I move—

Agreed to.

Bill read a Third Time.

When the debate was adjourned on Friday night, I was asking the hon. the Minister to lend his kind consideration to the possible establishment of border industries in the Steelpoort complex. I feel that the Steelpoort complex is the ideal site for the possible erection of a border industry, and for several reasons. Here I must also refer to what the hon. the Minister said, as quoted in Die Burger of 13th May. Amongst other things he said (translation)—

It is for this very reason that I feel justified in asking that that area should receive attention. I feel that here we have a golden opportunity, not only as far as a border industry is concerned, but also to further implement the policy of the Government, namely the development of Bantu homelands, because there everything can be concentrated in one unit.

I should like to draw attention to the fact that geographically Burgersfort is situated between two rivers, the Steelpoort and the Spekboom Rivers, and that it is also surrounded by all the necessary basic materials. Here I may also quote from a report I received from the interests concerned. The report states that there is 100,000 tons of asbestos, and recently R4 million was spent on increasing the production. 800,000 tons of chromium was handled at Burgersfort. 62,700 tons of vanadium was handled there, and 65,000 tons of magnesite. You will therefore see, Sir, that all the basic materials needed for border industries are obtainable there. To continue, I feel that I may also mention the following. As regards communications, Burgersfort is situated in a very central position; all the roads to the various mines have already been tarred, and there is a railway line through the area. Then there is also a power line from Escom more or less four miles from that area. At Aapies, where thousands and thousands of tons are loaded, the ground is level and most suitable for the erection of factories. It should also be mentioned that if we really want to develop the Bantu areas we shall find a suitable complex here. Beyond the Steelpoort there is great Sekukuniland, one of the biggest homelands in the Transvaal, which can provide the necessary labour. A Bantu township has been established on the opposite side of the Steelpoort River, and it will be very easy to transport all those labourers by bus over a tarred road to the proposed site. We also feel that as far as housing is concerned, which produces so many problems, this can be eliminated altogether in respect of Bantu labour, because they can live in the homelands and need only be transported a short distance to the factory. Various places have been mentioned for possible industries, and now I am not referring to what the hon. the Minister has already said, but I do feel that if we consider what is stated here in Optima, we are justified in making this request. Let me quote from Optima—

You will therefore see, Sir, that no matter from what angle one considers this, it remains the appropriate site for the erection of something of this kind. Allow me to explain, furthermore, that under the present position the Railways are burdened with all the heavy loads of low-tariff goods that they have to transport, such as raw ores. Take a year such as this one, in which we have this large maize crop and we will experience a shortage of railway wagons. Many wagons may be saved if the product is processed there and transported by the Railways in its processed form at a higher tariff, which will be more profitable to the Railways; it will also relieve the pressure on the Railways. Mr. Chairman, I want to make a cordial request to the hon. the Minister to come and visit us; we shall appreciate it very much. I can assure the hon. the Minister that if he visits that region, he will see large mine dumps there; he will see huge mountains of ore next to the station; he will meet friendly people; he will meet people with ambition who are prepared to do anything for the progress of the country. I hope the hon. the Minister will be so impressed that he will immediately take this area into consideration for the further planning of industries. Why should the rich raw materials which are available to us in that region be taken away from our constituency and processed elsewhere, while we stay behind with the empty diggings and with diseased people who worked in those mines, while the places where the basic materials are processed flourish? Why should these materials be processed in other places while our area is the natural and appropriate area for such an industry?

Mr. Chairman, whenever this Vote has been under discussion, we have always referred to the relationship between the hon. the Minister’s Department and what we used to call public utility corporations, but they are not really utility corporations; with the exception of Escom they are public corporations. I refer, of course, to the work being carried out by the Industrial Development Corporation (I.D.C.). I should like to refer this afternoon especially to the I.D.C. and in addition, to Iscor. Sir, 16 years ago we raised this matter with the hon. the Minister of Finance of those days, Mr. Havenga. We put our case to him in this way; we said that there should be accountability to Parliament; we regard ourselves as the representatives of the people, which of course we are. We know that these corporations are owned by the people of South Africa and we say that as members of Parliament, we hold the proxies for the people of South Africa. It is our duty on this annual occasion to put the case of the taxpayer, the shareholder, to you, Mr. Chairman, as I intend to do to-day. The I.D.C. publishes an annual report, a very fine-looking report, but it does not give us the information we would like to have, and on various occasions we have suggested that there should be a select committee, which would be able to obtain further information—not to influence the policy of the I.D.C. or of Iscor but to obtain further information. The I.D.C. has developed in recent years in a manner that was never expected in the beginning; it was never dreamt in the beginning that the I.D.C. would become the great giant—or as some people would say the “octopus”—that it is to-day. It invests in shipping; it invests in industry. On one occasion it took part in a take-over bid against another company. Large sums of money were involved. Public money was being used in this take-over bid. They were not successful, but under the name of Bonofel they were one of the competing companies; and then some years ago we had the Amato Consolidated Investment failure. We were unable to obtain any information in that regard as well. Now, Sir, there is a new development in the I.D.C.: Industrial Selections (I.S.L.). It was originally intended that the Industrial Development Corporation would dispose of its assets in companies when the companies were established and when they were able to realize their funds to make further investments to assist other companies. Instead of divesting themselves of these interests they have now formed a finance corporation, a holding company, in the shape of Rand Selections and other companies, similar to the great financial companies we have to-day called Mutual Trusts, but not in the same way as the mutual trusts. There is a difference; this is a financial holding company. I should like to quote what the I.D.C. say—

And then they say this—

In other words, the Industrial Development Corporation is now enabled to purchase shares in other companies and dispose of them as well. I think this is a development which was never anticipated in the beginning. I think the time has arrived when Parliament should make its voice heard and make it clear that we intend to obtain more information for the public of South Africa.

Sir, my time is naturally limited but I want to touch upon another Corporation, Iscor, where the same principle of lack of control is involved. In the case of Iscor I want to refer to an article which appeared in the press. This article said—

Sir, that is a very high rate of interest even in these days, when the hon. the Minister of Finance is anxious to borrow money at a much lower rate of interest, if possible. They say this—

The guarantee of Iscor makes it possible for Union Steel Corporation to raise money in the open market through a loan. Any loan by Iscor is guaranteed by the Government, so here we have the situation where an Iscor loan is guaranteed by the Government and Iscor in its turn guarantees a loan to a public company. One feature of the loan which struck me immediately was this. There are very well-known personalities who are directors of Iscor, as there are directors of the I.D.C. but what struck me was the fact that of the seven directors of Union Steel, four of them are also directors of Iscor. They probably have more information about Union Steel than the ordinary investor has, but four of them are directors and they are very distinguished men. One of them is vice-chairman of Iscor. Sir, this raises a very important question. Should not the directors of I.D.C., Iscor and other public corporations, be directors of those companies only? Should we not say that they may not become directors of other public corporations? In other words, Government directors should be placed in that position. I am not going to suggest, as has been suggested and as the policy is to-day, that members of Parliament should be excluded. That question does not arise; I do not wish to discuss it, but what I am anxious to say is this: These directors of public corporations should be responsible to Parliament, and we think they should not be directors of other companies in addition.

Sir, there is a final suggestion I wish to make. I think the I.D.C. has completed its main task. Its main task was to encourage young struggling industries to establish themselves. The I.D.C. was empowered to invest Government funds to assist them. That period we have lived through; one does not meet these struggling companies to-day as we did in the years of World War I and immediately after World War I. Those days have gone, and I think the main function of the I.D.C. to-day should be to conduct the work of these public corporations and not to be interested to the same extent in private work. I know that the I.D.C. is the Government’s method of investing Government funds. We understand that. There is no objection to that. If that is the case, then I think it is most important that there should be accountability to this Parliament year after year through a select committee or some other body that the hon. the Minister in his wisdom and with the advice and rich experience of the hon. the Minister of Finance decides upon, whereby Parliament can exert its influence over the policies of these companies. I think that is essential.

There is one other point I want to mention in regard to the report of the I.D.C. I think it is very important when loans have to be floated, as they are floated, that we should have much more information about them. This House should be provided with more information. We do not have sufficient. The report of the directors is good as far as it goes, but it does not go far enough. It does not give us sufficient information. [Time limit.]

Mr. Chairman, the hon. member for Kensington concentrated on the I.D.C. once again. It is his annual practice to express his misgivings about the I.D.C. Those hon. members do not like the I.D.C. What he did in fact advocate here this afternoon, was that the I.D.C. should cease to exist, and that it no longer had any task to perform since its task had been concluded, and that it should gradually disintegrate or that it should only confine itself to certain investments made on behalf of the State. Before I discuss the I.D.C., I just want to deal first with one aspect which the hon. member mentioned here and under which he raised objections to the fact that four directors of Iscor are serving on the directorate of Union Steel. There are seven. He said that there were four, and he wanted to know what they were doing there. What the hon. member did not add here, was that Iscor does in fact hold the controlling shares in Union Steel. Those four members who had been appointed to the directorate of Union Steel had been appointed by Iscor in terms of its controlling shareholding interest in Union Steel. This is the reason why that is so. Therefore, there is no sinister motive why those four gentlemen who are members of the directorate of Iscor are serving on the directorate of Union Steel as well.

I want to say a few things about the I.D.C. During the debate conducted on Friday a great deal of attention was given to the I.D.C. and its activities, and a great deal of misgivings were expressed in that regard. I want to confine myself particularly to a few of the matters that were raised here. We must also view the I.D.C. against the background of its establishment. That side of the House established the I.D.C. It came into being by way of the legislation of 1940. When the Bill was introduced, the then Minister of Commerce and Industries, Mr. Stuttaford, pointed out that according to data obtained in 1936—I shall indicate later what the data was in 1963, namely three years ago—there were 9,985 institutions in this country. To-day we have 16,580. He pointed out that the gross value of production was R350 million. Do you know what the gross value of our industrial production is at present? It has increased from R350 million to R3,027 million. The value of the South African materials that were used at that time, amounted to approximately R90 million. At present South African goods to the value of R1,680 million are being used in our industries. The total value of the materials used in our industries at that time, was R180 million. At present it is R2,270 million. At that time there were only 330,000 employees in our industries. At present there are more than a million employees. The wages that were paid then, amounted to R82 million. At present it amounts to R790 million. I mention these to show you to what extent South Africa’s industries have grown in this period. Other hon. members here also referred to that. That growth is perhaps to a certain extent attributable to the development that took place here during the war, but to a large extent it is also attributable to the purposeful stimulation of industries in South Africa, a policy which this Government has always advocated. It is attributable to the assistance that was rendered through the protection afforded by the Board of Trade and Industries. It is to a large extent attributable to the industries which were stimulated, inter alia, by the I.D.C. as well. It is no wonder that the I.D.C. played such an important role, even in recent times, because from this report that was introduced, it appears that only last year the I.D.C. received 916 applications for assistance. They investigated 286 of them. To 97 of them they rendered assistance in the form of R62 million. The assistance that was rendered in the past year, was less than that of the previous year, and that is in fact attributable to a policy of trying not to develop so rapidly industrially. The question that arises now is whether in this process of development and growth, the I.D.C. has in fact exceeded the terms of its statute? That is usually the charge which is being made by the other side of the House. Let us look at what the terms of reference were in the 1940 Act. The powers of the I.D.C. are as follows—

1. (a) with the approval of the Governor-General, to establish and conduct any industrial undertaking; …

Only three were established in that way. I shall continue—

1. (b) to facilitate, promote, guide and assist in the financing of new industries and industrial undertakings, and (c) schemes for the expansion, better organization and modernization of and the more efficient carrying out of operations in existing industries and industrial undertakings to the end that the economic requirements of the Union may be met and industrial development within the Union be planned, expedited and conducted on sound business principles.

There you have its terms of reference. Of all the matters mentioned here, not one can be said to go beyond these terms of reference. They are within those terms of reference and the I.D.C. acted within those terms of reference. It is no wonder that during this time the I.D.C. also took the initiative in many new fields. Let me mention them.

There were the fields of balanced rations, food fermentation, woollen textiles, the fine-cotton industry, pulp and wood, artificial fibres, artificial rubber, the increased manufacture of motor car components, tea production and processing, aluminium, the erection and construction of public buildings, export finance and even market credits for industry. These are new fields in which the I.D.C. were engaged every time. It happens sometimes that when the I.D.C. investigates a certain field, there is nobody who is interested in that field, but when it reaches that stage where it wants to proceed to the actual establishment of an industry, private enterprise was there and they came in for the very reason that the I.D.C. had indicated that it was an economic possibility. Therefore I say that the I.D.C. has been playing a very important role by taking the initiative in this industrial development, by stimulating it, by collaborating with it and even by co-ordinating it, as it is stated in its terms of reference.

As far as the I.D.C. is concerned, I do not think that the statement can be made that it exceeded its limits or even that its policy is not known. There is no secret as regards its policy. On the contrary, this I.D.C. Report is a very detailed report of the activities of the I.D.C. It is true that in recent times it has even rendered assistance in rationalizing, but in rationalizing by drawing together industries in which it already had an interest. After all, if greater rationalization is effected in an industry or an undertaking in which the I.D.C. has an interest, there is nothing wrong with the I.D.C. also taking an interest and even endorsing development in such an industry or undertaking.

Reference was made to Industrial Selections. The I.D.C. is trying to dispose of its investments. It has been doing so by way of Industrial Selections. Now hon. members do not feel happy about that. Last year the I.D.C. had 500,000 shares which they held in undertakings quoted on the stock exchange. They disposed of those shares by way of stock exchange sales. So far this year they have disposed of shares to the value of almost R400,000 in that way. The I.D.C. has already had a return of more than R90 million on the assistance they rendered in this way. That shows you that it is like a wheel that turns. It renders assistance, but at a later stage that capital is returned and can then be used for re-investment. I think that it is correct that the I.D.C. should, when it is within its power, issue some of these shares so that they may be made available to the public. I also hear that the I.D.C. is once again giving consideration to drawing up a portfolio in order that those shares may also be made available to the public.

I think it was the hon. member for Pine-town who said that we should know how many of the shares held by the I.D.C. in public companies, have been quoted on the stock exchange. This report shows that the I.D.C. has invested more than R80 million in companies of this type. Approximately R30 million of that, that is approximately half of that, has been invested in companies in the form of share capital. The rest is in the form of loans. Of those shares which are invested in public companies and which are quoted on the stock exchange, approximately half has been invested in that way. The other half has been invested in private companies and other undertakings. Hon. members will realize that it is not always possible for the I.D.C. to dispose of all those interests. Some of them are still at the development stage and can as yet not be quoted on the stock exchange. That will take time. The fact remains that that is the direction in which the I.D.C. is moving, namely that of making more and more of these shares available to the public. There are members on this side of the House, namely the hon. members for Soutpansberg, Florida and others, who participated actively in this debate, who referred to the important role fulfilled by the I.D.C. The very fact that the L.D.C.’s report is so exhaustive, greatly assisted some of them in emphasizing in this House once again the importance of the I.D.C. The hon. member for Wonderboom referred to small industries. That is correct. The I.D.C. does have a Small Industries Division. Financial assistance to the value of almost R1 million has been given to them. According to this report, small industries have a large number of problems, mostly in connection with management. In addition there are problems in connection with succession, and so forth. However, I think that the I.D.C. moved in the right direction when it established this Small Industries Division. I hope that they will continue at an accelerated pace to give the necessary assistance to small industries as well.

The hon. member for Constantia referred to the fact that in these Estimates we requested authorization for capital to the amount of R18½ million, whereas, according to the statements of the I.D.C., the available share capital only amounts to R18 million. The fact of the matter is that any investment in the form of shares is subject to ratification by this House. There is a ratification which is being requested in respect of a further R½ million, but the share capital of the I.D.C. is augmented from time to time in terms of a decision taken by the directorate and ratification by the executive council. Therefore the I.D.C. can, in the course of time, when they are able to determine their requirements, follow that procedure of increasing their capital once again, in which case that increase in share capital will also cover the additional R½ million. In addition the hon. member for Constantia said that he was alarmed at the fact that the I.D.C. referred to the tourist industry in this report. The report states that this is an industry with great potential. I think that there is nothing wrong in doing that, but that does not imply that they are going to move in that direction There is a concluding paragraph in which they refer in general to the great industrial potential this country has. They were merely laying emphasis on that particular field. The chairman of the directorate gave me the assurance that they had no intention of moving in that direction. On the contrary, the tourist industry is a very important one and it has, as far as tourists going abroad are concerned, increased by 15 per cent per annum in the world. It is an industry which has one of the greatest growth potentials and I do not think that it was wrong of the I.D.C. to refer that once again in its report.

A further important question was discussed. It is said that in its activities the I.D.C. should, to a greater extent, be subject to Parliamentary approval. This House does in fact approve the share capital of the I.D.C. This House does in fact approve the field in which those shares are invested. That policy can in fact be discussed here. Last year the hon. member for Kensington pleaded with my predecessor once again for increased Parliamentary supervision, perhaps in the form of a committee to inquire into the matter. I want to refer him to the reply my predecessor gave him at that time. He said—

Then the hon. member said: “We are the shareholders.” To that the Minister replied—

My predecessor stated his policy in this regard, and I agree with the way he set out that policy. I shall content myself with that.

Two other important aspects were mentioned here. One of them is in connection with Britain’s application to join the E.E.C., and the other is in connection with the Kennedy Round which is in progress at the moment. As regards the E.E.C., Britain’s renewed application is of the greatest importance to us in this country. That is why in the past British entry into the E.E.C. was followed with the greatest interest by my predecessor and the Department. Not only this Department, but also our foreign embassies and missions as well as the Minister himself were attuned to that. That is why my predecessor went to Europe as far back as 1962. There he had interviews with the governments concerned and their ministers. He stated to them South Africa’s point of view and South Africa’s interest in this important matter. At the end of last year he went abroad again. In 1962 he also had an interview with the chief instrument of policy of the E.E.C. countries, namely the E.E.C. Commission. He stated our particular problems to them. Towards the end of last year he went there again and he had interviews in this regard with our ambassadors and with our permanent representative in Geneva. On this occasion the investigated once again the problems South Africa might have if Britain applied for membership again. We are aware of the fact that on this occasion Britain has not laid down any conditions in its application, and that further negotiations will take place. We also know that Mr. Wilson indicated that, if he had to conform to the agricultural policy of the E.E.C. countries, there would, as far as Britain was concerned, be ample opportunity for adapting their own policy to the requirements laid down. Under these circumstances, therefore, it is not possible for us at this stage to indicate fully what the possible implications of Britain’s entry will be. We do in fact know what they may be. We do in fact know that, since Britain is one of our most important export markets, such a step will affect South African products very profoundly. Our exports to Britain benefit by preferential tariffs, and in practice that means that South African exporters receive more for their exports to Britain than for their exports to other markets. If Britain joins the E.E.C., it will have to accept the E.E.C. customs tariffs and remove all customs and other restrictions on its imports from E.E.C. countries. Britain will have to accept the E.E.C.’s agricultural policy. The question is: What does that imply for us here in this country? The implications of such a step will, in brief, be the following.

It will mean that South Africa will lose its preferential tariffs in Britain. It will mean that in respect of our goods which at present enter that country duty-free or at tariffs that are lower than those applicable to non-Commonwealth countries, we shall have to pay customs duties equal to those laid down by the E.E.C. In addition it will have the effect that those E.E.C. exporters whose products are subject to customs duties in Britain at present, will obtain free access to the British market. It will also have the effect that our position as a competitor on the British market will not only deteriorate appreciably as compared with that of the E.E.C. exporters, but also as corm pared with that of our American competitors on that market. Another effect it will have is that in practice our exporters will receive considerably less for their exports to Britain, and that our agricultural exports to Britain may be handicapped by customs tariff restrictions owing to that country’s application of the E.E.C. agricultural policy which is orientated in a different way so as to restrict imports and reserve increases in consumption for E.E.C. producers. Therefore it is clear that, especially in the field of our canned fruit, as well as fresh fruit, these exports will be affected very adversely in case Britain should join. I can assure hon. members that we are keeping track very closely of what is happening there. We have permanent representatives there. Our ambassadors and our trade missions are in contact with those countries that are affected by this application, and if necessary we shall in the course of this year reinforce that representation of ours even further and, if necessary, we shall once again enter into negotiations, on a ministerial level, with the E.E.C. countries as well as with Britain. You may therefore rest assured that in that respect, in view of the fact that we realize that South Africa may be affected very adversely by such a step, we shall leave no stone unturned in straightening out our position there.

Has the Minister’s Department worked out any provisional figures similar to what Mr. Wilson gave to the House of Commons in London? He worked out precise figures.

Order! The hon. member cannot make a speech now.

I am sorry, Sir, I just wanted to ask the hon. the Minister.

The Department is working out those figures because we are aware of the fact that our exports vary from year to year. For that reason it is not a fixed figure. By using the volume of export as a basis, we know what the tariffs are that affect it. Therefore we are more or less aware of what it may entail and what our loss of preferential duty in those markets may be. But, as I also pointed out, Mr. Wilson said that he hoped that his own agriculture would be afforded the opportunity of adapting itself to changed circumstances, and I hope that, if Britain does in fact join, we shall also be afforded the opportunity of adapting ourselves to that changed tariff policy.

Reference was also made here to the Kennedy Round of tariff negotiations. At the moment these negotiations are still in progress, but for the very reason that they are in progress at the moment, it is perhaps essential for us to pause for a moment and to see to what extent they may in fact affect us. These negotiations are now drawing to a close. We cannot say to what extent they will be successful. We hear that some progress is in fact being made. But these negotiations are about customs tariffs, and it is being proposed, in the first instance, that in the case of developed countries customs tariffs should be reduced by 50 per cent. That means, therefore, that import tariffs have to be reduced by 50 per cent throughout. In the second place, there were negotiations which were aimed at improving the facilities for primary agricultural and live-stock produce to gain access to the markets of developed countries by abolishing customs tariff protection measures. The G.A.T.T. organization accepted the plea of South Africa, Australia and New Zealand, namely that these countries occupy an intermediate position, halfway between the developing and the developed countries, and could therefore not be expected to offer a 50 per cent linear reduction of our customs tariffs. Therefore these three countries only had to offer a list of tariff reductions which had to make allowance for the trade preference and the trade benefits they would derive from the linear tariff reductions made by the developed countries. South Africa submitted its offer list with the explicit proviso that the maintenance thereof would depend on adequate reductions in the tariffs of developed countries on goods which are essential to our export trade. In other words, our representatives at the negotiations reserved the right to alter the South African offer list if the exclusions of the developed countries from the 50 per cent tariff reduction were framed in such a way that products that are of importance to our export trade would be excluded from their tariff reductions. The most important implication these negotiations have for South Africa, apart from the possible benefits that may be derived from the tariff reductions of the developed countries for our export trade, is the reduction of preferential tariffs on the British market which will result from the British Government’s linear tariff cut. It is clear that any reduction in the British most-favoured-nation customs duties will bring about a narrowing of the margins between these tariffs and the lower preferential tariffs. The attitude we adopt to this matter has already been sated clearly and fully to the British Government. Our approach to this matter is that, if the British offer of a linear tariff cut were to lead at the negotiations to a reduction of those preferences which are valuable to our export trade with Britain, the British Government has to support us in our attempts at obtaining adequate compensation for these preferential reductions by way of reducing the customs duties in respect of other developed countries or products essential to our export trade.

When, approximately six weeks ago, the Kennedy negotiations entered the final stage, our deputation, which looks after the Republic’s interest at these negotiations, was reinforced considerably. As is commonly known, agreement has not been reached among some of the leading countries involved in those negotiations, and the outcome of these negotiations is still in the balance.

The hon. member for Parktown referred, inter alia, to our exports. I want to point out that as far as our exports are concerned, they have increased considerably. In 1965 they increased by almost 9 per cent on the figure for the previous year. In 1966 they increased by 13 per cent. Exports increased in spite of the fact that our country was subjected to severe droughts. Over the past two months, as compared to the first two months of last year, there was an increase of approximately 26 per cent in our exports. That is a gladdening development and therefore we expect our exports this year to be considerably higher than those of last year, mainly as a result of the increased production of diamonds, the larger maize crop and the increased production of copper and refined copper. We find, therefore, that there is a substantial increase, which is higher than the target that was set in the economic development programme. But the Government is thoroughly aware of the necessity of distributing and encouraging our exports, and that is why provision was once again made in the latest Estimates for tax concessions of 12½ per cent to promote exports. Our export credit insurance provides our exporters with very useful services. In addition there has in recent years been development in the new field of export credit finance. This, too, is financing which is being undertaken by the I.D.C. with funds they obtain themselves, and it does in fact not involve any capital outlay on the part of the State. Our trade representation has also been extended to South America and Greece, and other extensions are also being envisaged.

The hon. member for Parktown referred to Safto. Safto occupies a place in our export promotion. There were problems in that limits had not been properly defined, but I can tell you that as a result of a commission that was appointed by my predecessor, that difficulty has now been eliminated. Limits have been defined. They can rely on a fixed contribution of approximately R100,000 a year for financing their extensions. Safto did good work in the past and I hope that it will continue to do so by supplementing the work done by the Department.

Reference was also made here, inter alia, to border area development. The hon. member for Constantia wanted to know in what way this 10 per cent rebate was granted to industries bordering on the Ciskei and the Transkei. The fact of the matter is that this is a 10 per cent rebate that is granted on Railway tariffs. When undertakings situated between the Ciskei and the Transkei export products, they have to do so under a declaration supported by an audited statement which is then submitted to the Railways. Then the Railways convey those goods at the normal tariff less this 10 per cent. This 10 per cent rebate is not brought into account, but in respect of that rebate for which those industrialists are not assessed, they, in turn, send an account to the Department which compensates the Railways. Therefore it is an attempt at shortening the distance. The fact that they are given assistance as regards the railage of such goods, has the effect that the high costs involved in such distances, are eased for them. This is assistance which is given to all industries in that area, including East London, King William’s Town, Queenstown and other areas.

The hon. member for Pietermaritzburg (District) had many misgivings about industrial development as far as assistance was concerned, particularly in the border areas. I cannot quite understand the hon. member. He had so many misgivings about development in the border areas, and yet Pietermaritzburg is one of those very cities which has been given a very great deal of assistance by the I.D.C. That is an area in which considerable border area benefits have been granted to industries, and he ought not to be quite unfamiliar with that, because he himself had this report of the Permanent Committee and I think that he quoted from it. On page 20 you will see that over the past two years 12 new undertakings as well as two Indian undertakings have been established in Pietermaritzburg, while there is a prospect of a few more being established in future. Ten undertakings expanded in that period. Obligations in respect of border area assistance to some of these 11 undertakings, are in the form of loans or rented buildings, and they already amount to approximately R2.5 million, while industrialists have invested R27 million in this area. [Interjection.] The report also indicates how many persons have been employed there, but I want to point out that as a result of the fact that the Midmar Dam has also been built there, development has been stimulated in that area. Pietermaritzburg is situated very favourably. It is close to the harbour and on the main line to Johannesburg, and it is close to Bantu areas. Labour, water and industrial sites are available there. I visited that city last year and the mayor of Pietermaritzburg took great pride in showing me their industrial areas and pointed out the development that had taken place there since the I.D.C. and also the Permanent Committee had rendered border area assistance. I really think that the hon. member for Pietermaritzburg (District) should not have so many objections against industrial development and the assistance that has been rendered for the purpose of establishing industries where sufficient labour is available.

He referred to the cost of establishing industries, but have you ever worked out the cost of establishing industries in other areas? Is there any reason to believe that it costs less to establish industries in urban areas than it does to establish them in border areas? Did he take into account the entire infra-structure? Is the cost involved in the entire infra-structure in these urban areas not just as much if not more than that in some of these other areas? There are factors which have to be taken into account, because in this respect we are not dealing with full occupation of those areas that have been planned. Many of them still have potential that has to be developed. It is only then that one will in fact gain a better understanding of what the return of these investments in border areas will be. [Interjection.] According to this report the additional employment owing to the establishment of more industries and the expansion of existing industries, is already being estimated at 4,300 persons, of whom 2,400 are Bantu and 1,271 are Asiatics. That is only in respect of Pietermaritzburg. [Interjection.] The hon. member wants to know what it is in respect of the entire country. He put that question and he even used it in his argument, namely that it was impossible to determine it for that area. But I can only say that industrial development costs money. I can also mention other figures, but it will not be of much use. I tried to ascertain what the additional investments are in the economic infra-structure in this country. I took the period 1961 to 1963, and at that stage the investment in the infra-structure was R2,562 million, and during that period the total employment in industries in this country, in the private sector, increased to 260,000. It works out to this, namely that the cost of the infra-structure is almost R10,000 for every person who is taken into service.

Reference was also made here to the film industry. The hon. members for Parktown and Constantia referred to the film industry. They wanted to know how the subsidies were granted. May I just mention the basic principles in accordance with which the film industry is assisted. It was rightly remarked here that this subsidy was increasing steadily. In 1957 the subsidy was R21,000; in 1960 it was R88,000, and this year provision is being made for a considerably bigger amount, R518,000, I think. It is therefore an increasing expenditure. This subsidy was introduced for the purpose of stimulating a film industry of our own. There are certain requirements that have to be met before the film industry can be assisted. The first requirement is that the manufacturing company must be a person or a company that pays income tax in the Republic; in other words, he must be resident in the Republic. The second requirement is that at least 75 per cent of the expenditure in regard to salaries and wages payable in connection with the manufacture of the film concerned must be paid to South African subjects. These are the basic requirements that are set. Immediately after the release of the film, it has to be registered and the Department has to be furnished with particulars in regard to the expenditure involved in the manufacture thereof, etc. The subsidy granted to an industry is calculated on the basis of the revenue it obtains from the exhibitors of its films. On the first R50,000 gross income the manufacturer receives from the owners of cinemas, he does not receive any subsidy. In respect of any amount by which the gross revenue of a film exceeds R50,000, the manufacturers receive a subsidy of 44 per cent, but the total subsidy they receive may never be more than the total cost involved in making that film. There are several film companies. In these Estimates provision is being made for seven of them. It is not customary to mention their names, but I can tell the Committee that three of them received approximately R120,000 to R150,000 each. That is in respect of various films of which they have given notice. Then there are four or five smaller undertakings which receive smaller amounts. The whole idea here is to stimulate the manufacture of films in South Africa. They do not receive any subsidy on films which are sent abroad and shown there. Nor is the revenue they receive from abroad taken into consideration for the purposes of this subsidy.

I have now tried to indicate what the general principles are on which this subsidy is granted. I think that the film industry in this country is in fact expanding, and it is being stabilized to a certain extent. In many countries it is customary to help the film industry in some way or other, be it as regards the provision of studios, processing, or whatever. The time has perhaps arrived that we should see, with a view to the measure of stability the industry has attained, whether other forms of assistance should not be rendered as well.

And television?

The hon. member for Parktown also wanted to know why the Film Board was no longer submitting reports. The Film Board falls under the Minister of Education, Arts and Science. Therefore I cannot say when the next report on that Board will be submitted.

Reference was also made here to the shipbuilding industry. The hon. member for Constantia wanted to know according to what principles the shipbuilding industry would be assisted and to whom that subsidy would be paid. The Government has decided to assist the local shipbuilding industry and to do so in the form of a subsidy for the purpose of encouraging the construction of smaller and larger vessels. In the case of vessels with a carrying capacity of 60,000 tons and more, the Government may pay a subsidy of up to 35 per cent of the accepted contract price to the shipbuilder. In the case of vessels with a carrying capacity of between 500 tons and 6,000 tons, a subsidy of up to 25 per cent may be paid on the same basis. The subsidy may vary between 25 per cent and 35 per cent. It will depend on an inquiry which will be made in every case.

Who makes the inquiry?

We are still negotiating with the shipbuilders in order to determine in detail how this calculation will be made, but the idea is that the inquiry will be made by the Board of Trade and Industries, which will then advise the Government. The subsidy will be limited so that the net profit made by the shipbuilder, after payment of income tax and after the subsidy has been added, will not be more than 5 per cent of the share capital appropriated for the building or the repair of such vessels. At this stage it is impossible to say what the amount will be, but provision has been made in the Estimates for R1 million for this purpose. This is merely the beginning of this undertaking. We realize that competition in the shipbuilding industry is very stiff, but we nevertheless feel that the time has arrived to enter this field gradually and to encourage the shipbuilding industry in this country.

The hon. member for Constantia also wanted to know why provision was being made in the Revenue Account for R1 million for the I.D.C. This provision in the Revenue Account is in respect of the construction of a dam at Makala on the Kunene River, in Portuguese territory. It is connected with the generation of power up in the north. This amount also appeared in the Estimates last year, but at that stage the investigations had not yet progressed so far that that amount could be paid out, but we expect the investigations to progress to such an extent that it will in fact be possible to pay out this amount this year. The other R18½ million for the I.D.C. is being provided for in the Loan Account.

The hon. member for Lydenburg referred to the potential of Steelpoort. It is correct that the Steelpoort-Roos-Senekal area is an area with great potential. They have many important minerals there, such as chrome, vanadium and also anthracite. Those raw materials belong to R.M.B. Alloys, Southern Cross and Highveld, and at the moment they are being processed there. It is perhaps a pity that the processing has to take place in Middelburg and Witbank and not in that area, but unfortunately we have to contend with the fact that most of those raw materials are being used in these undertakings. It will not be possible to move these undertakings to the Steelpoort area now. The ferrochrome industry is one which has very great potential. We feel that a great deal can be said for the principle that industries should establish themselves in those areas in which the raw materials are available. But these undertakings which are processing the raw materials are capital-intensive undertakings. I do not think that these undertakings will move to other sites, but it may nevertheless happen in the future that a certain measure of refining will be undertaken in that area. The Government is at present considering new points of growth and seeing whether these benefits that are provided for the purpose of decentralizing industries should not be provided in other areas as well, and when these matters are considered, the merits of the Steelpoort area will also be submitted to the committee of inquiry.

Mr. Chairman, in the time I have available I should like to address the hon. the Minister in connection with the establishment and development of industries and their geographic and physical planning in relation to the border area on the borders of the Ciskei and the Transkei. We have listened attentively to the Minister’s exposition, and at this stage I do not want to express an opinion on the question of whether the Industrial Development Corporation is expanding its empire too much or is exceeding its terms of reference. We know that in many cases, if the Industrial Development Corporation had not rendered assistance, some of the existing industries would not have existed. I was particularly attentive when the hon. the Minister mentioned the production of our industries, namely 1,600 industries with a production of R3,000 million a year and an employment figure of one million. Then I ask myself, and I also ask the hon. the Minister: How many of these are in the border area of the Ciskei and the Transkei, which have a population of 2½ million, of which a very large portion is unemployed at this stage? I want to read what the hon. the Deputy Minister of Bantu Administration and Education—I am sorry that he is not here at the moment—said in the Eastern Cape some days ago when he made a speech there at the opening of a part of an industry. He said this—

This relates to the Ciskei only. The report continues—

He also said—

I should very much have preferred hearing the Prime Minister give us the assurance that this will not happen. At this stage there are thousands of redundant labourers in the Ciskei-Transkei complex. In previous debates we mentioned the reports which came from areas such as Sutterheim and others which border on the Transkei. It is not a question of being afraid that there will be redundant labour or unemployment. They are there. It is not a question of being afraid, because there is a large number of unemployed idling about there. I think it is the Government’s bounden duty to see whether they cannot do something in this regard, not only to see to it that industries go there, but also to see to it that those people get employment. At this stage I am not going to comment on legislation which has not yet been introduced in the House in connection with the methods of compelling industries to go to certain areas. I want to put it most pertinently, however, that I cannot regard it as the work of the I.D.C. alone to try to attract industries or persuade them by other means to go to those areas which proportionally have not nearly their share of the industrialization, in relation to the population groups which are in those Bantu areas. Two and a half million of these people who are localized there at the moment or who are to be localized or who are in reserves are in that one area. I would suggest that the percentage of industries, and the hon. the Minister has already mentioned this, is alarmingly small in terms of the population there and in terms of the unemployed population in those areas. A great deal has been said about the localizing of a third Iscor, and I do not want to go into that in detail at this stage, namely about the pros and cons of ores, railage, distances, shipping, etc. A committee has been established with a view to that. I just want to put it to you, and I should like to bring this home to the hon. the Minister, that when there is a harbour which is not fully utilized, when there is a large population group whose labour is not utilized or is not fully utilized, when there are in fact ores and other minerals which may be exploited in a certain area, then it is surely the duty of the hon. the Minister and his Department, irrespective of any legislation which may be placed on the Statute Book, to set the example there as a Government, not only through the I.D.C. as such, which will not always have the capital available to undertake these large-scale operations. Then it is the Government’s bounden duty to establish, if not an Iscor, then some other heavy industry of a similar kind, or heavy industries, in that locality, because through this example they will attract the industries to that area and it will be possible to industrialize that area in the proportion in which it should be industrialized, having regard to the facilities and the labour available to it. I want to repeat this. That area has the characteristic requirements for industrialization. It is situated on the coast and it has a harbour which is not utilized as it should be, a harbour which lends itself to further expansion. It has the materials for industrial operations, namely, in the first place, the manual labour. Whether it has basic materials to the same extent, I am not prepared to argue, because there are other areas which have the basic materials closer at hand and in larger quantities. The fact remains, however, that from the humanitarian angle of industrialization this area has a claim to industries second to no other area in the Republic. There can be no doubt in this regard. I want to make a special plea to the hon. the Minister in this regard, that regardless of the assurance which the hon. the Deputy Minister of Bantu Administration and Education wants to give us as to how industries are to be localized there to absorb labour in future, we all know that at this stage they are not nearly adequate. We also know that there is some reluctance among prospective industrialists to take their industries to those areas. I have said before that we are grateful for the assistance rendered by I.D.C. to industries that want to go there. We are grateful for the concessions and the Railway rebates made available to that area, but only through an example and the active establishment of State-aided industries on a much larger scale than the I.D.C. could ever undertake, will proper industrialization take place there.

In the few minutes available to me I just want to raise one other aspect with the hon. the Minister. This relates to machines of diverse kinds which are assembled here and which are exported, but which are not manufactured here, and to the availability of their spare parts as such. It happens every day that large machines which are used during harvesting time break down, and then the owners are sometimes unable to obtain spare parts. Sometimes the facilities are not adequately centralized to enable them to get them, so much so that individuals on the Rand fly down to Cape Town to see whether they cannot get a spare part for a machine which has to harvest the grain crop. The same complaint is raised in connection with machines for earth-moving which are imported complete or which are partly assembled here. People find that many man-hours are wasted on getting the necessary spare parts for these heavy machines which are imported or which are partially assembled here, and if they are available, they are not adequately centralized to enable a man to get the spare parts at his nearest depot. [Time expired.]

Mr. Chairman, I am sorry that some while ago, when the hon. the Minister started speaking on border industries, I was called away for an urgent trunk call; consequently I do not know what he said in that connection. I have listened to the hon. member for East London (City). I want it placed on record here that he welcomed the concessions made to industries in border areas. This is the first time that has happened in this House in the six years I have been here. He says he has always done that. Why, then, does he contradict the hon. member for Pietermaritzburg (District), who tried to ridicule it only Friday? Why does he contradict the hon. member for Pinetown, who said only Friday that industries should be decentralized on an economic basis? Now he is pleading for so-called uneconomically subsidized basis. The Opposition should adopt a clear and unequivocal attitude in this regard. I want to promise them that I am going to Queenstown during this recess. I am also visiting King William’s Town and East London. I shall go there and tell the people what they will get as a result of the policy of that side of the House—nothing, literally nothing. The hon. member for Pietermaritzburg (District) got up on Friday afternoon, and I have his speech here. The hon. member said—

That is what he said. He also said—

He spoke of the “unfair competition created by the payment of lower wages and other concessions”. That is what he said on Friday. Now the hon. member for East London (City) says …

Read what is written there. Do not start from the middle of the sentence.

I shall read what the hon. member said. Here it is—

That is, the Ministers and we on this side of the House; I do not wish to distort the hon. member’s words—

Read on.

*Mr. J. J. LOOTS:

… that the industrial pattern of the country is being disrupted, that unfair competition is created by the payment of lower wages and other concessions have all been considered of minor importance.

He says all that just to disparage the concept of border industries and to ridicule it. Now the hon. member for East London (City) is very sorry and is deeply concerned about the few industries in East London and in the border areas. But all these years they have been presenting them in a ridiculous light to the industrialists of South Africa. Is that not so? I do not want to say something which is not true, but I sit here and I listen to them. All these years they have been making the industrialists of South Africa suspicious of this concept. The hon. member for Pietermaritzburg (District) went further. He referred to all the money which has been spent, and he said—

I shall not read this, but according to him it is almost R400 million. Is that not absolutely ridiculous? Do you know what it has cost the country so far? It has cost R4½ million in tax concessions. That is what it has cost the country. The rest is money which has been invested there and money which has been spent on providing power. Rates are paid for that Dower. The investment in buildings must also be taken into consideration. The private industrialist who invests there will get all his money back. In connection with the houses which have been built there for Bantu, I just want to say that if we had not built them there, we would have had to build them in Johannesburg or in Cape Town. They had to be built somewhere. All it has cost the country so far is R4½ million. The hon. member did not say that it was an investment of R400 million. He said it had cost the country that much. That is the biggest nonsense I have ever heard. They do all this to cast suspicion on the concept of border industries in South Africa. Now I should like to ask that side of the House a question. Are they in favour of a border industry going to Queenstown? The hon. member for Pietermaritzburg (District) raised these matters. He actually went to the trouble of hunting for them in this report. In connection with the 10 per cent concession on railage, I want to ask whether the Opposition is in favour of or against it. I am asking them a straight question. Are they or are they not in favour of this 10 per cent concession on railage? Why does the hon. member for Transkei not speak up? The hon. member need only say “yes” or “no”. What about the hon. member for Pinetown? What does the hon. member for East London (City) say? Well, it is on record that when the Opposition was asked such a reasonable question in respect of their opinion on the 10 per cent concession to industries on railage of products exported from the Ciskei complex, they did not have the courage to say “yes”. Are they in favour of our granting these additional allowances for investment in buildings and machinery? Hon. members should say “yes’ or “no”. Let me tell you, Sir. Hon. members are no more in favour of decentralization than the man in the moon.

How would hon. members on that side decentralize industries to Upington, for argument’s sake? How would they decentralize industries to George, for argument’s sake? How on earth would they do that if these measures are not acceptable to them? That is why I ask: Which of these measures are acceptable to them and which ones are not? If these measures are acceptable to take industries to Upington or to George, or to Zastron, for example, why are these measures not acceptable to take industries to Queenstown or King William’s Town or East London? Sir, the Opposition must realize that at this stage they have exposed themselves to grave criticism. I want to tell hon. members that during this recess I shall make a point of attacking them on this matter in East London (City) and East London (North) and in King William’s Town and in Queenstown, until we have chased all of them out of those places.

Mr. Chairman, the hon. member for Queenstown has spent a long time—ten minutes exactly—trying to debunk this figure of R400 million that was put forward as being the cost to South Africa of the development of border industries. He has made the greatest mistake of all by substituting for that a figure of R4½ million. Anybody with any sense at all knows that the cost of the application of the ideological policy of the establishment of border industries has cost South Africa far more than R4½ million. They know too that in the future it will cost very much more. But this hon. member has tried to make politics out of this matter. He said that he would tell the people of King William’s Town, Queenstown and all these areas what we say. This hon. member knows as well as I do what our policy is. We believe in the decentralization of industry and we have always said so. We have never fought against the decentralization of industry, but that is the intelligent decentralization of industry. Taking all the factors concerned with the intelligent decentralization of industry into account, we believe in it. We should like to see it take place. But let this hon. member get up later when he has an opportunity and justify just one of his border industrial areas. Let him get up and justify just one of them as compared with the policy of the decentralization of industry. He will not do so. He will not be able in one of those areas to justify his figure of R4½ million. I challenge him to do so.

I should like to move on to another subject, if I may. I want to come back to the question of shipbuilding. This Minister, in his reply to the hon. member for Constantia, said that he has set aside a million rand for the subsidizing of shipbuilding in this country. He is going to subsidize to the tune of something like 35 per cent. That frightens me, because if this Minister knows anything at all about shipbuilding, he will know that subsidizing on a 5 per cent basis, let alone a 35 per cent basis, will require very much more than the million rand he has set aside.

The very size of this figure makes me fear for the future of shipbuilding in this country. Let us just go into it further. I should like to know the Minister’s policy in regard to the whole of the ship-building industry. We have heard so much, we read so much in the newspapers, but very little of it has come from this Minister or his predecessor. We had the Norval Commission that went into the siting of the ship-building industry and recommended certain amalgamations. But what in fact has happened? Little or no research that I know of is being done as to whether a shipbuilding industry in South Africa can compete with the other countries which are ship-building in a big way, whether it can compete with the U.K., Ireland, Holland, Scandinavia, Italy, the U.S.A., Spain and—above all else— Japan. What can the Minister tell me about the state of the South African ship-building industry, what has got to be put into it, what plans are being made to enable it to compete with Japan? Because he should know, as well as I do, that when our ship-building industry can compete with the Japanese ship-building industry, then, in fact, it has “arrived”. But until he can tell me what steps he is going to take to enable us to do that, then I am afraid that I have not much confidence in the future, and the indications are that we are just going to fiddle around building small ships and bits and pieces.

I want to come to another point in regard to this matter. To me there seems a distinct tendency by the Minister and his Department to lean towards one company in the development of the ship-building industry. This is a very bad thing. The hon. member for Kensington raised the matter in connection with the I.D.C. When the I.D.C. takes an interest in a company, it tends to get favoured treatment, and I believe that this is what is happening in the ship-building industry in South Africa to-day. I want to remind the Minister that it is the older companies who built up our good name for ship repairs and established the ship building that we do now. It was the older companies of South Africa. They are the ones who delivered quality jobs. They have done quality work which has brought people back again. It is this Government that has done all the discouraging by refusing the use of the dry dock and other facilities from time to time.

When it comes to the competitive aspect of the business, let me remind the Minister that one of the older companies put in the best tender for the repairs of the Molmohus which was disabled in Durban not so long ago. It was not done by this company which the Government is pushing. I have nothing against the company which I believe is being favoured. But I want to remind the Minister of these facts. I will illustrate what I mean. I asked a question two weeks ago about a research vessel for the C.S.I.R., and a part of the question went as follows: “Whether tenders had been or are to be invited for the construction of the vessel, and, if not, why not?” The reply to that particular section was: “No, in view of the fact that it is a research vessel which must comply with exceptional requirements, and as no ship-building consultants for this type of vessel is available in this country, it has been decided to obtain a tender by means of negotiations.”

Now, who up to now has built the Administration’s vessels that have been built in this country? Is this a slap in the face for the other companies who were not negotiated with? How can this Minister say that one company alone in this country is capable of building this vessel? As a matter of fact, I would say this company is the least capable of all because it has had the least experience! But he switches in his answer not to the abilities of the company but the fact that there were no consultants. What consultant was used, and could the same consultant not have been used with some other company doing the building? Surely to goodness, in the interests of South Africa and the South African ship-building industry this should have gone out on tender? I quote this, not because I want to hammer this particular aspect, but I felt that I must give just one point of proof for my statement that I believe that this hon. Minister and his Department are leaning towards and favouring one company in the South African ship-building industry.

I want to know what steps the Minister has or is taking, or plans to take, to make us competitive? Does he honestly and sincerely believe that we are not just “playing around” with the ship-building industry here at the moment? Are we in fact making any progress?I cannot see any being made. We have shipbuilding yards at the head of the bay, but everybody is approaching it very cautiously indeed. And I do not blame them. This company, which I believe is receiving favoured nation treatment, has a huge place—it incorporated another company in a manner which was questioned at the time by the shareholders, as the Minister will remember, so that it could get a bigger share of the wharfage than any other company. That is fair enough, that was a company deal, there is nothing the Minister can do about that. But to the best of my knowledge, that place is empty, it has no orders. Is that perhaps why it was given this order for the C.S.I.R. vessel, to keep it “ticking over” in the meantime? Let the Minister tell us if this is the case. We do not want to see the company fold up; we are not attacking it. But we believe that in furthering the ship-building industry in South Africa the Minister has got to give consideration to all the people concerned, including those people who have financed themselves in the past, and I want him to tell me how he believes that by ploughing R1 million into the ship-building industry in South Africa, he is going to put it on its feet and give it a future. [Time expired.]

Mr. Chairman, unfortunately the hon. the Opposition tried to flog two horses in this debate. They were very reluctant horses; one was border area development and the other was the I.D.C. But those horses are both dead. Now that the Minister has replied to that, hon. members on that side are silent, so much so that the hon. member for East London (City) got up and said, “Yes, master, I accept everything now, and thank you very much”. Now the hon. member for Pinetown comes along and tries to sow suspicion against the shipbuilding industry in the Republic of South Africa.

The hon. member for Umlazi, not Pinetown.

I beg your pardon, the hon. member for Umlazi. Oh well, no apology is needed, because the hon. member should never have been here! But as for the words used by the hon. member fox Umlazi to-day in respect of the shipbuilding industry, we heard the same words in this House with regard to Iscor and Sasol. We begin on a small scale, we cannot compete with England, but now we hear the word “Japan” instead of the words “Mother England”. We are now hearing a new word, and that is Japan.

I mentioned five countries.

I want to ask the hon. member for Umlazi to give us a chance to see what we can do. At this stage he must leave the matter there. We shall show him how to handle this matter as far as the shipbuilding industry is concerned, and in a few years the hon. member will also get up to thank the hon. the Minister for what has been done for the shipbuilding industry. [Interjections.] The hon. member will not do that. [Interjections.]

I want to leave the hon. member there. I want to say to-day that we owe the hon. the Minister and his Department a great deal of gratitude for the great work done in the Republic in the field of industrial development. To-day we see South Africa, on the southern tip of Africa, as one of the giants as far as industrial development is concerned, and we are very grateful for that. However, we cannot sit back, rest on our laurels and say that we have reached perfection. We should now look beyond our borders as far as industrial development is concerned. We can no longer restrict ourselves to our own borders and say that we are satisfied. We must further expand the knowledge and skill that we have built up in the past years. Our next important forward step in the field of industry will be to concentrate on the export trade. We heard from the hon. the Minister about the tremendous progress made by Safto as regards our export trade, and we are also grateful to see what they are doing along those lines, and we are glad to hear that there will shortly be 65 trade commissioners throughout the world. But at present my main concern is this. Where we are now on the brink of entering the export trade in a much wider sphere, the question we should ask ourselves is this: Have our industries really developed to such a stage that we are able to compete with our articles on the overseas market? Is the worker attuned to competing with the worker abroad? Are our articles of the same quality, so that we may say proudly that this article was manufactured in the Republic of South Africa? I should like to ask this question very seriously. Does the employer offer the worker the opportunity to increase his productivity? As far as the past is concerned, did the employer always concentrate merely on the technical and economic problems of the industry, and pay little attention to the adjustment of the worker? It was generally held that labour followed the law of supply and demand; in other words, that labour is like an article which may be bought on the open market. I want to say that it is a misconception that the machine plays the most important part in the production process and that the worker plays a minor part. There is no machine which can work quite independently of the human being, and no production process which can take place without human labour. If a worker cannot or will not give his best production must, therefore, necessarily decrease. The production capacity of the worker is the key to any further success we may achieve in future, locally as well as abroad. This afternoon I want to ask organized industry this serious question: What are they doing to improve the production capacity of the worker, from the highly paid to the low paid one, in the factory or in the office? Are they pursuing any organized policy? I want to submit this afternoon, in view of the fact that we have achieved such vast successes in the local industrial field, that if we want to compete with the outside world we shall have to improve the production capacity of every worker in the Republic, and we can do so only if we create the opportunities for them to do so. In view of the fact that the Government has spent large capital amounts in every large town to establish commercial and technical schools, I want to plead that those schools should not merely be used to teach certain courses. I want to plead that at night those schools should not be in darkness because there is not activity in them. I want to plead with commerce and industry to use those schools to give organized after-hours training to every worker in the Republic. Then, and then only, can we boast that our workers are properly trained and that they can yield the necessary production which we expect of them. We cannot expect them to perform this essential task if we are not prepared to help them obtain the necessary training. It is of no avail that only the select “top boys” be given these training courses. Every worker must get them.

The Natives also?

Yes, in their homelands they must get that training. It is of no use that that hon. member tries, while I am pleading for this important matter, to drag a red herring across the floor. They are so obsessed with those unnecessary questions they are always asking in this House, instead of listening to the idea I want to convey. I want to plead to-day that we should give every white worker an opportunity to get the necessary training, and that every non-White should also get it in his homeland, in order that when the Republic enters the overseas market on a large scale we shall be able to supply articles of which we can all be proud. Unless we succeed in improving the productivity of each and every worker, we can forget about going ahead, because this is the key to our success in future—productivity, hard work and saving. Then only can we create a future for everyone in this country.

The hon. member for Brakpan has given us some excellent advice. He says that the workers should be educated. We agree with what he says about the necessity for further training. But I want to come back to the Minister, who gave a reply to our remarks about the Industrial Development Corporation. At no time during the speeches of the hon. member for Constantia and myself did we say that the I.D.C. was going beyond its legal status. We made it perfectly clear that it was not exceeding its powers, but what we did suggest, and I particularly suggested, was that it was interfering too much in the private enterprise field and that at least we should have the opportunity of examining what the I.D.C. was doing. So far the hon. the Minister has given us no adequate reply on that. He has only given us the usual reply we got from his predecessor, namely that we knew nothing about it. The hon. member for Queenstown suggested that we were dealing with border industries in two voices, but of course that is quite wrong because no hon. member on this side has suggested that we were in favour of uneconomic border industries. We are in favour of the decentralization of industries where it can be justified on economic grounds, and our criticism of the IT).C, was that the Minister indicated in his opening remarks that the I.D.C. should go into the private enterprise field on a business basis, but we are not satisfied that when it goes into border industries it does so on a business basis. [Interjection.] In response to that loud interjection, I would just ask the hon. member not to talk so loudly. Perhaps he should talk to some of those people who are on the point of losing their jobs in the Grahamstown Potteries. Perhaps they will answer him with equal enthusiasm, because here is a case, the Grahamstown Potteries, where the I.D.C. lent the company some money and it now is on the point of going into liquidation. I do not want to discuss the private affairs of the company here, but there have been occasions where the I.D.C. has failed. If the hon. member is able to read the balance sheet intelligently he will find that it shows that they have certain shares which have had to be written down because certain losses have been experienced.

Nobody except hon. members on the Government side is going to suggest that every single investment that the I.D.C. has made has been a profitable one, nor are we on this side going to suggest for one moment that every investment that the I.D.C. has made has been an unprofitable one. I think we have paid adequate tribute to the work the I.D.C. has been doing, but I do submit that despite the Minister’s answer there is a case to be made out for more adequate examination of the work that is being done by the I.D.C. Sir, hon. members opposite talk about efficiency in industry and ‘he hon. member for Brakpan talks about the training of workers. As far as industrial development is concerned. South Africa is a very young country. Take shift work for instance. How many of our factories are working two or three shifts a day?

What provision is being made, particularly in the border areas, for working 24 hours a day? Once you start using modern technical machinery, then it is not the intensive labour factor which is of importance, it is the capital cost of the machinery, and when you go to the textile industry and other industries using expensive machinery, then it is essential, if you are going to get industrial efficiency and lower costs, to keep those machines going as long as possible. Anybody who has any experience of what happens in oversea countries realizes only too well that if you are going to have an efficient organization you must have the maximum production and use your machinery to its full capacity. We feel that in too many cases in this country it is the labour intensive factor which is the deciding factor. What happens when you establish a factory near a Bantu area and after a time more modern machinery has to take the place of the original machinery and you then reduce the number of Bantu employees? What happens when you get completely automatic machinery? Does that industry still stay there? Does it still get favoured-nation treatment; does it still get all the benefits of border-area industries? That question has not been answered by anybody on that side. Sir, if I wanted to get the benefits of border-area industries, I would start a border-area industry with the maximum number of Bantu labourers, and then introduce modern machinery. If I were quite unscrupulous, I would be entitled, as the law stands to-day, to engage the maximum number of Bantu—say a 1,000 Bantu—to begin with. I would start a factory, get the buildings up, get the benefits of railway rebates etc., and then substitute the original machinery for modern machinery and then cut my labour force down from 1,000 to probably 200 or 300.

Then you will come back to the Western Province.

That is what businessmen do all over the world, and the Government has given no reply to that at all; they have not even thought about it. As far as industry is concerned they can only think in terms of Black and White. Very few of them know anything about modern industrial techniques; they only think in terms of Black and White. When the hon. member for Brakpan talks about further training, I wonder if he can tell me whether there is any technical training being given to non-Europeans in any one of the border-area industries; whether there are any technical classes at all, whether there are any facilities for them, whether any training scheme is being contemplated.

In the homelands.

Where?

That reminds me of another question unanswered by the Minister. Can the hon. the Minister give us any explanation as to why in the border-area developed by the I.D.C. at Hammersdale, not a single house has been built for the Bantu? Was that nart of the planning or was it not his responsibility? Sir, provision was made for 7,000 houses for Bantu but not a single one has been built. Is that planning—is that balanced plan-nine? Sir, we cannot wait until a new Minister of Planning is appointed before the building starts. This scheme has been going for six and a half years; what a backlog this Minister has to face! While we recognize the work that the I.D.C. does and while we recognize their managerial skill and technical know-how, there is a case for inquiry, particularly when we find that certain industries that have been assisted by the I.D.C. have fallen by the wayside or, alternatively, when we find them going into mutual funds or when we find them competing with existing industries on a basis which raises queries in the minds of the people running those industries. Sir, when the people who are concerned over this matter give us information it is our duty to raise the matter in this House.

Sir, while we are dealing with the Minister’s Vote, we would like the Minister to give us some information with regard to the work of the Board of Trade. At one time we had the impression that investigations by the Board of Trade preceded the establishment of most ventures. In recent years we have gained the impression that the investigation into the economics of industry has been done more and more by either the I.D.C. or by agents of the economic council. It does seem to us that we should be given some further clarification in regard to the work that is being done by the Board of Trade. The Board of Trade was a strong body at one time, but they seem to have been pushed into the background recently and we would like to have some further information regarding the work of the Board of Trade.

Then finally there is the question of price control. I would like to know from the Minister what staff he has to deal with this question of price control. While there may be some necessity for price control in certain fields, price control may fall into disrepute to a certain extent if there is not adequate evidence that he necessary staff is available to deal with the matter. I think that a great deal can be done in this connection by means of some Ministerial statement to discourage people who take advantage of their position to charge higher prices, but at the same time it is no good having price control legislation unless the Minister can show that the Price Controller has teeth. It appears to us that the Price Controller’s teeth are pretty blunt. [Time expired.]

I do not wish to follow the hon. member for Pinetown in his argument; he posed certain questions and I leave him to the tender mercies of our capable Minister. Sir, in the limited time at my disposal I wish to draw the attention of the hon. the Minister to the trials and tribulations and the plight of the general dealer in the platteland. The trader in the country is the forgotten man of South African society. He is and has always been the Cinderella in the field of commerce. The traders’ position in the South Africa set-up to-day reminds me of the portly old stationmaster who once had to face that great Australian fast bowler, Lindwall. It is told that Lindwall once visited a small town where he was a complete stranger. He wandered around the streets and came across the village green where two sides were being picked for a friendly cricket match. The fielding side was a man short; the captain came up to Lindwall and asked him whether he would join in the game. Lindwall agreed and told his captain that he was an opening bowler. He was duly handed the ball; he opened the bowling and facing him was the old stationmaster, broad in the beam, slow of eye and slow of reflexes. Lindwall bowled the first ball but there was no reaction whatsoever from the stationmaster; he remained completely stationary. He did not even lift his bat out of the block hole. The second ball was bowled and the same thing happened; the third ball was bowled with the same result; there was no motion at all from the stationmaster and then, Sir, Lindwall bowled the fourth ball and the umpire shouted “no ball”; slowly the stationmaster rose from his stance, he turned to the wicket-keeper and said: “I knew he had no ball”.

Sir, the general dealer has not seen or tasted the fruits of the economic boom experienced by this country during the past decade. It passed him by without his even noticing it. On the contrary, his future and his very existence has been placed in jeopardy by circumstances over which he has no control. On his own he cannot weather the storm and he has received little or no protection or assistance to enable him to do so.

He is like the Transkeian trader.

As a result of this unhappy state of affairs, many retailers in the country have been obliged to shut up shop. They were obliged to put up their shutters not only to their own loss and detriment but also to the loss and detriment of the communities which they served so faithfully and so well, and the tragedy, Sir, is that these communities simply cannot do without these businesses.

People living in the larger centres cannot appreciate the loss a small town suffers when a single business is forced to close down. In such a retail shop six or seven people are usually employed. They are usually married and have children who attend the local school. But with their departure they leave a gap which is never filled again—it affects the standing of the town, the status of the school and lends impetus to the growing stream of Whites flowing from the platteland to our large industrial centres. No one can tell me that this tendency is not to the detriment of South Africa. Whilst this is the case we should fight this tendency with all the forces at our command. We can do this by assisting the general dealer on the platteland. One of the obstacles the general dealer of the platteland has to face is caused by our magnificent highways. These highways have brought our larger centres, the chain stores in those centres, within easy reach of each and every plattelander who, the moment he is in possession of the necessary cash, takes his lorry—which he is by law entitled to do—and goes to a chain store in a larger centre, where he buys clothing, groceries and his farming equipment. But when his banking account is in the red he buys on tick from his local dealer and this general dealer has to wait months, sometimes years, for settlement, if settlement is effected at all. Meanwhile this trader is forced to take an overdraft with his bank in order to carry on his business and on this overdraft he has to pay an exorbitant rate of interest. Over the past years these small traders rendered Yeomanlike services to South Africa—not only to their community. They assisted farmers who were in the grip of a terrible drought and they supplied harried farmers in their needs on credit. I know of cases where traders had to register bonds on their immovable property to enable them to supply these needs on credit. By doing so they rendered a wonderful service not only to their own community but also to South Africa as a whole. If they did not do that the State would have been called upon no doubt to do further financing. So, I submit that these small traders should get financial assistance in times like these.

Then there is the prevailing system under which general dealers licences can be obtained. This also militates against the small trader’s chance of success and survival. Any Dick, Tom and Harry can to-day procure a general dealer’s licence regardless of the fact that he may not own a shop or that he may have no stock at all. He simply gets this licence to enable him, his family and his friends to buy direct from a wholesaler. We also find large companies which, having staged with a different objective, to-day are usurping the terrain of the general dealer with impunity. Take, for instance, the woolbrokers. Originally these companies were floated to arrange for the marketing of the farmers’ produce. To-day, however, they sell all types of merchandise, such as motor cars, clothing—the lot! What is more, they sell on a commission basis. They carry no stock and have invested no capital. They run no risk because they have a lien on their clients’ produce. I do not want to derogate from the wonderful services these firms have rendered to the farmer. However, I feel they should be told that they should get back to their original task. I feel it is the moral duty of the Government to assist these people, these general dealers in the country. In other countries of the world legislation has been passed to assist the small business. In the United States of America, for instance, the relevant Act is called the Small Business Administration Act. The purpose of this is to “aid and protect the interests of small business concerns; to make loans to them; and to make grants for studies, research and counselling concerning the management, financing and operation of small business enterprises”. Surely, Sir, the time has arrived that we here in South Africa too should see to these people and help them in recognition for what they have done for their respective communities and for the country as a whole.

I am in full sympathy with the hon. member for Graaff-Reinet when he speaks about the plight of the trader on the platteland. They are serving a very useful purpose and have supplied the needs of their respective communities, needs which were absolutely essential. So, everything the Government can do to assist these people will be welcomed and will be a move in the right direction. I was wondering whether, instead of decentralizing industries for ideological reasons, certain of these industries should not be sited on these platteland towns to help not only the traders but everybody in that area.

But I rise to say a few words about something which has not yet been mentioned in this debate. This debate so far has ranged over high finance, siting of industries, shipbuilding, the I.D.C. and all that. I want to raise a matter which affects every man, woman and child—everybody from the highest to the lowest. This matter is the prices charged by cinemas in this country. I think the public is really being exploited to-day in this field. Exorbitant prices being charged not only by the established cinemas, but also by the drive-in cinemas we have all over the country. It is quite true that the Price Controller last year froze cinema prices, but somehow or other cinema owners seem to be able to get past this regulation.

Take, for instance, the case of a small cinema in the northern suburbs of Johannesburg, which has been brought to my notice. It has been there for many years. It was operating for a long time and was getting disreputable and in need of repair and a face-lift. The prices charged by that cinema for the past couple of years was, I think, 39 cents. But then the owners got busy and licked it into shape by effecting a few repairs here and there. To do that the cinema was closed down for a few months, but immediately it reopened the top price went up to 73 cents. It went along with these new prices for some time until the Price Controller froze cinema prices. But immediately this cinema was closed again, and was given a real face-lift. As a matter of fact, it was very nicely repaired with new seats and all that. But what happened then? The price of the top seat went up to R1.45. The excuse, I understand, is that for certain shows, called “road shows”, these high prices are being charged. But it seems as if the tag “road show” is being applied to practically every film of any consequence and then these high prices are charged.

The position is that the cinema to-day is in such a position that people are more or less obliged to go there for entertainment and recreation. The people in the big cities living in flats and hotels and so on have no television. They have to go somewhere some evenings of the week. They are not allowed to gamble, so what do they do? They go to the cinema. When people complain about the high prices for cinema seats, the management merely says: Why worry? The house is full. Of course it is full. There is nothing else for the people to do.

Not only are the prices too high, but I also think the programmes we are forced to watch at some of these cinemas are shocking. One can go to most of the cinemas in Cape Town to-night, and what does one find? A mediocre film. The usual top prices are charged, and not the “road-show” prices. Whenever there is anything worth seeing, one has to pay “roadshow” prices, namely R1.45. One goes to an ordinary show and spends from 25 to 30 per cent of the time watching either an advert or the next attraction, whatever the next attraction might be. When one goes to the next attraction, it is worse than the present attraction, but the prices are still the same. As I have said, this is in spite of price control. I hope that the Minister will find some way of getting the price controller to close the loophole, whether it is a “road-show” loophole, or whatever it is. We must remember that the cinema industry overseas has to compete with television to-day. They have to make very good pictures. We ask ourselves: Where are those pictures? Why, when those good pictures come to South Africa, must the Republic of South Africa pay the very top prices? I hope that the Minister will either use his influence to close this gap, or use his influence with the Minister of Posts and Telegraphs to give us television at least. Then we shall not be forced to attend these indifferent programmes and pay through the nose for them.

Mr. Chairman, I am in the fortunate position that I do not have to go to the bioscope or to cheap entertainments and pay for them, because we get them free of charge in this House. Of course, one envies the people in the rural areas, because there the United Party has been thinned out to such an extent that they probably have no entertainments there, because they do not even have a United Party meeting from time to time any more.

I should like to take this opportunity to refer to a statement which the hon. the Minister of Economic Affairs made at Bellville (recently. I think it was on 13th April when the hon. the Minister made that statement. It related to the possible location of the third Iscor. The Minister also referred to it in this House last Friday. I think it was significant that he made that statement, because there had been a good deal of confusion. Many people were under the impression that the location for the third Iscor had already been determined. That misunderstanding has now been cleared up. Amongst other things, the hon. the Minister stated that as a result of representations by the management of Iscor, it had been approved that the existing Iscor unit at Vanderbijlpark be expanded to the amount of R26 million. This will mean that after the completion of the present expansion the production of Iscor at Vanderbijlpark will be increased from 2.9 million tons of ingot steel a year to 3.65 million tons. This means an increase of approximately 25 per cent on the present production. Sir, you will therefore allow me, as the representative of the constituency concerned, to convey my sincere gratitude and appreciation to the hon. the Minister of Economic Affairs, who also had a great deal to do with this in his previous portfolio, as Minister of Planning, and also to the Cabinet for this important announcement, particularly in so far as it affects Vanderbijlpark. Upon the erection of the second Iscor at Vanderbijlpark, adequate land was purchased to provide for this announced expansion as well. There is also enough land for housing for the additional staff which is to be employed. Not only has adequate land been bought, but the necessary services are also there. In other words, the existing machinery can be used without substantial expansions and costs to meet the needs. Also with a view to our present shortage of manpower, and particularly technicians, it is important that the Government has consented to this expansion at Vanderbijlpark; this will mean that with the present technicians and manpower, or with a minor increase in technicians, we shall be able to maintain the increased production without splitting the existing resources and knowledge.

It is important that the Government has consented to this expansion, not only far the reasons given above. Steel production has become one of the most important cornerstones of our economy and it will continue to play an important part in future. These approved expansions will also meet our ever-growing demand most expeditiously, without causing any delay regarding the third Iscor. When Iscor was planned originally, a production of 180,000 tons of ingot steel a year was planned. You will remember very well how pessimistic the United Party, in particular, was about the erection of Iscor, and how they fought the establishment of the steel industry. Now, once the present expansions at Iscor in Pretoria and Vanderbijlpark have been completed, those two factories should produce 4½ million tons of ingot steel a year. With the consent that has now been granted, this should increase to 5¼ million tons a year, as against the original estimate of 180,000 tons. Even this is not enough. For the financial year ended 30th June, 1965, a total of more than 3,200,000 tons of steel was sold in the Republic of South Africa, of which Iscor produced virtually 24-million tons, which represented 66 per cent of the consumption. Plus-minus 400,000 tons i.e. approximately 13 per cent of the consumption, was delivered by other South African producers. The remainder, namely 21 per cent, i.e. approximately 600,000 tons, was imported during that year. These figures show how important it is that the erection of the third steel factory should be proceeded with immediately. To me it is most important that we should not only meet our own needs, but that we should also consider exporting. Our steel is of such a nature and of such a quality that we can compete on any market in the world. It is therefore important, not only as regards our economy, but also as regards our security and viability. A country that has a backbone of steel cannot be bent or forced onto its knees by some other country. For the sake of our economy’s viability and to reduce our vulnerability it is most essential that we should get the third steel factory as soon as possible. We are therefore also grateful for the statement made by the hon. the Minister. If we consider what our own steel industry means to us in the economic field, you will agree with me that it is most important that we should expand our steel industry even further. The total net value of products sold during the past financial year amounted to R160 million. It is therefore clear in what a parlous position we would have been at present if we had not had a sound steel industry. In what position would we have been if we had had to import these products? I do not have the latest figures available, but I know that during 1964 this industry employed approximately 14,500 Whites and 14,000 non-Whites. The wages and salaries paid to those persons in the industry amounted to more than R48 million. In 1928, when Iscor was established, we had no men and women in South Africa who had knowledge of steel manufacturing. No, to a very large extent we had to rely on the knowledge and experience of other people. To-day the position is quite different. Although we have a certain shortage of labour, we do have the qualified men, South Africans, our own people, who know the industry in its finest details and who can even give guidance to the outside world as far as the steel industry is concerned.

I want to refer to the latest process which has now been put into operation in Vanderbijlpark and has been patented by Iscor, and which is most important. This process, which has been patented and which in future may be used throughout the world, is a South African process. It shows how far we have progressed in the field of steel manufacturing. I do not want to plead for the further expansion of Iscor at Vanderbijlpark to-day; I think that would be selfish. But, Sir, I want to plead that the erection of a third steel factory be expedited.

Mr. Chairman, the hon. member for Vanderbijlpark has touched upon the question of the siting of the third Iscor. Those of us who come from the Eastern Cape were pleased to see that some of the sites under consideration included Port Elizabeth and East London, but I think that we were disturbed at the very latest newspaper reports. According to these reports, the newspapers claimed that they had heard unofficially that East London’s claims will no longer be considered. I do not have the cuttings before me, but these are the latest newspaper reports over the week-end. I saw it on Friday or Saturday.

It is a lot of nonsense.

Well, I am very glad to hear that from the hon. the Minister, because East London has many of the facilities required for a successful industry in that line, including good railway communications, a port, adequate water and an adequate labour supply. If the Minister really wishes to get an industrial growth-point under way there, that is the place where he should site the new industry.

The hon. member for Graaff-Reinet—I am sorry that he is not here—made a good speech. Although I did not agree with everything he said, I should like to congratulate him on his speech, because this is a very real problem in the country towns indeed, in the absence of an over-all decentralization policy. The disappearance of the small trader and the small shopkeeper is a very real problem in the country town. Last year the hon. member for Graaff-Reinet was involved in a somewhat diverting argument here with, I think, the hon. member for Port Elizabeth (North), when he spoke on the question of the siting of a new teachers’ training college. This is an important point, because in these small towns one of the principal sources of economic activity is the wages paid to State employees in those small towns. I want to mention to the Minister that I hope that it will be the policy of the Government as far as possible to site Government institutions—not industries only— in the smaller towns where the land is not so expensive and where they can well be sited.

The matter which I want to deal with this afternoon is a matter which affects a small town, namely the principal town in my constituency, Grahamstown, and it is going to affect it very severely indeed. I am referring to the imminent closure of one of the very few industries we have there, namely a firm known as Grahamstown Potteries. An application has been made by the chairman of the board of directors of that company for it to be placed under provisional liquidation. This has been granted, and the final return date is the 1st June. This is a matter of urgency, but already some 147 Bantu and Coloureds have been thrown out of work there and 24 Whites have lost their jobs. This is happening in a town where there has been for several years—in fact, since the collapse of the pineapple boom —large-scale unemployment among the non-European population. This town has, apart from an electric light bulb factory, virtually no other industry except those based on the only raw material available in that area, namely high-grade clay. I am speaking under correction, but if my figures are wrong the Minister can correct me, but I am told that the investment of the I.D.C. in that firm was something in the region of R90,000. I do not know if that is correct, but I am told that that was more or less the case. In February of this year the firm asked the I.D.C. for further assistance but the request was turned down.

I am not a shareholder in this company and therefore I do not know what domestic difficulties they might have had, but I do know that one of the main troubles of the company in the past has been the fact that some years back they were placed on rail rate No. 1; they had to pay rate I when they railed their principally hotel chinaware, and also souvenirs, such as ashtrays and so on, and at one stage about 24 per cent of their produce was exported. Naturally, these goods break very easily, and with the long rail distances packaging has become a very expensive part of their costs. Secondly, the Road Transportation Board, although it allowed them to have their products carried for about 100 miles by road, has refused absolutely to allow them to use their own fleet to carry their products to places like Johannesburg and Durban.

This is happening to a town, as I said, whose only source of raw material is clay, and in fact, more than 2,000 tons per month of that clay are being railed every month to industrial users in other parts of the country, including places like Boksburg, for processing there. This is possible because the rail rates for the raw material are very much lower. It is also happening at a time when, according to the latest report of the I.D.C.—and I quote from page 16 of that report—the following is taking place in another area—

Well, here on the one hand we have a town which does not benefit under the Government’s border industry policy because it is some 30 miles away from the nearest Bantu reserve— I am referring to Grahamstown—and cannot enjoy benefits under that policy, a town where there is unemployment and where an industry which has been partly financed by the I.D.C. is being forced to close down. In fact, there is very severe unemployment in that town. On the other hand, we have a similar industry, also supported by the I.D.C. in a border industry area at Rosslyn, some 12 miles from what is one of the fastest growing cities in our country to-day, namely Pretoria. I say that it is a nonsensical sort of decentralization of industry that that sort of thing should be allowed in our country when we know of the problems which the small towns have, problems which were dealt with graphically by the hon. member for Graaff-Reinet. I hope that the hon. the Minister will make a statement about this matter and that this industry will not be lost to a town which needs industries desperately.

Mr. Chairman, I want to use this opportunity this afternoon to express my sincere gratitude for what the I.D.C. has done for us and is still doing, and for what we expect it to do in future. Despite remarks by hon. members on the opposite side, I want to give the hon. the Minister and his officials the assurance that the willing ear which has always been presented to every concern which approached them is highly appreciated.

In the short space of time available to me I want to take this opportunity to refer to parts of our Fatherland, particularly to the part of our Fatherland which I represent in this House of Assembly, namely the south-eastern region of the Free State, which have not been taken along in this tremendous development in the Republic of South Africa in the past years. Those regions were not taken along in the tremendous development which we experienced in the Republic of South Africa in recent years. The part of the Free State which I represent is one of those regions which may be called the backward regions in our development process. But we are grateful to be able to say that in the light of this Government’s policy there is hope for these regions, too, in the years ahead. But we are discussing the decentralization of industries, and where this is coupled with certain factors, we are grateful that in the south-eastern regions of the Free State we also have parts which comply with some of those requirements for the decentralization of industries and for the establishment of border industries. In the first place we refer to the Herschel Bantu homeland, the most northern district in the North-Eastern Cape, which on one side borders on the Orange River and which is also adjoined by the Lady Grey, Barkley East, Aliwal North, Rouxville and Zastron districts. We just want to bring this one fact to the attention of the hon. the Minister, and that is that this Bantu homeland, Herschel, has an almost exclusively rural population. In this entire region there is only one little village, in which only 447 people live, of whom only 116 are Whites. That means, and this is an important point, that in the Herschel region only .8 per cent of the population is urban in the broad sense of the word. The rest. 99.2 per cent of those people in the Herschel homeland, rely on agriculture for their livelihood. If we consider that in conjunction with this other figure, namely that in the Herschel homeland the population density is almost 90 persons per square mile, compared with the. average of 33.8 persons for the entire Republic, then we realize that here we have one of the most densely populated homelands, almost three times as densely populated as the rest of South Africa. In that homeland we have the tremendous labour potential. When the Tomlinson Report was published there were already almost 4,000 superfluous families in that area. In round figures we could say that in this homeland alone we have a labour potential of more than 20,000 at present. If we take into account that as a result of various factors, which we have already brought to the notice of the standing committee and which we therefore do not want to mention here, we have the position that influx control no longer allows people to move freely to the urban areas, and in the rural areas of the South-Eastern Free State the non-Whites have increased alarmingly in recent years. Because the South-Eastern Free State is attuned to making a living from agriculture only, we found that the white population of that region is decreasing tremendously. Now we want to make this other very important statement. I view of the fact that at present this Herschel homeland is compelled to make an existence from agriculture alone, the position has arisen that conservation farming is virtually impossible there. If we bear in mind that this homeland is one of the most important catchment areas of the Orange River and of the dams on that river, and if we bear in mind that as a result of this over-settlement by non-Whites, with the concomitant erosion which is brought about there, then it is imperative that for the protection of the dams in the Orange River something should be done in this homeland to alleviate the problem of silting in that river. On the other hand, we have an area which borders on this homeland. We are thinking particularly of the town of Zastron in the South-Eastern Free State, where there are certain factors which comply with the demands made of a region if it is to get industries located in it, and we are grateful to be able to state once again that all those factors are represented there. We have the labour. Herschel is also a homeland which has abundant water, and apart from what can be taken from the Orange River itself, the town of Zastron also has a water scheme at present which costs more than R180,000, for this kind of expansion. Escom power is also supplied in this region. The region also had adequate transport facilities, roads as well as railway transportation. It is for this reason that we make a serious plea that the Minister and his Department should consider establishing border industries in this left-behind region as well. We could have said a great deal more about this matter, but then we would duplicate, because we want to convey our sincere gratitude to the Minister and his Department for the visit the standing committee paid to the region for which we are now pleading. Our sincere request is that this matter should receive attention, and if it is at all possible, that in this homeland with its adjacent regions, with special reference to the circumstances as Contained in the report submitted by us to the standing committee, it will be ensured that employment will be provided, considering that we experience labour pressure not only in this homeland but also in the white region of the South-Eastern Free State, because of these people who as a result of circumstances come from that homeland.

We have heard pleas from both sides of the House for Government assistance and for industries to be established in the various constituencies. The hon. member who has just sat down has made a plea for a border industry in his area. This is a most important Vote. We are asked to vote something like R29 million on Revenue Account and R14 million on Loan Account. This Department is responsible for the commercial activity of this country, it has to make contacts overseas, and it has to try its best to further our export markets. But this Department, first of all, has to lend itself to furthering the Government’s political policy. It must firstly apply the ideological policy of the Government, and only then can it get down to the promotion of industry. When the Minister of Finance was still Minister of Economic Affairs he said that the Government was prepared to bend the nation’s economy for the sake of the policy of apartheid and separate development. That is the great obstacle that economists have to overcome in this country before they can get down to the facts of the economy. The industrialist is prevailed upon to modernize his factory and to introduce a high degree of mechanization in order to reduce the demand for Black or semiskilled labour, but the industrialist is not a philanthropist. He runs his business on economic lines because he wants to remain in business. When an industrialist wants to establish an industry, he has to overcome the obstacles of a political economy and then he has to face a serious shortage of skilled labour in this country, mainly through the shortsighted policy of the Government in stopping our immigration policy and not training our youth. The industrialist is restricted in his use of labour. He cannot make use of the full labour resources in this country. That is one of the obstacles he has to put up with, and then he is told to increase productivity and to compete on the overseas markets.

Now, we in the Western Cape are faced with the Government’s political economic policy more than anywhere else in the country. We have the removal of Bantu labour which is being carried out at present, and the Minister has said that the Government means business, and they are doing it. Native labour can only be brought into the Western Cape on permit. Before the Government thought of this scheme of removing the Bantu from the Western Cape, they should have thought of some scheme for replacing that labour, but they did nothing about that. They just said the Coloured man would replace the Bantu, but they have done nothing about it. The former Minister of Coloured Affairs told us that the Coloureds from the rest of the country would be brought to the Cape. This was tried by the Railways but proved a failure, and the Minister of Transport has to bring in a lot of Bantu labour from the territories to do his work here. The Western Cape has a large fishing industry. Most of the boats are manned by Bantu. We have a very great tourist potential also. But what has happened there? As a result of the restrictions placed on Bantu labour, it is very difficult for hotel proprietors to recruit waiters, so much so that one finds to-day that one hotel after another is closing down. Then, Sir, we have a very large fruit and wine industry in the Western Province. I do not have to tell hon. members what difficulties those industries experience when they require labour. Then we have a very big textile industry here and we must not forget that we also have a very large seaport. These are all growing industries. In order to keep industries in the Western Cape going, we are forced to live with the Government’s policy, but whilst the Government’s policy is to remove Bantu labour from the Western Cape, they have made no arrangements for the replacement of this labour. Sir, the Government, in its endeavours to further its border industry policy, of offering all sorts of incentives to industrialists to establish their industries in border areas. I would like to quote a few of the means adopted by the Government to encourage the establishment of industries in the border areas—

Sir, under the planning Vote we are going to be asked to vote R1 million to assist border industries; under Loan Vote J, Commerce and Industries, we are asked to vote something like R13 million for the I.D.C. for the development of border industries, and on the Revenue Vote we are asked to vote R210,000 as a rebate on railage in respect of articles manufactured in the Transkei and Ciskei areas. Sir, if the Government is serious in its policy of removing the Bantu from the Western Cape, then the Government should declare the Western Cape a Coloured border area. We in the Western Cape would like to have the facilities which are being offered to the Bantu industrial areas. After all, if the Government is going to remove our Bantu labour from the Western Cape, then the Government must assist us by providing other labour. We in the Western Cape will have to import labour and the Government should assist us by offering us rebates on rail rates. We should be given the same facilities which are given to the border area industries. [Time expired.]

The hon. member for Salt River has now also been sent in by his team to bowl, but I fear that the balls he delivered here were all wides. This question of the removal of the Bantu from the Western Cape and particularly from its industries has been discussed repeatedly in this House. I think the hon. member for Salt River is wide off the mark if he claims that at this stage it is still essential to have Bantu labour in the Western Cape to the extent to which it is employed at present. On a previous occasion I pointed out that there were only 22,820 Bantu labourers in secondary industries in the Western Cape, and that the proposed reduction of 5 per cent a year would mean only a minimal reduction in the manpower of industries in the Western Cape. On the other hand we have the alarming figures in respect of the Coloured population of the Western Cape that it is estimated that approximately 100,000 economically active Coloureds will be added between the years 1970 and 1975, and 114,000 between the years 1975 and 1980. It is only with deep concern that I think of the larger number of 674,000 economically active Coloureds who will be added between the years 1980 and 2000. When I look at those figures, I want to ask the hon. member for Salt River and other United Party members to plead rather that here in the Cape Peninsula and in the Western Cape new points of growth should be created for new industries. The hon. member also mentioned that the hotel industry was finding it particularly difficult to obtain Bantu to serve as servants in hotels. Mr. Chairman, in the University College of the Western Cape, which has been established for the benefit of the Coloureds, there is the opportunity for Coloureds to be trained in any industry. On occasion I have suggested that Coloureds should also be trained for the hotel industry. I may tell the hon. member that if hotel proprietors in the Western Cape made more use of the facilities which have been provided by the College and which are still at their disposal, they should have no difficulty in recruiting trained Coloured labour for the hotel industry.

Sir, I do not want to spend any more time on this matter. I feel that enough has been said about this. I want to refer to the present general shortage of manpower, a fact which has frequently been underlined. Here I am referring in particular to a speech made last month by the managing director of the Industrial Development Corporation, when he addressed the annual meeting of the Business and Professional Women, and pleaded that more use should be made of female labour in South Africa. On that occasion he pointed out that only 18.8 per cent of the women in South Africa were economically active. This is one of the lowest figures in the Western world. The other figures mentioned by him I do not want to repeat to-day. I just want to make the plea to-day that the hon. the Minister of Economic Affairs should try to create a new attitude to female labour in South Africa. I think that what we should try to eliminate in particular is the prejudice which is still prevalent in certain fields against the employment of female labour. In the professional field, particularly in laboratories and other places where research work is done, the notion has apparently taken root that women do not belong there. If one considers what has happened in other industrial countries, one finds that this is the very field in which the woman can make her greatest contribution to the development of her country.

Mr. Chairman, I also wonder whether the time has not come that we should see whether the services of women in our public service and elsewhere cannot be enlisted in half-day occupations, so that the woman who still has a family to look after but who spends a certain part of the day sitting at home in frustration, may give her services to public departments and also to commerce and industry. Then I also feel that it is high time the discrimination against married women, particularly in certain professions such as education, was removed. I know there are certain concerns which take a strong stand against that, but if we consider the role played by the woman in education in other great industrial countries, then it is clear that this is a profession which should be taken up pre-eminently by women, particularly also because a woman is the most suitable person to handle a developing child, and secondly because it is excellently attuned to her other tasks, namely to look after her family. If we could succeed in increasing this low figure of 18.8 economically active women in South Africa I believe we shall be able to meet the expected shortage of white labour to a large extent. I also want to point out that the argument which should be of predominant concern to us is that every woman who is employed in the place of an immigrant, for example, is a person who already has accommodation and for whom the basic services of the State have already been provided. To us as a country it is therefore much cheaper to use the services of that woman, for whom those services have already been provided by the State.

I also want to break a lance for the better utilization of our aged persons and in particular our pensioners. It appears to me as though it is at present the approach in our economic sphere and also in our Public Service that a person’s economic life ends at the age of 65 years. We must bear in mind that at present it takes much longer before a person reaches the stage where he starts becoming economically active, and that at present it takes a long time, particularly in view of specialization in commerce and in industry, for a person to acquire the degree of skill which actually makes him an asset to our economic life. We must also bear in mind that the human life-expectancy is increasing more and more, and if all these factors are taken into consideration, I am convinced of the fact that we should make much more use of our pensioners and aged persons in South Africa. We should not adopt the attitude that once a person has retired his labour may be employed as cheaply as possible. I think it is actually a crime against the State that these people, when they are still willing to work, are not encouraged to continue making their powers available to the State. Then I also want to point out that if channels are created to enable these people to remain economically active we save them from frustration on the one hand, and at the same time we also save the State a great deal because these are people who already have housing as well as the other basic services that the State has to provide to its population. In employing the services of these people we are not only using the accumulated knowledge collected in their lifetime, but it is much cheaper for us to use their services rather than other manpower.

Sir, whenever we discuss the question of Bantu labour in the Western Province, we must never forget that the hon. the Minister of Transport, who is in charge of the Railways, has not experienced a great deal of difficulty; he simply takes the Bantu labour he requires here in the Western Province and he even makes provision for the housing. He solves his problem by deciding that he must have Bantu labour.

On the question of the employment of married women, I can only say that we have discussed this many times in this House. When the hon. member for Vasco discusses the teaching profession, as he did, the trouble is that the Government and the Provincial Administrations have not made provision for the employment of married women as teachers. They say that when the teacher marries she must give up her profession, unless she is prepared to come back in an inferior position and be employed in a temporary capacity. I think that is not a fair deal. A woman who is employed in any other walk of life or occupation can always continue with her employment. A secretary or a typist in an office can carry on with her profession, but a teacher, who is a trained professional person with two, three or four years’ training is told that she cannot be employed as a teacher when she marries. I quite agree with the hon. member for Vasco that we must make greater use of the services of these people.

Sir, I would like to come back to the report of the Industrial Development Corporation because I think the hon. the Minister can help me in understanding part of it. The report is well drawn up but it does not give the detailed information I think we should have.

I should like first of all to discuss finance, the profit and loss account and the balance sheet. The I.D.C. presents what one can call consolidated accounts. We get no information about the detailed enterprises in which the corporation is interested. The accounts we have here are the consolidated accounts for all their activities. I see that their profit was over R3 million. I understand that the R3 million has gone to reserve account. That raises a very interesting question. Does the I.D.C. pay any dividends or part of its profits to the Government because there has never been a time when the Government requires money more urgently than it does now. Judging from the Budget Speech, we could deduce that the hon. the Minister of Finance is finding it difficult to get money at present. Therefore, I should like to know whether the profits are paid back or whether they are always ploughed back into the industry itself. I quite realize that there is naturally not very much in taxation. There cannot be because the interests of the I.D.C. are in other companies who have already paid taxation. That is my first point and I should like to have that information from the Minister.

I now come to a section of the report on which I think we should have a good deal more information. I refer to the textile industry and the interest that the I.D.C. has in that industry. I cannot do better than quote certain extracts from the report. It occupies a very important place in this report. It says:

I think the reason for that must be that we are already well provided through private enterprise with sufficient companies at present. Then is says:

I hope no one is evading the tariff. I take it that that would be illegal. There may be means of circumventing it. I should like to know what is meant by “evading the tariff”. Are there companies in South Africa which evade the tariff? Then I come to this very important statement. Being in a position to spread their overheads, the textile companies which are engaged not only in the production of poplin, but other products as well, are able to spread their overheads over the whole industry and their other interests. The report says this:

I should like the hon. the Minister to tell us about this catastrophic impact on the Cyril Lord mill and to what extent the I.D.C. was involved because, as I say, it is public money and we should like to know what the position is. I come now to another extract on the same matter:

That has been our complaint about the report. We do not receive sufficient information. We receive an indication without the facts. Tell us what losses were incurred. I should like to know that. Then again:

I like sober optimism and sober optimists but I do not like the other kind of optimism, the optimism that is not sober. I should like to know what the prospects are and whether we have been involved in any losses. By “we” I mean the Government that has invested the money. I come now to the part which tells us how the situation is to be saved:

I do not like these appeals to the Government for extra protection. This is our own enterprise—therefore we deserve to get further information. I remember saying to the predecessor of the hon. the Minister that when they were dealing with Mr. Cyril Lord they were dealing with a very astute Lancashire businessman. As a matter of fact, one has to get up very early in the morning if one wishes to get the better of a Lancashire businessman. He has a reputation throughout the world and, therefore, it will be interesting to know how he is faring in South Africa. These are facts we should have because the information given here is suggestive only. The facts are not here. So, we should like to get this information in some detail, if possible, from the hon. the Minister.

I do not want to reply to what the previous speaker said. What is more, he was not the only one to speak about that matter but a few other members also did so and consequently I have every confidence to leave it in the hands of the hon. the Minister to reply to them. The few minutes which I have at my disposal I should like to devote to our fishing industry. However, I do not want to speak about our lobster industry nor about our pelagic fishing industry. I prefer to restrict myself to our white fish industry. In this connection there are some facts which are very clear—in the first place, that the rise of the Republic of South Africa as a major fishing country is in full swing at present. I say that against the background of what Arnold Toynbee recently said during a congress on food. He said that by the year 2000—i.e. within the lifetime of the younger members of this House—world food production would have to increase by 200 per cent if the growing millions of the world were to be fed. It is common knowledge that protein foodstuffs are the most scarce and consequently the most expensive. Along with this fact, we must also bear in mind the fact that only 29 per cent of the globe consists of land and that 71 per cent is covered by water. This brings us to realize that in the future the oceans will have to play an even more important role as regards our food supplies.

Another fact of which cognizance has to be taken, is that South Africa is one of the few countries with rich fishing resources. Now it is so that our white fish industry has been shamefully neglected over the past number of years for the sake of concentrating on the production of fishmeal from the controlled species of fish, namely the oil-fish. That can naturally be explained on the basis of the higher profitability of fishmeal production from oil-fish and the fact that fishmeal factories are based on land. Then it is also so that our white fish industry has not received the attention it should have received because of the tremendous capital investment which it requires. A factory for the production of meal from white fish requires a capital investment of between R2 and R3 million. Another fact is that in comparison with other countries of the world South Africa has a much lower fish consumption. Ghana, for instance, has a fish consumption of 39 lbs. per person per annum and Zambia has a fish consumption of 37 lbs. per person per annum, as against South Africa’s average fish consumption of 9 lbs. per person per annum—4.4 lbs. per person in the case of our non-Whites and approximately 30 lbs. per person in the case of our Whites. If we can succeed in raising the fish consumption per person amongst the non-Whites in South Africa to the same level as that in Zambia or Ghana, we shall be able to sell 250,000 tons of fish locally. If one sees this against the background of the fact that 733 foreign fishing trawlers made their appearance in Cape Town and Durban in 1965 and that ± 137,000 tons of fish were transferred to other boats or shipped from here, whereas our own exports of white fish amounted to 10,137 tons, the picture becomes very clear in our minds that the white fish caught in our fishing ground by foreign trawlers are used for nourishing other nations while we virtually have the lowest fish consumption per person in the world and have a potential consumption of 250,000 tons amongst our non-Whites.

A next fact is that we do not manufacture white fishmeal. All fishmeal manufactured by us at present is manufactured from the pelagic species of fish, the species of oil-fish. This white fish industry is experiencing tremendous difficulties. To mention one example, whereas we supplied two-thirds of the Australian market with stock-fish up to the year before last, Japan, with its cheaper processing methods, lower standards of living and more rationalized fishing industry, has virtually deprived us of that entire market. Furthermore, prices in Australia have decreased by one-third. The Japanese transfer smoked stock-fish to other boats here in Cape Town and export it, in competition with us, as a result of an effective, rationalized industry in the hands of the Japanese who are more experienced than us. That entire quantity of fish is caught in our fishing grounds or off the coast of South-West Africa. Furthermore there has been a tremendous decrease in prices with which we cannot compete. Countries such as Germany, Belgium, Spain, Israel and Greece are coming to fish in South African waters to an increasing extent. They have increased their import tariffs. The E.C.M. countries which doubled their import tariffs on frozen fish in 1967 compete with South Africa. We experience a tremendous vacuum as regards our local market. In spite of a 10 per cent preferential tariff which we enjoy in the United Kingdom, other fishing powers, such as Spain and Japan, are pushing us also from the United Kingdom and the European markets.

That is not all. Fragmentation is the order of the day in our white fish industry. A whole number of small companies with a duplication of knowledge, technical knowledge, capital expenditure, buildings, etc., contribute to an uneconomic state of affairs which prevails in our white fish industry at present. In respect of marketing and exploitation we cannot speak of rationalization and efficiency within our white fish industry.

We experience yet another difficulty. The exploitation of fishing grounds is governed by a whole number of conventions of marine law, inter alia, one held in Geneva in 1958 which I call one of the basic and important conventions. In terms of those coventions and as a result of the position arising from them, a member country can only compel another country to enter into negotiations with it in regard to the protection and exploitation of any fishing grounds near its coast or within its territory if that member country concerned is exploiting its own fishing grounds to the full or to a certain extent. As regards our white fish industry we cannot enter into negotiations with any member country in terms of, I think, section 4 (1) of one of those conventions. At the moment I do not know what that convention is called. But the fact remains that in terms of that international convention South Africa does not have the right, as a result of the stage of development of its white fish industry, to have discussions with any other country in regard to the protection and the exploitation, the over-exploitation or the under-exploitation, of its fishing grounds. Having regard to this enormous potential which we are not exploiting, the enormous internal market and the thousands of tons of fish which are being taken from our coasts by foreign trawlers, I want to ask to-day whether the time has not arrived for us to give much more attention to the development of our white fish industry and whether there should not be an investigation into its possibilities. [Time expired.]

The hon. member for Carletonville must please forgive me for not following him in what he has just said. As the member for Carletonville he must know more about the fishing industry than I do, coming from East London.

I should like to refer to an allegation made earlier this afternoon by the hon. member for Queenstown. I immediately want to say that that was unworthy of the hon. member. I know that he does not suffer from a short memory, unless it is a convenient political memory. He ought to know full well that this side of the House has repeatedly advocated the decentralization of industries on an economic basis. If they can be border industries, so much the better. If he does not want to accept that, I refer him to Hansard (Col. 4559) of last year, where I said the following. I was dealing with the threat by the Deputy Minister that industries would be forced to go to the border areas. I said—

The plea referred specifically to border industries and industries being forced to go to any particular area. In addition the hon. member asked whether anybody on the Opposition side objected to a railage rebate on the products of factories from that area. That related to its industrial complex. To me that is such a silly question. If any area which is becoming industrialized is situated further away from the consumer’s market than any other area in South Africa, will there be people who will be so silly as to object to rebates in order to compensate the industries for the distance which they are situated away from the consumers market? Why does the hon. member hurl these allegations at this side of the House whereas he, as well as I, and everyone in this House advocate the decentralization of industries on an economic basis? What are the standards we want to apply? What standard does one apply to know where an industry ought to be situated? Does the following not relate to that? There must be raw materials, power, water, labour, transport and other facilities. In addition to these things, there are also political considerations, namely the grouping of the population, strategic situation, defence and what that involves. Surely these are the foundations on which the establishment of an industry should rest. My plea was precisely in regard to these considerations. That border area as such has water and power. Obviously I did not mention these two things. But I want to know what other area can offer a better water potential than the drainage area of the Drakensberg range in the Eastern Cape. I should like to tell the hon. member for Graaff-Reinet something in connection with the dealers. If an industry can be established at Graaff-Reinet, Cradock, or wherever, on the basis of these same considerations and that complies with this kind of requirement, inter alia, decentralization with a view to avoiding large concentrations, there can be no objection. But where one has these facilities in an area such as that, the position changes. I repeat them: The power, water, the locality, the harbour, the labour resources, to a certain extent the raw materials, and a rebate on railway tariffs. Those are the predominant reasons why we advocate that the industries should go there. I have spoken of the Ciskei-Transkei complex. I have not even mentioned that they need necessarily be within the corridor. To me, however, it is important that the State should take the initiative in this connection and I have advanced my reasons for that. I have said that it is not the task of the I.D.C. with the funds at its disposal—where we are concerned with many millions of rand for such an industry—to create such an industry which may employ 25,000 Bantu, for example, over a period of years. Doing so should preferably be the privilege and duty of the State. It ought to do so. It should place some bait there to draw other industries. If I am wrong in my views, the hon. the Minister must tell me where I am wrong, apart from the admission I have already made, namely that the necessary raw materials for a steel industry may not be present there. However, I insist that even though the necessary raw materials for a steel industry may not be present, the State should see to it that some other large industry or industries will be established there if the predominantly economic and political arguments which may be advanced are insufficient to ensure the establishment of an Iscor there, because otherwise, Sir, it will be impossible to develop that area. The political party to which we belong has nothing whatsoever to do with granting the inhabitants of the country and the inhabitants of the reserves a living. Indeed, that is the duty of the Whites in this country. To whatever party one may belong, one still has to see to it that employment opportunities are created. And if such employment opportunities can be close to the Bantu, they are so much better than when they are far away from him. If the factors of humanity and political policy, as such, are the cardinal considerations, then to my mind that particular area is the area where future development has to take place. I say that in spite of the allegations made by the hon. member for Queenstown—in any event, I think he made them with his tongue in his cheek. If it will be possible for that development to take place there without any force being exercised and with the State taking the lead, that would be so much the better.

Mr. Chairman, it is very interesting to listen to how the hon. member for East London (City) is welcoming the development in the border area. I think that it is also clear to the hon. member that the development which is taking place there in East London and in that area would not have taken place if it had not been for the assistance rendered there, if it had not been for the activities of the I.D.C. there, and if it had not been for the facilities made available there by the Railways Administration. These are not all economic considerations, as in the case of the assistance which was given, but development was made possible because we went out of our way to make matters more attractive for these undertakings. I am thinking now of the 10 per cent assistance, loans and low rates of interest which were granted to the East London City Council, and so on. I want to point out that although the I.D.C. had such a great share in this development because it took the initiative, the private sector also played a very important role. Very often the private sector follows the initial example of the I.D.C., and also when assistance in respect of border areas is given. We see this at Pietermaritzburg, at Rosslyn and even at Hammarsdale. We find there that the private sector is entering the picture. I think that a great deal more progress could by this time have been made in the border areas if it had not been for the consistent opposition from that side of the House to border area industries and the establishment of industries in the border areas. We would in fact have made much more progress.

Why?

I want to say that the rendering of assistance in respect of the decentralization of industries is not something unique to South Africa only, it is even taking place in highly developed industrial countries.

We admit that, it is also our policy.

It is nothing new. I see here a newspaper report in regard to something which happened recently in Ireland—

Then as far as Holland is concerned: “Holland to expand incentives.” It is nothing new therefore. But we have had consistent opposition to it because this process would allegedly favour certain industries, and so on. If the same methods are also being applied in those countries to draw industries to the labour-intensive parts of the country, then there is no reason why successful use should not be made of those methods in this country as well. I hope that private initiative will follow the lead given in this regard to a greater extent. The hon. member for Queenstown did the right thing when he pointed out what the attitude of the party in this connection had been in the past.

The hon. member for Umlazi referred to the assistance which is being given to the shipbuilding industry. It may sound small, but why cannot this industry also begin on a good basis, even though it is small? An investigation was instituted by the Board of Trade and Industries and it has been recommended that the three undertakings in Durban should form a consortium. I think that that was good advice. They have been negotiating, but without any success to date. I do not know whether the negotiations have been discontinued altogether. I really think that if it is possible to lay the foundation there, since there are shipyards and other facilities, it may perhaps be possible for a consortium to build larger ships more rapidly. I also want to point out that although this R1 million, according to the calculation made by the hon. member, is a small amount, it is nevertheless a fact that it takes time to draw up the necessary plans, to call for tenders, and so on. For that reason hon. members must not expect immediate results. Even if an order could be placed it would take several months to draw up the necessary plans and to proceed to the actual building work or the actual subsidization. This is only a beginning. The hon. member must not think the amount is too small. I think it is large enough to be the beginning of an industry which although it may have to start off on a small scale could nevertheless grow into a big one.

It is a pity that the hon. member tried to create the impression here that we are going out of our way to favour one of those undertakings. I have correspondence here which indicates that the other undertakings also negotiated with the Department. They wanted solutions to certain problems. If problems arise hon. members may rest assured that we will negotiate with all three undertakings on an equal basis.

The hon. member referred to the C.S.I.R. which had placed an order. Now, as far as that is concerned, the C.S.I.R. is free to place an order where it sees fit to do so. I do not think that it should inevitably be concluded that preference is being given to some industry or other. I realize that it is an industry which may still be experiencing growing pains, but I nevertheless think that it is a viable one. I think it is essential for us to make a careful start here because there is such a strong competition in this direction.

The hon. member for Brakpan pointed out that we would have to export on a greater scale and that our workers should be made to realize that they will have to compete with the rest of the world with their products. I think that this is a very timely warning which the hon. member made, because if Britain joins the E.C.M. a very large market will be created. That market will include over 300 million inhabitants, and a large economic unit will develop there. Although South Africa may be detrimentally affected in certain respects it is nevertheless also possible that we will be afforded new opportunities, particularly as far as our exports and especially manufactured goods, are concerned. I am thinking here in particular of heavy industries, since reference has been made to the expansion of Iscor at Vanderbijlpark. I think that there are many major possibilities as far as the exports of our processing industry are concerned, especially in so far as it affects our iron and steel products. There are already indications that some of the firms manufacturing spares here are exporting successfully to overseas countries. I am referring here to automobile spares. I think it is a direction which can be concentrated on to a greater extent. Productivity does in fact play a very important role here, as the hon. member quite rightly remarked. We are aware of the fact that if we want to utilize our labour potential to the full, then productivity is a very important factor. I need only refer to the findings in the Economic Development Programme which are based on the fact that we can only maintain this 5.5 per cent economic growth if there is also an increase in the productivity of our labour. The same criterion has not been laid down for all. So it is found in the case of agriculture for example that the increase must be 4.3 per cent per year, in mining 3 per cent, in the secondary industries 2.5 per cent, and in the services industry 2.18 per cent. We must take this into consideration therefore. If we are not able to maintain that level of productivity we will not be able to maintain this rate of growth. That is why the provision which the hon. the Minister of Finance has made in his latest Estimates for an amount of R50,000 for the Bureau of Standards is a timely one, and it has already been decided that a central productivity committee or organization will be established, which will be able to make advisory services available to our industrialists. That organization will be able to obtain international data and will have to make it available through lectures, publications, etc. In addition an attempt will also be made to stimulate the various activities affecting productivity by means of a comprehensive national productivity campaign. The aspects which have been mentioned here as far as training is concerned are already receiving attention from the Departments of Labour and Education. But this is also an attempt to get the industrialists more interested in productivity so that there may be the necessary co-ordination.

The hon. member for Graaff-Reinet referred to the important position of the dealer in the rural areas. It is a well-known fact that the dealer performs a very important function, not only as far as supplying the necessary means, but also by buying the products from the farmer and taking them to the industrialist. They have often acted as bankers as well. It is a fact that the retailer, for various reasons, is having a hard time. He is having a hard time because competition has intensified as a result of the entry of the large chain stores and other large organizations into the picture, and as a result of the greater demands which are being made on the financing of the retailer. Licensing has resulted in practically every farmer having on his own farm a licence to enable him to supply his own needs. There are many factors which have aggravated the position of the retailers. The Government has received representations to the effect that a form of financing for small industries should be undertaken by the I.D.C., and that financing for the retail trade should also be established. It has been investigated. Representations were made by the “Handelsinstituut”, but there are problems. Apart from the fact that it may cost considerable sums of money, it may also have the result that we will compete with the banks and the feeling is that at this stage it would perhaps be preferable to advise the retailers to co-operate, establish a central acquisition organization, and make their acquisitions as a body, and that we should, perhaps by means of this correct training, enable the retailer to obtain more advice. It is not being deemed advisable at this stage to apply that kind of financing although it is perhaps a matter which could receive more attention in future. I can assure the hon. members that we are aware of the fact that the retailers have problems.

Reference was also made to the form of licensing and it was suggested that this should be changed. In this regard there was a commission of inquiry and their report has already been published. Legislation is being envisaged, which will be introduced by the Minister of Finance. [Interjection.] I do not know when that legislation will be introduced. But further representations have been made by the provinces in regard to this matter, and that legislation will be introduced depending upon how quickly those representations can be considered.

In regard to border industry development the hon. member for Smithfield referred to Herschel. He was correct in stating that there is a great deal of labour, as well as other facilities, in that area. However, there are certain disadvantages involved. I do not want to go into the merits of the case, because we are at the moment instituting further investigations into the selection of more points of growth, and into the decentralization assistance which is being given, and new points of growth in the Free State are also being considered. This matter is under consideration and the hon. member can rest assured that his representations will be taken into consideration.

The hon. member for Salt River referred to the labour policy of the Government. He said that the policy is aimed at drawing the Bantu labour here away and that the opportunities for the employment of Coloureds are inadequate. However, he has, on the contrary, pleaded that border area benefits should be given to the Western Cape in order to stimulate more industries here. The fact of the matter is that the Western Cape does not at this stage need border area assistance in order to stimulate industries. There are already more industries here than the Coloureds can provide labour for. The director of the I.D.C. has also pointed out to what extent the demand for Coloured labour here will increase. In 1960 it was something like a 100,000, and it is expected that in 1980 the labour of 211,000 non-Whites will be required here, whereas there will in fact be 467,000 workers available.

The hon. member for Vasco also indicated that according to calculations there will not be a shortage of labour here. It is true that there will be a period of adjustment here, but adequate provision has been made for that in the regulations which have been proclaimed by the hon. the Minister of Bantu Administration.

As far as the hotel industry is concerned, it is not so much a question of a shortage of labour. I think the major problem is that many of the hotels cannot comply with the requirements of the Hotels Board for classification, and it is more economic to sell the hotels than flats.

The hon. member for Vasco also referred to the importance of female labour and half day posts. The question of female labour has also been brought to the attention of the Government by the Economic Advisory Council. Attempts are being made to make much more use of the services of female labour in the public service than was done in the past, and the same applies to the industries. This is something to which much more attention can be given by the private sector. As far as half day work for women is concerned, I can only point out that it is already being utilized. It is already possible for them to be employed in the Public Service on a half-day basis. The hon. member also asked that more use be made of the services of pensioners. In this regard I can only say that much greater use is being made of their services to-day than was done in the past.

Then the hon. member for Carletonville referred to the importance of the whitefish industry for South Africa. The hon. member is quite correct; the whitefish industry is very important. In one of the latest reports of the Food and Agricultural Organization of the United Nations it was indicated to what extent world catches had increased. In 1950 the total catch had been 18 million tons, but it increased to 45 million tons in 1965. As far as our own catches in the south eastern Atlantic Ocean are concerned, they increased from 1.44 million tons to 2.15 million tons. Our percentage did increase by a small amount therefore, but it is interesting to note that as far as whitefish are concerned, many other countries have entered our waters to fish on a large scale. So we find that although South Africa caught 87,000 tons, Spain caught 118,000, Russia 81,000 and Israel 1 million and Japan 6.4 million tons. Hon. members will note therefore that as far as whitefish are concerned, other countries are catching a great deal more here in the south eastern Atlantic Ocean than we are. The hon. member also pointed out and advocated that we should encourage an increased consumption of fish in the interior. I do think that more could be done to make our inland population a fish-eating one as well.

The hon. member also referred to the convention on the protection of living resources in the open sea. I can only say that we are now a member of that convention which came into operation last year and we can therefore hold the discussions there to which the hon. member referred.

Have the discussions with the other countries already been held?

No. The hon. member for North Rand referred to the question of bioscope prices. The price controller clamped down last year and placed limits on the levies being made by bioscopes because they immediately began to increase their prices and the prices were frozen with effect from a certain date, i.e. 1st October, 1966. It is in fact true that higher prices are being charged for some of the “road shows”, but they maintain that they display a better type of film and that the contributions which they have to make to the film suppliers are greater than in the other cases. Since then an application has been made by one of the large bioscope organizations for a general increase in admission prices, but that was refused by the price controller.

The hon. member for Vanderbijlpark referred to the importance of steel production. I think that I have already dealt adequately with that matter.

The hon. member for Albany referred to a report in the Press to the effect that it has already been decided that a third Iscor will not be established in East London.

I have the Press cutting here; I can give it to you.

I am pleased that the hon. member has brought the matter to my attention. No such decision was taken, nor has it been decided to eliminate the various places which I mentioned here. I agree that the Government should try to locate some of its establishments at the smaller places, but it is not always so easy. The willingness of people in the employ of the State to live in certain areas must always be taken into consideration. One often finds that employees do not want to live in certain areas; it is a problem which the industrialists also have to deal with. It is therefore a policy which cannot always be carried out, but I can assure the hon. member that it is an aspect to the principle of which the Government is already giving attention.

Reference was also made here by various hon. members to Grahamstown Potteries. Grahamstown Potteries is an undertaking in which the I.D.C. already has an interest. The I.D.C. interest is approximately R90,000, as was correctly stated here.

Is Grahamstown now a border industry area?

No. Border industry benefits have not been granted to Grahamstown because it is not situated in a border area. This particular undertaking is having a difficult time; I do not want to go into the reasons for that at the moment, but their own business acumen is perhaps a factor which may have had something to do with it. This undertaking may possibly be placed under liquidation and hon. members have expressed their concern about this. But I nevertheless want to point out that when an undertaking is placed under liquidation, it does not always mean that that industry cannot be re-established. The possibility of this industry being re-established after it has been liquidated is not being excluded therefore.

The hon. member for Pinetown inter alia to the question of housing in Hammarsdale. The fact of the matter is that as far as Bantu housing is concerned, the Department of Bantu Administration and Development provided the housing in all the industrial areas which the I.D.C. helped to layout. It is also the responsibility of that Department to do so in this case. I understand that there are problems in regard to the acquisition of land because the land in many cases belongs to individual Bantu owners. But that is a matter which hon. members can subsequently raise under the Bantu Administration Vote.

Reference was also made here to the mutual funds. Hon. members are not happy about the fact that the I.D.C. had an active share in the establishment of the National Growth Fund. The reason for this is that the I.D.C has for a considerable time had an interest in the accepting bank. That is one of the undertakings established by the National Growth Fund. The establishment of the National Growth Fund was a new idea and the public were unacquainted with its operation and at that stage when the National Growth Fund was established it was decided that the I.D.C. should also have a share in it. The I.D.C. has a 9 per cent interest in Fund Advisers Limited. Since then other funds have been established. As I have already said it was a new idea, but once again experience has shown that the I.D.C. was correct in co-operating in the establishment of such a fund particularly because it had an interest in an accepting bank. It was to be expected therefore that it would reveal its own confidence in the new idea by having a share in it.

The question was asked here whether the I.D.C. was not undertaking the work of the Board of Trade and Industries. The fact of the matter is that the Board of Trade and Industries still exists. It is performing a very important function as far as tariff inquiries are concerned. It appears from the latest report for the year 1965 that the Board has dealt with 112 applications for rebates on duties, 43 applications for a reduction of duties, 17 applications for the refund of export duties and 20 other applications. Then there were also applications for protection. There were 42 applications for customs protection and 23 for curtailment of duties. They also dealt with 33 applications as far as dumping was concerned. As far as that tariffs function is concerned therefore the Board has fulfilled an important function. Apart from that they also undertook special investigations such as those into the prices of fertilizer and sugar. These are general reports. Then there were also the general investigations by the Board into monopolies as well as special operational inquiries, such as those into the paper, textile, the chemical, the engineering and the cinematographic industries. Those were investigations into the broad aspects of the industries, which were made by the Board of Trade and Industries. The I.D.C. undertakes investigations for investment purposes, and they, on the other hand, were generally intended to indicate what possibilities there were in certain directions.

The hon. member for Kensington referred to certain aspects of I.D.C. He asked what became of the profit made by the I.D.C. and whether it was paid out in the form of dividends. It is not paid out in the form of dividends. The profit goes into the reserve fund and is re-utilized for investment purposes. The hon. member referred to the composite account. It is not a composite account. It is more of a report of the investments of the I.D.C. It has been stated that not enough has been said in regard to the investment in Cyril Lord. The I.D.C. has investments and interests in 230 different undertakings and it is impossible to give full details of each one of those 230 undertakings in its report. It is also impossible for it to be discussed here in detail in this House. The hon. member for Kensington wanted to know precisely how the losses of an undertaking were calculated. That meant that all the affairs of that undertaking would have had to be discussed here. That applies to each one of those 230 undertakings in which the I.D.C. has investments. Surely it is a principle which is under discussion there. Because protection is being afforded to the poplin industry, it is now being alleged that this was only done in order to protect I.D.C.’s investment in Cyril Lord. The fact of the matter is that that protection is being afforded to the entire poplin industry. Reference was made here to the increase in the tariffs.

Nor is it for the poplin industry only.

Yes, that is quite correct. As regards our textile industry, there were increases of tariffs in certain classes. The fact of the matter is that if we want to keep our textile industry going here we must protect it against competition from the East and even other countries, such as the United Kingdom and the U.S.A. We are obliged to afford protection, but that protection which is being afforded to the textile industry is by no means exorbitant. It was increased recently to extend it to materials above 42.5 cents per square yard because our importers circumvented the protection by importing material which was just above this limit, and then went and invested the difference safely in an overseas loan. There is another reason as well. Our local industry has expanded its production. We are not affording a large measure of protection. I think that this industry can compete on this basis, and this is supported by the fact that the cost-of-living index as far as the textile industry is concerned, has not increased by very much. In 1958 it was 100 and in 1951 it was 99.1. In other words, it decreased then. In March, 1967 it was 100.7. Our textile industry is therefore an industry where the increase has been very slight, and it is one which has contributed the least to an increase in our cost of living over the years.

The hon. member for Constantia put a question to me here in regard to the External Procurements Fund. He asked me why provision was being made for R2 million on the Revenue Account of the External Procurements Fund, while provision was also being made for the funds on the Loan Account. The reason for that is that interest is being paid on this External Procurements Fund, i.e. the money which is being given for storing essential and strategic stock. This provision in the Income Account is in order to make provision for the interest on those amounts which are being advanced in that way. He also put a question in regard to the staff. The fact of the matter is that the control of this Fund is vested in the first instance in the Secretary of the Department and he is supported by the staff in the Department, some of whom are singled out for this purpose.

Votes put and agreed to.

Revenue Vote 43—“Labour, R8,167,000”.

Mr. Chairman, may I ask for the privilege of the half hour? From time to time we in this House should look at the situation of the South African worker against the background of problems that are in many ways peculiar to South Africa, problems that are made all the more peculiar because of the impact upon them of Government policy. The hon. the Minister of Labour faces the general problem of the Government in a peculiar way. Any Government in South Africa has the problem of reconciling the existence of a market or money economy together with, for the majority of the people in South Africa, a subsistence economy—an economy which is actually based on the possession of cattle. The problem is how, within the existence of these two types of economy, to maintain growth and to ensure that there will be an orderly passing of the one type of economy into the other. As a result of the existence of these two economies together and as a result of our common endeavour to maintain a satisfactory rate of growth in the economy of South Africa, one of the most pressing difficulties that we face in South Africa is the shortage of manpower. It so happens that because of the different stages of development and the different types of society the people of South Africa have, 3½ million people have been called upon for many years to supply all the managerial, the executive and skilled talents to a community of 16 million people. The Government may pretend that we do not have a community of 16 million people. The Government may pretend that we are a multinational state of different nations, each self-sufficient unto itself, but that is not true. The hard inescapable fact is that in South Africa we have an economy based upon the needs and the production of 16 million people. More and more it is expected that 3½ million people should supply all the leadership qualities required to maintain this economy. The result is that for a long time this manpower shortage has been growing in South Africa. The United Party Government immediately after and during the war was aware of this. That is why it appointed the De Villiers Commission into technical education at the end of the war, which reported in 1945. That commission stated that it was a matter of urgency and that the Government dare not delay measures to ensure the best use of the human resources of South Africa. Nothing much was done. The Government, unfortunately for South Africa, changed in 1948. Very little was done then and very little has been done up to this very day.

It is not as though the Government was unaware of this. In 1955 for example the annual report of the Department of Labour revealed that we then had a shortage of 10,700 artisans in the building and engineering industries alone. It mentioned that in those industries we also had a shortage of 4,300 apprentices. If you look at those industries to-day, you will find that the shortages are still there. Very little has been done to overcome that. We have had forecasts, to which another Minister referred a few minutes ago, about the needs of South Africa in 1980. It is very interesting to know that whereas in 1960 we had 375,000 skilled and semi-skilled artisans in South Africa, the projection is that we will need 600,000 in 1980, a mere 13 years from now. That represents an increase of 3.5 per cent per annum. But our total white labour force, male labour force, increases at the rate of only 2 per cent per annum or 2.5 per cent if you include women but women often cannot do skilled or semi-skilled work. So, if we are to maintain the progress which we have set ourselves as a target in South Africa, the question arises where the additional labour is to come from. If we have to supply this additional artisan labour through immigration we shall have to have immigrants on a scale equal almost to the natural increase of our white population. No country can do that without friction and strains developing—so much so that we should rather not contemplate it here in South Africa because we would thereby change the ratio of our white population groups, causing great concern among many people. This problem becomes more interesting if we look at the facts.

I want to acknowledge that I got certain of my facts from the recent report of the Panel of Education of 1961, a report which deserves serious study by each one of us. They remind us that in 1963 there were 23,000 new apprenticeships registered in South Africa while we needed 49,000. Therefore, only about 40 per cent of the apprenticeships needed were coming forward for registration. The projection for 1980 is that we shall need 110,000 new registrations of apprenticeship contracts —an increase of 15 per cent per annum. Well, if we cannot get them to-day where are they to be found from here to 1980? The only alternative is immigration but I have already indicated that that will not be acceptable especially to the people supporting the Government—as a matter of fact, not in any country.

So the problem is where these people are to come from. With many hon. members opposite I believe that inevitably this need would have to be supplied from the non-white population groups in South Africa. Already between 1951 and 1960 15,000 non-Whites became artisans in the building industry—bricklayers, carpenters, plasterers, etc. It is a process which is going on everywhere and cannot be stopped. It cannot be stopped on the S.A. Railways, for instance. The Minister, although doubtfully at first, eventually applied the policy of the United Party and negotiated with his staff associations, especially the artisan staff association, and got them to agree that non-Whites should play a greater part in skilled occupations on the S.A. Railways. Even bastions of conservatism as far as the labour pattern in South Africa is concerned, bastions like the coal mines and the gold mines, have had to make concessions and allow the more rational use of non-white labour. It is, therefore, a problem we have to face, a problem which becomes more acute when we remember that we need a large and ever growing number of technicians in South Africa—people who are more highly trained than the artisan although not as highly trained as a qualified university engineer. It has been calculated that we shall need technicians at the rate of three for every one engineer we have. We are far short of that. We shall need something like 3,000 new technicians every year.

Inevitably more and more of the white people who to-day become artisans will qualify to a higher degree of education to become technicians and the vacuum thus caused will tend more and more to be filled by non-white people. It cannot be stopped— it cannot be stopped on the railways; it cannot be stopped on the mines; it cannot be stopped in the building industry; it cannot be stopped in the engineering industry, especially in the steel industry. It is a process of absorption of the non-White in higher grades of employment going on apace in South Africa and all the talk of the Government about separate nations and separate development, and all the talk about job reservation cannot stop this unless we want to see a retrogression in the economic standards of all the peoples of South Africa. The Government knows this and in some cases even co-operates in this process— it co-operates, as the negro parson said, with the inevitable. But they have political troubles, political difficulties and I have sympathy with them in these difficulties. But they themselves have brought these difficulties upon them. For years in the Opposition and for the first 12 to 15 years of their being in power they relied upon engendering fear into the hearts especially of the white worker—the great danger was the non-White; only they could protect him against that danger. But the facts, facts which the United Party foresaw long before they did, have since caught up with them and to-day they have to make more rational use of our non-white labour force, allowing it to do more responsible work. In the process, as we have always said, we make it possible for the white worker to advance to higher and therefore more remunerative types of work. But because they are in these difficulties, because they are like Frankenstein in the clutches of a monster of prejudice which they themselves have created, they look for an escape from their problems. I regret to say that they seem to find this escape in the concept of industrial development in border industrial areas, areas close to the reserves. Here they are following the correct concept, a wise policy—the concept of decentralization, the policy of dispersing industrial development over a larger portion of the country. But they are using this to serve an ideological purpose. Let us accept that the idea of decentralization is not something new in South Africa; it is not something which is peculiar only to this Government. It has also been the policies of previous governments. For instance, the other day I saw in a certain trade union publication a reference to decentralized industries established before this concept of border industries was developed, industries established both by the United Party Government and the Nationalist Party Government before 1960 when the late Dr. Verwoerd first formulated this policy of border industrial development. There was, among others, the establishment of the fine wool industry at Uitenhage—an act of decentralization. There was the great Good Hope Textile Corporation at King William’s Town established in co-operation with the Calico Printers Association of Lancashire. This corporation was established as early as 1945 and to-day it is the showpiece for the Government—they take visitors from overseas there to show them how well the Government’s policy works. There was the establishment of the factory of Masonite Africa Limited in Estcourt in association with the American Masonite Corporation. This was done also in 1945—therefore, decentralization of an industry. Then there was the establishment in 1948 of the S.A. Pulp and Paper Industries (Sappi) at the mouth of the Tugela river—again decentralization. Under the Nationalist Party Government before 1960 a little, although not much, was done in this respect. There was the S.A. Industrial Cellulose Corporation established at Umkomaas; there were the developments at Sasolburg in 1950 although this is a borderline case; then there was the Phosphate Development Corporation at Phalaborwa in 1951.

Therefore, this idea of decentralization of industries is not something which originated only in 1960 as part of the policy of separate development—it is no more than an intelligent step to take in an industrial country where there is tremendous industrial development. But what we are concerned about is that the Government is using industries in the border areas in order to escape industrial agreements and to lower the standard of wages applicable in certain occupations.

You are talking absolute nonsense.

Well, if I am talking nonsense, I will give certain facts, and I invite the hon. member for Brakpan to refute them. It is very simple for the hon. member for Brakpan, as is his custom, to make these stupid and sweeping statements. And he has no justification for making them whatsoever. [Interjections.]

Order!

We have had in South Africa tremendous increases in our national product, which was to a large extent due not to greater productivity on the part of the individual labour unit in South Africa but to the impact upon our labour resources of tremendous capital investment, which drew more and more labour units into industry without great increases in the productivity of the individual unit. It is interesting to see that this impact has had the consequence of making many industries, in spite of Government policy, less white than it had been before. It is attracting huge numbers of non-European labour into industries which were regarded as traditionally white. I was old enough to remember how in the years of the depression the motor assembly factories of Port Elizabeth made it one of the important points in their prestige advertisements that they employed 100 per cent white labour. They were doing that to combat the poor white problem in South Africa which was rife under the Nationalist Party Government of those days. Then I realized that by 1963, looking at the figures, the number of white workers in those factories had decreased to 42 per cent. As a result there was an investigation by the Industrial Tribunal into this motor assembly industry in 1963, and they found that, not counting administrative and office personnel, in 1949 the number of white workers was 82 per cent. The investigation found that in 1963 it had fallen to 42 per cent. In some areas it was as low as 23 per cent. There was a job reservation determination made by the Minister on the recommendation of the Tribunal which did not make much difference to this situation. And so, because the Government has to accept the fact that if we want to maintain our standards, if we want to maintain growth, we shall have to use more and more black workers and other non-white workers in higher capacities. They are now trying to disguise this fact by the development of the border industries. Indeed, the Viljoen Commission which reported in 1958, in the very second point they made when they listed the locational advantages of border industries stressed the fact that low wages would be the greatest locational advantage for those industries, and actually suggested that Industrial Council jurisdiction should be withdrawn from those industries as they developed. This was accepted by the Government, and we find that differentiated wages are one of the most important inducements offered by the Government to industries to establish themselves on the borders of the reserves. That is not the only one—there are many other inducements too. But in the South African context this is one of the most important, one of the most attractive to many employers. It is a bait. The employer can pay his workers less; he can get exemptions from all sorts of restrictions; he is not subject to Industrial Council agreements; the Wage Board will make determinations, but very often in the case of the border industries these are lower than the median wages actually being paid in those industries at the time the determination is made. Sometimes the wages fixed in these areas—and I want the hon. member for Brakpan to listen now—are dangerously lower than the wages paid in the established industrial areas. I want to give a few examples.

Do you know, Sir, that in a Hammarsdale clothing factory a male machinist, fully qualified, now gets just under R10 a week, and a female qualified machinist about R7.50 a week, which is 27½ per cent less than what is paid in similar factories in Durban. It is a tremendous margin—27½ per cent. In Johannesburg similar workers, irrespective of colour, and also in Germiston, are paid R13,42 a week, as compared to less than R10 in the case of men and R7.50 in the case of women at Hammarsdale. In addition, the people at Hammarsdale work a 45-hour week, they get 14 days’ leave a year and they get five paid public holidays a year; but the worker in Germiston does not work 45 hours a week, he works 40 hours; he does not get 14 days’ leave but 21 days’ leave; he does not get five public holidays but seven public holidays. Do you see how the dice is loaded in favour of the border industry to enable the employment of more and more non-whites on a scale which differentiates against the civilized labour policies of the factories in Brakpan and the factories in Germiston and the factories in Johannesburg.

The hon. the Minister will remember that recently 26 white lorry drivers employed at Phalaborwa were replaced. Now, it is true that they were replaced by non-Whites. It is true that they got better jobs. That is right—that is what should happen. But they were not replaced as one would expect under Government policy by other white people. They were replaced by Africans, by black drivers, with this difference: The white lorry drivers were paid R140 a month, whilst the black lorry drivers were paid R60 a month. That is good business! But it shows how fraudulent in many ways the policy of the Government is, the propaganda of the Government is, when they go around saying that they are keeping the industries of South Africa white.

I do not know whether the hon. member may use those words.

Which, Sir?

“Fraudulent policy.”

I withdrew the word “policy”, Sir, and I made it propaganda, I said that …

The hon. member said “fraudulent Government policy”.

No, Sir, then I corrected it to propaganda, but if you do not like the word, I withdraw it.

The word “policy” you can withdraw.

The hon. member must withdraw the word “fraudulent”.

I withdraw the word “fraudulent”, Sir. I am not quibbling now. But I think that you will agree, Sir, that I am fully entitled to say, “very strange” propaganda, very strange propaganda indeed. But, apart from that, I was most shocked of all when I read in an authoritative economic dissertation that the wages being paid in some of our border industries, for example in a certain sewing machine factory, of R7.50 a week for artisan-type work is lower than the wages being paid in similar factories even in countries like Japan. Then one begins to wonder whether this escape of the Government from realities, this escape from the publicity which attaches to the changing pattern of the labour force in South Africa, is morally justified.

There is one argument that weighs with one in connection with the payment of differentiated wages, and that is that these people are unskilled, they have no experience of our market economy or of work in a factory, and therefore they are less productive. But they become more productive. Many experts, many people sympathetic to the border industry policy, admit that this happens but they say it is temporary and wages will rise. But, is that the policy of the Government? Because I read in The Star of 1 November, 1965. that the Chairman of the Permanent Committee for the Location of Industries and the Development or Border Areas made this statement. He said—

He gave a reason, namely that low wages were the greatest counter to the disadvantages of establishing industries in the border areas that the Government could devise. I wonder, Sir … I did not mind when the hon. the Minister of Economic Affairs engaged the Minister in conversation, but it is getting a bit thick now.

Order! The hon. the Minister’s Vote is under discussion at the moment.

I wonder whether the Minister and the Government have considered what the social consequences are of such a deliberate cheap labour policy, of what is under their policy to become a growing factor in the industrial life of South Africa? I wonder if the Government has considered that if they continue with such a low wage policy, there is no real stimulus to management to organize increased productivity of labour force. This is one of the greatest needs all over the world. Low wages mean that there is no reason for management to try and increase productivity. The onus for increased productivity is not on the workers in the first instance—the onus is on management. It is man’s good management which increases productivity. But if the owners of the factory say, “Look, we can get all the cheap labour that we want from inexhaustible reserves of labour over the border in the Native areas.” then why should they worry? But it is not only that. The Government is slowing down what is one of the most important needs in South Africa, and that is a rapidly-growing internal market for the industrial products of South Africa. Already our black population spends—according to recent figures which I saw—or it has a spending power of R420 million a year, which is considerably more than R1 million a day.

The figure is R4 million a day, that is the latest figure.

Well, millions of rand a day—I stand corrected. It is a tremendous factor, and it should be growing, it should be growing fast. If we want to develop export markets, if we want to compete successfully against the world in the export markets of the world, our industries are entitled to say that they want a large and strong internal market on which they can base modern developments like automation and all the other methods of mass production. But this deliberate policy, which is the policy of the Government according to the Chairman of the Permanent Committee, is a policy to delay the advantages to South Africa of a larger internal market.

If people are paid like that and they remain illiterate and backward, there is no real incentive to them to improve themselves. They will remain what I think is one of the most disadvantageous features of their labour habits— they will remain what is called “target” workers. They will remain people who work for a certain period to earn a certain amount of money to buy leisure back in the reserves. That is one of the problems that we have. It should be the policy of the Government to diversify the needs of these people, to educate them in the needs and standards of a western way of life so that they will want to work continuously and not be “target” workers who work in order to achieve a certain target and then retire until they have to go back to work to reach that target again.

Finally, as far as the disadvantages are concerned, I am very curious. I want the Minister to pay particular attention to this. I am very keen to hear his comments on this. When we have such a vast reservoir of labour, being used in occupations which other races at a higher standard also follow, but at lower wages because they are in different areas, the opportunities of the other workers to advance their own cause and their own standards are weakened. There is not the slightest doubt about that. Dr. T. van Waarsdyk in 1966 published an interesting publication called Prices, Profits and Controls. He develops a long argument to justify this, but I will quote just one short extract to show the Minister that this is also the considered opinion of independent economists. He said—

Mr. Chairman, the hon. member for Yeoville tried to trot out a horse in the House this afternoon which he has been trying to trot out for a long time. [Interjections.] Let us admit in the first place that there is a manpower shortage in this country, but let us also admit that this Government has done its best to supplement that manpower shortage, and that efforts are still being made to do so.

It is well known to what extent our universities have expanded, to what extent expansions have taken place at our technical colleges and what large sums of money are being spent on that. We know how many bursaries are given to our students to-day. It is a well-known fact that we try to keep our children at school longer in order to prepare them for their task in this country. The law relating to apprenticeship has been overhauled and our apprentices have been given the opportunity of becoming artisans sooner. If they have the intelligence, the ability and the drive, they can reach artisan status much sooner in terms of the new legislation. We know how the number of contracts have increased. The hon. member mentioned that. We admit that we still do not have enough contracts.

What contracts?

Apprenticeship contracts. They have increased. If we look at the annual report, we see that 6,306 contracts were registered in 1962, while 9,474 were registered in 1965. This is enormous progress—almost 33 per cent. We know what was announced by the hon. the Minister of Economic Affairs, namely that the Government was endeavouring to increase the country’s productivity. The new council established under the S.A.B.S. was granted an amount of R50,000 for the purpose of increasing production. Another conference will be held on this matter in Pretoria in the near future. In other words, a great deal is being done. A body was established under the director of the Research Bureau, which will undertake manpower surveys. What the hon. member actually suggests now is that we are trying to keep out the non-Whites. But that has never been the policy of this party. On the contrary. We have always adopted the attitude that our economy will have to maintain a certain rate of growth so that we may provide employment to the non-Whites. Surely, this is a very well-known fact—we know we have to provide employment to the non-Whites. But the difference between that hon. member and us is this—we say we cannot provide employment to all the non-Whites in our cities: we therefore have to apply methods to draw them away from the large cities. In The Manufacturer figures are given to show how the concentration took place in our large cities. It is stated here—

In other words, we simply cannot continue in this way. Now I want to tell the hon. member this. Surely, it is not quite correct to suggest that because we are establishing border industries for the very purpose of providing employment to the Bantu we are actually undermining the other industries? We find that wages differ even from one large city to another, and the hon. member knows that. Wages fixed by industrial councils in respect of one and the same industry are different in various parts of the country. He knows that the wages paid in the clothing industry in Johannesburg are higher than those paid in the Cape.

I mentioned that.

He also knows that the wages paid in the clothing industry in the Cape are higher than those paid in Durban. That is where the Indians are employed. The hon. member knows that. They work for lower wages than what the Coloureds work for here. In the building industry the same position applies. It is a well-known fact that the wages paid in the building industry in the Transvaal, where mainly Whites are employed in the industry, are higher than the wages paid here in the Cape Province, where Coloureds form a large proportion of the artisans. To suggest now that we are undermining the position of the Whites is an utterly ridiculous thing to say.

Let us cast our minds back to the old fight we had here a few years ago in connection with Charlestown and Hammarsdale. Do we still hear to-day that the clothing manufacturers complain that we are undermining their position? On the contrary. This Government applied measures which were designed for the very purpose of regulating those factories established at Charlestown, Ladysmith and Hammarsdale by determining the wages in that way and by applying the industrial council agreement to them in order to protect the other factories.

How many factories in Germiston closed down?

The hon. member wants to suggest that they closed down owing to the establishment of border industries. That is not so.

The Government subsidizes factories to go to the border areas.

I want to repeat that we would have had a major outcry in the newspapers to-day, that the Government would have been very strongly urged to protect the clothing industry, were it not for the fact that they are protected. The hon. member knows that a very large percentage of clothing factories go under. It is a well-known fact in the clothing industry.

I want to repeat: It is not the policy of this Government to keep non-Whites out of employment. For that very reason and in view of the fact that we have this enormous concentration of workers in our large towns, we have to make this attempt to decentralize the workers, to take the industries to the workers themselves. I want to say immediately that it is wrong to suggest that we are undermining the position of the Whites by doing so. We know that the ratio between Whites and non-Whites in our industries has generally remained unchanged. There may be a small difference, but generally it has remained unchanged. All that we are trying to do is to concentrate the white labour-intensive industries in our white areas and to remove the Bantu labour-intensive industries to the border areas. That is the only way to prevent our large cities from becoming Black. That is the only way to assist the less developed areas of our country. That is the only way to use Bantu labour, labour which has not yet reached the same stage of development as other workers, in the border industries. The hon. member now says we do not want to increase productivity. He says we do not want to give them any incentive. On the contrary. I want to say that those industries are in fact going to be an incentive for those workers to train themselves and to educate their children. If people are paid wages which they were not accustomed to receive in the past and if they have the chance to develop, enthusiasm may be aroused in them to let their children study and develop further. To suggest that we want to keep the non-Whites down, that we do not want to afford them the opportunity to develop, that we want to take away from them the incentive to develop, is utter nonsense. That is the attitude adopted by the hon. member. For that reason the whole plea advanced by the hon. member falls flat when viewed in the light of the Government’s policy. The policy of this Government is the only policy which will give the non-Whites the opportunity they should be given. The policy is to allow our economy to grow at such a rate that we shall be able to provide a means of earning a livelihood to the thousands of non-Whites who enter the labour market every year.

Mr. Chairman, the hon. member who has just sat down seems to have completely missed the point made by the hon. member for Yeoville, because he is now comparing the effect upon industry. But in the course of trying to justify his argument he made some quite amazing statements, and I want to deal with one of them. The hon. member says that they want to have the white people working in the white areas and the industries in those areas while they want the Bantu to work in the Bantu areas and the industrial areas on the borders. Now, what a fantastic statement to make! Does the hon. member not realize that what his policy will eventually do will be exactly what the hon. member for Yeoville predicted, namely, to have the black industries competing against the white industries at depressed wages? What is more, they will compete on subsidies given by this Government to help them compete with the white industries and plough the white industries under. If anything is going to be ploughed under, on the argument of the hon. member, then it must be white industry in South Africa. I hope that if the hon. members enters this debate again, he will put the matter right, because his statement has made that so absolutely clear. Let him tell us, or let his hon. Minister tell us, how the white industries paying salaries commensurate with the standard of living in a city like Johannesburg or Germiston, if they are to be manned by white people—as he has said—can possibly compete with an industry in a place like Hammarsdale, where they pay depressed wages? Industry to-day in South Africa surely is run on the basis of the white man supplying the skill, the know-how, and the management, whilst the non-white supplies the labour. And on that basis it seems to work very well; it has produced a good quality product at a price which the average person can afford. This is what it has done. But now he is going to upset that whole economic rule. He has now said quite distinctly—and I am making this point again because I believe that it must be made —that he is going to set black industry to compete against white industry.

That is nonsense—he did not say that.

That is what he said. [Interjections.] The hon. member for Heilbron must try and use his brains a little more. If he had listened to the hon. member he must know that the natural outcome, the logical consequence of a policy such as he has enunciated now, must be as I have presented it. I do not want to go any further with that particular line. I will leave the rest of the hon. member’s speech to be dealt with by somebody else who will follow him in his line.

Mr. Chairman, I now want to bring to the notice of the Minister a matter which I think is of great national importance. I want to deal with the latest tragic death at the new sewer pipe which is being laid out to sea off the Umlaas canal. This death of Conrad Wilson, preceded three days before by the death of Pieter Beukes. is something that demands the immediate attention of this Minister. I must say that I was very pleased to see in the latest reports from Durban that the inspector of machinery has stopped all work on this project until something can be done. For that he gets full marks. But it is a little bit late. I sincerely hope that this will be the last tragic event in connection with this unhappy undertaking by the Durban City Council. This contract was scheduled for completion in October, 1964, and it is not completed yet. It was embarked upon in spite of the fact that the original reports of the City Engineer were against it. It has claimed five lives up to date, with one man still in hospital. It led to the appointment of the James Commission and has become a public scandal. I want the hon. the Minister to do something about it immediately, because to me it is obvious that the courage of these young men has been exploited to carry out a hazardous task, a very hazardous task. There has not been sufficient control of the operation, there has not been sufficient knowledge of the effect it will have upon the men doing the work. [Interjections.]

Order!

Yes, Sir, I wish hon. members over there would be quiet. This is a serious matter; this involves the lives of people.

Progress reported.