I move—

A total amount of R550 million is requested, i.e. R416 million on Revenue Account, R11 million on Bantu Education Account and R123 million on Loan Account. This is slightly higher than the amount of R535 million authorized in last year’s Part Appropriation Act. As hon. members know, these funds can only be used to meet the cost of existing services already approved by Parliament. Any new services must wait until the Appropriation Bill is passed.

Mr. Speaker, although I do not intend to anticipate my Budget speech by giving a general picture of the finances of the country and the state of our economy, there are nevertheless a few matters of financial interest I should like to mention for the information of hon. members.

The most important financial event during the past few months was, of course, the devaluation of sterling on 18th November. I am glad to note that the Government’s decision not to devalue the rand was generally endorsed by responsible opinion as being in the interest of the country as a whole. A similar decision was taken by nearly all countries except those whose balances of payments were weak and those whose economies are largely dependent on trade with Britain. It is a measure both of our economic strength and our economic independence that we were able to take this decision with confidence. That this confidence was justified, and was shared by the financial world generally, is shown by the fact that speculation against the rand was negligible and that our reserves have subsequently increased.

Our strength was such that we were able to take part, with other leading countries, in the assistance organized for sterling by the International Monetary Fund in the form of a stand-by credit to Britain. Under this arrangement we undertake to make available, for drawing by Britain from the I.M.F. when required, the rand equivalent of 15 million dollars, i.e. about R10.7 million. Hon. members may recall that last year we made available in a similar manner an amount of ten million dollars or R7.1 million to New Zealand. Britain has not yet drawn on the stand-by credit but New Zealand drew the full amount some time ago. If we should at some future time require these funds for balance of payments reasons, we can always draw them back from the International Monetary Fund under its rules.

The world-wide speculation in gold which followed the British devaluation proved once again that, in times of crisis, it is only gold which commands the confidence of the financial world. At the Annual Meeting of the International Monetary Fund in Rio de Janeiro, which preceded the devaluation of sterling by some weeks, I stressed this point and emphasized that schemes for so-called “paper gold”, however ingenious they may be, cannot hope to enjoy the same confidence as gold itself. If—as I believe and as an increasing body of opinion is coming to accept—a substantial increase in international liquidity is desirable, then it is far better to achieve this by increasing the price of gold than by tinkering with new and untried devices such as the “special drawing rights” proposed at Rio. It is not our desire to achieve an increased gold price through a world-wide collapse of currencies and monetary chaos, and for that reason I hope the leading financial countries of the world will see the light and bring about an orderly revaluation of currencies in good time.

I took advantage of my overseas visit to call in on several European countries for discussions with bankers and financial authorities. As always, I found everywhere the highest regard for South Africa’s economic progress and financial integrity. I was able to arrange the renewal of a revolving credit of DM.40 million (R7.1 million) from a group of German banks for one year at 5⅝ per cent, a credit of ten million dollars or R7.1 million for one year at 6½ per cent from a group of European banks under the leadership of a French bank in order to replace a similar credit which expired last November, and a new credit of ten million dollars or R7.1 million for one year at 6½ per cent, from an Italian bank. Certain other credits are still under negotiation. We were also able to arrange a revolving credit of 40 million dollars or R28.6 million at 6½ per cent for just under one year from a group of American banks, similar to the credits arranged with these banks in previous years. In view of our present strong position we have not yet drawn on the American or German revolving credits, nor indeed on the French stand-by credit of 13 million dollars or R9.4 million arranged early last year, but these credits are available at any time if required and in the meantime we only pay a small commitment fee.

While in Europe I also discussed the possibility of a South African Government public loan on the European market. Conditions appeared favourable and preparations were already far advanced, but the British devaluation and the subsequent restrictive measures announced by the United States Administration caused a good deal of dislocation in that market and forced us to postpone the issue. I still hope, however, to proceed with such a loan before long. We have been reasonably successful with our internal borrowing; in fact, the response to our recent 3-year stock issue at 5½ per cent was so great that we have had to close the lists for cash subscriptions. The total amount subscribed for this stock was over R94 million. Most of this, however, came from banking institutions which reflects the continued high liquidity of the banking system. The aspect of our financing which gives me the greatest satisfaction is the success of the RSA savings campaign. This campaign has two objectives: the promotion of thrift in general and the encouragement of investment through the various channels provided by the State, such as the Post Office Savings Bank and the 6 per cent Treasury Bonds. The latter have been particularly well received and up to last Monday a total of R69 million had been subscribed for these bonds. I think it is right that as in many other countries, the State should obtain a substantial part of its loan funds directly from the savings of its citizens, and I envisage the Treasury Bonds as a permanent feature of our finances. That is not to say that the terms and conditions of the bonds may not be altered from time to time as conditions change, but no immediate change is contemplated and I shall give reasonable notice (say one month) of any alteration. Meanwhile the savings campaign, which has helped appreciably to finance the State’s capital expenditure in a non-inflationary manner and so to counter inflation, will be continued.

We have been giving close attention to the position of the building societies. Up to the end of last year the societies continued to attract considerable sums from the public; during the last quarter of 1967 the share capital and deposits of the societies rose by R20.6 million, which was more than twice the amount for the corresponding quarter of 1965 and only slightly below the figure for the last quarter of 1966. In January, however, there was some outflow of funds. There is no clear evidence that the RSA savings campaign was a major factor in this outflow, though it may have played some part. The remaining inflationary pressure, and the measures which the authorities have taken to reduce this pressure, were in any case bound to have some effect on financial institutions—a point which the societies themselves accept.

As the general financial situation changes it is likely that the position of the societies will again improve. Temporarily, however, the ability of the societies to provide funds for housing, particularly middle-class housing, has been impaired, and for this reason the Government has decided to take certain steps to alleviate the position. These measures are as follows. Firstly, the Government is prepared to deposit with the societies an amount equal to the amounts guaranteed by the Government under the 100 per cent housing scheme for public servants. I understand the sum involved is about R8½ million. These amounts will, of course, be repaid by the societies as the mortgage loans are repaid by the borrowers. Secondly, the Government is prepared in principle to allow the building societies to issue to individuals a special class of permanent share, the interest on which will be tax-free up to a maximum of R400 per taxpayer per annum. The Government will undertake to maintain the tax-free status of these shares for a period of at least three years, but will retain the right to suspend the issue of these shares at any time. The interest rate on these shares will be lower than that on the ordinary type of permanent shares and will for the present not exceed 6½ per cent. The Government from its side will ask the building societies for certain undertakings, in particular that they will ensure that the money accruing to them as a result of these concessions will be used where it is most needed, that is, for the erection of houses for the middle and lower income groups.

The details of these concessions must still be worked out, but I believe it should be possible in this way to alleviate the position of the societies and to enable them once again to provide funds for housing on a significant scale.

As I said earlier, I do not wish to anticipate my Budget speech by giving a general review of the economic situation, but there are a few points to which I should like to refer. It is clear that the Government has achieved an encouraging measure of success in the fight against inflation, as evidenced, for example, by the fact that consumer prices in 1967 increased by only 1.8 per cent. There are, however, two points which cause me some concern. One is the question of wage levels and the other is the level of share prices on the Stock Exchange.

As regards wages, I think we should pay tribute to the responsible attitude of both employers and employees to this question. In general, I would think that wage levels in the private sector have in most cases at least kept pace with the rise in living costs, and, with the substantial slowing down of the rate of increase in consumer prices, I would hope and expect that the pressure for higher wages would now diminish. Particularly in view of the devaluation of sterling, it is important that we should wherever possible avoid increases in our cost structure.

Then, Mr. Speaker, I frankly find it difficult to see the justification for the level of certain share prices on the Stock Exchange. There seems to be an impression abroad that, now that we are winning the battle against inflation, the end of all restrictions is in sight and a new inflationary boom is just around the corner. There is no foundation for this belief. I repeat, there is no foundation for this belief. The present situation still calls for the retention of our anti-inflationary measures, probably for some time to come. Even when, in due course, some relaxation becomes possible, we are certainly not going to endanger our hard-won gains in the battle against inflation by an over-hasty abandonment of credit restrictions and other anti-inflationary measures. When the time comes, a gradual relaxation will in all probability be the appropriate policy. Those who base their actions on the expectation of a dramatic reversal of policy in the near future, will have only themselves to blame if they burn their fingers.

In general, however, I think we can be reasonably satisfied with the course of events in recent months. As the hon. the Prime Minister indicated last week, we are winning the battle against inflation with far less disruption to our economy than a number of other countries have experienced. There is every reason, not for unbridled optimism, but for sober confidence in the future.

The hon. the Minister has just given us a brief survey of the financial position of the country. We are indebted to him for enlightening us as regards the Government’s proposals for the immediate future. There are, however, one or two matters, matters arising out of his speech, about which we should like further information.

The Minister indicated that during his visit overseas he was able to get additional revolving credits as well as additional short-term loans. In view of the fact that the Minister has closed the lists for certain internal loans, what are these revolving credits required for? Although the Minister has indicated that he has been successful in getting revolving credits from certain banking institutions at varying rates of interest, the gap is quite considerable when one compares the different rates of interest which the Minister has been able to negotiate. We are entitled to ask the Minister whether he has been successful, internally and externally, in getting long-term loans. By, “long-term” loans I do not mean loans for a period of a year or so, but loans for periods of 10, 15 and 20 years. I think the hon. the Minister will agree with me that until such time as we do get long-term loans and thus plan our finances a long way ahead, we shall not be out of financial difficulties.

The Minister is asking for a substantial sum to meet the present position until the Budget proposals have been passed. The Minister, quite rightly, pointed out that since we last met he has had to face the problem of devaluation. This question gave the hon. the Minister a very difficult time; he had to make a very difficult decision—to decide whether we should follow sterling or stand on our own and maintain our present rate of exchange. On the 20th November the Minister issued a statement in support of the Government’s decision in the matter, in which he said—

He went on to say this—

With that I agree, as I agree with his warning this afternoon to the effect that we are not out of the wood yet, hence his warning to commerce and industry, banking institutions and the financial world in general that we still have some way to go. But in the course of the Minister's statement he added these words: “These problems will be greatly aggravated were we to devalue at present.” This is what I want to know from the hon. the Minister, i.e. what he meant by the words “were we to devalue at present”? Did he contemplate that we might have to devalue some time in future? As I have said, I appreciate that the Minister had a difficult decision to make. There are different opinions in the financial world about whether sterling can hold out at its present rate. While some believe that sterling is out of its difficulties, others believe that sterling will have to devalue further. Here comes the difficulty to which, I suppose, the Minister will not give me an answer this afternoon—as a matter of fact, I do not think it will be wise of him to do so. But it is a problem which the country will have to face. This problem is the question whether, if sterling is further devalued, South Africa will follow that devaluation all the way or will it only follow it to the extent of the present gap, or will it stand firm?

The Minister I think will agree with me that until such time as we have some stability in sterling and the dollar we are in for a period of uncertainty still for some time to come. Because sterling is still in difficulties. If Britain has to devalue further we shall have further problems to face. Some people suggest that we are out of our difficulties. But I think we still have a long way to go, and it is essential that until those difficulties are resolved we should impose a measure of financial discipline. We have told the Government in the past that financial discipline is essential, but the Government is too prone to create the impression that the finances of the country are being managed efficiently. The truth is that its failure to act in time has introduced a measure of inflation which in turn has necessitated more drastic action than would have been necessary had it acted timeously. Only last September the Prime Minister, after meeting his Economic Advisory Council, said—

It is a pity, Mr. Speaker, that the Prime Minister did not take part in the Budget debate of last year. He should have done that instead of reserving his remarks until September. Because in the Budget debate last year we enjoined the Government to give an eye to certain items of public expenditure in order to see which could be postponed. The Minister, however, said that nothing could be postponed. Even as late as the debate on the Appropriation Bill at the end of the session there was no indication whatsoever that certain items of Government expenditure would be delayed.

It is interesting to see what the attitude of the Reserve Bank is in this regard. In its quarterly bulletin of September, 1968, it is stated—

The Governor of the Reserve Bank said on the 27th August. 1967—

That is what the Governor of the Reserve Bank has had to say. This side of the House warned the Government during the Budget debate last year of the dangers of inflation. The Prime Minister became alive to the situation only in September, Yet it is interesting to note that while the Governor of the Reserve Bank gave that warning, a few days later all. or most of, the staff of the Reserve Bank received increases in salary. Therefore, it is not a question of do as I do, but of do as I say. The Reserve Bank is an institution over which the Minister of Finance has some influence and this is an indication of his influence!

You see, Mr. Speaker, this question of inflation is still a serious matter. In this connection I should like to draw the Minister’s attention to an address given by Dr. Norval before the Brick Association last year. In that address he dealt with the whole question of inflation. I am going to quote what Dr. Norval said and I should then like the Minister to tell me whether he agrees with those views. Dr. Norval said—

I think there will be general agreement that the planning we have seen in the country so far is planning based on ideology and not planning in the best interests of the economy of the country as a whole. The Minister has concerned himself about inflation, but is he satisfied that all is well with the various public organizations—organizations such as the I.D.C., Iscor, and others? Has the Minister’s attention been drawn to an article by Mr. Roux of the University of South Africa on public corporations? Is the Minister satisfied that the level of salaries, the level of inducements being made to attract men from the private sector and from Government departments is such that it is not encouraging the inflationary position?

In a recent report of the Reserve Bank we find that the total assets of the unit trusts in this country at the end of October was R61 million. Does the Minister regard it as the function of the I.D.C. to go into the mutual trust field; is that part of the function of the I.D.C.? Sir, I do not intend to get involved in a full-scale discussion on the I.D.C. and other Government institutions. The Minister talks about inflation; he is concerned with the effects of inflation, and the Minister is sitting here in a position of influence because he makes the appointments to these boards and presumably these boards are carrying out Ministerial policy. The scale of operation of some of these companies makes one question whether the Minister is able to effect the control which he insists on as far as the rest of the public are concerned. He has made it quite clear that he regards financial discipline as essential. He is telling people to tighten their belts for a further period again; he is telling people that a rise in wages is not desirable, that he does not regard it as a good thing. Is the Minister satisfied that everything is being run on an efficient basis and that all possible economies are being effected in all Government institutions? The civil servants have been told not to demand higher wages and to cut their coats according to their cloth, but as far as these organizations such as Iscor, Escom, the I.D.C. and various Government organizations are concerned, is the Minister completely satisfied that there are no inflationary trends there? Is the Minister satisfied that it is a desirable thing for the I.D.C. to go into the unit trust market when the Minister on the other hand is looking for loans and asking for financial discipline? Sir, I think these are questions which should be answered. There is a very grave danger that we may have a stopgo economy; that the intervals between a boom or a semi-boom and a recession, which is a more polite name for a depression, may become shorter and shorter. That is a very grave danger indeed.

The Minister has told people in his opening remarks that they must be careful; he has sounded a warning note, but it is no good giving a warning unless an example is set in the Minister’s own Department, unless the Government sets the example. It is no good the hon. the Prime Minister having an economic council that gives him advice, perhaps in many cases excellent advice, unless that advice is carried out in every sector where the Government has some influence. Sir, these are matters which require discipline from the Minister himself. I think the Minister will agree with me that example is better than precept.

Sir, to highlight our criticism I propose to move the following amendment—

1. (a) more positive steps will be taken to provide adequate housing, particularly for the lower income and middle income groups;
2. (b) a healthy agricultural industry will be established on a long-term as well as a short-term basis; and
3. (c) fair and adequate compensation will be given to those who suffer through sterling devaluation”.

So far as (a) is concerned, i.e. that more positive steps should be taken to provide adequate housing, in part—not completely but in part —the Minister in his announcement this afternoon has indicated steps the Government proposes to take to allow building societies adequate funds, but it just shows how we were anticipating the position by putting in the first leg of our amendment. It shows very intelligent anticipation on this side of the House.

You should withdraw the amendment.

The hon. the Minister of Community Development says we should withdraw our amendment. It just shows how irresponsible he is. Does he suggest that the Minister’s announcement this afternoon is going to overcome all the housing problems? Because if he does he must say so, and if he does not then he must stop making irresponsible interjections in this debate.

Mr. Speaker, we are asking that more positive steps be taken to provide adequate housing, particularly for the lower and middle income groups. If the Minister of Community Development was paying attention when the hon. the Minister spoke—I doubt that he was —he would have heard that the Minister referred specifically to the middle income group.

The Minister referred to the middle and lower income groups. For the lower income group provision is made.

You cannot even spend the money you have.

The Minister said in his remarks that as far as the building societies were concerned, he did not necessarily agree that the R.S.A. campaign had affected their funds. With that I disagree. I think the building society movement as a whole has made it the main plank in its platform, that the R.S.A. campaign has considerably affected the building societies. We have not yet had the opportunity of discussing with the building societies to what extent they have been satisfied but I presume that the suggestions made by the hon. the Minister this afternoon are being made as the result of negotiations and discussions with the building societies. The hon. the Minister confirms that. He has had discussions with the building society movement and this is an effort to assist them to get over their difficulties and to make an end to a position which has reached embarrassing proportions for the building societies. The Minister has indicated that he intends to meet the building societies, but I say that this is further evidence of the Government’s lack of over-all planning. Because if there was long-term planning and careful thought given to this matter, we should not have arrived at a position where building societies virtually have to turn down all applications for loans, which I am informed is in fact what one or two building societies are going to do, and special steps now have to be taken to help them in their difficulties. The hon. the Minister is quite right in suggesting that the building societies should be assisted, but I am glad he has made the suggestion that priority should be given to housing for the middle income group, because there has been a tendency for people to re-borrow from the building societies and to use the money for other purposes. I do not think that is desirable.

I think it is common cause that when there is a shortage of housing it is not desirable that there should be re-borrowing for other purposes. But on the other hand while the Minister has stressed the need for housing, do not forget that it was this Government which at a time when there is a housing shortage has encouraged the building of star hotels. Obviously with the desire to get a higher rating for their hotels—and I do not quarrel with hotel star rating; my quarrel is with the priorities, with the timing—we are having people in this industry spending money on a large scale, at a time when there is a shortage of housing, in order to get a higher rating and money is virtually no object. The result is that the middle and lower income groups are in difficulties; they cannot raise money for the building of houses and they are almost in desperate straits and that is why the building societies have come to the Government. The Government, having met the position when it has become desperate, now want us to congratulate them on their efforts—a further example of bad timing and unsatisfactory planning.

Do you remember the times of Harry the Housebuilder?

He did build a few houses at that time. The hon. the Minister was not in this House at the time.

Sir, a further matter which requires attention is the agricultural industry. The second leg of our amendment asks the Government to give an assurance that we will have a healthy agricultural industry which will be established on a long-term as well as a short-term basis. I do not propose to deal with that in detail because there are members on this side of the House who will do so, but I can speak from personal knowledge of parts of my own constituency where I have seen trends in agriculture due to a lack of long-term planning. I have seen the Natal Midlands, districts like Ixopo, Highflats, etc., changing. When I first came to Parliament 20 years ago, that was regarded as one of the best dairy areas in Natal. Most of the milk production for Durban came from that area. But as the result of lack of planning I have seen much of that area put under wattle trees and gum trees. Later I saw the wattle being ripped up and planted under sugar-cane, and I have seen it go full circle. Farmers who planted sugarcane ripped it out again because they were badly advised. The Midlands area of Natal was found to be uneconomic for cane. Some of the farmers who have been on this land for two or three generations are now saying: “How foolish we were to listen to the advice and to get rid of our dairy cattle,” and some of them are considering going back to dairy cattle again. It is obvious from debates we have had in this House over the years and from first-hand experience of what I personally have seen that there has been a lack of long-term planning in the agricultural industry. Organized agriculture is dissatisfied and will remain dissatisfied until this Government puts the farming industry on a more sound basis.

There is another class of person to whom I wish to refer, and they are the people who are affected by the devaluation. The Minister said in his statement of 20th November, when he made an announcement after Britain had devalued sterling, that certain of our agricultural export industries may find it difficult initially to retain markets in devaluing countries without reducing their prices appreciably, but he said that the Government was aware of this possibility and would consider ways and means in deserving cases to assist in solving the problems of these industries. Sir. that is a very general statement. The deciduous fruit-growers, the canners, the citrus industry and others are very concerned indeed about what the Government intends to do. They are concerned about what amounts will be paid by the Government as the result of the losses which may be suffered from devaluation. Last December there was a Press report that the Minister of Agriculture had given an undertaking in a general way that their losses would be met, but that undertaking is quite vague. It gives them no indication of what to expect. Many of them are reaping their crops now and they have to decide whether the crops are to be canned, what quantity must be canned and what proportion must be shipped overseas, and they do not know where they stand. On the other hand, I have a letter written by the S.A. Fruit and Vegetable Canners’ Association to all their members on the subject of the devaluation of sterling. It says this—

The full text of the letter is as follows—

Here is a letter written to the canner members in this country, quoting a letter written to the canners in Australia by the Australian Department. I maintain that if Australia can tell its canners exactly where they stand at this stage, there is no reason why our people cannot expect the same from our Government. My information is that already, as the result of this decision given by the Australian Government to their canners, they are quoting on the London market at prices in competition with the South African canners for the 1968 season, prices which would be uneconomic for our canners, and some of them may be in dire difficulties as a result of this. I suggest that this is a matter which requires urgent attention. People should know where they stand; the uncertainty should be removed and they should know whether or not they will receive compensation.

There is another class of person I wish to refer to, who may also be affected by devaluation, and that is a person working for a company in Britain who has been making pension contributions to a pension fund in Britain, and who now finds himself in the position that when he draws his pension it will be paid in sterling less 14.3 per cent. I am not referring to pensioners of the British Civil Service or people who are already on pension. I am thinking of an employee of a company in South Africa which is British-owned, and where the employee is required in terms of his employment to make contributions to a pension fund which is not in this country but overseas. The same difficulty arose some years ago in India when India became independent and the Indian Government found that there were certain employees of British companies who were in that difficulty. They made provision that the pension fund contributions made by those employees to the parent company should be retained in India, and suitable arrangements were made as the result of negotiations between the Indian Government and the British Government whereby those persons were assured that when they drew their pensions they would not draw them in devalued currency. I suggest that this is a matter which should receive the attention of the Minister so that these people can be protected.

The Minister is faced with the problem of inflation, a problem which he assures us will still exercise his mind for some time to come. Naturally he cannot give us any indication as to how long that will be. But I suggest to the Minister that he has a choice between either taking a negative approach or a positive approach. The negative approach is to have credit restrictions and a credit squeeze and to maintain tight reins for some time to come in the hope that he will dampen down development. The danger of that is that if it goes on too long we could very easily find ourselves in a recession when we least expect it. The more positive approach, while credit control may be necessary for some time, is to make an all-out effort to increase productivity. The positive approach to increase productivity has the advantage that it helps to give further employment and reduce costs and helps to ensure that in a competitive world, as markets develop, South Africa will be in a better position to meet competition. South Africa’s industry will not grow by providing for the internal market alone; it will grow by providing for the external market also. Recently the Government appointed a special committee to go into the question of productivity. But one of the difficulties about the appointment of this committee is that organized labour feels it has too small a representation. There are only three representatives of organized labour and they feel their views may be swamped. I feel that if this productivity committee is to play the role envisaged by the Government then it should be more representative than it is to-day. It is hoped, too, that when this committee sits it will not be just another committee with a problem but that it will be a committee which is active. It is hoped also that when it gives advice to the Government they will act on that advice. We have the position to-day where that side of the House is so much concerned about ideology and so little concerned about productivity that we find all over the country people who desire work but who are unable to obtain employment. I wonder if the hon. the Minister and his colleague the hon. the Minister of Labour have any idea of the number of people in the age group 50-65 years who are out of work because of redundancy. We have had rationalization schemes in business; we have had takeover bids and so on, and any number of able men and women find themselves redundant and unable to get jobs.

Nonsense.

It is no good hon. members on that side saying “nonsense” when these unfortunate people do exist. Even this week people approached hon. members on this side in the House and asked whether we knew of jobs for them. When we look at the non-Europeans who are unemployed then the position is even worse. One can go to any labour bureau in South Africa and you will find queues of unemployed non-Whites. One can go to the non-European labour bureaux in any of our big towns and see literally hundreds of unemployed people looking for work. In many cases they are afraid to register because they fear they might be endorsed out. We find cases of men who have been waiting for years in a city, afraid to register because they may be endorsed out.

The productivity in this country is not as good as it might be, and it will never be good, so long as able-bodied people who wish to work cannot do so because of Government regulations. We find that many non-Whites are sitting in the locations instead of doing a good day’s work. In this way erosion sets in.

The hon. the Minister called upon the country to make sacrifices. How can he expect people to make sacrifices when we find thousands of acres of land eroding away, particularly in the province I come from. The land concerned was bought by the Department of Bantu Administration and Development from European farmers to add to the Bantu lands, yet the Bantu lands are being allowed to erode away because no plans have been laid down for utilizing these lands. We find the soil of good farms being washed down to the sea because no plans were made as to how the land was to be used.

What planning was not done?

I suggest that the hon. the Deputy Minister, instead of asking questions across the floor of the House, should go up to Tugela Valley, to Dundee, to Vryheid, and see what the countryside looks like. I have been there and I have seen conditions there, I saw the soil being washed away. We find land earmarked for border development and then thousands of rand are spent on factories and equipment for these factories, yet just over the fence we find slums developing and people living in slum conditions whilst de luxe conditions are found in the factory. We find millions of rand invested in dams but, as the hon. member for Sea Point pointed out the other day, although the dams are built the plans relating to the use of the dams have not yet been completed. In the meantime the vast army of civil servants increases. According to the 1965-’66 Year Book the number of white persons in Government and semi-Government employ increased by 36,212, or 10.2 per cent in five years. Is it any wonder then that the civil servants are becoming restive? Another class of person who is complaining about the Government asking for sacrifices is the working wife. Working wives find no tax relief, no tax incentive, and housewives throughout the country, particularly in the large towns, cannot keep pace with the increased cost of living, especially the increased cost of food. They too want to know how the Government can have the audacity to ask for further sacrifices.

With the Part Appropriation Bill before us now, we are on the eve of another budget, and the Minister has already indicated one budget concession. The indications are that the Minister is going to have another record surplus, something of the order of R75 million plus. No doubt when he announces a surplus of R50 million plus or R75 million plus or R100 million plus there will be cheers on that side because they will think it is good budgeting. Perhaps now is the time for this side to give the Minister a few suggestions regarding the budget. I can only suggest that we should get some relief in his budget. We cannot get the answers now, but we can give him the advice now. He can give relief for the married woman taxpayer, for the middle income group who suffer under an inequitable tax bracket, for the old-age pensioner and a reduction in the tax on beer. There are also people against whom there is a discriminatory tax on beer and to whom reference was made in past budgets. These are a few suggestions for the Minister’s consideration when preparing his budget. Naturally he will not indicate his budget proposals now, but there is no reason why we should not give him the advice now. Should he accent our advice, we on this side can take the full credit for having advised him on the right lines.

There is no reason for the Minister to feel satisfied about the country’s present financial position He indicated in his opening remarks that he is not completely satisfied. He realizes that further curbing has to take place. Until we have a long-term capital market, and by long-term I mean 20 or 25 years; until there is a reduction of interest rates; until there is increased productivity; a substantial reduction in the cost of living; adequate housing; a coordinated farming policy; and relief for those who have lost through sterling devaluation, this Government cannot claim to be the friend of the ordinary man.

Mr. Speaker, I have listened attentively to the hon. member for Pinetown, and my expectations were indeed great when I heard him ask for an hour because he could not complete his speech in half an hour. But after having listened to the hon. member I can but ask him why he did not rather finish in half an hour. I do not think that I am being unreasonable when I say that the hon. member’s speech was really not conspicuous for any profound financial criticism of the Government’s policy. He did make a few references to financial policy. He said that “the finances of this country are not being managed efficiently”; he spoke of “inflationary trends”, of a “stop-go economy”; and in the end he apparently took on the role of Father Christmas and began to dish out presents in advance on behalf of the hon. the Minister, who is responsible for a very sound Budget and the very sound financial position of the country.

Before coming to the hon. member’s amendment, I do want to test what he said against the facts. He said firstly: “The finances of this country are not being managed efficiently.” I want to say at once that he did not prove this. I now want to prove that the financial policy of this Minister and this Government has been administered very well indeed. It has been implemented very well and very successfully. I want to reply to the hon. member for Pinetown and tell hon. members to-day that at the end of 1967 the economy of South Africa displayed some very fine features. One of these has already been mentioned by the hon. the Prime Minister and the hon. the Minister of Finance. It is that inflation has to a very large extent been brought under control in this country. In other words, the Government succeeded in returning economic stability to our economy last year. The figures are there for all to see. In 1964 South Africa had an inflation of 4 per cent. In 1965 we had an inflation of 3.2 per cent, in 1966 it was 3.8 per cent and last year it was 1.8 per cent. Now I just want to point out to the House that an inflation of 2 per cent is associated with normal economic growth and expansion all over the world to-day. I think it an exceptional achievement on the part of the Government to have succeeded in bringing our economy back to and below the 2 per cent inflation limit last year.

But now I want to emphasize two things about this economy, which the hon. member says is not being managed properly. The first is that there is no country in the world which has not had inflation in the past ten years. There are only three countries in the whole of the world which have had less inflation than South Africa in the past three years. Those three countries are the United States of America Canada and Greece. Let us now compare South Africa in this respect with 15 other countries as regards the inflation rate of 1967. We had an inflation rate of 1.8 per cent. Last year Canada had an inflation rate of 4.1 per cent; the Netherlands 3.9 per cent; Japan 3.6 per cent; Italy 3.8 per cent; the U.S.A. 2.7 per cent; France 2.7 per cent; Belgium 3.2 per cent; Sweden 4.5 per cent; Austria 5 per cent; Denmark 4.9 per cent; Spain 7.1 per cent; Portugal 4.9 per cent, and only two countries had a lower inflation rate than South Africa, namely West Germany and Great Britain. We know what the position was as far as the economies of West Germany and Britain are concerned. West Germany was in the grip of a fairly severe recession and is at present still doing her best to get out of it. We are reasonably well acquainted with Great Britain’s economic problems and I do not want to say anything further in that regard. We are aware of the measures adopted by Mr. Wilson to freeze and restrict wages and profits in order to surmount his economic problems. Only these two countries, countries that were in a static condition, had a lower inflation rate than South Africa with its strong, vigorous and growing economy. I just want to point out in passing that this fact that our most important trading partners experienced severer inflation than we did, has naturally greatly improved our international competitive ability. I would say that it is obviously a feather in the cap of this Government that this situation could now have been brought about.

I further want to point out that we have not combated inflation in the way in which other countries have, that is. by creating large-scale unemployment. We have done so while a condition of full employment has prevailed, and even with a shortage of certain types of skilled labour. The hon. member has spoken of the great unemployment which exists. I do not want to dispute that people have come to ask him for work. Who am I to say that it is not so? But we do have certain reports and figures that have been published. These are the standards by which we can judge. We cannot judge by two or three persons who went to see the hon. member for Pinetown at his house. We have the position that there were only 12,337 registered unemployed persons at the end of November 1966. At the end of October 1967. there were 13,937, and at the end of November. 1967, there were 13,990. For the year from November. 1966 to November, 1967. there was therefore an increase of approximately 1.600 registered unemployed.

I have said that this Government has succeeded in decelerating the rate of inflation and in reducing it to far below those of almost all the other countries of the world. But in that process we have net. and this is something I should like to mention here in the light of what the hon. member for Pinetown said, detrimentally affected the growth rate of South Africa. We have curbed the economy, but we have not forfeited the growth. In conjunction with the stability we have had growth. I think that this is of the utmost importance. It has always been our aim to achieve growth with stability. I just want to point out that in 1967 we had a growth rate of more than 6½ per cent. The U.S.A., for example, had a growth rate of 4.4 per cent last year. Since 1960 we have annually maintained an average growth rate of 6 per cent, with an annual per capita growth of 2.7 per cent. This 2.7 per cent represents the increase in the standard of living of our population from year to year.

Before I deal further with some of the points raised by the hon. member for Pinetown. let me just mention in passing a few other fine aspects. The hon. member for Pinetown said that this economy had not been managed properly and efficiently by the Government. In this connection, however, the exceptional achievement of our exports deserves to be mentioned. In 1967 South Africa had an increase of 12.7 per cent in its exports, that is to say, 12.7 per cent above the record year of 1966. It was the highest in the Western world and the second highest in the whole world, Japan having had the highest. I can also point to our wonderful balance of payments. This puts me in mind of the debate conducted here last week, when there was a dispute about the income of our own non-Whites. The income of our non-Whites is three times greater than that of Ghana, five times greater than that of Nigeria, six times greater than that of India. I mention this only in passing. In South Africa we possess more motorcars per head of all races of the population than any country in Africa, Asia or Latin America These things are attributable to the confidence in the stability and the reliability of this Government. These things are attributable to the financial policy of this Government, a financial policy based on the principle of private ownership and individual enterprise. These wonderful successes have been achieved because in the countries of the world to-day South Africa is still one of the most attractive countries for investment. In its publications the U.S.A. says that the yield, indeed the profits, on their investments here, vary from 15 to 20 per cent on the money invested by them in South Africa. Our dividend rate in South Africa is considerably higher than the average world dividend rate. These are the things that count. These are the fine aspects of our economy, and consequently it is no surprise to me at all that the hon. member for Pinetown did not succeed in disparaging the financial achievements and the financial policy of the Government in any way.

Mr. Speaker, there is in fact one small matter about which in passing I want to haul the hon. member over the coals. I do not know if I did not understand him clearly towards the end. but I think I heard him say that the Minister would have to succeed in bringing down interest rates. Did the hon. member say that? [Interjections.] I think the hon. member said: “Until the Minister succeeds in doing that.” I just want to remind the hon. member of what he said in 1966. He said that the freezing of interest rates was a misguided policy and the cause of all the Government’s financing difficulties. This appears in the Hansard of 1966, Col. 1187. Let me now say this for the record, so that no political propaganda can be made of this matter. I refer to the hon. member for Parktown, who is going to speak after me. In 1967 he said (Hansard, Col. 59)—

Likewise I can of course quote the hon. member for Constantia and even the hon. the Leader of the Opposition. I am saying this for the record, so that the hon. member for East London (North) may not fall into the temptation, as be is itching to do, of making propaganda about this matter.

The hon. member for Pinetown spoke about houses, about the building of houses and about building societies. I now want to tell the hon. member for Pinetown that the Government has nothing to reproach itself with in this connection. 55 million was voted for community development last year. Those hon. members said at the time that we should reduce the amount. We were spending too much. The State was spending too much money—R55 million for community development! To-day, on the other hand, he pleads for an increase. Do you know. Sir. that during 1966-’67 we spent an amount of more than R18 million on economic housing by local authorities, representing 4,371 houses? On the sub-economic housing scheme we spent an amount of more than R11 million, which produced 736 houses.

Is that for all races?

No, it is only for Whites. The National Housing Commission spent more than R8 million with its programme of housing loans, providing houses for 1,553 persons. I can continue in this way. But I do want to make the point that the money is available. There are certain town councils which do not want to carry on with sub-economic housing schemes. Then they ask: “Where must we put them?” They do not want to lower the standards of their towns. They do not want that type of house in their towns. I am not saying that it is done on political grounds, but in many cases. I would say in the majority of cases, the people who say so are supporters of that side of the House. They do that, and then hon. members on that side of the House blame us for there being no houses for the lower income groups.

The hon. member spoke about building societies. On behalf of our side of the House I want to welcome strongly the statement made by the hon. the Minister in connection with building societies. We are glad about it. We knew that if the building societies had problems, they only needed to approach the Minister and he would help them solve the problems. Now I just want to point out that in 1964 the building societies granted loans totalling R450 million. In 1966 the figure was R313 million and in 1967 it was R356 million. Hon. members will notice the difference between 1964 (R450 million) and 1966 (R313 million). Just look at the drop there was! In 1966 we did not yet have the RSA savings bonds. To-day we are reproached by the hon. member for Pinetown that the building societies’ lack of funds is attributable to the RSA savings campaign. That cannot be, because the funds of the building societies had decreased before the RSA savings campaign, and when the savings campaign was introduced, they rose again, from R313 million to R356 million. We do not deny that the Minister himself said that it might be a contributory factor. I want to explain this. But there are other factors too. In 1965 we amended the Building Societies Act in this House. The amendments to the Building Societies Act have also been a factor contributing to this decrease in the deposits and the loan funds of the building societies. [Interjections.] Yes, I want to say to the hon. member who is making so much noise there, that it was done unanimously. As the hon. the Minister has said, credit control must have had an effect on all financial institutions in South Africa. What is more, the national growth funds which are achieving such success throughout South Africa, must also have had an effect on the building societies. Now there are hon. members who want to spread the impression abroad that the RSA savings campaign is the only factor to be blamed for the shortage of accommodation. We want to say that we are glad that the hon. the Minister is envisaging a measure of permanence for the RSA savings bonds. At the same time I just want to point out to hon. members that in this country this principle of exempting interest from income tax is as old as the hills. The interest on subscription shares in building societies has always been tax-free. There is the interest on Post Office Savings Bank deposits. Interest up to an mount of R200 each for a husband and wife plus another R200 for each of their children is tax-free. Interest up to the amounts I have mentioned is exempt from income tax. The tax-free interest on Post Office Savings Bank certificates can amount to R400 per person, R800 per husband and wife, plus another R400 for each child. Interest equal to the amounts I have read out, is exempt from income tax. In addition there are the National Savings Certificates, the interest on which is exempt from income tax. Then we also had savings bonds and treasury bonds in 1961, 1963. 1965. and twice in 1966. The returns of all those series were exempt from income tax. The latest one, that of last year, which is effective in this tax year, is really the thorn in the flesh. But why? It is only because it was better advertised, because we placed greater emphasis on the matter of saving. I can remember very clearly sitting in the House and the hon. member for Parktown—he can confirm or deny it—saying: “What do you expect? You do not even advertise? Let the Prime Minister make a speech informing the country of this savings campaign. Let us make it known. Then it will be a success.” That is what the hon. member said. Now it is a success.

May I put a question to the hon. member?

My time is almost up, Mr. Speaker. I am very sorry. I now just want to say something in connection with the Government expenditure for which the hon. members are reproaching us so much. I want to point out that those hon. members tried to scare us at the beginning of the sixties with their talk of depression. Do they still remember that? Do they remember that when they tried to scare the country, the private sector sat back and did nothing? I now ask them and this House: If the Government had not stepped in at the time and announced its schemes at Sasol, Iscor, etc., what would have happened to the economy of South Africa? If this hon. Minister had not then said to the country in another capacity: “Spend for prosperity”, what would have happened to the economy of the country? Because there was a stage when we wondered how we would set the development going after those members had made the people so afraid. Then the hon. member for Constantia stood up here and said that the Government must do something. He said—

This is precisely what the Government has done, and after the Government has done so, they come and reproach the Government for having done too much.

Mr. Speaker, I should have liked to discuss this much longer; perhaps we shall be able to discuss it in the Budget debate. I now put the question to myself: What about the road ahead? We closed the year 1967 on a very fine note; we had gained a measure of stability and had maintained our growth. This is the basis upon which we are entering 1968, but everything is not right yet; we admit that. There are possibilities of inflation in our economy, and what of it? Therefore we welcome the hon. the Minister’s assurance to the country to-day, a very clear assurance about which no one can have any doubt—just as in the case of his prompt action after devaluation by Britain —that he does not intend just letting everything slip again, but that he will go ahead in a planned and very orderly fashion. We welcome this, because in the year that lies ahead we shall also have to guard jealously this precious possession of South Africa, namely our wonderful economy.

I nevertheless want to submit the following to the hon. the Minister for his consideration. I want to emphasize the fact that, owing to the terrible drought, there are bodies and persons in our country who, like the building societies,

will possibly require sympathetic consideration to some extent in the year ahead. I can say this because I have every confidence that any matter which is worthwhile will be treated as such by this Government.

With these few words then I want to say this to the Opposition: If they have any financial criticism to level at the Government, they must prove their charge in a very different way from that in which the hon. member for Pinetown tried to do so this afternoon.

Sir, in the no-confidence debate last week, the hon. the Prime Minister and the hon. the Minister of Economic Affairs, and to-day the hon. the Minister of Finance and the hon. member for Queenstown, expressed the greatest satisfaction with the progress we have made in combating inflation. It is true that last year we at last saw a slackening in the inflationary pressures. I want to tell the hon. the Minister of Finance that we are delighted that that should have been so, and we have every cause to be delighted because after all it is not the original remedies introduced by this Government that have brought about this state of affairs. Even the hon. member for Queenstown does not believe that. It was only after our advice had been taken and the many measures that we suggested should be introduced had been taken, that we began to get results. Sir, think of the labour pains that this country had to go through first. You know, Sir, it seems that we have to keep on reminding hon. gentlemen opposite of how they proposed to deal with inflation. For the sake of the record, as the hon. member for Queenstown has said, let us look at interest rates. What happened? The Government froze them. It took us two years to get them unfrozen. Our remedy was to unfreeze interest rates, not to freeze them. Then they tightened import control, then they relaxed it, then they tightened it again, then they relaxed it again, after it had taken us another two years to get the Government to understand that you do not fight inflation with import control. That was our second remedy. Then they planned a third Iscor and half the members of the Government were running round the countryside looking for a site, and then they postponed that project. Then they planned a large aluminium smelter plant at a cost of some R40 million. This has now been postponed. We were going to get two new Blue Trains costing over R2 million. We still have to use the old one to-day. Then they had the Orange River scheme. Half of that scheme has now been postponed. It was getting to be like the old Pea-trick—now we see it, now we don’t. It took us two years to get the Government to understand that you had to determine priorities, and I hope that the hon. member for Sunnyside now knows what our advice was.

Sir, this afternoon the hon. the Minister of Finance said that the thing that has given him the greatest satisfaction was the RSA bonds. I think he has good cause to be satisfied, but RSA bonds were first mentioned by the hon.the Minister of Finance in the Budget of August, 1966, and he added then, as I have told the House before, that a special savings campaign would be launched to advertise the attractive facilities offered. Last year we told the hon. the Minister that we had seen no signs of this savings campaign and that he should adopt modern and dynamic methods to achieve his objective which, of course, was to cull excess funds off the money market. I want to give the hon. the Minister of Finance full credit for taking our advice, because he has at last launched a dynamic sales campaign. With what result? In under six months, as we heard this afternoon, he has taken R69 million off the market. But, Sir, had the hon. the Minister acted in 1966 instead of waiting till the end of 1967, how much further would we have progressed in our fight against inflation? We would have been much further on the way towards overcoming the two great problems that we still have. I want the hon. member for Queenstown to understand that when we say that we have a problem of high interest rates, it does not mean that we want to fix those rates. It is a problem, and only deflation or the removal of inflation will cure that problem. Had we started with measures like RSA bonds earlier, we would have been well on the way to curing the problem of high interest rates and the shortage of long-term investment funds. Sir, the characteristic of this Government is this: First they fulminate—and this they do better than anybody else I know—then they vacillate, then they procrastinate and finally they hibernate and then we have to tell them what to do.

Sir, I am glad that the hon. the Minister has told the House this afternoon what he proposes to do to help the building societies. I do not regard this as helping the building societies; I regard this as helping housing. I want to draw the attention of the hon. the Minister of Community Development to the fact that in the quarterly Economic and Market Appraisal issued by Hill Samuel at the end of last week, they make the statement that inflationary pressures in the last few years are due to three factors: food, servicing and housing. This is what they say on housing: “Some real blame needs to be placed at the door of the Government.” I think we all subscribe to that. They go on to say—

In reply to a question put by my colleague the hon. member for Berea last Friday, asking for details of housing shortages, what did the hon. the Minister reply? His reply was—

This may well be true, but surely the hon. the Minister is in a position to give the House an estimate or even some guesstimate, if he likes,

as to what he and his Department consider the housing shortage to be. How can he deal with the shortage of houses …

I gave that last week in reply to a question.

The hon. the Minister only dealt with certain facets. How can we deal with such problems as funds for the building societies to help housing if we do not know what the housing shortage is? I think even the hon. the Minister will accept that there is a housing shortage; otherwise the hon. the Minister of Finance would not have had to advise the House to-day of his proposals to help the building societies, because helping the building societies, as I have said, is helping housing. But, secondly, the hon. the Minister changes his stand. At the Executive Council meeting of the Federated Chamber of Industries held at the beginning of November the question of housing was discussed, and according to the Financial Mail the Council was told that there was a “severe demand for housing”. But in the Acting State President’s speech what did he say? He said—

Sir, to me these are contradictory terms. If you have a shortage of housing, then there is cause for alarm. It may not cause alarm to the hon. the Minister but it is causing a great deal of alarm to the people who cannot get houses.

The hon. the Minister knows—and I am very sorry that his colleague who is in charge of Land Tenure is not here—that the one way in which we can help to break this bottleneck is by way of sectional title. Sir, I cannot get the Government to realize that by using sectional titles you mobilize for housing the down payment that a would-be flat-owner pays to acquire a flat and so you mobilize millions of rand which at the present moment are going into other forms of investment. I introduced this question of sectional titles, in 1964 by way of a motion which was accepted. Subsequently a bill was published for general information and in April, 1965, a revised bill was introduced into the House. In April, 1965, before the second reading, the bill was sent to a select committee. In June, 1965, the chairman of the select committee reported to the House that the committee had been unable to complete its work and asked for the committee to be discharged, but added the rider that the committee be re-appointed as early as possible in 1966 to resume and complete its work. What happened during the two sessions of 1966? Nothing. What happened in 1967? Nothing. And what was the reason given by the Minister of Land Tenure? This is what the Minister said, according to Hansard, Vol. 20, col. 5168—

I do not want to differ with the hon. member as to the necessity of housing having to be provided as soon as possible, but in view of the tremendous amount of subdivision of land, also for the purpose of community development and other purposes, the Deeds Office has a tremendous amount of work to do. The officials in the Deeds Office are already being overworked. If the legislation the hon. member advocated here has to be placed on the Statute Book, one will not be able to implement the Act. One will have an Act on the Statute Book, but one will be unable to implement it, since it will be physically impossible to do so. That is why, in reply to a question, I told the hon. member some time ago that I had appointed a committee with a view to inquiring into the staff position of the Deeds Office as well as the possibility of introducing legislation of the nature the hon. member advocated here.

In reply to a question this year the hon. the Minister told me that he had received an interim report and that the matter was being considered. Sir, the hon. the Minister and the House are well aware of the urgent necessity to provide more housing quickly and cheaply, but the hon. the Minister of Land Tenure throws up his hands in despair and tells us that the Deeds Office cannot find the necessary staff. Sir, I want to ask the Government this: Year after year they pass legislation on Bantu affairs, on Coloured affairs and Indian affairs and manage to find the necessary staff to administer it. But at the same time the hon. the Minister of Land Tenure tells us that he cannot find essential staff to deal with legislation which is necessary for the European section of the community. No, Sir, where there is a will there is a way. The Government is so busy directing its energies and the energies of the country towards this impractical dream of separate development, that it has no time for the real and basic needs of the people.

We are now told that the Coloured Persons Representative Council will be granted certain administrative powers and that initially white public servants will be on loan to that council to assist it with its administration. Sir, I do not wish to be misunderstood. We have no objection to white public servants helping this council, but it seems to me that the Minister of Coloured Affairs can get the staff he wants but the Minister responsible for Land Tenure cannot get the staff he needs to help the hon. the Minister of Community Development to get on with his job. The hon. the Minister responsible for Land Tenure is not here, but I hope the Minister of Community Development will take this colleague to task and get something done. You see, Sir, what hon. members opposite do not realize is that you cannot carry out the planning of large blocks of flats in one or two years, because they are big projects which take a long time, and until the Sectional Title Act is on the Statute Book you cannot expect people to plan for sectional title accommodation. In point of fact, there has been such a delay since 1964 that the average property developer to-day is beginning to believe that we are not going to get that Bill. I want to suggest to the hon. the Minister that he should re-introduce the Bill now—he has it—and re-appoint the Select Committee so that they can continue with their work. A great deal of evidence was received by the Select Committee last time, but they did not have an opportunity of considering it. A great deal of work still has to be done before the Bill emerges in its final form. If the hon. the Minister will do this, then at least people will know that we are going to get the Bill as soon as possible. But the general feeling today is simply that the matter is being unnecessarily delayed. Individual ownership of flats bring enormous benefits to the people, like security of tenure which they do not have to-day to any extent, and lower costs. The hon. the Minister knows that it costs about two-thirds of the cost of a house to build a flat. It is a hedge against inflation which a tenant never has. To-day that is enjoyed mainly by those rich people who put up the flats which we poor tenants have to occupy. There is the saving in income tax which a homeowner has. All these things are for the benefit of the people and I hope the hon. the Minister will see that something is done.

Now I want to deal with another matter, the question of income tax. Since 1964 we have been asking the hon. the Minister of Finance to set up a commission of inquiry into income tax. What has been the reply we have got every year? That the Minister and his Department are keeping income tax legislation under constant and continuous scrutiny, and that therefore there was no need to set up a special commission. On 24th November last year, some four years after we first raised this matter, a commission was eventually appointed. It took us three years in this case to get this done. Why I raise this matter is this: I hope the hon. the Minister of Finance is not going to use the setting up of this commission of inquiry as a reason for leaving the present tax position as it is. The commission is asked to report not only on the present system of taxation in the Republic, but also on the existing financial structure and the fiscal and monetary policies of the South African authorities. This is a very, very wide field and it is my guess that under normal circumstances it would not be possible to get action from the Government until at least 1970. We know that with this Government we do not have any normality in the time-lag which we find from appointing a commission, to action being taken by the Government, but I will discuss this at a later date. There are three tax matters which I believe require urgent attention. The first is the old question of ironing out the bulge. I do not want the semantic discussion we had last year of what the bulge means, because we all know what it means. I want to bring this to the notice of the hon. the Minister of Finance. Dr. Dônges told us in October. 1966 (Hansard, Vol. 18, col. 3682), that he had already on two occasions tried to flatten out the bulge and that he was always seeing whether there was an opportunity of completing the process. I believe there is an opportunity now. I do not believe that I am being unduly optimistic when I anticipate that the hon. the Minister of Finance will in his Budget speech show, shall we say, a moderate surplus. Should this be the case—and I am confident it is, and if it is not he will always be able to get help from his colleague the Minister of Transport, who I am sure will have at least R30 million to R40 million to help him with —I suggest here is the opportunity that the Minister’s predecessor had been waiting for. It will do no harm to his Budget. It will not be unduly inflationary and it will do a great deal to remove what has been a running sore for many years. The Minister now has a great opportunity for making a name for himself so that he will go down in history as the man who removed the bulge, perhaps more so than his colleague the hon. the Minister of Sport.

The second problem is the question of the taxation of married women. I do not want to repeat the same arguments we have had in this House since we raised this matter in 1964. We got some alleviation in 1965, but I want to say that the alleviation given in 1965 is insufficient and that we should take further steps now to step up the ceiling to, say, R12.000 instead of R9,000. The Minister has had sufficient representations on this matter. He has had representations from the Business and Professional Women’s Club, from TUCSA, from the Afrikaanse Sakekamer, the Society of Physiotherapists, the Vrouefederasie, the Union of Jewish Women, the Transvaal Teachers’ Association and many more, and I am sure there are hundreds that I have not even heard of. His own official, Dr. Rieckert, came out very strongly in support of this. I want to say this to the hon. the Minister, that he must remember the old adage that Hell hath no fury like a woman scorned. If he delays this matter any further, he does so at his own peril.

The third matter is that of medical allowances, which I raised last year, and I make no apology for raising it again. I had no reply from the Minister or his Deputy last year, but I am sure it was just overlooked. Firstly, I believe that the allowance should be changed to a rebate. Under the system of an allowance from income, the higher your income the more you benefit, and this, I am sure, is not the Minister’s intention, namely that the rich should benefit in regard to medical allowances to a greater extent than the poor. If a rebate from actual tax were substituted for the allowance, all taxpayers would benefit, not to an equal degree but to an equal amount, so that the small taxpayer would have the same amount by way of rebate as the rich taxpayer, and relief would therefore go to the people who need it most. Secondly, I believe that taxpayers should be able to carry forward any unused portion of the rebate so that in fact when they are faced with heavy medical expenditure they will be in a position to meet it. What this would mean, as I said last year, is that we will do for the working man and for every citizen of South Africa in regard to this allowance what we have already done for our friend the farmer, namely to equate it over a period of time so that the maximum benefit can be received. If I remember rightly, the hon. the Minister, in reply to a question this week, said that the average amount of rebate being claimed was R38. We are not dealing with an enormous amount of money here. This is not a tax-saving proposition; this is something which both sides of the House, I am sure, want for the people who most need it.

I was interested during the no-confidence debate to hear the hon. the Prime Minister tell us that all members of the Government were behind him 100 per cent, and not only behind him but also behind the policy of the Government. What struck me as being somewhat strange was the applause from the House and from the gallery. It seemed to indicate that this applause was an expression of great relief at the fact that the hon. the Prime Minister had been able to get up in this House and assert that all was well. I do not want to take the matter any further—time will tell— but I want to say this. Applause from the hon. members opposite is a very poor reflection of what the man in the street feels. He is concerned with certain basic things. He is concerned. firstly, with earning enough to keep himself and his family. He is concerned with having a roof over his head, and we are doing our best to get that for him. He is concerned with providing a proper education for his children and. again, after years, the Government has at last listened to us. I was interested to listen to a speech by the Minister of Education last year in the House when he got up and used figures, word for word the same as my hon. leader had used the year before. It takes time to sink through, Sir. I think there must be something wrong in our communication with the Government. We will have to ask our Whips to investigate it. We suggest lines of action and they do not seem to understand them the first time or the second time, but eventually we manage to get it into their heads that this is good for the country, and then the hon. member for Queenstown gets up and tells us what a wonderful job the Government has done for the country. I want an hon. member opposite to get up and thank the Opposition for telling them what to do to get the country on the right lines.

The man in the street is also concerned with security for his old age, and he is concerned with the ability of the rand to maintain its stability. This has to be our one objective. Until this country can get across to the people that the value of their rand is going to remain a rand, we will be obsessed with problems of long-term investment, interest rates and many other things. I hope we are on the right lines and I hope that our advice will be accepted. The man in the street is concerned with the burden of taxation. He is concerned with a fair salary, without unfair competition. We told the House this afternoon about some of the things we think should be done to relax his concern or to relieve the man in the street of his concern. We hope this time the Government will take our advice a little more promptly.

It is striking to see how United Party speakers have been claiming for themselves this afternoon the credit for our sound economy. The hon. member for Parktown, who has just resumed his seat, mentioned one factor after the other in an attempt at making us believe that the things the Government is doing at present, the sound steps it is taking, are steps which were suggested by them a long time ago. According to them, it is merely a case of this Government having been tardy in implementing those things which they had allegedly suggested. It is obvious that they are rather jealous of our sound economy and the sound policy followed by the Minister of Finance. Now they are trying to claim for themselves a little of that credit.

But when we analyse their arguments one by one, we cannot but come to the conclusion that they are extremely inconsistent. The hon. member for Parktown concluded his speech by making mention of the concern about the stability of the rand felt by the person who was about to retire from service. He said that the man in the street had one worry, and that was his concern about whether the value of the rand would remain stable or whether the rand would still have the same purchasing power by the time he retired. That is true— we all want that stability. But another speaker of the Opposition, the hon. member for Pinetown, came forward and advocated tax relief, inter alia, of the tax on beer. We want to keep our monetary unit stable. We do not want it to lose its value. Does the Opposition not understand the underlying fundamentals for a stable monetary system? They remind me of King Henry VIII. He also thought that one could simply increase your money all the time —everything would be all right. In that way the hon. member for Pinetown pleaded here this afternoon that we should increase the amount of money in circulation by distributing at this early stage the large surplus the Minister is anticipating. But, surely, by doing so one would be increasing the amount of money in circulation and then one would necessarily be jeopardizing the stability of the rand. On the other hand we have the hon. member for Parktown who says that he is concerned about the stability of the rand, whereas those things that are being suggested by the hon. member for Pinetown would in fact jeopardize that stability. In his day King Henry VIII gave permission—and in those days they still had coin money only—for the silver content of his coins to be reduced over a period of eight years to one-seventh of its original content. The result was that the amount of money in circulation immediately increased sevenfold and that prices increased sevenfold. In the same way the hon. member for Pinetown, too, wants to increase the amount of money in circulation and thus jeopardize the stability of the rand. Do you see how inconsistent this is? The main speaker on the United Party side is asking that the amount of money in circulation should be increased, which would involuntarily jeopardize the stability of the rand. On the other hand the hon. member for Parktown says that they are concerned about the stability of our monetary unit.

I can mention to you more examples, Mr. Speaker, of governments that gambled with the stability of their monetary unit, and I can point out to you, Sir, what infinite hardships this entailed for those poor populations. Do you remember what happened in Germany, for instance, after the First World War when there was a tremendous increase in the issue of paper money? Within a period of two years there had been such a tremendous increase in the issue of paper money that a loaf of bread cost 50,000 million mark—one single loaf of bread: 50,000 million mark! That is what happens to a country’s monetary unit when a government gambles with its stability. We find that the same thing happened after the Second World War in countries such as Hungary, China, Greece and Rumania. The value of their monetary units has just about been destroyed. In Rumania, for instance, the amount of paper money issued within a period of two years increased by millions and millions. The result was that prices increased to a multiple of a figure of 30 units. That is what happens when a government gambles with the stability of its currency.

Who has asked the Government to gamble?

The hon. member for Pinetown made the suggestion that the hon. the Minister of Finance should simply distribute the anticipated large surplus. That is gambling with the stability of the rand. It is indeed gambling with the stability of the rand when the large surplus the hon. member anticipates should simply be distributed, inter alia, by a reduction in the tax on beer. At present the amount of money in circulation is not increased by reducing the money content of the coins. Nor is it increased by issuing more paper money. Money is increased to-day mainly by creating credit or making tax concessions—in this way the amount of money in circulation is increased. When too much money is in circulation, a government only has a few remedies at its disposal for withdrawing that extra money. One of those remedies is the one the hon. the Minister of Finance applied last year, namely that of increasing taxes. In that way a large amount of surplus money is withdrawn from circulation. Another remedy is to persuade the public to save, not to spend everything. That is the exact opposite of what the hon. member for Pinetown asked when he requested that the State should spend everything it has collected, and that nothing should be saved. Should not the State too, just as the public, save its surplus or redundant money? Should the State simply go on spending all the time? To my mind this is the basic problem we have in regard to the hon. Opposition. On the one hand they are concerned about the stability of our currency, but on the other hand they are asking that the State should simply go on spending. If the State were to do that, it would be the surest way of jeopardizing the stability of our monetary system and of the rand to a very considerable extent.

What does the Government want to do with the money?

Surely, the hon. member is a capable financier, or is he not? Does he not know what one does with savings? Are they not being used for capital expenditure? Are fixed investments not savings, too? Surely, a fixed investment is a saving too, and that is exactly what the Government is doing with the remaining money. It is spending that money on its capital programme, and that is what we want it to do.

The hon. member for Parktown also had a great deal to say about our housing shortage, and he tried to intimate here that the hon. the Minister of Community Development did not even realize how great the housing shortage was, etc. The housing shortage, a state of affairs which this side frankly admits does exist, is perhaps a little worse here than in some of the other countries where housing shortages also exist, as in fact it does all over the world. Why is that? It is because our economic growth is more rapid than that of other countries. It is an indisputable fact that if a country has a very rapid economic growth, there will be a housing shortage. The reason for this is that people who previously lived in with other people in one or two rooms, earn so much now that they can afford a house. Consequently a housing shortage arises. This does not only apply to our white workers, but also to our non-Whites. How many of our non-Whites, who previously lived in tin shanties, hovels and slums, are living in very good houses to-day? That is because our economy is growing so tremendously, because our economy is so sound, because our rate of growth is so high; that is why we find this housing shortage. It is merely another result of our very sound economy.

The hon. member for Parktown also spoke contemptuously about the shortage of manpower in certain departments. He also claimed that certain departments, such as Bantu Administration and Development and Coloured Affairs, did not have a manpower shortage because the Government provided all the necessary manpower in those departments. This reminds me again of what the hon. the Minister of Bantu Administration and Development said last week during the no-confidence debate: “No matter what it costs to solve our relations problems, the price will still not be too high.” I want to confirm this wholeheartedly. I want to say that no matter what it costs to place our relations problems on a sound basis, the price will still not be too high.

The hon. member for Parktown said further that the Minister of Finance should not use the appointment of the commission on taxation matters as a fig leaf behind which to hide and neglect to set right what is wrong in our system of taxation. He said this after the hon. member for Pinetown as well as the hon. member for Parktown, I think, had accused the Government this afternoon of suffering from a lack of thorough advance planning. The Minister of Finance has appointed a commission to make a thorough inquiry into the whole question of taxation matters and to suggest a proper long-term plan to set everything right. On the one hand that side is accusing the Government of not having any long-term planning, and on the other hand the hon. member for Parktown asks the Government that it should not wait until the long-term plan has been worked out thoroughly before it grants relief, but that the Government should simply and heedlessly take rash and hasty measures to set right certain matters. How can the hon. member propose such a thing and at the same time advocate long-term planning? Is the hon. member throwing the requirements for long-term planning overboard?

I cannot help gaining the impression, to an ever-increasing extent, that this Opposition has by now been in opposition for so long that they can no longer think positively. They can only be negative and destructive. They simply cannot bring themselves to making a positive contribution. That is so because they have already forgotten what it is to be a government, a government that designs positive plans for the future.

The hon. member for Parktown also pleaded here this afternoon for aid to be granted to those sectors of the economy which had been hit very unfavourably and hard by the unilateral British devaluation. He referred to a few sectors which were being affected very unfavourably, and asked the hon. the Minister of Finance to be much more specific. On 20th November the Minister did in fact announce that the Government would accommodate those sectors of the economy or those persons who are being affected adversely. Now the hon. member asks that the Minister should be much more specific and should say what he is going to do. In other words, the hon. member wants the Minister to say that he is going to subsidize the fruit industry in this way, the canning industry in that way, etc. It is undoubtedly so that certain sectors of our economy are being affected very seriously by this unilateral British devaluation. But the solution to the problem is most certainly not a number of subsidies only, because to me subsidies are like brandy—good stuff, but one should use it sparingly, otherwise one becomes addicted to it. That is in fact the danger implied in subsidies, namely that they tend to become permanent. That is why I say that subsidies are like brandy. One can become addicted to it so easily. A government, a country, an economy can so easily become addicted to subsidies. Do you know what its eventual result is? It simply pushes up the price of land once again because, if those subsidies become permanent, the benefit which is given by means of a remedy becomes permanent, too. It has the tendency of making land prices soar once again. That in turn makes our bargaining power in world economy so much more difficult.

What is your policy?

I shall give you the solution now. I want to refer the hon. member to what happened in the United States of America after Britain’s devaluation in 1949. When Britain and many more countries than have done so now, devalued in 1949, the American exporter also asked his Government: Help us now, because at present we cannot compete with those industrialists from countries that did not devalue. The American Government said: “No, accept this devaluation as a challenge and find a solution that way.” What happened was chat by means of greater efficiency the American industrialist reduced his production cost to such an extent that he was then in a position to compete with those countries that had devalued. If they had been granted subsidies, these subsidies would have become permanent and they would permanently have found themselves in a weak position. But because they accepted that devaluation as a challenge, the economy of the United States was strengthened to such an extent that even to-day, although so many people are apt to say that the dollar is on its way out, the economy of the United States is so sound that in 1967 it had a surplus on its trade balance of $4,090 million. Owing to the fact that it had accepted that challenge, its economy was strengthened to such an extent that it has a tremendously sound economy to-day. This is also the solution for us, namely that we should not grant a number of subsidies which will tend to become permanent and which will in the course of time place us in a weak bargaining position, but that we should all put our heads together and increase our efficiency of production to such an extent that we will in fact be able to compete. I want to mention to you one other example of what can be done if unfavourable circumstances arise, circumstances over which one has no control. That is the example of our gold-mining industry. Since 1935 the dollar price of geld has remained unchanged, while all other prices have increased. The gold industry did not ask for subsidies, but they put their heads together and were able, by means of economizing on labour, rationalization and increased efficiency, to bring down their costs to such an extent that they could continue to produce.

I just want to quote two examples to show you the considerable extent to which the gold industry is being affected by the fact that the dollar price of gold has always remained the same, whereas all other prices have increased. In 1935 one could buy 12 bags of wheat for one ounce of gold. To-day one can only buy four bags of wheat for one ounce of gold. In spite of that the gold-mining industry is still producing. In 1935 one could buy two leaguers of wine for one ounce of gold. To-day one can only buy half a leaguer of wine for one ounce of gold. But the gold-mining industry has continued to produce because it accepted the challenge and did not run to the Government for subsidies. Here I may just say in passing that the latest developments of which the Chamber of Mines has only just given notice, has opened an entirely new field of vision for the gold-mining industry. I am referring to the rock cutter which is now being developed and which will enable the industry to stop using explosives for freeing the reef. It will be cut free by a machine, a rock cutter. In passing I just want to tell hon. gentlemen who have major shareholding interests in those companies which manufacture explosives, that they should try to get out in the meantime, because there is trouble ahead in that field. I mention this because the hon. member for Transkei asked me what my solution was. I want to show that the solution is never the easy way, the short cut. Langenhoven said: “There is a reason why the short cut is such a small path and why the major road does not follow that course.” There is a very good reason why the solution to our problems is not to be found along this short cut of subsidies.

Having said all of this, I nevertheless want to tell the hon. the Minister that we trust that he in his wisdom will find a very acceptable solution to these problems which are being created, because a short-term basis does in fact involve problems. But I also want to suggest how we can help the agricultural industry as well to surmount these problems which have been created as a result of the unilateral British devaluation. In this regard I want to refer to one single example. Owing to the British devaluation of 14.3 per cent it will now mean that if a box of fruit is sold in Britain for £1, we shall no longer be receiving for it R2 in our money, but R1.71. From the selling price in Britain approximately one-third is first of all deducted for costs. Once the costs have been deducted, the exporter in South Africa will not receive 30 cents less for his box of fruit, but only 20 cents less. But even that does, of course, make a considerable difference to the income of our exporters. The value of last year’s exports of deciduous fruit to Britain, was approximately R30 million. If we deduct the costs first, which amount to between R9 million and R10 million. R2 million remains. The devaluation loss we suffer on that is approximately R3 million. Therefore, if all other circumstances remain unchanged, if the prices in Great Britain remain unchanged, the fruit exporters of this country will suffer a loss

Col. 528:

line 2: For “R2”, read “R20”.

of approximately R3 million. If we add to this the losses suffered by the canning industry, which are approximately the same, we have an amount of approximately R6 million. If we add the losses suffered by the egg industry, the wool industry, the citrus industry and a few lesser industries, it would appear to me that our agricultural exporters will suffer a loss of approximately R10 million owing to the unilateral British devaluation. But that will only be the case if all other factors remain unchanged This does not necessarily mean, of course, that all other factors will remain unchanged. because if there is an increase in the price in Britain, it is quite possible that we shall not be suffering any losses. It so happens that the first reports received of prices in Britain amount to the very fact that prices are so much higher than those of last year that it seems quite possible that South African exporters will not be suffering any losses. For instance. the first grapes that have just arrived there … [Interjection.] The hon. member for Walmer is referring to Queen of the Vineyard grapes.

He does not know what it is.

The first prices received for our better export varieties, which arrived on the British market only last week, are as high as £2 3s. 6d. per 10 1b. box. I do not want to suggest that this is an indication of what all the prices will be. But I am nevertheless of the opinion that this indicates to us that prices will be such that the South African exporter will not suffer any losses. But, Sir—and now I should like to address myself to the hon. the Minister of Finance— the prices on the British market can only be increased and maintained on a consistently high level if the supplies are kept within bounds. The supplies can only be kept within bounds if other markets in countries which have not devalued, take more of our fruit. Here I want to appeal earnestly to the hon. the Minister of Finance to help us to increase our sales to such an extent in those countries which have not devalued, that the supply on the British Market must inevitably drop. Then the supply on the British market and the few other markets of countries which have not devalued either, will drop to such an extent that prices must inevitably rise. [Time expired.]

Mr. Speaker. I am sure that we have all listened with considerable interest to the lesson in elementary economics that the hon. member for Paarl has been giving us for the past 30 minutes. It took me back a very long time ago, when I sat in my economics I class at university. I do not think that he really came out with any startling new theories about the economics of devaluation. But I was interested in one thing which he said because I think it is a departure from the normal attitude adopted by farmers in this House. For the first time in the many years that I have sat here I heard a farmer not pleading for subsidies for agricultural and other products. I think that is a very good sign indeed. The hon. member obviously has come around to the point of view that subsidies in themselves are not necessarily a cure for evil, that in fact they are in themselves inflationary in character, and that they are no inducement for producers to improve their efficiency and their methods of production. For that change of heart I for one am duly grateful, because quite obviously subsidies are not going to be the answer in every regard as far as devaluation is concerned. He did make a few comments on the fact that the Opposition was constantly asking the Government to hand back the surpluses which they had obtained over the years by means of taxation. He made the point that this would mean more money in circulation, which would add again to the inflationary spiral. He mentioned the steps taken by Henry VIII to reduce the silver content in coinage as an example of bad money driving out good, and so on.

One thing he did not comment on, however, is that it is all very well for the Government to take large sums of money out of the tax-payer’s pockets in order to reduce the amount of money in circulation. I think that is a pretty well recognized means of attempting to cope with rising prices and rising demand leading to further rising prices. But of course he did not make any comment about what the Government does with this money except to tell us that it put this money into capital expenditure. This of course was a form of saving and therefore was fine. Of course it all depends on What sort of expenditure the Government goes in for. A great deal of Government expenditure is by its very nature, I believe, uneconomic. Certainly expenditure on current account is extremely unproductive. Just look at the thousands upon thousands of persons in Government employ. We now have this extraordinary situation where, if one takes the Civil Service, the Post Office, the Railways’ local administration and what I would call the “ancillary public utilities” run by the Government, one finds that these amount to close on half a million wage earners in the Government’s direct or indirect employ. That is not a very healthy position. We are supposed to be a capitalistic country. We are not meant to be a socialistic country.

We now have half a million people, one might say one quarter of the whole electoral roll—which in itself is not very healthy either from the point of view of the democratic choice in regard to a change of Government and so on—who are in the direct or indirect employment of the Government. I would not mind this so much if it were not for the fact that a large number of these people—hundreds and hundreds of them—are employed in utterly unproductive occupations devoted to maintaining the enormous apartheid structure. We have Coloured education, Coloured affairs, Bantu education and Bantu affairs, Indian education and Indian affairs. Here we see the triplication of effort that goes into administration in this country, which is very, very expensive and highly unproductive, and of course adds to the whole inflationary tendency in South Africa, because we are not producing the necessary goods and services that would really meet the increased demand of consumers in South Africa. It is all very well to say that on the one hand one has to keep down the amount of money in circulation as far as individual taxpayers are concerned, but at the same time to forget to comment on the very unproductive nature of the employment of so many hundreds of thousands of people who are civil servants or indirectly employed by the Government. Of course not a word was said by the hon. member about the necessity for increasing productivity in South Africa. He spoke about efficiency, particularly in relation to farmers, but the whole question of increasing productivity in South Africa and the full employment of labour was left untouched. We have heard a great deal in this House, not only during this last week or so, but over the years, about the full employment situation that we are enjoying in this country, of course as far as registered workers are concerned. But the hon. member for Pinetown was quite correct when he pointed out that a huge segment of the workers in South Africa do not have to register. Therefore we have no figures on which we can base our unemployment figures. There is no doubt that not only are thousands upon thousands of the African workers, who constitute the vast bulk of our labour force, unemployed, but even more serious is that a large number are under-employed or unproductively employed. They sit on the farms, they sit in the reserves and they do not produce anything up to the capacity of which they are capable or would be capable had they been allowed to come into productive employment in all those industrial, secondary and tertiary occupations in which their services are badly needed and, of course, would be extremely well used if only they were allowed to get sufficient traniing and education. This is the major factor which contributes towards inflation in South Africa. Sir, I believe this must be the only country in the world which deliberately inhibits the use of its labour force and deliberately inhibits therefore the full productivity of the country. These are things to which I think the hon. member for Paarl should have devoted his valuable time rather than reading us this somewhat elementary lesson in the devaulation of money.

We have not only discussed in considerable detail in this House the question of full employment, but we have also had a challenge, which I think was issued by the hon. the Prime Minister himself, asking the Opposition to cite one example of workers whose standards of living have not improved over the last couple of years, despite their having been adversely affected by the inflationary tendencies. In reply, a lot of time was devoted by the Opposition to proving that white workers on the rail ways and elsewhere were in fact suffering from the effect of inflation. [Interjections.] He said that he would like the Opposition to cite an example of one set of workers whose standard of living had not improved. I think I am not misquoting him.

I was speaking about the standard of living—not the rising cost of living.

Surely the hon. the Prime Minister, who always tells us that he knows nothing about economics, knows that the standard of living is closely related to the inflationary position.

And in spite of that the standard of living has improved.

That is exactly what I said. I said that the hon. the Prime Minister had asked the Opposition to cite an example of a single class of workers whose standards of living had not improved despite the inflationary tendency. From this side of the House lots of arguments were put forward to show that white workers were still suffering from the effects of inflation …

Of course, everybody is suffering from it.

Yes, and then everybody’s standard of living has deteriorated. Does the hon. the Prime Minister not understand that? The two are closely linked together. People are obviously being affected by inflation. However, let us leave that aside for the moment. I want to cite an example of where everybody’s standard of living has not improved, I cite the very obvious example, which has not been touched upon at all in this House so far, the example of something like 70 per cent to 80 per cent of the working force of this country or, if you take industrial employment only, nearly 60 per cent to 65 per cent. And that is the African worker of South Africa. Nobody has made any reference to this at all. Would the hon. the Prime Minister tell us that the standard of living of the African workers is satisfactory?

It is much better to-day.

Let me quote a few figures to hon. members apposite and let them then tell me whether they would regard this as a satisfactory standard of living, if the same standard of living were applied to other sections of the South African population.

There has been an improvement.

That is a relative term. You see, Sir, if one was earning R2 a week ten years ago and one is now earning R4 a week, it represents a 100 per cent improvement. Figures are very useful and they can say anything you want them to say and I am going to make them say a few different things. If your wages were R2 a week and they have risen to R4 a week, that is a 100 per cent improvement, but surely nobody would tell me that that is a satisfactory state of affairs, in other words, that one has to live on R4 a week to-day. This is something that hon. members opposite do not seem to have understood. I want to quote a few figures to them and perhaps then we will have a more realistic approach to the standard of living of a huge percentage of workers, particularly the African workers in this country. I am going to use figures which emanate from a survey produced by the non-European Affairs Department of the Johannesburg City Council. I say that these figures reveal a pretty alarming state of affairs. According to this survey, 68 per cent of all African families living in Soweto earn less than they require to meet their minimum needs, in other words, to come up to what is known in sociological circles as the poverty datum line.

When was this survey made?

This was last year. The survey was issued this year but it reflects the living standards over the past year in Soweto. Sixty-eight per cent of the workers living in Soweto earn insufficient to bring them up to the poverty datum line.

Their standard of living is still higher than anywhere else in Africa.

I will come back to that silly point in a minute, a point which is absolutely irrelevant. Or perhaps I should deal with it right away. It is entirely irrelevant to say that our Africans here are doing better than Africans in Malawi or Ghana or Tanzania. It is absolutely irrelevant to say that our Indians in Durban are better off than Indians in Calcutta. Of course they are, and our Whites here are a lot better off than the Whites in Southern Italy, so What! What does this prove? You must compare the standard of living of South African Africans who live in the Republic of South Africa—they do not live in Malawi. Ghana or Tanzania; they live in the Republic of South Africa—with the standard of living of the other inhabitants of the Republic of South Africa, because we are all, Whether we like it or not, citizens of the Republic of South Africa, and the resources of the Republic of South Africa should be at the disposal of all of us. I am not interested in the resources of Ghana or Tanzania or India, when we are considering the standard of living of South Africans, be they African or Indians. I am only interested in the standard of living of other sections of the population in the same country, South Africa.

This is meant to be a modern industrial economy yielding a Western standard of living for our inhabitants—or that is what we should be aiming at. I would like to add that it would redound to the benefit of everybody. I do not want to follow the hon. member for Paarl in his elementary lessons in economics, but quite obviously if all non-Whites—Africans, Indians and Coloureds—were able to produce more, to earn more and to consume more, it would redound to the advantage of all of us. There would be an enormous increase in the demand for services and goods of all kinds; the farmers would do better; the industrialists would do better; the commercial men, the men who render services, everybody would do better. But let me come back to this very revealing survey. The non-European Affairs Department of the Johannesburg City Council estimated that for a family of five at least R53.32 a month was required to cover the minimum expenditure on essentials like food, clothing, housing (i.e. rent) fuel and light, transport, taxation, cleaning material, medical expenses and education charges. In fact, as I have said, 68 per cent of all the African families in Johannesburg, in the Soweto area, where the family had only one earner, earned an income of R40.75. It is a little higher when it is a weekly wage.

Does the survey also reveal how many members of each family in Soweto are economically active?

Well, it is because the pay is so poor that the husband and wife generally both have to work.

I can tell you that that report is the most ridiculous thing I have ever read.

Perhaps the hon. the Deputy Minister will give us a factual explanation as to why this is a ridiculous report. I am not prepared just to accept what he says; I want a little proof and I want a logical explanation of his statement because we have had his bombastic remarks before, and when you analyse them you find that there is very little in them. Lots of bombast and very few facts. [Interjections.] Let me just continue. The average minimum unskilled wage in Johannesburg is only R35.62 per month, so the shortfall in these families where there is one unskilled wage-earner is as much as R17.70. Sir, this sounds very bad but it is much worse when you come to think how this poverty datum line is worked out. Long ago a sociologist—I think it was Professor Batson—said that the poverty datum line was more remarkable for what it omitted than for what it actually included. Not one cent is allowed by this survey for any payment on hire-purchase articles which, as everybody knows, plays a very large part in the expenditure of an average African urban family. Not a cent is allowed for dry-cleaning; not a cent is allowed for repairs of any nature, not a cent for tobacco, not a cent for recreation, not a cent for sport or any of the so-called “sociological necessaries”. It is not really a human standard of living; it only makes provision for the bare essentials for keeping the family alive. The educational costs included in the survey—and perhaps the hon. the Deputy Minister will tell me where this is absurd and ridiculous— are hopelessly under-estimated in the light of the Bantu Administration Department’s own estimate of what it costs an African family to keep a child at school, if it is kept at school, which, of course, happens in very few cases because of the poverty of these people, for the 13 years that a child is meant to go to school if it goes right through to matriculation. It is estimated that it costs something like R138.30 for the 13 years, which works out very roughly at R18 per annum. This is not my estimate, and it is not an estimate of the non-European Affairs Department of the Johannesburg City Council; this is the estimate of the Department of the hon. the Deputy Minister of Bantu Administration. This works out at 90 cents per month per child. The N.E.A.D. figures, which were based on this 90 cents a month per child, do not include uniforms; they do not include additional uniforms which the child may have to get over and above ordinary clothing; they do not include the building levies that the family have to pay; they do not include the amount which is levied on the family for the unsubsidized teachers. They also make no provision for any additional transport costs that might be involved. As far as medical expenses are concerned, the estimate assumes that only one member of the family of five attends a clinic once every three months. This refers to a family which always has small children— usually a husband and wife and three small children. Sir, I wonder if there is a head of a family, a father of a family, in this House who would attempt to estimate medical expenses on the basis of one member of the family paying a visit to a clinic once every three months.

It is all free.

It is not. That shows how much that hon. member knows. It is certainly not free.

I tell you it is free.

It is not; it is 25 cents a visit. It was made 25 cents a visit about four years ago, and that is a great deal of money when people are trying to make ends meet on the poverty datum line.

It is free at the municipal clinic.

I am sorry, the hon. member is wrong, as he so often is wrong. Sir, when I think that that hon. member may be thrust on the unsuspecting Transkeians my heart bleeds for them.

I do not need your sympathy.

Not for the hon. member; it bleeds for the Transkeians, and I hope very much that he is going to learn something about Africans before he goes there.

I wonder how many heads of families in this House would consider that the amount allowed in this survey for the total cost of food for a family of five, that is the grocer, the butcher, the baker and the milkman, namely R28.66 was sufficient. That is the total food bill for a family of five, and it is obviously nonsense to believe that this can buy anything more than the bare essentials to keep that family alive. I am not suggesting that African families can hope in South Africa to live at the same level as comfortable white families, or even lower-income white families. What I am trying to do is to point out the enormous discrepancy as regards the standards of living of the African people, and how their standards of living have indeed deteriorated despite the confident assertion of the hon. the Prime Minister the other day. And I should like to hear a little less from Government members about the generous transport subsidies which we pay in the Johannesburg area in order to get all these thousands of workers from Soweto into Johannesburg and back again. If we do not pay them a living wage, and we do not, then the least we can do is to subsidize some of the essentials like transport and housing. I would like to hear a little less from the hon. the Deputy Minister about luxuries in the African township. Let him go and live in the township, in a new house; let him not subject himself to the trauma of living in a house which has already been lived in, and let us hear no more about the luxuries in these townships, with no running water inside the houses and with electricity in only a few of the houses, and no ceilings or floors except those that are put in by the house-owners themselves.

We hear a lot about African families being able to live at a lower standard than Whites. It is not a case of being able to; it is a case of having to. There is no option for them and therefore they do manage to live at standards like this, but at a cost. The cost is in health and in lower productivity and in crime and in juvenile delinquency. The cost is also in those bulging prisons, because thousands upon thousands of Africans go to gaol for all sorts of petty offences. That is the social cost we pay fort is system. Now hon. members might very well ask why higher wages are not paid. [Interjection.] Yes, I knew that was coming from the hon. the Deputy Minister. It is an old line of his to say that the rich employers should pay higher wages.

I am with him there, but he knows perfectly well that the employer has to face competition and it is the Government’s duty to set the standard which employers must follow. I am not talking about the wages the Government itself pays to its African employees and which, heaven knows, are low enough, but it should set a minimum wage below which no employer would be allowed to employ Africans. We know there are unscrupulous employers, and however much some employers may want to raise wages—and some have— they are in competition with the less scrupulous employers. The employee is at the mercy of such employers, because the wage rates, where they are fixed by the Wage Board—and they are still very low although there has been an increase over the last few years—are still well below the poverty datum line. There has been a 14 per cent increase in the last few years, but the majority of workers still live below the poverty datum line. But the minute employers have employees who are due to get a wage increase, the tendency is to dismiss those employees and take on a new batch. The whole policy of this country lends itself to such exploitation, because the workers are migratory and the Government encourages the idea of a huge labour turnover. Instead of relying on the skills of workers and the value of a worker who has been there for a long time, unscrupulous employers are quite happy to take on new employees every time their employees are due for pay increases. And of course the employees are also open to this sort of exploitation because of the way in which influx control operates and the fact that they are unable to sell their labour in the best market and all the other factors that militate against them, particularly the lack of collective bargaining. This is another important factor, namely that the African is not able to join a recognized trade union and he is denied the advantages of collective bargaining, and as the result he has to rely on works committees, which do not function very well. There were last year only 50 of them functioning in the whole country. As a result black workers are denied all the benefits of collective bargaining which white workers have, quite correctly in a modern industrial country, used in order to improve their standards of living and their wages.

Now, I have given the House some facts and I will be very glad if the hon. the Deputy Minister, who said that this report was a nonsensical one, will stand up and quote facts to disprove what I have said, and never mind the bombast and the ranting and roaring.

Then you must stop ranting and roaring at me.

I am not ranting; This is St. Valentine’s Day and let me say that he is my favourite Deputy Minister, but he always lends himself to this sort of attack. He is always predicting what he is going to do,

and he is always staking his political career— a small thing but his own—and therefore he lends himself to this form of attack. But while I have him captive here, so to speak, I would like to ask him and the other Ministers to explain to us the discrepancy between a statement he gave in reply to a question by the hon. member for Rosettenville yesterday about the Meran removal scheme and this nauseous report that we had on “Current Affairs” last night or the night before. While he is on his feet answering the other queries I put to him, he should tell us where these discrepancies arise. [Time expired.]

The hon. member for Houghton has been telling us about unscrupulous employers, but I am afraid that at the next election her voters will get rid of an unscrupulous politician. She made certain statements which I think she knows we shall later prove to be untrue, statements in regard to that survey made by the non-white section of the Johannesburg City Council in connection with Soweto. After all, she knows that the University of Pretoria has made a survey which proved that the Johannesburg City Council’s information is incorrect. We know that in Soweto, in each of those families which consist of approximately six persons, there is more than one breadwinner. There are more than three in each family; more than half of them are breadwinners. Then the hon. member, along with the Johannesburg City Council, bases the total expenses of those six people on the income of one breadwinner, which is wrong, surely. No, we may argue, but then we must furnish facts, and this is not the first time that the hon. member for Houghton has misrepresented something here and then made an attack on the Government. She says that those people are living below the breadline and that they do not have sufficient income, and then she blames that on the Government. It is true that in those non-white families there are men and women who must work just as there are amongst White families men and women who must work. My wife is also working. The hon. member says that the Government should see to it that all of these people are employed, but the Whites do not want to employ people in the way that hon. member employed non-Whites in her backyard, as we heard some time ago in this House from the police.

What is the position in South Africa? We find that in the past 30 years everybody’s real income, the incomes of both Whites and non-Whites, has been increasing by 3 per cent per year, and within 30 years everybody’s standard of living has been doubled. That means that in one person’s lifetime his standard of living will be doubled twice. If the hon. member had looked at the figures, she would have seen that proportionately the wages of the Bantu in South Africa have shown a much greater increase than those of the Whites. And it is this National Government that saw to it that the standard of living of those non-Whites was raised to that extent and that proportionately their incomes showed a much greater increase than those of the Whites. That is much more than the United Party, of which the hon. member had also been a member, did for the non-Whites. To continue, what do those non-Whites pay for house rent? From R4 to R6 a month. I want to know from the hon. member whether that is after all such a terrible amount to pay for a house? That is what the Whites of South Africa and this Government are giving to them. No, in this world there has never been any country where so few people have done as much as has been done in the Republic of South Africa, and I think it is a disgrace to criticize this Government and to blame it for not having done anything for those people.

We also know that in South Africa, as far as education for non-Whites is concerned, we find that 90 per cent of the 11-year-old Bantu children are attending approximately 8,800 schools in which 32,000 Bantu teachers are teaching, while 85 per cent of the Bantu of school-going age can read and write. This shows a sixfold increase since 1925. Then I want to add that in the rest of Africa the increase has been 1 to 10 per cent, but here it has been 85 per cent. Then the hon. member should not tell us that we may not compare these things. What does she want to compare it with? I think that we should not gaze at the moon and then step into the mud. That hon. member is gazing at the stars and stepping into the mud.

I want to say further that what this Government is doing for the non-Whites, is the reason why the outside world is still tolerant and concedes that things are going well, and why they are already acknowledging that this Government is the right one for South Africa. So much is being said here about productivity. In the course of her speech the hon. member corrected a wrong statement she had made earlier on. She takes the view that all of the Bantu must work. Who is to give them employment? Surely, the Government cannot give employment to all of them. To-day, we heard the Opposition blaming the Government for spending too much in one respect. We are in a capitalistic country. The Government very seldom takes part in the economic life in South Africa. Why. the hon. member knows that in South Africa this Government’s participation amounts to only 12.7 per cent, whereas in England it is something like 30 per cent, and what do we find in England to-day? At present they have a million non-Whites living there, and look at the war that is raging there, and I think the Labour Government will come to a fall because of the non-White problem they are going to have there. No, we must realize that we in this country have a major task, and no government in the world will be able to achieve what this Government has achieved so far. We are on the right road. Take the productivity that hon. member was referring to. We can compare quite a number of countries. In the Republic of South Africa the annual increase in productivity amounted to 5.1 per cent, whereas in America it was only 2.2 per cent. In Britain the figure is 2.4 per cent, in Germany 5.1 per cent, in Japan 3 per cent, in France 4.1 per cent, and in Sweden 3.2 per cent. Only one country, namely Germany, can be mentioned in the same breath as South Africa. Now I am asking hon. members: To whom is the high South African percentage attributable? Most certainly not to the Progressive Party’s participation in our public life. It is to be attributed to the correct lead and guidance the Government is giving and the precautionary measures it is taking to ensure that South Africa’s infra-structure is in order and sound, a structure on which private enterprise may build and develop their interests further.

I do not want to deal any further with the striking figures the hon. member for Queenstown furnished here. Complaints were made here about the cost of living. In South Africa we have now reached a stage where inflation is almost non-existent. Two per cent is regarded as normal. The hon. member must also take into account that this Goverment provides the non-Whites with many more services than those she mentioned. The Government grants many subsidies to the non-Whites. The hon. member also referred to the transport that was being provided. However, she does not refer to the other services with which the Government is providing the non-Whites of South Africa. What about the health services? Has the hon. member noticed yet how the Bantu birth-rate is rising whereas the death-rate is dropping? That is because of the National Party’s paternal concern for all of South Africa’s inhabitants, both White and non-White. There are many things that have to be taken into account When one wants to criticize the Government.

The hon. member stated in passing that the rand had supposedly deteriorated so much. I do not wish to repeat what this side, the Government, the National Party, or the hon. the Prime Minister’s economic adviser is telling us. Let us see what Dr. Pick, the American monetary expert. has to say. He took 48 countries. and according to him only eight of those countries are better off than South Africa as far as inflation is concerned, countries where inflation has not assumed such great proportions. According to him the U.S.A.’s inflation percentage is 15, Canada’s is 18, Greece’s is 20, and South Africa’s is 21. As against that, we find in other developing countries like ourselves, a rate of inflation that even goes as high as 94 per cent. If we look at these figures, it becomes obvious that the Opposition has failed badly in its duty this afternoon, because instead of thanking the Minister and the Government for what was achieved in Africa, namely the combating of inflation, they introduced this silly amendment to the motion before the House.

I think that the extent of the Opposition’s participation in the administration of South Africa ought to be the same as that of the Government, in this respect that they should criticize positively and should not come forward here with destructive remarks and criticism. Is some gratitude from them as well not due to the Government? The hon. the Prime Minister and his Cabinet have succeeded in keeping the rand intact for us. Just imagine what would have happened if that side had been in power—where would South Africa have been to-day?

I shall not elaborate on housing, although I can say a great deal about it. Other speakers on this side will talk about it. Let us just look at a few figures. As far as approved building projects are concerned, construction work to the value of R332 million was approved in the year 1964, of which amount works to the value of R181 million were completed. The respective figures for 1965 are R383 million and R242 million, and for 1966, R334 million and R402 million. Therefore it appears that in three years’ time building projects to the value of R1,049 million were approved, whereas works to the value of R825 million were completed. Of these amounts R582 million was approved for living units and R409 million of the latter amount was spent. If that does not speak volumes for this National Government, then I wonder what one should say about it. Our gross national revenue amounts to R8,000 million, and therefore one eighth of that amount was approved in respect of building projects over this period of three years. Where in the world can one do more than that?

I want to mention just one more figure. In the year 1967-’68, the amount voted for housing and community development funds—apart from the other funds in the public sector—in respect of Whites alone, was R31½ million. I want to add to this that the function of the Department of Community Development is, surely, not only that of providing our people with houses. That is really the field of the building societies. It is estimated that 7,600 houses will be constructed. As the Government’s participation in the public sector only amounts to 12 per cent, we ought to be very grateful for what is being done in this regard.

I can mention many other particulars. but let us look now at what this National Party Government has achieved in general. If we look at our economic life in general, we find that there are certain fundamentals, basic factors or elements—whatever hon. members wish to call them—which are essential for having a happy and prosperous country, South Africa. What one requires for that are the soil, capital, manpower, raw materials, water, electricity, means of communication and transport. These are eight basic requirements. South Africa is not a socialistic country. It is not the exclusive function of the Government to provide those basic elements. However, there are three requirements with which the Government has to comply in order to make all the inhabitants of South Africa happy and prosperous. Let us test whether they are in fact being provided. The first requirement is that there should be protection. The Opposition did not say anything about the protection we are enjoying. This is afforded by the police, the defence force and our courts of law. Now they want no money to be voted at all! For the sake of the three insignificant points the Opposition mentioned here, they want no money to be voted for the purpose of governing this country further. That is what the Opposition wants. No more money may be voted. We in South Africa are in the position where every man and every woman can sleep peacefully at night. Yes, even the hon. member for Houghton can go to bed to-night with a calm conscience and a feeling of safety … at least, I suppose that her conscience is not as calm as that; I think it is actually chasing her! She can calmly go to bed, knowing that she is safe. Of what other country in the world can such a thing be said? I remember that more or less four years ago the hon. member told us that Nigeria was such a model country. I still remember well that she advised the National Party to take lessons from Nigeria. And where is Nigeria to-day? What conditions do we find there? We find murder, violence, yes, one side is annihilating the other. What is the condition of that country’s economy to-day? What do the people earn there? The standard of living of South Africa’s non-Whites is much higher than that of those people. That then is the country she held up to us as an example, the country which had to serve as a lesson for South Africa.

Another requirement I want to mention, is the comfort and the happiness of the people in this country. In this respect I am thinking, inter alia, of the food position in our country. This National Party has been doing its duty in that respect. I shall not quote the figures in respect of all of the subsidies, although I have them here with me. This Government is spending a tremendous amount of money in the form of subsidies on bread, maize, meat, etc., so that the consumer may obtain food cheaply. The hon. member for Kensington, who I presume will be the next speaker, must tell me whether he differs from me. Is it the wish of the Opposition that those subsidies should not be granted?

I have already talked about housing. Then we have health and opportunities for work. Where can a nation be given more opportunities for work by a government than the inhabitants of this country are being given by this Government? That side regularly asks us how much money we are spending on border industries. Now I want to tell the hon. member for Houghton that the border industries have exclusively and specifically been created for providing the Bantu in the homelands with employment. Just consider all the tax benefits that are being granted. It is taken from the pockets of the taxpayers, and the Whites of South Africa are paying for them. They must pay up for the establishment of those border industries. A great deal has of course been said here about the border industries. Only the other day a great deal was said once again; consequently I do not want to go into that matter any further. If necessary, we shall come back to those figures.

I have indicated what is being done in respect of education for the Bantu. I do not want to repeat what has already been said here about our university training. I remember very well how the hon. member for Houghton and the whole Opposition as they are sitting over there, the whole lot of them, opposed this legislation tooth and nail when the Nationalists proposed higher education facilities for our Bantu, namely their own universities.

That is, of course, untrue.

Oh no, I think the hon. member does not know what I have just said. He was sitting there talking and then he simply shouted that it was untrue.

We never voted against the establishment, but in fact against the closure of the other universities to the Bantu.

Ah, Mr. Speaker, there is a fine thing for you. Why, that is the best debating point I have ever heard. He was not opposed to the one that was established, but to the closure of the other. What did the hon. member want? Should the Bantu universities have been established only to remain empty while the Bantu remained in the white universities? Is that what the hon. member wanted? Surely, the hon. member knows that that is something he is dragging in by the hair. The hon. Opposition is scared now of coming out with what they said at the time when such a terrible debate was conducted here. In South Africa one out of every 74 persons obtains a university degree, whereas the figure for America is one out of every 52. Only the other day the hon. the Prime Minister gave us the figures for the other countries; consequently I do not wish to elaborate on them any further. In Britain one out of every 450 persons obtains a degree. Then there are hon. members opposite who have been telling us over the years to look at what “Mother” was doing overseas. In looking at these figures, I cannot help saving that this Government is doing for South Africa what no other government is doing for its people.

A few hon. members opposite said very casually this afternoon that they were very pleased because the Government had combated inflation to some extent. However, this was said very half-heartedly. I think they should have said so with much more enthusiasm.

Let us see what the position is in South Africa in respect of telecommunications. The particulars were published in the newspapers in great detail, and we shall return to them in a moment. Over the years the hon. member for Orange Grove has repeatedly made terrible attacks on the Post Office, and so forth. In 1948 when this side took over the reins of government, it inherited a tremendous backlog. Over the years it has had to contend with many problems and many factors came into play, problems which had to be solved. Look at the way we had to fight to have a Republic, a Republic which that side accepts to-day. If it had not been necessary for the National Party to waste so much time and energy on that, we could have paid much more attention to other matters to-day. The fact simply remains that it takes years to train an opposition; it has taken the Government 20 years to bring the Opposition where it is to-day. It is a slow process, but we are at least getting somewhere with them. However, if we do not manage to train all of them, we shall oust those others until we shall in the course of time have only Nationalists in this House! What is The position in regard to the Post Office to-day? I do not want to mention the various plans here, but within a short while all the major cities in our country will be linked with one another by means of automatic telephone exchanges. Mr. Speaker, we are ahead of most of the other countries of the world. There are very few countries which are ahead of South Africa in the field of telecommunications. [Interjections.] The hon. member for Durban (Point) is laughing very heartily, but I am actually the one who should have laughed so heartily, because we are the ones who are enjoying this situation.

I suppose you must defend your boss, musn’t you?

I am defending South Africa, and South Africa is proud. Nor is it one person or one department only. It is this whole National Party along with those departments which brought this about for South Africa.

I want to come back to the hon. member for Parktown. He raised a few points and I want to deal with them first. Amongst other things the hon. member referred to the commission of inquiry that was appointed to investigate the system of income tax. I do not want to deny that that hon. member and his people have been asking for years that that curve should be erased. Is it a disgrace for them to have asked for that? It is no disgrace for them to have done so. We admit that they have asked for it. But by whom was that curve erased to a very large extent? By the ex-Minister of Finance, Dr. the hon. Dônges. I can go on asking, and I can ask for many things. One can ask for many things, but it is quite a different story to carry them into effect. This Minister of Finance has also acted quickly. Although he had only just taken over this Department, he immediately appointed a commission which inquired into the monetary and fiscal policy of the Department, and into what was good for South Africa. Now I want to ask the hon. member the following: Does he have any criticism on the members of that committee which has been appointed? Is the hon. member satisfied with the members who have been appointed? Sir, I assume that he is highly pleased with them, because he does not say a word. When those findings are published, it will be this Government which will take action. Hon. members know that a commission was appointed to inquire into matters relating to the Post Office. The Post Office is now becoming autonomous. It will have its own finance, and it will be an autonomous body. This Government will act in the same way when the report of this commission becomes available. The steps that will be taken now, will be the same as those taken before. Hon. members know about the 1962 Income Tax Act this Government piloted through.

The hon. member also had a great deal to say about import control. That is correct. I am not going to argue with that hon. member. Import control is one of the instruments in the hands of a government for combating inflation or whatever, but it most certainly is also an instrument in the hands of a government for keeping a check over its balance of payments. That hon. member should not try to deny this. Nor will he try to do so, because as far as those matters are concerned, we are talking on an equal footing. Nobody can deny that. But that hon. member neglected to say something. I do not blame him for having omitted to say things he ought to have said. When action was taken, this Government took action in the interests of South Africa’s balance of payments in order that this country might be in a strong position in relation to countries abroad. We have purchased expensive machinery and defence equipment, and we would not have been able to do so …

No, I do not agree with you.

… if that balance of payments had not been sound. Does the hon. member want to tell me that he does not agree with me that our defence should be strengthened? Is that what he means?

No.

That hon. member knows that this Government was forced, owing to circumstances of which we all know, to strengthen our defence. Large amounts were voted for that purpose. Large amounts were paid out and our balance of payments— the reserves—was not in so sound a position that we could have lifted import control. It was used judiciously and at the right time.

I also want to refer to what the Prime Minister bad to say some time ago. In September the hon the Prime Minister announced, after discussions with his Economic Advisory Council, what this Government would do. That was six months ago. To-day the hon. member save that they objected to this and to that. One of the objections he had. was to the two Blue Trains. Another objection he had. was to the aluminium foundry at Richard’s Bay. But the Prime Minister announced six months ago last year, that this was not being done any more, that this was being stopped.

Can the hon. member for Sunnyside tell us when we first raised the question of stopping that expenditure. Was it before or after the hon. the Prime Minister’s statement?

It is not very clear whether the hon. member is talking about the Blue Trains or about Richard’s Bay. But let us assume that that hon. member asked in January last year that that expenditure on an aluminium foundry should not be incurred. That shows us to-day in which direction this Opposition is going with the country, South Africa. We have to import all the aluminium we require in this country. That hon. member knows it. That party, by mouth of the hon. member for Parktown, does not want us to establish an aluminium foundry here. He wants to make South Africa vulnerable. That is exactly what he said last year, namely that we should not search for oil in South Africa. Just as that hon. member covertly tried at that stage to make South Africa vulnerable, he is trying to do so once again. If we in South Africa cannot be independent and stand on our own feet, if we cannot have our own electricity and water and sufficient oil as well as our own aluminium, then we are, of course, vulnerable. That hon. member knows it. I think that the capital which is to be used for the foundry initially, amounts to R40 million. But does that hon. member not realize in how short a while that capital was paid back fully? That is because of the aluminium we are not importing now. The revenue remains here in South Africa, and opportunities for work are being created here for our people. The hon. member for Houghton need not moan any more, because her people will also be given employment.

Why have you stopped it now?

It was stopped temporarily in order to combat inflation. Much more has been done. The third Iscor has been abandoned temporarily. Further development to Iscor has been stopped for the time being. The hon. the Prime Minister announced very clearly that he would not simply stop everything just like that. In this way, for instance, the importers were requested, in order to combat inflation, not to avail themselves of foreign credit facilities. All of this has been requested. We are also very grateful to the importers of South Africa for the fact that they paid heed to these requests, just as the workers of South Africa have contributed their share by not making unnecessary demands. It was also decided then that, as regards the funds for border area development, no restrictions would be imposed. That is why I want to say that we in South Africa are grateful and fortunate to have such a National Party Government. May things always go as well for South Africa as they are at present.

Mr. Speaker, the hon. member for Sunnvside dealt with a survey that had been made in Soweto. The survey was first referred to by the hon. member for Houghton. She produced certain figures to show what the wages were and what the cost of living was, for an ordinary family. Her figures were very impressive. I have seen them before in Johannesburg and I found them very interesting. The hon. member for Sunnyside has given us the figures of another survey, a survey by the Pretoria University. I think that is also a very good thing. The more surveys of that kind we have. the better. But how can we get reliable figures that both sides of the House can accept? I think perhaps it would be a very good thing if representatives of Pretoria University could meet representatives of the Johannesburg municipality and agree on personnel for a survey so that we can get figures that we can all agree on. I do not think it helps very much in a discussion if members on one side of the House are arguing from a different basis from members on the other side. I hope the hon. member for Sunnyside will accept that suggestion. He tells us that non-white wages have risen proportionately greater than white wages. That of course is true. It must he so. But in fixing the wages the first thing is to determine the wage for the basic necessities of life, such as food, travel to work: the essentials of life to keep body and soul together.

Until they reach that stage, I do not think we can say that one section of the community is developing more rapidly than another. The hon. member then came to the subject of Bantu education. We have had many opportunities of discussing Bantu education in this House. We have gone into that matter many times very thoroughly. It is all very well to say that there is no country in Africa that has progressed as we have, but I want to say that from investigations I have made other countries are coming on very rapidly. One of those is Rhodesia. Rhodesia has made very great progress indeed and Rhodesia even for its white children who live on lonely farms has a much better system than we have for our young Karoo children from 6 to 8 years of age. They have made provision for them to be taught at home, on the same lines as that provided by the Australians about 30 years ago. I would say that Rhodesia has made great progress, especially in regard to the education of their Africans. They can be compared with us.

The hon. member says that the cost of living has risen by 2 per cent. I am not satisfied with that figure. Later on in my speech I will quote some Government figures which are sent out to us regularly by the Bureau. I shall come to that later. Then the hon. member also made a comparison with the position 20 years ago. A comparison with circumstances 20 years ago is never reliable. I will also give a comparison with circumstances 20 years ago before I sit down. I will give a comparison of what happened in this country at the time of the first budget of a Nationalist Government. We can see how they governed the country then and how they are governing the country now. Perhaps it will be a good thing if I were to quote a few extracts from Mr. Havenga’s first budget exactly 20 years ago. This is what he had to say about this foreign capital we are constantly trying to do something about—

He might have been speaking to-day when we read “in spite of its temporary difficulties”. He had a huge surplus which he inherited from the United Party. Members on the other side of the House went around the country talking about a “bankrotboedel”. This is what he did with his first budget. This is what he said at the end of his first budget—

Then later he came along When he still had not exhausted the supply of money and this is what he did with it—

There was even a reduction of tax on gold mines! It was a land flowing with milk and honey that the Nationalist Government took over. That was the position then.

We had to simulate the economy.

We will have another duel in that regard during the Budget debate.

My next point is this. The hon. member says that we have done all this with private enterprise. He says we are not a socialist country. But that depends on the definition of a “socialist” country. Let me say what we do in this country of ours, a country depending on private enterprise. The State owns the Railways and the Harbours and the Airways and will not allow competition from private enterprise. The State owns road transport and will not allow a man to own a lorry and compete with the Railways. I do not know whether one calls that Socialism, but it is socialistic. I am going to go further and say that the Government is one of the biggest industrial companies in South Africa through its Industrial Development Corporation. It has its tentacles throughout industry in this country. We are also in shipping in a big way through Safmarine and we have control. That is a very good move because there are clever men working for us. We own the harbours. There is no London Port Authority here. The hon. the Minister of Transport is the man who controls the harbours. We are in mining. Have a look at the Government’s investments in mining, directly or indirectly. We produce petrol and I am in favour of that. We ought to do so for strategic reasons, but now it is developing into a great chemical organization and we are in that too. We were in Klipfontein Organic Products but the Government sold that to a consortium. I am going to give the hon. the Minister some suggestions just now as to what he should do in this difficult situation.

I come now to the statement I have heard in the House ad nauseam, namely that this party was opposed to the establishment of Bantu university colleges, the University College of the Western Cape and the college for Indians. Mr. Speaker, that is a frigid, calculated falsehood.

Order! I do not think that the hon. member should use those words.

Mr. Speaker, I did not say that the hon. member said so. I said that statement is a frigid, calculated falsehood. I did not say that the hon. member was guilty of it. Let me explain what happened. A Bill was introduced in this House called the Separate University Education Bill and we waited for the Second Reading. The Second Reading was passed, the principle was accepted and then it went to a select committee after the Second Reading. We also sat on that select committee and it was an interesting experience. There are only two of us who sat on that committee left in this House, namely the hon. the Minister of Social Welfare and Pensions and myself. We drafted a minority report to state our point of view.

You and I?

No, we on this side of the House drafted that minority report. The hon. the Minister subscribed to the majority report. The report is available to-day and we stated in it that we were all in favour of establishing these colleges. Since Fort Hare was not included in this, we were sorry that Fort Hare as it was had to give way to three Bantu colleges. We should have liked to see Fort Hare develop as it was and establish more Bantu colleges. Fort Hare was approaching the stage of becoming a non-white university. But we never opposed that measure. We did, however, say that we wished to preserve the autonomy of what we called the “open universities”. We wished to preserve that autonomy so that they could do what they wished. When we found that we failed we made another suggestion. We said that you could not put this policy into operation for another 10 or 15 years, and we were ridiculed. Ten years have elapsed. My hon. friend, the Minister—no, four Ministers: the Minister of Bantu Education, the Minister of Coloured Education … these all have to send students to these universities to-day. Why? Not because they want to send them there, but because they have no facilities for them elsewhere. The Transkei Chief Matanzima, is sending people to the Witwatersrand to be trained as engineers because there are no facilities in the colleges. We said, “Have an interim period, where that can continue”. It is laid down very clearly in the Act that that would be a temporary arrangement. It is still temporary. I see the difficulty. I should like to say this to the hon. the Minister of Education on this subject: I know there is some difficulty about non-white students at open universities. They are his students because although in actual fact the Coloured students are the students of the Minister of Coloured Affairs, the African students the students of the Minister of Bantu Affairs, even if he does not like it, they are his students. He acts in loco parentis. He sends them there. They cannot go without his permission. It is not the universities, it is the Ministers, the Government, that send them there.

However, let us go on. I now come to this point: the “tipsters”. I should like to get a tip on the stock exchange. I want to have a word about the stock exchange. The Minister said that the public should be careful or they would burn their fingers. My friend, the hon. member for Paarl, was a “tipster” this afternoon too. He came along as a minor “tipster”, the fellow whom you meet at the door of the Exchange, not the man you meet in the office, but the man you meet outside. The stock exchange is simply a barometer. By studying the stock exchange, you can see what is happening in business. It is the measure. The men who conduct the affairs of the stock exchange are the market master and the agents. There is very strict control. There is no stock exchange in the world that is better conducted than the Johannesburg Stock Exchange. I can give that assurance. But it is a barometer. When the hon. the Minister says that there is no justification for the boom they are having at present, with which section is he dealing? Is it gold? Is it mining finance? Is it in the industrial section? The commercial or the mineral section? Which one does he have in mind? The gold section is setting the pace at the moment. Who wants the gold shares? America, London, and when I say “London” I mean every country in Europe excepting Paris, who deals independently, dealing through London. London and New York are buying our shares, and of course South Africa encourages it. We had a budget in this House some years ago and we announced in the Gazette after that budget that a company could be established, the American South African Company.

This Company would invest its money here, have the right to withdraw its funds, its profits on gold as well and not only dividends, provided that there is no South African shareholder. Surely our policy is to give South Africans a share in these companies; these big petrol companies, the tyre companies, and others. We must do what the Australians are doing: Give us a chance to get into them. Now what would one do, Sir? I want to say that the hon. the Minister, as representative or the Government, is in this boom up to the neck. Does the hon. the Minister know of the Industrial Selections established by the I.D.C. in 1962? They established a company, which is a finance holding company, a subsidiary of the I.D.C. In other words, owned by the Government. And last year, they established National Selections, holding shares and offering them to the public, and operating as an ordinary finance company. What should they do? What should the hon. the Minister do? I want to give him a tip. This is a very active market. There was an old cynic, Mr. Speaker, in the early days of the Witwatersrand who also dealt in shares. He had mines —some of them produced and some of them never produced. But he had the public rushing for shares, and he always used to say, “When the ducks are quacking, give them corn!”

Establish new companies. Sell them shares. But the hon. the Minister has got companies. Start selling the assets of the I.D.C. Industry has suggested this before. It is not original. Start selling the assets. Take the two companies that I have mentioned just now, the subsidiaries of the I.D.C. Start selling those. Not by giving them a million shares out of the four million as they did. Off-load the shares, so that the Government will be giving the shares to the public and it will be absorbed by all this money that is floating. Where is the money coming from? People have money but they cannot invest it. The hon. the Minister of Planning will not let us establish industries there. The hon. the Minister of Planning says: No, unless you have so many Whites, so many Blacks, and so on, you cannot establish industries without his permission. In other words, they are tying up the economy of this country and the development of South Africa. Well, let us get on with the hon. the Minister. We do not say for a moment that the big boom in gold shares has come from South Africa only. There has been a great deal of foreign buying, which is a good thing. They believe in this country, as we do. They believe in South Africa. As Mr. Havenga said: They find it a fine field for investment. It is a safe country with a conservative government, a conservative white population …

An apartheid country.

They talked about apartheid in a recent debate I attended in the House of Commons and they were not sure how they should pronounce it, let alone what it means. One fellow called it “appetite” and another fellow had another name for it. But the worst name they gave it was “apart hate”. I did not like that.

But security for the investors.

But they do not like that aspect of it. But that is not the point. When they are investing their money they do not care what your political theory is. They want to know whether the country is going to give a free deal to investors. And now I come to the hon. the Minister. We have been told that the influx of capital has created inflation. That is the theory, is it not? According to the hon. member tor Queenstown that is the theory. If that is the case, why do you say you are going to block the rands in this country of overseas investors? The two things are inconsistent. We do not want capital in the country, but we block rands when it is here. And we make this offer periodically: “If you pay R85 you will get R100 back in five years.” The hon. the Minister can tell us whether the period is still five years. But who wants that? These people from overseas have invested money in this country and they have realized their assets. What did Mr. Havenga say? He said: Free exchange, let them take it out. Give up the blocked rands idea and try it out for a year. Give up the blocked rand story. It is a waste of time. We read every day in the financial reports that there is a scarcity of blocked rands. There is not enough money from overseas to invest. But now I come to this pride of the Government. We have been getting messages in the recess every few days: The progress of the 6 per cent treasury bonds. Not much is said about the progress of the Post Office savings account. That is for the poor. I am speaking of the rich. What are these 6 per cent bonds? They are this. You can buy 6 per cent bonds up to R40,000. And of course your income will be R2,400 per annum. And if you are rich, comparatively rich, and you are at the top of the income tax table you start paying at least 50 per cent to nearly 70 per cent of increases in income to the Government. The man who is at the top at R18,000 a year buys these bonds. They are the people who are buying them. And they get R2,400 at the top of their income tax scale free of income tax. But it is not 6 per cent there. Up there, each level, each slice or each tier has a higher percentage. I do not know what the hon. the Minister makes it out to be. I make it over 10 per cent.

17 per cent.

It goes as high as 17 per cent. I should just like to take the fairly rich not the very rich. In other words, these men are buying them. But let me take the other man who gets R40,000 a year, a professional doctor who has a short professional life, the lawyer, the barrister, who makes R40,000 a year. He has to pay income tax on it all. He cannot afford to buy those bonds. In other countries where they make a distinction between earned and unearned income, they say that earned income should be taxed at a lower rate. The hon. the Minister taxes it at a higher rate. That is completely inconsistent. Well, let us get along. The hon. the Minister thinks the building societies are not in difficulties because of his 6 per cent bonds, his attractive R.S.A. Well, I think it is a factor. I think the small man will still be investing in the building societies seriously. But the big man who has had sums of money at any time that he could give to the building societies at a low rate, says that he would not have that investment now when he can have the Government 6 per cent bonds, which give him the higher allowance at the top of the scale. And I think that because of this the building societies are affected.

Now, I come to the point at the end. I want to come to the question which the hon. member for Sunnyside has stressed of how well-off people were. I have gone into some of this. I want to know how the ordinary man is faring. And the ordinary man in South Africa I will say is our own employees, the fellow who goes to work in the Post Office or anywhere else in the Services. They are the men we know and we know all about their salaries and so on. Now, this is what I have worked out. I do not know whether the hon. the Minister agrees with me. I take the years 1964 to 1967. I have not all the later figures as yet. In those three years all items of the cost of living rose by 12.4 per cent, that is 4 per cent per annum. The price of food in those three years rose by 17.12 per cent, that is 5.7 per cent per annum. The hon. member for Sunnyside said that we provide food in this country, that we subsidize food. Whether we subsidize it or not, those are the figures. In one year food went up by 7 per cent. Naturally there have been appeals by the public service people. And I saw this in one of my newspapers, Die Transvaler. The Public Servants are responding they say to the appeal by the hon. the Prime Minister by not asking for higher salary rates now. And they say they will not. The Paper says: “Amptenare vra nie meer”. Do they not? Just have a look at what they asked for and see whether it is nothing. All they ask for is this—

They want the State to take over half of their subscriptions every month. Last year I introduced a motion into this House for the appointment of a commission to investigate the question of non-contributory pensions for the Civil Service. The hon. the Minister of Pensions of those days ridiculed it, poured ridicule on the scheme. Other hon. members came in and did the same. The Civil Service gentlemen are going half-way already. And there is a good deal of jealousy in the Civil Service. They say: Why should we be paid at these rates while men in these public corporations, controlled by the Government—we used to call them utility corporations—get these princely salaries as men in business do. That is the first thing they ask for. These are what we call in English fringe benefits. What is the next one?—

Give a bit more to that scheme and a bit less for the employee. Another one is—

I am right with them. I support them. It goes on—

There are four requests. They ask for four fringe benefits. Add them up. Add them all together and see what it comes to. They are asking for a big increase. And they are unhappy. And I say to-day: Why are they asking for it? Are they trying to create inflation? No, the inflation had already been created before they asked for it. That is so on the figures I supplied. Inflation is there and an increase in salary is not to create inflation but to recognize the increase in inflation that has taken place and which is affecting them in their everyday life. That is the position. And I support these people. And I should like to put this suggestion to the hon. the Minister: Give another thought to this non-contributory pension scheme. It will eliminate such a lot of your accounting, funds, and so on. Do what they do in other civilized democratic countries. Pay your pensions out of Revenue and when a man retires do not say: Ah, we cannot give you more because the fund will not stand it. A man can say: You have given the men in service higher salaries. We want higher pensions. We are still on the pay list.

Mr. Speaker, the hon. member for Kensington is a much older man than I, and he received such a drubbing in this House yesterday that I really regret having to attack him. But I cannot allow him to say certain things and get away with it. I want to refer to the remark made by the hon. member about the late Minister Havenga and the surplus he showed here. The hon. member reproached the Government members for saying at that stage that they had received a bankrupt estate. Now, it is no proof that if one has a surplus on the Estimates that one’s estate is not bankrupt. The hon. member omitted to say what the national debt on that basis was what this Government had to take over, along with other obligations. The concessions made by Mr. Havenga under those Estimates were corrections which should have been made a long time ago, and which had not been made. But I also want to point out to the hon. member for Kensington that he launched an attack here against the National Development Council and practically accused us of being a socialist country. And one of the hon. members on the other side of the House has now given voice once again to the popular story of national socialism. In the first place I want to reject that idea in toto. It is not true. Private initiative and private business are what play the most important role in this country. They are the important factors. But these people must realize that the reason why the Railways and major industries belong to the Government is that we were a young country. We were relatively under-developed. The Government had to step in and establish those factors which were necessary to develop the country economically. Private capital and private money was not, at that stage, prepared to take the risk. This Government then played an important role; it stepped in and established the necessary infrastructure, and what came of it? Because the Government adopted that attitude, it initiated investment in this country; it initiated industrial development in the country, and it inspired confidence in this country. How could anyone with capital invest his money in this country if not even the Government of the country had any confidence in that country? That is what happened. The hon. member spoke about the money which is flowing into the share market from overseas. Is that not the result of the major role played by the I.D.C.? Is the role of the I.D.C. not a basic one for instilling confidence in this country? Think of the tremendous industrial development which has taken place in this country because of the activities and investments of I.D.C. Sir, I do not want to take this matter any further with the hon. member for Kensington. I think there are other speakers on this side who will enlighten him on the figures he mentioned.

I want to refer to the main speaker on the Opposition side, the hon. member for Pinetown, who patted himself on the back and boasted so much of his wonderful prescience, his anticipation of the so-called housing problem. a matter which the hon. the Minister has now rectified. I think one displays anticipation if one acts in cases where there is a deficiency and where one fills a necessary role. A good eighth man on the rugby field is always where the ball is and he tackles the man with the ball. If the hon, member for Pinetown had been playing in the eighth-man position, then he would never have been where the ball was; nor would he ever have been able to prevent a try from being scored. If I were in his shoes, I would have felt ashamed at moving this amendment, because the hon. the Minister has supplied the deficiency, to which he referred. It is not anticipation to rectify a matter now which has already been rectified by the Minister. If his anticipation had been correct, then he should in his amendment have proposed something to fill a deficiency, and there simply is no deficiency. [Interjections.]

We are not discussing housing now; we are discussing the anticipation of the hon. member. The series of elections which we have had, proved how much anticipation the Opposition displayed. Obviously they did not display much anticipation in regard to the decision of the nation on the political future of the country, and that is why their numbers have diminished to such an extent. Sir, the charge made by the main speaker on the opposite side, as the hon. member for Queenstown rightly said, did not deal with any profound economic problem; it was comprised solely of the ordinary clichés which one hears every day. He came forward again with the old story about inflation, i.e. too much too soon, or too little too late. Those are the sort of arguments they put forward. But what is the position throughout the world? It is easy to want to be wise after the event. The Opposition, at no stage, came forward with concrete proposals in regard to inflation. Throughout the world to-day, in every monetary unit, there is inflation. After the Second World War inflation became a built-in factor in every growing economy. There was a creeping inflation which affected every monetary unit throughout the world. But how are you going to combat inflation? The test is: How does one control that inflation? That is the test one must apply.

Inflation has two dangers. One has, of course, galloping inflation which can cause great hardships. On the other hand, if one curbs inflation too severely, one is left with a depression. But if one wants to pay the price for full employment and economic growth, then one has to have a measure of inflation. What happened here in South Africa? South Africa is a young, growing country, with a rate of growth of 5 to 6 per cent, and one must have creeping inflation, but how must one control that inflation? If one wants to control inflation, then one must have certain information at one’s disposal. That information is obtained by the Minister or the responsible person, and that information consists of figures and facts which are a combination of many factors in the country. When one obtains those figures and they indicate a certain direction, then one must decide what you are going to do: Are you going to allow the country to develop; is it dangerous or is it not dangerous? In this stage I want to say that those figures, from the nature of the case, will always become known at a certain time after certain things have taken place, because we do not have a computer in this country which can tell you precisely to-day what increase or decrease there had been in every respect of the economy; that takes time. The hon. the Minister dealt with this situation in an extremely able way; inflation in this country has been controlled in a wonderful manner. How is one going to prove that it has been controlled? The only criterion one has, is to measure the degree of success one has met with against the measure of success which has been met with in other developed countries in the world—Western capitalistic countries. The hon. members for Queenstown and Sunnyside mentioned certain figures which I am not going to repeat, but those figures indicate that as far as inflation in South Africa over the last few years is concerned, we are ranked third in the world. But what is more, out of the 90 national monetary units throughout the world to-day, nine of them have come through the post-war period unscathed, and when I talk about “unscathed” then I refer to units which have not at one stage or another devalued, or decreased in value or undergone a monetary reshuffle. South Africa is one of those nine countries. Sir, is this not a wonderful achievement and outstanding proof of ability on the part of the Government?

The hon. member went further and began to talk about tax concessions and prescribed to the Minister what he should do. One moment the Opposition is saying that the Government did too much too late; the next they are saying that the Government encouraged inflation; and immediately afterwards they are asking for tax concessions. What are tax concessions if they are not inflationary? On the one hand they accuse us of encouraging inflation, and on the other they allege that we are not doing so. What do they really want? All we have had from the Opposition in this debate up to now, has been general clichés without specific and proper proposals. The hon. member pleaded for tax concessions for the middle income group. He knows as well as the rest of us that the married man with two children in the lower and middle income group pays less tax in South Africa than a married man with two children in the same income group in any other developed country.

I concede that the higher income group in this country does in fact pay more than the higher income group in America for example, but it is necessary that this should be so; that is the method by which we impose taxes. But now I want to go further.

You want to kill initiative.

No. our taxation is not yet so high that it will kill initiative, but I do want to concede that it is reasonably high. We know that methods of taxation have changed with the times. It was in 1917, for example, that we heard about super-tax for the first time in this country; it was applied for the first time in Britain in 1907. The whole system has changed. The Minister and the Government are aware of the fact, and that is why they have thought the time ripe for the appointment of a commission to re-examine our tax legislation. The time has now come, but that does not mean to say that the tax figures will change. No member of the Opposition, or anyone else, has ever come forward with a suggestion as to how familiar curve in taxation should be levelled out. After all, the Government must collect the necessary money in order to defray the expense of essential services. There are three ways of imposing taxes.

The Minister has a large enough surplus.

We tax the taxpayer according to the group into which he falls, i.e. according to each one’s ability, which is known as the graded taxation method. The Opposition can accept that the Government will make tax concessions where necessary, and that it will impose taxes where necessary, because we have a major task to fulfil. They are always accusing us of the fact that our economy is based on ideological grounds. To them the economic laws are inviolable. One must obey them slavishly, irrespective of whether one’s nation goes under. This side of the House does not do so. We bend the economic laws to the advantage of the white man in this country, even though it is done at a price, for our people are prepared to pay that price.

I come now to what I think is the most ridiculous proposal of the lot, and that is this amendment dealing with agriculture. The amendment states that a sound agricultural industry must be established on a long term as well as a short term basis. This is another wild statement, because up to now none of the hon. members on the opposite side have said where the short term or the long term policy has failed. The hon. member for Pinetown told a story of what he had seen during the last 20 years. He said that people had farmed with dairy cows, that they had then planted wattle trees, that they had then taken out the wattle trees and planted sugar, and that subsequently they had reverted to dairy cows. If that is his proof that there is no long term planning in agriculture, then I stand amazed. Surely every man plans his farm as he wants to, and if at any stage any commodity brings him a better yield, he will change to that commodity, and if he ultimately reverts to something else, it still does not prove that there is no long term planning. The hon. members speak so readily of long term planning in agriculture. It is not so easy to plan far ahead in agriculture. This Government has done everything possible for the farmer. We have, for example, the Marketing Act and the Agricultural Credit legislation, and the Land Bank is there to undertake financing. How can one plan for a seven years’ drought, one year of rain, and suddenly another drought to follow? My own constituency is at the moment suffering a terrible drought. We had seven years of drought, one year of rains, and now we have another drought. There are people who are facing ruin. I want to tell the Minister that we will come and ask for help because those people must be helped. The country will have to realize that it must contribute towards helping them. But how is one going to plan for a change in an article’s value overnight? To-day it is worth nothing, and to-morrow it is worth a great deal. Change is therefore necessary in farming. Surely the farmer has the freedom to decide what he wants to do. What more can the Government do than to provide the services and regulate the market? The farming itself, however, has to be undertaken by the farmer. I have no doubt that the Government will help the farmers again. I am not concerned because this Government will always act for the benefit of every sector of the economy whenever it is necessary.

They will wait until you are all bankrupt.

That is another typical misrepresentation by the hon. member for Durban (Point). Nobody will go bankrupt. Personally I can give no undertaking in this regard, but I have enough confidence in the Government to say that it will not happen and that the Govermment will see to it that nobody goes bankrupt.

The hon. member for Pietersburg was talking about the hon. member for Pinetown using clichés and then he gave us a lecture on taxation. If he puts what he told us into a memorandum and sends it to the Commission on Taxation, it may do some good. We are told over the years by the different Minister of Finance what we will have in the way of a probable surplus, but invariably we find that it has multiplied. One year we had the late Minister of Finance saying that he was going to give the taxpayer a nest-egg, but he said that he was going to put it away so that the taxpayer would not spend it unwisely, and that he would keep it for him, but within a year or so the poor old taxpayer lost his nest-egg. The Government side, I think, are a little annoyed with the Opposition for our criticism. They feel that we must praise the Government for what it has done over the years. The hon. member for Constantia told them over the years what was happening in regard to inflation, but a study of Hansard will show that the Government denied that there was any inflation, and did very little or nothing about it. They always remind me of the story of the man who was waiting for something to turn up. Well, it did not turn up. The Government has been banking and waiting on a possible rise in the price of gold. That was their big bet. I think we know now what the position is internationally and the Minister is beginning to realize that if the price is to increase it will be progressive and that we cannot double the price of gold overnight. By increasing the price of gold you are really devaluing your own currency, and while it may be a temporary cure for some of the evils it is not a cure for all the evils. In this country we have this wonderful gold-mining industry and we also have other minerals. We must take it as a fact that in the foreseeable future there will be no rise in the price of gold and so we must put our house in order. The great thing to cure inflation is to increase productivity. The Minister of Finance, when he sees rising unemployment amongst the white workers, can say that he has beaten inflation, but that does not arise at present. There are more jobs than workers. In order to get greater productivity we have to put our house in order. We have to look at the Government and see what they are doing. We heard the Minister of Bantu Administration telling us that the Government’s policy would be put into effect in regard to the Bantu, no matter what it cost. That is the whole basis of the failure of this Government, namely the failure to use the Bantu, and all our labour resources to the fullest extent. They will not face up to it. One is reminded of an army going into battle. That is the Government side. They have an object in view. They have been battling for the last 20 years, making very little or no progress. They have been slipping back slowly. This war, like all wars, is expensive. Wars are always wasteful. We have seen heads roll, as you see it in wars amongst the generals. We have seen reorganization; we have seen Ministers brought in, the latest one being the hon. the Minister of Planning, to bolster up the fight; this is going to go on regardless of cost As the hon. the Minister of Finance said when he was the Minister of another department, we have got what we call a political economy. No matter what the cost, we must pay for it as if this is a war, even if we suffer. That is what we are faced with to-day.

They the Government have been here for two decades. I think they are having a celebration this year. But if they look back on their policies, can they name one policy that they have carried out? I cannot think of one. Just start thinking. [Interjections.] I do not know one policy that they have carried out since they came into power 20 years ago.

I want to get on to housing, and more specifically on to housing in the proclaimed group areas, the Group Areas Act with its many amendments, proclamations made under the Act, and the effect of proclamations on property, on the voter and the person outside. Let us take an example, namely District Six. Let us take the example of the virtual freezing of all development of large areas in the case of District Six, Woodstock and Salt River for 10 years and the effect on valuations of property. Think of the losses that people have suffered as a result of the freezing. They tell us that the properties are valued by valuators, but they never accept the provincial valuation. They just take what they call a basic valuation. Now what is the position? What is happening? Houses that could be saved, are deteriorating rapidly as a result of freezing. Nothing is being done. This is the first South African urban renewal scheme. I do not think they have even started painting one house. Now another commission of the Department of Planning is going into the matter. We are still to have an interim report. As a result of the indecision of the Government, properties are deteriorating not only in the Coloured areas, but also the white areas, and what is more, as a result of the Government policy they cannot have any additions to playing fields or to schools. Why? Because the area is frozen. Nothing can be done. We cannot even make additions to the hospitals.

Now what of the people of District Six, the Coloureds? Where are these people to go? One cannot change a group area without making provision for these people. That is the trouble with this Government. We have the Minister of Community Development moving the Coloureds out. The idea of course is to put them on the Cape Flats. But what is happening? He says: “I am moving them out of a slum area”, but please, do not let us move them into a new slum. Quite a number of very pleasant houses have been built. But one cannot be proud of such a place as Bonteheuwel as one goes out to the airport. They may look nice. But they have not even got a road. That is what we are doing. The majority of these houses, of course, are sub-economic. We must realize that the Coloureds are not temporary. They are a permanent portion of our population. If the Government’s policy is going to be carried out—I said they have carried out nothing up to now—we must make provision for thousands of Coloureds to come into this area. But they have not done anything about it. Now what is really happening? We have been told about the housing that is being provided for these people. Now listen to a statement made by the former Minister of Coloured Affairs in 1961. This is a policy statement made by the Deputy Minister of the Interior in Parliament on 17th May, 1961. With regard to the Group Areas Act, the Deputy Minister said that the assurance had been given that not a single Coloured would be removed unless alternative housing was provided for him. The Coloureds who were affected in the Peninsula mostly did not own their own houses. The Government wanted to take them out of their hovels of hessian and tin and put them into decent houses. He said that at that time 8,000 houses were being built for them in the Peninsula. That was in 1961 and it is now 1968. The following report appears in a newspaper of 31st January under the heading “Homes Crisis: Urgent Talks.” It deals with a meeting of the Health and Housing Committee of the Cape Town City Council and states—

The chairman of the committee, Major Berman, said—

What is the Government doing about this? If the Government has a policy and they are going to carry it out, then let them get on with it and carry it out. I have said this before. But where we have the present situation that side must not tell us what they have done over the past 20 years.

It goes further than this. The hon. the Minister of Planning is not here at the moment, but I want to say that amongst the Coloured people we are building up a feeling of great and bitter resentment. Over the years we have had various commissions dealing with the demarcation of the beaches. According to to-day’s paper the most difficult and thorny task of allocating amenities to the Coloureds has now been handed over to the Province. It may be that there will be more sympathy from the Province. Those of us who know Cape Town know that a certain beach was allocated to the Coloured people where the Cape Town City Council was going to build a lido. This was to be at the beach along Milnerton. This amenity was intended for the Coloureds living in Kensington, in Schotsche Kloof and parts of Athlone. The money was going to be spent in their interests. It was an amenity that they required. But what happened? The Minister of Planning reversed his decision. He originally agreed to the scheme and then he reversed his decision. He says the area in question is subject to group area planning. The area where the beach was going to be developed is an industrial area. Then he said a road was to be built there. The road is already built and it does not affect the project. Then he said there were going to be harbour developments in that area. But he does not know because at present we have a commission sitting on harbours. The Minister does not know where the harbour is to built. Even the hon. the Minister of Transport says he does not want that area for his harbour. Then he raises the matter of effluent and says the area will be affected by effluent.

So we get all these hollow excuses for taking an amenity away from these people. Where are they to go? Where does the Coloured man from Cape Town have to go if he wants to swim? Must he go out all the way to Strandfontein, a distance of 20 miles? Must he catch a train and a bus and cover 20 miles just for a swim? This is the sort of treatment the Coloured people are getting under the policy of this Government. At the same time we get Ministers telling us about the socio-economic upliftment of these people, these people who are going to replace the Bantu in the Western Cape. What are they doing about it? They are building up resentment amongst a group of people, members of the population of South Africa who, during the last World War, were prepared to pay with their own blood to protect this country. The Government are doing nothing for them. Moreover, as far as the white housing in frozen areas is concerned, the Government are doing nothing there as well. Houses are deteriorating. Houses which could be repaired and placed in good order are desintegrating as a result of the Government’s policy of freezing these areas for ten years and more. Ten years is a long time in any man’s life. This Government will not even be here in ten years’ time. Look at the mess which we on this side will have to clean up when we take over. The Government will only be here for a short time. Think of the mess we on this side are going to inherit. We heard the hon. member for Kensington telling us what that side inherited from us, this wonderful golden nest egg, but all we are going to inherit from that side is a vacuum, and we will have to start pumping air into it.

Mr. Speaker, the hon. member for Salt River challenged this side to state what had really been accomplished by this Government during the past two decades. How can a responsible hon. member from that side come forward with such a challenge? He puts me in mind of a rusty zip —when it must open, it cannot, and when it is open, it does not want to close. Surely the hon. member ought to know that the past two decades will in the years that lie ahead be lauded in the annals of this country’s history by the historians and the writers as the period in which a nation came into its own, formed its own identity and proved its innate right to survive. This for me is proof that when the hon. the Opposition analyses a matter, only the economic aspects of that matter are taken into consideration. They have never considered the moral or the moral aspect of our right to survive. Their only concern is for economic advantages. The hon. member for Salt River asked what had been done, what ideals had been realized, what policy had been implemented during the past two decades. Need I remind him of the fact that separate development has become a reality? Need I remind him that the homelands are being developed with large-scale planning? Need I remind him of the great achievements which have taken place in the field of agricultural research, achievements which have won world-wide renown.

I should like to discuss one aspect which the hon. member mentioned, namely gold, but because it is already so late, I move—