Mr. Speaker, I move, as an unopposed motion—

Agreed to.

I have to inform the House that I have exercised the discretion conferred on me by Standing Order No. 1 (Private Bills) and have permitted this Bill, while retaining the form of a private measure, to be proceeded with as a public Bill.

Mr. Speaker, with your leave I wish to make a statement in connection with a matter of public interest.

Order! Cannot the hon. the Minister make his statement after the commencement of the next Order of the Day, after the speech by the hon. member for Constantia?

Sir, on a point of order, it is customary that when a Minister makes a statement he does so before the normal business of the House starts, because when he does it later he does it during a debate and it breaks into the debate, in this case on the Part Appropriation Bill. Always when a statement is made it is made at this moment. However, we have no objection.

Order! Statements are allowed to be made when there will not be a suitable opportunity in the near future to discuss the matter. There is an opportunity today, under the first Order of the Day.

I may just add that the Minister is then making a statement which can then be discussed, if it warrants any discussion, but he places himself at a disadvantage by simply coming in and making a statement.

Mr. Speaker, I wish to move as an amendment—

1. (1) protect those dependent on fixed incomes and the pensioner against the continually rising cost of living; and
2. (2) cope with the economic difficulties of the farming community and alleviate the disastrous consequences of the present drought directly on the agricultural industry and indirectly on the whole of the economy”.

The hon. the Minister on Monday afternoon said he was going to give us an account of the economic events at home and abroad. Well, Sir, allowing, as we do, for the coming Budget and the limitations placed upon the hon. the Minister by that fact, one is bound to say that he did not say a great deal about a number of subjects in regard to which a good deal of public concern is being expressed. The hon. the Minister referred to the international situation and his recent trip abroad. It appeared from his statement that the future of the international monetary situation remains as uncertain as it ever was and even more so, in fact, with the events of the latter half of last year in France and with the uncertainty of the new administration in Washington. The hon. the Minister, in dealing with these questions, is playing his cards very close to his chest. We understand the need for that and we do not take any exception to it. He is heavily engaged against very powerful opponents in trying to reinforce the position of gold as a medium of international exchange which he believes, a belief which we share, requires a reasonable and, he insists, an orderly increase in its price. Sir, we support him in that objective, and on the principle of not interfering with the man at the wheel we do not wish to say anything in this House which might embarrass him in his efforts. As I see it, Sir, he has two objectives; firstly, to seek an increase in the price of gold, as he says, not as the result of international financial collapse, but in an orderly way by general agreement. He believes that circumstances will bring that about. Presumably his faith is sustained by facts and by information which he does not feel at liberty to disclose and we therefore have to leave it at that. All we can say is that we hope that that faith will be justified in due course.

Meanwhile, his second objective is to make satisfactory arrangements with other important countries for the marketing of our gold without playing into the hands of his opponents who would very much like to see the free gold market flooded. When the Minister speaks of monetary authorities, as he does, I take it he is referring to central banks other than the so-called group of ten, whose proposals at the recent I.M.F. meeting he was unable to accept. He was unable to accept them because they did not allow for the four principles which he quoted here on Monday afternoon, principles which we think were quite right. Here again therefore we can only agree that his attitude in this respect was the right one in our opinion, and express the hope that his negotiations with other countries which he said he was hopeful about will succeed in achieving what he wants, namely a method of marketing our gold at the official price without disturbing the free market.

That more or less covers I think what the hon. the Minister had to say in regard to the international position. He has succeeded in establishing himself on the European capital market by negotiating Swiss loans for a period of 15 years, something which we on this side encouraged him to do, as we encouraged his predecessors for a very long time. Therefore we think that is a step in the right direction. Apart from the fact that he has established himself in that market, it is not quite clear why he found it necessary to get that loan. But I think the very fact that he succeeded in establishing himself as a long-term borrower is probably sufficient reason for doing so.

When we come from high finance down to earth, the Minister referred to domestic events. He claimed that the economy had remained reasonably stable during the last year, but he was clearly concerned with the continuing danger of inflation and all it means. He referred to the excessive liquidity as a potential danger, together with the shortage of skilled manpower, and the decline in the rate of industrial expansion. He referred to the Government’s efforts in all three of those directions. Whilst one concedes that those efforts have achieved something, one cannot say as one looks at the position to-day that those efforts have been particularly successful. The excessive liquidity to which the Minister referred has been dramatically revealed in recent months by the frenzied activities on the Stock Exchange, about which the Minister has warned the country more than once. When we see that last week the Johannesburg Stock Exchange turnover amounted to something like 3 million shares a day—they handled some 17 million shares during the week to the value of about R54.5 million—when we read of brokers working from 7 o’clock in the morning till 11 at night, closing their offices because they are tired and cannot handle the orders and cope with what business is offering, then one realizes the amount of money, or near money, and particularly credit, there seems to be available. I must say that I was surprised, having regard to circumstances as they are today, that the hon. the Minister did not issue a more urgent warning than he did in regard to the temporary insanity which seems to be afflicting the Stock Market at the present time, because the reaction to what is going on at the moment I think may be very serious to the country’s economy. In fact, it looks to me that, after all the efforts by the hon. the Minister to drain off excessive liquidity from the economy, one would imagine at the present time that there is more excessive liquidity than there ever was before in the country.

The hon. the Minister referred to the manpower shortage and the fact that bottlenecks still exist in spite of the efforts of his Government to reduce them. I wonder if he realizes that the manpower shortage is going to get much worse if the hon. the Minister’s colleagues continue in their policy of turning all the non-White industrial labour in the country into contract labour. I think we might ponder over that problem and try to understand how impossible it is going to be for industry to increase its productivity and maintain its efficiency, let alone increase it, if the whole of its non-White labour force is going to be made subject to contract labour, or holding a 12-month contract. The whole conception of that policy seems to me so unrealistic that I still cannot believe that the Government intends to continue with it. If they do, the country is going to pay a very high price for it. The rate of industrial expansion is another serious point the hon. the Minister mentioned. After maintaining up to 1967, an average rate of increase of about 9 per cent, for the first eight months of last year it dropped to about 3 per cent. That is a very serious drop. The industries have given a number of reasons for that. They stated the reasons in detail. I do not propose to repeat them this afternoon, but most of them concern the Government’s policy. It is not only the hon. the Minister’s Department, but that of several other Ministers as well. If the hon. the Minister wishes to see the rate of industrial development rise to what he would regard as a normal rate, I would advise him to examine those reasons which industry has given for the very substantial fall in the rate of fixed investments and expansion and consult his colleagues to see what can be done about the present state of affairs.

All the indications, I think, to be drawn from the hon. the Minister’s speech are that after a period of, I will not say stability, but a period of passivity anyway, the cost of living which is a sure indicator of inflation, has begun to rise again. The consumer price index rise for the period March, 1967 to March, 1968, was something round about 1 per cent. In the five months from March, 1968, to August it rose by 1.7 per cent. The hon. the Minister told us on Monday that the figure for 1968 was 2.7 per cent. The figures released yesterday by the Bureau of Statistics show that up to the end of January the consumer price index for all items rose from January to January by 3.4 per cent. The increase, therefore, for the financial year ending in March may very well be 4 per cent. This brings me to the subject of the amendment which I have laid before the House. The position seems to be that some people are getting rich, and that some, if all we hear is true, are getting very rich, whilst with every rise in the cost of living a large number of people are getting poorer. This is the point I think the House should take note of this afternoon.

I am now referring to the pensioner and the man who is living on a limited fixed income. I think there are three things one can observe in this regard. In the first place we find a large group of people who suffer from every increase in the cost of living and from every depreciation in the purchasing power of the rand. There are something like 120,000 social pensioners, 20,000 civil service pensioners and between 5,000 and 6,000 Railway pensioners. These are white pensioners, and when we include the non-white pensioners the figure will be much higher. If one should add to this figure the pensioners from the provincial services and the local authorities and the drawers of pensions from private pension funds one will arrive at a very substantial figure indeed of people who are living on a small fixed income and who will be affected by any increase in the cost of living. I also want to say that the Government continually prodded by the Opposition over the years, have not been unsympathetic to the position of these people. We have a Social Welfare Vote of something like R125,000,000, a great deal of which is used for pensions and allowances. But Parliament as a whole has never yet applied its mind to the question of the cost of living and the effect on the lower income groups. It has never applied its mind to the cost of living as a permanent problem. It has, surely, become obvious now that if the country is going to go on expanding at a substantial rate, as it is planned, there is going to be a steady increase in the cost of living.

The third point is that the cost of living has been contained, restrained at any rate, compared with the rate of increase a few years ago. However, the cost of living has by no means been stabilized. In fact, at the present moment it is still rising. If you break down the figures of the Bureau of Statistics, a breakdown of the overall increase, you will notice that for the five months up to the end of August, when we had the last statement from the Bureau, food increased by 2.5 per cent, services by 3.6 per cent, medical services by 5.8 per cent, rents by 2.5 per cent. By the way, during the past nine years or so rent has, of course, increased by about 45 per cent altogether. Meanwhile, as you know, the cost of building is still rising and while that is going on rent will tend to increase as well. As we all know, the price of bread has been increased while in many parts of the country things like electricity, water and general rates have all gone up. There is one particular item I would like to refer to. This is not a major item in itself but yet is causing a good deal of annoyance to people. I refer to the prices of admission to cinemas, an item which is included in the statistics issued by the Bureau although I am not sure under what particular heading. Its weighted average is about 2.1 or 2.18. There is this tendency, particularly amongst suburban cinemas, to push the prices of admission up. In my own area there are four suburban cinemas. In recent years three of them have been refurnished, done up, refurbished and had their names changed. They are now called “luxury” cinemas. With that, the prices of admission have been substantially increased. In addition, whereas formerly films were changed at least once a week and the most expensive seats were in the vicinity of 60c or 70c, to-day the same film is being shown for months on end while the 60c to 70c seats have gone up to R1.25—almost doubled. I find it difficult to believe that such a large increase is justified. On the face of it I cannot help feeling that a long suffering public is being exploited by what is a near monopoly, a monopoly serving quite a large number of people. I suggest to the hon. the Minister that he might well ask his colleague the Minister of Economic Affairs to look into this matter and consult the Price Controller to see what exactly is happening.

The Government has accepted an estimated annual growth rate of 5½ per cent for the gross domestic product for the next five years. Personally I have not seen that statement yet, which I consider to be a pity. It was issued to the Press last week, I think, by the Minister of Planning and all we have seen is a short summary thereof in the Press. Well, I think an important statement like this should be given to Parliament first, seeing that it was in Session, before it was given to the Press, or at least at the same time. Surely this statement is appropriate to this debate, and yet we have not seen it. The conclusions set out in that statement were, obviously, arrived at after considerable research. Furthermore, the statement no doubt contains arguments for and against. But, as I have said, we have not seen it yet and, consequently, we have not had time to formulate any conclusions as to the correctness or otherwise of it. I really think that such statements should be made available to Parliament at least at the same time as they are made available to the Press. We have had similar projections before, and all of them have proved to be rather on the conservative side. Perhaps the Minister considers that 5½ per cent is a satisfactory rate of growth to aim at, but does he think that the Government will be able to maintain that rate and, if so, will maintain it at that level? Because I notice from the report I have seen that if the rate of growth increases to a level above 5½ percent our economy might find itself in difficulties. We have been told in this House that whilst our economy is expanding normally an increase in the price structure of about 2 per cent should not be regarded as entirely unsatisfactory. However, our present circumstances are not normal. After all, if the cost of living goes up by 3 per cent, which is more realistic than 2 per cent under present circumstances, it means a 15 per cent decline in the purchasing power of money over five years. As I have said before, we must remember that we are dealing with a very large body of people living on a very strict budget, unlike the Government, unlike the hon. the Minister. He is not living according to a strict budget. Between 1960 and 1967 his budget so far from being strict, has increased by nearly 160 per cent. All he does is to milk the tax payer, which I am sure he is going to do once more in a few weeks’ time. But the ordinary man cannot do that. He must live according to a strict budget and it is clear to everyone that he is greatly affected by the continually rising cost of living. If we accept that a normal feature of our economic life is going to be a steady, although gradual, increase in the cost of living and a steady reduction of the purchasing power of money then, surely it is time that we accepted it as a normal feature and did something about it.

We have long urged from this side of the House that as far as the Government is concerned there should be some machinery, however it is devised. After all, the hon. the Minister’s Department is an extremely resourceful department. They invented P.A.Y.E., they invented decimalization and they are going to invent metrification, and it has all gone very smoothly, and no doubt if they were asked to devote their minds to this question some system could be devised whereby the people we are talking about could be protected against the serious decline in the value of their money. There should be some scale whereby for every increase of so many points in the cost of living their pensionable allowances could be adjusted accordingly. We have pressed for that for many years and we shall continue to do so, and in the light of past experience, if the Opposition continues to press long enough, the Government sooner or later will do something about it; it will come up with the bright idea and then say how clever they are.

As with the Orange River Scheme or immigration.

The other half of my amendment refers to the drought. I should like to ask the hon. the Minister of Agriculture, who is not here, just in passing, if he comes into this debate—and I daresay he will—whether he is in a position to give the House some more information as to how far he has got in settling the question of compensation to farmers for last year’s crops in connection with the devaluation in Britain. This discussion has been going on for a year now and finality in many cases has not yet been reached. I think the Minister might tell us to what extent he has reached finality and give us details of the agreements he has made. But I do not have to tell this House that the drought is going to hit the agricultural industry directly, and very severely indeed. It may not have been generally realized outside the agricultural community that it is going to hit the whole economy indirectly as well. At the end of last month the president of the S.A. Agricultural Union, which may be regarded as a responsible authority, said that the drought could develop into the worst disaster for the agricultural community since the depression of 40 years ago. Some of us can remember the depression of 40 years ago and just what it meant to everybody. He also said that crop losses had already amounted to millions of rands, and millions more would be at stake unless it rained. He said it could mean a shortage of meat later in the season and a shortage of dairy products, that it might affect the balance of payments, and it would cause a piling up of farmers’ debts which are already considerable and crippling. He said that 50 per cent of the maize crop in the Free State, 20 million bags, had already been lost. The effects of the drought on agriculture will be dealt with by other speakers. But I am dealing now particularly with the people who are suffering as the result of the high cost of living. There is no doubt that this drought will affect them, too. All this means an increase in the cost of living plus possibly increased taxes which the community may have to pay in order to help the agricultural industry through the disaster which is threatening it. Perhaps you will remember, Mr. Speaker, that in the 1965 drought fruit prices alone went up by 6 per cent, and if there is going to be a prolonged food shortage, as suggested by the president of the Agricultural Union, prices must go up, which must affect the cost of living. So, Sir, from the point of view of the people on whose behalf I am speaking this afternoon the Government should not wait until all this has happened; it should not wait until the people are suffering. Knowing that it is going to be called upon to cope with the position, the Government should be prepared in advance to deal with it so as to be ready to help when the position arises, as in the case of the agricultural industry it has already arisen and is arising.

The purpose of my amendment, Sir, is to call attention to the necessity to take urgent action in regard to these matters. What we want from this Government is less ideological legislation and more action to meet the needs of the people.

As I intimated recently, and seeing that inquiries have been addressed to me from various quarters, I wish to make a statement on what is known as Hong Kong influenza. This disease has lately been causing epidemics in overseas countries, but so far our country has escaped it. Up to now there have only been seven confirmed cases in the Republic. However, these cases arrived from abroad and on their arrival they were placed in isolation until their recovery. As far as could be ascertained, they had not transmitted the disease to any other person in the Republic, and I should like to give the House the assurance that not one further case has been diagnosed out of all the specimens which have been sent for analysis to the South African Institute for Medical Research. The disease is nevertheless expected to occur in the Republic as well during the months of autumn. With the information at our disposal I can, however, put the minds of the public at ease as far as the nature and the seriousness of the disease are concerned. With the exception of a number of American cities where the occurrence of the disease coincided with extraordinarily cold weather, reports indicate that the disease is not a very serious one in the case of normal, healthy persons. The number of deaths attributable to the disease is extremely small. In densely populated areas in the East where epidemics occurred they abated after three weeks. This influenza affects the respiratory organs and is accompanied by fever, bodily pains and a sore throat. Its victims should rather remain at home, preferably in bed, for the sake of their own health, as a safeguard against possible complications and in order to avoid infecting other persons. However, as I have said, the disease is a fairly mild one and if the normal precautionary measures are taken it should present no serious dangers. Absence from work may, however, assume serious proportions and cause serious disruption.

Influenza occurs in various forms and in a variety of strains. Unfortunately there is no vaccine which gives immunity to all the various strains, and as a result a special vaccine has had to be prepared against this particular form.

The vaccine is at present being produced by the South African Institute for Medical Research. As it is expected that the Institute will not be able to have a sufficient supply ready in time, it has been decided also to import some. It is expected that adequate supplies of the vaccine will be available by the end of this month. The cost in respect of the imported product will possibly be lower than the cost in respect of the locally manufactured product. The imported product will, however, be of the same standard as the locally manufactured one. The necessary steps have also been taken to ensure that the vaccine is effective, and I am satisfied that it is indeed effective.

However, the effectiveness of the vaccine is limited, and the immunity provided by a single dose only lasts from four to six months. The vaccine is produced from eggs. Persons who are allergic to eggs or albumen should rather not make use of the vaccine, and persons who suffer from urticaria (papular urticaria), asthma, hay fever and other chest complaints and are sensitive to penicillin should inform their doctor, so that he may judge whether administering the vaccine would be warranted. It is advised that a single dose only should be administered. Reaction after immunization is usually minimal.

In order to prevent essential public services from being disrupted through the absence of employees as a result of a disease, it has been decided to immunise key staff free of charge. For this purpose the Department of Health has established an ad hoc-committee on which the Departments of Police and Defence, the Provincial Administrations and local authorities are represented, and which is to determine which groups are to receive preference in being immunized. These groups include all doctors and nurses, policemen, prison staff, members of Parliament and Parliamentary staff. The Department of Posts and the South African Railways and Harbours have been kept informed of developments and will make their own arrangements in collaboration with the Department of Health.

However, the vaccine will also be available through the ordinary commercial channels, and persons wanting to have themselves and their families immunized should please make their own arrangements with their private doctors. It is expected that the cost for the vaccine only will be about R1.20 per dose.

Members of Parliament, Senators, heads of State Departments, staff of members of the Cabinet and officials working in the House of Assembly and Senate will be vaccinated at the clinic in the Parliamentary buildings. All other Parliamentary staff will be vaccinated at the office of the local District Surgeon in the Thomas Boydell Building, corner of Parade and Barrack Streets. Further details of times and dates will be announced at a later stage.

Other persons throughout the country who are included in the preferential groups will be vaccinated by their local district surgeons and circulars in this regard will be issued soon.

Mr. Speaker, the hon. the Minister of Health has chosen to come into debate at this stage to make a statement. Might I suggest that the Minister might have taken another occasion to do so. He has made a very interesting statement indicating the steps being taken by his Department to prepare the necessary vaccine and to give the necessary protection against Hong Kong flu and to avoid the disease being any more serious than need be as a result of the special arrangements being made by his Department. However, had he chosen another occasion a little earlier, we might have had the opportunity of studying his statement and the Minister would also have had the opportunity to reply to the questions raised in the course of debate. He now denies himself the opportunity of taking part in this debate. [Interjections.]

Order! The hon. member may continue.

The Minister of Finance in his speech the other day indicated that he can give very little further explanation with regard to the position of gold. One can readily appreciate the necessity for this, because the Minister is in difficulties, and he has to maintain a certain measure of secrecy over the question of the negotiations in regard to the gold price. We share the Minister’s sense of responsibility and we will not embarrass him in that regard. We can only wish him well in his negotiations.

The Western world has embarked on the “paper gold” system, the two-tier system, which we discussed last year during the Budget debate. The Minister told us about the two-tier system and his difficulties in maintaining that system. But then we were faced with the position that America had a deficit on her balance of payments, and South Africa was striving not only for an increased gold price, but for the right to sell her gold on the free market as well as to international bankers at a fixed price.

But times have changed. Last September the French franc was in a position to endanger the dollar. The attitude of France in buying gold threatened the American dollar. But since last September the picture has changed once again, and we find that, far from America having a deficit on her balance of payments, for the first time in 11 years America has a balance of payments surplus. We find that in South Africa there is an inflow of money, with increased liquidity and an increase in the Minister’s problems. We are entitled to ask the Minister whether he cannot tell us yet whether he sees the two-tier system remaining a permanent part of the gold position.

I would like to put two questions to the Minister. I would like to ask him whether America has yet agreed with his contention that the member countries are bound to buy gold at 35 dollars an ounce, or whether any prospects of agreement are imminent; and whether he sees any risk of the price of gold being depressed below 35 dollars an ounce. The Minister is in a difficult position in that regard, because so far the free market price of gold has been in excess of 35 dollars an ounce. The Minister knows that if too much gold is put on to the free market, the price is going to be depressed. He has been having certain negotiations with the international bankers, hoping to reach an agreement on his contention that they are obliged to buy all the gold which South Africa may have to offer at 35 dollars an ounce. Does the Minister see any prospects of agreement in that regard?

There are tremendous pressures involved, not only political pressures, but also pressures due to speculative influences. There is no doubt that the Russian incursion into Czechoslovakia altered the picture as far as the American dollar is concerned. The Russian aggression in Czechoslovakia has had the effect of encouraging a flight to the dollar. I think the political pressure in that regard has had the effect of increasing the flight to the dollar and of strengthening the dollar, putting America in the favourable position she is now in. In that respect, is the change in the fortunes of the American dollar not putting the Minister in a more difficult position? The general impression we gained was that the Minister’s position was improving. The general impression has been that he is optimistic and I wonder if he is entitled to be so optimistic as he suggests. It seems to me that if there is a flight to the dollar and there is a surplus the position will be likely to be that America will get more than ever confident in the dollar and will be less inclined to increase the price of gold and to agree to suggestions of an increase in the price of gold. Will the American effort not be to insist as far as possible on maintaining the price of gold at 35 dollars an ounce?

Is the hon. the Minister not less optimistic than he was last year? Last year all the signs pointed to an increased gold price, but the whole picture has changed in the last eight months. The position changed in September when the French effort failed. The position changed again when Russia walked into Czechoslovakia and we again had the flight to the dollar. Will America not feel more confident than ever that she can hold the present price of gold? I think the hon. the Minister should not be so optimistic as he suggests. I would like to suggest that the Minister should take a more conservative point of view. Over-optimism, or even ordinary optimism, encourages speculation. The headlines and photographs in the papers of Monday afternoon, while the Minister was making his speech, gave some inkling as to the extent to which the fever of speculation had gripped certain sections of the community. It is against this background of optimism and speculation that we must examine inflation. This speculative fever has encouraged and contributed towards inflation and towards some of the troubles which we have now. I think the hon. the Minister will agree with me that the dangers of inflation are still with us. In spite of all the steps that have been taken there is still the possibility that the flames of inflation can consume the standard of living which we are enjoying at present. If South Africa is to survive long-term as an economically active nation she must sell her products of her secondary industries on the world markets. She must prepare for the day when the gold mines are exhausted. For this reason it is essential that the cost structure of secondary industries be contained not only to ensure that the gold mines’ life is extended and will continue as long as possible, but also to ensure that there is an outlet for secondary industries when the gold mines have ceased.

We have seen some drastic changes of thinking over the last 12 months. Shares have increased in value giving less than 1 per cent return and yet they still go up. New shares come onto the market. There are mergers and take-over bids and, at the same time, startling failures. These are businessmen who have miscalculated and find themselves compromising with their creditors. The day of allotment is more important than the Day of the Covenant. Many young executives spend more time watching the market than watching productivity in their respective businesses. If you had any doubt on that point, Mr. Speaker, you need only have gone to the various stockbrokers’ offices in this city over the last two or three days to find ample evidence of that. You would not have been surprised if the Minister had gone down and seen one or two members of his own Government down there as well.

What were you doing down there? [Interjections.]

I was not down there, Mr. Speaker, but I have reliable information. I attend to my duties in the House; I do not go wandering around the streets speculating on the share market. [Interjections.] Some people do not deal on the stock market; they buy houses in the group areas.

The saying goes that you can make more money on the stock exchange in a month than you can make from your firm in a year. That is quite common talk amongst some young men. I wonder whether the hon. the Minister really does know of the fortunes which have been made over the past 12 months both in share dealing and property speculation. I wonder if the Minister is having a sufficiently diligent inquiry made into the amount of dealing that is going on both in properties and in shares. He has the power in terms of the statutes which he has before him at the moment. We can deal with that at a later stage, but I suggest that it is something to which the hon. the Minister should give attention. The Minister has enjoined us to save for prosperity. In fact, he emphasized this by saying: Save for your own future, save for your family’s future, save for your country’s future. He did not say that such saving would be in eroded rands. Only last year we pointed out to the Minister that, while he was encouraging saving, his colleague, the Minister of Economic Affairs, was apparently giving different advice, in that the Industrial Development Corporation had invested in mutual funds, and the National Growth Fund was inviting the public to invest their funds as a hedge against inflation. It was promising a far more productive return than that offered by the Minister of Finance. I am pleased to see that the warnings given by us have been heeded. The latest report of the Industrial Development Corporation indicates that the Corporation has withdrawn from the mutual fund movement. I should like to say that we welcome the fact that the Minister accepted our advice timeously.

I know that the hon. the Minister has given a general warning about speculation in shares and property. He has given this warning on more than one occasion. Leading members of the Stock Exchange have given similar warnings that the position is unhealthy. But, Sir, are warnings enough? Has the Minister been sufficiently severe in his warnings? Does he feel satisfied that the present stock exchange and property boom can continue? Is he satisfied that excessive credit has not been given to speculators? I know of a case where two or three young men—obviously names cannot be mentioned—together raised a bank overdraft of some R27,000 towards the end of last year. They tried to obtain certain shares which were being allotted. Eventually the number of shares they obtained was less than 1,000, but over R27,000 was borrowed from the bank, at interest paid on overdraft for a period of about six weeks. That kind of borrowing from the banks must be contrasted with another example of a young man who came from overseas with his family, his father and mother and his brother. They were all invited to come to South Africa after discussing the matter with one of the members of the Government side. This young man went to South Africa House and asked for advice. He was told that he would be welcome in South Africa. He was a young farmer. His family brought £100,000 to South Africa. A portion of that amount was given to the one brother, and a certain amount was used by the father. The young son, who had been farming successfully overseas, had some R30,000 of his own. He was able to obtain a farm costing R85,000 in the Natal Midlands. He went to the Land Bank, and the Land Bank gave him a very meagre loan of approximately R34,000. The value of the loan was far lower than he had expected when he first started negotiating for the loan. The matter was brought to my attention, but I was unable to succeed in obtaining a better Land Bank loan for him. I could not help but compare the efforts of this young man with the case I mentioned earlier. He came out here with a wife and three children. He is going to be a good South African citizen, and he is going on to the land to follow the same calling he followed in Scotland before he came to this country. He cannot obtain money for farming, which is productive, and yet a couple of young men who want to speculate, managed to obtain over R25,000 almost without asking.

On the nod.

Yes, on the nod, as the hon. member says. When one hears first hand of conditions of that kind, one wonders whether we are living in a crazy world. While I respect the Minister’s warning, and while I realize that the Minister is concerned about this matter, I suggest that this matter has not been sufficiently emphasized. It is in the interests of the country that this speculation should be contained far more than it is. It is going to have its effect on the economy as a whole. The Quarterly Bulletin of the South African Reserve Bank, which appeared in December, last year, states:

I should like to emphasize this point …

There is the fault, Sir. This is a statement which appeared in the Reserve Bank’s Quarterly Bulletin. Similar conditions applied over 30 years ago when we experienced Black Friday. I hope that we are not going to experience another Black Friday, but if we do, to what extent is the Minister going to accept responsibility? With the present returns on share investments and the rate of development which has taken place in regard to properties, one wonders whether costs are a factor in calculations of any importance. And yet when one investigates the position of the ordinary civil servant, the white-collar worker, the old-age pensioner, and the person living on a fixed income, one finds one and all of them saying that they find great difficulty in making ends meet. The gap between rich and poor is widening. That is the point, and yet we have the incongruous position that while the gap is widening, people in the middle and higher income groups find that the taxation system is a disincentive to greater effort. The hon. member for Constantia has already pointed out that there has been a 2.7 per cent increase in the cost of living. The Minister himself agrees with this figure. He said that the retail price index had increased by 2.7 per cent. The increase in food prices over the past 12 months is 3.6 per cent. If we accept that the increase of 2.7 per cent per year will continue over the next five years, it will mean that a person having a fixed income of R200 per month will only be able to buy R173 worth of goods and services in five years time. One must remember that ordinary Civil Service pensioners and old-age pensioners have incomes of considerably less than R200 per month. The lower the scale of income, the harder they are hit by increased food prices. We pay for the lowering of standards of living ultimately by lower standards of health. That is the point. There is no point in increasing the number of hospitals, and then finding many of our non-European hospitals filled with people suffering from deficiency diseases, in many cases because they cannot afford to buy food, because the cost of food has gone up and their income has not gone up proportionately. To use the words of the ordinary man in the street, everything is coming up and nothing is coming down. However, in this Cadillac age that may not be understood. We find a shortage of staff everywhere, but particularly in the managerial field. And yet we find the tragedy of men who are retired before their economic life has ended. There are takeover bids, mergers take place and men in their early middle age are put on the scrap heap. It is a tragedy of the present system, which we see to-day, that men who could be gainfully employed are discarded. The recent fever of take-over bids has in many cases caused men to be put out to grass when they can still be gainfully employed. That is a factor which the Minister could bring to the attention of the Minister of Labour and the Minister of Social Welfare to see whether something cannot be done to use the abilities of these men while they still have many useful years before them. I had the opportunity recently of visiting Australia, New Zealand and the Far East. In every country I visited I found the emphasis placed on productivity, but in this country the emphasis is placed on ideology and productivity is forgotten. Unless we lay the emphasis on productivity and make a determined effort to reduce costs and place our industries on a competitive basis, we will find ourselves losing out in the competitive world. We will have to reduce our industrial costs if we want to compete. For far too long we have been talking about training our manpower and far too little time has been spent on getting on with the job. We need to train our manpower because we are in the middle of an economic war where victory only goes to the fittest. We find that our neighbouring countries are already giving concessions to encourage industries. In Lesotho, Botswana and Swaziland industries are being invited to settle in those countries and they are being offered concessions to go there. Because of the conditions which apply in South Africa we may find ourselves in a competitive situation without realizing it. When I visited Japan last year I found industrialists concerned not with investing in South Africa, but in investing on the borders of South Africa, in Swaziland and Botswana, honing to establish industries which would give them an opportunity to trade in the South African market as well as in the African market as a whole. Those are factors which have to be considered, particularly in South Africa to-day where the inflationary spiral is such that costs are going up. You cannot have a situation where shares are returning less than 1 per cent without realizing that the day of reckoning must come, and when that day of reckoning comes, the ordinary investor will not be satisfied with 1 Per cent. They are satisfied with 1 per cent to-day because they rely on an increase in the capital value of the shares, and as the increase in the capital value of the shares is not taxable they are getting the benefit there. But eventually the time will come when the return on the share investment will count, and we will find ourselves in the position where not only will we endanger the position of the gold mines by having increased costs in our secondary industry but we will find ourselves in a difficult position vis-à-vis the outside world; and the outside world will be right on our borders, the countries to the north of us and countries like Lesotho which are within our borders. Unless we take note of this and realize that our first duty is to our own people, we will find ourselves in difficulties. We must contain the inflationary spiral and ensure that as many people as possible get work, that we do not have people who are idle, and that we do not have an imbalance in our labour market. Unless we do that we will be in trouble.

The hon. member for Constantia has already pointed out the difficulties in regard to contract labour. We find in all our industries the difficulty of getting continuity of labour. We find that in our factories we build up a certain dexterity and experience among our non-white workers and then they go back to the Reserves and they find it difficult to get back again, so that we have lost their skill. They have difficulty in getting back because after they have left the factory and gone back to their homes the officials find that they belong to a different ethnic group and so they cannot get back again. On the other hand, we find able-bodied men in the white sector of South Africa being axed because of mergers and being unable to find work, whilst there are factories which could increase their productivity, but they have not got the trained men to do the job. The whole picture is a disorderly one, one which does not encourage us to feel that the Government has come to proper grips with the situation. We can expect in a month’s time to have the Budget and another surplus, a record surplus of possibly over R50 million. My guess is as good as that of anybody else, but I do not suppose the Minister will tell us now what he expects the surplus to be. It would certainly be unique if he did, but I think this is an opportune time to suggest to the hon. the Minister that he gives some consideration to giving relief to those who need it most, and here I have a few suggestions to make: (1) Relief for the old-age pensioner; (2) the smoothing out of the bulge, particularly as it affects the middle-income groups who are inclined to ease off because of the lack of incentive: (3) further relief for married women who work; (4) allow farmers a better spread of their profits and losses over a period of years; (5) withdrawal of the discriminatory 1 cent tax on beer; (6) abolition of estate duty and gifts tax. I do not expect the Minister to give an indication of his Budget proposals at the end of this debate, because he will quite rightly keep them for the Budget, but I would remind him that his predecessor was given advice in the past. In Col. 1446 of Vol. 96 of Hansard, the hon. member for Constantia made a plea for the following: (1) The abolition of estate duty and gifts tax. We have not got that yet. (2) The averaging of the farmer’s income for income-tax purposes over a period of three years. We have got that partially. (3) The exemption of a fixed amount of income from income-tax if invested in Government securities. The Government has accepted this advice, because it was good advice. (4) The exemption from income tax up to a specified limit of premiums paid by self-employed persons to secure retirement annuities. The Government has accepted that advice, too. If the Government goes on accepting the advice of the hon. member for Constantia and others on this side of the House, it will eventually get out of its troubles. As I say, we have given the Minister advice in the past and he and his predecessors have sometimes belatedly accepted it. We supported him in his efforts in regard to the gold price, but in the meantime we want to remind him that the country will not accept the state of affairs where the ordinary man in the street finds it more difficult to live while seeing his neighbours “getting rich quick” through speculation. The widening of the gap between the rich and the poor, between the “haves” and the “have nots”, creates a fertile bed for unrest. The Minister and the Cabinet must realize that both the townsman and the farmer expect and demand much more from the Government than they are getting now.

The amendment introduced by the hon. member for Constantia is in point of fact a good testimonial for the hon. the Minister of Finance. Almost nine months have elapsed since this House prorogued, and in those nine months members of the Opposition could find no reason for introducing an amendment to-day which really has a bearing on his Department. The two reasons for this amendment being introduced and for their not being prepared to approve the hon. the Minister’s Estimates, are concerned with other topics. The first one deals with pensions, which are important, and the other with farming, which is also important, but the amendment offers no criticism and advice as regards the work and the policy of the Minister of Finance. That is why I think that it is fitting for us on this side of the House to congratulate the Minister on the excellent work he has done over the past year.

I do not wish to say much about these two specific points as they come under another province, but by your leave, Sir, I want to say that no previous government would have been able to improve upon what this Government has done for the farmers. This is not a case of what has to be done; it is indeed being done. We have only to look at the list of concessions and benefits the hon. the Minister of Agriculture has been granting to the farmers and how, over the past five years during which we have been stricken by drought, he has come forward from time to time with new ideas and schemes for helping the badly hit farming community to the best of his ability. But it stands to reason that he himself cannot take over the farming industry. In this regard 1 also want to say that that side of the House offered no suggestions whatever as to ways in which the farmers should be assisted further.

The debate has only just started.

But we have already had two speakers. The same applies to the pensioner. I can also say that this side of the House, the Government, is extremely sympathetic towards the problems of the pensioners. We are aware that there are problems of inflation. We are aware that their earnings, their pensions, are decreasing as the years go by. Hon. members on that side are aware that, in order to meet that problem, the Government has in fact increased pensions from time to time. If I am not mistaken, pensions were increased once again only last year.

By R1 a month.

A moment ago the hon. member for Constantia suggested that pensions should be related to the cost of living. Sir, that is not a new suggestion. The hon. member for Constantia knows very well that members on this side of the House also raised these problems on several select committees—this has been recorded in black and white—and said that the Government would be well advised to think along those lines and to have the matter investigated. The hon. member is aware that England is working on a scheme for relating pensions and earnings to a cost-of-living index. There are problems and it is not for me to say that this can be done. But this is an important matter towards which the Government has adopted a sympathetic attitude and to which attention is being given.

Now I want to come to the question of cost of living about which so much has been said. It is true that the cost of living is rising continually, but throughout the world it is being accepted to-day that gradual increases in the cost of living are virtually inevitable. The Government must under no circumstances—this has been the experience of other countries—take such measures as would cause the cost of living to fall or remain constant. Germany wanted to do that. A few years ago she took drastic measures, and what was the result? She found herself in a serious recession and then she said—this was her experience—that no government should take such drastic measures as would curb cost-of-living increases entirely. This would have been ideal, but it does, in turn, create new problems and especially unemployment problems, which often hit the workers harder than an increase in the cost of living would have done.

Sir, what the hon. member for Constantia and the hon. member for Pinetown omitted to say, was that South Africa was still doing exceptionally well for itself. On several occasions in this House we have pointed out that as compared to other developed countries, South Africa has always come third from the top as regards combating cost-of-living increases. We regard this as an achievement, especially when this is seen in the light of the fact that South Africa has had one of the highest growth rates in the world, and this in itself is conducive to inflation. But, Sir, over the past year South Africa has improved its position. Hon. members on that side of the House would be well advised to look at international statistics every now and then; then they would be able to speak less critically and more highly of what the Government is doing and of its achievements. I have here the latest data since the previous Budget in March last year. These are the statistics up to August; it is the latest available information. Under the heading “Changes in cost of living: Percentage change in 12 months”, the following information is furnished: Whereas previously South Africa occupied the third position, it now shares the first position with Germany as far as this period is concerned. It is absolutely astonishing that under difficult circumstances South Africa was more successful in curbing the rise in the cost of living, which is a world problem, than was any other country except Germany. Sir, in actual fact South Africa did better than Germany, because Germany found itself in a recession; she had surplus capacity which South Africa did not have. Over this period the amount of money and near-money increased at a much faster rate than it did in Germany. There was a percentage increase of 13 per cent as against 8 per cent in Germany. We are, therefore, on firm ground when we say that although the Government would have liked to have been able to restrict cost-of-living increases to an even greater extent, there is, if one applies criteria for gauging South Africa’s success, not one single country that has done better than South Africa has.

Without boasting we on this side of the House regard this as a considerable achievement—a better achievement than that of the party opposite when they were in power. I have data here which shows how they did. From 1938 to 1948, under their regime, the average increase was 4.75 per cent per annum. From 1948 to 1967, under this Government, it was 4.3 per cent per annum; in other words, an improvement of 10 per cent on their achievement. They are so fond of giving advice. A moment ago the hon. member for Pinetown once again gave the Government a great deal of advice. Sir, this Government likes listening to good advice, but is it not strange that those who do not know how to solve their own problems, are so fond of giving advice to other people? As far as cost of living is concerned, it is being said that the people are having such a bad time. Recently a survey was made by South African Industry and Trade—the results of which were published in The Star of 12th February, 1969—of salary increases as against cost-of-living increases, for this is of fundamental importance. Now I want to read out to you, Sir, the conclusions that were arrived at—

“More than adequate.” In spite of inflation the workers did better for themselves. Over all the years under National Party regime their standard of living has risen, on an average, by 2.4 per cent. Over the past 20 years our standard of living has risen by 50 per cent. Our standard of living to-day is 50 per cent higher than it was in 1948 when this Government took over. We are aware that over the past few months the inflation trend has once again become slightly stronger, but the Government is giving this its careful attention and we can expect the Minister to take even stronger measures, if necessary, to control inflation.

A great deal has also been said about the question of liquidity. Mr. Speaker, South Africa is actually living in an ocean of liquidirty, it is true, but that ocean of liquidity is the result of prosperity; it is the result of too much money; it is the result of too much confidence in South Africa on the part of the outside world. This is by no means a bad position to be in. We are just as conscious of that problem as hon. members on that side are. May I ask whether they suggested methods for combating the problem? Yes, they suggested one. They said that we should integrate our non-white workers in the white areas economically, in the sphere of labour. Sir, we say that our non-Whites have every opportunity to develop. They can advance themselves in the border industries, and if that side of the House would support border area development and industrial decentralization and would encourage our industrialists to go to the border areas, then border area development could make more rapid progress. But this Government is under no circumstances prepared to permit the economic integration—as we understand it and as it is defined in dictionaries—of the Bantu in the white areas, for that would mean political suicide. Hon. members on that side know very well that political suicide does in fact mean economic suicide as well. The Government has taken other measures and is aware of the fact that we must attempt, as other countries are doing, to increase the productivity of our working community. That is why we established the Productivity Council, and that is why that Productivity Council is at the moment looking intently into what has to be done in order to accelerate the increasing of our productivity. As regards the question of liquidity, which is also a problem, the Government has tried to counteract this and to reduce its inflationary effect by means of its bank credit restrictions. At this stage the Government does not consider it necessary or desirable to intensify those measures any further, for those measures also give rise to other bottle-necks and problems, particularly in the banking system. Admittedly, the Government is watching the position carefully. I can only say that there are few other measures left which the Government can take. The Opposition is of the opinion that there are in fact further measures that can be taken, and I can also mention a few more. The Government can quite easily impose a tax on durable consumer goods, for one of the problems we are experiencing today, is the increasing consumption which is moving at a more rapid rate than is our national production. Sales tax is another possibility. I could mention other measures as well. However, one does not want to move too fast, especially not at this stage, because, as the hon. member for Constantia rightly said, seen from the economic angle our industrial production is moving at a relatively slow rate, namely 3 per cent. The hon. member for Constantia complained about that. The Government did in fact contemplate such a low rate with these measures, since the too rapid industrial development had brought about this problem of inflation. Naturally, this does not mean that this rate will remain as low as this. It will fluctuate and the Government hopes that within the foreseeable future it will rise again.

The hon. gentlemen opposite also spoke about the prices of shares and the Stock Exchange. It is true that authorities on this subject are of the opinion that the Stock Exchange has reached an unhealthy high and that this is dangerous. They think that non-authorities in particular will burn their fingers. The hon. the Minister acted correctly when he warned the public to be careful. South Africa is a capitalist state and not a socialist one. The Government cannot order a person to buy properties instead of shares. There is no connection between the instances in the example mentioned by the hon. member for Pinetown, i.e. that he could not obtain money to buy a farm, but that another person could in fact obtain money to buy shares. How does that hon. member know that the farm in question was an economic proposition, and how does he know that to buy shares at present is not an economic proposition? Surely, the State cannot interfere in this matter. You are aware of the legislation which will most probably be introduced in the course of the current Session, legislation in terms of which better control can be exercised over the Stock Exchange. We want to state very explicitly that the Stock Exchange is a private institution and not a Government institution. Although it is the duty of the Government and the hon. the Minister to lay down the rules and regulations in conjunction with that exchange so as to ensure that it operates on a sound basis as far as possible, it is, however, an exchange where private investors either risk or do not risk their money, and too much interference on the part of the Government can do more harm than good.

Finally, I want to refer to the question of gold, which has also been raised here. From the nature of the case the hon. member for Constantia is quite correct. It is true that we do not know about all these things and that we cannot or may not speak about all these things. However, there are many things we can in fact say. The hon. member for Pine-town said that he thought the hon. the Minister was over-optimistic. I should like to ask the hon. member what the effect would be if we were pessimistic. If one does not have confidence in the justness of one’s case, then one has lost before one has started. As I shall now point out to you, Sir, the Minister’s optimism is completely justified and there are many good reasons why the Minister can take as firm a stand as he has in fact taken. Before this problem can be grasped, I must furnish you with a few figures. There are four aspects which are important in this regard. Firstly, how extensive are the official gold reserves and where are they? Secondly, how extensive are the unofficial gold reserves and where are they? Thirdly, how big is the demand for industrial and jeweller’s gold? Fourthly, what do other experts think of the justness of South Africa’s case? I want to touch upon these points in brief. The total official gold supply amounted to $38.6 billion towards the middle of last year. The total unofficial gold supply (i.e. the accumulated supplies) amounted to $22.5 billion, i.e. the unofficial gold supply is equal to approximately 37 per cent of the total available gold supplies in the world. It is interesting to note that it is for the most part the United States itself and industrial Europe which are in possession of the greatest percentage of official gold. The United States and industrial Europe taken together are in possession of 76 per cent of the total official gold supply of the world. These are the ten countries about which so much has been written. The United States alone is in possession of approximately 25 per cent of the world’s gold. Now I come to the point I should like to make, i.e., that the gold reserves amount to approximately 58 per cent of the world’s total reserves. Gold is still the major reserve monetary unit and it enjoys the greatest measure of confidence in the world, especially that of financially strong countries such as France, Switzerland and Belgium, which hold high percentages of their total reserves in gold reserves. The U.S.A. holds 80 per cent of her reserves in the form of gold reserves, Switzerland 87 per cent and France 86 per cent, just to mention a few examples. It is worthy of note that the official gold supply has not increased since 1958. In 1958 the total gold supply amounted to $38 billion and in 1968 it was $38.6 billion. This is one of the major problems which has been held up by the hon. the Minister from time to time, namely that the international lack of liquidity is the result of a lack of sufficient gold. This is still the metal and the reserve monetary unit which enjoys the greatest measure of confidence in the whole world. As regards the unofficial gold, there is, as I have said, 22.5 billion dollars’ worth in the world, but over the past year this has risen by almost 14 per cent. In 1967 it was $19.7 billion and in 1968 it was $22.5 billion. These unofficial gold reserves are equal to the gold production for 15½ years, taking the 1967 figures as a basis. The question now is where is the unofficial gold? We suspect that it is mainly in the oriental countries. It is true that the oriental countries, Asia, have more or less the same quantity of gold in supply as the rest of Europe has, i.e. excluding France; Asia has $4.8 billion in unofficial gold reserves, the Western Hemisphere has $4.4 billion, France has $4.8 billion and the rest of Europe has $4.3 billion. As you can see, Sir, the accumulated gold is once again more or less the same countries, the speculation gold as many people call it. Let me read out to you, Sir, something which is very interesting. This is what Dr. Pick, an American monetary expert, has to say—

i.e. 1968—

i.e. gold—

This is in America, which herself accumulated so much over the past year. This is an indication of the confidence in gold, in spite of all the propaganda that is made by the American government.

There is a last point at which I want to pause, i.e. how extensive is the industrial use of gold, including jewellery? The present estimate is that it is 40 per cent of the world’s annual production of gold. This includes the Russian gold production. In regard to that country’s production there is no definite information; the only information we have is their actual sales. If we take that as an approximate basis, as well as their production over a period of five years, it appears that the world’s total gold yield is $1,442 million per annum. In 1966 the industrial use of gold amounted to $640 million. If we were to project the future, taking the past ten years as a basis, and if the consumption of industrial and jeweller’s gold were to increase at the same rate, it would appear that in the year 1980 the demand for gold by industry alone would be equal to the total production of gold in that year. That means that in 11 years’ time the demand for industrial gold would be more or less equal to our production. That is why we can tell the whole world that we need not be afraid as regards the future of gold. Apart from the important role it plays as monetary gold, as gold for the central banks, there is the growing demand for industrial gold.

In conclusion I want to quote a few passages dealing with the way in which the world views this problem, our case, the question of international liquidity as well as the role of gold. Let us listen to what Sir Gressing Vocham, chief of the Academy for Central Bankers in Europe, had to say recently. This is what he said—

According to this report he spoke these words “amidst loud applause”. On 17/10/1968 the Governor of the Bank of England said the following—

Those are, of course, the dollar and sterling. He went on to say—

This was said by the Governor of the Bank of England. Let me also quote what was said in New York by the National City Bank of America, which indicates that even in America our case is now beginning to gain ground.

All these passages I have now quoted constitute adequate proof to the effect that the case put forward by the Government of South Africa is right, that the Minister’s optimism is entirely justified, and that this is the road South Africa has to follow. We must not walk upon the road of pessimism or of less optimism. The present road is the road which we must follow and the one we must work on in order to achieve success. I repeat that it is only when one believes in the justness of one’s case that one can expect success.

I want to conclude with these words: I do not know of any other period in our history where South Africa was financially and economically as well off as it is at present. Under difficult circumstances the Government has not only succeeded in gaining the full confidence of our foreign entrepreneurs, and that in spite of bad predictions and prophecies of doom from that side of the House, but also in gaining the confidence of the Western world as never before. This testifies to success and nothing but success.

Mr. Speaker, I do not think the hon. member for Florida is correct when he says our amendments to the motion of the hon. the Minister should not have been addressed to the Minister.

No, I did not say that.

I am sure the hon. the Minister of Social Welfare and Pensions would have been delighted to increase his pensions twice or three times or even four-fold if he could only get the money from the Minister of Finance. Moreover, I am sure the hon. the Minister of Agriculture will give us all the dams we want, and perhaps one day even all the water we want, if he could only obtain the necessary funds from the Minister of Finance.

Or from the taxpayer.

I see I have to contend with the hon. the Minister of Sport and Recreation as well now. To go on, the hon. member for Florida has missed a further point, namely when we talk about protecting those who are dependent on fixed incomes, we are not only talking about pensioners and civil servants and people of that kind. We are also talking about the people whose money the Minister wants, namely the man and the woman he wants to invest in fixed interest securities. I will have something more to say about that a little later. What amazed me most this afternoon was to hear the hon. member for Florida, for whom I have a great deal of respect as an economist, stand up in this House as a protagonist of inflation. I do not think we have ever heard this in the House. The interesting thing is that thereafter he explained that although we have inflation, it has done little harm.

No, I did not say that.

He said we must have inflation. He said that is the view of people throughout the world, and asked what had happened in countries where they decided they must contain inflation, where they had not inflation but deflation. He also dealt with the Stock Exchange and with gold. I will also have something to say about that in the course of what I have to say.

Now, this problem of excess liquidity is quite obviously causing the hon. the Minister concern, as it is causing serious concern to other people in this country.

In the statement that was released by the hon. the Prime Minister after the meeting of the Economic Advisory Council, held in August last, the Council expressed the opinion “that official policy must henceforth distinguish very clearly between control over the domestic economy and the solution to the problem of liquidity”. These views were underlined by the Minister of Economic Affairs in a speech he delivered to a symposium of the National Development and Management Foundation on business prospects for 1969, when he said that “the objective of reducing excess funds in the economy would be given high priority in the Government’s economic schedule for 1969”. I agree that a distinction must be drawn between the domestic economy and the problem of liquidity, but I hope that we will not carry this distinction too far. These two questions are clearly inter-related in many respects. Excess liquidity, by its very nature, must have an impact on inflation. We are indeed fortunate, as the hon. the Minister has rightly said, that the inflation or the effect of liquidity has been mainly in the financial sector. But the hon. the Minister also very rightly said that there was a danger that the excess liquidity would spill over into the domestic economy. This is very true. I believe that it is already happening, and particularly, that at least part of the profits that are being made in the share market, through speculation, are already flowing over into the trading sector. The public is not reinvesting all the profits they are making back into the market. These profits have been abnormally high. In 1968 the market increased by no less than R6,000 million. These profits are finding their way into buying new motor cars, new furniture, new domestic appliances, new luxury goods and a higher standard of living. I think we can expect this process to continue.

In January the hon. the Minister announced that his immediate objective was to reduce liquidity by R250 million. This amounts to substantially less than the R400 million which the Minister of Economic Affairs mentioned in October of last year. Therefore, between October, 1968 and January, 1969, either the position has changed to the extent of R150 million, or the hon the Minister of Finance, in setting a more achievable target, is perhaps more of a realist than the hon. the Minister of Economic Affairs. It is strange, but this difference in figures has a familiar ring. We have noticed in the past in this House that hon. Ministers of Finance and hon. Ministers of Economic Affairs do not always speak with the same voice. Despite the more limited objective of the hon. the Minister of Finance, I do not think he is going to find his task an easy one. The sources from which he draws compulsory contributions to Government securities, such as insurance companies and mutual fends, are all experiencing very buoyant conditions and automatically contributions which these institutions are required to make by law, will flow to the Minister and will, no doubt, be substantial. But I have a feeling that the contributions from the voluntary sector may well present a very different picture. It has been said here, but one has to repeat it, because it is factual, that the public is riding high on the stock market, that they believe has no ceiling. The market is drawing off millions of rands which normally might well flow into the hon. the Minister’s fixed interest bearing securities. But the rate of inflation rose again last year. We have had the figures already. The public is very deeply concerned with the continued erosion of their money. If we are to place any reliance on the economic surveys which we have had lately, there are very sound grounds for concern by the public. They have not been reassured by the figures the hon. the Minister gave us on Monday, which have been added to to-day by the hon. member for Constantia. The climate for fixed interest rate investments is not a good one at the moment, because the real basic problem is that the most conservative investor no longer enjoys a sense of security in fixed interest investments. There is no longer any peace of mind for him. There is no longer any certainty in investments bearing fixed returns on capital fully secured. The investor is in constant fear of a capital loss, in real terms, through money losing its value. Our problem is that hundreds and thousands of people would say, “If my capital was to be secure, I would invest at fixed interest rates and have no worries”. But they have worries. If they continue year after year to invest their money in fixed interest bonds, in building societies and so on, in 10, 15 or 20 years time, the capital is so eroded that they have done themselves and their dependants an injustice. This is the problem. I am a conservative. I would like nothing better than to take my few rand, and to say to the hon. the Minister, “Take it and give me six per cent”, if I knew that the value of that income and that capital would be constant.

Tax free?

No, I would not mind if it is not tax free; if I was assured that every time the capital depreciated, the hon. the Minister would make it up; because this is the fear of the investor. This is our problem. One sometimes wonders whether money as money is still the criterion of material wealth, or whether the yardstick to-day is not the assets one possesses, namely property, shares and businesses, the material worth of which is merely expressed in monetary terms. I think this is what is happening in the world; because we are living in a new era, an era of managed economies, an era which has been untouched by the spectre of a slump or a real depression in two decades, an era of a new generation, to whom the setbacks of the 20’s and the 30’s are merely history, a generation that scoffs at yields and talks only of growth. It is a generation to whom equities are gods, and money is merely the medium for their purchase. It is a generation on whom the hon. the Minister’s warnings that the sharemarket is high, fall on deaf ears. The hon. the Minister, the most responsible Minister who can do so, has in this House warned the public on three occasions, that they are going to burn their fingers. What has happened? On each occasion the market has gone higher. There is no norm any more.

What do you suggest? [Interjections.]

Perhaps the market will collapse; perhaps the market will go higher. I often wonder who is going to be proved right: Those who say it is going higher, or those who say it is going lower.

We, who are a little older, have different views from these younger people with the new outlook. Perhaps we, who consider ourselves more mature and more experienced, carry too many old scars. We nurture too many inhibitions and we retain too many old prejudices. Perhaps over the course of time we have set up too many blockages to new concepts the penalty of the financial catastrophes that we have seen. While we are very busy postulating what ought to be, these young people who are full of energy, confidence, initiative, imagination and impatience, are confidently accepting what is. This is one of the hon. the Minister’s problems, and he knows it. He knew it when he introduced the first R.S.A. bonds which were to be tax free. He knew that to entice the public to invest in fixed interest securities, he had to offer special inducements. Quite correctly, he acted accordingly.

What is the hon. the Minister trying to do in regard to liquidity? First of all, he is endeavouring to repeat his successful R.S.A. bonds by issuing the new jubilee bonds. This bond differs in two respects. The first is the maximum family investment of R45,000 instead of previously R40,000. Secondly, the rate of interest is being dropped from 6 per cent to 5½ per cent. It is true that, since the advent of the R.S.A. bond, the bank rate has been dropped by half a per cent and consequently general interest rates have dropped by half a per cent. I wonder if the hon. the Minister has not erred on the side of optimism by dropping his rate by half a per cent in conditions as we find them to-day.

I know that the cost to the country of tax free bonds is high, particularly if the capital sum is frozen, which I understand the hon. the Minister proposes to do. He said so on Monday. He was going to freeze some of this money. But it is so essential to reduce this liquidity that I think the hon. the Minister should have left the extra half per cent.

The second aspect of the hon. the Minister’s programme is his national savings certificate, where he will merely increase the permissible investment from R10,000 to R15,000. It is a step in the right direction. The third proposal is the Post Office savings scheme, where the hon. the Minister has made one change. One can now withdraw R30 on demand at four day intervals instead of previously R20.

I want to say to the hon. the Minister, if he seriously wants to use the Post office as a vehicle for encouraging savings, then he had better have a general look at the whole basis on which the Post Office savings account system operates.

Because what is the position? The present position is that each depositor can deposit up to a maximum of R4,000 in a Post Office savings account in any fiscal year. What does this mean? If I deposit R4,000 on the 1st April, the first day of the fiscal year, this year, and I withdraw it any time before the 31st March, 1970, the last day of the fiscal year, I am automatically debarred from again depositing any amount with the Post Office until the 1st April, 1970. Is this the way to get money from the public, by telling them that if they deposit it and then draw it out again, they cannot put it back again? Everybody else is spending fortunes on advertising, including the hon. the Minister on his bonds, but he will not allow anyone to put his money back. But worse is still to follow. If you deposit your money with the Post Office after the second day of the calendar month it will not earn interest until the beginning of the following month. The hon. the Minister does not pay you any interest for 29 days. And worse still, if you take it out before the last two days of the month, say for instance the third last day of the month, he does not pay you any interest for that month. Taking the case to the extreme, one finds that if you deposit money on the 4th of one month and draw it out on the 27th of the next month, the Post Office does not pay you any interest. It has had the money for two months, but pays no interest. This method of operation, and I say this with all sincerity, is unfair to the small investor, the little man who uses the Post Office as a means of saving. What is even worse is that I believe that the average depositor is unaware that this happens. I know the hon. the Minister will say to me that it is their own fault, that it appears in the Post Office regulations and at the back of the Post Office savings book. Like most members I have had a Post Office savings book since I was a little boy when my father gave me my first one and it was only a year ago that I noticed the regulations at the back of the book. I did not know that I was not receiving interest for my money for the full period that it was deposited with the Post Office. I hope that the hon. the Minister, in conjunction with his colleague, the hon. the Minister of Posts and Telegraphs, will do something about this. We are living in an era of intense competition for the public’s money and this is not the way to get it. If the hon. the Minister wants to be competitive he had better put his house in order. He must not come to the House and say that he has not got the staff and that it cannot be done because of the clerical work. He should rather send a few people over to London to see what the Post Office is doing over there. They are paying your accounts and almost keeping you. He should investigate “Giro”.

The objective of the hon. the Minister to reduce the excess liquidity can of course be vastly helped by two other means. He could relax exchange control and he can give us another relaxation of import control. If we were able to use either of these two methods, the cost burden to South Africa will of course be very much less, because we will be getting a credit income from abroad instead of a debit for interest on frozen capital.

The problem, of course, is the gold reserves we are steadily accumulating and the solution of the gold sales problem. On the 31st January we had gold and foreign reserves of something well over R1,000 million. Of this amount the gold stocks were well over R900 million and our usable foreign exchange was about R100 million. The hon. the Minister has said from time to time, that to deplete our foreign exchange reserves further, by the relaxation of exchange control or import control would be hazardous. I agree with this. The 64,000 dollar then becomes: What about the conversion of our gold into usable foreign currency? The Minister has told us very frankly that he sold gold on both the free market and to the monetary authorities. Some sales were effected as late as the end of last year. We also know that the hon. the Minister is of the opinion—and I do not know if it will help him, but I agree with him—that in terms of the I.M.F. regulations they are bound to buy our gold at the price of 35 dollars an ounce in exchange for foreign currency. I agree with the Minister entirely. I am glad to hear from the hon. the Minister that he is supported in his views by the Managing Director and staff of the I.M.F. The problem is of course that the United States seem to take a different view. They did not even give us a chance to discuss the matter at the I.M.F. meeting, but cut the meeting short.

We also appreciate that the hon. the Minister is trying to find a solution to a very delicate problem. I am not going to promise not to embarrass him, but I am not going to embarrass him more than I have to and I certainly do not want to impede him in his task. On this front the hon. the Minister did not tell us an awful lot. He told us that he had discussions with “the group of ten”, but he did not tell us the proposals because it would not be in the interests of the country. This we accept. He then set out the four conditions, the basis on which, if I can use market language, he was prepared to deal. I agree with the hon. the Minister that if these conditions were accepted it will bring a more orderly process in attempting to find a solution to the world monetary problems. I believe that the conditions which the hon. the Minister laid down are fair and reasonable. I do not believe that the world can go on from one monetary crisis to another for much longer, unless, of course, we want to open the doors wide to Communism. I believe that events have shown that the hon. the Minister is right when he says that there is greater confidence in gold than in any currency. The question is, when are the other monetary authorities, of the Western world and the United States of America, going to accept these views? I do not ask the hon. the Minister to tell me. We are with him wholeheartedly in his endeavour to get these views accepted and we wish him nothing but success. I think, however, that in view of the situation we are entitled to ask the Minister for two assurances. The one is that he foresees no difficulty in South Africa obtaining the necessary foreign currency that she requires for her external payments. The second is that it will not be necessary to dispose of gold on the free market to the extent that we may depress the price below the official rate of 35 dollars an ounce. If we have these assurances from the hon. the Minister—and I would not have asked these questions if I were not positive that he would be able to give us the answers—all sides of the House stand firmly behind him in what he is trying to do for the benefit of South Africa.

These questions are particularly important at present, Mr. Speaker, because it would seem that our imports for 1969 are going to increase and that, because of the drought, our exports for 1969 are going to decrease. We are going to have a gap in our balance of payments position which, according to the Americans, we can only settle by foreign exchange.

Having said this, I, as had my colleague the hon. member for Pinetown, has done, want to anticipate the budget a little and just reinforce one or two matters. It has been said before, and I am making no apologies for saying it again, that in this lovely country of ours the rich are getting richer and the poor are getting poorer. While the rich are being given every opportunity for large investments far beyond the compass of the little man, tax-free investments for example, the burden of high taxation, soaring land prices, increased building costs and constant rises in the cost of living are hitting the lower and the middle income groups harder each day. The young man in the R4,000 to R8,000 income bracket, with his wife probably working, is finding it increasingly difficult to establish himself. I join the hon. member for Pinetown in hoping that there will be some relief from the bulge and for the working married woman particularly. I hope there will also be some further relief in respect of that item that can cause such a crushing blow, namely medical expenses. This has been asked for in this House over a period of years. I hope that the incremental rate in the higher income brackets will perhaps be adjusted, because it is crippling the professional men, the scientists and the chap we really want, the brains of the country. We cannot allow anything that will stultify incentive.

There is one last matter, and that is on the question of manpower. The Minister in his speech on Monday said that “die tekort aan geskoolde arbeid nog steeds ’n knelpunt in ons ekonomie is”. I could not agree with him more. Every time we discuss our economic position in this House we inevitably come face to face with one fundamental, namely that unless and until, while safeguarding the position of the white man, we are prepared not only to allow but to encourage all sections of the population to play their full part in our economic development, what are we going to live with? We are going to live with continuous and intermittent inflation, poor public services, and heaven knows some of them are poor enough, as we heard in the House yesterday afternoon, and constant measures which retard natural expansion. What is happening is, and this is the tragedy of South Africa, that the net result is a continuous brake on the optimum rise in the standard of living. Everybody should be better off, and we are not.

Sir, one day the public will realize, if it has not done so already, what might have been if our economy had not been hampered at every turn by Government ideology; what might have been if labour could be utilized to its full potential; what might have been if we had the rate for the job; what might have been if we had no Physical Planning Act. It might well have been the golden age that the hon. the Minister euphemistically spoke about last year, not a golden age for the few, not a golden age for the rich, but a golden age for all, a golden age in which the beginning would have been made to end poverty, a golden age in which every man could develop to his full potential, a golden age in which there would be a better life for each and every man and woman in South Africa.

It is not every day that one sits in this House and that a speaker on the other side gets up and says to our hon. Minister that he cannot agree more with what the Minister has done, or agrees with this aspect and approves of that aspect. We thank the hon. member for at least having thanked the Minister of Finance on behalf of his Party, and also for having indicated where they detected at least some good here. This is altogether different to what the hon. member for Pinetown said.

But I just want to return to a few small things which the hon. member for Parktown has just said. He asked two qeustions in connection with gold, whether it would be used for foreign loans and also whether gold would be sold. But I do not want to speak about gold. After all, the guidance which the hon. the Minister provided over the past year was clearly discernable in Press statements and explanations, i.e. that that is precisely what he is going to do. There is no doubt in anyone’s mind about that, and therefore we hope that the hon. member will also accept that, i.e. that it is also the right thing to do and that as far as gold is concerned the whole House ought to congratulate the Minister on the very capable and skilful way in which our whole gold situation has been handled up to now; and I hope that those hon. member agree with one another.

Both hon. members on the other side spoke about inflation, which had soared, and said that things were still in a bad way, but surely the hon. members know that that is not so. There is a measure of inflation. I obtained the inflation rates for 1967 of all the Common Market countries as well as the EFTA countries, the U.S.A. and Canada. That is the last year for which figures are available, and there is only one country, West Germany, whose inflation rate was less than that of the Republic, i.e. 1.5. That of the Republic was 1.8 and all these other countries, all the Economic Common Market countries, the EFTA countries, America and Canada, had very much higher inflation rates. In Amercia it was 2.88 as against our 1.8. In Canada it was 3.5, in the Netherlands 3.4, in Italy 3.7, in the United Kingdom 2.5, and in this past year we are in an even better position. There must be a measure of inflation; 2 per cent is recognized as being normal. We are 1 per cent under that norm. This is surely excellent. What is all the noise about?

I want to say something about the Stock Exchange. The hon. members said that the Government is doing nothing and that the Minister’s warnings are not good enough. It is true, as those hon. members have said, that the market value of the shares on the Johannesburg Stock Exchange increased by R6,000 million during 1968. This is almost as much as our national income. This is an unprecedented state of affairs and something must be done about it, but those hon. members did not offer a solution. I want to contend that this state of affairs which has developed, it partly attributable to the Opposition, but I shall come back to that. Let us just look at a few facts about the Stock Exchange. This tremendous increase in the market value is a record. We also found that last year there were 68 companies whose shares were quoted on the Exchange, also a record. It is estimated that about R2,000 million of new capital came onto the Johannesburg Stock Exchange last year, also an alltime record for us. The turnover in shares during 1968 was R423.9 million, and the value thereof was R1,203 million, with just a little over one million transactions. If this Stock Exchange goes on like that, South Africa runs the risk of encountering future set-backs. Some people are going to lose, and they are going to lose a great deal. It is my considered opinion that the time has now come, especially after a commission has been appointed to investigate income tax, to consider whether all transactions in shares should not be taxed, just like an ordinary commodity, just like clothes, etc., which are sold. In addition I want to put forward for consideration that if it were to be taxed as capital gain, we must only consider it in isolation, i.e. that if that gain in shares is to be taxed in the future, the losses incurred must be carried forward to be offset against gains in shares alone, and not against other income. This will assist in preventing our people from becoming so speculative. They are becoming reckless. Large sums of money are borrowed and gambled with. It is not healthy for a nation to go on like this. Therefore I feel that the time has come for these trans actions in shares to be taxed as ordinary commodities, subject to the conditions which I have imposed.

Hon. members opposite asked why it is that these matters have got out of control. There are certain causative factors, and the most important is the tremendous prosperity which we have in South Africa. We know that in 1960 we had a tremendous recession and it was this Government itself which actually did everything to stimulate our economy, and it was done so well that to-day we are faced with prosperity problems.

On a previous occasion the question has also already been asked as to what we are doing on behalf of education in South Africa, and complaints were made that we are spending too little. Let us look at what is being spent on education. In the U.S.A. 10 per cent of the national income is spent on education, in the United Kingdom 7 per cent, in the Netherlands 6 per cent, and in South Africa 3 per cent. But I want to say that, of course, a large portion of this money goes directly to our universities and I think that the time has also come for us once more to give a little attention to the education at our universities. I want to express one thought here and that is that something must be done about the situation, observed over the past year at certain of our universities, where there are students who are wasting their time and the country’s money and not studying as they ought to do. I think that in that respect we owe the Prime Minister a large debt of gratitude for his strong and firm action last year, which put these participants in “sit-ins” or loafers in their places. I think that at our universities in South Africa to-day the situation is such that the period in which students attend classes is altogether too short, and we must give attention to that. I think that the time has come for students to remain at university for longer during their period of studies. I see no necessity why the universities must only begin with classes in the middle of February and stop again in the middle of November. It was originally thought in earlier years that during this free period these people would devote themselves to specialization, but this is simply not done. It is my considered opinion that if the universities were to begin sooner and to continue for longer, so that the students remain at the university for a longer period to study, there would not be gadabouts and loafers, but that they would really work. We in South Africa cannot afford to waste one day of any man’s work, and the more knowledge one can glean the better. The people must, of course, have their vacations, but too much of that is not a good thing either.

One of the barometers of prosperity is, of course, the number of motor cars in South Africa. We know that earlier a motor car was a luxury article, but to-day it is not a luxury article to everyone; it is also to-day an essential vehicle in many respects. Let us just look at the figures. We find that in 1967, 124,000 new motor cars were sold, as against 134,000 in 1968. This is an increase of 7.5 per cent. The new commercial vehicles totalled 38,000 in 1967, as against 42,000 in 1968, an increase of 9.2 per cent. As far as vehicles in South Africa are concerned, we know that attempts are being made to-day to establish our own motor industries here and that this is also being done on a large scale. We also know that there is a stipulation that there must be a certain percentage of locally manufactured components, and that the industries have an interval of five years to meet this requirement. But as a result of these encouragements we have too many makes of motor cars in the country and this entails unnecessarily high prices for motor cars, because each manufacturer competes with every other one to find a market for his own product. I also want to put forward for consideration the fact that the time has come for us to realize that it is not necessary to have 100 different kind of motor cars on the roads. Why can there not merely be 50 different kinds? This is something which must be investigated thoroughly and then one can see whether something can be done about it.

We have prosperity in this country, and another indication of this is the manner in which people advertise in order to do business. We in this country must be under no illusions; this prosperity is attributable to the actions and good government of the National Party. That is the case, and we are all thankful for it. During 1968 about R100 million was spent on advertising. It was spent in four ways, i.e. through the Press, radio, cinemas and in exhibitions. It is expected that the increase in these advertisements will be between 5 per cent and 10 per cent annually. As far as the Press in South Africa is concerned, we find that in 1968 about 70 per cent of this R100 million went to the Press. This is for advertisements placed in the Sunday papers at about R1.5 million a week and in the daily newspapers at about R1 million a day, plus all the rural newspapers and magazines which appear weekly, half-weekly, and monthly. As far as broadcasting is concerned, Springbok Radio has made tremendous efforts since its inauguration in May 1950 to obtain advertisements. Broadcasting even went further and in addition established four other advertising media, namely Radio Bantu, Radio Highveld, Radio Good Hope and Radio Port Natal. As far as advertisements are concerned, the radio is not as dangerous as the Press and the cinema. The hon. the Minister of the Interior recently warned the Press not to publish morally corrupting articles, to put their own houses in order, and that if they did not do so, legislation would follow. After the hon. the Minister’s warning a great improvement fortunately took place and for that I want to thank the newspaper world. But as far as advertisements go, there is still tremendous room for improvement. If these newspapers do not put their houses in order where advertisements are concerned as well, I want to ask the hon. the Minister to put the matter right.

Mr. Speaker, a great deal of criticism was levelled here to-day from the other side about the Government’s activities, and the assertion was also made here that the white collar workers are not obtaining their rightful share of the country’s prosperity. Sir, what can the Government do to bring about salary increases in the private sector without taking drastic action? As far as the Public Service, the Provincial Administrations and the local authorities are concerned, a great deal is indeed being done by the Government. I think it would be as well for us to review for a moment how many people there are in South Africa in the service of the State, by comparison with England and America. In South Africa, with a population of nearly 19 million, the Central Government has 276,000 workers, i.e. one out of every 72 of the total population. In Britain, with a population of 52 million, one out of every 52 is in the service of the State. In England there are one million workers in the service of the State. In England, where one out of every 52 of the population is in the service of the State, Government action can have much greater effect than in South Africa. We in South Africa believe in free initiative. We believe in maintaining capitalism intact here and in not inclining to socialism. Therefore we in South Africa cannot take too drastic action against the private sector. It is specifically in the private sector where our problem lies. The private sector pays much bigger salaries to its workers than are obtained by Public Servants and semi-Public Servants. We can surely not continually increase salaries because this will simply cause a spiraling effect. If salaries in one sector are increased, similar demands will emanate from workers in other sectors. There would be chaos. Therefore we must at least think before we request that salaries be increased. But let us compare South Africa with the United States of America because America’s working conditions are more or less comparable to those of South Africa. In America, with 10 million workers in the service of the State, one out of every 19 of the population of 194 million is in the service of the State as against 72 in South Africa. In America it is therefore much easier for the State to regulate salaries as it wishes. Here in South Africa salary increases must be left to the initiative of the private sector. Let us also take a look at the Railways. The Railways have 221,000 employees of all races. The route mileage controlled by the Railways is 14,000. In England the British Railways have 400,000 employees and the length of their lines is only 16,000 miles, in other words, only 2,000 miles more than in South Africa while the number of employees is almost twice that in South Africa. And in spite of these figures members on the other side make the accusation that the productivity of our workers is not high enough! Are these positive indications not proof that our workers in South Africa do have a high measure of productivity? South Africa with an only 14 per cent smaller route mileage, needs 45 per cent less workmen to serve the Railways, and I think that we should thank our workers for such productivity on their part.

We must also take into consideration that Britain and the United States of America draw their workers from a population of well educated persons. In South Africa the position is altogether different. A tremendously large portion of our population is uneducated. About 50 per cent of the people in the service of the State and the Railways in South Africa are Bantu and then we are still much more productive than the workers in England and America. Why then do hon. members on that side come along with the insinuation that our people are not sufficiently productive.

No, Sir, we must at least give some analysis to the criticisms of the Opposition. The hon. member for Pinetown spoke about our industries. Let us just take a look at the position of our industries. In 1960 the total population of the Republic was 16 million. There were then 411,000 Whites and 737,000 non-Whites working in Johannesburg. If we add to this Vereeniging, Pretoria, Sasolburg and the cities of the Rand, we find that 75 per cent of the industrial production was concentrated in this small geographic area, in other words, also 75 per cent of our purchasing power. To-day I want to level the accusation at the Opposition that in spite of everything which this Government has done to decentralize industries, the Opposition has never co-operated. They cast suspicion on border industry development. The Opposition has thus far not made the slightest effort to assist the Government in encouraging our industrialists to establish their industries in other areas where cheaper production can be obtained and where they can supply our people with better facilities than in the urban complexes. Mr. Speaker, I shall return at a later stage to the question of our border industries.

I just want to say a few words about the Government’s participation in our economic life. I do not want to mention my standpoint here; I want to furnish you with the opinion of Dr. Holsboer which appeared in the F.C.I. Viewpoint of January, 1969. Dr. Holsboer stated—

This Government therefore invested 23 per cent as against 67 per cent by the other sectors. Sir, if this Government had not made that investment, would South Africa have been so prosperous to-day? This 23 per cent was chiefly invested to establish the infra-structure of South Africa; to establish water facilities, railways power facilities, transport and telephone services, etc. I think that this figure of 23 per cent is not too high at all. The State, of course, wants to interfere as little as possible in the private field, but the State must also ensure that the necessary investments are made to stimulate our economy, because if the economy prospers, there are opportunities for work for the people. We have no unemployment in South Africa. As a result of this stimulation on the part of the Government all our people are to-day employed. Sir, I also want to furnish you with an additional figure; in 1960 the gross domestic investment by the private sector was R765 million as against R1,599 million in 1967. In 1960 the investments of our public corporations such as Iscor, Sasol, Amcor, Escom, etc., were only R63 million. In 1967 this figure shot up to R293 million. In other words, in 1960 investments by public corporations represented 8.3 per cent of the total investments by private industries, and in 1967 it was 18.3 per cent. I now want to put this question to the hon. member for Kensington whom I believe is going to follow up on what I am saying: is he satisfied with the fact that the Government invested so much through public corporations to establish the basic services, or does he regard it as having been too large a sum and that the Government should not have supplied these basic services? I put this question because the objections which were indirectly raised here, that the Government must first do certain other things before the Part Appropriation is approved, boils down to the fact that the Opposition does not want to ensure that these basic services are established. We find that the State specially applied itself to these four basic services. Iscor and Sasol are two of the corporations where the Government has made its contributions. I want to ask hon. members on that side where South Africa would have been to-day if the Iscor legislation had not been passed when a previous National Party was in power? If Sasol had not been founded, where would we have been to-day? Then there is another factor which is lost sight of and which I want to mention here, because we have heard that there is a major agricultural debate coming. The Land Bank must supply the necessary capital to the farmers. It is surely unreasonable to attack the Government about these matters which I have mentioned here and then still to complain that the farmers are not receiving sufficient assistance. Where will the capital which the farmers need come from unless the Land Bank advances it to them? Then there is also the I.D.C. A major attack was launched against the Government here last year in connection with the I.D.C., because the I.D.C. was supposedly becoming too large, expanding too much and had entered the domain of the share market. But if the I.D.C. does not advance money for the establishment of industries in the border areas, who will do so, because this Opposition does not want to propagate the establishment of border industries. They come along with the fine excuse that we should indeed allow white capital into the homelands, just 100 yards over the border, and they have not yet replied to the question I put to them last year, i.e. why those industries could not be established 100 yards to this side of the border. The I.D.C. is continually attacked because it encourages the establishment of border industries. We must remember that, by providing facilities for the establishment of border industries, the I.D.C. supplies work to the non-Whites in their own homelands. Would the hon. member for Transkei prefer to see the Bantu not obtaining opportunities for work in their own homelands, in border industries established with the help of the I.D.C.?

No; who said that?

The hon. member thus agrees that border industries should be established there.

But they are not there.

The Opposition does not want border industries there; they do not want to propagate such a state of affairs. I expect that when the hon. member gets up again to speak he will encourage industrialists to establish their industries in the border areas.

Why just outside the borders?

Mr. Speaker, we have the fortunate position in South Africa today that our commerce is sound and strong. We want to thank the Government again today for the foresight which it has already displayed for quite a few years in sending three special trade missions overseas. What were the results of those trade missions? In 1968 the following countries held exhibitions here in South Africa: Austria, the United Kingdom, Italy, Portugal, Spain, West Germany, Brazil, Japan, Rhodesia and Nationalist China. Belgium and the Netherlands held exhibitions here in previous years. Mr. Speaker, there is only one language the world knows and that is the language of pounds, shillings and pennies, rands and cents, dollars or whatever. By means of trade one builds up good contacts.

A further result of these trade missions which the Government sent overseas a few years ago, was that during recent years 13 different trade missions were sent to South Africa. The United Kingdom sent 12, Canada 1 and Australia 3, and the following countries each sent one trade mission to South Africa: New Zealand, the United States of America, France, Germany, the Netherlands, Japan, Iran, Malawi, Madagascar and Mauritius. We are grateful to those people who come here to make contact with South Africa and to extend our trade. We know a great deal is being done to promote our exports, but I should like to see even more done in this connection. Closely linked to this is the fact that we must promote tourism to South Africa. Only this morning we read a report in the newspapers that the hon. the Minister of Foreign Affairs spoke about tourism last night at a function which he attended. We can entice many more tourists to South Africa. British tourists poured into South Africa during 1968. We do not have the final figures yet, but it is expected that the final figure for 1968 will be 50,000. Up to the 30th August of last year the figure was 30,972, an increase of 7,159, or 30 per cent, on the 23,813 for the same period of the previous year. In 1966 when the estimate was made, it was thought that 128 million people travelled outside of their own countries. They spend about nine thousand million rand. World tourism is increasing by about 12 per cent each year. We have seen that our own tourism has increased by 30 per cent. If we can succeed in increasing our tourism by 20 per cent, our revenue will double itself every four years. If we can succeed in doing this and in maintaining the position, we shall be receiving, within 15 years, as much from our tourists as we do from the Republic’s gold production at present. Therefore I think that it would be a good, sound policy to promote that industry slowly. I emphasize the word slowly. One cannot attract great numbers of tourists overnight. More people will come to South Africa, but arrangements will have to be made to receive them here. We want to show them our beautiful country without subjecting them to any inconvenience or such-like difficulties. Tourism goes hand-in-hand with trade and to extend our trade we shall have to do certain things. We say frankly that we are doing a great deal and that that is almost enough, but we can still do more. That is what the Government is doing every day because no Government is ever satisfied with its own achievements; a Government always improves on previous achievements. We shall have to do more research in respect of certain things. In the U.S.A. 90 per cent of the industrial research and the development expenditure is concentrated in only five of the 19 sectors. [Time expired.]

Mr. Speaker, the hon member for Sunnyside has covered a very wide field. He has touched on so many subjects that I hope he will forgive me if I do not reply or give time to them all. He spoke about gold, the cost of living, the warnings about the operations on the Stock Exchange, education in South Africa, the rationalization of the motor industry, the radio and the Press, State employees and so on. He covered a very wide field but if he will forgive me I will just say a word or two about each of these subjects.

We had a dissertation this afternoon on the gold question from the hon. member for Florida. He gave us a very good lecture on the whole question of the price of gold. We have also had very valuable contributions from our side of the House. My view of the price of gold and our attitude in South Africa to the price of gold is a very simple one. I do not want to shoot the man at the piano, namely our Minister of Finance. Last year he gave us an assurance that he was in close touch with the gold producers in all that he was doing. If the hon. the Minister with his excellent financial staff and the gold producers of South Africa cannot work out a good strong plan, I am sure that I shall not be able to do so. I have read a great deal about the price of gold and I was interested in what both the hon. member for Florida and the hon. member for Sunnyside had to say but I am afraid that I cannot make any valuable contribution. The hon. the Minister cannot tell us everything. He might be able to discuss the whole matter confidentially with the hon. Leader of the Opposition but even then I am afraid that we cannot bruit it abroad what the hon. the Minister is doing. I therefore say that I am not prepared to shoot the man at the piano because he is playing as well as he can.

The hon. member for Sunnyside also touched on the question of the cost of living. The hon. member for Florida said that we in this country had certain difficulties in this regard. I think we have fewer difficulties than other countries because we have such a large reservoir of cheap labour. That enables us to keep the cost of living down. I do not think we have difficulties. I think we have very real advantages. It should be easier for us to keep the cost of living down.

I want to come now to the question of the Stock Exchange. I am very glad to have as much information and as many tips as I can about the Stock Exchange. I sometimes feel that they are trying to teach grandmother to suck eggs. I know a little about the Stock Exchange. I understand that a Stock Exchange Control Amendment Bill will be introduced this Session. Hon. members will then have the opportunity to express their views about the Stock Exchange. The hon. member for Sunnyside also touched on the instruction given at our universities. I found his remarks in this regard most interesting but I cannot deal with that now. I do not know anything about the rationalization of the motor industry. There are expert people on this side of the House who know more about that. I was very interested in what the hon. member for Sunnyside said about the Press and the radio and the standard of their advertisements. I feel that the hon. member should start at home. How many Ministers of the Cabinet are directors of newspapers? He can raise this matter with them. The last time I looked into this matter I found that some Ministers were directors of Voortrekkerpers, Afrikaanse Pers and the verligte Press down here, namely Nasionale Pers. The Ministers of the Cabinet are directors of these newspapers and the hon. member should see them and tell them what he does not like about the newspapers. I have no complaints about any newspaper because I believe in the freedom of the Press. That was why I was so strongly opposed to the Government’s interfering with our newspapers during the recess. Let us have freedom of the Press. If the hon. member for Sunnyside wants to deal with the Press he must start at home.

The hon. member for Sunnyside also raised the question of our not helping the border industries. When the Tomlinson Report was published we told the Government quite frankly that without White capital in the reserves they would never be able to carry out the recommendations of the Tomlinson Commission. We had to wait all these years for the light to dawn on those hon. members.

It has not dawned on them yet.

Perhaps they are now in the darkness before the dawn. I was very surprised to hear the hon. member for Florida talking about inflation. He seemed to suggest that inflation is inevitable and that we should relax and enjoy it. That was his attitude. I read to-day that someone in the Sakekamer asked the hon. the Minister not to be too strict in controlling inflation. He did not want too much control of inflation. They have got the bit in their teeth, as you can see on the Stock Exchange. Those people do not want any control because they are doing too well in the present circumstances.

I now want to come to the hon. the Minister. I think that my first duty is to congratulate him on the jubilee of the thrift movement. I think we all feel that a very fine job has been done not only by the hon. the Minister and his Department but also by those distinguished citizens who have served on our thrift committees. I think it has been a great year for them. My colleague the hon. member for Parktown has explained why to-day people are not interested in saving. The magic word has gone abroad not to save. The hon. the Minister told us to save for prosperity but that is not the word that is going around to-day. To-day the word is growth. If you say “growth” you can sell anything. Do not tell the investor that he will receive a good dividend; tell him that he will have growth and everyone will want what you offer. That is the bait. I want to give the hon. the Minister a suggestion to encourage people to invest under his ordinary thrift movement. I have set out my suggestion in a private motion. I suggested that the hon. the Minister should introduce premium bonds. Hon. members will know what premium bonds are. Premium bonds amount to this. A man invests his money; he does not draw interest but the interest is drawn for in prizes. When it was introduced in Britain the “unco guid” as they call them in Scotland, the very good people, objected, because they said what an hon. Deputy Minister said to me, namely it was “dobbelary”. He said it was gambling, premium bond is gambling. The poor little fellow who invests in premium bonds does it because he does not have a lot of money to invest, he wants to give it to the Minister and his thrift movement, and he wants some excitement out of it. The amount of interest does not interest him. He wants the excitement of looking in the newspaper at the end of the month to see whether he has come out in the draw and won R10 or R20 or R100, and I hope, perhaps, R5,000—there should be one prize of R5,000. We talk about gambling, we the white people of South Africa who educate our children on the proceeds of gambling! Have hon. members never been to the race-course? Have they never examined the Expenditure and Revenue Accounts of our provinces, to see how much money is collected in taxation of gambling? The hon. the Minister came along, as the hon. member for Parktown pointed out, and said there would be a special 6 per cent loan free of income tax for the big man, who could invest up to R40,000 last year, which means R2,400 per year free of income tax. He was all right. Well, I am making a plea now for the small man, the fellow who puts his money into the Post Office and will also have a bit of premium bonds.

When I put forward the motion on premium bonds, the chairman of the British Thrift Committee happened to be visiting South Africa, that is Viscount Macintosh. He described their various investments but he said, “Our best line is premium bonds, because the ordinary man, in addition to the Thrift Movement, in addition to his investments in the Post Office and so on, likes to have something in premium bonds. Perhaps bigger people do as well. However, that is my contribution on that.

I do not want to use the word which you will not allow here about what people think of gambling, so I want to say they are inconsistent when they object to premium bonds and allege it is a form of gambling. I may not use the word “hypocrisy”, but that is the word that was going through my mind!

This is the Part Appropriation debate and during the debate we each have to peg a claim and make suggestions to the Minister of what he should do in the budget. I am coming back to my old one which he is familiar with. One of his predecessors, the late Advocate Louw, when he was Minister of Finance, introduced the veterans’ pension for veterans of the Anglo-Boer war, the 1899-1902 war, and it was a great blessing for those people. There was to be no means test for those men; I think it was in 1955. Now I wish to make a plea for the veterans of the 1914-1918 war. Why should they not be treated in the same way? The period between the two wars, that is from 1902 to 1914, is 12 years. Much more time has elapsed since the then Minister of Finance gave the veterans a pension without a means test. I can appreciate the Minister’s difficulty, but he could say the limit is 70 years; they will not qualify until they are over 70. They say “old soldiers never die, they just fade away”, but they are fading away very rapidly now. I put a question on the Order Paper and asked how many of the veterans of the Anglo-Boer war were still drawing a pension, and the reply was something round about 4,000. I find that in 12 months the number has decreased by 800. They do not have long to go now. Just add on the years, 67 years, to the age of the man at the end of the war. Therefore I make a plea that we should now give the same privilege to the veterans of the 1914-1918 war. Now I have pegged my claim and I am prepared to go on further.

The other thing I should like to mention in regard to pensions, seeing it is in our amendment, is this. We have just been considering the Provincial and the Territory Service Pension Bill and the Minister of Social Welfare and Pensions assisted us by giving us the states of these provincial pension funds to-day. Well, most of them, almost all of them, are insolvent, and therefore I should like to repeat what I asked for here some time ago by way of a private motion and in debate. I want to ask the Minister to consider whether it is not possible to introduce a non-contributory scheme, instead of these schemes that require a big staff and, as we find, became insolvent, because, of course, of the erosion of money and because men are living longer than they used to.

I also want to talk about this share business. I remember what Job had to say, and the longer I sit here on the Opposition benches the more I feel like Job. Do you remember what Job said, Sir? He said “Behold my desire is that mine adversary had written a book.” If you can always get a man to write a book you might be able to contradict him. The Minister has warned us about the boom on the Stock Exchange, that people would burn their fingers. Now, we are all writing books in this House. Here is one of them, the Hansard of the debate last year. This is what the hon. the Minister had to say a year ago on the 14th February. I quote from Hansard (volume 22), column 498—

Talk about “just around the corner”! It was not around the corner, it was at their feet. He said there was no foundation for this belief, whereas there was in fact a strong foundation for this belief. That was 12 months ago. The market index then was 100 and now it is 156. Let us just take the Minister’s final words—

Well, they have not burnt their fingers, but if the Minister keeps on giving this warning every year, some day he will be right!

I want to know what the Minister is to do about this activity. The Americans say this state of economic development and financial investment is “boom and bust”. What should the Minister do? Well, I have a suggestion. I do not want to be a tipster, but this is my suggestion. The Minister controls big companies as well, and, instead or moralizing, he should get into the market. I told him last year, “Get into the market”. He has a great opportunity. I am now going to say how he can get into the market. The hon. member for Sunnyside gave me an opening. He asked us whether we agreed with the development of the Industrial Development Corporation, the I.D.C. Act 22 of 1940 and the amendment two years later contain section 3 (a) and section 3 (b). I do not want to talk about paragraph (a), that is what the hon. member for Sunnyside was talking about. That paragraph deals with investment by the Government. But the other kind of investment is the investment I should like to refer to. Section 3 (b) reads as follows—

1. (i) new industries and industrial undertakings; and
2. (ii) schemes for the expansion, better organization and modernization of and the more efficient carrying out of operations in existing industries and industrial undertakings …

In other words, reference is made here to the assistance the I.D.C. was to give to young developing industries. We do not need to give them any assistance to-day. The industries are all developed. The hon. the Minister should pull out. Leave it to private enterprise. They are all developed now. They are forming amalgamations and there are take-over bids, so that those assets of the I.D.C. and the Minister are worth a lot of money. He will not need to tax people. I raised this last year. I gave the Minister the figures. Here is the Industrial Development Corporation, supposed to help these industries and then dispose of the shares, forming holding companies. They formed two holding companies last year, the Industrial Selections Company and the National Selections Company. I am very pleased to have a director here with me to confirm what I am saying. He is an ex-director, is that right?

[Inaudible.]

He will confirm what I am saying. The opportunity now is to sell. One should go into the market as a seller. That is the idea. This is the time to do it. All the other companies are doing it. The hon. the Minister told us in his speech on Monday that foreign companies are coming here and investing in South Africa. All to the good. He also says that foreign companies are offering their shares to South Africans. I am glad they are. That was the movement in Australia many years ago. They were anxious to have an Australian holding. Well, Sir, that is being done.

Now I want to go on to the question of what is happening in the boom. Companies some years ago—and still to-day—have asked to be able to plough back profits. If a company has capital to the amount of R1 million, and they keep on ploughing back a million and put it into reserves, then the operating capital is not R1 million; it is R2 million. When they proudly proclaim that there is a dividend of 10 per cent, it is not 10 per cent on their holdings. It is five per cent. That is what has been happening. I am now quoting from a financial paper—an Afrikaans paper, by the way—which says that during the year the profit has decreased from 9.18 per cent to 6.39 per cent. The dividends decreased from 4.52 per cent to 3.45 per cent. The dividends are dropping. Of course they are still ploughing back. They are not declaring fair dividends. And the hon. the Minister of Finance is losing money. They do not declare dividends; they declare a part of their dividends. The profits are taxed, I quite agree. But if they declare dividends, then the dividends are taxed in the possession of the shareholder in South Africa, and the Minister is losing that. But there is one exception, namely the exception of the gold mining industry. In the present state of the market the gold mining industry is the orphan of the storm, the only one not being given a chance. I saw an announcement this morning in the paper about the West Driefontein Mine, about which the hon. the Prime Minister and the hon. the Minister of Mines paid tribute to the magnificent engineering feat there. This is what the chairman said in a preliminary announcement—I am not going to give the actual figures; I am going to give percentages—

They are going to have reduced dividends, of course, because gold-mining taxation, as I have often described it in this country, is something unknown elsewhere in this world. It is something that should have been adjusted many years ago. May I ask the hon. the Minister if it is not possible to extend the rate of taxation to the old mines which has been offered to the new mines?

What?

The new mines have been given special concessions. When we asked that it should be extended to the whole industry, we were told that it could not be done; not by the hon. the Minister, but by his predecessor. I think that the industrial and commercial boom might have repercussions in this country, but they are all enjoying it. I want to know what the Minister is getting out of this boom in the way of taxation. How much is he getting? I do not agree with the hon. member for Sunnyside. I do not think one can operate a capital tax in South Africa. I know that people have considered the other possibility, undistributed dividend tax. I do not know about that either. I have not been able to go into the matter. I do not have the statistics for South Africa to be able to form a sound opinion about it. I should like to consider, undistributed profits’ taxation. Because the companies are saying: “We have a profit, but we are not going to distribute it. We will distribute part of it, or very little of it.” I am thinking of one company that has kept on doing that for years. Why did they do it? Because the big shareholders are rich men. The big shareholder says: “If we declare these dividends, we have to pay income-tax on them.” Therefore they do not declare them. The only exception where there is a straight declaration, is the gold mines; because the gold-mining companies do not plough back their profits. They have a certain allowance, of course, for capital development out of their profits. They must have that. Any company has it. But they cannot do what the industrial and commercial companies do. Therefore, I think, they deserve a little consideration from the Minister. But the practice with regard to these other companies, with rich people who direct the companies, is that they refuse to declare their dividends. They say: “We shall pay our profits tax to the Government, but we are not going to declare dividends,” because with their incomes and with the dividend income added, they have to pay again. I think the Minister is losing a lot of money that way. I know there was a cry some years ago that, if we are going to develop South African industry, we should give them the opportunity to plough back, because they could not get capital. Nobody can say that now. We have capital. Finally, I want to ask the hon. the Minister a question. We in South Africa some years ago made one exception in company taxation, namely the American South African Investment Trust Company. The Minister knows what I am referring to. This company did not have to have its profits taxed in the ordinary way. They would have certain privileges on the sale of gold and profits on that. They were given and gave a guarantee of five years. Now it is 11 years ago since that provision went through this House. I was shocked at the time it went through, but that is by the way. I was very much surprised. I want to ask the hon. the Minister, does that concession still hold good? I do not think that we should make that concession. I do not think there is any justification whatsoever for making an exception of any company. Why did we do it then? Because we said we could not get capital, and that if we could get American capital we should get it on these conditions. The chief condition is that no South African can be a shareholder. We give this concesssion to a company on the condition that it does not have a South African shareholder.

But the banks must become South African. They are sinful because they do not have South African … [Interjections.]

That is a surprising position. I think the hon. the Minister has an opportunity there to reconsider the extension of these facilities. I think now is the time when South Africans are prepared to buy shares in these companies. One cannot stop them from buying shares, as a matter of fact. Everybody is going public, because they are in that mood. I think it is an excellent opportunity for the hon. the Minister to say: “We are making no exceptions. You will all be treated in the same way.” My special plea is that gold-mining taxation should be revised as soon as possible.

Mr. Speaker, the hon. member for Kensington touched on quite a few subjects, but I want to agree with him as regards one of his statements, i.e. when he said: “Do not shoot the man at the piano,” to use his own words. I think he was quite right as far as this is concerned. I say: “Praise him!” The hon. member for Kensington also said that he did not believe in the word “grow”. He still knew the word “save”. Ostensibly the word “save” has now become “grow”. I now want to tell the hon. member, seeing that he is such an experienced politician and strongly believes in the word “save”, that it seems to me that he can no longer learn about “growth” in the United Party, and that he should therefore try to teach it to save and to keep what it has, otherwise it may lose even more. The hon. member made a very interesting speech on shares and asked the Government to enter the market. I do not want to elaborate on this and I shall leave it to the hon. the Minister to reply to this request.

This amendment of the Opposition contains two motivations. They asked for this debate to be held over for two days. It seems to me had they asked for three days we would possibly have had three reasons. The two reasons are generally popular ones; the one concerns the pensioner and the other the farming industry. These are not financial reasons, but a roundabout way of launching an attack. These are reasons which may cover a wide field, and this reminds me of the anecdote of the Hollander who fired a shot with his eyes closed from behind a rock during the Boer War and said, “Mog het troffe” (“May it strike home”). Here it is the same case. The Opposition took two days to think up these two simple reasons for opposing this Appropriation Bill. I do not want to blame them for this, because I am not a nasty fellow and therefore I shall never call anybody stupid.

I want to say that it is because of the brilliant management of the hon. the Minister of Finance that the Opposition has found it so difficult to find proper financial reasons for opposing this Appropriation legislation. The two main United Party speakers on financial matters spent half their time on theorizing about the dollar and gold. The rest of their speeches they devoted to the share market. The hon. member for Pinetown did not speak about cinema tickets or farming. I believe that to them the gold question was a godsend from Heaven, because by discussing that it was not necessary for them to cross swords with the Minister about the really fundamental financial situation in this country. They spoke a great deal about the stock exchange, and particularly the hon. member for Pinetown asked the Minister to do something at this stage. I want to agree with the hon. member for Florida that it is very clear indeed that South Africa is a free capitalistic country. The hon. the Minister can do no more than he is doing, i.e. to issue warnings. Surely he cannot tell the people what to do with their money. Surely he cannot protect a person against his own greed and against his own ignorance. If there are people who want to run the risk of landing themselves in debt by speculating on the stock exchange, and those shares subsequently went down, they will have to suffer the consequences. The hon. the Minister cannot be blamed for that.

The hon. member for Constantia praised the Minister here for keeping South Africa stable on the European market. But then he suddenly said that that was United Party policy. But the Minister has always been doing this. It has always been the policy of this Government to keep South Africa stable on the European monetary market. The hon. member for Constantia made a suprising admission here. He said the time of stability had passed. Now all of a sudden there was inflation and the cost of living was increasing. It is true that he has not participated in the debates of this House for some time, but I did not know that he was so out of touch with everything that was happening. Has it slipped the memory of the hon. member what a fuss the hon. member for Pinetown and others were making during the last two years when they maintained that there was no stability in this country? Has it slipped his memory how they attacked us about the increasing cost of living? Now the hon. member admits, however, that the past two years have been a time of stability. The hon. member for Constantia also spoke about the agricultural industry and the drought.

It is clear, however, that he is also out of touch with what is happening in that field. I come from an area which has been experiencing a drought for seven years, but where there fortunately is grass this year. Does the hon. member realize how many millions of rands this Government has pumped into the agricultural industry? Does he realize what this Government has always been doing for the farmers and does he realize what has been happening in those drought-stricken areas? Now the drought has hit the largest part of the country and now all of a sudden the hon. members become concerned about the drought and the farmers. After all, this is a popular thing to do at present. They may hit home somewhere and gain a vote somewhere. I want to give the hon. member the assurance that this Government, without this amendment, will see to the interests of the farmers.

The hon. members also spoke about inflation and complained about the existing inflation. In the same breath, however, they advanced pleas for tax relief. Surely such tax relief would in its turn be inflationary. Now what is it they want? Are they never satisfied? The report given here in this House by the hon. the Minister on Monday was reassuring and very promising for the future. I believe that all other Ministers of Finance, without exception, are envious of him in his task. I should specially like to congratulate him on the very controlled and responsible, but also resolute, manner in which he has handled the whole question of the marketing of gold during the recess and up to now. South Africa is only a very small country, but it is nevertheless intimately concerned with the monetary storms and disturbances which occur in the international field. Although we do not sit round the conference tables with those large monetary countries, cognizance must definitely be taken of us because of the fact that we produce gold in such large quantities. In the days of the old gold standard monetary discipline was a matter of course in the domestic economy, but after countries had gone off the old commodity monetary systems and the economic systems of the world had become totally unbalanced, a much more sophisticated monetary system developed. In subsequent years it moved virtually to a dollar standard, which was also partially supported by gold. However, a revolution against and opposition to the domination of the dollar started developing slowly but surely. This was unavoidably heading for a clash between the dollar, which simply is a political monetary unit, on the one side, and gold, which is a neutral monetary commodity, on the other side.

Instead of co-operation between these two monetary factors, there was a clash and they moved further away from each other. South Africa was caught and dragged into this clash as if into a whirlpool, irrespective of her wishes. The conduct of this Government, and in particular that of the hon. the Minister, in this situation, was the very thing that caused the prestige of South Africa to reach unparalleled heights in the international monetary world recently. To-day it is not possible yet to measure the full extent of the respect South Africa has commanded. I believe that the future holds great possibilities because of the attitude adopted by the Government to reunite the dollar and gold as partners in the international monetary system. This can only be done by means of a revaluation of the dollar as against gold, in other words a higher gold price. The co-operation of these two is essential if international monetary arrangements and relations are to remain stable. I say our international prestige has been heightened because of the fact that the Government has not adopted the attitude of deriving petty political or financial benefit or any other form of cheap exploitation from the situation, and because of the strong principal attitude it has adopted on the basis of the four principles as explained here in this House by the hon. the Minister. On these a marketing agreement can be built which can lead to monetary relations and arrangements which will be to the advantage of the entire Western civilization and mankind. Confidence in the rand, our own monetary unit, has been strengthened to such an extent that in future the rand will become a more and more sought-after unit of foreign exchange. I am referring to the demand for the rand as well as to the flow of foreign capital to South Africa. Although part of that may be flight capital, I am sure that genuine investment capital will amount to a considerable sum. We all want to express the hope that the hon. the Minister will be successful in his negotiations regarding the marketing of gold. I believe the entire Southern Africa will rejoice with him if he can succeed in negotiating such an agreement.

The Sound position of our foreign exchange and gold reserves is due not only to the fact that we produce 75 per cent of the world’s gold, but also basically to the fact that our domestic economy has remained sound to the core. It is a fact that a real rate of growth of approximately 6 per cent has been maintained, in spite of the fact that anti-inflationary measures have decreased the demand for goods and services. To me it is surprising that this high rate of growth has been maintained in the face of that, and to me this is a wonderful achievement. The other exceptional achievement is that inflation has been controlled and combatted so effectively by monetary and fiscal measures over the past few years that there has never been any sign of inflation possibly getting out of hand or running wild. On the other hand, these measures have been applied in such a way that there has not been any sign of serious recession, unemployment, etc., either. This fact is a fine testimonial to the planning of the Government and really is a feather in the cap of officials responsible for drawing up the national accounts. This shows that their details are really accurate and that their projections for determining the rate of growth and measuring the gross national product have a very scientific and realistic basis. This shows that the measures which were taken were timeous and not as the Opposition said in the past, in the time of stability to which the hon. member for Constantia referred, when they always maintained that those measures were taken too soon or too late. Their big complaint is that there is erosion of the rand, that there is a measure of inflation, but to the informed, this complaint is equally as unfounded as an accusation from them would be that this Government was responsible for the drought. Inflation is, as has often been repeated here in this House, one of the problems of the modern, sophisticated, unplanned, economic systems, i.e. systems outside the communistic bloc. Therefore inflation is a built-in factor in our economy. To-day we have to live with that as every other capitalistic country in the world has to do. This is the dilemma with which we have to live and this is the dilemma which the hon. member for Parktown raised here. This is the problem, but how does one solve the problem? No living economist has yet found the answer to this. The yardstick here is how successfully the rate of inflation is being controlled and whether it is being kept within safe limits. The hon. the Minister placed his finger on the pulse of the current economic problems and pointed out the excess liquidity which was to be found in this country at present. In the past these problems have been combatted and solved, and I believe and trust that timeous measures will ensure that this will happen again. Over-employment in the field of labour—I mean skilled labour—always is a difficult problem, because a large number of other factors have to be brought in to prevent wage inflation. The Opposition’s only reply to this always is to bring in non-white labour. That is economic integration and that is the cardinal difference between this and that side of the House. [Interjections.] There is a big difference between economic co-operation and economic integration. If hon. members still do not know this I shall ask the hon. member for Florida to give them a lecture on this one of these days and to point out what the difference is. This is the cardinal difference.

The hon. member for Parktown asked what would have happened had we done this or that, but had we done that, i.e. labour integration, years ago, we would not have been sitting here as we are to-day and the United Party would not have been living on the fruits and prosperity of the National Party Government as it is doing at present.

The major economic problems with which the Government has to cope therefore, are problems of prosperity and problems of that nature are always much more pleasant to deal with than problems of a recession or of a depression. In these modern times and in this economy in which we are living, we unfortunately have to fall back on measures of control such as credit control, import control, rate of interest control, exchange control, building control, etc., in order to control and solve these problems. Every measure of control chafes someone somewhere when it comes into conflict with his personal wishes or desires. But we shall have to learn to live with this too, as we have learned to live with the Opposition. We shall have to learn to live with that because of its greater importance to the country as a whole. Therefore I am pleased that the Government has never failed or hesitated to take any measure of control when it has been necessary to do so, no matter how unpopular, because what has carried most weight was what would be in the interests of our economic stability in the long run. We can look back at the Budgets of the past, one after the other, they all fit into the same pattern, i.e. that of long-term economic prosperity and stability, and not that of transient political advantage. For that reason it is possible for the hon. the Minister to appear before the nation with such a favourable report, this Part Appropriation Bill, shortly before the Budget. I can understand why the Opposition asked for the debate to be postponed for two days. They did not know where to attack this economic armour of the Government, and if this is the way things are with them already, I believe they are trembling with fear when they think of the Budget which is still to come. I want to tell them that when that time arrives, they will have to ask for the debate to be postponed and to be adjourned, possibly for an indefinite period. I believe that an equally exceptional, effective, far-reaching and good Budget as that of last year is awaiting us. All of us naturally have many expectations and conjectures as regards the possible new taxes the Minister may levy and measures he may impose, measures motivated by the report of the commission of inquiry which he has probably received.

Mr. Speaker, of all the discourteous speeches I have listened to. I think that of the hon. member who has just sat down, takes first prize. Here is an occasion when we are met together in a very pleasant atmosphere, dealing with a very pleasant Minister, to discuss the serious business of finance in the Republic, and the whole trend of the speech of the hon. member for Pietersburg was along the lines that it took the Opposition two days to think up some replies.

The actual financial aspects of the debate have been covered very effectively by four speakers preceding me, including the most erudite speech of the hon. member for Kensington. I do not propose going into details on that particular score, except to say, that the hon. the Minister, in speaking to us on Monday, told us, as was said before, very, very little. One must wonder whether what was accomplished, according to what he said, could not have been done by correspondence. Those of us who look deeply into these matters realize that the Minister is faced with some difficulties. We appreciate the difficulties, we sympathize with him, and if we can help we will do so. But I put it to you. Sir, that these hon. members opposite, who have been so quick with their motion of thanks, should realize that the hon. the Minister told us only the good news. There must be other news. So important a person as himself, would not have gone so far, so quickly, if there were not something far deeper to be considered and discussed. I believe that he will one day tell us that he has been successful, and I earnestly hope that that will be so. I think, however, that we should be sparing in our remarks in dealing with this particular matter, because gold is the lifeblood of our economy, and has been, ever since it was discovered in the Transvaal. It has been the making of the economy of the Republic as it stands to-day. Do not let us lose sight of these few simple facts. [Interjection.] My hon. friend reminds me that I must not forget diamonds. Of course you will appreciate, Sir, that from my point of view diamonds are the foundation on which the entire country was built, even Johannesburg, but one does not wish to lay claim to these things too often, because they are so obvious, and they are historical facts.

I should like to draw the Minister’s attention to one very serious matter affecting the building societies. The building societies, as is well known, have been in difficulties for some time in getting adequate funds, and I wonder whether the time has not come, when the restrictions upon the type of investments which they may accept should not be reviewed. I would go further and say I think he should have a word with the Minister of Community Development, and look into the terms and conditions of the 90 per cent loans, which are made by the Department of Community Development to the building societies. I think the conditions controlling such loans are a little out of date, and I think a review would help in no small degree, to get homes built, which is the earnest desire of everybody in the country.

The persons for whom I wish to plead, and to whom I would like to direct the Minister’s attention, are those who are in the pensionable class and who receive very little and who have not had their pensions adjusted for many years. I refer to the persons who fall within the scope of the Workmen’s Compensation Act and who receive pensions under that Act. Sir, these are the persons who have been overlooked, and I do hope the hon. the Minister will look into this matter, and make provision in his Budget for some suitable increase to be given to these people as soon as it is possible to do so. I go further, Sir, and plead for a review of the old-age and disability pensions paid to Bantu. I have in front of me a schedule, which was published in the Gazette of the 4th October, 1968, and this is what I find in the annexure: It will astonish you to know, Sir, that a Bantu who earns R42 gets no old-age pension, whereas if he earns nothing he gets R51. There is an anomaly that needs looking into rightaway. If a Bantu earns R42 and over he gets nil; if he earns nil up to R21 he gets R51. I put it to you, Sir, that these people are faced with the same problem of inflation, that faces you and me. They have to pay the same prices for whatever they want, as you and I have to do. Their pension works out at 14 cents per day. I say in all earnestness and seriousness, that this is not a proposition so far as these people are concerned, particularly when it is borne in mind, that the new policy of the Minister of Bantu Administration is to move all the aged out of the local authority areas, and to get them into the homelands or the Bantustans. When they are in an urban village or township, their neighbours and friends and relatives assist them. When these people are moved, as they are being moved because instructions have gone out to the local authorities that they must “see to it” that these people are moved to the homelands, you will realize what hardships fall upon them. I do ask the hon. the Minister, whether he will “see to it”, that they get a pension which is more in keeping with their needs and their wants. Sir, when I hear all this talk of inflation and money being made out of stocks and shares, and when I listen to the Minister using his favourite expression, namely, that he wishes to syphon off all the surplus cash, he puts me in mind of his predecessor, who used to style himself year after year either as a gardener or as a fisherman …

Or as a cook.

… or as a chef. I think the hon. the Minister could really class himself as a plumber, because he wants to syphon off the surplus funds. I make this appeal to him as a plumber knowing his trade: Do not syphon off from the top of the tank; do a proper job: drain it off from the bottom, by proper drain cocks, and drain it into the pockets of the poor people down at the bottom. That is the correct way. I believe that taxation, of which we have heard a little here this afternoon, is not the answer to this matter at all.

We have had the astonishing statement made by the hon. gentleman who has now left the Chamber, that the United Party Opposition wants to have integration with the non-Whites. You know, Sir, if it were not so serious, such a statement would be laughable, because they, the non-Whites, are with us already: they are running the show. Where does all this prosperity come from? Who are the people who are carrying the heat and burden of the day? None other than our black countrymen. This sort of statement, that economic co-operation is a very different thing from economic integration, is playing with words, because, from my experience of this country I would say that every factory that we have, and every mine that we have, would stand still to-morrow, if there was no black labour. There is nobody who thinks that it is a feasible proposition to talk about taking these people out of the urban areas. They are here, and they have been here for a long time. What we say is this: Make use of them; train them; have the proper safeguards; pay them proper wages and then this country would be able to emulate the tremendous advances made in the United States of America during the last century, and in the early part of this century. We have this tremendous asset, and if the hon. the Minister would consider the simple expedient of easing up on income-tax on the wage packet, we would begin to see a little more productivity. We have seen it in Britain, Sir, where the workman who received high wages, suddenly realized that he was working for the Chancellor of the Exchequer and the same thing is happening in this country. Why should people exert themselves unduly? They are being well paid. Those of us who work with weekly pay packets, know that the P.A.Y.E. deductions represent rather a large proportion of a man’s earnings. He may have a figure on his pay packet of R50 or R60 per week, but after you have taken off his trade union deductions and his P.A.Y.E. his pay packet does not look so good. I think this is the line along which the hon. the Minister should direct his attention. I agree with the hon. member for Parktown that the Minister has competent staff, and that that is the line and the direction, which they should pursue and investigate. I think the time is long overdue to have some reduction in taxation. The practice of estimating revenue low and expenditure high and then finding that the revenue exceeds the estimates by a large figure, and that the expenditure was over-estimated, with the result that there is a big surplus, is an expedient. It is an expedient which was resorted to in the days when the Government could not raise money outside the country. I think those days are over. I think the time has come when we should have some accurate budgetting, a budget which more or less balances at the end of the year. I do hope that the hon. the Minister will do just that; I hope that he will seriously consider bringing taxes down, so that those who want to work, can get some reward for their labour.

The final point I want to discuss, is not such a happy one. This deals with the report of the Auditor-General on Public Accounts. This was referred to in passing during the last session of Parliament. I refer to the Bantu Trust Account. I know that speakers are going to jump up and tell me that explanations have been offered, and that these matters have been put in true perspective. I want to say, quite frankly, that I do not accept any explanation for the gross inefficiency and incompetence shown in the administration of the funds given to the Bantu Trust to handle. The Auditor-General’s report is the most astounding chronicle of slackness, and I can only say, that if the results achieved in any business of that size, were as described by the Auditor-General, the man in charge would be fired; he would get the bullet.

He has been fired.

I would like to say that the hon. the Minister of Finance should have a very careful look at the way in which public funds are being handled under the Minister of Bantu Administration and Development. Sir, I have made careful inquiries into this matter. There are some people who want to gloss over the report, but do you know, Sir, that building material, motor trucks, tractors, and graders have been lying about in these Bantu townships for up to three years and in some cases up to 20 months, and, when the Auditor-General has complained, and asked for an explanation, it has taken nine months to get a reply. What sort of business is this? How can you operate this way? How do you know that our taxes are being spent in such a way that every cent counts? Here we have the sad story in the Auditor-General’s report. Then, of course, as far as the administrative side is concerned, he is scathing. He says what we have all said, that they are inept. The man who should take the responsibility is the Minister of Bantu Administration and Development.

But he says it does not matter what it costs.

The point is, that this is not what it is costing. If they spent the money it would be a fair cost, but this is not spending money, this is wasting money. I have a few headings here: Building material unused for up to 3½ years, lying about in the veld; heavy equipment, road graders, tractors, trucks, idle or only partially used for up to two years; stores in the open and so badly rusted and deteriorated, as to be of no further use; Houses: hundreds unoccupied for up to 20 months. We accused the hon. the Minister last week of a lack of planning. How do you plan houses, when there is nobody to occupy them? Let me tell you, Sir, that many of these houses are unsuitable. They are not suitable to the climate; they are constructed of the wrong material and, what is more, in the middle of the construction of the project plans are being altered and items changed, and the whole thing has cost the State an enormous amount of money.

Us.

Well, we are the State. Then I come to one which tickles me pink because a fortnight ago we heard so much about the services that were not available at a certain place: No charges for service and water were levied in many townships because there was no adequate water supply. In other words, they had decided to charge the people for water but when they turn on the tap nothing happens. Sir, here is another reason given by the Auditor-General: A change of planning in the course of the erection of the houses. Sir, I have looked at the townships and I say quite frankly to the hon. the Minister that he should look into this Department with his financial staff, and that he should look into it with his eyes open. I am not going to say to him that he must forget the ideologies and so on; we are dealing with hard cash. I believe that these townships which are being built by the Department of Bantu Administration are a mess and, what is more, that no local authority would ever have been permitted to build some of the houses which have been built by the Department.

They are all being built by the local authorities.

I visited a certain township the other day and I went into the little kaia of one of the residents. It consisted of one room, about as big as three desks stuck together here, for him and his family. You can see daylight through the wooden slats and he told me that when the wind blows the dust and sand just go straight through and that the only time that the place is dry is one hour after the rain starts, when the wood swells. In a large township nearly 700 houses are standing vacant. They are going to do something about the water supply. There are no hospital facilities at all on the spot. This township was built so that people could be chased 90 miles away from the urban area where it was planned to build a hospital. The hon. the Minister of Bantu Administration said no, they were going to build a hospital 90 miles away for 46,000 people.

And they are getting away with all that.

As my colleague said, they are getting away with it. The waste of money in Bantu Administration beggars description. I do not think for one moment that the Auditor-General was anywhere near severe enough. He should have recommended that some of the men at the top, the Deputy Minister and the Minister, should have been fired, sacked and discharged from the service.

Mr. Speaker. I tried to follow the gist of all the details the hon. member for Karoo mentioned in regard to tractors, building material and goodness knows what else, but there was only one thing I could understand. That was his concept of economic integration. It is clear to me that the concept he has of it is quite wrong. By economic integration we do not mean that Coloured persons will work together with Whites, but what is meant by that is that, while they are working together, no differentiation will be made between them. Economic integration is when no differentiation is made between Whites and non-Whites in the economy, and a Native, for example, can become the manager of a business and be in charge of Whites. It is integration when a Native can be a manager in the same way as a white person can be a manager. It is a very simple thing to understand. That hon. members of the Opposition are not yet able to understand it is beyond comprehension.

There is one thing which neither we nor the Opposition can get away from. It is that the Government has achieved brilliant things in the economic sphere, as in other spheres and that our Minister of Finance deserves the tribute of this House and of the country for what he has done to date. In the short while he has been Minister of Finance he has already accomplished a monumental task.

I now want to proceed to something else. I am surprised that the hon. the Leader of the Opposition, or other members of the Opposition, have not yet come forward with the attack they promised they would make on the hon. member for Umlazi. I now want to avail myself of this opportunity to congratulate the hon. member for Umlazi with his brave deed in walking across from that insignificant party to the National Party, which is the embodiment of the national movement in South Africa, for having had the courage to do so. He did not do the wrong thing. He did not act in an unprincipled or opportunistic way, but did so on the grounds of two principles, which he stated quite clearly. The first principle on the grounds of which he walked across to the National Party is the principle of separate development; the principle of differentiation between White and non-White in South Africa. This is a scientific principle which he adheres to, because there are very deep-rooted differences between White, Black and Coloured. I do not want to go into those details. The fact that we cannot make one nation of White, Black and Coloured in South Africa is something we cannot get away from. That is precisely what the Opposition wants to do, in spite of their race federation.

You are talking nonsense.

The Opposition wants to draw a distinction in the nation (volk), in the demos of democracy. They acknowledge the scientific basis of the principle of distinction and apartheid. They acknowledge it in the nation, because there they want a race federation. There they want to separate them. In the government of the democracy, however, they want to integrate it. They are therefore contradicting themselves. What it amounts to therefore is that for them the nation of South Africa will nevertheless still remain all the colours in the country. For them it does not amount to whether the nation is differentiated or not. It remains the nation of the federal state which they want, a race federation, a State with a nation which consists of all the colours amongst which a distinction is in fact made, but they are nevertheless the nation. That is the unscientific policy of the Opposition. They have never realized in the past, and they do not yet realize to-day, that a nation cannot be a mere conglomeration of individuals or even of groups, but that a nation is based on a national sentiment, and that a nation must have a feeling of solidarity. To them sentiment, too, has always been an evil.

May I ask the hon. member a question? I want to ask the hon. member whether this nation in South Africa, as he sees it, also includes a separation between the Afrikaans-speaking people on the one hand and the English-speaking people on the other?

Mr. Speaker, I am very glad that the hon. member has asked this question. It is in fact a matter I now want to discuss. English-speaking persons have always been welcome in the National Party. I now want to give you the reason for that. A nation does not necessarily consist of one language group, and a characteristic of the nation of South Africa is that it has a love for this country as its only mother country. In the second place the nation of South Africa has always aspired, and is still aspiring to maintain its own independent state. It is the essential characteristic of a nation anywhere in the world that it has a feeling of solidarity, that it aspires to having its own state, and when it has that state, aspires to maintain it. It is of the utmost importance that we have a complete understanding of this matter, because it is on the difference in national concept that the political groupings in our history took place and are still taking place to-day. Who are the nation, of whom does the nation consist? On that point the political grouping in South Africa takes place. The National Party standpoint has always been that the nation consists of all the Whites in South Africa who accept this country as their only mother country. Now, it was the case from the beginning that the people who felt like this, the people who felt that South Africa was their only mother country and who at the same time aspired to the realization of their own state were for the most part the Afrikaans-speaking people. Almost all of them were Afrikaans-speaking. As far back as the days after the Second Anglo-Boer War, General Hertzog made this very clear when he used the following words in 1905 at Wepener—

I take it, and I am convinced, that that is what the hon. member for Umlazi is doing. He is throwing in his lot with the Afrikaans-speaking people of South Africa, not because they are Afrikaans-speaking, but because they are the people who, together with a number of other English-speaking people, regard this country as their only mother country, and because they want to build a white nation here. [Interjections.] I am still answering the question. Language is in fact important; it is one of the ties which bind a member of a nation to the nucleus of that nation; it is one of the most important ties. The language defines the identity of a nation where there is a cosmopolitan society. But language is not the only tie. Although it is a very important tie, there are other ties as well. However, it is not necessary that all the ties should be present in order to bind a person to the nation. It can in fact be the language tie, but it can also be the economic tie. It can also be the aesthetic tie because there may, for that person, not be a more beautiful country than South Africa. Perhaps a person does not have the language tie, but does have the other ties. There is also the political ties which binds him to the nucleus of the nation, and the nucleus of the nation is national Afrikanerdom. What I have mentioned now is not applicable only to South Africa, but is the essence of all nations in the world. If one asks what a nation is, then one must not ask why one nation differs from another. In the same way, if one asks what a person is, then one does not ask why one person differs from another. If you ask what a person is, then you are in fact asking why all the people are the same. Why do they differ, for example, from animals. If one asks what is a nation, then one asks why all nations are the same. And then it is not because they speak the Afrikaans language. One asks what it is that all nations have which other social groups do not have, and then the reply is this. Among all nations in the world there is a feeling of solidarity, with a desire for political independence. That is the fundamental characteristic of all nations, and on these grounds English-speaking people can also be part of, and they are in fact part of, the nation of South Africa if they have this desire in them, that feeling of solidarity with the rest of the nation of South Africa, and in addition most of them accept the Republic as well. There are in any case many of them with urge in them to maintain the independent state. I think I have now replied to the hon. member’s question.

I have stated that a nation has a national sentiment. That sentiment is nurtured by the past. We must not be afraid now of hurting the feelings of an English-speaking person when we mention the past history of our nation, because if he is a true South African he will not feel hurt. If you yourself are proud of the past history of your people, then you feel yourself much more at liberty to stretch out your hand to an English-speaking person, and he feels much more at liberty to grasp your hand—when you yourself are not ashamed of your own past. And, Sir, we are proud of the past history of the people of South Africa, we are proud of the past history of our people who have gone through troublous times, who have achieved great victories, who have come up from under as a small nation and have grown into a strong South African nation, which does not consist of anything under the sun, but which consists of those people with their own state, because that is a nation. A nation is a people with a state of their own, and because a nation consists of a people with a state of their own, that is why the Coloured people in South Africa, the Coloureds as well as the Bantu, who are not part of those people, are not part of the nation either. Let us have a good understanding of this.

Are the Coloureds going to get their own state?

We are allowing them to develop their own state. [Interjections.] Precisely! We are busy doing that.

When?

Well, when is another question, but we are doing this; it is our policy. Our policy is very clear, and it is for that reason that the hon. member for Umlazi is more prepared to support us than to support the United Party, which has no or a very obscure policy. It is of the utmost importance that we should have a clear national concept in South Africa, because there will then be a great deal less misunderstanding, and that clear national concept is the following. We have a solidarity. It does not matter whether it is Afrikaans or English speaking, but we have solidarity in our common patriotism, and in our aspiration to develop our nation, that is i.e. to develop the nation as far as the national aspect is concerned, particularly by assimilating more English-speaking people into the nation. They can feel very fortunate that they are part of the nation; we and they can both feel proud of this.

Can they mix freely in the school grounds as well?

They can. They can play rugby together there, in this way they can mix. When it comes to education than it is a different matter. There we are dealing with educational methods which have to be applied scientifically. I just want to say that by mixing children in one school, we will not make one nation of them if they are taught other things by their parents outside the school, things such as being told not to be one nation together with the rest of us. All the leaders in the national movement have always adopted the standpoint that the nation of South Africa included the English-speaking people as well, provided that they entertained this sentiment towards South Africa. We may as well begin with Onze Jan Hofmeyr, whose statue is standing outside here. He adopted that standpoint a long time ago. Let us begin with General Hertzog in this century.

What did you do to him? *

What did we do to him? We regarded him as a hero, and we still regard him as a hero of nationalism in South Africa. But the question is, what did you do to him? You stabbed him in the back: that is what you did. I do not really want to elaborate on that. I want to say what I want to say, and that is that General Hertzog adopted that standpoint, and he was the founder of the National Party. After him Dr. Malan adopted the same standpoint. [Interjections.] General Hertzog called it the two stream policy, the two streams of the two cultural groups. In addition there is the English cultural group, the English language group, but with a South African national spirit, and General Hertzog welcomed that sector of the English-speaking people as part of the nation. Dr. Malan did the same. Let me quote what he said in this regard (translation)—

Those are the words of Dr. Malan. It is very interesting to note how he drew a comparison with the Americans when he said the following (translation)—

So what?

This is what. This is what is happening in this House, because the hon. member for Umlazi demonstrated and is still demonstrating how the English-speaking people in South Africa are becoming Afrikaners. I think the sooner we get away from the word “South African” the better it will be.

Why?

We are all of us, Whites and non-Whites, “South Africans”, but not all of us are Afrikaners. One has reason to be proud of the fact that one is an Afrikaner. I think we may as well talk about English-speaking Afrikaners, as our leaders in the past also did. I regard the hon. member for Umlazi as an English-speaking Afrikaner, and I welcome him as an English-speaking Afrikaner. How he is going to pronounce this word in English is his affair. We cannot call each other “Africans” because the Blacks have already claimed that name for themselves. In the time of Lord Charles Somerset, Greig was one of the people who stood for the freedom of the Press when Lord Charles Somerset wanted to suppress the Press. Then Greig, an English speaking journalist, wrote: We stand by South Africa because we are “Africans”. He said: We are “Africans”.

White Africans?

Yes, “White Africans”. He did not say that these people were “White Africans”. He simply called them “Africans”. In the time of Willem Adriaan van der Stel somebody said the same thing when that Governor also wanted to suppress the people here. That person was Hendrik Bibault. When the magistrate at Stellenbosch wanted to give him a thrashing, and he refused to run away, the magistrate asked him why he did not run away. Then this young man replied: “I will not run away, because I am an Afrikaner.” This happened at the beginning of the 18th century. It is remarkable that when one is faced by a threat one feels that one is an Afrikaner. Greig called our people “Africans”, but I want to suggest that we simply add a few letters. The letters are ERS or DERS so that the word becomes “Africanders”. In the past Afrikaners were in fact called this in English. I am thinking for example of a book by Molteno, i.e. “The Dominion of Africanderdom”. This is the Africanderdom which governs South Africa, and it is worthwhile being a member of this Africanderdom which is governing South Africa. This is the Africanderdom which has brought South Africa, humanly speaking, to where it is to-day. This is the Africanderdom which cherished the ideal of independent nationhood in South Africa. This is the Africanderdom which cherrished the ideal and the principle of a white nation in South Africa. It is worthwhile being an Africander.

Mr. Speaker, the hon. member who has just sat down and the hon. member on that side of the House who spoke before him both mentioned that economic co-operation and economic integration were not the same thing. I should like to ask them where interdependence stops and where integration commences. As we are discussing financial matters here this afternoon, I should like at the outset to support the hon. member for Kensington in pleading for our veterans of the First World War. It is really time that the means test was no longer applicable to them. I should like to speak about the ordinary pensioner. The age still remains a problem, but this should not be the case. These people have served their country in their respective fields and we have a duty towards them and we must look after them. The previous hon. Minister was not too easy in assisting with funds for their accommodation requirements. It was his attitude that the wealthy persons should assist more in this direction. But there are many areas in South Africa which do not have people who have that type of money, but they nevertheless have old age pensioners. I believe, that the South African National Council for the Care of the Aged has asked that the subsidies on buildings should be increased. I understand that the organization named Tafta in Durban in asking for tenders to erect buildings for the aged, found that it costs no less than R2,000 at the present time for each bed on account of the terrific increase in building costs. This also applies to the grant of R90 to equip each bed, which is to-day entirely inadequate. It is time the hon. the Minister pleads with the Minister of Finance for higher subsidies and loans for the care of the aged. This would be an incentive for welfare oganizations to provide more accommodation. Industry creates a new way of life. There are smaller families, smaller houses and the high cost of living decreases the income platform, which in turn prevents young couples from looking after older relatives. To-day 70 per cent of the aged live alone, and very often in appalling circumstances. Less than 25 per cent of the aged live with relatives and only five per cent live in institutions. In socialistic countries the State accepts full responsibility for the aged. Is it not time that we also give the matter serious consideration? A substantial rise in pensions could avoid pensioners living in accommodation provided for the aged, making room for the more needy. The old age pensions which are paid to the various race groups, I say race groups, are totally inadequate, especially in view of the lower purchasing power of the rand. Many countries in the Western world set aside a percentage of all new homes in townships for the aged. Planning of services for the aged should automatically form part of the country’s planning. In new townships, where the Government and provincial departments claim their endowment requirements, they should also claim suitable sites for old aged homes. Persons due for retirement should be retained in employment as long as possible. Not only are they then usefully employed, but do not become a burden on others. For them it contains the prospect of still belonging to society. In Pietermaritzburg the day centre, where pensioners meet socially, is proving a great success. Here they meet in the centre of the city, near the bus termini, near the bank, post office and shopping centre. They have a lunch costing approximately 15 cents and then they go home. It makes them feel that they still belong to society. The “meals on wheels” scheme which is also run by the same association, is an unqualified success, providing those who are no longer mobile with a daily hot meal. Here, I wish to compliment the Secretary for Social Welfare and Pensions for visiting Pietermaritzburg during the last recess, and seeing for himself what actually is taking place in Pietermaritzburg. I think, I can quite easily say on authority, that Pietermaritzburg leads in this field and others follow. I must convey our thanks to him for doing this. I sincerely hope that, as a result of his visit, he will ask the hon. the Minister for more funds for this service and that he will expand similar services in other towns throughout South Africa. A reasonably large home is being built in one of the suburbs to provide accommodation for the frail aged. I am still of the opinion that our cottage system, where single and double units are provided within a small garden complex, is the real answer for those elderly people who are still mobile and who are frightened by the thought of living in homes for the aged. This aspect should be considered, and the Minister should make more funds available for this type of accommodation. Another problem has now also reared its head and that is that the fixed income group of retired persons, persons with fixed investments, find that their income from interest has no longer the same purchasing power, because of the money being considerably devalued. It is time that their plight be investigated, with a view to assisting them before they become a burden to the State.

Mr. Speaker, referring to the I.D.C. a moment ago, the hon. member for Kensington expressed the opinion that we should do away with the provisions of section 3 (b). Section 3 (b) of Act No. 22 of 1940 provides that:

1. (a) new industries and industrial undertakings; and
2. (b) schemes for the expansion, better organization and modernization of and the more efficient carrying out of operations in existing industries and industrial undertakings.

This is a very important task and it is laid down in the Act. Since the I.D.C. was put into operation under this Act it has made a very great contribution to the industrial development of our country. Looking at the latest report of the I.D.C., we notice that since 1940 up to June, 1968, the I.D.C. has rendered assistance to no fewer than 945 industries. This gives an indication of the magnitude of the assistance which has been rendered. It also covers a very great variety of industries. The total amount of financial assistance rendered to industries is R688 million In the course of time some of that money has been repaid; more than R410 million has been repaid and reinvested in the course of time. The total invested in industry at the moment amounts to R278 million. But the hon. member said that South Africa is so prosperous that it is no longer necessary for the I.D.C. to render this form of assistance.

I think that if we look at the report of the I.D.C. again, we shall find that it contains enough reasons why we should not follow that advice. Although the I.D.C. reached its peak in respect of the rendering of assistance in 1966, there has been a decrease in the number of inquiries and applications. But this decrease is partly attributable to the Government’s following a policy aimed at curtailing economic activity. The I.D.C. also accepted this as its policy. It began acting more rigorously and refused more applications. But in spite of that, although there were more than 900 inquiries in 1966, the number of inquiries in 1968 still amounted to 568. This is an indication of how many companies approached the I.D.C. for assistance. Of the 500 to 600, 151 did in fact make application. Sixty-two of these applications were granted. If it had therefore not been for this assistance it would have been a difficult position. An interesting fact is that a small industrial division was established a few years ago as a subdivision of the I.D.C. They assist smaller industries whose total investments do not exceed R250,000, and in such cases the I.D.C. contributes up to R50,000. Since November, 1962, when this small industrial division was established, 111 industries have been assisted to the extent of a total capital amount of approximately R2½ million. It may be said that this is a small capital amount, but it shows to what an extent smaller industries are being assisted by the I.D.C. It is not always so easy for a smaller industry to obtain assistance. To a large extent it is dependent on banking institutions and other financial institutions, while many of the larger companies make use of inter-company loans, as we know. There are other companies which make very large profits. Out of their reserves they can then render financial assistance to other undertakings. But the I.D.C. performs a very important function. Although the allotted capital amount used by the I.D.C. in 1968 for assisting these undertakings was very small—it amounted to R6 million—the amount had been R30 million in 1966. In 1968 the amount was therefore much smaller, but the activities of the I.D.C. had decreased, because it had adapted itself to the economic pattern and the policy put forward by the Government. The fact that it adapted itself to that pattern does not detract from the fact that there is a very important reason why this section 3 (b) should remain, i.e. so that industries in South Africa can still go to the I.D.C. for assistance. That assistance will be granted readily. The I.D.C. insists on these categories of industries providing a large share of their capital themselves. I think that that policy is sound. The I.D.C has a special function to perform in South Africa, and it must remain. Mr. Speaker, in view of the time, I move—

Agreed to.