I lay upon the Table—

Report of the Examiners upon the Marburg Immigration Settlement Regulation (hybrid) Bill, as follows:

The Examiners beg to report that in terms of Rule No. 29 of the Rules relating to Hybrid Bills, they have examined the various documents which have been deposited in connection with the Marburg Immigration Settlement Regulation Bill.

They find that Rule No. 8 has not been fully complied with in that the notice of intention to apply for leave to introduce the Bill was not published in the Government Gazette during four consecutive weeks, the notice being in fact published on 27th November, 4th, 11th and 31st December, 1970.

However, the notice of intention was published during four consecutive weeks in three newspapers circulating in or near the locality affected by the Bill and the provisions of Rule No. 23 relating to the serving of individual notices have also been complied with.

Although the fourth notice in the Government Gazette was published two weeks after the preceding notice, the Examiners, in the light of the other steps which have been taken by the Promoters, consider that the parties affected by the Bill have not in fact been prejudiced in any way. Consequently they respectfully recommend to the House that indulgence be granted.

In all other respects the Rules relating to Hybrid Bills have been complied with.

J. H. VISSE, Chairman of Committees.

P. J. G. VENTER, Chief Committee Clerk.

Examiners.

Committee Rooms,

House of Assembly,

12th February, 1971.

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

That indulgence be granted.

Agreed to.

Mr. Speaker, my brief this afternoon is one of protest—protest on behalf of 20 million people who are suffering at the hands of this Government; against the harsh increases in the sales tax, increases that are going to hurt those most who can least afford to be hurt; against taxation on the instalment plan; against a Government that will not formulate and apply positive and properly planned measures to curb inflation and develop the economy; protest on behalf of the pensioners; protest on behalf of those dependent upon a fixed income; protest on behalf of those who are being squeezed between a fixed income and an ever-increasing rise in the cost of living; protest on behalf of the young married couples who are finding that the cost of establishing a home increases month by month, mainly due to the actions of this Government; protest against a Government that no longer has a labour policy, not even a bad one; and protest against a Government whose credo is: “Government of the people by the Nationalist Party for the Nationalist Party.” Accordingly I move as an amendment—

1. (1) ensures that positive and properly planned measures are formulated and applied to curb inflation and develop the economy of the Republic;
2. (2) reduces the burden of the sales tax on essential articles, which bears most heavily on the middle and lower income groups and is particularly harsh on young married couples, pensioners and those dependent on fixed incomes; and
3. (3) adopts a realistic approach to the Republic’s labour problems by promoting the more effective use of the country’s labour resources”.

The speech of the toon, the Minister on Wednesday had three main elements: Firstly, it contained an attempt—not a very successful one—to reply to our criticisms in the No-confidence Debate; there was also an attempt by the Minister to reply to a wide, wide range of criticism that has come non-stop from the public outside, from all sectors of the public and not only from those who support us—criticisms from Afrikaans businessmen who support the Government and from institutions that support the Government; secondly, there was a declaration by the hon. the Minister that he is hitching his star to the “damp” school policy; and, thirdly, there was his astonishing announcement of a further increase in the sales tax.

What the hon. the Minister of Finance says is vital to the country—after all he is the Minister of Finance. Consequently, I want to examine his speech in some detail.

He started off, with what is usual for a Minister of Finance in introducing the debate on Part Appropriation Bill, by saying that we must not expect of him to anticipate his Budget. He not only anticipated the Budget but he assumed the functions of the Budget to an extent of R47 million, and if this is what is happening in the Little Budget, what is going to happen in the big Budget; what is going to happen to us then? It is going to be very interesting to see this instalment taxation develop. Is the hon. the Minister going to develop it in his Budget, or has he made his main impact already so that at the time of the Budget he can appear to be a benign goodhearted Minister of Finance? Only time will tell.

The second point which the hon. the Minister made was that “inflation and rising prices are our most important economic problems but we must keep them in proper perspective”. Sir, obviously the hon. the Minister must have looked at these problems in their proper perspective; otherwise he would not have asked us to do so. What was the result of the hon. the Minister’s examination? Additional taxation amounting to R47 million; that was the perspective as it appeared to the hon. the Minister. Here we have something that has never happened in the history of South Africa, to my knowledge—I stand to be corrected. We have additional taxation amounting to R47 million six weeks before the Budget in a Part Appropriation Bill. In the hon. the Minister’s main Budget in August of last year the total extent of the new taxes he imposed was R15 million for a full year; that was in the main Budget, and now without benefit of Budget the hon. the Minister introduces measures that will increase our Revenue Account by R47 million, or by three times as much in his main Budget last year. This is an extraordinary state of affairs.

Then the hon. the Minister went on to say that he was not pessimistic about the balance of payments position and that the idea that we had reached a crisis stage was definitely exaggerated. If there is no crisis, Sir, why has the hon. the Minister taxed us to the extent of another R47 million in the Little Budget, not in the main Budget? We could have understood it if the hon. the Minister had said that there was a crisis and that he needs another R47 million. But he says that there is no crisis; he has examined the problems in perspective, but he still wants R47 million. I wonder why? There seems to be some unseemly haste here, Sir. The hon. the Minister did give us two reasons. He said—

That is correct. Then he went on to give this as his second reason—

Sir, I find it difficult to believe that the hon. the Minister really expects us to accept these two reasons as sufficient for the staggering additional taxation with which he has presented us. There is nothing in his speech to suggest that the issues are so urgent as to warrant the steps that the hon. the Minister took. Perhaps there are other factors that we have not heard about yet, factors that may become apparent when we hear the main Budget. The new measures have only created more uncertainty as to what is to follow in the minds of the public and have created more despondency. It is bad enough, Sir, where we have to deal with impositions from without, like the rise in the cost of crude oil. This is bad enough. But it is not good enough when we have to deal with further impositions from within as well.

Side by side with the increased sales taxes, we had a relaxation of the conditions of sale in respect of a certain group of durable consumer goods. The hon. the Minister of Economic Affairs set out the reasons for these changes in his press statement and this is what he said—

The hon. the Minister appears to have forgotten that Parliament was in session from 17th July, 1970 to the 2d October, 1970. What was the hon. the Minister doing then? Was he getting ready for a well-earned holiday, or perhaps getting ready for the provincial election?—

Now the public sees the picture somewhat differently. What they see is hasty, badly thought out measures that were creating havoc with the economy and had to be amended and amended and amended.

You see, Sir, the public goes back to before the election of April 22nd and they go along with the Financial Mail of last Friday, which said—

And we add, in instalments. The Nationalist Party first, South Africa second. But what concerns the public even more is the fact that the Government seems to be incapable of any firm policy. They see the credibility gap widening. Restrictions on the sale of these durable goods were first introduced on October 30th, two days after the provincial election. Within four weeks, 28 days, changes had to be made because some sectors of industry were being so badly affected that the situation was getting alarming. The hon. the Minister of Finance of course said in his speech last Wednesday that these restrictions were relatively moderate, but the hon. the Minister of Economic Affairs had to change his regulations within four weeks. Now we have them altered again for the third time in four months. What kind of planning is this, Mr. Speaker? Is this the way we are going to be governed? Regulations promulgated and changed, and changed again, three times in four months? This does not smack of very good government.

The sales tax was first introduced in 1969. It was changed extensively in 1970, and now it has been altered drastically again in 1971. There is no design in the actions of this chameleon-like Government, which changes and changes ad infinitum. And it is not only on the fiscal front that this happens; it happens in other areas. In the no-confidence debate that we had on the 3rd of this month we had the hon. the Minister of Labour standing up like Horatio, with the hon. the Minister of Bantu Administration and Development on his left hand and the hon. the Minister of Information on his right hand, valiantly keeping the bridge with him against the horde of non-White labour, and this is what he said: “I am allowing no more non-White labour into the White areas.” But five short days later, in the words of Macaulay, while those behind cry “Forward! I presume that applies to the Deputy Minister—those before cry “Back!”, the hon. the Minister in Pretoria gave up the epic struggle on behalf of the White worker and exempted Coloured bricklayers and plasterers from work reservation determinations. We ask the Government for long-term planning, but we hardly get any short-term planning.

We have theories, plenty of theories. We had quite a lot of them last Wednesday. Let us take a look at some of them. The hon. the Minister said on Wednesday—

It remains the Government’s endeavour to encourage economic development and higher productivity. These, however, were long-term objectives. For the immediate problem of inflation and the unfavourable balance of payments, these work too slowly. Therefore short-term “dempmaatreëls” are necessary to curb excessive spending.

Mr. Speaker, we have had inflation with us for a long time now. What were immediate problems in 1964-’65 are still immediate problems in 1971. The Government has taken short-term measures to curb inflation since 1964-’65, but these short-term measures have now become long-term measures. The hon. the Minister of Finance acknowledges that this is the case because he says—

It is wrong to talk of measures as short-term only. They are long-term in the interests of stability.

We believe that short-term “dempmaatreëls” may have a part to play, but only if they are used to prepare a base from which to launch long-term growth policies. That is the only value they have. In isolation they can only do harm. These new measures, taken together with the relaxation of restrictions by the hon. the Minister of Economic Affairs, are highly inflationary. They will certainly push up prices, not only to the extent of the new taxes, but to the snow-balled effect of the new taxes. That is what the public is going to pay. They will not pay just the extra 5 per cent, but the 5 per cent, plus, plus and plus.

The statement by the hon. Minister of Finance that the effect of the sales tax is only a single, non-returning increase, is beginning to have a somewhat hollow ring to it. We now have had three of these single, non-recurring increases in two years. I want to remind the hon. the Minister of a little saying: “Once is an accident, twice is a co-incidence, but three times is a habit.” It seems as if we are approaching the habit stage. It is doubtful whether the inevitable increase in prices plus smaller deposits, which we now have in terms of the hon. the Minister of Economic’s new ruling, is going to curb spending. What it is likely to do is to start off a new round of wage demands. We will be back again in the old cycle of higher prices and wage demands, higher prices and wage demands. It is like a gramophone needle which is stuck on higher prices and wage demands and we get no further.

Dr. A. S. Jacobs of Volkskas who was previously economic adviser to the Prime Minister has already said that these new measures cannot be successful unless the Government imposes restraints on wage increases. I want to ask the hon. the Minister this afternoon whether he is now going to embark on an incomes and price policy, whether he is going to stop further increases in wages and impose price controls right across the board and whether this is going to be part of his overall strategy to curb inflation and curtail buying. If this is so, I believe that the country should be told that the hon. the Minister is now following in the footsteps of the Socialist Government in England. It helped them lose a general election. Perhaps it will help the hon. the Minister too.

A further effect of the measures is going to be the transfer from the private sector to the public sector of R47 million. What is the hon. the Minister going to do with this money? Is he going to sterilize it or is he going to spend it? If he is going to spend it, I want him to know that we believe that the private sector could spend it far more effectively than the Government sector can. The Government still has to learn that, for spending restraints to be effective and successful, they must include the public sector as well. Up till now the private sector has carried the burden of restraint. If hon. members opposite would like to know how we suggest that the Government should save money and not be wasteful, let them nut their questions. There are many members on this side of the House who will be happy to answer them.

Why do you not answer them?

I do not have the time and I am in a rather difficult position when it comes to that as hon. members will realize, because I am a member of the Select Committee on Public Accounts.

The hon. the Minister has as his objective economic growth and financial stability, or what he calls stable growth. He believes that the key which will correct his problems is the key of fiscal and monetary policies. He believes that the correct policy lies in tight fiscal and monetary control. We disagree with the hon. the Minister and so does the rest of South Africa. Not since 1933 and the gold standard problem has there been such unanimous opposition to this Government on the economic front. The opposition is coming from every single sector of the community. I do not want to mention names like Jan Marais, the other Marais or Jan Hupkes. Everybody who is anybody in this country is attacking the Government. Their own newspapers are attacking the Government non-stop. There is criticism from the Government’s own supporters. There is criticism from the financiers and the industrialists; not United Party industrialists and financiers, but financiers and industrialists from every sector of the community. You are getting it from the housewives. You are getting it from the trade unions. You are getting it from everybody in South Africa. As Mr. Gorshel would have said in this House, there has not been such a cacophony of sound for years.

Stable growth is a very great ideal. I agree 100 per cent with the hon. the Minister as far as that is concerned. But the late Dr. Dönges was looking for this five years ago. He called it the golden mean. But we have never found this golden mean. Every country in the world is trying to find this ideal of stable growth. Not one has been able to find it yet. I think the hon. the Minister will be the first to acknowledge that. They have all failed. There are some interesting comments in Time of 14th December in an article by Time’s board of economists and headed “Inflation’s stubborn resistance”. Time’s board of consultants contains such eminent persons as Otto Eksteen, who was a member of the Council of Economic Advisers, David Grove, Walter Heller and many others, who are all known to the hon. the Minister. They had some very interesting things to say. Here is one of them:

This is what they anticipate. A very interesting little question is asked at the beginning of this article. It applies to America, but it has some merit for us too:

The sharply rising unemployment does not apply to South Africa. It goes on to say:

I do not believe that our situation is exactly the same. However, as I said in the No-confidence debate there is a new strain of inflation. The world is very very unhappy and has not yet found the mechanism to deal with this type of inflation.

Have you found the solution?

I think we have found a better solution than the Government. At least we are prepared to use the tools at our disposal and we do not lock half of them away. Then they go on to say this:

I suppose we could say “in the balance in our payments position”.

There you have it.

We will be no more successful than any other country in this world if we continue along the line that fiscal and monetary measures alone will give us this stable growth we all want, and if we fail to deal with our labour position adequately we will never achieve what the hon. the Minister wants. I do not want to be misunderstood, as we are misunderstood by the other side on every possible occasion; we are not talking about opening the floodgates of labour, but there are lots of jobs which White men are doing today which could be done better by non-Europeans and the White men could go to higher jobs. What we have to be careful of is that we are not playing with brinkmanship. This firm grip on the economy could very easily lead to brinkmanship. For the best we can expect only an absolute and relatively low growth in the economy and at worst we can expect a dangerous lack of confidence in the economy which can lead to a serious drop of inflow of capital to South Africa. If remedial steps are not taken in that case, it could lead to a recession. That is the big problem.

This see-sawing of the Government of over-reacting whenever they feel that corrective measures are necessary, and then over-correcting before these measures have had time to take proper effect, is playing havoc with forward planning in the business community of South Africa and it is getting dangerous. The hon. the Minister said quite rightly that spending that is greater than production undermines stability. We agree with the hon. the Minister on this point. However, you can bring spending into line with production, not only by curtailing spending, but also by increasing production. What we have from the other side of the House on the question of increasing production is a sort of vague reference in passing. The emphasis is all on curbing demand and no emphasis is being placed on increasing production. That hon. Minister had something to say about increasing production, but according to him some of the necessary measures will only be of effect over a long term. Then he referred to the Railways, the Post Office and housing. Of course, they are long-term but they will be longer-term if we do not get on with the job.

You tell the people not to work harder.

The hon. the Minister must not talk. We are seriously running short of water today, because the hon. Minister did not want to get on with the job. What is happening with the Vaal Dam wall? Of course it takes time, but the longer you wait, the further ahead the job will be done. That is what has been happening. We do not have to tell the House about the pipeline, the Vaal Dam wall, the Hex River tunnel and one example after the other. Their motto seems to be, “Do not do anything today, let us wait for tomorrow”.

We choose to increase production. We would opt out of a situation where there is no labour policy and where the economy can only survive because of exemptions and evasions. That is the only reason for the economy surviving, namely exemptions and evasions. The whole labour position is so confusing that the industrialists do not know which way to turn. When an industrialist gets an exemption under the Physical Planning Act, he finds that there are another three departments which he has to deal with before he can get the employment of one Bantu. That is what is going on. We will utilize the labour available on the basis outlined by my hon. Leader in the No-Confidence Debate. We will follow the general policy which had been outlined by my hon. Leader in the No-Confidence Debate. It is a policy which he has said would put to work our water resources instead of letting them run away to the sea. What proportion of our water resources is running away to the sea? We will put our mineral wealth to work and we will put our agricultural wealth to work. Furthermore we will put our productive capacity to work and that includes labour. We would cease to impose more and more burdens that strike at the very being of our middle- and lower-income groups and particularly at the non-Europeans that cannot defend themselves. What we would much rather do is to rekindle in the people a sense of involvement with South Africa again, an involvement which would lead to a greater South Africa and an involvement which would enable us to plan together for the growth and stability which the hon. the Minister is looking for.

There were some strange things in the hon. the Minister’s speech which I could not follow. He told us that the consumer index was standing at 4.1.

Last December.

But according to the Reserve Bank quarterly bulletin of December 1970 the annual rate from December to October was 4.6.

It was later corrected by the Reserve Bank.

We do not seem to be able to get a rate any more. First we had a figure of 6.2. That was then corrected to 4.6.

Who gave you that figure of 6.2?

Commerce, the publication of the hon. the Minister of Economic Affairs. I will be happy to send this publication to the hon. the Minister of Finance. This figure was, however, corrected and became 4.1. Soon we will have no inflation. Maybe we do not have inflation!

We have to look back over the year to get the correct figure.

But we were given three different figures. As far as I can understand from the authorities I have been able to consult, the current rate is 5.3. The Reserve Bank has changed its mind three times. I have here the Reserve Bank’s own report which the hon. the Minister has read and where they say that the rate of 6.2 was incorrectly stated.

But Sonny Emdin says 5.3.

There is another matter that concerns us, namely the question of devaluation. In his speech on Wednesday, the hon. the Minister of Finance dealt with this question of devaluation. I believe he dealt with it again in a broadcast on Wednesday night. I did not hear it. He said the following in his speech—

I am not arguing this with the hon. the Minister. All I am saying is that traditionally when hon. Ministers of Finance deny that there is going to be devaluation the next thing that happens is devaluation. This is what happens. I think the phrase “me thinks thou doth protesteth too much” arose on this question of devaluation. I do not believe that we should have devaluation. I agree with the hon. the Minister. I do not think that we are going to have devaluation. But I want to tell the hon. the Minister that people outside are very concerned at the fact that he thought it necessary, twice in one day, to refer to this question of devaluation. All I am asking the hon. the Minister to do when he replies to this debate is to make it quite clear that as far as South Africa is concerned there is no question of devaluation in the immediate future. I do not want to tie the hon. the Minister up too far ahead, because other things can happen. It is, however, very important from the country’s point of view for him to do so.

However, when we finished listening to the hon. the Minister last Wednesday we had the feeling that we had very little to be thankful for from this Government. We are tired of these peaks and valleys. We are tired of these ups and these downs. We are tired of these putting on of controls and these taking off of controls. What we want for this country is a better standard of living for everybody. What we want to do is to get down to a long, slow and steady upward move, but something that will be continuous. We do not want the continuous changes that we have had year after year from this Government.

Mr. Speaker, I have said on more than one occasion in this House that after 22, now almost 23 years of opposition, hon. members on the opposite side seem to have lost the ability to make a positive contribution. This amendment by the hon. member for Parktown, which you have just read, is to my mind the most outrageous piece of work I have come across for a long time in this House. The first leg of the amendment reads—

The only positive contribution the hon. member made here this afternoon, was to say that we must utilize all our means, all our possible labour. That is the only positive suggestion the hon. member made. For the rest it was a long string of criticism. The general public, the businessmen and others were suffering hardships, etc. In addition he began by saying that it was the general opinion among the public that this Government was unable to govern the country; that this Government was unable to combat inflation; and that this Government was simply no good any more.

It is of course very easy to single out observations made by members of the business profession and of the public which suits one’s own purpose. However, it is as easy for me to quote other observations. Now I am not even referring to observations made by the Press that supports us. I am also going to quote from the same publication from which the hon. member for Parktown quoted, i.e. the Financial Mail of 12th February, where the editor was discussing the Part Appropriation speech made by the hon. the Minister of Finance, and then said, inter alia—

That is what the Financial Mail said, and further to that—

So I can continue and also quote opinions of people in the business profession to indicate that they are not all that disillusioned by these new proposals of the hon. the Minister of Finance. In fact, as I quoted above, the one thought that it would stimulate industry in general; on balance it would only bring advantages.

The hon. member made a few wild statements here. He asked, why the haste with this new sales duty? Why did we not wait until the main Budget? It is quite clear to me that a few people who wanted to buy heavily before 31st March had been beautifully caught out by the hon. the Minister of Finance. I want to give the Government every credit for that. They have caught out a whole lot of people quite beautifully. What is more, this Parliament of ours is not in session throughout the year, as most parliaments in the Western world today are. It only sits for five months of the year. In November already it was quite clear that personal consumer spending was getting out of hand, and that something would have to be done about it. But Parliament was unfortunately not in session then, and the Minister did not have the means at hand with which to do something. And what is wrong with the Minister, at the very first opportunity after Parliament has resumed sitting, making use of the means at his disposal to curb that excessive consumer spending? “Higher prices, wage increases” was a recurring phrase in the speech of the hon. member, and he said the Government is incapable of doing anything about this spiral. I shall in the course of my speech return to the underlying economic principles which are responsible for this situation. At this stage I just want to point out that after the countries of the world had been given the fright of their lives by the depression of the early ’thirties, all Western countries have since the Second World War made it their aim to ensure full employment, and where there is full employment, one can have nothing but “higher prices, wage increases”. As long as full employment prevails the worker has the upper hand and he can command higher wages. I made it very clear in a previous speech of mine in this House that if we ever want to solve the economic problems of our country, we will have to make an appeal to all our people—workers as well as entrepreneurs— to display a very marked degree of self-discipline. We cannot on the one hand have full employment, and on the other prevent wages and salaries from continuing to increase, unless there is a more marked degree of self-discipline. Fortunately we have here in South Africa wage and salary earners who are in fact displaying that self-discipline. I have already referred to the laudable example of the Post Office, whose workers voluntarily undertook to work longer hours for the same salary. That is the kind of self-discipline we want to see. Then there is also the example of a large Afrikaans building society, that did the same thing. Over the weekend I heard that our second largest trust company, the Boland Kamer, had also proceeded to work two hours longer per week. Herein lies the solution to our problem. However, as long as we have full employment, we can do nothing about it by means of legislation or by means of collective bargaining, except, as I said, to make an appeal for self-discipline among our people.

The hon. member for Parktown said that the hon. the Minister was requesting an additional R47 million, and said that the private sector was far better able to spend that R47 million than the Government. But if we are to have that economic growth to which the amendment of the hon. member refers, we will in the first place have to have a very strong infra-structure. What is wrong with the Government’s using this R47 million as capital spending to strengthen this infra-structure, the infra-structure on which our economy can base its continued growth.

The hon. member also mentioned a new strain of inflation in the world. This so-called new strain of inflation is simply the result of a world-wide Government policy of full employment, for, as I have already said, we cannot on the one hand have full employment and at the same time prevent wages and salaries from rising higher and higher. The only positive contribution made by the hon. member for Parktown was his statement that they will fully utilize all the means at their disposal. With that he meant, and also said, that they would use labour far more efficiently. In the same breath, however, he said that this did not mean that they would flood the economy by releasing all the labour into it. But surely that is precisely what our policy on this side is, i.e. that we are selectively relaxing our labour legislation—as has just been announced by the Minister of Labour, but are not introducing a total suspension of all labour legislation. When listening to the Opposition we get the impression that if we would only change our labour policy we would immediately deal inflation a knock-out blow; if we would only lift the colour bar in industry—Eureka! With a wave of the magic wand, all our problems are solved and we would even overtake Japan with its growth rate of 10 per cent, inflation would disappear like mist before the morning sun and we would all become rich overnight—in fact, we would all wake up the next day to find ourselves in the wonderful land of Utopia. Mr. Speaker, the set-up is definitely not as easy as all that. The hon. member was quite right to admit that it was not only South Africa that is struggling with the problem of inflation; he said that all Western countries today were struggling with a similar problem. If lifting the colour bar here would solve this problem, what would solve America’s inflation problem? What would solve the United Kingdom’s inflation problem? I can furnish the figures to show that both countries are struggling with an even more acute inflation problem than we are. The latest figures available indicate that the inflation rate in the U.S.A. is 6.7 per cent. Even if I were to concede to the hon. member that our inflation rate is not 4.1 per cent, but is in fact 4.6 per cent,—of course I do not agree with him and I shall in a moment read out the quarterly report of the Reserve Bank to show that the hon. member was reading it incorrectly—even if I were to concede that, the inflation rate here is still lower than in America. As I have said, the hon. member was reading it incorrectly when he read out the quarterly report of the Reserve Bank. He said that the Reserve Bank had recently stated that the inflation rate was 4.6 per cent and that the Minister was now saying it was 4.1 per cent. The hon. member did say that, did he not?

No.

What did the hon. member say then? [Interjections.] 5.3 per cent? In the quarterly report of the Reserve Bank of December, 1970 mention was made of an inflation rate which had further accelerated to an annual rate of 4.6 per cent between December, 1969 and October, 1970, and pointed out that this increase was mainly attributable to the behaviour of food prices, prices which during the first five months of 1969 had moved horizontally. Since October 1970 vegetable prices had dropped considerably, the cumulative effect of which was that the expected inflation rate of 4.6 per cent for the entire year 1970 was then not 4.6 per cent but 4.1 per cent. Sir, I do not know whether the hon. member cannot read Afrikaans, but surely this report appears in English as well, and surely he must have read it.

That is just by the way, Sir. I was “busy explaining that if the solution to our problem supposedly lay in our simply relaxing our labour legislation and abandoning the colour bar, how did the problem of other Western countries originate which do not have such labour legislation? I mentioned to you the example of the United States, which has an inflation rate of 6.7 per cent. The inflation rate there was not only high in this one year. Over the past three years the figures have read as follows: 1967-’68, 4.6 per cent; the following year, 5.3 per cent; and last year 6.7 per cent. In Great Britain the inflation rate three years ago was 5.2 per cent; the year after, 5 per cent; and then 7.1 per cent. In the Netherlands the figures were 3.3 per cent, 7.2 per cent and 6.7 per cent over the same three years. In Western Germany it was 4.3 per cent during the past year and Switzerland 4.9 per cent. In Japan the inflation rate over the past year has been 8 per cent. I am asking you, Mr. Speaker: Must one laugh at such childishness, or must one weep at it? For if our problem can supposedly be solved so easily by abolishing the colour bar, then one wonders how the problem in these countries is going to be solved. I think all one can do is weep because we are in this year 1971 still saddled with an Opposition which has a blinker mentality, that simply wants to pull a rabbit out of a hat to impress the audience with, while that rabbit is certainly not going to be the solution.

It is not a rabbit; it is a donkey.

Let us face up to the fact, Mr. Speaker. All the countries I have just mentioned, that have this high inflation rate, also have high growth rates. That goes without saying; the pattern in our Western economy in recent years has been a high growth rate coupled with a high inflation rate. The latest growth rate in the United States was 5.2 per cent and their inflation rate was 6.7 per cent; the growth rate in the Netherlands was 6.9 per cent, and the inflation rate 7.1 per cent. So I can continue, and then I come to Japan with its 8 per cent inflation rate and its 10 per cent growth rate.

But what is their per capita growth rate?

Sir, a high inflation rate is simply the price which we are paying and which all the Western countries are paying for a high growth rate. And what is the position if one wants a low inflation rate? Simply consider the case of Zambia, of Ghana and Kenya. There you will find a much lower inflation rate, but there you find almost no growth rate.

Sir, this brings me involuntarily to this debate which is now being conducted with so much zeal in the public Press in regard to growth versus damping. Must we have a growth economy, or must we have a damped economy? We are being accused by the Opposition of being advocates of a damped economy. What is further from the truth than this statement? I can simply remind the Opposition of what the growth rate of this country has been over the past 22 years. Talk about growth rate! In 1948 our gross domestic product was only R1,700 million, and now it is R12,000 million, growth such as we had never seen before.

What was the inflation rate in those years?

I can tell you precisely what it was, if you pretend to know nothing about such matters. Over the same years it has been 75 per cent. [Interjections.] If the hon. member does not know that, I will tell him. The point is simply that we are being accused of being the apostles of a damped economy, and never in the history of the Western world has there been such growth as this country has seen during the past 22 years under National Party Government, from R1,700 million in 1948 to R12,000 million in 1970. What phenomenal growth! Now I just wonder what it would have been if the Opposition had been in power during the past 23 years. One cannot judge them by their deeds because it has been such a long time since they have been in power, but one can at least remind them of what their political forefathers said in 1928: “Where must mother England sell its products if we are to have our own steel factory here?” With that mentality one cannot have growth. With those theories one cannot cause a country’s economy to grow, and then the hon. member for Parktown has the temerity to move an amendment here to the effect that this Part Appropriation Bill cannot be passed until we take steps to develop the economy of the Republic. What temerity, Sir! Of course we believe in growth, hut we believe in purposeful, controlled growth and it is not merely a matter of our believing in it; we are also taking steps to bring it about. But we must be very careful not to encourage that kind of growth which spreads like a cancerous growth, that sort of growth which spreads like a cancer and which kills the body on which it is growing. That is the growth we must guard against, that uncontrolled and unplanned growth which will kill the economy on which it is growing.

The Opposition’s new slogan, introduced by its hon. Leader in last Year’s Session, i.e. that we must have a growth as Japan has, of 10 per cent per year, I find to be nothing but pure jealousy. I do not blame them for being jealous because to see how this country’s economy has grown over the past 22 years, is enough to make anyone’s mouth water. They put me so much in mind of the shoemaker’s son whose mouth watered every time he saw the farmer’s son eating such large red apples at break. But never mind, Sir, the people of South Africa will not allow them to go and farm with the economy of this Republic and for that reason we need not pay very much heed to them now. We believe in growth, but we plan the growth and we promote growth according to two very clear principles.

The first very essential and clear principle for sound growth is that sound economic growth must be based on hard work and savings, and secondly that it must be based on sound sociological considerations for it will avail you nothing to gain the whole world if you lose your soul. It is of no avail being the richest country in the world if there is social unrest and anarchy in the country. That is why sound growth must be based on two principles, i.e. that economic growth must be based on hard work and savings, and on the other hand sociological considerations must not be left in abeyance.

In the limited time at my disposal I should like to discuss very briefly the economic considerations in a growing economy. In the first instance I must point out that if we want sound growth it must be based on a marked degree of saving among all the members of the population. Our basic problem today is that we are not saving more in order to form our own capital. After all, any business undertaking is based on a sound relationship between its own and its borrowed capital. But our own capital is becoming insufficient because we are no longer saving. If we consider our savings figures over the past three years, we find that during the year 1967-’68 the personal savings of our population were 12.3 per cent; i.e. that the personal income of the population minus the personal spending of the population was 12.3 per cent. The year following that it decreased from 12.3 per cent to 8 per cent. In the most recent year 1969-’70 our personal savings figure was only 6 per cent. It is obvious that if our savings have in three years decreased from 12.3 to 6 per cent, we must be encountering problems on the economic front. Of course, it is very easy to say that one cannot save because everything is expensive and one is not earning enough. After all is said and done, this is a relative concept. Of course, I can never hope to save as much as the hon. the Leader of the Opposition can, because he is a rich man. But there is nothing to prevent me from saving the same percentage of my income as the hon. the Leader of the Opposition or Mr. Harry Oppenheimer are. When will our people understand that in order to grow one must save, because without capital one cannot grow. If one does not save, one does not have capital. Let us therefore examine our own conscience and make sure that we are at least saving a decent percentage of our income. Then we can have the necessary growth which we desire. This major decrease in personal saving is really a serious and dangerous situation which we cannot allow to continue.

It is true that inflation is at the same time the cause and the result of saving. One could argue that it is not worthwhile saving because inflation accounts for 4 per cent of one’s savings every year. That is in fact the case. But if we all argue in this manner and we spend all our money, then we can have no economic growth. That is why we must escape from this vicious circle of higher prices and demands for higher wages and salaries. While the population does not want to apply self-discipline towards that end, we have no other option than that the hon. the Minister of Finance should utilize fiscal measures to ensure that saving. If the hon. the Minister wants to spend that R47 million on the expansion of our infra-structure, then I have no fault to find with his doing so. As in the past I can do nothing but give my wholehearted support to the Government in its attempts to combat inflation and to ensure sound economic growth.

Mr. Speaker, it is a pity that we do not have the old rule where a member could be granted extension of time, because if we had the old rule and the hon. member who has just sat down was allowed to continue, he would have proved that there is no crisis at all. In fact, he seemed to suggest that there is virtually no inflation and that the position is under control in contradiction to what his Minister said.

There is another matter in regard to which I should like to correct the hon. member. That is his statement that there is full employment. I cannot accept that there is full employment in this country when we see the queues of men standing outside labour bureaux to apply for work.

Where?

That hon. member wants to know where. It is quite obvious that the hon. member is out of touch with what is going on. If he goes to any Bantu labour bureau in the country he will find queues of people.

Any of them?

Yes, any of them. If that hon. member goes to any of these labour bureaux he will find queues of Bantu endeavouring to get a permit to look for work. Where the queues are very small you will find that in that particular district the Bantu are so concerned about the hopelessness of trying to get a job that they do not bother calling any longer. In fact the position is such that in my own constituency of Pinetown there are people in the Bantu reserves who cannot get a permit to work in the centre of Pinetown although there is demand for their labour. The officialdom that is involved in trying to obtain a job is such that they despair of ever getting a job.

The problem of inflation is with us, despite what the hon. member said, despite his quotation of figures from other parts of the world, despite his quotation of figures from Japan, the United Kingdom, the United States of America. The ordinary housewife understands inflation in a much better way. She says the costs have gone up. We can have all the economic theories we like to talk about this afternoon, but if you ask the ordinary man in the street he will tell you that inflation is here and is here in a worse degree than it was in the past year. Both sides of the House agree that there is inflation. The hon. the Minister of Finance agrees that there is inflation, but the hon. member for Paarl dismisses that there is any serious inflation. Although both sides of the House agree that there is inflation, we are different in approach. The hon. the Minister in an interview reported in the Rand Daily Mail on the 30th November last year, admitted that the economy was not healthy, but that long-term progress could be expected. We have been waiting for that long-term progress for the best part of five years, as the hon. member for Parktown has showed us this afternoon. In his speech the other day, the hon. the Minister said that the country could not sit still and hope that things will right themselves. He said that where consumer spending was an important factor, it was the Government’s duty to curb this excess spending. He went further to say that inflation and rising prices were the public’s most important problems. That is my answer to the hon. member for Paarl, namely the answer of the hon. the Minister. However, the Government is guilty itself of inflation as is evident from the recent report of the Controller and Auditor-General. In part 2 of the Auditor-General’s report for the year 1969-’70, there are several references to inefficiency and inadequate control. On page 426 of the report on the Orange River project, the Auditor-General says—

These are not my words; these are the words of the Controller and Auditor-General.

Has the report been considered by the Select Committee on Public Accounts?

I expected that interjection from the hon. the Minister. The report has not yet been considered by the Select Committee. But the hon. the Minister knows the procedure as well as I do. The report is submitted to the Select Committee on public accounts. At the end of the session the Select Committee reports and the report is never debated by this House. The hon. member for Parktown could not deal with it, because he is a member of the Select Committee on Public Accounts. However, I can deal with it. It may be that the Select Committee will accept all explanations. But we have an Auditor-General who is a competent and responsible officer who makes this statement. The hon. the Minister and I both served on the Select Committee. We spent many hours there. We know how frustrating it is to spend hours on the Public Accounts Committee and then eventually the report is tabled at the end of the session and is never discussed by the House. I do not intend letting this opportunity go. I have a right to discuss the Auditor-General’s report here this afternoon. I intend to refer to these statements which I admit are prima facie. There may be an answer. However, subject to that qualification, I think the House should take notice of it.

As the department’s replies were in many cases unacceptable, he referred the matter to the Treasury and suggested, inter alia. the appointment of a competent committee to investigate the whole question of expenditure on the project and protect the interests of the State. This is surely a serious state of affairs where the Auditor-General asks for a special committee to be appointed and where the Treasury agrees with it, a special committee to go into the whole question of control over this spending of money. Surely this is a serious state of affairs. Then the report goes on to refer to the variation orders and states that the conditions of the contract in force provide that the engineer in charge of the works could make variations “to form, quality and quantity” of the works as defined. While the powers of the engineer in this regard are admittedly wide there are instances in which variation orders have been issued to cover additional work which in the opinion of the Auditor-General were not related to the work covered by the contracts and for which separate tenders should have been invited and the State Tender Board’s approval should have been obtained for the inclusion of the work under existing contracts. Under the heading “Fruitless or avoidable expenditure” there was included expenditure totalling R1,743,567 which was either fruitless or avoidable and should have been reported to the Treasury for covering authority in terms of Treasury Instruction No. 1526. I am quite certain that I cannot see the Public Accounts Committee saying that that R1¾ million’s work was in order. The Auditor-General is a responsible officer who has had many years of experience in the Civil Service. Under a further heading the report states with regard to the Hendrik Verwoerd Dam:

This means that because the estimate was over 50 per cent out, the contractor received an official bonus. Then the report goes on to say, and I quote:

The Auditor-General goes on to say that notwithstanding certain explanations offered by the department, he is still of the opinion that wasteful expenditure could have been avoided if the bill of quantities had been compiled on a more realistic basis by the consulting engineers. One is entitled to ask who the consulting engineers are and who the contractors are.

Still under the heading of Water Affairs, the Attorney-General goes on to say, under another heading in connection with this dam, that the vouchers in support of expenditure on this project generally contain little or no indication of effective departmental control or checking, and it would appear, at least as far as progress payments are concerned, that undue reliance is placed on certificates by the consulting engineers. This apparent lack of control was referred to the accounting officer for his comments and his final reply is still awaited. We know that this report will go to the Select Committee in the usual way, but despite the fact that this is a matter which will be referred to the Select Committee on Public Accounts, it is not likely to be dealt with during this Session. Prima facie there is evidence of serious lack of control and lack of control as far as large public spending is concerned, can stimulate inflation to a marked degree. If we look back on cases of previous years, we will recall the case of the Government Printer which had over R1 million’s worth of stocks which had been inadequately housed because adequate housing could not be found for them.

Last year the report referred to the waste in the Defence Department where stocks were inadequately controlled and the nonproductive expenditure becomes inflationary. In dealing with the Department of Transport, the Auditor-General said that during the year under review 737 garage vehicles, in addition to those involved in motor accidents, were with Treasury authority, withdrawn from service. Only 481 of these vehicles had completed the official mileage life. One finds that while the Government, and particularly the Minister of Finance, is calling on the general public to cut down on spending and to live within their income, the Government departments are not only wasting money but are spending cm prestige buildings. We get the impression that Government departments are all trying to keep up with the Joneses. They are all concerned with putting up prestige buildings and with creating the right impression. Every department seems to have its own magazine, all in glossy type, and the hon. the Minister of Finance tells the public that to control inflation the public will have to live within its means! I think the hon. the Minister should start with the various Government departments and ask them whether all the expenditure is really necessary. There seems to be a lack of co-ordinated planning in Government departments. One gets the impression that each Government department is empire building.

Again I want to refer to the report of the Controller and Auditor-General. On page 452, under Loan Vote J, Industries, it is stated that an amount of R3 million was invested in border areas. This amount had originally been invested in shares of the Atlas Aircraft Corporation during 1965-’66. When the Armament Development and Production Corporation of South Africa took over the Aircraft Corporation the amount was refunded to the Industrial Development Corporation of South Africa. With the approval of the Treasury the amount was utilized for investment in border areas. Am I to understand that this investment in the border areas by the I.D.C. did not come up for parliamentary approval? Parliament voted this amount of R3 million for the Atlas Aircraft Corporation. We had a debate in this House on it. Eventually, the Government changed its mind and when the Armaments Development and Production Corporation took over the Atlas Aircraft Corporation the R3 million was paid back to the I.D.C. The I.D.C. did not come back to Parliament to ask for further instructions, but took the money and invested it in border areas.

However, it is interesting to note that on the same page is shown a schedule of dividends received by the Government in respect of the relative industrial shares. The total to 31st March, 1970, is R76,504,653 but while this includes dividends from the Fisheries Development Corporation and the S.A. Iron and Steel Corporation, no dividends throughout the whole period have been received from the Industrial Development Corporation. Is the hon. the Minister satisfied that the I.D.C. is not making its contribution to the inflation experienced in the country? Is he satisfied that all the I.D.C. ventures are profitable or that they are good business? If they are not, they can be contributing to this inflation spree we have in this country. In his speech the hon. the Minister said that there was no crisis and that some people try to create the impression that there was a crisis. But let us look at the action of the Government over the past few months. Last year the Government, after the election, gave massive large scale wage and salary increases to Railway workers and Civil Servants. They then decided that tough hire-purchase controls were necessary, obviously without adequately considering the effects of these controls. It was then found that the effect was to seriously distort the production in some industries.

Furniture factories and electrical appliance factories were inundated with order cancellations, staff were put on short time and in some cases dismissed. If the hon. the Minister refers to last Saturday’s Natal Mercury he will find that in a factory in Newcastle one of the largest factories in South Africa producing electric stoves and washing machines, over 200 Bantu have been dismissed or laid off for the time being because orders have been cut. I know of other factories where staff have been put off as a result of the cancellation of orders by distributors. They cannot do business because of the restricted conditions and they had to cut orders. The cut orders were referred back to the factories and they in turn had to cut back on production and in some cases had to dismiss staff or put others on short time.

Has the hon. the Minister received any information from the Department of Labour as to what has happened to the 200 Bantu who were put off? Were they put off temporarily or for a period? What happens when they are put off? Do they get a dole or pay? What happens to hire-purchase instalments? Does the hon. the Minister know who the persons who buy under hire-purchase agreements are? If one goes into any Bantu township in Johannesburg, Cape Town or Durban, one will find furniture and radios purchased as part of their assets by means of hire-purchase agreements. This is a typical right throughout the world. People who cannot afford a good house, in many cases, will often own a luxury article because they like to have it.

A couple of years ago I was in Hong Kong. I saw a house on the edge of a squatter establishment. It was made of sacking, tin and timber. It was a real hovel, but outside was a TV aerial. They had a TV set inside. If the Minister goes to any of the townships, for example Soweto, Nyanga in Cape Town or Kwa Mashu in Durban, he will find in many cases that the Bantu people there have purchased furniture. When they are put off work, what happens? The hire-purchase instalments fall into default and along comes the owner to repossess. That is part of the story of putting people out of work, apart from the question of the purchase of food and the necessities of life. This limiting of the period as has been mentioned by the hon. member for Parktown, has already been changed three times within the last four months by the Government. The Minister of Economic Affairs changed his mind as to the down deposit and the terms of payment. This all creates frustration and uncertainty in the minds of the ordinary people. This was followed by a relaxing of hire-purchase terms, and now we find an amazing somersault.

The Minister introduced a new range of taxes on purchasers, and at the same time a further relaxation is announced on hire-purchase restrictions. Down payments are reduced and repayment periods are extended. That was the latest decision. Yet the Minister wants us to give him the power to raise taxes at any time during the year. With the example of vacillation which we have seen in the past year, how can he expect us to give him this authority?With all this vacillation in the field of hire-purchase transactions, what is going to happen in the coming year if he has the authority from this House to impose taxes whenever he wishes. How is it possible for commerce and industry to plan when we have had such an example of vacillation over the past few months? The Minister wants capital investment in this country, but has he thought of the difficulties placed in the way of those who wish to invest?

First of all, the investor must make a market survey so as to indicate what share of the market he could capture if he comes to this country. Then he must go to the Department of Planning to ascertain where he can establish his factory. He must inquire from the local authority to ascertain the local conditions with regard to factory buildings. He must then inquire from the Department of Community Development as to the prospects of getting housing for his employees in that area. He must also furnish details to the Department of Labour as to his labour requirements, indicating the class of labour—whether Indian, Coloured, Bantu or White. He may be required to indicate the extent of mechanization he proposes to introduce in his factory. He may be asked to indicate the ratio of Black to White labour, to decide on the nature and the location of the factory. He must also inquire from the Department of Bantu Administration as to the number of labour units he would be permitted to employ. By the time he has completed his inquiries the position has become so complicated that he invariably decides to leave South Africa out of his calculations and invest elsewhere where conditions are not so difficult. I gave the Minister an illustration last year of an overseas company considering investing over R2 million in this country, but who, because of all these restrictions and complications, decided not to come to South Africa but to go to Canada instead. I would like the Minister of Economic Affairs to compare the schemes for the encouragement of industry in Western Australia with those in South Africa. He would then realize why the rate of industrial progress in Western Australia has been so spectacular. South African industrialists are plagued with the number of forms which must be filled in, the applications which must be made to various State departments, the delay in getting decisions and the contradictions between one department and another. All this contributes to increased costs, and increased costs form part of the pattern of the inflationary spiral. The economy is sick because the labour situation is the key to everything and is the principal underlying reason for inflation.

According to the Minister, South Africans are spending too much and saving too little. But is there any inducement to save when the amount you save will buy less? The average South African does not consider total capital costs. When he wishes to buy an article—this particularly applies to the lower-income groups, Bantu, Coloured, Indians and certain groups among the White community—he regards the monthly payment as the portion he can afford out of his weekly or monthly wage packet. He does not make a mathematical calculation as to the difference between the cash price and the instalment purchase price. He works out how much he can pay in order to buy the article. If it amounts to so much a week and he can afford it, he buys that article and he regards it as a saving. An examination of the sales of many of our furniture and appliance shops will show that the average worker buys the article today because he knows that prices are going up and that it will be more if he buys later; also that on the other hand if he saves, by the time he has saved the price has gone up and put the article beyond his reach.

The export trade on which the future of the country depends is haphazard because many manufacturers still think that exporting means mainly selling abroad goods which are surplus to local requirements whereas if an overseas market is to be captured the article must be competitive. But how can the article be competitive in this country if we have an inadequate use of our labour resources and an interest rate as high as it is today, an interest rate which is higher than the overseas rate, and a continuous cost spiral?

There is a serious imbalance in capital investment. Too much is going into real estate and construction such as shopping centres, prestige office blocks, prestige government buildings and too little into manufacturing facilities. The Minister of Planning last year when he opened the National Development and Management Foundation Business Outlook Conference said the trends on the labour and capital market had led to a disquieting measure of inflationary trends. The Minister of Finance, however, in his speech tells us that there is no crisis. If he is right and if there is no crisis, then why this savage increase in taxes? Or is this not a prelude to a more savage Budget on the 31st March? I suppose we cannot expect the Minister to reply to this one. The Minister believes in damping down the economy, while we believe that by better use of the labour resources of the country, by better training and by better administration and organization, we could lift the country out of the morass and lay the foundations for a better economic future for all sections of the community. The Minister has a choice; he may either opt for the better use of all available labour resources and encourage growth and by that we do not mean a streaming into the towns by Bantu where there is no housing for them, but adequate use of the labour that is available, better training of the labour that is available and better use of the available labour in housing schemes. We have already had some relief in Johannesburg in the building industry but there is still a long way to go. Damping down the economy will retard growth and may result in increased unemployment which will in turn result in restlessness and frustration. I am quite sure that any responsible person does not want to see an increase in unemployment. The loss or reduction of the pay packet will result in failure to keep up the hire purchase instalments and the inability to purchase the required necessities of life. The repossession of assets to a small man means his life savings and will indeed be a hardship. This frustration can lead to crime and crime to unrest. There is no need for me to stress the position further than that.

A serious state of affairs exists in the country today due to the Government’s mismanagement of the economy of the country and for that reason I support the amendment moved by the hon. member for Parktown.

I did my utmost to follow what the hon. member for Pinetown was saying. Well, I know English very well; I understand it well, but I honestly could not make out what he was saying. I have here a note of 25 subjects he touched upon. No one, not even with the best intentions, could follow properly what he was saying. He must therefore not take it amiss of me for not reacting to what he said; it is, however, not because I do not have a respect for him; he himself is the cause of my not doing so. I shall go and read his speech, although I think it will be different to the speech of the hon. member for Von Brandis who as member of the Opposition here made a very sensible speech last year. I read his speech again yesterday, a very sensible speech, although I cannot agree with him in all respects. We are now dealing with a Budget here, and the question we must ask ourselves is: What is our present position? There are a few perfectly simple truths we must communicate to one another. The first is this: It has always been traditional that out of the total national product 70 per cent went into the hands of the consumer public for personal expenditure. That has been traditional over the years; it is virtually a standardized percentage. Traditionally, 11 to 12 per cent of this 70 per cent was utilized for personal savings. But what has happened now during the past number of years? This traditional percentage of 11 to 12 per cent has decreased and today stands at 6 per cent. Where previously 88 per cent had been spent, 94 per cent—R94 out of every R100—is now being spent by the ordinary public. Sir, here lies the essence of the dilemma in which we find ourselves at present. We may as well forget all these profound philosophical hypotheses on economic matters; this is the primary cause: an excessive consumer spending. Here are the statistics as I obtained them from the report of the Reserve Bank. The 12 per cent savings figure has now become 6 per cent; the 88 per cent spending figure has now been increased to 94 per cent. Sir, that is the problem we must face up to.

If we analyse this trend, we must put forward this hypothesis: The general public is permitting itself a standard of living far beyond its economic capacity. That is as clear as can be; we must recognize the truth. Why must we conceal and obscure the truth here for the sake of votes? This is what we must say to the public: We are permitting ourselves a standard of living far beyond our economic capacity. This high mass consumer economy—I am almost inclined in some cases to say this mass wastage economy—this trend which has taken root among our people, is the root cause of the present tension within our capital structure and our entire economic construction. Sir, it is a spiritual disease, and until such time as we set a limit to this mass consumer economy; until such time as we take preventive measures against it, all these vociferous demands for unchecked growth and the demand for the introduction of more labourers by the United Party will be of no avail, because increased growth will merely increase the further the inflationistic pressure of consumer spending. That is an established fact.

Sir, we must do what the Minister is now doing. You can speculate on whether it will succeed or not. I give you the right to differ about this, but in my heart of hearts I feel that the object of the hon. the Minister is the right one. What does he want to do? He has introduced this sales duty in order to check this mass consumer spending trend which has taken root among our people, and to bring them to their senses. Surely that is correct. But when I say this, Mr. Speaker, then we must ask ourselves what the reasons for this spending fever among our people is? I want to mention two reasons. I think the first and the most important reason is that there are too many facilities for consumer credit in South Africa. After the Second World War especially, this trend was introduced here from America. But, as sometimes happens to all of us, we did not take over the entire American system; we only took over about 50 per cent of it. The number of credit granting financial institutions which arose here was legion. They sprang up like mushrooms and supplied, sometimes with reckless irresponsibility, credit to the public. The easy way in which credit is obtained by the public is one of the basic reasons why our public buys and spends so easily. In America they have a system of credit bureaux. Before a person obtains credit on an instalment system a thorough investigation is instituted at the central credit bureau in regard to his past and how he pays. If he does not pay, he is placed on a kind of black list. In addition there is control over the man to whom credit is granted, and there is also control after he has omitted to meet his credit obligations. Now I want to say that if we want to rectify this matter, there is a need in our country to give serious attention, even if it is by means of legislation, to this matter of granting of consumer credit by uncontrolled financial institutions which sometimes act in an irresponsible manner.

The second cause of this buying fever which exists among our people and which the hon. the Minister now wants to curb, is what we call high pressure salesmanship and the concentration on mass advertising. No one denies the functional role of salesman within a modern industrialized economy, but it is my honest opinion that this is being completely overdone here in South Africa, particularly if we take into consideration our labour position and the social and political facets involved in our entire labour pattern in South Africa. Thousands of our young men—I say literally tens of thousands of young, healthy men—are being absorbed into service industries and into high pressure salesmanship. And tell me which of them are performing productive labour in the sense in which we ought to understand the term productive labour, by selling vacuum cleaners, sewing machines, carpets, and refrigerators? That is not the duty of productive labour for a healthy young man in South Africa. If I want to buy a refrigerator or a carpet, I can lift the telephone and I can within a minute be in contact with the seller. But these thousands of young men are expending their energy and are making money. Have they accepted the norm that making money means productivity? But all money-making is not the result of productive labour! Certain economists with whom I have been in contact, have told me that the number of these young men who are engaged in these service industries with high pressure salesmanship, in our country is 120,000. Just look at them standing in our shops and motor car showrooms. Just look at them travelling about the countryside selling fertilizer, fuel and goods. They all have their own cars. That means that a motor car must be built and that an expensive infra-structure must be expanded to meet those needs. No economy can endure and bear this burden of unproductive labour for any length of time. I want to repeat therefore that the second cause of the buying fever which has broken loose among our people is the abnormal incentives which arise as a result of this high pressure salesmanship, which is also something that was introduced into South Africa from other countries.

A few years ago Britain introduced employees’ tax. Britain then taxed institutions such as shops and banks, in other words service industries, per employee. The argument in favour of that was that the work they were doing there was not deemed to be productive enough. Today there are thousands of our young men who are unproductively wasting their labour and energy. Now the United Party is saying that the bottlenecks we are experiencing today are attributable to a scarcity of labourers and that we must open the doors to more labourers. To them I want to put this question: Where must those labourers come from? Do hon. members want to draw those labourers from the ranks of the Bantu? I want to point out to hon. members that there is no labour shortage in the field of unskilled labour in our labour market. There is no labour shortage there. Nor is there any acute labour shortage in our public service.

Yes, there is.

No, there is not. The labour shortage exists at the level of higher technological professions and trades. That is where the actual labour shortage exists. If the United Party wants to introduce labourers, where must they be located? That is an answer the United Party owes us. Do they want to bring those labourers into our metropolitan areas without taking into consideration the more complicated and more expensive infrastructures necessary to accommodate those labourers? The United Party owes us an answer to that question. They have not yet given us one. I should very much like hon. members to furnish me with a reply to that question in this debate. A labourer cannot simply be employed and brought into the economy without any consideration for what amount of capital investment such introduction of those labourers into the economy is going to involve. Has the United Party considered this? We should like to know. What is the per capita productivity achievement of the labourers the United Party wants to introduce? Particularly if they are Bantu? Will that per capita productivity achievement keep pace with the capital investment which must accompany the introduction of such a labourer into such a metropolitan area? Or do hon. members agree with us that we will be able to afford it with a decentralized industrial policy, in other words the decentralization of both industries to the border areas— particularly taking into consideration the political and social facets allied to our labour pattern? Those are questions to which the United Party must reply.

In the first place, therefore, I think that we will have to give attention to the granting of consumer credit. Secondly, I think that we will have to devote serious attention to the improved utilization of White labour in our service industries, but also as far as our Bantu and Coloureds are concerned, particularly in our distribution industry. Why must one Bantu drive out to deliver a loaf of bread; another to deliver a pound of meat; and another to deliver a pint of milk to the same house within the space of one hour? There may be up to six Bantu who in the same morning each delivers one item to the same house. These are six vehicles that have to be used and six labour force units which are involved. The improved utilization of White labour in certain industries, and the improved utilization of Bantu and Coloured labour in other specific industries is absolutely essential for us. It is imperative that the inflationary pressure of unproductive labour should be considered.

I am asking whether it is not time for a re-assessment of the utilization of all our labour forces in South Africa. After all is said and done, this is our most precious possession. This is the most precious human capital we have at our disposal. Labour and the utilization thereof cannot be left to the whims of supply and demands, without taking into consideration the per capita production achievement. That is essential. I repeat: I wonder whether we should not give serious attention to a complete reassessment of our entire labour utilization in South Africa. Mention any other valid causes which are responsible for the steps the Minister has now taken. When tensions arise in the capital structure and in the labour market, the Minister must from time to time introduce monetary and fiscal measures to turn on the brakes here and release the brakes there.

That hon. member attacked the Minister of Economic Affairs here for having relaxed hire-purchase restrictions. But those hire-purchase restrictions were after all introduced as an interim short-term measure, and they were so effective that he had to relax some of them. He did not relax them because they were not effective. The restrictions were so effective that he achieved his purpose. When the Minister of Finance introduced this Budget and imposed a sales duty on those same goods, the Minister had no choice but to announce certain relaxations. So that argument of the hon. member for Parktown definitely does not hold water. I do not know why a sensible man such as he is, mentioned it.

If we seek the invisible causes, I wonder whether this buying fever, this excessive consumer spending trend which has broken out among our people, cannot be attributed to the boundless confidence of the public—the ordinary housewife, the ordinary worker—in the policy of the National Party? Does it not perhaps lie in the fact that the stability, the order, peace and quiet on the labour front which is prevailing in our country, projected against what is happening across the ocean, has created such a confidence in our people that they realize that their tomorrows are being taken care of, and that it is the National Party that is responsible for that? I do not think we can simply overlook this fact. It is the National Party which is the cause of this confidence. It is the National Party which has to say in a paternal manner now that things are going too far and that it will have to plan calmly, as the hon. the Minister is at present doing.

But is the other invisible factor not quite probably to be located in the distorted approach to labour? If the United Party continually and monotonously states that we must introduce more labourers and that we must grow, the question occurs to me, while listening to them, whether this is not a contribution to this distorted idea which our people have to labour, i.e. simply bring in more labourers; do not advocate an increase in productivity! This is when the idea begins to take root among our people that the reward must be regarded more highly than the achievements. Less labour, more labourers, more money! This is an obvious defiance of a Law of Creation, i.e. in the sweat of your face will you eat bread.

But we cannot reason out this entire phenomenon in economic and financial terms only, for there are invisible forces within the individual and within a people which sometimes are far more decisive in the long term than a constant nagging, such as that of the United Party, about something which has nothing to do with the matter. This spirit which has taken root among our people, really worries me; this phenomenon that it is so easy to get rid of that buying agent which has been obtained by means of a labour achievement. It is not the money which is spent; it is the spirit and the approach behind it, which worries me. I will support my Government wholeheartedly in everything it does to set a limit to this wild spirit. I sometimes wonder whether it is not a reaction, just like the hippie cult, and a spirit which is rampant in the Western world, a rebellion against order and authority, and in this case, against sound economic order in our country. If we do not give attention to this, we can take monetary steps until we are blue in the face, and we can introduce our fiscal measures, but we will still be saddled with the spirit in which these things are received. If the spirit is a good one, as we expect among the people, then those measures which the hon. the Minister has now submitted to the House, will fall on fertile soil.

Over and against the quantitative approach of that side of the House in regard to labour, I want to present the qualitative approach of this side of the House today. It is not the numbers; it is the achievements. What has this Government done in the latest budget to expand this qualitative approach in our estimates? The number of measures I can mention is legion. In the first place the Government has opened channels for the flow of funds to our university institutions. Hon. members know that this was one of the features of the previous budget. In the second instance concessions have been made for the acquisition and replacement of equipment, of the means of production. In the third instance the road has also been widened for greater technological and scientific improvements and the concomitant greater organizational efficiency. In the previous Budget the Government put a premium on human capital formation, and this is basic to any policy which aims at reducing tensions in the economic structure and particularly in the capital market. That is what this Government has done.

The Government encouraged manufacturers; exporters were stimulated to conquer new markets, and the ordinary producers were protected when the discount rate was lifted. Nor did the Minister leave unprotected the defenceless and those who are unable to fend for themselves or those who would become the victims of exploiters and usurers. The hon. members know that he introduced those interest subsidies, whereas he encouraged the investors. While he hit hard in some cases, he protected those who needed protection. This was done with the sales duty of last year, and the sales duty of the present moment. It was not aimed at the poor man. The essential necessities of life were excluded from sales duty. How did those hon. members not carry on last year? There was an entire press campaign, and they based all their arguments on it.

The basic difference between this side and that side is very clearly manifesting itself. They are concerned with the growth of the economy, and growth for the sake of making money. With us, and this has been clearly proved, the emphasis falls not only on the quantitative aspect, but on the qualitative approach. We have built the qualitative approach into our entire financial policy. I can testify to that. If time allows I can produce many examples of this. I therefore maintain that the Government has already up to the present moment made positive attempts to give priority to the qualitative forces within our growing economy. Who can suggest to me here today a different approach which is more valid? Let them rise to their feet! I would like to hear. I do not want to sit here all day listening to stories about growth, growth, and labourers, labourers and bringing them in. What does that mean? If the United Party preaches growth as a means of out-growing inflation and the introduction of labourers as a prerequisite for outgrowing inflationary growth, they must reply to the question I asked a moment ago. Where do hon. members want to find the labourers to introduce? In what levels do the hon. members want to introduce them? What categories of Whites will have to be replaced by those labourers the hon. members want to introduce?

Those who can do better work.

Must the Bantu who work better be introduced then?

No, the Whites who work better can be moved up to higher positions.

There is no lack of work for White labourers who do their duty … [Time expired.]

Mr. Speaker, during the course of what I have to say this afternoon, I will deal with a number of the points which the hon. member for Carletonville has raised. Before I come to that, however, I want to deal with his assertion that consumer credit and the easy availability thereof is one of the major evils facing the economy of this country. I would like to say, while I realize that consumer credit must not be allowed to get out of hand, it is one of the things which lubricates the economy and which gives the public a better way of life. We on this side of the House look to the future for a better way of life and a higher standard of living. Consumer credit is one of the tools which is necessary to achieve that end.

During his speech last Wednesday the hon. the Minister of Finance identified most of the economic problems which are facing the country. I do not think there is any disputing what those are. They are that the demand for and the supply of the factors of production are in imbalance, that there is an imbalance between the demand for and the supply of goods and services, that inflation has reached a dangerous degree, that savings have fallen to an unsatisfactory low level, that investment by manufacturers in increased capacity for the future needs stimulating, and that the adverse balance of payments is a matter which is causing some concern. What the hon. the Minister omitted, and which I will add for the sake of completeness, is that there are also stresses and strains developing in the capital market, which, amongst other things, are causing interest rates to rise to unprecedented high levels. What concerns us is not the identification of these facts, but, firstly, that not only the hon. the Minister of Finance, but also other members of the Government, like the hon. the Minister of Economic Affairs and the hon. the Minister of Planning in their speeches in the no-confidence debate, tended to minimize the seriousness of this position. The hon. the Minister of Finance said last Wednesday that inflation has not reached a run-away degree and that we do rot have “galloping inflation”. I will accept the Minister’s figure that the degree of inflation last year was 4.1 per cent, because his sources of statistical information are far greater than mine, although indications are that the rate of inflation was higher. I will, however, not accept that that is not a serious rate of inflation. I consider an inflation rate of 4.1 per cent is critical. If the hon. the Minister would put himself in the shoes of a pensioner who has a fixed income for the rest of his life he will realize that if an inflation rate of 4.1 per cent is allowed to continue that pensioner’s rand in five years’ time will be worth 82 cents and in eight years’ time only 73 cents. That, in my opinion, is a very serious position. What concerns me even more than this minimizing of the position, is the complete lack of appreciation on the other side of the House and by the hon. the Minister himself of what is cause and what is effect in all the inter-related problems which have already been identified. The result is that the wrong conclusions are being drawn and that the wrong medicine is being prescribed to put these evils right.

What we have in this country is a vicious circle of inflation. Wages are spiralling, causing costs to spiral because productivity is not keeping pace with wages. This in turn causes prices to spiral and this again leads to demands for higher wages, and so the circle goes on. Until this vicious circle is broken, it will continue; and unless it is broken at the right point and in the right way, very great harm can be caused to the economy.

We on this side of the House submit that the basic problem facing the South African economy is the imbalance between the demand for and the supply of the factors of production, of which the most critical shortage is the shortage of labour. But it is followed very closely by deficiencies in the infra-structure, deficiencies affecting particularly the areas of housing, training and transport. These are the problems which must be tackled first and put right, because all the other problems with which we are faced flow to a greater or lesser extent, directly or indirectly from this basic problem of imbalance in the production factors.

I found it very disturbing that in his speech last Wednesday the Minister skated over this basic problem and that he named monetary factors as the main cause of the spiral of inflation. That may well have been true in the middle-1960’s, but it certainly is not true now. It is rising wages, caused by the shortage of labour, which is leading to the expansion in monetary demand, and not the other way around. To think so is, I submit, muddled economic thinking.

Mr. Speaker, if there are any doubts in regard to our diagnosis of what the main economic problem is—I think most people in this country realize what it is; it is the shortage of labour—I would like to refer this House to the conclusion reached by the Bureau of Economic Research of the University of Stellenbosch in its publication “Prospects for 1971”. I quote:

With that I agree entirely. To me it is basic economics. It is by refusing to admit what the basic problem is and tackle it effectively that the hon. the Minister and the Government have failed. The hon. the Minister was reported in Die Burger of the 6th November, 1970, as having told the German-South African Chamber of Commerce on the previous evening that inflation has become immune to the old tested methods of combating it. Of course, if financial and fiscal methods only are used, the remedy being applied is a remedy to symptoms only and the patient will become immune to that remedy. It is like lancing a boil without cleansing the blood stream of the poison that caused the boil in the first place. When a doctor prescribes even the wrong treatment to alleviate the symptoms, as I believe has been done in this case, all the inflammation remains and the patient enjoys no relief whatsoever.

We on this side of the House have made it known, loud and clear, what measures we would take to increase the factors of production, particularly to solve the critical labour shortage. I do not deny, however, that after such a long period of restrictions on labour as we have had under the Nationalist Government it would take time to rectify the position even if the enlightened policies of this side of the House were in operation. As a responsible Opposition, we realize the need for urgent short-term steps to bring about a better balance between demand and supply, and by doing so, to relieve the inflationary pressure and improve the balance of payments position. Obviously, in the short term this can only be done by reducing the demand element in the equation—in other words, by reducing the public’s propensity and ability to spend their money—very unpleasant medicine to have to swallow for the failure of the Government to treat our basic problems!

I cannot warn too seriously on the need for care and proper selection of the weapons to be used in the short term to control and curtail demand, and the proper timing of their application. The economy is an intricate and delicate mechanism one component of which is business confidence, a commodity which is very fragile and which takes a long time to mend when broken. If one uses the wrong weapons one can do great harm and cause harmful side effects to the economy. Even if one uses the right methods but uses them at the wrong time or to the wrong degree, they can also have harmful effects, even disastrous effects. Let us be quite clear—to curtail demand to the extent that is necessary to take sufficient pressure off the labour market in order to contain inflation—when one realizes that there exists at this point of time a shortage of labour in the industrial labour market of between 4½ and 5 per cent—entails a very real danger that by doing so we would create unemployment amongst White workers and for a virtual certainty unemployment amongst non-White workers, particularly amongst the lower paid echelons of Bantu workers. I think both sides of the House are aware of the social and political dangers if we allow such a situation to develop. On top of that, curtailing demand to the extent that may be necessary to be effective, will very likely cause harm to business confidence. We must also be clear that the curtailing of demand may solve the balance of payments problem, it may increase savings and may ease the inflationary position, but it will not create a climate that will be inductive to investors, because manufacturers invest when they see their markets expanding and not when they see their markets contracting. I know of no way in which demand can be reduced without at the same time reducing the inclination to invest, so when the hon. the Minister of Finance says that priority must be given to encouraging investment by manufacturers to increase their capacity for the future, he must have some other magician’s trick up his sleeve which he has not yet disclosed to the House.

Mr. Speaker, these are some of the conflicting results of applying short-term medicine to our problems and these conflicting factors, in my view, are virtually irreconcilable; so that the best one can look for is to achieve a delicate balance between these conflicting factors. In other words, if the application of short-term measures to reduce demand is going to be effective and at the same time is going to have the least harmful effect, very great judgment and skill is required in this application. Judgment is required to reach a balance between these conflicting factors; judgment is required in timing so that the measures are imposed at the right time, that they are lifted at the right time and, if necessary, adjusted at the right time. Judgment is required in the degree to which these measures are applied; whether they are applied lightly or whether they are applied heavily. Above all, judgment is required to select the right measures to apply.

All this, Sir, requires very great wisdom, and I regret to say wisdom in excess of that so far demonstrated by the Government. In particular I find it unfortunate that the Government have shown so little aptitude in their timing of the application of economic measures. Take, for example the hire-purchase restrictions. These were imposed at the end of October. They should have been imposed months before when it was quite clear that inflation was becoming a serious problem. I regard it as quite criminal that the Government should have waited until immediately after both elections of 1970 were out of the way before they took these steps. Then they took them in the most ham-handed manner without any consultation with the trade, who could have advised them how to apply them to the best effect, with the result that they have had to be considerably amended on two occasions since they were first imposed only months ago. An indication of the damage that ill-conceived measures can cause was given in the report of a well-known chainstore handling furniture and electrical appliances, i.e. that up to the end of October, when these measures were imposed, its turnover had been running 21 per cent higher than in the previous year, whereas in the next two months, after they had been imposed, its turnover fell to 28 per cent below the previous year’s turnover, in other words, an effective drop of something like 40 per cent from before October to after October. Very few businesses can withstand such a shock.

Sir, I feel apprehensive for the motor industry, which not only has to deal with these hire-purchase restrictions, but also has to deal with a higher sales tax and also with phase III of the local content programme; a very difficult problem indeed.

Mr. Speaker, I would now like to identify what I consider to be probably the three main weapons which are open to the Government to use to fight inflation in the short-term by reducing the demand for goods and services. The first of these is fiscal measures whereby taxation may be used to take money away from the public so that they cannot spend it. The second is the possibility that the Government could reduce its own spending; and the third is monetary measures to control the total supply of money and credit. I believe that a very grave error indeed has been made by choosing fiscal methods under the present circumstances, to try to reduce the demand by means of increasing the sales tax. Under the conditions which exist in this country, where labour is in critically short supply, it is labour which has the whip hand in negotiating with employers, with the result that any steps that have the effect of reducing the spending power of labour virtually automatically lead to demands being made for higher wages, which under present circumstances employers find it very difficult to resist. Therefore in these circumstances—and I emphasize “in these circumstances”—higher taxation must be regarded as being inflationary in its effect, and the longer it remains with us the more inflationary it becomes because it gradually becomes absorbed permanently into the cost structure of the economy.

But if the choice of fiscal methods on this occasion to try to combat inflation has been a grave error, an even graver error has been the indication which the hon. the Minister gave us in his speech last Wednesday that the money raised by the extra taxation would be used to finance Government requirements. In other words, what is going to happen is really robbing Peter to pay Paul; and the total demand for goods and services will not be decreased one iota. If the Government had really wanted higher taxation to be deflationary in its effect, then the proceeds of the higher taxation should have been sterilized and not spent. This I think, is a very grave example of completely muddled economic thinking.

The next short-term weapon which the Government could use would be to subject its own expenditure to more careful self-examination, because it is Government expenditure and not expenditure by the private sector that has been rising at the fastest rate. In the year to the end of June, 1970, Government expenditure rose by 14 per cent, whereas consumption expenditure by the private sector rose by only 11 per cent. Government expenditure must therefore be a prime target for control, and I would suggest to the Minister and his colleagues that Government expenditure should be subjected to the same degree of austerity as obviously the hon. the Minister of Finance is intending to impose on the private sector. In saying this, I realize that additional money has to be spent upon the infra-structure to make up for the deficiencies that exist. What is required, however, is a program of priorities whereby emphasis is given where it is most needed, for example in areas such as housing, transport, education and pensions, within an overall framework of a somewhat lower rate of growth in Government expenditure.

I think it is on monetary measures that most reliance should be placed in the fight against inflation and as a means to reduce demand. By monetary measures I mean monetary measures in their widest context, namely a control over total supply of money and credit available for spending. In this pattern hire purchase regulations obviously have their place, but they must be applied with discretion and not hamhandedly. Credit granted toy the banking sector must also toe controlled. I doubt, however, whether the system of credit ceilings which have been in force for the last six years is the most effective way of controlling bank credit. We have had the position where the total supply of money and near money has been rising over this period at a faster rate than the supply of goods and services, thus creating an inflationary condition, and the main cause, particularly in recent times, of the increase in the supply of money, has been the increase in bank credit. I would suggest that these two measures, i.e. hire-purchase regulations and control of bank credit, need to be supplemented by further measures whereby money is taken out of circulation and sterilized for as long as necessary. This could theoretically be done by way of taxation, but for the reasons I have already advanced I reject that method completely, and I suggest that it should be done by way of an aggressive borrowing program by the Government; that is a program whereby the Government goes into the market and borrows in competition with other borrowers. I realize that such a program would probably entail an increase in interest rates, but that is the price that one has to pay if one has to control inflation toy monetary means. I suggest that of all the means available for controlling inflation in the short term—they are all unpleasant medicine—an increase in interest rates would toe the least unpleasant medicine. [Time expired].

Mr. Speaker, the hon. member for Constantia came to light with a few contradictions. The hon. member says that the Government should adopt certain monetary measures. For example, it must withdraw money from the public sector and sterilize it. I noticed that his colleagues were staring at him with wide eyes. Hon. members have specifically been at loggerheads with us in recent years over the fact that the hon. the Minister was sterilizing money. The hon. member now says that we must not adopt certain fiscal measures, for example taxation and certain other measures. In addition the hon. member says that this Government must curtail its own expenditure. During the ten to eleven years I have been sitting in this House, the hon. Opposition has never said that the Government was spending too much money on certain items. The only person to do so was the hon. member for Parktown, who said at the time that the Government should not spend money on the exploitation of oil in South Africa. Apart from that they have never mentioned a single item. I shall be glad if the hon. members who follow me up will tell us what Government expenditure must be curtailed. Must this Government not pay our public servants who attend to the administration of the country? Must basic services, the infra-structure, not be established?

It was specifically the hon. member for Yeoville who kicked up a fuss about that the other day. He said that this Government is doing too little to establish basic services. Now the hon. member comes along and says that we must curtail expenses. No, Mr. Speaker, one must never toe that contradictory. The hon. member for Parktown said that it was the first time in the history of this Parliament that the Minister has come along with a certain announcement in a Part Appropriation. But it is also the first time in history that South Africa has had such a good government and that there is so much prosperity. That steps should toe taken could not be obviated.

This brings me to the hon. the Minister of Finance. I want to praise him for the courage he displayed in making these announcements at this stage. He did the country a service by taking these steps at this time, because the consumer now knows what the position is in respect of purchase tax and will therefore not fall victim to pre-budget speculation in respect of certain consumer goods. With this action the hon. the Minister took a positive step towards promoting price stability. The public at large is grateful for this step. They are also grateful that the hon. the Minister decided not to tax essential items, but continued to let the emphasis fall on the non-essential items. It could easily be asked into what group stoves and refrigerators fall. It must be remember that this is expenditure that is incurred only once and that these are durable items forming the basis of any housekeeping. When this is realized such a consumer can recover a measure of his expenditure. Those consumer goods are easily procurable items. In the no-confidence debate the hon. Opposition said that there is inflation in the country. They are saying it again today, but very few positive steps have been recommended by them, except for the recommendations which the hon. member for Constantia has now made. They said that it is a shock and a surprise, and that as a result of this Budget the cost of living would increase again and that this would promote further wage increases. The hon. members who were speaking about wage increases in that way did not spell out for us how this is really going to happen. Neither have they told us specifically where and how it is going to cause a wage squeeze. By this action the Government has ensured the promotion of the financial stability of this country.

The criterion for measuring financial stability is usually the rate of inflation prevailing within the national economy. However, problems are experienced when a definition of inflation and its measurement must be given, but it is done and we know approximately what the position in South Africa is. The consumer index, as calculated by the economic division of the Reserve Bank, increased by 4.1 per cent in 1970, as the hon. the Minister explained to us the other day. He also said that it is too high and that he would not allow it to get out of hand any further. However, under no circumstances can it be described as a price explosion. In the fourth edition of his book “Economics”, Paul Samuelson of America said that a figure of up to 3 per cent is moderate inflation. Other recognized economists agree with that. That is why we cannot say that it is an explosion. The hon. the Minister took timely action to put this matter right.

It is true that the economy received certain shots in the arm in the form of salary increases. The company profits increased, which indicates that the entrepreneurs are satisfied with their real incomes. As a result of the full employment, the labour costs per unit increased, because less effective labour was employed. Now the hon. Opposition comes along and says that we should employ still more ineffective labourers. Where would the rate go to then? One of the factors causing inflation has been the consequences of ineffective labour. Then there are also, of course, the prices of foreign raw materials over which we have no control. These factors have unavoidably contributed to the effective demand for goods and services increasing, but in the midst of it all the Government succeeded in maintaining financial stability. In the midst of all these inflationary pressure factors in the national economy there are only three countries with a lower consumer index than South Africa, i.e. Germany, the United States and Switzerland. Even in these countries the ordinary man, as far as his real income is concerned, is no better off than the man in South Africa.

If we now look at the components of the total demand, i.e. private consumer spending, private investment and foreign spending on local goods and services, it would be a good thing for us to take a closer look at private consumer spending. Since 1966 this has increased from R5,100 million to R8,100 million. This is a tremendous rate of private consumer spending. This present consumer spending cannot possibly continue, as the hon. member for Carletonville said. It is a crazy situation, and the time has come for us to take a look at it. The Reserve Bank’s economic division calculates that the gross domestic income for 1969 was R11,635 million. This unquestionably indicates that consumption in South Africa, in the economic sphere, has reached the stage where the Government now will really have to take action in connection with our consumer spending. An American economist recently said about the American economy: “We are spending ourselves into poverty”. I think we can say the same about South Africa. That is why no concrete arguments can be brought against the steps which the Government will take to keep in check this wild flow of spending that is being experienced at present. I want to state that any argument, no matter who it comes from, in which it is alleged that the steps the hon. Minister is now taking, i.e. in relation to an increase in the sales duty, are strict measures and not just ones, is obviously aimed at doing harm to the rand in South Africa. If we do not now protect our monetary unit, the rand, we shall find ourselves collapsing in future just as the monetary units of many countries in South America collapsed. This National Government will prevent this. We shall take care of it.

One must not lose sight of the fact that certain fundamental changes in the capitalistic world’s national economies have taken place. The most important single change, as we have already said, is the idea that has taken root with the general public since the Second World War, i.e. that the old traditional fluctuation in economic activity, characterized by a peak of prosperity and then again a depression, has disappeared. Our people simply cherish the idea that money devalues and that there is never a time when it appreciates again.

A further important change that took place in respect of the value stability of money has already been debated many times in this House. The hon. Opposition simply does not want to keep pace with this. The Opposition states that we must just employ more labourers. The hon. member for Constantia said a moment ago that there are other factors, i.e. money and near-money, that are going to make a big difference. I am very grateful for the fact that a light has dawned somewhere. In South Africa these inflationary phenomena, which are international phenomena, are seen in a much more serious light because our labour pattern is altogether different to that in any of the other overseas countries. The price of one of our most important export products, i.e. gold, has thus remained constant since 1932. When there are any local price increases, we find that one of our most important export products, i.e. gold, is detrimentally affected as compared with other elements of our natural economy. We also find that our exports are not sufficient for the balance of payments to tally. That is another problem we are faced with in the midst of all our other problems.

In addition I also want to refer to the spirit prevailing amongst our people, as the hon. member for Carletonville also did. This spirit of “let us eat and be merry for tomorrow we die” will have to be checked, whether the public likes it or not. We shall have to hit hard today so that the people can sec tomorrow that this Government did take sound action. All anti-inflationary measures have one thing in common, i.e. to balance up the total demand with the given production. These pre-budgetary fiscal measures can only be seen as a very courageous attempt by the hon. the Minister to achieve this object.

I also want to say that the South African consumer is spending himself into poverty, and there are two factors responsible for this. Firstly there is the lack of consumer resistance. The consumers in South Africa offer no resistance to high-prices. The other is the excessive granting of credit which is the order of the day in commerce. The reason for the lack of resistance among consumers can be sought in certain factors. The tremendous consumer spending indicates that the South African consumer does not only have a nominal demand, but that he is so well off, as far as money is concerned, that he can carry this out effectively. This is made possible for him as a result of his particularly good income and also as a result of the credit facilities created for him by commerce, enabling him to spend in advance, even as far ahead as 24 months. The question must now be asked about why there is no consumer resistance amongst the South African public. In the first place there is full employment. If we were to have had what the hon. Opposition is advocating, i.e. more labourers, we would have had unemployment in South Africa as a result. That is what they are striving for. They want large-scale unemployment so that they can blackmail the labourers in South Africa in so far as their wages are concerned, so that the entrepreneur and the capitalist can make large profits. That is not the orientation of this National Party. We believe in and are striving for full employment. We must concede, however, that inflation is one of its concomitant problems, but we are prepared to pay the price for that. We are prepared to take certain steps to place it on the right road again. A balance must first be found between saving and spending again. Because people spend so recklessly on consumer goods they only have 6 per cent left to save, as the hon. members heard, and that is insufficient for a country like South Africa. Our public must learn to increase their rate of saving to about 25 per cent. Our productivity has not increased in accordance with the salary and wage increases of labourers, and this is one of the factors that has also served as a stimulus to higher consumption without reference to real terms.

Fourthly we also find that credit is easily obtainable, and in this lies one of the biggest evils. Our people are even saying already that credit is more sophisticated than debt, and that they should therefore try to get as much credit as they can. And they do get it, but to the detriment of our economy. There is a great supply of money owing to the salary increases and the greater incomes, and further there is no restriction on open account credit. There is an Act in South Africa, i.e. the Reserve Bank Act, according to which the Reserve Bank can place a credit ceiling over banks and according to which it can prohibit the banks from granting further credit. There is also another Act, i.e. the Hire Purchase Act, with respect to durable goods. There is, however, no Act in South Africa that keeps a check on open consumer credit. I think the time has come, as the hon. member for Carletonville stated very clearly, for this to be one of the steps the Government will have to consider if it wants to take action against that.

Let us look at the situation over the past few years in connection with civil judgments. To obtain a good picture I want to refer to the years 1964 to 1969. During that period there was a 5.7 per cent increase in the total number of civil judgements. Compared to this there was a 37.4 per cent increase in respect of the amounts involved in those judgments. We therefore get an average increase of 6.2 per cent per annum. If the judgments for the same period in respect of open account credit are viewed, one sees that the picture is actually even more frightening. During that period there was a 43.25 per cent increase. The number of civil judgments in respect of higher purchase contracts, on the other hand, decreased by 18.8 per cent. In spite of this decrease, there was an 8.2 per cent increase in respect of the amount involved. There was also a 46.63 per cent increase in respect of professional services and 23.16 per cent in the number of judgments. These figures indicate to us unquestionably that a shift is taking place towards open account credit, which is at present offered altogether too easily. It is for this reason that I say that the time has now come when legislation will have to be introduced to keep a check on this open account credit that is provided by merchants and other bodies. Essentially no difference of any kind whatsoever exists between bank credit and consumer credit. Both are, and continue to be, something for which no immediate quid pro quo is given. A loan from a bank enables the consumer to obtain goods and services. We also have precisely the same thing with open account credit. The question I am now asking myself is why the discrimination. With banks and other bodies restrictions are applied, while merchants act without restriction, and this unrestricted credit which is being seized upon in South Africa today to do harm to our economy, is one of the causes of this rate of inflation. It is now actually the function of the merchant and the public to ensure that they follow the right road. It is not the Government’s job each day to prescribe to the merchant, the businessman and so on, it is also their own function. If they do not want to do their duty the Government will take action.

There is another factor too that must be taken into consideration, i.e. capital gains tax. On a previous occasion I spoke about it in this House, and it was also recommended by the Franszen Commission. I think that the changes in the financial structure of South Africa have given rise to the gap in returns and to a spirit of speculation. We see that the rate of profit on quoted company shares in industry and other sectors, for example, decreased from 7.6 per cent in 1960 to 3.3 per cent in 1969. John Citizen is therefore more conscious of inflation than other bodies, because he withdrew after he had lost his money on the Stock Exchange. He then realized that he would have to speculate somewhere else. Today we therefore have an unparalleled and unprecedented situation in that money flowed to other sectors such as property and consumer goods. Because as a result of the fact that land has become an item for speculation we have now reached the stage in South Africa where we can scarcely give a man a cheap plot again unless drastic action is taken. It would perhaps be much easier and do less harm to check the spirit of speculation and extravagance by means of capital gains tax.

We also saw that in 1961 share prices reached a low ebb. That low ebb has gradually vanished from the economy. Thanks are due to the Minister of Finance, who was then Minister of Economic Affairs, as well as to the then Minister of Finance, the late Dr. Dönges, for what they did together with the National Party in gradually eliminating this slackness in South Africa. We saw that in 1964 the economy grew. We also saw that even in 1965 there was already inflation. Share prices increased to such an extent that in 1969 conditions were more extreme than they have ever been in South Africa, i.e. there was the most reckless buying of shares that there has ever been. When this subsequently collapsed, people lost about R3,000 million. We must prevent the public from becoming so reckless again. The average compound growth rate of money plus near-money increased by 4 per cent per annum in the period 1958 to 1962. In the period 1963 to 1968 the growth rate averaged 9.9 per cent. This extra money and near-money that is created in the country is one of the main causes of inflation. By means of credit control, capital gains tax and so on we shall keep a check on this evil.

As far as the demand for shares in South Africa is concerned, the price increase of those shares increased very rapidly. At present the situation is normal. Our people must now know that if they are going to invest their money in those shares they will obtain a reasonable income on their money, and no more, as previously, when they spent recklessly, a half per cent and one per cent. Inflationary expectations therefore exert an influence on the form of savings. Our people expect inflation to continue. If that idea continues to exist, there will be no tendency to save. Those popular slogans of “Invest and grow” and “Capital gains without taxation” have become the fashion in South Africa. Investments of a speculative nature enjoy precedence over investments of a productive nature.

That is why it is now time for us to encourage private investment, so that it will not only be sufficient to finance the Government’s projects, but also private projects. Because there has, up to now, not been a system of capital gains tax in our country, we have found, as the hon. member for Carletonville said, that people simply spend recklessly on capital goods such as land, forgetting that there is such a thing as interest rates. If we allow this situation to continue in South Africa, with interest rates on long-term capital and on short-term capital as tremendously high as they now are, and so widely spaced, we shall continue to be the victims of adversity. I am honestly of the opinion that as long as this phenomenon of inflation is the order of the day, John Citizen will continually try to entrench his money against monetary erosion. In the past great reliance was placed on monetary measures and perhaps a bit too little on fiscal measures. That is why we are grateful to the hon. the Minister of Finance for having displayed the courage to take these steps. Preference must be given to investments of a productive nature, and here only with fiscal measures can one do what is necessary. Many man hours have been lost, particularly with the spirit of speculation that has prevailed in the past year or more. If we put our foot down and give our people at large the proper guidance, even if it is by means of legislation and drastic taxation in the general Budget, we shall place our economy on a sound footing in the foreseeable future. Then it will not be necessary, a year or two from now, to hear our people complaining that this National Party allowed inflation to get out of hand in South Africa. Therefore I just want to say in conclusion: Whatever the Opposition says about labour, and whatever they say about other things, the solution does not lie in pushing more non-White labour into our economy, as they want to do. The solution lies solely in the better utilization of our labour. That is why we are grateful to the hon. the Minister for coming forward with these steps. We support him actively and wholeheartedly.

Mr. Speaker, I should like to congratulate the hon. member for Sunnyside on what may be described as at least a new approach to this economic debate. He hit upon a moral element, a moral approach to this economic problem, and pleaded against recklessness in respect of speculation, jollity, pleasure and comfort. Of course, these are all sins which have fatal economic consequences, and we want to congratulate him on at least having found a new approach. As far as we are concerned, we feel that these things—speculation, jollity, pleasure and comfort—nevertheless form part of the economic philosophy of a country; that some room must nevertheless be made for them; that it is not a sin to strive after pleasure and comfort; that spending money on these things is not a sin either; they form part of he general economic picture and one simply has to make some room for them in the general economic approach in society.

The hon. member for Sunny side challenged the United Party to say, if we want to sterilize money, where we want to do so, since allegedly we have never been prepared in the past to indicate precisely where the Government should cut down on its expenditure. We have often said this, and we shall repeat it. We feel there is large-scale waste and delay in Government expenditure, and we have mentioned numerous examples of it. We have often said, and we shall do so again, that the whole approach to Bantustans, i.e. the ideological approach to the homelands, in terms of which money is being spent for ideological reasons instead of on the basis of economic criteria, is wrong; that it is a waste of money too; that it is precisely that kind of extravagance which defeats the country’s attempts to save and sterilize money at a time such as this.

I want to start my speech where the hon. the Minister of Finance started his and just refer to the question of gold. I fully agree with the Minister that the agreement with the International Monetary Fund, firstly, affords us the opportunity of placing our gold sales on a sound footing and, secondly, does afford us the opportunity of selling to monetary buyers as well as on the free market, which now and then gives us the chance of earning a premium and thereby obtaining more money for the country. Nevertheless, I want to say that it appears from a report of the Chamber of Mines that the sales of gold were not as profitable as we had hoped. Recently we read, and I quote—

Then some figures are mentioned which adjust these figures. It remains a fact, though, that the profits of the mines decreased last year in comparison with 1969. Therefore I jus want to make the point that the position of the gold mines and the position of our premium sales are not as sound as to enable us to depend on gold sales for the solution of our economic problems. The gold mines offer no lasting solution to our economic problems. However, they do contribute to the solution of the problem. But the fact that the hon. the Minister mentioned the gold mines at the beginning of his speech when he spoke about the economic problems of the country, constrains me to say that although the position is favourable and may become even more favourable, gold sales as such offer no lasting solution to the problem of our balance of payments or our economic problems in this country.

Mr. Speaker, I now come to the question of the confrontation which has occurred in this debate between the supporters of growth and the supporters of the “damping” policy. Most of us have probably read what the economists have written in recent weeks and months, and would consequently have seen that at least 20 to 1 of them were in favour of a growth policy for the solution of our economic problems. There were one or two—and I want to refer later to one in particular, Prof. Terreblanche of Stellenbosch—who wrote articles emphasizing the inconsistencies between these two tendencies. There is in fact a tendency on the part of the Government to play down the advantages of growth and to overemphasize excessive expenditure. We noticed this particularly in the speech made by the hon. member for Carletonville as well as in the speech made by the hon. member for Sunnyside. The hon. the Minister also laid particular emphasis on the heavy expenditure on durable goods and the large increase in the importation of supplies. He regarded these two factors as exorbitant tendencies which exert special and extraordinary pressure on, firstly, the cost of living and, secondly, our balance of payments. But are these two phenomena perhaps not rather to be attributed to the growth of our population, to the high expectations of that population and to the large number of wage-earners in the economy? According to the census that growth was as follows: The census figures show that between 1960 and 1970 the number of White wage-earners increased from 987,000 to 1,283,000, and that in the case of the Bantu the number of wage-earners increased from 2,561,000 to 3,733,000. There was not only this enormous increase in numbers, but also an enormous improvement in the wages paid to these workers. Is it really extraordinary that a bigger demand for durable goods has arisen? Is the increase in supplies really a temporary factor? Is that special increase in supplies, mainly imported supplies, not a response to the increased demand for goods? When there is a tremendous increase in manpower and in wages which have to be paid, is it not natural that a heavier demand for goods will automatically arise? It seems rather improbable to me that the importer would be prepared to import enormous supplies and to store them for an uncertain future, particularly when he has to pay a rate of interest in the region of 10 per cent. Is it not more likely that he imported those supplies for immediate consumption, for immediate sale? Does he not perhaps have a better appreciation of the needs of the country? Does he really import those supplies to stock-pile them, or does he import them in order to sell them, because he knows better than the economists do that there is in fact an immediate market for those very goods? I feel the argument is a particularly strong one if one bears in mind the rates of interest which have to be paid by the importer in stockpiling those goods.

There is another inconsistency. If there is indeed an excess of imported goods, if there is indeed excessive stock-piling, that stock-piling ought to counteract inflation. If there are indeed so many goods in the country and stored in the country, and available to meet the demand, it should counteract inflation. But we find the opposite to be the case. I do feel that the volume of goods available is too small to meet the needs of the growing population, of the large number of new workers and the increased wages which are paid to them.

If it is true that the increased demand is due to the increase in the population, to the increased number of workers, there is nothing excessive in the increasing demand for goods. What is in fact excessive then, is a lack of concomitant expansion of production capacities. This would logically explain why both the cost of living and imports are rising. This would also explain why the largest increase occurred in respect of food prices, which, according to the hon. the Minister, was 5.2 per cent last year, a good deal higher than the average price. This would explain why our exports are so disappointing, as a result of domestic expenditure. This would also remove the inconsistencies in the arguments of the “damping” school.

One of the supporters of the “damping” school is Dr. Terreblanche, and the hon. the Minister referred to him last week; his arguments were quoted with approval. I have also gone through Prof. Terreblanche’s article, and we find the following: He does of course refer to the misguided obsession with a high growth rate, but what does he really say? He starts off by saying, and I quote (translation)—

That we should stop being blinded by short-term problems and that we should rather tackle a long-term programme of action.

This is precisely what we on this side of the House have continually been saying. He then goes on to discuss the cost of too high a growth rate. He mentions, for example, the social cost such as pollution, the disappointments to be found in an increased standard of living and the dissatisfaction which also forms part of greater wealth. Well, we agree with these social concepts, but they are not really relevant when we are dealing with a purely economic problem. He argues that strict monetary measures are necessary because fiscal measures cannot be applied effectively in a fast-growing economy. That is precisely what the hon. member for Constantia said. The hon. member for Constantia argued that these fiscal measures cannot, in fact, have a lasting effect on the problem. If one has to chose between the alternatives he mentioned, it is in fact monetary measures which have to be applied, although they are also unpleasant. Prof. Terreblanche fully agrees with this. He concedes that quite a number of bottle-necks can be eliminated by a long-term programme, and that in the next decade or two a high growth rate and separate development may be conflicting objectives in the sense that the one will be pursued at the expense of the other. Now, we have continually argued that if we want to save our economy, we should use economic measures and should decide whether we are in fact going to place the ideological objectives first and the economic objectives second, or vice versa.

What do you suggest?

I suggest that the economic objectives should be placed first. [Interjections.] My argument is in fact that if one makes a careful study of what was said by Prof. Terreblanche, whom the Minister quoted incorrectly, one will see that he feels the same way. He feels that it is impossible to place these economic objectives second, because then there simply would not be the money or the strength in the economy to pay for the other objectives. He agrees, and I once again quote Prof. Terreblanche, that the labour supply may be increased by a relaxation in respect of Bantu, but particularly in respect of the Coloureds. He says, and I quote again, that this ought to raise our production capacity considerably in the long term. Over against this he says that a large-scale decentralization of industries, i.e. the homeland policy, will initially mean that industries there will be technically less efficient than in the metropolitan cities. Let us summarize everything now.

What does he say further?

The hon. the Minister says that in the short term all our economic problems are due to excessive and extravagant over-spending. For this, economic development and high productivity are too slow and the money supply has to be decreased, and he applies fiscal measures. What does our friend Prof. Terreblanche say? He says fiscal measures are not effective in a fast-growing economic situation. The fact of the matter is that the demand for goods is a direct result of the increase in the population, of increasing wages and the improved standard of living. Pushing up the prices by means of fiscal measures will not meet the needs of the public. It combats inflation by pushing up the cost of living; by applying fiscal measures, as the hon. the Minister intends doing, the cost of living will be increased considerably. No long-term solution will be found by doing this, and the problem which really has to be combated, i.e. the increasing cost of living, will be aggravated by these very measures. One may almost describe this as a homeopathic approach whereby one tries to effect a cure by administering a little more of the same poison. I doubt whether it will work in this case. I doubt whether inflationary costs can be combated by adding to those inflationary prices.

What are we going to do in the long term? In the long term the Government has no policy because, as Prof. Terreblanche says, firstly, a relaxation in respect of the Bantu and Coloureds is necessary, something the Government is not prepared to do; and, secondly, the homeland policy will be less efficient initially—and one may ask how long “initially” is—than an increase in production capacity in the metropolitan areas. The Government therefore finds itself in a dilemma. It is seeking a short-term solution to its economic problems, which will in fact cause prices to rise and not to drop. The addition of a percentage to the existing prices will, of course, mean a further increase in the prices. It is doubtful whether that addition to or increase of prices will have the effect of curbing inflation, because the demand for goods is in fact caused mainly by the increase in the population, the increased expectations of that population and the increased wages of that population. There is, of course, only one solution, i.e. to increase our production. If we do not increase our production, we will have to import more and more in order to meet the needs of the growing population. This will have disastrous results as far as our balance of payments position is concerned. I feel the Government does not have a long-term solution either, because, in order to pay for its policy, its expansion, decentralization, etc., it is forced to develop the metropolitan areas as rapidly as possible so as to generate the wealth which can be used for achieving that very progress which the Government envisages. I therefore feel that both in the short term and in the long term the Government has no economic solution to the problems in South Africa.

Mr. Speaker, actually I do not want to react to what was said by the hon. member for Von Brandis, except to refer to his reply to an interjection that was made. The hon. member was asked what the United Party would give top priority to. His reply to that was unambiguous: economic objectives. In fact, basically this is also the difference between the United Party and the National Party. To the United Party there is only one objective, i.e. economic prosperity in the country. As against that, the policy of the National Party is based on quite different grounds. The National Party is aware that it is also its task to govern this country properly, and not to rely on economic objectives only. The National Party also realizes that money is not everything.

As we say in English, the hon. member for Parktown “made great play”. He protested and protested and protested once again. He spoke of “to curb inflation and develop economy”. Once again I can use the term: “The gentleman protesteth too much.”

If we take an objective look at the aspect of inflation, as it is creeping in all over the world today, we find that we are dealing with one of the most important bottlenecks with which the world has to contend. I find it astonishing that the United Party, which, individually and otherwise, has at its disposal major capital resources in this country and is in touch with them, was able to contribute so little to this debate. There was so little that was constructive in what they said. They came out with superficialities. They spoke artificially and tried to generalize. Out of a serious aspect of this nature they tried to steal a political march.

I want to quote what was said a few days ago in one of our daily papers, which summarized the position as follows (translation)—

After all the articles which I have read on this matter of late, and having listened to the hon. member for Parktown and his colleagues, I am more deeply and more firmly under the impression that they definitely do not have the cure. Furthermore, I am more convinced than ever that this matter can, with conviction and satisfaction, be left in the hands of the hon. the Minister of Finance and in the hands of the National Party.

I do not think that it has happened by chance that the National Party’s economy has over the past 22 years, since 1948 and Strauss’s meatless and breadless days, gone beyond the limit or over-reached itself. The only reproach that can be levelled, is that, under the diligent and capable administration of the National Party, things have literally gone too well. I am going to quote the Financial Mail again—

When an economy is so buoyant and dynamic that it pushes against or surpasses the ceiling, it becomes overheated.

The consequences of such an economic cycle creates a vicious state of affairs. It creates a “vicious circle”, as was said by one of the hon. members opposite. It is symptomatic and creates a disproportion between consumption and productivity; it creates a reduction in the value of money; it creates a demand greater than the supply and the resultant price increases involved: expenditure in excess of the domestic product; increased imports; labour shortage; higher wages and, in turn, higher prices; reduced capital investment; higher rates of interest; little or no savings, and a false and deceptive image of perpetual prosperity with the general public. The sum total of these things is inflation as we know it: cost inflation, demand inflation, monetary inflation, imported inflation, etc. This is no novelty. We know about times in the past when this also existed. We know that as far back as 1958 the spiral of inflation in this country was as high as 4.9 per cent.

This is the result of an overheated economy which develops beyond its ordinary potential and which has totally exceeded the speed limit and is then faced with bottle necks such as insufficient labour, insufficient capital, insufficient raw materials and insufficient productivity. Structurally this is extravagant and excessive consumer spending which borders on waste and extravagance. Sometimes its consequences are disastrous, not only economically, but also socially. In that respect I want to link up with what was said by the hon. member for Carletonville. This leads to a situation in which people fall into a state of intoxication and an artificially controlled period of prosperity. It leads to a public degenerating into a superficial, materialistic and grasping community.

Work is no longer work for the sake of working or out of love of work. Human values are wrested from their context. Cultural values are ousted by this material greed. This affects a people not only in the economic sphere, but also as far as its total outlook on life is concerned; it affects the religion of the people, for it serves Mammon. The demands made by economic growth, have little connection with patriotism, have little connection with good health, have little connection with family happiness, with love, etc. If the pursuit of one’s economy is everything and if this is one’s only end in view and if this interferes with other important spheres of life, such as the internationalizing of one’s national Christian outlook on life, the promotion of unrest and dissatisfaction, neglect of family life, etc., then it is no longer worthwhile. Then it is time for us to pause and to ask ourselves whether money is everything.

This can also have disastrous consequences for the economy itself. In fact, it may be the forerunner of a depression. We had experience of that before. At present these signs are evident again in countries abroad, in America and in other countries. We are thinking, for instance, of the fact that the Rolls Royce organization, that extensive undertaking, is at present experiencing problems.

In considering this background, we asked ourselves this question: What are the counter-measures that can be taken in order to meet such a situation? We are aware— it has been said on so many occasions— that the labour integration programme advocated by the United Party is probably just as ridiculous, just as inept, as its race federation plan. If a programme of this nature were to be applied here, it could in fact have catastrophic consequences for this country, for productivity is founded on a long-term project basis. It can only be promoted by skilled labour. The immediate integration of an untrained labour corps, as is being envisaged by the United Party, can and will only cause chaos in this country. Consumer spending will, as a result of such a process, soar sky high. If this were to be applied, there would undoubtedly develop in this country the greatest inflationary condition there has ever been in history. That is why I suggest that it is totally impracticable, that it is totally short-sighted, that it is one of those dangerous proposals which are put forward by the United Party and which, if it should be implemented, could only be dangerous to this country. In a recent edition of Die Vaderland the financial editor of that paper asked whether purchase tax was the right medicine for the present ailment, inflation in the economy. He said (translation)—

This is not quite correct, because in the sixties the rate of inflation was as high as 4.1 per cent. It was in fact through the implementation at the time of fiscal and monetary measures that it was forced down to 2.2 per cent. The other major question that can be asked in regard to the sales duty being levied at present, is how the Government will spend the R47 million which the purchase tax is going to bring in for it. It is already being suggested that Government spending is one of the causes of inflation. I am prepared to concede this in part. The only solution which the editor of Die Vaderland offered in his article for eliminating this bottleneck, was that the production of consumer goods had to be increased very drastically. I accept this as a norm, but the gentleman did not suggest any solution as to how this could and was to be effected. To my mind this is tantamount to telling me that if I want to save myself from insolvency, I should pay all my debts. I am aware of that, but then I should also be told how I shall obtain the necessary means and ability to do this. The other economist, Dr. M. J. Marais, also said in the same edition that higher taxes would not be the solution to inflation, and he furnished sound reasons for saying that.

He said the public would not spend less; they would save less and live on savings, and they would live higher. However, he also failed to offer a solution to this major and difficult bottleneck. He merely criticized the upward trend in Government spending.

It has already become commonplace to say this, but in considering the matter, one once again gains the impression that this major and serious problem with which we are struggling, can only be solved in two ways; one realizes that in actual fact there are only two measures that are applicable. These measures are, in the first place, that consumer spending should be curtailed on a short-term basis, and, in the second place, that an attempt should be made to promote productivity on a long-term basis. To promote productivity is a lengthy project. Personally I am satisfied that this Government is doing everything in its power to effect this. There is the sustained immigration programme and then there are the measures which have just been announced by the hon. the Minister of Labour and in terms of which more labour will be made available in a controlled and disciplined manner, etc. For that reason we must, in so far as the short term is concerned, regard the present measures as a serious attempt on the part of the Government at restricting consumer spending. Furthermore, we must accept and support them. This measure amounts to the implementation of adequate fiscal measures in the form of sales duty. An American economist, Milton Friedman, said the following in regard to the United States, and I quote—

Consequently I want to endorse this wholeheartedly, i.e. that this is a serious attempt on the part of the Government at curtailing consumer spending. We are aware that if this were implemented on a larger scale, it would apparently even have the appearance of a recession in miniature, but that would be a lesser evil. We should be prepared to accept that. The present measures which are being applied by the hon. the Minister of Finance, are the minimum, and if they do not yield marked results soon, I shall be prepared to support more drastic measures in this regard.

The people of South Africa must realize clearly and seriously that we may not participate further in a pursuit of profit. If we did that, we would truly reach the position which exists in the United States at present. In the United States 90 per cent of the population are already living on the income they will earn in a year or two years’ time. We find that they are already consuming those earnings at the present moment, and that they are mortgaging their earnings in advance. We cannot tolerate that in our country, and we may not allow it to gain acceptance here as well.

That is why I want to suggest that in order to reduce this consumer spending, at the rate at which it is taking place, and to restrict it to what is absolutely essential, and to restrict it to the sine qua non, we should only do what we consider to be extremely essential. I think the State can, with what it may collect in this regard, R47 million or perhaps more, set a good example. There are various ways in which it can spend this amount. It can discharge Government responsibilities in this way. The best investment which I can see at this stage, the greatest sine qua non with which we are faced and which we should now regard as a top priority and without which a country cannot exist, is our agricultural industry. This is an industry which, at the end of the century, will have to make provision for accommodating 40 million souls in this country. That is why I think this is one of the ways in which the Government can spend the money it is going to collect in this manner. We must make sure that we are making the optimum use of our soil, the optimum use of our water and also the optimum use of our labour. We have the opportunity now to pay attention and give priority to those important facets of our society. In co-operating with that we can only and ought to bring about the most important infra-structure by means of which we can combat inflation.

I also want to express the thought that if these things still do not help, we should not hesitate to consider import control in some form or other. In that manner it will be possible to avoid price increases as regards imported goods. I am saying this conscious of the fact that we are members and endorsers of the G.A.T.T. agreement. I am also aware that certain restrictions apply in this regard. I think that we shall in fact have to think along these lines in order to maintain our position. We shall also have to think of means for taking steps against unscrupulous traders, who sometimes abuse this idea of sales duty in order that they may, over and above that tax, make a profit which is unfair and unjust.

Mr. Speaker, to the extent that the hon. member for Ermelo has identified this side of the House with the major contribution to the economic life of South Africa as far as the industrialists and commercialists can make that contribution, I would like to identify myself entirely with the remarks of the hon. members for Parktown, Constantia and Von Brandis. I think it is because we on this side of the House are in contact with commerce and industry that for so many years we have been making the point that commerce and industry have been making, namely that the Government is out of sympathy with the economic life of South Africa. To the same extent that the Government has been in power for some 22 years and to the extent that the hon. the Minister of Finance has handled a number of budget debates in the past, this Government must accept responsibility for the state of our economic affairs as we find them today. The hon. the Minister in his address on Wednesday was at great pains to analyse two or three of our major problems besetting our economic situation as we see it. He did precede his remarks by indicating that the arrangements which have been made for the sale of gold on the monetary market and the free market are advantageous to South Africa. There we heartily agree. But at the same time these very comments have highlighted the importance of gold as a commodity in stabilizing our economic life and welfare. We know too well, however, that the risk of the availability of our gold production, phasing out within 10 to 12 years from now and becoming of less importance in our economic life, is a real one. To the extent that the Government has not made the necessary provision within our infra-structure to build up our base metal exporting industries we are endangered in the future.

We disagree with two aspects of the hon. the Minister’s intentions to combat inflation. He has commented that he feels thwarted and frustrated, because of his lack of ability to alter income tax and other levies during the Parliamentary recess. As long as we can, we will uphold the Parliamentary principle that taxes will be imposed and authorized by Parliament. That we will continue to do. Then the hon. the Minister has introduced a concept almost without precedent in the history of the economic life of South Africa, namely that he will introduce a sales tax at this stage by means of the Part Appropriation Bill. Here, too, if we have regard to the commentary by the hon. the Prime Minister and the hon. the Minister of Finance himself that there is no chaos in our economic life, that there are no crisis, that we are well-found as a nation and that our economic strength is sound and good, we find it inexplicable that two months prior to a major budget and so recently after another major budget last year, these what I call “panic measures” have had to be taken. I can assure you, Sir, the whole of South Africa regard them as “panic measures”.

What perturbed me most greatly, is the possibility that because we are so concerned with the degree of inflation which the hon. the Minister of Finance has said is not abnormal, we must take relatively drastic steps to curtail it. I fear that we may go the way that both Great Britain and America have gone and slide from what is at the moment a stable and useful economy, into one where we have an undue measure of unemployment. I quote the hon. the Prime Minister himself, who in a very prophetic phrase said in Hansard (column 387):

I want to repeat today that if there is one thing I am afraid of, it is unemployment here in South Africa. As surely as I hold this position, I will not allow it if it is in my power to prevent it. I will not allow it, because this, more than anything else, could eventually lead to my downfall.

The experience has been in America and in Britain that in order to cope with the type of inflation they were experiencing, the measures they applied resulted in unemployment to the scale of 4 per cent. Ours at the moment, I believe, is .4 per cent. If we are taking measures that so destroy the confidence of commerce and industry, a confidence which is balanced on a tight rope to the same extent that confidence in the Stock Exchange was balanced on a tight rope two years ago, we may well slide into economic recession. One shudders to think of the influence of a rate of unemployment among Europeans and even semiskilled non-Europeans of 4 per cent, how that would affect our Bantu population and the unrest in this country it could create. I share the view of the Prime Minister. They could be catastrophic, unfortunately not only for the Nationalist Party but for the whole of South Africa.

Mr. Speaker, the incidence of the sales tax that has been increased at the recommendation of the hon. the Minister of Finance is having an inordinate effect on those categories of South Africans whom we regard as our special responsibility. It has been said before that the wage-earner in the middle-income group, the person in receipt of a fixed income and the pensioner are feeling this heavily. Then I want to make particular reference to the 5 per cent increase in the tax on motor vehicles. A few years ago the Government in an endeavour to find a catalyst for the implementation of our whole industrial policy, introduced the local content programme for the South African motor industry. It was realized that we would pay more for our vehicles, and to that extent the move was inflationary. But it was realized that it would create jobs for South Africans, and to that extent the move was accepted and welcomed. But now the motor industry, which is perhaps the second largest employer of labour after the mines and excluding the Government, is finding that it is in danger of moving into a recession. It has expressed the fear that because of this new increase in the tax there will be another splurge of buying of vehicles before the Budget. There was such a splurge just before the last Budget speech, and these figures distorted the true image of the demand and resulted in an unnecessary demand taking place. At the moment, with the increase in freight rates, the increases which are taking place in prices and now the increase in insurance on motor vehicles and a potential increase in the price of petrol, the motor industry the hen that lays the golden eggs in South Africa, apart from the gold mines, is in danger of moving into a deflationary phase which may not be quickly corrected.

These particular taxes that are being applied to the motor industry—and here I refer to the tax on motor car components —are hitting a very important section of our population, namely the farmer. Sir, you will appreciate the extent to which increasing prices are crippling the farmer in South Africa. Today South African farming is no longer a highly profitable enterprise. Just as in the past we had returns of 1 and 2 per cent on the Stock Exchange, so the farmer today is faced with a return of 1, 2 or 3 per cent on his capital investment and he has no security of tenure. He is therefore moving to the cities, and the satellite towns, which depend on the farms, are also becoming depopulated. The impact of the tax on motor cars and of the tax on motor spares, as well as the tax on a wide range of non-essential articles, is going to be very severe on the farmers.

Sir, if it was with his eye on the provincial election that the hon. the Minister of Finance refrained from taking what he regarded at the time as the necessary corrective fiscal and monetary steps during the last session of Parliament, then he must bear a heavy responsibility for this politically-inspired action. We, Sir, have a great regard for the hon. the Minister of Finance. It is a pity that under Cabinet discipline he is so shackled and hidebound that under the influence of Ministers in charge of other departments he has had to depart from his own concepts as a trained economist and from actions which would normally be completely satisfactory to South Africa. I predict that there will be a buying spree in South Africa of those goods which have still not risen in price, and that again there will be increased expenditure, the very thing that the hon. the Minister is trying to avoid. At the same time there is little doubt that prices will rise and to this extent again his move is inflationary.

Sir, in analysing the two prongs of inflation—cost inflation and demand inflation— the hon. the Minister of Finance has pinned his flag to the masthead of demand. I think—and we are supported in our views by many industrialists—that in this he is not entirely correct and that he would have been far wiser if he had devised ways and means of increasing our productive incentives rather than to stress so severely the pure aspect of demand. Sir, the hire-purchase restrictions applied by the hon. the Minister of Economic Affairs shortly after the provincial election had a severe impact. Following on those restrictions, the hon. the Minister of Finance, in an endeavour to escape the follies of a move that was not well thought out and that was criticized severely by practical men of commerce and industry, has now introduced his new sales tax and has in a sense saved the face of the hon. the Minister of Economic Affairs. But, Sir, who is the final whipping boy? Is it not Jan Public? A sum of R47 million is to be withdrawn from the pockets of the public, and not only R47 million.

Let us face it that with the escalation in prices as the article goes from the factory to the wholesaler and from the wholesaler to the retailer, this figure will be more nearly R70 million. It is a hidden tax in this new system of ours. We have departed from the tax bulge disadvantage, which was subjected to so much criticism, but we are now faced with a hidden tax which Jan Public seldom sees or seldom realizes. Not even on his packet of cigarettes does he now have any indication as to what the actual excise duty is. As against this we have had no single quid pro quo or offer from the Minister of Finance as to what the contribution of the Government will be—none whatsoever. Sir, is this R47 million, escalating to R70 million, high as the cost is, the only cost to the public of having this Government in power?

I make this point because of the Government’s present policy of forced decentralization of industry for ideological reasons rather than for normal economic reasons. Is it realized that the net cost disadvantage to the private industrialist who, under Government pressure, is forced to move either to the Bantu homelands or to the border areas, is in the region of R600 per Bantu labourer? This is another inflationary factor. In other words, if an employer is using 100 Bantu in a homeland area, then because of the Government’s ideological policies his bill at the end of the year in terms of direct excess cost will be R60,000. If we move some 20,000 Bantu over three years to the Bantu areas or to the border areas for ideological reasons, the cost to the South African Treasury, a cost which is then passed on to the man in the street, is R72 million. Sir, no industrialist has ever denied that there are advantages in decentralization; they have offered their support to the Government. But I refer now to decentralization for economic reasons, which help us to enrich our country productively, to reduce prices, to minimize inflation and at the same time help us to carry out the Government’s policy. Such a policy makes sense. But the ideological idiocies which the Government is now embarking upon in the shape of enforced decentralization at the present tempo, can no longer be afforded by this country at this period of time.

Sir, regrettably the Government has not explored all avenues open to it in its fight against inflation. I make no apology for again stressing the labour aspect, because we happen to represent commerce and industry. It was the Prime Minister himself who in his New Year speech exhorted the people of South Africa to explore every possible way of making better use of South African labour. He was further supported by Dawie of Die Burger who said that ways and means must be found to make the widest and most effective use of non-European labour, without upsetting the White workers too much and in this way disturbing industrial peace. Then came Dr. A. S. Jacobs, not a United Party man, calling for a more productive use of our available labour force. He was echoing the sentiments of other Afrikaner economists such as Dr. Jan Hupkes and Dr. Chris van Wyk of Sanlam, and he was anticipating the call of Jan Marais of the Trust Bank for adaptations to permit of a fuller use of our non-White labour.

I want to raise one point with those speakers opposite who mentioned it. We are accused of merely wishing to move tens of thousands of untrained Bantu into the industrial areas willy-nilly. Nothing could be more absurd and nothing could be less likely to be the reactions of those persons who have the economic welfare and the welfare of their own profits and balance sheets at heart. If I take the Government up correctly, I understand that they feel that in the foreseeable future the Bantu is capable of being trained and educated up to the stage where he can run his own independent Bantu state at all levels of government and he will have a viable economy. But then I say that where we have gaps in our economy which are so tragically apparent today in a highly industrialized civilization, there are many jobs which can be done by any person irrespective of colour. Those jobs will allow this relatively small labour force that we have which has high skills to move up the industrial ladder to become foremen, managers and entrepreneurs. Sir, those of us who have travelled in the highly industrialized centres, where industry is broken down into repetitive processes of manufacture, know that what is needed in the automated world of today is strength of body and willingness to pick up heavy materials, to press a button, to put an article in a press and to move it again.

Are you in favour of the Bantu selling his labour in the best market?

I have had experience of these catch questions before. I repeat again that if we are faced with the threat of unemployment in South Africa we will be doing our country no good whatsoever. What has been the reaction of the Government? When confronted by crises and having stated so often publicly that they will bend the economy to its ideologies, they buckle at the knees and by giving mass exemptions they carry out the sort of manoeuvre which we have just seen in the building industry in Johannesburg. The mind boggles at this sort of thing.

Sir, the Government has no long-term solution for our problems in South Africa until they will face up to the fact that we are a large country, that we have a vast economy, a vast economic potential, a good climate, raw materials and base minerals and also labour that is willing to work. I wonder whether it did not occur to the hon. the Minister of Finance that there could have been alternative solutions which would not have been so painful as the ones he is presently applying. Would it not have been possible to increase the attractiveness with realistic interest rates of a series of State bonds? I say this because I am aware, as he is aware, that there is a great deal of idle money which can still be mopped up without hurting the small taxpayer or the man in the street. If you, Sir, would attend an auction sale of antiques, or of good carpets or good art works, you would realize that there is idle money around waiting for proper investment. This money could equally have been invested in State bonds for the assistance of our economy, as it can be, because these people fear the impact of galloping or creeping inflation. It is merely a suggestion.

I have mentioned the impact of the present sales tax increases on the pensioner, the man with a fixed income and the working man. They are unduly harsh and it would appear that it is the poor who are bearing the main incidence of this tax. Do you realize the extent to which the middle class has been penalized in the past? Memories may be short, but this is the group which was most cruelly hurt when the Stock Exchange collapsed during the latter half of 1969. This was the group which lost most heavily with the collapse in the equity market. This was the group which saw its life savings vanishing with the collapse of the growth funds. This was the group which the Government punished most heavily when it introduced the recent hire purchase restrictions, the class which has the least availability of credit from trade or banks and the class which has to rely most heavily on hire purchase. This is the nub of the matter. As long as the Government continues to squeeze demand without doing anything to combat the principal long-term inflationary influence, namely our worsening labour shortage situation, and as long as the Government insists on tackling the imbalance between supply and demand exclusively from the demand side, so long will it resort more and more to short-term palliatives and deflationary policies. The Government must accept full responsibility for the inflationary binge from which the country is now suffering. It must also accept full responsibility for the hangover which is about to come upon us. It is only a pity that it could not find a more acceptable and logical economic palliative than the “regmaker” it is now endeavouring to give us.

Finally, in conclusion I feel that the hon. the Minister of Finance is wrong in regard to his priorities. We believe that not only are his priorities wrong, but that in the choice between the policy of growth and the policy of slowing down the economy he is backing the wrong horse, an error of judgment on his part which may be disastrous for South Africa.

Mr. Speaker, you will forgive me if I do not speak about economic matters, but I want to come back, for a while, to politics. The hon. speaker who has just resumed his seat, accused us of being responsible for the “hangover” to which he referred, but the trouble with these people is that they have now had a hangover for 23 years and that they cannot shake it off.

The previous speaker referred to “panic measures” which have recently been taken. I want to tell you, Mr. Speaker, that South Africa knows that it can trust its Minister of Finance, and even the Opposition admits that he is a person of integrity, a person who will not give money for salary increases before an election and deliberately take back that money after an election. I am therefore rejecting that charge. They are the people who are creating problems for South Africa. The trouble with the United Party is that they no longer have ideals. They have no ideal for the continued existence of the White population. They no longer have any faith in the continued existence of a White South Africa. The previous speaker said, and I hope I am quoting this correctly—

Sir, the National Party represents a people with a history behind it and with ideals and a future ahead of it. [Interjection.] That young member for Turffontein should keep quiet; he will not be with us for much longer. I want to, if I may, quote the words of a famous man of the past and apply them to the present Opposition. On 4th July, 1948, the following was said by the late Dr. Malan, and, with respect, Sir, I should like to apply these words to the people opposite (translation)—

This was said in 1948, and the same words still hold good today. Now there is a cry on the Opposition side: “Kick out the Government.” But they have been trying to do this for 23 years, and I must tell you, Sir, what methods they have been using to kick us out, i.e. the reprehensible methods of slander, suspicion-mongering and misrepresentations. They told us: “Go and be damned.” They referred to the Nationalists as “things crawling about at night”. They tried to employ the power of money against us. They tried to sabotage the Afrikaner people. But for 23 years their attempts have been failing miserably.

There must in fact be a reason why this Government has been in power for 23 years and will, as far as we know and are able to see, still be in power for many years to come. One reason is that the electorate of South Africa trusts the National Party. South Africa has confidence in the policy of the National Party. What is more, South Africa has confidence in its leaders. The electorate also knows that South Africa’s future is safe in the hands of the National Party. I could put this question differently. Why have we been in power for 23 years and why are things going well? Is it perhaps because the electorate still remembers the industrial unrest, political unrest and economic hardships when we had to queue for a piece of meat during the regime of the Opposition? Perhaps we still remember the industrial unrest. We still remember the Ballingers and their spiritual associates, who were given a free hand by the United Party to do what they pleased. We still remember how, 20 and more years ago, our children had to sit in tents instead of classrooms. These are things one no longer comes across today. We heard from the hon. the Minister of Economic Affairs that he had to work for four pence an hour. Those things are no longer heard today. They do not exist anymore. Or is it because South Africa realizes that our country’s greatest problem, i.e. the relations question, is being handled so well by this Government that White, Brown and Black have manifested their credibility and are supporting the Government in that matter? Is it also because White, Brown and Black have found that the policy of separate development, in which we believe and which is our ideal, is a just one? Hon. members opposite have a great deal to say about money and labour integration. I shall come back to these matters later on. It amounts to this, namely that the National Party has an ideal and an ideology. It is not ashamed to say this. It is willing to pay in order that that ideology may live and be realized.

This Government is handling its problems to the best of its ability. But now I have a problem with the Opposition. They are so fond of quoting the views of learned people. They are so fond of quoting learned people who want to dictate to the Government how it should act. Recently a newspaper asked one of those learned people why he was always criticizing the National Party and never criticizing the United Party. What was his reply? He said, “Learned people rarely comment on the United Party, as it is not worth the trouble to give serious thought to them.” This was said by one of the men who are regularly quoted by that Party in their attacks on us.

But I want to proceed. One of their political brothers, a very intimate friend of the United Party, namely the Cape Times, says that it wants to accuse the party of “double talk”. In fact, I agree whole-heartedly with the Cape Times. I quote—

This was said by one of its “traditional friends”. But talking about “double talk”, surely the hon. members remember Philip Myburg, who stood for the U.P. in Caledon and said that he would not eat with Coloured representatives if they should be elected to Parliament. Hon. members will still remember the friend in the constituency of the hon. member for Rustenburg, i.e. the U.P. candidate Mr. Buitendag, who thought that he would be able to catch a few measly votes in the recent election. Hon. members will recall last year’s Bantu labour question in the constituency of the hon. member for South Coast. According to the Volksblad of 11th November, 1970, the United Party held a congress at which they once again elected Mr. Mitchell as their leader. He rose and told the delegates, “I want to give you the assurance that our Leader can always depend on my loyalty”. When the hon. member said that, the delegates laughed. His reaction to that was, “This is what happens when one has a reputation for being a joker”. The United Party’s problem is that they are a lot of political jokers.

A campaign was launched to boycott the new opera building in Cape Town. The name of the leader of that campaign is Bamford. In the United Party’s programme of principles, which costs 5 cents—perhaps their principles are only worth 5 cents— they advocate social separation or separate facilities in order that points of friction, as they call them, may be eliminated. But here one of their front-benches in the Provincial Council has been advocating integration in that theatre. We remember the United Party’s discriminatory attitude towards the Afrikaner in the days when they were in power. We remember that they wanted to plough us under by bringing immigrants into the country on a large scale. [Interjections.] No, Sir, today immigrants are being brought into the country in a controlled manner. They are selected. In the U.P. days the door was thrown open to them. “Let them come, the good and the bad,” it was said. Anybody could come in order that the Afrikaner might be ploughed under. We remember the Alexandra’s and Sophiatowns, the slum conditions that existed. We remember how rapidly some areas were being swamped by the Blacks because the United Party had only one ideal, or norm in terms of which they measured, i.e. more and more money; money had become a god to them.

I have said that they are political jokers. I shall furnish another example of this. I am reading from the Hansard of 1969, column 1093, where the hon. member for Port Natal expressed his concern at the poor treatment accorded, in his view, to public servants. He said that he would raise the matter again the following year, i.e. in 1971.

With reference to this the hon. member for Transkei delivered himself of this piece of wisdom by saying that that would not be necessary after 1971, because after 1971 they would look after those matters themselves. We know what the results were of the elections held last year. We are still looking after those people, and we are doing so very well. It would appear to me as though the United Party does not always realize the dangers its policy holds for South Africa. It seems to me as though they do not know the history of the past 300 years of our country. It seems to me as though the United Party has forgotten that White South Africa has a political, a religious, a cultural and an economic heritage which it wants to preserve for the future. I can tell them that, if they do not give serious thought to these matters, the South African people is in fact giving serious thought to them. That is why this Government has been in power for so long and will still remain in power for many years to come. The United Party is predicting that we are going downhill and that a hard time lies ahead for us. Hon. members will recall that the hon. the Leader of the Opposition was also such a prophet 10 years ago. In his latest forecast he said, “Our country will stagnate economically if this Government continues to be obsessed with its idea of job reservation and its unwillingness to stimulate labour integration and to accept it as a principle”. He predicted that we would go to ruin if we did not apply labour integration. But 10 years ago this very same speaker also made a prediction. Ten years ago, with the referendum on whether we should become a Republic, the hon. the Leader of the Opposition also made a prediction. I am pleased that the hon. the Leader of the Opposition is entering the House, for now I can remind him of that prediction. At the time he said (translation)—

For South Africa to become a Republic is a hazardous undertaking, and without Britain to pamper it, South Africa will go to ruin economically.

That was his prediction 10 years ago! Hon. members know how we have grown during the past 10 years. The country has split its seams. Now the hon. the Leader of the Opposition has made another prediction, i.e. that we shall stagnate economically. I think he is once again going to miss the bull’s-eye just as far as he did 10 years ago. It is being said here that our cost of living is too high. I should like to quote a paragraph from the South African Industry and Trade of 12th February, in which the following is said—

What more do we want? This is sound evidence.

But now I do want to say that we may have a message to convey to our people outside, i.e. that there are probably many of our people who are able to aim at living on a cash basis. By that I mean that they should not so easily fall prey to the credit facilities which are being created. I had an uncle who, when I was still a small boy, gave me this piece of advice: “If you need something, do not buy it. You should only buy it when you cannot do without it.” I think that this will perhaps be a very good piece of advice to many of our people, i.e. to think first and not to avail themselves so easily of the credit facilities which are available.

There is one matter that troubles me, i.e. that we have to deal with a large number of ingenious, highly-trained salesmen. When our pupils leave school, they are confronted by these highly-trained salesmen. For what it is worth, I should like to express a thought in this regard. Should we not consider giving our young people a little guidance while they are still at school, so that they may offer resistance to these highly-polished salesmen who come to them? In other words, let us cultivate some thrift in our youth in order that there may be more planned spending on their part.

I read about overseas visitors to our country, and when they leave, they say, “We are impressed by the low cost of living in your country,” and also, “Your living standards here are higher than in many parts of Europe.” I should like to refer hon. members to an excerpt taken from the Financial Times, in which a comparison is drawn between the food and clothing prices here and the prices of these articles in many other cities of the world. I should like to mention just a few. In this article they refer to a food basket, and then they mention 22 articles, from meat to aspirins, which are to be found in such a basket. The price of such a food basket in Johannesburg is 16.07 American dollars. In Brussels it is 23 dollars, in Copenhagen 28 dollars, in Tokyo 34.61 dollars, in London 16.8 dollars and in Paris 23.9 dollars. Therefore, this food basket costs least in South Africa. For the information of hon. members I may just state what such a basket contains. It contains beef of the best quality, chicken, eggs, potatoes, rice, butter and quite a number of other articles. When this basket is bought in Johannesburg, the price for it is lower than it is in most of the other cities of the world. In buying clothing—and now I am not referring to that expensive suit for R60, to which the hon. the Leader of the Opposition referred, but to the suit for R43, which the hon. the Minister had in mind—we find the same phenomenon. In Paris those articles of clothing cost 198 dollars, in London 104 dollars, in Tokyo 119 dollars, in Copenhagen 165 dollars, in Brussels 158 dollars and in South Africa 102 dollars. Once again our prices appear to be the lowest. Therefore I cannot see how the Opposition can tell us that South Africa is in the process of becoming a very expensive country. I said at the beginning that the National Party had an ideal. The National Party has an ideology, and we do not mind what we have to pay to implement that ideal and that ideology of ours. Our ideology is that we are fighting for the continued existence of the White population in South Africa, and we are not ashamed to say it. This also holds good in respect of the labour legislation. In this respect I want to quote a passage taken from the speech made by the hon. the Minister of Labour as it was published in The Star of 11th June, 1970—

That was before he changed his mind.

I shall react to that in a moment. I quote—

Mr. Viljoen said it must be accepted without reservation that the Government will continue to protect the White worker and that job reservation will be enforced as in the past wherever circumstances demand it.

That is the policy, irrespective of what that hon. member has to say. Why? This is the case because the National Party believes in one thing, and I should like to read it as it is seen by an expert, a view with which we agree. The following question was put to this man (translation)—

What follows now, is the typical U.P. story—

That is the question. His reply to that was—

That is the policy of the National Party. It is not willing to sow a germ which is going to lead to the downfall of the Whites in South Africa. The trouble with the United Party is that it is quite subtly, and to an ever-increasing extent, trying to explain away and hush up the idea of separation in South Africa. How the United Party has been raging against the group areas legislation! What opposition has it not voiced against job reservation legislation! The hon. the Leader of the Opposition said— and I am quoting from column 58 of the Hansard of 1970—

Can hon. members imagine that a responsible person can say such a thing? They are fighting the Physical Planning Act. They are fighting the Mixed Marriages Act, they are raging about the Immorality Act, they are fighting the Bantu homelands legislation and they are inciting the Coloureds to fight against apartheid. The United Party is indulging in political treason towards the continued existence of White South Africa. On a certain occasion the hon. the Prime Minister said, “South Africa would be the most popular corpse there has ever been if it were to abolish the measures bringing about separation between colour groups.”

Order I think the hon. member should rather withdraw the word “treason”.

I withdraw it, Sir. My contention is that the United Party is disparaging and breaking down the idea of separation. The National Party stands for the retention of the colour and labour legislation. I want to ask the United Party whether they do not feel like inspiring the people with idealism. Do they not feel like acknowledging, recognizing, stimulating and impregnating the idealism of a people? I want to ask the United Party to stop forcing peoples to being intertwined politically. Should we get what the United Party desires, we would have political integration. That must, in turn, inevitably lead to social integration. The National Party is governing and governing well because it is filling the various population groups with idealism. The National Party also acknowledges this feeling of idealism in the Whites; it acknowledges it and tries not to belittle it. My Government does not stand for social or political integration. In other words, we are no integrationists. The National Party stands for the preservation of the identity of the Whites, the Brown people and the Black peoples. As my Government will not allow the ideology of a people to be destroyed by the power of money, it will adhere to this principle.

I want to conclude by saying that, in spite of what hon. members opposite are saying here, this National Party still has it in it to take, and is still capable of taking, our youth along with it. [Interjections.] Yes, it is still capable of doing that. It is still capable of inspiring the youth. I am not referring to the hon. member for Turffontein now, for I think he has gone astray. The National Government still has that inner power to inspire our youth and to channel its energies into positive and fruitful thinking.

What is just as important, is that I believe that with its policy the National Government is capable of breaking the hold of permissiveness on our youth, not only by criticizing but also by saying, “Come, we have a task and a future for you. Give me your hand. We want to work on these things together.”

Mr. Speaker, after the speech to which we have just had to listen, one can only say “Worcester, poor Worcester, do you deserve it”? Here we have a constituency with a proud record, with names like Charlie Heatlie, Piet de Wet and Dr. Dönges, who, even if you differed with him, was nonetheless a statesman and a person whom you could respect. Then we have to listen to a speech like this one. I do not know why the Nationalist Party got rid of Mr. Stofberg. It was unnecessary, for if you are looking for an H.N.P. supporter then you have found him here. Here is a person who stands up in this House and says that the United Party, the Opposition in this House —I quote his words—“uses reprehensible methods” and “has for 23 years been trying to sabotage the Afrikaner people”. That a member of this hon. House should say that the Official Opposition in Parliament is sabotaging, not South Africa or the South African people, but the Afrikaner people! That a person can stand up in 1971 and talk about the days when the United Party tried to plough the Afrikaner under by means of immigration!

Now I want to ask the hon. the Prime Minister something in his absence—but there are other Ministers present. I want to know whether this is still the attitude adopted by this Government towards immigration. I ask the hon. the Minister of Immigration: Is this his attitude? Is he now ploughing the Afrikaner under by means of the immigrants who are being brought in? We read about a “verligte” Government. This Government is just where it was at that time. I now want to let out a secret. I understand the hon. the Chief Whip of the Nationalist Party told his men: “Look, boys, we are losing this struggle by arguing about the new era; go back to 1948 and rake up all the old scare-stories again. Rake them up out of the past, the ‘here-comes-the-bogeyman’ stories; the racial hatred of 1948.” This is what this hon. member has now used again. It is no wonder that the hon. member had to start by saying that he was not going to speak about finance. He was not in a position to speak about finance, because he had received instructions to try to return politics to the emotional level, to the politics of frightening people, the Kaffir politics of the Nationalist Party, which remains the power and strength of the Nationalist Party, the traditional Nationalist Party, politics of racial hatred and of keeping the Englishman in his place. I want to put a direct question to the hon. the Minister of the Interior. I want to ask him: Does he approve of it that one of the members of his own party stands up here and speaks about the ploughing-under of the Afrikaner by immigrants, that a member of his party stands up here and says in 1971 that the Opposition in this House is trying to sabotage the Afrikaner people? I ask him whether this is the party which he joined to bring light into the darkness of the Nationalist Party. The “verligte” Minister of Immigration now has his chance to stand up in this debate and tell us how bright this light is which he has brought to his party. After this sort of speech there is no doubt that the Nationalist Party can no longer argue and must return to all the unpleasantness of the past, to the emotional and sentimental politics which it exploited for so many years.

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