Pursuant to Proclamation No. 147 of the State President, dated 23 June 1962, the summoning of Parliament to meet on this day for the dispatch of business, members met in the Assembly Chamber of the House of Assembly, Parliament Houses, Cape Town, at 11.30 a.m.

Mr. SPEAKER announced that during the recess a vacancy had occurred in the representation in this House of the electoral division of Florida owing to the death of Mr. H. G. Swart on 11 July 1962.

Mr. SPEAKER announced further that the following vacancies had been filled during the recess, viz.:

1. (1) Kroonstad, on 30th July 1962 by the election of Mr. Alwyn Louis Schlebusch.
2. (2) Florida, on the 12th December 1962 by the election of Mr. Hyman Miller.

Mr. A. L. Schlebusch, introduced by Mr. J. E. Potgieter and Mr. J. J. Fouché, made and subscribed to the oath and took his seat.

Mr. H. Miller, introduced by Mr. Tucker and Brig. Bronkhorst, made and subscribed to the oath and took his seat.

Mr. SPEAKER announced that on behalf of the House he had accepted the new gold mace presented to the House of Assembly on behalf of the Gold Producers’ Committee of the Transvaal and Orange Free State Chamber of Mines at a function held in the Gallery Hall yesterday.

Mr. Speaker and Members then proceeded to the Senate House to attend the ceremony of the opening of Parliament, and on their return,

Mr. Speaker took the Chair and read prayers.

Mr. Speaker appointed the Prime Minister and Sir De Villiers Graaff a Committee to assist Mr. Speaker in regard to the printing of the House.

Mr. SPEAKER appointed the following members to constitute with Mr. Speaker the Committee on Standing Rules and Orders, viz.: The Prime Minister, the Minister of Lands, the Minister of Foreign Affairs, the Minister of Finance, the Minister of Transport, the Minister of Social Welfare and Pensions, Sir De Villiers Graaff, Dr. A. I. Malan, Mr. J. E. Potgieter, Mr. Higgerty, Mr. Waterson, Mr. D. E. Mitchell and Mr. Bloomberg.

Mr. SPEAKER reported that the House had this day attended the ceremony of the opening of Parliament, and that the State President had been pleased to deliver an Address to both Houses of Parliament, of which, for greater accuracy he had received a copy, as follows:

Mr. President and Members of the Senate:

Mr. Speaker and Members of the House of Assembly:

The country’s economic balance sheet with the outside world showed a very favourable trend during 1962, and the year could be concluded with the foreign exchange reserves at a higher level than at any time during the preceding 15 years.

During the first quarter, the balance of trade came to within a few million rand of being in equilibrium, while the balance of trade during the second quarter, for the first time since the Second World War, showed a credit balance, namely R11,000,000. During the year as a whole exports should, according to estimates, be approximately R21,000,000 higher than those of 1961, while imports, as a result of increased internal activity, should increase by approximately R28,000,000.

The international terms of trade, as far as South Africa was concerned, remained more or less unchanged during the year.

The balance of payments on current account has also been reinforced by the further expansion of gold production. The value of gold output increased by no less than an estimated R50,000,000 above that of the previous year and so made a valuable contribution towards the increase of the country’s foreign exchange earnings.

Resulting from, inter alia, a decrease of the Republic’s foreign capital liability, the invisible items on current account will, it is expected, require considerably less foreign exchange during 1962 than the previous year, and the year’s credit balance on current account will possibly be as much as R80,00,000 more than in the previous year.

Mainly as a result of bigger repayments of foreign obligations, and the arrangements which were made to stabilize the foreign market prices of South African securities, the unfavourable balance on the capital account of the balance of payments will be higher in 1962 than in the previous year. The balance of payments as a whole will, however, show a considerable credit balance. This has already found expression in the level of the Reserve Bank’s gold and foreign exchange reserves. These reserves increased by R 154,000,000 to R430, 800,000 in the course of the year to reach a level three times as high as that to which it Had declined in June 1961.

In view of the strong and sustained improvement of the exchange reserves during 1962, the Government found it possible further to relax the control measures which are still being maintained on capital exports and merchandise imports. These relaxations were brought about in a manner thoroughly consistent with the country’s interests. In the field of commodity imports the relaxations were designed in a manner thoroughly consistent with the country’s interests. In the field of commodity imports the relaxations were meant to facilitate the procurement of industrial requirements and to prevent internal price increases, while the relaxation of the capital control measures were aimed at giving overseas industrialists, intending to establish themselves in the Republic, the benefit of the price differential existing for South African securities between the London and local Stock Exchanges.

The year 1961 revealed the one weakness that, while personal savings increased considerably, personal consumer spending as well as internal capital formation remained sluggish and even declined somewhat on balance. During 1962 this trend improved noticeably. In the first place personal consumption which already showed signs of revival at the end of 1961, revealed a continued increase during 1962. The improvement became very clear during the third quarter and although statistical data for the fourth quarter is not yet available, the indications leave no doubt that the upward trend has continued and has possibly become stronger. The spending on durable consumer goods has increased particularly.

The domestic investment also revealed a rising tendency. This rise cannot be attributed to bigger investment in inventories but rather to fixed investment by private enterprise, and more particularly in building and construction by the manufacturing industry, that is that form of investment which would be of the most direct benefit to national production.

As in recent years, the gross domestic savings during 1962 were more than sufficient to finance gross domestic capital formation. However, this does not mean that the Republic now wants to be completely independent of foreign capital. The Government will continue with the traditional policy of extending hospitality to foreign capital, because such capital, and the know-how and knowledge which accompany it, may still make a valuable contribution towards the maintenance of that rapid rate of growth and development of which our human and material resources are capable.

Similarly as far as the financing of the development programme of the State is concerned, the Government will continue to obtain the necessary finance partly from overseas, thereby preventing too heavy demands being made on internal capital resources. Meanwhile, it is reassuring to know that the foreign component of the national debt has diminished to a level where it can be repaid by only three-and-a-half months’ gold production.

The relative sluggishness of personal consumer spending and investment in the first half of 1962, together with the strong active balance of payments, contributed towards the creation of conditions of exceptional monetary liquidity in the Republic. The discount rate of the Reserve Bank was consequently reduced twice in the course of the year, and other short-term interest rates followed this movement. The revival of consumption and investment has apparently already begun to assert its corrective influence and in recent weeks have shown greater stability. The monetary and banking situation nevertheless remains very favourable for economic expansion.

The signs of economic revival which have already been referred to in connection with private consumption and investment, can be perceived in various sectors of the economy.

Secondary industry, which still retains the greatest single share in the national income has during the past year shown satisfactory progress in most branches, and important developments are in prospect for the future. For instance, notable expansion has been announced with regard to the manufacture or processing of poplin, ferrochrome, aluminium, coking coal, phosphates and fertilizer, and in some cases work has already been started. Plans for the establishment of a third refinery for the refining of imported crude oil have also been announced. Another development worth mentioning, which will shortly commence, is the establishment of a synthetic rubber industry, to which Sasol will also make an important contribution.

Special mention should be made of the steps announced recently to encourage the manufacture of a wider variety of motor vehicle components in the Republic.

Mention should also be made of the Government’s project to encourage the textile industry, especially in the border areas, by providing facilities such as factory buildings for intending manufacturers.

The building industry is also participating in this revival and the prospects, as reflected by the statistics of approved building plans, show a considerable improvement over those of last year.

The agricultural sector, as usual, had to cope with its own special problems.

The climatic conditions during the past year were, generally speaking, not favourable for the agricultural industry. But in spite of this, agricultural production reached record levels in several fields.

The surpluses of certain products created a marketing problem for the Government, the marketing boards and the producers. The attempts to promote internal as well as overseas sales, produced encouraging, if not really spectacular results.

The farmers courageously coped with weather conditions and adjusted themselves to the higher-rising cost structure, by means of more efficient farming methods and increased production per unit. Where necessary the Government rendered assistance by extraordinary relief measures.

In general, record summer crops were harvested and agricultural production as a whole increased compared with the previous year.

In the mining sector satisfactory progress was made. Gold production has during the past year reached a new peak, and still shows a rising tendency, although the problem of the marginal mines should not be lost sight of. With the continued encouragement of the Government, the local processing of minerals prior to export has been further expanded.

In commerce, retail sales recently showed an improvement, and further improvements are generally expected. The relaxation of import control ought to further stimulate this sector.

The Railways had to contend with difficult problems, but nevertheless transported a record tonnage. A remarkable milestone for this sector was the introduction by the Railways of the first electric unit manufactured wholly in South Africa.

The general economic revival, together with the liquidity of the economy, brought about a remarkable revival on the stock exchange and the prices of gold mining shares, and especially of industrial and commercial shares, rose considerably.

One of the most encouraging results of the economic revival has been the sharp increase in the demand for labour.

The Government is giving serious consideration to the problems which may arise in connection with export products if the United Kingdom should decide to join the European Common Market.

The successful immigration campaign will also have a favourable effect on the economy.

The past year brought little improvement in the international situation. In fact, there has been a deterioration which reached its climax with the Cuban crisis in October of last year and which brought the world to the brink of a third world war.

Also in other parts of the world there have been clashes endangering international peace, for example, in Laos, Vietnam, Yemen and elsewhere. India’s earlier aggression against Goa was ironically followed by Communist China’s invasion of India itself. Most important of all, the Berlin issue remains to be resolved if a clash between the Western powers and the Soviet Union, together with its allies, is to be avoided.

Another disturbing fact is that, in spite of long drawn-out discussions at Geneva and in the United Nations, Soviet intransigence has made impossible any progress in the attempts to eliminate the use of nuclear weapons. Meanwhile, the leading nuclear powers are continuing to compete with each other in developing and producing more effective and deadlier nuclear weapons together with the means of using them over increasingly longer distances.

These events during the past twelvemonths have once again demonstrated the inability of the United Nations to preserve international peace and security, the main purpose for which it was established. Different factors have been responsible for this failure. The main factor is that the United Nations has in increasing measure disregarded the ideals and purposes of its founders, as set out in the Charter. Rival ideological and political blocs have been formed, and this has led to issues being decided not on their merits but in order to serve the interests of a particular group of states, thus often leading to the application of double standards.

Within the United Nations as such, particularly as reflected in the General Assembly, there has been, as a result of the considerable increase in membership, a shift of power in favour of the Afro-Asians and away from the West. This is making it progressively more difficult for the Western countries to act effectively in the General Assembly. In fact, the stage has been reached where the majority of the Afro-Asians, often acting in concert with the Communist countries, are in control of the General Assembly.

It is in the light of these changed conditions and the shift of power that has taken place during recent years, that South Africa’s relations with the United Nations must be seen.

As early as the First Session of the United Nations General Assembly in 1946, South Africa was attacked because of the alleged oppression of its Indian population and in connection with South West Africa. With the considerable increase in the number of African members, now numbering 33 as compared with only four in 1946, these attacks have increased in intensity.

At the 1961 Session, and again at the recent Session of the General Assembly, South Africa was subjected to a sustained attack of false accusations and vilification, in which practically all the Afro-Asian delegations joined, assisted by the Communist countries. This was climaxed at the recent Session by the adoption of a resolution recommending a series of sanctions against South Africa.

The attacks on the White man in South Africa are no longer confined to the General Assembly of the United Nations; during the past year they have spread to other fronts, such as, for instance, technical and other organizations on the Continent of Africa, established for the purpose of co-operation and mutual assistance, and this in spite of South Africa’s useful contributions.

Notwithstanding attempts at sabotage in South Africa, inspired and partly directed and financed from outside the Republic, peaceful and orderly conditions prevailed. The Government has made it clear that it will deal most severely with persons guilty of this form of terrorist activity.

The Government will not be deterred by intimidation, either from outside or within the borders of the Republic, from proceeding with the policy which it firmly believes is in the interests of all sections of South Africa’s population—a policy which can best be described as one of friendly co-operation.

This is also the Government’s policy in regard to its relations with other states in

Africa, namely, a policy of willingness to co-operate with those countries in regard to matters of common concern on a basis of mutual respect. As in the past, the Government of the Republic will continue to make available its specialized knowledge and also technical aid to African Governments which directly seek, or make known, their desire to receive such assistance.

For more than a decade the outside world has been misled by a distorted picture of South Africa. Lately, however, increasing numbers of overseas visitors have testified to the orderliness and progressive character of a country which they find compares favourably with that of other Western countries. This favourable testimony when repeated in their respective countries, has also helped to create a better understanding of South Africa’s problems and of Government policy.

Outside observers are now inclined to compare conditions in South Africa with those obtaining in many of the African States. The comparison is indeed so favourable to the Republic that criticism is gradually giving way to second thoughts and caution.

Furthermore, thoughtful people abroad are beginning to show an increasing appreciation of the Republic’s firmness of purpose and its determination to solve its problems in its own way and with fairness to all. Conservative elements in the West, are beginning to accept South Africa as the real bulwark against Communist penetration in Southern Africa.

Notwithstanding the confused international situation, the general optimism existing in the Republic of South Africa is not misplaced.

The legislative programme which you will be asked to consider, will include, inter alia, the following: A Bill to extend the Territorial Waters of the Republic of South Africa and of South West Africa; a Bill consolidating and amending the Work Colonies Act, 1949; and a Bill on Entertainment and Publication; a Nature Conservation Bill; a Bill to provide for the establishment of a National Film Board; a Bill to amend the Natives (Urban Areas) Consolidation Act, 1945; and a Bill amending the Trades Coupons Act, 1935. Proposals are also being introduced with regard to amendments of the Patents Act, 1952 of the Coloured Development Corporation Act, 1962; of the Slums Act, 1934; and of the statutory provisions concerning the control, improvement and development of rural Coloured Areas. A Bill to provide for the transfer of Coloured Education to the Department of Coloured Affairs will be submitted for consideration. A Liquor Amendment Bill, a Maintenance Bill and a Bill on Sunday Sport and Entertainment will also be introduced.

Further legislation will be placed before you: introducing the Pay As You Earn system of tax collection; amending the Motor Vehicle Insurance Act, 1942; giving effect to the agreement reached, after full consultation with the Bantu authorities concerned, on a Constitution for the Transkei; and legislation making necessary changes in the Hire-Purchase Act, 1942. A Shops and Offices Bill and a Bill to amend the Apprenticeship Act, 1944, will be considered. Amending legislation will also be introduced affecting the Mines and Works Act, 1956, and the Pneumoconiosis Compensation Act, 1962. Legislation concerning Air Pollution, Medicines and Medical Aid Schemes will furthermore require your attention.

Mr. President and Members of the Senate:

Mr. Speaker and Members of the House of Assembly:

Late Mr. H. G. Swart

Motion agreed to unanimously, all the members standing.