Mr. Speaker, I should like to move the following amendment—

This amendment arises out of the debate in Committee Stage yesterday when the Minister indicated that he would be prepared to accept an amendment of this nature to lay upon the Commission the obligation to satisfy itself that expropriation was necessary, that negotiations had taken place and that no other land was available, so that it could not just expropriate. This amendment places that obligation upon the Commission itself instead of the present provision requiring the Commission to satisfy the Minister. Otherwise the wording of this amendment approximates as nearly as possible the wording of the relevant section in the present Act. I hope this amendment has been framed in a manner which is acceptable to the hon. the Minister and that it is in accordance with the spirit of our discussions yesterday.

I have no objection to the amendment.

Amendment put and agreed to.

Clause 9:

Mr. Speaker, I should like to move as an amendment—

This amendment is in similar terms and has the same effect as the amendment adopted to clause 3. In view of that, it is unnecessary for me to say anything more about it.

I have no objection to the amendment being accepted.

Amendment put and agreed to.

Bill, as amended, adopted.

Third Reading

Mr. Speaker, I move—

Mr. Speaker, we have no objection that this Bill be now read a Third Time. I feel obliged at this point to say that we appreciate the reasonable attitude adopted by the hon. the Minister on the amendments which we have moved and the assurances he has given that amendments on the lines suggested by us would be drafted and inserted in the Other Place. In view of this, we have no objection that the Third Reading of this be taken now.

Mr. Speaker, I am beginning to find myself in a most difficult political situation! I have lately been praised so often by the English Press and by the other side that I am beginning to be worried now about my position. Be that as it may, I thank the hon. member for his support. In regard to the political implications, with that I shall deal myself!

Motion put and agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

Before I proceed to setting out the principles of this Bill, I should like to make a brief announcement in connection with the retirement of Mr. J. P. van Heerden, the Secretary for Inland Revenue. This Session is the last one Mr. Van Heerden will be with us in the capacity of Secretary for Inland Revenue as he will be retiring at the end of December. By that time he will have served the State for more than 44 years, 42 of which he served in the Department of Inland Revenue. He joined the Department in 1926 at Pietermaritzburg and thereafter served in the offices of receivers of revenue in East London, Cape Town, Johannesburg, Bloemfontein, Roodepoort, Durban, Vereeniging and Pretoria. During 1936-’37 he was attached to the staff of the Cape Provincial Auditor and during the years 1945-’53 he served in the head office of the Department of Inland Revenue. He returned to head office in 1957 when he was appointed in the control post of the O. & M. division. In 1962 he was promoted to the position of Assistant Commissioner for Inland Revenue, in 1963 to Deputy Secretary and on 1st June, 1968, to Secretary. Mr. Van Heerden has served the Department well and loyally for many years. One of his main tasks was to reorganize the departmental procedures and organization when as a result of the overall expansion and staff resignations which followed the last war, the work of the Department became disrupted. Some of us will no doubt remember the times when we received two and even three income tax assessments in one envelope. With the help of bonus incentive schemes administered under his supervision, Mr. Van Heerden was able to have the arrear work in all district offices cleared up. It was while he was at the head of the Department’s O. & M. division that this House passed the P.A.Y.E. legislation which altered radically the system of tax collection in this country. It was left to him to work out and get the new procedure launched in departmental offices. The success of the new system speaks to his credit. Unfortunately we have had him with us as Secretary for Inland Revenue for a comparatively short period and we are indeed sorry to lose him so soon. During this period, however, I have come to know him not only as a very energetic officer, but as one intensely loyal to me, to the interests of the Exchequer and to his Department. On this occasion I want to express my thanks to Mr. Van Heerden for the good work he has done. It was my, intention on taking leave of him to express the hope that he would have a pleasant period of rest, but I believe he may well try his hand at farming, so let us rather wish him copious rains, good crops, healthy stock and personal good health.

Mr. Speaker, as in the past an explanatory memorandum has been made available to hon. members, which deals fully with each of the clauses of this Bill. I will, therefore, not take up the time of the House unnecessarily by giving a long explanation of all the provisions of the measure but will touch only on the more important aspects.

The first object of the Bill is to give effect to the taxation proposals relating to normal income tax. It also amends the Income Tax Act to provide for the concessions which I announced in my Budget speech, namely, the raising of the exemption margin in the case of persons over the age of 60 years, the more generous exporters’ allowance for exporters who increase their export turnovers, the investment allowances on new factory buildings and plant and the deductions to be allowed to both companies and individuals in respect of donations made to universities, to colleges for advanced technical education and to the National Study Loans and Bursaries Fund. Also, hon. members may recall that I mentioned in my Second-Reading speech on the Part Appropriation Bill last February that legislation would be introduced with retrospective effect, firstly to increase the medical expense allowance for divorced and unmarried persons who are the sole support of children to the same level as is applicable in the case of married persons and, secondly, to remove the restriction which excludes income derived by a married woman from a partnership or company of which she is a member from the category of income which can qualify for the concession in respect of the earnings of married women which was provided for in the 1969 budget. The appropriate provisions are now included in this Bill.

As the law stands, livestock which is on hand at the date of death of a farmer is required to be taken into account in the income, tax assessment up to that date at current market value. Representations have been made to my Department that this amounts to discrimination against the farmer in that tax is levied on an unrealized profit. There seems to be merit in these representations and I have decided to remove the anomaly. Henceforth a farmer’s livestock at the date of death will be brought to account at his elected standard values. In the case of a trader or manufacturer, trading stock is valued at cost price, but hon. members will agree that it would be practically impossible to attempt to determine the cost of a farmer’s livestock and a valuation on the basis of standard values is not unreasonable.

Last year I had to introduce legislation to prevent the abuse of the concession which is made in section 11 (w) of the Income Tax Act to allow employers to deduct the insurance premiums which they pay on policies on the lives of employees and, in the case of companies, on the lives of directors. It had been found that policies were being taken out on the lives of employees or directors for the express purpose of obtaining loans. This vitiated the very purpose for which the concession was originally made, namely to enable employers to provide against losses due to the death or retirement of key personnel. The amendment introduced last year prohibits the deduction of the premiums where the policy has been ceded or pledged. This prohibition can be circumvented by taking out a policy which provides for the payment of a single premium in one year of assessment, so that it can be pledged or ceded as security for a loan in a subsequent year. This loophole is now being plugged and for tax purposes single premiums will be spread over the probable life expectation of the employee or director insured.

It has been decided to exempt interest going from the Republic to individuals resident in South-West Africa from the non-residents tax on interest as is already the case with interest going to South-West African companies. Quite apart from the fact that the amount of tax involved is negligible and that the collection is creating administrative problems, the economies of the two territories are now so interwoven that I feel it is inappropriate to levy any special tax on interest flowing from the one to the other.

The hon. member for Parktown has drawn the attention of my department to an hiatus in the provisions which were introduced into the Income Tax Act last year to provide for the taxing of gains which arise from options to acquire shares where such rights are obtained in respect of services rendered or by virtue of the holding of office as a director of a company. The law provides a partial exemption from tax in respect of gains arising from options granted prior to 1st June, 1969. It seems that because of the peculiar wording of the law there are certain gains which, even though they arise from options granted prior to 1st June, 1969, could fall outside of the concession. Manifestly, this was never intended nor has my Department interpreted the law in that way. The matter is being put beyond doubt by an appropriate amendment in this Bill.

The remaining provisions are of lesser importance. Their nature and purpose are made clear in the explanatory memorandum and require no comment by me.

I should like to join the hon. the Minister in a word of thanks to the Secretary for Inland Revenue. Mr. Van Heerden. Being Secretary for Inland Revenue is not always the most popular of posts, and when an incumbent has been with the Department of Inland Revenue for 42 years and is still as well liked and as well thought of as Mr. Van Heerden is, then I think that is sufficient tribute to him. We have always had the greatest assistance from Mr. Van Heerden in our work on this side of the House. We are sorry that he is not able to be with us longer and we wish him well in the future. I hope that the benefits which the hon. the Minister mentioned this afternoon regarding stock will be applicable to Mr. Van Heerden for many, many years to come. We wish him well.

Sir, the hon. the Minister has rightly said that the Bill before us merely gives effect to Budget recommendations and puts on the Statute Book certain measures which were announced by the hon. the Minister between the two Budgets for example, the increases in taxable allowances in regard to interest rates on tax-free bonds and building society dividends on tax-free shares.

We have had the benefit of the White Paper for which we are grateful. As far as we are concerned the problem is not what is in the Bill that is of interest to us, but what is not in the Bill. There are many specific areas of relief which we would have liked to be dealt with in this Bill. I dealt with some of these on the hon. the Minister’s Vote and I do not propose to repeat them now. Other hon. members on this side of the House will deal with these matters.

However, there are one or two technical matters which I want to raise. Technical matters on an Income Tax Bill are not always easy to deal with and perhaps the hon. the Minister will agree when I say that they are not easy to reply to immediately. Perhaps I should raise them at this stage, and then the hon. the Minister can deal with them in detail, should it be necessary, when we reach the Committee Stage. The hon. the Minister told us about the alleviation of medical expenses in regard to divorcees and the concessions to married women regarding partnerships. These we all welcome. I am also grateful to the hon. the Minister for having dealt with the problem regarding the stock options which he has mentioned. He has clarified the position in the Bill which is before us. In regard to the question of stock options, we agree with the hon. the Minister that there should have been the change which will be brought about by this legislation. For a long time it has been felt by the farming community that a change from standard values to market values in the case of death created a far too heavy and in many ways an unfair burden on the estate of the deceased. The position will now be of course that the standard values can be carried over to the heirs for their benefit. This is something which we all welcome.

The hon. the Minister referred to the question of premiums on insurance policies. I am not at all certain that the reference made in the explanatory memorandum on page 6 is really an accurate summary of the situation The statement says—

The position appears to be that the allowance in respect of past premiums applies only to premiums paid by the taxpayer. That is in terms of the proposed new section 11 (w) (aa) of the Bill. However, if the taxpayer obtains the policy by way of cession and he pays the consideration, that consideration does not appear in terms of this section to be deductible from the proceeds. I understand that this is in fact allowed in practice. However, to me it seems somewhat of an anomaly that these provisions do not appear in the Bill. There are other areas in regard to these premiums which I think one should take a look at. As the Act stands at the moment, in other words, as qualified by this Bill, deductions only apply Where the company pays the premium. What I would like to know from the hon. the Minister is what would be the position where a director has paid the premiums on a policy and the policy is subsequently taken over by the company; is he going to get the same benefit that the company would enjoy? Another question which arises quite frequently is that of a cession of a policy of this type, from one company to another where the director changes his occupation. I think here is a hiatus as well.

Clause 7 of the new Bill is probably the one that concerns us most. This seems to indicate that we are incorporating the loan levy into the principal Act, instead of having it in the Schedule as we have had it previously. This also seems to indicate that South Africa is now going to be faced with a permanent loan levy, because it is now becoming part of the principal Act. It may well be that we are going to be faced with this problem, because we are coming to the end of a cycle. Very soon the hon. the Minister has to start repaying the loan levies that he collected in previous years. This would seem to indicate to us that what the hon. the Minister has in contemplation for the future is to continue to raise loan levies to pay for previous loan levies as and when they become due. So we will have a continual cycle of new loan levies paying off old loan levies ad infinitum. It is taking money out of circulation and then putting it back. It is one of these vicious cycles which are so hard to break. I hope the hon. the Minister will keep that in mind.

Clause 13 is something we and industry have been concerned about for some time, namely the question of investment allowances. My problem is that where this investment allowance is going to be allowed, the property or the plant and machinery must be brought into use. before the 30th June, 1973. We are now already in September, 1970, and I find that the three years is a very limited period, We are not interested in the buildings which have already been commenced. Those people went ahead with their plans, projected their futures and erected these buildings. Here is a concession, however, to a person who will erect a new factory or who will bring into use new plant and machinery. The hon. the Minister has advisedly said that if industrialists will do this he will give them a concession. Very often in the erection of any factory of magnitude the planning, the erection and the bringing into use can take a much longer time than three years. I would like to suggest to the hon. the Minister that he should, even at this late stage, give some consideration to extending the period beyond 1973. It is a very small amendment, which means only the changing of one figure in the Bill. If the hon. the Minister wants industry to utilize the incentives he is offering them in this Bill, I think he must be realistic.

I have another problem, which arises in connection with something we all welcome, namely the deduction from income of donations to universities, colleges for advanced technical training, the National Study Loans and Bursaries Fund, etc. We are beginning to find in income-tax legislation deductions from income of certain amounts of expenditure, as for example in this case the expenditure by way of donations for universities, etc. There are several provisions of this kind in the Act. The problem is beginning to arise how you apply the deduction of these items of expenditure from income. Is there going to be a priority list where a deduction is taken off first and you then work on the income less the deduction that is permissible? What is the policy in regard to calculating these deductions for which the Act, and now the Bill, are providing. I know it is no easy matter and I do not expect the hon. the Minister to reply to me on this issue this afternoon. It is a vexed problem and I think it is going to take quite a lot of study to iron it out.

The next clause I want to deal with is clause 18. Here again I do not think the explanatory memorandum is quite correct. The memorandum says that the provisions of this clause are a clarification. We often have discussions on semantics in this House, but I think to say “clarification” when you are in fact imposing a new form of taxation, is really stretching even semantics a little too far. You see, Sir, when we changed over to bring South-West Africa within the ambit of our Act, so to speak, certain companies were not taxable under the Act in respect of certain South-West African incomes. Those incomes are now brought within the ambit of the Income Tax Act. It is not a clarification; it is an intention. The Minister may well be right that this amendment was necessary, because otherwise certain companies would have obtained what, in effect, was an unfair advantage. There is another aspect to it in that at the same time it aggravates an anomaly. Companies which rendered returns to a date prior to 30th June, 1968, were grossed up and vice versa. Companies which rendered returns to a date after the 30th June, for the South-West tax year ended on the 30th June, 1968, were also respectively grossed up and grossed down. Under the old system, when they ceased trading, they were respectively grossed up or grossed down, as the case may be. This latter step was lost when the changeover took place. But the net result is that the grossed up companies ultimately paid more tax than they should have and the grossed down companies less than they should have. This is an anomaly which has arisen as a result.

These are the technical matters and perhaps we will raise them again in the Committee Stage to enable the hon. the Minister to go into them. What worries me is that the hon. the Minister should be using the Income Tax Act and this Bill in the context of the South Africa economy as it is. He is not doing so. We believe that through the medium of our income tax legislation, the solutions to many of the problems which we face to-day to ensure that South Africa’s productivity will increase and that the national growth will continue at the rate which we want, could find their way into this Bill. The hon. the Minister, when he made his Budget speech, referred to the Franzsen Commission and said that the Budget was a measure that should be used in the interest of our economy generally. Of course, when one talks about the Budget, one talks about the Income Tax Act, which flows from the Budget. I think the hon. the Minister has failed to make the fullest possible use of it. I raised certain matters with him during the discussion of his Vote, for example, the question of pensions of married women and the whole question of taxation of pensions. The hon. the Minister replied that he was awaiting the Second Report of the Franzsen Commission and could not deal with those matters at the moment. These are matters which, as I said at that time, may be not acceptable in the strict understanding of how we frame our tax laws. But we are faced with exceptional circumstances in this Budget. I do not want to repeat them, because this is not the place. But I do hope that the hon. the Minister will take cognizance of these facts. I am sure he will not do anything this year, but we are having another Budget in the not too distant future. When we encourage pensioners and married women to continue working, even to the extent that their pension should be allowed the rebate of R500, these matters should be taken into account in the general context of the South African economy and in the general context of the problems we have in establishing a strong, sound and expanding economy.

There is only one other question I want to raise with the hon. the Minister, namely that of the divorced man. We changed the law some years ago, whereby alimony, as it is called in America, or maintenance, as we call it. paid by a divorced man to his ex-wife, was no longer deductible from his income. We accepted this measure on the grounds that in fact the State was paying quite a large proportion of the maintenance which was being given by the husband to the wife. But there is one matter that puzzles me. The divorced man to-day is maintaining his wife and his children. He is in no better position than a married man who maintains a wife and children. In point of fact he may be in a very much worse position, but for tax purposes he is treated as a single person. I know there are certain allowances for children and so on, but I cannot for the life of me see why a man, although he is divorced, who is maintaining an ex-wife and children, should not have the benefit of the tax rate applicable to a married man. There have been representations— though not so many, because fortunately not many people are divorced—from people asking that we should raise this matter with the hon. the Minister, because these people feel they are really being unfairly treated. I hope the hon. the Minister will be able to do something about this matter.

Mr. Speaker, the hon. member for Parktown rather surprised me by being positive to a very large extent. I believe that the positive elements in his speech will indeed receive the hon. the Minister’s thorough attention. Unfortunately there were negative elements as well. I simply have to assume that the hon. member cannot help himself, because after 22 years a member of the Opposition is bound to have an opposition-psychosis, and will tend to accentuate the negative, the destructive and the critical elements. But I want to point out a mistake made by the hon. member for Parktown when he criticized clause 7 of the Bill and said that it seemed as though the loan levy portion of the tax had now come to stay, and would be an inseparable part of our budgets in future. I do not think the hon. member read that clause properly, because in fact that clause makes provision for the creation of a new schedule, i.e. the Fifth Schedule. In that Schedule provision is made for the levying of the loan portion and the method by which the loan portion is to be repaid. It will not become part of the Act. Clause 7 merely creates a new schedule to the principal Act, i.e. the Fifth Schedule to the principal Act, and as such I cannot see anything wrong with this Schedule being created. As regards the loan portion of an Appropriation Bill, I want to say that in my opinion the Appropriation Bill is in fact the means applied by the Government to control the entire economy by means of fiscal measures, in so far as fiscal measures can control the economy. It goes without saying that fiscal measures alone can never control an economy. But surely fiscal measures are a valuable tool in the hands of. the Minister of Finance with which to control the economy. The hon. member for Parktown said that the Tax Bill should be used within the context of the entire economy. There I want to agree with him. This is precisely what this Bill is doing, because it is a well-known economic fact that when the economic cycle is not controlled in any way, it rises to very high peaks and drops to low levels, which results in very great hardship being suffered by a large section of the people. That is why it is the task of the Minister of Finance by means of the Appropriation Bill to eliminate, level off or straighten those high peaks and low slumps as far as possible.

That is done by discipline.

Mr. Speaker, my hon. friend says that is done by discipline. This links up very neatly with the next remark I want to make, i.e. that fiscal measures alone cannot do this. A very large measure of discipline, discipline on the part of the entrepreneur, is also required. His attitude towards the economy and especially towards his employee must be the right one. However, there must also be discipline on the part of the employee. His attitude towards his work must be right. If one has both these elements, the discipline of the entrepreneur and employee on the one hand, and the fiscal measures of the Government on the other hand, one can to a very large extent succeed in controlling the economy and guiding it in the right direction. Our problem is of course that when the Government and the hon. the Minister of Finance put forward these fiscal measures in order to guide the economy in the right direction we so often find, as we did in the recent Budget debate and to a small extent in the speech made by the hon. member for Parktown this afternoon, this rearguard action of an Opposition which is only bent on catching votes. This frustrates the whole purpose of this discipline.

If I look at the Bill before me it is so clear to me that the correct fiscal measures are being applied here to level off the economic cycle, because we are at present living in a boom period of expenditure. The public are spending far too much. Consequently we have the imbalance between production and expenditure. With clause 1 of this Bill the hon. the Minister is on the one hand trying to curb this excessive expenditure by means of the loan levy. But at the same time it is also his duty to stimulate production on the other hand, in order to restore the balance between production and this excessive expenditure. That is why in clause 12 provision is being made for the 15 per cent investment allowance on machinery, for the very purpose of stimulating production. The same is the object of clause 13. in which provision is made for investment allowances on new factory buildings and improvements to such buildings. This is also being done in order to stimulate production. By curbing excessive expenditure by the public on the one hand and by stimulating production on the other, the hon. the Minister is doing nothing but levelling off this cyclical boom slightly.

Now the hon. member for Parktown has complained that this loan levy has apparently been introduced as a permanent feature in our economy. I want to reassure the hon. member. This loan levy is in fact a fiscal measure to level off this excessive cyclical boom. On the other hand, however, when there is another slump, when the economy slows down, the hon. the Minister will consider a repayment of this loan levy in order to stimulate expenditure so as to set the economy in motion again. That is why I can confidently predict that loan leveis will not simply be imposed every year; a time will come when those loan leveies will be repaid in order to help us out of a cyclical economic slump.

For this reason it is such a pleasure to me to support this Income Tax Bill, for this Bill does precisely what a government should do with the economy in so far as it can be controlled by means of fiscal measures. The Government is trying to eliminate the excessively high peaks and low slumps and to make the economic cycle follow a more even course to the benefit of the entire population.

But it is also a fact, of course, that our gold production, which forms such a large part of our economy, will in due course become less and less and that for that reason it is necessary for us to export far more manufactured goods. Hence the exporters’ allowance, for which provision is being made in clause 11, in order to stimulate export. In my opinion, this is again a splendid way of guiding our economy in the right direction. For this reason I do not want to criticize the hon. member for Parktown too severely. As I have said, there were positive elements in his speech, and we are grateful for that. But I want to suggest to him and to other members who are still going to speak that here we have a splendid method of guiding our economy in the right direction by means of fiscal measures. Therefore they must please not for the sake of a few miserable votes in the provincial election try to detract from this splendid method. Of course, fiscal measures can only succeed if they are accompanied by the necessary discipline, and in this regard, too, the Opposition has an important task. They must help us to create the necessary discipline in the case of the entrepreneur on the one hand and in the case of the worker on the other. By doing so, all of us will contribute to the creation of a sound economy.

Mr. Speaker, I will not raise any political aspects in my speech because it concerns a class of people who are not very numerous as far as voting is concerned. I should like to refer to section 8 (A) of the principal Act which is being amended by clause 8 of this Bill. Section 8 of the principal Act refers to directors and employees of companies who have been granted stock options, who have exercised those options and have been taxed on the difference by which the market value has exceeded the option price at the time the options were exercised. This taxation is rebated for options granted prior to the 1st June, 1969. The principle of taxing stock options and the benefit arising from stock options was first introduced into the Income Tax Act in 1969 at a time when the recipients of stock options stood to make substantial financial gains as a result of the upward path of prices on the Johannesburg Stock Exchange. When this amendment was considered to the principal Act last year, this side of the House did raise strong arguments against this principle, arguments which I think have been justified by subsequent events. However, the Minister adhered to his view that benefits arising from these stock options schemes represented income receivable for services rendered in connection with employment. As a result section 8 (A) was embodied in the principal Act.

Since then fresh reasons have arisen from developments which indicate that section 8 (A) should not only be amended, but should be scrapped altogether. The first reason is that on account of the fall in the prices on the Johannesburg Stock Exchange since the middle of 1969, the real benefits which were previously expected by option holders from exercising their options in many cases have not materialized while, on the other hand, these same option holders have paid income-tax in the expectation that those benefits would accrue to them. I think it stands to reason that options are only exercised if and when the market value of a share is higher than the price at which the option was granted. It is this difference, the difference between the market price at the time of exercising the option and the option price which is taxable. In practice, however, it has transpired that in many cases, in a great many cases, the share price after the exercise of the option has subsequently fallen, in many cases to below the option price and often very substantially below the option price. So, unless the shares acquired in terms of the option scheme were sold before the price fell below the option price, the option holder lost in two ways. First of all, he lost because he had paid tax on the difference between the market value at the time of exercising the option and the option price and, secondly, he has lost because the value of the shares which he acquired fell below the price he paid for them. I believe it is not the object of a stock option scheme that the shares acquired in terms thereof should be sold. On the contrary, the object of such a scheme is to give directors and managers who benefit by it an interest in that company in order to induce them to stay with it and to give of their best to improve its operation. An example was published in the Press this week where the holders of stock options in a very large financial institution fared so badly that the company concerned is now proposing special measures to repurchase the shares acquired in terms of the option scheme, and to do so at their original option prices. But these option holders have already paid income-tax in terms of the Act, a fact which, to my mind, is merely rubbing salt into their wounds. I would suggest that the experience with these stock option schemes over the last year does indicate that if this type of transaction is to be taxed, it should be taxed on the difference between the price actually realized when those stocks are sold and the option price and not on the difference between this and the price ruling at the time the option was exercised. This is the way in which other share transactions are taxed and I see no reason why it cannot be done in this case as well. Surely it is only fair that the actual profit realized should be the taxable entity and not the profit that may have been realized had one taken action of a certain kind at a certain time.

There is a second and, I think, more compelling reason why section 8 (A) of the principal Act should be repealed and not merely amended, and that is that this section has virtually killed all new option schemes for the very reason that new option schemes attract this tax. I think it is common knowledge that the business community has been searching for and has found ways in which the objectives which were formerly fulfilled by stock option schemes can be fulfilled in other ways without attracting tax. One such scheme which I believe is becoming quite common is to establish a trust in terms of section 86bis of the Companies Act, through which directors or senior employees of the company may purchase shares at a time of their own choice, at a time when they think the price is right, and they pay for those shares on an extended payment basis. Such schemes do not relieve the beneficiary of the risk that shares acquired in terms of them may fall, which risk they are relieved of in terms of the stock option scheme until they exercise that option, but it does provide a way for directors and senior employees of companies to become shareholders in those companies on reasonable terms and on terms that will not attract taxation as the law stands at present. It seems obvious to me that such schemes and others which I know are being investigated by the business world must supplant the conventional stock option scheme for the very reason that tax does not apply to them. I believe that the country is the poorer without stock option schemes, which to my way of thinking are the simplest, the most straightforward and the most effective way of giving directors and senior employees of companies an interest in their companies. an interest which acts as a spur to them to ensure the greater efficiency of those companies, and when that is achieved it is something from which not only the country as a whole but also the Department of Inland Revenue benefits by way of higher company profits.

Sir. I regret that I could never hear the previous member for Constantia, and that to-day I could also hear only the odd word of the present hon. member for Constantia’s speech. The hon. member must therefore excuse me if I preferably do not try to guess what he said, because I do not want to misinterpret him.

Sir, when the hon. the Minister made his Budget speech, he made it his particular aim to try to eliminate four bottlenecks in the economy: the first is the excessive private consumer spending, decreasing personal saving and the high inflation rate. The consumer index increased in the past twelve months by 4.1 per cent, in comparison with the average of about 2.5 per cent during the sixties. The second point the hon. the Minister wanted to correct is the crooked pattern of private investment, with over-emphasis in the building and construction industry. The third point he wanted to correct is the marked weakening of the current account of the balance of payments, as a result of exceptionally high imports; and the fourth point he wanted to correct concerned the obstacles and tensions in the capital market, and distortion in the interest rate pattern.

Sir, I think we should take a brief look at the extent to which the Minister, by means of his fiscal, policy, has succeeded in eliminating these bottlenecks, in as much as this can be done by way of fiscal measures. As far as the excessive consumer spending is concerned, the hon. the Minister, in terms of clause 1 of the Bill, added the additional loan levy, with a view to drawing money out of the economy and thereby decreasing its liquidity, and with a view to restricting escessive consumer spending to a degree. But the hon. the Minister did not stop at that; he also gave the necessary encouragements, as in clauses 9 (1) (a) and 9 (1) (b), for greater investments on savings accounts. In this way, for example, as far as investment in Treasury Bonds and other State securities are concerned, he increased the amount deductible from income-tax. from R2,600 to R4,650. He also made an additional concession; he allowed building societies to increase the amounts on Indefinite Period Shares that can be deducted from tax in the form of dividends, from R400 a year to R650 a year. He added this stipulation: provided that the interest rate on those Indefinite Term Shares does not increase above 6½ per cent. In other words, investments that can be made at building societies have been increased in this connection from R6,000 a year to R10,000 a year, which makes it possible for these bodies, one of the largest savings institutions we have, to collect greater funds with which to relieve our housing problems.

In coming to point No. 2, i.e. the crooked pattern of private fixed investment, particularly in the building sector, I want to point out that the decrease in investments in the manufacturing sector gave cause for concern. That is why, in clause 7, the hon. the Minister resorted to the establishment of a machine investment fund of 15 per cent. This machine investment fund of 15 per cent ought to have a very salutary effect upon investment in the manufacturing sector. In the light of the labour position it may be expected, particularly since this concession was made in respect of equipment and machinery, that this measure will speed up the long-term substitution of capital for labour. Sir, it must be conceded that it will perhaps create a little greater short-term pressure on the labour problem and on the salary structure, but eventually this concession must have a very salutary long-term effect on the labour structure in the manufacturing industry.

But the Minister did not stop at that; he also made tax concessions to stimulate market development in the export trade. Those tax concessions, which were increased to an eventual 100 per cent if a factory could succeed in increasing its exports by 25 per cent, will help to correct the deficit on the current account of the balance of payments as a result of excessively high imports. Both these concessions to the manufacturing sector must have that very salutary influence. But the Minister did not stop at trying to deal with this labour shortage by certain fiscal measures. Hence the tax concessions in respect of donations to universities. This has now also been extended to include institutions for advanced technical education. These concessions ave been extended considerably, so that an individual may now obtain a rebate of an amount of R500, and companies may now contribute 5 per cent of their profits for this purpose.

It is always necessary for a country and a Government to lay down priorities in its Budget and in its allocation of funds. In the latest Budget it is very clear that the Government laid down two priorities in particular, i.e. education and water conservation. I do not now want to elaborate on water conservation, but the education priority is absolutely essential for the country. The funds allocated to universities now stand at more than R45 million a year, and in addition these tax concessions have been made, in this legislation, which will further strengthen the funds of universities. In this way the necessary technicians can be made available and the management position in our country, as well as the position of the highly skilled and professional labour class, can be relieved.

Of course, we cannot neglect to praise the benefits that accrued to our older people, our pensioners and so on. I am thinking of the additional increase in the level at which persons older than 60 years of age must begin to pay tax. The income level was increased from R1,200 to R1,350. If the additional R150 for medical costs is deducted, a person of 60 years and over, and I am now referring mostly to the pensioners, will only begin to pay tax after he has reached an income of R1,500. This brings a great measure of relief to our old people in particular, and that is why I think that the hon. the Minister succeeded to a large extent, as far as fiscal, measures are concerned, in trying to achieve these objectives of his. I shall be told immediately that the hon. the Minister did nothing to the high level of imports. Perhaps nothing has been done directly, but by introducing the increased incentive for saving, plus the stimulation for exports and an increased productivity in the manufacturing sector, that decrease in our country’s imports must automatically follow. I think the hon. the Minister may be congratulated on these tax proposals, and we do thank him for them.

Mr. Speaker, both the hon. members on that side of the House referred to the loan levy, and I should particularly like to return to that. My approach is that the results of this loan levy work in a completely different way to what they suggested to us. The hon. member for Fauresmith who has sat down, set himself four norms according to which he judged the Budget. I have already referred to the first, but the second standpoint adopted by him was that the position in respect of decreased investment in the manfacturing sector was going to improve as the hon. the Minister had made concessions for expenditure on machinery. I think in this regard he was displaying a degree of optimism which is not justified by the available data. We know that investment in the manufacturing sector decreased by 11 per cent last year as compared to the previous year and that in the previous year it decreased by 17 per cent as compared to the year prior to that. Consequently I am of the opinion that there is an enormous gap here which is not going to be bridged by the technique disclosed here by the hon. the Minister.

In the third place the hon. member spoke of the balance of payments. During the past week our foreign reserves decreased by R20 million and I think my information is correct when I say that our foreign reserves decreased by nearly R100 million during the past month. Here we once again have a case of what the hon. the Minister is doing being too little and, in my opinion, also too late.

In the fourth place the hon. member said that productivity was being encouraged because so much more was being spent on education. Surely this, too, is a relative matter. We all know that South Africa spends only 4 per cent of its gross national product on education. We also know that most overseas countries spend between 7 per cent and 8 per cent on education. We also know that Britain, to which we often refer as the impoverished small country, spends approximately 10 per cent of its gross national product on education. Therefore, the entire matter is completely relative.

The hon. member for Paarl said that we simply wished to gain a few votes and that that was the reason for the approach we were adopting to this matter. I think in this regard the hon. member for Paarl was a very poor intercessor for the hon. the Minister. Indeed we know and surely it is clear to all of us that this Government found itself in a particularly embarrassing position in drafting this Budget, and as a result particularly so in drafting the Bill at present under discussion. Here the hon. the Minister is dealing with the spectre of inflation and it is quite true that there are certain fiscal methods according to which one can combat inflation, but the combating of inflation and the application of these methods are not always popular. We are once again on the eve of an election, and if there is anything about which the Nationalist Party is hypersensitive, it is an election. Did we not recently have the example of how an amount of R60 million had to be used for ensuring that the former hon. member for Benoni would be present in this House to-day as the hon. member for Langlaagte? It is a dubious privilege!

The hon. the Minister said he was acting as an economist and not as a politician in his approach to the Budget and the financial affairs of our country. We, however, see this somewhat differently. The hon. the Minister may be sitting there in the guise of an economist but if he is scratched just a little, one very soon sees him as a politician again. Consequently the Budget with which he came forward, actually is a piece of patchwork. We shall still have to pay dearly for it, because in view of this election he was not prepared to take the steps he should have taken.

Order! I think the hon. member should revert to discussing the Bill.

I was simply referring to the proposals made by the hon. member for Paarl, but I shall gladly return to the Bill. I just want to tell the hon. the Minister that in March next year we shall, of course, have another Budget. I think it is going to be the day of reckoning and that we shall be able to refer to it as the “Ides of March”. Possibly the people will say to the hon. the Minister on that occasion, “Et tu, Nico”, or, to put it more clearly, simply, “you, too, Diederichs”.

I should like, however, to refer to clauses 5 and 7 of this Bill. I think it has been pointed out to us that here we have an important fiscal technique which the hon. the Minister is employing. This is in fact so. What the hon. the Minister is doing in this Bill, is to raise the loan levy from 5 per cent to 10 per cent. The underlying idea is that it will be paid back after seven years. A rate of interest of 5 per cent is applicable in this regard, and that will not be taxable. This, of course, sounds perfectly in order, but the object, as explained by the hon. the Minister, of this loan levy is simply a form of compulsory saving. The classic idea is that it will combat inflation. I want to try to show now that I am convinced that id does not work that way in practice. To start with, I want to quote statistics, compiled by the Secretary for Internal Revenue. I start with the year 1965-’66, because it was at this stage that the new series of levies was introduced. We see that the Secretary indicates that only 15 per cent of the taxpayers provided virtually two-thirds of the amount collected in taxes, as far as personal taxes are concerned, and virtually 80 per cent of the loan levies. This was more or less confirmed by the Franzsen Commission, too, in an investigation they had conducted into the matter. What this means, is that in 1965-’66, when there was a 5 per cent levy, the yield of this loan levy was approximately R9 million. It amounted to only 3 per cent of the total amount collected in taxes. Our objection to this loan levy is, if the object of the levy is compulsory saving, that its range is much too restricted. It is applicable to too small a number ot people. This tax is paid only by people whose tax in a particular tax year exceeds R100. Yet again, when we consult the available statistics, we find that in the 1965-’66 tax year this involved 42 per cent of the people contributing loan levies. These people, I may just mention, number just over 20,000. They represent only 1.5 per cent of our taxpayers. In other words, 1.5 per cent of our taxpayers raised more than two thirds of the money which the hon. the Minister collected for himself and for the Treasury in this way.

I think this should be phrased in even wider terms. The contribution in this field, as far as these loan levies are concerned, consequently comes from approximately 10 per cent to 15 per cent of the taxpayers. But we know that it is only 8 per cent of the people in the country who do, in fact, pay tax. 10 per cent to 15 per cent of 8 per cent comes to approximately 1 per cent. In other words, this loan levy is, therefore, being contributed by 1 per cent of our total population. Now the hon. the Minister says that this is an anti-inflationary measure, because it is going to force people to save more. But the only group he is forcing to save more, is 1 per cent of our total population. In respect of the remaining 99 per cent there is absolutely no psychological reaction, because this levy is not applicable to them.

But I think there is a further standpoint. If the hon. the Minister says that the purpose of this levy is to force people to save, then we should also put it this way, i.e. that in that case it is forcing only 1 per cent of our total population to save in this way. Therefore, he is not encouraging people to save more; he is, in fact, taking money away from the small group who is already saving. In other words, he is taxing savings. He is, therefore decreasing the money in the private sector, the money which is already being saved. By doing that he is negating his whole object. But the money he is obtaining in this way, is used for supplementing the funds of the Treasury. What does the Government, in turn, do with this money? The Government uses this money and often does so in a way which is quite inflationary. Therefore, we do not agree with the standpoint that this is necessarily encouraging savings and combating inflation, because I think that even in the Franzsen Report it clearly comes to light that this money is often used in such a way that it, in fact, encourages inflation. Therefore, we have a vicious circle here.

Such as?

I think it also comes to light very clearly when we consider the position of companies. Hon. members will remember that at the present moment ordinary company tax is 40 per cent. This loan levy which is now being imposed, amounts to 2½ per cent. In other words, the real tax now imposed on companies therefore becomes 41 per cent. It is very clear that the higher the tax becomes, the less money remains for companies to reinvest in their own organizations. The following calculation shows this very clearly. I ascertained the data in respect of a number of years only. When one examines the data in respect of 1963-’64 one notices that at that stage—I am referring here to the manufacturing sector—27.3 per cent was spent on taxes. That left those organizatiions an average of 34.8 per cent as revenue retained, as so-called “retained earnings”. The amount which had to be paid in taxes increased gradually. For example, we find that in the year 1965-’66 taxation became 28.2 per cent. In the year 1966-’67 it became 32.2 per cent and in the year 1967-’68 it reached 33.3 per cent. If we were to express this as an index figure, with the 27.3 per cent of the year 1964-’65 as an index of 100, we find that four or five years later the index figure had increased to 144. Therefore, as far as the manufacturing sector is concerned, taxes are increasing constantly. On the other hand, the amounts which may be retained by these organizations for further investment, i.e. the so-called “retained earnings”, decreased from 34.8 per cent in 1963-’64 to only 28 per cent five years later. It is clear what happened here. The more the hon. the Minister is taxing these organizations, the less money they retain for reinvestment in their own organizations. Here we once again have a kind of vicious circle for which we shall still have to pay dearly.

The taxes which organizations and companies have to pay, are increasing constantly. In 1965-’66 the taxes amounted to approximately 33 per cent. As I have indicated, taxation has already reached 41 per cent now. This is a high percentage, even by foreign standards. Here we therefore have the phenomenon that taxes are rising, that transport and labour costs are increasing, that inflation is growing constantly, and that less money remains for investment by the companies themselves. Consequently the outside public is also investing less and less money. This is one of the reasons for the sharp decline on the stock exchange and for its inability to rally even now.

There is a further aspect to which attention has to be given. It is something to which the hon. member for Parktown has already referred. The stage has now been reached where these loan levies have become essential to the Government for balancing its Budget. It is no longer something which one can simply impose or abolish as one likes. That is the very thing the hon. member for Paarl tried to suggest. These loans have now become an essential part of Government financing. We can prove this very easily. The surpluses to whhch the hon. the Minister makes such frequent referencees, will not be possible without these loan levies. When we examine the year 1966-’67 as well as the year 1967-’68, we notice that the surpluses resulted chiefly from the levies which had been imposed by the Minister. In the year 1968-’69 there would have been a large deficit if the Minister had not carried forward the surpluses of the previous year and had not had the assistance of these loan levies. In other words, the Minister now needs the loan levies for balancing his Budget. A tremendous amount is already involved in these levies. Since 1965-’66 this Minister has borrowed approximately R227 million from us, by way of these loan levies. The idea is that he will get another R48 million in the coming year. By increasing the loan levies on persons from 5 per cent to 10 per cent, he anticipates to obtain approximately R25 million. By increasing the loan levy on companies by 2½ per cent, I think he anticipates to obtain approximately R23.5 million. This gives him a total of R48.5 million. This means that by March next year, this hon. Minister will owe the taxpayers of South Africa approximately R275 million. He is an honourable man and will repay this debt, but from where is he going to get the money to do so? This is the very thing which the hon. member for Parktown pointed out. In order to be able to repay us, he will indeed have to re-impose loan levies. He will have to continue borrowing money from us so as to actually repay us what he already owes us, as he has borrowed from us before. Here we really have a vicious circle. People talk of “perpetual motion”. But to me it seems as though the hon. the Minister has designed a form of economic perpetual motion in this regard. He is going to continue borrowing money from us so that he can repay what he has borrowed from us before. This is a nice way of borrowing money. I wish I, too, could borrow in this way. I do not know for how long I shall be able to continue in that way.

As a fiscal instrument this loan levy has undoubtedly lost its flexibility. It has become an integral part of the budgeting procedure and of the financing programme adopted by the Government. Therefore when we come to March next year and when we shall have a very difficult Budget, when this election has either been won or lost, and when the hon. the Minister will really start throttling us, I think he should simply go the full way and forget about this farce. He shall have to tell us clearly that in actual fact this is not precisely a savings tax but that it is money he is simply going to take from us. Then we shall be able to put everything together and we shall no longer have this farce where we are geing told that this is a loan, whereas it already is clear to all of us that it is not a loan but that it has in fact become a basic tax.

Mr. Speaker, I should just like to say to the hon. member for Hillbrow that this Government does not budget with a view to elections, because it knows its supporters. They do not allow themselves to be influenced by popular Budgets. This Government and this side of the House budget with a view to the national interest of South Africa. This being so, it can rely on the support of the electorate outside as far as these matters are concerned. We therefore have no need to introduce popular Budgets. We owe it to this country to budget in accordance with what is necessary in the national interest of South Africa. I just mention this in passing.

I am getting up to refer to clause 14 of this Bill. It deals with the deduction of R150 for medical expenses. I know that the hon. the Minister explained on occasion that this was the average amount of expenses arrived at with due regard to the fact that a person may have heavy expenses in one year and smaller expenses in the next. Under the previous system a taxpayer was allowed to deduct a maximum amount of R200 from his income-tax for medical expenses, but this entailed a great deal of administrative work. That I concede. I can appreciate that.

This afternoon, however, I wish to make a plea on behalf of many taxpayers who do not belong to a medical aid scheme. Many of these people do not have insurance policies in terms of which they can get interest-free loans for operations and so forth. On behalf of these people I wish to plead with the hon. the Minister that we should again institute a proper investigation to see whether we can find a formula in terms of which the less fortunate person who has had heavy medical expenses in any particular tax year can be met. At the same time I want to say to the hon. the Minister that I do not think the more fortunate ones who did not have such heavy medical expenses would have any objection to paying tax on their full taxable income. We therefore ask that the person who has had no medical expenses in any particular tax year should not be allowed to make any deduction. I want to make an earnest plea here that if the total amount in respect of bona fide medical expenses incurred by a taxpayer cannot be taken into account, a larger percentage of the actual expenses incurred by the head of a family should be deducted. It is unnecessary for me to tell the Minister and the House how difficult it is in these times of rising medical costs for people to keep up. I therefore ask that we should try to provide some relief here by seeing whether we cannot grant larger benefits in respect of actual medical expenses which the head of a family had to incur, even if it should mean that the person who was fortunate enough not to have had any illness would not be allowed to make any deduction.

The hon. member for Wolmaransstad said that it was not necessary for that side of the House to introduce a popular Budget. Well, I agree with him that it is not necessary. We have only this year had two examples of what really happens. All Minister have to do is to announce increases in salaries outside the Budget, as the Minister of Transport did for the railway workers at Langlaagte and the Minister of Finance did after he had presented his Budget to this House. Therefore, they do not worry about coming to this House with such proposals, but do as they please. In that sense, therefore, I agree with the hon. member that there is no need for them to introduce popular Budgets at all.

The hon. member then came with what I regard as reasonable comment on the deductions for medical expenses. But one of my colleagues on this side of the House is going to deal with that specific matter and, therefore, I shall not pursue it now.

I want to talk to the hon. the Minister about the new section 20A we introduced into the Income Tax Act last year. This section provides for the deduction of a certain amount of the earnings of a wife from her taxable emoluments. I should like here to read a short letter which was received by a taxpayer in Pietermaritzburg from the local Receiver of Revenue. It reads—

The local Receiver of Revenue was quite correct in his interpretation of the Act. As a matter of fact, I believe he referred this matter to his head office before he gave this ruling. But the Minister should now make up his mind on whether pension is to be considered as “earnings” or not. There are certain other provisions of the Income Tax Act where a pension is in fact considered as earnings. In the case of this particular taxpayer, the position is that his wife is in receipt of a Government teacher’s pension. An amount of R4.05 was deducted from her by way of P.A.Y.E. It was deducted from her pension. Under those circumstances, therefore, it was considered as “earnings” and consequently a tax was deducted. Under normal circumstances, in order to arrive at the total taxable income of a taxpayer a pension is considered as “earnings”.

An interesting fact arises when one studies the I.R.P. 12 form. Incidentally, I must congratulate the Department on this form—it is ideally drawn up, so much so that every taxpayer once having read through it, can do his own income-tax return. In the I.R.P. 12 for the assessment year 1970 there is paragraph 7 setting out how to calculate tax when the taxpayer’s wife earns a “remuneration”. It points out that the Income Tax Act makes provision for the exemption of a portion of the “remuneration” earned by a married woman. Then it defines “remuneration” as embracing “all payments for services rendered or to be rendered and includes basic wages …, pensions, etc.”. Consequently any taxpayer may conclude that money received by way of a pension can be included in the R500 to be deducted.

It is quite obvious that somebody in the Department discovered this error because when one comes to the I.R.P. 12 for the tax year 1971 we find that this has been changed. Paragraph 7 now prescribes how to calculate tax if your wife is in receipt of “earnings”— not “remuneration” anymore. It then goes on to state that the Income Tax Act makes provision for the exemption of a portion of the “earnings” of a married woman, etc. Then it defines “earnings” as meaning “the income derived by a married woman from any trade carried on by her independently of her husband and includes basic wages, pension, etc., but does not include her income from rent”, and so on. It is therefore quite apparent that somewhere along the line there is an intention that income received by way of pension should be deductible. In the case I have quoted, the persons concerned are an elderly couple, both over 60. The husband receives a pension from a Typo Union and another small one, totalling R954 while the wife receives R657 as a Government teacher’s pension. They have other income of R60—a total of R1,671. Allowing for a deduction of R150 for medical expenses they have a net income of R1,521. If R500 allowance is allowed it would leave them with a net income of R1,021 on which no tax is paid, because they are over 60. But if this R500 is not deductible, then they have to pay approximately R40 tax. The point I want to stress here is that this particular pension is not a “free” pension, if I may call it that, such as are received from the Department of Social Welfare. This is not a welfare pension but a pension which has been earned over the years through hard work.

But they deducted it from his salary in the first instance.

I grant the hon. member that. Contributions were deducted from salary for tax purposes all the way through. But I would like to plead with the Minister that where you have a pension which had been earned by a woman, it should fall under the category of “earnings” and be included in the R500 which a wife can deduct.

This concession was introduced last year after years of pleading from this side of the House. The motive behind it was as was stated by the Minister when he introduced it, to induce ladies to go into the labour market to help us with our manpower shortage in this country; to get more married woman into commerce and other spheres of our economy, to let them do a job of work to release men to do more important work I want to say that part of this work, part of this help to the economy by a married woman, is the pension to which she will contribute, the pension she will earn in that way which will help her in her old age. I submit that this type of pension has been “earned” in the true sense of the word and, therefore, it should be included in the definition of “earnings” under section 20A. I want to suggest to the hon. the Minister that he do it now if he can, or else in the Other Place, but certainly as soon as possible and that he give it retrospective effect in order to benefit the senior citizens who, I submit, have earned this concession.

I want to raise two matters with the hon. the Minister, one of which has already been touched on by the hon. member for Wolmaransstad. I was particularly pleased to know that a member on the Government side saw fit to raise this particular issue, namely the question of the allowance deductible for medical expenses. When the amount was reduced last year to R150, with the advantage that no accounts were to be submitted tot he Receiver of Revenue to support the claim, I found that it had created a hardship and not the advantage which it was thought at the time it would create, a hardship in the sense that to most people it really meant taking away an advantage which they enjoyed, not only in respect of those who were members of medical aid schemes but also generally, as was pointed out, by those who did not have the opportunity of belonging to this type of scheme. Now we have no national medical scheme in this country. All the medical benefit schemes are private ones and usually subject to rules and conditions which call for an affinity group of persons so that a considerable number of citizens lose the advantage which one gains from medical aid schemes. But nevertheless, even in respect of those who are members of medical aid schemes, the amount that is payable now, particularly in view of the recent increases in the subscriptions, is very much more than the sum of R150. And that amount is not deductible; at least it is taken into account in terms of section 11 in the rebate on insurance premiums with a ceiling of R30; so that in fact no advantage is really given to those who belong to medical aid schemes. I would like to see, if I may suggest this to the hon. the Minister, that the amount should be reinstated at R250 at least, particularly because of the fact that most of the subscriptions, virtually in all cases to-day, amount to at least R200 per annum. The extra R50 would assist in accounting for the increase which has recently been agreed upon between the Department of Health and the medical aid schemes for doctors’ charges, as well as the increase which has steadily been going on in the field of drugs generally. It is a known fact to-day that most drugs have almost doubled, if not trebled, in cost and it is a very heavy burden indeed on the average citizen in our country. I feel that this additional concession will make very little difference indeed to the Budget. I would hesitate to account for the infinitesimal amount that would be involved, but I feel convinced that a large number of citizens would be most grateful if this concession were made. I think it is important, because I think that the advantages which were suggested, and which prompted the hon. the Minister to make the change last year, were considerably exaggerated and perhaps overrated; certainly they did not prove to be an advantage to the community. I think that perhaps in the near future when the Minister has the opportunity this whole matter should be reviewed. I think the community is entitled to have this particular aspect of its domestic life considered, particularly because of the fact that there is no national medical aid scheme in force in the country. In fact, if I may say so, the Government is at the moment against a scheme of this nature and has constantly set its face against proposals made from this side of the House for the introduction of such a scheme, which could alleviate the problems of the community arising from ill-health. Sir, this is a very important matter but I will not pursue it except to say that I think the hon. the Minister should review the deductible allowance.

The other matter that I would like to raise with the hon. Minister is this. In considering the number of bilateral agreements with regard to double taxation which exist between this country and other countries, I find that at the moment we have only ten such agreements in existence with ten different countries. I am wondering why we cannot extend contracts of this nature, particularly with countries with which we are beginning to do very much more trade than we did in the past. It may be important to us in South Africa to cast our eyes a little further afield and to give more serious thought to the expansion of our markets in a somewhat different direction instead of confining ourselves to the traditional markets of the past. I am thinking here of the South East Pacific and I refer particularly to Australia and New Zealand, countries with which we now have a very much closer link in the field of imports and exports than we had in the past. As far as Australia is concerned, we have now been rated as its fourth largest customer. I think some two or three years ago we were its tenth largest customer. We have now been upgraded to fourth because there has been a considerable increase in trade between the two countries. This is merely an example of what I am asking the Minister to consider. I firmly believe that contracts of this nature are valuable both from the point of view of trade relations and from the point of view of greater goodwill between ourselves and other countries. I think even to discuss this matter with Japan, particularly in view of what we have in mind, might stimulate investment both ways. Such a policy might stimulate investment by other contracting countries in our own country and at the same time we can build up additional links by encouraging investors in our country to invest in these other countries. I think that this could open up an entirely new vista for us and we should not be so conservative as to confine ourselves entirely to the traditional markets that we have enjoyed in years gone by.

Sir, I would also like to say that generally I do not believe that the taxation concessions have gone far enough in meeting certain very important requirements of our citizens. I think that the Bill, following as it does the taxation proposals contained in the Budget speech, has not gone far enough in assisting some of the less privileged members of our community. I would like the hon. the Minister to give further thought to this particular aspect. It is not a question of asking him to remove this hand from a heavy or a hard heart because I think the hon. the Minister is well aware of the problems which face the people of our country, but I do suggest that there should not be that conservative approach in giving concessions. Particularly in the field of pensions, there should not be that conservative approach which constantly virtually compels the hon. the Minister of Finance to be afraid to take a step forward because of the fact that he might create ripples in other directions. There are occasions where ore has to look at the community with a very much more sympathetic heart than we have heard in this Budget. When one thinks of the approach of the Government, we as members of a compassionate society should rather think in terms of encouraging the purpose of assisting rather than discouraging it and maintaining a conservative policy which has perhaps dogged the footsteps of this hon. the Minister in the years he has been in this portfolio.

Mr. Speaker, I want to thank the hon. member for Parktown and other hon. members on both sides of this House who have spoken, for the spirit in which they conducted these discussions. I think they at least tried to be objective in examining these taxation matters, and succeeded to a fair extent. I think the one who had the most difficulty in being objective was the hon. member for Hillbrow, but I shall come back to him later. I also want to thank the hon. member for Parktown for intimating that I agree with him that this sort of legislation in connection with taxation is the most difficult legislation in the world to interpret and understand. Often it is much easier to pay the tax than to understand the clause which grants exemption from it. I shall try as far as possible to furnish hon. members who put questions here with general replies to the matters which they raised here. If there are matters which remain, we can deal with them further in the Committee Stage, which we hope will follow to-morrow.

I should like to go briefly into the first matter which the hon. member for Parktown mentioned here in respect of clause 8 of the Bill as it is before us to-day. If I understood the hon. member correctly, and I shall again go into what he said, I take it that the clause as it reads at present, completely satisfies the requirements set by him. This clause deals with the granting of options on certain marketable securities to employees, and in the second part it also grants certain exemptions. The question which arose in the mind of the hon. member was whether the exemptions which are granted are valid in all cases. It is for this reason that we amended this clause in such a way that it does not matter who grants that “right to acquire any marketable security”. Previously, the wording was as follows, and I shall read the English version of it—

†We are amending this provision by deleting these words. It actually means that it does not matter from where this right to take up certain options for marketable security comes. If this is true in the case of the first part of section 8 (1), it is also true in regard to section 8 (2) and the exemption is also valid as in the first clause. I think this covers the objections and problems of the hon. member. If it does not, I will deal with the matter later.

The hon. member also asked me about the loan levy and he said that in terms of this Bill it seems to him that the loan levy has now become a permanent part of our legislation. The hon. member for Parktown has no right to say that in view of this particular clause in this Bill. The hon. members for Paarl and Fauresmith have already mentioned that there is some change in this Bill and that many provisions regarding the loan levy which were part of the Act, have now been transferred to a schedule and are no longer a Dart of the Act itself. Clause 2 of the Bill can be taken as being only a consolidation of the previous provisions of previous years and should not be taken as an indication that loan levies are going to be a permanent feature of our legislation. I do not want to make any statement here as regards loan levies, because the future will tell us what we will have to do. The hon. member for Hillbrow’s inference, and I will come back to him later, from what he has learned from this Bill is completely wrong. He talked about a vicious circle and that someday we will have to repay these loan levies and we will then have to impose new loan levies in order to pay the old ones. That is what the hon. member means. He said that we shall introduce new loan levies to pay off old ones. That is possible, but it does not necessarily follow from this legislation. It does not necessarily follow from the policy of this Government because, after all, there are other ways and means of getting the finance that we need in order to repay those loan levies. The hon. member for Parktown more or less hinted at other ways and means. So did the hon. member for Hillbrow. I do not say we will follow those ways they suggested. These hon. members suggested that the Budget should have been a harsher one and that next year will be the Ides of March, the year of reckoning. I think the hon. member for Parktown and the hon. member for Hillbrow have it in mind that this Budget was not a true reflection of what should have been a Budget in this phase of our economy. They actually hinted that this Budget should have been a harsher one and that more taxation should have been imposed. I will admit that the hon. member for Parktown was not very strong on this point, but the hon. member for Hillbrow clearly said that the day of reckoning will come and that we have not done in this Budget what we should have done. In other words, he is of the opinion that we should have imposed much harsher taxation in this Bill in order to prevent us from borrowing more by means of loan levies from taxpayers.

Is the March Budget going to be an easier one then?

We do not ever say anything about a Budget beforehand, because Budget secrets stay secret. I do not want to divulge any Budget secrets to the hon. member. The hon. member for Hillbrow clearly intimated that this Budget is not harsh enough. He said that we are continuing to raise loan levies in order to contain inflation. He mentioned all kinds of intricate and involved examples to show that we are not successful in our attempts to contain inflation because only a very small percentage of people who pay tax, pay this loan levy. That was the gist of his argument. The hon. member has completely overlooked the whole situation. In my Budget speech I put it quite clearly that we do not wish to have an unbalanced Budget and that we do not want a Budget with a deficit. If we do not want to have a Budget with a deficit, given a certain expenditure, me must raise the money in one of two ways. We must either tax more or we must borrow more. If the hon. gentleman could give me any other way of balancing my Budget than either taxing more or raising more loans, I should like him to give me that. We have chosen the second method, namely of borrowing more and not of taxing more. Evidently, it seems to me that the wish of the hon. gentleman is that, in view of the election to which he is referring so often in his speeches, we should have taxed more. If the United Party had been in power, and if he had been the Minister of Finance, he would have had harsher taxation this year. That is the story. They actually mean that we should have taxed the people more and borrowed less. That is the whole story which we can present to the people outside.

We will only change the scales of taxation.

Well, they will only change the scales of taxation, not the taxation itself. The hon. member for Parktown asks about investment allowances and asks me to extend the period beyond the yeaR1973. Of course the hon. member knows that the investment allowances in my Budget are somewhat different from the old investment allowances. The old investment allowances provided that these investments whould take place before a certain date. This year it is provided that investments should take place after a certain date. The machinery or accommodation should be taken into use before a certain date. That is the difference between the two. We have chosen the date 1973 because we regard it as a matter of urgency to strengthen the development of industry in this country. If we give too long a time, if we allow people five, six or seven years, they might wait five, six or seven years, and we want them to start this investment as soon as they possibly can. I hope my hon. friend understands.

In regard to the matter of donations to universities and the method of accounting for that, I shall reply later. It is a very tricky matter, and I shall go into it later. The hon. member for Parktown said that actually his main problem with regard to this Bill is that it does not take sufficient account of the economic situation in this country. I am completely at one with the hon. member that one of the most important functions of a Budget is that it should take account of the economic situation in a country and be drawn up accordingly. I know there is a school of thought in finance these days which regards the main task in fighting inflation as lying not with fiscal, but with monetary policies. It is a matter of opinion which is true. We try in South Africa to have what they call the right mix of monetary policy on the one hand and fiscal policy on the other hand, a balance between the two.

A mix-up.

A mix. If the hon. member is a bit mixed up, I cannot help it, but it is a mix between the various policies. I am sorry my hon. friend has not given me any more examples of what he meant. The hon. member for Hillbrow has, with very little success, tried to give us certain examples. He took the loan levy as an example. My hon. friend took as an example only two cases. He showed me as an example the taxing of pensioners and, what the hon. member for Pietermaritzburg (City) also mentioned, the taxing of the married couple where the wife has a pension. I do not want to go into these matters too extensively, but I merely want to point out that if I were to accede to the request of those two hon. members I would more or less be undermining the basis of our taxation. I do not want to go into detail, but I want to say that, broadly speaking, their request seems to be a very good thing. It appears to be kindly, courteous and warmhearted, but in fact it to some extent undermines the basis of our taxation. Once you undermine the basis of your taxation system, you will find yourself in trouble sooner or later. The hon. member referred for example to a wife who receives a pension. We have made provision for cases where a husband and a wife are both earners of an income. Formerly there was no exemption at all in such a case The two salaries were taxed as one at a very high rate. We have, in previous legislation, made an allowance by providing that, in certain circumstances, a deduction of R500 can be made in the case of a wife and husband who work. This R500 should not be deducted in the case of pensions, rents or what we call “unearned income”. Why is that the case? It is the case because we have been considering the case of the working woman. The woman who works and earns R500 is in a different position to the woman who sits back and receives R500 by way of a pension, rent or interest.

She worked for her pension too.

In the past, yes, but not in the particular year of assessment. She sits back and receives her R500, whereas the woman who works for a salary has to go out to work. She may have to pay for transport, for a housekeeper or for someone to look after her children. She has expenses and therefore she is treated in a different way from the woman who receives unearned income. That is a basis of taxation. We can discuss the matter, but it is one of the bases to which I referred the other day when I told the hon. member that I thought certain bases of taxation were being investigated by the Franzsen Commission.

Another matter which was raised was the taxation of elderly couples who receive a pension as well as a salary. I have all respect for the elderly couples, but why should I again undermine a basic principle of taxation in this case? The basis of our taxation is the income which is being earned. What is the difference between an elderly couple who receive a pension of R1,200 and an earned income of R1,800 per annum and a young married couple with children who also earn R3,000 per annum? Why should I grant exemption in the one case and not in the other? Is the young married couple with children who earn R3,000 per annum not in a very much more difficult situation than the elderly couple who also receive R3,000 per annum but who no longer have children to support and who have their savings of the past? I think my sympathy lies mainly with the young married couple and their children. It creates all kinds of difficulties when we discriminate on the basis of age or some of her artificial basis. The hon. member for Parktown also mentioned the case of divorced men. I shall go into that matter later.

The hon. member for Constantia again brought up the vexed question of clause 8, which refers to stock options. This is not a very easy matter to deal with, but we are in fact dealing here with cases where stock options have been given to employees as a form of remuneration. We know that this system has been abused. Instead of giving straight salaries or remuneration to an employee, an option was given to him to buy shares of the company at some later stage, thus making a capital profit without any tax as a form of remuneration. We honestly think that that type of stock option, which is a form of remuneration, should be taxed as remuneration. If an employee wants to have participation in the company he serves, it is a very good thing. But then, why does he not buy shares? The company could give him the opportunity of paying for those shares over a series of years and give him direct participation in the company by owing shares. However, this matter of an option to buy shares at a later stage was nothing else but a form of remuneration and all remuneration has to be taxed. In any case, we will go into the matter again, as the hon. member has mentioned it. However, as I see it now, we should not amend this clause.

Hon. members have asked me about the medical allowance. The hon. member for Wolmaransstad and the hon. member for Jeppes referred to this matter. It boils down to this that the R150 per year is too little, particularly in these times in which we find ourselves. We all remember the time when we had to save all our medical receipts. These receipts had to be handed in together with the income tax form. This was very cumbersome for the taxpayer and administratively, a very difficult task for the office. We do not want to go back to that system again. The best system is the system where there is a fixed maximum amount for medical expenses which is exempted from tax. When we had the system of receipts a fixed maximum amount of R250 could be deducted. Now this maximum amount is R150, and R250 in the year during which a child is born. How did we come to this amount of R150? It is quite true that there may be a year in which R150 is far too little for a particular man. But then again there are years in which R150 exceeds the medical expenses of a person. A survey has been made in regard to various years, ages and income standards. Unfortunately I do not have the figures with me to-day. From this survey we know more or less what the average annual medical expenses of people are. R150 is far above the average which is being spent medically, and I think R150 is quite a fair amount. If we should come to the stage where we know that the average has increased and where it is much higher than it is to-day, that will be the time to consider an increase in this medical allowance.

But medical fees have risen.

It will be taken into account. The survey was conducted about two years ago and it was found that the average medical expenses of people are fairly below R150. We can always go into the matter, but for the present I think the average is still below R150. It sometimes exceeds this amount in individual cases and sometimes it is lower.

The hon. member for Parktown has quoted clause 18 of this Bill which deals with the taxation of South-West African companies. I fully agree with my hon. friend that this is one of the most difficult clauses in the whole Bill. I think the hon. member has a fair idea of what it amounts to. South-West African companies were previously controlled by the South-West African Ordinance. Now they fall under this Act of the Republic. In the case of certain companies there was an overlapping period during the changeover. All this provision means is that where the two tax years overlap, a company which has already paid in South-West Africa in respect of this overlapping period should not again pay in the Republic. That is the first meaning of this clause. The second is that for that period that they do not overlap and where the South-West African company has not paid in South-West Africa, it shall have to pay in the Republic. This is what the meaning of this clause amounts to although one would not say so when one reads it.

I should like to ask the Minister a question relative to the deduction for medical expenses. Can medical aid subscriptions be deducted in addition to the R150 or not.

As far as I know, such contributions can be deducted by way of rebate.

The last point I should like to go into is the point raised by the hon. member for Jeppes in regard to the agreements about double taxation. We have been fairly busy during the last two or three years with agreements in regard to the avoidance of double taxation. As the hon. member has mentioned, quite a number of agreements have been signed. The hon. member referred to Australia as a country with which we have much in common. That is true. As far as I can remember, their basis of taxation is much the same as ours, i.e. income is taxed on a source basis. We have, therefore, the same basis so that double taxation really does not play any role in this regard. It does, however, play a role in the regard to dividends. Dividends are flowing from Australia to South Africa and vice versa. In Australia they have a withholding tax of 30 per cent I think.

25 per cent.

We have a withholding tax of 15 per cent. There is therefore a difference. But again it does not really affect the issue of taxation because dividends received by companies are not being taxed. In any event, in regard to the avoidance of double taxation, we have entered into quite a number of agreements during the last few years. The basis we use for our agreements has been laid down by the O.E.C.D., on the model which they give. We think most of these agreements are not to our advantage. I say so for several reasons. We have stopped for the time being signing any more of these agreements. We asked the Franzsen Commission to go into the whole matter of Government taxation and the avoidance thereof and we are awaiting its report. We have a suspicion that the O.E.C.D. basis is not the right one for us. We are not an investing country in the outside world and we might pay out more in dividends than we receive. But we are going into the matter.

Mr. Speaker, I think I have dealt with all the important questions put to me; the others we can discuss further in Committee Stage.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

This Bill amends the Transfer Duty Act, 1949, the Cinematograph Films Tax Act, 1960, the Stamp Duties Act, 1968, and the Revenue Laws Amendment Act, 1969. The majority of the amendments are entirely of an administrative nature. All the provisions of the Bill are fully explained in the explanatory memorandum which has been made available to hon. members and, consequently, I propose to touch only on the few provisions involving principle.

Inspections by my Department have brought to light that the stamp duty on hire-purchase agreements is being avoided on a large scale. Some dealers insist on customers completing and signing hire-purchase agreements and very often even collect the stamp duty, but they themselves do not sign the documents unless the purchasers are in default and action has to be taken for the enforcement of the agreement. They claim that the documents cannot be said to have been executed until they have been signed by them and are, consequently, not subject to duty. Clause 9 of the Bill plugs this loophole and the agreements will henceforth require to be stamped when signed by the customers. A second amendment makes any person who for business purposes holds or retains or makes use of any unstamped document, liable for the unpaid duty thereon as well as any penalty incurred for the late stamping of the document.

The stamp duty payable in respect of the registration of transfer of a marketable security, is R1 for every R100 of the consideration passing. The minimum duty is thus R1 and cases have arisen where the duty equals the consideration—for example, shares in a cooperative society which have a fixed value of R1. The rate of duty is being changed to 10 cents for every R10 of the consideration.

An exemption from stamp duty which would otherwise have to be borne by the Rand Water Board is being introduced. The board already enjoys exemptions in respect of income-tax and transfer duty and there is no real reason why this should not be extended to stamp duty.

As hon. members are aware, the Transfer Duty Ordinance of South-West Africa was repealed with effect from the 1st October, 1969, and transfer duty is payable under the Transfer Duty Act of the Republic on acquisitions of property in the Territory after that date. Liability for Transfer duty usually arises on the date of acquisition of property but there was an exception under the South-West African Ordinance in the case of acquisition of property under the land settlement laws of the Territory. In those cases the date of acquisition was deemed for purposes of the Ordinance to be the date of issue of the title deeds by the deeds registry. There have been instances where property was acquired under the Territory’s land settlement laws before the 1st October, 1969, but the title deeds were issued only after that date. There can be no liability for duty in these cases under the Republic Act since the date of acquisition was prior to 1st October, 1969, and provision is now being made for duty to be collected in these cases under the South-West African Ordinance as though it was not repealed.

We have no objection to this Bill and we support it. Clauses 1 to 3 are merely administrative measures, which will save a considerable amount of work. Clauses 7 to 9 close certain gaps in the Act which we agree with the hon. the Deputy Minister should be closed and we have no objection to that. There is only one clause on which the hon. the Deputy Minister might give us some information. That is clause 4, Where the requirement as to notice in the Gazette is now being deleted with regard to the cinematograph films tax. Payments of the tax under the Act must be accompanied by declarations prescribed by the Secretary for Inland Revenue, and the requirement as to notice in the Gazette is deleted. I would be glad if the Deputy Minister could tell us something more about that. We are satisfied that the minimum provision in regard to the securities tax has been amended, because it has been causing hardship. Otherwise we find the Bill acceptable and we will support it.

In reply to the question put by the hon. member for Parktown, I wish to say that this arrangement will be made administratively. This, too, merely eliminates extra work in connection with publication in the Gazette.

Motion put and agreed to.

Bill read a Second Time.

I want to begin by stressing that we on this side of the House realize and accept that it is the duty of the Opposition to criticize the Government and its policies. We welcome constructive and objective criticism. We will never complain about such criticism. We only complain when attacks against us are personal, unfounded and far-fetched, or when the Opposition squeal when we hit back.

We also agree that internal matters affect foreign relations, although we are convinced that concessions to outside pressure are not the answer to our problems. We also believe that most of the concessions on which the Opposition insist are in conflict with our policies and may create very dangerous precedents. I am in fact convinced that our position in the world will eventually depend on our ability to solve our internal problems in a practical, satisfactory and fair manner, as we are actually in the process of doing. I honestly do not think that our domestic policies should be discussed in detail during the debate on foreign affairs. There are many other and more appropriate opportunities to discuss in detail matters like the 180-day or the 90-day detention law, the granting or the refusal of visas, Bantu education, etc. This does not imply that internal policies should never be referred to, as was done by several hon. members on this side of the House, for instance by the hon. member for Brakpan, who indicated the progress made in the application of our domestic policy by the Prime Minister and his Government. It was also done by the hon. members for Prinshof, Wonderboom and others who made very useful and very interesting contributions in this connection.

Sir, the hon. member for Wynberg mentioned her own difficulties and her own efforts to set the record straight during her tours overseas. We appreciate the hon. member’s efforts in this connection. We and all our representatives abroad are constantly trying to do these people are doing an excellent job of exactly the same. Sir, I can assure you that work. I have personal knowledge of it; I have knowledge of the quality of their work; I see them and visit them regularly. I also see the work done by officials in the Department of Information who co-operate very closely with my own officials. But one of our main problems in this connection is that the news media throughout the world to-day are to a large extent under the influence of Leftists or ultraliberal elements who are not well disposed towards South Africa. In the second place most of our enemies and critics are simply not interested in the real facts; they simply do not want to hear the truth, but that will not deter us from continuing to put the record straight and from continuing to state South Africa’s case.

*Mr. Chairman, yesterday my visit to London was once again raised during the debate, in spite of the explanation which I had specially given in regard to the timing of this visit. I want to repeat that it was a private visit. I did not try to give any publicity to it. I did not want to ask for any interviews, for I knew that the new Ministers had barely moved into their offices. But my presence there on a private visit leaked out, and it was informally brought to my notice that discussions with two British Ministers—and I am well known to many of them—would be welcomed. This was also apparent from various authoritative Press reports which appeared in various British newspapers on 23rd June. For instance, here I have a report which I want to read from the Financial Times—

This also appeared in the Guardian and the Times and various other leading British newspapers. The charge that I had arrived there impetuously. which was picked up by the South African newspapers and also by the hon. member for Bezuidenhout, had its origins in a letter published in the London Times of 24th June, the following day, a letter written by a Labour Member of the House of Lords, i.e. Lord Kennett. Incidentally, it was in this very same letter that Lord Kennett made the ridiculous statement that by sailing up our rivers South African warships would penetrate the interior and that the non-Whites would be bombarded from those ships. The British Press rightly poked fun at this, and a very fine and striking cartoon on this matter appeared in, inter alia, the Evening Standard.

The hon. member for Bezuidenhout wanted to know why there had been in the Estimates an increase of almost R1.3 million under my Vote. This increase is mainly attributable to the following factors: In the first place, there are salaries and allowances which were responsible for an increase of R490,000. In turn, this head has four sub-heads; firstly, increased foreign service salaries as a result of rising living costs abroad; secondly, provision for new missions; thirdly, increased salaries for locally recruited staff, and, fourthly, 47 additional posts in my Department, in view of the fact that the activities there have been expanded considerably. I may mention in passing that in recent times my Department has availed itself of the services of workstudy experts as well as those of members of the Inspectorate of the Public Service Commission. We employed their services in order to ascertain how the increased working load could be lightened. The Public Service Commission co-operated very commendably with us, and I want to thank them here for their co-operation in that regard, but the re-organization which has resulted from this, has had the effect that in the future, too, the staff of my Department will still be enlarged to a considerable extent and that more funds will have to be requested for this purpose. In the second place, this amount is made up of the subsistence and transport allowances, which are responsible for an indrease of R148,000, office equipment to the value of R119,000 and an increase of R423,000 in the case of technical assistance. The hon. member for Bezuidenhout raised the point that the provision under this sub-head had virtually been doubled. However, it must be borne in mind that additional provision for this purpose was made in last year’s Additional Estimates, i.e. additional to the R423,000 mentioned by him. In reply to a question put to me by the hon. member on 18th February, 1970, during a discussion in this House, I furnished the particulars in respect of the additional provision under this sub-head at that stage. In practice it amounted to a transfer to the Foreign Affairs Revenue Vote. Previously this amount did not fall under this Revenue Vote. In February already, during the Part Appropriation debate, I explained this matter fully.

The hon. member also wanted to know to what countries co-operation was being extended in this regard. I shall reply to this question in categories. Co-operation is being extended to approximately a dozen African countries and more or less half a dozen countries in South America and elsewhere. Definite projects are not involved, but a series of activities is being covered, such as the provision of technical staff in almost two dozen spheres; in the sphere of agriculture, five to six different fields; medicine, different fields; mining, geology, administrative, professional and jurists, as is done in the case of Lesotho, training facilities and post-graduate studies. If I had to furnish a detailed list, it would run into many pages and require a great deal of research In some cases the other governments cover parts of the local expenditure, and in other cases they do not. In the case of such assistance we on our part never ask for anything to be done in return, but in certain countries, in South America for instance, they have in turn made facilities available to South Africans again.

The hon. member also wanted to know whether all of our honorary representatives in the various countries were citizens of the countries concerned. Normally this is the case, but this is no requirement, and in some cases this is in fact not the case. He also wanted to know whether in my opinion such representation in the absence of other representation meant diplomatic relations with the country concerned. The reply to that is “Yes”. The concept of “diplomatic relations” is dealt with, amongst others, in a standard work. This work is entitled “A Manual of International Law” and was written by Schwarzenberger. I quote: “Even if the existence of a state as an international person is recognized by another state, this does not mean that a state is bound to have dealings with any specific head or government of a recognized state. If it does, fin other words, if it does have dealings with any specific head or government of a recognized state) it maintains diplomatic relations with that state. If not it suspends them.”

It follows from this that it is not possible for a country to have any form of representation in another country, unless diplomatic relations are in fact being maintained between them. Viewed the other way round, it also means that it is possible for two countries to maintain diplomatic relations with each other without the exchange of representatives. I do not think it is wrong or misleading to attach the wider interpretation to the term “diplomatic relations” which I am doing here and which is commonly being done. On the contrary; in view of the deliberate attempts at isolating South Africa, it is a good thing to point out that we are in fact not as isolated as all that and that in some way or other we do have contact with a large number of governments. I have already intimated to the hon. member for Bezuidenhout that I shall show him a list of states, which I do not want to make known here in this House, and I am repeating that offer now.

The hon. member wanted to know about the increase in the overall provision for Brazil. As hon. members are possibly aware, the Brazilian Government is in the process of moving its capital city from Rio de Janeiro to Brazilia. While the Estimates foR1970-’71 were being prepared, the indications were that this move would have to take place during the said financial year. Accordingly financial provision for the establishment of a mission in Brazilia had to be made, whereas it would remain essential to go on maintaining a consular office in Rio de Janeiro subsequent to that. According to the latest indications it appears as though the opening of the new office in Brazilia will only take place during the 1971-72 financial year, in which case the matter will be rectified by way of the Revised Estimates.

In the case of Greece there was a decrease of R900, about which the hon. member inquired. This is largely attributable to the fact that it was expected that during the present financial year the Head of Mission post would be vacant for a few months, which would then have brought about a decrease under the various sub-heads. In the meantime a new Head of Mission has been appointed, and he will assume his duties towards the end of this month. As regards the Lebanon, there is a decrease of R4,200. This is attributable to the fact that a married, subordinate official on the staff was replaced by an unmarried official at a much lower foreign service salary. In respect of Uruguay there was also a decrease of R1,700. The Estimates foR1968-’69 were prepared merely as an estimate prior to this new mission being opened, whereas it appeared later on that under several sub-heads there had been over-estimates which were rectified in the Estimates for 1970-’71 in the light of the actual expenditure incurred subsequent to the opening of the mission there.

The hon. member for Bezuidenhout wanted to hear my comments on the statements made by the hon. member for Wonderboom on human rights. I agree with the hon. member for Wonderboom in so far that if, as far back as 1948, we had made as much progress in respect of the realization of human rights as we have at present, we could at that stage have given consideration to endorsing them, with reservations which are vital, cardinal, to us. Under those circumstances we would in fact have been able to do so. I want to point out that in any case, no country in the world can accept and implement the declaration in every respect. Human rights is a matter on which I have often commented in public. I continually emphasize the fact that it is also our endeavour to realize human rights in our country, and that we have made a tremendous deal of progress in that regard. I can give the hon. member the assurance that my Department and I are constantly paying attention to this matter.

I should like to explain now that I did not mean that the Opposition were taking a delight in South Africa’s isolation. My intention was to say that when one was listening to them, one could not help gaining that impression, i.e. that they were perhaps taking a delight in it.

If you know the impression is wrong, why then do you say it?

That is the impression I have gained. It is like that. The hon. member for Orange Grove and other members as well, the hon. member for Bezuidenhout amongst others, complained that I was unwilling to give detailed replies to questions which they had put to me here. The hon. member for Bezuidenhout referred to questions dealing with the exchange of notes between the Government and other governments. This hon. member ought to know that decency and good manners, not to mention diplomatic practice, require that the contents of confidential notes between governments ought not to be disclosed unilaterally by either of the two parties, i.e. without the knowledge and consent of the other.

May I ask whether they were marked “confidential”?

Yes. All those notes are confidential. Common courtesy requires that, before I make a statement subsequent to having left the office of one of my colleagues, I should consult with him on what we are going to tell the Press and whether we may disclose the contents of those talks, although it is not said beforehand that we are going to hold secret talks. In the replies which I have been giving in this House, I have always tried to furnish hon. members with as much information as possible, without making myself guilty of this discourtesy. It is not a case of my liking to hold back information.

As regards the particular question which was put by the hon. member for Orange Grove and to which he referred, it was not clear to me and my department what he wanted. In replies given me to previous questions, I furnished all the particulars in regard to the diplomatic suburb. All the particulars which had been requested, were furnished. We thought he had in mind accommodation for diplomats when he used the word “accommodation”. For that reason I gave him the reply I did. But, in the event of an incorrect interpretation having been attached to his question by me and my Department, I referred at the same time to a previous reply in which I had furnished particulars in regard to buildings, i.e. accommodation, including particulars in regard to the item which he had in mind. If he had taken the trouble to look up that reference of mine in my reply, he would have found it to contain the information he wanted. Subsequent to that I explained to him personally what the position was. At that stage he was satisfied. Now I do not know why he once again raised the matter in such an unpleasant manner.

The hon. member for Orange Grove also kicked up a great fuss about an alleged “agreement or arrangement”—these are the words which appeared in his question—between my department and the S.A.B.C. in regard to daily transmissions of news and commentary about South Africa to South African diplomats abroad. I think he even accused me of a misrepresentation. In reply to a question I denied that such an agreement or arrangement had been made by my Department, and I am now denying it again.

May I ask a question?

Let me just finish my point; then the hon. member will perhaps not want to ask his question. In the annual report of the S.A.B.C. it is being suggested that there is a broadcast for South African diplomats and South Africans abroad. It stands to reason that our diplomats also listen to transmissions broadcast to foreign countries. In particular they listen to broadcasts on South Africa. Like many other people they, too, listen to the broadcasts of the S.A.B.C. In fact, this forms part of their task to keep themselves informed of what is happening in the world and in South Africa. In a number of our missions abroad there are even facilities for receiving broadcasts on the radio and making tape recordings of them in order that the Ambassador and his staff may listen to them later on, when it is more convenient for them to do so. It goes without saying that the S.A.B.C. is aware that many of our diplomats are listening to their news broadcasts. I really fail to see anything wrong in the S.A.B.C.’s stating in their annual report that diplomats, like any other South Africans, listen to these broadcasts.

They say that it is a special broadcast of a quarter of an hour a day for the diplomatic service.

Yes, and for South Africans. If it had been for diplomats alone, it would have had to be on a secret transmitter. That service is for the whole public. The only conclusion I can draw in this regard, is that hon. members are complaining about the manner in which I reply to questions because they cannot extract poison from my replies.

The hon. member for Bezuidenhout asked me to make a statement on South Africa’s membership of the U.N. I am sorry, but I have no intention of doing so. I do not want to waste the Committee’s time and I do not want to waste the country’s money by unnecessarily prolonging the session with unnecessary repetitions. If hon. members would take the trouble to look up their Hansard, they would find a lengthy statement by me on the U.N. It extends over four columns, starting in column 5442 on 7th May, 1969. In those columns I furnished a detailed explanation of the reasons why the Government believed that it was in the interests of South Africa to remain in the U.N. The Government’s attitude is still the same. Other hon. members on the other side, whose memories are also as short as that of the hon. member for Bezuidenhout is, would be well advise to read that statement again.

Do circumstances never change?

Our attitude is still the same.

Is that your reply?

Yes. there you have the reply.

The hon. member for Von Brandis referred to what he called the “border dispute with Botswana”. In this regard I should like to inform the Committee that when Botswana as an independent country became a member of the U.N., it had to define its boundaries. According to Botswana’s definition of their national boundaries, they would have had a common boundary with Zambia. If we had not done anything about it, it would have mounted to our tacitly agreeing to Botswana’s boundary having been moved at the expense of South-West Africa. Of course, we could not allow this. We cannot allow something like this. That is why we sent a note to the Government of Botswana. It is very important to know that this note had been sent before the proposed road scheme was announced. This is purely a juridical problem. It has nothing to do with the proposed road. I can give the Committee the assurance that this is something which will be considered further through the normal channels in a quite dispassionate manner. As regards the proposed road, I mentioned yesterday already what steps had been taken by the Government on our being approached by the Government of Zambia in connection with aerial surveys. I want to emphasize here that we do not interfere in the affairs of our neighbours. In fact, if such a road were built by Botswana, we would be able to make use of it, just as Botswana and other neighbouring states are also making use of our roads. As regards the crossing at the Zambesi, I may just say that a ferry-boat service has been in operation there for more than a decade. Apparently this service will still be used once the road has been built. Our South African Government does not interfere with the normal traffic at that ferry. But, just as we did in the past, we shall continue to ensure that South Africa’s security, our safety, is not threatened by it.

Before I resume my seat, I just want to deal briefly with the accusation that the Government’s foreign policy, but especially our conduct in regard to South-West Africa, is too defensive, that the Government is not taking constructive action, and that the Government is not displaying initiative. Without elaborating on this matter, I want to remind hon. members of all the things we have done in this regard. In the first place, I want to remind them of the fact that the first initiative was taken by General Smuts in 1946, when he proposed that South-West Africa be incorporated with the Union of South Africa. The outcome of this is well known. This application was rejected, and the U.N. immediately requested that South Africa should place South-West Africa under the trusteeship of the U.N. The second initiative was taken by the National Government in 1950-’51 in regard to the ad hoc Committee regarding South-West Africa. In an attempt at removing South-West Africa from the international arena, we negotiated with this committee for two years. We made certain constructive proposals in this regard. Those proposals were rejected. Then there was the Good Offices Committee of Sir Charles Arden-Clarke in 1957 to 1959. In 1958 the National Government invited this committee for discussions. Two of its members came to this country and visited South-West Africa. The proposal put forward by the committee —for instance, the possibility of partition— was summarily rejected by the U.N. In 1959 the Government offered to make available, for the information of the U.N., Blue Books and other reports. The Government also indicated that it would be prepared to consult with an ad hoc body, which would consider all proposals in a constructive manner. This was not accepted either. In 1960 we repeated this offer. But once again it was declined.

This was followed by the invitation extended to the chairman and vice-chairman of the Special Committee to visit the Republic and South-West Africa for talks, i.e. the Carpio Commission. What was the outcome? The Pretoria Communique was thrown out of the window by the U.N. Then there was the appointment of the Odendaal Commission and in 1964 the publication of the Odendaal Report, and subsequent to that the acceptance and implementation by the Government of substantive proposals for the development of South-West Africa. This is an initiative which can be discussed for hours on end. Just think of the gigantic Kunene Scheme. Furthermore, I can remind hon. members of the invitation extended to the Court to conduct an inspection in loco, which was not accepted either In 1966, after the court case, South Africa put forward its case at the U.N. at greater length than had ever been done before. In spite of that and in spite of the finding of the Court, the U.N. passed its Resolution No. 2145, in terms of which the U.N. would terminate the old mandate over South-West Africa. In 1967 we once again presented our case fully at the U.N. In 1967 we had the publication of the South-West Africa Survey, of which the hon. member spoke with appreciation. The tenor of that survey was that South Africa had nothing to hide; we wanted to inform the world, including the U.N. We invited ambassadors of all countries represented in the Republic to ascertain what conditions in South-West Africa were. Several of the ambassadors did this. Very recently one of them availed himself of that invitation once again. In 1968 I wrote a letter to the Secretary-General, in which I furnished a comprehensive analysis of the Terrorism Act of 1967 and a survey of the trial of the terrorists. In the same year, in another letter, I said the following to the Secretary-General—

The indication given on the part of the Secretary-General was that if he were to send somebody to have discussions with us, it could only be for the purposes of the implementation of Resolution No. 2145, i.e. on how the administration of South-West Africa could be taken over from us. If the hon. member for Bezuidenhout wants me to display further initiative, does he want me to follow up this indication given by the Secretary-General or what does he want? In 1969, i.e. last year, the South-West Africa Survey was brought up to date and sent to governments and international organizations, including the U.N. At the moment the legal team in my department are working on the reference of our case to the International Court of Justice. In spite of all these things, the hon. member for Bezuidenhout is levelling reproaches at me and the Government and saying that we are not displaying any initiative. One can hardly conceive of anything more irresponsible.

In passing I want to refer here once again to the Botswana border and road problem. The hon. member for Von Brandis want us to enter into an agreement, possibly in regard to an internationally guaranteed corridor. In view of the fact that this hon. member served in the Department of Foreign Affairs for such a long time, I find it difficult to imagine that he can be so naïve. I just want to refer him again to Resolution No. 2145 of the General Assembly, and ask him whether it is really possible for him to be serious about this proposal. He will also forgive me if I do not elaborate on this matter any further, for this can merely complicate the position.

The hon. member for Bezuidenhout and his colleagues did their best to disparage me and, along with that, to disparage the Government as well. Especially the hon. member for Bezuidenhout did his utmost, but his utmost is not good enough for this purpose. The hon. member for Bezuidenhout and the hon. member for Von Brandis levelled the accusation at me that I was guilty of complacency, of over-optimism, and that through my speech I had created the impression that we in South Africa had no reason to be concerned about our future. But, surely, this accusation is totally unfounded and unfair, and I must reject it. I am continually warning against the threat facing us. I am continually warning against smugness. I am continually warning that there may be setbacks and disappointments in store for us, and in the speech I made the day before yesterday I stressed these dangers time and again. I called attention to the necessity for us in this Parliament to present a united front to the outside world. I said that no country could afford not to take any notice of i‘s neighbours and of the outside world. I tried to put the feud against South Africa in its true perspective, and I called attention to the dangerous role being played by the communists in this regard. I made an appeal to our young people to take cognizance of these dangers and threats and to throw in their full weight along with us. Hon. members on this side of the House interpreted my speech in the right spirit and supported me. Virtually all of them emphasized the dangers, just as I did. I am thinking of the speeches made by the hon. members for Algoa, Brentwood, Middelland, and the hon. member for Springs, who gave a fine exposition of the conduct of the communists in Africa. To all these hon. members I want to convey my sincere thanks and also to other hon. members who made useful contributions in the course of this debate. Sir, if there is anybody who knows how many problems South Africa has in the international sphere and how seriously we are being threatened, then it is I, as I have for the past 10 years been very actively concerned in these matters. It is my duty to warn against dangers, and I do so regularly, but it is also my duty to point out the progress we have made, and this I have done. However, the Opposition refuses to admit that we have made any progress.

Oh no. You did not listen.

And, as I did when I started, I also want to conclude on an optimistic note, not only because I am an optimist by nature, but also because I try to be a realist and because my optimism in this case is based on realism. We are fighting against formidable enemies whom we may not underestimate, and it often happens that they achieve success against us. If often happens that we suffer setbacks, but we are also making progress. We are also achieving success, and generally speaking we are more successful than our enemies are, inter alia, because we are waging the struggle with a greater measure of inspiration and conviction. We are also fighting for a much nobler cause, i.e. our continued existence. It is no wonder, therefore, that we are gaining ground and that we will triumph in the long run.

Vote put and agreed to.

Revenue Vote No. 23.—“Labour”, R10,000,000, and S.W.A. Vote No. 9.— “Labour”, R75,000:

May I ask for the privilege of the half-hour? Sir, I approach my task to-day with a feeling that I will be giving the hon. the Minister of Labour an opportunity to do what his followers have been expecting from him for some time. When it was expected that he would take part in the Budget debate in the week starting 17th August, his Press announced under great banner headlines that the Minister would make a major declaration on policy during the Budget debate. We are still waiting, Sir. I want to express the hope that the Minister will take the opportunity to-day to fulfil the expectations of his Press and his followers and that he will give us an important statement on the policy the Government intends to follow in matters of labour, particularly on the shortage of labour in South Africa in the years to come. Sir, there is no doubt that this problem of the shortage of labour in South Africa, skilled and semi-skilled, and in some cases unskilled, is the most important internal problem in South Africa to-day. It is a problem that we of the Opposition have been aware of for a long time, and of which we have warned the Government insistently although with very little result. Indeed, I was interested to see the other day when I did some research that as long ago as 21st June, 1961, my Leader, the hon. member for Rondebosch, made a speech in this House in which he dealt with this matter and in which he said, amongst other things—

Further on he said—

Then again, Sir, before the election in 1966, the Leader of the Opposition made an important issue of this growing problem of the shortage of labour in South Africa—the artificial shortage of labour I should add. The Leader of the Opposition said—

That, Sir, has become more true now than ever before in our history. I have in my hand a sheaf of Press reports and comments, which I could increase to ten times this size, from authorities who warned the Government about the growing importance and urgency and the growing extent of this problem. We have had warnings from the trade unions. Mr. Murray of the Boilermakers’ Association warned us that in every branch of industry there is a serious shortage of workers. The Minister during this Session, on Wednesday, 19th of last month, gave us a little insight into one of the most highly confidential documents in his Department, that is the results of the regular manpower survey that he conducts. He told us that there was a shortage of 2,000 motor mechanics and of 6,000 workers in the engineering industry alone. That is the position in those two industries only.

It would be very interesting to know what the shortage is generally. The Trade Union Council of South Africa has calculated that there is a shortage of 70,000 odd workers at this moment and I can tell him, Sir, that these figures are conservative. I can tell him that people in the Motor Traders’ Association laugh at him when he talks of the shortage of 2,000 mechanics. They say that you can double the number and double it again and that the men would be absorbed so fast in the motor repair industry that you would not notice them. The Federated Chamber of Industries and the Association of Chambers of Commerce of South Africa and the trade unions have all spoken. I see, for example, that Dr. Krogh of the Chamber of Industries says that uncertainty over labour is the most important single factor that is slowing down our industrial development. When we quote these authorities we get the reaction that we have had recently from hon. members opposite, including the Minister, that these authorities are stooges of the United Party. I want to tell the Minister to-day about a few more stooges of the United Party who speak with the same voice. I want to quote Mr. B. P. Marais, President of the Afrikaanse Handelsinstituut, who said on 20th August that—

He made this plea when addressing the quarterly meeting of the Johannesburgse Sakekamer, adding the qualification that such a step should not harm the idea of segregation. He said that as the economy developed and the standard of living rose, the white worker gradually moved upwards and new work opportunities came into being. There would always remain a percentage of white South Africans who could not or who would not develop further. Then he added that they should be specially protected. He is not a stooge of the United Party, but an independent economist.

Here I have another example of a businessman, Mr. Felix Starke, the chairman of one of the great printing companies in South Africa, who warned us on 14th August, that the printing industry will have to solve its labour problems which were resulting in “chaotic conditions”. Here I have other examples. Here I have another “stooge of the United Party’, Professor S. Pauw, who is the principal of the University of South Africa. In May this year, speaking at the graduation ceremony at the University of the North at Turfloop, he said that the importance of the economic infra-structure of the country was often stressed. I quote—

Then he said—

This is a voice of the United Party, but certainly not a “stooge’ of the United Party. Here I have a statement by Dr. François Jacobs, the managing director of Union Steel who had been appointed to that job by the Government who owns 51 per cent of the shares. Speaking at the manpower conference in Durban quite recently, he said—

His first appeal was to the Government for better planning procedures. He said—

Again we have the policy of the United Party. Would (he hon. the Minister call Dr. Jacobs a “stooge of the United Party”? During the last session in the provincial council of the Transvaal, Mr. Van der Merwe Brink spoke, almost with tears in his eyes about the “bleak situation of a perennial staff shortage”. Mr. J. L. U. Liebenberg, the president of the Railway Artisans Staff Association, has been described by the hon. the Minister of Transport as one of the most enlightened trade union leaders in South Africa, and he said in June of this year––

Orderly?

Most certainly orderly. He added—

He means orderly, but if the Government goes on on its present course, the “order” will make place for bomb explosions. That is Mr. Liebenberg’s warning. Here I have the Handelsinstituut speaking with the voice of the United Party. The immediate problem according to Mr. A. J. van Wyk of Sanlam, speaking at the conference of the institute in May of this year, is that by 1973, allowing for a 6 per cent growth rate, there will be a shortage of 65,000 white workers and at the same time there would be a surplus of 98,000 non-white workers. I quote—

Again we have good and sound United Party thinking. Surely, Mr. Van Wyk is not a “stooge of the United Party”. Only yesterday there was a report of the Industrial Development Corporation, which is an independent agency of the Government. Therein they expressed deep concern about the shortage of the labour in South Africa and the retarding effect upon our economy. I do not think we will further the discussion in this House in any way if we depreciate the constructive critics who are concerned with the real problems of South Africa and if in doing so we refuse to face the seriousness of the problems in South Africa.

This crisis is having serious effects on South Africa. We find that because the shortage of labour is being artificially stimulated, especially by measures like the Physical Planning and Utilization of Resources Act, investments in South Africa are decreasing. I have here an article which appeared in the Financial Gazette, certainly not a United Party organ, of July the 16th, in which, under the heading “Spotlight on the Physical Planning Act”, the following is said—

This decline has not ended; it is continuing. In a country which creates its own capital for investment now at the rate of R1,000 million a year, it becomes a very serious position. If you find that your entrepreneurs, because of the uncertainty on a cardinal issue like labour, an uncertainty created by the enactments and the policies of the Government, become so nervous, uncertain and unsure of their own future that they will no longer invest sufficiently to maintain the growth rate to which South Africa is entitled and which it needs to solve its problems, then you have a serious situation indeed. The hon. the Minister cannot afford to play politics with a problem such as this, as he tended to do in the recent past. It means that there is undue competition for labour in South Africa and this leads directly to inflation. It means that many of our workers are getting higher salaries and wages which nobody begrudges them but which has the result that the value of money is declining so quickly that the increases become like the apples of Sodom which turned to putrefaction before they could be eaten. The time has come that we should give serious thought to our declining growth rate, which we cannot afford in South Africa. We can not afford to see our economic progress slow down and to see the power we need to solve our problems, diminish because of stupid Government policies. We need a faster growth rate than most countries of the world because we have a tremendous responsibility in South Africa, namely that of fighting poverty among our people. We must fight poverty among our people of all races. I do not believe that we can find any political solution to our problems in South Africa, any solution which will guarantee peace if it is a political solution that seeks something impossible, like a permanent compromise between the poor and the rich and between the haves and the have-nots in our society. Any solution will be a dangerous one until we tackle that problem. We see it in the United States of America to-day. When I was there 20 months ago, I was told by a university professor of Harvard when I talked to him about these things that the real problem was that the American Negro whose political and social rights were all now guaranteed, still had an income only two-thirds of the income of the average white man in the United States of America. He said, that that was the source of their grievances and of the maladjustments which exist. We have a worse ratio in South Africa. Any solution we arrive at before tackling the problem of poverty in South Africa will create new dangers. Imagine a policy like that of the Government fulfilled while poverty remains our greatest problem. It will mean that we will have poverty-stricken independent states on the borders of South Africa supplying the labour to our industries filled with grievances and a sense of the injustice, empowered to use the weapon of diplomacy and all the other weapons available to an independent state, including the weapon of control over our labour force, in order to further and to seek an adjustment of those grievances. Imagine the policy of the Progressive Party being applied in these circumstances, namely that of giving growing political power on a basis of merit to the non-white people while they are poverty-stricken and while discrimination in favour of the other races in this country is obvious. What would they use their political power for? To maintain our standards, or to demand that the voting standards be lowered, so that they can use political power to remove the real injustice of poverty in South Africa? For that matter, Sir, a policy of federation will have similar problems, because the political power, of whatever nature, that you have given to people who suffer an injustice, will be used to redress that injustice by every possible means. So I say that the greatest problem, the greatest need before South Africa, is that we should use our human resources to make ourselves materially strong enough to attempt the final and the true solution to our problem. While I do not believe that the Government’s solution will ever become a reality, I want to say, for argument’s sake, that they cannot hope even to apply their own policy, unless the means of their disposal is doubled and more than doubled, and unless that happens quickly. But we find that just the opposite is happening. We find the following sort of voice coming to us. I have here a statement, again not by a “stooge” of the United Party, but by Die Handelsinstituut, which in its organ, Volkshandel, tells us—

This is not all. They continue—

How can we maintain our rate of growth? How can we hope to achieve the task that confronts us as a multi-racial state, seeking a solution, if we are going to be so wasteful and if we are going to fall so far short of our potential and our need of manpower to develop the resources with which Providence has blessed South Africa? The fact is that South Africa can be great. The fact is that South Africa can be rich and powerful enough to solve her problems, provided the Government changes its outlook or, preferably, provided the people get rid of this Government, which has become the major obstacle to progress in South Africa. The Leader of the Opposition can confidently and truly show that South Africa by 1990 can be one of the major trading nations of the world.

We are going to do it anyway.

You cannot become one unless you use the human resources at your disposal. When you have a hard-headed businessman like Dr. Frans Cronje, telling South African audiences and audiences overseas that, provided we remove the brakes applied to our economy, South Africa can become the economic miracle of the fourth quarter of the 20th century, you find you are faced with a Government who refuses to give real attention to this matter. Therefore, to-day I want to support, on behalf of the labour group of the United Party, the plea made by our leaders, particularly the Leader of the Opposition, by commerce, industry, the trade unions, Afrikaans and English organizations and private business enterprises that we should accept that the labour pattern in South Africa will have to be altered.

But how?

I am coming to that. They feel that there should be a crash programme to educate non-Whites and to employ them in positions which the white people have vacated, or which they are only filling because there is nobody else to fill them.

Are you including Douglas?

Yes, I include him and he includes himself. He will speak for himself. I was pointing out that, according to these people, the white worker should be raised to higher notches and a higher status in employment. In the process the weak who may not be able to fit themselves to the major adjustments which will have to be made, will, if, necessary, be protected. They can be protected in the following ways: By continuing to implement the rate for the job wherever there is a danger of competition; by giving the right of appeal to the industrial tribunal to any worker who feels that he has suffered as a result of the adjustments: by giving protected employment to those who cannot rise higher owing to physical or mental disabilities; and by guaranteeing a minimum wage. This was in fact suggested by the Financial Mail, a liberal financial paper, in an article of 15th May, when it made a survey of our labour problems. Above all, this can be done in the following way—and this is the answer to the question: “How?” It can be done by using the machinery for collective bargaining which, thanks to the thinking of General Smuts in 1924, has become a permanent part of industrial relations in South Africa. This can be achieved by encouraging management, organized employers and organized labour to get together around the table and to work out plans for a change in the labour pattern of South Africa, which will enable our country to make the fullest use of the human resources available to it. We have the machinery. We should use it. We need not be pessimistic. We are always asked by members on the other side of the House: What will you do if the trade unions refuse? Sir, we on this side of the House refuse to accept that our trade unions are irresponsible and unpatriotic. We also refuse to accept that any Government would make such changes against the wishes of the trade unions, because one thing we cannot face in South Africa is a dispute in industry which is based not on economics but on questions of race. It will be an explosion which will end the social order as we know and understand it in South Africa.

Sir, I want to give you an example. I read to my joy that only a week or so ago the Confederation of Labour, the most conservative organization of trade unions in South Africa, announced that it would co-operate in a plan to change the labour pattern in South Africa and to allow non-Whites into more responsible jobs which they have not done in the past. We are always told that the Municipal Tramway Workers’ Union in Johannesburg is an example of intransigence. Of course they have been difficult. They have negotiated and bargained hard. They are not giving away anything for nothing, but the problem in Johannesburg has become so acute that the trade union and not the municipality, have put the case to the industrial tribunal for arbitration so that a solution can be found to the problem of whether non-Whites should be employed and how they should be employed. This was done on the initiative of the trade union. That is what members forget. I can confidently say to-day that this problem in Johannesburg will be solved, thanks to the responsibility of the trade union through the machinery for industrial conciliation that we have in South Africa, which include arbitration. I have no doubt about that whatsoever. What is, however, urgently necessary in the interests of all the poeples of South Africa, including the white people of this country, is that we should tackle this problem seriously, with the intention and the determination to succeed, and with clear objectives. We must not do what the hon. the Minister unfortunately did on the 19th of last month, when he tried to score a few political debating points against his opponents. On that day the Minister laid down certain conditions that puzzle me very much. I may be mis taken, because it may have been the Minister of Posts and Telegraphs, but in any case, it is all part of the Government’s thinking in this regard. One condition was that non-Whites should not serve Whites. The hon. the Minister of Posts and Telegraphs made a tremendous fuss about whether we wanted to have non-Whites in the telephone exchanges to serve Whites. Can hon. members believe that? Do not white telephonists to-day serve non-Whites? Do our white telephonists ask, when somebody picks up a telephone to book a trunk call, whether he is White or non-White? What nonsense! The hon. the Minister issued a statement in June to explain why he allowed a business in Sea Point to employ only Coloured people on one whole floor to serve Whites too. Is that the end of civilization? I do not want to challenge the hon. the Minister, because I do not debate in that spirit, but I would like to ask him, with all the courtesy I am capable of, to explain to us whether it is the policy of the Government that Whites can serve non-Whites in every departmental store and every retail shop in South Africa, on the telephone exchanges, everywhere, but that non-Whites should not be allowed to serve Whites? I should like to have clarity on this matter. The hon. the Minister challenged us to say whether we would encourage the use of non-Whites to replace the 2,000 motor mechanics who do not exist in South Africa? The answer is yes, by seeking agreement between the union and the employers. What is his policy? He also asked about the 6,000 in the engineering industry. The answer is also yes, if they can come to an agreement. We will help them and encourage them and work with them to come to an agreement.

What is his policy? The hon. the Minister of Finance will soon go to the industries to offer them a new approach. They must help with the industrial development of the homelands and the Government will make labour available to industry in the white areas of South Africa. Will they refuse in advance to allow the employment of non-Whites as mechanics or in the engineering industry when they start their discussions with industry? Will they tell industry that no longer will non-Whites be allowed to serve Whites? All the garage attendants will have to be Whites because otherwise non-Whites will serve Whites? Is that what we are coming to? This is not a political game. The hon. the Minister should answer these questions. He should tell us what his policy is. He must tell us firstly whether the Government appreciates that there is a real urgent problem before South Africa. Secondly, does the Government appreciate that if we want a just solution to our race problems in South Africa, we require the material means to bring about that solution? And that the one way in which we can acquire those means, is by using the human resources as well as the capital and natural resources of South Africa? Thirdly, when the Government approaches industry for a new deal, will their attitude be the attitude which was evinced by the cheap jibes and challenges at the United Party that came from this Minister and the Minister of Posts and Telegraphs, or will they go to these people sensibly, reasonably, as South Africans, to seek the true interest and the greater advancement to a greater South Africa?

Mr. Chairman, the hon. member for Yeoville has now been speaking for half an hour about one of the most important problems in the country, i.e. labour. Now I should like to ask the hon. member for Yeoville, as well as the hon. the Leader of the Opposition, whether it is a coincidence that the hon. member for South Coast is not present here while this debate is in progress?—Does the hon. member for South Coast know of this “crash programme” they are proposing? The hon. member for Yeoville said that in the newspapers, under banner headlines, it was announced that the hon. the Minister of Labour would make an announcement in this connection. Now he is very disappointed that the hon. the Minister did not make such an announcement. But I want to tell the hon. member that the difference between the National Party and the United Party is that the National Party does not allow the newspapers to prescribe to it what policy it should adopt. We do not allow ourselves to be led by the nose. That is the big difference, because every time the newspapers tell the United Party what to do they do it. But we will not do so. What has the hon. member really said here this afternoon? The hon. member read to us from many newspaper clippings about what other people allegedly said. We have read those items. I now want to say this to the hon. member once more. The National Party does not allow itself to be forced into a crush-pen. In addition I want to tell the hon. member that he is drawing wrong conclusions from the speech of the hon. the Minister of Finance. The Minister of Finance never said for a single moment that he was going to negotiate with the industrialists with a view to examining labour problems. He asked the industrialists to co-operate with him in the development of the homelands. He did not say a word about labour; and he said, according to the policy of the National Party. [Interjections.] But I want to tell hon. members very emphatically this afternoon that the National Party stands by its labour policy, and that the policy we advocate is that of controlled employment of non-Whites in our industries. We say we shall not deviate from that. We shall continue to employ non-Whites in a properly controlled way. We shall not come to light with that tremendous “crash” programme which they speak of. The hon. member for Yeoville and the United Party must take note of this labour peace prevailing in the Republic of South Africa, a labour peace, the value of which cannot be gauged. If we turn our attention to Britain, we find this tremendous headline—

This is a ticklish and difficult matter. One must always take the Whites into consideration as well. Which of those hon. members knows what it is like for Whites and non-Whites to work together shoulder to shoulder in the factories or in the mines? If we want to disturb that relationship, and if we do not regulate our labour relationships according to the method and the policy of the National Party, a policy which is explicitly laid out, we shall create chaos in our industries. The National Party has always been prepared to bring in the Bantu in a controlled way, and the conditions under which he may work are spelled out. The conditions are that no Bantu will ever be employed, in a white area, in a senior position to a white person and that they will not work in the same room. We are prepared to employ the Bantu, provided that sufficient provision has been made for him to do that work. The National Party is not killing our industry and our mines; we are letting them progress in an orderly way. But I just want to say this to the hon. members of the Opposition. This National Party has brought this country of ours along a road of peace and quiet these past 22 years. Let us not, at this present moment, throw overboard this peace and quiet in industry. It would only lead to chaos. Let us hold discussions, but this must be done carefully and not on the basis of the policy the hon. member for Yeoville wants That hon. member only wants the sluices to be thrown open. [Interjections.] That is why we want to give you a warning to-day: Do not misinterpret what the hon. the Minister of Finance saids he stands by the policy which the Minister of Labour has always advocated.

What policy?

To-day I should like to discuss a certain matter with the hon. the Minister of Labour. Sir, if we look at our industry to-day we find that the schools for apprentices play one of the most important roles in our industry, and since we find to-day that there are schools for apprentices in almost every large city. I should like to advocate to the hon. the Minister this afternoon that the schools for apprentices be expanded even further: that they be given the most modern of facilities and that they also be provided with the facilities that we furnish to-day to our high schools in the country districts and elsewhere. One great shortcoming in our schools for apprentices to-day is that the child from the country districts does not have the opportunity of obtaining a proper training as an artisan, in view of the fact that there are insufficient accommodation facilities available for him. This afternoon I want to advocate that positive attention be given to the erection of hostels at those schools, so that both boys from the country districts and from the cities may go to those hostels to receive the necessary training.

It should have been done long ago.

Sir, every time one comes along with a positive suggestion, one is interrupted. But I want to go even further as far as these schools for apprentices and technical colleges are concerned. As in the case of the tax benefits we give to-day to any body or person making a donation to a university, I want to advocate to the Minister of Finance that the same tax benefits be given to bodies who are prepared to give equipment to the technical colleges or schools for apprentices, so that the workshops of those colleges and schools will be of the highest standard. Technology to-day plays an important role in our industry, and we should like to see that the apprentice is receiving the best training available in the country. We are grateful for the facilities already existing at these schools for apprentices, but we want to advocate that even better facilities should be introduced.

Like the newspapers which are controlled by that side of the House, we were justified in thinking that the hon. the Minister was going to make a statement of importance during the recent Budget debate because this was foreshadowed by the hon. the Minister of Transport when he said that during the Budget debate this whole matter would be dealt with. It was further emphasized by the hon. the Minister of Finance himself when he said that one of his colleagues would return to this question; so, not unnaturally we assumed that the hon. the Minister of Labour would make this statement. Hence, like the newspapers that he controls, we were very disappointed.

The hon. member for Brakpan referred to the hon. the Minister of Finance and his invitation to industrialists to discuss the whole matter of the siting of industry and of labour. May I say that if this hon. member’s interpretation of what the hon. the Minister of Finance has in mind, is correct, then I think it would be an absolute waste of time for him to meet industry or anybody else. It would serve no purpose whatsoever. Sir, the hon. member talks about the policy of his party on labour. Surely, that policy all along has been to keep industry White and to stop integration. Indeed, one of the Ministers even staked his political reputation that he was going to turn non-Whites back to the homelands again. When I listened to the hon. member for Brakpan, it became quite clear to me that there can be no better example of his failure and the Government’s failure to come to grips with the reality of the South African situation. Here we have a classic example of a Government that has shown great laxity in identifying the problem, that has shown an obtuseness in assessing its long-term implications, that has shown a slavish adherence to an ideological pattern and that gives us every example of an obsession to try to mould the South African society to an outdated norm.

When we look at the labour situation in South Africa, we must come to the conclusion that here we have a government that is wilfully inhibiting our economic growth, thereby weakening us and depriving us of the most potent weapon in our whole armoury to ensure our future security. It is trying to do this in order to prove what is belied by every single labour statistic that is available; it is trying to do all this in order to demonstrate what is contradicted by what we see before our very eyes. I think that is why it is right and proper that this Government should be arraigned before this Committee and why this particular Minister, whose guilt transcends that of all other, should begin to face the mounting wrath of the people of South Africa.

Our charges against him are going to be specific. I want to reinforce the points made by my colleague the hon. member for Yeoville. Our first charge and our first indictment against the hon. the Minister is that he showed abysmal failure to recognize the problem and to diagnose its salient aspects. As has been pointed out, we have continually drawn attention to this, but what has his reaction been? He said that the United Party was trying to create a crisis where none exists; that we were trying to blow a molehill up into a mountain. In fact, he even linked us with Leftists and capitalists and communists because he said that we were trying to start agitations that would disturb the existing pattern. Sir, how anybody can in the same breath ascribe the same motives to capitalists and to communists, is beyond my imagination, but it has become indicative of the kind of mental gyrations of which we see more and more signs from that side of the House. Even in his recent speech, when the hon. the Minister spoke in the Budget debate, this is what he said—

Sir. this is really the kind of silly statement that we get from that side of the House and of which this hon. Minister is becoming the foremost exponent. Which Press do we control? The directors of newspapers sit not on this side of the House, but on that side.

Even the Deputy Minister of Bantu Administration and Education is one.

I think the only hon. member on the front benches over there who is not a director of a newspaper is the hon. the Minister of Sport. Sir, within the last two weeks there was a newspaper report, the heading of which reads: “Moenie blind staar nie”, and I can think of no better injunction for that hon. Minister. The report then goes on to say—

Sir, this is not one of our newspapers; it is Dagbreek en Landstem who wrote this. Where are the directors of Dagbreek en Landstem? They sit on that side of the House. But when I look at another newspaper, also an Afrikaans one, I find that the report is headed “Swart hande bou Suid-Afrika” and then it goes on to talk about the manpower crisis that has arisen. Sir, where do the directors of that newspaper, Die Beeld, sit? Not on this side of the House, but on that side. When he talks about the Chambers, do we control the Afrikaanse handelsinstituut? Do we control the Kamer van Koophandel? Every time you open Volkshandel, which is the mouthpiece of these two organizations, what do you note? More and more space is being devoted to the great manpower crisis that has arisen in South Africa.

A while back we asked that a national study be conducted to assess the ramifications of this problem and to study it in depth. What was the reaction of the hon. the Minister? He said it was entirely unnecessary; he asked why we wanted to do a study on manpower in South Africa. Now we find that he is doing it and that the Economic Advisory Council has assigned to its manpower committee the task of making a detailed assessment of the manpower situation in South Africa. Our criticism is, why should it be done surreptitiously? Why can it not be done publicly and openly, as investigations of this kind would be done in any other part of the world? Why must it be done behind locked doors? Even then we indicated that we do not think that it augurs very well for the future, because this manpower committee is composed or is most certainly dominated by officials. I am not denying their goodwill, but these officials are responsible to the Government. These officials must of necessity take their cue from this particular Minister and his colleagues. Under these conditions, I suggest that the field of this investigation is so narrowly defined that we will achieve nothing thereby in any case. My hon. friend from Yeoville referred to the report the hon. the Minister read from and from where he gave us all the shortages. I want to ask, why he did not total all these shortages? Why did he not tell us what total is reached when they are added together? Why must this report be handled in such a secret way? I suggest to him that he is handling it in such a secret way because he is trying to hide the true figures from us. I am suggesting to him that that report to which he has referred shows that there are at the moment more than 55,000 vacancies for white workers in South Africa. That is not what TUCSA or anybody else says; that is what his own departmental report contains. Why should that information be kept from us? After all, statistics of manpower are available to everybody in any free enterprise system. Why must he hide it in this way? Why must it be kept only within his Department? Is that sort of investigation not done with public money? In that case we have every right to demand that it should be tabled in this House. We are entitled to have that information. If it is done with public money, as it is, we have the right to demand that the most recent report, report No. 8, should be tabled in this House, so that the people of South Africa could have the true facts. I say that this information constitutes the most severe indictment of this Government and of that hon. Minister that we have had over the last 20 years.

Mr. Chairman, if one had closed ones eyes here and listened one would have heard Madam Rose speaking. I just did not think that she was such a pessimist and such a prophet of doom as the hon. member for Hillbrow. That is the member who is now attacking us because there is a manpower shortage. That is the hon. member who wanted to introduce legislation here last year which he copied from the British Act, the British Industrial Training Act. He wanted to use that Act as a backdoor for bringing the Bantu in and for smothering the white man in the industry. That is what he wanted to do.

Now he pretends that it is his original creation.

Yes, now he pretends to be the originator of the legislation. Apparently this United Party, its leader and all, have been suffering from “Michellitis” since 1961. The hon. member for Yeoville came along and said here to-day that the leader of that side of the House warned the Government in 1961 that there was a so-called manpower shortage here in this country. If one refers to column 6604 of the 1961 Hansard one would see that Mr. Eaton, who was leader of the Labour Group, said the following—

Now I ask you! The hon. the Leader of the Opposition says that there is a manpower shortage here, while his leader of the labour group complained about unemployment. Is that not ridiculous. That is now typically ambiguous. A few days ago the hon. the Leader of the Opposition replied here to a question of the hon. the Minister of Transport about whether they were in favour of Bantu trade unions. He then said a straightforward “no” However, what does the hon. member for Wynberg say? I have here a statement which the hon. member for Wynberg made in the Sunday Tribute of 22nd February. In a personal interview she said, under the heading “We will change nine laws”—

Where does the United Party stand now? How can the white worker in South Africa take any notice of this party when the hon. the Leader of the Opposition says that they are opposed to Bantu Trade Unions, and the hon. member for Wynberg says that she is in favour of them training them, and that they should then obtain their own trade unions. Where do we stand with the United Party?

I have another matter I should like to bring to the attention of the hon. the Minister. We have never denied that there is a manpower shortage here, but what we do, in fact, say is that there is no manpower crisis here. The United Party is trying to create a psychosis in this country. We acknowledge that there is a shortage of artisans, and this fact was emphasized once more to-day. The only solution for dealing with this artisans shortage is to train those people ourselves. For that we have an Apprenticeship Act. In 1944 that party amended the Apprenticeship Act. But what did they do? They amended it in such a way that when a survey was carried out in the Cape, between 1938 and 1944, of young men who were interested in becoming apprentices, only 6 per cent of the 29 per cent who applied could be taken up. However, if one asks the United Party to-day what they did to train artisans, they just say “There was a War”. That is the feeble excuse they bring forward. However, in 1960 the National Party instructed the National Apprenticeship Board to institute a proper survey and investigation into apprenticeship training. That board came along with concrete suggestions, and what was the result? The number of apprentices increased tremendously. I want to mention in passing that between 1922 and 1944 the United Party only trained a total of 30,000 apprentices. However, what happened under National Party rule? Since the Act was changed in 1963, 30,386 contracts of apprenticeships have been registered, and that merely in the 1966 to 1968 period. What does that look like?

It is no comparison.

The hon. member says it is no comparison, but the fact remains that in three years the National Party has trained the same number of apprentices that the United Party trained in 20 years. That is what the National Party did. We also know that from time to time the Apprenticeship Committees consider aspects of training, and that from time to time changed conditions of apprenticeship are published in the Government Gazette. We appreciate what is being done for the training of apprentices. I nevertheless seriously want to advocate to the hon. the Minister that we should once more investigate whether we cannot still further reduce the training period for apprentices. Is it necessary that all trades should have the same training period? I feel it is an aspect that should be investigated.

I also want to mention another aspect, i.e the question of the training of adults. We are grateful that a man such as the hon. the Minister of Transport piloted legislation through in 1951 that had a bearing on the training of adults as artisans. To-day we are reaping the benefits of that. In recent years more than 1,628 of those people have been; trained by the National Trade School at Westlake. In that Act the hon. the Minister also made provision at the time for opportunities for adults, if they had not been able to qualify themselves for a trade, but had, in fact, gained experience through the years, to be able to take a trade test. Over the years we have had about 5,742 adults who have successfully completed trade tests according to this system. Together this gives us a total 7,370 artisans. At present we again have a serious problem inf respect of drought conditions. What is happening at the moment? It is with regret that we must take note that the farmer is being pushed off his land as a result of circumstances beyond his control. Many of those adults must have recourse to the cities. They must go and look for work in industry. Perhaps they do not have the academic qualifications, and then they must accept less profitable work, such as the work of an operator or half-skilled work. I want to advocate to the hon. the Minister that we should investigate the possibilty of erecting a second training school in addition to the only one of this kind that we have. It could, perhaps, be erected in the Transvaal at Vanderbijlpark, in the heartland of our in, dustrial area, where there are schools for apprentices, technical high schools and a college for advanced technical education. I do, however, want to ask that we investigate this aspect, as well as the possibility of these training schools offering a larger variety of trades for our people.

Sir, I now come to a last, but very important request to the hon. the Minister. It concerns Republic Day. Every people, every country, has a national day. The national day of this people is one day only, i.e. Republic Day. We know that in terms of the Factories Act five paid holidays are laid down by law, plus Republic Day every fifth year. We want to advocate very seriously that this day should also be declared a paid statutory holiday for all workers every year. We feel that the factory workers and mine workers also make their contribution. They make the same sacrifices for this country. We want to ask the hon. the Minister to give serious consideration to non-discrimination against these workers. They feel strongly that we should statutorily declare that day to be a paid holiday.

Mr. Chairman, if ever we needed evidence to show that the Government is vulnerable on the manpower issue, we certainly have had this evidence this evening. It is amazing how hon. members on that side of the House are running away from this problem. All that they are talking about, is apprentices. We seem to have here a sort of “apprentice psychosis”. They don’t get beyond apprentices and holidays. They do not want to come to grips with what I call the realities of the South African situation. To this hon. member who has just sat down training and manpower seem to be synonymous with apprentices. He did exactly the same thing when we talked about training a session or two ago. The Government with a great flurry introduced legislation, which we were told would revolutionize training in South Africa. What, in fact, did it do? It did not go one iota beyond apprenticeships. What we are concerned with here, is a fundamental problem, which reaches way beyond these particular issues yet we find this extreme reluctance on the part of members on that side of the House to even begin to debate it.

But I want to return to the challenge I put to the hon. the Minister a little earlier on. The other day he enjoined us not to have any “jakkalsstreke”. I want to say to him that he also must not have any “jakkelsstreke” this evening. Is he prepared to deny that his report shows that there are more than 55,000 vacancies for whites right at the moment? Is he also prepared to deny, that the number of vacancies are increasing rather than diminishing?

The second charge we want to level against this hon. Minister is that, whilst he has failed to diagnose the nature of the problem, now that his attention is being drawn to it, he is absolutely incapable of solving it, because he is working within a predetermined ideological framework, which hinders him in handling this problem.

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

Evening Sitting

Mr. Chairman, before the adjournment I was trying to indicate that as far as we are concerned the hon. the Minister has failed. To begin with, he has failed to identify the nature of the manpower problem and to diagnose its remifications. Much worse that that, he is not in a position to solve it because he is caught up in the vicelike grip of his own ideological past. This Government is obsessed by an ideology and you cannot solve this problem if you try to operate within the framework of this particular ideology. The difficulty is that this Minister and his colleagues on the other side are looking at the problem in this country through draught-board glasses. They see nothing but black and white. The more they look, the darker the picture becomes and the less light there is. They want to reduce everything to black and white. A while back we put before the House suggestions as to how industrial training in this country could be placed on a better footing. What reaction did we get from the Government? They never looked at the merits of this solution. They ignored our proposals completely. All they said was that we wanted to open the sluice gates to non-Whites.

That is correct.

Sir, the hon. member for Brakpan says that that is correct. Let me put this thought to him: If 80 per cent of the workers in the manufacturing industries are non-Whites and if 90 per cent of the workers in mining are non-Whites, you passed the point of no return a long time ago. What is the difference going to be if you have 90 per cent or 91 per cent? The point of no return was passed many years ago.

Sir, this is the unusual situation we find ourselves in because of this Government’s policies. They continually try to accuse us of wanting economic integration. Recently, when the hon. the Minister replied to the Budget debate, he said, among other things:

If other people outside politics plead for non-Whites to enter industry, will that be “interasie” as well? If Dr. Anton Rupert suggests as he does, that non-Whites should be taken into industry, is he an integrationist? Is Dr. Albert Wessels an integrasionist? Is the I.D.C. pleading for integration? Are Volkshandel and the Afrikaanse Kamer van Koophandel integrationists? [Interjections.] Sir, what this Minister does not recognize is that he can influence this situation only in a very marginal sense. If 90 per cent of the workers in the; mining industry are non-White, as is the case at present, then according to him it is not integration, but if 91 per cent of them become non-White, it all of a sudden becomes integration. What the Minister does not realize is that he can manipulate and influence the situation only in the marginal area which probably does not consist of more than 2 per cent of the total labour spectrum in this country. He does not talk about the rest of it. You will never hear a voice from that side against the 80 per cent of non-White workers in industry at the moment, because they know that it is completely beyond their capacity to control the situation. There is absolutely nothing they can do about it. In order to compensate for it, they concentrate on a small 2 per cent area where they can still have some influence.

Our third charge against the Minister is that he failed to protect the White workers in this country. He bluffed them. He told us that he would protect them through job reservation. If ever there has been a gigantic bluff in this country, it is this so-called job reservation. I want to ask him straight out whether his colleague the hon. the Minister of Transport applies job reservation on the Railways. If this is such a fine solution, such a wonderful solution, why does his colleague the hon. the Minister of Transport the biggest employer of manpower in the country, not also apply job reservation? I should like to refer to Mr. Gerdener of Natal. I want to say in passing that we on this side of the House regret very much that he is indisposed. We wish him a speedy recovery. However, Mr. Gerdener said some while back that it is really silly to talk about job reservation because at the turn of this century nearly all the jobs that we are talking about at the moment will not even exist. That, of course, is quite true.

What the Government has done is that with these so-called job reservations and by hemming in our industrialists, they have caused uncertainty, and harassed them. This in turn is leading to reduced investment in the economic field. It will ultimately very materially affect our competitiveness in the outside economic world. Not only does the hon. the Minister try to bluff us with his job reservation. He went much further than this. In our opinion, he took a most unnatural step during the Langlaagte by-election. It is amazing how harassed Nationalist Party Cabinet Ministers can become the moment they are confronted with an election and the moment it is apparent that the tide is turning against them. What did he do when he addressed a meeting at Langlaagte? He invited Nationalist Party workers to come and report to him personally if at any time the job structures in organizations were changed. Do hon. members not see what is happening here? What is this hon. Minister trying to do? Is he trying to set himself up as some sort of labour commissar? He now invites indivudual workers to come and report to him personally, when there is a change in job structure. I want to ask him whether this applies to the Post Office too. If the hon. the Minister of Posts and Telegraphs replaces White workers, must they come and report to him too? If the hon. the Minister of Transport replaces workers, must they also come and report to him? I want to say to the colleagues of this hon. Minister: Little brother is growing up and little brother has ambitions. They had better watch out! [Time expired.]

Mr. Chairman, there sit the executioners of the white man and the white worker in South Africa. This evening we have once more had a very good example of the fact that they are prepared to hang the white man and the white worker from the gallows of labour integration. I now want to ask whether that hon. member for Hillbrow, who levelled a whole series of accusations at the hon. the Minister of Labour and the Government, is prepared to state frankly whether his party would do away with job reservation if they were ever to come into power? Let them reply to that so that the white worker and the white man in South Africa can know about it. But they are not only executioners, they also come along to this House and slant the truth. They do not tell this Committee and the white worker that their only preconceived purpose with this agitation is labour integration. No, they are too clever for that. They are trying to create, in this country, a psychosis of a manpower shortage which has supposedly now taken on critical proportions.

It is not necessary for them to come along here and identify the problem of a manpower shortage. The Government, and the hon. the Minister in particular, is very profoundly aware of shortages at certain levels. It has never been denied. We can quote from news papers, supporting that side of the House, in which it is very clearly stated that the hon. the Minister said that he is aware of the problem. That is not the question. Neither is it necessary for me to state, in a round about way, what must be done to eliminate this problem. Suffice it to say that the biggest problem does what must be done to eliminate this problem, not lie in a shortage of unskilled manpower; the biggest problem lies in skilled manpower. What is being done in this connection?

This is how the manpower sources in South Africa are being expanded as a result of the efforts of the National Government; this is how the full-time and part-time white students at universities increased from 31,585 in 1958 to 65,700 in 1968. Full-time students at technical colleges and vocational schools increased during this period from 9,000 to 16,000. School-leavers, 32,000 of whom were in Std. 10, totalled 45,600 in 1968. Economically active immigrants came in at a rate of 14,600 in 1958, and increased to 40,500 in 1968. Enrolled apprentices increased from 27,600 in 1959 to almost 36,000 in 1969: this is the proof that the Government is very profoundly aware of the problem, and that it is doing its level best to relieve the position.

But now I come to the point, and I am challenging the United Party this evening to relinquish their vagueness about the effect of their policy and to tell the white worker of South Africa very clearly what precisely they stand for. The United Party cannot and dare not deny that an organized Bantu labour force in white areas in South Africa would empower the Bantu, for example, to strike, in order, thereby, to enforce political rights. Is that what the United Party stands for? Then they must reveal their honesty in the face of South Africa by stating frankly that they are prepared to run that risk. That is where we stand to-night. It makes no sense to us on this side, and to the world outside, if they come along here and kick up dust about the so-called critical proportions of this problem. That is not what we must debate. We must debate their standpoint and about where it is going to lead white South Africa.

Who is governing the country?

There are two matters which I should like to bring to the hon. the Minister’s attention very briefly. In the first place I want to ask the Minister to give very serious consideration to paying attention to this question of the abuse committed by employers employing white workers in illegitimately including non-white workers in that labour force. Not only that, attention must also be given to instances where they have, under certain circumstances and subject to certain conditions, received permission to employ non-Whites, and where they then do not keep to the conditions under which that employment may take place. I want to ask since a great deal of misuse is being made of this situation, whether the Minister would not consider creating a special inspectorate which would apply itself to ensuring that this situation is not exploited by employers. But I want to go further and say that a special inspectorate alone is not enough; that the time has come for the Government to give serious attention to whether heavy penalties should not be imposed for contraventions, where people are found guilty of a contravention of the conditions laid down for the employment of non-Whites.

But there is a second matter, and where this is concerned I should like to say that I want to draw the attention of the Minister and the Committee to our country’s greatest asset, i.e. the workers themselves. We in South Africa are fortunate that in our white worker we have a responsible, dutiful, dedicated and hard-working person who is always prepared, as befits a good patriot, to devote his full attention to his task. That is also why we need not be concerned about his productivity. The Government has done more than its share in the past to encourage and stimulate productivity. One cannot find fault with that. But there is now a matter that does not look right to me. We speak so readily of a too low productivity from our workers, but now I want to ask our employers whether they see the worker as the most important component in our factory set-up. Do they realize that our technical aids cannot be linked up into the various production processes without the efforts of a worker? Do we realize that every trained artisan in this country represents a capital investment of about R20,000? Do we give the worker the same attention that we give the machine? A machine that saws wood cannot, after all, be used to smelt iron. Why then use a worker in a position he is not fitted for? When that worker has problems, do we give him the necessary lubrication with a friendly word? Does the worker receive regular check-ups for physical and mental defects? Has the time not come for the employer to place more emphasis on the worker? I now want to ask the hon. the Minister whether his Department would not be so kind as to take the initiative in bringing this matter more appositely to the employer’s attention. If we do so I am convinced that we shall have a happy corps of workers, and a happy worker is a good, useable and useful person for our country.

We have had an interesting debate on labour matters and I have listened with considerable interest to the speech of the hon. member for Yeoville this afternoon. I must say that I think there is a great deal in what he had to say and to all the people he mentioned who have been complaining bitterly about the acute shortage of labour in this country, I could add many more names. Our files are very full of authoritative statements on this score. I must say that the hon. member for Yeoville is coming on very nicely. I enjoyed very much hearing him pressing for relief of poverty and stressing the point that unless we do relieve the widespread poverty and the difference between the “haves” and the “have nots” in this country, we are not likely to have lasting security in South Africa, despite all the legislation that the Government passes. I have been saying this for a very long time and it is good to hear the official Opposition saying the same thing. [Interjections.] Of course where I do not agree with the hon. member is where he mentions the dangers of introducing Progressive Party policy in the face of inequalities. He does not seem to realize that Progressive Party policy actually entails the removal of inequities and the opening up of opportunities in every field for our non-white people. Their grievances would be removed pari passu with increasing the standard of living of the people. Of course he was probably thinking of the old facile argument of first giving them bread and then giving them the vote. Well, very often it happens that if you do not have the vote, you do not get to eat, and that has been the experience of many countries in the past. It takes years to redress grievances and years to redress imbalance. Even though the Negro to-day has legislative rights and full constitutional rights, it takes many, many years to redress the imbalance which was caused by many years of not enjoying the franchise and the rights that come from that. That is why the Harvard professor told the hon. member what he did. I am also glad to see, Sir, that the hon. member for Yeoville was a little more forthcoming in answering questions about whether or not the U.P. would be in favour of filling the vacancies in the various fields with Africans. He said “Yes”, they would fill them with Africans in the motor mechanic trade and also all the other vacancies mentioned by the hon. the Minister provided the trade unions agreed.

What do you say?

I say that the official Opposition should set the lead. It should not be dragging behind; it should not wait until there is a slow process of trade unions changing their mind.

You said that you wanted strikes.

I have never said that I challenge any hon. member here to show where I said that I wanted strikes; I have never said it.

I interjected. You did.

That hon. member interjected and said I wanted strikes; I did not say so.

And you said let them come.

Not at all. At any rate, the official Opposition should be setting the lead to the trade unions to take a reasonable line. I say that the bus dispute in Johannesburg …

Order! I cannot hear what the hon. member is saying.

Nor can I, Sir. I say that the bus dispute in Johannesburg could have been settled long ago if the United Party had only followed its own policy of the rate for the job. But this, of course, it was not prepared to do so the dispute has dragged on for months on end, while the union has been attempting to stop this process, and the rate for the job, which was what was being demanded and which was within the framework of the United Party’s own policy, was not, of course, adhered to at the time.

But we do offer the rate for the job in this case. Your facts are wrong.

You were rather late. Sir, I want to say that changes have been taking place in the labour pattern of South Africa. Over the last 20 years there has been the most enormous change in the labour pattern but it has come slowly and painfully. The transition has taken longer than it should have taken just because the lead has not been given either by the official Opposition or, worse still, by the Government, which has done all in its power to protect workers against changes. It has tried to stop changes instead of encouraging them. Sir, how much more quickly the unions would have come round to reasonable points of view, even the conservative unions, had both the official Opposition and the Government set the lead!

What has the hon. the Minister been doing all this time while these shortages of labour have been building up to the most drastic proportions in this country, and while we have been faced with bottlenecks that are threatening to strangle the economic development of the country? What has the hon. the Minister been doing? Sir, I have a few examples of what he has been doing. First of all he takes a teetering little step forward and then he stops in his tracks because he is suddenly frightened of what he has been doing. I will not even refer again to the old incident of last year during the Newcastle by-election campaign when he took fright because of all the “verkrampte” propaganda against the sensible things that he said about the utilization of non-white labour. But, Sir, since then he has done another thing. He has taken a teetering little step forward in so far as the utilization of Coloured workers is concerned. He told us that he was going to allow the employment of more Coloured workers. That was welcomed by everybody and he got a few leading articles commending him for this intelligent step forward. He was going to allow greater utilization of Coloured workers and I think he said also of Indian workers in Natal. Then suddenly he started taking fright again. The next thing we had was that instead of allowing Coloureds to fill vacancies where there are no Whites, he warned industrialists and businessmen not to jump to the wrong conclusions about his earlier statement on the wider employment of non-white workers. All this happened within a period of a couple of weeks. He suddenly went back and said—

Why did he do that? Who started bringing pressure to bear on him to go back on his teetering little step forward as far as Coloured workers are concerned?

Then, Sir, we had this other extraordinary thing. We have him sitting by while his colleague, the Deputy Minister of Bantu Administration, reintroduces that ludicrous notice of his in the Gazette, that ludicrous notice which is going to prohibit the employment of Africans in certain jobs, like counter assistants, telephonists, receptionists and Heaven knows what else, when he knows very well that there is a desperate shortage of labour in this regard. [Interjections.] Yes. I have looked at the Gazette. It narrows the field of employment in certain respects and it widens it in other respects, and it is so ambiguous that I doubt whether the industrialists and the commercial people are going to know exactly what the hon. the Minister wants. Why does the Minister of Labour allow this? Why does he allow it in the teeth of this outcry about the shortage of manpower, when throughout the country there is an absolutely desperate cry about what is happening in the manpower field in South Africa. I cannot understand what liaison exists, if at all, between the hon. the Minister of Labour and his colleagues in the Department of Bantu Administration. There is a missing link somewhere. [Interjections.]

Now I will give hon. members a third ludicrous example. This is the question of the motor car industry. Here I have a newspaper cutting from the Star of the 28th August. From an article under the headline “Labour crisis will hit all South African cars”, I quote the following:

Then, Mr. Matthews of the Motor Industry Federation gives a long sad story about what is happening in the motor industry which is one of our most vital industries in South Africa.

What is happening there?

I will tell you what is happening there. There is a jobs curb for industry, according to the other cutting I have here with me. I quote further:

I am sorry the hon. member for Smithfield is not here so that he can hear. I wonder whether the hon. the Minister of Labour, Mr. Marais Viljoen, will kindly explain to me why he is introducing these job curbs, even in a border industry area?

Why not?

Because the whole objective of border area industries is to try and attract industrialists there by releasing them from all these ludicrous inhibitions on the employment of labour and by granting them all sorts of concessions as far as depreciation is concerned, low rates of interest, transport facilities, etc. All of a sudden we have a industry going along merrily employing Africans in all sorts of jobs. I was privileged to be taken on a tour of the Datsun factory by the hon. member for Smithfield and he proudly showed me how Africans were being used in all these repetitive and skilled jobs in the motor car industry. At the very time, when everybody is complaining about shortages in the industry, the hon. the Minister of Labour comes along with job reservation in the border industry areas themselves. [Time expired.]

Mr. Chairman, I am very pleased to hear that this debate is possibly going to last a half-hour longer. I think it would be a very good thing if this debate could last longer than the predetermined time, for this House could then obtain clarity on the standpoints of the various parties in regard to this important labour matter. I think it is a good thing that we are going to have sufficient time to obtain clarity on how the various parties want to deal with the manpower shortage position in this country.

So far we have heard very little from your side.

Both the shadow Ministers, i.e. the hon. member for Yeoville and the hon. member for Hillbrow, have expressed their disappointment because I did not, as they term it, make a “major policy statement” on this matter.

Like Die Vaderland.

Fortunately, the National Party does not, as the United Party does, allow itself to be taken in tow by the English or any other Press. As far as a “major policy statement” is concerned, it is very clear that there would, in the concept of the United Party, have been only one requirement for a “major policy statement”. Do hon. members know what that would have been? It would have been that I would have had to announce here that the Government accepted the “crash training programme” of the Opposition Leader for the 20 million inhabitants of South Africa and that it accepted the integration policy of the United Party. Then that, in the terminology of the Press of that side of the House, would have been a “major policy statement”.

It is not our Press, it is your Press.

Before I come now to this fundamental question of how we should deal with this manpower shortage position, and before we deal with the various solutions suggested by the various parties, I just want to refer here fist to a few pleas on specific matters made here by hon. members.

The hon. member for Brakpan discussed schools for apprentices. Predants on the other side then pointed out to him that he had raised the matter under the wrong Vote. The hon. member knows, however, that this is a matter which deals with education, but he also knows that these trade schools are training apprentices who fall under the administration of the laws of the Department of Labour. We are therefore interested in these trade schools. I can give the hon. member the assurance that I am quite sympathetically disposed towards his plea and that I shall gladly give this matter my support with my hon. colleague, the Minister of National Education. The hon. member for Vanderbijlpark referred to the Apprenticeship Act, and he made an appeal to the effect that we should further curtail the training period. I can inform the hon. member that this is being done from time to time. During the past two years almost all the apprenticeship committees have been revising their training conditions with a view to curtailing them. In fact, shorter periods have already been introduced in most trades. The hon. member also advocated the training of adults and even advocated that we should establish another training school for adults in Vanderbijlpark. Actually, I should have liked to have had it in Alberton, but the difficulty is that if we were to establish it in either of these places, we would not find the adults to attend that school. Owing to the policy of this Government, there is full employment in South Africa and we do not have those people standing in unemployment queues as there were during the days of the United Party. People in this country can work and there is work for them, thanks to the policy of this Government. I just want to inform the hon. member for Vanderbijlpark that during 1969 there were 142 vacancies at the training school in Westlake. However, we were only able to find 137 suitable candidates to fill those vacancies. This year the number is even less, because we were only able to find 114 suitable candidates for the 144 vacancies. The hon. member will therefore understand that if we were not even able to fill the existing institution, it would surely not be reasonable nor logical if we were to establish another one.

Because you are satisfied that Whites should do unskilled labour.

I shall come to this matter in a moment and I hope that the hon. member will retain sufficient energy to reply to a few of the questions which I shall put to him. However, I first want to occupy myself with replying to these specific matters. [Interjections.]

Order! I want to warn hon. members not to persist in debating across the floor of the House while the hon. the Minister or anybody else is speaking.

The hon. member for Vanderbijlpark also advanced a plea in regard to the question of Republic Day as a statutory paid holiday. This is a matter which the Government feels strongly about and one which will be considered next year by the Cabinet prior to the Republic festival. During the Republic festival a statement will be made by the Government in regard to the possibility of making Republic Day an annual statutory paid holiday.

The hon. member for Springs advanced a plea to the effect that we should establish a special inspectorate in regard to the misuse of the conditions of service in terms of which employers allow non-Whites to do work which is often reserved for Whites. I can tell the hon. member that the Department is doing everything in its power to keep an eye on this matter. What I am now going to say serves at the same time as a reply to the hon. member for Hillbrow who is so concerned because I invited people to bring their complaints to me during a by-election. I want to do this now in this House. I want to say to our workers and the white trade unions that we, as a Department which is there to watch over their interests, do not have the inspectors to walk into all factories and see what is going on there. It is the task of our rightminded trade unions who have the interests of the white workers at heart to lay such cases before me. It is also the duty of the workers to do so. I do not feel ashamed therefore. On the contrary; I am once again addressing this invitation to them. It is their duty to join me in ensuring that this legislation is carried into effect.

In his attack on and criticism of the Government, the hon. member for Yeoville dragged in a speech made by the hon. the Minister of Finance. He also referred to the fact that the hon. the Minister now wanted to conduct a dialogue and that in exchange for that concessions would have to be made as to non-White employment in white areas. Let me say at once that the hon. member, and in particular the English Press, wrested this speech by Dr. Diederichs out of its context entirely and mis-interpreted it. An interpretation has been given to this speech by the hon. the Minister of Finance which fits in with the wishful thinking of the United Party, which wants to wish away the labour policy of this Government. [Interjection.] Yes, this policy must be wished away, so that black labour can enter white areas uncontrolled. Let me say at once to the United Party, and to all who are interested in this matter, that the statement by the hon. the Minister of Finance does not entail any change in the labour policy of the Government. What the Minister wants to do here, and I agree wholeheartedly with this, is a well-intentioned attempt to interest the industrialist in the direction of greater participation in the industrial development in the homelands and in the border areas. This is a well-intentioned attempt with which I fully associate myself and which I think every South African can welcome. That there are problems in regard to industrial development in the homelands that industrialists are experiencing problems and that there are obstacles, or to put it in other words, that there are perhaps insufficient encouraging factors present, I readily concede. I trust this dialogue, this discussion the Minister of Finance is going to have with the industrialists can lead to constructive proposals from their side, which could in turn lead to greater industrial development in the homelands and in the border areas. But to interpret this invitation from the Minister of Finance as meaning a kind of quid pro quo and that we are now going to abandon our policy on the metropolitan areas, is sheer wishful thinking on the part of the United Party. It is nothing else. The interpretation the United Party would like to attach to it, that it will now mean a kind of quid pro quo and that we will now, in exchange for development in the homelands and in the border areas, allow Blacks to be employed here on an uncontrolled basis, is a complete misinterpretation of the facts and of the intentions of Dr. Diederichs. It is a complete misinterpretation of Government policy. Let there be no doubt about this matter. As far as the white appearance and character of our cities is concerned, there will be no compromise by this Government. It is and remains Government policy that our metropolitan areas, our white cities, will in future become whiter and not blacker. That is Government policy, and everything is aimed at that. To the materialists, wherever they may be, I want to say that this Government deems the survival of the Whites to be far more valuable than any temporary economic benefits. I am emphasizing “temporary”, for in the light of experience we have seen that if one begins to abandon one’s policy in this regard, the economic benefits you achieve to-day, are ephemeral and of a merely temporary nature. Because this is the view and the conviction of the Government, it will proceed with its policy of controlled employment of non-Whites. It will proceed with this, and if the United Party thinks that it will with this “labour crisis” propaganda of theirs be abled to force us to relinquish this policy, I want to say to them that they are under-estimating the spirit of Nationalism. The philosophy of Nationalism is: “Live and let live”. In the first instance we as Whites want to live. In the first instance we want our white cities to remain white, but at the same time we are prepared to grant the non-Whites opportunities in this country in the field of labour and economy which they have never had under any other government. In the past 22 years we have, thanks to this policy of live and let live, offered the non-Whites in this country avenues of employment which they have never had before. This Government will continue to do so, but it will be on a controlled basis; and least of all in an uncontrolled way.

Now, in this criticism by the United Party, the question of the growth rate is being dragged in. It is being said that we will “grind to a standstill” if we do not aspire to the fantastic growth rate which the Opposition leader recently set here in the Cape, i.e. a growth rate of 10 per cent. Let me now refer to an authority in the field of growth rates. I now want to quote what the economic adviser said, as recently as 22nd August, 1970, in Port Elizabeth, when he opened a manpower symposium. Hon. members may as well listen attentively to this now.

Who was this?

Dr. Rieckert. Hon. members who now see the golden goose in the growth rate, would do well to listen to this. This is what Dr. Rieckert said—

That is what our economic adviser says, as compared with the gloomy predictions of the Opposition that if we are unable to maintain the fantastic growth rate of 10 per cent, we will “grind to a standstill”.

I now come to the question which in this debate, which is going to last a half-hour longer, must bring us greater clarity. The two shadow ministers of the United Party spoke of a “change of the labour pattern”. We have heard from them about the existing shortages, as if this was something new which no-one in the world had ever heard of before. Interminable newspapers quotes were read out to inform us that there were shortages. Everybody already knows that there are shortages, but we even had the naïve statement from the hon. member for Hillbrow that I am keeping these manpower survey results secret. I could almost describe making such a statement with a better name, but I had better keep to naïve. He was saying that it is only I who may know this. Nobody else may know it. Is that not a ridiculous thing to say? Do you know how this information is being distributed? It is being distributed to a series of bodies. Allow me to mention only a few. It is of course being made available to the Economic Advisory Council on which people of various political parties and shades of political thought have representation.

Is it marked “conficential”?

Yes, but surely those people are aware of the contents. Those people can make use of those contents as I am making use of them in this House. If it is sent to people, they know how to deal responsibly with it. It is also being sent to the Federated Chamber of Industries. It is being sent to Seifsa. It is sent to the Handelsinstituut. In addition it is sent to a series of other people. This is not something which is being hidden under the bushel. It is therefore no secret. The hon. member for Hillbrow asked so dramatically what the shortages were. I shall now furnish him with the total shortages. The last manpower survey, which is made every two years, was made in 1969. In 1969 the total shortage of white skilled and semi-skilled labour in South Africa was 45,709. As far as artisans are concerned, this survey was particularly significant. In this connection the shortage last year was 14,000. This is not alarming in a large country such as this with its tremendous developments. Now the hon. member for Yeoville has said that the people in the motor industry are laughing at me for having said the other day that there was a shortage of 2,000 motor mechanics. If they want to laugh, they must laugh at themselves, because we did not snatch these particulars out of thin air. Our Department sent questionnaires to the garages and others in the motor industry. These particulars are from those questionnaires which were returned by those people. If they want to laugh therefore, you may as well join them in laughing at themselves.

Now, the hon. member for Hillbrow has also reproached me for not getting “to grips” with reality. This is an expression he used a few times. But let us now, for a few moments, get “to grips” with more reality. He reproached me for not having been specific enough. Let us now become more specific in regard to these matters. It is necessary for one to become more specific if one wants clarity on the various standpoints in regard to how this manpower shortage should be dealt with. The United Party now wants to solve this manpower position. In his speech the hon. member for Yeoville then said that I had in my speech of the other day referred to a shortage of 2,000 in the motor industry and then the United Party asked how they wanted to solve it. He then said that the solution was of course an easy matter. They would consult the trade unions in regard to the 2,000 shortage in the motor industry. Now I want to know: If this motor industry trade union should refuse to do so, what is the hon. member for Yeoville going to do then?

I have already replied to that in my speech.

No, I shall explain it even further to the hon. member. Then he must in his next speech tell me very carefully what he is going to do if the trade unions refuse. If they were to refuse, the United Party would be faced with the dilemma to which the hon. the Leader of the Opposition referred when he spoke here in the Cape Town City Hall. The report of the Cape Times on the 14th August in this connection reads as follows—

Now the hon. member for Yeoville must tell me what they are going to do with these 20 million people who have been trained by means of this “crash programme” if the trade union of the motor mechanics refuses to admit any Bantu? We should like to have clarity on this. Must those trained masses stand in queues without there being any work for them? Now, it would interest the hon. member, who will reply to me in a moment, to know what the attitude of this trade union is. I had an interview with them last year, and do you know what the topic of discussion was? Not the employment of Bantu but the employment of Coloureds and not in the Transvaal, but here in the Cape. And do you know what the attitude of that trade union was? They were opposed to Coloureds even becoming artisans in the motor industry. I asked them whether it was not possible, for the sake of the development of these Coloured townships, for them to at least allow Coloured apprentices to be enrolled so that they could in due course man the garages in Bonteheuwel and Athlone, and do you know, they told me reluctantly that they would go and consider the matter. The issue involved here was the Coloureds, and not the 20 million the hon. the Leader of the Opposition wants to train with his “crash programme”. And let me now mention the other major important industry. Let us take the engineering industry. The engineering industry is one of the largest in the country, and let me tell you this. Our standpoint is that we are continually, through this controlled employment of non-Whites, considering the trade unions in this connection, and not only are we considering them, we are also consulting them. We want their cooperation and their consent, and this is precisely what happened here in regard to the engineering industry. In this engineering industry, which is such an important and such a major industry, and in which there was a reclassification of work, do you know how those trade unions felt about this matter? That is why I should be pleased if the hon. member would, after this, tell us how he is going to employ those masses which his leader now wants to train with the “crash programme”. I want him to tell us this in the light of the attitude of the trade unions. When these negotiations were in process last year between the employers and these iron and steel trade unions, those negotiations reached very critical moments precisely on this question of the employment of blacks in certain work which has always been done by Whites. It then reached such a point that the Press, who support you so enthusiastically, the Rand Daily Mail, announced with relish that there was going to be a major strike in the engineering industry because “White jobs” were now being given to “blacks”. Then it was announced with great relish that there was going to be a strike about this matter, but that strike never materialized. thanks to the sense of responsibility of the trade union.

Hear, hear!

But that classification which took place did not take place in the uncontrolled way which is where the United Party’s policy is headed. This peace which exists to-day in the engineering industry, exists thanks to the fact that we as a Government acknowledged those trade unions in their right to negotiate with their employers.

Hear, hear!

And what that right amounts to is that they are not opening the sluice gates. And now I should like the United Party to tell us how it is going to employ these 20 million without causing labour unrest in this country.

There are many lively pieces of legislation, but there are probably few pieces of legislation which are livelier than the Workmen’s Compensation Act of 1941. This Act is probably one of the most amended Acts. I should like to address a few words to the hon. the Minister in regard to the man who incurs an injury. We all know that any individual has a certain potential in life and exercises in the performance of his work certain abilities, but when he is injured there is a sudden interruption in his entire pattern of living; it is a sudden interruption of his entire family planning; his life is suddenly at an end. If one looks at the record, one finds that the Workmen’s Compensation Act Fund has at present plus minus R31 million in reserve. I want to ask the hon. the Minister if there is no possibility of allowing greater concessions to accrue to these people because the cost of living, as you know, is increasing by the day and our working ability makes its way slowly up the gradient. These are people who can to a certain extent be rehabilitated in order to be re-employed. But as we know the Workmen’s Compensation Act makes provision for compensation on the basis of so much for the loss of a limb, so much for the loss of an eye, so much for the loss of a leg, and so much for the loss of life. It is a difficult criterion to apply in order to do justice to all cases. For example, for the loss of a leg, 50 per cent is allowed, but one man, as you know, does a type of work where he has to use both his legs, while another man does not need to use his legs for his work. He loses his one leg, but he still retains the technical skill of his hands and is able to continue with his work as before. All these factors make it difficult to determine an equitable compensation. Every year provision is made for increased benefits for the workers, pensioners, etc. At the beginning of this year, for example, we amended the pensions again. We have funds at our disposal, and I wonder whether we should not therefore consider increased benefits for the man who loses his job because of an accident.

Sir, we are in this country experiencing labour peace which is unparalleled in the world, and that is why I should like to advocate, as the hon. the Minister advocated on a previous occasion, that our industries should co-operate and establish at some or other recognized university a chair for labour and industrial science. I am saying this because we have here a unique labour pattern which affects human relationships among various races. I am saying this because we have industrial legislation here which has in the past brought us labour peace. I feel that if such a chair could be established, we will be better able to study and utilize our labour. I should like to refer you, Sir, to what happened in Germany where there is such a chair, and where research is being done to find out how many people like their work. I am quoting from the German Tribune of 1967—

This is the type of problem which such a university department could investigate.

The hon. member for Hillbrow said here that there was complete hesitation on our side to debate a question of manpower training, but I have a problem. I cannot address the Opposition across the floor of the House; I will therefore have to be content with addressing them across this narrow aisle between us. Take a country such as England. England has 40 million inhabitants, and 10 per cent of them are ordinary labourers. Then you have a certain percentage which is doing skilled labour. Then you have an even greater percentage which has received further training, and you have a small percentage of members of Parliament.

Unskilled!

“Unskilled” or not. Every nation and every country has a certain labour pattern. You find that 10 or 12 per cent of the population are highly skilled people. You get that division from top to bottom in every nation; you get that pattern in England, Germany and you also find it in South Africa. We find this pattern among the Whites in South Africa, and we also find this pattern among the Bantu. There are educated Bantu; there are skilled Bantu and there are labourers among our Whites. Sir, as doctor I can tell you that a survey showed that at least 11 per cent of every population group displays psychological aberrations. Every nation has its problems, and if two nations are living cheek by jowl, then you get friction.

Must we not live cheek by jowl then?

I should like to give the hon. member the answer to that. I should just like to quote, in pursuance of what I have said and what hon. members accept from Hansard of 1969, column 1625, what the hon. member for Hillbrow said when he introduced a private Bill here. He said at the time—

That is very clear. Then he goes on to say—

Sir, I am very sorry to have to say this, but the hon. the Leader of the Opposition played second fiddle; he is eighteen months too late, but in order to string the fiddle correctly, he made the figure 20 million. Then I just want to repeat to the hon. the Leader of the Opposition the words the hon. member for Hillbrow used a moment ago. He said—

Sir, we must have certainty in regard to this matter. I want to quote what the hon. Senator Eaton said at the beginning of this year in the Other Place in the debate on the Industrial Conciliation Amendment Bill. He said—

That was before the hon. member for South Coast spoke.

On another occasion he said—

And the hon. member for Hillbrow told us who these skilled workers are. [Time expired.]

[Interjections.] Mr. Chairman, the hon. member is using the name Cassius. The hon. member is aping me.

It is only an ape that you could ape.

That reminds me of the words of Dr. Malan who said that an aper is not even an ape. That is why he must not use the word “Cassius”, because it is mine. The hon. the Minister is very satisfied with his name. The hon. the Minister of Labour rose to his feet to-night and after much biting sarcasm to the effect that we are supposedly being shunted about by the newspapers, he said that inter alia, he wanted to present a crystal clear image to the nation on the question of the labour policy of the Nationalist Party. He did so, but I want to say to hon. members to-night that the labour policy of the National Party at present is not crystal clear, but as clear as mud. Let us see what happened. The hon. the Minister of Finance came to this House, and the hon. the Minister told industrialists that they should come and discuss the matter with him because if they understood his problems with the development of border areas in the reserves, he would be prepared to discuss their labour problems with them. He said that they would reach a mutual agreement. What could this have meant except that the Minister of Finance indicated very clearly that if they were prepared to understand his side of the matter, he would be prepared, as far as the availability of non-white labour is concerned, to go to a certain extent beyond the policy of the Nationalist Party. He stated this unequivocally. The irrevocable impression was created that the Nationalist Party, through the words of the Minister of Finance, would be prepared to make non-white labour available to commerce to an extent beyond the policy of the National Party. Now the hon. the Minister comes forward this evening …

You are sucking it out of your thumb.

The hon. the Minister of Bantu Administration and Development would do well to read it. He will find that …

You are sucking it out of your thumb.

If I am sucking it out of my thumb …

We are waiting until we get the Hansard.

The hon. the Minister who is sitting there making such a noise on the other side of the House, can he tell me why the Federated Chambers of Industries already have an appointment with the Minister of Finance?

Out of your own thumb you are sucking it.

What does the hon. the Minister think the industrialist expects from the Minister?

I know what they expect, and it is not what you are saying.

Does the hon. the Minister want to tell me that the industrialists of South Africa have completely misunderstood the Minister?

You want to impute things to us.

If there is anyone who is sucking something out of his thumb, then it is the hon. the Minister. Now the Minister of Labour came here to-night …

Man, read out what he said.

Man, keep quiet!

Order! I am warning the hon. members. A moment ago I made an appeal to all not to debate back and forth. Everyone will have a chance to speak in this debate. The speeches are ten minute speeches, and hon. members must abide by that rule! The hon. member may proceed.

Now the hon. the Minister of Labour comes along and states that this is by no manner of means the case, and that his policy is the opposite. He states that it is they who want to reverse the black stream and would prefer to have more Whites and fewer Blacks. Am I correct?

That is correct. It is the policy of our Government, and the policy of us all.

Let me read out to the hon. the Minister a little of what the hon. the Minister of Finance has to say. I am quoting—

Where was the hon. the Minister of Bantu Administration and Development when the hon. the Minister of Finance was speaking?

He was sleeping.

Order. The hon. member must proceed.

Now, the hon. the Minister of Labour came along here this evening and repudiated the hon. the Minister of Finance. He repudiated one of the most senior Ministers in the Cabinet. He stated that the policy was just the opposite and that any person who had understood the hon. the Minister “as saying that more labour could then be admitted” was saying something which was untrue. I could never have believed that the hon. the Minister of Finance would go ahead for a short distance in “low gear” and that the hon. the Minister of Labour would then race back in “top gear”. He is already past the point where the hon. the Minister of Finance was.

The hon. the Minister of Labour owes this side of the House a few replies. Nothing causes me more concern than that the hon. the Minister of Labour, to whom this portfolio has been entrusted, should tell us that he has a shortage of 2,000 white motor mechanics, as well as a shortage of 6,000 white engineers, and that he should then ask us what we would do if the workers’ union were to say “no”. The first duty of the hon. the Minister is to inform South Africa and this House what he is going to do to eliminate those shortages. He does not, however, want to do so. The hon. the Minister is failing to recognize the whole essence of the problem and is evading it. He then comes to this House and indulges in a little politics. The people are seeing through the hon. the Minister.

There are a few basic questions to which the hon. the Minister must reply. It is imperative that we in South Africa should maintain the dynamic growth of our economy, because we as a nation have tremendous responsibilities towards ourselves and also towards the non-Whites. If we want to meet these obligations, all the authorities in South Africa say, we must develop dynamically. What do we find, however? We know that even with a growth rate of 5½ per cent there was a white labour shortage of 45,000 in 1969. Now the hon. the Minister can either tell the House that he can continue to have this shortage of 45,000 Whites and nevertheless maintain the growth rate, or he can say that he cannot do so. If the hon. the Minister should say that he cannot do so, I want to ask him to-night what he is going to do as Minister of Labour, to eliminate that shortage. He can say that he will urge the Whites to higher productivity, that he will mechanize, that he will introduce automation. The hon. the Minister must tell us to-night whether he is still able to do something to increase the productivity of the white worker. If he says that he does not know what to do, I want to tell him that he has now reached a stage where he will have to say to the people of South Africa that if they want to maintain the growth rate of 5½ or 6 per cent, which in any case is not high enough, other methods will have to be found to eliminate the labour shortage in South Africa.

What do you suggest?

There sits the hon. the Minister who said “five per cent fewer Bantu”. There sits the hon. the Minister who also ran away. He says that he now has other work to do; he must not therefore, put questions. I think the questions must be replied to by the hon. the Minister of Labour. If the present situation is allowed to continue, the hon. the Minister must be prepared to allow the economy of South Africa to decline. What does that mean for the Whites? It means the gradual impoverishment of the white nation. If we say this to the white worker, they will tell the hon. member for Springs that not the United Party, but the Nationalist Party is the executioner.

You are a coward.

Mr. Chairman, on a point of order …

The hon. member’s time has expired, but before calling on the next member to speak, I ask the hon. the Minister of Community Development to withdraw the word “coward”.

I withdraw it. He is just stupid.

Order! The hon. the Minister must withdraw the word unconditionally.

I withdraw it unconditionally.

Mr. Chairman, I listened attentively to the speech of the hon. member for Maitland. It surprises me how the United Party can put words into the mouth of the hon. the Minister of Finance which he never said. The hon. member for Maitland reads the hon. the Minister of Finance’s words, and when he has done so he gives them different meaning. I should like the hon. member to read the text again.

You read it.

Unfortunately I do not have it here, otherwise I would do so. The hon. the Minister once said that he would make more black …

Non-White.

… non-white labour available.

Made available from where?

I do not know precisely, but I can, for example, say what he could have meant by it. [Interjections.] No, we are not as foolish as that side of the House. We speak of facts. The hon. the Minister said that if the industrialists were to negotiate with him, and were prepared to go to the border areas, he would possibly also be prepared to give more labour to those who remained. Can hon. members not add two and two together? If two leave and two remain, surely there is more labour. That is just one way of illustrating it to hon. members. It is surely untrue that the hon. the Minister said that he would bring in more labour. It is not stated there, after all. The hon. member did not read it out just now. It is surely quite fair that if they are prepared to negotiate and to transfer a large percentage of these people to the border areas, so that only the necessary factories remain behind, he could perhaps give them more labour without bringing additional black labour in.

The United Party now has that shadow minister. What did they actually say? I must say that I have always listened attentively to the hon. member for Hillbrow, but every time he gets up now he is falling a little flatter. I think he must pull up his socks a little. But what did they say? They said that we have a critical labour shortage. The hon. member for Hillbrow asked what difference it would make if we had 92 per cent black labour, since we now have 90 per cent?

But what are you saying now?

Yes, if the hon. member keeps his mouth shut and listens, he will hear in a moment. They then said, in addition, the we should make use of the black man. They are now parrying so feebly and half-heartedly that the hon. member for Houghton had to level an accusation at them. The hon. member for Houghton had to tell them that they should not be so flabby and that they should say what they want to do. We all know, surely, that we have a labour shortage. The hon. member for Yeoville quoted people who said that we had a labour shortage. The hon. member wanted to make a little speech and waste his time in that way. He need not quote to us. Every one of us on this side of the House knows that we have a labour shortage to a certain extent. But we also know that it is not critical. There is absolutely nothing critical. We must surely combat those problems. But this talk on the part of the hon. Opposition is just election talk. Tonight they are speaking about the economic growth, factory owners, financial institutions, etc. They are making pleas on behalf of those bodies. But last year, before the election, they said that not even job reservation was enough to protect the White man’s work. To-night, however, the hon. member for Yeoville asked: “Why not make use of black labour?” The hon. Leader also asked why we did not let the 20 million people do skilled work. But we surely do not want to restrict all the workers to that class. Here is the hon. the Minister of Transport. We know that where he experiences a staff shortage he employs some of the Bantu and Coloureds. I do not want to go into the old episode again. But because they would like to have the support of the railway workers, when this is done the United Party asks: “What are you doing now, appointing Bantu to this work that whites should do? They are not even qualified to do it”. Then they criticize the Minister because they think they will canvass a few votes. But, after all, we use them in many spheres. The hon. the Minister spoke of the steel and furniture industries. Let me just take the Transvaal as an example; I shall not even mention this province. Skilled Coloureds work there. Take, for example, one section of the furniture industry. Upholstery work is done throughout the country, as it were, by the Coloureds. There are almost no more whites doing it. Take, for example, the building industry here in the Cape. There we find the same phenomenon. In the steel industry, in respect of which hon. members always complain that “the rate for the job” must be applied, there is a tariff price, and it makes no difference who does the work. It makes no difference whether the person operating the machines there is white or coloured or black. The people are already in those positions.

The hon. member for Maitland asked what the Minister was now going to do to supplement those shortages. It is not only the Minister and the Government that must always ensure that the shortages are supplemented. This can also be done in other ways. The industrialist must also, in his way, ensure that there is greater productivity and more amenities for his workers, so that they will be happier and work harder. The hon. the Minister and the Government are not responsible for everything on earth. There are other steps that can be taken. Just the other day we heard of concessions being made to the universities. Let us compare this with what the United Party did. If we just look at the schools, the number of pupils, apprentices and students at all levels, and at the help being given to universities and technical colleges, we realise that it is this Government that is doing everything in its power to eliminate the shortages. Those hon. members are crying about the shortages and about the fact that we have proposed a 5½ per cent growth rate, but notwithstanding the shortages we have always exceeded that growth rate. The problems are not that terrible at all. That story of theirs about our labour shortage being critical is not true, after all. We have not been paralysed in any sphere. Our people are happy. South Africa is probably the one country in the world with the greatest labour peace and quiet, notwithstanding all our various population groups. Hon. members cannot say that the hon. the Minister or the Government are not doing everything in their power to solve our problems. And the problems are, in fact, being solved in many respects.

Sir, I do not know whether time will allow me to do so, but there is a small matter I want to bring to the Minister’s attention. I can see one problem resulting from our labour shortage. This problem relates to the tests that pupils have to do. The training of pupils can now be shorter if they are suitable and have taken certain tests, but if a pupil cannot take his tests before the time, he qualifies after five years whether he has passed a test or not. In this connection I want to mention a specific case to indicate what can happen. A young man has written the matriculation examination, and after three years he was considered for his test. However, he could not do it, as a result of the fact that the pupils who completed their five-year period had to fake their tests before him. We must remember that the pupils who have completed a five-year training period must take their tests, but whether they pass or not, they are still qualified. Because they then take up so much time there is no opportunity for other pupils to take their tests before the five-year period. The result is that there are pupils who could, in fact, take the tests, who could qualify and whom we need, but who sometimes have to wait a year after they have reached the stage where they are sufficiently qualified to take the tests. It appears to me so unnecessary that the pupil who has already completed his five-year period should now specifically take up that time to do his test. We are suffering from a shortage of instructors, and if we were to eliminate the necessity for such pupils to take a test, it would give other pupils, who are already capable enough, the opportunity of taking the test, so that they may qualify before the time. It would be to their own advantage, and to ours as well. [Time expired.]

Mr. Chairman, we have had an amazing display here this evening by the hon. the Minister of Labour. We on this side of the House have noticed that something has gone wrong with the Government members. It is quite obvious for everybody on this side of the House that we have here tonight “Operation Playdown”. The hon. member for Maitland quoted the speech of the hon. the Minister of Finance when he introduced his Budget. However, it went further than that. The hon. the Minister also said—

Mr. Chairman, we know what happened. We expected that something of national importance would be said, but the hon. the Minister just made a political speech. We have found that the Government had been caught between two stools; they have no real answer to this very serious problem, the shortage of labour. Nobody stood up to repudiate the hon. the Minister of Finance. However, the hon. the Minister of Labour said that the articles which appeared in the newspapers in this regard, were just newspaper stories. Here it is in black and white. When the hon. the Minister replied to the Budget debate, he carried on in a similar vein. Many sensible remarks came from this side of the House. We expected a certain amount of horse trading to come in some type of Bill from the Government, but nothing has come forward. It is quite obvious that the Government is in the middle and that it does not know which way to go. It is one of the most glaring exhibitions of a lack of policy I have ever come across in this House. Of course, there is this very serious shortage of labour in this country. There is a change of pattern in the whole of our labour situation. No matter what the Government says, it is taking place. Our problem is the shortage of skilled manpower in this country. We have sufficient labour in this country, but we have a large shortage in skilled and semi-skilled manpower. What is the cure for this situation? Let us leave the Bantu for a moment. Let us deal with the Whites and the Coloureds. The cure for this situation is an intensive training of labour. That point has been made by my hon. Leader. The next cure is immigration. We know that it is most difficult to find qualified artisans who are prepared to immigrate to South Africa, because the world demand is so great. We might have to get a migrant type of artisan labour in this country like they have in Europe. But in the main we have to look in our own country for the solution to this problem. We cannot just treat it lightly. The whole question of the solution of this situation is a matter of education and training. It has been said in this House that we will have to have a revision of the apprenticeship system. We will have to train our apprentices to a higher degree. One is rather disappointed to see the low pass rate amongst our apprentices with the high standard of education that they receive at school. Therefore, it shows that there is something wrong. We will have to introduce a new type of technician into industry. We will have the artisan as we know him to-day. To follow on what my leader said, we will have to do what we did during the war when we were faced with a manpower shortage as far as artisans were concerned. We then introduced the “COTT” training scheme. This was of great assistance. The production of armoured vehicles and manufacture of war equipment during the war came with the assistance of COTT trainees. Some of the men came from the farms; some were unfit to go to the war. These people were trained overnight. They formed this very fine army of artisans during the war.

We are concerned about artisan training under the Training of Artisans Act 1951 and the Minister has disappointed us as far as this training scheme is concerned. I can say that it has been my experience that the educational standard of a majority of the people who enter for this particular course is too low; they do not have the educational qualifications and it is very difficult to work them into the pattern of this training scheme hence the poor response. It is a very fine training scheme and it is one which should be extended.

To overcome the position we have in this country with this very great shortage of skilled labour requires dynamic planning. It requires a Government which sees a little further than the next general election. They should see the interests of South Africa first. The Minister referred to the iron and steel industry. We have suggested here how we can overcome the question of negotiating as far as labour is concerned. We have said we should use the Industrial Conciliation Act to change our labour pattern. It is interesting to read the departmental report on the negotiations on the Industrial Council Agreement for the steel and engineering industry. It took a long time to negotiate this agreement and it was negotiated between eight employee organizations and 29 employer organizations. It says that they came to an agreement in order to utilize the industry’s skilled manpower to the best advantage. Certain operations which due to technological developments no longer required a high degree of skill, were assigned to an operative category, and this new allocation is directed towards the achievement of greater productivity in the industry. This agreement was on the basis of productivity. This is the basis of industrial council negotiations. Those people who say that you cannot approach the worker and that the worker is nervous of being ploughed under as far as colour is concerned are talking so much rubbish. The average worker to-day is an intelligent person. He realizes where his future lies and I have yet to find a trade union or a workers’ organization which is not open to negotiation. In this country we have never failed. Where we have wanted to change a labour pattern in any form, we have had no difficulty in regard to the trade union. It does not come overnight; it might take months to do it, but it is going to happen and we have to face up to the fact that if we do not go forward in this country there is no question of standing still, but we will go backwards. It was said in the Budget debate that our exports are in a very bad position. Without gold and our great mineral wealth we are a very poor country. So we have to build up our industries in this country and we have to become a giant exporting nation. We can only do that when we get the whole of our industrial machine working and we make the best use of our labour resources in this country. It is not impossible. There is no question of making a black man do a white man’s work. That is just so much rubbish. It is outdated. It is the type of stuff you put across on a political platform. What the working man wants is security, and he gets precious little from this Government. [Time expired.]

It is indeed interesting that the hon. member has pointed out the bottleneck to us and has suggested a few remedies as well. He spoke about training schemes, including ones which, for example, were launched by his Government during the war. But surely they were training schemes for Whites only, and the hon. members were in fact complaining that we did not have the Whites for training. Where do these 20 million people about whom those people are boasting, fit into the picture? Where does he want to fit the 20 million into this training programme the hon. member has spoken about? They always make this type of statement which sounds profound but means nothing. They said that dynamic planning was necessary and that we should look further than the next election, but the hon. member said nothing beyond that. He said we should negotiate with the trade unions. I wonder where there is a Government which has a better record in respect of negotiations with trade unions than this Government. We hold that record and we do negotiate. That is the very reason for the labour peace and quiet we are enjoying. The hon. member’s statement has no substance: it does not solve the problem for us at all. But that hon. member once used the words “all available manpower” and that party maintains that there are 20 million people here who can be integrated with the labour force of South Africa. This applies to Whites and all non-Whites. This applies, inter alia, to the large masses of Bantu as well. The large masses of Bantu must now be included in the labour pattern, and now I want to ask the hon. member for Yeoville the following question with regard to the Bantu who has to be integrated into our economy: If we want to use him productively, must he sell his labour on the best market? Is this your point of view? I am asking a simple question. I even want to put it to the hon. member for Durban (Point).

Repeat the question.

If we have to use the labour of the 20 million, including the Bantu, and if we want to use it correctly and productively in promoting the wonderful economic prosperity which you envisage, should we allow him to sell his labour on the best market? Is that what you want?

May I reply?

May I reply?

Order! The hon. members will have an opportunity to speak.

I make this statement. If those hon. members talk about the labour of 20 million people which must be used, then one can use that labour in one way only, and that is in the most productive way. As far as the Bantu is concerned, you must allow him to sell his labour on the best market. Where he offers his labour, you must accept it and not impose any restrictions. You must not do what this side of the House says. Under influx control, we tell the Bantu that he cannot offer his labour here or there and that he must offer it in the homeland. Sir, if he offers it on the best market, influx control falls away, and if influx control falls away, there are a few strings attached to such labour, it brings with it something which has been stated by those hon. gentlemen. If that labourer works here, surely we should not be so inhuman as to sever him from his family ties. We must allow him to come to the white area of South Africa with his family as well. We should not deal with such labour on the basis of migratory labour. We shall allow him to come with his family, and when he is here with his family, there will be another result, and his is the declared policy of the United Party. If he comes here, he must be given the right to own land in the white urban areas. That Bantu who sells his labour on the best market, may have no restrictions imposed on him, such as those this Government is applying, because it is held against us that we are imposing restrictions on him. But if we do not impose restrictions on him, it will mean the end of influx control. If we cannot make use of migratory labour, he will bring his family with him and obtain permanent residence within the white urban areas. Sir, they cannot argue with me; this is the declared policy of those hon. gentlemen. And the hon. members must give us an explanation in that regard. They should not attack us if we place restrictions on labour and, inter alia, on Bantu labour, because then I have to accept that it is their policy that he should be able to sell his labour on the best market. Then I want to tell you, Sir, that these matters which I have just mentioned, are not things I have sucked out of my thumb; it is what those hon. gentlemen have presented as their policy.

That is a ridiculous deduction.

They are not deductions; they are things those hon. members have said. And then I still want to make a fourth statement. After all this has come about, they would have deleted section 77 of the Industrial Conciliation Act and there would no longer be a measure of job reservation which could still afford some protection to the Whites.

Then there are the Whites who have inferior abilities. This evening the hon. member for Yeoville said there were those who, because of their abilities, would not be able to compete and that we would at least have to look after them to a certain extent, but that white person will not be able to come and complain to us. If that white person is prejudiced on the labour market, he will not be in a position to come and complain to us, because this evening the hon. member for Hillbrow ridiculed us for inviting white people to inform us when they were being prejudiced on the labour market. He said the Minister went from platform to platform and invited people to speak up in this regard. I have done so, Sir, and the Whites in my constituency are still grateful to me to-day, and the position about which we complained, has been remedied. But now there has been talk about the protection of the white worker. Those hon. members said they would protect the white worker, but they do not even want to give the white worker the opportunity of complaining about his position when he is being prejudiced. I repeat that the hon. member for Hillbrow actually ridiculed the invitation extended by the Minister, and that is that people should complain if they feel they are being threatened in their jobs. But how can the white man have labour security when the position will obtain which I have outlined at the beginning by stating their principles and when the white man may not even complain when problems arise? In spite of this, they say they will ensure security for the white workers in South Africa. Sir, if there has ever been security for the white worker, he has received it under the policy of this party. [Interjections.]

The hon. member for Hillbrow said we regarded the matter as a draught-board pattern; we thought only in terms of black and white. But now I want to tell the hon. member that they, too, saddled a few strange horses. They saddled a racing horse. They put him on the course and he approached the winning post looking like a winner. His name was “Available Manpower” and he was putting in a strong run, and cheers went up because he had almost reached the winning post. But then a snorting, dappled horse from Natal came along the same course, but completely from the opposite direction, and they called him “Irresponsible Bantu”. “Irresponsible Bantu” was now on the same course and was running completely in the opposite direction, and just look at the jockey’s colours for a while. “Available Manpower” had black and white squares, but really predominantly black as he came along, and “Irresponsible Bantu’s squares were reversed and suddenly predominantly white. But do you know, Sir, they were horses from the same stable; they were running on the same course and in fact for the same prize. They were heading for the same goal. I have no better illustration of the attitude of those hon. members in respect of labour in South Africa.

And you were the bookie?

Sir, we do not have a hope. Even the bookie would go bankrupt if we had to have that type of race in South Africa. And do you know who will go bankrupt? The white worker will go bankrupt. He will simply have to close down his bookmaker’s stand. But the hon. member for Hillbrow has discovered another word with which he is very fond of playing. It is the word “ideology”; everything is being tied to ideology. Now I am going to try to define ideology. I would say that as far as the ideology of the National Party is concerned, it is our policy of separation in which we include its political implications as well. But on their side there is an ideology as well. On their side there is also one principle or one policy on which they supposedly take such a firm stand. This is unlimited economic growth on the basis of a race federation when it comes to politics. [Time expired.]

The hon. member for Germiston, like every other speaker on that side of the House, including the hon. the Minister, talked about everything except the item that we are debating, the critical shortage of manpower in South Africa. He referred to our policy. I want to remind the hon. member for Germiston that it was the United Party that introduced influx control in South Africa, and when we get back into power everybody in South Africa will be in very good hands. We introduced it and the Government is using it to-day.

Abusing it.

Sir, the longer I sit in this House the more convinced I become that hon. members on that side suffer from a chronic integration psychosis. I say this advisely because they see the integration bogey around every corner and behind every tree. Sir, if one dares here to use the term “non-White worker”, in any labour context, except the most menial, then immediately you are branded as a liberal and as somebody who wants to introduce integration. Sir, I wonder why hon. members on that side of the House want to make martyrs of themselves and suffer unnecessarily? Do they not know that economic integration in South Africa is a fait accompli; do they not know that economic integration between white and black in white South Africa is on a larger scale at this very moment than it ever was in the history of South Africa, and this, Sir, after 22 years of Nationalist Party rule? Do they realize that after all their valiant efforts and even after certain hon. Minister staked their political reputations on this particular issue, black and white are today truly integrated in the economy of South Africa? I challenge any hon. member on that side of the House to deny that to disintegrate this integrated economy will be a physical and financial impossibility, and if it is ever done, then the economy of South Africa will collapse like a pack of cards. Sir, I have thrown out a challenge and I want to back it up. I want to ask hon. members opposite please to come out of the clouds down to earth and to look at a few facts and figures which, after all, do not lie. Then they will realize that we are an integrated society today and there is nothing at all that they can do about it. For instance, do hon. members realize that the number of Africans employed in the six major work categories—mining, manufacturing, construction, electricity, transport and the Post Office—is nearly three times greater than the number of Whites? Is that integration or not? Let us go a bit further and break them down; We find that in the mining and quarrying industry, there is a total of 634,000 workers, of whom 554,000 are Africans. Is that integration? In the manufacturing industries there are 257,000 Whites and no fewer than 544,000 Africans. Is that integration or not?

It is apartheid.

In the construction industry we have 50,000 Whites and no fewer than 193,000 Africans. Is that integration? Sir, in the electrical industry we have 7,000 Whites and no fewer than 14,000 Africans. Is this integration? In the Railway Service there are 222,000 Whites and 93,000 Africans, and in the Post Office we have 48,000 Whites and no fewer than 10,000 Africans. Sir, I say again: Why go through all this needless suffering? Economic integration is here; it is here to stay; it will be here in our time; it will be here in our children’s time and there is nothing that the other side or this side can do about it.

Sir, I listened too with more than passing interest to the speech which the hon. the Minister of Labour made during the course of the Budget debate. I want to say too that I expected a major policy statement from him. I did not expect it because the newspapers said so; I expected it because this House and the people of South Africa expected such a statement from the hon. the Minister. After all, he is charged with the very important task of resolving South Africa’s labour problems. What did we have from him? We had a speech in the Budget debate which lasted half an hour. The hon. the Minister spoke about this evening and in his two speeches there was not a single new thought; there was not a single constructive suggestion that will help in any way to resolve or even ease South Africa’s labour problem. I say that this is not good enough. The people outside want action and they want it from the hon. the Minister. After all, he is the Minister and his Government is running the country to-day.

Sir, I want to come down to more mundane matters. We have heard a lot here about the manpower shortage and how it is affecting industry and the economy of the country. But, Sir, there is a change to-day; the shortage of labour is affecting the man in the street; he is becoming aware of it, and I want to say to the Minister that this is something of which he will have to take note. The hon. the Minister might think that the things that concern the ordinary man in the street are unimportant but I think he is due for a shock, because the ordinary man in the street to-day, is becoming aware of the fact that his every day life is being acutely affected by the shortage of manpower. He knows, for instance, that to-day, after doing a hard day’s work, he will have to go along to a bus queue and stand there for possibly an hour or more before he gets on to the bus in order to get home. Sir, this did not happen in the past. He knows that if he wants a telephone installed, if he is lucky enough to get one; whereas before it took days to instal a telephone, to-day he might have to wait for months. This again is due to the manpower shortage in South Africa. Sir, if the hon. the Minister does not believe me, I want to suggest to him—after all he comes from the Transvaal—that he should take a walk to a bus queue in Johannesburg during the peak hours and have a little talk to a cross section of people. Believe me, Sir, he will be in for a very interesting experience. I have done it and I am asking him to do it himself. People have got to the stage to-day where they will say to you, “We want to get home; we do not care who drives the bus.” This is something of which the hon. the Minister will have to take note.

Sir, we have listened here to-day to four or five speakers on that side, but we have not heard a single word from one of them about any plans for the training and re-training of the existing workers in South Africa. We know that the hon. the Minister is pinning his hopes, as usual, on an increased influx of immigrants from overseas. But I think the hon. the Minister knows that even if we managed to get 50,000 immigrants a year from overseas we would still be scraping the bottom of the barrel for white labour in South Africa. He knows as well as we do that if you get 50,000 immigrants, it does not mean that they will all be economically active. We know that as many as 50 per cent of them could be children and aged people. That is why immigration is not going to help him out of his troubles. He will have to look for other ways to resolve his problems. Sir, automation will certainly help to resolve the labour problem. But it is so small. [Time expired.]

Mr. Chairman, this is a strange debate. We are constantly being warned from that side of the House that those hon. members are going to come forward with an enormous “crash programme” and one definitely expects them to make speeches of that nature, but the most important speech we had this afternoon, was made by the hon. member for Yeoville, who had a stack of newspaper clippings, and so forth, here to tell us in what light this matter was being viewed by other bodies, institutions, boards, commissions and newspaper editors and columnists. Sir, this side of the House has never denied the fact that there is a manpower shortage. We know that economic growth is taking place; it is necessary. We have said time and again that we know that there is a manpower shortage. [Interjection.] I shall deal with that hon. member in a moment; he does not know what is stated in the English text of his programme. That side of the House states time and again that what is at issue here for us is economic growth, which is necessary; work has to be provided for the unskilled labourers. The hon. member for Jacobsdal—I mean the hon. member for Hillbrow said that we were staring ourselves blind at “black and white”. Sir, this is their problem; they refuse to see “black and white” in this whole problem of ours. They refuse to see the problem this entails for us.

Sir, I want to tell them that the National Party has been built on the strength of the Afrikaans-speaking people. There was a time in our history when the Afrikaans-speaking people comprised the unskilled and the semi-skilled workers in our country. The National Party gave certain undertakings to them and it fulfilled those undertakings as long ago as 1924 when the civilized labour policy was introduced. This undertaking was subsequently given to the white worker on various occasions and not only to the Afrikaans-speaking people who, incidentally, comprised a large percentage of the unskilled and semi-skilled manpower of our population, but it was also given to the white worker of South Africa. We gave this undertaking to the white workers again when we had a referendum and told them that what we wanted was a Republic. At that time it was the party on the other side of the House which frightened the white worker by telling them: “The day will come when you will be without work in this country .” The United Party tried to make the workers believe that there would be an economic recession, and what happened? We did not have an economic recession, we had economic growth, to such an extent that they are constantly pointing out to-day that we do not have sufficient white skilled manpower. We shall not forget the undertaking we gave to the white worker; we shall not let the white worker down. The older members of this House remember quite well that we had night sittings in this House on section 77, the work reservation section, and on various other laws, for example the Bantu Building Workers Act, and so forth. Sir, they opposed that legislation. They had let down the white worker and literally stabbed him in the back. They were challenged by the hon. the Minister earlier this year and the hon. the Minister told the Leader of the Opposition: “Be a man now and tell the electorate during this election campaign that you will abolish work reservation unconditionally.” This they did not do. What is stated here in their booklet in which their promises to the worker are set out? It is stated here—

I now ask the hon. member for Durban (Point): What is stated in the English text of their booklet? He does not know, Sir. I can tell him that the English text contains words which do not appear in the Afrikaans text. I do not want to deal with that now.

Deal with it!

No, there are other matters I want to deal with. I shall make my own speech.

Read it.

Let the hon. member get his own book and read it himself. I shall make my speech on the subject I think necessary. [Interjections.] The fact I want to bring to the attention of hon. members, is that the English text contains words which do not appear in the Afrikaans text. [Interjections.]

Order! The hon. member for Durban (Point) must give the hon. member a chance.

Mr. Chairman, the hon. member has challenged me. May I reply?

Order!

In the Afrikaans text of their statement of policy it says that work reservation is not enough to protect the white worker. They are afraid to say that they shall abolish it unconditionally. The other day the Leader of the Opposition, in reply to the Leader of the House, quoted from a speech he (the Leader of the Opposition) made in 1963. He said that he had said so in his speech, but that it was unfortunately not published. There we find the following:

He then went further, but he stated clearly that they would do it. They would remove work reservation. But they are afraid to say so in a full-scale election. They are afraid to say so in a constituency where there are workers.

May I ask the hon. member a question?

No, Sir, I only have another few minutes left. In the few minutes left to me, I should like to put another matter to the hon. the Minister which I think is of importance to us at this stage. I want to advocate to the hon. the Minister that the entire system according to which women are employed should be subjected to a close scrutiny. What I am concerned about is the more efficient utilization of women in our labour market. When advancing this plea, I do not propagate the unconditional employment of women. We know that many people will revolt against this. But the fact of the matter is that women are being employed today. Wives are trying to-day to accomplish a task which the majority of our mothers accomplished in their lives. Some of our mothers did their own baking and slaughtering. They made clothes, did the washing and ironing. In the rural areas in our poorer homes these tasks were their contributions towards the national economy. This we can no longer do to-day. It is uneconomic to do the washing and the ironing, and so forth, to-day. The women are being employed in a different way in our economic life. I now want to appeal to the hon. the Minister. I do not think this is exclusively a matter for his Department. The Department of Social Welfare and Pensions is also in part involved in this, because this also concerns the maintenance of the family life and the establishment of a family policy which involves women labour. It partly concerns the Department of Higher Education, as regards training, adult education and so forth. But I want to appeal to the hon. the Minister to take the initiative in cases where it is his function and that of his Department to make arrangements for jobs, employment, conditions of service and so forth, to consult with those other Departments concerned with this matter, to see whether we cannot employ our available female labour force more efficiently. From the nature of the case there are more and more women who are available who have received training, many more than was the case 15 or 20 years ago. [Time expired.]

Mr. Chairman, this is the second time the hon. member for Westdene has tried to put across in this House the allegation that the translations of this booklet differ in the English and the Afrikaans texts. He did that following the accusation that we made, that the application for membership form of the Nationalist Party differs in that way. But this one does not differ. He said that the English translation concerning job reservation, differed from the Afrikaans text. Did he?

Yes.

Well, I will just read it to him and see if he can find any difference. He must get his book. I quote:

“The Government has no policy to deal with this.”

We are talking about labour. And further—

Is that the same as the Afrikaans text, or not? [Interjections.] I think he owes this House an apology. He is trying to insinuate that we are trying to put over two different viewpoints.

Read on.

That is what the hon. member quoted and what I am quoting now.

Read on.

With pleasure. I will go right through the book if necessary. It is a jolly good idea. Hon. members might learn something from it. I quote again—

Read the Afrikaans.

If the hon. member wants some more, I can give it to him. There is plenty here.

I just cannot understand why the Government runs away from admitting this manpower shortage in South Africa. What are they trying to hide? Do they think that closing their eyes to the manpower shortage and to these facts is going to make the fact disappear? They will remain. You can hide your head in the sand, but the manpower shortage will remain here. This is not a matter that we should hide.

This is a matter that we should discuss in the open. This is not an outside matter. This is a domestic matter that affects every single one of us. We all have the right to share in an attempt to solve the problem. But this hon. Minister uses cloak and dagger methods. He does things in secret. He does not take the House and the country into his confidence. How can we have confidence in such a Minister? We should have a mutual objective in trying to solve this problem. This side has taken its stand. It has shown its willingness to help the industry and everybody that is concerned with the manpower problem to-day. The shortage of skilled manpower is one matter in regard to which we must get together with the Minister and solve the problem. The only person who is dissident, is the Minister. It is time he came into line with the others. He is the only one out of step. Not only is he out of step, but he is not telling the country the truth, when he tries to hide the manpower shortage. I think it is high time that we brought him to book.

This Government is obsessed with the ideology which the hon. member for Germiston did not like to regard as such. He did not like the phrase. But it is one with which we have labelled them. They will remain with it. They have become obsessed with this ideology of apartheid. They want total separation. They want independent states. I want to ask the Minister a very pertinent question. I want him to tell us whether or not he is prepared to give the Bantu in the independent Bantustans every chance for advancement. He must answer this question to-night.

He has not heard it yet.

I want to know whether the hon. the Minister is prepared, in view of the fact that he will not encourage Bantu to become skilled where they are needed, to encourage them to become skilled in the homelands. Will he give them every chance of advancement?

Certainly in the homelands. That is our policy.

Now we will remember that. There is going to be no interference. He will not put any bans on them. He will not have to issue any permits. In the Transkei, where the Works and Mines Act is still in operation, is he going to give them the opportunity to advance fully? I want to ask him whether he is going to say to the Mineworkers’ Union: “Allow these people to advance.” Will he tell them to do so?

They will get sufficient opportunities for advancement. [Interjections.]

The sky is the limit!

Yes, Sir, he admitted to us that he would encourage them and that the sky would virtually be the limit. I can tell him now that the Mines and Works Act is in operation in the homelands. That Act has not been repealed as far as the homelands are concerned. Will he now keep his word and allow these people to advance?

The homelands are not independent yet. [Interjections.]

Sir, there are two factors which are necessary to make the homelands viable. The first is that they have to have the know-how and secondly, they have to have the opportunity to advance and to absorb that know-how. I wonder whether I should not repeat that for the benefit of the hon. the Minister of Mines. He can have a chat later on with the hon. the Minister of Labour. This is a very important matter, because there are mines that are affected and the hon. the Minister knows it. We want to know what he intends doing about this matter. To be more to the point, we must not forget that our economy depends on our mining wealth and the production of that which is under the ground at the moment. It was said in this House how important it was to start developing the production of base and other metals which will be needed when gold production starts to fall. We must start training people so they can take out of the ground what is lying there. It takes skill to do this and these people must be trained.

Will you also tell us in your remaining time what you intend doing about this? [Interjections.] We are waiting for your answer.

Do not run away.

I shall leave that point now and give the Minister plenty of time to think the matter over.

Tell him that you will answer his question if he gives you his salary.

That is a good idea. We shall change salaries and positions and then I shall answer the question.

Are you not the alternative Government?

Oh yes, but we are not running the country at the moment. We do, however, want to help you to do so. We want to know how you are going to tackle this problem. Sir, the hon. the Minister cannot have a policy for the homelands on paper and then run away when he is challenged to do something. He must not try to tell us that we have different policies for different parts of the country because they are the greatest culprits when it comes to this sort of thing. It is time that they were brought to book. [Time expired.]

Mr. Chairman, we have now reached the late hours of the evening and up to now, as in the past, we have not yet heard what steps the Opposition is envisaging for making the non-Whites part of the labour policy of this country. It still is the same standpoint as that of the old Unionist Party Opposition of 1910, but one which has been modernized and changed slightly. Had it not been for the Afrikaners they have always had in their ranks—and thank heavens that there still is a few of them —then we would have been displaced by their policy between 1933 and 1939. Mr. Chairman, we on this side of the House are honest in our labour policy. This evening we want to convey our thanks to the hon. the Minister for that honest policy which he is implementing. We are implementing a policy which is acceptable to the Whites, one which creates the security of the Whites and guarantees it. But we also accept that we have to look after the non-Whites. The non-Whites have also obtained security under the National Party Government. Just consider their buying power to-day. Their buying power already amounts to more than R2,000 million. So, is it not this Government that is seeing to it that justice is being done that is employing non-Whites where it thinks fit? Provision has been made for the non-Whites, but it has not been done precipitately. We have done our duty towards the non-Whites. But the United Party has always been dishonest in their policy. They are dishonest as a political party. In this House they couch their case in this way and when they come to the rural areas, they say we are negrophilists.

Order! The hon. member may not say the United Party is dishonest in its policy. The hon. member must withdraw those words.

Mr. Chairman, I withdraw the word, but their action comes close to it. One of the United Party’s senior members said in this House the Bantu were incompetent to do certain work on the Railways. Because of this statement trips were made to and from Natal. No, the Bantu can get their rightful share in this country. We are, however, standing firmly on our policy that there will be no economic integration in this country. In this regard I disagree with the hon. member for Johannesburg (North). There is no economic integration in this country. The Bantu can get their full rights in the homelands. In their homelands the Bantu may develop themselves and the Government will not hamper them there. There they may develop but here—and I make no secret of this —they are foreigners and they are selling their manpower to us. We are using their manpower to the best of our ability and at our discretion But this evening I want to plead with the hon. the Minister in respect of a different matter. In recent times a great deal has been said about working hours and working days. It has even been mentioned that the Bible says that we shall work for six days and rest on the seventh. But there are very few working groups in this country who still work 48 hours per week. There is one group, who does work 48 hours per week in very difficult circumstances. Here I am referring to the mineworkers. I represent these people. A great deal is said about the so-called labour shortage. However, I have my doubts about this in many respects. I beg to request you this evening that the mineworkers should also be allowed to work a five-day week. However, we are not asking to work less time. As far as I know, this is the only group of people who still work 48 hours per week. But with their manpower shortage, the mines are still producing more gold and other ores to-day than in the days when I worked in the mines. If a mineworker produced 500 or 600 units per month two decades ago, he was a good mineworker. To-day those very same men produce up to 1,000 and 1,200 units per month in very difficult circumstances. I do not want to give the monthly earnings of a man who has produced 1,000 or 1,200 units per month, because then I will be told that he has nothing to complain about. But one of those men told me that money was not the most important thing. He took off his shoes and showed me that his feet were covered with haemotomae, because he had to run eight hours per day in order to do his work. We do not know what it is like to work 5,000 or 6,000 feet under the ground in that heat. Up to 1,000 holes are loaded with explosives per day. These holes are between 5 feet and 6 feet deep. They have to be loaded and at the end of the shift the loaded holes are ignited. These mineworkers are now also asking for a five-day working week. But they are still prepared to work 48 hours per week. In that case the Chamber of Mines and the producers will not lose because of this; they will rather profit. The mineworker cannot, like an office worker, walk into his office, take up his books and start working immediately. No, safety measures first have to be taken. It takes at least from one to two hours every morning to water down those working places and to fix them up in such a way that they are safe, before the working teams can commence their work. If a five-day working week is introduced for the mineworkers, I can guarantee that the mineworker will put in two hours’ extra production per week, which is lost at the present stage. I want to make a plea to the hon. the Minister that when various trade unions approach him in connection with this matter in the future he should have regard to the fact that the people are not asking to work less, but that they only want a week-end to spend with their families.

There is also another matter which I want to bring to the attention of the hon. the Minister. We are aware of the fact that an industrial tribunal has been set up to conduct an investigation in connection with the samplers. the surveyors as well as the people who regulate the ventilation in the mines. I should like to hear from the hon. the Minister how far this investigation has progressed, because it is worrying our people.

We shall not give way in this country. We shall protect the identity of the Whites. We shall not sacrifice the identity of the Whites for economic prosperity. We shall rather go through hard times and retard economic prosperity to some extent, before we shall sacrifice the identity of the Whites in our pursuit of economic prosperity.

Mr. Chairman, the hon. member for Stilfontein started by giving a complete slap in the face to the Mineworkers’ Union. Does the hon. member not know that the Mineworkers’ Union is negotiating with the Chamber of Mines over the question of a five-day week? Yes, he nods his head. He is aware of it. His respect for the trade union movement is such that he ignores their negotiations. He tries to come over their heads. He tries to sabotage the negotiations between employer and employee by asking the hon. the Minister to use a big stick to interfere and thereby negate the whole principle of collective bargaining.