Mr. Speaker, I move—

Mr. Speaker, the Third Reading of this Bill does not call for any extensive comment. There is one thing, though, that I think we should stress and that is that the whole course of the debate on this Bill has proved that a fruitful discussion can take place if good legislation is presented to the House in tem. As you will remember, Sir, when this Bill was originally presented, there was extremely little time for this side of the House to prepare itself for the Second Reading, but I think all will agree that our speakers acquitted themselves with distinction. More time was available in Committee, however, and we could see then how, on account of that additional time, constructive amendments could be put and a constructive discussion across the floor of the House could take place. We now have, actually, a better Bill than the original one. I hope that this will be an example to the Government and that it will show them that, by trying to rush through legislation, they are harming not only the Opposition but also the country. Brinkmanship in politics certainly does not pay.

*Therefore, Mr. Speaker, let us confirm with the Third Reading of this important Bill that we regard this as a major scheme for the improvement and the progress of our steel industry in South Africa. The long trains, with their trucks filled with steel-ore, will cover this distance of 800 km and they will be able to do a very great deal for our country. The corner-stone of a great new industry is being laid. Steel is the corner-stone of the motor industry, of the construction industry and of ship-building, and I, too, support the development of Saldanha and its surroundings. The hon. member for Moorreesburg mentioned his various nicknames. I agree that he may be called “Piet Saldanha”, and that his nickname “Piet Growth Point” has now been given its economic content. I am in agreement with him, especially as far as Elands Bay is concerned. He said that beautiful village was going to be cut into two, and I support him wholeheartedly that that must not happen.

Then there is only one other matter which I want to mention in conclusion. I am sorry the hon. member for Vanderbijlpark tried to drag politics into the matter. I want us to …

Order! The hon. member must now return to the Bill.

Yes, Sir. With regard to Iscor and Iscor’s part, the hon. member made a number of remarks. I do not want steal a march on him there; I agree that it is a Bill which we must support together in the interests of South Africa. One could, of course, point out that as early as 11th February this year, an article was published in Rapport under this heading: “Oom Ben is man alleen; hy en Kabinet haaks or Saldanha” (Uncle Ben makes a lone stand; he and Cabinet are at logger-heads about Saldanha). But, Sir, I do not want to accentuate it here. Therefore I want to conclude by saying that I hope we shall not fight one another on this matter on political platforms in the future. It must not be said by A, “We established the Saldanha railway line”, while B in turn says, “No, we did”. Let us regard it as a joint achievement with regard to our great steel industry in South Africa.

Motion agreed to.

Bill read a Third Time.

Mr. Speaker, gold has a greater significance for us in South Africa than for any other country in the world. Gold is the base on which our economy rests. Gold is the fundamental factor in the picture of our financial strength that the hon. the Minister was able to present to us last Wednesday. Gold is the essential element in our prospects for the immediate future. Gold is, and must be, the underlying instrument for relieving the desperate needs of so many of our people and for the fulfilment of their wants. But gold is more than a precious metal, still greedily sought after by man as the price soars. Gold is even more than a stabilizing factor in the monetary systems of the world. Gold has created its own philosophical connotations. The late Dr. Dönges used to talk about, and seek, the “golden mean” between growth and inflation. It was, I believe, the hon. the Minister who talked about the “golden years” to come.

But there is another concept for gold. The challenge of the “golden opportunity”. But sadly, Mr. Speaker, this Budget has already rejected some of these opportunities, such as the opportunity to give maximum relief to those in need. Other opportunities it takes hesitant steps to grasp, such as the opportunity of training labour. But there are opportunities that, thankfully, the Budget has seized. These concessions in the Budget we readily accept, because many of these concessions meet the calls which we have repeatedly made over the years for these changes. I find nothing controversial in this statement, Mr. Speaker, nor any self praise. I believe that the Opposition has a vital role to play in influencing Government policy; that is its function. I believe that democracy flourishes and is at its best when there is an interplay of thought between Government and Opposition, and this interplay of thought brings the best legislation in the interests of the people of our country. That is why I believe it is highly irresponsible for the hon. member for Houghton and her party and for certain sections of the Press, deliberately and as a matter of firm policy, on every possible occasion, to use every possible means to try to convince the public that there is no effective Opposition in this House. They know this is not true, Sir. But it is even worse that the hon. the Minister of Finance, holding the position of major importance that he does in our political life, should have thought it necessary to make the statement that he did at a meeting which he addressed in Germiston on the 7th November last. This is what the Minister of Finance said, according to a report in The Star of the 8th November—

Of course.

You see, Mr. Speaker, this is democracy from my hon. friends on the other side.

A one-party State.

He went on to say— … because it has made no positive contribution to the government of the country.

Hear, hear!

Sir, as long as the country knows what hon. members opposite think, we are quite satisfied. I go on quoting?—

Sir, I would not have expected this from my hon. friend, the Minister. I want to motivate my standpoint by giving just two examples, and the first is the home ownership savings scheme. I first suggested this scheme to the Minister of Community Development in September, 1970, in an endeavour to help our young people to acquire their own homes, and I brought to his notice a similar scheme in Germany called “Help for self-help”. The Government accepted this suggestion and in the Budget of 1972, under the designation “Home ownership saving scheme”, they provided the necessary legislation. Naturally we immediately welcomed this, but we said at once that if the scheme was going to be successful it had to be more widely based to include higher income groups and more costly homes. Since April, 1972, we repeatedly expressed the view that the scheme, if it was to have any chance of success, had to exceed the limits imposed by the hon. the Minister of R5 000 income and R16 000 as the purchase price of a house. The hon. the Minister has now quite rightly come to Parliament and has raised the maximum value of a property under this scheme from R16 000 to R20 000, the maximum loan from R12 000 to R15 000, the maximum saving from R4 000 to R5 000, and the maximum permitted earnings from R5 000 to R6 000. But, Sir, had the hon. the Minister only listened to us a year ago, a year would not have been lost, because it is obvious that within a year he has had to accede to what we asked for. I believe it is the duty of the Government, when it sees that the Opposition is right, as it nearly always is, to accept our suggestions.

Sir, there is a second example and this is the example of transfer duty. We have pleaded year after year firstly, for a reduction in transfer duty, and secondly, for bond interest payments on dwellings to be tax deductible. This year the hon. the Minister, wisely again, has reduced the amount of transfer duty payable in respect of developed property up to a value of R25 000. This concession is a meaningful one and one which is going to be a great help to those people who want to acquire their own homes. I have no doubt that within a year or two the hon. the Minister is going to come back to Parliament and tell us that bond interest payments on dwellings will be tax deductible; I expect this to happen. Here are two examples where constant pressure from an effective Opposition, reinforced by public opinion, has brought about significant tax relief. This, Sir, is what Parliament is for. There are many other examples in other areas, but the main point at issue is this: Why must the Government take years before it reacts positively to what is the obvious? Had there been a United Party in power, the public would not have had to wait all this time for a further reduction in transfer duty. They would have been enjoying these benefits, and probably the benefit of no transfer duty at all, for many, many years.

Now, Sir, I want to say a word or two on the reduction of the surcharge on personal income tax by 10%. This change in the rate of the surcharge from 20% to 10% —the only concession in the Budget which really gives the public any significant amount—will amount to R16 million.

Which section of the public?

But no thanks is due to the hon. the Minister for this concession, as he calls it. All he is doing is to right a wrong which was done to the people of South Africa last year. You see, Sir, last year, in the guise of a concession to the public, the hon. the Minister abolished the loan levy, a levy that was repayable to the public and bore a non-taxable interest rate of 5%, and in its place the hon. the Minister upped the surcharge on personal income tax by 10%—a non-refundable personal tax. All taxpayers whose tax was R150 or more were in fact 10% worse off last year, and it is this additional 10% surcharge, that should have remained in our pockets last year, that the hon. the Minister has now removed. I suggest to the hon. the Minister in all honesty that in addition to removing this extra 10% surcharge, he should also give us back what he took from us last year.

Mr. Speaker, I would like now to consider the Budget in more general terms, and to sum up our overall conclusions immediately I move the following amendment—

1. (a) it believes that the Government will be no more successful in meeting the objectives of the Budget for 1973-74 than it has been in past years; and
2. (b) inadequate relief is provided for the lower income group and the less privileged sections of our peoples”.

Sir, it is cynically said that history tells us the past; economists tell us what the future will be like; it is only the present that is confusing. The confusion of the present is rooted in the economic performance of this country in 1972, as disclosed by the hon. the Minister in his Budget speech. Following the Budget speech last year, the country looked forward to the fulfilment of three objectives, objectives that were set by the hon. the Minister himself; firstly, an improvement in the balance of payments; secondly, more rapid growth and, thirdly, the curbing of inflation. We acknowledge gratefully the success that the hon. the Minister has had in achieving the first of his objectives, but I must admit to wondering sometimes—and I say this without in any way disparaging what has been accomplished—what our balance of payments position would have looked like if there had not been the turmoil in the world’s foreign exchanges and if gold had not approximately doubled its price. I want to repeat what I said in this House the other day: While it is proper that we should recognize the vital part that a satisfactory balance of payments plays in a healthy economy, we should not forget that its basic impact, its direct impact, is almost wholly on the performance in the financial sector, on our reserves, on Government accounts and on the Stock Exchange— very little for the man in the street—and a great deal else is required for a flow-through to an uplift in the economy generally. It is this “great deal else” that has obviously been missing and that has led to the hopelessly inadequate rate of growth in the real gross domestic product of approximately 3% for 1972. The hon. the Minister says that the figure of 3% is misleading because of special factors. Sir, this may well be true, but it is also true that probably each year there are special factors that create a plus or that create a minus, and we can only go on calculations based on the norm. Mr. Speaker, just imagine a real growth rate of 3% in South Africa against the 5% forecast by the hon. the Prime Minister, against the 5½% projection of the Economic Development Programme and against an estimate of possibly 6% or more by the hon. the Minister of Finance! Because, Sir, this is what the hon. the Minister of Finance said in his reply to the Third Reading of the debate on the Part Appropriation Bill last year, at column 9042—

All we get from the Government benches is words, words and words. Last Wednesday we had 41 foolscap pages of it. We had them too in last year’s Budget—hopeful words. The words used by the hon. the Minister of Finance in his Budget speech last year were these (Hansard Vol. 38, col. 4370)—

Nevertheless, the time has come to implement such a co-ordinated programme of action without delay. As Brutus said in Shakespeare’s Julius Caesar:

Sir, there has been very little in the last year that has led to fortune but there has been an awful lot bound in shallows and in miseries, the shallows and the miseries of an unendurable rise in the cost of living, a rise of 7,4% from December, 1971, to December, 1972; a rise of over 8% from February, 1972, to February, 1973, and a current increase at an annual rate of nearly 12%. This is how the twin objectives of more rapid growth and the curbing of inflation were met—by a growth rate of 3% and a rise in the rate of inflation of some 8% to 9%. This is not stagflation, Mr. Speaker, the stagnation of growth and the rise of inflation. It is dragflation, the economy dragged down by the policy of the Government coupled at the same time with mounting inflation. This will surprise the hon. the Minister, Sir, who said this last year referring to me (Hansard, col. 9046)—

It is now self-evident that there was very little in my statement which was remarkable—a 3% growth and a 9% inflation. It was possible and it happened.

This leads me to the reduction in sales duties which is granting relief to the extent of R13 million. What relief does the hon. the Minister think this concession of R13 million is going to bring to the less unfortunate lower income earners amongst our 22 million population? I will tell the hon. the Minister what this concession means. It will bring relief to the extent of 59c per person per annum. That is the relief brought by this reduction in the sales tax. Another factor is this. This concession is one which will disappear in the upward cost pressures that are still to be fully felt, the cost pressures of the R180 million in higher transport tariffs by my friend the hon. the Minister of Transport, the R28,5 million increased telecommunication and postage rates of the hon. the Minister of Posts and Telegraphs, and the higher wages for Whites, Coloureds, Indians and Blacks that the Government has already had to pay; those still have to penetrate into the private sector. And let us not forget another thing, that sales duty gets greater and greater, or higher and higher if you like, as prices rise, because it is a percentage of the commodity, and in a period of inflation, without doing anything, your sales duty is automatically rising. This year the hon. the Minister expects to collect R162 million from his sales tax. Not much has been given away. Take a few of the items mentioned by the hon. the Minister on which we are still paying duty and on which he told us that duty had been reduced. There is still a duty of 5% on sweets and biscuits and spices. There is still a duty of 10% on knives and forks and pots and pans and cups and saucers, all essentials for the normal person. Sir, if the hon. the Minister had really wanted to ease the lot of those of our people whose standards of living hardly meet the needs of basic existence, he should have used his Midas wealth to slash the sales duty on every single item that is a basic necessity for living. He should at the same time have removed these discriminating taxes on the Bantu. We have the situation that the Bantu earning a lower income than a White man is paying taxes, while the White man pays no tax at all. If we are going to live with ourselves and our consciences, let us see that the bounty of a gold price of 60, 70, 90 dollars an ounce, whatever the price may be, will at least be shared with those who need relief.

I find myself constantly amazed at the complacency of this Government. Their attitude seems to be: “This is what we want: Let us just say we want it and it will come about”—the miracles! It is an attitude of setting up objectives which are seldom, if ever, met. It is an attitude of ignoring the realities of the present in forecasting the future of tomorrow. In his Budget the hon. the Minister has set his goal for 1973-’74 and he presented us with a mammoth survey of the economy, but there was no word on the recent and current labour unrest which is a most vital factor in determining the trend of the economy over the next few years. We did not hear a single word on the strikes which we have been experiencing and the strikes which are on at the moment; on the strikes from which, as the hon. the Prime Minister rightly told the country, we have to learn a lesson.

The hon. the Minister did say that there was a rising trend in Bantu wages and that this was a trend with which the Government had expressed its sympathy.

He also told us that an increase in productivity of Bantu labour is today of the greatest importance. He then referred to the inter-departmental committee which has been set up to investigate Bantu training for industrial categories in White areas. This is a matter which we shall discuss much more fully during the course of the debate.

However, what does all this mean? It means that in the fullness of time the plans for the future will be made known to us. When the hon. the Minister talks about the committee investigating the desirability of pre-service and in-service training while wage increases are the order of the day, then one despairs of any orderly advance in South Africa. My suggestion to the hon. the Minister is that while his committee is investigating the desirability of training, he should tell commerce and industry now to get on with the job and then tell them how he is going to help them. That is what we need. We need action now.

I now want to pass from the confusion of the present to see what the hon. the Minister tells us the future holds. This year the hon. the Minister has dedicated himself to growth, to removing the inhabiting factors of growth and to stimulating growth positively. The hon. the Minister’s approach to achieving this year’s objectives for future growth cover a very, very wide field. On a cash basis the hon. the Minister is providing a reflationary impact to the effect of a little short of R600 million in an economy of which the hon. the Minister claims that the forces pointing to an economic revival are already very strong. So, in an economy which the hon. the Minister believes already to be strong, he is injecting nearly another R600 million. I regard an injection of this magnitude into the economy more of a massive goad than a mild stimulant. Clearly the hon. the Minister has opted for a policy of growing out of inflation. It is only a pity that he waited so long to come to this point of view. He could have—and I believe he should have —cut his sales duties, for example, before Parliament met. He might well have given the economy some of the additional impetus that is so badly needed during 1973. Be that as it may, the very fact that the hon. the Minister has chosen growth as his target merits our support. Heaven forbid, we have asked for it long enough, and over a period of many years. Of course the hon. the Minister had no other choice because the over-reaction of the 1972 Budget to conditions that existed at the time brought about the conditions that we found at the end of 1972. This has again caused the hon. the Minister to act more vigorously than perhaps he would have liked to have done. He has committed himself to an increased Revenue Account spending of 20% above the revised estimates of the current year, and increased Loan Account spending of 10,6% above the 1972-73 figures. Last year’s estimates were a mere 5,9% above the previous year for both capital and revenue. This is a wide swing of the pendulum. When you couple this with the fact that we are budgeting for deficits of no less than R407 million to be met from the Reserve Account and the Stabilization Account, I do not think anybody can call this Budget anything but highly inflationary. We know that there are increases in salaries which the hon. the Minister must meet, and we also know that a great deal of expenditure is needed this year because of the cut-back of Government spending last year, but nevertheless one wonders whether the 20% increase in Government expenditure is the right way to achieve the growth factor the hon. the Minister is looking for. Hon. members will know that there is a limit to the resources that are available in this country to both the public and the private sector. Too great a drain-off by the public sector must obviously affect the availability of funds for the private sector. Private sector spending is the key to the whole Budget. It is the private sector that will not only provide the production and the productivity, the only way you can have growth without inflation, but it is only the private sector that we can look to, to create a base from which to achieve longterm growth and export expansion. Much of the Government’s expenditure will be spent abroad. This is certainly not going to help a local industry. All in all, a somewhat greater tax reduction and a somewhat lesser increase in Government spending might well have provided a greater stimulus for the economy. With current rates of inflation, as a matter of fact, real incomes, even after the new tax rate, will only be minimally altered. There is going to be very little difference in the money that flows into the pockets of the taxpayer, and this is hardly going to provide scope for increased consumption and saving. The position was aptly put by one of the commentators last week when he said that the engine of growth will be better fuelled by greater tax reduction than by increased Government spending. Despite the increase in revenue expenditure of some 20%, and despite deficit budgeting to the extent of R407 million, the hon. the Minister sees an appreciable drop in inflation for 1973. He has, of course, like the hon. the Minister of Posts and Telegraphs did in regard to the increase in tariffs, protected his rear by the liberal use of “may’s”, “there are grounds for hoping …”, “one might expect”, etc. I do not blame the hon. the Minister for doing this. After all, he has been wrong on many occasions. Nevertheless I think it is fair to say that the hon. the Minister has given notice to the country that in his view the rate of inflation will drop in the calendar year 1973. The hon. the Minister has given his reasons for it, such as the depreciation of the rand, which in terms of other currencies in the world is some 9% below its level before 1971. It is very interesting that this year the hon. the Minister no longer sees devaluation as the panacea for all our ills. Now he tells the House that our currency is rising. There has been a change of thinking. Then he says that labour conditions are relatively easy and that in the manufacturing industry there is a considerable unused capacity available. I wish I could go along with the hon. the Minister but I am afraid I cannot. I see very little hope for any significant decrease, if any at all, in the rate of inflation for 1973. I hope I am wrong; I would be delighted if I were wrong. You see, Sir, the hon. the Minister expects a strong upturn in consumer spending to produce a strong consumer demand. Assuming this is to be the case, what is likely to happen? With stocks at a low level, the existing capacity is likely to be fully committed in a very short time and the labour slack will also quickly disappear. Administrative price rises are continuing and heavy wage demands are in the pipeline. Ours is a small economy which is something we sometimes forget. Past experience has shown us that a lag in the installation of productive capacity causes any surplus capacity to be fully utilized very rapidly. I believe that the potential to arrest cost-push inflation is strictly limited, it depends in which way the two factors of consumer demand and manufacturing investment move. If consumer demand does not increase significantly, or if manufacturing investment rises sharply and quickly, we might be able to hold the cost-inflation line; otherwise I do not think we will be able to. On the other hand, if consumer demand does rise meaningfully—and we all hope it will—and manufacturing investment remains sluggish, we are in for a spell of demand-pull inflation. It does not matter what the cause of inflation is, whether it is a cost-inflation or demand-inflation, because the ultimate inflation is exactly the same. As I said the other day, heaven help us if we have these twin devils coming together, that is to say, if we have cost-inflation and demand-inflation in South Africa at the same time.

The hon. the Minister has no easy road to follow to solve his problems. Only time will tell whether the steps he has taken will give us real growth and will hold inflation. This is the gamble the hon. the Minister has been forced to take. The legacies of the past are weighing heavily upon the shoulders of the hon. the Minister. The confusion of the present, arising out of the history of the past, inhibits the progress of the future. In my initial reaction to the Budget, I made the following points: There is too much hardship amongst our lower income groups, there is too much poverty amongst our Black people in the midst of plenty, the continuous increase in the rate of inflation is too great a burden for our people to bear, there were hopeful signs in the Budget but the Government was too complacent, and there was no clear-cut, meaningful blueprint for action. I have read the Budget Speech carefully and find no reason for changing my views. The specific provisions of the Budget do too little to ease the lot of the less privileged. There is small hope that in the short term they will find any relief whatsoever from the weight of inflation; there is hope, however, in the longer term that the decision of the hon. the Minister to jettison his “Dempskool” thinking and to opt for growth, may well lay the foundation for an overall increase in the standard of living, an increase in production and greater job opportunities. Growth by itself solves no problems; it would simply lead once again and in a shorter cycle to the all too familiar situation of the old “stop-go” policy, to applying the brakes, to curbs and controls, and again back to where we are today. The hon. the Minister knows this as well as I do. He is as well aware that in South Africa, particularly, no Budget of any value can be produced in a vacuum, ignoring the socio-economic factors to which it must be related. We therefore welcome some signs of acceptance by the Government of the fact that job reservation is meaningless and that the non-White population must be educated and trained in skills and that, in so far as the Black man is concerned, it is fruitless to try to confine the use of such skills to the homelands and the border areas, but that these skills must be made available for use in the White areas. It is the acceptance of the Government of the realities of the economic life in this country in which there lies some hope. If the Government will drop the complacent attitude of the past, if it is motivated by a sense of urgency, if it expeditiously gets down to producing a clear and concise blueprint of guide-lines without all the ifs and buts that we usually get from that side, then this Budget may have meaning, because as we have said ad nauseam, there is only one road to travel if we are going to raise our standards of living and if we are going to have a period of sustained growth, with inflation curbed. That road is to bring back confidence to the business sector by certainty of future policy and for the Government to make it abundantly clear that long-term growth will remain its objective and that it will not chop or change every year or two. The Government must realize that the successful ingredient for growth is the optimum use of all labour, the training and re-training of labour, the expansion of credit, the easing of restrictions, and so on, and this must be aggressively pursued by the Government. This is a clear road to the future and the vital question we have to face today is whether this Government has the drive, the energy, the knowledge and the will to carry out such a dynamic policy.

No.

Based on past experience the answer must of course be “No”. But we all believe, all the members sitting on the benches opposite and all my colleagues on the benches here, that South Africa is now at the moment of truth and we can only hope that the seemingly impossible will become possible and that the Government will do that which has to be done.

Mr. Speaker, the hon. member for Parktown has made very strange statements in this House before, but this afternoon he excelled himself. For example he said that if the hon. the Minister of Finance had only listened to them, how much better would the situation not have been. He said that if only a United Party Government had been in power, how wonderful the situation we are faced with this afternoon, would not have been. He went on to quote examples of suggestions which he had supposedly made to this House, and which, a year or two later, were taken over unchanged, lock, stock and barrel, by the hon. the Minister of Finance.

Last year I indicated in my speech that it is very easy to make such statements, because if one carries on asking for everything under the sun, one must sooner or later hit the bull’s eye, and one must sooner or later get something of what one has asked for. Now I want to tell the hon. member again that if this Minister of Finance and his predecessors had acceded, year after year, to the requests of that side of the House, it would have fared ill with us. I want to mention only one item as an example. When one looks at this White Book and sees the expenditure which has to be defrayed from Revenue Account during the year ending 31st March, 1974, one finds that the interest on public debt which has to be paid from Revenue Account, is approximately R280 million. Year after year, when successive Ministers of Finance on this side used surpluses from Revenue Account to finance capital expenditure, that side of the House accused us of stealing the taxpayer’s money, of using it for capital expenditure instead of paying it back to him. If this Minister of Finance had heeded the requests from that side, this R280 million in interest on public debt would easily have been R500 million by now. Now I ask the hon. member for Parktown: Does he want the Minister always to listen to those ridiculous ideas which they suggest to him? If that were the case the present taxpayer would have had to pay for the benefits which were granted a long time ago.

Then the hon. member for Parktown asked: What does this concession of R13 million on sales tax really mean to the man in the street? Then he made a calculation and found that it meant 59 cents per annum per person. But, Sir, that is of course by no means all. He forgets the R20 million which was awarded last year on 17th November. Then again, he asks why the Government did not reduce the sales tax even before the opening of Parliament. But the Government did reduce the sales tax on 17th November last year. If one adds that R20 million, it comes to considerably more than this 59 cents to which the hon. member referred so scornfully. But to me that is just another indication that the hon. Opposition is labouring under the mistaken impression that the hon. the Minister of Finance is a glorified Father Christmas. Now they are continually asking him to hand out this, that and the other to the man in the street. He must behave like a glorified Father Christmas. Just after the Minister’s Budget Speech last Wednesday, the hon. member for Parktown said in his introductory remarks that the two “poor sisters”, the Ministers of Transport and of Posts and Telegraphs, had already stolen R208 million from the pocket of the poor man in the Street.

Why do you call it “stealing”?

Call it “taken” then. Now he expects the hon. the Minister of Finance to give that R208 million back. Firstly I want to ask: To whom must he give it back? Judging from the remarks of the hon. member for Parktown this afternoon I take it that he must give it back to those people who paid it. What he said was that the surcharge on income tax demanded by the Minister last year was 10% too high, and that he could at least have had the decency to give it back this afternoon. That is what the hon. member said, not so? Very well, I therefore assume that he meant that the Minister should return that surcharge on income tax which he overcharged last year, to the people who paid it. They are most definitely not the people in the lower income groups. Now he says in his amendment that the House should decline to pass the Appropriation Bill, because inadequate relief is provided for the lower income group and the less privileged sections of our peoples. But if I am to believe him, after what he said here this afternoon, then that 10% surcharge has to be given to the people who paid it, and that is most definitely not the lower income group. It is the higher income group who paid it. According to his own words, then, it is they who must get it back. But now at the same time he has asked for many more concessions to the lower income group. Under these circumstances, can I come to any other conclusion but that this hon. member expects the hon. the Minister to be a kind of enlightened Father Christmas?

I also get the impression that the hon. member expects that the Minister of Finance should compensate for the underpayment of the worker by the employer. But is it not in the first instance the duty of the employer to ensure that this lower income group, for which he pleaded here, receives adequate wages and salaries? Is it, then, the duty of the Minister of Finance to compensate for the fact that the employer pays too little? Of course the Minister of Finance and any government has a duty towards the lowest income groups, or those who have no income of their own whatsoever, but that duty is being discharged very thoroughly by this Government, because never before have social pensions been so greatly increased as this Government has increased them during the past few years. Never before have social pensions been increased by R3 per month in one year, as they were increased last year, and never before have they been increased by R4 per month, as they are being increased in terms of this Budget.

I say again, Sir: Of course this Government has a duty towards those unfortunate persons in our society who have no personal income, but it most certainly does not have that same duty towards those who are still working. After all, it is the employer who has a duty towards them, and not this Government. Of course, in so far as it is able, this Government discharges that duty to the full, because to a very great extent it exempts those lower income groups from income tax, those who are still working and can still earn money. Only last year, when it introduced the additional 10% surcharge on income tax, it exempted from that surcharge everyone who paid R150 per annum and less in income tax.

Sir, because the Opposition has no good arguments against such a brilliant Budget as we have before us this year, they are making use of sentimentality and are playing on the feelings of the poor man and of the less well-to-do. But I ask you, Sir: Where, after all is said and done, must the money to be handed out come from if it does not come from the pocket of the taxpayer? Only this afternoon we heard the hon. member for Parktown say once again that the hon. the Minister must give the money back to the taxpayers who paid it. But at the same time he asks that all kinds of benefits be granted to the less well-to-do. My problem with the hon. member for Parktown—a problem which sometimes causes me to despair a little—is that he contradicts himself. In 1969, when the the hon. Minister of Finance wanted to eliminate the so-called tax bulge, concerning which the hon. members for Parktown and Pinetown had so much to say, the comment of the hon. member for Parktown was (Hansard, Vol. 26, col. 3549)—

But only two or three paragraphs further the hon. member says this (col. 3550)—

He had just said that he welcomed the elimination of the tax bulge, but after it had in fact done, he said it was a sorrowful thing. This is exactly what has again happened here this afternoon, again we get this double talk. In 1971 the hon. the Minister again increased the surcharge on income tax as well as the loan levy in the case of taxpayers in the higher income groups. In other words, through circumstances beyond his control, he was forced to introduce the tax bulge again. Concerning this one could have said that the hon. the Minister had heeded the supplications of the hon. member for Parktown. But what does the hon. the Minister get for his trouble? Appreciation? Certainly not, for listen to what he said in 1971 (Hansard, Vol. 33, col. 4229)—

Remember, two years ago he had said it was a sorrowful thing that it should be abolished, but at this juncture he said—

Sir, this is the kind of double talk which sometimes makes one despair. One might well ask, in desperation: What do the hon. member for Parktown and the Opposition want? They contradict themselves so frequently that it becomes quite ridiculous. Therefore I would like to make a very strong recommendation to the hon. member for Parktown this afternoon that at some stage he should go and sit down quietly somewhere, isolated from everyone around him, and establish for himself a direction, a course, a fiscal policy.

Mr. Speaker, two years ago I made the statement here that the way in which one judges a Budget depends to a very great extent on the angle from which one examines that Budget. That is just as true of this Budget. By far the majority of commentators received the Budget of 1973 very, very well, but there were nevertheless a few commentators who expressed criticism. I shall quote only a few. In the first place, I want to read what was said by Mr. Basil Landau, Managing Director of Leyland South Africa—

I quote a second commentator, Mr. Eric Ellerine, Managing Director of Ellerine Holdings—

Sir, here are two opinions which are totally selfish, which examine this Budget only from the angle of the interests of their own industries. Fortunately we do, of course, get many other opinions and I just want to quote one to you, that of Mr. Leslie Lucas-Bull, the Managing Director of the United Building Society—

Sir, I can continue in this way to indicate that when these sectional interests look at the Budget from the angle of their own activities, one gets a completely distorted image of the Budget. I can’t help thinking of that celebrated author-philosopher whom the hon. the Minister has taken as his mentor this year, namely C. J. Langenhoven. On one occasion Langenhoven said: “When one examines a mountain at close range, it is ugly; all its faults stare one in the face.” This applies very aptly to these critics of the Budget; they look at the Budget from their particular angle only—the mountain before them—and then it is ugly and all its faults stare one in the face. But when they stand to one side, as so many other commentators have done, and view the Budget from a distance, they see its beauty. Then they see the mountain with its majestic crags and all its awesome glory, steadfast, immovably strong. So stands this Budget, Sir. Steadfast, immovably strong like a mountain in all its glory. Mr. Speaker, this is the impression which this Budget makes on the unprejudiced critic. Sir, as far as the Opposition is concerned, I shall not judge harshly, because not one of us, upright people that we are, like to kick a man in the stomach when he is down; therefore I do not want to judge them too harshly. As far as the hon. member for Parktown himself is concerned, I want to say that he has to keep glancing over his shoulder to see whether the black hand is not reaching out to grab him, and therefore I, too, do not wish to hit him too hard.

Now he is haunting Florida.

When are you coming to the Budget?

That hon. member has been sitting there fast asleep.

Sir, that hon. member reminds me of Rip van Winkle who lay sleeping all the time. May I now give the hon. member for Parktown a piece of very well-intentioned advice? Forget the negative approach. Try to determine a course for yourself, a fiscal direction, and follow it unswervingly. Otherwise he must inevitably contradict himself all the time, as I have just indicated.

Mr. Speaker, the task of the Minister of Finance with a Budget is twofold. In the first instance, of course, he must by means of fiscal measures find the funds to pay for the services which the State has to provide; in other words, he must cause the State’s revenue and expenditure accounts to balance. But he also has a second task. By means of his Budget he has to do something else as well. He has to use his Budget as an instrument to direct the economy of the people along the desired course. However, in the free capitalistic system in which we live, he is unable to play the dictator. He can only indicate the direction and stimulate it. With this objective in view, he states right at the outset of his Budget speech that the main purpose of the Budget is to promote and stimulate sound growth. Because inflation has assumed such extensive, worldwide proportions, the hon. the Minister of Finance is doing the following: He is stimulating growth by means of a non-inflationary method. That is why I am welcome to such an extent the fact that he has not introduced a relaxation of hire-purchase conditions. The hon. member for Parktown, inter alia, also said this afternoon that if we want constant growth, we must make more credit available. I want to make the statement that if we were to buy growth by means of an injudicious extension of credit, then we would be heading for disaster. Because today inflation is the archenemy of the economy of the Western world. It is becoming ever more formidable and is sowing ever more destruction. It becomes so bad that it has already become a disaster in disguise to become old. At the same time medical science is succeeding in causing people to become older and older but that will be a disaster in disguise for our people if we are unable to curb inflation. The present rate of inflation which the whole Western world is experiencing today, and not only South Africa alone, is a headlong rush to disaster. I have here before me an excellent graph indicating the rate of inflation of all the Western countries, and it is a very sombre picture which is presented because it shows that the average rate of inflation in the Western world today is approximately 7%. Now, if the rate of inflation should continue at this rate, not only in South Africa, but also in the whole Western world, the income of a retired person is halved within seven years. Should such a person live for 20 years after he has retired, heaven alone knows what he must eventually live on. Probably the State will have to help.

Then we ask ourselves, what about a solution; how are we to face this tremendous problem of inflation and try to solve the problem? I want to make it very clear that wage and price freezes are not the solution. The two great Anglo-Saxon countries tried it, with almost disastrous results for their economies. The moment one lifts wage and price control, it is like a dam wall breaking and the water sweeps everything before it. There is only one permanent solution for inflation and I want to place heavy emphasis on this this afternoon. Each one of us, individually and as a group, who are still economically active, will individually and jointly, have to see to it that our production increases more rapidly than our earnings. This afternoon I want to stress the following as a general rule: Everyone whose earnings, wages or salary, increases more rapidly than his production is the cause of inflation. Capitalism is going to wreck itself on this simple rock of truth. It is on this very point that our Opposition has become such a positive danger to us. One does not motivate people to increase their productivity by continually pleading for concessions for this group or that; one only teaches them to fight for a bigger slice of the economic cake. When I talk about self-control in our claims to the economic cake, I do not, of course, refer only to the labourer, the worker. I also refer to the entrepreneur, because if the entrepreneur can adequately remunerate his top management and shareholders with a gross percentage profit of 30, why then insist on a gross percentage profit of 40 and 50 and why not rather give the benefit to the consumer in the form of lower prices for his products? Here, too Langenhoven showed us how to contend with this problem of inflation. He did it as long ago as 40 years ago. Since I want to do him full justice, I am going to quote his solution for inflation dating from more than 40 years ago (translation)—

He goes on to say—

If mankind were to accept this philosophy, we, too, would not be engaged in this decade in a fruitless search for a solution to the problem of inflation, because if everyone were to give more than was expected of him, there could be no inflation. If everyone were to offer more than he asked, there would never be inflation.

The hon. Opposition is trying out short cuts to beat inflation, but Langenhoven also had another very true maxim—

With a Budget such as this one which we have this year, which stimulates growth and at the same time does not feed the flames of inflation, I look forward to a very, very prosperous year following this Budget. I want to congratulate the hon. the Minister of Finance wholeheartedly on a brilliant piece of work.

Mr. Speaker, the hon. member for Paar] has been the acknowledged financial expert representing the Government’s viewpoint for as long as I can remember. I am certain that my hon. friend and colleague, the hon. member for Parktown, will give him his due for the analysis and the criticism he has made in his speech.

I want to associate myself this afternoon in all sincerity with the expression of regret that was conveyed to the hon. the Minister of Finance because of the dizzy spell that he experienced some two-thirds of the way through his Budget speech. I hope I can count on the humanity of the hon. the Minister of Finance when I say that I too experienced a dizzy spell when I realized the impact that the Budget would have on the electorate when I came to the second third of the speech. Early in this debate I want to deal with two arguments which I know will be introduced by hon. members on the other side of the House during this debate and I am certain that the hon. the Minister of Finance will deal with them too. Firstly, I refer to the concept that in South Africa we are suffering less from the high and harsh impact of inflation than is the case in other countries. I want to say at once that this is far from being the case and that the impact of inflation in other countries has little bearing on what we feel in South Africa. Let me say that a festering whitlow on my own little finger has a far greater physical and human impact on me than the news of the death of 1 000 people in an earthquake in Chile. To the same extent the hunger, the frustration and the despondency felt by the lower income group in South Africa is a real and physical feeling. It is an emotional feeling, and it is felt.

The second argument I want to deal with is that while the average wages for all the sections of the community in South Africa have increased by some 21% during the last twelve months, the average price increases have risen by only 13,5%. This does not apply to our Bantu and other non-White persons nor does it apply to the housewife whose marginal disposable income left in their pockets at the end of the month is far too low; in fact the days of the month when they have no money are far too many. The 1973 budget-year will go down in history as the year that the economy bent the Nationalist Government. Gone are the days when the Nationalist frontbenchers said from public platforms that if necessary the Government would bend the economy to its ideologies. I am reminded of the economist. Marshall, who said that the two great forming agencies of the world history had been the religious and the economic and whereas the religious has always been more intent, the economic has been more pervasive. Although Marshall did not mention politics, I have no doubt that the arbitrary political trends must in the long run succumb to the forces of economic necessity. That is surely the case today. I can only refer hon. members of this House to a leader in Die Burger of Friday, 30th March. This is probably the greatest political egg-dance of the century. Die Burger endeavoured to explain to its bewildered electorate the change in the policy of “opleiding vir swart arbeid”. I only quote the last paragraph:

The 1973 budget-year will go down in economic history as the year when the tide of economic realism has driven back the stubborn Nationalist King Canute from his ever-receding shoreline and his absurd political and economical ideologies. My hon. colleague who spoke before me, has dealt in depth with the financial and the fiscal impacts of the Budget. In addition the financial Press of the country has similarly highlighted the main Budget features and in doing so they performed a valuable public service, since not every member of the public has available to him the Budget in full.

I want to deal with two specific facets of this Budget, namely the hon. the Minister’s stated objective concerning the injection of growth into the economy and his efforts to stem escalating inflation which is beyond doubt crippling our economy. The hon. the Minister prefaced his address with a quotation from a speech by his predecessor which was made some 10 years ago: “ ‘Growth’ and the ‘growth rate’ are today the operative words in the dictionary of the economists.” It is strange that these views, which have been stated by a former Nationalist Minister of Finance, should have gone unheeded for so long and that these words of wisdom should have fallen on such sterile ground; however, perhaps the ground is not so sterile. Like the daisies in the Namaqualand veld, they may merely have been lying in the barren Nationalist landscape and, given the necessary climate, may conceivably again bloom in all their glory. But what of the lost decade under Nationalist rule? What has taken place in the 10 years we have lost that has altered the need for growth in our economy? Have we not always had our goldmines, our diamond mines, our mineral wealth and our agricultural potential? Have we not always had a fast growing population of Europeans and non-Europeans, especially Africans? Certainly the United Party has made this point continuously. It has been proclaimed and we have pleaded for growth in almost every session of Parliament over the last 10 years, and we have been in good company. The call for a faster economic growth rate to boost the living standards of all our peoples and races have been made by speakers from every section of the economy but they have not been heeded by the Government. Only recently Dr. Frans Cronjé criticized this Government for its plan to hold an economic growth rate of only 5,75% for the year. He said—

Dr. Jan Marais, the chairman of the Trust Bank, supported Dr. Frans Cronjé in this plea. Speaking at Johannesburg only recently he said that he had been pleading for a faster economic growth rate for years. Because the members on the other side of the House have continuously been attacking this side of the House for its lack of a contribution to the House as an effective Opposition, I make no apology for saying, “We told you so”. It was only last year in the No-confidence Debate that my leader attacked this Government for its economic policy. In Hansard of 1972, col. 35, he said—

That may well have been the prod which induced the hon. the Minister of Finance and the Cabinet to face up to economic facts and present this Budget.

I wish to come now to a far less satisfactory aspect of the Budget and I believe I speak for the forgotten people of South Africa when I ask: What has the hon. the Minister really achieved, or what will he achieve, in his fight against inflation? Inflation, as we know, is John Citizen’s cost-of-living headache number one. I submit that pressures of today have reached a danger point. Whatever definition the economists may give to it, inflation robs the widows, the orphans and the aged and all those people who live on a fixed income without the ability to add to these. Inflation has reduced these classes to the straits of having to live on charity and poor relief. Inflation in its harshest terms brings about a continuous erosion in the purchasing power of our money and diminution in our capital savings. The most disturbing aspect of inflation is that it feeds upon itself. Where does inflation hurt most? If you have been unfortunate enough to live on a fixed income, an income so small that you have no choice but to spend it all on that parcel of goods which makes up the content of our cost-of-living index, then your standard of living will have dropped by 13 % during the past year and your R100 in January will have purchased only R87 of the value it purchased last December. I can only quote the words of Dr. Hupkes who only last week warned that this Budget is a “make or break” Budget. He said, “The economic recipe which has been produced for this year simply has to succeed or South Africa will be engulfed in a tidal wave of inflation”. I wonder just how well the hon. the Minister of Finance will sleep during the next 12 months. Dr. Hupkes said too “that the key ingredient in his recipe is our training of Black labour”. This is indeed a grim warning and we cannot ignore it. We cannot escape its implications. He also warned that if we failed now, we would run slap bang into inflation such as this country had never experienced before. This was said by an economist with a great reputation on both sides of the House. I want to look at the inflation now as we have experienced it during recent years, and not in terms of economic theories or in terms of percentages but as it affects the vast majority of our country’s 21/22 million people. For most of these people this Budget is a bread-crumbs and caviar budget. Notwithstanding the fact that the Minister had available State coffers, full to over-flowing, a gold bonanza, an inflation rate of some 8% to 9% per annum and Black labour unrest, what did he think that the electorate hoped for in the Budget? When I refer to the “electorate”, I refer to the ordinary man in the street, “die volk daarbuite”, the railway worker, the housewife, the white-collar worker, the civil servant, the blue-collar worker, the artisan, the teacher, the tradesmen, the pensioner, the non-European, the Indian, the African, who, after all, are also South Africans. What do they really want? They look for an immediate reduction and an alleviation in their cost of living; they look for immediate and substantial tax reductions, direct and indirect, and they look for other concessions too. Without having received these, they face today another grim prospect of a year of grinding poverty. So what in fact did the hon. the Minister concede? Concessions on social pensions? Too low for White or Black, and peanuts or bitter almonds. He gave them 10% to be paid in October, buy by October, statistically speaking, the value of that increase will have diminished be cause of the increase in the cost of living, and it will not be worth having. The White worker, the artisan receiving R300 to R350 per month with three children, did not receive any income tax relief whatsoever, no relief from an erosion of living standards. What has the Budget done to remove labour unrest between both Blacks and Whites? What of the lowest income group, the group living on an income of between R600 and R900 per annum? There was nought for their comfort. The African still pays an income tax of some R9-72 and a poll tax of R2-50. He pays this to a different department. The unskilled worker received little benefit, if any. It is only from the income bracket R4 000 and upwards that the benefits of the tax concessions become real and available.

I maintain that the hon. the Minister has failed in his Budget endeavours on two fronts. He will fail to achieve growth and he will fail to contain inflation. I base my belief on the fact that he will not achieve the growth because 20% of Government spending is for defence, which is largely unavoidable. But equally he has failed to contain inflation. I wish the hon. the Minister could have had before him a composite picture sketching the effects of living costs and escalating inflation on most of our people as they experience it today. Our trouble began after the devaluation of the rand and while the hon. the Minister claimed at that time that the devaluation in fact would have only a one-time effect, this has proved to be far from the truth. The three biggest items affecting the house-holder today in his budget are the food costs, which account for more than 25% of the Whites’ budget and a much bigger proportion in the case of Blacks; transport costs, which take 15% out of the White bread-winners’ pocket, and housing costs which claim some 18%. These are the three biggest items in the Whites’ budget. They are even more telling as regards the Africans’ budget, and are followed by clothing, health and savings.

The year 1973 was but five days old when a new round of price increases began. Bananas were the first item to rise—I do not say this for the electorate of Umhlatuzana—followed by warnings from agriculture that there would be rises in the prices of mealies, beef, dairy products, poultry and bread. In February fish-meal prices rose by 9%, with a resultant increase in the prices of chickens, bacon, eggs and maize products. In February milk went up in price by 1,2c per litre in Cape Town, and 1,4c a litre on the Witwatersrand. The retail price of milk today is 16c per litre. Again in February butter went up by 12c a kilo and cheese by 10c. In March the price of bread went up by 2c. Small wonder that the housewives of South Africa are in revolt. They have had enough of rising prices. It is the housewife who feels the pinch when she has to clothe and feed her family. It is the housewife who resents to the greatest degree the impact of the sales tax on the items on which it has to be paid. It is the housewife, too, who resents the fact that the sales tax is automatically magnified by the mark-up of the retailer, and that in fact she pays more in tax than the Government receives as the result of the tax.

Now I want to deal particularly with the recent rise in meat prices throughout South Africa. After all, Sir, South Africans are meat eaters. We are a nation of meat eaters. In the case of our African people, it is possibly their only form of protein. This is what the people feel about the present price and the scarcity of meat—I quote from Rapport of the 29th October, 1972—

May I ask the hon. member a question? [Interjections.]

Order! The hon. member refuses to answer any questions. The hon. member may proceed.

I quote further (translation)—

But, Sir, the Bantu are the people who suffer most. Again I quote from Rapport (translation)—

†Sir, people in the lower income groups are being encouraged to think that they can buy a home. Indeed, the Budget makes provision for new limits in the State-aided scheme, but what do we find? Almost in the same week the price of cement, bricks, building timber, steel, aluminium and labour went up. Today we pay the highest price for aluminium anywhere in the world. This Budget has been no joy for the electorate whatsoever. On the inflation front there is little joy for the man in the street, and the recent increases in Railways and Post Office wages, plus the additional effects of two devaluations, have still to make themselves felt. And what of the much-vaunted 5% reduction in indirect sales Tax? Almost before we receive the benefit of this reduction, the increase in prices will have eliminated any benefit we might receive. Sir, costs continue to increase at an alarming rate, and this is what is worrying the electorate. During the months of July, August and September inflation was rising at an annual rate of 12,8%. This is high by any standard in the world. Can we really believe that in this year, 1973, the hon. the Minister will achieve anything better? It took the particularly pathetic picture of a screaming naked child, its clothes burnt off by a naphtha bomb in Vietnam, to bring to the realization of the world the full horrors of that war. It has taken the recent labour unrests in Natal to bring home to us the poverty and the frustration, the hunger and despair, in which so many of the people of our country are living. A picture which was published only recently has focussed the attention of the people of the world on the plight of labour in South Africa.

Housewives at every level face bigger and bigger headaches when they go shopping. Food prices are going up; clothing is becoming more expensive; the price of shoes is going up and today one can hardly afford a genuine leather shoe. The cost of clothing a school child is going up.

I now come to the motor industry. This industry is the country’s third largest industry. It has been known as a growth catalyst, a favourite of the Government. It uses the maximum amount of labour. It has the biggest impact on the cost of living. But in this Budget we saw no concessions at all which would encourage still further this very necessary industry and which would enable it to assist us with our labour problems.

Then, Sir, there is the mounting rage over the cost of spare parts. The cost of spare parts may be said to be half the culprit in a repair bill, but no sales tax reduction whatsoever was considered by the hon. the Minister. Even the Government has recognized the need for an investigation into the high costs of repairing a motor vehicle. You may well ask, Sir, what the Minister should have done. What was needed was a major reduction in sales tax on all essential items in the short term. We find it strange that the Government did not see fit to vary the application of the tax. I believe that it is necessary for the consumer to voice his fears and his worries, and we on this side will do so in this House. We do not want to see life reduced to a long, drab, colourless and meaningless existence, and the spokesmen on this side of the House will leave that issue in no doubt whatsoever.

On the economic front there are many pessimists in South Africa today, pessimists who lost their life savings on the Stock Exchange in the 1969 debacle, pessimists who are living on meaningless pensions, pessimists who are living on fixed incomes which do not appreciate as the cost of living rises, pessimists who are the sole bread-winners and cannot come out on their salaries, pessimists who are the typists, the clerks and the blue collar workers, those who are the wage-earners, the domestic servants, pessimists who are merely existing in the homelands, and those who live in the forgotten transit camps of Sada and Dimbaza. For these people the high cost of living is a frightening reality.

Now, Sir, I want to come to what actually hits the housewife most, and that is the present price of food and its escalating tendency. It is interesting to make some practical comparisons, in terms of real prices, between prices in 1948 and present-day prices. Since 1948 the price of flour has risen from 88,7 cents for 25 lbs. to 167,8 cents; the price of rice from 8,1 cents per lb. to 17,1 cents for 500 gm; rump steak from 22,3 cents per lb. to 62 cents per lb.; sirloin from 15,5 cents per lb. to 47,3 cents per lb.; mutton from 14,8 cents per lb. to 46,1 cents per lb.; fish from 8,1 cents per lb. to 26,4 cents per lb.; milk from 4,8 cents per pint to 7,8 cents per pint; cheese from 22,3 cents per kilo to 89,4 cents per kilo; coffee from 27,9 cents per 500 gm to 57,8 cents per 500 gm; jam from 18,5 cents per lb. to 33.9 cents per lb., and coal from 21 cents per 100 lbs. to 70,8 cents per 100 lbs.

Then I come to the question of rents, where the increases which have taken place from time to time have hit people hardest. Is there a Member of Parliament in an urban constituency who has not been approached from time to time with plaintive pleas from his constituents to try to do something to bring down rents?

I have already mentioned the cost of running a car. According to statistics prepared by the Automobile Association, the price of running a medium-sized car has increased inordinately. Over the past 18 months there has been an increase of 45% in insurance premiums, and normal adjustments and servicing today cost 25% more than they did 20 months ago.

What about petrol and oil?

In conclusion, there are two steps that I would recommend to this Government to fight inflation. The Minister could have embarked upon a two-pronged attack which would have had a considerable effect in curbing inflation. He should have replaced the sales duty by a selective turnover tax. I can tell you, Sir, that immediate price reductions would have been achieved by the simple device of ensuring that this tax was collected in such a way that there could be no mark-up on the tax itself. Then, as a second prong in his attack, he should have reduced import duties on essential goods which cannot be produced in South Africa or which cannot be produced here at an economic cost. You see, Sir, because retailers allow for sales taxes in their mark-ups, a R10 sales tax on an item can increase the price to the customer by R15 to R20, depending on the practice in the trade. As a result, an increase in the manufactured price of the item, necessitating an increase in sales tax, leads to an even greater increase in the price to the consumer.

Sir, I would like to mention a few items the cost of which have risen inordinately under this Government and which might be described as the seven stages of deterioration under Nationalist rule: the high cost of being born, the high cost of schooling, the high cost of marrying, the high cost of housing, the high cost of telephones, the high cost of illness and, finally, the high cost of dying. Each and every one of these items has been treated in the Afrikaans Press as items over which the Government has no control. Sir, I personally have the greatest confidence in the future of this country, but this Government which has been in power over the last 25 years, can certainly not pride itself on the way in which it has used its human resources, its raw materials, its labour and its political power. What this Budget seeks to achieve today should have been initiated some 25 years ago. Then, Sir, we would not have had to plan for economic prosperity in the future; we would be enjoying it at present and all our peoples would be partaking in this enjoyment and not just the privileged few.

Those few with the Cadillacs.

Mr. Speaker the hon. member for Gardens made a big detour to indicate to us how difficult life in South Africa has become. He mentioned a number of items the prices of which have supposedly increased so tremendously here in South Africa but the one thing that characterizes South Africa he did not mention to us i.e. the tremendously high standard of living that South Africans enjoy. He said that today chops could no longer be eaten by the housewives and the little children of South Africa. I want to tell him that if he would like to go for a short walk one evening about sundown in the residential areas of my constituency which is most certainly not one of the wealthiest constituencies in the country he would smell there the delicious aroma of grilled mutton chops—not pork chops.

Pork chops are nicer than mutton chops.

Sir if there were not a United Party City Council in power in Cape Town the hon. member would even have been able to smell the aroma of mutton chops in the evening air as well while he was walking in his own constituency, Gardens, were it not for the fact that air pollution here in Cape Town makes it impossible for one to do so today. The Opposition today moved an amendment in which they state that they are not going to vote for this Budget because, in the first place the Minister will not achieve the objects he has set himself, and secondly because he has not ensured that proper care be taken of the lower income groups. If one looks at the record of the hon. the Minister and of this Government, one can have not the slightest doubt about whatever object he sets him realistically being achieved. If we look at the opening sentences of the hon. the Minister of Finance’s speech on last year’s Budget, we notice that the primary object he set for us was a better trade balance and bringing South Africa’s reserves to a more satisfactory level. He stated this as a pre-requisite because without it more extensive growth in South Africa would not be possible because South Africa would not have been able to pay for the essential imports of capital goods. What has happened in the past year? Even the hon. members on that side of the House will have to admit that the Minister was able to paint us a very fine picture of what the balance of payments looks like today. While there was still a deficit in 1971 of R976 million on the current account of the balance of payments, that deficit was reduced by no less than 90% to R97 million. A deficit of almost R1 000 million was reduced in one year to a deficit of about R100 million. If one looks at the position of our reserves at the end of December, 1972, the picture shows one that at that stage the figure was R1090 million, at a time when gold was only valued at the official price and not at the free market price.

I think hon. members opposite ought to show recognition for what this Government, and in particular this Minister, has done to place South Africa in such a favourable position that it can now also level its sights at other objectives. In this respect we must congratulate the hon. the Minister, in the first place on having appointed the Reynders Commission, which had to investigate the position of our export trade thoroughly and had to recommend steps that must be taken by the Government to ensure that South Africa could increase its exports more and obtain a more favourable balance of payments position. A small while after the recommendations were presented to the Government, the first steps had already been taken, and in this Budget the Minister has announced an additional wide series of steps to implement the recommendations of this Commission. If you were to look at the amounts spent by the Government in the past two years alone, you would find that tax concessions amounted to about R11 million and other benefits to about R35 million. Over the past two years, i.e. in 1971 and 1972, the State stimulated the export trade in this respect by almost R46 million. I think any Government can be proud of the fact that it was not only so far-sighted as to appoint such a commission, but also that it immediately implemented the recommendations of the Commission. I therefore believe that in the years ahead we shall reap the benefits of these steps and that South Africa is now ready to try to give effect to the other objects which the hon. the Minister has set us.

He told us that he admits that the inflation rate in South Africa is high and that it is perhaps exceptionally high for South African standards. If we were to look at the rate of inflation in the past decade, and if we were to take 1963 as our basis, we would find that the consumer price index for all goods and services increased from 100 to 141,1. In other words, there was an increase over a period of ten years, up to the end of last year, of about 41%. This is high for South African standards, but was caused, in particular, because in the past three years the cost-of-living figure more than normally increased. In the year 1971 the increase was 6,9%, and last year it increased by 7,4%. If one takes 7,4% as the increase for 1972, it is almost twice as much as the average of about 4% for the past decade. However, the Minister is not satisfied simply to accept this situation with resignation. He told us what the causes of this big increase in the cost of living were, as he sees them. In the first place there was devaluation, which of necessity had to be carried through. In the second place, as far as agricultural and food prices are concerned, it is a fact that there was an abnormal increase in prices as a result of drought and other conditions. These two factors were chiefly responsible for the high cost-of-living figure which we had in the past year.

In this Budget the Minister indicated to us what he sees as the recipe to break this inflation rate. In the first place he says that in South Africa we have a surplus capacity of about 20% to 25% in the manufacturing sector, and that this surplus capacity must be used as quickly as possible. South Africa’s growth rate must be increased so that the unit cost of products can consequently decrease. That is why this whole Budget’s theme is one of growth. He also asks that each of us, all levels of the population and all population groups, must try to increase our own productivity. In this connection I want to point out one of the first steps which this Government took at the beginning of this year when it introduced a Bill to decrease South Africa’s public holidays by two. This underlines the fact that the Government is serious, so serious that even an historic day like Van Riebeeck Day will no longer be a public holiday in future.

That is a wonderful example to quote in the Budget debate!

This underlines the seriousness with which this Government is viewing the question of greater productivity.

Though we have a reasonably high rate of inflation at this stage, the Government is not prepared merely to take long term steps, i.e. to establish high productivity so that a higher growth rate can be brought about to combat this trend, but the Government has also, where it is most necessary, announced assistance in this Budget for those groups of the population that need it most. In the first place I want to refer to the question of transfer duties. To establish oneself in one’s own home requires probably the biggest outlay of one’s young life. For every young person who wants to establish himself in his own home in South Africa, it is usually the initial amount he needs that hits him the hardest. I believe that this announcement of the reduction in transfer duties will be heartily welcomed by all young people throughout South Africa. Now the hon. members on that side of the House must not, without more ado, claim for themselves all the credit for this, because if South Africa’s economy were not in a very sound position, the hon. the Minister would not have been able to make this concession to our young people.

He also went further by extending the home ownership savings scheme considerably. I want to congratulate him on having gone as far as to include the R6 000 per year income group in this scheme as well. It is a fact that over the years this Government has done a tremendous amount for sub-economic housing. Assistance has been given to the very lowest income groups in virtually every possible way. However, in recent years it has specifically been the lower middle income groups and the younger people who have begun to feel themselves most hard pressed. That is why we that much more welcome the fact that this home-ownership savings scheme will not only cover the R5 000 income group, but that it will go as far as the R6 000 group. The Government also went further. Last year it reduced the sales duty, and this year it has done the same. Through legislation it took for itself the power to give further attention to this matter in the future, if conditions justify this. The Government also appointed a special committee to investigate the question of sales duty and to see whether it could not be replaced by something else, such as a scheme of turn-over tax. Not only are the Government’s hands clean because it levied the minimum rates in this respect, but we know that with the sympathy with which it treats the consumer, it will give further attention to this matter when the time is suitable for doing so. And, as far as the whole broad stratum of the population is concerned, from the richest to the poorest, there has been relief by way of this Budget in that the surcharge on personal tax has been reduced from 20% to 10%.

I listened to what the hon. member for Parktown and the hon. member for Gardens said with respect to pensions for the very poorest group, i.e. those who obtain old-age pensions. Not one of them indicated to us here in concrete figures why the Government has supposedly neglected to look after these lower income groups. If we regard the position of the old-age pensioner over the past 10 years, I think this Government’s hands are clean. It has done everything possible to make their lot as tolerable as possible. I have already pointed out that from the year 1963 to the end of last year the cost of living index increased from 100 to 114,1. In other words, the cost of living index increased over 10 years by about 41%. If one now looks at what our old-age pensioners obtained in 1962, one finds that they were then being paid an amount of R24-50 per person per month. If one looks at the latest figures which will be applicable from the 1st of October of this year, i.e. R45 per person per month, this represents an increase of 80% as far as the incomes of our old-age pensioners are concerned. In other words, though the cost-of-living index increased over the past 10 years by 40%, the lot of our old-age pensioners has been improved by no less than 80%. In other words, though the annual cost-of-living increase was 4% per year, the Government was prepared to give our old-age pensioners an 8% improvement per year over this period. I say that the 112 000 people who draw old-age pensions in this country really cannot say that this Government has not done everything in its power to make their lot as tolerable as possible. But one must not only look at the amount that is paid out in cash to our lower income groups. One must also look at all the other steps being taken by the Government to make the pressure of the cost of living on our whole population, but particularly on our lower income groups, as tolerable as possible. I want to refer here to what is being done in South Africa for housing for the lowest income group. If one thinks that virtually no interest is being paid on loans that municipalities obtain from the State for the provision of sub-economic housing, and that the interest in reality amounts to less than 1%, I do not think this Government can be accused of not having looked after the lot of these people with the utmost sympathy.

We can just look at what is being done by the Cape Provincial Administration as far as hospitalization is concerned. The rich man and the poor man do not pay the same rates when they go to a provincial hospital. The poor man pays a nominal amount, while the rich man has to pay a more realistic hospital rate. Thus one could continue by looking at a wide range of steps the Government is taking to keep the cost of living figure low, and by so doing to also make the lot of the poor person with the lowest income as tolerable as possible. The Minister has indicated that the final answer to keeping the cost-of-living figure as low as possible is, in his view, embodied in pushing up the growth rate in South Africa to its maximum level, but with the retention of stability. The growth rate for the past year is low in real terms. The 3,1% or 4%, however one looks at it, is low according to our standards. Over the past 10 years the real growth rate of the economy in South Africa was 5,6%, which is 0,1% higher than the target rate was for the past decade, i.e. 5,5%. In this respect the Government has succeeded in maintaining a satisfactory growth rate in South Africa over the past decade, if one views this on a long-term basis. When the hon. member for Gardens states that this Government is now becoming aware, for the first time, of the necessity for a higher growth rate in South Africa, he is surely talking nonsense. This growth rate of 5,5%, which was set as the target for the South African economy, was arrived at after very thorough study, and after all possible facets of the problem were viewed, including what the optimum rate for the South African economy must be so that too great a restriction is not placed on the resources in South Africa. After all factors had been taken into consideration, the soundest optimum rate was fixed at 5,5% for South Africa. Yet we succeeded in achieving a higher rate than 5,5%, in spite of unfavourable factors such as the higher inflation rate during the last few years. Against this background we must judge the target the Minister is now setting us. If we were to take a long-term view, we would find that from the beginning of the thirties there has been an increase in the growth rate in South Africa every decade. The reason for that is self-evident, i.e. as South Africa has produced more secondary products, and the percentage of primary production in the country’s economy decreased, it was possible to obtain a higher growth rate in South Africa. Therefore I also believe that when a new target rate of 5,75% is indicated for the next five or six years, we shall, in fact, be able to achieve this, but that it will only possible if all the other steps, announced by the Minister in his Budget, are also taken. In this connection I first want to point out the emphasis he placed on the role of education; education not only of the Whites, the Coloureds, the Indians and the Bantu in their homelands, but also of the Bantu who are already established in the White economy. The fact is that we already have this Bantu worker in the White areas, and in particular in the metropolitan areas. It is therefore of cardinal importance that this labour should be applied as profitably as possible. If we do not want a further influx, and virtually a flood of Bantu labour in our White urban areas, we must see to it that these labour forces are used to an optimum degree. This can only be done if the maximum training is given to these people prior to their being employed and also after they have been employed.

A new approach!

I want to assure the hon. Minister that he will obtain maximum support from the White workers because it is realized that White labour alone will not be able to ensure that we achieve that growth rate that we set as our target. We shall have to give all our labour forces the greatest possible training. I want to point out that in the Western Cape, in particular, the Coloured will be able to play a much greater role in the expansion of our economy. With respect to the motor industry alone, South Africa has a vehicle population of about 2½ million at the present stage, with about 30 000 mechanics that have to look after the repair work of these motor vehicles. If we take into account that within the next eight years the number will increase to about five million motor vehicles, South Africa will need about 60 000 motor mechanics in this industry. At the present stage we shall have to employ about 4 000 persons annually in this industry as motor mechanics. This will mean that the number of trainees employed will have to increased drastically from about 1 400 to the desired number of about 4 000. I therefore want to reiterate what I said here last year and the year before, i.e. that we must have the greatest possible measure of co-operation between the State on the one hand and the private sector on the other hand to achieve, also, the ideal conditions with respect to the training of the Coloured labour in the Western Cape. On a previous occasion I pointed out that although there are about 40 000 White persons studying at technical colleges in South Africa, at the present stage there are about 1 000 students at the only college for Coloureds in Bellville South. One would have expected that at this stage there would have been about 15 000 Coloured students studying at technical colleges in South Africa. But one realizes that Rome was not built in a day and that what was neglected by previous Governments cannot necessarily be corrected by this Government in one or two decades. I hope that since this college authority has already done everything in its power to determine the need for Coloured labour, and has investigated the vacancies that exist for Coloureds in the economy, particularly in the Western Cape, it will receive every possible measure of support when a request is made for the expansion of its facilities. That plea has already been made from this side on a previous occasion, and I do not believe that it will fall on deaf ears. This can only be achieved if, at this stage, all secondary industries in the Western Cape look at what their needs are, will put their needs to the State and also to this college so that there will not be a wastage of labour forces, training forces and facilities, but that these will be applied in the best possible way so that Coloureds in the Western Cape can be trained in such a manner that they will also be able to play their role in the economy.

I have already pointed out that the Minister has indicated to us that growth will have to receive all the necessary emphasis in the future. However, growth will not be able to take place if the right attitude to labour does not exist as far as all levels of the population are concerned. I want to refer to what is being done at present in a country like Japan. With its giant industries, Japan has more than ever found it necessary to view the role of labour and to see whether the labourer’s attitude to what he is producing is a correct one. I want to ask that in South Africa we also take a leaf out of their book and also look here at the living conditions of all labourers in South Africa so that we can obtain the correct motivation in respect of labour amongst Whites, Coloureds, Indians and Bantu in South Africa. The hon. Minister has said that he sees Langenhoven as the central figure this year when it comes to philosophical thought, and I can only point out that on the front gate of Langenhoven’s house in Oudtshoorn there is the name “Arbeidsgenot”. I trust that we as South Africans, we as Whites and all of us will develop the correct attitude to our labour, that we will derive enjoyment from carrying out this labour, because by doing so we shall achieve that target and growth rate, and it will also be possible to bring down the inflation rate in South Africa to a more realistic and acceptable level.

Mr. Speaker, it gave me special pleasure to listen to the hon. member for Vasco, for we are making progress in this House. I thought it was a U.P. supporter speaking like that. Two years ago, when we had the fights in this House about employment, I would not have been able to believe that it would ever be possible for the hon. member for Vasco to praise the scheme of training non-Whites prior to employing them. After all, it was the policy of that party to remove the Bantu at a rate of 5% per year. Is it not true that Mr. Blaar Coetzee staked his whole political future on the undertaking that he would remove them at a rate of 5% per year? When we advocated what the hon. member for Vasco has advocated here this afternoon, the hon. the Minister of Labour said that we wanted to open the flood-gates through this crash programme. Where is this crash programme now? Now they are taking over the policy; we are making progress in South Africa. I want to congratulate the hon. member for Vasco. He went on to say that they were now going to train Coloured motor-car mechanics because of the shortage in our garages. But that is the Government which advocated job reservation! However, we are making progress, Sir. It is a feather in the cap for this side of the House to have succeeded in doing that job of convincing as decent a member as the hon. member for Vasco. The hon. member for Vasco went even further than that. He said the emphasis had to fall on growth. Growth, Sir? Do you recall how two years ago that side made this House ring with their cries that the country was growing too rapidly and that the growth rate had to be curbed? The hon. member for Lydenburg is not present here. Do you remember how he carried on, Sir? Do you remember how the hon. the Minister of Planning carried on here and spoke about the United Party worshipping growth as the golden calf, and how he reprimanded the hon. member for Parktown for, as he said, taking his stand squarely against the monetary and fiscal methods for curbing growth?

We wanted to have controlled growth.

He was not referring to controlled growth. Even the Prime Minister said the country was growing too rapidly. The hon. the Minister of Finance said: Rather a poor country but a White country. In that way they wanted to curb the growth in South Africa. Now the hon. member for Vasco is also advocating growth. We see now that the whole theme of this Budget is also one of growth.

But there is one point, though, on which I must reprimand the hon. member for Vasco. That is the point he made in saying as far as they were concerned, their hands were clean in respect of the pensioners. The hon. member for Paarl went further by saying that no Government had ever increased pensions by so much in one year. But, Sir, under what Government did the cost of living ever rise more than it has under this very Government? That hon. member should tell me how they justify their having given every public servant in this counrty an increase of 15%, and the Bantu public servants an increase of 22½%—I fully agree with that—but, to the pensioner, an increase of only 10%? Why is this so? Because they cannot strike and no longer have the voting power? Is that their sense of fairness? If a person cannot strike, this is what he gets: an increase of R4-13 cents per day. He cannot even buy a loaf of bread for that. Reference is being made here to the breadline. After all, it was this Government itself which told the employers of South Africa to ensure that they were paying their workers wages which were not below the bread-line. I do not know what the Government’s figure for a bread-line wage is, but I know that some people are talking of R60 to R80 per month. There are some people who are even saying that it has to be R120 per month. How does one justify the fact that a pensioner has to live on R45 per month? Sir, how is a pensioner to live on R45 per month? The Government should not tell us now that it does not have the money. We submitted schemes. We said: Introduce a State lottery. At the time that side of the House said it was a sin; the hon. the Deputy Minister said it was a sin. I say the biggest sin committed by him, is to let our pensioners live on R45 per month.

Mr. Speaker, the hon. member for Vasco went further and spoke about growth. He expressed confidence in the Budget as it was supposedly a “growth Budget”. In my heart I hope that he is right, for this country desperately needs growth. But, Sir, is he right in saying that? The greatest and the best judge, the best authority, who can say whether this is a good or a bad Budget, is the investor on the Stock Exchange. The investor is the person who is prepared to support his opinion with his money and not with idle talk. What did the Exchange say? You will recall, Sir, that before the Budget was presented, we had great improvement, great optimism and great expectations on the Exchange. But what was the reaction after the Budget had become known? These things vanished before the morning sun. Die Burger said the Exchange was unstable. The Cape Times said: “Market did not like Budget.”

And the Sunday Times?

I do not take any notice of the Sunday Times. [Interjections.] The Sunday Times is just as irresponsible as the hon. member. Sir, the hon. member for Vasco went further and boasted of the transfer duties that had been reduced by the Government, the houseownership scheme, etc. Did the hon. member not listen to the hon. member for Parktown? The hon. member for Parktown mentioned the origin of those schemes; he even mentioned the date on which he proposed them here.

Now I want to raise a more serious matter, and that is the shocking position in respect of our growth rate which was revealed in this Budget. This Government has succeeded in stripping the growth rate of South Africa down to 3%, and that in turn was the cause of our having had a rise in the cost of living of no less than 7,4%. Now hon. members opposite should not quote other countries. I want to mention a country to them, namely America. I am quoting these figures from the American Digest of 20th December, 1972. According to this publication the growth rate of America is 7%, as against a rate of inflation of 3,4%. In our country the growth rate is 3% and the rate of inflation 7,4%. Now I want to say that it is no use mentioning other countries. I do not agree with the figure mentioned by the hon. member for Vasco; in the ’sixties the average growth rate of this country was 6,7%—in other words, just under 7%. The rate of inflation was 2% from 1962 to 1965, 3,6% from 1965 to 1969, and 4% in 1970. In other words, we had a growth rate of 6,7 %, or almost 7%, as against a rate of inflation of 4%. Then, obsessed with the idea of curbing the growth rate of South Africa, that side introduced measures for combating inflation, and we were bombarded with bank-credit restrictions, loan levies, higher taxes, higher rates of interest, etc.

And you survived them.

I survived them, but South Africa suffered a grievous blow and its growth rate was reduced to a miserable 3%. I also want to tell the hon. member that we shall survive this, for the inherent strength of the economy of South Africa is of such a nature that it will even be able to resist any onslaught by the Nationalist Party. But what price did South Africa and the people of South Africa have to pay for this? Sir, they were subjected to a spate of rises in the cost of living such as this country had never known before. Prices are the highest they have ever been in the history of this country. What was the effect of these damping measures applied by the Government? The Minister of Transport himself said they led to the Railways suffering a loss of R38 million. As a result of the Government’s damping measures insufficient high-rated traffic was conveyed on the Railways. The hon. the Minister of Transport put it this way: “The cooling-off phase in the South African economy has been more drastic and protracted than could be expected …” That is why his Railways suffered a loss. That is why he had to increase the railage tariffs, and what effect has that not had on the cost of living? And what effect will that not still have in the future? Allow me to mention a few examples. The hon. the Minister did not increase the railage on livestock by something like 5%, as one would have expected, but by 60%. Those increases were introduced in respect of the meat of the people of South Africa, the meat which the man in the street has to eat. He increased tariffs on vegetables by no less than 57%. I want to emphasize this; tariffs on food were increased by no less than 57%. In the case of butter, it was increased by 31,7%, on cheese by no less than 31,7%, on eggs by 59,2%, and on maize by 36,4%. In the case of maize-meal, the main food of the Bantu in South Africa, the tariffs were increased by no less than 36,4%. Can you imagine the effect this has on the cost of living, Sir?

Mr. Speaker, may I put a question to the hon. member?

No, I do not have the time now. [Interjections.] Very well, go ahead and ask.

Mr. Speaker, may I ask the hon. member whether his plea for tariffs on agricultural goods conveyed by the Railways to be lowered, does not clash with the standpoint taken up by the hon. member for Yeoville the other day?

Mr. Speaker, I would suggest to the hon. member for Paarl that he consult with the hon. the Minister of Agriculture! [Interjections.] The hon. the Minister of Agriculture told us the other day that not all agricultural products caused a loss. The hon. the Minister of Agriculture will be able to enlighten the hon. member on this matter. Mr. Speaker, once these increases in the tariffs on food, such as the increase of 60% in the case of meat, have had their ripple effect and reach the consumer, they are no longer 60%, for if the wholesaler adds another 50%, which he may do, they come to as much as 90%. The retailer may add another 50% to that, and then the increase comes to 135%. Now you can see, Sir, why the cost of living is so high! [Interjections.] Sir, let us not joke about this matter. Once these increased expenses have had their ripple effect and reach the consumer, you can see what the reason is for the high cost of living in South Africa. If one increases the tariffs on food, the price of food is increased. Then the person working for a salary has to ask for an increase in salary in order that he may afford the food. Once he receives a higher salary, there will have to be higher tariffs again, and in this way we are caught up in a perpetual cycle of higher wages, higher prices, etc. The Minister said that if the railways had had sufficient high-rated traffic, it would not have suffered a loss. All these things are a result of the damping measures applied by the Government. All these things are boomeranging on the Government. Sir, it is for the very same reason that the Minister of Posts and Telegraphs is finding himself in difficulties. Two years ago he had to increase telephone rentals from R18 to R24, an increase of 33⅓%, but this year he did not increase telephone rentals by 33⅓%, but simply by as much as 50%, from R24 to R36, and the next time it will probably be increased by 100%. Sir, for years we on this side have been pleading with the Government to encourage growth. What is the effect of these increases in Post Office tariffs going to be? What effect are they going to have on businesses? They will cost any reasonably big business R50 000 per year. [Interjection.] Sir, I am not referring to the kind of business that hon. member knows; I am referring to a respectable business. Sir, the dealer will not absorb these additional costs; they will be passed on to the consumer, and this forces up the cost of living all the time. Sir, that was not all; the Minister of Agriculture also wanted to be in the picture, and then he simply increased the price of bread as well. He increased the price of white bread by 18%, but he increased the price of brown bread, which is what the poor man eats, by 22%, and for good luck he also lowered the farmer’s price of wheat by 20 cents per bag.

He hates the farmers.

The farmers’ price must be lowered, but the price paid by the consumer must be raised. And what did he tell us? He told us that the miller could not make ends meet; he said that the wages of the millers’ workers had risen by 26%, that the maintenance costs of vehicles had risen by 24%, and that the price of petrol had risen by 8%. Sir, who raised the price of petrol? His own Government. He went on to say that the railage on maize-meal had, on an average, been increased by 38%, and that was why he had to increase the price of bread. Sir, can you imagine a Government raising the price of bread at a time when we are faced with strikes throughout the country? One cannot open a newspaper in this country without reading about some strike or other as a result of the high cost of living. What is the position as far as food prices are concerned? The index figure for food showed an increase from 122,8 to 125 in February, i.e. an increase of 2,2 points in one month. Sir, that means an increase of 30% over a year.

No, one does not calculate it that way.

If food prices go on increasing at this rate, the annual increase will be 30%. [Interjections.] Under this Government the index figure has never shown a downward trend in any month; it rises month after month. Sir, we saw how the price of petrol rose. The price of fertilizer rose; the price of bananas rose. I cannot think of one single item of which the price did not rise as a result of the policy of this Government. Sir, medical costs rose by no less than 47%. If one is not a member of a medical-aid scheme, one would be bankrupt after an illness of three months.

But our people are members of medical-aid schemes.

Sir, that hon. member does not know the people of South Africa. Surely he knows that the farmer is not a member of a medical-aid scheme. There are hundreds of people in South Africa who are not members of medical-aid schemes. Sir, let us go further. Take motor vehicle insurance. It has become a crime to own a motor-car under this Government. Motor vehicle insurance was raised by 20% on two occasions—40% in one year’s time. And then the hon. member on that side is perfectly satisfied with the increase of 13 cents per day which the pensioner received in this Budget! Sir, what are hon. members on that side doing in order to ease the lot of the man in the street? What is the Government doing? The other day they introduced here a motion of thanks to the hon. the Minister for having supposedly combated inflation so successfully in South Africa. Can you believe it, Mr. Speaker, that something of that nature can happen in South Africa in this year of 1973? Now, after they have done all this damage, after the people has had to suffer as in fact it did, now the Minister comes along this year and shows that he too has learnt, as the hon. member for Vasco has learnt. Now they say that they too are standing for growth. Now the hon. the Minister says in his New Year message that we should grow out of inflation. Sir, surely this is what we have been saying all these years. And that is the way it is throughout. Has there been no planning? Could they not have foreseen that if they curbed the economy, the railways would not be a paying concern, the Post Office would not be a paying concern, and that the cost of living would rise as it did? There has been no planning. There has been no planning on that side. Let us see what the position is in respect of meat in South Africa. The housewife cannot even afford to buy a small piece of meat. In this land of plenty, in this land of potential, what do we see? That our meat has to be imported from New Zealand at 92 cents per kilogram. Why? I shall tell you why, Sir. Two years ago we gave this meat away at 18 cents a pound and lamb at 23 cents a pound. We told the Minister that the people could not subsist on this price, and we asked them to raise the floor price just a little, just to give the farmers an incentive. The hon. member for Prieska helped us. I want to pay tribute to him for having done so; he was the only one who helped us. But, no, do you know what the floor price of meat is today? For super lamb it is 53 cents per kg, but we are paying 92 cents per kg for imported meat. The Minister did not want to make that small concession. And what happened? The farmers could not subsist; they went out of production. This Minister himself made a speech at Malmesbury and told his audience how the farmers there had sold their sheep and switched over to wheat. Now we do not have meat, but we are saddled with a wheat surplus.

And you are pleading for the price to be lowered?

No, of course not. But there is just one thing the hon. member must realize now, and that is that if one pays 53 cents per kg for that lamb, the farmers will go out of production; then there will be no meat and then the housewife will not be able to get meat. Let me state this clearly. These meat prices do not benefit the farmer, nor do they benefit the housewife. They do not benefit the farmer, for he does not have any stock to sell. This is the case as a result of this shortage. We have the same position in respect of milk, and the hon. the Minister will have to learn. I want to concede frankly that he was not a Minister at the time, but he will have to learn that if he fixes the prices at too low a level the farmers will go out of production, and then we shall have to import food and then the housewife will have to pay what she does today.

What do you suggest?

No, wait a minute. The hon. member for Lydenburg can speak in a moment. There is therefore no planning on that side of the House. And so one can take every department. If one wants to take a person to a Minister today, one has to see four Ministers. There is no planning. There is overlapping. There is no co-ordination. Sir, that side of the House is teeming with Ministers. If one walks down Parliament Street one has to be very much on the alert if one does not want to run the risk of being run over and killed by the Cadillacs. For, after all, a Minister no longer has only one official car. One official car is no longer enough for him. Now he has to have two official cars—one big car and one that is even bigger. But what is so heart-rending about this whole matter, is that this whole problem of the growth rate in South Africa is not something which has descended upon us from the heavens. It is a man-made problem, a problem made by that side of the House, by the Government, just as that side of the House, the Government, has created problems for us in regard to immigration. When this country pleaded for more immigrants, it was Dr. Dönges who said that the machinery created by this side of the House for large-scale immigration, was being dissolved because the State had to be protected against a worldly outlook on matters. Here we have that bigoted outlook. Just consider what has happened to sport in South Africa. In 1965 we said that a few Maoris had to be permitted to play, for that would not be the end of the world.

And now Piet is playing soccer with them!

No, at the time they could not allow the Maoris to come here. But then one finds that after a while they do take over the United Party’s policy, as they have in fact done now in regard to growth; after a few years we convince them. Then, after a while, we had a concession in respect of the Maoris, but then it was too late. We asked them to be so obliging as to allow D’Oliveira to come and play here. No, that was not allowed either. Now I want to venture the prediction that within two years we shall have mixed football trials in South Africa. If we are therefore going to have them in two years’ time, why can we not have them now? [Interjections.] In this way this Government has been placing problems in South Africa’s way, in this way injustices have been committed, and the greatest injustice that was committed, was when this Government forced down the growth rate right to the bottom. This year the Nationalist Party is celebrating its 25th birthday as the governing party. However, this should not have been a celebration of the 25th birthday; it should have been a memorial service as a result of the injustice done to South Africa. [Interjections.] When the history of South Africa is written, this quarter-century will be called “the quarter-century of injustice”. When the history of South Africa is written, the Leader of the Opposition will be described as the person who dedicated his life to convincing that side, to wresting them from their bigotry and narrow-mindedness. He had to convince them of the necessity of immigration, of the desirability of allowing mixed sport trials to take place in South Africa, of the necessity for there to be growth in South Africa, of the necessity for television to be introduced. This is the job of convincing which the hon. the Leader of the Opposition has had to do. This is the way the hon. the Leader of the Opposition has had to take that side by the hair and drag it away from its bigotry. What is so heartrending, however, is that a person of this stature has had to dedicate his life to the job of convincing those people of what is good for South Africa. How much better it would not have been if this man of stature could have employed that same effort in leading South Africa, for where would South Africa not have stood then! Where would this land of opportunity not have stood then? Then this country would already have been firmly established on the road leading to its destiny, namely the industrial giant of Africa. [Time expired.]

Mr. Speaker, the hon. member for King William’s Town said he does not know what the position is as regards the hon. member for Vasco who is displaying United Party tendencies. I want to state unequivocally that the hon. member for King William’s Town must please remain a United Party member for the rest of his life. I say this because of the completely irresponsible method of debating he displayed here in a very important discussion, i.e. the Budget debate of 1973. He acted like a political clown. His hon. Leader must state whether it meets with his approval that an hon. member should stand up here and speak of an inflation rate of this much or that much, in spite of South Africa’s growth rate in the sixties of more than 6%, which was an achievement that met with approval throughout the world. The real growth rate is obtained after the inflation rate has been subtracted from the growth rate. The hon. member cannot understand that.

Then the hon. member comes to the aged. I find it reprehensible that when there is a by-election, as is now the case again in Umhlatuzana, they latch onto arguments such as the following. He said that the banana prices had increased a great deal, but he will have to eat up a great deal before he goes to Umhlatuzana with his statements, because they are so irresponsible.

He also said that the Public Service salaries were increased by 15%. That is so; they have been increased by 15%, but this is over a period of two years. Old-age pensions have been increased by 18,4% over a period of two years. The hon. member said in this Council Chamber that old-age pensions were increased by 10%. Then he jumps from white bread to strikes, and then to hop bread—a whole muddle which the hon. member came to the fore with. I say that the hon. member for King William’s Town must please remain a member of that party even if that party is in the process of …

Disintegrating.

Yes. He must remain there even if that party is in the process of disintegrating. That hon. member is the person who said he is prepared to relinquish his identity for the sake of a greater and broader South Africanism. I want to tell him that he may think in terms of a broader South Africanism, but that he should never think of getting out of the United Party because he is at home there.

That is a poor argument.

It is not a poor argument when it is said that in this country we are being devastated by strikes. What is the position in England? We in South Africa have extensive labour peace, notwithstanding the strikes that have recently taken place. Why is it being emphasized today that the strikes that are now taking place are so terrible? If one were to compare the position with other countries, one would find that we in South Africa have labour peace to a large extent, for which we must be grateful. That should not be bartered with, as this hon. member did this afternoon. What is the position at the moment? I want to state here this afternoon that the hon. member for Parktown is alone on an island. I find it remarkable that he did not have the support this afternoon of his financial supporters. Where is the hon. member for Constantia? Where is the hon. member for Hillbrow? Here they come now with the hon. member for King William’s Town! Let us look at the comments of economists in the Republic. Let us look at the comments of financial editors. What do we find then? This is what Die Burger of 29th March had to say about that under the heading “A far look by Diederichs, say economists” (translation)—

The people saying this are Dr. Chris van Wyk, an economist of Sanlam, Mr. S. C. Smith of Volkskas, the Federated Chamber of Industries, the Association of Chambers of Commerce and the Handelsinstituut. Let us look at what the English Press states. The weekend Argus, one of the newspapers that is quite well disposed to that party, but is nevertheless a very decent newspaper, dissociate themselves from these hon. members:

Not a “United Party buster”, but a “blockbuster”. I quote—

Is that not a fine thing? Let us look at what Colin Campbell says in the Sunday Times—Oh, look at that poor Dr. Fisher! I quote—

Here Dr. Diederichs could get into trouble with the hon. the Minister of Social Welfare and Pensions, and I shall now refer to the article in The Sunday Tribune under the heading: “Dr. Diederichs dishes out pep pills.” I quote—

Now hon. members can see what I mean.

What are you talking about?

I am speaking about the comments made by responsible economists in the Republic of South Africa who say that this is one of the finest budgets we have ever had. What I cannot understand about the hon. member for Parktown is that, with his financial background, he could not adopt a more positive approach in connection with this whole matter.

*I want to mention here today that unequivocal confidence in the economic future of the Republic of South Africa is written into this Budget. Against a background of international economic crises, against a background of currencies that are floating and instability in the international monetary world, which we have been faced with in recent years, I say that this Budget is focused on confidence.

Neither can we neglect to say what the gold commodity has to do with this entire set-up. In the present monetary set-up gold is the only international asset which is not regarded by monetary institutions as a burden of other monetary institutions. In saying this I want to add that over the past five years a war has been waged against the gold commodity by many people who were engaged in efforts to demonetize gold. But the fiercer the war, the stronger has the position of gold, as a commodity, been entrenched throughout the world. Therefore I want to say that when the rest of the world realizes that the only solution to today’s international monetary set-up is an increase in the official gold price, we will again have stability between countries as far as the economy is concerned and there will be greater liquidity between countries’ currencies. For five years, as I have said, a war has been waged to discredit the position of gold, and it has been the inherent potential of gold that has introduced the greatest resistance. It was the hon. the Minister of Finance who, in this respect, played a tremendous role to have gold take up its rightful position in the world. Not only in the Republic, but also throughout the world, the hon. the Minister of Finance has the recognition of great powers for his unshakable confidence in this yellow metal which can bring about stability in the international economy. I am fully confident that the official gold price will have to be increased considerably in the years ahead. The free market price is a clear barometer that this must happen, and when it happens I say that this Republic—quite rightly—will derive great benefit from that because we are the biggest producers of this commodity and because this is the country which has, with great judgment, mined this commodity and kept it in reserve throughout the years to establish our assets.

As far as the present set-up is concerned, the hon. member for Parktown ought not to have come along with an amendment to the effect that we would not be able to improve on the 1972-’73 Budget. I want to tell you, Sir, that notwithstanding inflation, the 1972-’73 Budget was a tremendous achievement. Let us look at what the Reserve Bank’s quarterly report, which has now been tabled, says about that—

Is that not an achievement? Our first task, to bring about growth in South Africa, was to correct our balance of payments. That was done by devaluation and by what the hon. member for Constantia and the hon. member for Yeoville called “an act of insolvency”. This 9% real devaluation of the rand played an exceptional role in correcting the balance of payments position. The guidelines and the possibilities were established to further stimulate growth in South Africa. But is it not only by fiscal and monetary measures and policies determined by the State? It will have to be a challenge to the people to place growth foremost. The Government and the Minister of Finance are accused of being the cause of the prevailing inflation rate. This is said repeatedly. The hon. member for King William’s Town also said it again, but one does not need to take much notice of him. The hon. member for Parktown and other Opposition members are continually saying at by-election time, etc., that we are responsible for the inflation rate in South Africa.

That is so.

There it is now being said again. Inflation is a chronic disease that has ravaged the whole world. We must make an analysis of the components of our inflation structure. The fiscal and monetary measures, as well as other measures, adopted in South Africa, display a great sense of responsibility. I shall gladly point out the components of inflation in the past year. As hon. members know, food is the chief component in the consumer price index. During 1972 the increase in food prices was responsible for 2% of the 7,4% increase in consumer prices. This considerable price increase is chiefly due to the influence, on our foremost agricultural products, of unfavourable climatic conditions, such as frost in the winter and drought this summer. Those hon. members do not realize this. That was the cause of 2% of our inflation rate.

And lack of planning.

One cannot plan the weather conditions, no matter who one is. The hon. member is levelling an unfair accusation at the agricultural industry in South Africa. I do not know much about agriculture, but I have particular esteem for the agricultural authorities on this side of the House. Those are people who are well-grounded in the agricultural industry, and that allegation of the hon. member is an allegation against agriculture in this country. What is the second important aspect? If one looks at the components of inflation, the price of imported goods is the second important aspect. Imported inflation was an important factor during 1972. According to estimates it is a fact that every 1% increase in the price of imported goods leads to an increase of 0,22% in local prices. It is estimated that the price of imported goods increased in 1972 by 13%, hence a price increase effect of 2,9%. If the influence is merely put at 2%, it means that the consumer goods increase amounted to 3,4%. In other words, if we had had a normal agricultural season, and had not had to import such a tremendous amount of goods, the rate of inflation would not have been so high. Notwithstanding this chronic disease of inflation throughout the world, it is an absolute economic fact that the production of goods is increasing annually. It is also a well-known fact that production is becoming an increasingly expensive process. Sir, I want to add that while 4% can be ascribed to the reasons I have mentioned, one finds that half of the supplementary 3,5% is due to rentals and problems in connection with accommodation. We shall have to ensure that no exploitation takes place of our salaried workers by people who do not realize that fair rentals must be imposed. Hypothetically stated, if one wanted to eradicate inflation completely, it would cause the greatest recession in South Africa that we have ever experienced. The process of growth would change into a total recession and depression. The only way to control, in a responsible way, the inflation rate we are saddled with today, is to grow out of it.

It has been said here today that this side of the House has never yet shown any interest in the growth of our Republic. That is unfair. Throughout the years this side of the House has consistently emphasized growth as one of the top priorities. What do the statistics of the World Bank indicate? Between 1960 and 1969 South Africa’s growth in its per capita revenue was 3,8%, and that with our tremendous population increase of 2,3% per year, larger than that of the United States, Sweden, Switzerland, Canada, Denmark, Australia, New Zealand and West Germany. It is one of the highest in the world. And then the accusation is levelled by the hon. member for Parktown that we have never emphasized growth in this Republic.

May I ask the hon. member a question?

Sir, my time is limited. Let us look at the comparison of growth rates for last year. The growth rate in South Africa was not 3%; it was 4%. [Interjections.] Our volume growth rate was 3%, but our value growth rate was 4%. But the hon. member would not understand that. The growth rate of the United Kingdom was 3,25%, the Netherlands 3,5%, Italy 3% and West Germany 3,25%. Can you see, Sir, we compare well with any other country. What, then, is this uproar about South Africa not growing? It is unfair and irresponsible.

Let us look at the real gross domestic product per capita. In 1948 it was R261, and in 1972 R457. Can you see, Sir, that growth in South Africa is a very important matter? This Budget is aimed at activating the economy and emphasizing industrial development. I say with great responsibility that in the years ahead we shall have to realize, from the managerial level that merely saying “work harder” will be of no avail. There will have to be a look at greater efficiency to bring about this increase in productivity. In the past I have already mentioned, as an example, Sasol which pushed up its production by more than 30% over two years with a decrease of 10% in manpower. We in South Africa can increase our production. We have a supplementary volume of reserve capacity in our industries of about 20%. In other words, at this stage we do not need the extensive creation of capital. This could be dangerous when this inflation is handled injudiciously. This cost inflation, with which we are now dealing, can then change into another inflation which would be extremely dangerous to South Africa. Our development must be responsible and balanced, thereby to entrench the future of this country. Sir, there is a drastic difference between this side and that side of the House. We do not see the economic future of South Africa as a dangling element, as something that must merely be utilized for personal gain; we see the economic future of South Africa in the framework of a political right to self-determination for every people here in South Africa. In that respect there is a drastic difference between this side and that side of the House, and therefore it is essential that this Budget should succeed in bringing about the necessary creation of capital for the implementation of this honest and sincere concept of political multi-nationality. [Laughter.]

Sir, hon. members on that side may laugh; they do not understand what I mean. Sir, it is going to need the extensive formation of capital to bring about the concept of political multi-nationality. It is going to require material sacrifices. The Opposition’s contribution is around zero as far as that is concerned. Sir, South Africa will still grow to an economic giant. Just think of the wonderful mineral riches we possess; think of our gold production with the increased gold price; think of our platinum mining; think of the enrichment process of our iron ore and all kinds of minerals, but that alone will not be sufficient to keep our national economy sound. We shall have to develop our industries. One of our priorities will have to be to continue with industrial development in South Africa on a well-ordered, planned basis and to ensure that the cost structure of our industries is not out of alignment with the cost structures of industries throughout the rest of the world. In the sphere of international trade we shall have to carry on a struggle to improve our trade relations. We shall have to attempt to conclude decent trade ties with other countries through an increase in the quality of our products.

Sir, I want to conclude by sincerely thanking the hon. the Minister of Finance for this Budget which gives security to the individual and to our industries. I am now speaking on behalf of the Magaliesberg Co-operative Tobacco Company Insurance Fund. Its head office is in my constituency. The areas that were hardest hit by the recent hail disaster are the areas which the hon. member for Brits represents and portions of my constituency. If the State had not made this contribution to the insurance scheme, the tobacco industry in our specific area would have suffered tremendously. Numerous farmers, who have produced tobacco throughout the years, would not have been able to continue producing tobacco. Sir, the amount being contributed by the Government to this insurance scheme, so that these farmers can be compensated for the damage they have suffered as a result of this disaster, is no less than R1,4 million. My thanks and appreciation to the hon. the Minister of Finance, the hon. the Minister of Agriculture and to the hon. member for Brits for his intercession in this matter.

Sir, I want to conclude by saying that the hon. the Minister of Finance is taking a strict look at the weal and woe of our various industries and our people. Here we have clear proof of that. We can enter the future with great confidence. We shall succeed in bringing about economic growth because we are continually working and building on this asset, our Republic.

The hon. member for Rustenburg, who has just sat down, has something in common with this side of the House in that he says he has the greatest confidence in this country. We all have that confidence. The hon. member spoke about gold and in the last part of his speech he mentioned platinum. I would like to mention here the depressed condition that the platinum industry is passing through in his constituency. I think we are all pleased to know that with the oders they will possibly get in the new year they will have a great measure of prosperity. Sir, hon. members opposite like to quote from papers, from the Sunday Times and what have you, to tell us what a good Budget this is. Well, I have just had a look at the latest issue of the Financial Mail, of 30th March. The heading is “Cold were our hearts”. The cartoon does not do the Minister any credit. I do not know what he is supposed to represent. It says here—

Pump-priming via the public sector has left too little for helping the needy. Growth may accelerate; but what about inflation? At a time when the State coffers are full to overflowing, when the cost of living is soaring by 9% a year, and when Black labour unrest is spreading, it is perfectly clear what Dr. Diederichs should have done in this Budget. He should have announced immediate and substantial tax and other concessions for those who lack bargaining power to demand more; for those who have to survive on the interest income from meagre savings; and for all others facing the grim prospect of another year of grinding poverty. This he did not do.

This is one of the leading financial papers which the hon. the Minister often quotes to us. He has taken great delight over the years in quoting this particular paper to us, because he says this is a United Party paper. He may not agree with what they say. I do not agree with the cartoon or anything like that. I think it does him less than justice, and I do not think this sort of thing should be done by a leading paper. Anyway, Sir, let us go a little bit further and quote one of his own Ministers, the Minister of Transport, when he introduced his very depressing Budget in which he stepped up the tariffs. He said this (Hansard, col. 2093)—

From quite a buoyant position, Sir, we get this very depressing picture. And let me quote the hon. the Minister’s Budget speech of 1972 back to him, to show what he said in summing up, when he explained the reasons for the devaluation of 12,28% in the previous year. He mentioned the following reasons (Hansard, Vol. 38, col. 4366)—

Mr. Speaker, that is what he said in his speech here, but it just did not happen that way. We went the other way. The hon. member for Rustenburg and the hon. member for Paarl also spoke, and I know the hon. member for Paarl is probably disappointed that he did not get a reduction in excise duty for the wine-producing industry. It was remarkable to listen to the hon. member for Vasco, who made practically a United Party speech. That was a wonderful change. It may be that he has given us a peep at what we can expect in the coming months in this House in regard to legislation embodying a new approach by this Government as far as Bantu labour is concerned.

At present, as we meet here today, there is probably the greatest currency upheaval the world has ever experienced. We have no link with our stabilizing factor, which is gold. As one of the world’s largest gold producers we play a very small part. Notwithstanding the hon. member’s opinion, we play a very small part in the drama which is taking place at present. The big nations of the world decide what must be done. We live in the era of floating currencies and there are changes from day to day. The Minister said, notwithstanding that fact, that with the devaluations and revaluations we have had, the value of the rand only differs by 9% from its value when we devalued. I say that such a statement is pure speculation, because of the fact that currencies change from day to day and practically from hour to hour. One has only to talk to the banks to find out how frequently these changes do occur.

We are very thankful that there has been an increase in the price of gold. The hon. the Minister says that as a result of that increase, he has been able to improve our balance of payments position. Surely, that goes without saying. Last year he was down by something like R976 million and now he has reduced that deficit to something like R917 million. He also stated that exports were increased by 36%. It would be very interesting to know whether the hon. the Minister can tell us whether that includes the export of gold. He also stated that our imports were decreased by 2,5%. This is the real position. The other day we found the hon. the Minister of Transport painting us a very, very sorry picture of the state in which our economy finds itself at the present moment.

When we heard the hon. the Minister of Finance the other day delivering his speech, we thought that he was in, what may be called, a doctor’s dilemma. On the one hand he was confident that the economy was on the move, but on the other hand he saw a rapid rise in costs and in the inflationary spiral. He said that we could take our pick. He also referred to crises which he saw all around us. The picture which the hon. the Minister painted was a depressing one. The Government as usual plays the situation by ear. By this I mean that as they hear of changes in the world economy, they try to effect changes locally. This is the Government whose task it is to plan for the development of the country.

Year after year we have had dozens of speeches of sound advice made from this side of the House and I think the hon. the Minister listened to them. When we experienced times of prosperity and we had money pouring over, the Government really did not know what to do with it. One year the Minister said that he was not going to give part of the surplus of R20 million to the taxpayers, because he knew that they would waste that money. He therefore paid that money into a special fund. It is clear that the Government mismanaged the time of prosperity and today when we need sound pilotage through the position of international finance for the benefit of our country in general, we find that we have a Government which just does not know how to guide us right.

That is rubbish.

The hon. member said it is nonsense, but I think he knows it is true.

I said “rubbish”, but you changed it to “nonsense”.

One year his theme was “work and save”, but this year his theme is “work and spend and get the economy off the ground”. However, he does not tell us how to do it.

There is really very little in this Budget for the poor man, for the poorer sector of our community. The man in the street is not going to receive the message of the hon. the Minister. This so-called “increased prosperity” is not brought down to him and he has not experienced it yet. The public have reached the stage where they become, as we refer to it, slap-happy. They get to the stage where they do not protest any more; they just pay and they say: Well, what can we do about it? They become tax-happy or slap-happy.

Punch-drunk.

Yes, they get punch-drunk because of taxation. They say that although they are paying heavy taxes, the Government does not give them anything back. When we saw these wonderful forecasts in the newspapers, the forecasts that the Government had a terrific surplus, everybody thought that there was a holiday in it for him and that he was going to make a few rand out of it. However, nothing came from the Minister’s table. Certain crumbs were handed out, but he made no substantial reduction in taxation, anyhow not any substantial reduction that we can see.

As far as the pensioners are concerned, we are very grateful, but I am sure that without the hammering the Minister received from this side of the House they would not have received that increase; it is the result of continuous prodding. Hon. members will see that this is a very unsatisfactory state that we have to put up with year after year. We have to come begging to the Government saying: Please, the people cannot live on what you are giving them. On the one hand the Minister tells us that we have inflation; he tells us what the depth of inflation is, but he will not increase pensions accordingly. His argument is that he is giving them something and hon. members opposite are quite proud of it. We want to hear from the hon. the Minister of Social Welfare and Pensions in this regard. He told us that the Government had no social security policy and he was quite proud of it. The Government is not interested in so far as the pension of the man in the street is concerned. However, the hon. the Minister of Labour, whenever an agreement relating to workers is put forward, insists on a pension scheme being included. This has had a marked effect, because most artisans in industries today are protected by very fine pension schemes. That is part of his policy. I do not know whether he has ever had a chat with the hon. the Minister of Social Welfare and Pensions—they sit in separate offices and probably in a different Cabinet room— but certainly it has not got through to the hon. the Minister of Social Welfare and Pensions that that is the policy of the Government. Unfortunately there are thousands of workers in this country who are not covered by any pension or by any social welfare scheme. They have to look forward to an old-age pension or to a disability pension. They go along; they fill in a form and if they qualify they may get a few rand per month.

Let us come to health services. Hon. members know that people cannot afford to get sick today because it is too expensive. When I say this I am talking about the middle-class man. The man who is in the lower-income group is always looked after. The middle-class man, who is the backbone and the worker of the country, is the man who gets nothing. Hon. members will remember that when we, the United Party, were in power—maybe they will not remember it because they were not here—it was our policy to have free hospitals. We went further and we said that there should be some measure of health insurance. We felt that that was the one thing that we owed the taxpayer, the person who did the work, found the money and who kept the country going. What happens today? The hon. member for Vasco said that they are given free hospitalization. The poor people are, but the other people the middle class have to produce their income tax receipts. If they qualify, i.e., if their income is low enough, they can have treatment. They then get a few pills, etc., but it is a costly business today to get sick. The hon. the Minister can ask his colleague the Chairman of Committee; he will tell him about it.

The hon. the Minister of Transport had to find the money to pay his staff by increasing railway fares by 20% and in the case of some tariffs by as much as 60%. This is having a chain effect on the cost of living. Again it hits the man in the street. Although we are fortunate in this country today to have these huge self-service stores and highly competitive buying organizations where the goods are sold at a very small profit, the prices can be kept down. The hon. the Minister of Telephones, or rather the hon. the Minister of Posts and Telegraphs, was not satisfied. He thought: “Well, I will have a cut”; so he increased telephone rentals and other tariffs. In doing so he is making it a little bit more difficult for people to get telephones cheaply.

Let us look at the galloping state of the cost-of-living index today. I have here the latest figures. In 1972 it was 109,6, in December, 1972, it became 117,4 and in January, 1973, it became 118,7.

From what are you quoting?

I am quoting from the cost-of-living index figures that are supplied in the bulletin one gets in the post every day. The increase for January has been 8,3% and the increase in December was 1%. If it continues at this rate, the cost of living will rise by 12% per year. This gives one an idea of what is happening today and how it affects the man in the street. I was listening to the argument between the hon. member for King William’s Town and the hon. members on that side of the House and, although I am not a farmer, I know that we are getting to the stage where we will have to go to the museum to see what a piece of meat looks like! One will have to go to the museum and pay sixpense to see what meat looks like. We find that today there is resistance on the part of the buyer. People just will not buy. More and more families today are cutting down; I know of a family that has meat only twice a week. It is not because they cannot afford it …

They are buying chickens.

Yes, perhaps chickens, but they all come home to roost somehow! It may sound like a joke, but the position today is that meat is becoming a luxury.

It is no joke!

If you invite anyone to your house and say “we have a piece of roast beef”, it is quite an occasion. We even have to cut the whisky out so that we can say “we have roast beef instead of whisky tonight”.

The hon. the Minister of Agriculture is a man I have always admired. He is an honest fellow. I see that he is not here now; I do not know whether he does not want to listen to us or whether he has had enough, but he warned us—and he is quite honest—that in 1973 the food prices were going to rise. He does not make any bones about it. Every time one sees a newspaper poster in the street, one sees that prices have gone up; meat goes up, this goes up and that goes up. Of course, I cannot entirely blame this Government because there is no rain. However, if they had built a few more dams, this might not have happened. The price increases occur throughout. The prices of food go up: In February of this year there was a rise of between 10% and 20% in respect of canned foods, and I am referring to the prices in the big self-service stores. The managements of these stores were reluctant to announce the increased prices, but they said they were forced to put those prices up notwithstanding their very strong bulky buying position. They were most reluctant to do it, and I must hand it to them that, when the hon. the Minister announced certain sales tax reductions in the House, they worked all night to reduce the prices of the commodities affected. I do not know where they found the lists in order to do that.

Then the Government, not satisfied with this, increased the price of bread. This was the commodity which helped the Nationalist Government get into power; their great cry was “we are going to give the poor white bread”. Now it has been announced that bread has gone up by 2c per loaf; milk, too, went up by 1½c to 2c per litre. Even the small man no longer can afford these commodities. What then of the Bantu employees who just live on their loaf of bread and, maybe, a bottle of ginger beer?

Then we can talk about the motor trade, although I do not know whether I am the right man to do so. Even there motor car tyres, which are like shoes to a person because one cannot drive a car without tyres, have gone up in price. There is a reason for all this. Even if one looks at housing we see that the Government is failing in its housing policy. Figures can always lie, but no matter how you juggle the figures, you find that its housing policy is failing. We do not say that the Government must provide a house for every person in this country, but the Government should make it possible for every young married couple to buy a house economically. If you are able to house your young people properly, you get sound citizenship. The Government fails to come to grips with the situation all the way through. When the Minister of Transport announced the pay increases for railway workers, the hon. the Minister said a depressing thing which probably affects all of us, namely that the advantage of the 15% salary increase will be lost because the cost of living has increased to such an extent that any advantage that might have come from it had already been dissipated. The same applies to the Public Service. The Government, therefore, will probably be approached shortly and told that the increase was not enough, and then they will have to face up to the fact of having to increase salaries again. The 15%, instead of being a substantial increase, is only a mild sedative.

We have heard from that side that there is no labour unrest, but the cry throughout South Africa is that the wages and salaries currently paid are not enough and that people cannot live on them. We therefore have this continuous rat-race of increased salaries. Where is it going to end? Are we going to face up to the fact of another devaluation? Hon. members on the other side, including Ministers, talk loosely about greater productivity. The hon. member for Vasco said that we have cut down on two holidays and that we are therefore going to get greater productivity. That is just rubbish. You will not get greater productivity in this country until you accept the fact that—and I get these figures, for 1972, from the Department of Statistics—the Blacks comprise 70,5% of the population, the Whites 17,2%, the Coloureds 9,3%, and Asians 3%. We have to face up to the fact that the handful of Whites in this country, namely 17,2% of the total population, cannot carry the economy on their backs. It is impossible, but that is what the Government is trying to do. They are trying to do the impossible. The Government has to face up to the fact that these people are here and that we have to use them to the best advantage. It is no good talking about greater productivity; you have to establish a settled labour pattern. You will never get greater productivity if you bring in Bantu labour and you only have them with you for one year. They are very strict with this and you are told when they have to go. You then have to go through the process of applying for them and maybe you will get them back. You have trained this labour and you want them back in your factory again, but that is the way you have to jog along. Now how do you get greater productivity? This is what industrialists have to do. They are sick and tired of approaching the Government to alter the position. The one department blames the other department, and so you are messed around. Despite all this, the Government says they want greater productivity. Of course, one cannot do it that way. You have to have a settled labour pattern. We hope that the hon. Minister will give us something a little better than we have at the moment, as we understood from what the hon. member for Vasco said. I know that the policy is to remove all the Bantu in the Western Cape, but I think even the hon. the Minister has found that that is impossible. I know there is a plan to remove most of the Bantu from the Witwatersrand. When, I do not know. I know that is the policy. But if you are going to continue along that way, you are going to get nowhere in this country. The hon. the Minister wants the country to expand industrially. Unless he sits down and solves his labour troubles in this country, as far as availability is concerned, he will never get anywhere. We are told that people who want to open industries must go to the border areas. Sir, a lot of us know exactly what is happening in the border areas. We know the difficulties the industrialists are having there in establishing factories. It is not easy. I think the Government knows about these difficulties. I do not think the discounts allowed as regards taxation help them much.

Sir, it all comes back to the economy of this country. The Government is talking about greater productivity and prosperity. You will never get it until the Government recognizes the fundamental fact that the people are here and must be used to the best advantage. We are talking about reeducating the people. Of course, we spoke about that years ago, and they just laughed at us. You see, you have to have trained labour. You cannot train a man in a year, send him home and hope to get him back again. You cannot do it that way. Whoever thought of this migrant labour scheme, I do not know. He probably had no experience as far as industry is concerned. It was probably just something to suit the Government’s policy.

They wanted to avoid permanent residence for the Bantu.

Well, I do not know what it was. That is what I admire about the Minister of Transport. Do you know what he does? Out here at Langa, he puts up barracks and says he wants 300 Bantu. He brings them in, and sends them back when he has finished the job. He is not interested in contracts. He gets on with the job, and we would like to do the same. We would like to get on with the job in this country and build a prosperous country.

Mr. Speaker, with reference to the speech made by the hon. member for Salt River, as well as the other speeches which have been made by the hon. Opposition, one could say that, if one were to remove the padding from the arguments used by them concerning this Budget, only three points remain. The first is a plea for increased Government expenditure, the second a plea for lower Government revenue, and the third is that they point out to the hon. the Minister that certain things appear in the Budget which they have been advocating for years. This is really the gist of the arguments which have been used in regard to this Budget by hon. members of the Opposition. For example mention has been made here of the cost of living. Because the cost of living is high, there should be less taxation, etc. Sir, it is very easy to make the statement that the cost of living is high. Everyone knows it. It is true. But the cost of living is high throughout the world. The question is: How is this problem of the high cost of living being dealt with? To see how it is being handled, a comparison should be made with the cost of living in the rest of the world. When this is done, we shall find that this problem of inflation and the problems that result in inflation, are being dealt with by this hon. Minister in a manner in which other countries would like their ministers to deal with them.

Hon. members of the Opposition advocated increased old age pensions; in fact, they were really breaking their hearts about it. Sir, for my part I would like to say that I would be very pleased if it were possible to pay increased old-age pensions, but that is really not the point of view from which a budget should be judged; that is really not the way to judge the responsibility of the State and the responsibility of the individual. When we refer to old-age pensions, there are two factors which should not be overlooked. The first factor is that the duty of the child towards the parent can never be placed on the State. It is the responsibility of the State to create opportunities for the child so that when the parent requires the help of the child, the child should be capable of helping that parent; that is the responsibility of the State, but a responsibility also rests on the shoulders of the child of that parent who requires help. There is a second factor. It is now being said here that old-age pensioners are going to receive an increase of R4 per month; that is correct, but, Sir, with the miserable record which that side of the House has in this connection, I think it ill becomes them to come here and talk about these old-age pensions. The issue is not only this increase of R4 which is being paid to pensioners. Sir, if the State fulfils the responsibility which rests on it in respect of people who require help from the State, then long-term plans have to be introduced. We cannot remunerate people to enable them to maintain a high standard of living or so as to enable them to live when the cost of living is high, but what have we done? Since the National Party came to power in 1948, homes have been established in South Africa which today accommodate thousands of old people, who need the help of the State. They do not only accommodate those people who need the help of the State because their children are unable to help them, but they also accommodate people who require skilled care from day to day. Sir, as far as this is concerned, that side of the House has a very poor record which this side of the House has had to rectify since 1948. The Opposition have come here again this year to celebrate a birthday; they came here to celebrate their 25th birthday as an opposition. To me it is clear that this quarter century celebration is not very pleasant for them, but if this is the way in which the Opposition judges and regards a budget, namely to see what they can get out of it in order, perhaps, to win a few votes, then I predict that they will also celebrate their half-century in this House in the Opposition benches. From this side of the House the direction has been indicated by the hon. the Minister of Finance, i.e. that a budget should be the guidepost to the economy and the development of a country. Last year’s budget was aimed at achieving two things. The one was to rectify the unfavourable balance of payments which existed as a result of factors beyond the control of this Government or this country, and the second was to establish a climate in which, once this balance of payments had been rectified, we could give a greater stimulus to the growth of South Africa and to its economy. I say that this is what was aimed at and who on that side of the House, or what economist, will deny that the hon. the Minister succeeded 100% in achieving these two objectives? Therefore we find that the previous budget was referred to with great praise, and experts have also referred to this budget with great praise. But what is very interesting, is that after the conclusion of the Budget debate last year—and I want to predict that the same will happen again after this Budget debate—the Opposition found that they could get no support whatsoever from economists or industrialists or anyone else from outside for the standpoint they had adopted here. Therefore one need not concern oneself about what is said by them here. I say that two objectives were set and those two objectives were achieved. This economic climate which was to serve as a stimulus for growth, we have achieved, and the proof of that is that last year we had an influx of money of about R500 million. South Africa could not have had this influx of money if there was no confidence in the country. In order to create confidence in one’s country one must create an economic climate for development. Because this climate was created it was possible to take measures to make money available again for development. Now I want to say at once that it is quite true that money is still expensive. Last year the hon. the Minister effected measures to make money in South Africa cheaper but the fact remains that lending rates are still exceptionally high. Our objective for this year, as the hon. the Minister of Finance has set it, is to produce. If we want growth we must produce, but now there are requirements for production. That production and growth must occur in a country in such a way that everyone may share in the growth which occurs in the country; and if everyone is to share in the growth which occurs there must be goods which can be bought at reasonable prices. To be able to produce cheaply, one requirement is that capital should be available at an inexpensive rate. I say that during this year which has passed we have already found that capital became cheaper, but I think that our efforts should be bent to making capital even cheaper. I want to point out one factor to the hon. the Minister of Finance which could have a possible effect on the high lending rate which we have to deal with, namely the measures in connection with liquidity and prescribed investment requirements for the banking sector. I want to suggest that the hon. the Minister could perhaps take another look at that. The fact is that in terms of these requirements a fairly large volume of money has to be held at fairly low interest rates which vary from 4% to approximately 5%, and the difference between deposit rates and the volume of money which must be held at these rates by the banking sector, causes lending rates to be established on a scale capable of compensating for those losses. Therefore I should like to suggest that the hon. the Minister, while considering ways of making cheaper money available, should also take this into consideration.

As a result of this economic climate and the availability of money, it goes without saying that the possibility exists of our having to contend with demand inflation. However, there is one effective method which has already been referred to and on which I do not want to elaborate, namely that we in this country could give much more attention to the productivity of our people. It is not only the responsibility of the State to adopt measures to achieve greater productivity. The entrepreneur has as great a responsibility, if not a greater, as the State to ensure the productivity of his people, because the productivity of his workers determines the size of his profit. Let me say at once that the lesson which we have learnt in the past, that increased wages and salaries alone do not serve as a stimulus to higher productivity, should be taken to heart.

In our industries and in the business world much emphasis is being laid on the employment of able and trained financial experts, but in my opinion the time has arrived for every entrepreneur to place emphasis on the employment in his organization of experts in the field of labour, in personnel matters. It is only under expert guidance that in-service training can take place. Therefore, indispensable though a financial expert may be, personnel experts have become just as indispensable financial organizations.

There is another factor which determines the future development and prosperity of this country, as it also determines the prosperity of other countries. I am referring to political stability. In a country like South Africa, its ethnic structure being what it is, political stability possibly plays an even greater role than in other countries of the world. Since we have this ethnic structure, it goes without saying that when the relations between these peoples are not what they should be—in other words, when the relations policy which is applied, is not the right one—we may experience a disruption which affects the political stability of the country in such a way that it destroys the prosperity of the country. Therefore, it is not only a government which is responsible for political stability, but an opposition is also responsible for political stability within the country. If the Opposition is to do its duty in maintaining political stability in this country, it cannot have a new relations policy every second or third day. If it has a different relations policy every second or third day, it confuses the various non-White peoples in the country so that they do not know what the future holds for them should the alternative government come into power. After all, it goes without saying that an opposition in a democratic country ought to be an alternative government, although with us this is perhaps not the case. The Opposition is in the process of confusing the various peoples in the country, between whom harmony ought to exist, over what their political future will be in this country.

They went further and did something else. In my opinion this is one of the most dangerous things the United Party has done in respect of our relations policy. They are including the economic contribution of the various peoples as a political component of their federal policy with a view to the realization of the political aspirations of these various peoples.

Did you think of that first?

You do not even understand what he is saying.

I ask the hon. member whether he admits or denies that this is the case. He cannot deny that the attainment of the political aspirations of the non-White peoples in this country are linked to the economic contribution which they would render under their federal policy. That is the most dangerous seed in the policy of the United Party for the future of this country and for the economy of this country. What do they mean by it? The hon. member for Hillbrow shakes his head. When he shakes his head I wonder whether that is not because this is the case. What lies hidden in the policy of the United Party? Here I refer to the hon. member for Orange Grove. He gave an explanation and said that it would be on the basis of the contribution of every federal unit to the benefit of the country in general and to the prosperity of the State. He said further that as yet there was no certainty concerning how this would be arranged. However, of one thing he was certain and that was that it should be arranged in such a way that he could say the following: We have already done a great deal of work in this connection, i.e. in working out this formula. He said further: We shall continue with this, but hon. members can rest assured that among the 120 in the federal council, the Whites would have a considerable majority. When it forms part of the relations policy in this country that the economy should be manipulated in such a way that the White man should always exercise power over everyone in South Africa, we are on a very dangerous road, a very dangerous road not only for the people of South Africa, but on a very dangerous road along which one is courting disaster, a collision which could destroy the prosperity of South Africa.

Mr. Speaker, let me say to the hon. member for Bloemfontein East that we on this side of the House also look to political stability in this country as long as political stability does not mean indefinite rule by the Nationalist Party. However, we believe that the best foundation for political stability lies in a contented population and in increasing and improving the standard of living and until we are assured of that, we have not achieved a sound basis for stability … [Interjections.]

Qualify “contented”.

In the course of what I have to say, I shall bring out some of the things which I think need to be done to improve the standard of living in this country.

I should like to come back to the Budget and the hon. the Minister of Finance. The hon. the Minister of Finance in his Budget speeches seems to like to draw analogies between himself and philosophical and literary geniuses. Two years ago it was Confucius; last year it was Shakespeare and this year it is Langenhoven. I believe that, as he is dealing with the business of the country, with its finances and economy, it would be more appropriate if he were to play the role of a company chairman rather than a philosophical or literary genius. I believe that, if he were to do that, the tag of genius would probably be a little more difficult to apply. Had he, for instance, last year placed himself in the position of a company chairman delivering his annual address to shareholders at the annual general meeting, he would have been setting his company three targets to achieve during the following year: The first target would have been to improve the liquidity of the company—in other words, to get more money into the company’s banking account, which is what he aimed to achieve by improving the balance of payments. His second target would have been to step up the production of the company becuase that is what the higher growth rate, which he set himself last year, really means. His third target last year would have been to increase the dividends of the company so that all shareholders would have been better off as a result, and would have enjoyed a higher standard of living, because that is exactly what his target of reducing the inflation rate of the country meant. One year after setting his company these targets, this hon. company chairman has come back to his next annual general meeting of shareholders and has been able to report success in the achievement of only one of those three targets. He has been able to report that the company has improved its liquidity position, that is, it has improved its balance of payments, mainly, I may say, because of handsome windfall receipts on account of the higher price at which gold has been sold on the free market and on account of the good agricultural season that was enjoyed last year, which left surpluses which could be exported and, in fact, on the whole fetched good prices; he also enjoyed higher receipts as a result of improved world demand for the primary products of the company. He has also been able to report improved liquidity because the inventories of the company have been run down, because less has been spent on plant and plant replacements and on fixed investments by important departments of the company, and on account of the sluggish economy in which the economy had been operating, there had been a reduced demand for purchases and a reduced demand for working capital. I will give the hon. company chairman his due even though he has not been responsible for the improvement in the liquidity of the company.

Of the second target he set himself last year, that of stepping up the rate of production of the company, that of stepping up its real growth, he has been able to report no success at all unless a 3% increase in production can be regarded as success; a 3% increase in production which barely covers the increase in the population. Of the third target, and I think the most important target, namely that of improving the shareholders standard of living by increasing dividends, he has had to present a picture of failure a picture of dismal failure; a picture in which the value of the currency in which he is dealing has decreased from February, 1972, to February, 1973, by 8,9%. Only by dipping deeply into his reserves has he been able to give any semblance of a maintained per capita income and certainly he has been able to show no measurable improvement in that per capita income.

On such a report as that which this company chairman presented this year I think the shareholders have every right to feel dissatisfied. One target achieved out of three, and that target achieved more by good fortune than by good management, is just not good enough. Shareholders are not impressed at annual general meetings by excuses that failures have been due to factors beyond the control of the board. They want to see in results what has been promised to them at the previous meeting. They are not impressed by promises that steps have been taken to see that problems that were experienced in the past will not happen in the future. As far as shareholders are concerned the chairman and the board of directors have failed to produce the results promised. They have let the shareholders down and the shareholders are entitled to clamour for a change.

In the Budget this year the hon. the Minister has rearranged his targets, he has rearranged his target priorities, and he has put as top priority growth in the economy. With that top priority we on this side heartily agree. We have consistently propagated that it is in real growth, in the creation of real wealth, and only real growth, that the solutions to our economic, our social, our political and our racial problems lie. It is in real growth also that the only way lies in which inflation is going to be effectively combated. I must say that while the Budget does contain a number of steps which are likely to encourage growth, particularly as far as the incentives to encourage fixed investments and to encourage exports are concerned, and while there are a number of conditions present in the economy at present which are conducive of short-term growth, I do not believe that the necessary steps have been taken, or are present in the economy, to lead to sustained growth over a long period. We on this side of the House in previous debates this session have already agreed that the easier money conditions and the easier availability of credit and of labour are favourable to immediate growth. Now, quite obviously, the pumping by this Budget of some R800 million into the economy by means of increased expenditure on Revenue and Capital Accounts must have a favourable effect on economic activity, as long as there is spare capacity in the productive machine to take up the additional spending which is going to be generated by the additional expenditure. Our concern—It is a very real concern—is one that is shared, I think, by most businessmen in this country, namely that some of the vital conditions which are necessary for sustained satisfactory growth over a long period are not present in the economy, and that it will therefore be necessary to apply the brakes within a year or two in the same way as they were applied a year or two ago. If this is going to happen, it is going to court inflation on a scale that will be quite unprecedented in this country. The last time brakes were applied it resulted in a stagnant economy. My fear is that if they have to be applied again within a year or two, it is going to result not in stagnation but in recession, and very likely it will result in the Government having to resort to further devaluation of the rand. If this happens, the Government will be inviting a highly dangerous situation as far as the political, social and racial spheres of the country are concerned. But if it is not to happen, the Government must act. Time is not on its side. Having pumped all this spending power into the economy, there must be no looking back as far as encouragement on the supply side is concerned.

I would like to deal now with three aspects of the situation where I think the danger lies as far as long-term sustenance of our growth is concerned. The first thing I would like to look at is the Budget itself. The Budget this year is a deficit Budget on the grand scale; it is what I would call “a printing Press Budget”, because the hon. the Minister of Finance is going to finance his expenditure to an appreciable extent by the creation of money which he is not taking out of the economy. The Minister is taking R298 million from the Tax Reserve and the Stabilization Accounts to balance only his Revenue and Expenditure Accounts. He is taking a further R109 million out of the Stabilization Account to balance his Capital Account. He is having to do this at a time when revenue is buoyant, when the economy is expected to grow, when he can reasonably expect huge windfalls as the result of the higher price of gold on the free market, windfalls from taxation on the gold mines and from taxation on the dividends of the gold mines. He is having to do this at a time when company profits and company taxation are expected to grow. Despite these favourable conditions, the hon. the Minister is still not able to make ends meet unless he were to resort to increasing taxation to an intolerable extent. I would like to ask him what is going to happen when these reserves are exhausted. The deficit this year is going to wipe out his Tax Reserve Account; it is going to take a great part of his Stabilization Account. Once the reserves are exhausted, he is faced with the alternative of either having to pull in his horns as far as expenditure is concerned or of increasing taxation. This is something that we on this side of the House warned him about at least two years ago. Surely the Government should have learned a sharp lesson as a result of the operations of the Railways and the operations of the Post Office, where one year they operate on a deficit and the next year they increase their tariffs substantially. This is just what we are inviting to happen to the country as a whole, but still, despite this, the tendency for Government expenditure to eat up an increasing part of the gross domestic product goes on.

Last year Government expenditure amounted to 18,7% of the gross domestic product. This year I estimate that the figure will be well over 20%. I would have been very much happier if the increase of expenditure had been concentrated more on Capital Account than on Revenue Account because then we would at least have had something to show for the increased expenditure; we would have had something to show by way of an improved infrastructure, improved schools, roads, housing, etc., but in fact capital expenditure, as a percentage of the gross domestic product, has not shown any increasing tendency. In fact, in comparison with 1971 it is actually a lower percentage; it has fallen from 6,4% to 5,6%. Mr. Speaker, higher and higher Government expenditure, financed by deficit budgeting, is not the recipe for longterm growth; it is the very opposite of it. We do not want to see Government expenditure on Revenue Account growing so rapidly that it is the fastest growing industry in the country, because that is exactly what it is at present; there is no other industry that is growing by more than 20% in a year. We do not want to see State expenditure, which is the least productive of our activities, increasing in this way. If expenditure is going to continue increasing and if deficit budgeting is going to continue, then as sure as night follows day the economic brakes will have to be applied, and applied sooner rather than later. What we need in South Africa is some long-term planning as far as State expenditure is concerned so that the peaks and the valleys from year to year can be smoothed out. I thought that there was a Cabinet Committee that was responsible for long-term planning of Government expenditure, but as far as I can see that is one of the nonfunctioning Cabinet committees.

The second reason why I believe that long-term growth is by no means assured, is that the Government’s more enlightened labour policy, which it has adopted from this side of the House, in regard to the reclassification of skilled work, and in regard to the provision of educational and training facilities for Bantu workers, not only in the Bantu areas but also in the White areas, does not go far enough. It falls far short of the crash programme which our Leader proposed two or three years ago as the solution to the labour problems in South Africa. The economy will not pluck the fruits of this more enlightened Government policy until greater mobility is permitted to the Bantu to offer his services geographically where they are needed and within the industries where they are needed; until he is permitted to offer his services in jobs he is capable of doing. We will not pluck the fruits of this policy until the Government recognizes that the Bantu in the urban areas are permanent urban dwellers, permanent urban dwellers with desires for security, permanent urban dwellers who have wants that they want satisfied, such as housing and the ability to own houses, and the other requirements which we take for granted, such as family life. The training schemes in the White areas will not bear fruit until those White areas are assured that Bantu will be available in them, and until they are assured that once the Bantu are trained under these training schemes they will be permitted to remain in the urban areas where their services are required.

Mr. Speaker, I consider that one of the main reasons which has been holding back growth in our country in our economy, and which will continue to hold back growth both in the short term and in the long term, is the fear which entrepreneurs have that once the economy gets moving, it will be bumping its head against bottlenecks and labour shortages in the same way as it did during the last boom period. This fear is a real one because it has been spelled out in black and white and in figures by the Department of Planning, showing exactly how many workers the economy will be short of at various rates of growth. This problem of labour can only be met if there is a realistic approach not only in regard to reclassification of jobs, not only in regard to the training of Bantu labour, but in all respects which affect Bantu labour.

Finally, as far as the factors which are militating against sustained growth are concerned, I think possibly the most important factor lies in the critical state of inflation at the present time, which runs at a figure of 8,9% from February last year to February this year. I do not share the Minister’s complacency, nor do I share the forecast of the hon. the Prime Minister’s Economic Advisory Council, that the rate of inflation may abate later during this year. I sincerely hope that he is right and that the council is right, but I do not think so. I believe that escalating costs, such as we are experiencing now and will continue to experience, escalating costs from the higher rail tariffs and the higher post office charges, and from increased wages, and particularly increased Bantu wages, which is a development which will continue, will outweigh the factors mentioned by the hon. the Minister which might lead to an abatement in the rate of inflation, the factors of cheaper imports from the United Kingdom and the U.S.A. and lower unit costs as a result of higher production. I believe, too, that the hon. the Minister is ignoring the chain reaction which is always present in an inflationary condition which becomes more virulent the higher the inflation rate. Inflation feeds off itself and it feeds off itself faster the higher the rate is. Inflation is probably the most devastating obstacle to real growth that the Government has to overcome. It saps the consumer’s ability to buy. It saps the individual’s ability to save. It saps entrepreneurs’ desire and ability to invest in real productive expansion, because it affects the demand for their goods and it affects their ability to make profits. Inflation makes some of the rich richer, but it makes the great majority of people poorer. That is why this Budget fails and fails miserably in one critical respect: Far too little has been done to lower prices directly.

I do hope that the lower sales taxes, which are to be applied to a range of domestic goods, will lead to lower retail prices, but I think that this is by no means certain, because most manufacturers are suffering from escalating costs and they are looking for ways of increasing their prices, or if they are not increasing their prices, they will be inclined to use the reduced sales tax to stabilize rather than lower prices.

I think that the Government has lost a golden opportunity in this Budget to combat inflation. Think what a reaction a reduction in the price of petrol would have had! It would have benefited not only the motorist directly; it would have benefited everybody because petrol is a cost in the running of every business, it is a cost in the running of every organization, it is a cost in every farm and every institution. I know that the hon. the Minister is going to say that he cannot please everybody and that he cannot give everything away. We are not asking him to do that. What we are asking him to do is to treat inflation as the crisis situation which it is and to apply powerful remedies to combat it. The hon. the Minister has failed the country by failing to do this.

I should like to conclude by saying that if growth is to be continuous and if growth is to be long term and not run into the application of brakes as it did two years ago, an application of brakes which on this occasion could be very dangerous and put the economy into a skid, the hon. the Minister must act now to tackle and to remove the obstacles which are preventing longterm growth, some of which I have mentioned.

Mr. Speaker, after listening to the hon. member who has just resumed his seat, and also to other hon. members opposite, I can arrive at no other conclusion but that that company over there is going into liquidation. To me it is clear that they have no plan of attack. They covered the whole field. The issues were the under-privileged, housing, inflation, food prices, the training of non-Whites, and such a song of lamentation was raised about that that Jeremiah would have blushed if he could have heard it. What I find so strange is that every year the Opposition tries to make us believe that certain proposals which they have made to the Government from time to time have subsequently been adopted by the Government. The question I would like to ask them, however, is why, after 25 years, they are still struggling to convince the voters to accept their proposals.

The financial and fiscal aspects of this budget have been replied to so conclusively that I think that to elaborate on them at this stage would really constitute a repetition of facts. I would therefore like to extend my thoughts a little by discussing the importance of the gold-mining industry in the economy of the country. The gold-mining industry is a most important cornerstone of the economy of the country. That no one can deny. We owe the prosperity and welfare which is being experienced today to the fact that gold has proved itself to be the anchor to which the monetary systems of the world have to be coupled. It was fitting that the hon. the Minister should have told us last year that 1972 would perhaps be a golden year in the development of the economy of our country. Today one is inclined to say that the year 1973 will be a golden year for the Republic of South Africa in the literal sense of the word. As a result of the fact that the official gold price has been increased, phenomenal price increases have occurred on the free market and this has earned valuable foreign exchange. This contributed in large measure to our unfavourable balance of payments shrinking remarkably to only R97 million during 1972. Our gold and foreign reserves have already exceeded the R1 000 million mark and are still rising rapidly. Now we must remember that last year it was predicted that our gold and foreign reserves would reach R900 million before the end of the year; in fact, we have exceeded the R1 000 million mark.

In recent years there were many people who asked whether there was still a future for gold. Today there is an answer to that question. Trends in the gold trade and in this Budget which we have before us have to some extent supplied an answer to that question. The unheard-of increases in the price of gold have not only had a substantial influence on gold production in our country, but what is to me of greater importance is that it has extended the life of our mines. The pegging of the gold price at the Bretton Wood agreement, pinned down the gold-mining industry with rising production costs on the one hand and the resultant lower profit margins on the other. The result of this was that in many instances mines were forced to mine only the rich gold-bearing ore and to leave the poorer gold-bearing ore in the mines. During a visit which I paid to one of the mines, I saw for myself that there were many tons of low grade ore lying at the bottom of the mines waiting to be brought to the surface and processed one day when the gold price was increased. It is interesting to know that the prices of various metals between the years 1934 and 1967 rose as follows: The price of silver rose by 223%, the price of copper by 354%, the price of lead by 263%, the price of zinc by 233%, tin by 194%, and gold by 0%. In other words, the gold price did not rise at all. Fortunately, the year 1968 ushered in a new era for our gold-mining industry because it was during this year that attempts to peg the gold price at the level where it had been for the previous 34 years, were abandoned. The result was that the pool sold approximately 2 500 tons of gold—that is equal to two years’ gold production which, calculated at $35 had a value of R2,8 million.

After analysis it appeared that the authorities had stared themselves blind at the monetary value of gold and had not taken into consideration the demand which exists for the industrial use of gold. Gold is a metal—and the hon. member for Parktown also sang its praises—which is very flexible and malleable and goldsmiths can fashion it into anything. It is heat-resistant and a conductor of electricity which causes it to play an important role in the instruments and implements used for space exploration. These extraordinary properties of gold resulted in the utilization value of gold assuming a very important place in our modern electronic age. As a result the demand for gold increased. Between the years 1968 and 1971 the utilization of gold as a result of its industrial value rose as follows: In 1968, 928 kg were used for jewellery as against 1059 kg in 1971; in electronics, 84 kg were used in 1968 as against 91 in 1971; in dentistry 72 as against 76; in other industries, 61 in 1968 as against 75 in 1971; and for coins and medallions, 127 as against 111. This should be seen against the world production of gold during the same year. The free world produced 1 262 kg in 1968 as against 1 225 in 1971.

There was therefore a decrease in the production of gold. From this we may deduce that the utilization demand for gold already exceeds the annual production of the free world. The question which one cannot help asking oneself now is: Do we accept that gold has become an indispensable metal in society, whether as a monetary or an industrial metal? The second question we must ask ourselves is: What is the lifetime of the gold mines of our country? It is worrying to read in the Economic Development Programme for 1972-'77 on page 61:

Now I am particularly interested in the low-grade gold mines of which there are a few in my constituency. As has already been said, much low-grade ore is present in some of the gold mines. With the higher price of gold, the low-grade ore can be refined economically, it can push up gold production and it can prolong the life of the gold mines. The analysis of the mines of the Union Corporation group will prove my statement. At the price at which the ore reserves of this group were calculated in 1971, the reserves at that stage were put at altogether 21 750 000 metric tons. With the more realistic price of R1 300 per kg the reserves increase to more than 30 million kg for 1972, an increase, therefore, of 50%. This marked increase in the ore reserves of the group is owing to the fact that the higher price makes it possible to refine ore of a lower grade as well. Thus one finds that a mine such as St. Helena in my constituency is able, at a price of R956 per kg, to refine ore reserves of 8 million tons with an estimated average gold content of 18,5 kg per ton. This gives a mine a potential gold production of 148 000 kg. A price of R1 300 per kg makes it possible for the mine to process no less than 10 million tons of ore, with an average gold content of 16,5 kg per ton. This pushes the potential gold production up to 165 000 kg, therefore from 148 000 kg to 165 000 kg. Consequently, the higher the gold price the higher the potential gold production of the existing mines.

I must point out that the price of R1 300 per kg as against the prices which are being attained today may be regarded as very conservative. The new era in the gold industry has therefore placed a great responsibility on the State and on the gold-mining industry. This is an opportunity which must not be missed if we are in earnest about guaranteeing stable economic growth in the future. The responsibility is to seize the opportunity presented by the increased gold price and to oblige mine owners to develop and refine low grade reefs rather than make big profits and in so doing reduce the production potential. This will ensure that the gold-mining industry will, for a long time to come, remain the anchor to which the economy of the country will cling. It will ensure the economic growth in the country in years to come.

Mr. Speaker, I must congratulate the hon. member for Virginia on delivering an exceptional address on the gold-mining industry. I listened to him very carefully and having had some experience in the industry myself, I felt I could not have said it better. I think what he said was both uncontroversial and totally acceptable by this side of the House.

There are one or two comments I would like to make. The hon. member for Virginia said he thought it would be advisable for the State to compel the gold-mining industry to mine lower-grade ores. I believe the gold-mining industry is well aware of the enormous opportunity which the increased price of gold is providing to lengthen the life of its mines. It is correct, as the hon. member for Virginia said, that when the price of gold rose, it increased effectively the quantity of gold contained in the ore bodies, because it made the lower-grade ores exploitable. The consequence is, of course, that the additional ore body which was thus created by this increased price of gold, does give a longer life to the gold mines. I hardly think it necessary that the State should compel the gold mines to mine lower-grade ores. I do not believe it is for the State to judge which mines are in fact exploitable at those prices. This is a highly technical operation, one which the gold mines can best judge for themselves. But generally speaking, it is certainly their policy to mine those ore bodies which are exploitable at the current price. I believe that they will be acting against their own interest, as well as the interest of the country, if they fail to do so, and thereby to lengthen the life of the gold mines.

The other point which rose from the remarks made by the hon. member for Virginia was the question of rising costs. Rising working costs in gold mines are like the cost of living in our own lives. Working costs are to gold mines what the cost of living is to private people. I have recently been looking at some of the reports of the various mining groups, and it is a most startling fact that working costs this year have risen by something like 11%. This is a figure even greater than the rise in the cost of living or the escalation of prices in our economy. If this tendency persists, the bonuses, the bonanza, the advantages which the gold mines have achieved through an increase in the price of gold will be eliminated. It means that the very lengthening of the lives of mines, of which the hon. member for Virginia spoke, will in fact again be decreased, because as the working costs of mines rise, it becomes less profitable to mine these lower grade ores. This increased working cost has the effect of reducing the lives of mines, the size of the ore body and the profitability of mines and their value to the economy of South Africa.

I will come back to this question of inflation, because I believe it is a raging disease in our economy. I believe it not only affects the gold mines, but indeed all aspects of our economy. Unless this raging disease is checked, we shall be in very grave difficulty in South Africa.

It is a world disease.

I will come to that as well, for the benefit of the hon. member.

I watched, with my usual admiration, the hon. the Minister of Finance dealing with a very difficult subject. He reminded me not so much of a philosopher or of a literary figure, or even a company director, as of a juggler; because the hon. the Minister was trying vainly to keep three balls in the air. The hon. the Minister is a very astute juggler with figures, but when he juggles with balls, he tends to have one in the air and two on the ground. The three balls with which he was juggling were, of course, the balance of payments ball, the inflation ball and the growth ball. Temporarily, he has been able to keep the balance of payments ball in the air. In fact, he has tucked it under his arm while he picks up the other two balls from the floor.