Mr. Meyer. Personally I am very happy to have the opportunity to take part in this tribute because Mr. Meyer and I were colleagues already 25 years ago in London and since then we have always been associated with one another in one capacity or another. Through all these years I knew him as a most able, conscientious and always courteous officer of the Public Service. As Controller and Auditor-General he proved himself to be a most zealous upholder of the rights of Parliament— as a matter of fact, Parliament has had no more zealous servant than him. I can only say that as long as we have men of the calibre of Mr. Meyer in our Public Service we need not worry about the possibility of anything greatly going wrong in the Public Service. So, I should like to join the hon. the Minister in wishing Mr. and Mrs. Meyer a long, happy time after his retirement. I hope he will still enjoy many games of bowls and have success in other directions as well.

It gives me pleasure to have the opportunity of associating myself with all the tributes paid to Mr. Meyer. He has been described as able and courteous, something which can be expected seeing that he comes from the same district as I come from. Not only are we from that district able and courteous but we are also very fair minded. We resent injustices and that is why I regret that I am constrained to raise a matter of injustice under this Vote. I am afraid that unless the Minister is able to help me and give me more consideration, more than I have had from his colleagues, the Minister of Transport and from the Deputy Minister of Police, I shall have to endorse the words of the hon. member for Orange Grove that the Minister was petty and cruel. I refer to the question of allowances payable to officials in the Transkei. I raised this matter before under other Votes and complained that those members of the Civil Service not seconded to the Transkeian Government were not being paid allowances—the housing and territorial allowances being paid to seconded officials. I had occasion to tell the hon. the Minister of Transport that he was not quite correct in giving that as a reason for not paying these allowances to his officials because some seconded officials were, in fact, getting these allowances.

Order! What has that got to do with audit?

I am talking about the fact that audit officials who were not seconded are not being paid the allowance. I see the Minister of Transport is nodding his head. He seems not to mind to take the blame for what has happened. He said in this House he would take the matter up with the Cabinet. He did so and the allowance has since been taken away from the audit staff. When I asked the Minister of Transport why his officials in South-West Africa were paid this allowance, although they were not seconded, he said they had a vested right. But that same consideration must apply to audit officials in the Transkei. They too have a vested right. When they were sent to the Transkei to assist the Transkeian Government they were promised these allowances. They did get them and they budgeted on these additional allowances. So I say it is unfair, in fact cruel and petty, to take those allowances away from them. They are working in the same offices with other officials who get these allowances. So the audit officials are being discriminated against. That is quite wrong, I say. These officials are just as important as the officials with whom they are working. If they are to be a satisfied group of men doing their best under all circumstances they should not have to nurse any feelings of resentment or any feeling that they are being discriminated against. Therefore I should like to appeal to the Minister to reconsider the matter and to use his influence with the Cabinet. Surely he must have as much influence in the Cabinet as the Minister of Transport. I hear laughter in the House. Does that mean that the Minister of Finance does not have as much influence in the Cabinet as the Minister of Transport has? But surely the Minister of Finance does have some influence and to him I should like to appeal not to succumb to the overtures of the Minister of Transport. Just because the hon. the Minister of Transport has landed into difficulties with his officials is no reason why the Minister of Finance should give in to him and allow him to dictate what should happen to the audit officials when they work elsewhere. When I brought to the attention of this House before this injustice being done to a group of officials in the Transkei, the hon. the Minister of Transport reacted by making that injustice general. I appeal to the hon. the Minister of Finance to rectify this.

Mr. Chairman, I am sorry the hon. member for Transkei had to interfere with the fine atmosphere which was prevailing here before I could have the opportunity to express my thanks and appreciation to Mr. Meyer, the Controller and Auditor-General. It having been my privilege to have been the Chairman of the Select Committee on Railways and Harbours for the last two years, I want to convey my thanks and appreciation on this occasion to Mr. Meyer for his help, his support and his guidance. What particularly struck me about Mr. Meyer was his very strong sense of responsibility. You know, Sir, Railway finances are very complicated and we have a Deputy Auditor-General who carries out Railway auditing, but Mr. Meyer’s sense of responsibility never allowed him to let me, as Chairman of the Select Committee, discuss the agenda of the Committee’s meetings with the Deputy Auditor-General without his also being present personally. This is proof to me of his real sense of responsibility, as well as the interest he has taken in his work. In view of the fact that Mr. Meyer was in charge of the Department of the Controller and Auditor-General, which is the watchdog that has to keep an eye on the way in which the money of the State and the Railways is spent, and knowing Mr. Meyer to be one of the most responsible of officials, I want to thank him here this afternoon for the great service he has rendered to our beloved country, the Republic of South Africa. Sums of money are voted and the Auditor-General and his staff are the watchdogs which have to see to it that that money is spent correctly. I want to thank him this afternoon particularly for the inspiration that went out from him, and also because he inspired those of us connected with the Select Committee with his sense of responsibility and made us feel that it was also our duty to see to it that the money was spent correctly.

It is a pity that we are to lose his services owing to his retirement. However, I hope Mr. Meyer is not going to rest now, but that he will make available to our country the experience he has gained over the years so that it will not be lost to our country. I want to wish him and Mrs. Meyer a long and happy life, and I also wish them everything of the best for the future.

Mr. Chairman, the hon. member for Transkei raised a matter here in connection with which he virtually wanted to incite me against my colleagues. He made a plea that I should be less “cruel and petty” than my colleagues allegedly were in regard to the allowances which are paid to officials of the Audit Office in the Transkeian Territory.

I now want to say to the hon. member for Transkei, in view of the fact that he says “an injustice is being done”, that my colleagues and I also have to see to it that no injustice is done to other sections of the Public Service staff. When one grants a certain section of public servants benefits which are not granted to others who may also be entitled thereto, one is in fact committing an injustice.

Why do you not grant the allowances to everybody? Why only to some? Surely a double standard is being applied?

There are two kinds of officials in the Transkei. The one kind is the official who works under the instructions of the Transkeian Government. He is actually an official who has been seconded to the Transkeian Government as a result of the fact that that Government does not yet have officials who are capable of performing that work. Those officials who work under the instructions of another government are entitled to certain allowances.

Who pays the allowances, the Transkeian Government or we?

We pay them. They are entitled to certain allowances. But those public servants who work under our Government do not get those allowances because they fall under the authority of their own Government. If I should now apply that principle in respect of the staff of the Audit Office, would it be fair towards other Departments?

In the Transkei, yes.

Must officials of other Departments who work there also get an allowance?

Yes, of course.

Are officials who work under our Government in the Transkei more entitled to allowances because of the fact that they work in the Transkei than are officials in other difficult parts of the country?

Why were the Audit Department staff paid their allowances when they went there in the first instance, and why has it only been stopped now?

Because it was found subsequently that those officials of the Audit Office who fell under the Government of the Republic were in a different position to those who fell under the Transkeian Government, and that it was a mistake to pay them the allowances. We cannot accord different treatment to one section of the Public Service than we do to another section, particularly not when they work under similar circumstances or when the circumstances are not very different. That is the whole position. I understand, however, that this matter will again be submitted to the Public Service Commission, and I can give the hon. member for Transkei the assurance that, if this matter is raised again, if· will be dealt with as objectively, in as levelheaded and sober a way and on as reasonable and fair a basis as the State dealt with this matter in the past. That ought to satisfy the hon. member.

You will consider it again?

Yes. We have to reconsider it if it is submitted to us.

But I have submitted the matter to you now!

To satisfy the hon. member I shall say that I shall reconsider the matter. I hope that will satisfy the hon. member.

Vote put and agreed to.

Mr. Chairman, it is rather late to start with the next Vote, and the hon. member is so keen to make a half-hour speech that I must rather ask you to report progress.

Progress reported.