Sir, we have indicated our opposition to this Bill at the second reading. In this clause provision is made for the Act, as it will become, as well as any amendment thereof, to apply to the whole of the territory of South West Africa, including that part of the territory known as the Eastern Caprivi Zipfel, although it is true that hereafter there is a clause which says that it can only apply to the Caprivi Zipfel in the case of a special provision made in any enactment to indicate that it shall so apply to that particular territory. Sir, anyone reading the Bill, particularly clause 2, which I cannot deal with now, might think that there is a reservation in regard to the areas in respect of which this Bill applies. That is not so. I wish to emphasize that it applies to the whole of South West Africa, and therefore the provisions of the Bill are provisions which apply to the whole of the territory, and as our objection is to the Bill in principle, we naturally must object to the provision which makes it applicable to the whole of the territory, including the Eastern Caprivi Zipfel. We shall oppose this clause therefore.

In this clause we find it is the intention of the Government to establish the so-called separate nations into which the Government wants to divide the people of South West Africa. We indicated, during the second reading, our opposition to this idea and there is no need for me to go into that further, but I want to refer particularly to paragraph (g), where the Minister, or the State President, takes the right to define such other land or area as may be necessary, as set apart for the exclusive use of and occupation by any Native nation. The question was put to the hon. the Minister during the second reading about these new nations which we assume will evolve. During the Minister’s introductory speech in the second reading he told us it was not his intention to include Namaland, which was to be administered by the Department of Coloured Affairs. Towards the end of the second-reading debate the hon. the Minister by way of interjection led me, at any rate, to believe that he did not foresee that any other so-called nation would evolve in South West Africa. If I understood the Minister correctly—and I hope he will correct me if I am wrong—and he does not anticipate that there are any more so-called Native nations which will evolve, what is the necessity for this paragraph (g)?

It is correct, as the hon. member says, that in my introductory speech I did not refer to the Tswana, but in my reply to the second-reading debate yesterday, the Leader of the Opposition by way of interjection asked me about the Tswana people and then I confirmed that if it was found necessary in future to make provision for land for them, it can be done under paragraph (g). I said that yesterday and I repeat it now. Paragraph (g) can also be useful when other land must be added to existing homelands, as in the case of Damaraland That I also said yesterday.

Can I take it then from the Minister’s reply that this is intended to enable the State President only to proclaim areas for the Tswana group and perhaps extensions to the other six which are defined in this section, and that there is no intention of creating another nation which is not mentioned here, outside of the Tswana group?

We have created no nations in South West Africa. The Good Lord created them.

I should be grateful if the Minister would help us to form a better idea of what the position is in South West Africa as regards the homelands and what progress has been made in sorting out the population groups in that area. The Odendaal Commission provided us with certain figures as to the number of members of each population group who are living in the proposed areas. With reference to the seven areas mentioned in this clause, could the Minister give us an indication of how many members of the population groups concerned are living in each area, and how many have to brought there in order to make these areas true homelands for them?

For the information of the hon. member for Pietermaritzburg (District). I may perhaps add a word or two. It is clear that there is in fact only one small group of people, the Tswana, about whom doubt might have existed. I thought I had dispelled this doubt yesterday pursuant to the question put by the hon. the Leader of the Opposition. There is in fact no other group falling within the circumference of the Native nations in South West Africa for which such an area should be set apart. The only other possibility I dealt with conclusively yesterday, namely the Nama people, and I said that although we had until now governed them according to traditional practice, we did not intend governing them for all time, as they must become the responsibility fo another Department.

As regards the figures inquired about by the hon. member for Yeoville, I do not have these figures before me, but I think we may take them to be more or less the same as those furnished in the Odendaal Report.

Has nothing been done in the past five years to change those figures?

There has been nothing to change those figures, apart from births and deaths which have occurred.

Mr. Chairman, there are certain clauses here which we on this side take violent objection to; they are part of the pattern and consequently we must object to them. We take no violent objection to this clause but we shall object to this clause and others for the purpose of the recording of our objections. We object to this clause.

Mr. Chairman, we find in this clause that “The State President may … if there does not exist in a tribe or community any government … establish after such consultation as is contemplated in the said paragraph, a tribal authority” and other forms of local self-government. I want to address the hon. the Minister on this question of consultation. Very much the same sort of provision applies here in the Republic. In the Republic too we have a provision referring to consultation, but it is not clouded by the issue to which reference is made in this Bill in another clause, which I am not allowed to refer to now, namely the question of self-determination. I the light of comments made both by the Minister and the Deputy Minister of Bantu Administration, I wish to raise a certain matter now. They have repeatedly stated, “Ons sal niks op hulle afdwing nie”; we will not force them to accept anything. In the light of that undertaking, when we think of consultation and the type of consultation which takes place with the Bantu people, and when we think of the nature of these Bantu people and what happens at such meetings, we have doubts. At such meetings the Bantu Affairs Commissioner or some other official appears and elaborates on what is being offered to the tribe, what they are being asked to decide on. The Bantu people respond by saying, “This is the law of the Government” and they leave it at that. The first point I wish to make is to express the hope that consultation with these native peoples will take place in some other manner. They should not be given the impression that “this is the law of the land, this is the law of the Government, and it is the wish of the Government that you accept this”. Those people should rather be given a free opportunity of expressing their wishes.

I go a little further and say that consultation does not necessarily mean agreement. We have seen this time and again in this country where we have had proclamations announcing the establishment of tribal authorities and other such bodies where it was apparent that there has not been agreement. It has been apparent that the establishment of that tribal authority has not come about as a result of a request of the tribe concerned but because it has been deemed expedient by the officials or the Minister or the Government as a whole. We have found in proclamations such statements as “the tribe has been consulted and it is therefore considered desirable to establish a tribal authority”. Another example is “the tribe has been consulted in connection with the establishment of a tribal authority and it is therefore necessary to establish a tribal authority”. We also found such statements as “the tribe has been consulted and it appeared not disinclined that such a tribal authority be established and it is therefore necessary to establish a tribal authority”. I want to ask the Minister how does he intend to let consultation take place with the various tribes with regard to the establishment of these authorities. In view of the other principle which is being introduced by the Minister and his Government, and which applies only to South West Africa, namely the principle of self-determination, is he only going to establish tribal authorities at the request of or on the majority decision of a meeting of the tribesmen of the tribe concerned?

Mr. Chairman, one must of course act with a great deal of circumspection when dealing with the question of consultation with the Native nations. This matter must be dealt with carefully. As a matter of fact the hon. member had a slip of the tongue in regard to the examples he quoted. He said that the proclamations stated that “whereas consultation has taken place, it is deemed necessary …” to do this, that and the other. But it is not put in that way in the proclamations. The proclamations simply state that this, that and the other will be done. The hon. member may have seen that wording in memoranda or similar documents but he has not seen it in a proclamation.

As regards the Natives in South West Africa, I can give him the best answer on the basis of the experience we have thus far had with them up in South West Africa. It must be clearly understood that those Native nations are far removed from the Natives here and that they do not and cannot learn much from the practices followed here, as they have no connection with each other. Up to now our experience up there has been the following: We met the leaders of the various nations, the leaders from the various tribal areas they have there. Thus there are seven tribal areas in Ovamboland. There are really eight, but in actual fact numbers seven and eight may be grouped together. The leaders and councils of those tribal areas are interviewed individually by our officials, or otherwise they are interviewed as a group. I have, for example, spoken to them on several occasions at which the representative leaders of all seven groups were present, at which 60 or 70 of the Native leaders were there at the same time. I then spoke to them in that way. This was also the case when the hon. the Prime Minister met them last year. The same thing happened at Runtu, where the Prime Minister and I saw the Native leaders of all the various areas—I think there are five tribal areas—last year. The officials then consult with the nations or with the leaders of the various tribal areas, either separately or collectively, as may be required in each case. The principles, procedures and implications are explained to them. They ask questions, as they asked them to me in March last year. When one has explained matters to them, they say they want some time to consider the matter. Fortunately they only asked me to give them a few hours, but they sometimes ask our officials for a few weeks in which to consider the matter and to consult with one another in private. Then they return to us and we give them a further explanation. This is the method which is followed. We recommend things to them which we consider wise and which are in line with their own developments and traditions of the past.

I am glad that the hon. Whip has once again made it possible for me to see the hon. member for Pietermaritzburg (District). There has been such a visibility gap between the hon. member and me.

Discussions we had had in the past, made it necessary for us to point out to them with great emphasis that in these modern times they had to make provision for their absent members to have voting rights in respect of their governing bodies. They were very slow in doing anything about this matter. As hon. members on the other side may perhaps know, the Bantu are not so keen on introducing the element of voting rights into their traditional leadership. We brought this to their attention very strongly and they seem to be prepared to make provision for it in certain respects, but not to the extent that other people would like it to be done. We shall not force things onto these people by which we may provoke their antipathy. We shall have to adopt a gradual approach in these matters. Where certain things are too difficult for them to accept immediately, the governing bodies will be established and they will be taught the rest gradually by means of education. The hon. member need not think that the consultation with the Bantu will only be a formal or symbolic one. We have as a matter of fact had so many extensive discussions with them for more than a year that the hon. member may rest assured that these discussions will be very extensive and full in future as well.

Mr. Chairman, I am grateful for the explanation given by the hon. the Minister and for the detail in which he explained the position. I want to say that I sincerely hope that this is the manner in which it is going to be carried out and I accept the hon. the Minister’s word for it. There is, however, one point I want to bring to his notice. He said that nobody wants to raise the antipathy of these people. I agree with the hon. the Minister completely in this regard. I want to say that my experience with these Bantu people is that when it comes to a question of “umtetho ka uHulumeni”—that is “the law of the Government”—there is no question of antipathy. Their attitude is: We are subjects of the Government. If the Government says we must go left, we go left; and if the Government says we must go right, then we go right. That is why I am so glad to hear from the hon. the Minister about the detail in which they have explained the position to these people. I hope that when the time comes when a decision is made, these people will fully understand the implications of what they are being asked to accept.

Mr. Chairman, clause 4 (2) (a) provides for “The election by way of voting in the territory referred to in section 1, and the designation of the members of a legislative council”. “Designation” seems to me to mean nomination.

Order! We are now dealing with clause 7.

Mr. Chairman, the matter is referred to again later in this Bill and I shall deal with it then.

Mr. Chairman, clause 4 (2) (a) is relevant here. Subsection (2) of clause 7, with which we are dealing, imports the provisions of subsections (2) and (3) of section 4 which “shall mutatis mutandis apply to a proclamation in terms of this section”. I suggest that the hon. the Leader of the Opposition is correct in wanting to refer to clause 4 (2) (a). He is dealing adequately with clause 7 which is before us now.

The hon. the Leader of the Opposition may proceed.

One wonders what the hon. the Minister has in view here, because we seem to be in a position where these legislative councils may be designated without being elected. In other words, what we may be faced with as a result of the incorporation in clause 7 (2) of the provisions of clause 4 (2), particularly paragraph (a), would be councils designated entirely by the Minister. I think we should know from the hon. the Minister what his ideas are in this regard and whether his view is that these councils should be nominated or elected. If they should he designated, what does he have in mind by the term “designation”?

Mr.

Chairman, the reference made in clause 7 back to clause 4. is really a result of the idea of the designation of members of the councils by way of voting. That is why it has been worded in this way. In other words, the intention here is that members of the councils may be elected by way of voting both in the case of the highest body, the legislative council of the area, and in the case of the lower bodies, community authorities, tribal authorities, etc., and that persons may be brought in by way of voting in this case as well. It is difficult to predict the way in which these matters will develop. However, I think that we must accept that in certain of these Native areas, and perhaps in all of them, we shall eventually have the position that some of the members of the tribal authority will be the traditional members and others will perhaps be added by way of voting on the part of the Bantu public. This also applies in the case of the highest body, the legislative council. Some of them will serve on that council by virtue of tradition, of being their traditional leaders, and their number will be supplemented by others who may be elected. It is difficult to say at this stage what will happen, but I think this must be accepted as a possible eventuality.

Clause put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

Clauses 8 and 9 put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

Clause 10:

Mr. Chairman, this clause provides that the books and accounts of any executive council and any tribal authority, community authority or regional authority “in respect of which a Revenue Account has been established in terms of section 9 (1)” must be audited by the Controller and Auditor-General. Then follows the extraordinary proviso:

The principle that the Auditor-General should audit the accounts and should report on them is a principle which we hold to be very important because through our Committee on Public Accounts we are then able to determine and scrutinize what has been done in this regard. In other words, this is Parliament’s watchdog over what is done. But now we have this provision that in some cases this need not be done. The extraordinary provision here is that the person who decides whether or not the accounts should be audited by the Controller and Auditor-General, is the Auditor-General himself. Is this not a most extraordinary provision? Should the Auditor-General be placed in a position that he should decide which of these accounts he would like to audit? We do not approve of this principle that someone should decide that only some of the accounts should be audited and others not. But surely, the person who makes that decision should be someone who is answerable here in this House, someone that we can deal with. One should not place the Auditor-General in the position that he decides. How is he going to decide? In what circumstances does the hon. the Minister anticipate that the Auditor-General might decide that the accounts of the one should not be audited, and the accounts of the other should be? In other words, in what circumstances does he feel that in any event some accounts should not come under the scrutiny of Parliament, and some accounts should? But, particularly, why has he put the Controller and Auditor-General in this position? Surely, the Controller and Auditor-General is rather in the position of a Judge. He is someone impartial. He is protected from the normal means of being relieved of his post. He is a man of considerable independence, and he is the person who stands between Parliament and the Executive and the Administration. Perhaps the hon. the Minister could indicate the position to us.

Mr. Chairman, the reply to this question is very simple and straightforward. First of all I want to give hon. members an explanation, but now the hon. member for Durban (North) must listen to me.

I am listening.

What do you think you are? A teacher?

The hon. member for Durban (Point) must not make so much noise. He cannot see how the hon. member sitting behind him is looking about in different directions in the House. I should like to explain this specifically and once only; not three times.

Yes, miss!

In any case, the order in Committee is maintained by the Chairman, and not by the hon. member for Durban (Point) … The pattern in respect of Bantu authorities, as the hon. member may perhaps know, is that the Controller and Auditor-General has up to now audited all books of the higher authorities, i.e. the territorial authorities, and those of regional authorities. But the Auditor-General has never yet audited the books of tribal authorities. I want the Auditor-General to be responsible for the auditing of the books of the tribal authorities as well, in other words, of all three of the layers: of the top layer, the regional authority layer and the tribal authority layer. This also applies as far as the other Bantu areas of the Republic are concerned. But the position is that in terms of the Exchequer and Audit Act the Auditor-General has a measure of autonomy as an officer of this Parliament. He may decide, even in the case of the responsibility to audit books with which he is charged at the moment, to delegate his auditing to an auditor appointed by him. He already has the right to do so. And he does so too. In many of the Blue Books which are issued to us, the hon. member will see that many outside organizations are not audited directly by him, but by other auditors commissioned by him. We must realize where these areas are situated in South West Africa. We must realize how far apart these tribal areas are. It may just happen that the Auditor-General will find it impracticable to have all the books of the higher authorities, namely the legislative councils, as well as those of regional and community authorities that may be established and, thirdly, tribal authorities that may also be established, audited by his own staff. He is here being charged with the duty of auditing all these books. This is what the law provides. But the law acknowledges that, within the circumference of the Treasury and Audit Act, he possesses a kind of autonomy in his office. That is why it is stated that, if he decides not have the accounts of certain authorities audited, but to have them audited by another auditor, he must do so in consultation with the Secretary of the Department. It would not have been right, in terms of the measure of autonomy that he enjoys, to say that the Minister alone must decide the books of which of the authorities are to be audited by another auditor if the Auditor-General finds that he cannot manage everything. That is the whole position. This matter has been discussed both with him and with the Treasury, and he is quite happy with the wording in the Bill. It honours the primary duty imposed upon him by the law, i.e. that he must audit the accounts of all the authorities. But if he finds it impracticable to audit all of them, then he has the right to decide which he will not audit himself, but will entrust to other auditors. He may then designate the other auditors and must consult with the Secretary of the Department on the matter. This is the whole explanation.

Mr. Chairman, if the Auditor-General exercises his discretion and asks another auditor, an accountant, to undertake the work, will that report of the auditor who has been deputed by the Auditor-General come before our Select Committee on Public Accounts, and will the Auditor-General assume responsibility for it? Will it be examined by our Select Committee?

This is already done where outside auditors are appointed by the Auditor-General, and the same thing will happen in this case, i.e. the report of those appointed auditors will be referred to Parliament through the Auditor-General, and of course to the Select Committee.

Clause put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

Clause 11:

Mr. Chairman, may I ask the hon. the Minister what is his intention regarding the Herero people outside of their reserves? Will they have just the one representative to represent the large location in Windhoek, or will they have a separate one for all those employed on the farms throughout that section of South West Africa as well?

Mr. Chairman, it seems to me as though the hon. member has neither read nor understood the clause properly. It is not a question of the Hereros, the Ovambos, or the Damaras who are outside having to decide whom the representative will be. It is just the opposite. It rests with the legislative council of the nation concerned to designate somebody to represent the people outside. In other words, the decision will rest with the executive council of the main governing body. Therefore, when the Hereros have appointed a legislative council with an executive council under this Bill, this executive council will have the power to designate somebody in Katatura to represent their people who are in Windhoek and to look after their interests, and they will likewise have the power to designate a person in Walvis Bay, for instance, if some of their people live there.

In the same way the executive council of Ovamboland will have the power to designate somebody to look after the interests of the people outside Ovamboland.

Mr. Chairman, the hon. the Minister replied to my colleague from Pietermaritzburg (City) and quite rightly indicated that the representative would be nominated by the executive council or by the authority of the tribe. Subsection (2) provides that that nominee shall be approved of by the State President. We do not have any objection to that.

But when we come to subsection (3), we find that the State President may withdraw the recognition of this representative, not only at the request of the executive council by whom such representative was nominated, but also after consultation by the Minister of Bantu Administration and Development with that executive council. What I am asking the hon. the Minister once again, not forgetting the fact that here the hon. the Minister and his Government are prescribing in a law for the first time their right to self-determination, is the following: We agree one hundred per cent that, if the executive council should so request, the State President’s recognition should be withdrawn. I am wondering why the words “or after consultation by the Minister of Bantu Administration and Development with the executive council” was inserted in subsection (3). Is there any real reason for this?

It is clear from subsection (3) that the appointment of such a recognized representative may be cancelled at the request of those people themselves, in the first instance. After consultation with these people it may also be done at the request of the Minister. The Minister may have sound reasons why the appointment of such a person should no longer be recognized. This is a principle which applies throughout the world in respect of diplomatic representatives. The initiative for the withdrawal of a foreign representative can come from either side. The same principle is being applied here. I hope the hon. member is not going to press me to furnish various hypothetical reasons on the grounds of which the Minister may find that a representative in the white area should no longer be recognized and that his appointment should be cancelled by the State President. There may be various reasons for that. I do not want to mention one as an example. By applying his powers of imagination and knowledge the hon. member can think up a few examples for himself. It is desirable to have this provision.

I accent what the hon. the Minister says: that I can think of reasons why the hon. the Minister should have this power. What I am objecting to here is the principle which is introduced whereby the hon. the Minister can go to the State President and have this approval withdrawn. In the circumstances as explained by the hon. the Minister I agree that these circumstances can arise. What I want to suggest to the hon. the Minister is that it would be better under those circumstances for him to go to the executive council and to persuade them that it would be better for them to request that the State President withdraw his nomination, rather than that he should be able merely to consult with them and thereafter request the withdrawal of this approval by the State President.

I accept this wise suggestion.

Clause put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

Clause 12:

Mr. Chairman, we would be very grateful if the hon. the Minister would inform us in connection with the functions and duties of this consular corps he has in mind for the urban areas of South West. It would appear as though they are similar to representatives of our own reserves who are appointed in municipal areas. Perhaps the hon. the Minister with his experience and knowledge, can inform us whether that experiment has really been successful. According to our information these people do not really fulfill any function. When one reads the clause one finds it very difficult to understand what functions they can fulfill. The clause reads that they are to discuss with the Executive Council in question the general interests of the native nation in question. What would happen if that were done and the executive council of the native nation were to clash with the local authority in question? Whose point of view would prevail? Who would be the arbiter? Is the hon. the Minister not merely creating a source of discord and friction here between the visitors—according to the hon. the Minister’s view—to the urban areas and the authorities in those urban areas themselves? There is no indication in this Bill as to how any disputes may be settled. In order to justify his position, this person will have to look for points which he may raise in the interests of the native nation in question. In order to strengthen his hand it is being suggested that he may even constitute a committee to assist him in regard to these matters and to involve more people so as to find possible disputes between the native nation in question and the local authority, and to report such disputes to the executive council, which may perhaps be hundreds of miles away. The Bill provides that he “shall act as representative of that executive council with the members of the native nation in question, and shall on behalf of such council serve the interests of that nation within the area in respect of which he has been recognized”. Since when is it then his function to serve the interests of those people? After all, that is the function of the city council which is in charge and which is responsible for the welfare of these people. Is it the idea that they will merely act as a consular corps and diplomatic representatives of some kind? Is this done to emphasize the concept of separate states and to create the impression of there being a representative of a sovereign state in another sovereign state, although it is on the level of an executive council and a local authority? I must say that in reading the clause one has to come to the conclusion that to a large extent there is a play upon words and that to an even larger extent a source of possible discord and friction is being created between the executive of the native tribe concerned in this matter and the local authority which is responsible for the welfare of the people in its area. I should very much like the hon. the Minister to give us more information in regard to the way he envisages this system would work and of what use it would be, not only to the nation in question, but also to the local authority and South West Africa as a whole.

Mr.

Chairman, I am sorry to have to say this to my old friend, but I feel that he has simply lumped together a whole lot of unrelated things.

I confined myself to the clause.

Yes, but the hon. member also mentioned matters relating to local authorities.

I read that in the clause.

No, I think the hon. member read it between the lines. I want to explain it to the hon. member, and I shall give him a good lesson. While the hon. member was speaking, he had at the back of his mind the position of the Bantu in the area of a local authority in respect of matters relating to local authorities. These are matters which, for instance, are handled in the Republic by an urban Bantu board or by an advisory committee, under the control of the municipality. The hon. member is now nodding his head in assent; in other words, my deduction that he read between the lines is correct. He may have added to his ideas a mixture of what we have in the Republic, where we have representatives of chiefs. He also added the representatives of the territorial authority, which we have in the Republic. Let us try to “unscramble” this matter now, because it is quite apparent to me that at the moment that hon. member is very much confused. The position in regard to the Bantu areas of South West Africa differs greatly from the position here in South Africa. In South Africa we have these three elements which I have just mentioned to you, namely that one finds in the areas of the local authorities, in the urban Bantu boards and in the advisory committees Bantu persons who deal with municipal matters in their residential areas. In this respect there is also the possibility of having representatives of chiefs—and there are many of them—in a place such as Soweto. These representatives of chiefs represent the chiefs of the Bantu areas. The third possibility is that there may be in Soweto a representative of a territorial authority, such as the representatives of the Tswana territorial authority we do have in Soweto at present. We do not find the equivalents of all three of these authorities in South West Africa. In South West Africa there is no statutory recognition to the effect that an Ovamboland chief may appoint a chief’s representative. He may perhaps do so unofficially, but not statutorily as is the case in the Republic. That must not be confused with this. In South West Africa there can in fact be advisory committees of the Bantu in the areas of local authorities, such as those at Katutura or at Walvis Bay in respect of the residential area there. However, now we come to what is being provided here, and only one thing is being provided here. It is something which is more or less the equivalent of what exists here in the Republic in respect of territorial authorities, namely that that legislative council—the highest body—of the Ovambo’s, or of the Okavango’s, may designate a person to serve the interests of the people of Walvis Bay and Swakopmund for instance. What are the interests that will be served? This has to be understood very well.

That is what I want to know.

The hon. member must not confuse them with municipal matters, because the representatives of the governing body of the Natives—they prefer to be called Natives and that is how they are called in the legislation—in Ovamboland, i.e. the person who may be appointed in Katutura, will have nothing to do with the municipal affairs in Katutura. He cannot commit such extra-territorial interference there, but as regards the Ovambos in Katutura and that area in respect of which he was appointed, he will organize them personally and by means of his committee as regards those interests of theirs which are connected with Ovamboland. They may be taxable in respect of Ovamboland; they may have a certain levy they have to pay. As hon. members know, the Bantu also impose levies on members who are outside their areas. There may be lobolo difficulties; there may be all sorts of other matters in relation to their areas—people whose children must go to school in Ovamboland whilst the parents are living in Katutura. There may be problems in connection with education or accommodation as regards those children, and all sorts of other matters. It is for that reason that the representatives of the Ovamboland Legislative Council will be in Katutura to organize and serve the interests of the people who work in Katutura and who have ties with Ovamboland, even in the case of people who are working there and who go back for a while and want to be sure that later on they will once again be considered for employment. All these things can be dealt with there. But it is not his duty to play a part in connection with municipal affairs, and that is why both our officials and the municipal officials will have to exercise supervision, because the Bantu do not always understand these things. To them it is even easier to make the mistake the hon. member made to-day, i.e. to think that they are there simply to participate in everything.

But you realize that it can happen?

We do not only realize it; we know it from experience.

Clause put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

Clause 13 put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

Clause 14:

Mr. Chairman, this clause has to be read against the background of the fact that power is being provided here for the State President by proclamation to go so far as to repeal laws in force in the areas referred to herein, the Native areas, and to enact new ones by proclamation. I say that that has to be read against the background of this Bill once it is passed into law. It means that the Government need not come back to Parliament for further powers in respect of legislation for the granting of additional political rights to the Native people in South West Africa up to the point of sovereign independence. Against that background we must now read this clause, a clause which we believe is extremely far-reaching. It is much too far-reaching because all the provisions for the making of laws, ordinances and statutes—call them what you will—by the bodies which represent the Native tribes in terms of this Bill, can be nullified by the State President. It is really at the will of the Minister, presumably with the approval of the Cabinet. That is a matter of such far-reaching importance that we have to view it particularly carefully now that we have come to the clause which is going to confer those powers of proclamation upon the State President, powers to repeal laws and to make new ones, without let or hindrance by Parliament, without the Government ever coming back to us. Sir, let us look at one or two of the paragraphs which follow subsection (1). Sir, here provision is made for what one might call an emergency, because while provision is made that a draft of the principal provisions of a proclamation has to be published in the Gazette one month previously, in the event of an emergency or what the Government may deem to be an emergency for any reason whatsoever, they can publish the proclamation forthwith. The fact that they have not advertised it for a month previously does not nullify the proclamation in any way so that in fact a proclamation can be issued from time to time at the will of the Minister if he feels that he wants it done that way, because in his opinion, and for no other reason—and his opinion cannot be tested—there is adequate reason why a proclamation should be issued forthwith without its being advertised for a month. Then in subsection (3) you will notice that “different laws may in terms of this section be made in respect of different areas, regions or places and in respect of different categories or groups of persons”. Sir, this is really going a long way. Sir, let me repeat that this does not come back to Parliament. Here is a power which we are being asked now to place in the hands of the Minister. For all practical purposes the State President is a constitutional president and he acts on the advice of his Ministers. The different laws that he can make are in respect of different areas, regions or places. You see, Sir, we have to bear in mind in considering this Bill that this is something which is entirely sui generis. It is not based on this Government’s own laws in regard to the Bantustans here in the Republic; it is not based on the model of the Coloured Council legislation that we have had or the proposed Indian Council or any other body whatsoever. This is a figment of imagination being determined in legal terms and put into law. It is something for which there is no model anywhere as far as I know. One of the things in respect of which it must be quite unique is this power that is being taken now in regard to the people of South West Africa. You will notice, Sir, in clause 14 (3) that “different laws may in terms of this section be made in respect of different areas, regions or places and in respect of different categories or groups of persons”. There is no question here about “nations”, this new term which the hon. the Minister defined about three years ago, if I remember rightly. This deals with persons, and the Bill applies to the whole of South West Africa and the Eastern Caprivi Zipfel. The Minister can make and repeal laws by proclamation, and if in his opinion he does not consider it to be necessary, he will not give 30 days’ notice so that people may know what is coming. He can say that in his opinion it is not necessary to give notice and he can issue the proclamation forthwith in the name of the State President. That then becomes the law and it applies to all those persons named in the proclamation. He can differentiate and he can discriminate to his heart’s content for whatever reasons may seem to him to be good. No, Sir, this is the kind of legislation which even under normal circumstances we should view with the very greatest misgiving. I go so far as to say that on this side of the House we would reject it. But I say that to come with this legislation at a time like this is doubly dangerous in the interests of South Africa.

Subsection (4) makes it clear that in addition to the powers vested under section 38 of the South West Africa Constitution Act, the powers vested under this section shall be additional to the other powers, so any possibility that there could be a loophole there has been done away with. Presumably the power is also taken away from the Administrator of South West Africa because these must be overriding powers, and I assume that to that extent the powers of the Administrator of South West Africa to issue proclamations must be diminished. As I say, this is one of the most evil clauses in the Bill from the point of view of the Opposition.

I am afraid that the hon. member for South Coast has conjured up unnecessary spectres in regard to clause 14, because in several of his explanations of his point of view the hon. member was mistaken, too. The fact of the matter is that in essence clause 14 already exists. It exists in respect of the Bantu areas of South West Africa as well as those of the four Provinces. The hon. member should merely look it up in the Statute Book and in the Consolidation Act that was passed earlier this Session. It was the South West Africa Constitution Consolidation Act. Then he will see that this provision does in fact appear in that Act. It is for that reason, therefore, that reference is made in subsection (4) to section 38 of the South West Africa Constitution Act, No. 39 of 1968, which was passed here by way of a Consolidation Act. It links up with that legislation. This principle was embodied in that Consolidation Act, which was simply a consolidation of the existing Acts. In section 38 of that Act it is provided that the State President may make laws; in other words, the State President may by proclamation promulgate statutory provisions in respect of those Bantu areas. It was for that reason that we inserted it in this Bill, especially for the sake of furnishing more particulars in certain respects. The danger the hon. member for South Coast has discovered is not a new one; it is an existing principle which is being implemented.

The hon. member had quite a lot to say about subsection (3) of clause 14, where it is provided what laws the State President may make. The proclamations made by the State President are called laws, and nothing is wrong with that. The principle that the State President may make laws by proclamation is an old one, and what is being provided here is simply that the State President may make laws in respect of different regions or places and in respect of different categories or groups of persons. Suppose it is considered necessary for the State President to make a proclamation in regard to the male labourers from Ovamboland who seek employment elsewhere then that constitutes a category of people in respect of whom he makes the proclamation. Suppose further that it is necessary for him to make a proclamation in regard to the tract of land following the course of the Okavango river, where certain essential services have to he provided in regard to floods. In such a ease he can do so by proclamation, and what is wrong with his mentioning that region? Why should he cover the entire area in the proclamation? The hon. member really failed to do justice to this clause, since no new principle was introduced here; it is merely a repetition, a re-affirmation and a consolidation of existing principles in respect of South West Africa as well as the Bantu areas in the four Provinces. Then the hon. member should also take into consideration the contents of the next clause, with which we are going to deal in a moment, in which it is provided that any proclamation issued by the State President must be tabled in Parliament within a given period of time. That is dealt with here, and Parliament is granted the right, by resolution passed in the same Session by both Houses, to rescind and nullify such a proclamation. The hon. member must realize that any responsible Minister who does attach some value to his own prestige and his responsibilities, will see to it that in advising the State President … I should like to continue my speech as soon as the hon. member listens. I say that the hon. member must realize that any Minister who wishes to be worthy of his prestige and to shoulder his responsibilities in the right way … Sir, I should like to know from that hon. member why he has twice in succession started to speak to his Leader while I am trying to explain something to him?

I would like to know what right you have to challenge my right to talk to anybody I like.

The hon. member should not allow his lower instincts to surge up. He rose here and put a question to me, and obligingly I listened to him and tried to explain the matter as well as I could, but he goes on speaking to others and that is why I shall stop explaining.

Sir, I am sorry, but the hon. the Minister is not in a classroom now. This is Parliament, which has a right to expect of a Minister something better than a kindergarten attitude. The hon. the Minister is the last person who has the right to complain about talking to other people when he addresses them. It has happened over and over again during the discussion of this Bill. We have the right to raise under this clause matters which concern us. We have the right to go on raising them and the Minister, as the Minister responsible, should deal with those matters. They are matters which should be placed on record. They are not matters raised by an individual as an individual; they are raised in Parliament as part of the record of this House. The attitude which the Minister is adopting is one which will not make it easier for us and him to work together in the spirit of Parliament, and that is exactly what our objection is to this clause. Our objection to this clause— this Carel de Wet type of clause—a clause which involves a sort of approach towards government which is alien to our concept of government, is an objection to its extension. In terms of clause 2 (g), which has already been passed, any area in South West Africa can be brought under the purview of clause 14 by proclamation. In terms of clause 2 (g) the State President may proclaim any part he likes to be subject to this measure, and therefore this clause would then apply in regard to the making of laws. That is an extension of the existing powers of the State President. The Minister is wrong when he says this is merely a re-statement and a clarification of existing powers. There are existing powers, but surely the hon. the Minister and his Government, are dealing with these God-created nations and not with backward people and the approach towards these people who are developing towards independence, should be to move away from dictatorship and away from government by decree, and rather to move towards government by debate and legislation by their councils. But here he is moving in the opposite direction; instead of saying that we are moving these people towards independence and self-government and therefore we will reduce the powers of government by decree, he goes in the opposite direction and increases the powers to govern by decree. Government by decree may be necessary in certain cases, but we have sat here for three or four days and have heard paeans of praise for the ability and the right of these people to self-determination and to move towards self-government and independence. Is that phrase meaningless? Why must we now grant these overriding powers? We have every right, and we intend to exercise that right, of expressing our opinion on this clause and this measure.

Not for one single moment have I ever denied that the Opposition can raise objections. I did not have anything to do here with the objections raised by the Opposition, and I did not refuse to furnish information. Three times I tried to finish the sentence in which I wanted to furnish the information, and on each of those occasions the hon. member for South Coast wilfully ignored me by speaking to somebody else and not listening to me. It is true that when an hon. member opposite puts a question to me, it is a question from the whole Committee and I have to reply to it, but this is the first gesture of courtesy that anybody can demand. [Interjections.] I repeat that this is the first gesture of courtesy to which I, as the person who furnishes the reply, am entitled, i.e. that the questioner should at least listen to me. If I object because he does not listen and he persists in not listening, even on the third occasion, then I suppose that I do have the right to react to that. For this reason I shall now, for the sake of my friend the hon. member for Durban (Point), repeat what I wanted to say a moment ago.

We are not dealing here with the contents of the clause, but with parliamentary courtesy which one may even expect from one’s opponents. I want to tell the hon. member for Durban (Point) that he is wrong if he thinks that we can induce the State President to make laws in terms of clause 14 for the entire territory of South West Africa. That applies to areas that have been set aside for the Bantu. A moment ago I said that clause 15 provides that all those proclamations must be submitted to this Parliament and that they can be rescinded here if Parliament so wishes. At that stage I wanted to add that no Minister who shouldered his responsibilities correctly and wanted to be worthy of his prestige, would advise the State President to approve things which would soon afterwards be rescinded by Parliament. A Minister cannot shoulder his responsibilities in that way; a Minister would not do it in that way, nor will such a person become a Minister under our present Prime Minister. That is why any Minister who makes such recommendations to the State President, knows that his recommendations will be acceptable to this House, which does eventually have the final say in regard to that law which is made by the State President. That is what I wanted to say, and I am repeating it for the information of the hon. member and the whole Committee.

Mr. Chairman, the hon. the Minister must not be so upset because one hon. member of the Committee was not looking at him. The Minister is not answering the hon. member for South Coast, he is answering the Committee …

Order! I want the hon. member to come back to the clause now; we have had enough of personalities.

I am not dealing with personalities, Mr. Chairman.

Order! Yes, the hon. member is dealing with personalities.

No, Sir, I am talking about this Committee, about what the Minister’s responsibilities are in this Committee. What the Minister says is intended for the whole Committee, and what hon. members opposite do not realize is that they are part of this Committee of the whole House.

Order! I think the hon. member for Durban (Point) made that point quite adequately and I do not think the hon. member for Durban (North) can improve on it.

Well, it seems to have had very little effect on the hon. members opposite. May I return to the Minister’s first reply to the hon. member for South Coast. He said there was nothing new in this provision. I wish the Minister would listen to me when I am talking and not talk to other people, and what is more I wish he would look at me when I am talking.

May I take this sip of water?

No, before you drink some water I want to say that what is sauce for the ministerial goose is sauce for an Opposition gander. The Minister said to the hon. member for South Coast that this was nothing new, this was in the South West Africa Constitution Act. He said the Act contained power to make proclamations, power on the part of the State President. I think I understood him correctly. What the Minister forgets is the great difference there is between that provision and this provision. In terms of section 38 of the South West African Constitution Act, “the State President may by proclamation in the Gazette and in the Official Gazette, make laws for the territory in relation to any matter in regard to which the Assembly may not in terms of section 22 make ordinances”. The very next subsection says—

That is the difference. The Minister’s reply is no reply at all. Where in this clause is there such a provision that such a proclamation must not be inconsistent with or repugnant to an Act of this Parliament? It is not there, and that is the big difference. I should like to ask the hon. noisy members on the opposite side of the House whether they are not concerned, as members of Parliament, that Acts passed by Parliament, in which they take part, can be over-ridden and ignored in effect by the Minister of Bantu Administration and Development. Are the hon. members really prepared to accept that? Because if they are they should not call themselves M.P.s, they should call themselves M.N.P.C.s—members of the Nationalist Party Caucus, because if they agree to this sort of thing, then in effect that is what they are.

Those proclamations are all coming back to Parliament.

No, we will deal with the question of the proclamations coming back to Parliament in the next clause, and I hope the hon. the Deputy Minister will reply to this question: Does he wish that those proclamations should in fact be debated by this House if this House wants to?

Yes, they can be debated.

If we would like to debate them, do we have the guarantee we can debate them?

That is what clause 15 says.

That is not the point; will the Deputy Minister give us the guarantee that if we want to debate them we will be able to?

I am not in charge of this House. How do I know?

Precisely. How does the hon. the Deputy Minister know, how do we know?

When the Vote comes up you can say anything you like.

When the Vote comes up! It is not a case of when the Vote comes up. If the Deputy Minister will read clause 15 he will appreciate that nothing like this can be done when the Vote comes up, there has to be a special resolution.

Then move the resolution.

Who will give us the time? When do we move it? At what stage can it be moved? In private members’ time, which will lapse after 2½ hours, as the Deputy Minister knows? Let us not have all this wonderful talk about Parliament in fact having control over the situation. The Deputy Minister knows it does not, and hon. members know it does not. It does not unless the Government wants it to. That is what it comes to, because the time is not made available. I hope that, apart from someone on the Treasury benches, hon. members on the opposite side will get up and say what their attitude as members of Parliament is to the Minister in effect, the Executive, having the power to make a proclamation which can over-ride any Act of Parliament which it passes. Because “any law” includes and means an Act of Parliament. I hope we will get some contribution from hon. members on the other side in this respect; otherwise their silence is construed as consent. The power which the Minister has is a very important power. One of the powers is the power to give land to these various groups, these various peoples that are called nations. He has power to give them land with a view, in accordance with the preamble of this Bill, to those territories becoming independent and obviously then owning the land which is then to be excised from the other land over which ultimately this House must have control. Obviously the hon. the Minister made an error in this regard and I want to ask him whether he will not reconsider this matter. Perhaps he will consider withdrawing this clause or at least he will put in some sort of provision which will give Parliament some control over those proclamations. The hon. the Minister not only sits here as a Minister, as a representative of the Executive, but he also sits here as a member of this House and he should in that capacity try and protect its dignity. The other hon. members on his side are not allowed to say anything he does not say and in his latter capacity he should do something to try and save their dignity as well as his.

Mr. Chairman, as far back as in the original South West Africa Constitution Act of 1919, it was provided that the Governor-General would have the power to make laws in regard to South West Africa by proclamation. In the legislation of 1925 and in subsequent legislation this provision was repeated. It is really a symbol of the sovereignty South Africa exercises over South West Africa. In 1949 they neglected to repeat that provision, but within two years it was found necessary to reinstate that provision on the Statute Book. The reason is that not all of South Africa’s laws are applicable to South West Africa. Every now and then we found that owing to certain circumstances it was imperative to apply certain South African laws to South West Africa as well. It may happen that Parliament is not in session, and since one cannot wait for the legislation to be passed by Parliament, there has to be statutory provision for making certain provisions applicable there.

I shall now deal with the Bill itself. A certain provision was written into the mandate granted to South Africa, i.e. that the laws of South Africa could be applied to the mandated territory, with amendments as required by circumstances from time to time. In other words, there is no need to apply these laws to South West Africa just as they are, i.e. just as they were passed by this Parliament. That is why this Bill is now being worded in such a way that the State President is empowered to make any law applicable to South West Africa, even a law which does not correspond fully with an Act of this Parliament. It is true that what the hon. member read out here is in fact stated in the Constitution of South West Africa, i.e., that such a law must correspond with a law of the Republic. But owing to the contents of the mandate agreement, it is desirable that that paragraph should not appear in this Bill so that South African laws may be applied to these particular areas which are now being established by means of amendments, since we may come across cases where it will not be desirable to apply the law exactly as it is applicable in South Africa. We must remember that we are now dealing with a quite fluid position. This is a new position which is being found in South West Africa, where new areas and authorities are being established. For instance, the Insolvency Act cannot be applied just as it is to Ovamboland for example. It is simply impossible to apply that Act, as it reads at present, to that area. I want to mention another example of this. At present our laws are such that no non-white person can be subpoenaed for debt. I do not know whether hon. members know this. The present position is such that no non-white person in South West Africa can be subpoenaed for debt. We can apply to South West Africa a law which is applicable in South Africa at present, or we may apply to those areas a law which is applicable to South West Africa to-day, but they must be amended in any case so that they may fit in with the circumstances in South West Africa. Accordingly it is necessary to word the provision in that way.

There is in addition another reason why it is essential to have this provision. It is that we should not cloud our international position. Whereas we are now going to separate these areas from the jurisdiction of the Legislative Assembly which has had certain powers in this regard up to now, and whereas this has been written into the Constitution of South West Africa in regard to the relationship between the Legislative Assembly and Parliament, and whereas there will now be other legislative assemblies in respect of the other areas which are to be established, it is once again necessary to repeat this constitutionally in this Bill which can virtually be called a Constitution, so that it may be clear to the outside world that the sovereign position in regard to the relationship between South Africa and South West Africa is still in existence. That is why it is necessary in all the circumstances, internationally and domestically, for this provision to be written into the Bill, as is the case at present.

Clause put and the Committee divided:

Ayes—100: Bodenstein, P.; Botha, H. L; Botha, L. L.; Botha, M. C.; Botha, M. W.; Botha, S. P.; Brandt, J. W.; Carr, D. M.; Coetsee, H. J.; Coetzee, B.; Coetzee, J. A.; De Jager, P. R.; De Wet, C.; De Wet, J. M.; De Wet, M. W.; Diederichs, N.; Du Toit, J. P.; Engelbrecht, J. J.; Erasmus, A. S. D.; Erasmus, J. J. P.; Frank. S.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Havemann, W. W. B.; Henning, J. M.; Hertzog, A.; Heystek, J.; Janson. T. N. H.; Koornhof, P. G. J.; Kotzé, S. F.; Kruger, J. T.; Le Grange. L.; Le Roux, F. J.; Le Roux, J. P. C.; Loots, J. J.; Malan, G. F.; Malan, J. J.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Marais, W. T.; Maree, G. de K.; Martins, H. E.; McLachlan, R.; Meyer, P. H.; Morrison, G. de V.; Mulder, C. P.; Muller, H.; Muller, S. L.; Otto. J. C.; Pansegrouw, J. S.; Pelser, P. C.; Pienaar, B.; Potgieter, J. E.; Potgieter, S. P.; Rall, J. J.; Rall, J. W.; Raubenheimer, A. J.; Raubenheimer, A. L.; Reinecke, C. J.; Reyneke. J. P. A.; Roux, P. C.; Sadie, N. C. van R.; Schlebusch, A. L.; Schlebusch, J. A.; Schoeman, B. J.; Schoeman, H.; Smit, H. H.; Steyn, A. N.; Stofberg, L. F.; Swanepoel, J. W. F.; Swiegers, J. G.; Torlage, P. H.; Uys, D. C. H.; Van Breda, A.; Van den Berg, M. J.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, S. W.; Van der Merwe, W. L.; Van Rensburg, M. C. G. J.; Van Staden, J. W.; Van Tonder, J. A.; Van Zyl, J. J. B.; Venter, M. J. de la R.; Venter, W. L. D. M.; Viljoen, M.; Visse, J. H.; Visser, A. J.; Volker, V. A.; Vorster, L. P. J.; Vosloo, A. H.; Vosloo, W. L.; Waring. F. W.; Wentzel, J. J. G.

Tellers: G. P. C. Bezuidenhout, G. P. van den Berg, P. S. van der Merwe and H. J. van Wyk.

Noes—31: Bennett, C.; Eden, G. S.; Emdin, S.; Fisher, E. L.; Graaff, De V.; Higgerty, J. W.; Hourquebie, R. G. L.; Jacobs, G. F.; Kingwill, W. G.; Lindsay, J. E.; Marais, D. J.; Mitchell, D. E.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Oldfield, G. N.; Radford, A.; Raw, W. V.; Smith, W. J. B.; Steyn, S. J. M.; Streicher, D. M.; Sutton, W. M.; Suzman, H.; Taylor, C. D.; Wainwright, C. J. S.; Waterson, S. F.; Webber, W. T.; Wiley, J. W. E.; Winchester, L. E. D.

Tellers: H. J. Bronkhorst, and A. Hopewell.

Clause accordingly agreed to.

Clause 15:

I hope the hon. the Deputy Minister of Bantu Administration and Education will help us with this clause. Clause 15 provides that the proclamations with which we have dealt under the last clause, issued by the State President, must be laid on the Table of the Senate and of the House of Assembly within 14 days of promulgation. Then it goes on to say that “if both the Senate and the House of Assembly by resolution passed in the same session disapprove of any such proclamation”, then it shall lapse. This, in effect, means very little. They have to be laid on the Table in any event in terms of the Interpretation Act, and they have to be published in the Gazette. So that part of it is not new. The only other provision there is that they may be disapproved of if there is a resolution of both Houses of Parliament during the same session. The first thing I want to ask, is this, and this is why I put this to the hon. the Deputy Minister of Bantu Administration and Education when we were discussing the last clause. Is there going to be any guarantee that this House will have the opportunity of discussing any proclamation which has been made by the State President? As it is, they are laid on the Table, and if during that session they are disapproved of, then they lapse. In other words, it can only be done by a resolution. How does one come to a resolution in this House? How does anyone on this side of the House move such a resolution, disapproving of say part of a proclamation, so that this House can discuss the matter and come to a decision. How does an hon. member do it from this side of the House without asking for Government time? Then he does it in private members’ time, and that motion lapses after 2½ hours.

Then Parliament does not want to discuss it. You are not Parliament.

Exactly. I am not Parliament, but neither is that hon. Deputy Minister, nor this Minister, nor any other person.

It all depends who of the two of us can get the majority in this Parliament.

If this is the hon. the Deputy Minister’s argument, then may I ask him why we have this clause at all. What he is saying, is that it is the majority’s view that counts, not mine. If that is so, then the majority view is the view of the Executive. And the proclamation can be amended at any time by the State President. If that is really the view of the hon. the Deputy Minister, then this is a mockery of our process. Why put it in? Why talk about Parliament at all if the hon. the Deputy Minister’s view of what Parliament is, is that it is the majority. One of the most important aspects concerning Parliament is that one should discuss a matter. How often does it not occur that we discuss something here and, as a result of the discussion, an amendment is moved? The amendment is moved from this side of the House and accepted by the hon. the Minister or the Deputy Minister in charge of the Bill. How often does that not happen? Surely, this is likely to happen even more often with legislation in the form of a proclamation. If this Parliament is going to have the opportunity of discussing it—that is the first thing, namely the question of discussion—then this means nothing at all unless it can be changed. It is framed as a negative resolution. The proclamation is laid on the Table. If it is then by resolution disapproved of, or partly disapproved of, then it lapses. What I want to suggest to the hon. the Minister, so as to ensure that there will be a debate, if Parliament requires a debate, or if some members of this House require a debate, is that the word “if” in line 56 should in fact be “unless” and the word “disapprove” in line 58 should be “approve”. It would then read that any proclamation must be laid on the Table of both Houses within 14 days, and “unless the Senate and the House of Assembly … approve of any such proclamation” it will lapse. There is still the saving provision that nothing done in terms of the proclamation before it is disapproved of, if it is disapproved of, will be affected. Surely that is fair. It may be that no debate will ensue. But the function of this House finally is to have a public debate upon matters of public importance. I wonder whether the hon. the Minister will consider changing this clause in the manner which I have indicated, so as to ensure that we on this side of the House will have the opportunity of debating such a proclamation if we feel that it is in the interests of the country to do so.

Mr. Chairman, I listened very attentively and gave much thought to what the hon. member for Durban (North) suggested. But I think the hon. member for Durban (North) should reconsider the matter once more and, in particular, have due regard to the existing procedure which is being followed in regard to such proclamations. Having done that, he will concede that the position is adequate, i.e. as it will be in terms of this Bill. The position is after all as follows: What is provided in this Bill, corresponds exactly with the procedure which has been followed so far in respect of all proclamations made by the State President in regard to Bantu affairs. The position is that if a proclamation of the State President’s is made, it is tabled in Parliament during the ensuing session. It is tabled by the Minister and referred to the Select Committee on Bantu Affairs. These proclamations will also be referred to the Select Committee on Bantu Affairs. That Select Committee can, with all due respect to this Committee, discuss these matters in greater detail, and there such matters may perhaps be discussed, unravelled and investigated more exhaustively than is possible here. Having done that, that Select Committee can submit a report to this House. Then it is for the whole House to discuss the report of that Select Committee. That is the procedure that we have been following in regard to proclamations all these years, and the course that will be followed in respect of the proclamations referred to in terms of clause 15 will be exactly the same. What the hon. member is suggesting, amounts to the fact that the Select Committee on Bantu Affairs will be eliminated, i.e. that the proclamation should be introduced here, that a formal motion should be introduced here, and if it is passed it is also approved. I think the existing procedure, as I outlined it here, is better, because at present the proclamation is submitted to both bodies. It is submitted to the Select Committee and from there it is submitted, accompanied by a positive or a negative report, to the whole House, where it may once again be discussed and either be rejected or passed. This House is therefore not in the least being deprived of its full say. It is in point of fact being backed even further, i.e. by the preceding analytical discussion in the Select Committee. That is why I think that the existing provision, both in this Bill and in actual practice over all these years, is more than adequate.

Clause put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

Clauses 16 and 17 put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

Clause 18:

Mr. Chairman, this clause only relates to the Eastern Caprivi Zipfel, but is the absolute ultimate of what one may call executive contempt of Parliament. In this clause we are asked to approve of the deletion of subsections (3) and (4) in section 38 of the South West Africa Constitution Act, 1968, which provides that the State President may subject to the provisions in subsection (4), by proclamation in the official Gazette make laws for the territory known as the Eastern Caprivi Zipfel. Subsection (4) says that a proclamation issued in terms of subsection (3) shall have effect in and for the said Eastern Caprivi Zipfel, so long, and only so far as it is not repugnant to or inconsistent with an Act of Parliament which applies there. This is the same sort of thing as we had before, only perhaps a little worse. One cannot have an Act of Parliament applying to the Eastern Caprivi Zipfel unless it is expressly declared to apply there as one finds in terms of clause 18. One has the situation that this Parliament passes an Act in which it says that this Act shall apply in the Eastern Caprivi Zipfel, and we now have the position that the hon. the Minister may advise the State President to make a proclamation which goes completely counter to an Act of Parliament which it is specifically stated by Parliament should apply in the Eastern Caprivi Zipfel. One appreciates that there may be reasons why one needs to make proclamations. Can the hon. the Minister, however, explain why he feels it necessary to make a proclamation contrary to an Act of Parliament, made by Parliament, which specifically states that it should apply in the Eastern Caprivi Zipfel?

I want to remind the hon. member of the example the hon. member for Omaruru gave a moment ago. I think he gave a typical example why this deletion of subsection (4) of section 38 of the South West Africa Constitution Act is necessary. In our legislation the various Bantu areas and the white areas were very often integrated in the past. There may be legislation that was made for South West Africa as a whole, for both the Bantu and the white areas There may also be legislation that was made for South Africa as a whole and for the Bantu areas of South West Africa in the past, whereas parts of that legislation are not really suitable any more for the specific purpose of the Bantu area of Ovamboland alone, so that there should now be a variation in so far as Ovamboland alone is concerned. In terms of the deletion of subsection (4) of section 38 in that part of the overall Act which makes provision for the whole area, including Ovamboland, it is then possible to effect the necessary amendment so that Ovamboland alone can be covered. A moment ago the hon. member for Omaruru gave the example of people who owe you money and whom you cannot get hold of, because the provision in respect of South West Africa perhaps does not apply properly in respect of Ovamboland. There may be more examples like this one. This deletion is to make it possible to cover cases like the one mentioned. As I said, legislation often integrates these areas and there may be old existing statutory provisions which are no longer of any importance as regards the application of proper administration in one of the Bantu areas. It must then be possible to rectify the position by way of a proclamation of the State President, which then becomes law, and which will then be referred to this Parliament for rejection, if that has to be done.

Clause put and the Committee divided:

Ayes—103: Bodenstein, P.; Botha, H. J.; Botha, L. J.; Botha, M. C.; Botha, M. W.; Botha, S. P.; Brandt, J. W.; Carr, D. M.; Coetsee, H. J.; Coetzee, B.; Coetzee, J. A.; De Jager, P. R.; De Wet, C.; De Wet, J. M.; De Wet, M. W.; Diederichs, N.; Du Toit, J. P.; Engelbrecht, J. J.; Erasmus, A. S. D.; Erasmus, J. J. P.; Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Havemann. W. W. B.; Henning, J. M.; Hertzog, A.; Heystek, J.; Janson, T. N. H.; Jurgens, J. C.; Koornhof, P. G. J.; Kotzé, S. F.; Kruger, J. T.; Langley, T.; Le Grange. L.; Le Roux, F. J.; Le Roux, J. P. C.; Loots, J. J.; Malan, G. F.; Malan, J. J.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Marais, W. T.; Maree. G. de K.; Martins, H. E.; McLachlan, R.; Meyer, P. H.; Morrison. G. de V.; Mulder, C. P.; Muller, H.; Muller, S. L.; Otto, J. C.; Pansegrouw, J. S.; Pelser, P. C.; Pienaar, B.; Potgieter, J. E.; Potgieter, S. P.; Rall, J. J.; Rall, J. W.; Raubenheimer, A. J.; Raubenheimer, A. L.; Reinecke, C. J.; Reyneke, J. P. A.; Roux, P. C.; Sadie, N. C. van R.; Schlebusch, A. L.; Schlebusch, J. A.; Schoeman, B. J.; Schoeman, H.; Smit, H. H.; Smith, J. D.; Steyn, A. N.; Stofberg, L. F.; Swanepoel, J. W. F.; Swiegers, J. G.; Torlage, P. H.; Uys, D. C. H.; Van Breda, A.; Van der Berg, M. J.; Van der Merwe, C. V.; Van der Merwe H. D. K.; Van der Merwe, S. W.; Van der Merwe. W. L.; Van Rensburg, M. C. G. J.; Van Staden, J. W.; Van Tonder, J. A.; Van Zyl, J. J. B.; Venter, M. J. de la R.; Venter, W. L. D. M.; Viljoen, M.; Visse, J. H.; Visser, A. J.; Volker, V. A.; Vorster, L. P. J.; Vosloo, A. H.; Vosloo, W. L.; Waring, F. W.; Wentzel, J. J. G.

Tellers: G. P. C. Bezuidenhout, G. P. van den Berg, P. S. van der Merwe and H. J. van Wyk.

Noes—31: Bennett, C.; Eden, G. S.; Emdin, S.; Fisher, E. L.; Graaff, De V.; Higgerty, J. W.; Hourquebie, R. G. L.; Jacobs, G. F.; Kingwill, W. G.; Lindsay, J. E.; Marais, D. J.; Mitchell, D. E.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Oldfield, G. N.; Radford, A.; Raw, W. V.; Smith, W. J. B.; Steyn, S. J. M.; Streicher, D. M.; Sutton, W. M.; Suzman, H.; Taylor, C. D.; Wainwright, C. J. S.; Waterson, S. F.; Webber, W. T.; Wiley, J. W. E.; Winchester, L. E. D.

Tellers: H. J. Bronkhorst and A. Hopewell.

Clause accordingly agreed to.

Clause 19:

Sir, I would like to deal with our objection to the title, which is supposed to represent the character of this Bill. We certainly do not believe that this Act in any way can be called the Development of Self-Government for Natives Act. This, as we have already pointed out, is government by proclamation by the State President, and it cannot by any stretch of the imagination be deemed to be a measure towards self-government by the Bantu. Provision is made in fact for them to have possibly even less legislative power than they have to-day. The hon. the Minister, in his second-reading speech, said that the Ovambo’s had been governing themselves very satisfactorily for 30 years; that they were doing it well and that there was no cause for complaint. Now comes a Bill which is going to present them with a new form of Government, which is government by proclamation. Sir, this is a most unsuitable title and we must object to it.

I just want to correct the hon. member for South Coast. I did not mean that the Ovambos had governed themselves well as a national unit; I was referring to their tribal governments and said that their tribal governments were reasonably good under the circumstances, although they did not even have an adequate statutory foundation.

Clause put and the Committee divided:

Ayes—99: Bodenstein, P.; Botha, H. J.; Botha, L. J.; Botha. M. C.; Botha, M. W.; Botha, S. P.; Brandt, J. W.; Carr, D. M.; Coetsee, H. J.; Coetzee, B.; Coetzee, J. A.; De Jager, P. R.; Delport, W. H.; De Wet, C.; De Wet, J. M.; De Wet, M. W.; Diederichs, N.; Du Toit, J. P.; Erasmus, A. S. D.; Erasmus, J. J. P.; Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Havemann, W. W. B.; Henning, J. M.; Hertzog, A.; Heystek, J.; Jansen, T. N. H.; Jurgens, J. C.; Koornhof, P. G. J.; Kotzé, S. F.; Kruger, J. T.; Langley, T.; Le Grange, L.; Le Roux, F. J.; Le Roux, J. P. C.; Loots, J. J.; Malan, G. F.; Malan, J. J.; Marais, J. A.; Marais, P. S.; Marais, W. T.; Maree, G. de K.; Martins, H. E.; McLachlan, R.; Meyer, P. H.; Morrison, G. de V.; Mulder, C. P.; Muller, S. L.; Otto, J. C.; Pansegrouw, J. S.; Pelser, P. C.; Pienaar, B.; Potgieter, J. E.; Potgieter, S. P.; Rall, J. J.; Rall, J. W.; Raubenheimer, A. J.; Raubenheimer, A. L.; Reinecke, C. J.; Reyneke, J. P. A.; Roux, P. C.; Sadie, N. C. van R.; Schlebusch, A. L.; Schlebusch, J. A.; Schoeman, B. J.; Schoeman, H.; Smit, H. H.; Smith, J. D.; Steyn, A. N.; Stofberg, L. F.; Swanepoel, J. W. F.; Swiegers, J. G.; Torlage, P. H.; Uys, D. C. H.; Van Breda, A.; Van den Berg, M. J.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, S. W.; Van der Merwe, W. L.; Van Rensburg, M. C. G. J.; Van Staden, J. W.; Van Tonder, J. A.; Van Zyl, J. J. B.; Venter, M. J. de la R.; Venter, W. L. D. M.; Visse, J. H.; Visser, A. J.; Volker, V. A.; Vorster, L. P. J.; Vosloo, W. L.; Waring, F. W.; Wentzel, J. J. G.

Tellers: G. P. C. Bezuidenhout, G. P. van den Berg, P. S. van der Merwe and H. J. van Wyk.

Noes—31: Bennett, C.; Eden, G. S.; Emdin, S.; Fisher, E. L.; Graaff, De V.; Higgerty, J. W.; Hourquebie, R. G. L.; Jacobs, G. F.; Kingwill, W. G.; Lindsay, J. E.; Marais, D. J.; Mitchell, D. E.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Oldfield, G. N.; Radford, A.; Raw, W. V.; Smith, W. J. B.; Steyn, S. J. M.; Streicher, D. M.; Sutton, W. M.; Suzman, H.; Taylor, C. D.; Wainwright, C. J. S.; Waterson, S. F.; Webber, W. T.; Wiley, J. W. E.; Winchester, L. E. D.

Tellers: H. J. Bronkhorst and A. Hopewell.

Clause accordingly agreed to.

Schedule:

Sir, the Schedule sets out the powers that can be given to legislative councils, tribal authorities, communal authorities and regional authorities in terms of clauses 5 and 8 of the Bill. They are set out in some detail in the Schedule, and then in clause 22 of the Schedule comes the general clause empowering them to act in respect of any matter declared by the State President to fall within the powers of the particular council or regional authority. Sir, what powers has the State President to declare matters to fall within the powers of the councils concerned? That immediately brings us in respect of the areas which have been or back to clause 14, under which the State President may virtually govern by proclamation may be reserved, as is contemplated in section 4 of the South West Africa Native Affairs Administration Act. But in addition to that, of course, the President still has powers in respect of other areas under section 38 of the South West Africa Constitution Act. In other words, he has certain powers in respect of the Native areas and he has certain powers under section 38 of Act No. 39 of 1968, the consolidating Act, covering those matters over which the legislative council in terms of section 22 of the Act cannot legislate, and they, as the hon. the Minister will know, go well beyond the Native areas. The Act itself applies to South West Africa, which does not mean that the Republic is excluded. One is faced with the fact that not only has he those powers, which are frightening enough and to which we have already indicated our opposition in dealing with clause 14, but clause 22 of the Schedule goes further and includes any matter in respect of which the State President or the Minister of Bantu Administration and Development may, in terms of any law, make regulations. Well, Sir, this Minister and the State President have power to make regulations not only outside the areas envisaged by the Native Affairs Administration Act of 1954, but even outside South West Africa. I wonder whether it was the intention of the hon. the Minister that this Act should have application outside South West Africa in respect of the powers of those councils? The Minister shakes his head; I accept that, but I am afraid that this clause, unless circumscribed or limited, may very easily give those powers. It is bad enough to find that the State President may delegate to these councils any of the powers which he himself has under clause 14, and those powers are hardly circumscribed in respect of the Bantu areas. Sir, the State President can also make proclamations in respect of matters outside the Bantu areas in terms of section 22 of the Consolidating Act concerning the Constitution of South West Africa; and then it seems that he has powers to make regulations over an even wider field which is not circumscribed by this Bill. If one had any objection to this Bill, then that objection would be multiplied many times by the provisions of this clause in the Schedule. Actually our main objection is to the fact that the State President by proclamation can extend the powers of these councils, in terms of clause 14, virtually up to the point of independence, although I concede not up to that point. But he may be placed in a position under the powers that could be exercised in terms of the Schedule where there is no opportunity to retreat, where you cannot withdraw as a result of what he has done. Clause 1 of the Bill says—

Does that mean that it is limited entirely to that territory or is it extended beyond that in terms of the Minister’s powers to make regulations? Sir, I think there are three questions in respect of which we have difficulty. The first is the power of the State President under clause 14 to extend powers to these councils coincident almost with those of the State President. The second is his power to extend powers to them in terms of the additional powers he has in respect of section 38 of the Constitution of South West Africa Act, which is not limited to the Native areas. The third is what is envisaged by the ambit of the permissive power here concerning the power of the Minister or the State President to make regulations. I think our objections to the first portion are fundamental and will cause us in any event to vote against the Schedule, but for the sake of clarity I should like to know from the hon. the Minister what he envisages in respect of the other two feet on which this paragraph 22 of the Schedule rests.

I am glad the hon. the Leader of the Opposition has raised these misgivings with reference to paragraph 22 of the Schedule. I myself subsequently got different ideas concerning paragraph 22. First I just want to point out that it should be clearly kept in mind that the legislative councils and also the regional authorities, and even the tribal authorities, have jurisdiction only within their own areas. Therefore it will not be possible to grant them jurisdiction outside their areas, because it would be ultra vires this Act. But what I feel a little unhappy about, is who has to decide about these additional powers which may be delegated to them. In this respect I think the Leader of the Opposition has a point, and I want to suggest something which may comfort him, namely that an amendment be effected in paragraph 22. What I suggest is that the words “State President” in the first line of paragraph 22 be omitted—this will mean that it will not be the State President who will have to determine what additional powers can be given to the authorities—and that the words “both the Senate and the House of Assembly by resolution passed in the same session” be substituted therefor. This will mean that any additional powers to be conferred upon these legislative councils will be decided upon, not by the State President, as it reads now, but by this House and the Other Place. In other words, just as we are now in the relevant clause of this Bill authorizing this long list of powers in the Schedule, it will also be this House and the Other Place that will confer upon those authorities the powers that will be incorporated in the Schedule as Nos. 23, 24, etc.

I move the following amendment—

I refer to clause 5 (1) (b) of the Bill. It provides that “any legislative council referred to in section 3 may, with the approval of the State President previously obtained, provide in any such enactment for the enforcement thereof in respect of members of the Native nation in question who are or reside outside that area but within the territory referred to in section 1”. It seems to me amendments will also have to be made in clause 5 if that amendment in paragraph 22 is accepted. We are now in the position that the powers in paragraph 22 can only be granted with the approval of the Other Place and this House, but in terms of clause 5 the State President determines whether those powers can be applied in a certain area. In other words, notwithstanding the fact that this House and the Other Place approve of certain powers, it remains in the power of the State President to determine whether they will be applied in that area or not. It seems to me as though a clash may possibly occur. This House and the Other Place may feel that those powers should be applied, but they can only be applied with the approval of the State President in terms of clause 5. I wonder whether the Minister, in making this amendment in paragraph 22 of the Schedule, would not consider making an amendment in clause 5 as well, in order to avoid clashes.

No, I do not think this is desirable or necessary. If we look at clause 5 (1) (b), we see that it provides that any legislative council referred to in section 3 may, with the approval of the State President previously obtained, provide in any such enactment for the enforcement of the enactment in respect of members of the Native nation in question who are or reside outside that area but within the territory referred to in section 1. Section 1 only refers to South West Africa. Let me give a concrete example to which this provision is applicable. We know those Bantu nations are not paying tax at the moment, but suppose, as is provided for by one of the powers in the Schedule, that they levy a tax on their people. Then they will be in the position that there are members of their nation who are working in Walvis Bay, Usakos, or Windhoek, and they want the tax of those people, but they cannot get it. The enactment made by them to levy that tax cannot be applied to the persons living in Katutura and working in Windhoek, but now they can, with the approval of the State President, extend the application of that enactment to their people who are working in Windhoek, in order to obtain their tax. That is the intention.

I want to raise two points in connection with this Schedule. The first is in regard to item 11. It refers to the administration of justice, including the exercise of civil and criminal jurisdiction, etc. As my leader pointed out, these matters can be dealt with in terms, of ordinances by the various bodies and the powers that can be conferred upon them. When they have criminal jurisdiction conferred upon them, I am unable to see that they have any enforcement agency to enforce it. I want to ask the Minister whether in fact this means that they will be entitled to establish a police force for the maintenance of law and order and for the enforcement of any criminal jurisdiction which may be accorded to them? Otherwise it seems to me they will have to use another enforcement agency, presumably the S.A. Police or the S.W.A. Police. But I can see no provision in the Bill anywhere which gives them the power to raise a police force or to have such an enforcement agency in respect of their criminal jurisdiction.

The second point I want to raise is in respect of Item 15. It refers to a direct tax on the members of the Native nation in question and on their income, whether they are in or outside the particular area, and on property. So a direct tax can be levied on members, presumably some kind of poll tax or a personal tax, and secondly an income tax can be levied also on members outside that area for which the legislative council or the regional authority has been established, and then they have the right to levy a property tax. What I want to get to is this. As far as our taxation in South Africa is concerned, Parliament can levy a tax on various people and it can levy an income tax on all people with common criteria for the purpose of levying it. In the case of these people in South West Africa, is it the intention that there shall be two authorities with the right to levy taxes, that is the S.W.A. Administration or this Parliament? The hon. the Minister shook his head when I asked him in regard to the Legislative Assembly of South West Africa, so I take it that authority is out. But is this Parliament then divested of its power to levy taxes on the folk in South West Africa who are concerned here, who from time to time will be given these powers of direct taxation, personal tax, income tax and property tax? Are there to be two bodies levying taxes, this Parliament plus their own legislative assembly, or what is to be the position in regard to taxation? Then there is the question of the enforcement of their criminal jurisdiction and secondly the question of double taxation.

Firstly, the provisions in paragraph 11 are there not for the establishment of a police force. The hon. member is correct when he says that nowhere is there provision for the establishment of a police force. Item 11 is there to provide for the institution of a proper system of courts, a judiciary, for the Bantu people, and that will of course have to be done by a separate proclamation or a separate enactment of their own. But of course when you have a court you need court officials, and they will have to have those officials. In fact, in their tribal courts they already have people whom they use as officials to perform certain duties on behalf of the court.

Tribal police and tribal messengers?

Yes, something of that sort. That they have already. That is of course an inherent component of a court. What they have, will remain. Perhaps it can be better arranged by enactments they will pass themselves, or by proclamation, as the need arises.

In regard to the point raised relating to taxation, the hon. member perhaps knows that up to now the Bantu in South West Africa are not liable to any specific Native tax, as is the position in the Republic. Here we have two direct taxes on the Natives, the old poll tax and the additional tax based on a group system of income. Then of course here they are also liable to ordinary income tax. But in South West Africa there is nothing of this sort with regard to the first two taxes applicable in the Republic. They have no poll tax or an additional tax, and I think it is foreseeable that some time in the future there should be a tax payable by the Bantu people. Here provision is made that if the time is ripe for them to pay taxes, then the taxes can be introduced by them if it is deemed necessary and wise. Of course this Parliament still has the over-riding power also to introduce taxes payable by the Bantu in South West Africa. But I would prefer the Bantu authorities, the legislative councils of the natives in South West Africa, themselves to introduce the taxes payable by them so that it will not be necessary for us to introduce such taxes. As the hon. member knows, in the Republic taxes payable by our Bantu are introduced by Acts of this Parliament and the entire collection is handled over to the Bantu. Therefore I feel it would be better if the taxes, which they will in any case receive in toto, were to be levied by their own authorities. Therefore that provision is in this Bill. Of course, it would be better if there were not two different authorities levying taxes payable by them.

Mr. Chairman, I want to discuss with the hon. the Minister the provisions in items 5 and 6. I wonder whether the Minister would check with his department whether or not there should be a comma after the word “law” in the last line of item 6. I notice a comma appears in the Afrikaans version and I do not know whether the omission is the result of a typographical error. Item 5 provides that the local Bantu authorities there will have control of business and trading undertakings, “and the issue of licences for the carrying on thereof to member of the Native nation in question …” The question arises what or who will control the issue of trading licences to members of any other population group. Before the Minister replies that no other population groups will be allowed to go into these areas, let me remind him that, if we accept what is contained in the preamble as the intention of the Government, these territories will go to the Bantu people, and they will have control there and be the authorities. The situation may arise where they find that for the development of a viable economy it is essential that white, Coloured or even Asiatic traders should be allowed in. Under what provision are they going to be controlled?

Could I have an answer from the Minister on the question of the comma in the last line of item 6, please? Should there be a comma after the word “law”?

I will reply when I get up.

That is all I wish to say at this stage, Sir.

As regards the little comma, Mr. Chairman, I may tell the hon. member I will have a look at it. If a comma is necessary, it can be inserted by way of the normal corrective amendments, as allowed by the rules. However, I do not think the comma is necessary in the English version. One does not translate punctuation marks; one translates words. I do not think the hon. member knows more about the punctuation marks of the Bill than the people who read the proofs. However, I shall bring his suggestion to their notice. After all, one cannot insert a comma by means of an amendment; it can be done by way of correction when the Bill is reprinted.

I want to say the following about the more substantive matters raised by the hon. member. At present there are of course no white licensees in this regard in the Bantu areas mentioned.

What about SWANLA?

SWANLA is a corporation, a body. There are no individuals; that is what I mean. Whites who have to obtain licences at present, obtain them from the South West Africa Administration. It is not the intention at all that the licences should be obtained from these authorities. If provision has to be made in future, if the situation arises that provision has to be made for Whites within the areas—and I hope it will not be necessary—the matter can be attended to. However, it is not the intention that these matters should fall under these authorities.

Mr. Chairman, I guess I must accept the hon. the Minister’s explanation regarding the issue of trade licences. SWANLA, as he points out, is a corporation and not an individual, but this provision does not make allowance for the issue of a licence to this corporation, which is controlled by Whites, by non-Bantu.

With regard to item 6, let me say I consider it most important whether or not this is a typographical error, and whether or not there should be a comma inserted there or not, because if one reads this item one sees the following—

If the comma is left out the words “or otherwise” will refer to “whether in co-operation with any corporation … established in terms of any law or otherwise”, but if the comma is inserted then there is a completely different meaning which is the meaning, I submit, which is apparent in the Afrikaans version, which reads as follows from the second-last line—

—then there is a comma, and then the final words, “… of andersins.” I submit that means the “planning, establishment,” etc. “of … projects having as their object the economic progress of the native nation concerned …” with any body, with any organization, not only with “any corporation … established in terms of any law …”. The reason why I am raising this point is because not so long ago we passed in this House a Bill for the promotion of the economic development of the Bantu homelands. In terms of clause 32 of that Bill the Bill is applied to South West Africa. At that time we on this side of the House pleaded with the Minister and suggested that, rather than close the door to economic development by stipulating in terms of this Bill that development shall only take place through corporations registered and acknowledged by the Minister under various conditions laid down here, it should be open for white initiative and white capital to be allowed into these Bantu areas for the development thereof.

To come back to the question of the comma: As I interpret this, if the comma is inserted and as I read the Afrikaans version, these authorities will be free to call in any white organization, indeed any organization, white or otherwise, to assist with the development of that area. A little while earlier in this debate the hon. the Minister got extremely angry with hon. members on this side who did not pay attention to what he was saying, yet the Minister does not seem to be listening to what I am saying now.

I am listening to everything you are saying, also to the comma.

Is this a typographical error or has it been left out intentionally? Is my interpretation of the difference between the English and the Afrikaans versions correct?

Amendment put and agreed to.

Schedule, as amended, put and the Committee divided:

Ayes—101: Bodenstein, P.; Botha, H. L; Botha, L. J.; Botha, M. C.; Botha, M. W.; Botha, P. W.; Botha, S. P.; Brandt, J. W.; Carr, D. M.; Coetsee, H. J.; Coetzee, B.; Coetzee, J. A.; De Jager P. R.; Delport, W. H.; De Wet, C.; De Wet, J. M.; De Wet, M. W.; Diederichs, N.; Du Toit, J. P.; Engelbrecht, J. J.; Erasmus, A. S. D.; Erasmus, J. J. P.; Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Havemann, W. W. B.; Henning, J. M.; Heystek, J.; Janson, T. N. H.; Jurgens, J. C.; Koornhof, P. G. J.; Kruger, J. T.; Langley, T.; Le Grange, L.; Le Roux, F. J.; Le Roux, J. P. C.; Loots, J. J.; Malan, G. F.; Malan, J. J.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Marais, W. T.; Maree, G. de K.; Martins, H. E.; McLachlan, R.; Meyer, P. H.; Morrison, G. de V.; Mulder, C. P.; Muller, S. L.; Otto, J. C.; Pansegrouw, J. S.; Pelser, P. C.; Pienaar, B.; Pieterse, R. J. J.; Potgieter, J. E.; Potgieter, S. P.; Rall, J. J.; Rall, J. W.; Raubenheimer, A. J.; Raubenheimer, A. L.; Reinecke, C. J.; Reyneke, J. P. A.; Roux, P. C.; Sadie, N. C. van R.; Schlebusch, A. L.; Schlebusch, J. A.; Schoeman, B. J.; Schoeman, H.; Smith, H. H.; Smith, J. D.; Steyn, A. N.; Stofberg, L. F.; Swanepoel, J. W. F.; Swiegers, J. G.; Torlage, P. H.; Van Breda, A.; Van den Berg, M. J.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, S. W.; Van der Merwe, W. L.; Van Rensburg, M. C. G. J.; Van Staden, J. W.; Van Tonder, J. A.; Van Zyl, J. J. B.; Venter, M. J. de la R.; Venter, W. L. D. M.; Visse, J. H.; Visser. A. J.; Volker, V. A.; Vorster, L. P. J.; Vosloo, A. H.; Vosloo, W. L.; Waring, F. W.; Wentzel, J. J. G.

Tellers: G. P. C. Bezuidenhout, G. P. van den Berg, P. S. van der Merwe and H. J. van Wyk.

Noes—32: Bennett, C.; Eden, G. S.; Emdin, S.; Fisher, E. L.; Graaff, De V.; Higgerty, J. W.; Hourquebie, R. G. L.; Jacobs, G. F.; Kingwill, W. G.; Lindsay, J. E.; Marais, D. J.; Mitchell, D. F.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Murray, L. G.; Oldfield, G. N.; Radford, A.; Raw, W. V.; Smith, W. J. B.; Steyn, S. J. M.; Streicher, D. M.; Sutton, W. M.; Suzman, H.; Timoney, H. M.; Wainwright, C. J. S.; Waterson, S. F.; Webber, W. T.; Wiley, J. W. E.; Winchester, L. E. D.

Tellers: H. J. Bronkhorst and A. Hopewell.

Schedule, as amended, accordingly agreed to.

Preamble:

Mr. Chairman, while it is true that the preamble is not a clause in the Bill, it is part of the intention of Parliament, in dealing with the measure we have before us, as signified here in writing. Here it is stated as a fact that “it is desirable that the Native nations in the territory of South West Africa should in the realization of their right of self-determination develop in an orderly manner to self-governing nations and independence”. This we find one of the most objectionable features of this Bill, because as regards the question of the word “self-determination”, as we have pointed out, we accept that on this side of the House as being a concept which is absolute. It cannot have qualification. It is not capable of qualification. Self-determination is self-determination without qualification. No qualification is possible. We do not agree that there is a right of self-determination, vested in what is called “the Native nations in the territory of South West Africa”. Fundamentally, there we differ from the Government. But in any case, to pin it down, it goes on to say that, pursuant to their right of self-determination, the Government feels it is desirable that these nations should develop in an orderly manner to self-governing nations and independence. We can hardly conceive of anything in that part of the territory under the control of the Government of South Africa which can be more catastrophic. We shall therefore have to vote against the preamble.

Mr. Chairman, the hon. member for South Coast has raised the question of how the preamble is worded and the principles involved therein. Let me say that I have done a little research, and I have gone into other Acts which might have been placed in the same category as this one. I had a look at the Bantu Authorities Act of 1951. There is no preamble. Nowhere in it is mention made of the right of self-determination. Nowhere in that Act is there mention of a Native or a Bantu nation or of independence for these Bantu areas. I also looked at the promotion of Bantu Self-government Act, No. 46 of 1959, and the Transkeian Constitution Act of 1963. Those two Acts do have preambles and in those preambles the gist of each of the Acts and the whole intention of the Legislature at that time is set out. But once again we find that there is no mention of separate nations, of self-determination or of independence. The question arises as to why the Government has inserted such a preamble in a Bill which does not establish separate nations and which nowhere, as has been shown in the debate this afternoon, gives the right of self-determination to any one of the so-called nations.

Self-determination is the primary right of every nation on earth.

With all due respect to the hon. Chief Whip I want to say that this is no primary right. We have rejected the theory presented by the other side categorically. I want to ask the hon. Chief Whip a question. If we in Natal decided that we wanted to secede from the Republic, would he agree to it? [Interjections.] I should like the hon. Chief Whip to answer that question. Would he allow us to secede from the Republic?

That is not being stupid, it is being silly.

Is the hon. Chief Whip silly? I want him to answer my question: Will he allow us in Natal to secede from the Republic of South Africa?

Order! The hon. member must confine himself to the preamble.

I am dealing with the question of self-determination.

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

I am saying that we have here a preamble which talks about separate nations and the principle of self-determination and independence. But not one of those three principles is mentioned anywhere in this Bill. Nowhere does it establish independent nations. Nowhere does it give self-determination and nowhere does it make provision for anybody’s independence. I want to repeat what I said during the second-reading debate. This is something that is being introduced by the Nationalist Government with one object only, namely to pull the wool over the eyes of the outside world. [Interjections.] Mr. Chairman, if I were to reply to the hon. Chief Whip you would again rule me out of order. I want to say once again that we have here in the preamble the Nationalist Government establishing a premise which is false. Before they start they establish a false premise and then continue to try to build a case on that. I disagree entirely with this.

Mr. Chairman, it appears from what the hon. member for Pietermaritzburg (District) has just said that there is great confusion amongst the hon. members of the Opposition in regard to what is meant by a nation and by self-determination. Self-determination is very clearly envisaged in the South West African Mandate. In the manifesto of the U.N. repeated mention is made of self-determination.

Order! The hon. member must return to the preamble.

The hon. member asked whether they in Natal can become an independent state.

Order! The member was out of order and I told him so.

Mr. Chairman, I want to give the hon. member a definition of a nation.

The definition of a nation is quite irrelevant now.

Preamble put and the Committee divided:

Ayes—101: Bodenstein, P.; Botha, H. J.; Botha, L. J.; Botha, M. C.; Botha, M. W.; Botha, P. W.; Botha, S. P.; Brandt, J. W.; Carr, D. M.; Coetsee, H. J.; Coetzee, B.; Coetzee, J. A.; De Jager, P. R.; Delport, W. H.; De Wet, C.; De Wet, J. M.; De Wet, M. W.; Diederichs, N.; Du Toit, J. P.; Engelbrecht, J. J.; Erasmus, A. S. D.; Frank, S.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Haak, J. F. W.; Havemann, W. W. B.; Henning, J. M.; Hertzog, A.; Heystek, J.; Janson, T. N. H.; Jurgens, J. C.; Koornhof, P. G. J.; Kruger, J. T.; Langley, T.; Le Grange, L.; Le Roux, F. J.; Le Roux, J. P. C.; Loots, J. J.; Malan, G. F.; Malan, J. J.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Marais, W. T.; Maree, G. de K.; Martins, H. E.; McLachlan, R.; Morrison, G. de V.; Mulder, C. P.; Muller, S. L.; Otto, J. C.; Pansegrouw, J. S.; Pelser, P. C.; Pienaar, B.; Pieterse, R. J. J.; Potgieter, J. E.; Potgieter, S. P.; Rall, J. J.; Rall, J. W.; Raubenheimer, A. J.; Raubenheimer, A. L.; Reinecke, C. J.; Reyneke, J. P. A.; Roux, P. C.; Sadie, N. C. van R.; Schlebusch, A. L.; Schlebusch, J. A.; Schoeman, B. J.; Schoeman, H.; Smit, H. H.; Smith, J. D.; Steyn, A. N.; Stofberg, L. F.; Swanepoel, J. W. F.; Swiegers, J. G.; Torlage, P. H.; Van Breda, A.; Van den Berg. M. J.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, S. W.; Van der Merwe, W. L.; Van Rensburg, M. C. G. J.; Van Staden, J. W.; Van Tonder, J. A.; Van Zyl, J. J. B.; Venter, M. J. de la R.; Venter, W. L. D. M.; Visse, J. H.; Visser, A. J.; Volker, V. A.; Vorster, L. P. J.; Vosloo, A. H.; Vosloo, W. L.; Waring, F. W.; Wentzel, J. J. G.

Tellers: G. P. C. Bezuidenhout, G. P. van den Berg, P. S. van der Merwe and H. J. van Wyk.

Noes—32: Bennett, C.; Eden, C. S.; Emdin, S.; Fisher, E. L.; Graaff, De V.; Higgerty, J. W.; Hourquebie, R. G. L.; Jacobs, G. F.; Kingwill, W. G.; Lindsay, J. E.; Marais, D. J.; Mitchell, D. E.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Murray, L. G.; Oldfield, G. N.; Radford, A.; Raw, W. V.; Smith, W. J. B.; Steyn, S. J. M.; Streicher, D. M.; Sutton, W. M.; Suzman, H.; Timoney, H. M.; Wainwright, C. J. S.; Waterson, S. F.; Webber, W. T.; Wiley, J. W. E.; Winchester, L. E. D.

Tellers: H. J. Bronkhorst and A. Hopewell.

Preamble accordingly agreed to.

Title put and agreed to (Official Opposition and Mrs. H. Suzman dissenting).

House Resumed:

Bill reported with an amendment.

Mr. Chairman, when this debate was adjourned we were discussing the statement made by the hon. the Minister on Customs matters. We then agreed with his statement that a very serious state of affairs had occurred. We pointed out that it would seem that the regulations had become so involved that importers were finding it almost impossible to comply therewith in every detail. I gave the hon. the Minister an example of the difficulties. It seems by all accounts from all the information one could get—and I have no doubt the hon. the Minister has more information at his disposal than we have—that the system has grown so complicated for both importers and the department …

I think that should be discussed under the Customs and Excise Vote.

We were discussing on broad lines the effect of the Minister’s statement which he made last week. I was specifically not going into any details at all on the question concerning the Customs Department. I made it clear that we proposed to discuss the Customs Department under the proper Vote.

The hon. member may proceed.

It would be open to me to propose a decrease in the Minister’s salary in which event we could discuss his policy. But I do not want to do that.

The hon. member may proceed.

The position seems to be now that the department is unable to cope with its work and that there are endless delays which on the whole affect importing industries. It seems to us that the position as revealed by the hon. the Minister in his statement is almost chaotic.

Nonsense.

The hon. member says nonsense. I do not know whether he knows anything about it. If he does he can get up and enlighten us. To all people who have studied this it seems to be quite chaotic. It is causing losses to the State to which the hon. the Minister has referred. It is causing serious difficulties to both importers and manufacturers and is certainly causing severe headaches to the hon. the Minister’s department. Everybody seems to be unhappy about the position. The purpose of my taking this opportunity of discussing it is to say that we think that the position as revealed by the Minister and as emphasized by himself, is serious enough to warrant a special inquiry into this whole matter. The hon. the Minister himself has referred to the fact that in one section alone there is some R340 million worth of goods involved under rebate of duty, which is one of the spheres in which these things are alleged to have been taking place. Public opinion is thoroughly disturbed over the position. I see newspapers using phrases like “The Customs Racket”. I even see that sermons have been preached about it in churches where they talk about the decay in public morality. We agree with the hon. the Minister that the position is serious from every point of view. We feel that there should be a special inquiry, not an inquiry into the crimes or wrongdoings which may have been committed but a special inquiry—preferably a judicial inquiry—on which both the department and trade and industry could be represented, to see whether between them they cannot devise ways and means of removing the disharmony and the inefficiency which appears to exist at the present moment. I am not trying to apportion any blame of what inefficiency there is. But that it exists there is no doubt. Thereby a more orderly and businesslike system could be brought about.

It is quite clear—and the hon. the Minister has made it clear that that is his feeling too— that the present state of affairs cannot be allowed to continue. The wise thing to do would seem to be to get the interested parties together and to hammer out the difficulties on both sides, and to establish a system which will work in the ordinary way. Let the authorities by all means proceed against people who have been wilfully misusing the Act and the regulations. But our feeling is that the more complicated you make the regulations, the easier it is for the clever man to get through them, and the simpler you make them the easier it is to administer them and to make them effective. I hope that the hon. the Minister will be able to reassure us in this Committee and the country that the state of affairs which he revealed last week will not be permitted to continue and that he has some concrete proposals for establishing a means of doing away with it.

Mr. Chairman, allow me on behalf of the Committee to welcome the hon. member for Constantia back to this Chamber. I am sure that we are all very pleased to see that he has recovered to such an extent that he can again take part in these financial debates. I also want to tell him, in case he does not know it, that his financial companions on that side have found it extremely difficult during his absence to cope with the difficult task with which they were confronted, and I think that they are even more delighted than we are to see him back again.

The hon. member has raised the question of malpractices in connection with certain imports, particularly textile materials. In this connection the hon. member has mentioned that I made a statement a few days ago. I would have thought that this matter could be discussed much better under the Customs and Excise Vote.

It will be.

I understand that the matter is being raised here only in general terms and that the details will be discussed under the other Vote. The hon. member will appreciate that I propose therefore to reply only in general, leaving the details until later. I also find myself in this difficult situation that there is much detail that cannot be disclosed at this particular moment. The hon. member has raised this matter in a very responsible manner, and as a responsible member he will appreciate that a disclosure of some of the particulars at this particular stage would seriously hamper the investigations that are being conducted presently by the Department and the Police.

I would like therefore at this stage to make only a fairly general statement in reply to some of the questions put by the hon. member. Although the Department suspected malpractices in connection with the importation of goods, particularly textile materials, since July, 1967, this suspicion was confirmed during raids performed on 16th August, 1967. It became clear that the biggest percentage of these malpractices was in respect of the classification of textile materials which to a large extent rests on a weight and price basis, as well as in respect of price manipulation. At this stage the matter was brought to my attention.

It was, however, not expedient to make an earlier public statement because the documents which were seized during the raids proved that if an earlier statement had been made, it would have placed certain individuals in a position to hamper the investigations. It was also necessary to obtain the modus operandi employed by the parties concerned, namely certain overseas exporters, indent agents and importers who, because of these malpractices, were enriching themselves to the detriment of the State and of their honest competitors. The Department immediately formed a special section to handle all importations of textiles with a view to protecting revenue. It can also be stated that this section had to be strengthened from time to time to cope with the volume of importations which were detained at the various places of entry.

To assist the Department in this regard, additional regulations were published on 6th October, 1967, which prescribed that further information regarding the consignments should be furnished and that a sample of the material imported must be attached to a duplicate invoice for departmental use. The duties performed by the special section had the effect that not only cases of malpractices were found, but also many cases of negligence on the part of a large percentage of importers and agents came to light, with the resultant detention of many consignments of textile materials. The stage has, however, now been reached where consignments which are detained because of minor mistakes can be released sooner, while cases where malpractices are obvious, are being studied. The Department has had numerous meetings with trade and industry and it was expected that the number of cases would diminish.

It was found, however, that the number of cases did not decrease to any extent, but that more ways and means to avoid the payment of duty came to light. Interested parties were asked to attend meetings in Pretoria in the fervent hope of obtaining their assistance not only to combat malpractices but also to prevent the so-called clerical errors. At a subsequent meeting with organized commerce it was mutually agreed that every effort would be made to find a satisfactory solution to protect the importers and other parties who are not involved in these malpractices. In terms of the Customs and Excise Act the onus of making correct entries for customs purposes rests upon the importers, and it is in this connection that the Department can be greatly assisted by them. This is even more the case as the Department has no control over oversea exporters and indent agents. Organized commerce has since given the assurance that it will endeavour to give the Department its fullest assistance to obviate errors of this nature.

The Department has for a few years been concentrating on training its staff but is not aware of importers having taken similar organized steps. Because of our protection policy the tariffs on textile materials, tariffs which are amended from time to time on recommendation of the Board of Trade and Industry after close examination of every individual case, have become more complex—we admit that—and it is in the interests of importers that they should pay more attention to the provisions of this tariff. The Department is also contemplating the use of present legislation to enable it to make use of an electronic computer to expedite the release of consignments and to obviate the non-payment of revenue. It can be pointed out that according to Press reports, other countries such as the United Kingdom and Australia, were experiencing problems similar to these encountered by the Republic. The Australian Minister of Customs and Excise is reported to have said recently that he regarded the activities of the parties concerned as constituting an attack on that country’s protection policy.

Considering the prevailing circumstances, it is not considered advisable at this stage to furnish any further detailed information regarding the matters raised by the hon. member for Constantia as the publication of such information might have the effect of obstructing the Department and the South African Police in their investigations, and also because of the court cases which are foreseen. I might add that the hon. member for Constantia has mentioned in his speech the possibility of a special judicial inquiry. I do not think it is necessary to have such an inquiry at the present moment. We have the information collected by the Department and by the Police, and after studying the information that we have at present and seeing: the outcome of the cases which are pending, I think we shall be in a better position to decide how to act in future.

I would like to express my appreciation to the hon. the Minister for the remarks made by him concerning the hon. member for Constantia. We agree with most of them.

The Minister has referred to the matter of customs and excise. I do not propose at this stage to carry it any further. We will deal with it under Vote 31. under the heading of Customs and Excise. I want to deal now with the Minister’s policy, and first of all. I want to deal with the question of inflation. I think both sides are agreed that inflation has not yet been adequately contained. The Minister has recently made certain pronouncements outside this House, where he has indicated that he is not happy with the state of inflation and that while steps have been taken to contain inflation, still further discipline is necessary to ensure that the present rate of inflation is contained and also to ensure that inflation is further reduced. I would like to know from the Minister to what extent responsibility must be placed on the shoulders of the Government itself. The hon. the Minister had questions put to him during the course of the Budget debate, questions which were not answered and which are still unanswered.

Sir, I refer to his colleague, the Minister of Economic Affairs. The Minister of Economic Affairs is concerned with the control of the Industrial Development Corporation. That organization, apart from assisting to develop industry, has gone into the mutual fund market and into the investment field. The Minister of Finance is trying to control the finances of the country and to contain inflation. Is he satisfied that the development in recent months, in recent years, of the mutual funds is non-inflationary? Is he satisfied that it is in the interests of the country that the Industrial Development Corporation should enter the field of the mutual funds? The Minister has admitted that it is essential that the country should have more long-term loans. He has said from time to time that it is an unhealthy position to have a superabundance of short-term money. I think the Minister will agree that the position to-day is that the country is over-liquid. In fact, his colleague, the Minister of Economic Affairs, has said only recently that we do not need all the money that is coming into the country. At the same time, however, he said, that he did not want to discourage long-term investment in this country. But he did express concern over the money pouring into the country.

Sir, having regard to the excess liquid position, has the time not arrived for the hon. the Minister to give some consideration to a relaxation of exchange control? Should some consideration not be given to the question of allowing investment outside South Africa? Certain of our leading industries may find it advisable to invest in countries outside our borders. Here I have in mind our neighbouring territories. Having regard to the extent to which the liquid position is embarrassing the Minister so far as inflation is concerned, we would like to know what he intends to do about it, and how he sees the present position; whether he regards it as essential to discourage his colleague, the Minister of Economic Affairs, from giving encouragement to the I.D.C. to invest in the mutual fund market; whether he regards the mutual fund market as a market which is encouraging inflation rather than discouraging it? We find that the Minister on the one hand tells us that the Economic Advisory Council of the Prime Minister regards a 5½ per cent growth as the limit of healthy growth and anything above that as inclined to overheat the economy. On the other hand, we find our mutual fund friends advertising a growth of 20 per cent to 25 per cent per annum. The Minister’s colleague, either through acquiescence or through encouragement, is helping the mutual fund market and helping these growth funds which depend for their very existence upon a very attractive growth rate. These are matters which are concerning the country, because while we agree with the Minister that inflation should be contained we find these contradictions. We want to know whether the Minister is satisfied with the position, and if not, what he is going to do about it.

Then we raised with the Minister during the Budget debate the question of gold, and the hon. member for Parktown has since asked further questions about it. Can the Minister give us any further information now? The Minister indicated that at present South Africa does not intend to sell gold, but for how long can the country continue without selling gold? The gold mining industry is selling gold to the Reserve Bank which for the time being is not selling gold to its traditional market, the Bank of England. We understand that it is not in South Africa’s interest at present to sell the gold on the free market, because that may encourage the depression of the price. The Minister and his predecessor for years have been trying to get an increase in the price of gold, and therefore it is not in our best interests to put gold on the free market if it has the effect of reducing the price. But on the other hand, all of us know that in the long term we cannot go on indefinitely without selling our gold. How does the Minister see the problem? I think these are matters in regard to which we are entitled to expect answers from the Minister, if he is able to do so, or if he thinks it is advisable in the interests of the country to reply. As the Minister said in reply to the Budget debate, the position is a delicate one, but I submit that some time has elapsed since the Budget speech and if there is anything further which can be added at the present stage I think now is the opportunity to ask the Minister these questions and for him to reply to us.

The hon. member for Pinetown raised quite a few points, and obviously I will not try to reply to all of them, nor have I the authority to do so. The hon. member referred to the position of inflation. I think it would be a good thing if we took a closer look at the present position of inflation in our country. I think the picture is reasonably favourable and it gives us great satisfaction at this stage when we think that last year in August the consumer price index stood at 122.5, and that in March it stood at 122.3, i.e. after seven months it was lower than it had been in August 1967. If we look at what is happening in other countries of the world it is definitely a situation we can feel very happy about, and we can say that it is one piece of evidence to prove that the financial policy which the Minister and the Government is following has been crowned with success. To my mind this is one of the strongest pieces of evidence to prove that the financial policy at the moment is the right one and that we are following the right course; and if one realizes that one is following the right course, then I do not think one will easily deviate from that course and adopt another. The fact of the matter is that in the past three months the consumer price index has increased somewhat. If one calculates it on an annual basis then I think it has increased by 1.6 per cent; but it remains a great achievement and I think we have every reason to feel satisfied, particularly if we bear in mind that it goes hand in hand with an excellent rate of growth in the economy of our country, a rate of growth which is amongst the highest in the Western world.

Now in regard to the rate of growth and inflation the hon. member for Pinetown has also referred to the growth funds and the fact that the I.D.C. is also beginning to participate in them. That is true. I have personal knowledge that agents of these growth funds have gone about amongst the public and their only selling line to the public was in regard to inflation. Now the hon. member is pointing out that these funds have grown far more rapidly then the actual growth of the national income.

What is this inflation story being told by the agents?

They said that if people invested their money at a financial institution on deposit, they would lose a great deal, because inflation would erode their money and it would reduce the yield; the public should invest their money in the growth funds as an insurance against inflation. That was the whole story.

Now the hon. member has pointed out that they have in fact grown far more rapidly than the economy of the country has grown in real terms, and he mentioned the figure of 22 per cent. That, I think, was one of the reasons which prompted the Government to come forward here last week with a Bill in which we stated that these funds were drawing the savings of the public away from deposit-receiving institutions, and was doing so on the basis of propaganda which was not patriotic. We then stated that these funds should now invest twice as much as they invested in the past in certain approved securities, inter alia Government securities, and the Opposition saw fit to oppose that Bill and vote against it. My contention is that if the argument of the hon. member for Pinetown is correct today, then the Opposition was wrong when it voted against this Bill last week.

The hon. member for Pinetown also spoke about the great deal of money in the country; the financial position in the country is very liquid. There is a great deal of money coming in from abroad. Of course there are various reasons for that, of which the hon. member is as well aware as I, but the hon. member then asked whether we should not abolish currency control, and allow people to take money out of the country at liberty. This is one of the replies which I do not want to try and furnish on behalf of the Minister, but in general I would say that if one has a control system, why should one abolish it? One can either impose it more sympathetically, or more strictly, but one ought to maintain one’s machinery because one does not know what to-morrow will bring. In the same way as there was a great deal of uncertainty a few months ago and such international speculation as the world has not seen for a long time, which caused great quantities of money to flow into our country, so it is possible—I do not know how—that one can have an international situation where, if we were to relax this control measure or abolish it entirely, people would begin the speculate and take money out of the country again even if it is only temporarily. That is why I would say, as a general principle, that if one has control measures, one must retain them and adapt them to the circumstances prevailing in the economy, as this becomes necessary from time to time.

The hon. member also had something to say about gold. I do not want to react to that, but it is of course a fact that the great influx of money which we are experiencing at the moment is making it possible for us to refrain from selling gold at the moment. But the hon. member is probably correct when he says that this cannot be a long-term policy. There I want to agree with him all the way, but it is a matter in regard to which the Minister and the Government will have to decide.

The hon. member for Queenstown has told the House that in his opinion the inflationary position is favourable and that we could be well satisfied with the situation at the moment. I am inclined to agree with him. If we could maintain the situation as it is at the moment, we, and I am sure I can include the hon. the Minister, would be very happy indeed. But unfortunately new dangers are beginning to rear their ugly heads and it is quite obvious that the Minister is aware of this fact, because last month the Reserve Bank issued a directive to the commercial banks to deposit with the Reserve Bank, free of interest of course, 40 per cent of their short-term liabilities in excess of the figure at which they stood in March, 1968. I think we should like to hear from the Minister the reason for these new directives from the Reserve Bank and their purpose. It would seem that the Minister, like most people, is concerned with this vast amount of money coming into the country to-day, which was mentioned by the hon. member for Pinetown and the hon. member for Queenstown, because it creates once again an excessive liquid position in our economy. We are building up at the moment this liquidity which is causing a great deal of concern to everybody, including finance and industry. The F.C.I., in a statement they issued on 8th May, had this to say—

I should like to ask the Minister what sort of open market operation he has in mind to mop up this excess liquidity. If the directive of the Reserve Bank does not have the desired effect and the gap between overdraft and other interest rates widens, all we are going to get is new activity in the grey market. We once again have to guard against a distortion of the picture by these new rules and regulations. In the Budget debate I suggested that we should fake three things into account, firstly that the time might have arrived for the phasing out of the control over blocked rands, and I want the hon. member for Queenstown please to note that I use the word “phasing”; secondly, a planned acceleration of exchange control relaxation, and I want him please to mark the fact that I use the word “planned”; and, thirdly, a relaxation of import control for capital goods. In this statement issued by the Chamber of Industries on 8th May they made exactly the same points. I want to get it quite clear so that there can be no misunderstanding. We are not suggesting that exchange control should be done away with; we are not suggesting that blocked rands should be freed immediately. But what we are suggesting is that perhaps the time has come now to relax to an extent beyond which relaxation might have taken place, and which the public generally knows nothing about, so as to ease our liquidity position.

The Minister in reply to the Budget debate told us that these matters were being given serious attention by the Government. I am sure this is the case, and I hope the Minister will be able to tell us whether any decisions have been come to. For instance, we still have the problem—and it is strange to have to call it a problem—of our high rate of exports which is bringing funds into the country. We have got to face this problem and we have to take action. One of our criticisms of the Government in the past has been that they have not faced our problems early enough or taken action early enough. This problem is becoming an obvious one and I think the time is ripe that we should be able to do something about it.

I know that in some quarters the reason for non-relaxation of exchange control is stated to be the fact that overseas persons, financiers, whatever they may be, who are sending funds to South Africa at the moment might step up the tempo if they were assured that the funds could be withdrawn at any time. This may well be but only to a certain extent, because although we have the controls the funds are still arriving. What we have said is let us start relaxation in respect of funds that are in this country already. I think it would be appropriate, as the hon. member for Pinelands has said, for the hon. the Minister to tell the House at this stage what his over-all policy is in regard to excess liquidity. Is he satisfied that his directive to the Reserve Bank is going to achieve what he has set out to achieve, and, generally, is he satisfied that he has the problem under control?

I want to pass on from the question of exchange control to the question of gold. In his reply to the Budget debate the Minister dealt at great length with the question of gold, but I am afraid he left a number of vital questions unanswered. We appreciate, as the hon. member of Pinetown has told the House, that this question of the sale of our gold is a complex and difficult one, and the last thing we want to do is embarrass the Government. But having said that, I think there are certain questions we can ask the Government.

In his reply to the Budget debate the Minister said, and I wish to emphasize his first few words—

He then went on to tell us that there were many countries who for the sake of promoting monetary stability would be keen to supplement their gold supplies. But since the Budget debate of the 8th April last many things have happened and much has been said and written, some of it probably true and much probably false. We have heard a lot about Zurich wanting to buy our gold, about Paris wanting to buy our gold, and the net result is that there is a great deal of confusion in the minds of the public, in the minds of those people who are interested in gold, and they are a lot of people. The hon. the Minister has said that too many people are buying shares. This is true, and everybody who owns a gold share wants to know how he stands on the gold front. On the 20th April I put a question to the Minister when I asked him, in brief, whether there was a legal obligation upon anybody to buy our gold at 35 dollars an ounce, and the answer was “no”. Subsequent to that, on the 29th April, under a date-line from New York there was some rather disturbing information from abroad. I wish to quote from the report—

[Time expired.]

Mr. Chairman, I was very pleasantly surprised here this afternoon to hear how the Opposition, and specifically the hon. member for Parktown, who has just resumed his seat, agreed with us when we maintained that our rate of inflation had decreased considerably and that the dragon of inflation had now to a large extent been slain. I consequently expected, since the Opposition had admitted these things, that we would hear a word of gratitude from them, addressed to the hon. the Minister for the particularly successful steps which the Minister took. I recall only too well what the hon. member for Constantia said during the debate last year. He predicted that the steps taken by the Minister would not be successful, and he predicted that the rate of inflation for 1967 would once again be between 3 and 4 per cent. In this regard I refer to Hansard, volume 20, column 4991, where the hon. member said the following—

We have seen that the prediction was wrong, and in view of the fact that the Opposition now agrees that the Minister did in fact achieve success with his anti-inflationary measures, they could at least this afternoon have addressed a word of thanks to him. But gratitude is of course in short supply, and that is why I should now like to congratulate the Minister sincerely on the fact that his measures have in fact achieved so much success, and I want to thank him for them very sincerely. Both sides of the House expressed concern this afternoon about the fact that the unit trust schemes were attracting so much of the nation’s savings that we will in due course no longer have any deposits at the deposit-receiving institutions. The hon. member for Pinetown expressed his concern about that, and asked where the State was subsequently going to get loans, since nobody wanted to invest money at fixed rates of interest any more. The hon. member for Queenstown pointed out that last week, when we were dealing with this legislation in this House precisely in order to restrict the activities of these unit trust schemes, the Opposition voted against that. I want to state here that the very best method of persuading the public to invest money with deposit-receiving institutions on a long-term basis at fixed rates of interest again, is in fact to combat inflation as efficiently as possible so that the public will once more have confidence in the stability of our money. When the public regain their confidence in the stability of our money they will once again invest money in the old way in fixed deposits. The reason why the public has no confidence in the stability of our money is because the rate of inflation is eroding the value of our money so rapidly. All these outgrowths we find to-day are the result of the fact that the saving public has no confidence in the stability of our money. This fact applies to the entire Western world. In the Cape Argus of 9th May, 1968, I read in an article which first appeared in a Wall Street Journal in which inter alia the following was said—

This gives a precise indication of what is happening in the entire Western world. The people have lost their confidence in the monetary systems, particularly because it has been suggested that the monetary systems of the Western world will move further and further away from the gold standards. As long as this tendency continues people will continue to lack confidence in money, and particularly in paper money, as well as in long-term investments. I therefore maintain that the most certain way of re-establishing confidence in the monetary systems is to combat inflation as effectively as possible so that money will retain its value. That is precisely what this Government has been doing over the past two years. In regard to South Africa’s purchases of gold—and on this subject I certainly do not want to speak as an authority—I see no danger for the time being in the fact that we are not at the moment purchasing gold. In spite of the fact that America is waging a psychological war to force down the price of gold to $35 per ounce, or even lower, the price of gold to-day still stands at $39.50 to $39.80, and as I have just said, the prospects are that this price may still be raised. As long as that is the case, it is probably good policy to restrain our gold purchases for the time being. That is why I see no danger in this. I say again: America and those six other countries of the Gold Pool, to which the hon. member for Parktown referred, are waging a war of nerves against the price of gold. But I want to predict that they cannot win that war. [Time expired.]

Mr. Chairman, I do not wish to argue with the hon. member for Paarl about the price of gold. I presume that the hon. the Minister is in close contact with the producers in South Africa. Ministers of Finance always have been. I presume he is following his policy in close co-operation with the producers of gold in this country. If that is so, I think we should have confidence in what he is doing, because, obviously the producer is the important person. It is not only because it is gold. The Minister of Agriculture has boards in close association with mealie producers and with meat producers. And I presume that the hon. the Minister, as he declares his policy, would not dream of doing that without being in close contact with the producers of the metal in South Africa. They are the people who can advise him.

I wonder whether the hon. the Minister has given thought to introducing gold coins again. When we were on the Coinage Select Committee, the Chamber of Mines, representing the producers, suggested that we should introduce the trojan. The trojan is now available, of course, but under another name. However, it is not in circulation. The obvious question to put to those people is the question we put to them: Supposing you do put the trojan into circulation—that is a coin weighing a troy ounce, and therefore worth to-day R25 in the ordinary market—would it not naturally disappear? Because people would start hoarding them? Well, supposing they do? People are hoarding to-day in Switzerland, France, Germany, America, wherever they may hoard. They would hoard in Britain. They are hoarding diamonds as well. That might happen. We naturally would not put gold into circulation at its face value. It would have a much higher value. So, if anybody wished to hoard a sovereign—I am sorry to use the word “sovereign”; I would not use “goue pond” either—a R2 gold piece, it would not be worth exactly R2, rather less, because of the content of gold. But he would hoard it, because eventually he hopes that amount of gold would be worth the R2 we have to-day. Well, that is a suggestion. I do not know what the Minister thinks of that, but it has been suggested to me by people who are interested.

Now I come to this question of exchange. The hon. the Minister knows that for several years under his predecessor, Dr. Dönges, I raised the question of the release of blocked rands. If a man from, say, America or Britain sells his holdings in shares in this country, the proceeds are blocked. He must then re-invest the proceeds in South Africa. I could see why that was introduced at an earlier period. Some years ago I think it was necessary. The Minister of the day gave us a scheme whereby that money could be withdrawn over a period of years. That was a wise precaution, I think. Now what is the position to-day? In the Budget Debate I pointed out to the Minister that in reply to questions, he told us that over the last two years the amount of money invested in blocked rand loans in this country, in the Government loans, was insignificant. The total amount was not as much as the amount of appreciation in our reserves for a week or a fortnight at the present rate. I can see no reason why we should not release blocked rands. It can perhaps be done gradually but I think it can be done. I do not see any difficulty in that regard.

I now come to another subject which has been mentioned, namely inflation and the part that mutual funds play in inflation. Of course mutual funds do not cause inflation. The mutual funds are a symptom of inflation. They prosper because people have no confidence in our currency, not only the currency of South Africa but any currency. Investors have seen currencies depreciate over the years, and so they feel they must invest their money in some other way. They buy diamonds, gold, precious stones and, in the case of farmers, they buy land. The farmer invests in land and up goes the price of land. We know that the price of land in South Africa is much too high for economic production. But that is the position. These people say they are not prepared to invest their money in an ordinary loan, because they might not get the full value back. But this is not only true of South Africa. This is not because that investor is causing inflation. He is merely investing his money in that way. I regard the mutual funds as a popular form of finance company. They are really only finance companies. They are organized in such a way that they are prepared to give a buying price and a selling price. They are quoted in the Press and they give a fair deal. Of course they are very popular. The fact that a man buys units from a mutual fund does not cause inflation. Because he feels that there might be inflation he buys units from them. But what do we find in the mutual fund? The mutual funds themselves are holding shares in various companies. If he goes into the market and buys shares he is doing exactly the same thing as a mutual fund. Recently the President of the Stock Exchange in his annual address said that not sufficient companies were coming forward for listing. That is, I think, putting the finger on the spot. There are not sufficient avenues for investment, and therefore there is too much money chasing too few investments. That is our position at present. People do not wish to hold cash. They are anxious to invest their money and there are not sufficient avenues for investment. But what can the hon. the Minister do? He himself is interested in investments in shares as a Minister of Finance, because through the Industrial Development Corporation, which he and the Cabinet control, they are selling shares in the market. We have heard of National Selections and Industrial Selections Now they have gone further and they are in oil. They are going into the petrol selling business in South Africa. This very excellent production “tegniek” gives the details. The I.D.C. is making its shares available to National Selections, at 10 per cent of course. The I.D.C., the Minister’s own investment in consultation with the Minister of Economic Affairs, is in the market. Why does the Minister not come forward with the suggestion I gave him during the Budget debate, namely that when you sell shares through National Selections and Industrial Selections you should put in some of the Government loans as well? You should not go to the Mutual Investment Corporations to do it. Let the Government do it. They say we are now going to form a new company to take over the shares the I.D.C. has at present. In order to form that company they should take their shares in various companies, put them into this new finance holding company and add some of the Minister’s own loans. I think I am assisting the hon. the Minister in this regard because to-day people are attracted by equities. What I am afraid of is that unless something of that kind is done people will buy anything in the market rather than invest their money in the manner that the hon. member for Queenstown would like them to do. They will buy shares and you will have the usual boom when they will take any bait that is offered. As I said to the hon. the Minister some years ago, the cynic said “when the ducks are quacking you must give them com”. Give them more shares. Even pyramiding can happen, because people have lost confidence in the ordinary form of loan investments. They do not wish to hold loan investments. One felt sorry for the poor colleague of the hon. the Minister, the hon. the Minister of Community Development the other day, because he cannot get money. He cannot get money because he has to lend money out at a low rate of interest for his housing schemes. He asks where he is going to get the money. [Time expired.]

Mr. Chairman, hon. members on the opposite side mentioned the fact that South Africa is bursting at the seams with money and asked why the hon. the Minister did not subsequently see his way clear to relaxing currency control to a certain degree. The question of the relaxation of this control definitely has a certain bearing on the question of the gold price, which we are faced with to-day, and the question of the sale of gold, of which at this stage the supply in South Africa is a large one. The Minister indicated on that occasion that it was a very important question, particularly if viewed from the long-term position of Africa, and that it was also very important for the finances of the world as a whole. He indicated that he would keep an eye on the position, that he wanted to make a thorough study of the matter and that it was a matter in regard to which one should not take a hasty decision. I think we can say that the Government is much closer to taking a decision on matters such as those which have now been raised by the Opposition. However, the fact of the matter is that since his last statement there have been many developments. It is still necessary to wait a while and watch the situation in order to see what direction developments are taking.

I want to say something in respect of the developments in the gold price question. Only three months have elapsed since America made every effort to rectify her international position in the financial field. Despite that, international concern about the dollar is on the increase rather than on the wane. As a result of this the U.S.A. is at present engaged on a major psychological offensive to break the morale of the gold price speculators and undermine confidence in gold as opposed to interest in the dollar. To succeed in this purpose the U.S.A. is even resorting to dubious methods. I should like to mention two examples of this. In this way for example the American assertion that according to the recent Washington agreement “the whole gold stock of the participating countries had become available for continuing the defence of the 35 dollar per ounce official gold price” is not correct. I shall come to that in a moment. In addition American Ministers are reading into the agreement those things which may suit their declaration of psychological warfare against gold speculation. An example of this is the statement made by the American Deputy Secretary to the Treasury for Monetary Affairs—and this is also an example which the hon. member for Pinetown quoted—“that the significance of the idea of not buying any more gold for monetary purposes may not have come through to all of the countries of the world”. Now what is the true position? The Washington communique definitely did not go so far as to place a general prohibition on the purchasing of gold, outside the monetary system by the central banks.

Business suspended at 6.30 p.m. and resumed at 8.05 p.m.

Evening Sitting

When I spoke last, I was referring to the question which I had put to the hon. the Minister and his answer and also to a report which had appeared in the Press, emanating from New York, regarding the attitude of the United States to our gold. Knowing that there was no legal liability on the part of anybody to buy our gold, which information I elicited from the hon. the Minister in reply to my first question, I put a second question to him on the 3rd May, in which I asked him whether any member nations of the International Monetary Fund had agreed to buy no newly mined gold, and if so, which members; whether the member nations of the Fund are obliged to accept gold from the Republic in settlement of the Republic’s external debts, and, if so, whether such debts can be settled by (a) newly mined gold and (b) monetary gold. The hon. the Minister’s reply left us somewhat in the air. He said this—

Subsequent to that, on the 7th May, the hon. the Minister of Economic Affairs, addressing the Afrikaanse Handelsinstituut, discussed the question of our gold production and gave certain figures which he anticipated for the future and then he added this—

Sir, it rather perturbs us to hear the hon. the Minister of Economic Affairs suggesting at a gathering such as the Handelsinstituut, that there is a possibility that gold will not retain its present position as an international payment. I hope that the hon. the Minister is now in a position to clear up some of the doubts and fears which have arisen in regard to our legal ability to dispose of our gold—I repeat, our legal ability to do so. I know the hon. the Minister has told us and will no doubt tell us again that there is no immediate need for us to sell our gold, and this we appreciate. As long as we have this inflow of funds from overseas, we will have adequate foreign currency to settle our external debts and our gold can accumulate. But what we want to know from the hon. the Minister is this: If and when it becomes necessary for us to sell our gold how do we stand? I hope that by now the hon. the Minister will have some further information as to what the attitude of the member nations of the International Monetary Fund is. What have they decided? Can he take the position any further than he did in his reply to my question on 3rd May? Are they still prepared to take our newly mined gold? I also hope that the hon. the Minister and his officials have now had an opportunity of finding out exactly what our rights are in terms of the agreement of the International Monetary Fund because the crisp question there is whether we can legally settle our external debts in gold. We appreciate that the rules and regulations of the Fund can be fairly complex, but, as you know, Sir, the Fund was set up in 1947, that is to say, 21 years ago. I think the hon. the Minister will agree that by now we should know what the rules and regulations mean. The Department has had a fair measure of time to study them. As we have said, we do not want to embarrass the Minister. We do not want to know from the hon. the Minister what we are going to do with our gold unless he is in a position to tell us and we will not try to anticipate his reply or embarrass him. What we want to know is what our legal rights are in respect of our monetary gold and our newly won gold. What are the obligations of other countries in respect of the gold holdings that we have?

Mr. Chairman, I want to say one final thing, particularly perhaps in relation to exchange control which I discussed earlier and also in relation to gold. In both these cases, we do not want situations to develop whereby, as a result of a lack of adequate planning now, the hon. the Minister may find it necessary in the future to take less desirable and more far-reaching steps than he would have to take if he acted promptly now. The hon. the Minister knows the problems better than I do; he is much closer to them, and I hope that he will take the Committee into his confidence as far as he can and tell us what he proposes to do in regard to these two matters which I have raised which we and I am sure the hon. the Minister consider to be vital. The first is the question of our over-liquidity and the second is our legal position in regard to gold.

When business was interrupted I was referring to what is internationally described as “United States excesses in psychological war”. What I am going to say here, will to a large extent serve as a reply to the hon. member for Parktown, although the actual question will be replied to by the hon. the Minister. I have said that America alleges inter alia that the countries participating in the Washington agreement had stated that all their gold was available in order to protect the price of $35 per ounce for gold, and I stated that this was not the case. In the second instance there is no general prohibition on the purchase of gold outside the monetary system by the central banks, as is also being alleged by the Americans. All that was stated in the agreement was (translation)—

Mr. Chairman, this is something quite different from a total prohibition. Let me read out to you—this will perhaps throw quite a lot of light on the subject for the hon. member for Parktown—from the Lombard column of the Financial Times of London of 7th May, 1968; what is said here is important—

I think the attitude of the Government is that under the charter of the International Monetary Fund the Fund itself is obliged to purchase gold from South Africa at the official price of $35 per ounce. I quote further from the Financial Times—

I think that shows that what the Americans alleged in respect of gold in their psychological war against gold is not quite the whole truth. The question can now be asked whether the United States will, within the foreseeable future, be able to rectify its finances by means of the control measures in respect of capital investment and spending abroad and at home, the possible cessation of the Vietnam War, and by means of the Special Drawing Rights, about which so much has been said. Inasmuch as the first two measures are concerned, one can only guess. In regard to Special Drawing Rights it must be stated at once that they imply important limitations. The Special Drawing Rights will not go very far towards solving the problem of reserve monetary units, i.e. the dollar and sterling. During the past seven years the American gold reserves have decreased by almost $9,000 million, whereas her short-term international obligations increased by approximately $11,000 million, i.e. a deterioration of almost $20,000 million over a period of seven years. If the Special Drawing Rights come into operation they will during the first five years mean a maximum issue of approximately $2,000 million per year for the world as a whole. The American share in this is no more than $500 million, i.e. a quarter. With a booster of this magnitude only, as far as the American reserves are concerned, it will take the U.S.A. approximately 40 years to place the dollar in the same position as it was in 1960. In the meantime the need owing to a growing international economy would instead have increased even further.

The Special Drawing Rights will in fact help to strengthen international liquidity. But the need for liquidity has increased considerably during the past five years. In 1960 the international trade amounted to a total of approximately $130,000 million per year. In 1967 it is estimated at approximately $200,000. That means that approximately $3,000 million in additional reserves is required to do the work of approximately $2,000 million five years ago.

Opposed to that we find only a small increase in the international reserves since the beginning of 1960, i.e. not even an average of a full $1,000 million per year. According to this a considerable accumulated demand for liquidity must arise, over and above the future annual growth. In the third place the Special Drawing Rights are not being regarded as of the same calibre as the actual reserves in the exchequer. The Special Drawing Rights which are being planned, can therefore not supply the final reply in so far as the world’s financial and liquidity problems are concerned. They have considerable limitations, and can only be regarded as an auxiliary means. A greater and more comprehensive attempt is necessary. According to many indications an increase in the international gold price is the most important starting point from which a reconstruction and a redevelopment of international finance should take place. Apparently the Washington agreement has merely given the dollar, as well as sterling, a temporary breather. There does not seem to be much time. Authorities in the international field are becoming firmly convinced that if America has to deal with a real confrontation and if it has to choose between either increasing the price in gold or a demonetization of gold it will choose the former, i.e. an increase in the price of gold. That is because the demonetization of gold, as rumour has it, will be like “pushing the world into the monetary unknown”. Since the last devaluation of gold in 1930 monetary values have decreased by approximately 250 per cent. That means that $35 of 1930 is only worth $13 today. The gold price must therefore be increased by at least 2½ times in order to give gold its pre-war purchasing power. Various authorities think that it is almost out of the question that the gold price will fall below $35 per ounce. These are facts which the hon. the Minister must examine and consider. In this regard Lombard of the Financial Times states—

However, South Africa dare not underestimate the American determination to prevent an official gold price increase. South Africa must take its decisions, not so much its immediate, but to a far greater extent its long-term interests, into account. There is much at stake both for South Africa and for the world, and careful and judicious study and action is therefore essential. Undoubtedly the Minister has, since the Washington agreement, gained a lot of experienced and has seen what happened, and I am convinced that we do not have long to go before the Minister will find his hand free to reconsidering the position in regard to the purchasing of gold in the free market and through the official channels, i.e. through the monetary banks. [Time expired.]

The hon. member for Florida has been speaking about the American attitude towards the gold price, but I think there are two important factors that the hon. member has overlooked. The one is the stated objection to the gold position by the American Treasury, namely that there is not enough gold in the world to-day, or not enough in prospect, to finance the expansion of world trade which is expected over the next couple of years.

Only at the present price of gold.

Yes, only at the present price of gold. The American President has further stated that the production of newly-mined gold is in the hands of what he has called unfriendly powers, namely South Africa and Russia, and it is for that reason that he has stated his determination to maintain the price of gold at 35 dollars an ounce. I believe that we have to be extremely careful both in the way in which we plead for an increase in the price of gold and the way in which we present the stock of gold that we have here in South Africa as an asset. I wish to ask the Minister whether he does not perhaps believe that we are living in a fool’s paradise here, with the stock of gold that we have building up.

The hon. member for Parktown asked whether the Minister is in a position to oblige other countries to accept our gold at 35 dollars an ounce. If he is in that position and can give us the assurance that he is, and that he can oblige other countries to accept it at 35 dollars an ounce, then our gold stock is worth something in terms of foreign assets. But if we have to rely on the free world price, I believe we are placing our reliance on something which is essentially speculative. I raised the point with the hon. the Minister in the Budget debate, and I raise it again. The price of gold this evening has reached 40 dollars an ounce on the London market. I believe that is speculative. The value of gold on the free market is speculative in terms of the expectation of people that the American dollar is going to be devalued. I do not believe that the healthy and rosy picture we show in regard to our balance of payments, which to-day puts us in the billion dollars class, is really quite as sound as the Minister would have us believe. It worries me because the American economy is so big and powerful that if the President and the Government are prepared to take the ruthless steps necessary to bring the American economy back into balance, you may well find a panic in the free world gold market. If the American economy comes back into balance and the Americans have then proved to the world that they can maintain their balance of payments and the soundness of their dollar, then the position of the special drawing rights will be strengthened to the point where people at large will have confidence in them, whereas to-day their confidence is undermined by the fact that they do not expect the dollars to be able to withstand the speculative pressure that is being put upon it by the outside world.

We have a tremendous problem here. There is a fantastic holding of gold in private hands. This is speculative money which will increase the pressure on the dollar. I believe that we in South Africa have a very responsible part to play to enable the American economy to sustain itself and the dollar to sustain its present value and its present position in world trade; because if the dollar and the pound sterling go, we will be sailing into the waters mentioned by the hon. member for Florida, which are uncharted and unknown. I believe that South Africa to-day holds an extremely important position in world trade and in the world’s monetary system. I would welcome comments by the hon. the Minister on the position of this country in relation to the special drawing rights and whether we as a country are going to do our utmost to see that this new facility, which is intended to finance the expansion of world trade, will have our full support and that we will do everything we can to see that it achieves its object. I believe that South Africa has a very important part to play in this new attempt by the International Monetary Fund, of which we are a member, to create some other source of liquidity with which to finance expansion.

Do you want a higher gold price, yes or no?

Last time that hon. member was talking about mini-skirts, and he did not like them, but now he asks me questions about the price of gold.

That is a fair question. Reply to it.

[Interjections.] While we are in this fortunate position of having a tremendous balance of payment credit …

Say “thank you” for that.

I am sure that hon. members thinks it is due to his own efforts that we are in the fortunate position in which we are. He looks that type of person. But while we are in this position, I want to ask the hon. the Minister a question because it is something I will be raising with other Ministers when their Votes come up for discussion. I want to ask the Minister whether it is not now the time for South Africa to engage the services of overseas consultants and experts in certain fields on the basis that they can come to South Africa and repatriate the full amount of any moneys paid to them in the way of salaries and allowances, etc. If we can now secure the services of people such as those, it will be non-inflationary. They will be able to repatriate any money they receive in South Africa, and I think we would then be able to avail ourselves of the services of people who can help us in some of our immediate needs. I ask the Minister to consider that, because it is something I intend to raise later on under the other Votes, and if the Minister is prepared to grant it I will be in a much stronger position to discuss it with the other Ministers.

The hon. member for Mooi River is another of those people who are now becoming concerned about the position of gold. In his reply to the Budget debate the hon. the Minister dealt with the question of gold and made the position very clear, but now this hon. member is ostensibly becoming so concerned about the matter. The basic problem in regard to gold is the following. America has declared war against gold, and not gold against America, and the fundamental reason for America’s having done so is because she is not herself a producer of gold. Now it wants to demonetize gold. If it succeeded in demonetizing gold the international currency would depend absolutely upon the political future of a country, and that country is possibly America. In that speech the Minister stated very explicitly that he could not foresee that such a move could be successful against an acknowledged international currency such as gold. Now the Minister has decided to adopt a policy of wait and see, and he is playing this matter by ear. The hon. member for Florida has also made it very clear what the difficulties in future will be. These are the only plans one can make at the moment. It is not possible at this stage to plan on a long-term basis, and the hon. member for Mooi River is wrong when he says that the Government is speculating.

I did not say the Government was speculating; I said the people overseas were speculating.

I understood you to say that we were speculating because we were not deciding precisely what we were going to do in regard to gold now. If you did not mean it in that way, then I am glad that you did not say it.

I want to return to something which the hon. member for Kensington said. He was actually reprimanding the hon. member for Pine-town, and he said that investment in the unit trust schemes did not actually cause inflation, and that is correct, but then he went on to say that people were investing in unit trusts because they have no confidence in our monetary system, in our monetary unit. That is not altogether correct, and we cannot allow it to go into the world in that form. The people are investing in unit trusts principally because it offers investment in very small units. It offers a field of investment for people who normally cannot invest in shares. Now they can acquire shares in companies by investing in small units. That is the basic reason, and not because they have no confidence in our monetary unit. After all, the entire world has so much confidence in us that they are investing here even under the present circumstances where there restrictions are being imposed on investments and where they cannot take their money out again. I think we must understand this very clearly. I do not want to go any further into that matter. I have something else which I want to discuss with the Minister.

I should like to refer to the mortgage loan insurance scheme on mortgages granted by the Land Bank in conjunction with the S.A. Mortgage Insurance Company. This is a wonderful scheme for the farmers of the country. Since the introduction of this scheme mortgages to an amount of approximately R17.5 million have already been redeemed. That means that there is an amount of R17.5 million less in debt owing by the heirs of farmers who have died. The total amount which is owing at present, and which is covered by insurance, is the enormous amount of plus-minus R170 million. I want to praise this scheme and I want to urge the percentage of debtors, approximately 7 per cent, who are not yet covered by the scheme, to have themselves covered as quickly as possible. Nevertheless I do feel that there is a deficiency in this scheme, and I shall try to explain this by way of a particular case which I dealt with.

It was the case of a farmer who was covered, but who landed himself in financial difficulties and fell behind on his instalments and premiums. He then became seriously ill and went to hospital. Then for the first time his children became aware of his straitened financial position. They found out that he was two instalments behind on his premium. Amongst themselves they agreed to raise the money and pay the premiums. It so happened that this particular farmer died a few days later. The insurance company refused to pay out the mortgage insurance on the grounds that the policy had already lapsed and had not been reinstituted in time. Now my representation is as follows.

The Land Bank must itself obtain an authorization from each mortgagee in which the debtor automatically grants the bank the right to increase his debt when a premium becomes payable. The bank may then advance such an amount to the debtor. If the debtor does not have the financial means of meeting his obligations the bank then pays the amount owing on the due date on his behalf. If this method were to be applied it would protect the bank itself in that all amounts owing would for all time be covered under the mortgage insurance. The bank would therefore not be concerned with difficult transfer and dispersal sales after the death of such a person who had landed in financial difficulties. The heirs who suspected nothing and did not know in what a difficult financial position the breadwinner had found himself in, would also be saved from great inconvenience and financial embarrassment. That is why I would appreciate it if the Minister could see his way clear to asking the Land Bank to consider this matter and give their attention to it. It is possible that they can in this way render great assistance to the farmers.

Mr. Chairman, the hon. member who has just resumed his seat mentioned the question of a “wait and see” policy. I intend to raise a matter which has nothing to do with the price of gold, although regarding this matter I hope the hon. the Minister will not keep the country waiting too long to see what he intends doing. I refer to the committee of inquiry which submitted a report, which was recently made available to the House, dealing with pension funds matters. The Minister’s responsibility for the office of Financial Institutions means that this report was submitted to the Minister. This inquiry was first instituted four years ago and according to the tabled report it was signed some two years ago. Possibly the Minister has now had an opportunity to study the important recommendations of the report. We know that the terms of reference were rather limited. We have since had the opportunity of studying the latest report of the Registrar of Pension Funds and we see a continuation of a state of affairs which I believe is not in the interests of the pension fund movement in South Africa as a whole. Here I refer to the withdrawals of benefits under the various pension funds. If we look at the report we will see that withdrawals from the benefits fund other than on retirement or death amounted in 1965 to R20.5 million whilst in 1966 to nearly R23 million. On the other hand, normal benefits paid on retirement or death amounted to R21,969,000. Over the past five years a sum of money exceeding R103 million has been withdrawn from pension funds other than for the purposes of the pension fund, in other words on the death or retirement of the member concerned. I believe this to be important development because the purpose of a pension fund is to provide for the occasion of a member’s death or retirement. The primary object of a pension fund is to pay retirement benefits. However, at the present time the payments of the pension fund are far less on the occasion of a member’s death or retirement than on other occasions. This is not a healthy state of affairs as far as the pension fund movement in South Africa is concerned. Consequently the committee of inquiry dealt in some detail with the problems that arise from this state of affairs. We know that in many instances members of a fund regard the money to be obtained as a means of liquidating accumulated debts, and in some instances where a member has already utilized his benefits it is particularly difficult for the widow and other dependants of the deceased to reap the benefit thereof. The committee made important recommendations regarding the two terms of reference dealing with the transferability of pension benefits and the preservation of accrued benefits. If we study its recommendations we find the committee is not in a position to recommend the transferability of pension benefits owing to various practical difficulties. Although the number of pension funds has increased in South Africa during the past four or five years, and indeed at the moment there are 4,782 funds with a membership of over one million, it would appear not to be practical to enforce transferability until such time as there is a form of standardization of the various schemes administered by all these funds and more employers establish such schemes. Consequently, the report recommends that transferability should be on a voluntary basis. This is an important recommendation and this Committee would be interested to hear whether the hon. the Minister has had an opportunity of studying this particular recommendation.

The other important question is the preservation of pension benefits, and here the commission makes an important recommendation where it suggests that machinery should be set up whereby a central pensions bureau will be established as well as a central pensions registry whereby it will be possible for the accrued benefits of the members to be centralized and administered. The administration of this type of fund is virtually divided into two departments. In the first place there is the Secretary of Inland Revenue who has to scrutinize the various rules of the funds, and in the second place the Registrar of Pension Funds also has to perform that task. I believe the machinery suggested in this report is worthy of close study and the Minister, I feel, should give an indication whether he has had an opportunity of studying this recommendation regarding the preservation of accrued benefits. Perhaps he will also tell the Committee whether he intends taking any steps to implement these recommendations which will no doubt mean legislation later on to amend the various Acts concerned. I believe we are dealing here with a very important matter, one which affects a large number of people, and requires the co-operation of both employers and employees. I hope before the Minister introduces any legislation in this regard he will consult fully with the interested parties. Another important factor here is the mobility of labour because the non-transferability of these pension rights and benefits militates against this.

Other important matters are also referred to in this report. There is the question of the age barrier which exists. We know that in a community where free enterprise is practised, such as South Africa, there is keen competition as regards the various schemes of pension funds. We realize that there are these practical difficulties involved concerning the transferability of funds. One of the difficulties, however, is the age barrier which is another factor militating against the mobility of labour and also adversely affects, in many instances, the older worker who finds that due to the fact that an employer has a compulsory pension scheme and that new membership is confined to persons under the age of 45 years they cannot even be considered for a position that might exist. Consequently this has a bearing on the labour position in South Africa, the mobility of the labour force and an expanding economy. It is essential that the various shortcomings that do exist should be eliminated wherever it is possible. I therefore hope that the hon. the Minister will have an opportunity, during the course of this discussion, to indicate whether he accepts any of the recommendations of this committee of inquiry.

Mr. Chairman, the hon. members on the other side of the House, and also certain hon. members on this side of the House, raised very interesting points in the course of this debate. I want to congratulate hon. members on the high standard of debate maintained on this occasion. The questions raised in this debate are of such a nature, of such extent and such weight that if one wanted to reply to them properly one would not need half an hour in which to do so, but would perhaps have to devote hours to it. This is not my intention to-night. I want to try and reply in a few moments to a few of the most important questions raised here, especially in connection with the problem of inflation, the matter of gold and things connected with that. However, before coming to that, I should like to say to the hon. member for Pietersburg and I shall go into the matter which he mentioned in connection with the Land Bank. I shall then get in touch with him again. As far as the hon. member for Umbilo is concerned, I want to say that the report reached my predecessor and that it has been studied by my Department, but that it is a matter about which my Department does not want to decide on its own, because it is also of importance to other Departments, particularly the Department of Social Welfare and Pensions. That report is now with the Departments concerned and will be studied by them. I believe that all those Departments will get in touch with all the parties concerned in that regard and that subsequently a clear statement of policy will be made by the Government.

I now come to the important questions raised by hon. members on both sides of the House. I want to begin by dealing briefly with the problem of inflation, because I think that we are all rather tired of hearing about and speaking about inflation. As the hon. member for Queenstown rightly remarked, we are, of course, satisfied with the results thus far achieved by the various measures we have applied in the fight against inflation. The fact which I mentioned in my Budget speech, namely that last year we had an inflation rate of 1.8 per cent, as compared with 3.8 per cent the year before, is already an indication that our measures were successful. The additional fact that during the first quarter of this year prices increased at an annual rate of 1.5 per cent is also an indication that our methods were successful. I also agree with the hon. member for Pinetown and the hon. member for Parktown that we have no reason to be completely self-assured. I agree that inflation is a dangerous beast, that it may rear its ugly head when one does not expect it or is not prepared for it and that a government and a country should always be on guard against a possible danger of inflation. I have warned on occasion—and I want to do so again this evening—that we are still living in a period of latent inflation. Although we have succeeded in curbing actual inflation to some extent, there are inflationary forces at work which, unless we take the necessary steps and do so in good time, and unless we are sufficiently on guard, may eventually break out in a renewed wave of inflation. I mentioned the accumulation of funds from abroad—and the hon. member for Parktown also did so again here this evening. It is true that recently, at the end of last year and thus far in the course of this year, a tremendous stream of money has come to South Africa from abroad, which is proof of the confidence which the outside world has in South Africa, but which is at the same time also inconvenient, because it builds up a volume of liquidity in this country which may be dangerous as a contributory factor in the development of inflation. In addition the influx of that foreign capital, there are also other factors present in South Africa. I am thinking of the huge credit which must be created by the Land Bank for the financing of agriculture. In this connection we will have to give serious attention to that problem. I am thinking of the seasonal phenomenon, which I must just mention in fairness, i.e. that for a short period of the year the Government spends more money in the country than it receives in taxes, but this is a temporary phenomenon. However, I am thinking of the psychological factors which exist throughout the world and here in South Africa, especially those psychological factors which are stimulated by events overseas, i.e. the expectation of a higher gold price and the resultant speculation. All those factors have an inflationary effect. If South Africa does not take care, and if we do not proceed cautiously, we may once more be faced with the danger of inflation. Therefore it is important to us that the methods which we have thus far applied, the fiscal and monetary methods which we introduced previously, which we have thus far applied, and which appear to have been successful, should not be thrown overboard now, but that we should retain them and not relax them, however heavily they may weigh upon us at times, until the danger of inflation has finally disappeared. I am thinking here particularly of the credit control and the fiscal methods which we have applied.

The hon. member for Parktown put a few pertinent questions about the liquidity which is being built up in the country, the liquidity which we see in the banks and which is largely attributable to the influx of foreign capital. He asked what we were going to do about that liquidity. I want to say that, as far as the liquidity is concerned, there are various things which one can do. In the first place the State can of course continue with the sale of Treasury bills and other short-term securities. The State is doing so. The Reserve Bank can continue with its open market transactions; and it is doing so. But I just want to point out to the hon. member that this procedure on the part of the State of issuing more and more Treasury Bills and borrowing more and more money which it does not need, is all costing the State money. I want to point out to the hon. member—he is nodding his head and I know that he understands the position—that while in March we issued Treasury bills to the amount of R8 million per week, by the end of April it had increased to R14 million per week. These are tremendous amounts which the State is borrowing for the purpose of draining off the surplus liquidity in the banks. One can continue doing so, but it costs money. This is one of the methods which we have thus far applied. Ultimately the taxpayer must pay for it, and specifically in the form of the higher interest for greater loans and the tax which we forgo in the case of the tax-free Treasury bonds. For this reason the Reserve Bank recently came to light with a new directive instructing the monetary banks to invest 40 per cent of the increase in their short-term commitments in the Reserve Bank as from March. The whole object of this is to drain off the surplus liquidity in the banks, which exerts pressure on the short-term rates of interest, which is detrimental.

The object of the Reserve Bank is therefore to absorb only that extra 32 per cent above the 40 per cent of the additional liquidity, and not the total liquidity, of short-term funds. If this does not happen and the banks are allowed to retain all those short-term funds, it will mean extra liquidity which is inflationary and the State will have to come forward with more and more Treasury bills and short-term loans, which cost the State a tremendous amount and the hon. member and I will have to pay extra taxes in order to afford the banks that higher liquidity. I think this is the background to this new directive on the part of the Reserve Bank. Then the hon. member asked what more we could do. The hon. members said that we must get rid of this money in the country. That is all very well. We must now get rid of this large amount of money in the country and this money which has entered the country particularly as a result of the influx of foreign capital. The hon. member for Parktown mentioned a few examples. First he spoke of the blocked rand and said that we should take note of that. It is not quite clear to me whether the hon. member meant the blocked rand as such or the blocked rand debentures. As far as the blocked rand as such is concerned, the hon. member is probably aware that any foreigner who possesses a blocked rand can convert that blocked rand into shares and sell the shares abroad. As far as the blocked rand debentures are concerned, the hon. member will know that they are sold at a premium. There are many practical technical difficulties in freeing blocked rand debentures. But the most important argument is that one is not going to diminish inflation by freeing those blocked rand debentures, because it is money which is already in the hands of the State. It is not money which is in circulation. Even if one were to free those debentures altogether, it would have no effect on inflation at all. In the second place the hon. member spoke of the relaxation of import control in respect of capital goods. The import control in respect of capital goods is in fact an anti-inflationary measure. I concede that in the long run one cannot keep it up—one cannot put a stop to all development. It is specifically in order to prevent too rapid industrial development in the country that this has been applied. Import control on capital goods was introduced in order to ensure that the country did not have too rapid an economic development. A total lifting of import control on capital goods will therefore not solve the problem either. The hon. member for Pinetown and others said that we should then allow more capital to leave the country in the form of outside investments. We should allow our people to take more money out of the country and leave it abroad. This is very interesting. It would have been very interesting if we did not live in the times in which we are living. It would have been very interesting, and possible, if we lived in times when the future was absolutely certain. But in the times in which we are living to-day, the future is not certain. We are not living in times where we can pick and choose as far as our foreign exchange reserves are reserved. There are many economic and political factors on the international horizon which we must take into account. If ever there was a time when South Africa had to be careful in respect of its foreign exchange reserves, it is now. Recently our foreign exchange reserves have been built up by the influx of foreign capital. No one can tell me how long that influx of foreign capital will continue. In recent months it came in on a speculative basis to a large extent in order to buy gold shares in South Africa and it is decreasing to a certain extent. It may flicker up again, but this is an altogether uncertain element. One cannot base one’s future policy in regard to foreign reserves and exchange, on an uncertain element. Secondly, we have no certainty in regard to our imports and exports. It may again happen that our exports decrease and our imports increase, narrowing the gap between them. Many things may happen on the monetary front and on the gold front with which we are dealing now. It is on this front that the hon. member thinks we should speculate. I believe that if ever there was a time in which we should be careful with our exchange reserves, it is the time in which we are living now. Especially in the coming weeks or months, and I am not speaking of the distant future, because we cannot see so far ahead, we must be very careful to maintain our reserves.

Are we not being too careful?

I would prefer to be accused eventually of having been too careful rather than to be accused of having been too speculative.

This brings me to the question of gold. Both the hon. member for Parktown, who put a few very interesting questions, and the hon. member for Mooi River, have my full sympathy this evening. They have my full sympathy in the sense that I think they know that there are many things which I know and can say, but which I am not allowed or do not want to say at the present moment, not because one wants to be so secretive, but because it is in the interests of South Africa, as “we live in a time where silence is golden”. I agree with the hon. member for Mooi River when he says that it is a serious situation in which we find ourselves, not only for South Africa, but a serious situation for the world as a whole. What we have in mind now and whatever we do are not simply aimed at gaining temporary benefits for South Africa, because South Africa can never benefit from chaos in world monetary conditions. We believe that the policy which we are following is one which is and must be to the benefit of the world as a whole, and that it will also be to our benefit. The last thing we want to see is confusion and chaos in the international monetary field. Our standpoint is that if the financial powers of the world continue to regard the question of the price of gold as a political issue, as the hon. member also said, they will never reach a true solution. If they do not want to increase the price of gold because Russia and South Africa produce the most gold, then the concepts on which they base their arguments are worth nothing, and will lead to nothing. Purely economic arguments are all that applies here. In addition we adopt the attitude that if the U.S.A. does not want to increase the price of gold because the prestige of the U.S.A. and the dollar are at stake, it is also a wrong point of view, because neither America’s prestige nor that of the dollar is what is involved here; what is involved here is the welfare of mankind as a whole. The international economic welfare of mankind as a whole is of much greater importance than the value and the prestige of the dollar.

The hon. member for Mooi River, if I understood him correctly, expressed certain fears about what might happen if the dollar were to devalue. I do not know if the hon. member did not understand correctly, but I just want to repeat what we have often said. We are not seeking to bring about a devaluation of the dollar. We have often said that it might in fact be the beginning of chaos and disorder in the monetary system if the dollar were forced to devalue unilaterally. What we are seeking to bring about is a general revaluation of the gold in terms of the dollar and in terms of all monetary units. Since I last spoke, in reply to the Budget debate, a few things have happened. On that occasion I told hon. members what my attitude was in respect of the future of gold and in respect of the price of gold. I still stand by every word I said on that occasion. But in the meantime certain other things have happened which have slightly influenced the future picture in respect of gold and the sale of gold. In the meantime, as hon. members know, the two-tier gold system was introduced. On the one hand we have monetary gold and on the other hand the so-called free-market gold. What has happened in the meantime is what hon. members have read in the newspapers, i.e. that America has said, through the month of the Under-Secretary, Mr. Deming, that it is America’s aim that all financial authorities and all central banks should refuse to buy any further free-market gold. In other words, endeavours are being made, according to those reports, to have two markets which are isolated from each other, namely a free market and a monetary market, which will in no way be connected with one another. It seems to us, if those reports are correct, that we must take into account that it is America’s conscious endeavour soon to cause the price of gold on the free market to fall as low as possible. The endeavour is apparently to cause the price of free-market gold to fall to a point below $35 an ounce, in order, by so doing, to be able to prove to the world that gold is not worth more than $35 an ounce, and thereby perhaps taking a step towards the demonetization of gold. In my previous speech I told the House that I did not believe that America would take this drastic step. I now want to repeat that it seems as though an attempt is actually being made to depress gold and to harness the central banks of the world in a common endeavour to support America in not buying further gold. Then there is the question of the hon. member for Parktown: What about our legal rights in respect of the sale of gold on the monetary market? I said on a previous occasion that we would make use of our right to sell on the monetary market or on the free market, assuming that we have the right to sell on the free market and assuming that we have the right to sell on the monetary market. I just want to read one paragraph from the statutes of the Monetary Fund. Section 5 (6) reads as follows—

I do not want to say anything more about this matter. I just want to say that we have our own interpretation of all these things. But as a result of the steps taken recently, we have now been placed before a completely new situation. We are at present making a very thorough study of the whole situation. We are studying the question of the extent to which central banks of the world are subject to any decision not to buy gold. We have progressed with these studies. Now I must just ask the hon. member for Parktown and other hon. members not to ask me to say any more than this at this stage. We know where we are going. We realize our problems and we know what we must do, but the time has not yet arrived when we can reveal our findings. As far as the free market is concerned, we have of course the fullest right to sell there. We are still adhering to our decision not to place gold on that market at present. I told the House previously that one of the reasons why we are not placing gold on the market at present, is that there is close on 2,000 tons of gold still hovering over the market, which was purchased quite recently, and which will again be off-loaded onto the market. No one knows how much of that gold is speculative gold and how much is investment gold, and how much gold will come onto the market in the immediate future, in the next few months, but the fact remains that that gold is exerting pressure on the market. We are prepared to wait a little. The hon. member once again asked me the “sixty-four thousand dollar question”, or rather the “thirty-five dollar question”: “How long can you hold out?” this is almost the same as asking a general during a war: “How strong are your forces?” I think the hon. member should appreciate that we cannot say now how long we can hold out without selling gold. There is a good deal of elasticity in our position. I can assure the hon. member that this position is being studied closely each day and that we are planning every subsequent nove virtually day by day, week by week, to see where we are going, and in order to avoid being caught unexpectedly and landing in an impossible situation.

You must not miss the boat.

I do not know what the hon. member means by that, but it is no use getting into a boat which takes you to the wrong place. If we get into a boat, we want to know that that boat will take us to the place we want to go to, in the long-term interest of our country. As far as the free market is concerned, there are a few uncertain factors. There is the factor of the gold hanging over it. There is the factor of the gold which is in Russia at the moment, and of what Russia is going to do. But the most important aspect of all in this entire matter is the economic position of Britain and the economic position of America. These are the most important of all the factors. This whole matter depends upon whether British sterling is going to hold out and on whether America can restore its domestic economy to a healthy state and can correct its foreign balance of payments deficit. The whole situation depends upon that. These are matters beyond our power. These matters are in the hands of England and America. In the last resort it is their economies which will determine the price of gold and our future position. It seems to me as if the people in Europe and even in America are rather sceptical about the possibility of America restoring its economy.

The hon. member put a question to me pursuant to a speech made by my colleague the hon. the Minister of Economic Affairs, in which the hon. the Minister of Economic Affairs used the words “if gold remains a means of payment”. There is sense in what the hon. the Minister said, because important persons in America have declared on more than one occasion that America should cut away the ties of gold altogether and that it may demonetize gold. It is not altogether out of the question that a stage may be reached when America, if it finds that it cannot save its economy, may resort to the demonetization of gold. I think that is what the hon. the Minister of Economic Affairs referred to. In my previous speech I again referred to the fact that I do not believe that America will resort to that. To me it seems as if it would be fatal. If America were to resort to such a step, we would have two monetary blocks, one tied to the dollar and one tied to gold. I would place my trust in the one tied to gold and I think that most countries in the world would also do so.

Hon. members put questions to me about the special drawing rights. We have just received the latest proposals. We are busy studying those proposals, and pursuant to that study we shall eventually determine our attitude. I have already indicated in this House, and I also did so in Rio de Janeiro at the meeting of the International Monetary Fund, that we do not believe in international special drawing rights, the so-called SDRs, as a solution to the world’s monetary problems. Such rights can indeed play a supplementary role, but they can never be a substitute for gold. They can alone serve as a supplement and auxiliary to gold. We shall always approach the matter on that basis. We believe that when special drawing rights are used on a large scale as so-called paper gold, they will be worthless, just as glass diamonds are worthless. They can only have value if used on a limited scale together with gold and based on gold, because gold has indicated that it is the only monetary means of payment in which the whole world has confidence.

I now come to the important question raised here by the hon. member for Kensington, who asked me whether we were in contact with the gold producers. I want to assure him that we continually hold discussions with them. This is done either by me or by my Department or by the Reserve Bank. We are in the closest contact with them.

In conclusion I just want to return to the question asked by the hon. member for Pinetown in connection with unit trusts and their inflationary effect. I want to say to the hon. member for Pinetown that I agree with him— although I perhaps do not altogether agree with the hon. member for Kensington in this connection—that unit trusts have an inflationary effect in time of inflation. A report recently appeared from America about the stabilizing power of unit trusts, and it has been clearly proved in America that unit trusts have no stabilizing effect, but that in times of inflation they intensify that inflation and that in times of recession they intensify that recession. I believe that they have an inflationary effect in South Africa. I pointed out last year already that some of them were misleading the public in their advertisements by taking the growth rate of the country as an inflationary rate and then saying to the public, “Look, you must invest with us because each year the value of your money is going to decrease by 7 per cent, 8 per cent, 9 per cent or 10 per cent”. I believe that they have an inflationary effect in the country, but that they will have a recessionary effect if a recession should come, and that they are in no way a stabilizing factor in our economy.

The hon. member also referred to the I.D.C. My reply to his question is that I am sorry that the I.D.C. is associated with that, but I also appreciate that if everyone is taking part in the movement, it is very difficult for others to remain outside it. I know of certain trusts which entered the affair reluctantly, but because others were in, they had to enter as well, for reasons of self-preservation. I am sorry that this should be the position. Then, in conclusion, I just want to say to the hon. member for Kensington that since the I.D.C. offers shares to the public through National Selections or Industrial Selections, it is acceding to his request by making shares available which the public can purchase, and it is also meeting another need in that they are getting money back from the public in this way, money which would otherwise have had to be provided by the State. The I.D.C. obtains this money from the public, which enables it to continue with its task of industrial development.

Do you have any objection to Government loans being included in the shares of the I.D.C.’s companies?

Mr. Chairman, I do not want to reply to this question, because it has great many implications which I do not have time to discuss now across the floor of the House. If you were to require of the I.D.C. that it should also include State loans in its shares, then you must also require it of a large number of other companies—not only in the case of the I.D.C., but also in the case of a great many other investment companies and financing companies; it will entail a whole series of complications.

I am not saying that it should be compulsory.

If it wants to do so privately, it is of course free to do so. Mr. Chairman, I think that with this I have replied to the most important questions put to me by hon. members.

Votes put and agreed to.

Revenue Vote 18,—Provincial Administrations, R229,682,000:

Sir, I am obliged by pressure of time to compress in to a few minutes a subject which I believe demands more of the attention of this House, and that is the question of the subsidization or the contributions—I do not like the word “subsidy”—from Central Government funds towards the funds of the provinces of South Africa. The Provincial Administrations are an essential part of our governmental structure. They are, whether hon. members opposite like it or not, the federal element of the Constitution of the Republic. They are the element which handles local affairs at local level. If you want proof of that from the Government side, then you have it in what has happened only recently in the Cape Province, where the Cape Province appointed a commission to investigate the question of beach facilities. The Central Government, after this investigation, then appointed their own commission, with an honourable aspirant leader of the Nationalist Party in Natal as the chairman. He then carried out another investigation, his own investigation, and when he submitted the results of his investigations the Government said: “Thank you very much; that is a lot of nonsense”. They then proceeded to chuck it into the wastepaper basket and passed the baby back to the Cape Provincial Administration to handle at the local level, where it belongs. The fact is that the province has been given the responsibility for handling provincial affairs, matters close to the hearth and home of the province. It was proved in this case that the importation of somebody from Government level does not work. Sir, this is our system of government. We have had two commissions, the Borckenhagen Commission and the Schumann Commission, which have been investigating the question of provincial-Central Government financing for a long time. I hope that they are not going to become like the Press Commission, which sat for 14 years, produced a wheelbarrow full of nothing and then disappeared. I believe that these commissions have produced sound suggestions for the solution of this eternal problem of the financial relationships between the provinces and the Central Government. Sir, we want to know why we cannot have the results, the fruits, of this investigation.

They have been promised us.

We have been promised them over and over again, session after session, in speech after speech. We expected them in the last recess, but every time we are told that the Government has not yet had a chance to study them. Must the provinces go on waiting in never-never land for the Government to make up its mind, or is the position that these commissions have produced a solution which will work and that the Government is not prepared to accept it? Nobody knows except the hon. the Minister. I plead again that this procrastination, this hiding behind the excuse of wanting to study the reports, must come to an end so that we can seek a basis for Central Government/Provincial financial relationships that will work.

But what is happening in the meantime? We have a hand-to-mouth ad hoc system of special subsidies. I want to deal just for a moment with this year’s Budget. On page 107 under Vote 18 we have item G, “Extra Statutory payments”. I cannot question the statutory payments, the subsidies paid according to formula. Here we have an extra-statutory payment, a measure introduced as an ad hoc measure in an attempt to meet the emergency which the Provincial Administrations were facing. We find that last year that vote came to R8.6 million. This year it has climbed to R25.6 million. In one case the increase is R13½ million.

What is wrong with that?

The reason is that the Cape Province faced a financial crisis which had to be met by an ad hoc measure based on no formula other than their own crisis. But the point I want to make is that in Natal the subsidy was reduced from R3.2 million to R1.8 million. Natal is the one province in South Africa where the ratio between Bantu and White is eight to one. Every white taxpayer in Natal has to contribute towards the services for eight Bantu. The average for South Africa is four to one. In the Cape the ratio is a little more than two to one. Natal, where every white taxpayer has to carry the services for eight Bantu, aided by those Indians who are taxpayers, has the most impossible problem of all the provinces as far as the provision of Bantu services is concerned. Instead of that problem being met, instead of that difficulty being recognized, the Natal subsidy is cut by 40-odd per cent, from R3.2 million to R1.8 million. The Cape subsidy has gone up by R13.4 million; the Transvaal subsidy has gone up by R3.1 million and the Free State subsidy by R1.85 million, from nothing to R1.85 million. The problems of all three provinces are recognized and they are given extra-statutory payments, but the subsidy of Natal is reduced by R1.4 million to a nominal R1.8 million. Sir, these subsidies from the Central Government—as I have said I do not like the word “subsidy” which appears in the Budget—are the only help the provinces obtain to meet their obligations. What is happening is that the Central Government is forcing the small province of Natal to cut its services to its people; it is forcing the white taxpayer to carry a bigger responsibility and, on top of it all, it has cut the subsidy to Natal this Session. I call upon the hon. the Minister to give us an explanation for this inexplicable cut in the subsidy to Natal, and I ask the hon. Whip over there (Mr. Torlage), the hon. member for Umhlatuzana and the hon. member for Zululand to get up and join forces with the Administrator of Natal, who has said that he will use his influence to get greater assistance from the Central Government for Natal. I ask those members to stand up and to support their Administrator in getting greater recognition of the special problems of Natal.

It is not a strange phenomenon that arguments on a provincial level are every now and then sought on the part of the Opposition in this House when they no longer have arguments to use in the discussion on the Vote of the Minister of Finance.

I just want to try to reply to the two things which were mentioned by the hon. member for Durban (Point). In the first place his way of doing things is to play the provinces off against one another. He is not the only one to have recognized the problems of the provinces. They are generally known. They are known in the various provinces and they have been mentioned in this House on many occasions. I do not want to repeat all the arguments. I just want to tell him that if justification exists in Natal for a higher subsidy, and I believe that there is probably justification for it, then there are other arguments which apply in respect of other provinces, which he would do well to take note of, and which he may safely leave to the sound judgment of the Administrators of the provinces, the executive committees and the provincial councils which represent those provinces. I just want to mention an example. The Cape can say with every justification that the extensive areas across which roads have to be built, provide very good justification for their having to receive a higher subsidy. I can say to him that the province of the Transvaal, in which by far the greatest number of Whites in the Republic live, is entitled to say that they have a greater right to higher subsidies than Natal, because they serve a very large white population, for which schools and hospitals must be provided. The Free State, with its rapid development which caught it after the development of the gold fields at a time when it was a very poor province, can probably also make out a very good case for special preference. But I think the hon. member would do well if he confined himself to arguments relating to this House, and rather left the relationships between the provinces and the arguments in favour of higher subsidies to persons who are probably more competent in their respective provinces to decide about their needs when they discuss them with the Minister of Finance.

But I should like to come to the second matter, and this is a matter which has been raised here on various occasions by hon. members opposite, as if it were a sin on the part of this Government that no final decision has yet been announced about the Borckenhagen Committee and the Schumann Commission reports, which are at the moment before the Government for consideration. I am also looking forward to these findings being made known, and to the Government announcing their decision to us.

When?

The hon. member asks when. I shall try to explain to him, who has himself been a member of a provincial council, why he should use his sound judgment as to what would be a suitable time. In the absence of the hon. member for Karoo, I want to say that he was a member of the Borckenhagen Committee and that he resigned from that Committee because he could not find the time to do the work which the members of that Committee had to do. The Borckenhagen Committee was composed of persons who had to do this work while having to cope with a lot of other work as well. For the hon. member’s information, and the information of the hon. member for Durban (Point) and other hon. members, I just want to say something about the modus operandi of the Borckenhagen Committee, about which they ought to have known if they know anything about municipal and provincial matters.

The Borckenhagen Committee adopted the view that it should obtain all possible information before provisional reports could be prepared. And in what way was it done? [Interjection.] The hon. member must not interrupt me now. He can speak again later. The Borckenhagen Committee set to work in such a manner as to afford all parties the opportunity of submitting evidence. And those parties were in the first place the provinces, and secondly the local authorities. Surely the hon. member knows that no channel exists for direct contact between municipalities mutually and the Central Government, surely he ought to know that the provincial associations of the municipal association only meet once a quarter and must then dispose of all their business. Surely he ought to know that any investigation such as the Borckenhagen Committee made is also judged on merit and properly investigated by each separate municipality before replies can be given. I think that the hon. member knows that there were delays in the case of the Borckenhagen Committee, not because that Committee had anything to do with it, nor the Government, but because the evidence could not be collected from the provincial and municipal administrations.

But have they submitted a report?

Yes, they have. [Interjection.] If the hon. member will give me a chance and not answer his questions himself, I shall tell him that the first interim reports were received as from 1962, but that the Government had to wait for the final report, and the Minister said that the last report about the divisional councils and the resumé of those reports by the Borckenhagen Committee only became available at the beginning of the year.

If the hon. member would only adopt a responsible approach in considering the work which Parliament must do in connection with these reports, he will know that there is a great deal of work. Through the Borckenhagen Committee and the Schumann Commission the Government obtained the views of the municipalities, the provincial associations, the United Municipal Executive and the provinces. But is it not the duty of this Government and this House as the Central Government, which in the last instance is responsible for good government, first to consult its own Departments as well? Do the hon. members not know that the investigation of this Borckenhagen Committee dealt with all matters affecting the public in daily life? It commenced with an investigation into health services, which have through the years always been dealt with on an ad hoc basis. Do the hon. members not know that this report as well, when it has been finally compiled, must first be sent to the Department of Health for its comment? Do hon. members not realize that the changes proposed in the preliminary reports of the Borckenhagen Committee may possibly require constitutional amendments as well? Does the Opposition really expect that a Government and the Minister concerned would be so irresponsible as to come before the House immediately with such a report of a committee and to present the whole matter here, so that everyone may look at it and criticize it, a report which has not yet been dealt with by the Government?

But, what is more, I cannot understand the irresponsibility of the Opposition in insisting, purely for political gain and in order to sow suspicion, that the report should now be issued hastily, while everyone knows, or at least ought to know, that in the last resort the Government carries the responsibility of taking a decision which must serve as a final solution.

I just want to inform the Opposition what happened in 1945 when the Opposition dealt with this legislation. [Interjection.] Yes, I know that the hon. member for Green Point will not like it. In 1945 the late Minister Hofmeyr, at the introduction of the Financial Relations Consolidation and Amendment Bill, said in his introductory speech (Hansard, 1945, column 8572)—

In 1945 the Government of that time, which is to-day the Opposition, introduced a new Bill which was to be the solution to this problem for all times, but only in 1957 there was a tremendous fight again because this wonderful Bill was not acceptable after all. I was not the one who made that wise statement. At that time already the late Mr. Werth, speaking from the Opposition side, had warned that that Bill would be no solution, the Bill which was suggested by the then Government as the final solution. Mr. Werth said (Hansard, volume 54, column 8615)—

[Time expired.]

Except for an increase in the gold price, there is nothing which would afford me so much pleasure as to be able to come to this House with a final solution for the provincial problem. I am at one with hon. members on both sides of the House who feel that we should set this matter of the relations between the Government and the provinces in order as soon as possible. But precisely because it is so important a question, it is not one which we can deal with over-hastily. I just want to repeat what I said in this House on a previous occasion, i.e. that these reports of the Schumann Commission and the Borckenhagen Committee are reports which must be dealt with together. It is true that the Schumann report appeared years ago, but one could not evaluate the Schumann report properly before having received the complete Borckenhagen report, and we have only had the complete final instalment of the Borckenhagen report for a few months now. We received it at the end of last year. We are studying those reports at the moment. The Government does not believe in simply releasing those reports and allowing various pressure groups to do what they like with them. As responsible people we believe that we should study those reports, sum them up and come to Parliament with recommendations after we have also discussed the matter with the provincial administrations.

May I ask whether it would not be advisable to make these reports public? There are a number of formations of government at various levels which are concerned with the reports, and it will take a long period of time for them to be studied by the local authorities. Cannot the reports be made available for information at this stage, to be followed by the Government’s recommendations at a later stage?

As I said a moment ago, we do not believe that it would be in the best interests. Our various Departments are very hard at work studying those matters, and I want to express the hope—and I want to make no promises—that we may perhaps reach a fair measure of finality in the recess. We are aiming to do that, but we cannot promise that that will be the case. We shall in any case try, because we know that this matter of the provinces must now be resolved. I agree with the hon. member for Durban (Point) that this question of subsidies on the basis on which it has always existed, is no longer functional. But the very fact that it is no longer functional and that so many measures have been applied and the legislation has had to be changed so often in the past, shows us how difficult it is to solve this problem. Therefore we cannot come forward with an over-hasty answer. I want to give hon. members the assurance that we are doing our utmost to bring this matter before this House as quickly as possible.

Now the hon. member for Durban (Point) has, of course, once again tried to tell the world in his melodramatic way that we are discriminating against Natal. We have now taken poor Natal’s subsidy away from it and we have given more to the other provinces. I just want to say this to the hon. member. Every year the various Administrations come to me and we discuss their entire financial position. We see what they themselves can provide, and we see what they need, and we reach agreement with each of the Administrations about a reasonable amount as an extra-statutory subsidy. This was also done this year. We discussed the matter with all the Administrations and we examined the strength of their own financial positions at that moment. We considered the essential needs of each province. We considered the Central Government’s own financial position, and we also considered the inflationary and other economic conditions in the country. Eventually we reached a solution with each of those provinces with which each of them was quite satisfied under the circumstances.

But Natal had to curtail its services.

All of them had to curtail their services. Each of the provinces had to curtail its services, just as the Central Government also had to curtail some of its services, owing to inflation. We purposely had each province curtail some of its services, but in proportion to one another, and one was not penalized more than another. I can really give the hon. member the assurance that Natal was not treated more harshly than the other provinces.

Why was it cut?

Because its position this year was better than in the previous year and because its needs this year were not the same as the year before.

May I put a question to the hon. the Minister? Was that position due to the fact that Natal had to curtail its services drastically in order to save money, and did it still need that money?

Natal had to curtail certain services fairly drastically, but all the provinces had to do so. The hon. member cannot tell me that greater sacrifices were expected of Natal than of other provinces.

Vote put and agreed to.

Revenue Vote 20,—Inland Revenue, R6,380,000:

Mr. Chairman, I want to ask the hon. the Deputy Minister whether he will not, through the Secretary for Inland Revenue, arrange to publish the income tax rulings and practices of the Department of Inland Revenue. I want to say at once that I am not complaining about the rulings per se. Most of the rulings that I am talking about are favourable to the taxpayer. If they were not, in most cases, one could take them to the special court and have them changed. They are favourable to the taxpayer, but they are known basically only to the department and a limited number of people. We know that the Department publishes these rulings and practices together with other matters for the information and guidance of the officers of the Department of Inland Revenue, but I sincerely believe that the time has now come for these practices and rulings to be given wider distribution and to be made available to the general public. What is happening at the moment is that these practices are known to some, often through fortuitous circumstances, but are not known to the main body of the public. In some cases they are even not known to professional people who practise in the tax field. Because of this we have a situation that one taxpayer having knowledge, for one reason or another, of these rulings that have been made by the Department, is benefiting as against another taxpayer. The general basis of taxation is that all must be treated equal. All must be in possession of the same knowledge and no one taxpayer must be preferred against another taxpayer. In other words, it is with one or two minor exceptions a cardinal principle of our tax laws that there should be no differentiation between taxpayers. I want to give one or two examples of what can happen. If one looks at the famous buff form, as it is commonly known, one finds under schedule 2, Rebates, the heading: “Children, stepchildren and legally adopted children”. Under this heading it says—

There is also a reference to look at note 2A on page 7, but this is not material. Now, Mr. Chairman, it is correct that—

I am quoting from Income Tax in South Africa, by Meyerowitz and Spiro. And further that—

Order! I just want to put it to the hon. member that this matter really belongs under Treasury, because Treasury decides on what taxes should be levied. The Department of Inland Revenue is only the collector of the taxes.

With due respect, Mr. Chairman, I am asking for the Inland Revenue Department to tell us how they provide for the collection of taxation. I am not querying the tax. I am querying the fact that they are not making known to the public their interpretation of the tax. It is really, with respect, Sir, believed to be a mater pertinent to Inland Revenue and not to Treasury. It is out of Treasury’s hands at this stage.

The hon. member may proceed, but I think the details should really be obtained from the Secretary for Finance.

We believe that the Department of Inland Revenue is correct in making this allowance and not taking into account such matters as a child getting an income from vocational work. But the point is that I may know about it, but Messrs. A, B, C to X, Y, Z may not know about it. I, by virtue of my knowledge, then get a benefit of the extent of a child’s allowance as against people who have no knowledge of the fact. The same applies to an illegitimate child. In law one is not entitled to a rebate, but the Department of Inland Revenue has always allowed a rebate in regard to an illegitimate child that is supported by a father.

I now refer to contributions to a retirement annuity fund. Again the Department of Inland Revenue makes a decision on the interpretation of the law which has come before Parliament in terms of the Income Tax Act, because section 11 of the Act says that—

and subsection (n) tells us that one of the deductions is a sum—

But it is the Secretary for Inland Revenue and his Department who determine what that means. There are, I understand, different interpretations. I had a case brought to me a little while ago on this matter, and I made some inquiries among my professional friends, and found that a figure, for example, of R600, earned as directors’ fees were considered to an earning from trade in terms of this definition. That was the ruling of the Department. There are many others that one could quote in connection with this issue. There are many matters which arise. There are such a thing as allowances for post-graduate medical study, and the method of determining the taxable portion of liquidation dividends, and the reopening of assessments which we as taxpayers sometimes have to resort to with the Secretary for Inland Revenue. What we want is publication. I would suggest to the hon. the Deputy Minister that he has two alternatives: To publish all the rulings that are relevant to the public generally in a special Gazette, and thereafter to continue to publish the rulings from time to time in the Gazette. This will make the rulings available to everybody. If this is not practical then they should be published in booklet form, and those members of the public who require them or who are interested in them, can buy the booklet, so that each member of the public who wants to know on what basis the Department is interpreting the law, will be able so to ascertain. I think this will be a public service. I think it is long overdue. It is being done in Rhodesia, and I hope the hon. the Deputy Minister will accede to our request.

Mr. Chairman, I should first like to inquire from you whether you will allow me to discuss the taxability of pension contributions during an employee’s working life.

No. The hon. member should have raised it under the Vote “Treasury”, which has already been disposed of.

The ideas expressed by the hon. member for Parktown sound very fine in theory, and the way in which he presented his case here, may give rise to the idea that there is in fact a need for something like that to be done. And let me say that if it were practicable to bring about that idealistic state of affairs which he pictured, it would have been a good thing. Unfortunately I have to differ with the hon. member—not so much on the ideal as on the practical implementation thereof. Taxation proposals are laid down in legislation in this country after they have been adopted by a Committee of Ways and Means. These laws, like all other laws, have to be interpreted. In this connection we have to bear in mind that this class of legislation does not remain constant, as does our common law, for example, which we have inherited from the Romans or from the Dutch. On the contrary, these laws are amended from year to year and from time to time. Moreover, one cannot rely on the legislation alone—there is still the interpretation attached to it by the courts from time to time. If, for example, a certain course is adopted by the Department of Inland Revenue and the hon. member does not agree with it, then he can go to court to ask for an interpretation of the legislation. It speaks for itself that where no interpretation by a court is available, the Department has to make its own interpretation. There are cases where a parent is liable for the full amount in respect of the support of a child and where the child has an income of R10 or perhaps R20 or perhaps R100 per annum. There the Department has to decide whether or not it would be fair to allow that parent a rebate for that child. It speaks for itself that where there are no court decisions in such cases, the Department has to draw its own conclusions.

The hon. member will also realize that in these circumstances no fixed rule can be laid down. If you try to do so, you will find that if it is applied to another case one day, the circumstances of the new case may not fit that fixed rule. But there is another consideration as well. If we accept the hon. member’s suggestion, it will mean that a fairly large staff of experts will have to work on this matter only.

The hon. member also suggested that the procedures of the Department in this connection should be published in the Gazette, and that any changes in that procedure—as a result of court decisions, amendments to the law, or something similar—should also be made known. The hon. member will realize that maintaining that expert staff and publishing in the Government Gazette any changes which may occur in the practice from time to time will entail fairly heavy expenditure for the Department. In the light of all these circumstances one is faced with the question of whether it will be worth the trouble. If we publish it in the Government Gazette, as the hon. member pleaded, how many people will read it? A very small percentage of the general public indeed!

But the newspapers pick it up there.

And which section of the general public will read it there? It will be persons like the hon. member, persons such as accountants, auditors, attorneys and other professional people—persons who should know these things in any case. In my opinion it will therefore not be justified to incur all these costs, and that for people who should know these things in any case or, if for whom it is possible to interview the Receiver of Inland Revenue. But in my opinion it is in any case unpracticable to lay down rules for the infinite variety of cases and problems which can arise when it comes to the paying of income tax. The office of the Secretary for Inland Revenue is prepared to discuss problems with taxpayers at any time. When the new system of deductions for income tax was put into operation, the Department issued certain brochures to taxpayers for their general information, but it soon became apparent to the Department that the people did not read those leaflets, because large numbers came to the Department and asked for information already contained in those leaflets.

Therefore I want to say that what the hon. member is proposing, may be fine as an ideal, but will not work in practice. In the first place it will cost too much money, and in the second place the information will not reach the people for whom the hon. member pleaded here. It will only reach those people who should have the information in any case.

Vote put and agreed to.

Revenue Vote 21,—Customs and Excise, R10,030,000:

The hon. the Minister of Finance has already referred in general terms to the questions raised by the hon. member for Constantia in regard to this question of customs and excise. This is now the opportunity for dealing with that in greater detail. It is unfortunate that from Press publicity which has been given to this matter in the last week or two the general impression left by the Minister’s statement is that the general public is in the main to blame. Some reports created the impression that organized commerce was to blame. However, these impressions were later corrected. In the circumstances, one is entitled to ask where the blame lies, whether with commerce, whether with industries, whether with the public or whether perhaps the Minister’s own department has been lax or whether the regulations are so obscure that people unwittingly break the law. The Minister in his statement said—

The impression given to the public when you quote a figure of R340 million is that millions have been taken out of the pockets of the Exchequer by people determined to defraud the authorities. I appreciate that where prosecutions are pending no explanation can be given by the Minister, but let us see what kind of difficulty the public have to face when it comes to textiles. I am sure neither the Minister nor the Deputy Minister would pose as experts in this field. One is entitled to ask whether the head of the Department is an expert. Is he a man who has had a lifetime of experience in customs and excise? As an example I wish to show what sort of information is sent by clearing agents to their customers overseas regarding textile goods, it is the sort of information the public are required to give before their documents can be passed: (1) General trade description of the fabric, (2) composition by weight, e.g. 55 per cent trevira and the balance wool, (3) type of construction, e.g. knitted, plain woven, twill or sateen woven, fancy woven, brochewoven, brocade or damask woven, woven pile fabric, woven terry towelling, lace (not knitted), Knitted lace (Raschel) etc., and so the list goes on.

If this information is not included in the documents, what happens is that the ship enters the docks and the whole shipment is held up whilst a decision is awaited from Pretoria. Further information to be supplied is the following—the type of finish, whether it is printed, piece-dyed, yarn-dyed, bleached, unbleached, worsteds, non-worsted, raised, embossed, and so forth. The next item is the finished width. Then there is the number of threads per square inch (for Wovens only), e.g. warp = 86, weft = 72. Then there is the yarn count, warp and weft. Another item is the type of yarn, whether filament or discontinuous fibres and in the case of mixtures, the percentage of each should be given. Furthermore the form requires that information be given regarding the square yardage, the finished weight per square yard, and the finished weight per linear yard. If one examines the tariff book one will find there are over 100 pages dealing with textiles alone and I doubt whether any hon. member in this House can differentiate between one type of material and another, particularly when the materials concerned are very similar. These are the kind of difficulties the public have to face.

Some shipping people say the material requirements of this country are some of the most difficult in the world. Materials come into the country and the Minister could, if he were an irresponsible Minister, say, “I am quite satisfied things have been going wrong because look how many admissions of guilt have been signed.” I wonder how many hon. members have signed admission of guilt forms for parking offences when they feel they should be let off. What is happening in many cases is this. Shippers land the goods in the country, the supplier does not comply with all these instructions, he may leave one item out, the description may not be strictly in accordance with what is required. Thereupon the Customs people seize the goods and keep them until a correct invoice is sent over, or alternatively they demand that the shipment be surrendered, or else that an admission of guilt be signed and a penalty be paid. It may be that the shipper has R 10,000 worth of goods and he signs an admission of guilt of say R100, which is considered to be a reasonable amount. He pays that plus a penalty of say R150, so that he can obtain the shipment because he requires it in his factory. He has to decide whether to refuse to sign an admission of guilt until the matter is cleared up on the one hand, or whether to put people out of work on the other hand. That is a serious matter.

Other hon. members on this side will give details of factories having to close down and people put out of work. People have lost money in this way. Whenever a technical decision has to be taken, the local people say the matter has to be referred to Pretoria, and if they have any doubts about the matter it is referred to the S.A.B.S. or the C.S.I.R. for the necessary analysing to be done. Eventually a decision is taken and some time later the firm concerned may only have to pay a reduced penalty or they may even be able to satisfy the authorities no penalty is payable at all The way in which this legislation is being administered and the way in which the descriptions are being increased and new rulings being given from time to time are such that they are making criminals of the commercial world. I hold no brief at all for those firms who have had clearing agents or employees or members of their staff who deliberately falsified documents and broken the law. I hold no brief for them at all. I am not talking about them. But there are many honest importers who are signing admissions of guilt simply because the rules are so complicated and it takes such a long time to obtain decisions, and they are being included in this situation described in the headlines as a “Customs Racket”. Many of these people are not parties to a customs racket. They are honest traders importing as ordinary businessmen, but they find the customs declaration requirements are so involved and so difficult. It is not these people who are breaking the law but the shippers and the suppliers at the other end who do not comply strictly with what is required.

When all is said and done, the documents are completed at the other end in many cases by People who may be foreigners. They have their clerical staff with the instructions in front of them and they are told to complete the export documents in accordance with the instructions. In some cases they may be careless. In most cases the documents are hand-written or typed by people to whom English and Afrikaans are foreign languages. Only when the documents are received here are the transgressions detected. Therefore I think it is unfortunate that this Ministerial statement gives the general impression that most importers are participating in this racket to try and defraud the Government. There are many people who have done the Government down in this respect, but I think in most cases the importers will tell you they are besides themselves with worry trying to get a more simple way of dealing with this matter because they find themselves embarrassed, shipments held up, and trade coming to a standstill because goods are seized and kept in the warehouse until such time as an official ruling is obtained. [Time limit.]

Mr. Chairman, in his statement the hon. the Minister mentioned three types of offenders. One type is the man who falsified invoices and whose case the police are now investigating; the second type is the man who imports or exports and who was negligent; and then we have the person who uses goods illegally for a purpose other than that for which it was allegedly imported according to the forms concerned. I am glad that the hon. member for Pinetown said he held no brief for the two types who break the law and that he had no sympathy with them. Then he referred to the third group, who make bona fide errors or are possibly negligent. I think we must admit that those forms and all the various tariffs with all their detail are rather complicated. It is true that it requires study to comply with the requirements properly. But now I want to add this. From the nature of the case, as a result of the enormous number of different types of fibres and the demand in South Africa for all the different types, different weights, different compositions, the particulars must be given in substantial detail. The tariffs imposed must be stipulated in detail. If this is not done, we may get one of two things. On the one hand the possibility will exist that the requirements can very easily be circumvented while remaining within the law. This is one possibility, and then there can be no question of protecting our local industries.

On the other hand an overall tariff can apply to all items. This will completely simplify the position, but then the cost of living will increase, because protection will be given to industries outside South Africa. Commodities not manufactured in South Africa will then be so much more expensive. This alternative is not practical or desirable either. Therefore all that can be done is to schedule the requirements in detail, which does not involve the disadvantages of the other systems. This is not an easy system, but it is simply the only solution. I do not want to suggest that the system cannot be simplified. As far as I know the Board of Commerce and Industries is at this very moment investigating in what respect the system can indeed be simplified. I think they have appointed an official with that specific object. But now I want to say that we must not exaggerate the position either. People who are in the textile business, and people who enter into contracts in this regard, generally know what they are doing, or at any rate they should. Now, who are involved here? In the first instance the importer is involved, then there is the agent of the exporter, the third party is the exporter himself and in the fourth instance we have the clearing agent.

There are, therefore, four different parties involved in this. It is not so difficult to have employees study the various tariff schedules. There are few traders or manufacturers who import over the entire field. They import in a specific field, some in a narrower and others in a wider one. Much has already been done to simplify the system. Let me mention one example. South Africa accepts the Brussels’ standardization of items in the textile industry. We have already standardized it. We have the general classes. No fewer than 96 countries, including South Africa, have accepted this broad standardization. A further 20 countries are at present in the process of accepting it. A great deal has already been done in South Africa to simplify the matter. If one studies the schedules and pays proper attention to them, then I feel it is not really so difficult. All these tariffs are classified according to the type of fibre, and there are approximately eight types of fibres.

No.,

Yes, it is true, I have it here with me. All one has to do is this. Each fibre again is classified into further subdivisions, firstly into its basic raw material, secondly half-finished products, and thirdly we have the finished product. It is not as difficult as it is generally made out to be. If this system is put forward as an excuse for the things mentioned by the hon. the Minister, then I say it is not right. We admit that the system is a complicated one to a certain extent. We admit that, unless the employees study it well, they will make mistakes. But as I say, four different parties are concerned in the matter, and if they cannot make a study of this matter and cannot acquaint themselves with what is required in the narrow field in which they are trading, then there is not much excuse for the mistakes that are made. As I say, we admit that there is room for simplification, but the Government and its officials are working on the matter. However, we cannot accept that all the careless mistakes are attributable to the complicatedness of the tariffs and the forms. Only a small percentage of the mistakes are attributable to that. While the Government is prepared to help as regards the simplification, I want to appeal to firms to appoint certain specific officials to make a study of the tariffs and items that relate to the kind of trade in which they are engaged.

Mr. Chairman, I was very interested to hear the hon. member who has just spoken describe—as he put it—the simple question of the classification of fabrics. I wonder how much experience he has had apart from reading about it.

I am in the trade.

If the hon. member is in the trade he will know that three-quarters of what he said is utter nonsense. There are to-day in the textile industry people who have made a lifetime study of it and yet who are unable to unravel the tangled jungle of definitions and regulations with which they are faced. The hon. the Minister would be surprised if one mentioned the names of some of the people whose life is spent working with textiles and imports, and who to-day admit quite frankly that they have not got a clue when it comes to some of the involved modern fabrics with which they are trying to deal. What the hon. member tried to do was to deal with a few basic definitions. Of course you can establish a few basic definitions; that is simple enough. You can establish the fibre of which a cloth is made, you can establish its count or its denier—the thickness of the yarn—the number of threads per inch, the weave and the weight. But when you come to the detailed finishes I challenge that hon. member to differentiate between some of the raised finishes and to say whether they are brushed, whether they are pile, whether they are loop-razed, or what sort of finish they are. I challenge that hon. member to define the fibre when it comes to a mixture. Unless he read the label on the shirt he is wearing I challenge him to tell me what yarn is in that cloth of that shirt he is wearing. Except by scientific investigation the ordinary person cannot establish that. But the point I want to make is this. Even if the hon. member is right, that is not the issue, and I want to put it to the hon. the Deputy Minister who deals with this matter that at least 90 per cent, if not more, of the rackets and contraventions are concerned not with the description of fabrics but with the price of fabrics.

The description is something physical which can be checked by the S.A.B.S. and which is in fact checked. Samples are submitted. It is one of the many complaints of importers that the price has gone up to R40 for testing every sample. There comes back a scientific examination and description of that fabric, with all those factors the hon. member mentioned. Therefore what sort of fool a crook would be to try to falsify the description of cloth, I do not know? I hope these crooks, these racketeers, will be caught and will be hammered because they are doing untold harm to the good name of the textile industry. I hope that when they are caught they will be very severely punished indeed. I believe, however, that the fact that they have kept this Department on the hop for so long and that it has now become a national scandal indicates that they are not fools. If they are not fools then they are obviously not going to give a false description of a cloth when they know that immediately it arrives it can be tested and that falsity can be proven by scientific investigation. It is only a question of using a stitch glass to determine how many threads in an inch. The hon. member shakes his head. Does he now tell me that you cannot establish the identity of a cloth?

The manufacturer should know.

My point is this. A false description will get an importer nowhere, because firstly there is a sample attached to the invoice, secondly the sample is compared to the bulk consignment when it is received, thirdly random samples are taken throughout the consignment, odd bales are opened, rolls are taken out and pieces cut off. They are compared to the original sample.

They are tested scientifically. Only a fool is going to give a false description. The real racket, the hon. the Minister will agree, is in the pricing, the giving of false current domestic values, false export prices and false values to cloths. If the hon. the Minister’s statement tonight that this was only discovered last July is correct, then I want to say that the Department has been fast asleep. I want to know why they have been fast asleep, because the racket involved in pricing is not new. For years now the Department has had trouble with this issue. For years they have had difficulty in establishing values. For years they have queried shipments. We have got our officials overseas, attached to our embassies, who to my knowledge, have gone out and checked the price of shipments and compared them with the invoices. I have been out of textile imports now for three years and have not imported any since then, but even in my time checks were being made on the value of fabrics. That is where the racket takes place, namely the giving of a false inflated value to a duty-free product and the cutting down of the price of a dutiable product.

The Department should have known about this for years, but the hon. the Minister tells us that it was only discovered last July. I challenge the hon. the Minister to deny that they have investigated cases like this over at least the last four or five years and that they have investigated this exact problem. The hon. member for Florida simply shrugs his shoulders and says: It is easy, you can define your fabric. The problem, as I have said, is in the pricing and where a simple definition is concerned—it is often simply one of wording—I believe that the importer should not be penalized for a clerical slip. I have here—and it was quoted earlier—a reference made in April this year to over a thousand terms used in connection with textiles as defined by the South African Bureau of Standards.

I submit further that the petty holding up of consignments and the application of penalties for a simple clerical error are in conflict with the G.A.T.T. agreement to which South Africa is a party. It is in direct conflict with the General Agreement on Trade and Tariffs which lays down in article 8, paragraph 3, that—

That is the agreement to which South Africa is a party. I put it to the hon. the Deputy Minister that in their utter panic at discovering that they have not been controlling the position, the Government is now imposing penalties on the innocent, the genuine and the decent importer for technical and minor errors which action is in direct conflict with the conditions of the international agreement to which we subscribe. The hon. the Minister knows that I can quote instances and he was good enough to deal with a specific case which I took to him. The hon. the Minister is now, however, advised that this is now a vast national racket and that, therefore, any infringement of any sort has got to be radically dealt with. I submit that because of a different sort of racket innocent clerical errors are being treated as a major crime.