Mr. Speaker, I move—

The Bill before the House contains important amendments to the Limitation and Disclosure of Finance Charges Act, amendments which are urgently necessary.

The principal Act prescribes the maximum finance charge rates which moneylenders and credit grantors may charge in connection with money-lending transactions and credit transactions. Except for a minor adjustment which was made to facilitate the application of the rates in practice, the prescribed finance charge rates have remained unchanged since the commencement of the Act on 1 April 1969. On the other hand, interest rates at which moneylenders in particular, such as banking institutions, receive money on deposit from the public, have increased considerably. Consequently the difference between the rates at which money was accepted and the maximum rates at which that money could, in terms of the provisions of the Act, be placed on loan again has decreased to such an extent that an adjustment had to be made to the prescribed maximum finance charge rates. The greatest pressure was experienced in the case of the finance charge rate of 12% which applied in respect of money lending transactions in excess of R400. Since the principal Act prescribes fixed rates, it was not possible to make the necessary adjustment in terms of the provisions of the Act and, as an interim measure, the provisions of the Currency and Exchanges Act 1933, were utilized to increase the finance charge rate for money-lending transactions in excess of R400 to 14% with effect from 14 August 1974.

Experience has shown that it is in the interests of the national economy that it should be possible to adjust the finance charge rates prescribed by the Act when a change in circumstances makes such an adjustment essential. Consequently the amendments envisaged in clause 2 empower the Minister of Finance to increase or decrease by regulation the finance charge rates at present prescribed in the Act. Furthermore, the Bill provides for the making of regulations in terms of the Act with retrospective effect as from 14 August 1974, to substitute the interim measure introduced in terms of the provisions of the Currency and Exchanges Act, 1933, to increase finance charge rates for loans in excess of R400.

A further important provision is the exemptions envisaged in clause 4. The existing section 15 of the principal Act exempts certain transactions, as well as the Land and Agricultural Bank of South Africa, from the provisions of the Act. The amendments which are now being introduced by the clause, envisage that, over and above the existing exemptions, the South African Reserve Bank as well as any money-lending transactions concluded between borrowers in the Republic and moneylenders outside the Republic, shall be exempted from the provisions of the Act.

The exemption envisaged in respect of the South African Reserve Bank is essential for monetary control purposes. The finance charge rate at which a loan is granted by the Reserve Bank, is determined with a view to and in the interests of the general monetary circumstances prevailing when such a loan was made.

The exemptions envisaged in the case of loans concluded outside the Republic, are equally important. Major companies and other bodies in the Republic sometimes find it necessary to borrow money outside the Republic to satisfy their financial requirements. The finance charge rates at which such loans may be raised, are sometimes higher than the maximum rates allowed by the Act. Since foreign loans are usually raised for the financing of major capital expenditure or for the redemption of existing loans, it is in the interests of the economy of the country that, where necessary, such loans be allowed even if the finance charge rates at which the loans were concluded are higher than the maximum rates allowed by the Act.

Mr. Speaker, the amendments envisaged in this Bill, serve to adapt the principal Act to a change in circumstances.

Mr. Speaker, let me say in the first instance that I am indebted to the hon. the Minister of Finance for the courtesy shown me in not dealing with this particular matter on a day when for religious reasons I was unable to be here. May I say initially that perhaps not all the time I devoted to those religious pursuits was lost in relation to this legislation before the House. I should like, if I may, to commence my address on this subject by quoting from the Old Testament, which is not inappropriate in view of what the hon. the Minister has said. I quote from Leviticus 25: 35—

This is something which perhaps in this modern age should be thought about more often.

It is perhaps also not inappropriate in regard to the methods adopted in this legislation to quote from the New Testament as well. I should like to remind the hon. the Minister of a passage from Luke, 19: 23-

That, Sir, is advice which others might also well take in relation to the investments which are made today and when in fact the hon. the Minister is experiencing serious problems in relation to grey markets and the investment of money in institutions which are not registered financial institutions in South Africa. The one aspect, which is perhaps the most important of this proposed legislation, is that the amendment is designed to allow maximum finance charges to be altered by way of regulation. Sir, rates in respect of finance charges, or interest as it used to be called in some respects in the olden days, are prescribed not only for economic reasons but for reasons of public policy and also for socioeconomic reasons. Sir, history has unlimited examples of the exploitation of the needy over the years. If I may refer again the Old Testament, the first examples of this type of activity occurred when the children of Israel were in captivity and property was in fact mortgaged, because before that day they were not a commercial community. Sir, the history of the world is full of examples of the exploitation of needy people as the result of which, for social reasons, it was necessary to place a restriction upon the interest rate that could be charged. But, Sir, when it comes to commercial matters, the position is quite different, particularly if people are bargaining from the same positions of strength, and in that type of activity the need for control, or some degree of control, is less social; it is more related to the monetary and financial situation in the country from time to time. I think it is a matter of some regret that today we may well be seeing the end of an era in which the maximum rate of interest has been 12%, a rate which has stood the test of time through both difficult times and through flourishing times in South Africa. In 1926 when this legislation was enacted the maximum interest rate for certain loans was pegged at 12%, and today, in the year 1974, we find that economic circumstances and monetary conditions not only in South Africa but in the world as a whole have created a situation where I think that the hon. the Minister had no alternative but to act in the manner in which he did act if he was to act responsibly and in the interests of South Africa, and for that reason one must agree with the principle which is involved here. But, Sir, the question that must be posed is whether in fact it is desirable to have sliding rates, rates which may be adjusted by means of regulation. It is quite interesting, to note if I may refer the hon. the Minister to it, that in the year 1926 when the Usury Bill was debated, no less a person than Sir Ernest Oppenheimer addressed the House in order to advocate the very thing which the hon. the Minister is today suggesting. I quote from Hansard of 8 February 1926, in which Sir Ernest Oppenheimer, then a member of this House, is reported as follows—

Order!

Sir, apparently some hon. members have so much money that interest is of no consequence to them. Sir Ernest Oppenheimer went on to say—

Sir, what is also interesting is that this side of the House, when the 1968 legislation was introduced, similarly raised the issue as to whether in fact provision should not be made for sliding rates in this regard, and the then Deputy Minister, who has now passed to other pastures, is reported as follows at column 4647 of Hansard in 1968—

Then he goes on to deal with the details of it and finally comes to this conclusion, and this is the important point—

Sir, these are the operative words, “until changed by legislation”. My argument is strengthened even further when we look at the report of the 1967 committee of inquiry into the Usury Act. If you look at that report, Sir, you will see that there, too, the issue is put very clearly. In so far as this type of activity is concerned, there are three ways of dealing with the rate of interest, either to have it fixed or, alternatively, to have it changed by regulation or, alternatively, to have it changed by legislation, and the Committee stated at page 21 of its report—

Sir, looking at the historical background, looking at the authorities for the proposition that there should be legislation governing this fundamental matter in our whole monetary structure, I want to say immediately that there may well be circumstances from time to time which will not allow us to wait for Parliament to meet in order to bring about changes in the legislation. But, Sir, this is a matter which is of fundamental importance to the monetary structure, as I have indicated, and I do not believe that Parliament should entirely abdicate its rights in this regard. I believe that what one should do is to authorize the changes by regulation, but that such changes by regulation should only be in force for a period of for, say, 12 months. That would give the hon. the Minister ample time to come back to Parliament in order to amend the law or to get approval of these regulations or to get whatever other authority is required. But, Sir, I think with respect, that it would be unwise, for Parliament to abdicate its rights in respect of these matters which are so important in the monetary and financial structure of our country.

Then, Sir, I come to the second important point which the hon. the Minister raised and that is the question of section 4. I think there can be no quarrel with the exemption of the South African Reserve Bank from the provisions of this Act, and we support that provision without any qualms. The Reserve Bank acts as the instrument of the State in this regard and it is quite clear that it should have complete freedom of movement. For example, monetary policy may require that the penal rate which should be imposed upon institutions which come to the Reserve Bank as the lender of last resort should be such as to enable one to move absolutely freely in this regard, even though one hopes that one will never have to exceed the rate laid down in this measure.

Then we come to the question of lenders who are outside of the Republic. Here again, Sir we can have no quarrel, with the principle of this legislation, because quite obviously conditions in the money markets of the world dictate the rates, and if we wish to borrow overseas it is idle to legislate that people will not be allowed to borrow at the prevailing rate overseas if the State in fact wants people to borrow these.

Sir, there is only one matter to which I would like to draw the hon. the Minister’s attention with respect; as we all know, we have a rand currency bloc in Southern Africa. In the rand currency bloc there is freedom of movement of currency between the Republic of South Africa and Lesotho and Botswana and Swaziland. This means that it would be quite possible to form, for example, a company in Lesotho or Swaziland, to move money from the Republic of South Africa to Swaziland and then to lend that money to South Africa. Unfortunately, under the proposed legislation this would mean that the moneylender would then be outside of the Republic, and that moneylender would then be exempt from the provisions of this measure. This provision is due to the fact that we have free movement of currency in the rand currency area, and it seems to me in the circumstances that whereas the principle of this legislation is a laudable one and one that we will accept, it should in fact not apply to the three territories in Southern Africa with which we are associated in this monetary union, because if it did apply it would open the door to very substantial abuse. I would therefore ask the hon. the Minister to give his attention to this matter. We propose during the Committee Stage to move an amendment in terms of which we will seek to limit this type of loan to loans which come from areas outside of the rand currency area, in other words, not including these three particular States. So, of course, we can also look ahead a bit. We were told only the other day that the Transkei was about to become independent and other areas were about to become independent, and the same principle would then apply to those States which are part of a currency area where there could be free movement of funds from outside the Republic and where we could have this type of abuse.

There are, Sir, in addition to these matters I have raised, some other matters which the hon. the Minister might like to consider before tomorrow. That is that there are banks in South Africa which are South African banks but which operate also outside of South Africa. If such a bank were to arrange a foreign loan from outside South Africa without money from within South Africa, but with foreign money, I believe that such a banking institution should similarly be excluded from the provisions of this Act in respect of such a transaction. Let us take an example, namely that X bank, a South African bank, might have an office in Germany or elsewhere, and may raise German funds in order to lend it to South Africa. I think such a banking institution should also not be subject to this Act. Here the definition of moneylender in respect of a person outside South Africa should include a South African banking institution in so far as its activities outside of the Republic are concerned.

Then, Sir, just to come back to some minor matters contained in the proposed legislation. I think the provisions of clause 3 have not been explained by the hon. the Minister. They appeared to me not to be of tremendous impact. They appear to close a loop-hole, but it might be given. Then there is also the question, in clause 1, of the definition of the Republic to include the territory of South-West Africa. Now, the old legislation, the 1968 Act, contains in section 19 provisions which apply this legislation in certain respects to South-West Africa. But I would like, with respect, not only to draw the hon. the Minister’s attention to this fact but also that of other members of the Cabinet, that we believe that in the light of existing circumstances and political relationships which are developing, and the developments in South-West Africa itself, we believe that South-West Africa should legislate in respect of its own affairs to the maximum extent possible, and that this Parliament, with respect, should not seek to legislate in respect of matters which can be dealt with by authorities in South-West Africa.

My last point is in respect of clause 2. I believe that a number of consequential amendments will be required in respect of this particular amendment, and to these consideration must be given. The opening words of the new subsection (1) of section 2 are that “No moneylender shall in connection with any money-lending transaction stipulate for, demand or receive finance charges … Sir, that is all well and good at a time when rates cannot be altered and when in fact you cannot have a change in these rates, but the effect of this provision, in terms of which we can now amend rates, means for example that if a rate were 14% and the rate is then by proclamation reduced to 12%, the effect would be that whereas the initial stipulation was for 14% he would then only be allowed to receive the lesser percentage, and that really cannot be the intention behind this legislation because if money is financed by an institution at one rate, then that rate should be recoverable right until the very end of that transaction.

There are other consequential amendments which I believe are required. There is, for instance, section 4 of the Act which deals with matters which are affected by this Bill. Section 4 deals with the limitation of sums which are recoverable if there is a default or a deferment of payment. If, in fact, the charge which was made initially upon an extension of time is not capable of being increased, the result will be that debtors will not get any deferment of payment, will not get an extension of time, if in the meantime rates have gone up. I believe that section 4 needs amendment because if it is not amended the effect will be that debtors will find it very difficult to get an extension of time when rates of interest are on the increase. In exactly the same way section 6 of the principal Act would appear to require a consequential amendment in that, if there is an advance payment, the benefit given to the person making the advance payment is stipulated at 7½% per annum, and surely with the increased rates debtors should receive some degree of recognition so that if they make advance payments they should also get the benefit of increasing rates as now provided for in this legislation.

So, therefore, while we have no difficulty with the principles contained in this Bill, while we support the principle and recognize the necessity for the changes, we believe that there are amendments which are required in order to give effect to the principles of this legislation and close any loopholes which might exist.

Mr. Speaker, we on these benches also should like to support the principle of this legislation as it clearly reflects a necessary action to bring a part of the capital market into line with interest rates prevailing elsewhere. To that extent we welcome the measure in addition as it was proposed a long time ago, as the hon. member has said, by a past chairman of the Anglo-American Corporation. We would like to associate that with the proposal put forward here by the hon. the Minister of Finance. We should also like to make one further point. I am not so sure that I am in full agreement with the hon. member on my right in the sense that I am not so certain that this is a matter that can be dealt with only at one-yearly intervals. I feel that this is a practice which is adopted in other countries, i.e. giving Ministers of Finance the right to change interest rates at much quicker intervals than that. That is simply a reflection of the fact that the market does change extraordinarily quickly. Indeed, in this country we know that the S.A. Reserve Bank is at present pursuing a tight money policy, a policy which is holding back private enterprise in this country. The evidence is that the governor of the Reserve Bank has indeed issued a further instruction to the banks. It may well be that the hon. Minister is going to have to come back or publicly announce that the rate which he has already raised to 14% may well have to go even higher before the end of the year in order to meet the facts of the situation. One other point we would like to make concerns the dangers and difficulties which this situation and rates such as these cause for those who are in the worse possible position to resist them. We are thinking of those at the bottom of the salary scale—Black, Brown and White South Africans—and who, in the nature of events, tend to finance rather more of their consumption or purchases of durable goods by such measures as have been dealt with here. They obviously will feel this to a very great extent, and whereas I am not saying that in the circumstances anything can be done for them, what we would ask is that the hon. the Minister of Finance bear this in mind should it prove necessary to keep on raising this rate before the end of the year, and we would hope that as soon as it is obviously possible for him to do so, he will reduce the interest rate.

Mr. Speaker, since there is general agreement on the principle of the Bill, I do not think I need say much further. I can only say that to my mind this question of interest rates and the economy as a whole, not only in South Africa, but all over the world, is a matter of great importance these days. We all know that interest is asked, in the first place, because if one lends one’s money one no longer has that money at one’s disposal, and, secondly, interest is charged because of the risk factor involved in money-lending. Today we actually have another important factor— actually two important factors—in money-lending at various interest rates. The most important factor today affecting interest rates is the factor of inflation. I think everyone will agree with me that these high interest rates we have today are partly due to the rate of inflation which one finds in most other countries of the world. As a matter of fact, many of us when we borrow money do not pay any interest rates at all. We pay an interest rate of 10% when there is an inflationary rate of 11% but when we repay that money we are actually paying back money that is worth 11% less. It is really amazing that with these rates of inflation we have today, all over the world, that money rates are not much higher than they are. Money-lending is not a paying proposition today when you take the rate of inflation into account. But there is a fourth factor which is of great importance today in times of disturbances in the economic field, viz. money management. We all know that in times of inflation there is a tendency among Governments to keep money tight, and the best way of keeping money tight is by raising interest rates. When there is a time when you want to expand the economy you try to bring down interest rates in order to stimulate growth. Interest rates, therefore, do play an important part as an effect, and as a cause, of the economic circumstances of the day. We cannot simply leave them to follow their own way without State interference. I agree with the hon. member for Johannesburg North, but not with the hon. member for Yeoville, in this particular instance, viz. that the Minister should be much freer not only to increase, but also to decrease, interest rates. We are living in very unusual circumstances all over the world today. There are disturbances in the economic field—as a matter of fact, uncertainty and instability exist everywhere. These disturbances have an effect on interest rates and are such that we cannot come to Parliament only once a year to change interest rates but must be in the position to change interest rates whenever world causes or local causes force us to make these changes. We do not know what is going to happen in the next few months in the world. The outlook everywhere seems to be a bit dark. But it is not impossible, within the next few months or so, before we come to Parliament again, that interest rates in the rest of the world may be lowered. There are indications—I do not say there is proof—in America and elsewhere that interest rates are falling slightly. It could be possible, even in terms of this Bill when it has become law, that we might find ourselves in a situation next year that we might be forced to lower interest rates and not increase them. But the main thing is this principle which I think is accepted by everybody, viz. that at this time when there is this complete instability and complete insecurity in regard to financial and economic matters, we as a country where Parliament sits for only five months of the year, cannot wait for it to make the changes, because they have to be done immediately when required. I do not think I need to reply to other matters raised by hon. members on the other side. These matters can be more adequately dealt with during the Committee Stage and I will deal with them then.

Motion agreed to.

Bill read a Second Time.

Mr. Speaker, I want to admit at once that before the debate was adjourned, I made a mistake. I requested that Ben should be brought back, but after analysing the Budget that we are discussing this afternoon, I realized that the hon. the Minister has merely inherited this Budget. Therefore he is really the victim of his predecessor. I hope that we shall enlighten the hon. the Minister a little during this debate, so that he will not introduce a Budget such as this on his own responsibility in the future.

Ben was better!

I may well have said “Ben was better” in the shock of the moment. But even if that was wrong, the shock remains.

As in the case of the Minister, this is also the first time that I am acting as the chief spokesman of my party on the Railway Budget. He has subjected the structure of the Railways, Harbours and Airways to close scrutiny, and we on this side of the House have done likewise. We have focused attention on the role of the Administration, its duties and its responsibilities. Just as the hon. the Minister has given honest replies according to his view, we too shall try to suggest honest solutions and answers to these problems. But the difference between us is a matter of approach, whether or not one should consider this Budget in isolation. That is to say, one may consider this Budget in relation to the Railways only, or one may consider this Budget as being a part of the overall picture of South Africa and its economy. I am afraid that the hon. the Minister has tried to over-simplify things. He has tried to isolate the Railways from the requirements of South Africa as a whole. In analysing the Budget this afternoon, I think that we should examine it on that comprehensive basis. The hon. the Minister’s attitude is that the costs have increased, that we have had to grant wage increases and that we need more money. Therefore the consumer must simply pay more.

Then he came to the incredible conclusion that this Budget would cause an increase of only ½% in the cost of living. Can he really be so naïve? I think there must have been a short circuit somewhere in the department’s computer.

†I have read all the soothing, honeyed words that have been said, all the statements that have been issued about how it is only going to cost 0,17 cents more on a kilogram of butter from Bloemfontein to Johannesburg, etc., etc. We have not heard how much it would cost from Cape Town to Johannesburg and as one reads these statements, one is lulled into a beautiful sense of false security. One thinks, “Really, after all, it is not going to hit me so badly.” However, when one works it out, one finds that 0,17 cents per kilogram of butter means, in the measure in which one normally buys it, that by the time it reaches one’s table, it is an increase of 0,34 cents, a third of a cent on a pound of butter. One realizes that the R7 on one head of beef coming from South-West Africa to Cape Town is going to be a lot more by the time it comes through to the consumer. What the Minister has done, is to calculate at source the actual amount which an item on a restricted journey will cost more. The examples given, I know, are all carefully selected. But he has not taken into account that that item, shipped at source, goes to a wholesaler who takes his percentage of profit on what it costs landed in his wholesale store. It then goes, with the additional increase, with the percentage addle to the landing costs, to the retailer who then adds his fixed percentage cost. This is absolutely legitimate. The hon. the Minister in his previous capacity, would certainly have approved of that in exercising price control. So, the wholesaler adds his percentage and so does the retailer. Then you add “rationalization”—that wonderful term which spatters the Railway reports on tariff increases and by means of which certain tariffs and rates are rationalized. I have never quite worked out the technique but all I know is that rationalization means bumping up the amount by a few cents in order to get a round figure every time it is applied.

The cold hard fact is that the increase of 12,7% on the revenue of the Railways last year amounts to a sum of R171,8 million. That is what a 12,7% increase on the revenue means; based on the amount on which the hon. the Minister has calculated. In other words, it means that South Africa is going to pay R171 million more. It does not sound much when you say it quickly, but when you have added the wholesale escalation and the retail escalation, that figure is at least going to be double, if not more. Let us take it, and I do not think that the hon. the Minister will dispute it, that that figure will become R400 million over the counter for the ordinary buyer. I think that is reasonable; that is the normal escalation, i.e. that it will be double or slightly more after you have added various other factors which I shall deal with. That does not work out at much! For approximately 20 million people to pay R400 million works out at R20 per capita. However, that per capita includes children and babies. If you take an average family, it is going to cost the average family between R100 and R150 more per annum. I did not need a computer to work this one out. Computers produce an increase of 0,5%. However, I challenge any hon. member on that side of the House to dispute that this will cost between R100 and R150 more per annum for a family with four or five children in a home. It must be so. R20 per capita for a family of seven works out at R140 per annum. Let us apply this to a pensioner with an income of R57 per month. Here the increase does not work at 0,5% per capita. The cost alone, if you take an average spread of purchases is going to be 3% or 4% for that pensioner. The pensioner does not eat iron ore, he does not eat the low-rated traffic. He eats the vegetables and the agricultural produce which is to be transported at low rates by the Railways but all the manufactured goods which he needs fall under the high-rated goods. Immediately you find that the percentage of 0,5% becomes a mockery. The Bellville commuter, for the information of hon. member for Bellville, is going to pay R2,25 more per month if he travels by train.

He has said that no householder will pay more than R2 per month.

According to him nobody was going to pay more than R2 per month, but this is what this commuter has to pay only for his fare and nothing else. But then the other fares increases start to hit him. What is the position in so far as the resettlement workers are concerned? I have found out the exact definition—though I do not know how they get it—of resettlement, but it includes Soweto in Johannesburg, Germiston, Daveyton, Tembisa, Sibokeng, Aatteridgeville, Saulsville, Mamelodi, Ga Rankuwa, KwaMashu, Umlazi Crossmore, Nyanga, Langa, Lavistown and Bonteheuwel. For a period of a year up to 1973, which is over a year ago, half a million one-way journeys were undertaken by people living in resettlement areas daily. That means 1 million journeys per day— half a million each way. Now, increase the fares for a million journeys by 12%. The hon. the Minister went out of his way to say that there will be no increase in third-class fares—only the withdrawal of subsidies for resettlement areas. If you take one million journeys per day and you work out the effect of the increased fares, it means that they have to pay for more than just a few journeys in the course of the year.

What I have been dealing with, concerns only the basics, i.e. before you get to your secondary increases. With the increase in the tariff for coal, electricity must go up. Coal in the Cape is going to cost a tremendous amount more. Therefore electricity is likely to go up in many areas. Petrol, too, is likely to go up in the inland areas. Can the hon. the Minister give us the assurance that the price of petrol will not be increased? Even on Ali Baba, the pipeline which is the biggest thief from the ordinary motor car user in South Africa— bigger even than the traffic cops who hand out parking fines—the tariff is going to be increased even though the pipeline is making a huge regular profit year after year. Having taken the effect of tariff increases on the price of electricity and petrol into account, one has added another factor. The hon. the Minister appeals to commerce and industry please to absorb the “little” increase. He did the same in 1973 when he increased tariffs. There was an appeal from the Government: “Tighten your belts; fight inflation.” But having made that appeal, the Railways upped its rates a few weeks later.

He appeals to commerce and industry to absorb these increases, but he himself increases his own tariffs. Let me give you an example of a letter I have received only today from a manufacturer. This factory happens to be manufacturing tinned food, which is an essential commodity for many people, particularly people who do not have big fridges and who therefore buy tinned food which they can keep because it lasts for a longer time. I refer to the people who live in back-rooms, such as pensioners and people who do not have the facilities for cooking fresh food and therefore rely to an extent on canned fruit and canned vegetables. This particular factory has found that Metal Box—the only people who make these cans—receive their raw material in two stages. First the ore goes to the manufacturer of tin and then the manufactured tin goes to the Metal Box factory which makes the cans. In other words, before the material gets to the factory which makes the cans for canning the fruit, it has been subject to two increases due to increased railage. Then the manufactured cans must be transported, in this case to the North Eastern Transvaal, i.e. it is sent on a third journey and incurs a third increase in respect of Railway tariffs on the same item. It started off as ore, it became tin and then it was transported to the factory to become a can. The can is then filled and sent to the consumer—a fourth increase in railage. In other words, before that tin of orange juice or tomato juice, or whatever it may be, reaches the wholesaler—let alone the consumer—it has been through the hands of the Railways four times and on each occasion it has been subject to the increased tariffs. This particular factory tried to absorb the last increases. It found that by reducing the quantity in the cans it made only an infinitesimal difference because the cost of the can was the major factor in the costing of their products. Not the product but the can itself was found to be a major factor.

Does the hon. the Minister now dispute my claim when I say that this is not going to be a minimal 0,5% increase? That is why I said at the start that the shock which the hon. the Minister dealt South Africa last Wednesday, remained a shock and a very severe shock for many people. I shall take that matter no further. Other hon. members on this side will deal with it further.

Before continuing with my argument, I want to say two things. I want to say that we on this side of the House accept that wage increases for the railway staff were essential. In fact, we made the case for increases in February of this year. It would have softened the blow had that increase really in fact helped the workers to overcome the problems of inflation. In his Budget Speech the hon. the Minister himself admitted that since the last wage increase for railway workers inflation had risen by 18%. This was since January 1973. The hon. the Minister has increased wages by between 12½% and 15% for White workers. In his speech, he pointed out that increases for non-Whites would match the increase in the rate of inflation and enable them to maintain the status quo. After all this, the Black railway worker is able just to maintain the status quo, but the White worker is worse off than he was 18 months ago. It is simple arithmetic.

What of the pensioner? The Railway pensioner received a miserable 10% increase. Surely the Railway Administration could have done at least what the Central Government in the person of the hon. the Minister of Finance did? The hon. the Minister of Finance realized that inflation always hits the lowest income groups hardest. This is what we have always said. The hon. the Minister of Finance provided that any civil pensioner receiving R250 per month or less would receive a flat R25 per month increase. That is where it hits. The poorest person gets hit hardest.

Another Father Christmas!

You see, Mr. Speaker. That is the amount of interest taken by Government members in this matter. That is how much they care. We are dealing here with the distribution of R110 million to the staff. What I am saying is that the man who needs it most is the person who has now received the smallest increase. This is the man with the smallest income. For the man who is earning R10 000 per annum, 10% on R10 000 means an extra R1 000 per annum. In the case, however, of the person earning the minimum pension, that 10% increase is absorbed before it even reaches him, not to mention the 2% annual increase. What else have they done? I have here an example of one of these “Father Christmas” increases to the pensioners. This individual was in receipt of a pension of R141-47 per month plus an allowance of R39, giving him a gross pension of R180-47. He then received this Father Christmas letter advising that he was to receive a 10% increase. This was the letter he received from the Chief Accountant of the South African Railways, Johannesburg. In terms of this letter, that pensioner’s pension was increased to R155-62—a 10% increase. At the same time the allowance was reduced from R39 to R35. This pensioner now receives a gross income of R190-62 —R10 increase on an income of R180. This is technically correct. The purpose of the temporary allowance is to bring the pension of a married couple up to the minimum. When, however, the cost of living rises as it has done, a 10% increase is no earthly good to anyone living on the lowest possible level. What is the good of giving them an increase if you promptly cut the allowance? No sooner had this pensioner received his 10% increase, than his allowance was reduced. Is the railway pensioner less worthy of consideration than the civil pensioners of South Africa? Is the hon. the Minister aware that there are in excess of 20 000 railway pensioners receiving pensions below R250 per month? Could he not have given them at least what the civil pensioner in South Africa is getting? There are 15 650 railway breadwinners with a basic salary under R200 per month and 150 000 Black breadwinners earning under R200 per month. I say, therefore, Sir, that this increase does not touch square one.

The second thing that I want to do is to acknowledge that progress has been made in the administration of the Railways, particularly in the mechanical and traffic control fields. That is perhaps the advantage of having a practical engineer as General Manager. I want to make it clear that in saying what I am going to say afterwards I am not minimizing the progress and the improvements which have been made so far, in particular with specialized single-purpose trucks, centralized traffic control,’ colour-light signalling and increased carrying capacity. These are technical advances which we welcome and which improve the capacity of the railways. Sir, although we see this as part of the general movement forward into a new age through technical improvements, I want to say that when Government members see any improvement at all they think it is a miracle. I want to forecast here that for the next four days, you will hear “Mbongo” speech after “Mbongo” speech from that side of the House you will hear paraphrases of selected extracts from the General Manager’s report showing how everything in the garden is rosy. We admit that there have been improvements, we want to give due credit to the Administration for those improvements and we say “Hear, hear”, but we do not say “Amen”. We would be bluffing ourselves and South Africa if we looked at this and the rates rise in isolation.

The underlying implication, measured against the circumstances in which this Budget was introduced, is that the Railway Administration has reached a crisis point, and the evidence of that lies in the Minister’s speech itself. I quote from his Budget speech at page 49:

“Last year started with a moderate increase in economic activity.” He went on to say that it had “levelled off in the third and fourth quarters” and he said that there was “under-utilized physical production capacity.” In that atmosphere of underutilized capacity and a levelling off of economic activity, he ended the year with a surplus of R32 million after having budgeted for a surplus of R7,8 million. Then he said, in respect of the current year, that there is an “increasing volume of exports”, … an “increase in domestic income”, … “imports at a high level”, … “stepped-up manufacturing production at full capacity”, … “acceleration of investment to 9% from 2.9% in 1972”, … “a favourable economic climate” (meaning high-rated traffic, of course), and at page 60 he spoke about exceptionally good agricultural crops, of the gold price remaining high, of a steep increase in domestic demand and of increased imports. Sir, every one of these is a quotation from his speech. And then he says—

Then he gives the details: 7 million tons of extra traffic in goods and coal: 3 million extra tons of maize, etc., etc. Sir, will all these components of a budgetary dream, with everything going up, with increased traffic and with the available capacity, he bumps the rates up 12,7% and he decimates the R32 million surplus to R3,2 million in his current Budget in one stroke. If that is what he is going to do in a time of economic boom what will happen if there is an economic slowdown? When there was one in 1972-’73 he sold investments forward at a loss. He flattened the Rates Equalization Fund the next year. He robbed the Renewals Fund by paying less depreciation into it, and he increased rates. Now, with the boom, with everything at his finger-tips, with everything running his way, for a growth economy with higher traffic, he (a) has to increase tariffs and (b) has to reduce his estimated surplus by ten times. Therefore I say that I believe we are entitled to say that we have reached a crisis point and that the hon. the Minister is living in a state of euphoria if he believes that he has answered the questions he has set himself, the question of whether he is merely adapting to situations or whether the Railways are dynamic in their approach to the challenges of this day and age.

The hon. the Minister, within the Railway perimeter, has given an honest answer. We do not believe that that reflects the facts. Let me check one or two of his answers, Sir. The hon. the Minister, on page four, analysing the Railway role, says no one other than the Railways should undertake public rail transport. But in the same speech he refers to another issue, an issue where he as Minister of Economic Affairs overruled the Administration, overruled his colleague, the then Minister of Transport, to establish a R400 million railway line and harbour and this year it was announced that that railway line was now to carry public traffic. So on page four of his speech the Minister says no one else shall run public rail transport and he, the same Minister, is responsible for a privately-owned railway line which is going to handle public traffic. What I want to ask him is who is going to build the spurlines to that railway. Who is going to pay for the spurlines? Who is going to lay down the tariffs? Who is going to determine the tariffs on that line? Who is going to manage the harbour? I will come to harbours later, or perhaps in the Committee Stage. The hon. the Minister went out of his way to say that harbours have to be under unified control. I want to know who is going to control the harbour at Saldanha. Now, who do we believe, the Minister of Transport who says in his Budget Speech he will control all these things, or the ex-Minister of Economic Affairs who has created a private railway line and a private harbour, a railway line which is now going to be used for public traffic, the one thing the hon. the Minister said would be fatal for the Railway Administration? I want to know who is going to lay down the wage scales on the private railway line. Who is going to lay down its safety regulations? Who is going to lay down the hours of work, this Minister or Tscor? And what is the effect going to be on the personnel of the S.A. Railways? What effect will it have on the personnel of the S.A. Railways, seeing a private line running in competition, with wage rates and hours and conditions of service over which they have no control whatsoever?

This hon. Minister, in his Budget Speech again, on page six, says he is looking for methods to increase traffic. Yet on page 20 he boasts of having saved R5 million by cancelling services. He has saved money by cancelling services, and that is his method of increasing traffic. We want to look more closely at particularly the passenger traffic and its losses. Passenger traffic is soon going to be a high-rated category here in South Africa and only now is the Minister starting to talk of what was suggested by the Marais Commission in 1969, namely a staggering of working hours. Now he is talking about it. This commission’s report was laid on the Table in 1969, R.P. 32, but only five years was necessary to take up a common-sense proposal of the Marais Commission’s report into the coordination of transport. He complains of empty trains, of peak loads. Why has it taken five years to implement a simple recommendation to negotiate with commerce and industry to try and stagger working hours? The public sector employs 40% of the White people of South Africa in Government and semi-Government institutions. What contribution have they made to staggering the working hours? We believe that we have reached the point of decision, and whilst I pay tribute to the management and their objectives, I believe that the stage we have now reached is beyond solution by management techniques. South Africa’s socio-economic structure cannot carry economic tariffs and provide a socio-economic service even where one is dealing with a captive market as one is with suburban Black traffic. The Minister is working from within the walls of his own policy limitations, a philosophy of fixed perimeters. I suggest that as a new Minister, before he himself becomes a prisoner of this fixed perimeter within which the department works, he should get outside and look inwards to see whether there is not something more that can be done than what is now being done.

So we call from this side of the House for a new broad-based inquiry using the best brains available in South Africa, an in-depth inquiry into the whole transportation scene, the organization, the role, the economics of all fields of transport; not a limited one like the Marais Report, which in any case was rejected because it dared to go outside the perimeter of existing official policy. That report was rejected. We have had lots of reports; the Schumann Report on rates; the Marais Report on coordination: the report on exports; the Driessen Report on urban transport and the Borckenhagen Report on financing. We do not want that kind of restricted inquiry. We want an in-depth and broad-based investigation, an investigation which will get beyond the target the Minister has set himself in his own speech where, on page 22, he said that the Railways had “kept abreast”. That is the kind of philosophy we want to get away from—keeping abreast of demand, walking an annual tightrope between demand and carrying capacity. We want leadership in transportation from our transportation services. I therefore move—

I want to suggest, in the few minutes left to me, some of the things which should be investigated. The primary one, of course, is the role and the responsibility of the Railways which by law must operate as a business undertaking and must finance its own operations, but which, at the same time, must contribute transportation infrastructure to develop the resources and stimulate the development of South Africa. Thirdly, it must supply uneconomic socioeconomic services out of his own pocket, uneconomic traffic required in the interests of South Africa. The Railways cannot do all three, and this is recognized. An article yesterday in Rapport shows that the Federated Chamber of Industries, and everyone who has thought about it, recognizes that if the Railways is to give uneconomic services in the national interest then the national purse must contribute to those uneconomic services.

I refer to harbours, although I do not want to spend much time on that as I think it is common cause. There are ships queueing outside our harbours, there are delays, there are penalty freight rates because of waiting time at harbours right around South Africa’s coasts. I admit that much has been done. But the fact is that what is being done is projected into the future. What is happening now in 1974 is that no harbour in South Africa can meet the demands up on itself. Cape Town harbour is fully committed until 1977. Durban harbour is committed until the new No. 2 pier comes into operation, while Richards Bay will only be ready in 1976. The hon. the Minister quoted in his speech that R298 million was being spent on harbours for capital works. But this work should have started seven or eight years ago. I looked in the Brown Book for 1966-’67 in which the Vryheid/Empangeni railway line project first appeared, when the concept was there and when they started building this railway line. In that year R22,7 million was planned for total harbour development but not yet appropriated. In 1974-’75 this amount has gone up five times to R109 million. But planning must not only be the plan on paper; there is also timing. It is in the timing that the Railways and Harbours service has not foreseen the demands that would be made on it. Except for Lourenço Marques there has been no other unforeseen event since Suez. Since Suez there has been nothing unforeseen which could not and should not have been planned for. In total, capital, unappropriated planned capital on the Brown Book for 1966-’67, was just over R400 million, while the amount for this year is R1 883 million. The plans are there, the same as for Durban station, where the plans and the promises have been there for 15 years. Like Durban station the thing goes on stage by stage; maybe my children will be able to appreciate it. But figures on a Brown Book do not provide services; time also has an effect.

I want to suggest that one of the items which could be investigated is whether we should not have a division of marine affairs or a department of marine affairs to co-ordinate harbours, lighthouses, sea-rescue, pollution, the stranding of ships—I think we have had five ships stranding during the past two months—all these things which affect the sea and which now fall under different departments. These things could be brought together and coordinated within the over-all transportation structure of South Africa.

Another thing which I believe is important is the role of transport in our national security. The Government looks up on the Railways as a national carrier only. We see it as being correlated with the defence and security of South Africa. That is why we in this party have linked the departments of Defence, Transport and Posts and Telecommunications into an over-all grouping of Security and Communications. They are three legs of the safety of South Africa if we should ever get into trouble. I want to know what thought has been given to this by the hon. the Minister. Are the Railways and Harbours represented on any defence councils? Are they represented on any advisory committees advising the Defence Force? Is the South African Defence Force represented on any advisory committees of the Railways and on its planning committees? What consideration has been given to the logistic help which the Railways would have to give in times of crisis? What consideration has been given to the role of the harbours in relation to the South African Navy and to the workshops in meeting emergencies that may arise? My colleague, the hon. member for South Coast, as a railway artisan, helped to make the first armoured car ever produced in South Africa. Here were facilities which could be used for the national good in a time of emergency. Have the Railways given consideration to the effect of mobilization on their personnel, as to which can be released and which cannot be? Informal co-operation, Cabinet co-ordination, is not enough. This is detailed planning which should be carried out at departmental level, with departments serving on each other’s relevant planning and advisory committees.

Have the Railways considered their role in the homelands? What contribution is going to be made to their economic development? What plans are going to be made for rail networks and ports for the homelands? What about the situation in Botswana, where the railway line is being taken over? Has this situation been analysed in relation to our own homelands?

Another question of vital importance to South Africa, and incidentally, not directly, but indirectly linked to security, is that of urban transit, the role of the Railways and the local authority and their co-ordination. Our cities are strangulating themselves with the traffic which is being poured into them. In Pretoria there is a complete circuit with high-level platforms, ticket offices, everything, but not even used as a passenger circuit. It is completely circling the town, unused, whereas it could be leading traffic away from the centre of the city. So I could go on, but time does not allow me to do so.

I shall close by repeating that we believe that such a wide-based inquiry is necessary. It could consider, for instance, whether the Railway staff board should not become a planning organization. These and many other suggestions, some of which will be made by my colleagues, are the reasons behind our calling for an urgent and an in depth investigation of the total transportation scene in South Africa. Until such time, we cannot approve this Budget.

Mr. Speaker, this afternoon we have traditionally had from the Opposition side the typically superficial and light-hearted approach in respect of a national organization such as the Railways, which has to deal with problems, problems connected with our times and with specific circumstances.

Before I take this debate any further, Sir, you will permit me, firstly, to commit briefly on the new hon. Minister, who has taken over this portfolio. We feel very much at ease, conscious of his background and abilities and also of the fact that the staff of the Administration will stand by him in this major undertaking. We wish him much success—something which we do not doubt—but, especially, joy in his work and good health. Secondly, I also have a word of thanks to express to the hon. member for Durban Point. He will not take it amiss of me if I were just to give him recognition for the good influence he used in Port Natal by letting us have the provincial seat as well, as was announced only today.

If you cannot win it, you get it by other means.

It is because of his relationship with the former member of this House, who is in the Other Place now, namely Mr. Winchester, that this happened.

Order! The hon. member should at least stay on the track.

Mr. Speaker, you will permit me to do so, because such a side-track is often rather interesting, especially when it is a political side-track such as this one.

The hon. member for Durban Point came forward here with a sob story and said that the poor illiterate children, the housewife, the pensioners and the public in general would have to pay for these inhuman and unreasonable rates increases announced by the hon. the Minister. He went further than that and made the statement that the position of the Railways as regards its contribution to the economy of the country was so hopeless that it could no longer be saved. A more far-fetched and absurd statement is difficult to conceive, especially when it comes from a person who has all the documents at his disposal and who made a proper study of and went through all these documents and reports. I think that the planning, the manner of planning and the results produced by way of that planning—on which the officials worked for years—directly belie the statement made by the hon. member for Durban Point.

The hon. member reminds me of the case of Van der Merwe who bought a new car. His neighbour then came over to him to show his interest and congratulate him on his purchase. Having described all the good points of the car, Van der Merwe said to his neighbour: “You know, my friend, I do not want to tell you a lie, but I want to say that this car of mine is too fast for its ‘peed.” This is like the locomotive which skids on the iron tracks and, in doing so, creates the impression that it has reached a high speed, but is in fact moving very slowly. The hon. member for Durban Point left the same impression here this afternoon. Both as regards his points of departure and as regards his evidence he was somewhat too fast for his speed.

Reply to my speech.

We are dealing here with an attempt by that hon. member to deceive the electorate of South Africa. It is traditional of that party to confuse the public before an election in order that they may get as much as possible out of it for their own party’s sake. And then, after the election, their greatest problem is to settle amongst themselves the question whether, politically, they lied enough or too little. Between these …

Order! The hon. member must withdraw the word “lie”.

I withdraw it. Will “fib” do?

The hon. member must withdraw that word too.

I withdraw that too, Mr. Speaker. Then I say that at election times the United Party makes an attempt to confuse and mislead people.

The hon. member waxed very lyrical about the distress and the hopeless position in which the Railways allegedly finds itself, but he will not mind if I were just to remind him of what he said in this very same debate last year. I should like to refer the hon. member to the Hansard of 12 March 1973. I refer to column 2429 of the speech he made on 12 March 1973—

I said it again today.

Yes, I am coming to that. Now that the Minister and the Administration want to stop this welfare function, also in pursuance of the recommendations of the Schumann Commission, we have had as a reaction this tirade from the hon. member for Durban Point. This points to a direct inconsistency being entertained by the hon. member. It is ill-considered and is definitely not meant to be conducive to the situation in which we find ourselves. What is the situation in which we find ourselves today? We are dealing here with an organization which for three years, since 1970, had an accumulated loss of R89 million and which was fortunate enough to have it absorbed by means of a small rates adjustment. Furthermore, the Railways is faced with the situation that it has to find additional revenue to the amount of R110 million for the increased salaries of its officials. Then it also has to find an additional amount of R35 million for the increased cost of fuel and an additional amount of R5 million for the increased cost of steel. This is the situation with which we are faced. The reason why we are debating here is not to become emotional and to try to influence or persuade people, but to face this problem realistically and soberly and to try to find a solution to it. We should be on our guard against giving way to hysterics, as the hon. member for Durban Point is so fond of doing.

The Schumann Commission’s recommendations were mainly aimed at eliminating rates anomalies, bringing about the narrowing of the rates gap and reducing uneconomic traffic. This, and nothing less than this, is the task with which the Minister has concerned himself in this Budget and in which the officials have been interesting themselves for the past year. They are trying to achieve these objectives gradually and with a great deal of circumspection. Some of the recommendations, such as the narrowing of the rates gap and the elimination of uneconomic rates, are long-term recommendations which must be handled with a great deal of caution. Today, more than ever, it is very important for the Railways to move closer to the cost structure of its activities. Therefore the object in introducing the present rates increase is not only to collect additional revenue for the Railways, but also to comply with the recommendations of the Schumann Commission, recommendations which, up to now, have only been put into effect partially or not at all.

A number of rates anomalies still remain, such as the special rail/harbour rates between the Rand complex and the harbours of Port Elizabeth and East London. These are still being retained, chiefly with the object of effecting a better distribution of traffic and in order to have a better utilization of our harbour facilities. For instance, in this way we are retaining the arrangement whereby export maize exported through Cape Town are still not subject to the East London rates. This arrangement is being retained for reasons already mentioned. As far as the narrowing of the rates gap is concerned, a smooth progression and fixed interrelation have, in the first place, been created in respect of the various tariff classes. By reducing, in 1973 and now again, the gap between the various tariff classes and increasing in general the higher-tariff classes by smaller percentages than in the case of the lower-tariff classes, the rates gap has been narrowed appreciably. This was also done in pursuance of the recommendations of the Schumann Commission.

Furthermore, in the present rates increase, a change has been effected to the progression of the tariff lines. The intention is to imitate the cost lines. In practice one finds the case where the middle-distance rates are more economic than the short-distance rates and the long-distance rates. This necessarily has the effect that while the middle-distance rates remain relatively untouched, an increase is being placed on long-distance rates and short-distance rates. The reason for this is to bring the cost line and the tariff line closer to each other. As far as the rates for livestock are concerned, to which the hon. member for Durban Point also referred and in connection with which he suggested that the housewife and the consumer would now have to pay so much more for their meat, it is very clear that in this case the producer—in other words, the farmer himself—will pay the increased rate and that this will not necessarily have an effect on the retail or wholesale price.

A good thing for the farmers, not so?

I just want to say that this is not a very popular thing amongst the farmers. However, our farmers have marrow in their spines, not water. The remarks by the hon. member for Durban Point serve no other purpose than bringing the citizen of South Africa to the point where he will have water in his spine instead of marrow. In bygone years it was in fact financially possible for the Railways to bear losses on the conveyance of livestock and to keep its rates constant. However, the Railways is no longer in a position to bear such losses. The hon. member for Durban Point also recommended that the Railways should stop being a welfare organization. For that reason it was imperative for the Railways to give very serious attention to this matter and to increase the rates. The present rates cover approximately 40% of the cost in respect of the conveyance of livestock, if I may illustrate it this way. The total loss during 1973-74 was approximately R17 million. After this rates increase the cost cover will be approximately 65%. In this case we have not even reached that point where we can call it an economic rate.

The hon. member also referred to certain transport concessions in respect of certain specific areas. With reference to the price of coal and other commodities, if it is necessary for certain areas such as Cape Town and South-West Africa, which are situated far away from the important production areas and their markets, to be assisted by way of transport concessions, then I agree with the hon. member for Durban Point in this regard. This is no longer the task of the Railways, but in fact that of the central Government. The precedent exists in respect of rebates for border areas and also for export goods. In these specific cases the State is already paying the full concessions. This is not a new idea or a solution of the problem which the hon. member for Durban Point raised here. It has existed for quite some time. However, I want to say that if he is trying to suggest in that way that we should cover all deficits from the public exchequer, then our answer is definitely no. That would immediately take away the initiative, the incentive, of our own staff to do well and to fight against problems, because then the attitude would be: “Surely there is a Father Cristmas; I am just going to sit on this crate until 5 o’clock tonight.” Sir, this is what hon. members opposite want to propose, namely water instead of marrow in a staff numbering more than 200 000. Sir, I think the hon. member for Durban Point did not give this matter very deep thought and that he did not have a “point” at all. Sir, in the latest data at our disposal we saw how the KLM Airline had a loss of R26 million; Pan American is insolvent; the railways of Japan had a loss of R560 million in 1972, the Netherlands had a loss of R38 million, Belgium had a loss of R1,8 million, Italy had a loss of R430 million, Norway had a loss of R44 million, and West Germany had a loss of R300 000 in the same year. Is that the game the hon. member for Durban Point wants to play? Where is the money to come from to pay for all these things suggested by him? The hon. member probably expects the taxpayers to provide it voluntarily. What a crazy argument! Sir, the standpoint has been and can be adopted that the 20% increase in fares in the case of commuters will, because of its direct nature, have an adverse effect. After all, it is a fact that increases in fares are taken directly from the pockets of the travellers and the consumers. However, this has the effect that increases in fares cannot be passed on; it has the advantage that the burden cannot be increased owing to normal price mechanism and/or exploitation. The hon. member for Durban Point overlooked this completely. He only made calculations here to prove what the increase would mean per capita and per family, and that the amount the public would ultimately have to pay would not be R170 million but R400 million.

Sir, from a macro-economic point of view, a direct rates increase such as an increase in fares is therefore more preferable than a rates increase which may have a cumulative effect on the public. Analysed in practice, it amounts to the following, and I mention to you, in the first place, the main-line fares which are payable before 1 November and which will be payable after 1 November: From Johannesburg to Bloemfontein, for a single ticket, R11-73, and after 1 November R13-50; this is for a first-class single ticket. A first-class return ticket will cost R26-40 as against R22-95; second class, single, R9 as against R7-82 before 1 November; second-class return ticket, R17-60 as against R15-30. Next I shall give you the fares from Johannesburg to Cape Town: Single, R39-30, which is being pushed up to R45-20 after 1 November; a return ticket which costs R26-20 will cost R30-15. The last set of figures I mentioned is in respect of second-class tickets. Sir, then I mention to you the fares for commuters: Johannesburg to Germiston: 24 cents daily as against 29 cents, a difference of only 5 cents. The commuter’s weekly season ticket between Johannesburg and Germiston will cost R1-90 as against R1-44, a difference of 46 cents. Then I mention to you the excursion concessions for scholars which have been abolished: Johannesburg to Bloemfontein, return R14-08 as against R17-60, an increase of just over R3. Through this increase, according to the hon. member for Durban Point, we are promoting illiteracy. Sir, how can the hon. member talk about promoting illiteracy when we have such a network of school buses that a very small percentage of our scholars have to make use of train transport today, except perhaps in the case of technical colleges and some of our universities? He waxed quite lyrical about this, as though we are being faced with illiteracy. Sir, the hon. member really did not think before he spoke; he really did not do his fatherland and education in South Africa in general any favour by making as uncontrolled and rash a statement as he did here.

As far as parcels are concerned, from Johannesburg to Potchefstroom—150 km —the cost before 1 November is R2-39. After 1 November it will cost R2-75— only a few cents more. In respect of milk and cream in cans between Klerksdorp and Potchefstroom, 20 to 25 litres, it was 6 cents before the increase and will be 7,5 cents after the increase. This is only 1,5 cents more. I suppose this is also the farmers, not so?

What distance is that?

Klerksdorp and Potchefstroom.

About 30 miles?

No, it is slightly more than that. Passenger services and main-line services—this traffic is and remains uneconomic. During 1972-73 the revenue was nearly R13 million and the expenditure was estimated at approximately R70 million. An increase in the fares of approximately 531% would be necessary to make the service pay. However, such an increase is unthinkable. The proposed 15% is regarded as the maximum that can be applied at the moment. The impression was left here that we were handling these things in a reckless manner. The facts prove that this is far from being the case. The whole policy behind these steps can also be explained in the spirit and in the light of the endeavour, without causing disruption, to transfer this type of transport eventually to the S.A. Airways. As compared with the economy of conveying first and second-class passengers, there is justification for not increasing the fares for third-class passengers in general. The cost cover in respect of the latter group was approximately 84,34%. During 1972-73 the revenue from first-class commuters’ fares was R13 million—in round figures—and the costs were estimated at R45 million, with the result that the cost cover was only 28,77%. Experience has shown that increases in fares can arouse passenger resistance, and consequently a 20% increase is being regarded as the maximum in this case.

And next year?

We are not guessing now. We are implementing a policy circumspectly and on a long-term basis in the best interests of the entrepreneur and the consumer. Here I have some more examples of how the rates increases will work in practice. I mention the case of cooking oil conveyed from Boksburg East to Bloemfontein, a distance of 405 km. The present rate is R3-20 per 100 kg. The proposed increase is R0-05, i.e. 1,56% or 0,04 cents per article. This is quite close to the estimate of the Minister when he said that the cost of living would in general not be affected to the extent of more than half a per cent. I can mention more examples, such as that of grape syrup, but we may as well leave the matter there. As far as five-stock is concerned, we concede that this is not a popular measure. It will cost R7 more to convey one head of cattle from Grootfontein to Cape Town, and 17 cents for a sheep from Potgietersrus to Pretoria. Commerce can easily absorb these amounts if they are correctly and magnanimously attuned.

Quite a fuss was made here about the position of harbours, the congestion and the backlog in planning. It was said that these things would lead to a disaster and to an insurmountable crisis as far as our economy is concerned. For reasons of his own this hon. member kept quiet about many things connected with this position, especially as far as the congestion is concerned. Of course, it is part of their tactics of deceiving the public to blow up a matter until it assumes the proportions of a monster, whereas it is in fact a gnat. Since the last quarter of last year we have had to deal with, in the first place, a rapid increase in steel imports by Iscor, so much so that as from the last quarter of last year Iscor imported 40% more than it did in 1971. This inevitably had to place an additional burden on our harbours. There was also a similar increase in timber imports, which used to be handled mainly by the harbours of Mozambique. As a result of the circumstances prevailing there, the exporters of these articles also have to rely on South African harbours now, a development which has contributed further to this congestion. We know that the heavy rains in the Cape Midlands also had an effect on the conveyance of ore to the Port Elizabeth harbour. There were floods, railways had to be repaired, and all this disruption affected the smooth operation of this organization. The result was that there was at times a congestion of ships waiting to ship minerals at Port Elizabeth. There is only one single berth, and it did therefore happen that up to 14 ships waited there at the same time. But this position had also improved tremendously. The figure for July shows that only six ships lay there waiting to ship their minerals, as against 14 a month before. [Time expired.]

Mr. Speaker, as this House knows, the hon. member for Witwatersberg is the chairman of an important body, the Select Committee on Railways.

A good chairman.

Someone over there says he is a good chairman. I should not like to discuss that Committee and will therefore leave his chairmanship at that. As far as this House is concerned, I regard him as third in order of rank. After the hon. the Minister, I should say, comes the hon. the Deputy Minister, and then, probably, the hon. member for Witwatersberg, as far as the Railway set-up is concerned. He began by saying that the hon. member for Durban Point was too fast for his speed. I had really hoped that the hon. member himself would show a little speed. However, it was very clear to me that he struggled to reply to the charges made here by the hon. member for Durban Point in connection with the rates increases. He read out a number of these rates to us and at one stage it sounded to me, with respect, like a book of rates. It was so many cents here and so many cents there and half a cent somewhere else. It made me think of the article by Schalk Pienaar in a weekend newspaper concerning these very rates increases. I should like to quote from it for the edification of the hon. member. He writes as follows (translation)—

In other words, when the hon. member comes along with the half-cent, etc., he might as well forget about it, because it does not exist any more. He goes on to say (translation)—

The hon. member said that trade could absorb the costs … (translation)—

Before the hon. gentleman says that the hon. member for Durban Point is telling sob stories about the rates increases, therefore, I want to tell him that this is a matter of major significance to all of us, particularly to those people who are perhaps not as well-endowed financially as the hon. member. What, to me, is even worse as far as these rates increases are concerned, is that at present we are living in times in which we have to contend with perhaps the greatest financial enemy, namely inflation, the terrorist of the financial world. Wherever we go, and in this hon. House too, appeals and calls are made to the people to go out of their way to combat inflation. It is in this atmosphere that the hon. the Minister of Transport, without turning a hair, announces a number of increases which, in my humble opinion, are going to have a very marked effect on the inflation spiral; they will push it higher and higher.

Are you referring to the salary increases?

It makes no difference whichever way we approach the matter. I shall now deal with the railwayman’s salary. The fact that the hon. gentleman increased these rates has a marked effect on inflation, and on top of that there is the fact that we are going out of our way to combat inflation in South Africa at this very time. Virtually every week-end newspaper, even newspapers who support the hon. the Minister’s party, exclaimed: “What a pity that this had to occur!” They realize what the effect of this will be. However, they all go on to say: “But we realize that the hon. the Minister had no alternative.” The hon. member for Witwatersberg …

Do you have an alternative?

I am coming to that, my friend. Be quiet now; we are not dealing with labour matters. The hon. member for Witwatersberg tried to indicate that one of the main reasons for the increase in rates was to give effect to the recommendation of the Schumann Commission, namely to bring the gap between low-rated traffic and high-rated traffic closer to the costs. That is certainly one of the motives, but I now want to ask the hon. member whether he really wants to tell me that if the hon. the Minister could have obtained his money from another source, he would have been concerned about the recommendations of the Schumann Commission? Surely not. The recommendation of the Schumann Commission in respect of the rates increases at this particular time when we are dealing with inflation, has surely, with respect to the hon. member, nothing whatever to do with the price of eggs. I repeat that this was an essential step and that the hon. the Minister had absolutely no alternative. What is so tragic and such a pity, is that he should have had to do so at the very time when virtually everything was in favour of transport, a time when the transport market, as it were, was there for the taking. All the indications are here for an increase in freight and for a wonderful year for transport. However, the hon. gentleman states that he has no option and that he has to increase rates. This is a serious matter, and why is it so? Why does the hon. the Minister have to increase rates? We appeal to trade and industry to absorb costs, but the hon. the Minister is unable to absorb his own costs. We know why, too: His predecessor, with all respect, totally exhausted all his funds, inter alia the Rates Equalization Fund, over a period of years. This occurred because over the years the Government had allowed him to be driven into such a corner with his rating policy that he had no other opinion whatsoever. No alternative could be found. The rating policy has been so wrong over the years that this side of the House has pleaded time and again for changes to be effected. There has been no response thus far, but I have not the slightest doubt that the changes will have to be effected. Over the years the rating policy has been of such a nature that the hon. the Minister did not have any alternative at all. He had to take this step. That is why all the newspapers and all those who comment on these matters are also saving that it is a great pity hon. the Minister had no alternative.

Let us dwell briefly on the capital account of the Railways, an account which at present amounts to more than R3 000 million. This is capital which can be obtained from a few sources only, for example, from the Consolidated Revenue Fund or from overseas loans—that is the latest arrangement —or perhaps locally. The capital account of the Railways carries with it a burden of interest which already, at this stage, amounts to more than R200 million per annum.

Is it a productive or an unproductive burden?

Sir, we shall come to the question of productivity. The Railways pays interest of R550 000 per day on its capital. The hon. member talks about productivity. Let us compare this amount with salaries. Do you know, Sir, that the wage of 44 000 White officials of the Railways per day is equal to the interest the railways has to pay per day on its capital loans. That is an enormous sum of money.

How are you going to avoid it?

We cannot obtain capital from income, and it is very clear to me that the Railways cannot continue in this way. This is not the first time that a change in the funding of the capital requirements of the Railways is advocated in this hon. House. The Railways simply cannot continue to carry this enormous burden of interest.

Let us take a look at the Railways itself. Over the past seven years the Railways as an entity—i.e. excluding harbours—has reflected a deficit, on average, of R50 million per annum. This is a deficit which has had to be carried every year.

Harbours?

The fact that the Railways could carry on at this deficit of R50 million per annum, is owing to the cross-subsidization which has occurred in respect of the pipeline, the harbours and, to a lesser extent, the airports. The question that occurs to me, is how long it will be possible to continue in this way.

What is the bottleneck in the Railways that causes such an enormous deficit? The problem is not to be found in goods or livestock. The real bottleneck as far as the Railways is concerned, with its enormous resultant deficit, is to be found in the passenger services.

Oh no, really.

Yes, Sir. This year, while the Railways ran at a total deficit of R56 million, we find that the passenger services deficit amounted to more than R100 million. This latter loss is carried by the transport of goods and livestock.

But Vause Raw has just said that that is already high-rated traffic.

No, Sir, I am coming to those matters. I am simply pointing out the problems. I am simply trying to isolate the problems. The deficit on the Railways passenger services rises year after year. It is clear to me that unless something is done about this matter, we shall not be able to continue in this way. The fact is simply that the socio-economic structure of South Africa is of such a nature that as far as the passenger service is concerned, we are simply unable, apparently, to afford an economic tariff.

That, surely, was not the intention of the constitution. That I do not accept. If hon. members read section 105 of the Constitution of the Railways, they will find that when, for example, a harbour required by the State is built and it is found that the revenue from the harbour will not cover the expenses involved, the State must pay in the difference. This is stated in the Constitution, but we find, as far as passengers are concerned, that there is a deficit of more than R100 million; however this is accepted in a spirit of complete resignation. Really, it is clear to me that this is a matter which calls for very thorough investigation.

The tariffs are too low.

Let us consider the calculation of costs as far as passengers are concerned. I want to tell that hon. member that I am dealing with questions concerning the Railways which are causing me difficulty. I am not levelling criticism, but am raising questions in respect of problems in respect of the Railways that have to be investigated. We know that the Railways run at a loss as far as passengers are concerned, but we also know that Government officials travel with concessions. We know too that national servicemen travel with concessions and that none of these people pay the full price. In addition, we know that if I were a shunter on the Railways, at the end of the year I and my family would be able to travel free by passenger train. In such a case I should travel gratis, but my expenses would not be indicated against “Shunting”, but against “Passenger services”. The argument is that we cannot recover the expenses from the Government departments, because the Railways is given other concessions, concessions such as tax-free fuel and tax-free vehicles. All other Government departments also get these benefits, but to me it seems entirely wrong that the Railways should have to transport passengers gratis and that its losses should be pushed up merely because it gets the same privileges as the other Government departments. Let us look at the statistics themselves. Let us look at the statistics for long-distance passengers during the 1973-74 financial year. In that year 3 million first-class and second-class passengers undertook long-distance journeys and paid a total sum of about R14 million. This means that the revenue from passengers amounted to R4,85 per capita. At the same time a total number of 35 700 000 third-class passengers were transported. An amount of R37 million was earned from the transportation of those passengers. Whereas the first- and second-class tickets provided us with a revenue of R4,85 per capita, the third-class ticket provides a revenue of only R1,06. This, clearly, is an enormous gap. It seems to me to be simply impossible for there to be such a substantial difference between these two revenue items. I know that there is the question of occupation which could be argued, and that the third-class carriages carry more passengers, but I simply cannot believe that they can carry three to four times as many passengers as the first- and second-class carriages. There must be a mistake somewhere.

When one comes to the urban trains, the position looks different. Here one finds that the per capita revenue from first-class passengers is calculated at 11,5%, while in the case of the third-class passengers, taking into account the aid provided by the State, it amounts to 10,8% cents. This seems a lot better, but it seems to me as if there is a difficulty somewhere that needs to be sought and ironed out. We cannot continue to transport passengers on a basis of enormous deficits like these.

I want to add at once that I am not advocating that the fares for third-class passengers should be increased.

So what is to be done?

No, wait a moment, I am coming to that. I say that the transportation of passengers is not something which is done for the fun of it. The passengers are transported because they are workers in the economy of South Africa and when the Railways have to transport them, they are performing a socio economic service for which they should not have to bear the cost. It is as simple as that.

For whom do those people work?

They work for various employers, but this is a function the State has to perform in order to keep the domestic economy going. It seems to me as though those hon. members are afraid to investigate these matters. I just cannot understand it. I repeat, subsidization is not a foreign concept; it is a principle that is being accepted. The constitutional position is such that the Consolidated Revenue Fund may in fact pay if there are losses. In this way the Bantu from the resettlement areas, for example, already receive a subsidy to the value of R20 million per annum. We already have the cross-subsidization within the Railways itself.

†Still the Railways carry on happily although they have a loss of more than R100 million on passenger transport alone. Yet my hon. friends on the other side seem to be quite satisfied. They are not even prepared to have the whole matter investigated.

*I believe that these are matters which undoubtedly call for very thorough investigation.

If I were to ask for an investigation in respect of the passenger services, I should not only ask for an investigation of the financial side of the matter. The scope of the Railways is far broader than that. There is no city in South Africa today whose local management is not experiencing traffic problems. Throughout the world the urban population is rebelling against the presence of the tens of thousands of cars in urban society. We know that a kind of Parkinson’s traffic law is developing: The more roads one builds, the more cars use those roads. At this stage we are already finding that 133 cities on the continent of Europe have banned the car from the heart of those cities. If we want to protect the character of our cities, we should ensure that there are certain areas of those cities which will be free of care—to prevent pollution, to render unnecessary the construction of enormously expensive roads, and to save fuel.

When we deal with passenger transport, I want to congratulate the hon. the Minister on finally coming up with an attempt to encourage people to make use of the passenger services. It goes without saying that we should long ago have started to consider enlisting the co-operation of local authorities and industrialists in staggering working hours. This is not an idea which has come onto the market today, or which the hon. the Minister discovered yesterday; it is something which has been debated from as far back as 1969. Hon. members will remember that this is a matter which the hon. member for Parow pleaded for years ago. When we speak of passenger transport, the question occurs to me whether the Railways really goes out of its way to welcome passengers, particularly in the urban areas. After all, all of us who come to the city everyday are aware of the hundreds of cars, each carrying only one person, that enter the city. What are the Railways, as the major provider of transport in South Africa doing to dissuade people from using their cars and persuading them to take the train instead? For example, are we, for the sake of argument, considering telling the people in Bellville: “Come and park your car free at the station. There is sufficient parking space there?” Are we considering telling them: “Take the train to Cape Town, and when you get to Cape Town, there will be buses which will take you to other points?” Is this being investigated, perhaps? Is this a possible means of encouraging people to travel by train? Are we considering modernizing the trains, particularly long-distance transport? Why should we only have air-conditioning on the Blue Train? Can we not introduce it on other trains as well? Can we not follow the example of the Airways and try to make travel by train as attractive as travel by air? Can we not try to make people who travel by passenger train, feel that they are guests of the Railways, that they are in the hands of the Railways and will receive the finest treatment? Take the Cape Town station, for example—I am not talking about Johannesburg now. One has the greatest respect for the people who work at the station and who deal with the travellers’ suitcases. In these modern times I have really wondered whether this is the best way of dealing with the matter. The staff members at the station are usually elderly men. One treats them as one’s father and one is sorry to give them work to do. Could we not think of another system, which could perhaps cause a passenger to feel: “This is speed, this is service, I am a guest of the Railways and I want to travel with the Railways?” It does not matter whether this applies to long distances or only to local transport.

I want to deal with the matter of the capital of the Railways. I want to tell the hon. the Minister of Transport this afternoon that he is not only in charge of Railways, but is also Minister of the transport affairs of South Africa. This afternoon we ask the hon. gentleman to cast his gaze across a wider field. We do not want him to control the transport industry. We should like to see him properly co-ordinating the transport industry in South Africa. In this regard I should like to suggest a few ideas.

We are looking for capital. The Railways has to undergo enormous changes. I have in mind passenger trains, for example. We must have underground trains. The time for this will come. The municipalities cannot afford it because it is too expensive. We shall have to make provision in other ways in our cities. The hon. the Minister was right when he said that the steel wheel on the steel track was still the best means of transport, particularly as far as mass transport was concerned. I want to tell the hon. the Minister that when we investigate the e matters, when we investigate the financial aspects, we will have to find ways and means of increasing our capital income. I should like to see in South Africa—I do not state this as policy, but as steps which could be investigated— that everybody in South Africa that is taxed in respect of transport, should not pay that tax into the ordinary finances of the State, but into a national transport fund. This, then, could serve as a source of capital for the financing of all the activities of the transport affairs of South Africa. To begin with, for example, I should like to see all licence fees, car licence fees, which are at present collected at a thousand places, not being collected in the form of an annual licence fee, but by way of a small addition to the tax on petrol. I should like to see third party assurance dealt with in the same way. If one were then to buy a car, one would be paying one’s third party and one’s licence fees on one’s petrol. These monies could then be utilized to build roads, etc. I should like to see the excise duty on cars, which is at present deposited in the Consolidated Revenue Fund, being deposited in that national transport fund, too. I should also like to see the tax on petrol not being paid to the hon. the Minister of Finance, but to the hon. the Minister of Transport. I should like to see all customs and excise duties on the import of everything connected with transport, being deposited into the national transport fund. A number of things could be done with the money in that fund. It would meet the capital requirements of the Railways, it could be used for road-building purposes and it could also meet the requirements of the necessary expansion of transport in South Africa.

Apart from this, I also want to associate myself with the statement by the hon. member for Durban Point that what we require is overall planning of all transport facilities in South Africa. Have we considered what it would mean to us if it were only to synchronize licence fees and third party insurance? Tens of thousands of man-hours would be saved every year in respect of the issuing of these licences. Tens of thousands of rands in salaries would be saved. It would ensure that many people would not be able to defraud the State in connection with third party insurance. It would ensure that the man who drove the most would pay the most tax. The man who uses his car once a week would pay tax once a week. The man who uses his car every day would pay that tax every day. Every time he fills up he will know that he is paying that tax to promote, for example, the passenger services of the Railways. The benefits to be derived from something of this sort, are manifold. There may of course be objections but this is a matter which must be investigated. It is very clear to me that under the present financial set-up, the Railways are simply unable to obtain the capital they require. The Railways pay interest on the capital they receive from the Central Government. They also have to pay interest on the capital they receive from abroad. The burden of interest is getting so that in time, the Railways will have to carry on an entire transport service merely in order to pay interest. Transport lies at the heart of the economic development of South Africa. I am really unable to see how we can continue to allow transport, which is so vital to the growth potential of South Africa to suffer the least detriment as a result of outdated policies. The constitution of the Union of South Africa was adopted in 1910. At that time we had the wagon and the train. Now we have dozens of other forms of transport. I believe that the time has arrived for us to change the Constitution of South Africa in such a way as to fit in with the modem financial and transport arrangements South Africa requires.

Mr. Speaker, I was particularly interested in the performance of my good friend, the hon. member for Durban Point, as the United Party’s chief critic on the Railways and Harbours Budget. I expected much from him, Sir, because I have a great respect for his application to duty and his intelligence. But it is a pity that the hon. the Leader of the Opposition is not here, because I would have said to him that he is not fair either to the hon. member or to Parliament. We have learned to expect much from the hon. member for Durban Point and he has seldom disappointed us, but today he showed signs of wear; he gave indications of the burden that he has been forced to carry as the United Party’s chief critic on the Railways, as their chief critic on the Post Office and as their chief critic on Defence. Sir, that is too much even for his robust figure. I am not saying this because I am concerned about his health or about the contribution that he himself makes on behalf of the Opposition. I say this, Sir, because one is generally concerned about the standards of our Parliament and it would be tragic if because of an unconscionable burden placed upon the shoulders of one of the most able members we have in this House, the standards of Parliament itself were to suffer. It was obvious that the hon. member was under strain because he seems to have missed some pretty obvious things. For example, he again and again criticized the hon. the Minister for only increasing pensions this year by 10%, but, although he is aware of it—and this is a sign of a weary mind—he completely forgot that some years ago the Government decided to increase pensions basically by 2% a year, so actually the increase this year is not 10% but 12%. It is not like the hon. the member to make a mistake like that. That is not all. Let me give you another example. The hon. member made a major point of the fact that the amounts indicated in the Brown Book have increased over a number of years from some R400 million to R1 200 million. That is perfectly true, but he tried to deduce from that that the Railways were becoming inefficient; that they could not spend the money that was available to them.

You can do better than that.

But he did, Sir; he raised it as a point of criticism; but surely he should know, if he was not overworked, that the reason why that amount has increased so much is that there is better and more planning as well as planning further ahead. That money has not actually been voted; it is an indication of what the Railways have in mind for the future years in view of the expected development of South Africa, it is a sign of foresight on the part of the Railways; it is not a shortcoming for which they should be criticized. They deserve praise for it. The hon. member’s performance has been a real disappointment to us.

*Perhaps it was fortunate for the Opposition that the hon. member for Durban Point was followed by the more refreshed and calmer member for Maitland, for the hon. member for Maitland made interesting suggestions here and there. But, Sir, the climax of his speech absolutely amazed me. It is difficult to react immediately to such a profound idea. He came forward with the suggestion that all income deriving from the transport industry of South Africa, should be set aside and be paid into a transport fund. Did I understand him correctly?

Yes, I enumerated everything.

Yes, he enumerated everything. He enumerated everything and everything has to be paid into a transport fund. Sir, where does the idea come from? Surely this is an extremely dangerous idea. I have heard of political syndicalism, but this is the first time I hear of economic syndicalism. If this should happen to the Railways, why should it not then happen to other forms of activity in South Africa as well? Then all the revenue generated by mining should surely be paid into a mining fund and used for the advancement of mining in South Africa. Everything which is generated by commerce, should be deposited in a commerce fund. Surely we cannot establish a separate, watertight, economic compartment for one section of the population, because if we did that, what would then happen to those extremely important aspects of our economic life which do not themselves immediately create an income, such as defence or education or social welfare? I regret having to say this to my hon. friend, but his speech was an ill-considered speech.

What about licences?

Sir, the Defence Force does not have licences. That is my whole point. And social welfare does not have licences.

So what?

Surely the point is that one cannot create compartments, watertight economic compartments in the economy of your country, because the economy is a totality. Therefore, I want to suggest that my hon. friend should go back and think about it again.

To come back to my friend, the hon. member for Durban Point—he comes, inter alia, with this surprising statement that the hon. the Minister in his Budget sees the Railways as something detached from the rest of South Africa. Strangely enough, the more attentively I listened to the hon. member for Durban Point, the more I came under the impression that he was judging others by his own standards, for if ever a Railway speech was made in this House which did not take into account what is happening in South Africa and in the world, then it was the speech of the hon. member for Durban Point. He saw the Railways as a concern existing only for itself, without any relationship with the rest of the economy of South Africa or of the world. For example, he never once made allowance for the fact that this Budget was introduced by the hon. the Minister during a time of world inflation. Inflation is the problem par excellence, the greatest source of concern to the Western world at the moment. But the hon. member for Durban Point did not refer to it once, except to accuse the Railways of creating inflation. But he never once admitted that the Minister’s problem was created for him by the inflation existing in the outside world and in South Africa, circumstances beyond the immediate control of any organization. And it is important to realize that the inflation with which we in South Africa have to contend, partly as the result of the fortunate position we have with South Africa’s mineral riches, and partly as a result of the sensible policy followed by the Government itself, is affecting us to a lesser extent than the rest of the world. That extremely important fact, without which one cannot judge the Railways Budget, did not dawn upon the hon. member for Durban Point or the hon. member for Maitland. Sir, I want to ask my friends. If we do not recognize inflation, if we do not want to realize that inflation is a problem, one could criticize in the way they are criticizing, but would they consequently say that it was wrong of the Railways to pay their people more? That they will not say. Would they consequently say that the Railways, during this time of rising prices, should stop making capital purchases which are necessary to increase our traffic capacity as our economy expands. Then they should also tell us what their standpoint is in respect of the essential fact that if one wants to combat inflation in the long term, one must have increased production, one must become more productive; for the Railways can make a major contribution to making increased productivity possible, but then it should even now be spending for the share it will have in that tomorrow, and the day after tomorrow; and this means that it has to spend on a market in which everything is more expensive, and that it has to compensate its employees under circumstances where labour is becoming more expensive everywhere. It cannot do anything else. But not one of them made provision for that. Not one of them thought of the necessity for the Railways to keep pace with the times, and to keep pace with the needs of economical transport. They are criticizing into the wind, in a vacuum; they are criticizing without taking into consideration the reality facing us today. Sir, let us look at the reasons for the increased expenditure. Here I have the estimates of expenditure that has to be defrayed from revenue funds for the current year. Under each head there is an explanation of why more money has to be spent. I want to refer only to the first two or three. The same applies throughout the Budget. I want to bring it home to my hon. friends that we are not dealing here with fickleness or wilfulness on the part of the Government. I read here on page vii of the Estimates on Head No. 1: Administrative and General Charges—

Is there one of these causes which my hon. friends opposite are able to criticize or lay at the door of the Railways alone, without taking world circumstances into account? Is one of the members opposite able to say that it is wrong to make an additional amount available again for salaries, wages, holiday bonuses, etc.? No, now there is a deathly silence. In this dream world of political scavenging of theirs they carried on as if this world phenomenon were the fault of the Railways, and as if this hon. Minister alone were responsible for it.

Look at Head No. 2 “Maintenance of Permanent Way and Works”. On page vi it is stated—

Now, is this what they are criticizing? It is very easy to criticize increased expenditure and then to withhold the reasons for that increased expenditure being incurred from the people. I continue reading—

In each case it is either to the benefit of the staff in order to protect them against inflation, or the result of rising prices as a result of inflation. But a deathly silence prevails. There is no admission of these facts. There is no cognizance, no taking those irrefutable facts into consideration. I can go further and refer to the remarks on Head No. 3, on page vii—

This is the case throughout. It was, therefore, an inevitable situation with which the Minister of Railways and his Administration had to contend.

[Inaudible.]

We shall come to that. Under the circumstances it is remarkable to see with how much restraint and discipline the Railways met this problem. We see, for example, that the Railways are determined that its employees should not suffer as a result of circumstances over which they have no control. Earlier this year I mentioned examples of the fact that the railwayman has, over the years, benefited from and has had his share of the increased per capita income of South Africa. The Railways have a very good record. It is not only this year that wages are being raised; it is done each time it is necessary or justified. Between 1963 and 1973 the per capita income of the White railway worker increased by 7,6% and the per capita income of the non-White railway worker increased by nearly 8% per annum. That Railways was responsible for this. It does not have to increase its rates if it does not expand or if it does not want to deal with its employees according to this principle. But that hon. members would not advocate. They will level superficial criticism; they will never criticize in depth, taking these facts into account.

The responsibility of the Railways goes further. In general, it has to keep its costs as low as possible; it has to be efficient, and it has to bring about greater productivity in the interests of South Africa. For this, more effective management is necessary. When I was sitting on the opposite side, I often said and I still say, that if one wants increased productivity from one’s employees, one should not only encourage them to work harder by standing behind them with a whip. Good management and planning should also make it possible and easy for them to give more production per unit. On this score, too, I think, we could congratulate the Railways. I was very impressed by the following words in the hon. the Minister’s Budget Speech:

Surely this redounds greatly to the credit of the Railways. But not a single word of appreciation or any sign of insight from my hon. friends on the other side of the House. The hon. the Minister also pointed out that during the 18 months to June 1974, the wholesale price index increased by 17,3% and the consumer price index by 18%, while the rates, about which hon. members on the opposite side are making such a fuss, only increased by an average of 12,7%. Surely this is proof of the efficiency of internal discipline in the interests of South Africa, but not one of my hon. friends on the opposite side have realized or said this.

I said that if one seeks increased productivity—and this is one of the keys to the solution of the problem of inflation in South Africa and the world—the Railways has nothing to be ashamed of and need not take second place to anyone. To make it possible for our Railway people to be more productive, the Railways are prepared to spend large amounts to mechanize, to rationalize, to computerize the working conditions of their people— for that matter, to do everything which makes it possible for each worker to be able to give more. In this connection it is interesting to note that the index of real capital per worker on the Railways was 100,9% in 1963-’64. Last year—the most recent figure I was able to obtain— it was 170,1%. Often criticism is expressed by the other side on the fact that too much use is being made of overtime, of temporary workers, of Sunday time and on the practice of using workers in higher-paid posts in lower-paid posts at the salary they normally earn. It is interesting, however, to see in the report of the General Manager for the previous year that the saving on temporary staff, overtime and improved working methods during that one year amounted to R15 million. But hon. members on the opposite side do not realize these things and in their criticism they do not take this into account. Their criticism can be so much more effective and be so much more striking if they show signs of having seen the whole picture and then in the light of this, make suggestions for improvements.

When one looks at the productivity index of the railway workers and if one takes 1 000 as the basis for the 1950-’51 productivity, one finds that in 1970 it was already almost 1 400, while last year it exceeded 1 500. This means an improvement of nearly 50% in 23 years. I think there are a number of enterprises in the private as well as the public sector that can boast of a better achievement.

One could continue in this way, but I do not want to bore the House with too many figures and statistics. It remains, however, a remarkable picture of efficiency and responsibility. I think every South African ought to be proud of these achievements. Let me mention only one more example, the example of South African harbours, on whose shoulders an exceptional burden was placed by the closing of the Suez Canal, something over which we had no control. During the past few weeks an even greater burden has been placed on their shoulders as a result of the uncertainty in Mozambique, with the resulting sporadic shutdown of the Lourenço Marques harbour. This morning, when I got out of bed in Mouille Point, I looked out over Table Bay and counted the ships. Perhaps I did not count correctly; perhaps I counted ships I should not have counted, but I saw 22 ships lying at the entrance to Table Bay waiting their turn to be berthed or provisioned.

This is what happens, and one finds the same picture everywhere, at every port along the coast of South Africa. We have ascertained from the Minister what this means. He told us that the increase in the harbour traffic of South Africa was 31,7% during the past year. At Durban the increase in April this year compared with the traffic of April last year, was 109%. Sir, became this enormous increase in the number of ships calling at our harbours is attributable to factors we all hope will be temporary, one cannot organize one’s harbours on the assumption that this is going to be the situation.

One has to take urgent ad hoc measures to deal with the vast increase in traffic that could disappear again at any moment. Then one does not want to be saddled with enormous, unnecessary capital expenditure that might not be necessary for the next 20, 30 years. Yet we all have to admit that the ships are being well looked after. They sail around our coasts and carry on doing so. Sometimes the service is a bit slow because sometimes there are greater problems, but yet they receive the service to which they are entitled. This is a remarkable acheivement. But surely this is typical of the South African. During the war we also boasted that nobody could improvise better than a South African. It requires improvisation of the highest order to face this temporary problem with immediate success. I think we should also feel a little bit of pride. I think the hon. members opposite should occasionally forget for a moment that they happen to be the parliamentary Opposition in South Africa, and instead pay tribute and show gratitude where it is well deserved, as in this case.

Sir, I sometimes wonder whether we are not fortunate that much of the criticism and many of the proposals that came from the other side of the House, and from me, too, over the past years in connection with Railways, were not accepted and_ applied at the time by the Minister. This is not to say that our proposals were wrong. That I do not want to say. It is not that the Government knew better than we did. It is only that the Government was_ so much more cautious than the Opposition. If all the proposals of the Opposition were to have been accepted by the Minister of Transport, we would have been saddled with a Railway system in these times of crisis today which would have had to depend solely on low-rated transport in South Africa. All high-rated transport would have been taken away from the Railways by other forms of transport, especially road transport. The effect of inflation on the Railways would, therefore, have been infinitely greater and the effect on the cost of living would have been infinitely more critical for the people of South Africa.

There we now have an admission.

It is not really an admission; it is merely a fact.

It is so easy to make proposals, as the hon. member for Maitland did. It makes me think of the learned professor—his name escapes me for the moment—who yesterday gave an interview in depth to Mr. Krause in Rapport and who suddenly suggested that it was a mistake to have laid down in the constitution that the Railways should be managed on a business basis. Now, this is supposedly a mistake, and the way to rectify this mistake is, according to him, to subsidize the Railways as a whole, without consideration of business principles. Can you believe it, Sir! If one takes a good look at the Railways, many of its problems are due to the fact that it was not really, for good reasons all Governments from 1910 up to today have accepted, managed on a business basis because it was not possible to do so.

The fact of the matter that the Railways not only has a business function to fulfil, but an economic and a social function as well. The most important is—and there I agree with my hon. friend, the member for Maitland—that the State expects the Railways to operate some services at heavy loss in the interests of the community as a whole. I should like to ask the hon. the Minister to put his standpoint in this connection and to indicate whether he would consider raising this matter with the Treasury.

I do not think it is fair to expect the Railways, brilliant organization that it is, to fulfil functions which are in reality the responsibility of the State and more specifically the Consolidated Revenue Fund. If it should be necessary for certain types of goods to be conveyed at a loss in the interests of the country, the country as a who’e should bear the responsibility for it. Much is being done by the Railways to readjust rates so that all types of goods that have to be transported, are transported economically. But there will be many types of goods in respect of which it is going to be extremely difficult to do this without causing disruption in certain aspects of the economic life and the requirements of the State. It is in respect of those specific cases that I want to suggest that the hon. the Minister should see what can be done in negotiation with the Treasury to ensure that the responsibility rests on the shoulders where it belongs.

I see my time is up, but I should still like to say something in respect of Railway staff. I think South Africa—not only the Government—owes much to the employees of the South African Railways for the sense of responsibility they display. I think we will recall that the Railways had to fulfil an extremely strategic and tactically important function during the war years, in the war effort, while the majority of its employees were probably not even agreed on the necessity for South Africa’s participation in the war. Nevertheless the workers of the Railways out of loyalty to South Africa rendered services which were an absolute model and an example to the whole of South Africa. Now again, during these days of inflation, in these days of difficulties, the people are again willing to make great sacrifices and to make an effort to give more than duty demands of them in helping us to cope with inflation.

There are people, clergymen among others, who are trying to weaken and undermine the morale and the steadfastness of the South African citizen during these days, but when we look at an organization such as the Railways in which South Africans at every level of the social and the economic life are employed and in which virtually equal numbers of Whites and non-Whites are working and we think of how faithful they are and how willing they are—because they are treated properly, that is true—to do what is within their means to carry South Africa through this crisis, we can say with the utmost confidence that those who want to sabotage the morale of the South African people can look to the employees of the South African Railways. If they do that, they will appreciate the quality of the mettle from which the South African people are constituted.

Mr. Speaker, in the very short while that I have been in this House, I have learnt to appreciate the ability of the hon. member for Turffontein as an orator and as an entertainer. The logic of his argument is inescapable. It has been very interesting indeed to look at the debate of last year. I was highly interested to see what the hon. member had to say at this stage of the proceedings when he happened to be arguing from this side of the House.

I did not argue from the other side of the House last year.

Yes, in the last Railway Budget. [Interjections.] I read the hon. member’s speech in Hansard and he was arguing it from this side of the House at that stage. Nevertheless, he did it very well, very competently, very dextrously.

You are quite right.

Probably the most worrying aspect of the Budget presented by the hon. the Minister is the inflationary effect of the tariff increases. Millions of people in South Africa are going to be very hard hit indeed. The contention of the hon. the Minister that the average family budget will scarcely be affected is very hard to swallow. Bitter experience in the past has proved that a tariff increase leads to other understandable resultant increases and is sometimes seized upon as an excuse to increase the price of goods and services out of all proportion to the actual tariff increase. Increased passenger tariffs will place an immediate strain on the average family budget. The costs of foodstuffs, of fuel and of other household goods will invariably rise. It is very disappointing that it should have been necessary to raise tariffs as sharply as the hon. the Minister has done. Certainly, an increase was expected, but the extent of the increase appears to be inordinately large. The prospect of increased general traffic with railway lines and harbours working to capacity as a result of a successful agricultural year as well as an increase in traffic from Rhodesia, which we hoped would result in an increased revenue and presumably a greater profitability, had given rise to hopes that only small increases would have been necessary. Regrettably this is not so. At a time when it is very necessary to conserve petrol, when the conservation of fuel is a national priority, it is hoped that the rises in passenger fares will not discourage the use of public transport. Specifically, why it was necessary to withdraw scholars’ concessions, is a mystery to me. We find that pupils aged 12 and over will pay the full fare and those under 12 will pay 50% more. This is not something to take lightly. Just think what the impact of this will be on top of all the other frightening price increases on a family with three children at school. It could easily cost them R30 per month just to get their children to school.

Why? After all, the school is right next to the home.

The schools are not next to their homes. There are thousands of school children who travel by train every morning of the year to go to school.

Why?

If we look at the attitude of the Railways and the attitude of the hon. members on that side of the House, what do we find? We find Dr. Moolman, Chief Rates Officer of the Railways, saying in a statement that their analysis shows that the main users of scholars’ concessions are scholars of elite schools and that they think that if parents can afford these schools, they can afford the new rates. What an incredible thing to say. People are justifiably very, very angry indeed at this. I have a letter here from a gentleman in Pinelands, a Mr. Sutton, who wrote to my hon. colleague from Pinelands to complain about this. What is this so-called analysis? Which schools are classed as the so-called elite schools? What possible right does Dr. Moolman have to generalize in this very callous fashion about the financial affairs of the parents and pupils of these schools?

What school did you go to?

We all know that thousands of people make great sacrifices to give their children a good education. In reply to the hon. member, I must say that I also wonder whether the hon. members on the other side went to school at all. However, this is not all. These pupils are supposed to be the main users of these concessions. What about the thousands of others? Are they just unfortunate victims? What about the thousands of Black and Brown pupils who have to travel many miles to get to their schools, training colleges and other colleges? If this is what the Railways think, they must think again. I cannot say I like the quality of thought displayed in this little bit of thinking.

Then we come to the question of subsidies on fares to and from resettlement areas. We listened to the hon. the Minister’s speech and we think it will hit the Black commuters hard. If only resettlement areas were involved, thankfully it would not have affected all that many. However, on inquiry—and here I agree with the hon. member for Durban Point—what do we find? We find that the so-called resettlement areas include all the main local lines servicing the Witwatersrand, Pretoria, Vereeniging, Durban and Cape Town. In short, all the thousands of Black commuters are hit by a rise of 12,4%. What nonsense it is glibly to talk about resettlement areas! What is the hon. the Minister seeking to achieve by means of this item of misrepresentation? Over whose eyes did he think he was pulling the wool? I would like to say one thing to the hon. the Minister and that is that the Black commuters are not going to be fooled. They are certainly going to know that they, many of whom struggle along with wages below the poverty-datum line, living miles and miles from their places of work, are all going to pay 12,4% more to get to their jobs. Do I really have to spell out what the burden of this is to these people? These are concessions that should not be affected and I would suggest to the hon. the Minister that he tell this House just how much these favourable rates for scholars cost the Railways Administration in the past. In the light of his reply, consideration could be given to subsidizing scholars’ fares once again so that these increases can be done away with. I would suggest to the hon. the Minister that he talks to his Cabinet colleagues about restoring this particular subsidy and also the subsidy for Black commuters.

In his introduction to the Budget, the hon. the Minister drew our attention to the Constitution Act which provides that the South African Railways and Harbours should be run on business principles. Despite this, the Railways have for many years operated at a loss. The only way running expenses have been met, has been by balancing losses on Railways against the profitability of the Harbours, Pipelines and sometimes of the Airways. What I should like to do is take a very careful look at the Railways themselves and try to analyse why running on business principles should result in losses every year. The answer to this is, of course, that the Constitution Act also stipulated—I quote the hon. the Minister again—that the Railways and Harbours should pay due regard to the agricultural and industrial development of the country. At the time the Constitution Act was passed, such blessings as airways and pipelines were unheard of. One should perhaps try to look at railways on their own without taking into account these other wonderful moneyspinners. If the hon. the Minister had to stand up each year and present a Budget dealing with Railways alone, it would be a highly embarrassing exercise. It would not have the advantage of the profitability of the other branches of the organization to make it look better. The hard facts of the matter are that the Railways themselves are not profitable, and that many goods travelling by rail are transported at a loss to the Railways and Harbours Administrations. Is this loss incurred due to incompetence? What is the reason for it? I think that it would be very unfair indeed to suggest that the thousands of railway workers throughout the country are an incompetent lot. This is certainly not so. I believe that our railway staff should be congratulated on doing a first-class job. I think that we are very well served indeed by the hard work and dedication, often under very difficult circumstances, of the railwaymen themselves. We must therefore look further afield to discover what is causing these losses on the Railways. Is it perhaps mismanagement? Are the General Manager and his service staff a lot of bumbling in-effectives? This is clearly not the case. I believe that the Railways and South Africa are extremely well serviced by the Railway Management. What then are the reasons for the losses incurred on the Railways? It is clear that the overriding reason is that certain goods are carried at uneconomic rates. The Railways have to pay up in respect of every ton of certain classes of goods carried by them. What in fact the Railways are doing is subsidizing users who are paying less than they should. Is this a good business principle? Is it a good business principle to transport goods knowing full well that you are going to lose money in doing so? If an average business were to run at a loss of this nature, it would soon be out of business. We have to look further than profit in this matter. We have to look at the stipulation in the Constitution Act quoted by the hon. the Minister—that due regard shall be paid to the agricultural and industrial development of the country. The hon. the Minister described the task of the Railway Administration as being the provision of an adequate and effective transport infrastructure, and one must agree with this. Do we, however, read into this an instruction to subsidize certain classes of traffic if it is good for the country to do so? A case can always be made out for subsidizing transport rates on certain goods. I would agree if it is for the good of the country, but is it right that this subsidy should be a hidden subsidy? Are South Africans, and is this House, aware of just how much certain goods conveyed on the Railways are being subsidized? Sir, I do not believe that hon. members are aware of just how much these goods are being subsidized and I do not believe that we know what goods in particular are being subsidized.

Why not tell us?

I would like to say very clearly that it is time the facts of this situation came out into the open. If we are going to subsidize certain traffic —and this is exactly what we are doing— we should do so after careful consideration of the overall priorities. Are these subsidies really the most important in our list of priorities? Without a very careful study of figures, it is just not apparent what is being subsidized and to what extent it is being subsidized. When agricultural produce is carried, just what is the exact extent of the losses incurred? What is the additional subsidy to farmers who are already highly subsidized in other directions? Is this the top of our list of priorities? When mineral ores are transported, just how heavily are these transport costs subsidized? How much is White passenger traffic subsidized? How much is Black passenger traffic subsidized? Let us take a very simple example of my contention, Sir. Does the average inland motorist, who pays a higher price than perhaps he should pay for his petrol in terms of the huge profitability of the pipeline, know just how much he is subsidizing the mealie farmer, for example, whose transported mealies are being at an uneconomic rate? Why is the motorist singled out to bear the cost of this subsidy rather than the total South African community? Is this a sort of selective taxation? Sir, I am not saying that these things should not be sugsidized. In many instances there is a very good case indeed as to why they should be subsidized for the good of South Africa, but what I am saying is that we should know exactly what we are subsidizing and the extent of the subsidies so that we can be in a better position to decide on our priorities. We should be in a position to judge whether or not, for the good of South Africa, a particular industrial undertaking is perhaps more worthy of encouragement by way of subsidy than a particular section of the agricultural community.

I am not making judgments myself in these matters, but I do believe that when a judgment or an assessment has to be made, it should be made in the full light of public knowledge and public opinion. To many South Africans it may seem unfair, when mealie farmers are enjoying the benefit of a record mealie crop, that the Railways should possibly be placed in a position where losses could be increased because more mealies have to be transported at an uneconomic rate. Sir, in the presentation of a Railway Budget I think it is important that subsidies of this nature should be seen as subsidies and that consideration should be given to them in that light.

Sir, perhaps I should now approach the next problem from a somewhat different angle. I want to approach it from the point of view of the ordinary railwayman. I do not think that I would like to be working for the South African Railways at the moment. It must be very demoralizing to know that you are working for an organization that is continually losing money. It must be very demoralizing to know that you are working for an organization which on the face of the figures presented to us is failing. It must be very demoralizing to know that because you are working for an organization that is losing money, that organization’s ability to pay you a good wage is going to be influenced very strongly by the fact that it is losing money. I am convinced that if the Railways were making profits, they would look with a very different eye on the question of how much they should pay their employees; they would look with a very different eye on the wage demands of railwaymen. Any commercial organization in the private sector that is making a good profit is likely to be more favourably disposed towards sharing its good fortune with its employees by paying them more. If it is losing money, its employees are not likely to be given a favourable reply when they ask for wage increases. The same thing must apply to the Railways. If the Railways were making a profit year after year instead of losses year after year, I am quite convinced that their attitude towards paying railwaymen better wages would be a very different one. Sir, is it the fault of the railwaymen that the Railways are not making a profit? Is the loss of the Railways really due to the fact that the Railways are subsidizing other sectors of the economy? I think if this is the case, then it is not the fault of the railwayman. I do not think it would be unfair to say that the railwaymen themselves are probably subsidizing other sectors of the economy. One could well say perhaps that the railwayman was subsidizing the farmers or any other sector that takes advantage of the Railway’s uneconomic rates. Why should this be the responsibility of the railwayman, particularly, instead of the whole South African community? Sir, the fact that the Railways are showing a loss because they are subsidizing certain users has a number of very undesirable effects indeed. I think it is necessary for the hon. the Minister to ensure that the Railway Budget is presented in a very different form in future. I believe that hon. members have the right to know in detail what sections of our economy are being subsidized by the Railways, and I believe that hon. members have the right to know so that they can assess these subsidies in the light of carefully considered priorities. I believe that railwaymen themselves have the right to know what they are subsidizing. By all means, if there is a case for subsidizing transport costs for certain sections of the economy, let these subsidies be made. I would agree with them, but let them be seen as subsidies and not as inefficiency on the part of the Railways. I am sure that if the cold light of detailed analysis were placed on railway results each year, showing who has benefited from the subsidy, there might well be a re-think about our priorities. I am well aware of the fact that the Railways Administration is working towards the implementation of the recommendations of the Schumann Committee and that progress is being made towards the levelling of the rates for high-rated traffic and for low-rated traffic on the principle of cost of conveyance, and this is to be welcomed. But, Sir, it is not enough. We welcome the fact that tariff classes 1 to 7 are only being increased by 5,8%, while those in classes 8 and lower are going up by 19,8%. This is a step in the right direction in the levelling process. It is a step in the right direction in so far as operating on sound business principles is concerned, but it is not enough. Full implementation of the Schumann Committee’s recommendations will take many, many years. In the meantime the searchlight of public knowledge and public opinion should be directed at all subsidies. I am, for example, a little suspicious of the new tariff class 15, for ores and minerals. How much are the Railways going to lose in transporting ores and minerals at rate 15? Again I make the point that a good case can probably be made for subsidizing transport costs for ores and minerals, but this should be in the form of a direct and open subsidy rather than a hidden subsidy. Instead of the Railways being shown up as the loser, they should be shown in the open as subsidizing, perhaps justifiably, other sections of the economy. The hon. the Minister himself admits that the principles of Railway rating policy in regard to the broader national interest are not generally appreciated. This is one way the hon. the Minister could ensure that they would be generally appreciated. Full economic rates should be charged to all users, and if the traffic will not bear it and certain users cannot afford the higher rates, then consideration should be given to the payment of an open subsidy on the merits of the case. I am quite certain that our present methods of hidden subsidy are sheltering other sectors of the economy who, if they had to make out a case for a subsidy, would be very hard-pressed indeed.

Tell us about the subsidy you get from Harry Oppenheimer.

You will hear about it in a moment, but it is not that particular subsidy, because I get no subsidy from Mr. Harry Oppenheimer. [Interjections.] But it is this kind of hard, businesslike assessment and analysis that is needed if we are to make sure that no inefficiency in other sectors is being hidden by transport subsidies. I think it is true to say that certain users of transported goods are probably paying too much. Motorists are paying too much for transported fuel. The pipeline profits are excessive, but they are used as a cover-up for uneconomic traffic. The profits on pipelines for the year 1973-’74 were of the order of R58 million. One could well say that motorists were subsidizing the mealie-farmers to the tune of R58 million. It is important that hon. members should know the facts.

On the question of harbours, the Minister stated categorically that he can find no valid argument for divorcing the harbours from the other services, and gives his reasoning for this conclusion.

Marais, did you write that speech for him?

I feel complimented that the hon. member for Durban Point thinks that the hon. member for Turffontein wrote this speech. When the hon. the Minister says that he can find no valid argument for divorcing harbours from other services and gives reasons for these conclusions, I think he should reconsider his attitude. I can see why the hon. the Minister would be very upset at losing his control of a money-spinner like the harbours, because how else would he balance his Budget? The previous Minister of Transport had come to rely on the harbours to make up shortfalls from elsewhere, and I can understand the hon. the Minister wanting to have the same advantages as his predecessor to make the picture look a little better. However, I am convinced that a Minister who has to run the Railways without the assistance of harbour and pipeline profits would ensure that the case for the Railways themselves was presented in a fairer light and that he would be keener to ensure profitability. Far more important is the fact that the Railways and Harbours portfolio has just become too big. I do not believe that the multiple responsibilities of harbours, railways, airlines and pipelines are best served by the control of a single department.

I think you missed the boat!

I think there is a very good case indeed for a separate Ministry of Marine which would take total responsibility for harbour matters among other things. I think the time has come for the whole question of harbour development to be seen on its own and I think that the situation we have found ourselves in in the last few months, which almost assumed the proportions of a national emergency, was a clear pointer that urgent action must be taken in terms of harbour development. The hon. the Minister argues, and I quote:

I am afraid I cannot agree with him. Harbours and marine matters are a very specialized subject. They need specialized treatment and control. Of course there is need for co-operation and close co-ordination between harbours and railways, but all departments of Government always have to co-ordinate their operations very closely. We are in the era of the specialist. This also applies very strongly to expertise in matters of government. The hon. the Minister says that he has satisfied himself that there is no substance in the allegations that harbour facilities are not being provided on a realistic basis. I am afraid the hon. the Minister is in the minority because there are very few others concerned with harbour facilities who are satisfied. There are many people in South Africa today who believe that there should be radical reorganization of shipping and port facilities in South Africa. Outside Government circles it is a generally accepted fact that there has been a failure to plan adequately for ports which could cope with the national growth rate. I am sure that the present harbours management is fully aware of the prevailing problems and is quite efficient in doing what it can but there has been a lack of adequate planning for decades. The last three years we have seen much improvement in this. This year’s belated acceptance, however, of the Steenkamp Commission’s recommendations of 1970 on containerization means that we will only have this facility to ease congestion by the beginning of 1977, seven years after the recommendation. Certainly there are signs of forward planning in Cape Town, at Richards Bay and Durban, signs that the Administration has in the past four years become more aware of its responsibilities and priorities in respect of harbour development. However, the tardiness in accepting the St. Croix scheme can only be deplored.

Can we examine one particular aspect of harbour administration? I should like to quote a figure given on 24 July of this year by Mr. Wim Holtes, the chief executive Safto, the South African Foreign Trade Organization. After consultation with some of the country’s main exporters, ship owners and trade officials, he estimated that this year’s congestion in our harbours was likely to cost the country about R100 million in lost revenue in extra demurrage charges and in delays. The hon. the Minister does not appear to be worried by the fact that the country is possibly losing R100 million. Until containerization is working, these extra costs are something South Africa will just have to grin and bear. The view seems to be that conditions are likely to get worse, though, and there is a strong possibility that the estimate of R100 million per annum could escalate. Congestion was partly due to increased inflow of capital goods to service the many expansion programmes, and the ports were just not equipped to handle the increased traffic. We have to consider the whole question of our ports very seriously indeed. Never before in the history of South Africa has it been necessary to focus so much attention on our ports. Recently a spokesman for the South African Conference Lines said that the possible re-routing of Rhodesian export goods through South African ports would be disastrous. It may never happen, but the strong possibility remains. What are our plans if this should happen? Furthermore, the spectre of a shut-down of the Lourenço Marques harbour is hanging over South Africa’s head. We hope and pray that this will never happen, but it could happen. Recently, at one stage, there were something like 80 ships idle in the harbour and anchorage at Lourenço Marques. If these ships, and all subsequent traffic, were rerouted to South Africa our ports would face a tremendous crisis and I am not confident that we would be able to cope with it. At a time like this surely there is a strong case for a department which will concentrate on and specialize in our harbour problems. There are many other aspects of harbour administration which give cause for considerable concern. There is no doubt at all that hold-ups cause losses to commerce and industry and that these losses are inevitably passed on to the consumer. I am sure that delays in shipping are having a serious effect on costs with the resultant inflationary financial impact being passed on to the consumer. Also, although Safmarine carries a lot of our goods, there is no doubt at all that a big proportion of the surcharges are going to foreign lines and will therefore affect the export account.

But let us look at another trouble area. At any time there are ships in the roadstead outside Cape Town docks waiting for bunker facilities. I would take the view that bunkering is largely an oil company responsibility. In a very good article in this morning’s Cape Times Mr. George Young, The Cape Times shipping editor, points out that the giant oil cartels reveal a conspicuous nonchalance about these difficulties. But again, Mr. Young emphasizes, our Government frequently proclaims that Table Bay is a strategic port for Western nations. If there should possibly be an emergency of any kind involving the use of Cape Town harbour for strategic purposes Western countries, whose ships will be speeding to the area, will have to wait a long time in Cape Town for fuel. Mr. Young is quite right and, apart from this, the frustration of many international ship-owners whose ships are time and again delayed at huge cost while they wait for fuel supplies does nothing at all to enhance the reputation of our country overseas. Again I am absolutely certain that a ministry of marine, which could concentrate its efforts on problems of this nature, would increase efficiency.

There are other areas which a minister of marine could control, e.g., the ever-growing problem of pollution of the coastal waters. The oil pollution problem on our beaches, I believe, would be better served by a department which was not concerned with the multitude of problems besetting a Railways Administration. These problems are in no way related and the decentralization of control in areas of special expertise must surely result in increased efficiency. The facts of the matter are that considerable dissatisfaction exists about marine matters. Containerization will, no doubt, be of great assistance in alleviating the crisis situation, but are we approaching containerization in the best possible way There is a strong body of opinion in South Africa who believe that our intended participation as a signatory to the 15-year ocean freight agreement is a grave mistake and that it will permit other nations to have a strangle-hold on shipping services between Europe and South Africa. This opinion may not be correct and I am not in a position to say, but informed people of considerable expertise are very unhappy about it. [Time expired.]

Mr. Speaker, at the outset of my speech I should just like to associate myself with the good wishes which the hon. member for Witwatersberg conveyed to the hon. the Minister. May the hon. the Minister derive great pleasure from his task of dealing with this very large and important department.

The hon. member for Orange Grove, who has just resumed his seat, stated right at the outset that what he was objecting to was not so much the rates increases as such but the fact that these had been such tremendous increases. I shall reply to that at a later stage, in the course of my speech. The hon. member also mentioned and objected to the cancellation of the school concessions. I just want to put it that these concessions no longer serve the purpose for which they were initially introduced, viz. to enable less well-to-do children to receive specialized training. At present the concessions are for the most part being used by people of substantial means to send their children to exclusive schools. I, who was a member of the teaching profession and am aware of what happens there, also know that certain areas are demarcated for certain schools. As far as I know, there are not really many high or primary school children who need travel very far, particularly by train. We have also been informed now, by the leaching authorities, that State assistance is being granted to the less-well-to-do children as well. To a large extent, therefore, the argument advanced by the hon. member, as well as the hon. member for Durban Point, falls away.

The hon. member for Durban Point made two remarks in particular in his speech to which I hope to return in the course of my speech. He said inter alia:

He said this repeatedly in his speech. It was also, in a subtle way worked into the amendment of the hon. member, particularly in that section which read: “… including the role and financing of the railways and harbours”. Sir, I think this is a blatant accusation of incompetence against the Management in its handling of the administration. In addition, the hon. member also said—

The hon. member for Maitland also referred to this, as well as, to a certain extent, the hon. member for Orange Grove.

When attacks are made on the Minister by the Opposition here, and by the Press and other persons and bodies concerning the increase in the rail and other transportation rates, the arguments should not merely be based on hypercriticism and emotionalism, as the hon. member for Durban Point succeeded in doing in such a masterly fashion last Wednesday and again here today. They should rather be based on realism and a constructive and objective approach. No one likes rates in increases, least of all the Minister and the Management, because these lead to a specific chain reaction. But circumstances—such as rising costs, inflation and so on—have induced the Minister to take these steps; he was compelled to take them in the interests of South Africa’s largest transport undertaking and in the national interests.

There are quite a number of matters in regard to which the Opposition and we on this side of the House do at least, or ought to, agree on. To use the new catch-phrase, “consensus”, I want to put it in this way: There are definitely many matters on which we could at least reach consensus. Firstly, everyone agrees—hon. members on that side also put it in this way—that the Railway servants had to receive salary and wage increases, to make provision, inter alia, for the rise in the cost of living. This increase of R111,7 million last year is of course something which has a cumulative effect in that it will in future be included in the pay-sheet every year. In the second place, we all agree that the entire cost structure has changed as a result of abnormally increasing costs. In this way the cost of rolling stock and other equipment has increased. Similarly, there has been an increase in the price of coal, of fuel, and in the price of electricity, something over which the Railways as such has no control. The oil crisis itself played a major part in the increased cost of fuel and diesel oil for the road transportation services, as well as of fuel and oil for our Airways.

In the third place it is agreed that it is necessary to move in the direction of bringing rates into line with the actual costs of transportation. Adherent to the recommendation of the Schoeman Commission, we agree that the gap between the high and low-rated goods and commodities should be narrowed, and that greater emphasis should be placed on the costs as such. The Minister has incorporated the idea of the narrowing of this gap in the Budget proposals. The hon. the Minister is supported in this inter alia by the director of the Suid-Afrikaanse Handelsinstituut, Mr. F. F. de W. Stockenström, and various other persons and bodies.

In the fourth place it is definitely agreed that, apart from the essential maintenance of the existing railway property—including the thousands of kilometres of permanent way, and the rolling stock—inevitable expansion must take place. The infrastructure must be adapted to economic progress. New railway lines have to be built, existing railway lines have to be doubled, railway lines have to be electrified, and mechanization and automation is imperative. All this costs money.

Everyone is agreed that harbour facilities have to be expanded. The previous speaker and other speakers referred to containerization and to the container traffic which we will have in future. We know that container quays will have to be built. This is inter alia in respect of expansion which has to take place in regard to the harbours. Our airports will also have to be improved, and our Airways must remain competitive with the air-lines of other countries. For that reason we must constantly purchase new aircraft.

We all agree that it is necessary to plan ahead with vision and that long-term planning is necessary and that this should form part of the task of the management. In this particular regard we think inter alia of Richards Bay, and the entire project related to that.

On both sides of the House, on the side of the Progressive Party as well, there is unanimity in regard to the matters which I have mentioned, and also in respect of certain matters which I have not mentioned. All these matters are factors which have helped to bring about tariff increases. They were inevitable.

We do, however, differ on other matters. In particular we differ in regard to the extent of the increases. The hon. member for Orange Grove said that the increases were too drastic. We differ on the extent of the rates increases and to what articles and to what commodities the increases should apply. In addition, we do not agree on the resources which should be applied to cover these rising costs. The one resource which the Opposition is so fond of referring, the resource which they want to apply, in the Exchequer. They say that the State should make provision for that, and should do so from the Consolidated Revenue Fund. Time and again in the past the United Party came forward with the idea of instant solutions. They frequently made these “wave-of-the-magicwand recommendations” and, so they alleged, behold! all the problems will be solved— all the deficits will disappear, and no further rates increases need take place! I maintain that the Opposition has repeatedly in the past made these magic-wand recommendations.

According to the Opposition the Consolidated Revenue Fund should be responsible for all losses on goods conveyed. The necessary funds will probably have to fall like manna from heaven, or be available on demand. In that way it is then possible, as they contend, to counteract the increase in wages, bolster the Rates Equalization Fund and recover the increased costs in the industry. If that could be done, the hon. the Minister and the Management may as well sit back and relax. The initiative of the workers will disappear, for then there is after all a Santa Claus who will provide the funds. A Utopia will then dawn for the Minister and the Management. Nor is that all. As soon as the Railways comes forward with this request, the Minister of Posts and Telecommunications and the Post Office management will come forward with a similar request. They will regard it as a very convenient source on which they, too, can draw to recover their losses. It was in fact the opposite side of the House that claimed in the past that it had been they who had agitated for the Post Office to be independent.

Where does the money for this Consolidated Revenue Fund come from? Is it not the same taxpayers who maintain this fund as those who will have to pay for the new rates increases?

The hon. members of the Opposition want the S.A. Railways to sacrifice its independence, if they constantly come here with pleas of that kind. The Railways is an independent business institution which is responsible to this House and to the country. The Railways must balance its Budget and it must meet its own needs to cause its books to balance as far as possible out of its own resources. That directive was given to the Railways Administration and the Minister in Section 103(1) of the Constitution Act of the Republic of South Africa. I am also saying this for the information of the hon. member for Maitland, who referred to the Union Constitution Act of 1910. In 1961 that directive was again included in the Constitution Act of the Republic. The Opposition must tell us whether they feel that that section ought to be deleted, and that the Railways, because it cannot, according to them, make the grade itself, should sacrifice its independence. Time and again the Opposition advances the argument that the Government has, in accordance with section 106 of the Constitution Act, already subsidized certain services from the Consolidated Revenue Fund. That is, after all, what the hon. members meant. For example, the passenger services to the Bantu resettlement areas and to the Indian areas are subsidized in this way. In addition, the hon. member for Witwatersberg mentioned the example of rebates. What the Opposition now wants, as I see it, is that the Government should also subsidize the conveyance of goods from this fund. I do not want to ask them what commodities should be subsidized, and to what percentage. How generally should this be applied? The hon. members did not furnish replies to those questions in the speeches which they made.

With these increases the Minister and the Management have upheld the fixed principle of railway rates policy. The basic principle in the determination of rates is the cost of the conveyance of an article and what the transportation system is able to bear These two principles must apply jointly. Any Railways organization which does not want to go bankrupt, must take these two basic principles into account if they want a healthy industry. As matters stand at present, even after the application of the new rates—-the hon. member for Orange Grove also referred to this —the rates on the high rated goods will still have to be applied to subsidize the loss on the conveyance of the other goods. In addition the profits on the pipeline—and on the harbours—if there are any—will be applied to subsidize losses on rail transportation.

We on this side of the House will strengthen the hand of the Minister and the Management in carrying out the directive contained in section 103(1) of the Constitution Act. The South African national transportation system must be managed according to business principles and as a business undertaking. Nowhere in the world is there a national transportation system which has been and is being so successfully managed as this transportation system of ours. I believe that this Minister, with its extremely competent Management and with the loyal co-operation of a dedicated and disciplined workers corps, will overcome this severe criticism and the difficult times which lie ahead for them.

In conclusion I should like to discuss the provision of housing for the Railway servants. In the Republic the South African Railways excels as the one employer which has done such a tremendous amount for the housing requirements of its employees. The Management believes that if its Railway servants have good accommodation, and they need not therefore be constantly concerned about the housing of their families, they will also be happy and positive employees. Since the 1948-’49 financial year —here I just want to draw the attention of hon. members to the fact that this was the year in which the National Party came into power—a total of 15 280 departmental houses have been constructed or purchased for an amount of R 109,9 million. On 31 March 1974 a total of 24 269 houses were available to the staff. Approximately 50% of the total White staff are accommodated departmentally, and over 90% of them are married staff. As hon. members are aware, unmarried staff are accommodated in flats and in communal dwellings. Apart from the provision of departmental houses, there is still the well-known house-ownership fund from which loans are made available. This fund was established with effect from 1 April 1956 with the purpose of financing the home-ownership scheme. The home-ownership scheme enables members of staff to purchase or build houses with the aid of loans which are repayable by them in monthly installments, in the past the interest rates payable on those loans were exceptionally low. For the financial year 1972-’73 this interest rate varied between 3½% and 4%. In respect of the 100% scheme 855 loans to the value of R13,6 million were granted during the financial year ending 31 March 1974. Since the introduction of the scheme, i.e. on 1 April 1956, 20 662 properties have been purchased for an amount of R 162,8 million. In respect of the 10% scheme, 719 properties were purchased for an amount of R1,5 million during the financial year ending 31 March 1974. Since the introduction of the scheme on 1 April 1956, therefore, an amount of R21.4 million has already been appropriated from the fund for the purchase of 17 439 properties. Sir, I am giving you these figures simply to indicate to you that approximately 70% of all White railway workers are today being housed departmentally or are enjoying the benefits of the home-ownership scheme. Sir, the abovementioned figures are really a feather in the cap of the Management, and are an indication of the earnestness with which the Railways regards the housing situation of its employees. Throughout the country housing problems are causing tremendous headaches, particularly to newly-weds, and in the light of this fact and the steadily increasing building costs, one would like to see the housing programme of the department, particularly in respect of departmental housing as well, being strengthened and expanded. We are all thoroughly aware of the lack of funds, which is a major stumbling block. In this regard I want to refer to a reply given by the General Manager of the Railways to a question before the Select Committee on Railways and Harbours on 20 April 1972. This question was put to him by the hon. member for Durban Point, who made a good contribution there, perhaps better than his contribution here today. The question was—

To which the General Manager replied—

He then continued—

Sir, this matter, in which I am specially interested, was broached once again this year on the Select Committee. I am of the opinion that it is in fact possible to amalgamate the Pension Fund and the Housing Fund, even if it should be necessary to introduce an amending measure in this regard to make it possible.

Sir, it was very interesting to listen to the debate here today, and especially to the arguments of the hon. member for Orange Grove and the hon. member for Durban Point. As far as this Budget is concerned their attitude is strange; for where there is a little bit of icing-sugar on the cake they want to take it off at once. They want the pipeline to be placed under separate management, as well as the harbours, which are associated therewith. In other words, the two important legs which yield profits have to be taken away from the Railways and then the rest has to remain under the management of the Railways Administration.

No, you did not listen carefully.

Sir, this afternoon in this debate we have had the same refrain from that side which we had here in 1971 and in 1973. When the increases in rates were introduced at that time, we had the same questions from that side as we have had here this afternoon. At that time we also heard how the increases in rates would affect every person in the country. But what has been noticeable this afternoon is that the hon. member for Durban Point, who introduced the debate, did not speak with anything remotely resembling the conviction with which the present member for Turffontein spoke when he introduced the Railway debate in 1971 and 1973. Sir, the hon. member for Turffontein has already mentioned here that the hon. member for Durban Point is carrying a very heavy burden; that is so; he has to carry a heavy burden; he has to bear the brunt in that party; he has to pull the chestnuts out of the fire for them for they have no one else on that side who can do it for them. But, Sir, one wonders where all the bright sparks are that the United Party was allegedly bringing to this Parliament. We constantly read in the newspapers of the wondergul new talent the U.P. was sending to this Parliament. They selected these people themselves; they were all hand-picked, and what do we find in this Railway debate today? We find that not one of them is here; they are conspicuous by their absence. Sir, I chanced to read an article in The Cape Times this weekend in which the writer evaluated the new members and expressed his opinion on how they would perform in future. He spoke, inter alia, of the three Young Turks from the Rand, the hon. members for Sandton and Randburg and the other one who is less important. What conclusion did he reach? He said, after he had evaluated them—

In other words, this important paper evaluated these new members and found that they were of no value to the United Party. I say it is very clear that a few of those men have been derailed en route and that the old guard once again has to stoke the train. Sir, surely we remember what happened when rates were increased in 1973. At that time there was the same row which that hon. member has now kicked up again, and we recall how dramatically he ranted and raved. Sir, you know the other day he almost moved me to tears with his performance here. I said to my bench-mate next to me: “Pass me a handkerchief, for Vause has moved me to tears with the hardships the people are suffering.” But this is the same hon. member who said in that debate how disloyal the railwayman was, and how the railwayman created special overtime and Sunday time for himself, which was tantamount to theft. No doubt he has already forgotten about that.

No, you can do better.

That accusation taught them an expensive lesson for in the process they lost six seats. Do you know, Sir, they are sitting there today without a single constituency in which there is a concentration of railwayman being represented by them. They no longer represent one Railway constituency.

What about mine?

We even miss Mr. Bands. He is out, with all his yellow canaries and all. Yes, we shall continue missing him for he was the mail bag. Surely we recall how he brought forward all the complaints from his pouch and told us of employees against whom disciplinary action had been taken, and that it had been so unfair, and then he would have another clever story which would issue from his pouch. I say we miss him, but his task has now been taken over by the hon. member for Durban Point. But it is strange, Sir, that they are so quiet and that not one of them speaks about the salary increases the railwaymen received. Do you recall how they ranted and raved in the past? They said we had bought the elections; we had bribed the railwayman during the election. When the railwaymen received a salary increase of approximately R64 million on 1 May 1970, before the by-election at Langlaagte, they spoke of the Langlaagte “lolly” or “hike”. Do you recall, Sir, the by-election at Klip River? At that time we heard the same story, but now they are deadly quiet. There is not even any thanks for the increase, and they are supposedly the champions who supposedly pleaded for higher salaries. But I want to take this opportunity to thank the hon. the Minister for those salary increases for those people.

What about the workers who earn R200 a month?

They deserve it They work for it [Interjections.] But this National Party does not think of the railwayman at election time only. No, we have too fine a record for that, and I just want to refer to it. On 1 October 1965 the railwayman obtained R35 million in salary increases, on 1 April 1968 R43 million, on 1 June 1970 R64,3 million, on 1 January 1973 R100 million, and on 1 July 1974, just recently, R11 1,7 million. This is a total amount of R354 million which has been paid to the railwayman in salaries during the past eight years. I say they are a fine staff and deserve it.

I want to take this opportunity to express my thanks to the Minister for the 10% increase which pensioners have received. They are people who have no bargaining power. They no longer have trade unions. They are dependent on the State and that 10% increase plus 2% is, in effect, as the hon. the Minister said, 12½%.

Thank the Minister for the reduction in allowances as well.

Every speaker on the opposite side attacks the Government about the increase in the rates and then they enlarge upon them and say that these increases affect everyone. I am referring, in particular, to the scholars about whom the hon. gentleman became so dramatic, but I think the matter was dealt with very effectively by the hon. member for Gezina when he supplied the necessary answers. Those needy pupils have the right to go to the provincial administration to appeal for assistance there. We do not see exactly why it should specifically be the Railways which should carry that burden. We had the same attitude from the Opposition again this year, the same negativity. There was nothing positive. They are here and they are there, they blow hot and they blow cold, so they move from the one side to the other. However, I shall deal with these rates in the course of my speech and I shall also indicate how they will affect the consumer. I still say, and I stand by it, that if the retailer or the trader would simply recover the railage and not abuse the increases, we would not have the results the hon. member for Durban Point mentioned, i.e. that the impact of this might run into R400 million.

When are you going to start your speech?

Surely it is the biggest nonsense to say that this is going to be the impact on the ordinary consumer. The hon. members should adopt a very clear standpoint. Do they accept that the Railways should be run as a business undertaking in terms of the Constitution? They should tell us this once and for all. Perhaps they really do accept it. One moment half of them accept it and the other half not. They do not know exactly where they stand, and that is why the Opposition is in the position it is in today. It is because they never adopt a standpoint. That is why they are sitting where they are. They should say straight out whether they want the State to subsidize the Railways. They should bear in mind that when it is done on that basis, it would not be a once-only amount that will have to be subsidized by the State It would have to be paid into the Railway funds each year by the Treasury. I say very frankly that I do not believe that it will promote sound management if the Railways is not run as a business undertaking. I believe that in that way efficiency might be detrimentally affected. One would be taking the initiative away from the people. I stand by the view that it should remain an autonomous body under the control of the General Manager. It should work out its own weal and woe. The Railways renders a specific service to either the individual or the community, it makes no difference who it is. And now I want to give an example. If we want to subsidize internal flights, on which losses have already been suffered in the past, out of the pocket of the taxpayer, I ask: Can my wife and I just go ahead and fly? What then?

You travel free of charge.

Yes, be free and easy.

He said you travelled free of charge.

Then the State has to pay money into the fund, because where will the Railways be able to obtain it from if it suffers a loss in respect of that revenue? One may run a business, one may be a farmer on one’s farm, one may erect a fine pumping installation on the bank of a river as a luxury item for oneself. One can acquire that expensive article. One must, however, order it and it has to be transported by rail. It is for one’s own use, but if a loss is suffered on the basis of those rates, should the taxpayer bear it? What kind of nonsensical argument is this? Surely one cannot run a business along these lines. The only logical solution, whether we want to admit it or not, and whether it is popular or not, is that we can only achieve all these things if we are prepared to increase rates.

Annually?

One shall have to do so from time to time. If rates were not increased at the present time, we would have been saddled with a deficit of R61 million at the end of this year. The Rates Equalization Fund does not have the money to finance it. As I have said, the only solution lies in increasing rates. But let us return to the Budget itself and see what the situation is. This Budget is not drawn up from a number of figures which are taken from our operating revenue and expenditure. This Budget is based on facts. After all, information is gathered beforehand. In this way the Maize Board, for instance, is approached beforehand to determine what the expected maize crop will be and what the possible export figures will be. It is determined, too, how much maize there will be and from where to where it will have to be conveyed. The same happens, of course, as far as coal is concerned in respect of the Transvaal Coal Owners’ Association and others.

Commerce as well.

Of course. In other words, it does not simply comprise a lot of figures which are submitted to us at random. Now, we should remember that although the Railways is a large organization, it is not an unwieldy one. It is a very delicate and sensitive body. After this Budget has been drawn up, there are many factors which may influence it, such as drought, floods and economic conditions. Let us have a look at this Budget and consider the facts before us. In this regard I want to refer the hon. member for Durban Point to page 12 of the Green Book. On this page there is a summary of the revised estimates of revenue and expenditure. One notices that in respect of the Railways there was an increase in revenue of R22 million. However, in respect of expenditure, too, there was an increase of R9 million. This means, in other words, that there was R13 million more in revenue which reduced the deficit in respect of the Railways from R43 million to R30 million. In respect of pipelines there was a shortfall of R8 million in respect of anticipated revenue and if it is unavoidable, that revenue must be found somewhere else. However, one cannot mention the pipelines only and that is why I want to refer to passenger transportation services as well. In respect of passengers the revenue was R3¼ million less than the original estimate. In respect of livestock the revenue was R2½ million less than the amount which was originally budgeted for, while the deficit in respect of coal was R3,45 million. The deficit in respect of these three commodities, therefore, was in excess of R9 million. So this Budget clearly shows where the bottlenecks are to be found in the whole field of operation. Hon. members are not prepared to accept increases in rates. Let us take a look, however, at operating expenditure. The salary increases amount to R1ll million, while the costs of additional fuel amount to approximately R35 million and expenditure in respect of steel to R5 million. An additional appropriation of R9 million has to be made available in respect of depreciation, while the interest burden is R22 million higher. In respect of the Superannuation Fund an extra amount of R17 million has to be contributed. If one takes only this additional operating expenditure, one finds that it amounts to R199 million. This is the picture we have before us and which this Budget reveals to us. But I wonder how many of those hon. members take the trouble to analyse the Budget. I think most of those books are still lying as unopened as they were when they were delivered to them. Now, if their plea is that we are not to effect any increases in rates, one can balance the Budget in one other way only, and that is to effect savings in one’s expenditure. Are we to cut down on Brown Book expenditure? Are we to cut down on new works? No the hon. members do not want that. Are we to cut down on salaries? For surely that is a direct expenditure. No, they do not want to touch that either. Are we to reduce our staff? No, Sir now they are at a loss. Not one proposal is forthcoming.

What does it avail one to argue with a man who cannot understand?

I ask the hon. member: Are we to cancel the depreciation of R106 million for which provision is being made in the Budget? This is quite a big amount, not so? If we are to do this, surely there will be no need for us to increase rates. No, Sir, all this cheap talk of the hon. members will serve no purpose. The answer is very clearly that we have to increase rates. The Schumann Commission provides us with the answer. If we examine our high and low rated traffic, we find that 83% of the total tonnage which the Railways transports is low rated traffic. What amount of revenue does it earn?—51% of the total revenue. As against that, the 17% of high rated traffic earns 49% of the revenue. In other words, now it is very clear where the weak spot is, not so? If we increase the low rated traffic by, say, 20% now, we can expect to earn, where we had a revenue of R315 million from low-rated traffic in 1973-’74, an extra R60 million from this. Here I agree with the hon. member for Orange Grove—that gap should be made even smaller.

We should not exaggerate the effects of that either. The rates for livestock are high. That is so. But, Sir, between 1958 and 1972 the rates for transporting livestock were not increased once. Where the rates covered 50% of the costs in 1950, they covered only 22% of the costs in 1972. When we introduced an increase of 60% in rates on 1 January 1973, only 36% of the costs of transporting livestock was covered in spite of the increase. As I have said, we should not exaggerate these increases in rates. On the basis of the new rates, if one transports cattle over a distance of 220 km, the additional costs per head will amount to R1-19 only.

There are six minutes to go.

There is still plenty of time.

Thank you very much for the hon. member’s kindness. I shall certainly make use of it. Let us look at the transportation of sheep. Such a great fuss was made here about how this would affect us. If one transports a sheep over a distance of 307 km, the additional costs will amount to 22 cents only. But now the Railways is being blamed for all price increases in this regard. The producers price index on livestock rose by 133,9% from 1958 to 1972. In the same period the consumers price index rose by 119,3%. Although there were no increases in rates, there was nevertheless a difference in the price index. Surely this shows that the things the Opposition is trying to make the public believe, actually have nothing to do with the matter. They are, in other words, conjuring up spectres. We can have a look at how a few other rates will affect the public. The hon. member referred to rates here and tried to colour them differently to what they really are. Let us see how the increased rates affect coffee. If one transports coffee over a distance of 716 km, the present rate is R4-72 for 100 kg while the new increased rate will be R4-88. This means that the increase in the transportation cost of 100 kg of coffee will rise by 16 cents only. This is the real effect the increase in rates will have and, all of us drink coffee, not so?

Let us look at another example, at breakfast food. If one transports breakfast food over a distance of 383 km at the present rate, it will cost one R3-08 for 100 kg. The increased rate will have the effect that the transportation of that commodity over the same distance will cost R3-13. In other words, 100 kg of breakfast food will have to be transported at a rate which is 5 cents higher.

What about jukskeis?

Let us look at the increased rates for the transportation of citrus fruit. Over a distance of 383 km its transportation costs R3-08 per 100 kg, while it will cost R3-13 on the basis of the increased rates. In other words, the increase will amount to 5 cents per 100 kg of citrus fruit.

Let us take the tariff on butter as another example, and then I am not referring to the hon. member for Pietermaritzburg South. It costs R1-36 to transport 100 kg of butter over a distance of 406 km, while it will cost R1-53 on the basis of the increased rates. This means that the increased transportation costs as regards the transportation of 100 kg of butter amount to a meagre 17 cents.

Let us now look at the transportation costs as regards meat. Meat is a commodity we use daily, and the hon. member for Durban Point will have a particular interest in this for I think he consumes a reasonable amount of it.

Just as you do, Jood.

I admit that I enjoy my meat. At the present moment it costs R1-28 to transport 100 kg of meat over a distance of 376 km. The increased rate in this regard is R1-45, in other words, the increase on 100 kg of meat amounts to 17 cents. The only difference is 17 cents on 100 kg, which means that the increase does not even amount to half a cent per kilogram.

Let us take mutton as, an example. The costs as regards the transportation of mutton will increase from R0-79 to R0-90 per 100 kg. in other words, an increase of 11: cents.

The old rate for the transportation of 100 kg of clothing over a distance of 405; km was R4-78, while the new increased rate will be R4-84. This means that it will cost 6 cents more to transport 100 kg of clothing over a distance of 405 km.

Let us take a tractor, an item which is essential to the agricultural industry and affects the farmer very directly. To transport a tractor over a distance of 167 km at the present time costs R1-03 per 100 kg, while it will cost R1-07 per 100 kg on the basis of the increased rates. In other words, the costs of transporting a tractor will increase by only 4 cents per 100 kg.

I can give hon. members many more such examples. Now, there will be certain retailers who will want to exploit this situation. We know this, of course, and it is something that will definitely have to be watched. I therefore want to make a serious plea that this in fact be done.

There is yet another matter I wish to bring to the hon. the Minister’s attention. The turn-round time of trucks struck me when I perused the annual report. In 1968 the average turn-round time was 9,86 days. Now it has increased to 11,03 days. If many of the trucks are standing at sidings for a long time, I think the demurrage fees ought to be increased, higher demurrage fees ought to be charged. The S.A. Railways is not the only railways in the world which is experiencing difficulties. I have here a report which appeared in The Argus of 6 March 1973, the concluding paragraph of which reads—

So this is a world wide phenomenon. I think we are particularly fortunate to be in the situation in which we are. We know that the United Party has always been pessimistic. When we introduced the 1973 Budget, we told them we had confidence in the future. When we budgeted for a surplus of R7,8 million, they said the world had no confidence in South Africa, but the contrary has been proved. Instead of R7,8 million we now expect a surplus in excess of R30 million. We want to take this opportunity of congratulating the Minister, the General Manager and the staff on those achievement. We know, too, that under their expert guidance and with the faithful, loyal staff they have with them, all will be well with us as far as the railways is concerned.

Mr. Speaker, I would like to congratulate the hon. member for Vanderbijlpark for having used his full 30 minutes, especially after having had a request from the Whip on the other side to stretch my speech out. However, I am afraid I may have to disappoint him because, while the last speaker on the other side started off in a very good manner talking of the so-called bright sparks on this side of the House—I expected him to come with some bright ideas—he has really given me nothing to talk about.

However, I would like to make some remarks about what the hon. member for Gezina had to say. At one stage I found he was agreeing so much with the points of consensus that exist between his party and ours, that I almost expected him to agree to the amendments put forward by the hon. member for Durban Point in this particular debate. I say this because, having read the documents which have been supplied by the Administration on the operation, management and statistics of the Railways and Harbours, I find I cannot help but agree with the hon. the Minister when he says that he has never had any illusions concerning the extent and the importance of the contribution of transport generally, and particularly of the South African Railways and its related services, to the economic wellbeing of this country. It is encouraging therefore to hear the hon. the Minister say that he is fully conscious of his responsibilities in ensuring that the transportation needs of our wonderful country will be met in the most efficient manner and that he will take a critical look at the policies being followed and will pose the question as to whether the national transport organization adopts a purely pragmatic attitude of merely adapting to situations that have developed or whether it is sufficiently dynamic in its approach to meet the challenges of this day and age. In fact, I think that this is exactly what the hon. member for Durban Point was trying to put to the House, namely that there is a need for an inquiry into the whole operation of transport in South Africa. I feel that this is a very good start on the part of the hon. the Minister in his new portfolio. I am sure that, if this is his approach, he is going to get a lot of sympathy from this side of the House because we have for many years been fully aware of the challenges emerging in South Africa in this day and age and we have for years, and especially in this session, called upon the Government to take a truly critical look at its policies, not only in the field of transport, but in all matters concerning the welfare of our fatherland, and to come forward with a truly dynamic approach in the interests of all the citizens of South Africa. I sincerely hope therefore that the hon. the new Minister of Transport has not just said these things because everybody likes to hear them, but rather that over the next few years this nation will see emerge a truly new approach to our transport problems, an approach which will take full cognizance of such vital considerations as the population growth, changing socio-economic patterns, the protection of the environment, the fuel crisis, inflation and our ever-diminishing areas of usable land. Most of all we on this side of the House would like to see the hon. the Minister stopping the trend that has developed over recent years, where the Railways and Harbours have progressively abdicated their responsibility to lead overall transport development in South Africa. They have generally drifted along in a stop-go manner from one crisis to the next. I say that while there is evidence that the Railways and Harbours are keeping pace with technological developments in certain fields, mainly in order to update existing systems, and while they manage to cope, somehow, with the agricultural and industrial development of the country, there is the lack of a clear assessment of the overall emerging patterns in all aspects of our nation’s day-to-day life. This is allowing development patterns and human attitudes to emerge, some of which are becoming entrenched in this nation, which in the long term, could prove to be detrimental to the country as a whole. After all, the hon. the Minister has said that while the Constitution Act provides that the S.A. Railways and Harbours shall be run on business principles, it also stipulates that due regard shall be had to the agricultural and industrial development of the country. He has also admitted that because the Administration functions as a Government department, it therefore has undeniable advantages. I can list these, as he did.

Firstly, it is able to liaise with the private sector as to its needs in the field of transport. Secondly, the operation of services and expansion are not governed by profit motives but are rather directed solely at the development of this country of ours and its economy in all its ramifications. Thirdly, it is subject to strict parliamentary control. This means that because the Administration is controlled by Parliament and should therefore represent the real needs and welfare of the people of South Africa, and because it has an operating Budget in excess of one billion rand per annum, it is ideally placed to be a leader in the field of transport in South Africa along with all the other related activities.

It is because of these reasons that we on this side have called upon the hon. the Minister to initiate an inquiry to ensure that the Railway Administration clearly defines its role in the South African transport industry which now, probably more than at any other time in our history, must be co-ordinated in order to ensure the optimum economic development and security of this country of ours. The hon. the Minister did, I believe, acknowledge the fact that there is a need for such an inquiry when he admitted that in order to determine the role of the Railways in the transport market of tomorrow it is necessary to evaluate the relative overall cost advantage of conveying goods and persons by rail vis-à-vis other modes of transport. He also said that such cost factors as suitable fuels, pollution and other ecological and sociological factors had to be considered. We agree with him in this regard but we should like to ask him what he intends to do about this. Is it just a case of acknowledging the need but delaying action and allowing things to drift until we have another crisis on our hands? I feel this is rather a case of management by crisis than management by objective. Our harbours are surely a case of management by crisis, and what is this costing South Africa at present? Surely most of the present problems should have been foreseen ten years ago? I acknowledge that things are moving now in this regard but only because of the appalling conditions that we have had to live with for the past few years.

What does it cost the man in the street? I believe that it is the man in the street who is paying for this lack of planning on the part of the Railway Administration. We all know of the number of ships that are queueing at all of our South African ports at the present time. We also know just how much it costs in delays as far as these ships are concerned. These figures can run into thousands of rand per ship per day. This has resulted in a surcharge being placed on goods entering our country and this surcharge has to be paid by South Africans in all walks of life. I believe that the lack of far-sighted planning in this regard is just adding to our inflationary spiral. What are the answers we recieve to these accusations? All we get are a lot of ifs and buts and whys and wherefores.

I also believe that it is not only on the part of the harbours that we see this lack of planning. We have a crisis on our hands at the moment in relation to the aircraft of the S.A. Airways. I believe that this service is one of the best in the world. The staffs and the crews are extremely well trained; they are very helpful and courteous. Millions have been spent on advertising, and as a result of this there has been a tremendous upsurge in the number of people flying on the South African Airways. But I believe this is at the expense of the South African Railways. This tremendous upsurge in the use of our Airways has resulted in a shortage of aircraft and ground facilities at some of our airports.

Sir, it is no use hon. members on that side of the House saying that this has also been the experience of other countries. This is South Africa, Mr. Speaker, and it is we who sit in this House who must set the standard as to what we want in this country. It is this Government, the Cabinet, which is the board of directors of the South African Railways and Harbours, and the hon. the Minister of Transport is the managing director of the South African Railways and Harbours, and I believe that it is his duty to see that the Administration has the wherewithal, both in staff and capital equipment, to meet the growing needs of this country. I accept that we have ordered three new Boeings 747 SP and that these will be delivered in about 15 to 18 months’ time.

But, Sir, I am sure most of us sitting here fully appreciate the possible and the probable emergencies which are going to develop here during this period; and so I could go on, Mr. Speaker: Congested harbours; shortage of aircraft and trains; insufficient trucks; loss of rail business to roads; overcrowded highways; indecision over whether the new Vryheid/Richards Bay line should be dieselized or electrified; whether we should have Saldanha or St. Croix, or both; whether we are going to get a certain quantity of steel for Iscor or not. It is a case of management by crisis, Sir, and because of this we are now calling upon the hon. the Minister to set up an inquiry to look into this matter and clearly to identify the roles of the South African Railways and Harbours in the total transport scene in South Africa and to co-ordinate all these activities for the economic well-being and security of South Africa.

Mr. Speaker, having stated my criticism, I would like to submit a few observations, especially in view of the fact that the hon. the Minister has said that he must take a critical look at the policies of his department. To this end I would like to ask him to look at the Railways’ policy with respect to the promotion of the use of rail vis-à-vis road and air. I say this, Sir, because it must be accepted that development will proceed at a pace which is either in the interests or at the expense of the various bodies which have vested interests either in transportation and its allied activities or in the consequences thereof. Nowhere is this better illustrated than in the field of passenger transportation. If one studies the figures appearing in the 1974 memorandum of the hon. the Minister, one finds that in 1968-’69 there was a total of 4,068 million first and second-class railway passengers travelling long-distance journeys. There was a total of 982 000 people travelling on the internal flights of the vices of the Airways. Sir, this gives a total of 5,05 million passengers travelling long distances in South Africa either by rail or by air. Five years later, in 1973-’74, we find that the number travelling first and second-class dropped approximately 26% to 3 million passengers, while the number of air passengers increased by just over 103% to a total of 2,09 million, causing the number of first and second-class rail passengers and the number of passengers travelling on the internal flights of the South African Airways to reach a total figure of 5,094 million.

This means that in a period of five years the Administration has made no real progress in attracting either first or second-class passengers to its long-distance services. What has in fact happened is that we are finding that over this period more businessmen are flying, that fewer and fewer people are travelling by rail and that the increase in passenger traffic which should have accrued to the South African Railways has been lost to road traffic. Over five years there has not been an increase in the number of passengers travelling first or second class by rail or by air. This is a fact which I believe the Administration must face. That there is a steady potential growth in the number of passengers which could go to the Railways is borne out, I believe, by the fact that long-distance travellers travelling third class have increased by 41% to some 35,7 million passengers during this five-year period, which is an increase of approximately 8% per annum on average. It is inevitable that because of the economic growth of South Africa many former third-class passengers must each year be able to afford to travel either first or second class, reserved, or by air, and should be able to make use of the S.A. Railways and Harbours facilities.

The fact that there has been no growth in this field must mean that the majority of these people elect to travel by road, most probably in their own motor-cars. The question I would like to ask is: What is the role of the Administration in the transportation of long-distance travellers? Has it abdicated its responsibility in this respect, as I believe is indicated in last year’s report of the General Manager of the S.A. Railways? It states that the problem of providing passenger train services on an economic basis is not peculiar to the S.A. Railways, but is being experienced to an increasing extent by railways throughout the world. It goes on to say that the following extract from a recent report of the New South Wales Railways in Australia aptly summarizes the underlying reasons—

I would like to ask the hon. the Minister again whether the Railways has really abdicated its responsibility in respect of the transportation of people by rail. If the Railways has abandoned its role as the major transporter of passengers by rail, I believe we should be told this. I say this because I would question the merits of such a decision on the basis of where such a policy would lead South Africa, especially in view of the environmental, economic, social and practical considerations. After all, what is the total cost of constructing highways and what is the total cost of purchasing motor-cars which also will stand idle for many hours of the day after having transported their occupants? I appreciate some of the reasons for the Australian views which I quoted a moment ago.

I believe one can find a similar situation in North America and other countries which are experiencing a similar development to that which we are now experiencing. But I question the theory as to whether we here in South Africa must necessarily follow a similar road, especially today when there is a lot of re-thinking going on in the U.S.A. and in Canada on this very subject because of the present fuel crisis, which has hit the motor business to a tremendous extent in those countries. I feel it is up to the hon. the Minister clearly to state the Railways’ role in this regard. He must tell us whether he wants more South Africans to travel by rail. After all, we are losing money on the railways. Surely the objective should be to attract more people to travel by rail. I say that because it appears to me that this Administration is doing everything in its power to discourage people from travelling by rail. One just has to look at the Budget which has been presented by the hon. the Minister. In the Airways section we find the heading “Sales Promotion and Sales”. We find under this heading a total of R28,6 million, of which a figure of R672 000 has been budgeted for sales promotion. In addition we find that R14 million is budgeted for agency fees and commission and there is a further R4,9 million budgeted for advertising. Then we find in this section yet another heading. “Passenger Services”, for which a total of R14,7 million is to be voted. Under this heading you get individual items, for instance R1 million for catering and cabin services: ground staff. Another R3,5 million is being voted for catering and cabin services: flying staff; R6,3 million for meals, dry stores, liquor, accommodation, etc. And so it goes on. Granted, if one looks into this Budget deeply enough one would find that against this expenditure there is a budgeted revenue figure of about R4,7 million directly attributable to the foregoing expenditure. However, if one adds up the total amount of money which the Airways is spending and budgeting for to attract passengers, and to look after them once they board the airlines, one arrives at a figure of R38 million. This represents a figure of 18% of the total Airways budget of some R210 million. This amount is being spent to attract, serve and look after passengers on the South African Airways. No wonder we have the best airways in the world. One does not have to look far to find this out. All one has to do is to open any newspaper, any magazine, listen to Springbok Radio or go to any local cinema and one hears how South African Airways looks after one. Maybe this is why we have had this tremendous increase in the number of passengers now travelling by air. After all, they treat one like a king when one goes to get a ticket at the South African Airways. There is a pretty girl behind the counter who attends to you and asks you where you want to go.

You like it?

Certainly I do. Don’t we all? This is the point I am trying to make. She gives one one’s ticket in a nice little folder. One takes this ticket and one gets into a bus. They provide one with a nice clean bus. When one gets to the airport—except for Louis Botha, which is a bit of a shambles and has been for many years—one finds that our airports are beautiful and clean, comfortable and well designed. They have nice clean cloakrooms and comfortable chairs to sit on. Once one gets on board the aircraft, it is a case of free meals, snacks, free soft drinks, nice soft music if one happens to have a pervous wife like I have who does not like flying by air. The music soothes her nerves. Can one blame the people for travelling by air today in South Africa? They are encouraged to travel by air.

On the other hand, let us look at what is happening in rail transport, and this is the point I want to make. I see from this Budget that there is a total of R 1,319 million allocated for advertising the railways as a whole. Within this Budget one sees more than half this figure, R766 000, is for salaries and wages; R31 000 is for commission, as opposed to millions in the Airways budget; R385 000 is for printing and only R137 000 is for other advertising expenses, whereas the Airways has R4,9 million, What sort of advertising budget is this, when we are told that the total expenditure on the railway passenger services amounts to some R233 million, on which I believe we have incurred a loss of about R120 million? And here we spend R1,3 million on advertising. This is not an advertising budget. It represents less than one half of 1% of the Railways’ passenger service budget alone, and that is on R233 million. What it represents on the total Railway Budget of R 1,235 billion I cannot get on to my calculator. The figure does not even show up on my calculator. What is the result? We have had a tremendous fall-off in long-distance passengers travelling by rail. Why? Because I believe the hon. Minister has abandoned the South African Railways’ passenger service. There has been no modernization programme, consideration for the passengers has dropped to an all-time low, we have antiquated booking and ticket systems, no new thought has been given to passenger comfort, either at the stations or in the trains, and there has been no real programme to speed up the train services to meet modern-day needs. I believe that the Railways today, as a passenger service, is worse than it was 25 years ago.

I feel it has to be accepted that the passenger service of the South African Railways has now become the Cinderella of the whole Administration. The glamour, I believe, is today in air travel; the high profits on pipelines are what the Administration wants. I think they have been so busy worrying about the problems in our harbours that they have relegated the passenger service of the South African Railways to a third-class service. It may be that hon. members on that side are thinking that I am being a bit hard on them, but I want to tell them that during July I did a considerable amount of travelling in South Africa and in Rhodesia by rail. I went to Durban station and applied for my ticket. I gave them all the particulars. It took them three days and about three visits by me and eventually I got 15 little envelopes, all handwritten, and each one containing bedding tickets, breakfast tickets, a single ticket from such-and-such a place to such-and-such a place, lunch tickets and dinner tickets. In addition to this, I received a handwritten list of what these were all about with the prices on it ticked off. The whole caboodle was wrapped together with two elastic bands. That is the service I received travelling on the luxury Drakensberger train running between Durban and Johannesburg. This was on the Trans-Natal Express, the old Blue Train.

I must admit that once we got onto the train the service was 100%. The staff was courteous and the food was good, the rooms were well carpeted and warm and there were hot water and towels. This was airways service on one train which runs between Durban and Johannesburg. Let me say that it does only one trip per week. Why not three trips per week? Then we arrived at Johannesburg station, which used to be a beautiful modern station. At this station there are no facilities for looking after the person who is travelling or touring by rail. You just go into a huge barn of a place, sit in a cold and draughty cloakroom and wait two or three hours for your connection. Try travelling on an ordinary train, not a luxury train, let us say from Johannesburg to Beit Bridge.

What did you want to go and do there?

I wanted to travel South Africa by train. From Beit Bridge I went to Salisbury by road. I flew around Rhodesia and came back by train. But here we have a passenger service in the Northern Transvaal where you get on the train at 7 o’clock at night and get off at 10 o’clock the next morning. There is no hot water or heaters in mid-winter, there is no dining-car and the only place where you can get something to drink is when the train runs into Pretoria. You then see all the passengers detrain and dash down to the local cafetaria and come running back with little paper cartons of coffee. This is the inconvenience and discomfort which the passengers travelling by rail have to put up with these days.

Mr. Chairman, I think you must agree that the conditions I have referred to, as being my experience on the South African Railways, do not apply to the position that we find on the Airways today. This is the point I am trying to make. This very thing has put thousands of passengers off rail travel and has made them opt for air travel. I believe that the same principle and attitude apply to our suburban rail services. What is really being done in this regard?; I am aware that a commission has investigated this matter and that its report is now with the Minister of Finance, but I believe that this matter is urgent and that we must take certain action right now if a crisis in the passenger and road transport service is to be, avoided is future years.

I have had a look at the amounts that are going to be spent in regard to road transport services in the next few years. I found that within ten years R 1,367 billion is going to be spent on main roads in South Africa and that R2,5 billion is going to be spent on metropolitan roads. This gives a total of R3,867 billion which is going to be spent on providing roads for South Africa’s road traffic in the next ten years. At the present rate of vehicle growth I found that the present number of vehicles is going to double in the next ten years, which is going to cost the country R6,l billion at today’s values. This gives a total figure of R 10,967 billion that is going to be spent in South Africa in the next ten years just for roads and vehicles. It is estimated that it will cost our nation R4,7 billion a year just to keep this fleet on the road, compared with the total South African Airways, Railways and Harbours Budget of R 1,554 billion. In addition to this vast capital cost, and also operating costs, there is the cost of pollution, road accidents, land for parking lots and so on. It is for this reason that we on this side have called upon the hon. the Minister to institute an inquiry into the whole question of transportation in South Africa. Let us take a good look at it; let us not just brush aside this suggestion just because it comes from this side of the House. Rather let hon. members on that side try to appreciate the proposals which members on this side of the House are putting to them, in the interests of South Africa as a whole. [Time expired.]

Mr. Speaker, listening to the hon. member for Amanzimtoti and his colleagues opposite criticizing this Budget so eloquently and in such unbridled terms as they have been doing this afternoon, I can only come to the conclusion that it must really be very pleasant to sit there on the other side and bear no responsibilities, to divorce oneself entirely from reality. Hon. members opposite are so divorced from reality that they come here with castles in the air and have hallucinations concerning things that have absolutely nothing to do with actual practice. The hon. member for Durban Point said the Railways are facing a crisis. This is not the first time the hon. member has said this. In 1973, when we discussed the increased tariffs—I read his speech—he said the same, namely that the Railways were facing a crisis. He was a prophet of doom.

Sir, in the meantime the position as regards Railways has improved. Last year we budgeted for a surplus of a little over R7 million. The Railways fared even better than that. It fared a great deal better than that. It fared five times better. It reflected a surplus of more than R30 million. In the meantime the United Party has undergone a crisis, for which neither we nor the Railways were responsible. When discussing these matters, which are of importance to South Africa, one must at least take the facts into account and in addition, one needs to retain one’s sense of perspective. The hon. member mentioned a number of points, for example how the increased rates are going to influence the overall cost structure and how they are going to promote inflation. I can agree with the hon. member. I am not one of those who believes that these increased rates are not going to promote inflation in the slightest. Of course that will be the case. What is there that we do today that does not promote inflation? When we gave the railwaymen an increase, after so many other people had also been given increases, inflation was assisted; but we did not make a song and dance about it. If we were to argue today as the hon. member for Durban Point has done, we should spend nothing; we should allow no further capital development on the Railways; because we should be afraid of paying interest. Sir, the hon. member conceded that certain steps have to be taken in order to face up to the situation. We can concede to the hon. member that these increased rates will have a detrimental effect, as will in fact be the case in certain spheres, but we should ask ourselves whether there was an alternative, and whether it was essential to do so.