Mr. Speaker, under S.O. No. 26 I ask leave to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, that matter being the removal of a Bantu tribe from the Mayen Bantu reserve.

Order! In terms of Standing Order No. 26 the hon. member had to give me notice that he proposed to move this motion today and I have consequently had an opportunity of considering it.

I regret that I cannot put the motion to the House as there will be an early opportunity for discussing the matter when the debate on the Second Reading of the Part Appropriation Bill is resumed today.

It was accordingly not necessary for me to consider whether the motion is one contemplated by the Standing Order.

Mr. Speaker, on Monday afternoon, before the debate was adjourned, we listened to the hon. the Minister’s Second Reading speech. For his first public pronouncement in this House, it was an unremarkable one. I think it was more notable for the things that he failed to say than the things he actually said. I know that it has not been the general practice of Ministers of Finance in this House in the past to make the Second Reading speech on the Part Appropriation Bill the occasion for an in-depth economic review of the country’s economy but I would have expected something of more substance than we actually got. After all, Mr. Speaker, this Bill before us provides for the expenditure of R1 900 million which in anybody’s language is a very large sum of money. It represents approximately 10% of the anticipated national income over the period. It compares with the last Part Appropriation amount which was discussed by this House on a similar occasion and at a similar time of the year, viz. in February 1973, of R1 290 million. The difference of R610 million represents a very, very substantial increase in State expenditure indeed. I believe that even in an interim report of this nature the public deserves more information than the rather sketchy information it was given in the Minister’s Second Reading speech. I believe that we should at least have been given some idea of the comparison between income and expenditure for the current year, whether a surplus or a deficit is anticipated and some idea of the size of that surplus or deficit. I believe that we should at least have been given some indication of what the Government’s thinking is in regard to what the real growth rate of the economy will be during the current year. I believe we should at least have been given some indication of what the Government’s thinking is in regard to the rate of inflation that we are likely to experience during the current year. It must have had some idea of what these figures would be when these estimates of expenditure were framed. The trend in private enterprise is for businesses to report more and more fully and more and more frequently. I think that this is an excellent example and I hope it is one that the hon. the Minister will consider following.

I said last Monday before the adjournment that the hon. the Minister held many of the keys to the nation’s welfare. In particular does he hold the keys to the level of the standard of living of the population of South Africa as well as many of the keys which control the rate of inflation which the people of South Africa have to suffer. These are two measurable factors on the economic scene and they are also two of the most important factors which affect the lives of every person living in this country. I propose this afternoon to deal primarily with the question of inflation, a subject which I feel the hon. the Minister skated over in his Second Reading speech. I propose to deal with it because I regard it as being the main obstacle in our economy to the achievement of growth and to the achievement of higher living standards for our people. I regard it in the economic scene as being public enemy No. 1. I believe it is public enemy No. 1, because despite the array of statistics with which the hon. the Minister of Planning dazzled this House during the no-confidence debate, inflation quickly wipes out or at least greatly reduces the real benefits of any monetary increases in income. I say this conceding that the figures quoted by the hon. the Minister of Planning may well have been correct; that it may well be correct that many people have received increases in monetary incomes higher than the rise in prices. It may even be that that is the average position. But I do not concede that there are not many people— probably the majority of people—to whom that does not apply and who have consequently suffered as a result of inflation, and particularly do I not concede that the lower income groups, who have to spend the largest proportion of their incomes on food, food being the item that has risen most in price, have not suffered greatly as a result of inflation. I consider inflation to be public enemy No. 1 because it distorts the behaviour of the whole economy; it discourages people and it discourages businesses from taking the actions which help to promote productivity and which help to increase the national wealth. It discourages savings, it discourages thrift, it discourages productive investments; it plays absolute havoc with cash flows and liquidity which are needed so badly to keep the economy going and to replace the tools of production and to keep them in a modern condition. It encourages the Government to make undesirable interferences in the economy with such measures as interest-rate control at the expense of allowing market forces to have their free play.

Mr. Speaker, I regard inflation as being public enemy No. 1 because it is self-generating, because it is self-accelerating, because it feeds on itself and because it gets worse all the time. I do not think there is any need for me to emphasize the seriousness of the present inflationary position to this House, but I will mention the latest figures. The consumer price index, if you take that as the measure, shows that prices in December were 14,1% higher than they were a year ago. To put that in other words, it means that in 3½ years’ time the rand is going to be worth less than half what it was a year ago. Food prices have risen by 18,2% which, put in other words, means that in three years’ time food is going to cost double what it cost a year ago. The wholesale price index indicates that wholesale prices over the past year have risen 19,4%, and in the wholesale price index we have items which are still in the pipeline, items which have not yet reached the retail level, with the result that we yet have to feel the rises in the prices of these items. Put in other words, as far as wholesale prices are concerned, in less than three years’ time wholesale prices will be double what they were a year ago. And it seems to me that we have not yet seen the worst of the picture because the latest Opinion Survey report of the Bureau for Economic Research at Stellenbosch University has this to say about inflation—

Mr. Speaker, I am completely unimpressed by the arguments that have been raised by the hon. the Minister of Planning and, to some extent, the hon. the Minister of Finance that as far as inflation is concerned, we are better off than other countries and that a large part of our inflationary problem is an imported problem. As far as a comparison of our rate of inflation with that of other countries is concerned, I say thank God that we are better off than other countries; I say thank God that we are better off than Britain and Australia and Japan, because if we had the rates of inflation prevailing in those countries, the problems that we have in this country in regard to race relations, our social problems and our political problems would be all the more difficult to solve. As far as imported inflation is concerned, of course we have imported inflation. How could we avoid it with oil prices having gone up as they have done? But I think that is an irrelevant argument. What is relevant as far as the combating of inflation by the Government is concerned is whether we have done the best job in the circumstances in which we are placed with the resources which are available to us to fight inflation. Sir, if you look that question squarely in the face and give an honest answer to it, that answer must be “No”.

Give us your solution now.

Mr. Speaker, what has the Government done to combat inflation? It has introduced a tight money policy and high interest rates. Sir, that is the classical approach to dampen down demand when inflation is caused by excessive demand. But we have not got a situation where inflation is caused by excessive demand; we have a situation where inflation is caused by cost pushes, by costs going up, and the main effect of the Government’s policy of tight money and high interest rates is to dampen down investment and to increase costs through high interest rates at a time when the real need of the economy is to encourage investment so that there can be a greater flow of goods, and to take every possible step to reduce costs, not to increase them. Sir, what else has the Government done to fight inflation? It has been exhorting businessmen to keep down prices by taking lower profits. Sir, businessmen are human beings; they are motivated by human nature; they are in business to make profits, not to give profits away, and I suggest to the Government that the way to make businessmen keep their prices down is to ensure that they have to compete with others for business. That is the way in which you are going to make businessmen efficient; that is the way in which you are going to force them to keep prices at the lowest possible level. What is needed is steps by the Government to ensure that competition prevails and that cartels and monopolistic arrangements are not allowed. I was shocked, Mr. Speaker, at the reply to a question which I placed on the Order Paper earlier this session to ask how many investigations the Board of Trade had done under the Monopolistic Act since I last asked the question last September. The reply was that there had been only one such investigation and that that investigation had been in respect of retail price maintenance in the clothing industry, which I know from personal experience is one of the most competitive industries and one of the industries least needing investigation for monopolistic conditions I would like to ask the Government why they have not asked the Board of Trade to have a look at the cosy bank cartel; why they have not asked the Board of Trade to look at the trust companies’ operations, the conference shipping lines, the coastwise shipping lines, the paper-mills, the newspapers and the packaging industry and many others. I believe that there is evidence in all these industries of cartel arrangements, and where you have cartel arrangements they are not there to keep prices down; they are there to keep prices up.

What else has the Government done to fight inflation? Apparently there has been a lot of talking. An inter-departmental committee has been established under the chairmanship of the Secretary for Commerce and there has been a subcommittee of the Prime Minister’s Economic Advisory Council on inflation, which I understand has reported to the Economic Advisory Council. But the report has not yet been seen by members of Parliament, although I understand it is to be discussed with the private sector. Then there was a conference organized last year by the hon. the Minister’s predecessor. But all this appears to be a lot of talking without any action. These seem to be the measures which the Government has taken and I ask this House whether these measures can possibly be expected to be effective.

If you look at the other side of the picture, Mr. Speaker, there is a sad catalogue of Government actions which have piled on the agonies of inflation instead of relieving it. I propose dealing with five items in that catalogue. The first, and top of the list, remains the Government’s labour policy because that labour policy is completely inadequate to deal with the needs of the present inflationary situation. Despite the encouragement which has been given through tax to employers to train African labourers, despite the limited facilities which the Government are establishing themselves in the White areas to train African labour, and despite the limited encouragement being given to employers to use African labour in more skilled work, the Government is only scratching the surface of the problem of what is needed to achieve real labour productivity, and after all, it is real labour productivity which is the key to fighting inflation. What is needed in the labour field is a crash program of training, particularly the training of Black labour but also the retraining of Whites so that they can take up positions of greater responsibility. What is needed is greater mobility of labour so that the workers can perform the jobs which he is capable of performing and where those jobs are geographically available. This of course needs an adjustment to the way in which influx control is administered and an adjustment to the way in which the Physical Planning Act is being implemented. What is also needed is to provide some of the basic human needs of the Black worker in the urban areas. They need basic facilities to motivate them to contribute of their best to the economy. They need things which we Whites take for granted, such as family life. They need home ownership to give them the spur to contribute their maximum to the economy. That is the first on the catalogue of the things which the Government is doing to pile on the agony of inflation.

The second item is that if we are going to fight inflation effectively, we must get away from striving for self-sufficiency in the economy. I do not regard self-sufficiency in itself as a virtue. It may be a necessity for security reasons, and if it is necessary for security reasons I accept it. But just for the sake of itself it is an expensive luxury I think that we in this country must back the hon. the Prime Minister’s efforts to establish political co-operation in Southern Africa, with real efforts also to establish economic co-operation.

Why did you oppose his amendment?

We need economic co-operation whether that co-operation is by way of a common market, a customs union, some mutual aid program or any other arrangement. But if we are going to have economic co-operation, the partners in co-operation cannot all be trying to be self-sufficient. They have got to get down to a division of labour, they have got to get down to a division of activities, and they have got to get down to doing what each of them can do best instead of trying to be Jacks of all trades.

As far as self-sufficiency is concerned, I was appalled, during the recess, to learn of the decision by the hon. the Minister of Economic Affairs, who is now the hon. the Minister of Finance, not to delay the introduction of the next phase of the local content program for the manufacture of cars. I ask this House whether it is advisable, in times which are as critically inflationary as these times are, to force motorcar manufacturers to produce parts on a scale which is totally uneconomical. No wonder that there is a steep and continual increase in the price of cars. It is no wonder that a Volkswagen Beetle, which cost R1 500 five years ago, now costs R2 200.

It seems to me that we are setting up a similar sort of situation in the television industry. In the nature of things, in the way in which the television industry is being set up and protected, it seems to me that we are establishing an industry in a market which is too small to sustain economical runs. At the outset we are putting television on a high cost basis. This is not going to be cured or dealt with by price control or by limiting the mark-up by the distributors of television to 50%. What is needed in the television industry is efficiency. Efficiency is only going to come about in that industry if we have the necessary modicum of competition. I believe that it is necessary to have a certain modicum of imported competition to see that the television industry really keeps on its toes.

Third on the catalogue is the Government’s management of our currency. I would like to ask the hon. the Minister why it is that the Government is so reluctant to treat the rand as a strong currency. I have never made any secret of the fact that I regarded the devaluation of the rand in December 1971 as a disaster. I believe that that disaster is being compounded by the way in which the rand is now being managed. Last year, 1974, the rand was allowed to sink by more than 5% in terms of the weighted average of the currencies of the countries with which we trade. It was allowed to sink by 4% in relation to sterling which by no stretch of imagination, can be called a hard currency. And yet this Government complains that it is imported prices that are mainly responsible for our inflationary situation. They have a golden opportunity to do something about it, and yet they do nothing about it. We have a strong economy, not thanks to the Government but thanks to the wealth of our resources; we have a sound balance of payments situation, again not thanks to the Government but thanks to excellent exports of agricultural products and the high price we are getting for our gold. We also have a strong reserve position. It would be seen to be much stronger if the gold content of our reserves was realistically valued. We have terms of trade with the rest of the world which may be becoming slightly less favourable, but which are still in a very strong position. Why does this Government not use the weapon of revaluing the rand to fight inflation? I believe that by not doing so when it has the opportunity and there is a strong case for doing so, it is failing the country in not taking a practical step to fight inflation.

Fourth on the catalogue is the whole list of measures coming under the apartheid flag, in particular the duplication of amenities whether the people using them require separate amenities or not. We in Cape Town know what the cost is of having separate bus services. We have just had a very steep hike in bus fares in this city. The same applies to taxis, lifts, post office entrances, separate railway station entrances and separate facilities at airports. I hope that the avowed intention of the Government, as enunciated by our ambassador at the United Nations, that discrimination based solely on colour is insupportable is going to lead to some of these senseless practices being dismantled. If these practices are dismantled there is going to be an enormous saving in costs and this will have a material effect on inflation.

I would also like to mention the way in which the administration of the Group Areas Act is highly inflationary. Last year I witnessed a whole Coloured community being moved from a township in my constituency, viz. Diep River, to one in the dunes on the Cape Flats known as Lavender Hill. In Diep River this Coloured community was housed in good quality housing in a housing estate which was conveniently situated to transport, shops, churches, schools and playing facilities. In Lavender Hill none of those facilities exist. In Diep River the rent of a three-roomed house was R9,15 per month. In Lavender Hill it is R26,50 for slightly inferior accommodation. There is an additional transport cost of R7 or R8 per month for every person who uses transport. Apart from the human misery which a move of this sort generates …

Come back to finance.

Who are expected to pay these additional costs? The Coloured people themselves? And if so, are they going to be paid more so that they can meet the costs? This is the cost of apartheid and of movement of people under the Group Areas Act.

The fifth and final item on my catalogue —I want to emphasize that this is by no means a complete catalogue—is the additional duties on textiles which were imposed during the last session of Parliament. We on this side of the House pleaded with the hon. the Minister to take measures to exclude from these increased duties textiles which had already been shipped and were on the water at the time when these duties were imposed. We did so because the only effect of levying these duties on such goods would be to put the price of such goods up when they arrived in this country and thus to extort this extra duty from the public. The orders for these goods could not be cancelled. The goods had to arrive in South Africa and upon arrival had to be be cleared. Then they had to go on the market and be sold and the public had to pay for the additional duty. Imposing the extra duty did not help local industry at all because the goods would have arrived in any case. The Minister refused to listen to us at that time, but he has subsequently reversed his decision. His reversal, however, has come too late; it has come after a certain volume of these goods have already arrived in this country, gone through customs, been cleared, gone on the market and been sold, the public having paid the extra duty. To my mind it was a senseless action not to listen to this side of the House because that action was directly inflationary. It came as a result of not listening to a responsible Opposition which knows what it is talking about. The fact that some of this duty may now be refunded does not help the public because they have already paid the duty on the goods they have bought. It may help to swell the profits of the importer who added on the duty and then sold the goods to the public.

I finally want to say that I believe that inflation is such a critical problem Chat every possible opportunity should be taken to fight it. I have mentioned five areas in which all possible steps are not being taken to fight inflation. In fact, the contrary applies. Because the Government is failing to take the necessary measures which are open to it in order to deal with the situation, I want to move the following amendment to the motion before the House—

1. (a) to take more adequate steps to relieve the crushing burden of ever-increasing living costs; and
2. (b) so to conduct race relations as to put an end to discrimination, baasskap and domination.”.

Mr Speaker, the hon. member for Constantia has recently suffered a grievous loss with the passing away of his beloved wife. Having had the privilege of making her acquaintance I can in a limited way gauge the enormity of his loss. Therefore I want to assure the hon. member that we on this side of the House share in his loss and offer him our sincere sympathy. Under these circumstances I shall endeavour to temper the tone of my attack on him in this debate. Instead I shall deal with the criticism of the Opposition of financial matters in the current session and in recent sessions.

Before doing so I have two very pleasant tasks to perform. First of all I want to congratulate the hon. member for Constantia on his promotion to the leadership of the finance group of his party.

A great improvement!

I wish him well in his task. I believe that he, with his financial background, should do well.

Secondly, I come to our new Minister of Finance. I, as the member for Paarl, and my fellow Paarlites are proud of this new hon. Minister of Finance because, I may say, we consider him in a way to be a product of Paarl. In the early ’thirties when he went to school in Paarl, there were two excellent boys’ high schools in Paarl, and in a spirit of friendly rivalry which also existed between these two schools I should like to say that the only bone I can pick with this new Minister of Finance is that unfortunately he did not choose the better of the two! In any case, the school which he attended is still one of the very best boys’ high schools in the whole of our country. As a matter of fact, the Paarl Boys’ High School, which is the school which he attended currently boasts of no less eminent an old boy than our very popular State President and two members of the Cabinet, namely the hon. the Minister of Water Affairs and the hon. the Minister of Finance. In the school hall of this school we find the names of all the dux students in fine gold lettering on mahogany. I think that it is against the year 1935 that we find the name of one Owen Horwood as a dux student of Boys’ High. Not so long ago one of his old masters told me that of all the brilliant students which Boys’ High has ever had, Owen Horwood was the most brilliant. We on this side of the House therefore believe firmly that he is eminently suited to this very high office. We on this side of the House shall give him all the support as far as we can and sincerely wish him well in this very high office.

*I have said that in view of his personal circumstances I shall not cross swords with the hon. member for Constantia this afternoon. After all, how could I cross swords with him after he had repeated here this afternoon, lock, stock and barrel, a large portion of my Third Reading speech on last year’s Budget? He pointed out to us here the grave dangers threatening the capitalistic system if we do not take the necessary steps against the formation of cartels. I dealt with that aspect in great detail in my last speech of the previous session. But the hon. member quoted almost my entire speech here this afternoon! How could I quarrel with him? However, under the circumstances which I mentioned, I shall not cross swords any further with him this afternoon, although I made notes of what he said, to return to this at a subsequent opportunity.

If we cast our gaze over this session of the past few weeks, there is one fact which stands out as plain as a pikestaff, viz. that our hon. Prime Minister and his Cabinet completely dominate the entire political scene in South Africa today. It puts me in mind of what an English-language journalist said to me a few weeks ago here in the Lobby. That was just when the Opposition was engaged in a very vehement internecine squabble, and the front pages of the newspapers were full of what was happening in the Opposition caucus. The English-language journalist then said to me: “It seems to me the Opposition is stealing the limelight from you completely; they are now making the front pages of the newspapers”. This reminds me of the man who jumped to his death from the 20th storey of a building just so that he could see his name in the newspaper!

The major part of the attack made by the hon. member for Constantia concerned living costs. Of course I foresaw that, and therefore I looked into the problem of inflation and rapidly rising living costs. The Opposition maintain that we are shying away from these things. Only recently the hon. member for Yeoville said again in the no-confidence debate that we kick up a row when they discuss the rising living costs. We are not shying away from this at all. For that reason I want to expose this empty cry mercilessly this afternoon. What the cry of the Opposition amounts to for the most part is that the poor worker cannot bear the burden of the rising living costs. Surely that is not only a half truth, but also blatant politicking with the purpose of trying to catch a few votes, for that is, believe me, a rare commodity among them these days. We on this side have already proved over and over again that it is not true that the rising living costs are bearing down too heavily on the man in the street. They are of course bearing down heavily on all of us, for we are all aware that prices are rising, but we have proved over and over again that wages and salaries are increasing more rapidly than the rise in the living costs. Wages are not increasing a little more rapidly, but are in fact increasing considerably more rapidly. If we consider the gross domestic product and the per capita income of our people over the past two years, we find that the per capita income over this period increased by 6%. That is the real increase, and not the increase against constant prices. The real increase in the per capita income of the entire population during the past two years was not less than 6% per annum. Surely that means that the standard of living of our people during the past few years in general rose by 6% per annum. Is it correct to say then that our people cannot endure the rise in living costs any longer? It is of course very popular to keep on pointing out the deprivations which the rising cost of living is causing our people. It is, however, extremely irresponsible. I want to place this in the same category as the newspaper which recently published a long list of increases in the price of essential commodities on its front page. It almost waxed lyrical about the high prices and the great increases in living costs. The Government was asked to do something positive about it. After it had mentioned all these price increases, it arrived at the conclusion that the total increase in the living costs had been approximately 10%. The next day, not on the front page in great banner headlines, but in a small report tucked away somewhere, that same newspaper announced that as from that day the price of that newspaper would be increased from seven to ten cents, i.e. an increase of approximately 40%. On Monday it castigated the Government for not having prevented the prices of essential commodities from rising by approximately 10%. On Tuesday it announced a 40% increase in the price of its own product. The following day, on Thursday, I read that the profits of that same newspaper company had increased by 30% during the past year. Now I asks you: Was it necessary then to announce a 40% increase in the price of its own product if its profits had risen by 30% during the past year? There is of course a very good reply to why this newspaper was increasing its price in spite of good profits—it is because its shareholders were screaming for higher dividends. That is the crux of the problem of inflation in our capitalistic economy today—everyone wants a bigger share of the gross national product. Whether it is the worker or the entrepreneur or the shareholder, everyone wants more without contributing more. That is the reason for the deplorable situation in which the entire capitalistic system finds itself today.

We also have tremendously irresponsible statements on the part of the hon. Opposition when they complain about inflation and the rising living costs. What they advocate is extremely inflationary, and nothing else. It seems to me the hon. member for Yeoville is not here. In a recent debate, in this very session, the hon. member for Yeoville, who was at that time still a member of the United Party and was therefore still speaking on behalf of the United Party, had this to say (Hansard, col. 331)—

In other words, the increase in wages has to be greater than merely to allow people to keep pace with inflation. What is more inflationary than allowing wages to increase more rapidly than inflation and productivity. Mr. Speaker, one does not merely increase wages to satisfy people; that is one reason, it is true, but in the capitalist economy one increases wages for greater achievement. That is the crux of the matter. If one wants to combat inflation, one raises wages for greater achievement, for greater production. Sir, then the hon. member complains in column 333 about a 200 to 300% increase in fruit and vegetable prices. I am certain that hon. members on this side who have more to do with agriculture will return to this matter and demonstrate why the prices of fruit and vegetables have increased considerably. There is for example the question of fuel which is used a great deal in agriculture and which has, during the past 15 months, increased by more than 100%. There is the question of fertilizer which is very important in agriculture and which has, during the past 13 months, increased by approximately 75%. But I am not going to elaborate on this any further. Sir, I am certain that other hon. members on this side will in fact do so.

Sir, the hon. member for Yeoville complained about the 200 to 300% increase, and he said that he simply could not understand why this was necessary. Mr. Speaker, that is not only a half-truth; it is quite simply a gross untruth.

Order! The hon. member must withdraw the words “half-truth” and “gross untruth”.

Sir, I obey your ruling; I withdraw them. Apparently, Sir, the hon. member has never heard of such a thing as seasonal differences in prices. Does he not know that if one buys in season, one can buy more cheaply than out of season? For example, if one buys oranges in February, one pays twice as much for them as one would pay for them from May to October. In March and April apples are only half as expensive as in October. If you buy a simple lettuce in a vegetable shop you will pay 50 cents for it, but if you buy it in July to September you will pay only 10 to 15 cents for it. Sir, this is a simple economic fact. I do not want to accuse the hon. member of having done what you ordered me to withdraw because he was being wilful. I want to assume that he was merely ignorant, fcr if he was not ignorant, he was being wilful, and he then destroys with one sentence the entire image of himself which he is trying to build up, which is that he, a fair person, in contrast to the United Party members, the unfair people, supports the Government when the Government does something good. With one single statement he destroyed that entire image that he is allegedly so fair and that the men who remained behind in his old party are unfair. Sir, while I am discussing this matter of fruit and vegetable prices in and out of season, I think it is a very good suggestion for the South African Agricultural Union to inform the radio, and for the radio from time to time to inform the housewives of what products are in season and may consequently be bought cheaply, so that the housewife, in her ignorance of these matters, will not look for fruit and vegetables out of season and then pay dearly for them. This is one of the simple means which the housewife can adopt to combat the high living costs. This cry about combating inflation puts me very much in mind—and here I must refer again to the hon. member for Yeoville, who so often presents us with Biblical truths—of the story of the great captain of the host, Naaman, who unfortunately was a leper. At the request of a Jewish handmaiden, he went to the great prophet Elisha to be made well again by him. The prophet heard that Naaman was at his door, and did not even go out to see him. He simply sent word to him that he should bathe seven times in the waters of Jordan and that he would then be cured. The mighty Naaman was bitterly disappointed that the great prophet had not even come out to speak to the great captain of host of the mighty king of the Aramaeans, to lay hands on him and make him well. But fortunately this leader of hosts had very sensible subordinates who persuaded him to go and try out this simple medicine. Naaman then went and bathed in the waters of Jordan, and was cured. Sir, the problem in the capitalistic economy today is precisely the same. All want to seek the great, spectacular cure, and they will never find it, and all are seeking it because the newspapers are waiting for that great, spectacular for this disease, inflation, while the simple rules which have been developed down the centuries of capitalistic development are simply ignored. Now, Sir, what is this simple medicine for this disease inflation? It is nothing less and nothing more than hard work and thrift. Capital, after all, consists of savings, and if one does not save, one cannot have capital. Now, the market mechanism of the capitalist economy tells us that price is determined by supply and demand, and because capital is scarce and there is a great demand for it, it is of course expensive. That is why we have high interest rates. Now, there are members of the Opposition who say that the Government should control the interest rates. Sir, we shall simply have to return to the basic truths of the capitalistic economy, the truths which made it great over a very long era, namely hard work and thrift. This brings me to the role of the Opposition.

The Opposition has a very important role to play in this respect. I have before me here a pamphlet entitled “Inflation— How do we tame our public enemy No. 1?” and in this pamphlet the writer. Dr. Anton Report, has inter alia the following to say (translation)—

And this, Sir, is where I now turn to the hon. Opposition. I repeat this last sentence again—

We can only achieve long-term gain in the combating of inflation if we are willing to endure short-term inconvenience, and short-term inconvenience means harder work for the same, or less, income. And now, Mr. Speaker, we unfortunately have an Opposition which is not always very responsible, for it is constantly being suggested to the workers that they are not really receiving their fair share, and that this Government is not looking after them. Sir, if we display this attitude, we may as well forget about a spectacular cure for inflation; we shall never find it. We shall have to get rid of this attitude; and now I am not referring only to the workers. I am referring to the worker as well as to the entrepreneur and the share-holder. All of us will simply have to endure this short-term inconvenience for the sake of long-term gain. It is as simple as that, Sir. The hon. member on the opposite side there who is probably going to speak in a moment is shaking his head. Either he does not understand or he is ignorant. Dr. Anton Rupert wrote to 32 of the most prominent economists in the world, and asked them what they would do if they were the Ministers of Finance of their various countries to eradicate inflation, enemy number one. Among these 32 leading economists there was no consensus except in respect of one point. Running like a refrain through those 32 replies one finds this solution: Harder work for the same or less income. One finds throughout the refrain, and it is in fact the short-term inconvenience to which I referred.

Mr. Speaker, may I ask the hon. member a question? Would the hon. member say that if production were to go up by 100% in this country while the cost went up by only 30%, that would reduce inflation or not?

Mr. Speaker, that question is too naïve to take seriously. [Time expired.]

Mr. Speaker, I rise to support the amendment moved by my colleague, the hon. member for Constantia. I also want to associate myself with the condolences which were conveyed to him by the hon. member for Paarl on behalf of members on that side of the House. The hon. member indicated that because of the sad situation, he intended to keep the heat off the hon. member for Constantia. Let me say, Sir, that I believe that the hon. member for Constantia would not have wanted this. Across the floor of this House we debate matters of urgency which concern this House, and they take priority. However, in case it has been forgotten, the debate which is taking place has to do with the Part Appropriation Bill which, as my hon. friend has indicated, calls for the expenditure of some R1 900 million during the four-month period March to June of this year. The hon. member for Paarl unfortunately seemed to be living in the past. He devoted all his time to a discussion of the debate which took place during the no-confidence debate, and used the speech of the hon. member for Yeoville on which to hang his arguments. I want to refer him to what was said by the Stellenbosch Bureau for Economic Research. In discussing the future, about which we are concerned, they had this to say—

That is the quarter under review as far as this House is concerned. They continue—

Sir, I am sure you will allow me to associate myself with the tribute which was paid to the hon. the Minister of Finance on his recent appointment to this high office, by members on this side of the House. Both the hon. the Minister and I have one thing in common, we had the privilege of being academically educated in the same faculty at the same Alma Mater and to that extent I think we talk roughly the same language. I was interested to see on the front page of the Financial Mail of 7th February 1975 a very attractive portrait of the hon. the Minister with the caption “The Second most Powerful Man in the Land”. Today, speaking economically because I do not think that the Financial Mail would want to speak disrespectfully of the hon. the Prime Minister, the hon. the Minister has become the most powerful man in the land. I am sure that the new incumbent of the portfolio of Economic Affairs will be proud to know that he is now the second most powerful Minister in the land. I want to take this opportunity of not letting the hon. the Minister escape now that he has changed his hats. I want to have it on record, particularly because he comes from an enlightened university, that while he was Minister of Economic Affairs he subscribed to principles which I find we on this side of the House can support entirely. The following is reported in The Cape Times to have emanated from his direct commentary—

I want it on record too that he went on to say—

We on this side of the House entirely subscribe to those comments. The natural consequence of such a philosophy, we hope, will lead the new Minister of Finance to influence his Cabinet to take the necessary steps to ensure the removal in stages of crippling controls which have hide-bound the Government in power during the last 26 years. I refer particularly to rent control, price control, interest rate control, import control and exchange control. This would free our economy and allow us to react to the rapid changes which must inevitably take place in the few years ahead of us. If we were really economically strong there would be no need for these props. They should go as rapidly as possible. Let us rather pin our colours to the flagpole of free enterprise.

The hon. the Minister went further, and in order to pin down his successor, I want to point out that he made another statement with which we are entirely in accord, namely “that the State should encroach as little as possible upon the field of the private sector and not deprive it of its investment opportunities”. He was referring here to public corporations and State corporations. He went on to say:

Again we compliment him on his attitude. The Government really is learning now from the Opposition’s philosophies. I want to compliment him too on the appointment of an advisory committee in which commerce and industry and the private sector will be allowed to confer with the State when they feel that their privileges are being infringed.

The hon. the Minister, however, has moved today, in the Part Appropriation Bill, the expenditure of R1 900 million of State money which is roughly divided between the Revenue Account, the Loan Account and the South West Africa Account. He has indicated that he does not want to anticipate his Budget speech. I can understand this, but if he is loath to show his cards to the Opposition, in our opinion it does not remove from the Opposition the very real responsibility that we have, particularly in this debate, to throw the spotlight of public opinion on such facets of public financial and economic life as affect the day-to-day living of the private individuals and business corporations. If we do not do this now, it may be said: “Forever hold your peace”. I say this because when the main Budget speech is delivered later in March, the Rubicon will have been crossed, the boats will have been burned and the Government will be committed to a policy and we cannot then expect the hon. the Minister to listen to us as he has done in the past and make concessions on private taxation, on indirect sales tax or on any other direct form of taxation. The hon. the Minister has listened to us before, and I know that he will listen to us today because, as the hon. member for Paarl has said we are the official Opposition and we are important in the hierarchy of this hon. House.

There are many things that are wrong in the South African economy. This country is overtaxed, both directly and indirectly. The corporations are overtaxed, thus inhibiting productivity. We are experiencing excessive inflation and our cost of living is completely unacceptable and intolerable. World trends and world indicators however, are all flashing red-light signals as far as the economy of the future is concerned. It would be foolish if we did not react to the world situation. We know that the United States of America is in a state of severe recession. Their unemployment rate is becoming unacceptably high, being in the region of 8%, and they are not very successfully combating inflation. Britain, sad and tragic as it is to say this, is on the verge of bankruptcy. The price explosion there is completely out of hand. In Germany there is almost a negative rate of growth and Japan is in recession. I can only say that fortunately we in South Africa have moved against this trend owing to factors I shall enunciate shortly. However, no country is an island unto itself, and the hon. the Minister has indicated, in his initial speech, that we are facing a period of economic slowdown, that our gross national product has fallen from a high last year of 8% to a figure which he expects will go as low as 3 % or 4% this year. These are the classic signs of stagflation—high inflation with low growth. We accept that a period of consolidation which we may be entering upon and which economists believe will carry us not only through this year but possibly into the year 1976, may at this stage be acceptable if it assists us in fighting what has been described as public enemy No. 1, i.e. inflation. The Minister, however, is on the horns of a dilemma. Curbing inflation can bring on recession and unemployment, and unemployment is the one factor which the hon. the Prime Minister has said would cause him sleepless nights, bearing in mind the social impact and the possibility of social revolution which could arise. Let us get the facts straight. Let us recognize that in our South African economy today we are in a state of paradox. What have we actually to face? We see that we are living in the midst of prosperity whilst we are in recession. We are experiencing “gloom in boom”. We are getting poorer as we are getting richer. While our minerals prosper, industrial shares are at a low ebb and may go lower. While profits are inflated, serious major liquidations and bankruptcies are escalating at an alarming rate. The rand has lost a third of its value in the past five years, and as the hon. member for Constantia indicated, this rate of erosion in the purchasing power of our currency is increasing apace. What are the answers? We must recognize that the bounty of the almighty God and our natural resources are such in South Africa that we are envied by most countries in the world. It is important that we should realize that we must not waste this bounty, and that we must use it to buy the time necessary to convert our economy from largely a mining and agricultural economy to an industrial and manufacturing economy. We cannot waste the good fortune that has been given to us. Equally I want to make the point—the only political point—that this Government and this Minister have come to power at a time when the resources that we have are such that no Government could bring about a state of chaos in the country, a country blessed with riches and tangible wealth which are envied by the rest of the world. I want to refer to a speech which was made by Mr. Haak, a previous Minister of this House, who said recently:

I want to go on to say that the gold-mining industry in this country is so important to us that it will be our saviour in the present and in the future. We must realize, however, that the size of this industry is so tremendous that any group of mining houses is today producing wealth far in excess of the total wealth of any six moderately large African States and moderately poor African States and that it is the mining industry with its entrepreneurial and technical skills that has come to the salvation of our country at a time when we needed it most. Because of our climatic conditions we enjoy the bounty of agricultural surpluses from time to time, but we cannot rely on them. I want to stress Mr. Haak’s warning that the capital which can be obtained because of our tremendous income from gold mining should be canalized into manufacturing industry for the simple reason that the gold-mining industry is a vanishing one, that the asset is a vanishing asset and that we cannot always count on it in the future. The future of this country with its rich resources of human material and labour, which are largely untapped, is industrial as was the case in Japan. Time is running out for our country and we must make the most of these resources. The London Times once said that the Prime Minister of South Africa governs a country which without its mines would rank nowhere in the hierarchy of nations and that it is the mining industry which produces the assets that give South Africa its international position. This is important if we are going to keep in perspective what should be done during the coming financial year to make the most use of the assets which the hon. the Minister of Finance in his office has at his disposal.

What then are the problems facing our great country? These problems, which are facing most countries, are recession, inflation and energy replacement. These problems are just as urgent as they are important. What we on this side of the House ask for from the hon. the Minister of Finance is to undertake bold planning right now to ensure the removal of the uncertain climate which has clouded the initiative of private enterprise during recent months. This could be the one way we could beat inflation. I refer to the prognostications of the Stellenbosch Bureau of Economic Research and also to the comments of Prof. J. L. Sadie. I refer to what he said in the bureau’s report, “Prospects for 1975”. He said:

For a quick summing up of the economy in a nutshell, a summing up which is at the disposal of the hon. the Minister of Finance for the plans he makes for the year ahead, let us look at the present economic situation. I quote:

These are the indicators to which I know the hon. the Minister will give due regard. However, as a positive contribution from this side of the House, I want to offer a ray of hope. We have faith in the economy of South Africa. We have faith in the ability of the people to weather the storm. I was impressed by what Dr. Willem Coetzer, the chairman of General Mining, said in a statement he made to the Press in London only yesterday when he appealed to South Africa to realize the power of gold and observed that gold is a bullish market, that we can have faith in the future prospects of gold and that we should open our doors to overseas investors. The gold-mining industry calls for high entrepreneurial skills, but equally there is a high risk factor. It looks as though we need between R1 150 million and R1 300 million new capital for the gold mines in the period that lies ahead of us. If we are to find this sort of capital, surely we should encourage overseas capital which we need so badly. At another level we should encourage—and I appeal to the hon. the Minister of Finance to give this due consideration—new skills to enter the country because we can boost the future of gold in this way. We should get young people from Europe and America, Australia and New Zealand and these young people should not merely possess technical skills, but they should have know-how, trading ability and entrepreunerial skills. Such people could introduce a diversity of life in this country in manufacturing, industry and commerce, a diversity we so badly need. I believe that in this way we can expect much faster growth than we are experiencing at present. We are going to need this capital investment and we must make use of every possibility of encouraging it. How can we do this? I want to make two comments in this connection. Firstly I have a suggestion on taxation which may well be given some thought before the main Budget speech. The State revenue from the gold mines has trebled during recent years to R436 million, but at an average gold price of $150, State revenue could rise in this fiscal year to R700 million. Surely we have here a bonanza which could be used to build our economy and to take away of the harsh effects of inflation.

Such as that experienced by the pensioners.

I am coming to pensions, Sir. I also want to ask the hon. the Minister to ease taxation of companies, to increase plant and equipment redundancy allowances and to encourage the modern concept of inflation accounting in order to reduce the incidence of taxation. I think this is important because we must keep the cash flow of companies at a high level if they are to plough money back and bring about increased productivity which is so vital to us.

I also want to talk to the hon. the Minister on the question of blocked South African rands. Our exchange control currency system has been very tightly controlled for a number of years. I want to call upon the Government to revise its attitude towards blocked rands because this system has severely inhibited the interest of overseas speculators and investors as far as share investment is concerned. I feel that he should also ease the position of the blocked rand to reward the holders of gold shares in overseas countries for their foresight, tolerance and their enterprise because, if we look at the disastrous vulnerability and paradoxes which characterize our present economic world, we realize that the upward potential in respect of our gold shares, our gold market, is quite fantastic. Finally, in relation to the blocked rand I would suggest to the hon. the Minister that he consider removing most of the prohibitions on the movement of capital as an act of supreme confidence in our economy and that he consider easing the present irksome restrictions on the export of capital and locally-held funds, by residents and immigrants.

The hon. member for Constantia dealt at some length with the problem of inflation. I also wish to say that the fact of the matter is that in recent weeks we have been threatened with dearer food prices because fertilizer prices have risen inordinately. Car prices, telephone and railage rates and steel, food, bricks, cement and timber prices have all risen. In fact, it would appear at the moment as though prices are rising faster than wages even though, in the past, wages rose faster than productivity. All these factors are designed to make the life of the hon. the Minister difficult. I do not wish to repeat the statistics that were given by the hon. the Minister of Planning during the no-confidence debate as well as by the hon. members for Paarl and Constantia during this debate. I do, however, want to say one thing about imported inflation. It is a fallacy to say that we are fortunate in comparison with the rest of the world. The individual is concerned with his or her economic and social welfare. Under the present conditions of frustration, of poverty, of anxiety and of uncertainty for the future experienced by the ordinary man in the street as well as by those many hundreds of thousands of South Africans living below the poverty datum line—including the pensioners and fixed income owners—life has become a dreary existence. They are more concerned with their own situation, the hurt and despondency that they feel now, than they are about catastrophes overseas. This is their personal evaluation of the position. One must not forget this.

I also want to deal, as did the hon. member for Umbilo, with the plight of the pensioner, for whom we all have the greatest sympathy. I want to quote that great humanitarian and advocate of the pensioner, Maj. K. Ueckermann, who said—

He goes on to say that members of Parliament should make themselves aware of the situation. We do appreciate the fact that there have been regular increases but, after all, what is an improvement of 100% on one? It is two. Do we really expect the pensioner to live on some R57 per month if he is a White person? Do we really expect the non-White pensioner to live on the miserable pittance which comes his way? The answer is, no. In most modern countries the income of the pensioner is tied firmly to the consumer price index so that he does not have to wait for a year in a state of starvation before he is given relief. The pensioner is affected by the price of food and clothing and the question of rentals. Experience has proved that any benefit he has received by way of an increase in pension has already been swallowed up.

In conclusion, Sir, I want to say that we on this side of the House would appeal to the hon. the Minister of Finance to apply himself to the solution of this problem in the months that lie ahead, with the time available to him, and to realize that despite the wonderful conditions under which we do live in this country because of the bounty of nature, there is much this Government can do to alleviate the hardship, the difficulties, the frustration and the disappointments of the man in the street.

Mr. Speaker, it is a great privilege and honour for me this afternoon, as an Afrikaner, to extend my sincere congratulations to the hon. the Minister, the first English-speaking Nationalist to hold the office of Minister of Finance, and to say to him: May the Lord grant you grace, strength, health and prosperity in all respects to serve South Africa, your country and ours, in that office. I wish him the best of luck and success.

Sir, I listened attentively to the two speakers on the Opposition side. I have respect for both these members, but they surprised me this afternoon. When they are not contradicting themselves, they are saying things which they do not really believe. The hon. member for Constantia says, “Thank Heaven things are going as well as they are in South Africa and not as badly as they are in overseas countries”. The hon. member for Gardens also rejoices because things are going so well in South Africa. But in the same breath these two hon. members say that this Government is bad and that things are not going well in our country. How is one to understand them? I too can say as George Elliot said: “To get an idea of the misery of my countrymen, I need only look at their pleasure”. Sir, things are going very well for this country of ours, South Africa. Just go and see how many people are in our cinemas every night. You will not find one drive-in cinema that is not chockfull.

And horse-racing every Saturday.

Yes, horseraces are held every Saturday. Just try to reserve a seat in any cinema this afternoon and you will find that all the seats have been taken. Just visit our pleasure and holiday resorts and see how crammed they are. We are grateful for a National Party Government which has made these things possible. Things are going well with our people. Sir, I just want to quote a few things the two hon. members said here. The hon. member for Constantia made two statements here. He said that inflation discouraged productivity and saving. But, Sir, the position is just the opposite. If one wants to combat inflation, it is obvious that one has to increase one’s productivity and save. These are the two solutions for combating inflation. The hon. member is speaking against his better judgment when he makes that statement here. The hon. member agrees with me that these are the solutions. Sir, I want to refer to this little book, Inflation, which was published by Dr. Anton Rupert. I want to ask those two hon. members to read this little book.

We have already read it.

Did the hon. member understand it? Sir, all the leaders of the Western world give their answers here; they state very clearly what the solution to inflation is. Those hon. members say, “Thank Heaven things are going so well for South Africa” …

And then they curse it in the dark.

… and then they refuse to believe what those Western leaders say. Sir, I just want to examine one other statement the hon. member for Constantia made here. He says that influx control should be abolished; that Bantu workers should be allowed to bring their families to the cities, and that there would then be higher productivity in the country. We are speaking of economic productivity now, not of other forms of productivity. Sir, how would it promote productivity if we were to do what the hon. member suggests? In the course of my speech I shall have more to say about this.

The hon. member also said that we should revalue the rand and that in so doing we would be combating inflation. If that were the solution to inflation, all the countries of the world would be able to revalue their monetary units tonight and tomorrow inflation would be a thing of the past. Is that what he said? Surely there is more to it than simply revaluing the rand. There are pros and cons. We might prejudice our exports and benefit our imports; it depends on the circumstances. After all, the hon. the Minister has told us very clearly what he, the department and the Reserve Bank and all our capable officials and all the experts in South Africa have done. This is not a one-man show, Sir. All the brain-power in South Africa is ranged behind the National Party regime to get the best for this country. We invite those hon. members to come and help us if they so wish. Sir, while I sat here listening I thought that we should abolish this twelve-hour debate on the Part Appropriation Bill. It is merely a repetition of the no-confidence debate, and an anticipation of the subsequent debate on the Main Budget. I really no longer see any sense in having this debate as well. The hon. members say the hon. the Minister requested R1900 million, but they did not elaborate any further on it. Do the hon. members not know that this is merely a provisional advance and that no money, of whatever kind, may be spent on any new work besides those for which Parliament already gave its approval last year? That is so. If anything new crops up it falls under the Main Budget. We can debate the matter at that stage. Why do you want the Minister to give you an economic survey now and tell you why it is more this year than it was last year? It might have been R2 000 million or R1 500 million; it makes no difference. This was merely to obtain enough money to enable the administration of the country to carry on; that is all.

I also want to devote myself to the question of inflation, and in the first place I ask myself: How does South Africa compare with other countries in the world? What is the economic and financial position of South Africa compared to the rest of the world? We see, we know, we hear and we read that throughout the world there is a tremendous economic recession, one might almost say, economic collapse. There is a depression of the first water in many of the countries, and we have unemployment throughout the world. In the U.S.A, that financially powerful country, 8 % of the economically active people are unemployed. If we examine our real growth rate—I do not want to quote all those figures again —we find that during the period 1973-’74 South Africa’s economic growth rate was 10%. I just want to repeat that the growth rate of the United States, with all its capital, its resources and its oil, where there is no apartheid and everyone is allegedly equal, was minus 1¾%. The real economic growth rate of Britain, to whom we were linked to such an extent that the people of Natal almost wanted to secede simply because we wanted to become a Republic, was minus 1%. In Germany it was 1%, in powerful West Germany. We are ten times stronger than West Germany. In France it was 4¾%, in Canada 4½%, in Italy 4¾% and in Japan, which was always held up to us as an example, it was minus 3¼%. Now these people are saying that the Republic is doing so badly. Thanks to this National Party régime we can boast of a growth rate of 10%.

I can quote a great deal more about inflation, but I do not want to spend any more of my time on it. I want to refer to a man who probably knows more about it than I and all of you put together, and that is Mr. H. J. Witteveen, the managing director of the International Monetary Fund. What did this gentleman say at the 29th meeting of the Fund held on 30 September last year? He was concerned about the economic position of the entire Western world: Firstly about the high rate of inflation, secondly about the sharply declining production throughout all the countries, and thirdly about the balance of payments deficits of almost all the oil importing countries. I just want to quote one small paragraph from his annual report. He said—

He is concerned about it; he realizes that in that sphere they will have to render large-scale financial assistance and that to those financially strong industrial countries, whereas we in South Africa do not need this assistance thanks to the sound National Party Government. What is the position in South Africa? Let us examine it. We know what the position is in the rest of the world, and we are concerned about it. I do not want to laugh at the misfortune, poverty, misery and deterioration of those countries. I am sorry for them, for we are a part of the Western world. However, what is the position in South Africa? We also have an inflation rate but, as I have said, it is in fact low and compares favourably with that of the rest of the world. However, the hon. Opposition is constantly asserting that the National Party is responsible for the entire inflation rate. I want to repeat what the hon. the Minister of Economic Affairs said last year on 28 October on the question of imported inflation. I think it is a good thing, for the sake of the record, for me to quote in this debate from Hansard 1974, col. 6697—

Surely that is an extremely high figure! When we consider these aspects, where do we stand in South Africa? What is the cause of inflation? Let us examine it. If we accept the general definition of inflation, that it occurs when an excess of money is chasing a shortage of goods and services, we must consider how this is caused. It is caused when governments spend more than they gain from taxation and other sources. When does it happen that a government spends too much money? One of the reasons is that too much money is spent on wars and armaments. We had an example of this during the war years when the United Party was in power. At that time South Africa was unproductive in virtually every sphere, for everything was put into the war effort. And we know what the upshot was and what a bitter struggle the National Party had to wage to get itself out of that situation and to build up the Republic into the economically strong and powerful country which it is at present. A second aspect is the increasing scope of State activities, but it depends on whether or not the increasing activities of the State are productive. Nevertheless, one of the causes is that a position arises in which too much money is chasing too few goods. In the third place, and I want to emphasize this, there is a tendency towards the left and greater expenditure on welfare services for the masses. After all, we get the socialist states which wan to wipe out the capitalistic system. No doubt the hon. member for Houghton will agree with me that we should not destroy capitalism.

I say that the State should face a responsibility towards the welfare of the citizens.

We in the National Party want to promote and expand capitalism because, as I see things, it is the only system that is beneficial for South Africa and the world, and that is why I am opposed tooth and nail to communism, as well as to socialism as such. One cannot simply promote welfare services and plough money into them. And then the hon. member for Cape Town Gardens asked for a tremendous increase in pensions. Where must that money come from? It has never been the policy of the National Party that people should obtain an adequate pension on which they can live comfortably and even go on holiday. A pension is intended merely to supplement their income.

The fourth cause of inflation is that pressure groups, such as the labour forces, business undertakings and farmers, request a larger share of the national income without taking an increase in productivity into account. The hon. member for Paarl also referred to that. One cannot simply want more and plough in less; we must be productive. If one does not do that, one runs the risk of becoming idle.

The fifth cause is a desire for better standards of living, for this leads to increased demands. Once that higher standard of living has been achieved there are even further demands which have to be met in order to maintain that standard of living. This results in more needless expenditure. A sixth cause is a desire for shorter working hours. At first we had a five-day working week, but now we already have a desire for a four-day working week. The solution is to work harder and in that way combat inflation. Throughout the world one finds that people are indolent and do not want to work harder. They always want more money for less work. The solution to inflation is that we simply have to work harder. The seventh cause I want to mention is the energy crisis. The sudden rise in the oil price has definitely had a negative effect. The reason why the Western world is in this position today is attributable solely to the oil price. I do not have time to do so now, but I have done so before and will discuss the oil crisis again during the Budget debate. The world must take care of its energy sources. During the period 1960 to 1970 the United States of America consumed more energy than the whole of mankind had done up to that time. The U.S.A. at present consumes more energy for air-conditioning than the whole of China uses to meet its energy needs. Therefore, this is something that everyone in this world will have to consider.

An eighth cause of inflation is that people demand more and more and greatly anticipate their ability to produce. This is also a form of inflation, and I want to ask the hon. Opposition to inform their voters about this aspect as well. Another cause is the concentration of a great monetary power in one spot. This too can be inflationistic. Recently an esteemed overseas banker said that he foresaw that by 1980 5% of the world population would control a total of approximately 85% of the world’s currency. Surely this cannot give rise to a healthy state of affairs and it must surely promote inflation. Arising out of this hon. members can again discuss cartels and monopolistic conditions at a later stage. The shortage of raw materials is another cause of inflation. Only certain countries have these at their disposal and this leads to incidents such as the one which took place when the Arab countries allowed the price of crude oil to rise so sharply. They quadrupled the price of this raw material. We also have another problem and in this regard South Africa can play a role. The growth of the tertiary sector is extremely inflasionistic. The prices of manufactured goods have not risen significantly. According to the OECD, the Organization for Economic Co-operation and Development, the prices of manufactured goods in 17 of the most important countries, the industrial countries, rose by between 1% and 2,5% during the period 1958 to 1968. As against that the prices in the service and construction sectors jointly rose by between 70% and 90% in these 17 countries during the same period. Therefore the tertiary industry, too, is a sector we shall have to watch.

In France the index for services rose by approximately 10% per annum during the period 1962 to 1970. The index for manufactured goods, however, rose by only approximately 3% per annum. This is something which we and the rest of the world will have to watch. The decline of the capital market, to which the hon. member for Paarl also referred, is the reason why high interest rates are being paid. High interest rates are being paid because there is not enough capital. Prices are being pushed up and this leads to inflation. Can the National Party, this Government and this hon. Minister, be blamed if there is a world shortage of capital? Are we responsible if this country of ours has a shortage of capital? We, as Afrikaners, have to take the blame, whereas the financial strength is to be found in the ranks of the United Party. They and their supporters control approximately 80% of the economy in South Africa. Where is their capital? Why doo they not produce it?

However, I want to mention another factor, i.e. the lack of confidence. There is no confidence today in the international money systems and that is why we are in fact experiencing such a high rate of inflation. If there were more confidence, inflation would not have become as uncontrollable as it has in the Western world. This shows why we in South Africa, where there is confidence in the National Party, do not have a high rate of inflation. That is why we are the country with a real growth rate of 10% while there is no appreciable growth rate in overseas countries. Where can one find better proof of the confidence in this Government on the part of not only the inhabitants of South Africa, but also the outside world? We are grateful that this is so. We do not want to boast or make a tremendous fuss about it, but we are pleased that this is the case. I just want to tell the hon. Opposition that they should take cognizance of it. I now want to ask the hon. Opposition: Who is causing the highest degree of inflation in South Africa today? This National Party Government or they as the Opposition?

“The National Party” is the answer.

Who is trying the hardest to combat inflation in South Africa? I now want to mention a few aspects. This Opposition always comes forward—they cannot deny it—and advocates the abolition of sales duty. They want us to reduce taxes, to give more for social services and pensions. They want equal pay for equal work. The non-Whites must earn the same wages as the Whites. This means that more money has to be pumped into the economy. However, there is no increased productivity at all. The National Party tells the people frankly that they cannot obtain higher wages unless they are more productive. Those hon. members, however, are trying to make political capital. They do not want to inform their people correctly. They want to treat everyone alike. This afternoon we heard that the doors must be thrown open and that everyone must stream into the industrial areas of the Southern Transvaal, Durban/Pinetown/Pietermaritzburg complex, the South Western Cape and the Port Elizabeth/Uitenhage complex. I do not know whether hon. members know that one-third of South Africa’s population is living in these areas. Eighty per cent of the country’s urban population is already in these areas.

What are you going to do about it?

The total area of all the cities in South Africa comprises a mere 4% of the total area of the country. It seems to me those hon. members want to absorb all the people from the Bantu homelands into that 4% as well. We never hear that the Opposition want to promote productivity. They will not plead for longer working hours. We do not hear about that. We shall never hear them telling their people that they should work longer hours for less money. On behalf of my Government I want to make an appeal this afternoon to all the working people of South Africa: Please produce more work for the same, or lower, wages. Some time ago the officials of the Post Office offered of their own accord to work longer hours for the same pay. Did we hear the Opposition express gratitude for that? It was the hon. the Minister, the National Party and myself that thanked them for that. It was an example to South Africa and we want to ask our people to do it again. I want to tell the hon. member for Port Elizabeth Central that I see that they have at least seen the light a little. That is, he moved a private member’s motion …

You have not yet seen the light.

… in which he requested us to decentralize. I think there will soon be another crisis in their party and he will be kicked out for having asked for something of that kind. Let us realize one thing in South Africa and that is that the National Party Government is doing its best. It is doing everything it can, far more in fact, to combat inflation and to keep the standard of living of our people high. I wonder whether hon. members realize how high our standard of living in South Africa really is. Those hon. members undertake far more overseas trips than we do so they can tell me in which comparable country the people enjoy such good living conditions as we do in South Africa. Take our houses, take our motor cars, and we shall find that in all respects we are better off than most countries in the world. For example, how many of our people own motor cars? How much does it cost us to run motor cars? Look how inexpensive it is for us in South Africa to drive around in motor cars. Take one factor, the price of fuel. Fuel costs 13,8 cents per litre in South Africa whereas it costs 24,7 cents in France, 30,5 cents in Italy, 25,3 cents in England—during the past week the fuel price was again adjusted in England— 23,5 cents in West Germany, 25,5 cents in the Netherlands, 23,1 cents in Japan and 9,7 cents per litre in the United States. The United States is the only exception, but there they have control measures and other factors. Moreover, they have their own fuel supplies. But in spite of the inexpensive petrol in the United States they do not have the growth rate we have. I just want to say that the hon. Opposition should also realize that we have done a great deal for this country. As far as it can, the National Party sees to it that there are work opportunities for everyone in this country. This is important, for here in South Africa we have no unemployment of any kind. I see the hon. member for Sea Point is sitting here laughing. He says there is unemployment among the Bantu. That is not true. The mines and the farmers cannot find labourers. I have been around for some time and I want to tell hon. members now that if they go to the Bantu homelands they will find Bantu there who are there because they, as they say, have enough money for the next four to five months and therefore do not need to work.

No!

It is true. That hon. member can come with me to see this. The salaries and wages are of such a nature that they can all do well. As far as capital expenditure is concerned, the National Party is doing its best to make provision for basic services. In order to prove this, I want to mention a few figures which will indicate what the State and semi-State institutions are doing to provide capital in order to lay a foundation for the future economic prosperity of South Africa. Escom alone is going to spend R915 million in the next four to five years. Iscor—in their time hon. members on that side of the House did not want Iscor—is going to spend R3 238 million on its various steel works in the next ten years. That is over and above the R460 million which is going to be spent on the Sishen/Saldanha complex. Furthermore, it will cost R71 million to establish the St. Croix terminus at Port Elizabeth. This will be done by the private sector.

That took a long time to accomplish.

Let us take Sasol—which the United Party did not want at that time—as an example. During the next six to seven years R1 050 million will be spent on the second Sasol. This will help to bring about that in 1980 we shall be able to provide for plus-minus 28% of our petrol needs. That money will come from our strategic funds as well as from parliamentary appropriations. I could also mention that in the next two years approximately R50 million will be spent in the Shell and BP refinery at Durban. R290 million is going to be spent at a few other chemical industries while African Explosives and Chemical Industries is going to spend R1 000 million. Foscor is going to spend R40 million and the fertilizer companies R110 million. This means that within the next five years R4 349 million is going to be spent in the interests of South Africa. All of this has been made possible by the sound government of this National Party.

Mr. Speaker, it is not often that I find myself in agreement on one aspect of economic policy with the hon. member for Paarl and the hon. member for Sunnyside. Therefore, I am not sure whether I should tell them that I am extremely grateful—I do not know whether I should be more grateful to Dr. Rupert— for the fact that they have at least accepted intellectually that the cure for inflation is increased productivity. Where, unfortunately, we agree to differ, is that they will not allow it in practice. I would also like to congratulate the hon. the Minister on his appointment. His job is of the utmost importance. I would simply like to say that we on these benches intend to subject him to the most rigorous scrutiny and I do not think that he would ask for anything else.

This debate is an appropriate medium by means of which to review this Government’s stewardship of our economy, to look ahead to the future and to decide whether their economic policies are in the long term interests of the majority of the 25 million people who live in South Africa. I say this because it should never be forgotten that even when this Government’s actions run counter to those interests, that remains the only criterion; that the Government stands in a fiduciary capacity to each and every one of us to apply itself to the task of creating a framework within which all the factors—human and material with which our country has been so richly endowed—can make the greatest contribution of which they are capable towards a steadily rising standard of living for all of us. We will no doubt hear ad nauseam, as we have just heard from the hon. member for Sunnyside, the comparison between our country and those elsewhere. A real growth rate of 7% as opposed to little, if any, growth in other countries, is certainly something for which we should be grateful. But it also needs to be treated with caution. We have far from reached the maturity of the developed countries in Europe or the United States of America. Are the hon. member and the hon. Minister trying to tell us that we can do no better than that? Surely we should be able to do better than that in South Africa. The same is true for the underdeveloped countries of the Third World.

South Africa stands, or rather is moving, in a transition between these two ends of the spectrum of economic development, and probably the most appropriate country with which we should be compared, is Brazil. From this it is clear that in terms of real growth over any particular period of time we have no cause for complacency. But even that comparison is invalid as a judgment because the fundamental criterion is simply whether this Government turns to best possible account all that has been given to us here in South Africa. The short answer to that, to which I shall return later, is that this Government, far from encouraging that, in fact refuses to allow it.

Before coming back to that subject it is necessary to consider the economic outlook as we now see it for 1975. This outlook is broadly for a much lower growth rate than that experienced in 1974. The expectation is that our growth rate in real terms will be of the order of 3% to 4% as compared with 7% to 8% in 1974. That in itself may be understandable though not, of course, desirable in the light of certain extraordinary factors which provided an additional impetus to our growth last year and over which neither this Government nor anybody else in this country had any control. In addition there are other disturbing features which give cause for grave concern, namely accelerating inflation, very high interest rates and extremely tight conditions for the raising of capital. There is also the shortage of savings, the shortage of skilled labour and the financial liquidity position. There are also indeed, as a result of all the facts I have mentioned, the psychological expectations of entrepreneurs in the private sector and, last but no means least, the level and extent of Government expenditure both by itself and through the public corporations. I have said that it is clear that our rate of growth has been slowing down. Indeed, in the absence of the fundamental changes required, which I will come to later, it was inevitable as the limits of our productive capacity were reached and the same old internal bottlenecks appeared. Further evidence of this can be seen in the striking figures for our imports during 1974 and in the correspondingly high level of stocks within our system. Part of that undoubtedly arose from increased prices charged by those countries from which we import, which incidentally and obviously also imports an element of inflation, but more importantly it also reflected a substantial increase in volume. The increase in the price of oil naturally also contributed. Be that as it may, the rate of increase of imports slowed down in the fourth quarter to coincide with a decline in excess of demand as a result of the tight money policy of last year. This trend can be expected to continue in 1975.

I said that in 1974 there were two extraordinary items—in the sense that they cannot be relied upon to occur regularly every year—which bolstered our growth in that year, namely agricultural production and the value of our mining output, and in particular gold. Neither of these can be relied upon to maintain the same rate of increase in value to us in 1975. In fact, leaving gold aside—I would like to deal separately with it—we can only expect the value of both our agricultural and mining output in the aggregate to fall. In the one case this will be due to the weather and in the other to the level of recession in our principal trading partners in the world and the consequent decrease in the demand for these basic raw materials. The prices of our products such as copper, platinum and a number of others already reflect this.

Gold, of course, remains the key and, as has happened so often in the past, it remains on the centre of the stage despite many and varied attempts to remove it and to despatch it into oblivion in the wings. No such thing has, of course, occurred and the intrinsic value of gold as a store of value has been proven yet again over those who for one reason or another have tried to deride it. But as we look at it now it would be a bold if not foolhardy man who would be prepared to give firm advice as to the future direction of the price in the sense of predicting that the same strong upward trend of the past year or two would continue. This is because of the many conflicting factors which surround what unfortunately for us has become an emotional issue rather than the result of objective analysis. On the one hand we have the recession and inflation elsewhere in the world, the uncertainty and instability resulting from the oil crisis and the underrated factor of the climatic conditions in India last year which produced a situation whereby its inhabitants ceased to be net buyers of the metal. We also have the underwriting of the price by the revaluation by the French at around $170. All of these can be seen as bullish.

On the other hand, we have the continued insistence by the Americans of the supremacy of the dollar and their attempts to denigrate gold. However misguided they may be their efforts should not be underestimated, more particularly as it would seem that the predilection of the citizens of that country to own shares which give a return through dividends as opposed to more possession of the metal has been the subject of severe miscalculation. It would seem to me—and of course in circumstances such as surround gold it is no more or less than conjecture as to its place in the short-term—that we cannot rely on the same sustained increase that we experienced in the past year to two although it should keep pace with inflation, whilst we can remain more than cautiously optimistic in the medium and longer term.

So much for the factors beyond the control of the Government which may impair our growth in 1975 as compared to 1974. We must now turn to the areas of grave concern where the Government has within its grasp the power to remedy the situation, if not immediately certainly in time. Indeed, it is of cardinal importance that this Government should now be taking steps to effect two things, namely to reduce the rate of inflation and at the same time to create the avenues through which our country can move to a rate of sustained growth which will be to the mutual benefit of all peoples who live here. It is no coincidence, Sir, that the remedial action to accomplish both these objectives is similar. I would think that whatever this Government may fail to do, there would be a general consensus among the majority of each and all our people that these were ends devoutly to be desired. Mr. Speaker, the rate of inflation in our country in 1974 has been running at an inordinate level, almost approaching an intolerable level. It has hurt each and every South African, irrespective of colour, but particularly and tragically it has hurt those in the weakest position to defend themselves, broadly speaking the old and the poor. Sadly, Sir, we cannot even expect an amelioration in the immediate future. In fact, it seems likely that the position is going to get worse before we can hope for an improvement. This is because, as has been mentioned by hon. members on my right, there is still a number of significant price increases which still have to work their way through the system. The increase in the wholesale price index is still running at a rate in excess of 17%, according to the latest available figures. These increases will undoubtedly be passed on to the consumer, at least to some extent, though it is to be hoped that manufacturers and distributors will bear as great a portion as possible and as is feasible for them through a reduction in their profit margins. There is, however, clearly a limit at this point of time to such a capability amongst both producers and manufacturers and distributors against a background of inflation in excess of 10% and tight liquidity. Mr. Speaker, in these circumstances and against that background, this Government should implement the following economic policy: (1) It should continue to recognize that we are part of the world capital market and should refrain from excessive interference with its workings; (2) it should exercise self-discipline in regard to its own expenditure; (3) it should move now—and I emphasize the word “now”—to remove all discrimination, whether it arises from custom or law, which prevents the full utilization of our labour resources; (4) thereafter we must maximize the productivity that will thus be released and available to us to be turned to account; (5) it must accept that we require foreign capital to finance our developments and that whether it continues in fact to be forthcoming turns on the other factors which I have mentioned and (6) it must recognize—and this is where I come to a fundamental disagreement with the hon. members for Sunnyside and Paarl—that the future prosperity of this country and the policy of separate development stand in direct contrast the one to the other and that in fact the myth of separate development cannot stand the cold touch of reality. Mr. Speaker, by the first I mean that the Government should keep the interest rate prevailing in South Africa within a close relationship to the rates prevailing in Europe and elsewhere. It should not allow too large a gap to develop either above or below those rates from time to time. The margin must be kept very small, and moves should only be made in our interest-rate structure in tandem with similar movements in the world capital market. The results of keeping them too high are obvious. It makes new investments more costly and results in a lower growth rate than we could otherwise have attained. I doubt whether such an occurrence is therefore probable. The more likely temptation is that the Government will come under severe pressure to pump money into our system to make money and therefore credit easier. Such a course has of course superficial attractions. It would cause our interest rates to fall, with all the attendant benefits, and it would probably fuel a revival on the Stock Exchange and demand in general. But it should be resisted because it will at the same time inevitably increase the rate of inflation, even beyond that which we have already experienced and can anticipate in the future. This cannot and should not be tolerated, as the containment of and indeed a reduction in the rate of inflation should be the first and overriding objective of the Government. This need not in our our case be at the expense of growth over a period of time, but rather as a result of it. Another result if our interest rate structure were to get out of line on the low side would be the drying up of any inflow of foreign capital, even if by some chance there was not in fact an outflow. This we could not afford in the past, nor can we afford it now. Sir, it is important that the Government should let the self-correcting mechanisms at present in play run their course. The running down of stocks and the very substantial decrease that can be anticipated in the level of imports will of themselves give rise to a substantial improvement in the balance of payments and consequently to liquidity. We can also therefore expect it to lead in turn, if the past is anything to judge by, to a substantial inflow on capital account.

Sir, the hon. the Minister’s most difficult task in his new job is going to be his ability to say “No”. The Government must also impose on itself the most stringent self-discipline on its own expenditures. It cannot be gainsaid that by its abject failure to do so in the past, it has added directly to the conflagration of inflation. Sir, the sums are now vast and they need to be subjected by the hon. the Minister to the most rigorous scrutiny. Of course we need to have infrastructure, but we cannot but come to the conclusion that in recent years the Government has simply ignored the timing of the long list of projects or even the consideration of whether they could be rephrased. It has simply continued unbridled on its way. The upshot has been that the public sector has accumulated a greater and greater portion of the cake at the expense of the private sector, which in contrast has been subjected to strict monetary control. Sir, it is no use creating infrastructure and at the same time denying through the application of monetary policy the private sector from making the contribution of which it is capable. It is no use, to take an example, creating a railway line and denying people the opportunity of opening up mines and producing the goods and services which will travel down that railway line. In this respect the Government should take the beam out of its own eye first.

It is vital that the Government should not repeat the errors of the past and squander the opportunities open to us to build a sound and enlarged platform from which the future growth of our country can be launched. This it can only be assumed is what the then hon. Minister of Finance meant when he said in his last speech in this House—

We on these benches have repeatedly pointed out the shortage of skilled labour and indeed have warned of the incipient signs of the developing absence of labour overall in relation to our future economic development. This will be translated— whatever this Government may say or do or, more accurately, fail to do—into greater and greater economic integration within South Africa, seen as it should be, as one country and not as ten. This will of course in turn lead to higher productivity and skills for those at present denied the opportunity to develop them. This process is already percolating through the economy and its implications will be profound for every established industry, be it in commerce, industry, agriculture or mining, but it must be understood that it will continue to occur first and predominantly in the established industrial complexes. We have, of course, some distance to go but it is inevitable that we shall continue on this road. Yet at the very same time the Government’s policy has as its explicit objective the development and building up of group or ethnic identity, the maximum differentiation as groups and at all levels between the different peoples of our land, between, for example, the Zulus, the Xhosas, the Coloureds, the Indians and the Whites. Against this, as I have said, we have the fact that in order for South Africa even to maintain its economic growth—let alone increase it, to which this Government is publicly committed—that of necessity will require an ever-increasing degree of economic integration. However, it will not stop there because when that point is reached as it has already been by some, if by altogether too few a number, other aspirations and desires for recognition and participation in spheres other than the economic will come into play. Broadly speaking they could be described as the rights of citizenship. Then at that point in time the policy of separate development will be touched by cold reality and will be seen for what it was—because it will no longer exist—a myth, an economic fraud perpetrated upon and at the expense of all of us in this country.

I therefore want to move as an amendment—

Mr. Speaker, I think the hon. member for Johannesburg North has made some rather bold and sweeping statements this afternoon. I think some of these statements bordered on irresponsibility and I shall leave it in the able hands of the hon. the Minister to reply to them. However, I cannot resist the temptation to remark on a few of his statements. First of all I want to point out that the old tune has again been harped upon about increased productivity. It is a strange phenomenon that among Opposition speakers on economic affairs the matter of Black labour is always brought up as a stumbling block in the way of economic development If we talk about increase in productivity, do we then always only mean Black productivity? Do these people not also recognize a need to urge the White people in this country to increase their productivity? Why do they always leave the urging, as far as that is concerned, to the Government side? There is also a second point. Referring in a derogative manner to the comparisons drawn by the hon. member for Sunnyside between South Africa and other countries, the hon. member for Johannesburg North said something about it not being applicable. However, had it been the other way around and had South Africa been lagging behind other countries, we would have heard a lot of comparisons from that side of the House.

The hon. member referred to two factors which he said were completely beyond the control of this Government, factors which contributed largely to the prosperity we enjoyed in South Africa in 1974. I would venture to say that if it had not been for this stable Government and for the security provided for foreign investments and for the inhabitants of this country, it would not have been possible to achieve the rate of prosperity that we have achieved in this country consistently over a number of years. The fact that these things happened means that we were properly geared to take the utmost advantage of these two factors when they arose during the course of last year. If we had not been prepared, we would not have been able to grasp those opportunities and exploit them to the maximum, as we in fact did.

The hon. member also said that the Government should reduce its interference into the workings of the capitalist system. I shall come back to this a little later, but I would like to remind the hon. member that the capitalist system stands on two legs. Surely, the Government is responsible to create a certain atmosphere and to put certain machinery into motion to provide the necessary opportunity for the capitalist system to blossom and to bear fruit. But there is also the responsibility of the individual. Firstly, there is the way in which he does his work and, secondly, the way in which he spends his money. Why do Opposition speakers, when they talk of interference, never urge the public outside to consider their vital role in the capitalist system? The hon. member also spoke about the myth of separate development. I would urge the hon. member to stay in South Africa for a little longer. He will still find that this “myth”, which has existed in South Africa for 27 years, is going to be completely developed and is going to bear the fruits on which he also will thrive.

*The chief spokesman on the Opposition side mentioned the tremendous rise in the cost of living. The cost of living is measured by referring to the consumer price index, a figure which is so easily bandied about in this hon. House. It is also heard and read about from platforms and in articles everywhere. I think it is necessary, by way of introduction, to refer briefly to what the consumer price index actually is. When one takes an average family and studies its spending pattern, one finds that it spends a certain part of its money on certain commodities and foodstuffs. When one makes a good random test, one arrives at an average weight per commodity for a certain income group. By studying the changes in prices, and bearing in mind the weight one may attach to the various commodities, one is able to discover how the prices of the various commodities are rising. In this way one is able to arrive at a properly indexed figure. Although this is an old technique in South Africa—for the sake of interest I may mention that it has been used in South Africa since 1895 and that the last survey among the public was undertaken in 1966, when 3 000 White families were questioned in eleven urban areas in South Africa—and while it is a very useful figure at which one arrives in trying to approach the problem statistically, such a statistic does have certain inherent disadvantages to which I want to refer briefly. I should like to do this just to give hon. members some perspective, particularly Opposition members, who are so fond of speaking of the uncontrolled rise in the cost of living, and I want to ask them to keep these shortcomings in mind when discussing this subject. As I have said, the last survey was conducted in 1966. It is usually done every ten years, so it will be done again next year. Particularly at the end of the period the consumer price index has certain shortcomings. Over the period of ten years the spending pattern in every family changes. Although it is statistically possible to provide for the index to keep reflecting this change in family spending over the period of ten years, it is very difficult to do this accurately. New articles may be added, while at the same time there is usually a tremendous rise in the quality of articles. I just want to dwell on this for a moment, for it is very important. What was known as a washing machine ten years ago is an obsolete piece of machinery today. Today washing machines are almost all automatic, and when buying a washing machine one buys an automatic one. When buying a refrigerator, one prefers the one which defrosts itself, although one has to pay a little more. When buying a car one buys a model with automatic transmission. In other words, any index must take account of rises in quality because of technological development. Then there is the question of fixed expenses, which is important. If one is earning R100 this year and paying R30 for one’s house one may still be paying R30 for the house next year, while one’s salary may have increased to, say, R200. In other words, one has then started to move out of the pattern of weight which was determined for one ten years ago. The Department of Statistics pays very close attention to these aspects and has developed very effective techniques for taking this into account in calculating the price index. In fact, the intention is to collect enough information during the investigation next year for the purpose of perhaps creating three different price indexes, i.e. an index for the lower, middle and higher income groups, because the spending patterns of these three groups differ widely. In other words, when one begins to talk about the rise in the cost of living and the price increases, one should first of all see the measuring instrument one uses in its proper perspective.

However, there are a few other things as well which one should keep in mind. It is impossible and impractical to freeze prices. The best one can hope for under our present circumstances is to stabilize prices as far as possible. It is important for us to aim at stabilization, because, as I have said, even without inflation an inherent increase factor is built into prices. Also, when prices rise, we must ensure that our capitalist system is kept as pure as possible in order that it may have the necessary effect at the final point. This is very important. The hon. the Minister may say in this House that we stand by the capitalist system, but it remains a fact that the eventual point of contact between the individual and the capitalist system is at the point of sale. That is where the system will stand or fall. If the individual does not display the necessary common sense and carefulness in spending his money, he is seriously contributing to the price spiral. We have found in South Africa that as the inflation rate rose, we have nevertheless been able to bring about salary adjustments to compensate for this, so that the real spending power of the individual could be maintained as far as possible. In South Africa there is a further factor we must bear in mind, and this is the fact that a few years ago our prices were quite unrealistically low compared to those in other countries, with the result that when our prices start to increase, we in South Africa can tolerate a more rapid increase than other countries which already had a higher price level when inflation really began to soar.

An important factor in the whole spiral of inflation is the question of food prices. However, a large percentage of the price of food reverts to the farmer in order to enable him to produce more. We must take care of the farmer, not only to keep ourselves going, but also in view of our intention to assist other African states. In addition, good prices enable the farmer to provide proper facilities for his workers on his farm, thereby raising the standard of living of the Black workers. I want to concede that there is certainly a great deal that can be done in our food distribution system to rationalize costs.

What did the Government do when it found again last year that there was a tremendous rise in the inflation rate? The Government simply saw to it that interest rates rose, so that a tremendous capital squeeze could be brought about which allowed demand inflation to cool down. The Government did not do anything to increase or to decrease capital. It left the situation just as it was, and it was so successful that between April and September the retail trade—this is ancient history by now—showed almost no growth. When these measures began to take the desired effect, demand inflation showed a further drop, to such an extent that an expert told me today that at the moment we are suffering almost purely from cost inflation rather than from demand inflation. This means that we still have inflationary pressure on salaries, etc., as a result of the high demand inflation we had and as a result of the fact that people are still asking for more money because they felt the squeeze last year. It will take us some time to regain a proper balance. An important matter we must impress upon the Opposition is that at certain times one gets a mixture of demand inflation and cost inflation in the various economic sectors. In such a situation the Government cannot apply different policies in a sectorized manner. It can only lay down to the best of its ability a general policy which will eventually create a balance between cost and demand inflation.

I want to conclude by expressing a few thoughts about the role of the individual. The Government has taken many other positive steps which will probably be mentioned by other speakers, but let us look at the role of the individual in this whole question of inflation. I said a short while ago that the individual has two levels of responsibility in regard to his role in the capitalist system. These are, firstly, how to obtain his money and, secondly, how to spend his money. Let us first look at the second level, namely the spending of money. It is in this field that the individual has a tremendous responsibility, for if he is going to allow himself to be exploited, he will simply be fanning the flames on that consuming level of inflation. It is the responsibility of the individual to see to it that he buys at the best possible price, and to give the course of the capitalist system free rein so that the exploiter may eventually be eliminated because he does not receive the support of the public. There are many factors which make this extremely difficult. One gets captive markets where regional shopping centres are concerned. People come to the big department stores in a neighbourhood in which there may be one or two other small shops. Transport would also involve expenditure, of course, but mainly for the sake of convenience many people prefer to spend their money in this one centre rather than to shop around. I do not want to offend the businessman—I still want to say something about the businessman as well—but such a situation gives him the opportunity for exploitation. It is for the public to identify these things. By simply not buying there they will bring down the price, or the exploiter will simply have to move out. Then I want to refer to the individual’s spending in respect of household requirements. A short while ago I referred to automatic washing machines. It is all very well to make use of all these fine developments which are available to us today, but there is a limit to this. It is absolutely essential that we discipline ourselves and that we appeal to the public from this House to exercise great self-discipline as far as the acquisition of luxury goods is concerned. It is quite possible that during the boom period a few years ago, people suddenly found themselves on a higher income level, which has since become stabilized. When such a person suddenly attained that higher income level, he was able to buy a caravan, a third car, a motor boat or something of the kind. Today he is struggling to keep up and he has to make every rand go a long way in an attempt to maintain that standard of living. I think we should take stock of ourselves and see whether we are not trying to live too luxuriously as regards our houses and what we have in our houses.

The next aspect I want to mention concerns the spending of our money. Every individual must understand that if he does not contribute his share and save as much as possible in cash, he will in fact be jointly responsible for cutting his own throat economically, because that money is so urgently needed to create opportunities for himself, to increase his income, to find a better job for himself or to create jobs for his children.

There is a further most important matter I want to mention. In this regard, too, the Opposition often lays the blame at the door of the Government. In this way it is often said that we should increase productivity and introduce training facilities. One hon. member said: “It is the Government’s responsibility to retrain Whites.” With all due respect to the hon. member for Constantia, I want to concede that it is indeed Government’s duty to meet this need up to a point, but the most successful big enterprises also provide on a large scale for the training of their own people. I think it is time for our businessmen to examine their own conscience as far as this is concerned. I want to repeat what I said in this House last year, that there is only one person, or rather two, who can judge a person’s productivity. The first is the person himself. The moment he pockets his money he knows whether he has in fact earned that money or whether he is pocketing more money than is justified by his production. The other person who knows is his manager. If the manager does not go out of his way to induce that person really to earn the money he pockets, the Government can certainly not do it for him.

In this connection I should like to come back to the hon. Opposition. I have listened this afternoon to what was said by the hon. members opposite on the reason for inflation, the problems, etc., but I did not hear a single one of them make an appeal to their supporters outside, or to the public in general, to examine their own conscience. Nowadays the Government gets the blame for everything: The Government must ensure that the public is not exploited; the Government must ensure that measures are taken to increase productivity, etc. How is this possible? I kant to make the statement that many if not most businessmen in key positions outside are supporters of the hon. Opposition members opposite. We want to ask them how consistently, inside and outside this House, they have appealed to their people to make a purposeful attempt to meet this problem. It is high time the hon. Opposition got rid of its apartheid mania and of the spectre of ideology, as far as the economy is concerned, with which they are still obsessed in this House. Surely, for example, it is an economic reality that one has to decentralize. There are so many reasons for this. There are so many economic realities in the policy of this Government. I also think it is high time this Opposition and businessmen outside who support them realized that this Government is not going to be defeated soon and that the policies which have been followed for 27 years will continue to be followed for as long as the Government is in power. In other words, it is time they practised their economic activities within the framework of Government policy. The sooner they realize and do this, the sooner they will be able to effect an improvement in the lot of the poor Blacks, whose cause they plead every day and whose circumstances are also a matter of concern to this side of the House. However, we are not always able to do something about it along business channels, because we do not control every particular economic activity. They do control it to a large extent. For that reason it is up to them today to create the opportunity for the Black people to achieve maximum productivity and to improve their own position within the framework and atmosphere created by this Government.

†Mr. Speaker, I should like to make one observation in regard to the remarks of the hon. member for Constantia about self-sufficiency. With respect, I should like to say that in this country it is not only for the purpose of security that we try to make ourselves as self-sufficient as possible. We have a very grave labour problem. We have been told over and over again by hon. members of the Opposition how many jobs we have to create every year. I think that the hon. member for Constantia must realize that in trying to become self-sufficient as far as possible we are in fact at the same time creating job opportunities for all our people. I agree that we have to import those items that we cannot manufacture economically here and to stimulate competition in South Africa. The all-important thing, however, is not simply to open our ports and allow people to import just what they like.

*I should like to refer to the big department stores. I want to pay tribute to those department stores, businessmen and other parties who do their very best not to exploit the advantages which inflation sometimes offers the businessman, those people who make a most responsible attempt to keep prices as low as possible and who pass every possible price advantage directly on to the public. I think those people deserve much more thanks and appreciation from us than we actually give them. We should also be grateful for those individuals who still realize their responsibility in regard to their role in the capitalist system, who go about carefully when they have to make purchases and who save as they should.

One last word regarding the hon. member for Yeoville—Now that he finds himself on the other side of the fence, I wonder whether the statement he made last year, which was most important, although it passed without any comment—it received no publicity in the Press—I wonder whether the important concession made by him still applies. He said in this House that it was sometimes necessary to bend fundamental economic principles in order to give effect to certain ideological standpoints. Is this still the attitude of the official Opposition?

Mr. Speaker, the hon. member for Florida touched on a few important points to which I wish to reply in brief. The first point is with regard to the measuring instrument which must be used for testing the consumer index. The hon. member spoke of the ingenious techniques which exist for establishing this. My experience has been that the higher the index rises, the less relation it bears to the reality of the problems of the man in the street. I do not know what the position in his constituency is, but in my constituency there are literally thousands of people and in Durban there are tens of thousands of people whose part of the basket, as compiled by the consumer index, is almost completely occupied by rental and food. After the rental has been paid and food has been bought, there is practically nothing left for the luxury refrigerators, automatic washing machines and other articles which he mentioned. These do not enter into the picture at all. When we talk of inflation, we must think of those people who are not only struggling today, but who can no longer make a living. Here I am referring to the pensioners, the people with a fixed income, the people who have no say in the matter and who cannot do anything to augment or increase their incomes. I challenge that hon. member to discuss refrigerators and luxury washing machines with the pensioner who receives R57 per month and to discuss the question of his rental with him. Each increase in pensions is immediately and completely wiped out by the increase in rental. With regard to food prices, he must go and talk to the ordinary people who have to struggle to feed their families and to the old people who have to struggle to feed themselves. The hon. member spoke of productivity, but. Sir, what incentive is there? When a person knows that there is a shortage of skilled workers in his industry, then there is no incentive for him to work harder. Why should he try to work harder? He knows that he cannot be dismissed because there is no one to take his place. He can practically do as he likes with his employer, for his employer needs his services; his employer has to pay him more and more and he can do less and less work because there is no one to take his place. Sir, if the Government really wishes to encourage productivity, it must ensure that there are enough skilled workers with the necessary abilities to fill all the posts: then there will once again be competition and then there will be an incentive to higher productivity.

†Mr. Speaker, I want to direct the debate into another field. I am glad to see that the hon. the Deputy Minister of Bantu Development is here. I want to refer him to the disturbing reports that we have seen regarding the forceful removal of a tribe of the Tswana people from one area to another. We sought to have a debate on this, but you, Mr. Speaker, in your wisdom, ruled that the matter could be raised in this debate. I do not intend to deal with it in detail, but I want to remind the hon. the Deputy Minister that last year we opposed this matter in the Select Committee. We warned the Government that in matters of this sort, where deep emotions were affected, where traditions and superstitions were concerned, they should go out of their way by consultation and negotiation to reach agreement.

Do you know the area?

Yes, I know the area. We pleaded with the Government to reach a settlement by agreement, and now we read of Police being moved into the area and of threats of violence, if necessary, to move these people, whatever their own wishes may be. Sir, I call on the hon. the Deputy Minister or his Minister to give this House a clear statement as to what steps were taken to reach agreement. I appeal to him on behalf of this side of the House not to take action which can lead to strife or unpleasantness or incidents. South Africa is in a delicate stage of detente with the rest of Africa. An incident of this sort can send all the efforts of the Prime Minister back to Square One, and that hon. Minister, together with his department, carries the responsibility of ensuring that nothing occurs which can harm the image of South Africa and which creates the impression that whilst we talk to others outside, we are not able within our own country to reach agreement by consultation and negotiation and to act in harmony with the people concerned.

Sir, what I want to talk about this afternoon is the question of racial harmony and how we are to achieve it. As you will know, Mr. Speaker, last week a new political party was born. I have this interesting report here. It is headed, “Party born in darkness in a house of intrigue” and reads—

Sir, not I but a Reformist called it a “house of intrigue”. I feel very sorry for one of the members of this House who by accident or through bad luck found himself in that house of intrigue that night. By Gad, Sir, it must have been a blow to him! There he was in this traumatic situation, a loyal member of the United Party, loyal to my leader and dedicated to the principles of the party and, here, by Gad, he found himself in this house of the intrique …

By chance.

… where 10 of his protégés, the people he had hand-chosen and picked, were plotting against the leader and the party to which he as chairman of the Transvaal was dedicated and loyal. What a situation to be in, Mr. Speaker! But it was not above him. With integrity and with honesty he did not attend that meeting. He did not attend that meeting, Sir; he sat in another room alone. He did not participate. We have his word for it. He was in the House but he did not attend that meeting. We can only picture him sitting there playing solitaire, playing patience, in a side study while his protégés were hagling and brewing their devil’s brew of rebellion and revolt. I take my hat off to him, Sir. I would not have had that self-control. I would have got up and stopped them. I would have said: “What are you doing to my party?” It must have taken tremendous self-control not to go into that meeting and stop these people from intriguing against the party, which he was coming back to join the next day in this House, to sit as a colleague in the United Party caucus. It must have been difficult. I am sure the game of patience he must have worked out must have had a new set of values for the cards. Instead of the ace being the highest card, I suspect that the highest cards which took all the tricks were the knaves. But, Sir, it was an even tougher week, because last year the hon. member placed his political future at stake when he challenged the hon. the Prime Minister that if within a year, on his birthday, he had formed a new political party he would resign his seat in Parliament. Now, Sir, it is not his birthday yet. That was on 19 April, so there are still two more months to go to his birthday, two more months today. Here is the birthday present; he said he chose his birthday because he could get no better present on his birthday than Mr. Vorster’s resignation. Now it is not the hon. the Prime Minister who is in another party, and I think we are entitled to know whether that challenge to the Prime Minister will be carried out either now or on his birthday.

May I ask the hon. member a question? Would he like to read the full challenge instead of merely quoting a section of it out of context?

I have only half an hour, but the full challenge was that the hon. the Prime Minister would resign if the hon. member was still in the United Party. But now he is not in the United Party and therefore that is irrelevant. That part of the bet is functus officio.

Try to keep to the truth.

Mr. Speaker, I want to bring into perspective some cold, hard facts. I know that facts are often embarrassing to those who are desperately seeking to clothe disloyalty and guilt in a cloak of respectability. I intend to record some political history and I am going to ask the hon. member for Yeoville and those who support him to tell me where they disagree with that history and where they disagree with what I want to say.

In November 1971 my leader appointed a constitutional committee to review the federal policy of the United Party. The members of that committee were the hon. member for Durban North, the hon. Senator Horak, the hon. member for Hillbrow (Dr. Jacobs), the hon. member for Von Brandis (Mr. Derek de Villiers), the ex-member for Orange Grove (Mr. Etienne Malan), the hon. member for Wynberg (Mr. Jacques de Villiers) and myself. To that committee was later co-opted the hon. member for Yeoville, who attended his first meeting in July 1972. The other members, I have mentioned all except one of whom are still here, are so-called members of the establishment, the Old Guard, whatever you like to call them, and all are still loyal to the party and to my leader. That committee met on 23 August 1972 to sign an interim report a bare month after the first draft interim report had been drafted, and we presented our proposals to the central head committee the following day. Those proposals were accepted in principle. Six major principles were accepted. Somehow it leaked to the Press and the fact is that that policy was hailed by almost the entire Opposition Press of South Africa as a major breakthrough …

Who leaked it?

… as a new concept in political thinking in our time.

Who leaked the policy?

I do not know; I wish I knew.

You do know.

It is equally true that there were certain red herrings drawn and that there was hair-splitting to try to sow confusion about this policy. However, there were three incontrovertible facts. Firstly, my hon. leader initiated the enquiry, secondly, the so-called establishment formulated the proposals; and thirdly, the party’s head committee and caucus unanimously accepted the basic principles of that policy which were proposed.

Now let us look at these principles in perspective and in detail. We as a committee looked at what existed, the facts of life. We found that there were in South Africa different and identified and identifiable racial communities. We found different ethno-cultural identities amongst our people. We found that to a large extent they lived in separate identifiable residential areas, with some blurred edges, i.e. mixed areas. Basically, however, our people lived according to their ethno-cultural identity. I am not arguing the rights or wrongs; I am stating the fact, the fact which we found.

What do we have to do with it?

I want to apply it to Government policy; that is what it has to do with this debate. The next fact that we found is that there were in South Africa fears amongst the minority groups of swamping and domination not only amongst Whites, but also amongst the Coloureds and Indians. There were fears of being swamping by numbers. We also found that there was a frustration and a bitterness amongst those who had no share in the meaningful decision-making which governed their lives.

Everywhere we looked, everywhere we probed, we came across one insurmountable obstacle, namely the unitary system of government with a unitary Parliament based on individual representation direct to that central Parliament. This stood in the way of every possible solution we tried and tested and any way we moved it meant domination by numbers of a majority over a minority as long as the Central Government was based upon a central unitary Parliament with direct representation from the people at the bottom straight to the top. We as a committee had accepted four basic principles: that there should be no domination of one group over another; that there should be meaningful participation in decision-making by all the peoples of South Africa; thirdly we decided that whatever we found as an answer had to be sincere and real and not a bluff, not a pretence, not a camouflage to try to satisfy people without being real; fourthly, we believed and accepted that it must give security and stability to all South Africans, to the majority as well as the minorities. The unitary system could not meet these demands without leading to domination by majorities or undermining security. So we as a party, on the recommendation of the committee, abandoned the unitary concept, the Westminster concept, a fundamental change in political thinking. We then looked at the only practical alternative, that of a federal system. We looked at the federal system and, firstly, at the conventional federal system, viz. the geographic federation such as that advocated by the Progressive Party. We found that this merely repeated in microcosm the situation in macrocosm. In macro the whole South Africa has a problem and if you simply split it up on a geographical basis you merely multiply the problem of the whole of South Africa by that number of units. It solves nothing, because within each unit you have duplicated the problems of the country as a whole. You are left with exactly the same situation on a smaller scale, in microcosm but in many more units. We therefore rejected the Progressive Party’s idea, the conventional idea of a totally geographic federation. What happens in that sort of system is that wherever you have a minority group, say a White group in a Black federal unit, a White minority under a Black majority, you have domination of that minority by the Black majority. Where you have a Black minority in a White unit you have domination by the majority over that minority within the White unit. And so, which ever way you look at it and however you try to juggle your boundaries, you will have a majority control dominating a minority.

We then proposed—this is now and has been the policy of this party since August 1972—a federation not of geographic areas drawn on a map, but a federation of communities where each community would control its own affairs, viz. those affairs affecting the members of that community alone, free from domination by any other community.

Such as?

Such as, as we have said over and over, education, hospitals, local government, laws of status, social welfare, pensions and so on. These are all matters concerning the individual in his own community. As the hon. the Prime Minister has found—this is where I answer the hon. member for Carletonville’s question about what this has to do with the debate—there are areas of common interest to all groups. Just forgetting for a moment the homelands and the myth that they may become independent, the hon. the Prime Minister has accepted that there are areas of common interest where there must be common boards, a board on which all races will serve, or a joint Cabinet council where the Coloureds and the Whites will come together on points of common concern. The Government is fiddling with the idea of boards and a Cabinet council, but we faced the issue squarely and said that there must be a centre at which all the communities meet. That centre will be the point at which matters of common concern will be dealt with. Once again we looked at what exists in South Africa. We found, politically, this Parliament which is sovereign and the source of all political power. We found four White provincial councils, one Coloured Representative Council, one Indian Representative Council …

Two Coloured Representative Councils.

I am talking about what exists now. We also found a number of homeland legislative assemblies with under them local authority structures, all with various compositions and with various powers. But the fact was that these bodies existed. And because you cannot simply wipe everything clean and say that there is now a vacuum in which you are going to create a new South Africa, you have to move from what you have. And so the federal concept clicked into place. By starting with what exists, these community controlling bodies can become their community governments, and the White provincial councils become the White man’s community governments. The Coloured councils —and we stand for two Coloured councils —become the Coloured man’s community government. The Indian Council becomes the Indian community government and for the homelands there are the legislatures which will become their community governments. We also add the urban Black man, for whom there will also be a community government. Each will be under a legislative assembly, under a form of Parliament, dealing with the matters concerning the people themselves. And because consultation is the essence of the United Party, we create standing committees to consult on the devolution of power from this Parliament to those bodies.

I cannot deal in detail with this aspect because I want to come to the end of the road, an aspect in respect of which there are attempts to confuse the issue. We believe that we should create a Federal Assembly as the centre based on a basic equal representation plus a balancing, a stability, a responsibility factor, of 120 additional members elected on the contribution each community makes to South Africa as a whole. We believe that this Parliament will then in its wisdom transfer powers which we control today to that federal assembly, powers which cannot be devolved downwards because they are of common interest. This Parliament will then transfer those powers to the federal assembly where they will be handled by all groups commonly and by all communities commonly in the interests of South Africa.

What will the end of the road for the White Parliament be?

The hon. member asks what the end of the road for the White Parliament will be. I knew that question would come, and my answer is loud and clear. When this Parliament has set up the federal structure—and because it is the only source of power, this is from where leadership, White leadership, the instrument which will set up the federal assembly, must come. When, Mr. Speaker … [Interjections.]

Order! Hon. members put questions to the hon. member, but when he wishes to reply to them, they do not afford him an opportunity to do so.

When this Parliament has set up this structure and has gradually transferred powers to it and the stage is reached where that federal assembly has won the confidence of the people of South Africa and is functioning satisfactorily and with security for all, then this Parliament can, on a referendum or special election, transfer all its residual powers, the keys to the security of the State. When those powers are transferred, I say without equivocation, that this Parliament will be functus officio, it will have no further role to play as the sovereign authority in South Africa. If you should ask me whether it “could” happen, “would” happen or “should” happen, the answer to all these semantic games would be “yes”, because if this scheme is to work, if this federal plan is to work, the federal assembly would have to enjoy the confidence of all South Africans. When it enjoys the confidence, all South Africans will place their faith and their future in its hands. And, therefore: Could it? Yes. Should it? Yes, because it should work in the interests of South Africa. Would it? Yes, because it will be illogical to say that that would not happen. But the test, the choice before South Africa is to overcome the choking fear, the cringing, abject fear I see opposite me. All the hollow mockery I hear behind me means nothing. Only if we can find a structure which will win the confidence of all our people can we be assured of a future free of revolution and anarchy, a future in which there can be harmonious co-existence, a future in which there will not be poverty-stricken, isolated, cut-off bits and pieces from where people will be looking with greedy eyes at the small, rich, and privileged segment in the white restante of South Africa. Only if South Africa has faith in its own people and can devise a system of government where no community will dominate another in the handling of its own affairs a nd where they can work together at the top on matters of common interests, only then will there be for any one of those frightened, cringing members a future in this South Africa. Only then will there be a future for them, for their children, for the Blacks, for the Coloureds and for the Indians in South Africa.

That is our policy and I want to know where the hon. member for Yeoville disagrees, where he did not previously agree, where he did not vote, agree, approve, go along with or support what I have set out here. If he does not agree now then he has changed his policy, he has changed his principles and he has changed his philosophy within the last week. So, this is where we stand. Now, let us see where they disagree with us and where they stand for something different from what the congress of the United Party has accepted.

Mr. Speaker, the hon. member who has just resumed his seat again delivered a plea in which he asked in respect of the Black people who were moved to Mayen: “What steps were taken to reach agreement?” It is significant that he asked such a question, viz. what steps were being taken to reach an agreement while he devoted the greatest part of his speech to the lack of agreement within that party, and depicted for us the palace revolution, the drama and the intrigues which played off in the dark rooms.

Those are their words; not mine.

Surely this is a terrible contradiction that the same people who are continually pleading that we must hold consultations and that we must bring the Black people together cannot reach unanimity in their own ranks. I do not want to pause for long at the dramatic exposition which the hon. member for Durban North has given here, but nonetheless I want to ask him a few small things in connection with their policy. He indicated to us how their federal policy will evolve. It was very interesting, especially the fact that they want to go back to those who have been enfranchized to get a decision about what will happen to this Parliament. Before they come to that, there are of course quite a number of things that have to be done. In the first place the hon. member must tell us how this federation will work with so many different groups and so many interested parties—which he enumerated for us. Are the Whites within that party going to determine the basis of income or the earnings which are necessary for the franchise? Then, immediately, there is discrimination again, something to which the hon. member takes such strong exception.

Not on grounds of skin colour or race.

Then one has discrimination in the sense that the White decides which conditions will apply to the others. Is that the case or is it not? Will the Black groups and the Coloured groups decide themselves?

By consultation and agreement.

It is very clear that these people dream dreams; they are dreaming dreams about how agreement will be reached. When the hon. member for Durban North was asked the other day whether it would be possible to realize this new constellation, this new dream of theirs, he said: “It will work because it has got to work”. That is the answer which was given. In other words, we come back to the point that the hon. members worked out a plan for themselves which so frustrated the hon. member for Yeoville that at this early stage on their road to federation that he preferred to leave because he no longer saw any hope for the Old Guard, as they are called, or Old Turks …

Old Progs.

Yes, the old members, the old “crocks” or old nags —I do not know what they are. The hon. members will simply have to decide for themselves which description is to be applied to them. It is very clear in any case that, in their own ranks …

It is very simple: “United Party”.

It is a divided United Party as it sits there now. All that remains “united” in that party is its name. In any case, those are the problems of the hon. members. The hon. member for Yeoville will simply have to reply himself to the challenge issued to him and the accusations hurled at him by the hon. member. I think that we on this side are quite interested in getting more light on this subject, on all that was accomplished in the dark room.

Tell us about Mayen.

I should prefer to return to the inquiry of the hon. member about the removal of the people at Mayen. First I want to inform this House that as a result of the great amount of rain which has fallen in that area, it was decided not to continue with the removal for the time being.

Hear, hear!

The position is that representations have been made, to the hon. member for Houghton as well. She sent a telegram to my colleague, the Deputy Minister of Bantu Administration and Education. I just want to refer to that. I received this telegram this afternoon and had inquiries made. It is being said by the people of Mayen who sent her a telegram that no arrangements had been made for them to be paid out for their cattle or for the transportation of their cattle. I want to make it clear in this House this afternoon that very thorough arrangements were made in both cases. In the first place I want to say—I want to link this up with the question put by the hon. member for Durban Point as to whether proper discussions had been held—that discussions have been held with these people since 1968, for a period of seven years therefore. Our information is that there is a very small group of agitators in the ranks of these people. That is the sort of information which the hon. member for Houghton and other members disregard. The peaceful silent majority who are prepared to cooperate, are in this entire process, placed under pressure, intimidated and victimized. Mention is also made of the policemen who are there. It is of course necessary, where so much emotion is being stirred up and people are being incited, that the Police should be there to maintain order and to protect officials in the execution of their duties. It is a delicate operation and I want to say here in this House that we are not going about it in an irresponsible way, and that provision is being made for them to be paid out, and for the transportation of their cattle. In this connection I just want to mention that there was a voluntary move in 1970. Last year this matter was also discussed in quite considerable detail here. A certain number of families then moved voluntarily. Valuations were then made, but because a number of years have since elapsed, it is obvious that values will no longer be the same as they were at the time. It has been decided that when the removal takes place payment will be made at the 1970 valuation, but also that immediately after the removal a new valuation will be made and that the adjusted amounts will thereupon be paid out as soon as possible. Hon. members will understand that this requires a great deal of organization to organize all these people to allow such a removal to take place smoothly and that it is not possible, merely as a result of the actions of a few malcontents who are inciting the people, to delay the whole process each time. I want to mention the dam which is being built there and which is going to fill the area. It is expected that a stage will be reached this year when certain parts of the land will already be under water. Therefore it is absolutely essential that we proceed with this removal. I visited the area recently and it came to my attention that the place to which these people are moving is vulnerable when heavy rains fall because water can rise in the area. I have asked the department to conduct a very thorough investigation and to make sure that problems do not arise. I want to leave the matter at this point and inform this House …

May I ask a question?

Certainly.

Apart from the agitators, are the majority moving voluntarily, are they co-operating or not?

The position will become clear once the move begins. Lt is unfortunately the only way of ascertaining this. I am telling you in advance that we have evidence of individuals who have come to the Bantu Affairs Commissioner and said that they want to move, but that they are afraid. Some do not come forward. But as soon as the opportunity presents itself, we will find out in practice how many people come forward and are prepared to make use of the facilities and indeed to move voluntarily. It is very difficult to say at the moment. I do not want to imply that all those people will move voluntarily. We are in fact aware that there are about a half-dozen who go around and cause problems. I shall therefore leave the matter at that.

Last year I made mention of the fact that a school and clinic have been established in the area to which these people will go. This is in accordance with the established, practice, prescribed by the hon. Minister, that the necessary facilities must be there. I do not want to leave the House under the impression that, when conditions become more favourable, we will not continue. The officials are there and they are looking into all possible problems which might arise. The removal has been stopped until such a time as better weather conditions prevail. You will understand that in rainy weather and so on, it can cause greater problems than it normally would to proceed with such an operation. Before I leave that point, I would like to say to the hon. member for Durban Point that the great drama which has been made here about the …

Could the hon. the Deputy Minister please inform us about the newspaper reports this morning and tell us what truth there is in the allegation that one of the sources of dissatisfaction is the fact that the grazing on the land is not very good? In other words as agricultural land it does not compare as favourably with the area in which they are at the moment. Apparently this has been confirmed by one of the officials there. Now I just want to know whether it is true.

This matter was debated last year. I have information here, but I do not have it immediately to hand. I want to tell the hon. member that, as far as I can remember from the discussions last year, it appeared that the present Mayen is approximately 10 000 ha in extent. The land which we are giving in exchange for it, is over 12 000 ha. The land to which they are going, has in fact a higher grazing value—it is primarily grazing land. Our policy in the department, and thus my policy—I to whom the matter has been entrusted—is that when we err, we must err in favour of the people who are being resettled and must receive compensatory land. I make very sure of that. Therefore I want to give the hon. member the assurance that in spite of the fact that the land to which these people are going has greater value according to agricultural experts, we have nevertheless made a larger piece of land available. People say that there is no grazing. Perhaps I could go into the matter and refer to it again on a subsequent occasion. Perhaps there is no grazing at the moment for other reasons—for example because the veld has been burnt, or something of that nature. But the fact that it has greater agricultural value has been incontestably proved. Sir, I leave the matter at that.

May I ask the hon. the Deputy Minister whether the Police have been withdrawn yet? Does he intend withdrawing them?

What has that got to do with you?

I have not been to Mayen to see what precisely has happened there. We have stopped the removal temporarily and I presume that the presence of the Police is no longer necessary there and that those who were there, have already left. But as soon as the operation commences and the officials have to enter the area, there will be Police there for their protection. I presume that most of the Police who were there, have been withdrawn.

Have you abandoned the whole operation now?

No. It has only been postponed because of the weather conditions.

Only for a few days?

It depends; it might only be for a day. At the moment it is raining in Mayen. I understand that the possessions of only four families have been moved and that the operation was then stopped because of the weather conditions.

May I ask the hon. the Deputy Minister a question? The allegation has been made here by the hon. member for Durban Point that violence has been used to remove people from this area. He used the words “People are being removed by force; violence is being used; there are threats of violence”.

I did not say that.

Is it the case or is it not?

It is not the case, and the hon. member for Durban Point did not put it that way either. He said that the impression could be created that people are being removed by force. I want to make it clear that an order has been served on these people, and if they do not move, they are perpetrating a breach of the law. Action will then be taken against them with as little force as possible, but one can simply not allow people to continue to disregard the order in an undisciplined manner. Therefore action will have to be taken, but we are all responsible people and we shall act, as the hon. member for Durban Point also said, in the spirit of détente and the example which the hon. the Prime Minister sets. I think that we have all been inspired by that spirit. We are doing our best to take the necessary steps within that framework. But I also want to make it very clear that we cannot allow anarchy and lawlessness and irresponsibility in the name of détente, because if we do that, then we destroy the whole spirit of détente.

Mr. Speaker, you will allow me to elaborate a little on the question of racial and ethnic relations in this country and to elucidate the policy of the Government further, especially now that the United Party has accepted the existence of the different identities of our population groups, which are recognized by the Government in its realistic policy, in their federation policy. It is a step forward that they are at least giving recognition now to the existence of different groups. In the past we always had the argument that we were merely indulging in ideologies, and that our policy was not a practical one. Now it is very clear that at least they and some of the other splinter parties on the opposite side as well, take cognizance of the fact that there is not only one group of people in this country, but a variety of races, peoples and religious groups. Of course this is a position which exists throughout the world, and I want to congratulate hon. members on the opposite side for the realism which they are now displaying. Sir, there is one thing which I want to mention and that is that hon. members on the opposite side, in their Opposition of the Government’s policy, allowed exaggerated emphasis to be placed on colour. Sir, we are not just dealing with colour differences in this country. It is important that hon. members on the opposite side should take note that there are other fundamental differences as well. When I discuss this, Sir, I want to refer to the urban Bantu once again. It is said every time here in this House and outside that the urban Bantu is not a group of people who have ties with the homelands. The hon. the Prime Minister recently pointed out that in discussion with the leaders of the homelands, not one of them asked to be freed of their obligations to their brothers in the White urban areas. This is significant and very important. But I want to tell you that if we want to argue superficially about all these things, we would be doing the wrong thing. People argue and write far too superficially about people and their needs—cultural, religious and otherwise—and then everything is hung on the peg of colour alone. We must realize very clearly that these people have a connection with their brothers in the homelands, that that connection is a fundamental one and that, in the light of the process of acculturation with the Western culture—which does in fact influence these people in the urban areas more than those in the homelands and in the undeveloped Bantu Areas—we cannot merely say that the one group is entirely different from the other group. I want to emphasize very strongly that we shall fail hopelessly if we adopt that standpoint. I want to mention an example, an example which I think I have already quoted in the past. The other day I read an interesting article about the Lembas. They are actually called the “Black Jews of Venda”. They are an exceptional group of people. They speak the Venda language, but they feel that in reality, although many of them stay in the White urban areas, they are not accorded recognition as a separate group within the Venda people as such. That is simply to show you how important it is that we recognize the identities of peoples, an identity which finds expression in what they recognize as their own customs, etc. We must recognize those identities of peoples. These Lembas, under leadership of Professor Montiva of Turfloop, have repeatedly asked me that their people be recognized as a separate group. They base this on their customs and on tradition which, as they tell me, is deep-rooted. The delegations which he brings to my office to argue these things, do not come from the Venda area, but from the urban areas, from the White area. There he brings them together and they support him in this argument for recognition of his people. I say to hon. members that we must take very careful cognizance of and must act with great certainty as far as human relations are concerned, also between the respective Black peoples, and that we must not merely accept that because these people are Black they are alike and must all be treated as one group. It is very important that we take their different languages and cultures into consideration and that we must allow them to develop these in their own areas, as well as in the urban areas. Where there are Tswanas, justice must be done to the Tswana language, and where there are Zulus or Xhosas, justice must be done to their respective languages.

But I want to refer to the development of these people under the policy of this Government. We are now getting the admission from the opposite side of the House that we must not only see to the economic development of these people. They must also develop culturally, constitutionally and politically. But this is not something which can be done overnight, for the simple reason that, as I have already indicated, there are fundamental differences which one cannot undo merely with a little education according to Western standards. These people attach great value to this and we cannot interfere on the basis of our own standards and say they must do as the Western countries want. Yesterday we had another manifestation of this, when a plea was made in this House for Black women to be treated in a certain way. We cannot do this without consultation with the Black people, taking into account their customs. This also applies to development of these people in the economic sphere. It is becoming a popular slogan that the homelands must develop and that we must spend more money on them. Once again I want to draw attention to the fact that for Whites merely to undertake development for the sake of development in the homelands, will only have partial value. If those people do not participate and are not taken along and do not have a share in this development, we are only going to waste our time and we will find dissatisfaction. What these people want, is not just development by the Whites, but development in which they have a share. They do not want to remain the hewers of wood and drawers of water in their own area. They want to be owners as well. I think that is the only answer we can present as a solution to this problem of underdevelopment in Africa in general and in our homelands in particular.

I want to point out that, in recent times, we have put particular emphasis on agricultural development. I know there are people who say that the Black man is not an agriculturist and that we are wasting our time in trying to develop him agriculturally. However, I want to make it very clear that we must have balanced economic development. In the homelands we have a tremendous potential in the agricultural sphere, but if we are of the opinion that the problems can only be solved by means of industrial development, we shall be erring completely in our judgement and developing in an unbalanced way. Over the last few years the corporations have been giving attention to agricultural development and we have found that the investment which is necessary to employ one man in agriculture, is approximately R2 000. However, it is also true that in order to employ one man in industry an investment of R8 000 to R10 000 must be made. So far, inflation and the economy have been discussed in particular and therefore it is important that this economic aspect is also taken into account, apart from the other merits which agriculture has in this development. I want to point out as well that we, as responsible Government attending to the development of the homelands, must approach these matters in such a way that we do not place too heavy a burden on the Whites. A great deal is said about the rights and the development of the Black people and this is quite correct, but we must not disregard the interests of the Whites and the contribution which they make to development, nor their initiative and perseverance over the years in bringing this development about.

At the moment we are buying land, but one of our great problems is to retain the productivity of the land. Therefore I want to express my appreciation for the fact that there are people from our farming community who are prepared to make a contribution. They are coming forward and indicating their willingness to hire that ground, to act as agents until such time as sufficient Black people have been trained to use the skills enabling them to do the work themselves. We are using various methods for the development of the Black man in agriculture so that he can make a greater contribution to the economy of the country in his own interests, as well as in the interests of everybody. In the first place, the emphasis now falls to a greater extent on the individual farmer. However, it is not easy because in the whole pattern of land ownership, in the homeland control pattern, we are experiencing the difficulty that it is not easy to allocate large units to individuals. We must remember that tribal ownership is a basic premise in the Bantu approach. We are, however, trying to select individual farmers for the land which we are now purchasing so that they can also be treated according to their merits. We are also trying to develop some or other sort of co-operative system so that where the Bantu are organized in a tribal context they can also get co-operation in some way—for example in the form of a co-operation—and can achieve higher productivity. I mention these aspects because it is said too often that we are developing in this country while the homelands are not keeping pace with such development Already we have developed to such an extent in the homelands that at the moment we are experiencing a tremendous shortage of trained people to fill technical and higher administrative posts in the homelands. Over the past few years we have attained exceptional achievements in the development, in all fields, of the homelands. In future our biggest problem is going to be finding enough trained people to appoint to these different posts so that these people can manage their own affairs.

Does that include medical services? Was there an increase in this field?

I did not hear the hon. member’s question very clearly. I have already answered many questions. The hon. member should rather put his question again on another day. He referred to medical services and I can tell him in passing that we are trying to train people in all fields as quickly as possible. In a modern society however it is not an easy task to satisfy the high demand on acumen and so on which a highly developed economy makes, by training enough people. There is so much glib talk about the Republic and Africa. However, I read the other day that there are 30 million Indians in South Africa who are not recognized in practice as ordinary citizens. They are simply there and possess no rights of any kind. I mention this fact just because we talk too glibly about and level criticism too readily at the complicated situation which we have in South Africa. I want to refer briefly to an article in the News Digest of the United States Information Service of August 1973 about the wage gap. A great fuss is being made about this matter, and we have to take the situation into careful consideration. In this article the following is said—

In a country which professes, and which I presume tries, to narrow the wage gap between Black and White, we find a report such as this. They admit that they have not succeeded and indeed have experienced a setback in their attempt to bring about a narrowing of the wage gap. I mention it because the attempts of the Government to achieve much for the Black man in this respect, are often belittled.

Mr. Speaker, the hon. the Deputy Minister gave us a survey of what he and his department are doing in the Bantu homelands. We on this side of the House are pleased to note that progressively more is being done to launch development in the homelands. Hon. members opposite had the Tomlinson Report at their disposal for many years. This report provided them with a very clear outline of what had to be done to bring about large-scale developments in the homelands. One can, for example, take a look at what is being done by the Xhosa Development Corporation. In the Transkei and the Ciskei this corporation is only able to provide employment for about 8 000 people annually. In those same areas, however, about 33 000 workers enter the labour market annually. Probably the greatest hesitation on the part of the State was displayed with regard to this matter when it was not prepared to accept the recommendations of the Tomlinson Report concerning the development of these areas—I am referring now to economic development as distinct from political development—at the time. They failed to give effect to them on a large scale then. Last year, when Prof. Tomlinson opened the congress of the South African Agricultural Union he expressed his total disappointment at the fact that the Government had not regarded it as an act of faith at the time. I just want to quote these few words from his speech (translation)—

And then he said the following (translation)—

This is the architect, the chief adviser, whom the Government had at the time to tell it what had to be done in this regard. Now the hon. the Minister comes along and says that he is now engaged in encouraging a propertied class among the Bantu. Now they are seeing whether they can boost agricultural development in that area. However it is now 20 years—20 years of the locust—in which there has been a lack of development. It is only since 1970 that they have begun with these large-scale plans to develop the homelands. They were repeatedly given the assurance from this side of the House that they did not need to hesitate to allow White capital or skilled White workers to develop those areas. The hon. the Minister has told us that they have called a halt to the resettlement at Mayen owing to the circumstances prevailing there now. He states that it will be postponed to a later date. Under those circumstances we on this side expect of him that he will see to it that the resettlement, when it takes place, will occur with the least possible disruption and that feelings in that area will be provoked as little as possible.

Harry is going to take the entire United Party and resettle it in the Transvaal.

On an occasion of this kind it is probably only fitting that attention be given to that gangster that is operating day and night, namely inflation—as many members on this sie of the House have done. There is not a single housewife, pensioner or salaried worker, particularly of those who do not possess large capital reserves or property, who is not being robbed day and night by this thief, inflation. The whole world, and South Africa in particular, has reason to deplore this phenomenon today. In spite of the fact that a great deal is made of salary and wage increases, we find that people are inclined to spend and buy because they believe that everything is going to be exactly twice as expensive tomorrow. The businessman does not know from day to day what the value of the items behind his counter is nor does the farmer know what his production requisites are going to cost him. Under those circumstances one often finds that there are excessive claims for increased prices and one also finds that under those circumstances profiteering is practised. There is not a single person involved in the development of our country who is not caught fast in this trap of steadily rising production costs. At the same time we also want more for what we think we deserve. We on this side, having seen the Government in action against inflation for the past ten years, can only think that they are standing and looking on, powerless, and are merely watching the position. They wash their hands in innocence. In this Budget speech the hon. the Minister made mention of the overseas inflation that is playing the biggest part in our domestic economy. Time and again other hon. members participating in this debate also stated that in actual fact, the inflation we have in South Africa today comes from abroad. However, we all know that this is not the full picture, although any informed person knows that overseas inflation must necessarily have an influence here as well. The greatest number of South Africans of all races must first have enough to be able to eat and clothe themselves Even our good race relations and racial peace will depend on that situation and will be decided by it. Although on paper inflation enriches some people, in practice it impoverishes others. If this process should continue, we shall find more and more people—the signs are already there becoming dependent on the State. What hope did the hon. the Minister of Finance and the speakers who supported him hold out in this debate to the thousands of South Africans who are concerned about, the situation with regard to inflation? It is all very well to say that we have gold, that we can do well with gold sales and that the prices of our gold reserves can be utilized one of these days in the best possible way according to the prices we are able to realize on the open market, but for the ordinary man in the street, for the ordinary man who has to provide for his family on a meagre wage or salary, it means very little to say that South Africa is fortunate because its gold is realizing such wonderful prices on the open market. Thousands of these people are supporters of that side of the House, but what do we find today? We need only look at the newspapers and magazines to see how they are complaining right, left and centre about the existing situation as regards the high cost of living.

Only last year we found that the increase in the price of bread had disturbing results. We find that for the people for whom it is difficult to come out on their wages or salaries, there is no longer such a thing as a holiday or a film show. They can only think about these things, but are seldom able to share in them. Shortly before Christmas las year, when this Government raised the bread price, it gave an indication of what it was prepared to do about the increased cost of living in South Africa. If it had been the wish or the inclination of this Government to stabilize the cost of living, it would have had to ensure that that price was not increased, but then it should rather have been prepared to subsidize the consumer price in South Africa to a greater extent. With every rise in the cost of living in South Africa the contribution of that side of the House as regards the stabilization of food prices has been minimal or absolutely non-existent. It is no wonder that today their own people are thinking that this is a rich man’s Government, that it has become so to an ever-increasing extent and that it no longer cares about the ordinary man. The hon. gentlemen opposite must not think that because there is support at the leadership level and in intelligent circles for the detente movement of that side and because this is drawing attention away from everyday problems, the ordinary man also feels that way about it. Hon. members opposite need only listen to what the people, including their own supporters, have to say and to the groans about the cost of living in this country. This stumbling block of the steadily rising cost of living must be got rid of by the hon. the Minister of Finance. A great deal of praise for his appointment has come his way and it is well that he should receive that praise, but he will also have to earn that praise in the course of time. He will have to show what he is prepared to do to alleviate the burden of the cost of living in South Africa. As the Minister of Finance he may not allow our money to become worthless in the long term because we shall solve absolutely nothing in that way. Excuses for inflation can be sought. It is probably easy to find those excuses, but in many countries the problem is not only one of inflation. We know that the problem is also aggravated still further by a high rate of unemployment.

Where?

One finds this in Germany, and in America too. Hon. members say that we are inheriting everything in this regard from overseas, but if we are going to inherit the same situation here and are therefore also going to have a possible increase in the numbers of our unemployed, we want to know what the hon. the Minister’s reply is going to be to the breadwinners in this country. It will get us nowhere to say, as he said in his Budget speech, that the pressure on our labour market will be relieved and that the employer will be in a position to be more selective. If we are going to have unemployment and the consequences of what is happening overseas, in this country, we want to know from him how they intend to solve the social problems in South Africa. What is his reply to that; what is going to be done? On a previous occasion the hon. the Prime Minister told us, and emphasized the point, that rising unemployment would cause him sleepless nights. Are the Government’s plans to combat a problem of this nature, in order, and what are the plans which they envisage in this regard?

It is not only in this connection that a certain lack of planning has been noticeable thus far—as regards our race issue, too, the greatest uncertainty prevals in the ranks of the Nationalist Party itself. The Nationalist Party’s difficulties in this country started on the day the hon. gentlemen opposite decided that clear political dividing lines had to be drawn.

[Inaudible.]

They thought that by means of apartheid they could elevate discrimination to the status of a virtue in this country.

What does Eric Winchester say?

Mr. Speaker, all that hon. member can do is snigger. But he is one of the people who has repeatedly gone from platform to platform in South West Africa and elevated discrimination to the status of a virtue created by his party. He taught his supporters that they should discriminate in order to be able to survive as Whites in South Africa.

That is untrue.

That is what that hon. member and dozens of his supporters have been doing over the past 20 years. To save their own skins, they have been telling the people: “You must discriminate and you must deprive people of things and if you communicate and consort with anyone of another colour at any level, that will mean the end of your civilization.” That is what hon. gentlemen on that side have been deluding the people of South Africa into believing for more than 20 years. Now the fight is one on that side of the House between the pragmatists on the one hand and the bitter-enders on the other. There are hon. members on that side of the House who want to share the fruits of White civilization or Western civilization, and there are those who want each group to do its own thing on its own. There are hon. members on that side of the House who are accessible and who want to give the non-Whites major privileges in the White areas and in this way cultivate sound relations, and there are the hon. members on that side of the House who regard any concession whatever, however minor it may be, as the thin edge of the wedge and the breaking down of the barriers. I want to tell those gentlemen who believe that, these I have just mentioned, such as the hon. member for Carletonville and the hon. member for Waterberg, that they are, of course, the real Nationalists. They are the pre-1948 models. One can only have respect for them because up to now they have still taken seriously the old philosophy of the Nationalist Party. Although one may have a great deal of respect for them in view of their standpoint that they stand by their principles, I must tell those hon. members, and others who think as they do, that they have been outstripped by events in this country and that they must necessarily become hide-bound. Within the framework of separate development as presented by, for example, the hon. member for Waterberg and other hide-bound people, there can be no doing away with discrimination. That hon. gentlemen believes that one can only recognize and realize fully the human dignity of the individual if one does not allow the races to get close to each other. That is why those who believe in the letter and the spirit of separate development brook no compromise. Nor do they believe in the middle way. What do we find with regard to the hon. member for Johannesburg West, Mr. Dawie de Villiers? What did he say last year? On 2 September 1974 he said (translation)—

In his speech he went on to say (translation)—

Mr. Speaker, on a point of order, there is a motion on the Order Paper in the name of the hon. member for Green Point, a motion dealing with this matter. Is the hon. member for Newton Park entitled to deal with these aspects in his speech while this motion appears on the Order Paper?

I am not pleading what the motion asks, namely the selection of merit teams. I am referring to a speech by the hon. member for Johannesburg West. He said that the time has come for these teams to be selected on merit. This morning I find in the Oggendblad of the 18th of the second month 1975, a speech made by the hon. member for Waterberg. What does the hon. member for Waterberg say in his speech?

Order! The issue of mixed sport teams selected on merit is blocked by a private motion.

On a point of order, Mr. Speaker, I submit that the hon. member is not discussing sport; he is discussing a difference of opinion in the Nationalist Party. He is discussing how they differ in their outlook on apartheid.

The hon. member may proceed. I shall exercise my discretion as the hon. member proceeds.

Here, again, is the hon. member for Waterberg. At a meeting in Pretoria West he said: “Aikona to mixed rugby and cricket,” and “if, in playing one’s sport, one does something which is contrary to one’s policy and endeavour, and as regards teams at international level, it is basically at variance with one’s policy to have mixed teams, one must not expect to mix the teams of the two sports which are not mixed for the sake of consistency.” I appreciate that hon. member’s standpoint because he is consistent. He is the true Nationalist. He is the man we have come to know and he can be proud of the fact that he is a true Nationalist of 1948 vintage. The hon. member for Johannesburg West and those who agree with him, such as the hon. the Minister of Defence and the hon. the Prime Minister are the pragmatists in this country. They are no longer the real Nationalists we had before 1948.

What are they?

I shall tell you what they are. These hon. gentlemen have realized that if one wants to be consistent about applying a policy of separate development in this country, it will be impossible, firstly, to have economic development in South Africa, and secondly, to have sound race relations, because the two simply cannot be divorced from each other in this country.

The hon. member for Waterberg does not believe in concessions, nor does the hon. gentleman believe in exceptions that need to be made. The moment one makes an exception—so the hon. member for Waterberg believes—one’s policy will sooner or later collapse in ruins. The hon. member for Waterberg and the hon. member for Sunnyside are, of course, logical, but they are not correct within the present South African context. Those hon. gentlemen believe that all forms of apartheid must have a geographic content. That is why those people can depend on the support of people like the hon. member for Carletonville who, for example, proposed last year that as far as the Coloureds were concerned, the policy should be given a geographic content to a large extent.

May I ask the hon. member whether his party does not accept separate group areas?

Whether or not the United Party accepts separate group areas, one traditionally has separate residential areas in South Africa. But what I am talking about is this. This hon. gentleman thought that each group has its sport and its social life and that it would never have them close to the White area. The hon. member for Waterberg believed that he could always keep an institution like the Nico Malan Theatre in the hands of the Whites, but the hon. the Minister of Defence was not so unpragmatic as to believe that and the hon. the Minister of Defence and the hon. the Prime Minister are the people who were prepared to move, and because they were prepared to move one will find today that we on this side, too, are prepared to support the efforts of the Government in this respect. It has been the United Party that has been saying through the years that one must keep one’s policy flexible when dealing with race affairs. It is a continual evolutionary process. One can never lay down a hard and fast rule that applies in 1910 and that will still apply in 1975. The hon. the Minister of Defence and others have realized this. But we should like the hon. the Minister of Defence and those who think as he does, to tell us again in this debate, although they have said it before, that they do not go along with the hon. member for Carletonville who thinks in terms of a possible homeland for the Coloureds. [Time expired.]

Mr. Speaker, after the extremely interesting interlude we have had here this afternoon, the first clash between two former stalwarts of the United Party who have now broken away from each other, it is a pleasure to come back to the Part Appropriation. We are grateful that the hon. member for Newton Park has now begun to show a little fight once again. We have become tired of all the dejected faces of Opposition members here in front of us who have been devouring each other in recent times. The hon. member for Newton Park says that this Government is a rich man’s Government. We want to tell him today that nothing could be further from the truth. This Government has always been openhanded towards the lesser-privileged in this country. In order to keep prices low, this Government pays extensive food subsidies. I just want to mention a few examples. In order to keep the price of butter low for the lesser-privileged, an amount of more than R12 million has been paid in the past year. In order to keep the price of bread low, an amount of more than R64 million has been paid, and to keep the maize price, and therefore mealie meal cheap, a subsidy of more than R39 million has been paid in respect of maize, and I could continue in this vein. However, the hon. member states that this Government is a rich man’s Government. The hon. member complained about the price of bread that was supposedly so high, but he omitted to say that the price of bread in South Africa is still the cheapest in the whole world, twice as cheap as in most other countries. This is so for precisely because this Government pays a subsidy of more than R60 million in this regard. I want to mention a few examples in order to indicate how bread prices throughout the world compare with the price of bread in South Africa. In London, a loaf of 900 grammes costs more than 26 cents; in Brussels it costs 31,7 cents; in Rome, 32 cents; in Melbourne, 39 cents; in Bonn, West Germany, 57 cents; in Toronto. 49 cents; in Copenhagen, 56 cents and in New York, 59 cents, as against the trifling 15 cents paid for a loaf of white bread in South Africa. Notwithstanding this, the hon. member states that prices are so high and that we do not see to the interests of the lesser-privileged people in this country.

Do you know that the subsidy on wheat has been reduced?

The hon. members of the Opposition have really become strangers in Jerusalem. While everyone in this country can testify how extremely well South Africa is faring, they present a sombre picture to us in this debate. However, that is how we know them. They are in a state of political wretchedness. All they see around them is wretchedness, and now they think that South Africa is in the same wretched state as they are. This is not the case. This afternoon, the hon. member for Cape Town Gardens, while pleading in the same breath for higher pensions, also stated that the South African people are over-taxed. I asked him where the money for higher pensions is to come from, if not out of the pocket of the tax-payers. Income tax in South Africa is still among the lowest in the world, notwithstanding the extraordinary circumstances in which we find ourselves in that we have to develop eight homelands and have a high defence account. It is true that South Africans retain more of their income after tax than most other people in the world. The finding of Associated Industrial Consultants, a British company that has carried out world-wide surveys in co-operation with French and Dutch consultants, is that South Africa is one of the countries that pays the least tax. Our people are as fortunate as that, but then hon. members try to create the impression that we do not think about the poorer people.

I want to come back to inflation …

What is your solution?

If the hon. member listens, he will hear what I have to say. South Africa is one of the few countries that has managed to contain the creeping disease, inflation, to a reasonable degree in spite of the fact that inflation, as Dr. Anton Rupert puts it …

Have you also read his book?

You might as well read it too; it will do you good.

Dr. Anton Rupert states that inflation is spreading across national borders like a Middle Ages plague and that this disease affects industrial communities. We even heard, this afternoon, from the hon. member for Newton Park that inflation is a gangster. We should be so grateful if the hon. Opposition would help us to catch this gangster and tie him up, but we get very little help from them. Millions of people of the East and the West, and even in the Communist countries, are caught in the iron grip of inflation. Even from Singapore comes the following very disturbing report that appeared in The Star—

This is not, therefore, a phenomenon limited to South Africa. The entire world is crippled by inflation. Not a single country in the world has escaped inflation. President Ford of America calls inflation humanity’s Public Enemy No. 1. The leaders and economists of the world are powerless against this two-headed dragon. The one head is inflation and the other recession. The more they attempt to combat inflation, the greater is the threat of a recession; the more they attempt to avert a recession, the more the inflation monster is fed. What a dilemma this is for the world! Although South Africa is struggling with inflation, it is still in the extremely fortunate position that inflation has not taken on the proportions here that it has taken on in most countries of the world, and in this country we have growth to compensate for it. The Nationalist Government has already taken innumerable steps in an attempt to contain inflation. I could mention 20 steps that have been taken, but unfortunately I do not have the time to do so. In the struggle against inflation the Nationalist Government has already achieved a reasonable degree of success in spite of the fact that it is specifically overseas factors, such as the tremendous shock of the higher oil price, the devaluations that have occurred, the revaluations and the monetary crises, the more expensive imported goods and so on, that are the most to blame for the price increases that we have experienced in this country as well. I want to agree that not all price increases are due to imported inflation. However, imported inflation plays a very major role in forcing up prices here. Hon. members opposite should be grateful that they are able to live under Nationalist rule in South Africa. The Nationalist Government has controlled the economy in this country so well for more than a quarter of a century that it is still one of the cheapest countries in the world. In many respects South Africa is in a privileged position. In comparison with the foreigner, the average South African is by no means so badly off. Wages and salaries in South Africa are still rising faster than the cost of living. In the past year the average income per capita of the population rose by about 6% more than did prices in this country. This means that the South African can at least keep his head above water and that he will still have money over with which to raise his standard of living and afford luxury articles, too. We have inflation, but we also have growth in this country. While strong countries like America, Germany, England and Japan have reached a stage of virtual stagnation, our growth rate in 1973-’74 was one of the highest, namely about 10%. In America, on the other hand, there was a negative growth of 1,75%, in Japan a negative growth of 3,25% and in the economically strong West Germany, a growth of only 1 %. Is this, then, not an achievement for South Africa? Nor is the fear of a recession as strong here as it is in other countries, because we have a strong economy. Our economy is supported by gold and, more important still, by a strong Government with a sound economic policy. Indeed, other countries envy us our position and we should appreciate this. We should do less grumbling and complaining. The hon. member for Newton Park ought to hang his head in shame because he is still complaining in the midst of all the prosperity he is enjoying in this country.

It is possible to reduce our rate of inflation still further, but it will have to be at the expense of our growth, and we may not restrict growth. The Government can deal more firmly with inflation. There is strong medicine that can be used. There are theoretic solutions to inflation. It is possible to take drastic steps in regard to prices, wages, profits and dividends and to reduce credit drastically, but this will not be good medicine. It may prejudice our growth and eventually bring it to a standstill. This could also have serious repercussions. We shall not be able to maintain our standard of living and keep all our people in this country—White, Brown and Black—satisfied and happy if we restrict our growth. It is important that there should be work in South Africa for everyone who is willing and capable of working. For that reason we must create employment opportunities. When inflation strikes, we must not seek scapegoats or accept resignedly that the problem rests on the shoulders of the Government alone. The time has come for each of us in this country to search his own heart, and here I refer both to the manufacturer, the trader, and the businessman and to the consumer. The ordinary man senses the dangers of inflation, but he does not always realize that he possesses most of the power with which to fight inflation. Everyone can have a greater share in combating inflation; everyone can help to keep prices down. It will of course be asked how this can be done. The manufacturer can combat inflation by increasing his productivity, boosting production and then offering goods at lower prices. The trader, again, through good planning and improved sales techniques, can keep profits lower and eliminate exorbitant profits, and the consumer, in his turn, can display a greater degree of control and judiciousness when making his purchases.