Mr. Speaker, when the House adjourned last night I had concluded with certain remarks in regard to the gold price policy and the particular responsibility resting upon the hon. the Minister in this regard. I want to let these few remarks suffice.

I now want to proceed to certain accusations which the hon. Opposition hurled at this side of the House, such as those contained in their motion, inter alia, to the effect that the taxation which the Government has imposed on the nation is too burdensome both in itself and in comparison to that of other countries. That is how the hon. member for Pinetown put it. He also said that the Government had done nothing, nor was it doing anything in this Budget, in regard to the important question of productivity. This amendment contains other points which I shall deal with if time permits. The remark which was made, i.e. that in comparison to other countries we were over-burdening the nation with taxation, is incorrect. The hon. member for Pinetown made certain blunders. He compared certain matters which cannot be compared. He presented this House with an entirely distorted picture of the actual situation. When he made comparisons, he mentioned direct taxation and he lost sight completely of the question of indirect taxation. Indirect taxation plays a very important role in the tax structure of older countries in particular. The first example he quoted to prove how unfavourably South Africa compared with other countries was France. In France indirect taxation alone amounts to 61 per cent of the total. He did not take that into account at all. In South Africa it is only 36 per cent of the total. I maintain that this presents a distorted picture. In this way I can also mention examples of other older countries. In particular he also referred to one group of taxpayers, namely those in the R10,000 category. He then made a certain comparison which in itself was incorrect. But even if we take only the direct taxation into account, the overall picture differs completely from the one he presented to the House. Firstly, if we consider the taxpayers with a taxable income of less than R7,000, we see that South Africa compares very favourably with other countries. If we compare this with countries with which we can be compared as far as indirect taxation is concerned, countries such as Australia, New Zealand and Canada, one finds that in South Africa’s case the total taxation, government and provincial taxes collectively, amounts to 11.6 per cent. I am talking now about those taxpayers with a taxable income of less than R7,000. In the case of Australia it is 36.6 per cent, and in the case of New Zealand 23.8 per cent, and even in Great Britain it is 23.5 per cent. In all the categories i.e. the category of a taxable income of R1,000, that of R2,000, and up to R7,000, the taxation in South Africa is considerably lower. The hon. member did not furnish the House with those facts.

Are you satisfied with the taxes?

I want to ask the hon. member whether he was satisfied with the taxes which the United Party levied when they were in power? When they think it suits them they like making comparisons with other countries. I shall make comparisons between the taxes levied while that party was in power, and taxes under this Government. Perhaps they would prefer that. Before doing so, however, I merely want to say that mention was also made that the rebates on children were inadequate. In 1947 the rebate per child was R15 under that Government. At present it is R35 per child, and R45 for the third and subsequent children. It is three times more than it was under their rule. But let us make a comparison now.

What was money worth then?

Not three times less. The hon. member ought to know better than that. [Interjections.]

Order!

But let us now make a comparison between the taxation pressure in 1947 and that in 1968. I have already pointed out how low our taxes are, and that particularly as far as the lower income groups are concerned we are paying very little income tax. I pointed out that it was in accordance with a general principle of taxation, namely to have people pay taxes in accordance with their means. I think I should first mention these figures. In South Africa only 5 per cent of all races pay State income tax, as against 30 per cent in Australia, 34 per cent in Britain and 35 per cent in the U.S.A.

Is that the White population?

It is the total population. Do hon. members now want to suggest that the rest do not form part of the population? Is it not a sound principle to let those very people who cannot afford to pay, abstain from paying? Is that not a fair comparison?

But let us come now to the Opposition’s term of office. Now hon. members must please exercise a little patience.

Golden years. [Interjections.]

The amounts to which I am going to refer also fluctuate between R5,000 and R30,000. This is not taken arbitrarily: R5,000, R6,000 R7,000, R8,000, R9,000, R10,000, R12,000, R16,000, R20,000, and R30,000. In not one of these categories did the income groups falling into those categories pay more taxes in 1968 than in 1947.

They could buy a lot more with what they had left.

This has nothing to do with that comparison, nothing whatsoever. [Interjections.]

Order!

A person falling into the R5,000 income group paid R349 more in taxes in 1947 than in 1968. I am quoting the following figures as well: R6,000—R439, R7,000—R431, R8,000—R450, R9,000—R374, R10,000—R313, R12,000—R226, R16,000—R149, R20,000—R272, and R30,000—R1,177.

That is the reason why your golden years came to an end.

Now I want to ask you, Mr. Speaker, who burdened the nation, this side of the House or that? Why did they do one thing and say another?

Here I have a report which appeared in the Star of 21st November, 1967, under the title “Lucky South Africans”. Here the percentage of taxation of the gross national income is taken as a criterion, i.e. “Percentage of gross national income paid in taxes”.

It seems to me the English Press is lying again.

These particulars the English Press received from abroad.

Do you now believe the English Press?

But that hon. member wants to maintain that everything the English Press prints is untrue? This side has never yet said that. He is putting words into our mouths which we never uttered. In South Africa’s case it is 17 per cent. In Japan it is 22 per cent, in Switzerland 24 per cent, in the U.S.A. 29 per cent, in Canada 32 per cent, in the United Kingdom 34 per cent, in Western Germany 38 per cent and in Sweden and France 43 per cent. Listen now—

I think that this quotation adequately refutes the allegation that the National Party is burdening the nation with taxes. What is significant is the fact that hon. members on that side of the House so readily level accusations against this side of the House without any proof. It is very easy to accuse someone else without having to produce any proof of your accusations.

I come now to another accusation which hon. members on that side of the House have often hurled at us, i.e. the one in regard to productivity. I want to begin by saying that it is accepted that the most important task of increasing productivity amongst workers is the responsibility of the employees. I have here a report of the International Labour Office on Practical Methods of Increasing Productivity in Manufacturing Industries in which it is stated that the primary responsibility for productivity in private undertakings rests with the management of those undertakings.

I agree.

We on this side of the House agree with that, and I am glad to hear that that hon. member also does so. Those hon. members are now asking what this side of the House has done to promote productivity. I would rather hear what they have done. The word “productivity” is not a new one. It is almost as old as the Ark. I went into the matter but nowhere could I find that they had ever done anything to promote it, or that they had discussed it. Early in the fifties the National Party took the first step in this direction. The then hon. Minister of Labour refused to register any industrial agreements which prohibited piece work wages and incentive wages. Subsequently a report was made by the industrial court in which it was stated inter alia (translation)—

The then Minister of Labour asked the industrial court in 1957 to investigate and report on the application of incentive wages in South African industries. A report was submitted and the Department acted in the light of that report. But hon. members opposite are maintaining that we are doing nothing in regard to productivity. In addition it may be mentioned that the Department of Economic Affairs is making available an annual amount of R4,000 to the National Development Foundation for the promotion of productivity. In addition, a council for productivity was established last year, the Productivity Council, the specific aim of which is to promote productivity throughout the country. On 22nd April, 1967, the Argus stated with reference to the establishment of that body that, “it is tangible evidence of the importance attached to productivity by the Prime Minister and his colleagues”. This is what the Argus had to say, a newspaper which is not favourably disposed towards the Government. But let us consider what results have already been achieved. The International Labour Office made a survey entitled, “The quality of labour and economic development in certain countries”. It is a scientific study. They use the term “adjusted labour productivity”—“adjusted” simply means that the necessary provision and allowance has been made for the various wage scales in the various countries. Let us take a look at the situation in countries with which we can compare ourselves. New Zealand was first and South Africa, with a figure of 2.71 second best. For Australia the figure is 2.69, Canada 2.18, the United Kingdom 2.15 and the U.S.A. 1.80. Glancing at the figures for recent years, we find that South Africa was first—even better than New Zealand. Here are the particulars which indicate how productivity has increased in South Africa.

Let us consider productivity in the Public Service. As I calculated it productivity has increased on the S.A. Railways by 9 per cent during the past year—in other words, the tonnage transported divided by the number of employees. Nine per cent in one year! It is a fantastic figure. When we come to the number of officials employed by Government Departments, excluding the S.A. Railways, but including provincial administrations, we find that as regards the U.S.A., 6 per cent of its economically active population is employed in the public administration; 3.8 per cent in the United Kingdom; 9.1 per cent in Australia; 8.2 per cent in New Zland; and in South Africa 3.5 per cent.

What percentage of Whites?

I am amazed that that hon. member should pretend that the nonwhite population does not form a part of our population. Do they not form a part of our population. [Interjections.] The fact of the matter is that these figures do not suit the purpose of hon. members opposite. These figures, factual figures, indicate the degree of productivity in South Africa to be the highest in the world. It compares well with other countries. The Government is proud of the employees, the employers as well as the contribution which it has itself been able to make in this regard.

I want to conclude with the idea that the years since 1962 have indeed been wonderful years for South Africa. Never before in our history have we had such good years as we have had since 1962. And of those years the past year was undoubtedly one of the best.

And the farming population is flourishing!

The whole country has flourished. Our real income increased by 7 per cent. In addition to that our monetary unit remained reasonably stable, and we had no appreciable unemployment. I maintain that these years have been the best years in the history of South Africa. In the time when the party on the opposite side was governing, South Africa never experienced such years. We can, in fact, describe these years as golden years for South Africa. The years between 1962 and 1969 will go down in history as seven fat years. But we must not expect that we shall always experience such years.

Are you making a prediction now?

I am making no prediction—I am stating facts. We realize that there are still certain deficiencies and problems to which we must give our attention and will have to continue to do so in future. We know that the rent structure is still too high, that there is a need for more housing, and that we are still faced with agricultural problems, particularly as regards certain sectors of agriculture, such as the wool industry. We know that there is a shortage of skilled manpower, and that we are also faced now with the gold problem which has brought uncertainty to international economy; but I want to say that this question is safe in the hands of the Government. The achievements of the Government over the past 20 years have been of such a nature that the population of our country is prepared, and will always be prepared, to leave these important matters in the hands of the Government, and their experience of that side of the House when they were in power, was such and is so strong in their memories still, that they will be sitting on the cushions of the opposition benches for the next 20 years or more.

I feel that at least the financial aspects of the Budget should be discussed free of political considerations, and I propose to do so now. One thing that has emerged very clearly from the Budget presented by the hon. the Minister this year is the high Standard and the sound and strong economy of South Africa. It has been the Minister’s privilege to present to the House and to the country, and indeed, to the world, a picture of South Africa’s stable economy which I am sure is the envy of many other civilized countries in the world. The Minister has highlighted the economic well-being and strength that South Africa is now enjoying. He has shown to the world the strength and the stability of our national economy. It is indeed amazing that despite our internal differences of political opinion, and despite the adverse criticisms which our country receives from the outside world, indeed despite the Government itself, South Africa has emerged with a wonderful picture. This is surely a clear indication of the inherent strength and stability of our national financial structure. Now whilst it is right that we should give credit to the hon. the Minister and to his advisers who played an important part in creating this structure, and for guiding our economy, we must at the same time not forget the co-operation that the Minister received from every section of trade and industry, and indeed from our citizens in South Africa generally. In order to present this favourable picture, the citizens of our country have had to play their part in combating the inflationary trend with which South Africa, in common with the rest of the world, has been confronted.

I feel that the hon. the Minister and his advisers and our citizens generally are to be commended on the successful fight they have initiated and which they are continuing to wage against the inflationary trends which have permeated the entire world. We know that some of the steps the authorities have had to take to combat inflation have not been popular. They have had serious effects on some of our development plans and on the investment field in the private sector. But taking a broad view, one is bound to say that some of these unpopular steps were essential in combating this dangerous enemy of inflation to which the Minister referred in his Budget speech. We know that inflation can impose tremendous hardships on the lower income groups in any country. In South Africa, if inflation were allowed to progress unrestricted, the worst sufferers would be the Coloureds and the Bantu and the lower income group among our white citizens. We know from experience that inflation gravely reduces the buying power of our poorer people. We know that it can and does substantially reduce the value of any savings that these poor people may have built up over the years from their meagre earnings.

It was essential, therefore, that the Minister should take strong measures, however unpopular some of them were in the circumstances, to combat these serious inflationary trends. If these steps had not been taken, one shudders to think of the grave consequences with which our country might have been confronted. The anti-inflationary measures taken by the authorities have had the effect of establishing a stable and ever-growing economy which must inevitably result in a generally better standard of living for our people. I feel that the hon. the Minister and his advisers must be given every encouragement to help them in their continuing battle to check this inflationary trend and to check the prices of our essential commodities to enable our country to progress on the sound economic lines already envisaged in this Budget. I personally feel that the Minister and his advisers are entitled to receive commendation from this House for the stand they have taken, and I am sure they will continue to receive the cooperation of trade and industry and of our citizens generally.

The latest bulletin issued by the S.A. Reserve Bank recalls very succinctly what has been achieved by our country in the past financial year. In the first place there has been a very substantial growth in our economy. Then there has been a fairly high ratio of employment, and thirdly, there has been reasonable price stability. These are very encouraging signs indeed and form a very encouraging aspect of our national economy, and I believe that our country is entitled to be proud of it.

One of the matters which has been causing a great deal of concern in everybody’s minds at present is the situation which has arisen in regard to the disposal of South Africa’s gold. In this connection it would appear that one of the most important aspects in the present controversy is where South Africa will stand in relation to the traditional gold markets. Here again, I feel the Minister is right in adopting a cautious attitude in waiting to see the trend of the deliberations which have taken place. I can only express the hope that the Minister will not allow South Africa to rush into the free gold market merely because a higher gold price is offered there at present, because this may be only of a temporary nature. I feel that South Africa should continue to tread cautiously and that we should keep to our traditional markets. It is by no means certain that the price on the free market will remain in excess of the price established by the gold pool nations. Then of course there is also the doubt about the quantity of gold that one could continue to supply on the free markets without driving down the price of gold. These are important questions which I am certain the Government will keep in mind. Personally, I am strongly of the opinion that South Africa should continue to deal with the traditional markets, which after all have the great advantage of having world-wide contacts in the international gold trading sphere. Finally, on this aspect of the matter, I would appeal to the hon. the Minister to maintain the closest possible consultation between the Government and the gold producers in regard to our future markets.

Now I would like to turn to some very important aspects arising from the reports on our country’s economy. Whilst it is gratifying as a whole to see that our country is in a high state of liquidity, there is no gainsaying the fact that in relation to the public and private sectors there is very little investment capital available for mortgage facilities in the country, and this is one of the most important aspects of our economy. South Africa has always had a ready field of investment funds available for mortgages, both in the cities and in the country. The Minister has to some extent helped the situation, but I want to say that although we are in this state of liquidity there is very little investment capital available for longterm mortgage investment. I say the Minister has gone in the right direction in helping to maintain the liquidity of our building societies, which in turn will enable the building societies to make improved mortgage facilities available to the small house-owner. I think that is a step in the right direction, and I want to say to the Minister that the country expects him to do everything possible to help our building societies so that they in turn can make available more and more funds to the poorer section of our people for the acquisition and the building of their own homes.

But it is not only the position of the building societies that concerns me. There are many other sources such as well-established industrial organizations and farmers who are clamouring for long-term investment funds by way of first mortgage facilities for the essential development of their factories, businesses and farms. These mortgage facilities are simply not available in South Africa, and many people, out of sheer frustration, are abondoning schemes which would help the economic development of South Africa in various ways. There is no doubt that something must be done in the near future to encourage the private sector at least to invest again in long-term mortgage bonds. The thought has occurred to me that the hon. the Minister might encourage this form of investment if he would give consideration to the question of differentiating, from the taxation point of view, in respect of interest income derived from such mortgage investments. The hon. the Minister’s predecessor and his Department have already introduced a form of differentiation for taxation purposes in regard to dividend income. As you know, Sir, taxpayers pay a lower rate of tax on dividend income. I feel that if similar consideration could be given by the hon. the Minister to interest income derived from long-term bond investments, a substantial amount of money would be forthcoming for development in this field. Then again the hon. the Minister will know that the growth of mutual funds in this country has attracted a considerable amount of money from the private sector. In this connection I recall a statement made by the financial editor of The Cape Argus just a few days ago in which he pointed out that the six unit trusts, none of which is yet three years old, have ousted the building societies from their previous position of being the main recipient of South Africans’ savings. In the four months up to January, the latest Reserve Bank bulletin reports that the unit trusts drew in more than R25 million from the public and in the same period of four months the building societies throughout the whole of the country, societies which have been here for generations, only received. R18 million. This gives one an indication as to where the money from the private sector is going. In the three months ended 31st December, these unit trusts received R17 million from the public, equivalent to an annual inflow of just under R70 million. This form of investment is very largely responsible for the shortage of investment capital in the mortgage bond field. The hon. the Minister might give consideration to the introduction of some measure to compel these big mutual funds by law to make available a percentage of their funds for investment in the mortgage bond field. After all, the hon. the Minister in his own Budget has compelled them to make available a certain portion of their funds for investment in Government securities. I say that if the hon. the Minister would give consideration to the question of compelling these big mutual funds, which have attracted so much capital to themselves, to make available for the general benefit of this country a portion of the funds for investment in the long-term mortgage bond field, he would be doing a great deal to alleviate the unfortunate position which exists at the moment. I mention this as a suggestion as to how the Government can help to make more funds available for mortgage bond facilities in this country, and before I leave this aspect, I would emphasize to the hon. the Minister that this is a serious matter which deserves the earnest consideration of the Government. I do hope that the hon. the Minister will give some consideration to the two suggestions I have made in this regard.

I want to refer now to another form of taxation which I think should be dispensed with. I refer to the undistributed profits tax. Sir, this tax is something of an enigma under present circumstances. It is a tax which was introduced years ago to prevent corporation sayings. The hon. the Minister is doing everything possible to advocate and encourage savings in the Republic and I commend him for this attitude. It is doing much to combat the inflationary dangers with which this country is confronted. We are all anxious to encourage saving in this country and yet this undistributed profits tax quite often forces companies to distribute dividends in excess of what is wise in regard to the companies’ business requirements. To my mind this tax is basically a negation of the hon. the Minister’s own philosophy of national savings. It is an unwise tax in present circumstances. I think that our public companies, and indeed our private companies, should be given a free hand to retain as much of their earned profits, on which after all they pay tax, as they consider to be necessary in the interests of their own business. To force them to distribute their profits or else to face liability for undistributed profits tax is, to my mind, quite wrong under present conditions in South Africa. I hope therefore that the hon. the Minister will reconsider this tax. In any event, I think that the hon. the Minister should give the most earnest and favourable consideration to the question of increasing the proportion of profits which can be ploughed back into the business without attracting tax liability.

Sir, I would like to say a few words on the question of taxpayers receiving income tax relief in respect of charitable donations made by them. I was very pleased indeed to see an announcement in this morning’s Cape Times to the effect that the Secretary for Inland Revenue had exempted from income tax all receipts and accruals to the Chris Barnard Heart Fund. He has ruled that donations to the Fund will be exempt from donations tax and that bequests or other accruals from deceased estates in favour of the fund will be exempt from estate duty and that receipts issued by the Fund will also be exempt from stamp duty. I would like to congratulate the hon. the Minister and the Secretary for Inland Revenue on this decision. It is indeed a very wise one and the announcement will undoubtedly be well received by everyone, because no fund has brought greater credit to South Africa than this outstanding Heart Fund. It would appear that no decision has yet been made or announced by the Government as to whether or not any income tax deductions will be allowed to donors to the fund. I would make an earnest appeal to the hon. the Minister to give the most favourable consideration during this session, to this request to exempt donors in respect of donations made by them from income tax liability in respect of such donations. I am quite certain that if the Government were to take a generous attitude and allow our citizens the benefit of income tax deduction in respect of donations to this fund, the target amount which the fund seeks to collect would be forthcoming in the very near future. I know of no cause in South Africa which has greater merit and I would appeal to the Government to do something along the lines indicated to encourage our citizens to give generous support to this fund and other national charities. In other parts of the world—my time is limited and I cannot go into this very fully—genuine donations to recognized charitable organizations are deductible from taxable income.

We do it also in this country in relation to certain donations given for specific causes to some of our universities, and I would appeal to the hon. the Minister to grant a similar relaxation in regard to genuine donations to some of our charitable causes and national causes in South Africa.

Sir, I would like to say a few words on the question of death duties in the Republic. This matter was referred to yesterday evening by the hon. member for Kensington, who drew attention to the fact that some years ago I made an appeal in this House for the abolition of estate duty. In doing so I followed the very good example of an appeal made repeatedly some years ago by the hon. the Minister of Immigration, who was then sitting on this side of the House, to the Government of the day for the abolition of estate duty in South Africa. I am glad that the Minister has seen fit to introduce in his present Budget a further relaxation of death duties in the case of surviving spouses and so on. This is undoubtedly a step in the right direction, but I should like the Minister to take a step further and to give favourable consideration to the entire abolition of death duties in South Africa. Such a step would undoubtedly be well received and would do our country a great deal of good. The case for the abolition of death duties is a very good one indeed. On previous occasions, as I have indicated, I have argued this case in this House, and periodically the Government has scaled down the death duties payable by increasing the basis of exemption. But in my submission that is not enough. Serious thought should be given to the entire abolition of death duties in South Africa. I feel there is an unanswerable case for total abolition.

I would remind the House what a former outstanding Minister of Finance, in the person of the late Mr. Havenga, had to say on this matter as far back as 1954. He said the following in this House—

It was obvious from this statement that Mr. Havenga was leaning towards abolition. He regarded the duty as having a deleterious effect on our economy. He accordingly proceeded to reduce the burden of estate duty. Unfortunately Fate intervened, or otherwise I am sure he would have gone ahead towards the complete abolition of this unjustifiable form of taxation. His successor then introduced a reform in our system of death duties. Because of alleged administrative difficulties, he abolished succession duty and increased the estate duty. Since then there has been an outcry from all parts of this House and from all parts of the country, and since then there has been a progressive reduction in the death duty rate. I feel, however, that the time has come when we should follow the example of many other countries—excluding Socialist Britain, because there the death rate duty is very high indeed—and abolish completely our death duty. This would undoubtedly have the effect of attracting permanent capital to our country. People from all over the world are opposed to this irksome form of taxation, which imposes a heavy tax on an accumulated estate in respect of which taxation has already been paid on the revenue attaching to the estate.

It is not as though these people have got away with not paying ordinary taxation. A man who has built up an estate has paid taxation on his revenue over the years, and it seems wrong to me that his estate should be taxed again on his death. Countries which have abandoned this form of taxation have attracted people with substantial estates to spend the evening of their lives in new surroundings, secure in the knowledge that their survivors will not have to bear this unjustifiable tax. I have known of cases, in my professional capacity, of farmers in this country whose executors have been obliged to sell substantial portions of landed property which had been in possession of their families for generations in order to meet the estate’s liability for death duties. This has had the effect of the farmer’s wife and children being deprived of a large portion of their husband’s or their father’s farmlands, which he has built up over many years by hard toil and sweat. They were compelled to sell a large portion of their lands to complete strangers to meet the estate’s liability for death duties. Surely the average income from this tax does not justify the hardship it inflicts on our people?

Moreover, this is a fortuitous type of tax about which one cannot be certain. How can the Government know with any degree of certainty what next year will yield in this field of taxation? By no stretch of imagination can this be regarded as a certain or a stable source of revenue. It is mainly for this reason—and I want to emphasize this for the hon. the Minister—that the proceeds of this tax for years have been paid into the Loan Account. It does not go to alleviate our revenue in this country, and it is for this reason that it is paid automatically into Loan Account, by reason of the fact that the Government cannot budget from year to year as to what these estate duties are going to bring into the coffers of the Government.

The present Minister has exhorted our people to save their money, and I should like to associate myself with that appeal. But in all conscience I would ask the hon. the Minister this question which has been posed time and again by people in this country: “What incentive is there for people to save their money, if on their death their heirs have to pay substantial estate duty?” That is a serious question that has been posed by many influential people in this country. May I say it has been asked by many influential people on both sides of the House. There is no political significance attached to this. Both sides of the House have asked this question.

We are all engaged in a campaign to fight inflation. We claim that unnecessary spending causes inflation. But the feeling exists that there is no incentive to save your money if on your death the Government is going to take a substantial portion thereof. As I say, I have known of many hard cases where the incidence of this unpopular tax has hit people very hard indeed. I want to recite just one case which I recall here this afternoon. I recall the case of a leading farmer in the Cape who left property, consisting of a number of farms, valued at a figure of nearly R300,000. The property had been in the family’s possession for generations, but had increased in value purely because of the annual depreciation in the value of money.

As we know, as the value of money depreciates, the value of landed property increases. Because of the depreciation of the value of money this farmer’s properties increased to the enormous amount of R300,000. The heirs were faced with a liability of nearly R90,000 for duties. This had to be paid on the properties worth R300,000. There was only some R2,000 cash in the estate, and in order to meet the claim for estate duty the farm had to be sold. Is it right that such a form of taxation should continue? Surely we are entitled to claim that in view of the wonderful way in which our country has prospered and progressed, in view of the tremendous development of our country, in view of our revenue surpluses which are increasing year after year, in view of our outstanding and incomparable economic position, a position which can hold its own with any part of the world, the time has come when we can dispense with this unfair and unjustifiable form of capital taxation. It is only a form of capital taxation, after all, and it only yields a comparatively small percentage of our national revenue.

Last year the Minister drew attention to the fact that it yielded some R19½ million, I think. That did not go into our Revenue Funds but into our Loan Account. Does it matter, in this enormous capital structure in South Africa, if we were to forego this money?

I feel the hon. the Minister will be satisfying not only the inner feelings of hon. members on both sides of the House but will be satisfying public opinion throughout the whole of the Republic of South Africa, if he abolishes what is being regarded as an irritable and quite unjustifiable form of duty. I commend to the Minister these constructive suggestions for his favourable consideration.

Mr. Speaker, I have listened with interest to the excellent speeches made by hon. members on the Government side, as well as to a few suggestions from the hon. Opposition in regard to the complicated matters with which the Budget dealt. I hope I shall be allowed to return to a level which affects the general public more specifically, a level where I as layman may perhaps also have something to say about financial matters.

I have a heartfelt need to convey my thanks to the hon. the Minister for the provision which is being made for pensioners. I think these concessions have been gladly received by both sides of the House. The nature of the concessions is such that our aged and other deserving persons, as well as all other sectors of the population, can be pleased at this excellent Budget. A second matter I am particularly grateful for, also in regard to pensions, is the payment of family allowances. There appears to be a misunderstanding in our country, if one glances at the letter columns in our newspapers and listens to opinions being expressed at meetings, to the effect that this Government and its predecessors has no real interest in immigration through the cradle, as one hon. member called it. It is a fact that these family allowances for which pleas are often made are already being paid for quite some time. I think that the Government deserves a vote of sincere thanks for encouraging larger families, particularly in recent years. This is a matter which affects our country and nation intimately. I hope therefore that the hon. the Minister will forgive me if I should, in this regard only, point to a deficiency which still exists. I have said that there are many people, and this becomes apparent from people who write public letters, and others, who are not aware of these concessions which the Government is applying from time to time. In addition, I would just like to make the assertion that amongst members of the public there are many people who qualify for such allowances, but who are unaware of these privileges relating to pensions, and particularly to family allowances. It is a fact that many people who are entitled to pensions are not aware of that fact, and consequently do not make use of this privilege to which they are entitled. There are deserving cases which do not make use of that privilege. I think we must bear in mind that many of these people who qualify for family allowances are people who do not read the newspapers regularly and who are not able to study all these complicated formulas in accordance with which they are payable. Consequently they do not take the trouble to make application when they can in actual fact qualify for these allowances. I want to ask therefore whether it is not possible to find some means or other whereby these concessions which the Government is making from time to time can be brought to the attention of the public. I have found in the course of my work as member of this House that even social workers did not have a clear idea in regard to precisely what cases could be recommended for consideration by the Department. I am certain that if improved publicity could be given to this matter, no matter in what way or by what Department, the public would be extremely grateful, particularly those people with large families who qualify for these allowances for which provision is now being made.

I now request the friendly attention of the House in respect of another matter which was touched upon here in the debate yesterday by the hon. member for Paarl when he spoke about the extra-statutory payments for which provision is being made in the present Budget and which, as you know, has been drastically increased in the case of the Cape and certain other provinces. When we discuss the provincial system I must admit that I am aware that in recent times people have often criticized the system of provincial government. I wish to state emphatically that I am not siding with those people who want to level criticism in this regard. I think that this House ought to be grateful for the work which has been done by the provinces in the past and which they are still doing. I am discussing the provincial councils now as councils, and I am also discussing the members of the provincial councils. A great deal of the work which has to be done in our constituencies by M.P.s is being undertaken by them, particularly when the House of Assembly is in session. I think we can display a little more gratitude towards the provincial council members for the work they do for M.P.s.

Does that also apply to United Party M.P.s?

I do not know whether United Party M.P.s work. [Interjections.] The hon. member for Benoni is asking me to exclude his M.P.C. in this regard. I do so gladly. I want to add to that that I cannot assume that he is not doing any work. I think all M.P.C.s are doing good work.

Apart from the M.P.C.s I think we have once again in regard to this Budget come to the conclusion, with these tremendous concessions which have been made and which were referred to yesterday, that the Central Government should also give serious thought to what precisely was envisaged in the Act of Union of 1909, and the Constitution of the Republic of South Africa, which subsequently took over practically all the provisions in regard to provincial councils as they stood. It is a fact that we cannot expect the provinces to draw up proper Estimates if they are not at least certain of what their income is going to be. Adjustments have been made from time to time. I want to remind you of the special legislation passed in 1945. However, it also became apparent at the beginning of the session this year, when the Deputy Minister of Finance introduced a Bill in this regard, that it has in recent years become increasingly necessary for a new formula to be found. The hon. member for Paarl pleaded yesterday that as far as the Cape is concerned, special circumstances existed which warranted an increased allowance being paid to the Cape. I do not begrudge the Cape that increased allowance which has been allocated to it this year. I think the Cape deserves it, but at the same time I want to say that where particular circumstances prevail in one province, particular circumstances of another nature are, on the other hand, prevailing in another province. When the expansiveness of the Cape Province is mentioned, it can also be borne in mind that particular circumstances exist in a province such as the Transvaal, where there are tremendous concentrations of population groups, with the resulting requirements in regard to the provision of an infrastructure. In this regard I want to say that we as a House of Assembly should also take cognisance of the fact that when these policy matters are being discussed and policy decisions are being taken in regard to the establishment of towns, etc., the immediate result is that the provinces are required to provide certain services. These services simply have to be provided because the Central Government adopted resolutions along specific lines. We adopt resolutions in the implementation of our national policy in regard to the establishment of a town, but these services do not end with the provision of a railway line and other basic services. We must remember that when this Government has done its share of the work, the province is left with the problem of providing schools, which is the first thing people ask for when there is a concentration of population. Nor does it take long for those people to ask for essential services, such as hospitals and clinics. As we know, those services have to be provided by the province. I say this without reproaching myself or anyone else in this regard. It often slips our minds that urgent demands are made for these services by local communities, and that this places a tremendous burden on a provincial authority. I am aware that the provinces have the right to levy taxes with the approval of the State President and the House of Assembly, but when we think of the province as a second level of government, and in fact an integral part of the Government, then I want to say that when we have a splendid Budget such as this for which everybody can be grateful, we must bear in mind that a province may be faced with a situation where it is compelled, because there is an urgent demand for other services, to levy provincial taxes which can to a large extent detract from the excellence of a budget presented by the Central Government. It is also necessary that a province’s Budget should balance. A province is instructed by the Central Government to accomplish this, but the province is not always able to do so because the allowances which the Central Government have appropriated for them, are not known to them in advance, and because, as the hon. the Minister himself said, the formula according to which it has been done in the past has become entirely obsolete.

Then I also want to mention the problem of our local authorities. I am aware of the fact that the commissions of inquiry which have been appointed are due to report soon, if they have not reported already. I am also aware of the fact, and I accept it with every confidence, that these reports are being studied at the moment, and that we will soon learn what recommendations will be made by the Government to the House. I can probably even venture to say that I had the privilege of being present at the discussions of the provisional reports. I want to say that in regard to the determination of the financial relations, and the amendments thereto, the final reply will not as yet be given in respect of the problem of the liaison between the Central Government and the local authorities, with the provincial councils in between. It is not merely a case of finances and the provision of finances. Another essential factor which has to be faced is the fact that the local authority remains the body which in the last resort is most intimately involved with the implementation of Government policy in local communities. I believe that in that past local authorities have shown that they can act responsibly in this respect. However, that is not to say that this will always be the case. Lengthy and involved discussions have been held in this House in regard to the factors which might result in inflationists tendencies, inter alia, by means of the duplication of services. If other taxation proposals are adopted here which have to be duplicated on another level of government, it must of necessity lead to increased costs for the general public. There is only one way in which local authorities proceed to increase taxation while they are bound by ordinances not to exceed a certain level, a method which can affect the public in their daily lives. It can affect every person, both rich and poor, the person who can afford it as well as the person who cannot. This method is the triennial valuation of properties. With this the same results are obtained, i.e. increased revenue from the pockets of the taxpayers. The best legislation and taxation proposals can, if there is ill-will on the part of a local authority, be undermined by it. By virtue of my experience of local authorities I am of the opinion that we can trust local authorities to do the best for their communities. I think that there are capable men in local authorities, men who are inspired by the same ideals for our country and our people as we in this House are. However, these people should also be placed in a position where they can plan in advance so that they can do their best for their respective communities. I am saying this in all humility, but also from experience. That is why I hope that the hon. the Minister of Finance, when the implementation of these taxation proposals is being considered, will bear in mind this one aspect, i.e. the lack of liaison between local authorities and the Central Government. Through the Union Constitution, and subsequently through the Republican Constitution, certain duties were conferred upon local authorities, independently of provincial authorities. I am referring in particular now to the National Health Act of 1919, and the Natives (Urban Areas) Consolidation Act, Act No. 25 of 1945, which conferred certain duties upon local authorities, which they are obliged to implement. I know that from time to time accusations have been leveled to the effect that there are local authorities who have acted wilfully. This has in fact happened in a few cases. However, it is only fair to mention that in by far the most cases city councillors have acted with the greatest degree of responsibility as soon as they have understood a position, and were convinced that it was in the interests of our country and in the interests of that local authority. The method of liaison between the provincial and the Central Government still leaves much to be desired, so that a great deal of work which is being undertaken by this Government could have been done more successfully if there had been liaison.

Here I should like to mention only one aspect. There are city councils which have contributed—and I think that those town councils without exception wanted to do their duty—to funds being made available for housing. The hon. the Minister of Community Development has also, on a former occasion, said that there are many town councils who did not want to do their duty, and the hon. Opposition has found it easy to say that it was the Government that was not building enough houses. However, that is not always the case. There may be a few city councils who are being wilful, but most of them are unable to do so because the right channels for the implementation of that work which the Government has transferred to them do not exist. Other developing countries have already thought in terms of ministries of local authorities. I do not believe anything of that nature is necessary here, but I do think that some form of liaison should be created, even though this is done by means of a Department of Local Authorities in the Central Government, under one or two portfolios. It should be possible for local authorities to hold collective or individual discussions with the Central Government in regard to the best way in which they can give effect to the tasks which this Central Government has entrusted to them. In 90 per cent of the cases, I believe, local authorities will do so eagerly and with dedication, regularly and honestly, if only they were given the opportunity to acquire that direct liaison.

Mr. Speaker, I am rising to discuss more specifically, in the very limited time at my disposal, the amount of almost R17 million which appears on the Estimates for a water plan for the Boland. Let me say at once that the announcement of this first phase, of which we do not yet have all the particulars, and of the provision of this amount, was good news to us, the people of the Boland, news we have been looking forward to in the past number of years. Now this scheme has been given new significance, a new stimulus. New vistas have now been opened for the economy of the Boland. If this new urge to develop which is now being born is correctly assessed and planned and positively regulated in advance, this development can become as colourful to our Boland economy as the lupin lands in the Swartland after good rains in the winter. In short, this stimulus compels us to reconsider the position with regard to the future pattern of this old heartland of civilization. In other words, we will have to start preparing a new master-plan for the Boland at once. In this connection I want to refer briefly, without giving a detailed motivation, to a few of the basic problems here which I think will now have to receive attention.

Firstly, there is the desirability of at least some degree of finalization of the industrial and residential development in the Cape Peninsula and a more conscious removal of further development to new points of growth within the Boland as a whole. Put differently, the new growth and development which is now going to arise, will have to be spread more consciously over a wider area, so that all Boland towns may rather develop as a greater, dynamic whole.

Water supply has in many respects until now caused all forces of development to favour centralization in and around Cape Town. The investigation into the economic structure for a greater Cape Town conducted by the Bureau for Economic Research of the University of Stellenbosch was published a few months ago. This investigation, which was published provisionally, quite categorically proves my statement. In 1960, approximately 78 per cent of the total population of the smaller Boland, namely 807,000, were living in four magisterial districts which form the heartland of the Boland. With an area of 509 square miles the population density of the heartland was approximately 1,586 persons per square mile. The population density of the four magisterial districts separately was as follows: Cape Town, 3,142 persons; Wynberg, 2,062 persons; Bellville, 1,092 persons; and Simonstown, 303 persons. The corresponding figure for the areas bordering on the rural part was 82 persons per square mile. Applied correctly, the announced water plan for the Boland now lays the foundation for a new and better ordered future pattern.

There is a second aspect I want to mention here. At the moment the white-brown ratio in the Boland entails that in future we will have to think more socio-economically, and not only in terms of financial economies. Let me develop this statement of mine. The Boland, and especially Cape Town with its enormous Coloured population, whose rate of increase at this stage borders on the biological maximum, cannot escape the population explosion in the second half of the twentieth century. By the year 1980 the Boland heartland will have, according to the latest calculations, a total of 1,240,000 Coloureds as against 526,000 Whites. If we take the normal calculation, that is, if 39 per cent of the Coloureds are economically active, the area will by the year 1980 have a Coloured labour force of 479,000, of whom 211,000 will have to be absorbed at the present economic growth rate. In other words, if no large new development takes place, the Boland is heading for a future of unemployment and emigration, especially of the Coloureds, to different areas.

If we analyze this picture in greater detail, it becomes even more difficult. Nobody who knows the Boland, and especially the Peninsula, can deny to-day that large numbers of Coloureds, particularly in the Peninsula and on the Cape Flats, have landed in a sub-economic twilight world where they are eking out some sort of existence to-day without making a noticeable contribution to the organized labour force. This is a fact, a reality with which we are faced to-day. Now, surely we must assume that our education policy for the Coloureds and our policy of social upliftment for them, will, as the years go by, impart greater impact to this vast labour potential. This adds even more force to my argument.

In this time of scarcity of labour, it is perhaps difficult for our Boland lay-public to accept such an argument on the part of particularly our economists and sociologists at this stage; yet these are basic facts we will undoubtedly have to face. Now I just want to express a few thoughts as regards this basic problem and the future.

The Slater Report, which was issued last year, very clearly points to the development of new social tensions if we should continue in a haphazard way to develop, within the future pattern for the Boland, the metropolis of the Coloureds in the Cape Peninsula; as I called it, a sub-economic twilight world which sometimes gives rise to misgivings. This opinion is also confirmed quite unequivocally by the report released last week of the survey which was made under the supervision of Professor Muller of the Western Cape in an area such as Bellville South. It appears from this that at this stage the won’t-works and the unemployed in Bellville South alone amount to approximately 10,000. Now the very pointed question occurs to me as a person from the Boland whether we should not in this respect, give new attention in a regional context to our three traditional Coloured towns in the Boland, namely Mamre, Saron and Pniel.

Let me deal with Mamre first. It is an old, traditional Coloured town. It is an area that is steeped in history. This old, traditional Coloured town or mission station was established in 1808 by the Moravian missionaries at the place where the D.E.I.C. had a military outpost from 1701 to 1791. Now, the position is that if one analyses the economy of the Boland in a regional context, this old traditional Coloured village is situated on the new line of development which has developed during the past years in an almost dramatic way from Cape Town harbour through Milnerton in the direction of Darling and further on to Saldanha, and also in the vicinity where the State has already bought land for South Africa’s first nuclear project for the desalination of sea-water. I say this town has tradition. It is situated in a region where we can build a model area for the Coloureds and which will extend to the sea and where we can also meet the problem of the lido conflict which arose, the lido which cannot be built in the neighbourhood of Milnerton. Here we have the obvious locality where we must give attention to the matter in a regional context. It is true that even at this stage there are approximately 17 daily buses running from Mamre to convey workers back to Cape Town from there. In other words, geographically this locality fits beautifully into the framework of a new line of development which runs in this direction.

The second town, Saron, is also an old, traditional Coloured village which in a new pattern for the Boland can impart new impetus to that particular area. Here we have the situation that a place like Gouda is situated on the main transport line to the north. This is the area where, if this water plan which has been announced becomes a reality, it can have its greatest impact, because in these Estimates one of its aspects is a traverse from the Vier-en-Twintig-rivier complex to the Voëlvlei Dam, which is at present being raised at a cost of approximately R4 million in order to increase its capacity by approximately 61,000 morgen-feet of water. This is also the area which will be served from this Berg River plan which is being announced here. In other words, here we have a concentration of water. Here we have water and here we have land, of the cheapest in that particular area, and as I said, it is situated on the main transport route to the north. If we now impart new strength and momentum to Saron we shall have here, from a geographic point of view, one of the points of growth in the Boland.

The next one is Pniel. This village is situated in probably one of the most picturesque areas in the Boland, an area which will impart a totally new momentum to the agricultural industry in the Upper Berg River area as a result of the stimulus provided by the water plan announced in the Budget. The question occurred to me whether we should not give new attention to this Coloured village, especially with the creation of new resources and the preparation of the labour capacity of the Coloureds in agriculture. I say that meaningful attention to these three traditional Coloured towns in the Boland will accord perfectly with, firstly, meeting the obvious signs of overconcentration in the Peninsula, and secondly, within a regional context regulating with new method the new vitality which is being born out of this Boland water plan as announced in the Budget. But when I have said all this, the great challenge still remains, i.e. to meet the predictions of our economists and our sociologists as are evident from the provisional report of the University of Stellenbosch, that we cannot create sufficient avenues of employment in our future pattern for the Boland to keep pace with the population increase of the Coloureds.

May I ask a question?

No, my time is very limited. I say this despite the new momentum which is being released by this new Budget for the Boland economy. If in the Boland economy, despite the new impetus which is now being imparted to our primary industries, we have to look for a solution, it remains true that in our Boland economy we nevertheless have to look for a new basic industry in this particular region, and what can it be? We can analyze the situation in whatever way we like, but there is only one way open to us and that is the calculated initiation of a shipbuilding industry with its many ancillary industries for the Western Cape, an industry which, primarily, can draw White immigrants to counter the unbalanced growth in the white-brown ratio in the Boland.

Let me point out further that in 1960 the Whites in the Smaller Boland constituted only 36.3 per cent of the total population, whereas the Coloureds had increased to 53.1 per cent. This trend is still being constantly accelerated to-day by the emigration of Whites from the Boland and the immigration of non-Whites to this area. On returning from overseas last year, the hon. the Minister of Finance made a point which he thought was possibly realized better in informed foreign circles than in South Africa itself. This is that the importance of the Cape route between the West and the East is no temporary phenomenon. On his arrival here the Minister concerned suggested that it was in fact a historical juncture for South Africa. Let me put it the other way round. I say it would be unimaginative if the Boland did not get its basic share of these new maritime activities which are developing in this particular area. Let me say at once that the matter of the calculated initiation of a possible ship-building industry in the Western Cape, and more specifically, in the neighbourhood of Saldanha, is under consideration at the moment and therefore I do not want to say any more about it. But in conclusion may I just say this against the background of the facts which I have tried to present here.

This Government of ours has the ability, as has again been shown by this Budget, to think on a large scale about the future of our country. The new stimulus of which the Boland is being assured in this Budget, in the form of this splendid amount for a water plan to ensure new growth here, demands from all of us, and especially from our Government, new thinking in respect of the future pattern of the Boland.

There are several matters I wish to raise with the hon. the Minister and certain comments I wish to offer in relation to the Budget before us. Before I do so, I must say that I have listened with interest to the speech of the hon. member for Moorreesburg. Those of us who are concerned with the development of the Western Cape and the problems of the future certainly welcome this planned development of a water scheme in the Boland area. It strikes one that there is perhaps a new approach to the dispersal of industries and that one is attempting now to create an economic factor which induces industries to be established in an area, rather than the ideological one which has been paramount in a lot of Government thinking up to this stage. It seems also that the hon. member has raised certain questions, and has asked for thought to be devoted to these questions, which relate to the labour which will be available and to the productivity of that labour in relation to our Cape Coloured people and such Bantu as may be available, particularly having regard to the decline in the percentage of white persons who are presently employed in industry, a percentage decline which is likely to continue in the future. En passant, he referred to one matter in regard to which I hope the hon. the Minister will take the House and the country into his confidence and perhaps make a statement, and that is the hon. member’s reference to the acquisition of certain ground in regard to some future desalinization scheme in the Boland area—the desalting of sea water. Sir, we would like to hear more about that. If there are set plans and decisions have been taken as to what schemes the Government has in mind, we would like to hear where this new undertaking is to be established. Perhaps the hon. the Minister might be good enough to take us into his confidence in this regard.

Turning to the Budget, I want to say at once, as others have said in this debate on both sides of the House, that our national economy is undoubtedly strong, and I believe that all South Africans have reason to be thankful for that position. That there has been some relief from inflationary tendencies cannot be disputed. That our balance of payments’ position is satisfactory cannot be disputed, and the fact that the rand is one of the sound currencies of the world similarly cannot be disputed. I agree with the statement made by the hon. member for Parktown that the hon. the Minister of Finance sits here possibly as one of the most envied finance ministers in the Western World. I know the hon. the Minister, and at the same time I am sure that he is sufficient of a realist and perhaps a sufficiently modest individual not to claim that this situation in the country is entirely due to the fiscal policy and the actions of the Government. The fact that there has been a sigh of relief from the man in the street that he is not faced with additional taxation this year, does not necessarily mean that the Budget is sound in all its aspects. I believe that because of the sound position in which we find ourselves it behoves us to be even more critical and to be more prepared to examine in every detail our national economy because we are fortunate, as a country, in enjoying a sound economy and an almost complete absence of unemployment in the country. I believe that this present position is attributable not to the fiscal policies of the Government but to the natural resources of our country, to the resourcefulness of our people and to the opportunities for expansion which have been presented in South Africa as a young country since the end of the last war. I say therefore that we must examine this present general prosperity and see whether it is adequately distributed amongst all sections of the population. Having said that, Sir, I wish to offer one or two criticisms and comments which I believe are relevant to this re-examination.

I believe that in our financial picture at the present moment there are certain imbalances which require urgent attention and upon which we must focus our attention, the first of these being the budgetary procedures and practices which have now become to be regarded as normal and acceptable in this House. For many years the hon. the Minister of Finance for the time being has announced the outcome of the year’s activities, the prognosis for the end of the current financial year, and has announced a surplus out of all proportion to what was anticipated when he presented his Budget 12 months earlier. The hon. member for Parktown has indicated, for instance, that at this stage the hon. the Minister has under his control an amount of R180.7 million of moneys which have not been finally appropriated by this House. No doubt the hon. the Minister will deal with the unexpended balances of the current year—the R88 million which was transferred to the Stabilization Fund, the R47.7 million which is the unexpended balance on his Loan Account as at 30th March of this year, and the estimated cash surplus for 1968-’69 of R5 million. Sir, judging by the applause from hon. members opposite when the hon. the Minister announced his surplus, they seem to regard him in the position of a trader, and if at the end of the year he announces a good profit, then he has had a very good Budget! Sir, I think that is very unsound and I think the hon. the Minister will agree with me that he should get the loudest applause if at the end of the year he is able to say, “I have taken from the taxpayer just sufficient to pay for the services needed by the country during this particular financial year”. Sir, the hon. the Minister shakes his head. If he presents his Budget to us and he hopes that there will be a surplus at the end of the year, then he must take the House into his confidence. He must not say to us, “I anticipate this revenue, I anticipate this expenditure and at the end of the year I will have a surplus of R700,000”, and then present us with a surplus of R60 million at the end of the year, because then either the correct picture was not given to the House at the commencement of the financial year or the estimates were hopelessly wrong. I believe that one of the contributory factors to the inflationary trends which have grown in this country over the last 10 to 15 years—and there are certain economists who agree with me and others who do not—is this excessive taxation.

How is that?

If taxes are higher than the amount required, those taxes invariably result in higher wages; they increase prices and increased prices mean demands for higher wages. I say that this is a contributory factor, and this has been going on for years and years under this Government I believe that the Estimates which we have had presented to us over the past few years and last year were far from accurate in the total result presented to us by the hon. the Minister, and one wonders whether more careful attention should not be paid to the figures which are put before us as the prognosis for the coming year.

Secondly, I believe that the many intrusions through Government policy into what are normal economic factors determining the future of the country, hold out dangers to our economy. The hon. the Minister of Planning was quite frank with us last year. He told us that in determining the siting of industries under his Physical Planning Act he would not have regard essentially to the economic factors which would normally be taken into consideration, but that he would have regard to the fact that he wished to encourage the establishment of industries in the border areas. Sir, we have control over labour resources, which again is an interference with the normal economic demands. We have a Minister of Bantu Administration and Development who says “I will carry out my policy regardless of the cost”. I think it is as well that we should look at the position here to-day, when our finances are strong, and see how much we can take of this interference with normal economic processes in the future.

I want to turn for one moment, if I may, to the question of Provincial Council finance. This matter has been dealt with already by the hon. member for Paarl and there have been certain comments from the hon. member for Witbank. Sir, this matter is becoming serious. I believe it is bad finance to have extra-statutory grants appearing over and over again. We have had public statements by Administrators who say that they are getting tired of having to come cap in hand to the Government to ask for relief. We have a recent statement, which appeared in Die Beeld, from the Administrator of the Orange Free State, who is reported to have said this—

I want to remind the hon. the Minister that when I raised this matter last year in the Budget debate, he made this statement (Hansard, 13th June, 1967, col. 7866)—

The hon. the Minister then went on to say that the Borckenhagen Commission had only just issued its final report; that it had been submitted in English and that the Afrikaans translation was not yet available. But he then gave this assurance—

Sir, this dialogue is going to be on a rather stale diet if the report of the Schumann Commission is kept on the secret list much longer. It has been there for four years. I believe that it must have an important effect on the financial relations between the Central Government and the provinces and on many matters which are in the hands of the provinces and to which the hon. member for Witbank referred—the questions of hospitalization, education and so on. In the meantime the Administrators and the Provincial Administrations are at the mercy of the hon. the Minister—and so far it has been the tender mercy of the hon. the Minister—as to what extra-statutory grants they should obtain. Let me mention here that I notice in the Budget before us that the hon. the Minister anticipates receiving from excise alone on tyres, petrol and motor-cars on local manufactures, excluding customs, a total of R82,450,000. A little more than half of that excise only is made available to the provinces for road building. Receipts from customs go entirely into the Central Exchequer. Sir, it was a joy to me to hear the hon. member for Paarl say that something should be done in regard to the Divisional Council tax position in the Cape Province. This matter was raised in the Provincial Council some six years ago and his Party then voted against even an investigation into this matter. But, Sir, we persisted, and when we persist we find that finally our views are accepted on the other side.

It takes a long time to break through.

I want to move on now to the question of the tax bulge which we have been told will be investigated. Well, I think this is the time where there might well be an investigation, seeing the state in which our finances are. Now is the time for a measure of straightening out and of adjustment. I am sure the hon. the Minister was made to realize during his discussions with commerce and industries that the present incidence of taxation is killing initiative in the young executive strata of our economy in South Africa. I have in mind particularly the young executive who has initiative and ability who wants to get places and can get places, and make a contribution to the growth of our economy. But to-day this young executive is concerned more about fringe benefits—an expense account, motor-car allowance, and overseas trips These are of more importance to him than what his basic salary or what his contribution is to the economic growth of South Africa. This is an unhealthy state of affairs, and this is the time, as I have suggested earlier on, for us to take stock. This aspect particularly is one where we can afford to take stock and make some adjustments in so far as that tax bulge is concerned.

Another inevitable factor before us is that there is going to be expansion in this country. Inevitably there is going to be continual economic expansion. One of the challenges this brings to us is to ensure that all our people, of all races, are fully equipped to cope with that expansion. For the moment I want to refer to the question of research. Certain figures were quoted to me in this regard by the Minister of Planning earlier this Session. After having scratched the bottom of the bucket of every Department in order to find every cent which could possibly be attributed to research, the amount he arrived at was R40 million, and even then there is doubt as to whether certain items were for research as such. In any event, here is a matter where we should have a measure of co-ordination in some way or another. I hope the Minister of Planning is going to bring about this coordination.

I say this because if one looks at the Estimates one finds bits and pieces scattered throughout the various Votes. Let me give the House some indication of the nature of these bits and pieces. Under Vote 49 there is an amount of R2.5 million for research by the Atomic Energy Board—the same as last year. Under Vote 50, for research by universities, medical institutions and by hospitals, a total amount of R1.4 million is being set aside—an increase of R100,000 over last year. The C.S.I.R. is to get R250,000—a new item—and for research by Government Departments an amount of R580,000 is being set aside—more or less the same as last year. For educational research we shall be asked to vote R100,000, and R20,000 under the Health Vote for research into human diseases, by the Council for the Blind and by the S.A. Institute of Medical Research—hardly enough to pay for one research project. It is true—and I am indebted to the hon. member for Peninsula for having raised this matter earlier this afternoon—that the Department of Inland Revenue in response to inquiries has indicated that in terms of present legislation, funds such as the Chris Barnard Fund are accepted as not being liable to taxation, i.e. income-tax and donations’ tax provisions do not apply. But this is not going far enough, not for the times in which we live. I believe commerce and industries have made representations to the Minister for an investigation to be instituted into this matter. But this has been turned down, on the grounds that the cost thereof will be too much. But yet the hon. the Minister has taken out of the pocket of the Treasury taxation on interest earned on R90 million which has been invested in R.S.A. bonds.

What about the loss of tax revenue on that? That tax-free interest is earned by the wealthy group. Surely, it is not beyond the powers of this Government to find a formula by means of which a taxpayer can donate a percentage of his taxable income, for instance, for research. I am sure the Minister of Finance will be able to find that formula. Alternatively there could be a percentage reduction in the tax which is levied. It would be a boon especially for our aged and chronic ill—and I am very glad the hon. the Minister of Social Welfare has come in now—if this tax relief were to be granted on a percentage basis in respect of donations to welfare organizations and research undertakings, such as the Chris Barnard Fund. Many of the problems facing the aged and the infirm and the people who wish to do research work would be removed without cost to the Government. It would have to be an enormously successful year as far as the recipients of donations are concerned if the Government were to lose R5 million in tax. I have done a quick estimate, and donations to the value of some R100 million would have to be made from individuals throughout the country to welfare organizations and research projects for the Government to lose R5 million in tax.

There is another important aspect to this. It would give the public an opportunity of having a personal interest in the development of research in this country, which is so important. I have had many letters from people saying they are sending cheques for the Barnard Fund, but they would send much more if they were able merely to add on the income-tax they pay the amount of the donation. I am sure that would happen if the tax relief were granted, and I do hope the Minister of Finance will find it possible to act in this direction.

Are you referring to research and welfare organizations?

Research is one aspect, the other is the welfare organization. I believe a great burden which the State is called on to carry in respect of welfare organizations might be lightened and the public might take more interest in these institutions if they were able to contribute directly to these institutions. A taxpayer who knows that the Exchequer is handing over his tax to some old-age home is not really as interested in that home as he would be if he could go along and give his R10 or R100 direct to the institution and feel he is a contributor to the particular welfare organization. I believe this attitude is an additional benefit to be considered.

Another matter which I believe has to be considered, and I mentioned it earlier, is the question of the ability of all races in this country to meet the expansion which we are going to have. With others I am deeply concerned about the few non-white people who enter the skilled classes. The Whites, 20 per cent of the population, cannot perform all the skilled labour required or fill all the professional posts in the country. It is a mathematical impossibility. I feel the danger sign is there when one finds that last year only 485 Bantu children matriculated. That was the total number of matriculants. From them must ultimately come the doctors, the lawyers, the architects, all the professional men and leaders of the Bantu population. As regards these matters, our fiscal policy must be reviewed. In the light of these demands, our budgets must be reviewed. I hope that these matters will, while we are enjoying this economic prosperity, be tackled with ever-increasing attention.

I want to raise another matter with the Minister, and that is the question of the Post Office Account. The Minister has provided R21 million for the projected Post Office Account. That is a working balance to start with. This action somewhat intrigues me, because if one looks at the figures, one sees the following. First of all, the Post Office is run on a cash business basis. In the present Budget we are providing R38.45 million on Loan Account for the Post Office, which is an increase of R7.65 million over the last year. The capital requirements are thus apparently being taken care of. The Post Office expects an income of R149.8 million, and an expenditure of R107.38 million. That will leave it with a profit during the coming year of R42 million. Why is it then necessary to transfer this R21 million? We have already had a substantial increase in telephone charges to place the Post Office on a sound financial footing. I hope the hon. the Minister in his reply will be a little more explicit as to why this cash business with an anticipated estimated profit of R42 million must be given R21 million to start off with. I trust this is merely a temporary advance which will be coming back again. Perhaps the Minister will be good enough to deal with this point.

In conclusion I want to say I believe the challenge which we face in this country today is a most urgent one, and that the need to direct our economic strength of to-day to meet the developments and challenges of the future is important. I do not believe that the prevailing attitude of “wait and see; let’s wait for developments and then decide what to do”, is the correct attitude to adopt. I want to say with respect to the hon. members of the Cabinet that what is lacking to-day in this country is co-ordination and really long-term planning as far as our economic future is concerned. I will give a few examples. [Time expired.]

Mr. Speaker, the hon. member for Green Point will pardon me if I do not follow him. I want to reply to representations the hon. member for Kensington made here yesterday afternoon. He asked that the pensioners or the war veterans who fought in the First World War should be placed in the same pension category as that of the war veterans of the Second Anglo-Boer War. As far as the latter are concerned I just want to say that they receive a prestige pension. There are 4,455 of them and one-third of them are Britons who fought on the British side. They all receive prestige pensions. On 1st January, 1968, there were 7,977 men who had fought in the First World War, and they are already subject to a largely relaxed means test. Their assets, both movable and immovable, may total R8,000. Then they are still entitled to a pension which will shortly amount to R40. Then there are 262 of the protesting burghers who fall into the same category. Their assets may amount to a maximum of R16,400; in addition they receive a pension of R12. Therefore there is not one of them who is being prejudiced. Each of them who needs assistance, gets it from the State.

Mr. Speaker, I am glad that the hon. member for Witbank mentioned the recovery of taxes by local authorities. The Minister will forgive me if I also adopt this attitude and plead for it. This afternoon I want to plead for Pretoria in particular, since Pretoria finds itself in a unique position as far as this matter is concerned. It is not my intention to anticipate the findings of the Borckenhagen Commission. I merely want to mention for future consideration that the Minister may perhaps consider whether there is a possibility of subsidizing a city such as Pretoria or of granting more sources of taxation to the local authorities. As regards revenue from taxes, local authorities are at present exclusively dependent upon property rates. This afternoon I want to plead here for the man in the street, and I want to point out that the present system, namely that of property rates, is an old Elizabethan custom which dates back to the year 1601. It is a British system. I should just like to quote from a table taken from a publication of the International Union for Local Authorities in 1955. In Australia, Britain and South Africa local authorities obtain 100 per cent of their revenue exclusively from property rates, including public properties. France recovers 29 per cent from property rates, including public properties, 61 per cent from business tax and 10 per cent from sales tax, entertainment tax and other forms of taxation. West Germany recovers it as follows: 28 per cent from property rates, including general tax on properties, 69 per cent from business tax and 3 per cent from sales tax, entertainment tax and other forms of taxation. Norway, for instance, recovers 2 per cent from property rates, including public properties, and 97 per cent from income tax. In 1956 Britain herself had to subsidize 38.5 per cent of the taxes of her cities.

Now we find that a tremendous amount of urbanization is taking place, an urbanization explosion of such a nature that in 1960, 84 per cent of the white population and 47 per cent of all races in South Africa were resident in the cities. Local authorities have only one source of revenue from taxation, whereas they have to meet an insatiable demand for essential services. Attendant upon this tremendous urban population explosion, there is a continual backlog as regards the rate of inflation and the rate at which prices rise, since revaluation—in other words, the new assessments—only takes place every three years. Taxes ought to move along with the economic trends. This industrial revolution we are experiencing, gives rise to better earnings. In view of the fact that the urbanization is on the increase, greater problems are steadily being created in respect of essential services, where it must be ensured that the supply anticipates the demand. Now one is presented with the problem that valuations may only take place every three years. The result is that in regard to expansion, which has to take place very rapidly, “dead” capital is being created which is, into the bargain, exclusively dependent upon property rates.

Pretoria’s rate of growth is much more rapid than that of any other city in the Republic. Its increase in population was 38 per cent over the period 1951 to 1960, whereas that of Johannesburg was 25 per cent for the same period. Its increase in population is almost double that of Johannesburg. In addition urbanization entails the intensification of the urgent necessity for meeting needs which are of a basic, personal and direct nature. The new city dweller expects the entire infra-structure to be available. He does not want to know where it comes from; he expects it to be there.

We are no longer living in the year 1601, or in the time of the ox-drawn wagon or the horse-drawn cart. Re-planning has to be done to-day. Expensive properties have to be demolished in order that carriage-ways may be widened. This excludes the cost involved in the construction of carriage-ways. The present is the age of the machine with its multitudinous forms and its particular demands. Taste, needs and the standards of services have undergone a complete change. Twenty years ago the Bantu rode on bicycles. In the year 2000 they will own more motor cars than the Whites. The fact that mothers are working has had the effect that nursery schools have sprung up overnight like mushrooms, and these institutions expect the municipalities to support them. The advances made in the sphere of medicine have had the effect that the ratio of pensioners to ordinary taxpayers is a disproportionate one. As a source of tax pensioners are unproductive. The modem skyscraper has had the effect that a tremendous number of buildings has to be demolished and that room has to be made for the so-called “green lungs”. Higher speeds and an increased flow of traffic are essential, and that is why freeways have to be constructed, for to-day time means money. In this way premises on which there is a high yield of property rates, are being bought out to make room for streets, freeways and the “green lungs”, and this is fatal for taxation purposes.

There ought to be compensation for the loss of revenue owing to the exclusion of buildings belonging to the State. On 30th June, 1965, non-rateable valuations amounted to R131,099,830 as against rateable valuations amounting to R367,065,708, i.e. 26.6 per cent was non-rateable. The old concepts of the ability to pay and benefit are falling away. The means theory is falling away, because rich A is investing his money in buildings, business undertakings and properties, whereas rich B is investing his money in shares and is living in an hotel. Official A who has ten children, needs a house with at least five bedrooms, whereas official B who is childless, lives in a small flat. Therefore the rates on property actually penalize the owner. Furthermore, the part of their income people spend on properties and housing shows a relative decrease as their income increases. The purpose of the “1601 idea” was to relieve the burden of the poor and to tax the rich. For the reasons I have mentioned, this simply does not work any more. The benefit theory is also falling away, since it is impossible, in view of the complex nature of public services, to determine whether A derives more benefit from the services than B does. Agriculture and unutilized State lands cause gaps. In these cases services have to be provided over great distances. Even built-up areas can suddenly cause the intensification and doubling of the supply services of local authorities. Let us take the Railway works at Capital Park. These works entail extra costs because the city council has to counteract the danger of smog. The airport at Waterkloof, owing to the noise that is being made there, has had the effect of arresting the development there, whereas the services are located in that very area. The South African Railways are also buying large tracts of land which will eventually become residential areas. At the moment this land is not being utilized profitably. In Pretoria the man in the street is paying taxes to the State to the extent of 26.6 per cent. They are paying taxes for the business undertakings and the industries, because the business undertakings and the industries regard these taxes they are paying as part of their costs. Then they pass them on to the consumer. Then these people pay their own taxes as well. Therefore I want to plead that the Minister should consider this matter and that he should kindly go into this matter very thoroughly so that the Pretorians will in the future be able to keep up the pace. At the moment these people are being burdened to such an extent that they simply do not know what to do any more. There are people who already feel inclined to settle on the borders, just to get away from this tremendous burden.

Mr. Speaker, it was with interest that one listened during the past few days to the discussions in this Budget debate. I must say that having listened to the debate, the only conclusion to which I could come was that there was no difference between the behaviour of the United Party and the way a group of children would have behaved if they had walked about blowing soap bubbles. So far their speeches have contained absolutely nothing. We do, of course, expect the hon. member for Durban (Point) and the hon. member for Yeoville to be the two persons who would try to blow the biggest soap bubbles, because they have not yet taken part in this debate. We know them, of course, as the persons who always try to raise the biggest dust. We have also found that after they had raised a dust and the dust had settled, nothing remained. As I have said, we have been listening to the criticism that was raised by the United Party. The expectation was that something constructive would at least emerge. Even after the previous speakers on this side of the House had referred to various bodies which leveled criticisms at the Budget and cordially congratulated the hon. the Minister on our sound economy, not one of the members opposite felt free to admit that. When reference was made yesterday to one of the financial correspondents of the English Press, they quite sneeringly took cognizance of him. Now I wonder what their attitude will be towards one of their own newspaper correspondents of whom, I think, they ought to take a fair amount of notice. I am referring to Mr. Steven Mulholland. On 10th March he made this statement in the Sunday Times under the heading “South African economy amongst the strongest: Budget will show that inflation has been tamed”—

This gentleman could at least think for himself and determine beforehand, on the basis of the tendencies he had been noticing in the recent past, that this Government had taken the right steps and that the wild horse of inflation had been tamed. Unfortunately the United Party could not do so. We know them as a Party which has difficulty in catching on and noticing things, and that is why they look the way they do to-day. After the Pretoria (West) election to-morrow, they will look even worse. Apparently they only take notice of articles in newspapers when it suits them. If this gentleman had written a different report or revealed a different trend, they would most certainly have worshipped him. What he wrote here at this stage, does unfortunately not suit them. I am pointing out how this gentleman, who can at least think for himself, showed how sound our economy is.

However, I want to come back to the accusation and the charge the hon. member for Pinetown leveled at this Government. I refer specifically to the second part of his motion in which he accused the National Party of having failed to provide for the necessary incentives required for increased production and productivity. The charge is that the Government has not succeeded in providing those incentives for increased production and productivity. But we must analyze the facts and see what the record of this side of the House is as against the record of that side when they were in power, and we must see what they did to increase productivity as against what this side of the House has been doing to increase productivity and production. It is, of course, very difficult to obtain a record of the steps taken by that side of the House. When one does find it, it is so old and evil-smelling that one does not want to delve into it too deeply. At the same time we can also look at the attitude their allies adopted. In this respect I am referring specifically to the steps taken by the Trade Union Council to increase productivity in this country. However, I shall come back to that later on. The most important factor that guarantees and increases productivity, is that of ensuring a safe and untroubled continued existence. That is the most important guarantee for increasing productivity. Only that assurance of a safe continued existence can bring about industrial calm and industrial peace. Then one can expect the artisan and the worker in this country to be more productive. I want to say that I think that this side of the House has succeeded in maintaining that industrial calm and peace in South Africa over the years. That is why I have every right to say that this side of the House has succeeded in increasing productivity. However, I shall deal with this again later on.

Now I want to mention a few of the other steps that were taken by this side of the House to increase production in this country over the past few years. The first one I want to deal with, is what this side of the House has done as regards education, training and instruction. The National Party has always realized fully that one of the most important factors is that the youth should be trained and educated properly. If we think back, we find that there were four autonomous universities in South Africa when the United Party was in power. They were the universities of Witwatersrand, Pretoria, Stellenbosch and Cape Town. Then there were four non-autonomous universities, namely Natal, the Free State, Potchefstroom and Rhodes. Who granted to those universities their autonomy? It was this side of the House. The National Party granted autonomy to those universities. Now I want to know what accusation they have to level at this side of the House by saying that we have never promoted productivity? But this side went further than that. The University of Port Elizabeth was established under this Government in 1965, and recently—in 1968—the Rand Afrikaans University was opened. I say that these are factors that are important in increasing productivity. But what did those hon. gentlemen do? Let us look at the number of students enrolled.

It is down by 50 per cent.

The hon. member usually mentions things about which he does not know much, and if he thinks he will put me off, he is making a very big mistake. In 1952 the number of students at our universities was 18,500. What was it in 1965? An increase of 110 per cent. There were 38,715. That shows us what this side of the House has done as regards the training and education of the youth. Take the University of South Africa as an example. In 1955 there were 3,948 white students, and in 1965 there were 12,934. I could also mention the subsidies. Do you know, Sir, what that side of the House appropriated for the current expenditure and maintenance of the universities? In 1947 it amounted to R1,436,000. What is the amount under the National Government? In 1967 it was R21,660,000, almost 15 times as much. Then those hon. members have the audacity to point a finger at this side of the House and to say that we have done nothing to increase productivity. These facts confirm what this side of the House has done.

Over and above university training, let us look at vocational education and how it has developed. In 1948 there were 60 schools, i.e. vocational schools, technical schools, commercial schools, part-time classes and schools for domestic science, and in 1965 there were 126 with a total number of students of almost 82,000, as against 53,000 in 1948. All of these are people who are entering the labour market. Dare that side of the House level the accusation at this side that it has neglected its duty as regards increased productivity? Take advanced technical education as an example. The contribution the National Party has made towards the development of the autonomous technical colleges, is a major one. Four of them are in existence. Last year the College for Advanced Technical Education was established in the Vaal Triangle. When that college opened, it immediately had full enrolment. The amount of R1½ million was spent on that college, where training is being offered in the following subjects: chemistry, metallurgy, electronics, instrumentation, mechanical engineering, etc. And then that side of the House can take up the gauntlet and point a finger at this side of the House! I say that that is typical of the arrogance of the United Party. We can go further. Apart from that technical education, the planning of a similar college in Port Elizabeth is in progress. But that is not all. What has this Government done as regards vocational training, and what was it like in the time of the United Party? In 1960 this Government asked the National Apprenticeship Board to conduct a thorough inquiry into this kind of training, and it brought out a report which recommended drastic changes in this training and this Government implemented those recommendations, and what were the results? Let us look at the results, because then we shall see facts in which there are no holes to pick and which do not hang in the air and disappear, such as those which are mentioned by the United Party. With those amendments that were effected, there was better screening of apprentices and there were aptitude tests so that those people could be placed properly in industry. It was not a case of apprentices completing their training before it was found that they were unsuitable for a certain industry, in which case they had to be placed in another position again. I say that all of these are changes that have been effected. In addition there is the accurate definition of the training of those people. There has been smartening up of the system of class attendance and the financial compensation they may derive from doing so. If they attend the classes and obtain certain qualifications, they receive additional compensation. All of these are things this Party has effected for the purpose of increasing productivity. We have had the introduction of a system of voluntary tests which shorten the period of training. Previously an apprentice had to take five years to complete his training, but under this Government he may, with certain qualifications, attain the status of an artisan within two and a half years. Then those hon. members have the audacity to state in a motion that the Government has failed to increase productivity and raise the standard of training! All of these are things this side has done. Apart from that, in 1966 alone, 4,731 apprentices were given aptitude tests, and these tests are more suitably adjusted and can be put to better use.

Let us look at the results achieved under this new system. The number of contracts for apprentices concluded in 1963, was 6,611; in 1964 it was 7,279, and in 1966 it was 11,285, an increase of 4,000 over a period of two years. Let us go further. In 1966 the total number of indentured apprentices was 31,163, whereas in 1964 it was 24,331, an increase of 6,832. Dare that side of the House come forward and point a finger at this side? Apart from that, the standard of education of these apprentices has also been raised a great deal. In 1964 the number of indentured apprentices who had passed Std. 8, was 2,515, and in 1966 it was 4,245, an increase of 1,730 with higher qualifications. Let us go further. In 1964 the number who had obtained Std. 9 or Std. 10 qualifications, was only 541, but in 1966 it was 1,228, an increase of 687 indentured apprentices with Std. 9 or Std. 10 qualifications. I say that here we have proof of what this side of the House has done for training and for increasing productivity.

But we can go further. Let us look at the success achieved with the qualifying trade tests these people wrote. In 1964 the number tested was 4,147, and the number of passes was 1,601, or 38.60 per cent. In 1965 it was 38.89 per cent, and in 1966 it was 37.72 per cent. That is what this side of the House has done to counteract this accusation that is being flung at us. But apart from the training of apprentices, the Government introduced training for adults in 1951, in terms of which adults could go for aptitude tests and also to be trained as artisans. Apart from that, the State established the Training College here at Westlake, and over the past year 158 persons were trained there; the total number of persons trained at Westlake alone, is 1,400. But when we asked that side last year to see what was being done at Westlake, not one of them went there. They were conspicuous by their absence. Now they are talking; they do not even know what is happening in Cape Town. Then these are the people who are so interested in the workers and who say that the workers are labouring under delusions. If the workers are labouring under a delusion, then it is that they are definitely and for ever through with the United Party. But the accusation is leveled at this side of the House that the Government should undertake all the training. I want to ask those hon. members: Tell me how many private industries undertake the training of adults? No, the Government must undertake it, but they are not doing it. I wonder how many the hon. member for Salt River is training? Then they come forward with these accusations.

I say that the most important factor is still industrial calm and peace. The National Party has seen to that. The Unemployment Insurance Act has been improved over the years; the benefits have been improved. Take the Workmen’s Compensation Act. But what was it like under the United Party? Just let us see for a moment, and I want to go back to 1922 and start there. All that remains of their record, are the blood stains in the streets of Johannesburg. That is the calm and peace they had in industry, when they could not uphold the colour-bar, and when they had to use other methods. It was this side of the House that established the Department of Labour in 1924.

But let us go further and take the period 1946-’47. At that stage, under the régime of those hon. members, the trade unions were infested with communists and Solly Sachs reigned supreme, and they were too weak to take action against those people. It took a National Party to put Solly Sachs and those people in their place and to keep them there. But they did not care, and when the Industrial Conciliation Act was introduced in 1956, so that for the first time the white man would also be the master in his trade union, the hon. member for Yeoville took the lead on the opposite side in opposing that measure, but the workers chased him from Alberton to Vereeniging, and from Vereeniging to Yeoville. In that way they were chased out. Where is the then member for Umhlatuzana? Where is the former member for Florida? They have all been repudiated by the workers of South Africa with the contempt they deserve. Why did they make such a fuss in regard to the Industrial Conciliation Act in 1956? It was about one thing. They wanted to grant the black man the same powers in the trade union as were being enjoyed by the white man. They begrudged the white worker the right to be his own master. But do you know, Sir, how they want to increase productivity? They want to do so by bringing the black man into the industry, because in that way the industrialist will have cheaper labour. That is what they consider to be an increase in productivity. But this Government provides the brown man and the black man with work in the industrial areas, in border areas and in homelands. I say they ought to be ashamed of themselves. Then they talk about promoting productivity!

Two years ago, when we had legislation in regard to compulsory stop orders, that side of the House opposed it, because they were keen to stir up discord amongst the workers. What right have they to accuse this side of the House? All they have done so far, has been to cause unrest. But if they were to act like a responsible Opposition, they would at least have granted recognition to the Minister of Finance and said: Thank you for what you have done for South Africa. They are prepared to reap the benefits, but not to contribute something themselves. I say this is the most irresponsible Opposition we have probably ever had. I wonder what would happen if they were to govern. We have seen that their Leader has now adopted the pressure-cooker policy of his. What would he do if these black people were to bring pressure to bear for being granted equal recognition with the white workers in the trade unions? We know what he will do. He will give in eventually, because then they can apply “the rate for the job”, irrespective of race and colour, as they would like to have it. Then they will give way.

We want to avail ourselves of this opportunity to pay tribute to what the workers in the Republic of South Africa have done to combat inflation. We know that the white workers have been acting in a responsible way. They will not allow their heads to be turned by the empty promises of the United Party, because they know the United Party, and we shall see what the result in Pretoria (West) will be. I want to say beforehand that I doubt whether they will get 2,000 votes.

We have full employment to-day; there is no unemployment and we have a contented corps of workers. But that side of the House can do something. There is nothing to prevent any industrialist to pay incentive bonuses. There is nothing to prevent any industrialist, if the profits are there, to distribute them amongst his workers. Why must the initiative always be taken by the Government only, which always has to set the pace? I say that we have brought about calm and peace in this country, and that is why I say that those hon. members cannot level the accusation at this side of the House that the Government has neglected its duty as far as the increasing of productivity os concerned. I want to thank the Minister in particular for the concessions he made where the shoe pinched most. We extend to him our thanks and appreciation.

Up to the present moment there has been a calm atmosphere in this Budget debate. We have heard some very constructive speeches even from the other side of the House—and I refer to the hon. member for Witbank—but the hon. member for Vanderbijlpark decided to make a Pretoria (West) speech here by getting into the political arena. That, of course, is the last thing that we want in a Budget debate, but we are quite prepared to meet him on his own ground.

The hon. member made all sorts of claims with regard to increased productivity in this country. He gave us a complete list of universities which have been created. Sir, as far as the creation of universities is concerned, I would like to remind the hon. member that it is not the quantity that counts but the quality of the university. These universities, which have all been created with our blessing, have yet to prove themselves and in time to come they will do so, but at this stage I cannot see any link between these universities and increased productivity. I do not know what connections the hon. member has with industrialists as far as apprentices are concerned. The hon. member has told us here what the Government has done with regard to the training of apprentices. Sir, the Government has done nothing. The negotiation of agreements and the training of apprentices are done by the industrialists in collaboration with the trade unions. It has nothing to do with that party at all. The only thing that the Minister had to do was to introduce the legislation. I want to tell the hon. member that the Industrial Council legislation we have on the Statute Book to-day is the outcome of the work of the party on this side of the House. I would like to remind the hon. member that over the years his party has tried to undermine that industrial legislation with the result that to-day you have politically inspired trade unions. The hon. member talks about the industrial peace we have in this country. Let me tell the hon. member why we have this calm amongst industrial workers. Sir, the intimidation by the Government is such that the workers dare not open their mouths.

That is a scandalous thing to say.

We have had no strikes but I can tell the hon. member that we have politically inspired trade unions in South Africa to-day. The political inspiration comes from that side of the House.

To which trade unions are you referring?

I will mention one—Yster en Staal.

It is the best union in the country.

I do not say there is anything wrong with it but I say that it is a politically inspired union. They were the fathers of the latest amendment to our industrial legislation. Why? Because there is political control over the workers. Sir, the hon. member for Vanderbijlpark must not come here with this sort of story. The foundation of Vanderbijlpark was not laid in his time. The foundations were laid by this side of the House at a time when we were fighting a war. We built up this industry during the war years. To-day the Government is reaping the fruits of that industry. During the war when we could not get artisans, we trained apprentices through the Cott scheme, and it was the United Party which laid the foundations of industry in this country.

The hon. member also referred to the white man’s fear of the black man. I was wondering when that was going to come. It used to come from the hon. the Minister of Planning or from the Deputy Minister of Bantu Administration and Education and now the hon. member for Vanderbijlpark has taken over this story. Hon. members on that side know our policy as far as the black man is concerned.

Sir, let us get back to the Budget; let us get away from the political clap-trap that we have heard here this afternoon. Reference has been made here to the international currency situation and we have heard views expressed here in regard to the future of gold. As you know, Sir, gold is one of the world’s greatest currency stabilizers, and we can only hope that the whole situation will be stabilized and that no harm will be done to world trade through an unstable international currency. I think we can consider ourselves fortunate that we are one of the greatest gold producers in the world. I take it that the Minister of Finance and the Government are watching the situation. With the situation as delicate as it is at the present moment, I am sorry to see the hon. the Minister of Finance sitting here. I feel that his place is overseas closer to the scene of discussions because the outcome of those discussions is so important to this country.

You seem to have the wrong notes.

No, I have not got the wrong notes. I think he should be overseas at the present moment. [Interjections.] Well, he can take that Deputy Minister with him. The Minister of Finance probably has his contacts overseas and I suppose they are reliable but it would be very much better, I think, if he were on the spot and if he could have on-the-spot discussions in view of the importance of this whole matter to this country. I think the present situation has brought home to everyone the necessity for world cooperation on currency matters. The day of isolation is gone, and the entire future economy of this country depends on the events which are happening overseas. Our prosperity and the future of our export industry depend on what is happening there at the present moment.

Sir, the hon. the Minister has had congratulations showered upon him in this debate. We have listened here to extracts quoted from English-language newspapers like the Sunday Times, a name which has become a rude word in this (House as far as hon. members opposite are concerned. We have listened here to quotations from these newspapers in an attempt by hon. members opposite to show how acceptable his Budget is to everyone and how pleased everybody is with it. Sir, I want to say—it has been said before but I think it bears repetition—that the Budget has been accepted outside for the simple reason that the Minister has not increased taxation. When we examine the Budget very closely, as the hon. member for Parktown has done, and we find that the Minister has a nest-egg of R180 million, then it does not look so good. The Minister tells us that his additional money came from ordinary taxpayers and from taxation on petrol; that he had an unexpected increase of revenue and that he had a very good year. The Minister’s surplus, as the hon. member for Park-town has shown, is very much higher than the Minister tried to make us believe. In his published Estimates he shows that he has a surplus of R76 million. Sir, we have not reached the end of the financial year and we have not got the final figures. I want to put it to the Minister that his surplus may be even higher. Surely there should be a greater measure of accuracy in our budgeting. We constantly find at the end of the financial year that the taxpayers have been over-taxed. Surely this can be avoided if we have a more accurate system of budgeting than we have at the present moment. With the pay-as-you-earn taxation system, as has been said before, people have come to accept the position; they do not notice the tax which is deducted from their pay week by week or month by month, but I do not think we can fool the taxpayers all the time. The excuse that it is necessary to retain the present scale of taxation in order to combat inflationary pressures, is wearing a little bit thin. We have had two Budgets presented to us here this year, one by the Minister of Finance and one by the Minister of Transport. These two Budgets present a glaring contrast. In his Budget the Minister of Transport said that we had got on top of the inflation bogey whereas the Minister of Finance was not so happy about it. In the Railway Budget the Minister of Transport gave direct benefits to the railwaymen by way of salary increases and in the Budget presented by the Minister of Finance he announced fringe benefits for the civil servants. In other words, there is a very great difference between the approach of the two Ministers. One wonders when these two Ministers are going to get together and make up their minds whether we have inflation or whether we have succeeded in checking inflation.

The hon. the Minister of Finance, in order to contain inflation, has been mopping up all loose cash. His tax-free Government bonds, as expected, have proved attractive to the investor, but by and large the investor, because of his lack of faith in the stability not only of the pound but of our own currency, has invested in other fields for capital gain; he has either invested his money in property or in the mutual funds, with the result that the building-societies have suffered. That is one of the effects of this lack of confidence on the part of the public in the currencies of the world. People are looking for some sort of security. They want to make quite sure that their money is not lying in the bank if devaluation should come along. To contain inflation, the Minister has also restricted bank credit. The effect of this has been to slow down the economy. Sir, I would advise the Minister to watch that position. It is easy to slow down the economy but it takes a great deal to get it started again. I think this is a matter which the hon. the Minister should watch. I think he should consider the question of relaxing credit control as far as the banks are concerned. The Minister’s policy of retaining the present tax position in order to contain the inflationary pressures, is considered to be wise by economists, but we hope that the Minister will not advise the Provincial Administrators, who are due to meet very shortly, that they must increase provincial taxation. I say that because it has happened before. On occasion we have got off lightly in this House as far as increased taxation is concerned, only to find that provincial taxation has been increased shortly afterwards. I hope therefore that the Minister is not going to suggest to the Administrators that they should increase taxation on the pretext of containing the inflationary spiral.

Sir, as far as the financing of the Provincial Councils is concerned, we have heard from two speakers on the Government side and from the hon. member for Green Point how very unsatisfactory the present position is. I hope that the hon. the Minister is going to take note of the points made by these hon. members because I am one of those who believe that the provincial system is a sound one. When I came to the Provincial Council in 1949, I heard Administrator after Administrator telling us of his difficulties in obtaining finance from the Central Government. Invariably he has had to tell us that in order to balance his Budget he has had to go cap in hand to the Minister of Finance and get additional capital. It is a very unsatisfactory position and the Administrators have the greatest difficulty in balancing their annual budgets. It is probably not generally known that the Provincial Councils have very restricted sources of revenue. There are not many avenues of taxation open to them, and therefore they have to come to the Central Government from time to time and ask for an extra hand-out. As a result of this unsatisfactory position we have had two commissions investigating this matter. Neither has reported and we are in the same muddle to-day as we were before. I hope that the Government will take note of the remarks of the Administrator of the Cape as reported in the newspapers, to the effect that the position is very serious at the present moment. This is a matter to which the Government will have to give its attention.

On the employment position in commerce and industry, and as far as productivity is concerned—I am sorry that the hon. member for Vanderbijlpark has gone out—the Minister reminded us in his speech, as did the hon. the Minister of Transport of the shortfall in the skilled manpower position in this country. There is no doubt about it that this shortage is one of the causes of our inflation. This acute shortage of manpower is one of the causes. We have to face up to it that this country’s productivity cannot be improved unless we are prepared to make full use of the available manpower in this country. We must have a more dynamic training policy as regards our manpower. Figures were read out here of the increased technical college education facilities, but that still is not enough. As I mentioned, during the war we had the “Cott training scheme”. It should be revived for training our youngsters for industry. Industry itself cannot train all the artisans and technicians we require and the Government must assist in this direction. I do not think immigration by itself is going to help us. I know the Government feels that border industry development is the answer, but they are taking such a long time to get off the ground that it will be some years—perhaps not even during our lifetime—before that policy will be of assistance to us. The Minister also talked about productivity. The hon. the Minister of Planning is not in the House at the moment, but I want to say he does not help in this regard with his Physical Planning Act, his control of labour, etc. You see, Sir, industry to-day does not have the freedom that it should have. They have to meet competition. We are asked to increase our productivity and our exports and to produce at a cheaper rate. We are exhorted to work harder and save. But how can an industry, with a completely unstable labour force as a result of the restrictions placed upon it by the hon. the Minister of Bantu Administration and Development, do these things? Let us take the Transvaal, for instance. In the hub of the industrial area there, before a factory there can be extended, before one extra Bantu can be employed, they have to get permission from the Minister of Planning. How can an industry develop on that basis? We cannot get anywhere that way. We are also told that we are the workshop of Africa. But we will lose that position unless we wake up to the fact that we have to use the manpower that is available to us. We only have to take the example of Japan. That country was completely devastated in every possible way after the Second World War. It had no factories, it had nothing left. To-day it is one of the strongest industrial countries in the world. It is said they could only recover to the extent they did because of their very large population. But we also have a large population in this country. The difference between us and Japan is that in that country everybody works. They worked to build up that country once more. They do not have the restrictions we have here, and they do not have the divisions we have in our country.

Do you want me to remove all those restrictions?

I knew that was going to come from the hon. the Deputy Minister. He knows exactly what the position is. He would rather see the country go right down, he would see the white man in the street, if the country had to be saved in that way. He is prepared to say, “Well, the white man might be poor, but, anyway, I have saved him!”

You tell me which restrictions you want removed.

When we open huge ore bins and ore-loading plants at the various ports we are proud of it. We export hundreds of thousands of tons of ore to the various countries of the world, particularly Japan. We have the ore and the coal here, and this country could be one of the biggest steel producers in the world. But what do we do? We export our ore overseas to another country that has become the biggest ship-building country in the world and one of the biggest steel exporters. Surely it is for us to wake up to that fact. Let us produce the steel and sell it on the world markets.

In the few minutes I have left I want to get back to the fellow who really pays, namely the man in the street. We are grateful to the hon. the Minister for relief granted to the pensioners. I am not going to deal with that at length because the hon. member for Umbilo will do that. Year after year we get a few extra crumbs, and I want to suggest the Government might at this stage re-examine its whole pension policy and accept the policy of the United Party, namely have a contributory pension scheme. It would be much better than the present policy, in that it would not be a form of charity or hand-out, as is the case now. The man in the street is finding it more difficult to make ends meet. The Minister has given us figures, and he is proud of the fact that he has been able to contain the rise in the cost of living over the latter part of last year. But the rise is still taking place. The man in the street is finding it difficult to make ends meet, and to-day we have a husband and wife economy. We know what the results are. We have an increased divorce rate and greater delinquency among the children. Let us face it—the people who pay, the people who enable the Minister to have such a rosy budget, do not understand “high finance”, but what they do understand is that prices are going up all the time. Rates, meat, fish, coal, electricity, clothes, everything is going up in price, and they are worried about it. When one talks to them about it, they ask, “What can you do about it? What is the Government going to do about it?” The net result is pressure for higher wages and salaries. To-day employers are faced with the problem of what we call the “clear pay packet”. I mentioned this before. When a worker comes to an employer, he does not say he wants R20 per week, less deductions. He says, “I am not interested in deductions—you pay the tax, pay the lot—I want R20 in my pay packet”. The Minister will find that attitude among his civil servants one day. They will say, “We are not interested in all these deductions you are making; what we want in our pay packet to take home to our wives each month is xR”. That is what they want, that is what the worker wants to-day. This Government has not been able to control the costs-spiral, the rise in the price of goods, because it has not got on top of inflation. Moreover, it has not removed the handicap which we have, namely not using our available labour force economically. No matter what the Government says, that is the position.

Mr. Speaker, like all United Party speakers before him, the hon. member for Salt River tried to get at this Budget and at this hon. Minister, but nowhere have they been able to get a proper grip on them. If one looks at the Budget and listens to the speeches made by the hon. member for Salt River and other members opposite who spoke before him, a feeling of great compassion for the Minister of Finance comes over one, firstly because the Minister has up to now really had nothing to reply to, and secondly, because by the very fact of this Budget’s position of strength he cannot indicate what he would like to do for the country in the future. But I think that the Budget’s greatness lies specifically in this, and our thanks to the Minister must be expressed specifically for this reason, that, although he is in a tremendously strong position and our currency and our country’s financial position are very strong, he has not succumbed to the temptation to come to light with large salary increases or large schemes or tax reductions. I take it that in this particular year, now that the National Party have governed the country for 20 years, the temptation must have been very great for him to come forward with new ideas for further growth in South Africa, new ideas which will further emphasize the tremendous potential of our fatherland. I say that we must admire the Minister for his willingness to mark time this year and to attempt to break the inflationary tendencies of the past year finally in the interests of our father-land, despite these great temptations and our knowledge of the inherent strength of our economy.

Opposition speakers have so far raised mainly three points of criticism here. Firstly it was said that the Minister was not using the opportunity which he now had to give the country an indication of what was envisaged for the future, and that he had announced no great plans as to what the future development pattern was going to be. The second point was that the Government was not making full use of all our available labour resources in South Africa, especially as far as the Bantu and the Coloureds are concerned. The third point was that sufficient opportunity was not being given to the so-called man in the street to share in the country’s prosperity.

If we look at the first point, namely that the Minister is not making use of this opportunity to tell us in this golden year, as hon. members opposite call it, what our future pattern of development is going to be, then I must say of hon. members opposite that there are none so blind as those who will not see and none so deaf as those who will not hear. Surely every person must see for himself what tremendous potential is inherent in South Africa. Our economists estimate that our country’s buying power, which is approximately R5½ billion per annum at present, will increase to approximately R40 billion over the next 30 years. They estimate that the buying power of the Bantu, which at present amounts to R1,000 million per annum, will be approximately R7,000 million by the year 2,000. They estimate that where our factories at present have a production figure of approximately R2,000 million per annum, there will have been an eightfold increase to R16 billion by the end of the century. Besides, one need only look at schemes which one reads about. As far as water supply is concerned, there is the great Orange River scheme which is still to be completed. There is also the Boland water scheme at the Berg River which has been announced here. Then there is the Breede River scheme, a future undertaking. There are also certain schemes in Natal which are receiving attention. We also have the co-operation at the Kunene River on the northern border of South West Africa, for the supply of water and power. We are also co-operating in Moçambique on the Cabora-Bassa scheme, which involves R260 million. In the field of water conservation alone there is so much work for South Africa in the next 50 years that no one need fear that there will not be more than enough work for future National Party Governments and for every conceivable worker in South Africa in this regard. Let us also look at the generation of electrical power. At this stage we produce about 36 billion units of power per year. It is estimated that, by the end of this century, we shall be producing about 300 billion units of power per year, which is an increase of virtually 1,000 per cent over the next 33 years. We have read of the schemes which are envisaged, for example the so-called Oxbow Scheme in Lesotho. We have heard of the Cabora-Bassa scheme in Moçambique. Recently we had the statement by the Minister of Economic Affairs on a possible nuclear power station near Cape Town. In this field of power supply as well a tremendous potential awaits exploitation in the next 33 years, up to the end of this century. In the field of harbour development, too, we know that the Government is busy at this stage with its final investigation of the Richard’s Bay scheme, the extension of Table Bay Harbour, investigations at Saldanha and many others which one can mention. In the field of harbour traffic, too, where we expect the volume of freight of the large ore ships and oil tankers to increase from 100,000 tons to about 2 million tons per year by the end of this century, South Africa will be ready to absorb that traffic round the southern point of Africa. In this field, too, a tremendous period of growth lies ahead for our fatherland. In this way one can go on indefinitely, indicating the tremendous potential of our fatherland. I believe that the hon. the Minister of Finance will be able to give a better indication to hon. members in additional budgets of how systematically he will let this development take place. Hon. members should really thank him for the fact that, in spite of the strong position of our fatherland to-day, and in spite of this wonderful potential which can be developed, he is nevertheless prepared to keep that strength in abeyance and not to employ it at this stage, because precisely by doing so he wants to ensure a secure future for the pensioner, the general public and the low-salaried person, so that the buying power of the rand will be maintained.

Hon. members’ second point of criticism was mainly that inadequate use was being made of all the potential labour resources in our country, especially those of the Bantu and the Coloured. But this Government’s entire policy is in fact aimed at affording these people the greatest possible opportunity for development. It is this Government which established a Coloured Corporation especially for the Coloureds. It is this very Government which envisages the creation of a local authority, and now also by means of the Coloured Persons Representative Council, the creation of new opportunities, both political and administrative, for the Coloured people. This Parliament recently passed the Act relating to the Bantu Investment Corporation and other corporations in Bantu areas. The policy of this Government is in fact aimed at creating new points of growth on the borders of the Bantu homelands and in the homelands themselves which will make it possible in years to come for the Bantu not only to be a worker in the white cities but also to be someone who can progress in his own right in his own homeland. I think it ill behoves the Opposition, having consistently opposed this policy until now, to make the assertion that insufficient opportunities are being afforded the Coloured and Bantu population in our fatherland. But one sometimes wonders whether the United Party does not simply desire a systematic replacement of white workers by non-white workers. The policy of the National Party Government has always been to ensure that there should be the least possible unemployment among all our population groups. But the ultimate aim was also to ensure that labour peace would prevail in South Africa. I cannot imagine a greater potential source of difficulty for the future than that we should accept the ideas of the United Party, namely that the Coloured and Bantu should be indiscriminately allowed simply to displace the white worker and the white artisan.

However, I do not want to dwell too long on what hon. members of the Opposition said here. I want to avail myself of this opportunity to thank the hon. the Minister of Finance for voting the sum of R5 million for more direct aid to our neighbouring states and other states in Africa. I feel that we may hereby enter a new era in which South Africa will, not only in the technological field, but also in other fields, take up the rightful position which it should occupy in Africa. I have noticed that from 1957 to 1967 our foreign trade with African states only increased by ½ per cent. Now, one wants to concede that the mere idea of a so-called common market in the southern part of Africa is far-fetched at this moment, because the products which we can buy from many of these states in Southern Africa, are products which we ourselves can produce. I am wondering whether our Government should not perhaps think of new methods of rendering assistance to our black neighbour states, perhaps also to the Portuguese territories in Africa, as well as Rhodesia and other friendly countries. After I myself have become reasonably well acquainted with these states in recent years, as well as with the problems existing there, the idea is more and more taking root with me that the spirit of co-operation should perhaps begin principally in this, that since all countries, including our fatherland, may experience difficulty in future in exporting their products to South and Central America and Europe, where regional cooperation exists, the latter having formed a common market, and since we now find that Britain may perhaps abolish the preferences sooner than we expected, it would perhaps be in our interests and in those of the other states to think firstly of a form of co-operation in terms of which export markets can be planned on a joint basis. Even if our trade does not increase to any degree worth mentioning in the next decade, we shall perhaps, as the leading power, be able to devise methods of helping to create markets for the states immediately to the north of our borders. I believe that a much larger market for our products than exists at present will develop far more quickly than we might expect in the southern part of Africa if only the necessary points of growth can be created in territories such as Angola, Moçambique, Rhodesia, Botswana, or wherever, and if only we can help to make a start with the exploitation of their resources by such means as the provision of capital, technological knowledge and the finding of markets.

However, there is one field of activity in particular in which I feel that more immediate results can be achieved. I already indicated in the Budget debate last year that there was one field of activity which was consistently maintaining a rapid growth, and in which I feel that we can in fact co-operate in the southern part of Africa, because we can supplement one another, and this is the field of international tourism. We are here dealing with an industry which has already become the largest in the world. Since the returns from international tourism for the whole of the world amounted to R9,100 million in 1966, and since Africa’s share in this was only R277 million, or approximately 2.5 per cent, we must accept that the southern part of Africa obtained little more than approximately 1¼ per cent, i.e. R110 million in that year. Now it so happens that each of these states has something special to offer. The thought which I should like to bring home to the hon. the Minister of Finance is that, since we as a state spend relatively little on the promotion of tourism and since we must think of finding substitutes for markets which we are losing in the export trade, we should also consider being the co-ordinating factor and taking the lead in this field, not only for the sake of the other states and in a spirit of rendering assistance, but also for our own sakes. Would the tourist visiting Europe from South Africa go there to see one country only? I personally would never do it, and I believe that no international tourist goes overseas to see one country only. I think that the aim is always to visit an entire region. Therefore I do not believe that by advertising itself alone, South Africa can have much hope of attracting a greater stream of international tourists. Since inflation can in any case not be promoted by a measure of capital flowing out of the country, I think that our approach in the future must be that we, as the leading power, should use this position of power to finance the promotion of international tourism especially in respect of those states in Southern Africa who wish to co-operate with us. This could provide the necessary stimulus to a state such as Malawi, which has a great deal to offer the tourist. It could also provide a stimulus to a state such as Rhodesia with its exceptional tourist attractions. I think that it could perhaps even mean a great deal in future years to Lesotho, which is at this stage one of our poorest neighbouring states. Since there is a very strong tendency in America to visit hunting grounds, I think that a poor state such as Botswana with its hunting grounds in the north and Angola with its hunting grounds in the South would both benefit greatly from such a combined effort. But because in the past these states to a large extent simply took it for granted that tourists would come. I think that we should take the lead here and should make these states the offer that we are prepared to do the advertising work, not only for South Africa, but for the entire southern part of Africa. I believe that this attempt can indeed succeed, because we shall then be able to create an eighth tourist region in the world. This ought to provide the necessary stimulus to our neighbouring states. It might just bring about the necessary capital inflow so that new points of growth may develop there, new points of growth upon which the common market for Southern Africa can perhaps one day be built.

Mr. Speaker, first of all I want to deal briefly with a few remarks made by the hon. member for Green Point and the hon. member for Salt River. Unfortunately they are not present in the House at the moment, but I hope someone will convey my remarks to them. The hon. member for Green Point said that our party had voted against a motion by the United Party in the provincial council requesting the appointment of a commission of inquiry to investigate the taxes of divisional councils. Surely the hon. member knows that that is a half-truth. Surely he knows that the National Party moved an amendment at the time, which was accepted, to the effect that no useful purpose could be seen in the appointment of the commission proposed by the United Party as the Government had already appointed the Borckenhagen Commission as a technical committee for investigating these matters. As we so often find from the United Party, they wanted to make political capital out of the taxes of the divisional councils. They wanted to drag that matter into the political arena. The hon. member for Green Point also said that the provincial administrations were dependent upon the charity of the hon. the Minister of Finance. We can only say that we are glad that they are dependent upon the charity of such a good Minister of Finance, a Minister who is aware of all the needs of each of our provinces as those needs are put to him. Consequently he appropriated this large amount of more than R17 million to the Cape as an extra-statutory appropriation.

In spite of what the hon. member for Umbilo said some time ago during the Railway debate, we want to tell the hon. the Minister to the point that we are grateful for this Budget with which he presented the country. This is a Budget which towers above the budgets of other countries. This is a Budget which shows how independent our economy is, how stable it is and how strong our South African economy is. This flows from the stability of the National Party Government. This Budget has been called a status quo Budget but this status quo had to be maintained so as to continue keeping inflation at bay. To me, however, this is not a status quo Budget in the full sense of the word in that the Cape Province has received this additional assistance from the hon. the Minister. For that we want to thank him once again. At this stage I want to associate myself with the hon. member for Paarl and the hon. member for Witbank in their expressions of gratitude to the hon. the Minister. In our constitutional set-up we must necessarily regard our provincial system as a sub-division of powers. The Central Government delegated powers to our provincial authorities. The provincial authorities in turn delegated powers to the local authorities in the same way. Consequently our central authority is responsible for matters of national importance, the provincial councils are responsible for matters of provincial importance and the local authorities for matters of local importance. But because the country is constituted on a union basis and not on a federal basis, the emphasis must necessarily fall on equality and proportionality in the provinces. When Dr. D�nges opened a congress at Vryburg in 1959 he said that a union basis had been accepted in 1909 and that a federal system had been rejected so firmly that no idea could ever have been entertained of there having to be considerable differences in the taxes and services of the provinces. He said something like that was the feature of federalism and was not feasible in a state founded on a union basis. It is therefore the task of the central authority to rectify matters where big differences exist in respect of taxation and services between provincial authorities, seen against the heterogeneous constitution of our provincial authorities. Here I want to point out that the Government does in fact perform this task. When tremendous differences existed in the field of education and each province followed its own education policy, methods, etc., the central authority took a hand in matters and we got a central education council and subsequently a union education Act. We can also mention the example of separate traffic ordinances which used to exist in each province. At the instance of the central authority uniform traffic ordinances were passed in all four provinces and South West Africa. The rectification of these matters, as that used to be done and is still being done, will always be the task of the central authority. The central authority will also have to see to it that the tax burden on our provinces is equal.

This large amount granted to the Cape Province this year, involuntarily causes some people and the public as a whole to ask themselves whether there had possibly been poor administration in the Cape, or whether irresponsible action had possibly been taken in the Cape. I want to refute that straightaway by paying the highest tribute to the Provincial Administration and the Executive Committee for the administration of the affairs of the Cape. In pointing out further aspects relating to the position of the Cape, I am not doing so in a spirit of making comparisons with other provinces. I am stating the position of the Cape Province so that the rest of the country may take cognizance of that position. As far as this matter is concerned, I want to associate myself with what was said by the hon. member for Paarl. The vastness and other geographical features of the Cape Province require the province to maintain extensive and expensive lines of communication. Its rural population is widely spread. Farming in these parts is mostly extensive, and not intensive. There are clear differences between the Cape and the other provinces as far as income levels are concerned. As everyone knows, provincial tax is levied by means of a percentage levy of the income tax paid in that province. We find that the average, normal income tax per taxpayer in the four provinces for the tax year 1964-’65 was as follows: In the Cape, R163.05 per taxpayer; in the Transvaal, R204.33; in Natal, R183.68, and in the Orange Free State, R168.08. By way of comparison this means that on the average R13.76 was paid less in the Cape per taxpayer than in the Transvaal. When this is calculated as a full amount it means millions—a total amount of approximately R3.4 million which the Cape Province received less in 1964 as a result of its taxpayers being less prosperous. In addition there is a considerable difference between the number of economically active people in the respective provinces. In the Cape Province it was 36.3 per cent in 1960, in the Transvaal 37.4 per cent, in Natal 39.1 per cent and in the Orange Free State 33.8 per cent. Consequently we find a constant flow of people from the Cape Province to more profitable activities in the other provinces. On the other hand we find that there is a tendency for people from other provinces to come to the Cape Province when they retire. It has been estimated that there is an annual drain of 6,000 people from the Cape Province to the other provinces. Port Elizabeth, our fastest growing city, is mainly dependent on the motor-car industry, an industry, which settled itself at the coast mainly as a result of its dependence on the importation of motor-cars and motor-car components. But with the increase in the percentage of the local content we find that motor-car assembly plants are moving to the interior to an increasing extent, to the places where their biggest markets are situated. Thus, Chrysler, for instance recently moved from Cape Town to Pretoria.

It is a known fact that if the Cape Province had not received extra-statutory assistance of R4 million last year, and if motor-car licences had not been increased, the province would have had to balance its budget for 1967-’68 with a deficit of R8.4 million. Discussions between the Minister and the various administrators are always taking place so as to determine the actual needs of each province. The Cape Province has always done its best to balance its budget. In addition the Cape Province still levies its divisional council tax—a tax on all properties. This tax yielded R2.496 million in 1950; R6.297 million in 1962; and between R8 and R9 million in 1967. This tax is therefore continually increasing in order to meet the requirements of the roads division.

The cost per capita as far as hospitals and schools are concerned is also higher in this province than in other provinces. That can be attributed to the smaller degree of urbanization which the Cape Province is experiencing in comparison with other provinces. 43.5 per cent of the population of the Cape is established in the cities, in comparison with 54.7 per cent in the Transvaal. This distribution of our rural population over a larger whole than in the Transvaal for example, must necessarily have an effect on the education and hospitalization costs of the Cape Province. We therefore find that the unit costs per patient per day during the year 1964-’65 was R7.87 in the Cape Province; R6.55 in the Transvaal; R5.80 in Natal; and R9.01 in the Free State. Similarly, there is a big difference as regards education costs. These were all contributory factors which placed the Cape Province in such a difficult position that the hon. the Minister of Finance had to make this large concession to the Cape this year.

If we look at our provincial roads for instance, we see that there were 3,309 miles of tarred roads and 38,082 miles of other roads in the Cape Province in 1964 a total of 41,390 miles. In the Transvaal there were 3,880 miles of tarred road and 26,400 miles of other roads in 1964, a total of 30,310 miles. We therefore see that only 8 per cent of the roads in the Cape Province are tarred and 12.8 per cent in the Transvaal. In addition we find that the Cape Province has 33 per cent more roads than the Transvaal. Other factors which contributed to the Cape Province having to receive this large concession this year, were factors beyond the control of the province. Increases in salaries and contributions to Government medical aid schemes amounted to R18½ million in 1958, of which amount the Cape Province had to pay R9 million. Up to and including 1964 the Cape had the additional burden of Coloured education, for which it had only been compensated in part. The present subsidy formula was introduced in 1957-’58, and even at that time it was regarded as a temporary measure. It has now been in operation for 11 years. The Government took steps to establish a more permanent basis by appointing the Schumann Commission and the Borckenhagen Commission. It has already been said that the Borckenhagen Commission presented its report only last year, and that report in turn forms part of the inquiry of the Schumann Commission.

In the meantime the hon. the Minister of Finance had made provision for the provinces. For example, the Cape received R600,000 in additional statutory allowances in the year 1960-’61; R1,200,000 in 1961-’62; R1.7 million in 1962-’63; R900,000 in 1963-’64; R4 million last year; and R17.49 million this year. It is true that these allowances are granted on an ad hoc basis, and that a subsidy formula has been requested which will provide a better basis for budgeting to the provinces, so that they may know where they stand. This formula may be very involved, especially if the circumstances of each province are to be taken into account. My plea is that the conditions peculiar to each province should be taken into account in the application of this formula. Certain factors should always be taken into account, and the special needs of the Cape Province should also be taken into account.

There is one last point which I want to mention. The Administrator of the Cape Province announced that he was appropriating R4 million for divisional councils from this extra-statutory allowance. We want to express the hope and the trust that the step of making this amount available to divisional councils, which, unfortunately, will only be reflected in the next budget of the divisional councils, will assist in bringing about a more proportionate tax structure in the Cape Province as compared to other provinces. We are very grateful that the Administrator has made this concession.

Mr. Speaker, the hon. member for Vryburg has dealt mainly with the position of the provinces and their relationship with the Central Government in regard to the financing of the provincial services. Obviously we, as members representing Natal constituencies, are most concerned with the situation as far as our own province is concerned. This is due to the fact that there is a very high ratio between non-Whites and Whites, namely 8:1, and the fact that the province has to bear important and enormous costs as far as non-white hospitalization is concerned. It is therefore imperative for the province of Natal to have a degree of relief also in regard to the financial costs involved in administering the province. Due to these reasons we find that the provincial tax in Natal is perhaps the highest of all four provinces. There are very good reasons as to why that has occurred. One of them is the population ratio in Natal. Another reason is the inability of non-Whites to pay for, amongst others, expensive hospitalization services.

I want to deal with another group of people however. These are the social pensioners who will receive some benefit in terms of this Budget. It is obvious that members on the other side are loath to discuss the question of concessions that have been provided for in the Budget before us. This is understandable when one considers the amount that is involved in this concession. The hon. member for Pine-town has called the concessions to social pensioners “crumbs”. If one should look closely at these figures, one soon discovers that the increase announced by the hon. Minister for Finance to the pensioners was indeed a very small increase. The hon. the Minister announced that the increase in the pension of the white social pensioner would be R1 per month. This means that the white social pensioner will now receive an old-age pension of R32 per month. These people will have to continue to try and exist on something like R1 per day. The attitude of the Government has been that the object of the pension is not to provide an amount of money on which alone a person can live. Pensioners have to receive some assistance. It is obvious that the small increase that has been granted will not go very far in providing alleviation to this deserving group of people. The hon. the Minister also announced that a proportional increase will be granted to the non-white pensioners. If this increase is to be based on the ratio of 4 : 2 : 1, which has been the ratio adopted in the past, it means that the increases for the Coloured and Indians social pensioner will only be 50 cents per month, or 1.7 cents per day, and that of the Bantu pensioner 25 cents per month, or 0.8 cent per day. I feel that when we examine these figures, and realize the spiralling costs of the necessities of life, the concessions and increases that have been granted can only be described as minute. The position has been explained to the Government, and one can only express disappointment and dismay at the small increases that have been provided for in this Budget. We must keep in mind that this older group are invariably unable to take employment, or continue employment, due to old age. They have to be dependent, to a great extent, upon the Government for their livelihood. I cannot see how an increase of a greater measure, even if it was twice the increase, could have had a serious effect on inflation. I do not believe that such an increase would have fanned the flames of inflation, which obviously the hon. the Minister of Finance is using as a reason as to why he is not able to grant a more generous concession to these people. The things on which this increase will be spent on, will be the necessities of life, as for example food, bread, milk and tea. I fail to see how the hon. the Minister could offer as an excuse the fact that we are now trying to fight inflation, and that therefore the increase has to be of such a small nature.

Another important point is that this increase is only to take effect as from the 1st October, 1968. I believe that this is a point on which the hon. the Minister has been very stingy indeed. I am sure that it could have been arranged that the increase be effective as from the 1st April, 1968. Why try and deprive this group of people of money which they urgently require? The white social pensioner is being deprived of R6, the Coloured and Indian pensioners of R3, and the Bantu pensioners of R1.50. Similarly, the family allowances and other increases that were announced in terms of the Children’s Act, are also to take effect as from the 1st October, 1968. The hon. the Minister said that in view of the fact that the increases will only take effect as from the 1st October, 1968, it will only amount to R4.5 million, whereas in a full tax year the increase will be R8.9 million. I think that the hon. the Minister could quite easily have granted this increase as from the 1st April, 1968. If we should look at increases granted in the past, we see that one of the excuses that has been used is that there has been an adjustment to the means test, and consequently the Department of Social Welfare and Pensions has to carry out a large number of amendments, and that they require time to bring about the relaxation of the means test. They could therefore only pay an increase as from the 1st October of that year. In March, 1966, when there was an election, an increase was granted which was in effect as from the 1st April, 1966. It was an increase of R2 per month for white social pensioners only. In 1967 there was an amendment to the means test, and once more it was announced that the increase would only take effect as from the 1st October, 1967. In terms of the Budget now before us, there has been no announcement of any relaxation of the means test as far as social pensioners are concerned. The reason that there has to be certain adjustments made because of the relaxation of the means test, therefore falls away as an excuse for not paying this increase as from the 1st April, 1968. If one should look at the position as far as the means test is concerned, one realizes that this is the greatest stumbling block as far as providing a proper system of social security in South Africa is concerned. During the years the limited form of social security in South Africa has been extended in some phases as far as the Government is concerned. Generally speaking the Government is inclined to view the existing system as the best system. The Government therefore wishes to retain this system. As long as the present system is retained, it will be necessary to have a means test. It will obviously not be possible to abolish the means test until such time as a contributory pension scheme is introduced. I would strongly urge that the hon. Minister of Finance should discuss this matter with his colleague the Minister of Social Welfare and Pensions to see whether it is not possible at least to institute an investigation, to see whether a contributory pension scheme can be introduced to abolish this highly expensive and discriminatory means test that exists at present. The investigation that did take place was in 1944, some 24 years ago, and during this period of 24 years there has been a tremendous amount of advancement made as far as social security is concerned. Certain matters which 24 years ago were considered as socialistic are not longer regarded as such, but as realism. The hon. the Minister of Social Welfare and Pensions went overseas last year and I understand he also visited the U.S.A., which has a system of social security which was instituted in 1935. I hope that at a later stage perhaps the Minister of Social Welfare and Pensions will give us some indication as to what he learnt while over there.

As far as the means test is concerned, there is another factor which is an important one and which no hon. member opposite has mentioned, namely that there has been no relaxation at all of the means test. One would have thought that with the attitude of the Government and of this Minister of Finance in regard to improving the productivity of the nation, they would have given consideration to at least relaxing the income limits provided for in the means test. [Interjection.] I hope he has studied it sufficiently to give some relief where relief is due. It would appear that this is a deserving group of persons who should be granted sympathetic consideration when considering the Budget proposals, namely those who just fail to qualify. I mention this question of productivity because the income limits prevent many of these people in the age group from 60 to 69 years from taking employment, even part-time employment, without endangering their pensions. Surely it will be an incentive if at least a portion of the emoluments earned from employment is disregarded for purposes of the means test. It is disregarded in the case of persons over 70 years of age. Their emoluments are disregarded. But the group from 60 to 69 years, who are most likely to be able still to play an active role in the economy of the country, are discouraged from doing so because of the income limitation contained in the means test. When the means test was amended, with effect from October, 1967, concessions were made in regard to the amount of assets a person was permitted to have. A number of the proposals put forward by us on this side were finally accepted by the Government. However, the income limits remained unaltered; there was no relaxation of that. One would have thought that this year of 1968, the Minister of Finance and the Minister of Social Welfare and Pensions would have got together and found ways and means of at least relaxing the means test in regard to the income permitted. I feel that this would be an encouragement and an incentive to many of these people at least to take part-time work and to remain productively employed in the economy, rather than to sit back and to receive the maximum pension without taking any form of employment.

The question of these income limitations also brings to the fore the discrimination against some persons who I believe deserve pensions. These are persons who are receiving military pensions. We find that their military pension is taken into account when the means test is applied to them when they apply for a war veteran’s pension, and invariably it disqualifies them from receiving the war veteran’s pension, or it reduces that pension. Similarly, with the miner’s phthisis pension, we know that those pensions were increased by 20 per cent some four years ago. Widows receiving pensions of R30 a month had an increase to R36, but what was the effect on the social pensions of these people? It meant that their old-age pension was reduced by R6 a month, and therefore they were no better off at all. The 20 per cent increase granted in regard to the miner’s phthisis widow’s pension was immediately reduced by an equivalent amount as far as their old-age pension was concerned, thus defeating the object and the motive of giving relief where relief was due. The extra R6 a month was given with one hand and taken away with the other hand. This is the way our present outmoded system has to operate. We are restricted to an outmoded system of social security and I believe that at least these two groups could have received some sympathetic consideration from the Government when working out the concessions that have been announced.

Then the Minister of Social Welfare and Pensions announced last year that a concession would be made to the working wife who was supporting an aged or disabled husband and that only half of her income from employment, would be taken into account. We heard of these concessions, but afterwards we found that there were strings attached. For example, in regard to this particular concession, although not announced at the time, subsequently it was found that if the husband was receiving any sort of income at all, that concession did not apply to his working wife. I had a case where a man was receiving R1.53 a week from his typographical union, and because of that amount of R1.53, when his wife had to work to support him, the concession did not apply as far as his wife was concerned, and both he and his wife were unable to qualify for any form of social pension. I believe this is something which should be reviewed and which requires the urgent attention of the Government. We know that in terms of the Income Tax Act, the Minister does give relief. In terms of section 10 (1) (g) there are three groups of pensioners who are not liable for tax on their pensions. They are the war veterans, the military disability pensioners, and persons receiving a pension or compensation paid in respect of any miner’s disease or any disease contracted whilst undertaking mining operations. A very noble exception is made and these people are exempted from tax on their pensions. This raises the question why it is not possible to give them also additional consideration when it comes to applying the means test.

The question of taxation on pensions is another important matter. There are many pensioners who feel aggrieved that when the time comes for them to live on a reduced income, which a pension is, they are also then required to continue to pay tax on that pension. Here I believe the hon. the Minister should give some consideration to at least exempting part of that pension from taxation, so as to take into account the reduced income. The Minister may argue that a concession is already made in regard to their contributions to the pension fund, which is true, and I believe it is an encouragement for people to make some provision themselves for their old age by belonging to a private pension fund or contributing towards a retirement annuity, thus achieving a degree of tax alleviation. However, when the time comes to receive the pension, the advantage that is perhaps obtained during that period is lost by their continuing to have to pay tax.

I mentioned the question of the aim and object of the Government to encourage productivity and for persons to remain active in our economy. It is an important fact that throughout the world this is an aim and object of most governments. It was announced in the U.S.A., on February 15th of this year, that there would be a programme to provide jobs for older Americans. President Johnson officiated at ceremonies to guarantee old Americans’ security and their pride in being active and productive in their latter years. He also made an announcement that the U.S. Labour Department had accepted and approved three projects to create community service jobs for more retired men and women over 55 years of age. Here I believe that we in South Africa are wasting a large portion of our experienced, trained personnel, due to the fact of retirement and due to the fact that these people are not remaining active in our economy. I believe that it is only by financial means that we can encourage them to remain active in the economy. I believe that it would be a step in the right direction if the hon. the Minister of Finance could grant some form of taxation relief to companies employing a certain percentage of older employees. Obviously one would not want to retain the services of older people who would be blocking the promotion of younger people in the organization, but at the same time I think it is folly to discard experienced, trained personnel merely because they have reached a certain age. I believe that the question of some form of tax concession to companies employing a certain percentage of older workers should be considered by the Government.

Sir, while I am on the question of the productivity of workers, particularly the older workers, there is another aspect of the means test to which I think the Government is not giving due consideration and sympathetic consideration, and that is in so far as it relates to blind persons. Blind persons who apply for a pension on the ground of their blindness are obviously subjected to the means test. In terms of the present means test applicable to blind persons, one-half of the income which they earn is not taken into account and that, of course, is a concession, but I believe that the Government could be twice as generous and allow only one-quarter of their income to be taken into account for the purpose of the means test. I had occasion some time ago to deal with a case of a large workshop for Coloured and white blind persons in my constituency. They sent me a petition signed by the various persons employed in this workshop. The emoluments of these people were increased as from the 1st January, 1967, but five months afterwards they received a notification from the Department of Social Welfare and Pensions calling upon them to refund over-payments made to them due to the fact that their financial position had improved. I would like to read out just the last paragraph of the petition signed by this group of blind workers—

I believe that this is another step which the Government should take to assist the blind people of South Africa to get better-paid jobs without endangering their blind person’s pension, as happened in this particular case. They were granted increases in their emoluments on the strength of their improved productivity and five months later they were called upon to refund to the Department half of the increased emoluments which they had received. I believe that this is another step which could be taken to encourage these people to remain more active in our economy.

As far as civil pensioners are concerned, the hon. the Minister announced in his Budget speech that a certain amount of relief was to be given to them. The bonus which is granted to civil pensioners on a sliding scale, varying according to the date on which they retire, is to be increased by 5 per cent throughout. In many cases, particularly in the case of the older civil pensioners, this represents a very small increase indeed in their civil pensions. Take the case of a civil pensioner who has a basic pension of R25.82. He is now receiving a 25 per cent bonus, which amounts to R6.45, apart from his other allowances. In terms of the proposals before this House, the bonus will be increased from 25 per cent to 30 per cent which means that this bonus will be R7.75, in other words, an increase of R1.30 per month. I mention this just to illustrate the point that as far as actual cash is concerned, this concession involves a very small amount indeed.

The hon. the Minister also referred in his Budget speech to the welfare organizations. I believe that our welfare organizations are playing a great role in alleviating suffering and hardship amongst our people. The position is that the financial relief which is now being afforded to these organizations, is being granted to them as a result of representations which have been made to the Government from time to time to review the position. The present position is that where children, who have been committed in terms of the Childrens’ Act, are sent to various homes to be cared for, the entire cost of maintaining them—their clothing, their food, their accommodation, etc.—has to be borne by the welfare organization administering that particular home. In terms of the Budget proposals the allowance for white children is to be increased from R17 per month to R20 per month, but what does it cost these welfare organizations? I have figures from 12 different organizations which care for committed children, and here I am only dealing with white children. The gap between the allowance and the actual cost is even greater in the case of non-white children than it is in the case of white children. The following figures will illustrate what it costs to maintain these children. In the case of one large home for European boys, the per capita cost on a monthly basis as at 31st March, 1965, was R32.70. The cost as at 31st March, 1966 was R35.75; the cost for the year ending 31st March, 1967 was R37.84 per boy. There is still a very large gap therefore between the grant of R20 per month which is to be made in terms of this Budget and the actual cost incurred by these organizations in keeping these children. These people are performing an essential welfare service. These children are committed to them in terms of orders of court. They assume the responsibility of looking after these children and yet they have to carry this enormous financial burden. This particular welfare organization states that of the expenditure incurred in the year ended March, 1967 only 44.6 per cent was contributed by the department towards the cost of feeding, maintaining, housing and supervising the boys committed to them. The remaining 55.4 per cent was contributed by the public at large and from the meagre resources of the home which resulted in a deficit of over R4,000 for that financial year. It appears therefore that these organizations deserve relief. A certain amount of relief has been given to them by way of an increase of R3 per month in respect of white children, and I assume that a proportionate increase will be granted in respect of non-Whites. Sir, I do not want to bore the House by quoting more figures but there is ample evidence to prove that the gap to which I have referred is even greater in the case of non-Whites.

Then I come to my next point and that is the work done by social workers and the question of the subsidization of their salaries. The hon. the Minister has indicated that the State subsidy for the social worker is to be increased from R1,450 to R1,620 per annum. The Minister has indicated that these people are carrying out an essential professional welfare service. In the United States of America it is accepted that these professional social welfare workers in the employ of welfare organizations and agencies are performing such essential professional welfare work that their salaries must be subsidized 100 per cent by the Federal Government, and that is what is done there in fact. I believe that the hon. the Minister should give further consideration to the question of affording further relief to the welfare organizations which employ these social workers. In the main the salaries of these workers are borne by the Central Government but there is still a gap between the Central Government’s grant towards the salaries of these workers and the total amount that has to be raised by the welfare organizations.

In his Budget speech the hon. the Minister announced further relief for the family man in the form of childrens’ rebates, etc. However, when one studies the report of the commission of inquiry into family allowances, a report which was tabled some four or five years ago, one finds that this commission, which is known as the Piek Commission, came to the conclusion that a great deal more must be done by the Central Government and by the various departments with a view to encouraging larger white families. One important recommendation made by the commission is that instead of the rebate of R34 per child and R39 per child after the third child, this system should be replaced by a system of tax abatements according to the size of the family. No mention has been made of this by the hon. the Minister of Finance in his Budget speech and one can only assume therefore that the commission’s recommendation in that regard has not been accepted by the Government and that they intend to continue with the present tax rebate system. We will be pleased to hear from the hon. the Minister of Finance whether he has considered this particular aspect because obviously we in South Africa would like to do everything in our power to foster family life and to encourage people to have larger families so as to bring about a greater degree of prosperity in South Africa.

If one looks at the rate at which the members of the United Party leave their party and this House, one is not surprised that every year the same speeches are made on the same problem, namely that of pensions for various kinds of people.

You are not concerned about that.

Neither do I know whether it is simply a matter of coincidence that the hon. member for Umbilo has this particular name, because he covers exactly the same old field every year. One would not hold it against him that he entered the same terrain or covered the same field, but then he must put forward constructive ideas. All these questions put by him to the present and the former Minister of Finance year by year, have been replied to in various ways. What I find particularly striking about the hon. member’s speech before this House every year, when he takes his turn to speak, is that he, being the main speaker on the other side in respect of matters of welfare, creates the impression here that the entire welfare programme consists solely of care for aged persons and related matters, or that it consists solely of Government allowances granted to certain groups of our community who have to be assisted by the State from the nature of the case. I shall return to some of these matters later on. He devoted about 90 per cent of his speech to the aged. I do not intend covering the same field, considering the replies given to him in the past. I hope that the hon. the Minister or other hon. members will be able to return to that later.

The matter I should like to discuss, is the fact that this Budget, in particular, makes very ample provision for a variety of welfare services in our country. The amount may be small and the addition to what is already being spent, is probably small in relation to the magnitude of the work that is being done, but we must not only see it in terms of monthly allowances. We must view this matter in a much wider perspective. The significance of this Budget and these large amounts of money that are being made available for welfare purposes and related matters is not in our opinion to be found in the amounts as such, but in the methods of approach and the underlying principles.

Sir, the Government’s welfare programme covers a very wide field and is based especially on three particular methods of approach. In the first place the Government takes a direct interest in the underprivileged; in the second place, the Government adopts a scientific approach to the entire matter; and in the third place it affords special recognition to voluntary welfare services. The hon. member for Umbilo referred to voluntary welfare organizations towards the end of his speech. The fact of the matter is that these private organizations are very grateful for the exceptional support which they already receive. I shall return to this in more detail shortly.

If the hon. member wants to deal in more detail with the variety of rehabilitation services in which the Government is engaged, and for which large sums of money is being made available in these Estimates, he will find that more than 20 per cent of the Estimates is in respect of various forms of social services. The social care provided by the State is not only for the aged. It does not consist solely of the distribution of alms and poor relief allowances. On the contrary, the service rendered by the State is to help any person who may not be able to help himself, in such a way that he may lead a peaceful life. But on the other hand any person who cannot help himself at any particular moment, but who has the potentialities of being a full-fledged member of the community, must be given special assistance. If we return to the aged and analyze their budgets, we will find that these people are in actual fact not so much worse off than other persons, for example unskilled and semiskilled persons, in our community. It is a fact that these people can live peacefully, but we have the problem, of which the hon. member on the other side is also aware, that a large number of people who may be cared for in old-age homes, prefer to live on their own although, on account of their physical infirmity or their mental capacity, they are not able to look after themselves. They are too stubborn to make use of the provision made for them in homes or elsewhere.

A few years ago the Government appointed the Gauche Commission on Rehabilitation Services, which made some important findings, which were unfortunately not published. But we who gave evidence before that Commission can see the effects of its work very clearly in the more efficient organization in the Government’s welfare programme. Among other things the National Welfare Board is now adopting a very broad programme which is being worked out by its four commissions. These commissions will want to put into effect the recommendations of the Gauche Commission, both those that are practicable and those which have not yet been carried out, and the Government will be advised in this regard in due course.

Another aspect recognized by the Government in its welfare programme and the furtherance thereof, is the recognition of professional services—the recognition of professional skill in the care of our underprivileged people. We have the Department of Social Welfare and Pensions with its own particular professional division, but we also have a whole series of other Government Departments which render special services to underprivileged people in various categories. I cannot analyze all these aspects at this stage. We have the Department of Labour with all its ramifications and its whole variety of rehabilitation services. We have the Education Department, particularly its schools of industries division, which performs a very useful function. We have the Departments of Health, Community Development, and Prisons. The public may get the impression from the outside that the only function of the latter Department is to lock up criminals, but in practice this Department is in fact educating and rehabilitating people in a constructive way so that they may once again become full-fledged members of the community. Then there is the Department of Justice with its children’s courts. A Department which, in my opinion, will have to do very important work in this field shortly, is the Department of Immigration. We may add to these the three Departments of Bantu, Coloured and Indian Affairs. If we look at the amounts spent on these various activities in the field of social care, and if we add them up and analyze them, then, as I said just now, we shall find that they constitute more than 20 per cent of the total Estimates. What right has the Opposition to try to create the impression here which the hon. members for Pinetown and Umbilo tried to create? They tried to focus everything on one little facet in relation to these indigent people in our community. Why cannot they also put forward constructive ideas about the other people for whom the Government provides so many services through the various departments? The most recent additions are the Human Sciences Research Council and the Act which we passed a short while ago. A tremendous amount of research is going to be undertaken by that council in this particular field. I shall not go into detail and statistics, etc., now, but I am convinced that if it is the object of hon. members on the other side to suggest to the public outside that this Budget does not look after the poor man or the underprivileged or whoever falls in this category, I may say to them that they are completely on the wrong track. When we come to deal with the various votes, we shall have the opportunity of going into these points in more detail.

Another point of departure adopted by the Government in regard to its social care programme is the recognition of private initiative. We usually classify this work under the two categories of family and children’s homes care. The hon. member for Umbilo mentioned figures a while ago in respect of the care of children in children’s homes. I had a hand in calculating a certain figure. We approached the Minister of Social Welfare and Pensions and told him, “So many children are cared for in children’s homes; they are children in need of care under the Children’s Act. We have considered each item, food, clothing, etc., in the finest detail. We have taken into consideration the sub-economic rates of interest at which those institutions were built, and we have found that the minimum amount we need is not R204, but R240”. And the Government has given us R240 in this Budget. We approached the Government about the staff in those children’s homes. We told the Minister that we needed professional staff to do this work in the children’s homes, as these children were disturbed children who needed special care. We received the money for which we had asked.

Reference has also been made here to the work of the social workers employed by the various welfare organizations. I may inform the hon. member for Umbilo that I have already received telegrams and letters of appreciation for this concession which has been made. The people who deal with these matters had not expected these concessions this year, but only in the next financial year. But the concessions have already been made now.

If I may mention something to the hon. the Minister of Finance, I want to mention the entirely erroneous concept which outside people have in regard to services of this type. Some people have the impression that we are concerned here with the care of bad people, lazy people and so forth, and that we take money from the State coffers to care for these people. That is not the approach adopted in regard to welfare work, neither by the voluntary organizations, nor by the organizations of the various departments concerned with rehabilitation work. The approach adopted in our welfare programme is that every person in this country who is potentially able to make a contribution in the labour market, must be strengthened spiritually, mentally and physically to enable him to make this contribution. I am therefore convinced that our points of departure are correct. The Minister of Finance will be approached in future and told that certain services that are as yet non-existent, should be developed. In this particular respect I mention the need for psychologists who must form an integral part of family and children’s care services. As yet, no Government Department has any formula that makes provision for this. I am referring now to psychologists in the employ of these children’s homes where we have more than 5,000 white children who have to be taken care of in children’s homes. Aftercare services are rendered by social workers. In this field, too, we need more psychological and psychiatric services.

The social services in this country have only really developed in the last 30 years and we are very happy about the progress which has been made. We are very satisfied with the progress made by the Department of Social Welfare, as well as by the Department of Labour with its vocational services and various rehabilitation services, etc. This has been made possible by the money made available to these Departments from year to year. If we consider that the Department of Social Welfare is only 30 years old, then we are surprised to see where we stand to-day.

Certain American schemes were held up to us by the hon. member. Time will not permit me to do it now, but we can tell him some very shocking things about America’s experiences of all those kinds of schemes held up to us here by the hon. member. Those schemes simply do not work. Here in South Africa our schemes do work, because what we have here is peculiar to South Africa, something we are maintaining here which has not been maintained to the same extent in the Western countries of Europe. This is that private initiative makes a very large and important contribution to our welfare programme. The State recognizes that service, and because the State recognizes it, we can plan that service properly with the assistance of the Welfare Act, with the assistance of our churches, particularly the Afrikaans churches, and with the assistance of the various welfare organizations. I now want to tell the hon. member for Umbilo that I have been in the field of welfare work for many years, but that I have never come across him, not even in Durban. He may be active in certain narrow circles, but as far as the broad set-up of our welfare planning is concerned, I have not come across him there to the extent I should have liked. I know that he might react to the composition of the Welfare Board. He might say that there are so many Afrikaans-speaking and only so many English-speaking persons on the Board. This Board was constituted—and performs its functions in this spirit—to enable people who are well known in the field of social welfare and in the field of social care …

Is the representation that of national councils of various welfare organizations?

We are not endeavouring to have a multitude of mushroom organizations represented on that Board. We have more than 2,000 registered welfare organizations in this country. We have some 17 or 18 National Councils. Even they are not all operating in as wide a field as we would like. The Welfare Act states quite clearly that the Board does not make provision for the representation of groups or schools of thought. It makes provision for people who have knowledge of welfare work. That is why they are there and that is why they are of assistance to the State.

Mr. Speaker, I have a very pleasant task to perform this afternoon. I should like to remind you that I pleaded for relief for working wives in my maiden speech, and it is a great pleasure for me this afternoon to convey sincere thanks to the hon. the Minister of Finance on behalf of all the working wives for a further concession made to them by him. The hon. the Minister’s predecessor made a similar initial concession a few years ago. I should like to point out to hon. members that under the old system, in cases where both husband and wife were working and the head of the family sent in a tax return at the end of the year of assessment, the family was assessed at the higher rate. But the family never realized that, because the amount of the tax due was quoted in one figure, and the family was not in a position to say that the husband’s income was subject to so much tax and that the wife’s earnings had increased the joint income, and that they had therefore been assessed at a higher rate. They never realized that. In other words, the P.A.Y.E. system also had the good result that the Government could grant relief where this bottle-neck had developed.

The hon. the Opposition’s man speaker spoke about the high cost of living. Now, sometimes when one listens to the hon. members opposite one gains the impression that one can actually exist without there being such a thing as cost of living. Is the Government responsible for the fact that one has to eat every day? They make me think of the man who gets angry when he gets hungry, and that, after all, is absurd.

In pursuance of what the hon. member for Vryburg said earlier in this debate, I should like to mention a few figures. The hon. member mentioned the figure paid in taxes by the average taxpayers in the various provinces. As a representative from the Transvaal I know he quoted the amount applicable to an average taxpayer in the Transvaal, which comes to just over R200 per year. Let us look at what the province gives the Transvaal taxpayer in return for the tax he pays; then we really have reason to be grateful to this good National Government. I now want to give one example only. That is the amount spent on education alone by the Provincial Administration in the Transvaal, apart from all the other good things which the Administration makes available to the taxpayer, to the public and to the nation. The figures I am now going to quote relate to the year 1962-’63, and one may assume that the amounts are considerably higher at the present time. In that year the Administration spent an average amount of R112.41 per primary school pupil. The average figure for the high school pupil is R146.72. Pupils at agricultural high schools cost the province an average amount of R221.94. For students at the teachers’ colleges the amount was R339.60. The hon. member for Vryburg said that the average taxpayer in the Transvaal paid just over R200 in taxes; consequently it is evident that he receives much more than what he contributes by way of direct taxation. That is a very fortunate position, and that is the case because this Government has always been keeping its finger on the pulse of all the problems of our country. Every section of the population is being cared for. There is really no cause for any hon. member opposite to complain about this Budget.

I can quote a great deal more. I can take you back to the year 1938, Mr. Speaker. It was repeatedly stated by hon. members on this side that the standard of living of the nation had been raised. But hon. members on that side disputed and tried to disprove that, but they still fail to convince me that they are right. In the year 1938, when the United Party was in power and at the peak of their power, the average working man was far worse off than he is to-day. I know from personal experience that the person who began his career in those days by joining the Public Service was in no position to save anything after he had fed and clothed himself. Out of a salary of £7 10s. 0d. in those days, a person had to pay £5 10s. 0d. for board and lodging. Then he had not even bought clothing. What about recreation?

Business interrupted in accordance with Standing Order No. 23 and debate adjourned.