Mr. Speaker, I should like to inform the House of the business for today and for next week. Today we shall proceed with the legislation which appears on the Order Paper up to Order of the Day No. 8. After that we shall deal with the Vote of the Minister of Agriculture. On Monday we shall continue to deal with the Agriculture Vote.

The target date for the prorogation of Parliament still remains the 18th of this month. To achieve this, however, the cooperation of all the members of this House in planning their participation in debates will be necessary.

To this end may I submit for consideration that if there were a little less squabbling among the Opposition groups it would go quite a long way towards enabling us to achieve our aim.

Mr. Speaker, may I say two things about this. Firstly, we support the proposal. Secondly, I would like to express my personal appreciation to the hon. the Minister for having dealt with the matter in this particular way. I would also like it recorded that despite the problems which existed in respect of both the pressure of time against which the hon. the Minister was working and the other difficulties which he had, I think he has dealt with this matter not only in a proper manner but in a courteous manner. I refer to some difficulties I had which I do not want to detail but in regard to which I fully appreciate and understand his position. I want to say that I think the organizations which made the representations have been fully and courteously dealt with by the hon. the Minister.

Mr. Speaker, we on this side of the House would like to say that we welcome the amendment which has now been effected in the omission of clause 9. This will remove what would have been disabilities in regard to certain associations’ perfectly proper and rightful activities. We welcome the amendment.

Omission of clause 9 agreed to.

Amendment in clause 11 agreed to.

Mr. Chairman, when this debate was adjourned last night, the Committee found itself faced with four separate amendments that had been moved to this particular clause. The amendments moved by the hon. members for Yeoville and Johannesburg North have as their viewpoint the denial of the powers which the hon. the Minister is now asking should be given to himself and to the Treasury. The hon. member for Randburg last night asked us as the official Opposition whether we were prepared to abrogate our powers in this House and in this Committee totally and transfer them to the hon. the Minister and the Treasury. Sir, I thought that we had made this matter clear to him and to the persons whom he represents. We are not prepared to abrogate those powers entirely and transfer them to the hon. the Minister. However, we have on reflection considered the practical situation. What is the practical situation? It is that in the 10 years I have been here, every year the hon. the Minister of Finance has introduced a Bill in which he has asked for exactly what he is asking for in this Bill, and never once in those 10 years has there even been any debate on it, let alone any objections. For that reason we have come to the conclusion that in the interests of good budgeting it is as well that the hon. the Minister and the Treasury should be granted certain of those powers. I emphasize “certain of those powers”. We unfortunately cannot go along with the hon. the Minister when he asked for all these powers. As far as subsection (1) is concerned, I want briefly to tell him that we cannot accept that the hon. the Minister and the Treasury should have the power to use funds to defray expenditure under a new main division. This means that without Parliament even being aware that it is anticipated that money should be spent in a particular direction, the Minister and the Treasury can decide to spend money. This, we feel, is going too far. We cannot have the control of Parliament removed totally when it comes to new items. If there is to be a certain amount of juggling of funds among items which have been approved by Parliament, we are prepared to grant the hon. the Minister that power, but we cannot allow him to apply these funds to new matters.

Now, regarding the amendment I moved to subsection (2), the hon. the Minister says it involves only a small amount. As was shown last night, however, it involves approximately R1 000 million in the present Budget, so that this is no small amount. I want to say that the hon. the Minister has an extra R50 million he can play with in terms of the amendment which we will consider later on under clause 7. I believe that it is not necessary for the hon. the Minister to have these powers.

I want to put it to him this way, that “Column 2” items are special items. The hon. the Minister conceded this last night. They are special items which are dealt with in a special way. If he believes that what he is asking for in this amendment is in fact correct, then why specify “Column 2” items? Why should we have Column 1 and Column 2, if the hon. the Minister is really serious when he says that he requires these special powers regarding the “Column 2” items? I want to appeal to him to reconsider the amendments we have moved from these benches of the official Opposition. I believe that they are reasonable. I believe that he will have sufficient latitude to budget efficiently and to run the finances of this country efficiently, even if he does accept the amendments that we have moved.

Mr. Chairman, I am pleased to see the hon. member for Pietermaritzburg South now understands exactly the principle which is involved. I find it interesting that, understanding the principle involved, he is still prepared to go along with voting against the amendments moved by the hon. members for Yeoville and Johannesburg North. We must clearly understand what is happening here. As the hon. member for Pietermaritzburg South quite rightly said, annually the hon. the Minister comes to this House …

Order! I hope the hon. member is not going to repeat all those arguments. We have heard those arguments twice already. The hon. member may proceed.

Sir, we are dealing with a situation here where the hon. the Minister is asking us for certain powers. I hope you will allow me to motivate my case. The hon. the Minister comes to this House annually with the Appropriation Bill, and in the Appropriation Bill he asks for the kind of discretion which he feels is necessary for him and the Treasury to run the affairs of this country. It is in clause 5 of the Current Appropriation Bill. I want to put forward this simple situation. If we now abrogate our right and if we say that the hon. the Minister now has the right provided for in clause 5 and he need never in future come back to the House to ask for this right because he already has it, we are actually going to make a mockery of the whole question of going through the estimates. The hon. the Minister said in his Second Reading speech that no Minister has his own portfolio examined to the extent to which the hon. the Minister of Finance’s is in that we spend a great deal of the session going through the estimates. What the hon. the Minister is actually asking for is this. He says: “Give me the power to appropriate money which I feel should be appropriated. I am not going to come back to this House because I shall then have that right.” We will actually have the situation where, if we vote something down or reduce a Vote or omit a Vote in the estimates, we will already in terms of this Bill have given the hon. the Minister the power to fly in the face of Parliament; in fact, to use the enabling powers that we will have given to him here to provide money for a Vote which this Parliament has specifically voted against.

Order! The hon. member must advance new arguments now.

This is a new argument.

No, I have heard it once before. In fact, the hon. member for Randburg used that same argument last night.

This is the first time I am mentioning it. The argument is simply that if the hon. the Minister has to come to us annually and we have reduced Votes or we have amended certain of the Votes before the House, we can amend the powers under clause 5 of the Appropriation Bill to deal with the actual situation.

Order! We are not discussing that clause now. We are discussing clause 6.

Clause 6 enables the hon. the Minister to have, permanently, the rights which clause 5 of the Appropriation Bill enables him to have on an annual basis. That is in fact what happens. If the hon. the Minister has to come to the House annually and ask for this, it is the privilege of the House to grant it or not. If the House has not passed any amendments or has not in any other way reduced the amount of any of the Votes or any of the sub-Votes in the budget, there is no harm in passing clause 5 of the Appropriation Bill and the House might consider whether that is what it wishes to do. I would agree with that, but there could be circumstances in a particular year—it could happen with next year’s budget— where the provisions of clause 5 of the Appropriation Bill will not be appropriate and has to be amended to coincide with what has in fact been debated on one of the particular Votes. In such a case this House would be in the position to pass a suitable amendment to clause 5 of the Appropriation Bill which will have the effect of fulfilling the wishes of the House. What clause 6 of this Bill as it stands at the moment will do is that when one goes through the estimates and one wishes to move a deletion or that an amount be reduced, it will become meaningless because the House will have enabled the Minister with power to utilize moneys which he has saved elsewhere to pay for something which the House specifically did not want money to be spent on. We must accept that what we are doing is to continue this process of letting powers and privileges be taken from the hands of this House and allowing these powers to be put in the hands of the Executive, who will never come back to this House and never lose these powers again.

Mr. Chairman, I simply want to go back to the amounts which are set out in column 2 of the schedule. As has been mentioned, these amounts come to an amount which is, roughly, in excess of R1 000 million. Within those column 2-items there are particular Votes which run into considerable sums of money. On occasion it can be in excess of R100 million. What the hon. the Minister is seeking for in terms of this clause is power to use savings as—as I say, they may occur under a particular Vote in an amount in excess of R100 million—for other expenditure for which insufficient appropriation has been made under that Vote. I hope that the hon. the Minister will give us reasons for this because when you consider some of the Votes which are in excess of R100 million, the hon. the Minister is seeking a very far-reaching power. Our objection to this is simply that some of these column 2-items are in themselves very large and that the hon. the Minister is seeking powers to use money for other expenditure under that same Vote.

Mr. Chairman, I have already said, and it is also stated in the explanatory memorandum, that the power we want to give the Minister in this regard, is one which he is given annually in the appropriation Acts. The hon. member for Pietermaritzburg South stated this clearly, and I am glad that the hon. member agrees with me this morning as far as the first part of the legislation is concerned, i.e. this power being inserted into the legislation so that we need not come back every year. There has never been any discussion; it has always been passed. It is important for us to consider what we agreed to in the Appropriation Act each year. I quote the wording:

There you have it. This has been passed in this form year after year, i.e. that a saving may be used for a new subhead of the same Vote. The provision I have just quoted is followed by a proviso.

†So I say again this is not a new procedure at all. We are simply doing what we have been doing since 1910. We are now making it a regular feature so that we do not have to come back each year, as it has never been in dispute. I think the difficulty with the hon. member for Randburg is that he starts from the premise that somehow we are trying to minimize or reduce the function of Parliament in these matters. That is a completely false premise. If one analyses this new Bill, one will find that in important respects we are making it more effective. [Interjection.] If the hon. member wants to dispute that, then we can discuss it too. I merely want to say that this is a perfectly legitimate procedure that we are now adopting. All parliamentary governments, as they proceed, have to obtain a certain flexibility in these matters, but at all times the Minister is involved and therefore Parliament is involved at all times. Parliament is fully involved and we have numerous opportunities to discuss all these issues in the budget debate. I do not think that I can carry it any further.

Mr. Chairman, may I ask the hon. the Minister whether in any particular budget Parliament can actually reduce a particular Vote in view of the wording of clause 6 of the Bill? The hon. the Minister would then have the power to ignore such an action and would in fact be able to spend an amount in excess of the amount originally asked for. Is that correct or is it not?

It is no more or no less correct than the position that obtains when Parliament adopts the existing procedure under an appropriation Act. It would be exactly the same.

Mr. Chairman …

Order! The hon. member for Randburg has spoken three times already.

No, I have spoken twice.

Order! The hon. member spoke at three minutes past 10 last night; he spoke on the same issue at 18 minutes past 10 last night and he also addressed the Committee at 26 minutes past 10 this morning. So he has had his three turns.

Mr. Chairman, the basic submission, with respect, which is being made here—I think the hon. the Minister in his answer to me a moment ago illustrated it—is that if this provision exists in terms of an appropriation Act, Parliament has the power, when it has amended a particular item, to amend that provision and to indicate that it cannot be used—the provision which is contained in clause 5 of the Appropriation Bill—to increase the item which Parliament has reduced or limited. Parliament retains that power every year. The moment this is passed so that it applies generally and does not have to be dealt with specifically each year, Parliament will have lost that power of control. That is the submission which I make.

On amendment moved by Mr. H. H. Schwarz.

Question put: That all the words after “(1)” in line 53 up to and including the first “division” in line 57 stand part of the clause.

Question affirmed and amendment dropped (Progressive Party and Reform Party dissenting).

Amendment (1) moved by Mr. W. T. Webber negatived (Official Opposition, Progressive Party and Reform Party dissenting).

On amendment moved by Mr. G. H. Waddell,

Question put: That all the words after “(2)” in line 64 up to and including “shall” in line 65 stand part of the clause.

Question affirmed and amendment dropped (Progressive Party and Reform Party dissenting).

Amendment (2) moved by Mr. W. T. Webber negatived (Official Opposition, Progressive Party and Reform Party dissenting).

Clause put and the Committee divided.

As fewer than fifteen members (viz. Dr. A. L. Boraine, Messrs. D. J. Dalling, R. M. de Villiers, C. W. Eglin, R. E. Enthoven (’t Hooft), R. J. Lorimer, H. H. Schwarz, Mrs. H. Suzman and Messrs. H. E. J. van Rensburg and G. H. Waddell) appeared on one side,

Clause declared agreed to.

Clause 7:

Mr. Chairman, our objections to clause 7 are threefold. In the first case we are dealing with special warrants which are issued in order to appropriate moneys which have not been agreed to by Parliament. We feel that when these moneys are appropriated, it should be done by the State President. In other words, it should be a decision of the whole Cabinet. We do not believe that important matters like these should be left to the Minister himself to take decisions on. We feel that there should be decisions by the whole Cabinet in regard to these issues. Secondly, we feel that the previous figure, i.e. 1% of the total amount appropriated, is sufficient. The appropriation does grow year by year but we see no reason why it should be increased from 1% to 2%. We think that 1% is entirely sufficient. The third aspect is that the obligation to report such warrants is being removed by this Bill. Previously the onus was on the Auditor-General to report via the Minister and to table in the House copies of all the warrants that have been issued.

The fourth point is that an important section which was in the previous Bill, the section referring to contracts negotiated by the Government, has been placed by me as my fourth amendment on the Order Paper. My last two amendments relate to the safeguards which we had under the old Exchequer and Audit Act. We no longer have them. Again the same principle is involved. Powers and privileges of this House are being taken away. Control over the estimates is eroded and the Executive is asking to take power completely into its own hands and to ignore the wishes and desires of the House. I think this is wrong in principle and in principle I feel the House should vote against this. I consequently move the amendments standing in my name on the Order Paper as follows—

1. (1) On page 10, in line 6, to omit “Minister” and to substitute “State President”;
2. (2) on page 10, in line 23, to omit “two” and to substitute “one”;
3. (3) on page 10, to add the following subsection at the end of the Clause:
4. (3) If any special warrants are granted under subsection (1) by the State President while Parliament is in session, the Auditor-General shall cause statements thereof to be prepared monthly and shall transmit them to the Minister for presentation to both Houses of Parliament without delay, and in the case of special warrants issued by the State President while Parliament is not in session, the Auditor-General shall cause a statement thereof to be prepared and shall transmit it to the Minister for presentation to both Houses of Parliament as soon as possible after the commencement of its next ensuing session.
5. (4) on page 10, to add the following subsection at the end of the Clause:
6. (4) No contract involving expenditure in excess of an amount of fifty thousand rand for which provision is not made in a vote of Parliament or by a special warrant under subsection (1) shall be valid or binding on the Government, until approved of by both Houses of Parliament by resolution introduced in the House of Assembly.

Amendment (1) negatived and amendment (3) dropped (Progressive Party and Reform Party dissenting).

Amendments (2) and (4) negatived (Progressive Party and Reform Party dissenting).

Clause agreed to.

Clause 8:

Mr. Chairman, here again we are dealing with exactly the same principle to which I have objected all along in this Bill. Parliament is being asked to give the Minister, as a token right, the power to use money which he could not previously use. Consequently, he will not have to come to the House on an annual basis to ask for the money. In this case, when there have been savings on various subheadings of other Votes, the hon. the Minister will be able to utilize those moneys for any purpose he may deem fit. Again I think that this is wrong in principle. I believe that if the hon. the Minister requires such powers, he should come to the House on an annual basis and ask for them. The principle involved is the same as that objected to previously. I consequently move the amendment standing in my name on the Order Paper as follows—

On page 10, to omit subsections (3) and (4).

Mr. Chairman, I would just like to remark that this is, of course, on a par with the other earlier amendments, the effect of which is to negative one of the main purposes of the whole amending Bill, the object of which is to give us, as I have said before, flexibility in certain matters and a little bit more discretion, always subject to Parliament. This amendment will place the Minister in a straitjacket. There is no other way I can put it. In the circumstances, I regret I cannot accept the amendment.

Mr. Chairman, the idea is not to restrict the hon. the Minister in any way at all, but to ask him to respect the privileges of this House by not taking power which enables him to ignore the wishes of the House. The position is that should this clause not be amended, the hon. the Minister need never to come back to the House for these privileges. Once he has them, they are his forever. We ask the hon. the Minister, out of respect for the privileges of this House, to come back annually to ask the House to afford him the privilege and I am sure the House will afford him that privilege. However, it is the privilege of the House to decide. There is no intention to put the hon. the Minister into a straitjacket and I think he knows it.

Amendment negatived (Progressive Party and Reform Party dissenting).

Clause agreed to.

Clause 13:

Mr. Chairman, during the Second Reading debate, I expressed my concern that the length of time being allowed by the Bill for the preparation of statements by the Treasury was being extended from four to six months after the end of a financial year. I believe that it is only by expeditious preparation of financial statements and expeditious auditing of those statements that can have full protection against the misuse of funds. One of the aims of the Bill is to extend the powers and the scope and thoroughness of the work of the Auditor-General. That is an aim of the Bill, which is thoroughly worthy and has our support. However, in our view that aim is being thwarted by allowing the time for preparation of accounts to be extended.

In his reply to the Second Reading debate, the hon. the Minister argued that this lengthening of the time for preparation of accounts was justified by the great increase in the work that had to be done by the Treasury and that the time limit of four months had been set as long ago as 1911. I do not dispute for one minute that the amount of work has grown and grown enormously, but so has the number of people in the department to do this work and so have sophisticated aids, such, as computers and other accounting machines being developed to enable accounts to be prepared more expeditiously. It worries me that the tenet of Parkinson’s law, which says that the longer the time you allow to do the job, the more people you need to do it, is being applied in this case. This step of lengthening the time allowed for preparation of accounts is being taken at a time when the general trend in business is to shorten the time for preparation of accounts, to shorten the time for accounting and to shorten the time for reporting. In this country we have enormous conglomerate businesses, e.g. Barlows and the S.A. Breweries, that report to their shareholders within a matter of weeks from the end of their financial year. Even that lumbering giant from 44 Main Street reports within four months.

I believe that prompt accounting is part and parcel of efficient management. Conversely, a delay in accounting is something which breeds inefficiency. I believe it to be a retrogressive step to lengthen this period that is to be allowed for the preparation of accounts by the Treasury and I accordingly move the amendment standing in my name, as follows—

On page 14, in line 29, to omit “six” and to substitute “four”.

Mr. Chairman, I must react to this. I really wonder whether the hon. member for Constantin is not being slightly unreasonable here. The wording of clause 13(3) reads as follows—

The hon. member refers to the statements of a company, but let us see what this provision deals with—

I should like the hon. member to come and see what that Exchequer account looks like before we refer to the accounts of a company—

1. (b) the State Revenue Account;

Of which I can say the same—

1. (c) the South West Africa Account;
2. (d) the Paymaster-General’s account;

The hon. member should come and see what the details of that account look like—

1. (e) the State debt of the Republic and the amount of debt created and redeemed during the financial year;
2. (f) the interest and dividends received in the State Revenue account and the interest paid therefrom on the State debt;
3. (g) the purposes to which the State debt of the Republic has been applied; and
4. (h) all other moneys controlled by the Treasury.

The hon. member should also come and see what (h) looks like.

†No, Mr. Chairman. We want to be efficient and we want to try to promote efficiency. We are giving the Auditor-General a greater part in this. The hon. member agreed with this during the Second Reading debate. He was in favour of it. This provision states quite clearly that the Treasury shall prepare these statements as soon as practicable but in any case not later than six months after the close of a financial year. I want to say that when one takes into account the extent and the detail that one has to handle in relation to these accounts, it is almost a physical impossibility to tie the Treasury down to a period of four months. I make this point very strongly and I make it on the facts. The hon. member has stated that the tendency today is to shorten the period. I am not so sure about that. I am not so sure that the period during which accounts have to be prepared is being shortened generally. I know of many cases where in fact companies are taking longer. In this case, however, it is a question of sheer practical necessity and so I regret that I cannot possibly accept that amendment.

Mr. Chairman, I must honestly say that it is with sincere regret that I heard the hon. the Minister say that he cannot accept this amendment. All we are trying to do is to maintain the present position. In terms of the law as it stands the hon. the Minister and his department only have four months. That is all that they have. I must admit that they have been exceeding that period of four months.

We have been experiencing great difficulty.

I must admit they are possibly experiencing great difficulty in doing this within the period of four months, but I want to say to the hon. the Minister that I believe that this goes right down through the Service. The hon. the Minister will know that we are going to move an amendment to the next clause as well dealing with the other departments. His department is a collating department. These other departments are required to submit their statements monthly. I believe that the hon. the Minister has to look at the efficiency of the accounting procedures throughout the Public Service and not only in his department. I feel that if the Government will make use of all the mechanical aids available to it in this day and age, if it will use the manpower available to it in the Republic, it must then be possible for those departments to account timeously to his department to enable that department timeously to prepare the statements which have to be submitted to the Controller and Auditor-General. I believe that four months is a reasonable period in which to do that. I want to appeal to the hon. the Minister not at this stage to say that he cannot accept the amendment and that he must have six months and, as far as the next clause is concerned, that he needs a period of five months, because this is going to allow those other departments as well as his own to delay matters. A longer period will not compel them—to use the vernacular— “to pull finger” and get on with the job of drawing up their statements of account. I believe that this is going to be a retrogressive step. The whole question involved in this regard is that of control by the Controller and Auditor-General. As the hon. member for Constantia has said, the longer one delays, the less control the Controller and Auditor-General is going to have and the less control Parliament is going to have Time is of the essence here. If there is anything wrong it must be discovered early. It is no good discovering these things when it is too late.

Question put: That the word stand part of the Clause,

Upon which the Committee divided:

Mr. Chairman, the object of the amendment standing in my name under clause 14 is exactly the same as the object of the amendment we moved to clause 13. I do not propose repeating the arguments that I used in favour of the amendment proposed to clause 13, and, consequently, I merely move the amendment standing in my name on the Order Paper, viz.—

On page 14, in line 55, to omit “five” and to substitute “three”.

Mr. Chairman. I regret that I am not able to accept this amendment, on the same grounds that applied to the previous one. It is in my view an essential requirement to give an accounting officer just that little extra time where an audit is very involved and very long. It says: “An accounting officer shall as soon as possible”, although he is given up to five months. In my view I think that is absolutely reasonable in the circumstances and in the light of experience, and consequently I regret that I cannot accept the amendment.

Amendment negatived (Official Opposition dissenting).

Clause agreed to.

Clause 18:

Mr. Chairman, I move the amendment standing in my name on the Older Paper, viz —

On page 18, to omit paragraph (b) of subsection (3) and to substitute the following paragraph:

1. (b) deposit moneys with the Bank for the purpose that such moneys may be advanced to the National Supplies Procurement Fund established by section 12 of the National Supplies Procurement Act, 1970 (Act No. 89 of 1970), as provided in terms of section 14(1) of the said Act.

I move this amendment for a very simple reason. The hon. the Minister can tell me whether it is necessary or not. If he refers to the National Supplies Procurement Act of 1970, he will see that section 14(1) makes the following provision—

I think that the intention is that advances should be obtained only from the South African Reserve Bank. Whilst in terms of the National Supplies Procurement Act the hon. the Minister is entitled to get advances from the bank itself, in clause 18 of the Bill we say that the Minister may transfer money from the Stabilization Account to the National Supplies Procurement Fund. It might be that while we are enabling money to be made available to the National Supplies Procurement Fund, the fund may not be able to accept those funds. The object of my amendment is to make it possible for the money to go through. In other words, it is purely a legal issue.

Mr. Chairman, I do not see any practical difficulty. If we accept the amendment of the hon. member for Randburg, we shall find that the Reserve Bank is really given the power to deposit money with itself: that is what it really amounts to. Therefore I am not able to accept the amendment.

Mr. Chairman, with your permission, I withdraw my amendment under the circumstances.

Amendment, with leave, withdrawn.

Clause agreed to.

Clause 20:

Mr. Chairman. I wonder whether the hon. the Minister could give us a little bit of additional information in regard to this clause. We are afraid that the finance charges, if I may call them that, which are involved are going to get lost in the unitary budgeting system. We believe that the rules must be kept as tight as possible as a guide to the Auditor-General. If the rules which bind the department are too loose, the task of the Auditor-General is complicated when he comes to apply them because he can only apply what Parliament passes. Whatever we write into this legislation is going to be the binding rule and will guide the Auditor-General. Does the hon. the Minister not feel that the wording of the provisions regarding finance charges in particular are a little bit loose and that the finance charges might get lost in the unitary budgetary system?

Mr. Chairman, the hon. member certainly has not been very specific. He has simply asked whether this is not a rather loose system. Let us read what the essence of the clause itself is. I quote subsection (1)—

That is quite clear and simply sets out the procedure which has to be adopted, Then it provides—

1. (2) (a) All interest payable on any State debts …

I cannot see that there is any vagueness here. Paragraph (b) says—

Subsection (3) states—

If one follows these procedures carefully, one cannot see why this should be a loose procedure. I am trying to assist the hon. member. Perhaps I am not quite getting the hon. member’s point.

I can see that it is a nebulous matter and perhaps I not explained it quite clearly to the hon. the Minister. In clause 20 we are making provision that the hon. the Minister need no longer come back to Parliament for an Appropriation Bill to pay certain amounts. In clause 20, subsection (1), we find that—

When we look at the explanatory memorandum, which at this stage is dealing with subsection (3), we find that—

I am simply pointing out to the hon. the Minister that it is now going to be his responsibility and the responsibility of his department to see that these amounts are accounted for in such a way that the Auditor-General is going to be able to keep track of what is happening, because we in Parliament are now going to depend on the Auditor-General and on his report to advise us of what is happening, whereas in the past, we have had to depend on the Appropriation Bill with the hon. the Minister as adviser.

Mr. Chairman, if the hon. member would read the explanatory memorandum properly, he would notice that the changing rates of interest, etc., which must be budgeted for specifically, complicate this type of budgeting. The hon. member will notice here in the second last and last paragraph on page 8—

This is actually the point. I think that Parliament will be fully informed and that this clause is only directed at simplifying the budgeting procedure where we deal with changing rates of interest.

Clause agreed to.

Clause 35:

Mr. Chairman, on clause 35 our objection is to the amount of R300 million per Minister which the Cabinet has guaranteed. The problem is that there has been very far-reaching powers given under various Acts, e.g. the Bantu Law Amendment Act of last year and the Industrial Development Act of this year, which enables the Government to guarantee various statutory bodies who in turn can give very wide cover. They can indemnify against losses of any nature. It is a very onerous undertaking. Here we are enabling the hon. the Minister to guarantee each Minister to the extent of up to R300 million. I think the amount is excessive. R100 million is also a large amount of money, but I think that R100 million is as much as the House should afford the hon. the Minister as a sort of a blank cheque. If he wishes to have more than R100 million in respect to any particular issue or the portfolio of any particular Minister, I think he should come to this House and say that in the circumstances this Minister or this portfolio needs more than R100 million and that the House should agree to give them what they need. I therefore move the amendment standing in my name on the Order Paper, viz.—

Mr. Chairman, I just wish to indicate to the hon. member for Randburg that this clause is a re-enactment of the present position. No new amount is being stated. It has been so for some time. I respect the hon. member’s feelings on this, but we have been doing this for a long time in the light of actual experience. I think it has worked well, and I know of no objection of any kind that has been raised anywhere inside or outside this House in respect of this specific amount of R300 million maximum. Therefore I ask that we leave it as it is.

Mr. Chairman, I would agree with everything which the hon. the Minister said, but the point I am trying to make that the terms of the Bantu Laws Amendment Act passed in 1974 and the Industrial Development Amendment Act passed in 1975 gave very wide and sweeping powers of guarantee to various statutory bodies. What I am saying is that R100 million, in the light of legislation which has been passed and the guarantee to other bodies, is what we should give as a blank cheque and that in addition to that, in the light of recent legislation, we should not be asked to give more.

Mr. Chairman, I shall be brief. There are 18 Ministers. I presume that Deputy Ministers will be excluded from this. We therefore have a total right to an amount of R5 400 million here. This is the theoretical position. Could we ask the hon. the Minister whether in practice guarantees under this heading have ever really approached the theoretical limit, because that is a very large sum of money. I take the point the hon. the Minister has made, but I also have some sympathy for the hon. member for Randburg. It in practice one does not require the theoretical amount, would a compromise solution, for example simply to make, in aggregate, a lower sum of money available than R5 400 million, not meet both points of view?

Amendment negatived (Progressive Party and Reform Party dissenting).

Clause agreed to.

Clause 36:

Mr. Chairman, clause 36 embodies the same principle we have been discussing right throughout the Committee Stage, namely that certain privileges which belong to this House are delegated to the State President as a privilege. The next thing we find is that these privileges are then delegated from the State President to the Minister, which takes them even further away from this House. Now we find that in certain circumstances these powers can even be delegated by the Minister to departmental heads.

It is already the position.

Yes, but my feeling in this respect is that this House should again jealously guard the privileges it has. Where the Minister feels that discretion in these things are needed and where he cannot come to Parliament, obviously the House would be sympathetic, but at the same time I think he should acknowledge the privilege of Parliament and not continue this process of taking control further and further away from Parliament.

Mr. Chairman, notwithstanding the fact that the hon. member for Randburg has not moved his amendment, I do feel that I must briefly put the attitude of the official Opposition. I should like to refer the hon. member for Randburg to the Finance Act of 1968 (Act No. 78 of 1968). Because of the very position the hon. member for Randburg has referred to, this House in its wisdom passed a special provision which I think I should quote to him. Section 3(1) reads as follows—

Let us be reasonable and practical about this matter. One cannot always get two Ministers together. By the same token it is not always practical to get the heads of two departments together. I therefore believe this to be a perfectly reasonable provision. As I have said, it is already a provision in our law and we support it.

Mr. Chairman, I accept the argument of the hon. member for Pietermaritzburg South.

Clause agreed to.

Clause 37:

Mr. Chairman, we on this side of the House agree with the contents of this clause as far as it goes. We feel, however, that there is an opportunity here, while this Bill is under consideration, to look a little more closely at the control which should be exercised in respect of the receipt of gifts by office bearers of the State. It is quite clear, according to the clause, that when a gift is received by the State, and the purpose of that gift is not clear, the hon. the Minister may give certain directives. However, the manner in which gifts are received varies from case to case. I am not referring to bribery or corruption because the law does make provision for such cases. It does, however, happen in the course of the ordinary administration of the State—and I say this without reproaching any particular person or group of persons—that gifts are presented to officebearers acting in their capacity as representatives of the Government. These gifts are not always made in contemplation of a service to be rendered, but can, in fact, be made subsequent to a correct and proper action on the part of the officebearer on behalf of the State. The officebearer may feel that he has not, in point of fact, given any concession or granted any privilege on account of the gift because his decision had been made before the gift was received. He may also shrug off the possibility that the receipt of such a gift may in the future influence his further decisions in connection with a request by the same person. I believe that since we are here looking at a new law, one which enables the Treasury to carry out its functions more efficiently, one which puts the Auditor-General in a position to exercise his authority more efficiently in relevant matters, it would be a pity—particularly since we are now discussing this clause—if advantage were not taken of the opportunity to clarify the position of people who act as officebearers of the State and receive gifts which they may or may not be tempted to regard as their private property, or in connection with which they may or may not be certain how to act with propriety. I do not want to move an amendment but I would like to read a type of amendment which the hon. the Minister may wish to consider and which I think may perhaps further clarify my purpose. The present clause, with my change incorporated, would then read as follows—

This offers a line of propriety. It offers a line of conduct to those persons who do not fall under the control of the regulations which apply to a civil servant. There are many people who serve the State in various capacities more or less related to the direct responsibilities of the State. I am thinking for instance of people who serve on boards and on various corporations, people who are in positions of influence by virtue of the fact that they carry certain responsibilities on behalf of the State. They hold office of one type or another. I think the hon. the Minister has an opportunity with this Bill to define what the obligations and duties of such people are when they are in receipt of gifts presented to them not in their personal capacities but by virtue of the offices they hold. I believe the Treasury requires the kind of control I am suggesting here. It will put Treasury in a stronger position because in terms of the suggested amendment the Treasury would have the right to demand that people should be obliged to report such matters to it. If the people concerned failed to report such gifts, the Treasury could in effect write a sharp letter to them saying: “You have not reported the matter to me”. If there was uncertainty, the Minister would be able to take further action. What is more, if the Auditor-General was unhappy about the position, it would put him in a position to inquire of the Treasury whether in fact a report had been made on such a gift.

I am perhaps putting this matter in less than specific terms, but I hope the hon. the Minister has understood my meaning. It is not my intention to query any principle contained in this clause but to suggest to him that, while this Bill is still being considered by the House, he has an opportunity to introduce a principle, a method or a control which will in fact tighten the ability of the Treasury and the Auditor-General to supervise the kind of actions which may still be in a vague field of uncertainty. The hon. the Minister has the opportunity to establish a principle here which will ensure that the probity of the State can be maintained and watched over by the appropriate people. This is the sense of what I am trying to put forward to him and I would ask the hon. the Minister, if he is not able to give a firm reply now, to consider the possibility and desirability of such an amendment which could then be introduced in Another Place.

Mr. Chairman, clause 37 of course refers to gifts made to the State. That is quite clear. There is nothing there about gifts made to officers of the State. I merely want to say that as far as gifts to officers of the State or officials are concerned, I myself would regard that as an administrative matter. I think it is a matter for the head of a department or for the Minister. As far as I know it is in fact dealt with very carefully on that basis. However, we on this side of the House are very reasonable as the hon. member has seen. Therefore, I shall certainly have another look at this. I should like to discuss it further with my senior officials. If we deem it necessary to do anything along the lines suggested, I shall be able to do so in the Other Place. Although I cannot give any undertaking, I want to give the hon. member the assurance that I shall certainly look into it.

Mr. Chairman, I should like to thank the hon. the Minister for his very reasonable attitude. I just want to make it clear that, when one refers to gifts made to officebearers of the State, the question arises whether such a gift is not in fact a gift to the State itself. The officebearer must consider his position. He is not sure whether this is a gift to him personally or a gift to him in his capacity as an officebearer of the State. Let us assume that a gift is received ex post factor, viz. after a decision has been taken on a matter. If it is not clear to the person concerned whether he can return it—it may be a non-returnable type of gift—what is he to do with this gift? I think that if we can create a presumption that this is a gift to the State and, as such, must be reported to the Minister, that will remove the area of uncertainty and the obligation upon the officebearer himself to make up his own mind as to the character of the gift. He will be obliged to report the gift to the Minister and if there is uncertainty as to what kind of gift it is, the Minister will then be in a position to decide how that gift is to be applied.

Clause agreed to.

Clause 41:

Mr. Chairman, I rise to move the amendments, rather lengthy as they may be, standing in my name on the Order Paper as follows—

1. (1) On page 40, in line 6, to omit all the words after “office” up to the end of subsection (2) and to substitute:

1. (b) When the Auditor-General is removed from office in terms of paragraph (a), the provisions of any pensions Act applicable to him shall be given effect to.

1. (2) on page 42, in lines 13 and 14, to omit “vacate his office, and if he is a person referred to in subsection (11), he shall”;
2. (3) on page 42, in line 20, to omit “vacate his office or”;
3. (4) on page 42, to omit all the words after “Service” in line 40 up to and including the second “to” in line 48 and to substitute:

The purpose of these amendments is to achieve two things. The first thing is that we feel that the post of Auditor-General should not be subject to the favour or the whim of any person or groups of persons, even including the Cabinet. I say this in all seriousness and without any rancour or any ill-feeling. We believe that the post of the Auditor-General should be one which falls under Parliament, that the Auditor-General should be the servant of Parliament and that he should have the protection of Parliament. For that reason we believe it is not fair that he should be appointed, as the Bill reads at the moment, “for such period not exceeding five years”. The purpose of the amendment is to retain the present situation where the Auditor-General will remain in office during good behaviour, but always subject to the other provisions of the Bill, as for example in subsection (9), where it states that he shall retire on attaining the age of 65, but that if it is considered necessary, he can be reappointed for a further period.

A further consideration is that the Auditor-General does not only protect the interests of Parliament but is, in fact, a servant of Parliament and as such can only be dismissed by Parliament. That is the effect of the second part of the amendment to subsection (2), namely that the Auditor-General shall be removed from office by the State President only on an address praying for his removal presented to the State President by both Houses of Parliament.

All the other amendments are consequential upon that and I do not believe there is any need to address the Committee at this stage on them. I should like to hear from the hon. the Minister what his attitude is before we carry on with further arguments.

Mr. Chairman, I have given very careful thought to this matter which was also raised during the Second Reading debate. I personally feel that we could proceed along the lines of the wording stated in the Bill because I do not see any great difficulty in practice. There are the safeguards which I actually read out during the Second Reading debate affecting the actions which can be taken in regard to the Auditor-General. Furthermore, if anything is done to him, the procedure which has to be applied is clearly stated and Parliament does come into the picture. Nevertheless, I think the overridingly important consideration here is that there should be no doubt at all on this matter; there should be no doubt about our intentions or the intentions of anybody else. The Auditor-General is an extremely important officer in the whole public administration of the country and I should not like to see any dispute or disagreement on the appointment of the Auditor-General. If there is such disagreement or dispute I think it will be a great pity and that is certainly not what we wish to bring about. In view of the difficulty which the hon. member has once again stated, I am prepared to accept that we do not specify a period for his appointment; in other words, I am now prepared to say that I agree to the omission of the reference to a period of five years. The effect will then be that the State President simply appoints the Auditor-General as at present.

As far as the rest is concerned, the hon. member will appreciate that I must have an opportunity to look closely into precisely what the proposed amendments mean because there are certain consequential matters. The hon. member for Pietermaritzburg South can accept that I am prepared to delete the reference to five years so that the Auditor-General will simply be appointed indefinitely and so that, while he is in a good state and able to continue, he will continue with his work in the very secure position in which he must be. I shall look further into the matter and if, after further consideration, it is necessary to make any consequential amendments, for I shall need time, I shall then move them in the Other Place. The essence of his amendments, as I understand the hon. member, is not to specify a period and that I am prepared to agree to.

Mr. Chairman, it is not very often that I get up in this House to thank a Minister of this Government, but I want to say to the hon. the Minister that I appreciate very much the attitude which he has adopted this morning. I believe that he is right and with the permission of the Committee I shall withdraw the amendments.

Amendments, with leave, withdrawn. Clause agreed to.

Clause 45:

Mr. Chairman, clause 45 provides that in general all the reports of the Auditor-General, which are submitted to the different departments or different bodies whose books he is required to audit, shall within seven days after receipt thereof be presented to both Houses of Parliament if Parliament is in session, or immediately after Parliament re-convenes if it is not then in session. Sir, the proviso in line 36 reads—

We are wholly happy with this provision. As we have said, we believe that the Auditor-General is the servant of Parliament. He is the watchdog of Parliament, the watchdog of the public, and he must report to Parliament. Sir, if I may refer briefly to the schedules which appear at the end of this Bill, we find on page 56 an amendment to the Bantu Authorities Act of 1951. The following proviso is added there—

Then, Sir, on page 62 you will find a similar amendment to the Development of Self-government for Native Nations in South West Africa Act of 1968. To my mind, there is a doubt as to whether the provision which is contained in clause 45 that any special report which the Auditor-General may make under this Act shall be submitted to Parliament, also covers the special report, of which I have given two examples here. I accordingly move the amendment as printed on the Order Paper—

On page 48, in line 38, after “this” to insert “or any other”. In other words, however the Auditor-General is required to submit any report, all such reports shall be reported to Parliament. I commend this amendment to the hon. the Minister.

Sir, I have also reconsidered this matter and I wish to state immediately that I think it will be reasonable to accept this amendment. I think it is really in the spirit of what we meant, and if it will bring greater clarity to amend the wording in this manner, I am quite satisfied to do so. I only want to say, Sir, that I hope this debate will soon draw to a close, for I am becoming so indulgent that I do not know what will become of this Bill if we carry on in this manner.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with an amendment.

Report stage taken without debate.

Third Reading

Mr. Speaker, I move—

That the Bill be now read a Third Time.

Mr. Speaker, we have come to the last stage of a Bill which has probably caused more discussion than the hon. the Minister anticipated when he introduced it but I think it is right that a measure of this importance should have been thoroughly discussed. It may not be a measure which excites the interest of many members of this House but it is a measure of great importance to the administration of the finances of the country and that, after all, is one of the prime functions of Parliament. Now we on this side of the House have raised opposition to this Bill on the grounds that it introduces the unitary budgeting system. During the Second Reading debate the hon. the Minister did not satisfy us with his reply to the arguments we raised against the unitary budgeting system. The other parties in opposition supported the Minister in introducing the unitary budgeting system. I might say to them that I found their arguments in support of this unitary budgeting system very, very difficult to understand. I should like to deal with those arguments in due course. Before I do so however, I should like to emphasize what I said during the Second Reading debate, viz. that our opposition to the unitary budgeting system is based on the belief that when it is introduced, the taxpayer, besides having to contribute by way of taxes to the current running revenue of the country, is also and inevitably going to be made to finance an increasing part of our capital works out of taxation. Sir, this is not contained in the Bill but it is very clear from the reasoning behind this Bill, which is based on the recommendations of the Franzsen Commission report, that this is going to be the result. The Franzsen Commission report used very simple words in motivating its reason for advocating a unitary budgeting system. I quoted these words during the Second Reading debate but I must quote them again because this, to our way of thinking, is the essence of our argument against the unitary budgeting system. The Franzsen Commission report states—

Now this is important—

Sir, those to me are plain words. They have a plain meaning. They mean only one thing and that is that the taxpayer is going to be asked to contribute increasingly towards the financing of capital works.

Now I should like to come to some of the arguments used by the hon. member for Johannesburg North during the Second Readying debate to support the unitary budgeting system and to counter our arguments in opposition to it. I may say that I find some of the arguments used by the hon. member very tortuous. He could not see how a unitary budgeting system could be inflationary.

I did not say that.

The unitary budgeting system by itself, ipso facto, is not inflationary. It is the effect of a unitary budgeting system which we fear is inflationary. It will be inflationary if it raises the level of taxation above the level necessary to finance current revenue. I believe that that is the intention of the introduction of this system. The hon. member for Johannesburg North may belong to that school of economic thought which believes that to raise taxes is deflationary because it takes money out of the taxpayers’ pockets and dampens demand. That is the old classical theory.

It has nothing to do with it.

I believe that in the circumstances which exist in South Africa today, where we have rampant hyper-cost-push inflation, those theories go right out of the window. In the circumstances we have in South Africa today, if we increase taxes, whether they be direct or indirect taxes, it will push up costs. Will the hon. member for Johannesburg North not agree with me that the 2 cent tax which has been imposed on petrol in the budget will have an inflationary effect?

And the unitary budget causes that. What tripe!

The unitary budgeting system does not cause that, but it opens up the way, for the reasons motivated by the Franzsen Commission report, to let it happen, and it is already happening. I do not have to contort my mind very much to say that the 2 cent increase in the price of petrol to finance a capital project is inflationary. Does the hon. member for Johannesburg North not agree that higher income tax is inflationary? Does he not get demands for increased wages and salaries when direct taxes go up?

That has nothing to do with the unitary budgeting system.

This has something to do with the unitary budgeting system. It has this to do with it, that the system is designed, as I have already shown from the Franzsen Commission’s report, to finance a greater proportion of capital expenditure out of taxation.

Do not talk to them; they will not listen. Talk to us rather.

Can you understand him?

If we are going to do that we shall have to raise taxes. The hon. member for Johannesburg North … [Interjections.]

Order!

Chris, do you agree with him?

I am listening to his argument.

The hon. member for Johannesburg North also used the tortuous argument that what matters, the only thing that matters, is the total level of Government expenditure. It does not matter how that is divided between capital and revenue expenditure. Surely there is a great difference between revenue expenditure for running the country and capital expenditure for the creation of assets, e.g. for infrastructure and particularly productive infrastructure. Does the hon. member approve—and this could happen under the unitary budgeting system—that increases in the share capital of Iscor be provided by tax increases? I am sure the hon. member does not. I found that the final argument of the hon. member, viz. that the cost of capital works should not be shared with future generations who will also enjoy the use of those capital works, to be probably the most unfortunate of his arguments. If one carries that argument to its logical conclusion, it appears that he advocates that all capital works should be met out of revenue. Finally, before I leave the hon. member for Johannesburg North, I would like to say that I am not against the balancing of total expenditure on Capital and Revenue Accounts against the total receipts from taxation and loan sources on a cash basis. Obviously that has to be done if we are going to live within our means, but it does not require a unitary budgeting system to do so. As far as I am aware, it has been done for years.

Now I would like to come back to the hon. the Minister and the arguments which he used to justify the unitary budgeting system. The hon. the Minister quoted Sweden, the United Kingdom and the United States as examples of countries with unitary budgeting systems. I would like to take Sweden as an example, because I assume that he quoted Sweden because he thought that what suits Sweden also suits, South Africa.

It is a question of the stage at which it was done.

I presume that the hon. the Minister considers that what is right for Sweden, can be applied also in South Africa.

It is a question of the stage.

I think that one should examine these comparisons very carefully, because I consider that it is dangerous to make the conclusions that what one country does, is suitable also for another.

That was not my argument.

But the hon. the Minister did quote the three countries in justification of the unitary budgeting system.

I will come back to that.

I would like to make a comparison between South Africa and Sweden. Sweden has an economy which, judged by its gross domestic product and its Government’s expenditure, is approximately double the size of the economy of South Africa. Sweden has a population which is one-third that of South Africa. The population is growing so slowly that you can virtually say that it is a static population. From these facts one can deduce that the standard of living in Sweden, the income per capita in Sweden, is about six times as high as it is in South Africa and that the economy of Sweden is a far more fully developed economy than ours. It follows from that that the need to expand the infrastructure and to spend money on the infrastructure of Sweden, is proportionately very much lower than it is in South Africa. On the other hand, South Africa has a rapidly growing population, one of the fastest growing populations in the world. It has a huge potential for economic development and a great need for infrastructural development by way of communications, transport, housing, education and so forth. The comparatively low capital expenditure in Sweden has enabled it, on a unitary budgeting system, to finance all of its expenditure— that is, all of its current expenditure and capital expenditure—by taking 95% from tax and only 5% from deficit borrowing. If in South Africa we were to finance our capital and revenue expenditure in the same proportion of tax and deficit borrowing as Sweden does, we would have to raise our tax figures, in round figures, from R5 000 million to R6 200 million, an increase of R1 200 million, that is if we were to use the same sort of proportions that apply in Sweden.

In practical terms that means that either we would have to double the amount which we get from income tax from individuals or we would have to get three times what we get from the gold mines or we would have to get five times what we get from customs duty or we would have to get three times what we get from excise duty or we would have to get seven-and-a-half times what we get from sales duty. If we apply the proportion between tax collections and deficit borrowing which exist in the United Kingdom and in the United States of America, the position is not very much different from that of Sweden. These are the three countries the hon. the Minister used to justify the introduction of the unitary budgeting system in South Africa.

This is why I say that the time is not ripe for the introduction of this system in South Africa. We need enormous sums to be spent on our infrastructural development. If we are going to take any meaningful proportion of that from the taxpayer, it is going to mean a greatly increased burden on the taxpayer. Our structural position is different from that of the countries which the hon. the Minister quoted in his reply to the Second Reading debate. I fear that if the unitary budgeting system is introduced, the burden which I have mentioned is going to be a very real one on our taxpayers. I believe that if tax has to be levied at a level that is higher than is necessary to finance revenue expenditure, the additional tax so levied can be used in a way much more acceptable to the people of South Africa than using it to finance capital expenditure. I have in mind that if there is money to spare from taxation for financing capital works, that money could well be put to better advantage by, for example, raising social pensions or subsidizing foodstuffs in order to lower the cost of living.

I would like to say in conclusion that we on this side of the House cannot support the Third Reading of this Bill because it will have the effect of placing an additional and intolerable burden of taxation on the people of South Africa.

Mr. Speaker, I shall not go into the argument about the unitary budget as against our old traditional form of budgeting. Other members on this side will do so. Our position on that score was made absolutely clear, at any rate, during the Second Reading debate on this Bill.

I very briefly want to express our disappointment at the fact that we are once again seeing powers and privileges which this House should jealously guard, being eroded in favour of the Executive. We come here as ordinary Members of Parliament, conscious of having a duty to perform. As far as expenditure is concerned, one of those duties is to satisfy ourselves that when sanctioned the money is properly spent. We want to satisfy ourselves that the money is effectively spent and when we have any doubts about the money being effectively spent, we want to have the privilege of withholding money from the Executive. This is one of the important functions that we have as ordinary members of this House. In the Bill which we are debating now, we find that our control over this situation has been greatly lessened. What I find tragic is the support which the Executive has had in this.

I can understand the support of the National Party because there is a Whip system and a party system. Therefore they, as ordinary members, would find it difficult to stand up for their rights. What I have found difficult to understand, however, is the attitude of the hon. members of the official Opposition. Here they have —as in so many cases in the past—allowed an enabling Act to come before this House, thus slowly eroding our powers as ordinary members and as a House. In the past, after we had been through the whole Vote and examined all the estimates, the Minister would ask us for the discretion to use certain funds for purposes other than those voted in order to keep the wheels of government turning, and quite rightly, year after year these powers have been granted. It has, however, been a privilege that the hon. the Minister had to ask us for and a privilege which we have accorded him.

I do not think there is an hon. member in this House who can remember an occasion where the House actually denied a request for money on the part of the Executive. In the system we have had, such a denial was a theoretical possibility only, a possibility which the governing party would not allow it to happen. In theory, however, it could happen. If it were to happen, however, after this Bill is passed, it would mean absolutely nothing, because we would not be in a position to amend clause 5 of the Appropriation Bill because clause 5 would not exist. The House would permanently have alienated itself from one of its rights by having given that right to the Executive.

I think this House spends about 100 hours considering the actual Estimates, and if we come to the conclusion that there are certain estimates we do not wish to pass and that there are certain estimates we would like to reduce, we would not have the power to do so. After having thus negatived or reduced an estimate, the hon. the Minister would simply use the powers granted to him in this Bill and pay the moneys out anyway. If, however, the Minister had to come to us year after year to ask for the privilege or discretion of the House, we could, upon granting that discretion, tell him that he can have the privilege or discretion save in respect of this or that specific aspect in connection with which we are not prepared to grant such discretion. That is a privilege of this House which no longer exists. Because this has happened, we in these benches will not be able to support the Third Reading of this Bill.

Mr. Speaker, I shall be very brief. I simply want to say that we on these benches continue to support and welcome the introduction of the unitary budgeting system. This system high lights the most important figure, namely the deficit before borrowing. On the other hand, as the hon. member for Randburg has stated, we continue to have certain objections which have not been put to rest during the Committee Stage. I refer to the objections in regard to the powers that are now being taken as statutory by the Minister, powers which, even though it may have been the practice in the past, impinge on the responsibilities of this House.

I want to reply to two points which were made by the official Opposition during the Second Reading. The hon. member for Constantia has somewhat changed his ground. He now agrees that the mere introduction of a unitary system of budgeting is not in itself inflationary, and for that we are grateful, because that represents considerable progress since the Second Reading of this Bill. Although obviously I cannot refer to the evidence of the Select Committee—nor have I seen it —I want to say, too, that the hon. member’s behaviour seems to display the normal contradictions we hear from members on my right.

Finally, I wish to refer to a point made by the hon. member for Walmer. In his Second Reading speech he said: “I am amazed at the hon. member for Johannesburg North. Being involved in big business, he should know by now that they finance their capital projects from loan accounts.” Where on earth did the hon. member get that remarkable statistic? If he cares to read the South African Quarterly Reserve Bank Review and takes any period over the last 15 years, he will find that the primary source of finance of business for loan projects or revenue projects is retained earnings, which have nothing to do with loan finance.

What about Amaprop? Where do they get their finance from?

If the hon. member wishes to talk about what he regards as big business, will he please in future get the facts straight?

Mr. Speaker, it is quite apparent that my friends, the Progressives, still have not made up their minds what they are going to do with the Bill. The hon. member for Johannesburg North admitted that when he spoke on the Second Reading, and he still does not know what he is going to do with the Bill. All he knows is that he does not like any reference to big business. I want to say that I am very disappointed to hear that the two splinter groups on my left are not prepared to support us in our objection to the whole issue of a unitary budgeting system. I want to tell the hon. member for Randburg that it ill-behoves him as an ex-member of this party to criticize us for, as he puts it, not guarding the powers of Parliament. I believe the record shows that no party has guarded or protected the powers of Parliament more jealously than those of us who sit in the ranks of the official Opposition. I am sure my Nationalist friends on the other side will be the first to concede this, because they will remember the many fights we have had in guarding the powers of Parliament. I do not think I have to spend any more time on the arguments advanced by that hon. member.

I believe the hon. the Minister has been reasonable and that I am very glad the debate has gone along the lines it has, because this measure before the House is a most important measure. What happens today is going to affect the people of tomorrow. It is for that very reason that we believe we should not allow the Government to introduce a unitary budgeting system. We believe future generations should share the burden of providing the development from which they themselves will benefit even more than we shall. At present the tendency of the Nationalist Party is to budget more and more on short-term planning and short-term financing, which means that they pay for capital developments out of revenue. We believe the people of South Africa are being overburdened with this system. We believe the burden of taxation is too high and that they should not be carrying this burden. We believe that too much is being paid for out of Revenue Account today, when we can see from the accounts as they are presented how much is paid for out of Revenue Account and how much out of Loan Account. In future, when there is a single line Budget, how are we going to know what is being paid for on Loan Account and what is not being paid for from other sources? We will be given a globular amount of expenditure which will be broken down and we will have a globular amount of income which will be specified. The difference will be what we will have to find on Loan Account. I believe that if this example is followed by the local authorities in South Africa, the ordinary people of South Africa are going to be taxed out of existence.

No.

Yes, I mean it. Just think of what this Government now has to tax them for. It has to tax them for Bantustan development, for Richards Bay, for Newcastle, for Saldanha and for all the other tremendous capital development schemes which are going to be for the benefit of future generations.

You must not spoil your amendment now.

I have the hon. the Minister’s assurance, Sir; I am all right. One must think of that expenditure, and then couple it with what the local authorities will do if they follow this example. Just think of the ring roads, the additions to freeways, the anti-pollution measures and all the other measures which are being undertaken today for posterity. Bearing that in mind, I want to repeat that if that happens, the people of South Africa are going to be taxed right out of existence.

In conclusion, Sir, I believe that if this procedure is to be followed, loan levies and foreign borrowings are going to be used solely for loan repayments. If we project what is happening now, the amount of taxation which the people of South Africa will have to pay under this Government can only increase. For that reason I regret that we cannot vote for the Third Reading of this Bill.

Mr. Speaker. I have a grave difficulty with people who put forward the argument that the manner in which you keep your books is going to cause taxes to be increased. I have the gravest difficulty with this argument. I do not understand—and I do not think anybody who knows anything about finance can possibly understand—that by reason of the fact that you are going to have a unitary budget, the long list of items which the hon. member for Pietermaritzburg South read out, are all going to be paid for out of taxes. If this were so, we would have a completely different situation. You would not have to have a budget which was unitary or which was separate, because you could do this irrespective of the manner in which you present the budget. It is an absolutely fallacious argument to suggest that because there is going to be a unitary budget, we will have the situation where everything will be paid for from revenue, where the whole concept of raising loans for the Government is going to be changed and where, to take the argument of the hon. member for Constantia, the price of petrol has been increased in order to pay for Sasol 2. This has nothing to do with the idea of a unitary budget. I must say that in all the time I have listened to financial speakers I have never heard such utter nonsense. I say that with the greatest of respect. It has no relevance to reality, and it has no relevance to anything that is connect with finance.

To come back to the question of a unitary budget, I want to say that as far as we are concerned, we accept the concept of a unitary budget, a budget which will employ management techniques, a budget which will show, as far as Parliament is concerned, not only the actual expenditure, but what the expenditure is intended for. With great respect, a unitary budget can still show—and I think the hon. the Minister might tell us in reply that it will show—in respect of the particular items whether they are revenue or capital items. You can have separate columns, in terms of which you can specify this. It is well known that the hon. the Minister’s department has been busy with this matter, because his predecessor referred to it. If we had before us at the present moment the report of the Select Committee on Public Accounts, we would be able to demonstrate without any difficulty that hon. members sitting to the right of me appear to have on view in the Select Committee and another view when they speak in this House, and they do so in order to be able to say to the public that taxes are going to be increased because the bookkeeping is being changed.

Order! The hon. member may not refer to an unpublished Select Committee report.

No, Sir, I cannot. This is my difficulty. In fact, I am not referring to it.

That shows their hyprocrisy again.

Order! The hon. member for Carletonville must withdraw the word “hypocrisy”.

I withdraw it, Mr. Speaker, I am sorry.

Mr. Speaker, on a point of order: Is the hon. member for Yeoville not reflecting on other members?

In what sense?

He has been saying that members say one thing in the House and another thing in Select Committee.

The hon. member may proceed.

Thank you, Sir. The matter I should like to deal with specifically …

Tell us about the success you made of Western Bank.

Mr. Speaker, I want to deal with the fact that public expenditure as such is continuing to rise, that there are increasing needs and sources of revenue which are required and that there is an almost unlimited demand for capital in South Africa by reason of our particular stage of development. What is apparently not appreciated is that the capacity of the Government to borrow is also limited. The Government does not have unlimited borrowing ability, both in the local market and the overseas market. It is in fact extremely difficult to borrow in the overseas market and I think it is much to the credit of the Government that it has been able to raise the sums of money it has raised. There is, however, not an unlimited ability to borrow. There is a certain capacity in relation to the Government’s borrowings overseas, and I think one needs to look at the whole situation. I am not suggesting that we need to finance our development from increased taxation; far from it. We have opposed that repeatedly. But it is a recognized financial fact that you finance your expenditure in respect of capital to an extent from savings. If you look at the Reserve Bank Quarterly Bulletin you will see that it is clearly demonstrated that, to a large extent, South Africa’s development depends upon our ability to save and to utilize those savings for development. To suggest that everything which is of a capital nature in the whole of our economy whether in public or private finance, is dependent upon loans, is indicative of the lack of knowledge of what finance in fact is.

In so far as the budget is concerned, I think we need to ask some specific questions as to what one seeks to achieve with it. In the first place I think one needs to know from a management budget what we are seeking to achieve. What do we want to do with the money that we are going to spend? In the second place, we need to know how in fact the money will be obtained. In the third place, we need to know what the effect of the expenditure will be on the economy as such, because the expenditure can have a variety of effects on the economy, depending upon the manner in which the money is spent and when it is spent. The fourth question is what the effect will be of the manner of financing which is employed at a particular moment in time. The use of the fiscal and monetary tolls in a correct manner in the test. The method of financing is the test. In particular, the method of financing the deficit is the test, and not the bookkeeping, as long as the bookkeeping is in such a form that members of this House will have the information that they require, that it is in fact meaningful and that it is capable of being correctly audited.

There are two other matters I should like to raise with the hon. the Minister. In the first place, as far as South West Africa is concerned, the revenue from the Territory, other than that which, is paid into the Territory’s fund, goes into the Consolidated Revenue Fund, together with certain other funds. It then goes to the credit of a South West Africa account. The issue which I should like to raise with the hon. the Minister—because this is referred to in this piece of legislation—is whether in fact, in the light of developments in South. West Africa, the stage has not been reached where, instead of merely having an account for South West Africa with the Consolidated Revenue Fund, we should have a completely separate Consolidated Revenue Account for South West Africa. In this way, we could deal with South West Africa in a manner which would indicate that its finances are quite separate from the finances of the Republic of South Africa. Sir, this is a matter which I think development in South. West Africa will require and will require perhaps very shortly, and I believe that some advance in this direction in respect of the method of dealing with South West Africa accounts should in fact be considered.

The other matter that I would like to touch upon is the question of a budget committee. The hon. the Minister is aware of the recommendations contained in the Franzsen report and I need not read them. But, Sir, with respect, it does appear that with the developments which are taking place it would be desirable for the hon. the Minister to consider the setting up of a budget committee, not just a Cabinet committee but in fact a parliamentary committee which could participate in budgeting as such.

Lastly, Sir, I would like to make the point that one of the important factors of parliamentary government is the right to withhold supplies in the light of our knowledge. One of the matters that concerns us is that in terms of this piece of legislation there is a limitation upon the knowledge which hon. members could have, depending on how the budget is presented, and I am hoping therefore that the budget will be presented with more information than we have had in the past. With regard to the ability to withhold supplies, there are certainly restrictive measures contained in this piece of legislation and we will therefore vote against the Third Reading.

Mr. Speaker, I want to thank hon. members of the House for their contributions to tips debate. I say that especially in view of the fact that this measure is surely one of the most important measures we have discussed here for many years. Of course, it concerns the entire financial system of the Republic and the way in which we regulate and control our financial matters. There is no need for me to elaborate on it any further.

†Mr. Speaker, I would like just to comment briefly on some of the points which have been made here. First of all, I think the difficulty of the hon. member for Constantia is that at an early stage he committed his party to opposition to the unitary budget. I must say that I absolutely fail to see how he could take up such a position, because this unitary budget is something that we could not have avoided; it is something that had to come. The hon. member said in the Second Reading debate that it was too soon and that in any case the timing was wrong. Sir, I want to say that I think the timing is absolutely correct. We have been looking at this for many years. It is a very carefully considered step that we are taking at tips point. I would just like to clarify the position. The hon. member said that I was comparing us with Sweden. Not at all, Sir. What was the issue the hon. member raised? The hon. member raised the question of the timing. He said that he did not think in any case that we were sufficiently developed to adopt this system. My comment on that was: At what stage of economic development were the United States, the United Kingdom and Sweden when they in their turn adopted this type of budgetary system? That was the whole point at issue and no other. Sir, I believed that we in South Africa are if anything at a higher stage of economic development than those countries were when they adopted that system. They did not all adopt it in one year.

That is where we differ.

I therefore differ completely with the hon. member on that point. When the hon. member says that a unitary budget as such will mean that we are going to have higher taxation in this country, I think he is really misconstruing the whole meaning of the report of the Franzsen Commission on this aspect. What the Franzsen Commission is doing is that it is stating a fact. When the Franzsen Commission says that as a country prospers and as its level of economic development moves higher and higher, so it in fact broadens its tax base and so it in fact takes into the fiscus more and more in the form of taxation, it is stating a simple fact. This happens in country after country, but the mere fact that you have a unitary budget or, if you like, a dual budget such as we have now, seems to me to be irrelevant. I must say that there I must agree with the hon. member for Yeoville and others. I cannot see the relevance of this, simply because you move to a unitary budget where you put the capital and revenue accounts together. Sir, each time I say this the hon. member picks up the Franzsen Commission report. That is not the meaning of the Franzsen Commission report. They are stating a fact of life. As your tax base broadens with greater prosperity and development, of course you take in more in the form of taxation. I do not know whether I can persuade the hon. member of that, but that is an absolute fact. The hon. member, as his main example in justification of his whole attitude, came back to this idea that you ought not to finance capital development or capital projects from revenue. There I think the hon. member has really put himself in a strait-jacket. If any financial or any other institution, company or venture, is in a position where it is strong enough to earn good income, why should it not use part of that to expand? That is the simple issue. If it can, surely it is far better to do that than to go and borrow money at exorbitant rates of interest as we have had for some time now. This is the issue. He takes the case of Sasol 2 and says that, in fact, the way we are doing it,—in addition to loan capital and export credit financing, we are using this levy or excise duty on petrol —He says this is going to be inflationary. Has the hon. member for Constantia ever considered, if we did not do this, and if we financed the whole project out of loan capital, what the interest burden on that operation would be, how it would push up the current operating costs, and what the price of petrol and of the products of Sasol then would have to be? You see it with Iscor today. Iscor is a capital-intensive, huge enterprise. It has had to borrow great sums of money to develop. The interest burden on Iscor today is an enormous problem and it is one of the main reasons why from time to time we have to adjust the price of steel upwards. I think the hon. member has left that completely out of the reckoning.

Then I just want to mention, in regard to the hon. member for Randburg, that I think, with respect, that the hon. member has a bee in his bonnet. I have seldom seen anybody with a more persistent bee in his bonnet than he has in this respect. He continually reverts to saying that what we are in fact doing here through this Bill is to weaken the position of Parliament in our financial administration. I must differ from him fundamentally. Indeed, it is so important to me that this impression should be put right that I would welcome an opportunity to discuss this Bill with him in that respect and show him instances where we are in fact doing the very opposite. Hon. members opposite for example said, in relation to the form of the budget, that we would not consult Parliament, but I pointed out that in fact the way it is done has the force of law because it is an agreement between the Treasury and the Select Committee on Public Accounts; and if the terms of that agreement on the form of the budget are not carried out by the Treasury, the Select Committee could immediately come to this House and seek the authority of this House to enforce on the Treasury the terms of that agreement on the form of the budget. What could be a more compelling sanction than that? We have not touched that. We are in fact making that a regular feature of our financial administration in this Bill.

Then the hon. member for Yeoville mentioned the position of South West Africa. He asked whether we should not consider having an entirely separate South West Africa account. I can assure the hon. member that we have been looking at this position. We shall give it more attention. We obviously want to have the most effective system as a whole, and we shall certainly give more attention to this matter.

The second point he raised was whether we had not come to the stage where we should have a Budget Committee as such. This is something which we can certainly discuss, but I should like to draw the hon. member’s attention to the fact that the Select Committee on Public Accounts has a very important role to play in this regard. The Select Committee, in consultation with the Treasury, has played a traditional role in this regard and I am sure that they will continue to play this role. These are matters which we can certainly discuss.

*I do not want to detain the House any longer, but I want to thank everyone in this House once again for the interesting discussion we were able to conduct on this very important Bill.

†In conclusion, I should like to say that at time the exchanges amongst the Opposition parties became so warm that I almost began to feel as if I were out of Che debate. I must ask hon. members not to leave me out of the debate in future, as it is good to be included in these diversions.

Question put,

Upon which the House divided:

Mr. Speaker, I move—

I promise to be concise and brief. The Wine and Spirit Control Act, 1970, provides in section 45 that when the production of distilling wine is inadequate, the K.W.V., with the consent of the Minister, may import distilling wine and that the spirit obtained from such distilling wine may be deemed to be the produce of vines in the Republic for the purposes of the application of various Acts.

However, the Act does not provide for the importation of brandy by the K.W.V. As a result of drought conditions and poor crops during the past number of years, the K.W.V. was unable to reserve more brandy for maturing purposes than the normal specified needs of the wholesalers, with the result that—particularly in the case of one wholesaler—a serious shortage of brandy which has been matured for three years, has arisen.

Since, under the circumstances, it is necessary that brandy which has been matured for three years has to be imported for blending purposes with South African brandy, it is now being proposed that a new section be inserted in the Act which provides that, when there is a shortage of brandy in the Republic, the K.W.V., with the consent of the Minister, be allowed to import brandy for the purposes of making it available to the trade, and that such brandy, for the application of the various Acts, be deemed to have been produced from the produce of vines in the Republic.

Certificates will have to be provided by the export countries to ensure that the imported brandy complies with certain minimum requirements, and furthermore such brandy will only be allowed to be sold in such quantities and on such conditions as approved by the Minister.

Mr. Speaker, as has been indicated by the hon. the Deputy Minister, the Bill before the House deals with the permission the Minister may grant to the KWV to import brandy. Therefore it is a measure which affects agriculture, and normally the hon. member for Newton Park would have participated in the debate. The fact that I am doing so instead of that hon. member does not mean that I know more about brandy than he does. [Interjections.] I am doing this merely as a kindness to the hon. member for Newton Park, because when it concerns a drink, one has to try to be friendly.

As far as the principle in the Bill is concerned, we have no objection and we shall support the Bill. However, the importation of brandy gives rise to one or two problems, problems to which, in my humble opinion, the hon. the Minister ought to give attention. It is a legal requirement that when one sells a bottled product, such bottle shall have a label on which is indicated (a) the type of product in the bottle and (b) the origin of the product. It is necessary for those two aspects to be indicated. In the first place, we do not want to sell inferior liquor to the consumer; therefore, we want to give the consumer the assurance that the product he buys is a decent one. In the second place, we want to protect the liquor industry. For these two reasons there are legal provisions to the effect that such a label shall furnish this information.

I know that we granted permission to the KWV in the past to import distilling wine and to process it into spirits. The spirits are then used for the fortification of wine or for the blending of brandy. In the case of a distilling wine the importance of the origin in relation to the final product, for example brandy, is not important at all and consequently it does not matter where the distilling wine comes from. Therefore one may advance the argument that when the spirits are used for the blending of brandy, it is not necessary to indicate on the bottle that the distilling wine comes from another country. But in the case of brandy it is a different matter. The hon. the Deputy Minister said quite rightly that it would be matured brandy, which I presume would be at least three years old. This brandy will be regarded as the product of the vines of South Africa and will be used for blending purposes; it is not going to be bottled directly. It is going to be used for blending with spirits. Perhaps a little colouring in the form of caramel would also be added to give the brandy its colour as we know it today. The most important ingredient of the brandy which would then be marketed will, however, come from abroad. According to the present provisions of the Bill, it means that this brandy will be marketed as a product of South Africa. To me this does not seem right. I should like to suggest for the hon. the Deputy’s consideration that since he is being granted the power now to tell the KWV that they may import brandy and sell this brandy to the trade under specific conditions, one of the conditions ought to be that there should be some indication or other on the label to the effect that the brandy element is of foreign origin. I do not think we should try to create the wrong impression among our consumers. I do not want to over-emphasize the matter either. Nor will we import brandy every year, but for those years during which we will in fact be importing brandy, I believe it is essential that the hon. the Minister should devise some term or other. We cannot say “produce of the Republic of South Africa.” However, some wording or other has to appear on the label which will indicate that a large percentage of the brandy which is being offered, comes from abroad. I think this is quite necessary, not only for the wine trade and the wine industry in South Africa, but also that justice be done as far as the consumer is concerned. For that reason I ask the hon. the Minister that when he lays down conditions, he should make this a condition as far as the KWV is concerned.

Mr. Speaker. I shall be very brief as my worries on this Bill are very much the same as that of the hon. member for Maitland. We have no objection to the principle of this Bill, viz. the importation of brandy, but we do find it a little extraordinary, and the hon. the Deputy Minister has not motivated this at all, that this should be regarded as South African produce as it clearly will not be South African produce. We have seen very praiseworthy attempts in recent months and years in the wine industry to ensure that people know where wine is coming from. Our wines of origin are now becoming famous and people can be assured that at least 90% of any wine that is specified as a wine of origin is produced in that area. Yet here we have a situation where brandy in quantity can be made out to be the produce of South Africa when it clearly and patently is not the produce of South Africa. My appeal to the hon. the Deputy Minister is, therefore, that I would like some motivation as to why it is necessary to call this brandy South African brandy when it is not South African brandy at all.

Mr. Speaker, I think it is important that when the interests of the drinkers of brandy in South Africa are under consideration, one should be heard to speak in their defence. Our view on these bench.es is exactly in line with the views expressed by the previous two speakers. We believe that irrespective of what you market or where you market it, the consumer’s rights and interests should always be considered and protected from the point of view that he should be aware of what he is buying and where that product originates from. It may just be changed that by not taking this fundamental requirement into consideration, there is to an extent deception with regard to the consumer as to the product he is buying. In principle we are in favour of the Bill, because obviously it is important that the demands should be met. However, in order to protect both the interests of the consumer and the bonafides of the supplier, provision should be made that the origin and the percentage of the product from that origin should be clearly specified as far as the product is concerned. I do not think it will in any way affect either the reputation or the sales or the consumption of the products concerned, but I do believe it will be the protection on the one hand of the consumer and on the other hand the bona fides of the supplier, which would then not be in any way under suspicion.

Mr. Speaker, I think that if the hon. gentlemen had understood the situation better, they would have had no objection to this legislation. Therefore, I am convinced that once I have explained the situation, they will accept it as such. I know that the hon. member for Maitland has some knowledge of the KWV, but in this case it really seems to me as if he is correct when he says that he does not know too much about brandy.

Not knowledge, only experience.

Initially brandy consists only of spirits and only becomes brandy after a process of maturation. If one considers this aspect of the matter, one appreciates the standpoint of the KWV and the trade. They do not want to import brandy. As has quite rightly been said by the hon. member, it will then have to be provided with a label. They are desirous of keeping their own products on the market, to maintain their good name, to maintain the mutual competition and for that reason it is surely justified that we should not disturb the brandy market in South Africa in any way. However, what we can do, is to import wine for distilling purposes. In this case we will not be able to do so, however, because of the reasons I have mentioned, i.e. droughts and poor crops, not enough brandy was reserved to be used in three years’ time. For that reason there is going to be a shortage. Because we want to protect our own people and our own trade …

And the consumer.

… the best way to do it is as we are doing it here. This is not the way in which we would have preferred to do it, but it can be incorporated under this protective measure without disturbing the trade. Both speakers on the opposite side asked that we should offer some distinguishing mark or other to this brandy so that the consumer can be protected, because we are in the process of educating our people to use our own wine in a manner worthy of that wine. The wine is divided into regions and is distinguished through their origin. We should have liked to do the same in the case of brandy and also protect our own brandy, but we are experiencing a shortage. The only thing we can do, is to import this brandy, to blend it and not to blend it as an imported brandy, because it is not imported brandy. It is blended with our own brandy. It is blended in such a way that it retains the character of the well-known trade-marks one now finds on the market. Therefore, I do not think this is a suggestion we can accept. I does not correspond with the request of the KWV and the trade either. Therefore, I want to ask hon. members to content themselves with the thoughts that have been expressed here, and to allow us to proceed with the legislation as it has been proposed.

Motion agreed to.

Bill read a Second Time.

Committee Stage taken without debate.

Third Reading

Mr. Speaker, I move subject to Standing Order No. 49—

Sir, we cannot simply accept the Third Reading unless the hon. the Deputy Minister assures this House that he will lay down as one of the conditions that the KWV will be allowed to blend only a small percentage of the imported brandy with the local brandy.

You do not know what it is all about.

Sir, the hon. the Deputy Minister will be surprised. 25% to 75% of the brandy you and I find on the market, is brandy which is just as old as the brandy which will be imported. The hon. the Deputy Minister says he wants to blend the imported brandy with local brandy. What the hon. the Deputy Minister is saying, is that the imported brandy will be blended with local brandy, that it will then be blended with spirits and be supplied to the public as a mixed brandy. Sir, I have no objection to this being done. I am aware of all the problems, but the consumer will have to be protected to a certain extent as well, and I will be very sorry if I buy a brandy with a well-known label and then find that the brandy is not South African brandy; that 50% of the content is, for example, French or Spanish brandy. Sir, the hon. the Minister of Indian Affairs said I only have experience but no knowledge of brandy. I know what good brandy is. I think the hon. the Deputy Minister is making a mistake. He should at least tell the KWV that they should insist that the trader buying the brandy, should have a label affixed to the bottle to indicate to the consumer exactly what he is buying. I do not want large red letters on the label. Sir, I wonder whether the hon. the Deputy Minister has ever noticed how small those letters are “Product of the Republic of South Africa”. One can hardly read them. But, Sir, the person who is interested in his product, should have the right to be able to read it on the label. This will also protect the consumer. I have no objection if the wine farmer is protected, but, after all, the consumer has to be protected as well.

Sir, I believe that the motivation from the hon. the Deputy Minister has not been adequate. Under this Bill brandy that is brought into the country—and we have no objection to bringing in this brandy—can be sold in its entirety, not blended with South African brandy at all. You can bring in brandy from Japan, from France or anywhere else and sell it as a South African brandy. I agree with the hon. member for Maitland that this should be restricted possibly to a certain percentage and that at least the buyer should know what he is buying. To be able to sell, for example, French brandy as South. African brandy would be ridiculous.

Mr. Speaker, I think the hon. gentlemen still do not understand the position very clearly. The blending of this brandy is in fact intended to protect our own people. We do not have a shortage of brandy, and we do not want to prejudice our own people. Does the hon. member want traders to be treated on an unequal basis?

No.

This is exactly what we want to avoid. We will never be able to convert French or Japanese brandy into South African brandy through legislation. Surely, this is impossible, but we pass this legislation to authorize that it may be accepted as such; that is all. The hon. member would do well to leave the matter to our own liquor firms. If blended brandy is sold under the label of a South African liquor firm, it will see to it that the consumer will not be able to notice the difference. This is precisely the intention, otherwise we could just as well have imported brandy. It would have been quite easy, and the State would have benefited through it. We could have brought it in as normally imported brandy, with a label indicating that it is a foreign brandy and, what is more, the State could have collected all the excise duty in respect of it. In this case the brandy has to be matured for three years and the financing thereof has to be borne by the South African liquor firms. We are doing it in this way in order to be of some assistance to our own trade in this emergency in which they find themselves. If the hon. member has a different solution to the matter, he is free to tell us. I take it that the way in which we are doing it, enjoys the support of the KWV and the wholehearted support of the trade. I cannot see how we can take any other measures and impose restrictions on these people. Both the KWV and the trade are anxious to protect their own product, particularly their own trade marks. I am convinced that this is the best way in which we can do so. It would be an impossible task to tell them that they would only be allowed to add a certain percentage. Since they are trying to protect themselves and to market a fine product, we are merely going to make their position even more difficult.

Motion agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

I just want to explain at the outset that clause 1 of the Bill really contains a short correction to section 14 of the Copyright Act of 1965, which contains references to the Board of Censors and the Publications Control Board, which were instituted in terms of the Entertainments (Censorship) Act, 1931, and the Publications and Entertainments Act, 1963, respectively. Since the functions of these boards have been entrusted to other bodies in terms of the Publications Act, 1974, section 14 of the Copyright Act, 1965, has to be amended accordingly in order to provide for the changed circumstances. Having dealt with this purely formal amendment, I just want to refer briefly to the more substantive amendments proposed in the Bill, which I believe hon. members will support.

The Copyright Act, 1965, came into operation on 11 September that year and is applicable to the territory of South West Africa as well. This Act provides, inter alia, for the protection of copyright in sound recordings, cinematograph films, television and sound broadcasts, as well as literary, dramatic and musical works.

During the last few years, copies of foreign cinematograph films have been made by certain bodies and made available to the public for private showing, without any royalties being paid to the producers of the original films. This practice entails an infringement of the provisions of the Berne Convention for the Protection of Literary and Artistic Works, of which the Republic is a member country, and seriously prejudices the interests of the owners and authorized importers of cinematograph films which do comply with the requirements of the convention.

What about the S.A.B.C.?

If the hon. member will be patient, I shall reply to that shortly.

The above-mentioned practice is assuming such proportions that at present South Africa is regarded internationally as the greatest infringer in the world of copyright in films and even in sound recordings. Consequently it is clear that if we are to fulfil our international obligations, drastic steps will have to be taken to restrict the illegitimate use and distribution of works and articles on which copyright does exist.

Major problems are experienced in civil and criminal cases at the moment in prosecuting the infringers and in obtaining damages or criminal convictions. The onus resting on the author or his representative is difficult and involves great expense when witnesses have to be brought to South Africa from abroad in order to discharge the onus resting on the State or on a claimant in a civil case. In addition, the criminal fines are so small that they cannot be regarded as an effective deterrent to infringement. Then, too, it frequently happens in civil actions that the persons who have been guilty of infringement possess so few assets after the court case has been concluded that the litigants cannot recover their costs anyway and consequently suffer considerable losses.

Representations have also been received from certain interested groups, asking for the penalties which can be imposed for offences of this nature in terms of the existing Act to be revised in order to provide for considerable increases in the criminal fines which can be imposed on infringers and for certain presumptions to be applicable in respect of infringers in actions.

†In order to meet these various situations and representations, the following amendments to the existing Act have been formulated after full discussion with a committee comprising representatives of all the interested parties:

1. (a) Section 21 of the Act contains provisions to the effect that, if certain indications should appear on a work identifying a person as the owner of the copyright therein, then, in any action relating to the work or subject matter, that person is presumed to be the owner of the copyright in the work or subject matter. It is now proposed that an additional subsection (8) be added to section 21 to provide that, in cases where it should be proven that a particular article is an infringing copy and that the article was found to be in the possession of a person at any particular time, it shall be presumed that that person knew that it was an infringing copy at the time when the article was found in his or her possession, unless the contrary is proved.
2. (b) There is some doubt as to whether the provisions relating to the presumptions contained in section 21 are also applicable in criminal proceedings. It is, therefore, proposed that a new subsection (9) be added to section 21 so as to remove this doubt by providing that an “action” shall include also a prosecution for an offence in terms of the Act.
3. (c) The penalties for infringements of the Act are substantially increased by clause 3 of the Bill. I realize that the penalties for the infringement of copyright works are being drastically increased, but it is a fact that the present sanctions of the Copyright Act have not served their purpose at all. The only possible way in which the Act can, therefore, be made effective, is by providing for penalties which will act as a deterrent to infringers or potential infringers.
4. *(d) Section 23 of the Act provides for the introduction of restrictions on the importation of infringing copies of literary, dramatic or musical works by the Secretary for Customs and Excise at the request of the owner of the copyright in the works concerned. In the Copyright Act, 1916, cinematograph films and sound recordings were included in the definition of literary, dramatic or musical works, while the present Copyright Act defines cinematograph films and sound recordings separately. It is being proposed that section 23 of the Act be amended to include cinematograph films and sound recordings as well, so that the measure concerned may serve as a further means of limiting the making of copies of foreign cinematograph films and foreign sound recordings.

Mr. Speaker, the hon. the Minister has been frank with this House in his Second Reading speech in indicating to us the problems the Government and also the trade have been faced with. It is a sad commentary that we in South Africa, who have based our original Act on the British Copyright Act of 1911 and who, as a country, are a member of the Berne Convention which has been subscribed to by some 50 different countries, should have acquired the reputation for having been one of the worst offenders as a result of contraventions of an international convention. This is not the pattern of conduct in our relation with overseas States. We should note this. In this regard I acknowledge the endeavour the hon. the Minister is making to put this matter right.

We believe that in recent years the trade has been faced with an extreme difficulty in that there have been many modern developments such as sound takes, television, gramophones and more particularly printed films. We recognize too that there has been a tendency to misuse films that have been produced overseas by having them copied and released here and show for gain. In respect of some films this may have been perfectly legitimate, but others might have been blue films. We see that there are two aspects to this. Firstly, the Police have a problem in enforcing the legislation which deals with undesirable films and, secondly, there is the infringement of copyright, an aspect which this Bill is more concerned with. We on this side of the House are very keen to give the hon. the Minister support in ensuring that those people who have the protection of copyright, are in fact fully protected. We realize that the practice that has come into being, should be stifled.

However, I want to say immediately that we regard the wording of the new section 21(8), as proposed in clause 2 of the Bill, as unfortunate. This is a presumptive clause which immediately made it suspect. A first reading of the Bill indicates that the wording is so wide that it might cause innocent people to be caught in the net. I want to quote the proposed new subsection (8) briefly:

Take the case of the innocent member of the public who walks into a film-hire or film-lending library and hires a film to show on a Sunday evening to his family or to guests. The man is given the film and he pays the fee. He goes home and there is nothing to show that that copy is either copyrighted or that it is an infringement of copyright. However, the man is apprehended with the film in his possession and in this way a completely innocent person can possibly come under the suspicion of the courts. I would have persisted much more harshly with this, had it not been for my reading of section 22 of the Act, which deals with penalties and proceedings in respect of dealings which infringe copyright. Here I think the hon. the Minister lets himself off the hook because under this section 22, which deals with penalties and proceedings in respect of dealings which infringe copyright, it is made quite clear that it is the use showing or hiring for gain or commercial purposes of a film which is not allowed. I take it that under the terms of this Bill it is not the intention to charge any innocent person who may be showing a film, which has been hired privately in the home for his own purpose without even serving tea for gain or having obtained certain concessions in order to pay for the cost of the film.

The section provides for the showing of a film for gain.

That is right; we understand that clearly. In relation to section 23, I believe that it would be in the interests of the trade if the hon. the Minister would negotiate further with them and consider the establishment of a register of firms which are licensed or otherwise permitted to deal in these films. This would make it easier for the Police in their dealings and to know whether a person has the right to be dealing in films or not. They will then know the type of people they are dealing with. The trade itself will have better disciplinary control. Furthermore, those people who are producing these films will then know that they can rely on the protection of the Government to see to it that strangers and pirates are not coming into the trade.

I think that the hon. the Minister has been frank with the House, and we see no further snags, other than the one I have mentioned. We therefore give our support to the Second Reading of this Bill.

Mr. Speaker, we on these benches also had some problems with clause 2, but they have been resolved after the Minister’s reference to the principal Act. There is, however, another question that we would like to raise in particular with the hon. the Minister. We accept that he wants to make the penalties effective, but if one looks at what is proposed in this particular Bill, in clause 3, one realizes that a series of penalties are being introduced which can only be described as simply huge increases. What was previously a fine of R4 for a first conviction is to be increased to R500, and in terms of sub-section 6(b) the term of imprisonment of two months is being increased to one year. Similarly, the fine which was previously R4 is being increased to R1 000. Finally, when one comes to the proviso to section 22(6), which overrides paragraphs (a) and (b), because fines can be imposed cumulatively for a number of offences, one finds in effect that the total fine or the total period of imprisonment imposed by virtue of the subsection, shall not exceed R10 000 where it was previously R100, and shall not exceed ten years imprisonment whereas, as I understand it, the maximum period was previously two months. I hope that the hon. the Minister will reply to this, because these are extraordinary high increases and one is left with the impression that clearly the original fine and sentence of imprisonment must have been far too low. But even if that is the case, I wonder if the hon. the Minister could give us some kind of idea as to the particular offence which could cause an individual to be sentenced to ten years’ imprisonment under this particular Act. Finally, I would simply like the hon. the Minister to confirm explicitly, in respect of clause 2, that the law is such that the person who purchases or hires such, infringing copy innocently is clear of this particular offence, and that, therefore, to be found guilty of this offence, one must be indulging in it for the purposes of gain.

Mr. Speaker, I shall be brief on this issue, I am mainly concerned with the provisions of clause 2. I am concerned with the increasing tendency to create more and more presumptions. I am particularly concerned about the position of perfectly innocent people outside the trade, who are not concerned with this trade, and who may be in possession of an article which they hired in the ordinary course, because this presumption may then be deemed to apply, and they may have some difficulty in rebutting the presumption. To my mind this is the main problem we have as far as this Bill is concerned. In so far as the remaining provisions are concerned. I agree with what the hon. member for Johannesburg North has said, and I do not want to detain the House any longer.

Mr. Speaker, I should like to thank hon. members for their support of the principle of the legislation. I shall be brief in replying. I should like to refer at once to what was said with regard to clause 2, viz. that the presumption was a very wide one. I want to say at once that the presumption is meant to be a wide one. To my mind there seems to be a basic lack of understanding as regards the type of offence we are dealing with here. What we are dealing with here is nothing but theft, which normally carries very high penalties under common law. Because we are dealing with things other than physical things which can be stolen, legislation has to be enacted to protect the rights of people. We may argue about this, but I believe that it is extremely important for us to understand two things. In the first place we should understand that South Africa is a member of the Berne Convention, that we have to meet our international obligations, and that it is essential in general terms that the image of South Africa, as far as all its obligations in terms of all conventions and contracts are concerned, be beyond suspicion. I do not think any member can argue with me in this regard. In the second place we should have regard to the fact that the majority of films shown for gain in South Africa, are imported films, the copyright in which is in the hands of overseas people. Moreover, these often are films which are sold by an author to a distributor, who is also overseas. We should have regard to the fact that it is virtually impossible to obtain convictions in this regard without pushing up the costs of prosecutions phenomenally. If hon. members would only look at the prosecutions in this regard and see how difficult these are, they would realize that we obviously have to depart here from the normal legal rule as regards where the onus for proving guilt is to lie, for it is within the knowledge of the person against whom the presumption operates, to prove that his was not an infringing copy. Secondly, we must increase the fines drastically, and in this regard hon. members will concede, if they agree with my basic statement, viz. that we are dealing here with the theft of rights, that a fine of R4 is not in keeping with the crime.

Finally, this onus should also serve as a deterrent to the people who operate it in this way as far these things are concerned. I just want to add that this is not the final word on this matter. I have already received very strong representations for the establishment of a central register of all films produced locally in which copyright rests, which register is to include imported films. In that case the presumption provision will fall away because it will be an easy matter to prove in whom the copyright nests. I shall, therefore, consider this matter during the recess. I have already instructed the Registrar of Copyright to report to me on the matter of a register which if it is a practical exercise will possibly render these measures superfluous.

Motion agreed to.

Bill read a Second Time.

Committee Stage

Clause 2:

Mr. Chairman, it sometimes happens that the hon. the Minister and I do not agree so perhaps I should take advantage of this opportunity to say that I agree with him in large measure in regard to his purpose in putting clause 2 into this Bill. It is a fact that the Copyright Convention of Berne, which is a kind of safeguard against international theft —because breach of copyright is a kind of theft-—suffers perhaps some of its most flagrant breaches, some of its greatest damage, right here in South Africa. We must give the Berne International Convention on Copyright our fullest support, but we do not have adequate curbs and adequate measures to ensure that these breaches do not take place. It is right that South Africa should meet its commitments in respect of this convention. Failing its ability to meet these commitments, South Africa itself may suffer damage in its right to international copyright.

The second point I want to make is that breach of copyright can be a highly profitable business. The hon. member for Johannesburg North has asked why the penalty should be so high. This can be a multimillion rand business because these copyright productions are made at enormous expense and if they are copied without regard to copyright by the very efficient means of reproduction which are now available, it will be possible at very little cost and with the minimum of trouble to make vast profits out of such theft of other people’s rights. I believe it is justifiable and right that South Africa should provide for the protection of copyright in this country.

The only other question which arises in this clause is, of course, the question of presumption. During the sitting of the Commission on the Publications Bill it was shown, I think to the satisfaction of everyone, that it is not very easily possible to trace the evil-doer, the person who is in fact responsible for the breach of copy right. These films are not as easily available as books in libraries are where they can be opened and read. In order to view a film which is sometimes stored under false or misleading labels, it is necessary to view the entire film which has to be shown at a certain, steady pace. If it is not shown at a regular pace it is not intelligible at all. Therefore, if one comes across a dealer in breach of copyright films it is necessary to go through his entire range, which might occupy some thousands of hours, in order to identify those films which are in breach of copyright. The only resort of the Police who control the question of breach of copyright is in fact to identify the person who is showing a film at any particular time for commercial gain to a particular audience. They have to put the onus on him and obviously allow him to discharge that onus and to prove where he obtained that film. Unless the onus is placed on the commercial exhibitor in the first place …

The possessor.

Indeed. Unless this is done, it is not possible to trace the breach of copyright back to its source. This, I understand, is the reason for placing the onus on the exhibitor for commercial gain, and in view of these circumstances we support this clause.

Mr. Chairman, I am afraid that I still have some difficulty with clause 2. As I understand it the possession by an innocent party will not constitute an offence, but if something comes innocently into the possession of an individual we will have great difficulty with clause 2 where the presumption or the onus of proof is shifted. However, it may well be that I have missed something, in which case may I ask the hon. the Minister to confirm it. The clause now states “If in any action brought by virtue of this Chapter it is proved that a particular article is an infringing copy and that it was in the possession or under the control of a particular person at any time, that person shall be presumed to have known …” If we are after getting at the middleman, so to speak, or a person who involves innocent parties by hiring out a film or by selling a book or the various other things which are set out in the Act as being an infringing copy, that is one thing, but as I understand it that is not what the law says at the present moment. I think the hon. member for Yeoville, to clarify this issue, will ask the hon. the Minister whether he will accept an amendment stating that “in the possession or under the control” will relate to purposes of gain or purposes of trade. If we understand the hon. the Minister correctly e introduction of those words, which are not in the act, would not render mere possession, which at the moment does constitute an offence. He should therefore have no problems with such an amendment.

Mr. Chairman, in the first instance, I think we must clarify a number of points. There is agreement in regard to the necessity to stamp out infringements of copyright. There is agreement in regard to the concept that when you take away a man’s copyright you are probably committing something equivalent to a theft. The problem we have is that there are literally thousands of ordinary individuals who are in possession of films which they obtained from dealers and in respect of which they cannot check whether in fact the dealer has or has not the right in respect of copyright to be in possession of these films. They cannot be expected to check whether this is so or not. The hon. member for Von Brandis made the point that you cannot expect the Police to go and search through thousands of films. He said that what they must do is to go to the person who exhibits it and from that person they can obtain the information as to where the infringing copy comes from. I agree with the hon. member completely, but that information can be obtained without making that individual presumed to be guilty of an offence. There is already machinery available to obtain that information from him. In terms of the Criminal Procedure Act, if a person does not give this information voluntarily he can be brought before a magistrate.

What about receiving stolen property?

I concede that in respect of receiving stolen property there is a presumption in the Criminal Procedure Act, but this is a completely different set of circumstances. Here you can obtain from the private person the information in this regard. In regard to the trader, we concede that the position may be completely different. The trader is not able to say: “I innocently hired this for tonight to show it at my home.” That is quite a different set of circumstances. We believe that the many thousands of ordinary members of the public, who do not inquire when they go to a shop to hire a film, should not be made, by a presumption, guilty of an offence. For that reason I would like to move the following amendment—

for the purpose of trade

Mr. Chairman, I am sure you will allow me to address a personal remark to the hon. member for Von Brandis, because any opportunity for making friends is a good opportunity. I thank him for his support of the clause. I am not able to motivate the matter any better than he has done, because the basic reasons for (a) the creation of the presumption and (b) the increases in the penalty clause, are essentially as presented by him. Apparently the hon. member for Yeoville confined himself to the Bill only and did not consult the Act itself. If he were to look at section 14 of the Act, he would find a reference to the infringement of copyright in an existing film. In the light of the Act his amendment is completely superfluous.

†With due respect, it is completely superfluous. If a film is not shown for gain, there is no infringement. The provision does not then apply. To now qualify the subsection by inserting “if for gain” is merely to introduce into this section a provision which already exists in section 14 of the Act.

*There should not be the slightest doubt in this regard. If we were to refer to section 2, the presumption would become operative only after something else had been proved, viz. that the copy concerned was an infringing copy.

†Only once that has been proven, in civil and criminal cases, does the presumption operate. The presumption assumes that the possessor was aware, at the time that the copy came in his possession, that it was an infringing copy. It is also the easiest thing in the world to discharge that presumption. The person concerned can merely state that he received or hired the copy from a certain distributor, having done so innocently. The matter would then rest there and that person would then be involved in an action. It is completely impossible, however, to apply the law under the present circumstances. Take my word for it, the penalties prescribed at the moment are no deterrent. Therefore I suggest that the amendment is superfluous. The principles remain.

Mr. Chairman, I briefly want to deal with the one point made by the hon. the Minister. The amendment to section 21 overrides the provisions of section 14, and I regret to say that I believe that the hon. the Minister is mistaken. I have section 14 in front of me, and a look at it will show that the provision would apply even if the person in possession of the film was not a trader. He would still have to discharge the onus. This is the difficulty we have. Our difficulty is that one can find a completely innocent person being in possession of the film. There is already a procedure in our law in terms of which people can be made to give information which is required for the purpose of a prosecution. It is not necessary to make them guilty of an offence by a presumption to obtain that information from them.

Sir, it is a complete misrepresentation to say that a man is found guilty by a presumption. Surely he is not found guilty by a presumption; it is the onus that shifts.

†This is a rebuttable presumption, not an irrebuttable one, and to contend that a man is convicted by a presumption is completely unjustified.

Amendment negatived (Progressive Party and Reform Party dissenting).

Clause agreed to.

House Resumed:

Bill reported without amendment.

Third Reading

Mr. Speaker, I move subject to Standing Order No. 49—

Agreed to.

Bill read a Third Time.

Mr. Chairman, I move the amendment as printed in my name—

Sir, because of the fact that this matter has been before a Select Committee and because the proceedings of that Select Committee apply to all the remaining amendments on the Order Paper, I wonder if I might state the case for all the amendments at this stage in so far as they overlap. The Committee will know, Sir, that this matter passed through the Second Reading without opposition, but thereafter a petition in opposition was filed in relation to this matter which in terms of the rules required it to be sent to a Select Committee, which was duly done. That Select Committee reported in a Blue Book which is before this House (S.C. 13/1975), and it will appear from that report of the Select Committee that the proposers of this Private Bill, i.e. the Church of the Province of South Africa, and the opponents of the measure, the Church of England in South Africa, both appeared before the Select Committee, legally represented. It will also appear from the report that fortunately the two parties, the proposers and the opponents, had met prior to the sitting of the Select Committee and had settled the differences of opinion between them in the form of a written agreement which is Annexure C to the Blue Book. I may say, just for the information of the Committee, that that disagreement arose almost entirely out of different interpretations both of the amending Bill and of the original Act. Each side interpreted some of the measures in a different way, and it was to overcome that difference in interpretation that the agreement was entered into. Sir, I have taken the liberty of dealing with this at perhaps greater length than would normally be the case, because I understand that this is the first opposed Private Bill since 1967 and only the second opposed Private Bill under the new rules which were introduced in 1966.

As I have said, the effect of the agreement between the parties is merely to make clear what was always intended by the promoters of the Bill itself, and that being so, I do not think it is necessary for me to elaborate on the amendment in clause 2 to any greater extent.

Amendment agreed to.

Clause, as amended, agreed to.

New clauses to follow clause 9:

Mr. Chairman, I move the new clauses 10 and 11 as they stand on the Order Paper—

1. 10. The Central Trustees of the Church of England in South Africa are hereby declared to be the Trustees of the proceeds of Lot 80, Burger Street, situate in the City and County of Pietermaritzburg, Province of Natal, with the powers possessed by them from time to time in terms of the Constitution, Canons and Trust Deed of the Church of England in South Africa, and for the benefit of the Church of England in South Africa: Provided that in their administration thereof, the said Central Trustees shall observe and fulfil the special condition contained in Deed of Transfer No. 80 of 1883, dated 26th January, 1883.
2. 11. The Central Trustees of the Church of England in South Africa are hereby declared to be the Trustees of the Remainder of Lot 26A, Block Tiles of the Town Lands of the Borough of Durban, No. 1737, held under Deed of Transfer No. 2436 of 1928, dated 12th June, 1928, with the same powers in respect thereof as were conferred upon the Curators of the Church of England Properties in Natal under the Order made by the Natal Provincial Division of the Supreme Court of South Africa in Case No. M.436 of 1973 on 13th February. 1974.

This of course will have the effect of renumbering clause 9 and putting it lower down in the Bill. I take it, Sir, that this is the proper stage for me to deal with the new clauses 10 and 11. Those clauses, 10 and 11, merely establish what the promoters of the Bill have believed to be the position throughout the piece. They vest in the central trustees of the Church of England in South Africa certain properties and the proceeds of certain properties to which the promoters of the Bill never had any claim at any time. As I have said, without elaborating upon it any further, this merely clarifies what it was intended should be the position from the beginning.

New clauses agreed to.

The Preamble:

Mr. Chairman, this amendment which I move as it stands on the Order Paper is—

I think it is right that I should say that what is now sought to be omitted was never included in the original draft by those who drafted the Bill on behalf of the Church of the Province. It was a paragraph inserted by the law adviser to this House, who believed that the Preamble was incomplete without this particular paragraph. It was never our intention that it should be there, and when it was objected to by the opponents of the Bill we had no difficulty whatever in agreeing that it should be deleted. That has been accepted by the authorities of this House.

Amendment agreed to.

Preamble, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Report State taken without debate.

Bill read a Third Time.

Mr. Chairman, may I have the privilege of the half hour? I read in the Press that the hon. the Minister of Agriculture opened a wine show recently. On such occasions the hon. the Minister usually displays imagination in the remarks he makes. However, I was astonished to see the hon. gentleman conclude his opening address in an extremely exuberant and, one could almost say, dramatic way by saying, “Go, man, go! ” (“Laat waai, Meraai! ”) The hon. the Minister used those words to urge everyone on to greater efforts in agriculture. What we must investigate today on this occasion is not merely whether the farmers of South Africa have been told to produce, but also whether these Votes provide an answer to that appeal adressed to the farmers of South Africa by the hon. gentleman. I do not want to differ with the hon. the Minister in regard to asking the farmers of South Africa to continue to increase their production. We fully discussed that matter here earlier this year, when we said that we regarded it as being in the interests of South Africa and of detente that we should not only meet the requirements of our own country, but that we should produce enough to export, particularly to African countries which are perhaps not able to provide sufficient for their own needs. I do not, therefore, want to differ with the hon. gentleman in regard to the appeal he addressed to the farmers of South Africa on that occasion and in that way. However I must ask what the hon. the Minister himself is doing to get things going (“dinge te laat waai”), to use his own words. I want to say that the farmers of South Africa can only produce if the authorities are prepared to grasp their problems and provide the necessary assistance. The farmer’s approach is usually a very simple one, namely, “I am on the land; that is my life’s task. But give me the necessary equipment in the form of a reasonable price for my product, relatively stable prices that keep pace with the rise in the costs of production; then I shall produce as never before.” If the necessary financing facilities are available too, the farmer will give of his best. When that ideal situation prevails, the necessary labour, which is becoming more and more of a bottle-neck in the industry nowadays will be attracted back to the industry, too, because the agriculturist will then be in the position to pay for the services rendered to him. This simple statement must be implemented in practice in agriculture in order to encourage the producer in South, Africa. That is why pious thoughts about the importance of the Agricultural industry are unnecessary under these circumstances.

We have to look at this year’s budget in order to determine whether there will be necessary encouragement for the farmer this year. There has been a vast increase in the overall budget, but looking at the Agricultural Economics and Marketing Vote, we find that the amount voted has been increased by only about R3 million. In the case of the subsidy on wheat, we find that there is an increase of approximately R5,6 million in the amount voted. In the case of the subsidy on fertilizer, there is an increase of only R2 million in the amount voted, but we must take into account the fact that there has been an increase of 40% in the price of fertilizer in the course of one year. In the case of the subsidy on maize there has been an increase of less than R1 million in the amount voted. I know that additional amounts will be allocated for the Stabilization Fund by way of the Supplementary Estimate.

The subsidies are consumer subsidies, of course.

Yes, that is so. In the case of dairy products, the amount voted for the previous year was R14 million; this year it is only R8,9 million.

That has to do with the subsidy on butter.

Yes, but nevertheless it is a form of encouragement to the farmer.

I now come to Loan Vote C—Agricultural Credit and Land Tenure, and here and now I want to put a few questions to the hon. the Minister. The amount voted under subhead 1—Assistance to farmers—amounts to only R15 805 000 whereas the amount voted under subhead 2—Purchase of land and/or improvements—amounts to R16 550 000. In the case of these two subheads there is a net reduction this year of about R15 million, in comparison with the amounts voted last year. We all know what “assistance for farmers” means. Sections 10 and 11 of the Act concerned deal with this. We know, too, what “purchase of land” involves, and consequently I do not want to go into that now. I want to ask the hon. the Minister why there should be such a substantial reduction in the amount voted under these two subheads. If it is true that the conditions for farmers in South Africa have improved so considerably, it could be asked whether the farmers might not demand more assistance this year than they enjoyed previously in terms of the sections I have just mentioned. I want to ask the hon. gentleman whether these reduced amounts are an indication that in the view of the Government, this industry has now become less important. I want to mention another example and focus attention once more on the point I have already made. It is pointless for us to say that the farmers must produce, whereas at the same time, when it comes to the push and the hon. the Minister has to act, there is failure. I want to take the maize industry as an example.

What do you know about the maize industry?

Anyone can read, study and find out about a certain industry. One need not be active in an industry oneself to know what is going on in it. I want to tell the hon. the Minister that the South African industry is undoubtedly one of our best earners of foreign exchange. Apart from local industry, we shall have maize surpluses to export for years to come. Recently I read that an authority in this field is of the opinion that in the year 2000 we shall still be in a position to export surplus maize.

Whereas the maize farmer’s production costs have increased by 25% the price he receives has been increased by a mere 12%. The Stabalization Fund is being used to subsidize the price of maize by R3, so that the consumer need eventually pay only 6% more than the people out of the maize industry, something which will in fact happen if the producer price is not adjusted to keep pace with the increase in production costs. I do not want to quote the full statement issued to the House by the Maize Board; I do not believe it is necessary to do so since hon. members on the other side of the House are aware of its contents.

Do they agree with it?

Whether they agree with it or not is going to be the interesting question. Originally, the Maize Board requested a price of R60 per ton and this was submitted to the Cabinet. However, the hon. the Minister told them that he was sorry, but that the Cabinet was not prepared to approve that price and that the Cabinet had fresh proposals. Eventually the Maize Board told the hon. the Minister that they were not prepared to accept the Cabinet’s proposals. The Maize Board requested R60 per ton and eventuality was decided that the price would be R56 per ton. I want to ask the hon. the Minister whether the Cabinet originally proposed a price of less than R56?

No.

If the hon. the Minister’s reply is “no”, then I accept that. There is another question which I want to ask the hon. the Minister. If the control board of a particular industry has an intimate knowledge of that industry— and hon. members must bear in mind that the maize farmers are dissatisfied with their control board’s evaluation of production costs and the eventual price of the product —and it asks for an amount of R60 per ton, how is it possible for the Cabinet to award only R56 per ton? When this happens, surely one must expect that the maize farmers of South Africa to be dissatisfied. As. I have indicated, these people had a 25% increase in production costs over the past year, whereas they were given a price increase of only about 12%. If we do not adjust the prices properly for those whom we want to encourage to produce, we are going to have a situation where people will no longer be interested in that industry. South Africa must not be placed in a position of having to try to obtain, at great expense, a staple product like maize from elsewhere in the future. I wonder whether it would cost the South African consumer less than R12 per sack if maize were to be imported from elsewhere. The hon. the Minister is co-responsible with his colleagues in the Cabinet for this. I simply cannot imagine that when this was the situation, his colleagues in the Cabinet, and the Minister of Finance in particular, were unable to assist him in this matter. I do not want to lay all the blame on the hon. the Minister of Agriculture, because he himself is a practical farmer and I do not need to tell him and quote to him the figures indicating what an enormous increase there has been in production costs in South. Africa. Perhaps I will, in fact, quote the figures to the House later in order to prove certain other matters. It is the responsibility of this hon. Minister to ensure that South Africa will have the necessary food. We know this, and his department states as much in its report. This is very clearly stated in the report of the Secretary for Agricultural Economics. At the very beginning they state—

When, despite the fact that that is being said, we nevertheless have to encourage the production of essential foodstuffs, then the responsibility of the State and that of the Cabinet becomes even greater. I want to maintain that the hon. the Minister of Agriculture has been left in the lurch by his colleagues in the Cabinet in this regard. I cannot imagine for a moment that he, as the responsible Minister, would recommend to the Cabinet that the maize farmer be given a price lower than that which the Maize Board itself requested. The farmer who produces grain, in particular, is at the mercy of the man who provides him with services. He has no control over the production costs, and when it comes to determining the price of his own products— this, again, applies in regard to maize then it seems to me that he has very little say in the eventual determination of the price of his products, either. The standpoint of this side of the House is very clear and has been put on record. It forms part of our agricultural policy and we have stated repeatedly in the House that if the Government is obliged to encourage the production of basic products such as staple foods, in particular, then it should do so irrespective of the cost. However, this must be done in such a way that the farmer is encouraged and at the same time the consumer in South Africa is projected. This was an opportunity for the Government, but as was the case last year when the price of bread was increased and the Government did not see its way clear to granting a wheat subsidy, I believe that in the case of maize, this time it will in fact be the maize farmer himself who will have to pay large amounts out of his own pocket to assist in stabilizing the price for the consumer and subsidizing it in that way. However, when the farmer wanted a price which could provide him with a decent return as an entrepreneur, the Cabinet definitely failed. It is wrong that the Cabinet should have taken a decision on a matter of this nature which did not correspond with that of the Maize Board. I want to maintain that if the maize farmers had not received a deferred payment of 50 cents, which is theirs, after all, their position would undoubtedly have been critical under present circumstances. We are saddled with a precisely similar problem today, with just as ticklish a problem, in the case of our dairy industry, particularly as regards the production of fresh milk. The number of dairy farmers has dropped from 74 000 to 58 000 over a period of only six years from 1968. We find that over a period of less than six years, the number of dairy farmers in South Africa has dropped by about 16 000.

Why?

I shall tell why. One of the reasons is the fact that when the dairy farmers asked that prices be adjusted, their request was not acceded to at an early stage. Another reason for dairy production, particularly the production of fresh milk, being too low, is that it was more to the farmer’s advantage to enter the meat industry. It is calculated that by 1980 we shall need at least 1 million milchcows in this country producing at least 5 000 kg of milk per lactation. When one considers what will be needed over the next five years, one has to ask oneself whether the Government is aware of this and whether the hon. the Minister is sufficiently aware of it and whether he is doing enough, apart from the 21% increase for fresh milk and the increase of about 25% for industrial milk which he has granted, to encourage the producer to enter this industry.

The hon. the Minister must be prepared to take his hat in his hand and tell the people of this country that predictions indicate that we shall require a certain amount over the next five or 20 years and that the people must already be prepared to make those sacrifices at this stage. We must encourage people now to increase arid improve their livestock to such an extent that we shall be in a position to produce the necessary amount. The Government must not try and create a consumer resistance. We on this side of the House know that this is the Minister’s dilemma. To a large extent this will always be the authorities’ dilemma, viz. to encourage the producer, but at the same time to assist the consumer. How often has it not been requested that a consumer subsidy on fresh milk, for example, be paid?

I read that Mr. Koos Blanckenberg, the chairman of the Milk Board, said recently that a subsidy had become necessary. I read, too, that Mr. Marais, the secretary or manager of the board, requests that a subsidy be paid on milk. Why cannot this be done? The hon. gentleman maintains that because there are large areas in South Africa where control of fresh milk is not exercised, there would have to be differentiation in respect of the platteland and the non-White areas—where a subsidy is extremely necessary—and a subsidy could only be awarded in respect of urban areas. If there has to be a difference between the city and the platteland, then that is a pity.

However, the need is just as urgent in the urban areas, where there are thousands of people who do not enjoy a very high standard of living. They do not earn high salaries and wages. Let us, therefore, start with them. After all, there is a consumer subsidy on butter, which applies everywhere, on the platteland and in cities. Consequently there is a precedent for this. I understand that there are milk subsidies in many overseas countries. Why, then, are they in a position to do this, whereas we here in South Africa are unable to do it.

It is the Opposition’s policy that subsidies be paid on fresh milk in the urban areas and not in areas such as Sibasa or Mafeking? Is that their standpoint?

Initially a distinction may be drawn in order to launch the scheme. However, I am convinced that the scheme could also be extended.

Hear, hear!

The hon. member behind me here will explain to the hon. Minister shortly how this can be done. I want to ask him in a very friendly way to give this matter serious consideration because one cannot reason away the fact that essential protein foods such as milk and other dairy products form an important part of our diet. In particular it protects us against the onslaught of disease. It would be preferable if we were to take the necessary precautionary measures and incur the necessary expenditure rather than to allow the health of all the people of our country—I am referring to White and Black—to suffer as a result of their lacking an adequate daily intake of protein food.

Hear, hear!

That is why I want to insist that the hon. the Minister give this matter serious consideration.

There are a few other matters which I should also like to mention to the hon. gentleman. I should like to discuss with him the issue of Bantu labour and the enormous expense involved in mechanization. I also want to mention the fact that there is going to be an increasing shortage of trained non-White labour on our farms. It is generally recognized that we in South Africa will not be able to expand our agricultural production much further horizontally. It is stated that only a further 25% of our land can be developed horizontally. Evidently, however, this is land of a low quality. Consequently we shall have to do progressively more to expand our agricultural production on a vertical basis. In order to do so, one will undoubtedly have to mechanize to an increasing extent and will have to have an increasing number of trained people. Combines and tractors are becoming progressively bigger and more important. They are also becoming more and more expensive, fantastically expensive, if truth be told.

We cannot, therefore, allow untrained people to operate that machinery. We know that courses are being offered everywhere and that the farmers themselves are doing a great deal, but, Sir, we shall have to redouble these efforts, because we are going to have less and less labour for our farms. That is why our farmers will have to be well-trained individuals of high standing in order to make a decent living on our farms. Sir, it is unnecessary for me to quote all the figures here. The hon. the Minister has his own department’s report before him, and he has agricultural documents; he knows how the index figure for agricultural implements and tractors, etc., has risen over the past year. Nor does it seem that there is going to be any drop in prices. These prices will continue to rise. If we want to utilize implements of this kind and highly specialized services, we shall have to have the right people to operate those implements and that machinery. [Time expired.]

Sir, the hon. member for Newton Park began with the story of “Go, man, go!” (Laat waai, Meraai), and it is very clear that he did “go”. He covered a wide field in this debate. He spoke for the consumer and for the farmer, but when he was finished, he had still made no suggestions, he had not told us what should in fact be done to solve our problem. Sir, unfortunately the time at my disposal is very limited, and therefore I cannot devote too much attention to the hon. member’s speech, but I am convinced that my colleagues, who will follow me, and the hon. the Minister, will reply to the questions which he put here.

This afternoon I should like to break a lance for our farmers and try to put agriculture into perspective for those who do not have appreciation for agriculture. Since the original settlement was founded 3¼ centuries ago, agriculture has been a primary facet in the South African national economy. Until the beginning of the development of the mines, the agricultural industry was the dominant factor in our country’s economy. Its relative contribution to the gross national product has declined as commerce and industry has developed side by side with mining. Obviously, the share of agriculture in the gross national product has declined relatively, to the present one-tenth share, which is a very welcome and encouraging development of a sophisticated and balanced national economy, as we have seen this developing in South Africa over the past quarter of a century. But, Sir, agriculture in South Africa has not lost its importance as a result of that. On the contrary, with the tremendous increase in the world population, food as an irreplaceable primary need of man, has increased in importance spectacularly. There is a daily increase of plus-minus 200 000 mouths which have to be fed, in other words, 70 million people per annum. We have only 24 or 25 million people in this country. It will take three times the South African effort to be able to feed these 70 million mouths that are added each year. Sir, this situation arouses in the minds of many thinkers a Doomsday image of future hunger and misery. In truth, it cannot leave those responsible for the provision of food unmoved or indifferent. Although South Africa is in a relatively favourable position because the South African farmer is succeeding in feeding our own people well, the farmer also has a very real share in the ever-expanding export trade of South Africa. Consequently we have a reserve potential for our rapidly growing population, but the nature of our fluctuating climate, the limited agricultural land potential, the bottleneck in respect of the limited water resources of the Republic, the inevitably rising prices outside our borders which bring about scarcity, are going to make the pressure as regards food, over shorter or longer periods, more clearly felt by the South African consumer in future than has been the case in the past. There is no doubt that our food will become more expensive in the future. Scarcity creates a demand and a demand creates rising prices. We can accept that the general tendency indicates that the farmer considers the future prospects for his industry to be favourable. But these favourable prospects are dimmed by the sharply rising costs of the means of production and the consequent decline in the net profit of the farmer. I want to illustrate this to you, Sir. We have here the survey which the hon. the Minister of Finance placed at our disposal together with the Budget, and there we read on page 25—

But that is not yet all. In the long term there was a steady increase, but what has it been in the past 15 months? From October 1973 to December 1974 the price of agricultural produce has risen by 16 points on the index scale, while farming requisites, together with the material for permanent improvements and machinery, equipment and implements, has risen over the same 15 months by 35,5%. Here we have a real problem which dim the prospects for agriculture a little. If the risk factor of farming enterprises is correctly estimated and taken into account, it has a considerably adverse effect on the favourable financial position of the farmers. We have had two good years, and I hope that we shall have a third. If we analyse the interdependence of the agricultural industry and other sectors, such as finance and trade, especially in the rural areas, and the industrial and communications sectors, we come to the conclusion that agriculture, with its almost 30% contribution to the economic activity of South Africa and to our national economy, together with its primary nature, is in essence fundamental to the entire socio-economic structure of the Republic. Agriculture is a very important facet of this structure. This interdependence will increase in future. The best and most fertile land is already being occupied and utilized, and only by means of increased turnover will we be able to include our poorer land in order to increase production. What is the conclusion of the 70 economists of the Club of Rome? Because the world’s best land is already being cultivated, food production can only be increased by utilizing tractors, fertilizers and insecticides, which are all industrial products. Therefore, we are very closely linked to one another and we cannot separate the agricultural sector from the other sectors.

From the above survey of the importance of the agricultural industry in South Africa, it should be clear to hon. members that I am advocating to them, as representatives of all sectors of the national economy and from all parts of the country, that a much more realistic and sympathetic approach be shown in respect of the agricultural industry, because an antagonistic division between urban and rural areas could undoubtedly constitute serious dangers to the country. By the nature of our location, there is tremendous ignorance of one another’s circumstances, our problems and needs, of what we demand from life, our working circumstances and such things as expenditure, and so on. By the nature of our respective locations, a wide gulf already exists between the farmer and the urban-dweller. This gives rise to misunderstanding and makes an appreciation of one another almost impossible. This is often contributed to in this House and by the Press which interprets what is said here. By the nature of our location norms and approach to life of the farmer and the urban-dweller, and even their outlook on life, are different. I saw a very interesting article in The Argus, written by Mr. Lewis Blom. He had previously written an interesting article on Blommetjie, the cow which they milked at Muldersvlei, an article which I enjoyed very much, and I also appreciated his very positive approach to the problem. But when the newspaper thinks that Blommetjie is a sex symbol, then I must say that we really differ a great deal from each other. As I have already said, there is a great difference in our respective views because of the nature of our location. Often the interests of the two groups are not identical; in fact, they cannot be. Often they are competitive and very often conflicting as well, especially when it comes to prices. In the heat of the political struggle the temptation to exploit these sentiments is very great. However, I want to tell hon. members that if the national interest enjoys any priority among them, then they can make a contribution in this field. I should like to spell this out for the hon. member for Pietermaritzburg South. If hon. members should perhaps take this amiss of me, in the spirit in which the hon. member for Newton Park said of me a few years ago that I should like agriculture to be kept out of the political arena, it must be accepted that I do not mean by that that there should be restrictions on criticism of the Government, of the Minister of Agriculture or of the department. I want to give an example …

Order! The hon. member’s time has expired.

Mr. Chairman, I am rising to give the hon. the Deputy Minister a chance to complete his speech.

Mr. Chairman, I appreciate the courtesy of the hon. member. We should not like criticism of agriculture to exceed the limits which are imposed for another producer, viz. mining. I think that it is only fair to do this. If the price of gold soars, we all cheer. If its price soars from 42 dollars to 170 dollars per fine ounce, then we are all very pleased. When our shares increase in value, all South Africans cheer, but when the same thing happens in agriculture, we are criticized. If the price of meat, for example, increases by 220%—and we must remember that the price of gold has increased by 400%—then this is intolerable and everyone takes part in a campaign to denounce agriculture. I feel that the farmer is not being fairly treated in this respect. We need the support of the Opposition to rectify these matters. The economic laws which govern agriculture, are different from the ordinary economic laws. We must point out these differences to people, so that they can gain a better understanding of agriculture. What is more, we sometimes play politics with a will, but the same inflationary factors which play a role in mining, also play a role in agriculture. There is only one minor difference and this is that the level of mining is that of the “haves”, while agriculture is that of “haves” and of the “have-nots”. Possibly that is the only difference. Basically the position is exactly the same, because both are primary producers. I do not hold it against the public, because often they are not informed, but I definitely hold it against hon. members on the opposite side of the House when they often distort things and mislead the public by doing so.

No, you are wrong.

Am I wrong? Let me tell the hon. member then what the hon. member for Pietermaritzburg South said a few years ago. I have his Hansard here in which he said—

Do hon. members not think that that is misleading? It is most seriously misleading.

The facts are completely true.

I have obtained an excellent analysis from the domestic scientists which I should just like to give to the hon. member. Let us consider the needs of a child between the age of 7 and 10. Such a child requires 2 400 calories of fuel. Of that, milk contains 28% and cool drink 17%. Then there are proteins, of which the child needs 36 g. Milk meets the needs of a child completely in this respect. Cool drink, on the other hand, has no protein at all. The child also needs 800 mg of calcium. Milk provides 152% of that, in other words, more than is necessary.

That is precisely the point.

Wait a minute. Cool drink contains no calcium. Milk, to a certain extent, also provides the vitamins which the child needs. Mr. Chairman, do you realize that the total nutritional value of cool drink is less than the sugar content of milk? Yet the hon. member comes here and compares the prices of the two. I want to state specifically that no comparison can be made. If we are to judge according to the nutritional value of these two products, milk ought to cost at least R1 or even more. If the hon. member was not misleading the public with that comparison, if the hon. member was not moving in the shadowy regions of the truth there, I do not know what else he was doing. There is no doubt that we must rectify this matter and that hon. members, when they conduct a debate here, must do so without attaching intonations which are not relevant.

It is not only necessary that we get our priorities straight; we must also accept our responsibilities and duties. We must not simply play politics with agriculture. Yesterday evening I was at my mother’s 80th birthday party. I attach great value to what my mother taught me. When we were children she told us, “Do not play around with your food.” I want to repeat specifically today that one does not play around with food. Agriculture produces food, and therefore we must not play around with agriculture. I do not want the hon. member to play politics when we are dealing with agriculture. He must ensure that he has his facts straight; that is absolutely essential.

All of us are certainly concerned about the tremendous price increases. But it would surely be very naïve to seek all solutions in subsidies. The hon. member for Newton Park referred to that. I cannot see how subsidies can be the only solution. After all, subsidies only mean one thing, viz. that we must have higher taxation to be able to pay higher subsidies. When he asks for the subsidies, he must also tell us how we must find the necessary money for that. He must not separate the two from each other. The simple truth is that the money must come from somewhere.

There is something else about which I am concerned, and I am convinced that all of you share that concern with me. I refer to the squeeze of inflation. I can almost predict that the hon. member for Pietermaritzburg South is going to refer to “the poor housewife” again in this debate. He is going to single her out again. What right has he to do so? It is only a cliché which he uses. He refers to “the poor housewife” and the newspapers take up the refrain, and then he becomes the hero of many women who do not think. I can tell you that the farmers’ wives, as well as the wives of Nationalists do think. They will judge the hon. member according to his worth; there is no doubt about that.

Mr. Chairman, may I put a question to the hon. the Deputy Minister?

Sir, I have very little time. The hon. member can see that I am already in a hurry. If I had had more time, I would have spoken calmly to him. It is purely because of the time factor that I am not doing so.

Do not be calm; give it to him.

The pensioners, the wage-earners—everyone—are suffering under inflation, and we have great sympathy for them, but does the poor farmer not feel the squeeze of inflation as much? He finds himself in exactly the same position. Why must we then separate these groups from each other? When one reads the newspapers, it is simply dreadful to see how the poor consumer is suffering, but who is the consumer? I should like to say a few words about that. I want to suggest that the consumer and the producer are all too often the same person. These two words have a clear meaning. I want to adopt the standpoint that a producer is certainly nobody else but a person who earns a wage —I am not referring to those who do not work. In other words, everyone who earns a wage is also a producer; otherwise he does not earn his wage. Everyone who earns his bread by the sweat of his brow, is a producer. Everyone who uses his wage to buy the fruits of someone else’s labour, is a consumer. We who are sitting here on the green benches are surely producer’s too, for why then are we being paid a wage? There is no doubt about this. If I look at the soft i hands which manipulate pens and cause the daily newspapers to appear with fine headlines, I must ask whether those hands are only the hands of consumers, or also those of producers. I can give the assurance that if those hands do not produce so that the newspapers can appear in the streets, the journalists will not be able to be consumers the next day. There is no doubt about that either. When we look at the farmer and take his position into consideration, he is also a consumer, perhaps a very large consumer, because he is an entrepreneur who employs people. He is someone who has to acquire machinery and keep implements. There are many people who have to provide services for him, and there can be no doubt that he is one of the large consumers. Why are complaints only raised about the position of the housewife, and is it said in the same breath that ore should not play politics with agriculture? If the hon. members were only to make that same warm plea on behalf of agriculture, there would be far greater understanding for the problems of agriculture. The consumer would then also evince a greater understanding of and show gratitude to the people who have to sweat and slave and brave the elements while other people earn their living under easier circumstances. Then there will definitely be appreciation for our farmers.

Mr. Chairman, I have listened to the very eloquent plea by the hon. the Deputy Minister for agriculture to be regarded as a very special case. I should like to say to him that a lot of people have the same problems. A lot of people are big users. People in the manufacturing industry also run into trouble and are criticized when they raise their prices. People in the transport industry find themselves in the same position. I have the utmost sympathy for the farmers and their problems, but, with respect, agriculture is not a sacred cow even though when one looks at milk prices one is inclined to think that every litre of the milk comes from sacred cows. [Interjections.]

This afternoon I want to raise again the unpleasant matter of food prices with the hon. the Minister and the hon. the Deputy Minister. I have heard from the hon. the Deputy Minister that it is wrong to plead only the case of the housewife, but, believe me there are many housewives, including farmers’ wives, and many of them are very upset about food prices. In the discussion we are having this afternoon, I am not only going to discuss the question of farmers. I am going to talk about all people in South Africa who are users of agricultural produce and who are people who eat. This is the important aspect. The criticism I have is that there seems to be absolutely no sense of urgency in the whole approach to the problem of food prices, but in the meantime the people in South Africa are being subjected to food prices which are rocketing daily to absolutely unbelievable levels. Poor people of all colours in South Africa are suffering a great deal of hardship. People with low incomes, pensioners and people who live below the poverty datum line cannot make ends meet, and this is the problem with which we are faced. I want to point out again, as I have in the past, that the standard of living in South. Africa is dropping despite the higher gold price, the higher price for maize which we get in the international market and the higher prices for nearly all our exports. This should enable us to improve our standard of living. I am not prepared to listen to the usual arguments that statistics show that standards are going up. I suggest to the hon. the Minister, if he says this, to tell that story to the housewives of South. Africa who are faced every day with the problem of how to feed their families adequately. This is getting much more difficult. There is no doubt at all that people are not eating as well, and I have said it before. Milk prices, meat prices, bread prices, the price of fruit and vegetables and now butter prices—in fact, all food prices—have reached unprecedented levels.

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

I have very little time. On this occasion I only have six minutes and I still have a lot to say.

Very briefly, I want to look at the situation in regard to the price of milk. According to newspaper reports recently we in South Africa pay one of the highest prices in the world for this very basic commodity. Hon. members on the other side who are very fond of arguing our situation with carefully selected comparisons with other countries should, as far as I am concerned, take a look at this comparison for a change although I do not believe that comparisons of this sort have any real value, because conditions are always totally different. I cannot really believe that the farmers in South Africa are lacking in expertise compared with farmers in other countries. Therefore I believe that there are other reasons which make our milk so expensive. These reasons concern, firstly, the very unhappy conditions under which our dairy farmers operate Our dairy farmers operate under very unhappy conditions indeed. I believe, secondly, that there is room for criticism in regard to the complicated machinery involved in marketing from the time the milk leaves the farm till the time it gets to the table of the consumer. There is no doubt at all that conditions under which dairy farmers operate today are not satisfactory in spite of the fact that the price the farmer gets has almost doubled since 1970. Their costs are rising daily as the inflationary spiral continues. The hon. member for Newton Park has drawn attention to this. It is not the farmers I am blaming. I am blaming the hon. the Minister and this Government, because I believe that the regulations governing the production and marketing of milk are outdated and in need of revision. I would like to mention just a few matters. The gap between the industrial milk price and the fresh milk price should be done away with. According to a report in the Sunday Express of 15 May 1975, a considerable quantity of industrial milk has been supplied to various markets from time to time, for example in Johannesburg. Pretoria and Durban. Was the housewife paying less for the milk when the farmer got less for his milk? No, she was not. As far as I know, South Africa is the only country in the world who grades milk on this basis.

They also do it in Canada.

I am subject to correction. Perhaps Canada does. I do not know about that. Furthermore, co-operatives operating as a closed shop limit the number of fresh milk producers as well as the quantity of milk that can be sold at fresh milk prices. I do not believe that this encourages production because of the industrial milk prices. There is absolutely no incentive to produce more. In South Africa we have a Dairy Board and a Milk Board. Why is this? Surely this must mean duplication of efforts and frequently inefficiencies, different approaches and policies being applied to the same industry. I do not believe that the hon. the Minister and his Government are giving adequate attention to the state of the dairy industry. I believe there was a commission some five years ago which made various recommendations as to what should be done in the dairy industry, but these have not been implemented. I could, for example, ask the hon. the Minister what exactly has been done to introduce ultra high treatment milk, i.e. milk with a long shelf life, generally throughout South Africa?

Anybody can buy it off the shelf at this moment.

You might be able to buy it off the shelf today, but when I go to the supermarket I cannot. I believe something is being done, but the point I want to make to the hon. the Minister is that not enough is being done. This sort of thing could be the salvation of the dairy industry in South Africa. At the moment, farmers are leaving the dairy industry every day in spite of the increased milk prices. The situation is desperate, and the recent increases in the milk price have not put the situation right. The hon. the Minister has to realize that he has to take emergency action, because the situation is out of control. From time to time he has expressed pious hopes that the increase in the price of milk—the latest by 3 cents— will perhaps make the difference and he has raised hopes. But raised hopes are not enough. The hon. the Minister has to go further than this. He really must introduce some sort of crash programme, or emergency action, in regard to the way milk is being marketed. The marketing Commission has now been sitting for a long time. I have hopes that the hon. the Minister is going to come forward with some sort of recommendation on how milk should be marketed. Something has to be done now. To do something in a year’s time is not soon enough. I have a very short time at my disposal at present, but it is my intention to talk about the whole situation with regard to agriculture and marketing later in the debate. I do, however, believe that the situation in the dairy industry, which I have quite a lot to do with, is so serious that the hon. the Minister should be asked to spell out his intentions in detail as to what he is going to do to alleviate what can only be described as a crisis situation.

Mr. Chairman, the hon. member for Orange Grove will pardon my not reacting to his speech at once. In fact it seems to me that we both want to deal with the same subject. The dairy industry in South Africa will have to aim at a drastically raised level of efficiency in order to meet the estimated dairy shortages which may arise roundabout 1979-’80. This Statement was made by Dr. D. M. Joubert, Director of the Transvaal region, on the occasion of a symposium in Pretoria on food production. He also said, inter alia, that the solution to the production problems of the diary industry was to be found in better animals given optimum feed and care, and being kept in relatively large and economically justified herds. Expectations are that the Republic will need at least one million cows by the end of the century with an average of 5 060 kg of milk per lactation to provide for its minimum needs. The hon. member for Newton Park also made this statement. It is true that a strong and vital dairy industry is absolutely essential for high-level national development. Because of its high priority within the food situation, the dairy industry must also adjust its price structure to production costs more rapidly than most other sectors of animal production. Up to now the dairy industry in South Africa has been able to succeed in a praiseworthy way in keeping pace with the real needs of the country, and I think that this is a very great achievement in the circumstances. In the past 25 years, dairy production in the Republic has increased dramatically from 910 000 tons to 1,4 million tons in terms of milk equivalent per year. This has been done in spite of the fact that the number of dairy factories have decreased from 127 in 1947 to only 62 in 1973. At the same time, the number of dairy farmers, as has also been mentioned by the hon. member for Newton Park, has decreased from 74 000 in 1968 to 58 000 last year, while the production areas in extensive parts of the country, with their traditional field dairies and the production areas of the peri-urban dairies of bygone days, have changed into semi-intensive crop farming and grazing areas which actually demand less intensive labour.

There are various reasons for the fact that milk production has not been as desired in recent times, in spite of the fact that the Republic has had good years for the past two years. Many farmers have left the industry, as I have already indicated, and I believe that this happened because the prices of other commodities, such as meat and agricultural products, have soared. This has led to many of our farmers going over to the production of those commodities. However, our farmers know that changing over to the production of those commodities is very dangerous. Therefore, I can tell the hon. the Minister now, that in my constituency there are many farmers who have reverted to milk production in the past few months. I want to give the hon. the Minister the assurance that more and more farmers will revert to milk production as a result of the price which is now being paid for milk. I believe that we shall not have a shortage of milk in the future, because our farmers know their duty and they will do their duty in supplying our country with milk. There are many other reasons which have contributed to this state of affairs. I mention to you, inter alia, the fact that dairy farmers have the problem that their labourers have to work seven days of the week. This actually means that a labourer has to Work 24 hours per day. Labourers are no longer keen to do so today, and therefore, labour for milk producers has to be bought, as it were, today. Therefore, I believe that the dairy farmer deserves a good price so as to provide for the need. As a result of heavy rains, fodder was destroyed on the lands and that which could be harvested, was of a very low quality. This affected our milk production as much as anything else. Diseases occurred among dairy herds because of the heavy rains, and this had a detrimental effect on production. Good prices for meat and field crops also contributed to this state of affairs to a large extent. In spite of all these problems, the average production per cow increased.

Now it is being asked that milk be subsidized. The hon. the Minister has already reacted to this by way of reply to a question put by the hon. member for Orange Grove, by saying that it was simply not feasible to subsidize milk. I want to agree whole-heartedly with the hon. the Minister; it simply cannot be done. I also want to maintain that the Government already grants subsidies on a large scale. I should like to mention a few of these. The amounts which I want to mention, are for the twelve months ending 31 March 1975. The subsidy on bread amounted to R56,3 million; that on maize to R39,9 million; and that on grain sorghum to R0,6 million. Grain sorghum is mixed into cattle feed which is used specifically for milk production. The subsidy on butter amounted to R12,7 million and that on fertilizer to R15,4 million, while the rebates on the transport of maize and other products amounted to R2 million. One may now ask oneself whether the subsidies on these products do not contribute to a cheaper milk price. Rebates on the transport of maize and subsidies of grain sorghum, butter and cheese, amounted to a total of R73 million. The latest maize price, to which the Government contributes R3 per ton by way of subsidy, also contributes to making the price of milk cheaper, because the dairy farmer uses 60% yellow maize in the feed mixture of his herds. The products of industrial milk can be imported, but fresh milk cannot. Therefore, the producer of fresh milk must be encouraged, by means of a good and realistic price, to produce to the maximum. I want to express my thanks to the hon. Minister for the price which is paid to the producer today for fresh milk as well as for industrial milk. It is important that the producer of industrial milk also obtains a good price, because he is the producer who provides cows for the fresh milk producer. If the industrial milk producer does not obtain a good price, so that he may build up his herds for the future, the fresh milk producer will not be able to buy cows in the future. Therefore, I feel that the gap which is being closed between the prices of fresh milk and industrial milk, is also very important and I want to thank the Minister very much for that as well.

Mr. Chairman, I do not think that it would be inappropriate in the debate on agriculture to say that the ordinary man in the street does not know much about gold. He concerns himself little or not at all with gold, nor does he have any real need for gold. But the ordinary man in the street knows about food. He has a real and definite need for that. A large part of his activities throughout his while life centres around food. Therefore the hon. the Minister of Agriculture’s own, but meaningful idiom of “food for peace”, will yet become a famous slogan throughout the world. If the hon. the Minister perseveres long enough in this and achieves success, he will surely become just as well known in the field of agriculture as “Mr. Gold”, our highly respected State President, but with this difference: Food will become more valuable and more sought after than gold in the future. If the hon. the Minister of Agriculture remains in politics for just as long or longer than our highly respected State President, he might surpass him in importance.

For that, however, the hon. the Minister needs a partner, and that partner is the South African farmer, more specifically the maize farmer, because he produces a staple food and because the maize industry is the largest single agricultural industry in South Africa. However, production costs in respect of this industry have increased tremendously. The hon. member for Newton Park referred to that. However, I just want to tell the hon. member that I can also quote figures. Does he not know that this increase is due to a chain reaction over which this Government has had little control? Die Transvaler of 5 January 1975 said that the partner of the Minister, the South African farmer, was being strangled. If the present rate at which the prices of the means of production are rising, continues, we shall reach the point where the good partner of the hon. the Minister, the maize farmer, will no longer be able to do his share.

Therefore, I also want to appeal to the Minister, on behalf of this industry, to see that his good partner is not strangled to death in the process. I believe that the hon. the Minister will make provision for this. Die Transvaler of 5 January 1975 said (translation): “Farmers really suffering.” Actually the Press report is correct, because figures are quoted from the report of the Department of Agricultural Economics and Marketing. From these it appears that fuel prices alone—which are outside our control —increased by 65% from July 1973, to July 1974. Since that time there have been substantial further increases—once again outside our control—and the figure now stands at 115% for diesel and 74% for petrol. Fertilizer prices increased by 11% from 1 July 1973 to July 1974, and here too there have been further increases as a result of circumstances and the figure now stands at almost 70%. Sprays, which are a large item for crop farming, and which will have to be used to an increasing extent in future if we want to increase production in the maize industry and reduce production costs, were subject to a price increase of 37% during the year under review. Since that time there have been further increases, and the figure now stands at 60%.

In a moment I shall refer to this item again in the context of successful maize production. However, I want to quote one more cost increase, viz. that of steel. The increase in the price of steel has led to the price of capital goods, such as tractors, implements and spare parts, rising by a larger percentage than that of steel itself. Steel prices have increased by 44,2% since 11 May 1973 while tractor prices have increased by 63%. The increase in the price of tractors has not resulted purely from the cost of steel in South Africa. There are many other factors which have also played a role in this regard. As against this percentage increase in respect of the means of production, the farmer has obtained an increase of only 12% in the price of his product this year, as the hon. member for Newton Park rightly said.

The hon. member, however, drew attention to an overall increase in production costs of 25% in the maize industry, but is he not aware of the fact that that is not the formula in terms of which the maize price is determined? The price is determined on a sliding average over five years. For that reason he cannot come forward with this figure. For that reason I am grateful that the Minister has already intimated that he will have discussions with various agricultural organizations in July so as to revise the formula in terms of which the maize price is determined. I want to ask the hon. the Minister please to remove the principle of a sliding average over five years from the maize industry, because I think it is to the detriment of the maize industry.

Hear, hear!

I said that I should refer again to the importance of sprays in the context of successful maize production. We all accept that, for the sake of our own welfare, and also for the ideal of “Food for peace”, we shall have to increase our production by means of scientific methods. In the maize industry we have now exploited virtually all possibilities—for example, improved techniques in respect of the cultivation of land, scientific methods of utilization of fertilizer, and so on. Fertilizer prices, however, have in-creased so tremendously that I am afraid that over cropping is going to be the order of the day.

I do not want to elaborate on that now, because that is a study in itself. We have mechanized at great expense so as to produce effectively. We apply expensive soil and moisture conservation techniques to improve our crops and our yields. Sir, I can continue in this vein to tell you how we in the maize industry have exploited all possibilities to increase our production and to force our production costs down. There is only one possibility which still remains and that is overall preventive spraying in respect of weeds and pests and plant diseases.

If overall preventive spraying becomes general practice in the maize industry, then we shall be able to increase our production considerably and reduce our production costs considerably thereby, because where hoeing is still applied as a method of combating weeds effectively, almost 60%of the expensive running time of our tractors is taken by that operation, viz. hoeing, with a consequently high use of ex-pensive fuel, implements and spare parts. Sir, the damage which is done to the root system and the plants themselves in this process is of such a nature that it can reduce crop yields. In times of drought, we attribute this damage to the drought it-self, and in a favourable year such as this year, when the yield is good, then we hardly notice the damage, but the damage is there.

However, Sir, the high risk connected to the maize industry prevents many thousands of farmers from incurring the additional expenditure of overall preventive spraying, because if there is a drought or one is struck by a hailstorm and one has cultivated the crops at great expense, used fertilizer and sprayed effectively, then one is bankrupt. That is exactly how high the risk is in the maize industry today. The risk is so high, even if one is a strong, established farmer, that one can be totally ruined, financially, in one year, and therefore, I should like to appeal to the hon. the Minister to look anew at the question of risk connected to the maize industry and that this risk also be taken into consideration as an item in calculating our maize price.

Sir, we should all like to increase our production by scientific methods for the sake of our own welfare and also for the sake of the ideal of “Food for peace”, and for that reason we are gradually changing over to overall preventive spraying, in the maize industry as well, at great expense. But, Sir, now the money-makers lie in wait for us, because instead of the price of sprays decreasing as the volume increases, and increases drastically, the prices, as is usually the case with the farmer and his product, rise excessively—I have mentioned the figures to you, as the volume increases. Since this is another method by which we can increase our production in the maize industry successfully, and it is a method which can help to reduce production costs by eliminating hoeing, I should like to appeal to the Minister to ensure that we shall not be exploited beyond our means by the money-makers in respect of this important item, an item which has become very important in the maize industry. Sir, it will be to the detriment of the maize industry; it will be to the detriment of the consumer: it will be to the detriment of our national economy, if this subject does not receive the urgent attention of the Minister.

Mr. Chairman, the hon. member for Ladybrand and the hon. member for Parys dealt with the question of an adequate return to the farmer for his products. I am very glad that the hon. the Deputy Minister has raised the question of the importance of food production. I want to deal this afternoon, if I may, with the relationship between the producer and the consumer or the housewife. I believe that it is the responsibility of this Minister to see that there is no unnecessary conflict or antagonism between the producer and the consumer because of what happens in between their relationship with each other. Sir, obviously there is no consumer who does not believe that the producer must get a fair return for his products, but at the same time what the consumer pays for the goods that he eventually gets into his home must, I think, bear some relationship to the return that the farmer gets for the commodity when it leaves his farm. I want to raise this afternoon with the hon. the Minister certain aspects, within a very limited field, which I believe need his most urgent attention. I believe that this is a matter which equally vitally concerns the hon. the Minister of Economic Affairs. The hon. the Minister of Economic Affairs has said in the last day or so that he has chaired an anti-inflation action committee meeting and that its recommendations will be considered by the Cabinet in the near future. Sir, I believe that at the present moment the public is completely bewildered with what is going to be done or can be done by consumer councils and organizations of that sort. The housewife herself who goes out to buy produce in the supermarkets in towns at the present moment does not know from one day to the next what that produce is going to cost her. I want to tell the hon. the Minister from what I have seen in my constituency, which is a heavily built-up constituency, that there is absolute chaos in the retail marketing of vegetables, fruit and similar articles. There is an enormous gap between what the farmer is getting and what the consumer is having to pay for these products. When the farmer-producer finds, as is happening now, that it does not pay him, for instance, to market carrots, that he must just plough them back into the soil, then I believe that there is something wrong when one has regard to the price of a bunch of carrots in Green Point or Sea Point or in any other city. There is something radically wrong when the farmer finds that it is not even worth his while to send carrots to the marked. Sir, I want to ask the hon. the Minister whether he is aware of what is really going on. I know that he is a busy man, but I would suggest to him that he should spend one or two mornings walking round supermarkets. Let him go there in the morning and then again in the afternoon. He will find, for instance, as happened during this week, that in a supermarket here cabbages are sold at 29 cents in the morning and then at about four o’clock in the afternoon they are reduced to 10 cents. The housewife does her shopping in the morning and she pays 29 cents for a cabbage. That price ensures a profit for the supermarket and covers its costs. In the afternoon those cabbages can then be sold at 10 cents because that 10 cents represents profit only. That is what is happening, Sir. I know that it is difficult to control that type of thing, but I am going to make certain suggestions to the hon. the Minister. Take the price of potatoes in the Peninsula last week. Last week the average price, depending on grade and size, worked out in the 15-kilo pocket at between 10 cents and 12 cents per kilo at the auction. Those very same potatoes were sold in the supermarkets in 1-kilo packs at prices ranging from 29 cents to 39 cents a kilo. In other words, the consumer paid three times the price for which those potatoes were sold at the market in Epping. Sir, let us look at the price of onions during the last week. The average price for all grades of onions at the early morning auction was somewhere around 22,9 cents a kilo. They were sold retail in 15-kilo bags in the supermarkets at between 39 cents and 48 cents a kilo. Assorted packages of onions were selling at 50 cents a kilo more than 100%, above the market price. Take the case of yellow mealies. The hon. member for Parys has been talking about the price of yellow mealies. I understand that the farmer gets a subsidized price of R5-60 a bag and that it goes to the wholesaler at R5-10. But does the hon. the Minister know what yellow mealies are selling at in the market and what the price is to the retailer, where there is no control whatsoever? I have taken the trouble of looking at it myself. You will find that the wholesaler will sell mealies, if he sells a 70 kg bag instead of a 100 kg bag, at something like 6,71 cents per kilo, but if you go in to buy a kilo of yellow mealies in a supermarket you can pay up to 36 cents for one kilo of yellow mealies.

You can get it much cheaper.

You can, Sir. You can get the 2½ kg bag—I checked it again this morning—for 29 cents. But what housewife or a person going home in the afternoon buys a 2½ kg bag of mealies for domestic purposes? But that is what is being done. When you buy in bulk you can get it reasonably.

You can get one kilo at 10,8 cents in some supermarkets.

I am glad the hon. the Minister tells me this, because I have found it to be 18 cents per ½ kilo. I want to suggest to the hon. the Minister that there is absolute chaos in the journey between the producer and the consumer in regard to produce of this sort. I want to suggest that this is a matter which has been neglected by the Government. I realize it is probably due to a great extent to the divisible responsibility between the hon. the Minister on the one side and the hon. the Minister of Economic Affairs on the other. Now, what do I suggest? In some places in the Peninsula there are opportunities for the farmer to sell direct to the consumer through fresh produce market facilities. I think there is one at Wynberg and there is one at Rondebosch and at Mowbray. I believe a real effort must be made by the department to have facilities available where there can be a quicker movement from the producer to the consumer in our big urban areas, where you cut out these vast numbers of middlemen who handle the products. I want to tell the hon. the Minister that whilst we are paying this figure I mentioned for onions at Green Point, I can go to Sir Lowry Road and buy onions at 1 cent each. But what must the housewife do? Must she travel and spend 36 cents on bus fare so that she can buy onions at a selling point far away from her home? I think that is the first point. Secondly, I want to make a suggestion to the Minister. I do not know how it is going to be done, heaven knows, but the Minister is the expert in these matters. Every new fruit stall which is opened in town creates another area for wastage. If you have five stores competing in one area to sell vegetables and tomatoes, each of those five stores must provide for an amount of wastage for unsold fresh products, and I believe that some control seems to be necessary in this direction. The hon. the Deputy Minister says we should not allow food to be wasted, but that is what is in fact happening in our urban areas. This goes for fruit as well. The Minister should give attention to this matter. Sir, there is no consumer who wants to deny the producer an adequate return for his product, but the burden becomes intolerable on the consumer when this fluctuation and upsweep of prices in the retail market hits him. Then he starts grumbling immediately that the farmer is getting too much for his product, whereas in fact that is not the case. [Time expired.]

The hon. member for Green Point touched on a very delicate matter here, viz. the issue of the gap between the consumer price and the producer price. Now, there are only two methods of tackling this problem. The first is to introduce a subsidy between the consumer and the producer, but the moment one introduces a subsidy, one has to develop a marketing system at the same time, since one cannot simply introduce a subsidy without further ado. The Government can only subsidize by means of an ordered marketing system. Now, we have the Marketing Act which is at present in operation in South Africa and which is also subject to investigation by a commission at the moment, but I want to tell the hon. member that it is extremely difficult to develop a system of control in regard to perishable products. The hon. member mentioned potatoes here. We have a control board for potatoes but this is only a system set up to deal with surpluses. One is dealing here with a perishable product and one cannot store it for a long period. Now, there are fluctuations of supply and demand, and when one has major shortages, one cannot always exercise due control over the rise in prices. But this is a position which is at present being investigated by a commission appointed by the State President.

In my opinion there is another aspect which ought to receive the attention of this committee. This concerns the issue of consumer prices and the increase in those prices in recent times, something which has been the subject of a great deal of discussion in South Africa, and I fear that in this process, a distorted image of the agricultural industry is being projected. In the first instance, there seems to me to be a tendency for the consumer to be incited against the producer. In the second instance, it may result in one’s being able to undermine the price structure which the hon. member for Newton Park, too, is so concerned about, by attaching a stigma to the producer in the eyes of the consumer; because who, after all, is the consumer? He is very difficult to identify. It is the masses in general, and the moment one succeeds in inciting the masses against the producers, particularly on the basis of subsidies which the taxpayer has to pay, then we are entering a very dangerous situation. I want to tell you that the National Party Government has a very long record as far as agricultural policy is concerned. The Deputy Minister of Agriculture sketched the agricultural policy of the National Party Government very neatly here. I think that if one takes into account what the position has been over a long period, the National Party Government has been extraordinarily successful in maintaining a proper relation between the producer price and the consumer price. I say that we have a long history and I refer here to the Abstract of Agricultural Statistics which began in 1947-’48. If one were to draw a comparison there between the index price for food only as against all consumer items, one would find that during the initial phase, food prices were at a lower level than other items of consumer goods. In 1948 toe index figure, with 100 as a basis figure for the years 1953, 1959, 1960 and 1961, was 63 for all items and only 59 for agriculture. The following year it was 67 for all items and 60 for agriculture. The year after it was 69 for all items and 63 for agriculture. This tendency continued up to and including the years 1953 to 1955, and at that time the index figure for agricultural products began to run parallel with that of other items. But since those years, agriculture has passed through tremendous crises, various crises of drought, in the course of which this Government had to take extremely vigorous action. This Parliament had to vote large amounts of money to save agriculture from this situation. Then, in the years 1972 and 1973, we reached a stage when the world’s food suddenly ran out, and when that happened, food prices rocketed upwards. The price we obtained for maize last year was as high as R114 per ton overseas, whereas the domestic price at that stage was R50 per ton. In other words, we can therefore say that the maize farmer is at present subsidizing the consumer in South Africa, due to the fact that although he can obtain such a high price abroad, he first has to supply the domestic market. I only mention this in passing. What happened was that agriculture was then emerging from a very difficult period of droughts and problems. We then had the position that the prices rose sharply because the high prices overseas necessarily had an influence on the domestic prices. In 1972-73 the position was that the price structure of food began to exceed that of other consumer items. In 1972-’73 the consumer index for all items was 155 and that of agriculture, 159. In the latest year for which data are available, the year 1973-74, the index for agriculture rose from 159 to 180, in comparison with the consumer price index which rose to 170. Consequently there was an enormous increase in the prices of agricultural products. This matter caused a great deal of sensitivity among South African consumers. A great deal was written about the matter and housewives even went so far as to want to stop purchasing. I should like to draw the attention of hon. members to certain publications in regard to this matter. I refer inter alia, to the editorial of The Star dated Tuesday, 22 April 1975, and I should like to draw the attention of the House to this and hear the opinion of the hon. member for Newton Park on it. To me there seems to be a great deal of politics in this article. In its editorial, The Star congratulates the Government on having succeeded in putting a spoke in the wheel of the so-called “political power” of the maize farmers, in that they were not able to obtain such a high price. It then attacked the maize farmers and stated that a great deal had been done for them and that they had been assisted a great deal, but, it states, there was “no talk of improved efficiency”. The article goes on—

Now it is no longer just those specific farmers to whom reference is made, but the farming community in general. I quote further—

The Star goes further and states—

In other words, according to the newspaper we are living in luxury. They go on to state?

I think that if The Star is in earnest in this regard, it most decidedly owes the farmers of South Africa an apology.

That is the policy laid down by the hon. member for Parktown.

I take note of the remark by the hon. the Prime Minister. I want to say that in my opinion, there is a great deal of politics in this, because I think that what they had in mind was precisely this: to ascertain the extent to which they could attach a stigma to agriculture in the eyes of the taxpayers. If they were to succeed in doing so, and South Africa were again to enter a situation of drought, and the government were to hesitate to provide the necessary funds and we had to declare one day a meatless day or a milkless day, a dangerous situation could be created in South Africa. Before I conclude, I should like to refer to the productivity of South Africa’s farmers. [Time expired.]

Mr. Chairman, I should like to say a few words and express a few ideas about the meat producer. It is, of course, a very popular procedure to put both the producer’s case and the consumer’s case at the same time here. For any sound and responsible Government there are three basic responsibilities in regard to its task. The first is that any good government is responsible for the security of the population. The second important and basic matter is that the Government must ensure that opportunities are created so that every worker in the country who wants to work, can do so. Thirdly, the Government has to ensure that the people are well provided with food. This Government has carried out these three important and basic duties in full. Most important of all is that the people must be well provided with food, because such a people is satisfied and one can enter the future with such a people. The consumer is constantly accusing the Government of doing too much for the producer. This may be so, but it is important for any people to be well provided with food and consequently that provision be made for adequate food for the population. There are various countries in the world which have neglected to look after the farmer, the producer, and which are close to famine today. We have a great deal of sympathy for the consumer who has begun to protest against certain consumer prices in recent times, but we want to ask him not to begrudge the farmer the increased prices, so that he can farm profitably and produce food for the population of South Africa. This is necessary because we want to prevent our people having to queue in future because there is insufficient to meet their needs. As long as the farmer and producer is protected, the people of South Africa will have enough food and will be provided with food.

Over the past five years, land prices in the parts where meat is produced have increased by no less than 200%. Furthermore, the price of cattle licks has increased by more than 100%, that of dosing agents by more than 60%, that of fodder by more than 100% and that of labour by more than 100%. Marketing costs, too, have risen tremendously over the past few years. I just want to indicate how the expenditure involved in the marketing of livestock has increased. On 8 October 1973, municipal fees were still R1,20 per beast. In August 1974 the figure was R3,90 per beast; on 9 September 1974 it was R4,08 and on 17 March 1975 it was R7,66. In the case of cattle, therefore, municipal fees rose by R6,46 between 8 October 1973 and 17 March 1975. On the same date, viz. 8 October 1973, the municipal fees for sheep were 27 cents per sheep. Today the abattoir fees are R1,70 per sheep. This just goes to show how abattoir fees, let alone other expenses, have risen. If a farmer in the middle of the Karoo wants to market a lamb—under normal circumstances he will market a lamb of between 14 and 16 kg—the eventual cost involved will be R7. I believe that the consumer must realize, too, that the cost of living has not risen for them only, but has risen endlessly for the producer as well. That is why the consumer is not always able to understand or reach agreement with the producer today. The cost of transporting a sheep from the central areas to any market in any direction amounts to about R7 per sheep. If that sheep is sold and one deducts the R7 from the price obtained, that leaves the farmer with very little, and, after all, this farmer is surely exposed to all the increases in production costs I have already mentioned. The costs in regard to a beast—now I am not referring to a beast marketed from South. West but about cattle sent to the various distribution points in the country from the heart of the Karoo—is no less than R30 if the price obtained for the beast is more than R140. The consumer sometimes does not take into account what the producer has to go through to be able to produce red meat. I want to address a few words to the consumer today, but where do we draw the distinction? Surely we are all consumers. However, I want to tell the consumer to try to save, too. There are many commodities on which one can cut down. I do not want to be personal now, but at the block of flats in Cape Town where I live, when I came there there was one drum for empty bottles of liquor and it had to be emptied every week. Now, however, there are two such drums which have to be emptied every week. I definitely think that liquor is not an essential commodity. One can cut down on it. If one looks at the empty bottles of liquor, one will see that the liquor that is consumed is of the most expensive kind.

Liquor is also an agricultural product.

The agricultural sector has to pay because we use an unnecessary amount of liquor. Looking at the statistics, and studying the consumption of liquor in South Africa, one comes to the conclusion that the liquid consumed would be enough to make a small river. Now, however, the consumer is complaining about the high prices of the essential things with which the child and the older person have to be fed and then those things have to be cut down on to the detriment of the producer.

There are a number of other items of importance—fuel, for example. The Government has to pass laws in order to impress upon the consumer that he has to conserve this commodity. The consumer does not want to conserve of his own accord; it is necessary to pass an Act to make him do so. That is a shame! People can cut down on cigarettes, too. I was strolling through the Company’s Gardens here the other day, watching the men and women smoking like chimneys. Cigarettes are not an essential commodity; therefore the consumer can cut down on them. Why is food not given priority, and why can the people not cut down on unnecessary things? Where I believe there is a party every second evening. The consumer does not want to save in this regard, whereas appeals are made to the farmer to keep his prices low. However, the farmer is the one who has to see to it that he makes a profit out of providing our people with the basic requirements. This situation is unfair. The consumer must understand the conditions under which we are operating.

In our country we have mineworkers, railway workers, farmers, agriculturists and all kinds of other people. When our agriculture was in a critical condition in 1966, the Government did not fail to honour its obligations towards the farmer. The Government pumped R385 million into agriculture to assist in rehabilitating the farmer. The Government succeeded in re-establishing the farmers. However, the Government was accused of doing too much for the farmers and too little for the consumers. It is asked what the consumer and the other people receive. The day will never come when a man coming home in the evening will ask his wife to put a couple of pounds of iron ore or copper in his plate. He will want food. What is most important is that the Government sees its responsibility towards agriculture as something which is to the benefit of our country and our population, because the situation may be expected to deteriorate. [Time expired.]

Mr. Chairman, being a farmer, I would like to assure the hon. member for Prieska that my sentiments are very much with him when he talks about the tough time the farmers are having today. The debate so far has been about the high cost of production and the high cost of food for the consumer. I wonder whether the whole eight hours of this debate is going to follow this trend.

I would like to take just one minute to talk about one agricultural product in South Africa which has not gone up in price over the last few years. It has not gone up in price for the last seven years. If my memory serves me correctly, there has, in fact, been a reduction in price over the last seven years. I think there were price reductions over this period. I am now referring to sugar. You may rule me out of order, Mr. Chairman, because the sugar industry does not fall under this particular Minister, but under the hon. the Minister of Economic Affairs, but I would like to say—maybe hon. members do not know —that the sugar industry does all its own research. It pays for this out of its own funds; it does not use the taxpayers’ money for this. It also handles the processing of its products, the marketing of its products and the packaging of its products itself. This is a very interesting point I am making here today. I do not want to discuss it further, because we in the sugar industry are very happy and we do not want our industry to be messed around.

Do you realize that the producer price of sugar went up over 50% over the last five years?

Not the internal consumption price, though.

Does the hon. the Minister criticize his colleague and his department.

I would like to pay tribute to the South African farmer. I believe that we are indeed fortunate to have a farming community which is efficient enough to ensure that the people of South Africa do not suffer from hunger. I think it must be accepted that our farmers are doing their share in contributing towards our nation’s wealth and well-being. This is borne out by a paragraph in the latest Land Bank report which says—

This is an important statement, because it shows that our farmers in South Africa are on the ball, so to speak. I believe that they have earned the respect of all South Africa. What is happening today? One rarely opens the newspaper without reading reports about the spiralling cost of living. I am sure there are many hon. members here who have received letters from people in their constituencies about the high cost of living. I have one here from the Amanzimtoti Civic Association which says—

This is indeed a very sorry state of affairs that South Africans of all colours should be suffering as a result of inflation the way they are. This is especially the case for those on fixed incomes, such as pensioners. Because this particular matter involves food, it is inevitable that the public will look upon the hon. the Minister of Agriculture and say that he is responsible for this state of affairs. I must say to the hon. the Minister that I sincerely feel sorry for him, because I believe that he and his department have got a tiger by the tail. Being the Minister closest to the housewives’ purse strings, he is now finding himself in the front line of the battle against inflation. He must know that unless the rate of inflation can be arrested and contained, our farmers will be forced to continually ask for price increases in order to maintain the viability of their farming enterprises. The consumer, forced to pay more, will inevitably demand a higher wage packet which in turn lead to a new round of price increases, thus keeping the inflation spiral in an ever upward motion. Does the fault lie with the farmer? I would like to ask the hon. the Minister whether he really believes that our farmers can survive without increases in the price of their products when they have to put up with some of the increases which have been mentioned here today. For instance, fertilizer has gone up as much as 275% over three years. I also know that in the sugar industry, in certain cases labour has gone up 500% over six years. This is because we have to compete with the gold-mining industry for labour. As has been said here today this certainly applies to all other materials which the farmer uses, such as fuel, machinery and spares. I believe there are extreme dangers if this spiral is allowed to go unchecked. I do not intend expanding upon this statement at the moment except to say that if this spiral is allowed to get out of hand, as it appears to be doing, I believe there is a great danger that the very principles which, have been applied and followed over the years to bring South Africa to its present state of development, will be in jeopardy. Already attacks on some of the principles of our capitalistic society are being made by students. We have also had this from church groups. In fact, I think if we study some of the speeches of late in this very House, we would see that those principles have been criticized here as well. In some quarters people’s thoughts are moving away from the concept of free enterprise and drifting towards nationalization of certain key industries, as I believe one of my hon. colleagues will explain. In some quarters thoughts are also moving towards Socialism. I firmly believe that this rot has got to be stopped, and it is the responsibility of this hon. Minister and” his other colleagues in the Cabinet to stop it. This Government, I believe, must get back to some basic principles. It must get back to the “nitty-gritty” of the whole economy of South Africa. We have got to accept that our economic system is being threatened by inflation and that the basic cause of this inflation is that as a nation we are spending more than we are earning. It is all very well for the Government to call upon our farmers and upon the other sectors to work harder and to increase productivity in an effort to fight inflation and the rising food costs. I would like to submit that a more profitable exercise would be to call for the scrapping of a lot of unproductive jobs and costly ideological projects and to put the people and the money involved to better use in an endeavour to create additional wealth, for our nation. The farmer fights inflation by cutting down his overheads, e.g. the number of labourers, delaying repairs to buildings and postponing costly, less productive development projects. If he is wise, he spends his savings on more fertilizer, better weed control and greater supervision of labour. He has to pull in his belt, work harder and make sure that his hard-earned money is not frittered away on unnecessary projects and purchases.

This is what the Government should be doing. Instead, however, at this crucial time in our history we see unprecedented Government spending, much of it on inflationary, unproductive endeavours, all of which I believe feeds the inflationary monster. Inflation is making paupers of some of our people. It is threatening our standards of living and is eating at the very soul of our free enterprise system. There is only one way to cure this and that is through self-discipline. By this I mean that we as individuals and as farmers, and as a nation, must accept the reality that in this world today we just cannot get anything for nothing. We must discipline ourselves, our desires and our dreams. In the case of this particular Government, it must discipline its ideology. The world is full of big spenders. However, the normal checks and balances of the free enterprise system soon sort them out. The bankruptcy and debtors’ courts are full of the records of businesses and individuals who have learnt too late that by spending more than they earn they will collapse financially. These people, however, do not cause nation-wide inflation. The results of their foolishness soon sort them out without any serious damage being done to the economy as a whole. It is only when the Government thinks it can spend more than the nation earns, or lets the nation believe that it can spend more than it earns, that rampant inflation occurs. I believe—and it is there for all to see— that the world is full of such nations today. There is the free spending, social welfare state of Great Britain topping the list and we see the tragic mess that she is in today. Way down the inflationary list, we find the hard-working and disciplined West Germany. President Ford of the United States has slashed Government spending and the Americans, by pulling in their belts, are getting on top of inflation. [Time expired.]

Mr. Chairman, the hon. member who has just resumed his seat began very well and I think that we all endorse his praise of the farmers of South Africa. Subsequently, however, the hon. member again began a tirade and tried to create the impression that South Africa was the worst country one could live in and that the country had the worst Government imaginable. [Interjections.] I want to tell the hon. member that by-elections are taking place in the country. We shall have one in Caledon shortly and the hon. member may as well go and make his speech about inflation there. In recent times some very important statements have been made on agricultural matters by agricultural experts and this has been stressed in this debate this afternoon. I want to refer in particular to a statement by the Secretary of Agricultural Technical Services, Dr. W. A. Verbeek, who said: (translation.) “In South Africa, sustained and steadily increasing agricultural production is more important than in most other countries. Adequate food supplies are of cardinal importance for prosperity and peace within and beyond the borders of the Republic.” In my opinion, this statement stresses the importance of agriculture to all of us. There are two things which we must take into account and bear in mind at all times. Firstly, there is the international food situation which is assuming serious proportions because the food production of the developing countries is increasing by a mere 2,6% per annum, whereas the food requirements of those countries are increasing annually by 3,8%. Secondly, there is the vast population growth we are faced with, which makes tremendously high demands of agriculture. Since 1940 the world population has increased, in fact it has doubled, and consequently it is logical that this will occur in our lifetime, too. Between these two poles, namely the enormous population increase and the demand for food, is the agricultural industry. If the agricultural industry were not to accept that challenge, I believe that the consequences for South Africa and all its people would be incalculable. It is not a foregone conclusion that the agricultural industry will be able to cope. It could very easily happen that whereas today we are dissatisfied about the prices of agricultural products and fight about them, in the future we shall have to fight in order to get hold of the products. I believe that this can be prevented if we in South Africa put everything in the struggle to make the agricultural industry basically sound and productive, and to keep it that way. It will have to be seen to that more producers do not disappear from the scene. We shall have to adopt the premise that we must keep the farmer on the farm, but then they must be farmers capable of utilizing the land and producing. I make this statement with a view to production, but I am convinced that the economic basis of the greater part of the platteland of South Africa is agriculture. In order to check the depopulation of the platteland, we shall have to take this fact into account in our planning, as well. Under another Vote I referred to my region, the Little Karoo, which is an irrigation area, and I pleaded that very serious consideration be given to the supplementing of the water of this region. To support my plea, I should like to refer under this Vote to the annual report of the Lucerne Control Board for the financial year 1973-’74—

I can tell you now that the lucerne seed production in 1975 was the poorest since 1952 and that the recent crop yielded only 9 000 sacks of 70 kilograms each. As many as 9 000 sacks had to be imported from the United States and Australia, for which the State paid a subsidy of R270 000. It is very clear, too, that in areas where there must be production and where there is no water, we shall have to do everything in our power to provide that water so that we may achieve that production. To keep the farmer on the farm, we in South Africa will have to realize that every industry and every sector in South Africa must be capable of acting in its own right, but that each is supplementary to the other and they need not be in direct opposition to each other. There is one thing we shall have to avoid in this country viz. weighing up one sector of the domestic economy against another in terms of the assistance to be obtained from the State by way of subsidization or otherwise. That is why I am a very strong advocate of the idea that where economically possible, agricultural co-operatives should process and also market the agricultural product which they handle, in their own area so that the farmer, too, may have a full share of that income from the product he cultivates and makes available.

There will also have to be sound planning throughout the entire Republic as far as agriculture is concerned and this planning will have to extend from the agriculturist, from the producer, to the consumer, including everyone and everything in between. If a few culprits are caught out, then that will have to occur. To refer to my own area again, I want to say that I find it very difficult to understand how the trade gets a specific product at the co-operative at R3.90 per kilogram whereas the consumer has to pay R10 per kilogram for that same product at cafés, or wherever. I believe that we in South Africa have a kind of trader who has obtained a virtual monopoly in regard to certain agricultural products, the type of trader who makes excessive profits. That is why the housewife and the consumer are having a hard time of it. I therefore believe that in this regard, too, we will have to ensure that excessive profits are not made on the sale of agricultural products. This afternoon I want to address the farmer and appeal to him to make full use of the research which is being carried out by the department and which is at the disposal of all the farmers of South Africa. I think that we as farming groups can undoubtedly take our hats off to and convey our thanks to the department for the research which is being carried out at the various research stations and experimental farms to assist our agriculture. We can also be very grateful for the large amount of information being made available to the farmers. I therefore believe that it is imperative that faulty farming methods be eliminated. If farmers make use of this research and extension, they can eliminate faulty farming methods and produce an over-supply. I believe that it is also necessary for the farmer to have links with organized agriculture. There is a well-known saying, “Knowledge is power.” This applies to the agriculturist as well. I believe that the farmers’ associations are there to convey this knowledge and information to him. I know of far too many farmers’ associations where attendance at meetings is too poor and where the farmers do not show the necessary interest in their own associations, notwithstanding the fact that valuable information is made available to them. That is why I want to make this plea here this afternoon and ask the farmers to link up with organized agriculture.

To conclude, I want to say that I believe that in the South African national structure, the cultural and stabilizing and spiritual influence of a healthy farming element can never be sufficiently emphasized. It must be conserved and extended as much as possible in South Africa by means of sound planning.

Mr. Chairman, I should very much like to associate myself with the remarks made by the hon. member for Oudtshoorn emphasizing the aspect of production. However, I want to concentrate on production area and more especially the combating of weeds. We are dealing here with an aspect which, is often lost sight of, namely the surface area which is virtually removed from production by weed infestation. I refer here to the extent of infestation by jointed cactus and silver-leaf bitter apple (Satansbos) in our country, and more especially in the Karoo region.

We know that the State has already spent R7 million on combating jointed cactus. In spite of this, infestation by this weed has increased to such an extent that approximately a further 22 300 ha were infested by this weed in the past year. The total area of infested farm land is at present approximately 1 600 000 ha. We are dealing here with a weed on which not only the State, but the farmer, too, have to expend a great deal of money. I have in mind in this regard the high cost of labour involved in the combating of this weed.

Although jointed cactus has assumed serious proportions, infestation by silver-leaf bitter apple is described as a more serious pest by experts in this field, people who are continually attempting to combat this pest, particularly since silver-leaf bitter apple, being a perennial, has a very deep root system, particularly in the Karoo region and more especially in the lower lying parts of the Fish and the Sundays River —particularly those parts where irrigation is applied. The seed of this weed is distributed in cattle fodder. We are told that the plant was introduced from the United States via imported cattle fodder. It is striking, therefore, that when this plant is mixed with lucerne, lucerne hay, the animal does not eat the hay. We also find that in irrigation areas where field husbandry is applied, this pest has become a serious problem, particularly since up to now, no antidote has been found. I have in mind, too, the people who practice field husbandry. The root system of the silver-leaf bitter apple also has a detrimental effect on plantations and more especially the citrus industry, wheat farming, maize farming and lucerne farming in those parts. The great danger lies in the fact that the distribution of this weed occurs very unobtrusively. I myself have seen sorghum seed ordered for sowing purposes which has contained a high percentage of silver-leaf bitter apple seed. An extension officer has shown me sorghum seed the quality of which was such that I was barely able to believe that one could sell such seed for distribution. Nevertheless, this has in fact occurred. It is disturbing to note that the area already infested by silver-leaf bitter apple, in the Karoo region specifically, is 4 900 ha in extent. In the Republic as a whole about 15 000 ha are infested by this weed. Taking into account the vast increase in the infested areas and the fact that up to the present no antidote has been found with which to combat this weed, one realizes that something drastic will have to be done in this regard. Here I want to ask that we redouble our efforts to crack down on those people who distribute any seed infested by this weed. It happens only too easily that seed containing this weed seed is distributed. Here I have in mind the water courses where we have irrigation. This silver-leaf bitter apple is often found along the water courses and consequently it is further distributed by means of irrigation. I myself have seen maize brought from the Free State during the recent period of drought to serve as cattle fodder, which contained a dangerous proportion of silver-leaf bitter apple. The animals which eat that fodder carry the seed to the grazing lands. I therefore want to make a plea that more research into the development of an antidote for this weed be carried out. In addition, our farmers must be more seriously urged to attempt to eradicate this weed. The dangers of further penetration of silver-leaf bitter apple must be pointed out to the farmers. I believe that our farmers in those parts where infestation has already taken place do not regard this matter in a sufficiently serious light. If we close our eyes to the fact that this infestation is assuming ever larger proportions, we can expect that this weed will continue to infest even greater surface areas.

To conclude, I request that an attempt be made through more dedicated research to develop an antidote and that more effective control be exercised over the distribution of seed, even seed used as cattle fodder, containing large amounts of silver-leaf bitter apple seed. I want to repeat my plea that it be stressed to our farmers with a greater degree of seriousness that this is an extremely dangerous plant which can involve the State and the farmer in enormous expense.

Mr. Chairman, as a townsman I hardly feel qualified to comment on the subject of the speech by the hon. member for Somerset East. It did appear to me that he was pleading his case with knowledge and a degree of ability. [Interjections.] It appeared to me too that he was putting forward a worthy plea for the eradication of what appears to be a great problem in the Karoo and his constituency, viz. cactus and other obnoxious weeds.

This afternoon I want to address the hon. the Minister in his capacity of Minister of Agricultural Credit and Land Tenure. On 4 February, the first question day of this session, I put a question on the Order Paper in which I asked the hon. the Minister for certain information in regard to a property the purchase of which was the responsibility of his department. The property, situated in my constituency, was purchased in order to extend the magistrate’s court and the police station in Wynberg. The property is more accurately described as erven 66402, 3 and 5 in the municipality of Cape Town. The property was purchased by the hon. the Minister’s department in 1971; i.e. before the hon. the Minister assumed his present office. I asked this question at the beginning of the session for a very good reason. That reason was and is that there is a measure of disquiet in my constituency, which is shared by myself, that the price paid for this property in a deal which was conducted by private treaty was substantially higher than the property is really worth.

To me it is a matter of regret that the reply to my question, which was given in my absence, was evasive and somewhat discourteous which are characteristics which are quite out of character, I might say, with the straightforwardness and courtesy usually shown by the hon. the Minister. I can assure the House that a reply such as I received created a very poor impression. It is also a matter of regret to me that due to unavoidable circumstances I was not present at the time when this reply was given, otherwise I would have asked a supplementary question. It is for this reason that I am raising the matter under this Vote and I hope that the hon. the Minister, in his reply to me, will be able to allay some of the disquiet which I and some of my constituents feel.

The property I am referring to is situated in Aliwal Road, Wynberg, and comprises three erven. These erven measure in total 1 550 sq. metres and on them are old dwellings that can only be described as old-fashioned dwellings. The municipal valuation of these properties is a site value of R11 600 and a building value of R14 980 making a total of R25 580. This is a site which is zoned partly as “R.4” which means that it enjoys flat rights and partly for business purposes so that it is readily acknowledged that the value of the site as such is considerably above its municipal valuation. However, if one values it on its flat rights and on its business rights, then one must also recognize that the old-fashioned dwellings on it are virtually valueless. I have had this site valued at R38 500 against its municipal valuation of R11 600. I can assure the hon. the Minister that the valuation that I got, generally reflects values that are higher than the values which have been obtained in sales in recent months and years of properties which can be compared with the property, so that the site valuation which I obtained, I regard as being a high site valuation. If to this valuation of R38 500 which I mentioned, is added the municipal valuation of the buildings of R14 980, which is a very high valuation for those buildings which are really valueless assets if one takes the value of the site into account, one gets a total maximum value of R53 480 which I regard as a very high value for this property. Yet this property was purchased by the hon. the Minister’s department in 1971 for the figure of R77 511-50. It created a very poor impression when, in reply to my question, the hon. the Minister evaded giving me information in regard to the municipal valuation and size of this property and the price paid for it, all of which information was readily available to the hon. the Minister’s department. It created an even poorer impression when the hon. the Minister refused to divulge the details of a valuation which his department had made of this property prior to purchasing it, a valuation made by a Cape Town valuer, Mr. A. W. Ward, who is highly respected. My fears that too high a price was paid for this property were not allayed by the remarks the hon. the Minister made at the end of his reply to my question. I want to quote those remarks (Hansard Questions, 4 February 1975, col. 6)—

In other words, more was offered for this property than its valuation or what it was worth. That is how I read the hon. the Minister’s answer.

I think it is very important that land deals involving the State should be completely above suspicion and should be seen to be above suspicion. I think it is important, therefore, that the hon. the Minister should advise this House on the amount of Mr. Ward’s valuation of this property so that members of this House and members of the public, particularly members of the public in my constituency who are very concerned about this, can judge for themselves as to whether a fair price was paid for this property. If the amount of approximately R77 000 paid for this property was substantially above the independent valuation of the property by Mr. Ward prior to its purchase, I should be glad to have an explanation from the hon. the Minister as to why it was necessary by private treaty to pay a price higher than the value of the property when expropriation procedures were available to him to obtain the property at a fair price.

Mr. Chairman, I do not think the hon. member who has just resumed his seat will take it amiss of me if I do not react to his speech. I think the hon. Minister will certainly clarify the matter which he raised with him. However, I believe that the hon. member could possibly have ironed out this matter just as fruitfully at the hon. Minister’s office as in this House.

In the very short time at my disposal, I would like to raise a few matters which I believe are of vital importance for the agricultural industry. I would like to begin with a quotation from Die Burger of Monday, 14 April, from a report of the speech which was made on Saturday, 12 April, by the hon. Minister of Finance at Bloemfontein when he opened a show there. The hon. the Minister was reported to have said (translation)—

It is of vital importance that agricultural production should increase in this country. Various speakers have already pointed this out and I do not want to deal with this again. It is, however, important to ask how we are going to increase the production and how we are going to catch up on the backlog. To me there is only one solution, i.e. that we should have a higher production per hectare. This is what is needed. Various things can be suggested to bring this about. One of them is, for instance, that we should, in the case of wheat production in the Western Cape, have a better research programme regarding new varieties and of cultivation methods. For that reason I today want to plead for the establishment of a wheat research institute for the South. If we compare our yield with that of Europe, we find that South Africa’s average yield is too low. During the past few years there has already been some remarkable improvement, but this is still not good enough. If the yield increases, the production costs will necessarily drop. The price is determined on a cost plus basis. To supply bread cheaply, subsidies are being paid. If we could increase the wheat production per unit we could decrease subsidies. The State will therefore benefit by spending money to increase the production per unit. I believe the best investment would be to establish a wheat institute for the South. Producers as well as researchers have been asking for this for a long time. Such an institute could harness all the brainpower, the idealism of researchers and research apparatus to the full. Research institutes already exist in the Republic for land and irrigation, for plant protection, botany, citrus and tropical fruit, horticulture, tobacco, veterinary science, animal and dairy science, fruit and fruit technology as well as penological and viticulture. These institutes are doing excellent work otherwise they would certainly not be maintained. I do not believe that anyone will ask that the costs involved in such institutes should be reduced. If we consider the situation overseas, we see that Western Germany has three agricultural faculties and three research institutes for wheat alone. In Denmark there are three research stations for horticulture, three for crops, four for fertilizers, land and climate, five for botany, four for weed control and two laboratories for routine analysis. In Holland there are 28 institutes at Wageningen and nine research stations elsewhere. These institutes conduct specialized as well as applied research work. One could mention many more. Food is important, more important than what it costs. I want to put it to the hon. Minister that there are many questions in connection with the wheat industry which should be answered. I want to request him to establish a wheat institute. By doing this more concentrated research will be made possible.

There is also a second matter which I want to discuss, i.e. co-operative societies and their taxability. The co-operative societies play an enormous and very important role in agriculture, not only in South Africa, but overseas as well, where it is today admitted that the agricultural industry cannot exist without well-organized co-operative societies. In a speech made by the chairman of the KWV, Dr. Du Toit, at the 57th Annual General Meeting last Tuesday, he had the following to say (translation)—

Dr. Du Toit is here completely in line with the prevailing circumstances in America and also in Europe, where it is generally accepted that only bonuses which are paid out to members will be taxable. Since that I do not have the time to elaborate on this any further I simply want to refer hon. members to a book which was published recently, i.e. Die Moderne Landboukodperasie en Ekonomiese Perspektief written by Dr. A. S. Meyer. In this book the whole tax aspect of co-operative societies is set out quite clearly, and one can obtain very useful information from it.

I would like to quote another important point which Dr. Du Toit made, i.e. (translation)—

It is a fact that when a co-operative society needs money, it cannot approach the public and issue shares. The co-operative society has to turn to its members and can only obtain funds from them. We also know that it is practically impossible these days for a co-operative society to obtain funds from its members by means of the issuing of shares. Every member of a cooperative society, every shareholder, knows that he will only get 8% on his share capital. Furthermore, as a result of our co-operative legislation they do not have to have many shares. Where is a co-operative society to obtain the funds from? I believe that the hon. the Minister, when this matter is discussed, will have a good look at co-operative societies and will ask the hon. the Minister of Finance never to make use of this tax source.

There is also a third matter which I would like to deal with. The hon. member for Parys this afternoon made a very moving plea for cheaper weed killers. It is a fact that we strive for higher production. Now I can say, and I have considerable evidence of this, that when wheat is sown, for instance in the George area, and no cultivation takes place but only chemicals such as paraguay and diquay are used, there is a remarkable increase in the production per hectare. But it is also a fact that enormous profits are made on the sale of chemicals. I have evidence that profits of up to 400% are made on the landed costs of some chemicals in this country. I therefore feel that it is really time that a proper investigation be made into the costs of chemicals in the agricultural industry.

Mr. Chairman, I shall not follow up on the argument of the hon. member for Malmesbury. In view of the constantly increasing needs of our own rapidly growing population and the needs of our neighbours further to the north of us—in fact, the needs of the entire world—it is absolutely essential that every possible source of food production be exploited, expanded and fully utilized. I want to confine myself here to two such possible sources of food production. In the area of the Vaal-Harts State Water Scheme, farmers are at present replacing the earth walls of their storage dams with cement walls. The average size of the cement dams are a depth of four feet and a surface area of 175 feet by 175 feet. It is possible that within the foreseeable future there will be approximately 800 to 1 000 of these cement dams in that area. In addition, there is a whole series of such dams along the entire KB canal from Warrenton to Delportshoop. These dams are never completely emptied. I am convinced that these dams could be utilized to great advantage for the production of fish. This will be an additional source of income to every farmer, and a saving on expenditure on food for his labourers. Therefore I want to request that this department institute an urgent investigation into the utilization of these dams for the production of fish. Then, too, the possibility of the establishment of a fish-hatching station in that area should also be investigated. In conjunction with this the marketing of the fish thus produced should also be investigated.

I also want to mention a second possible source of food production, namely the utilization for the purposes of food production of our indigenous game, specifically the springbok, the impala, the eland, the blesbok and even the giraffe. In recent years a steadily increasing interest in game farming has been discernible among our farmers and urban dwellers, and not merely for aesthetic value or for the personal pleasure derived from this, but also, and particularly, for commercial purposes. So we find that in the Transvaal region of the Department of Agricultural Technical Services there are already 213 farms with a surface area of approximately 350 000 ha, which are exclusively game farms. In addition there are a further 547 farms with a surface area of 999 000 ha which are combined game and cattle farms. There is also an increase in the purchase of land by urban dwellers for the purpose of starting a game farm.

The growing interest in game farming is understandable. I am mentioning only a few considerations. In the first place it is an interesting and attractive farming practice. In the second place it requires little labour. There is no question of dosing, inoculation or intensive care. Also it is, apparently, profitable. Carcasses fetch good prices on the markets. Horns and hides also fetch good prices, and live animals are in great demand, and at good prices. In addition to that this kind of farming has a prestige value, especially if one can invite one’s friends, and occasionally a few VIP friends, to a game shoot. For the above mentioned reasons it would seem as though game farming has apparently come to stay, and will continue to expand. Prof. J. D. Skinner, chief of the mammal research institute of the University of Pretoria, alleges—

This is very important. There are people who allege that there are great possibilities in game farming, particularly in the marginal areas where it can be attempted as a supplementary industry. This and similar allegations have, however, not yet been scientifically proved or confirmed. Because this is the case, there is the danger that agricultural land and grazing could be injudiciously and unscientifically utilized, which could lead to uneconomic farming activities, which our country cannot afford. Therefore I am asking the Department of Agricultural Technical Services to use the various experimental farms for further research and study to investigate, in regard to game farming, methods of harvesting, the time to harvest, and the grazing and eating habits of certain species of game. It is alleged that the springbok and eland, for example, do not have the same eating and grazing habits as cattle and sheep, and that they can be kept on the same veld without mutually detrimental consequences. I want to mention at the same time that cognizance is being taken with much gratitude of the work which is already being done at this wild project station in Omatjenne in South-West Africa. For the protection of this young industry—it appears as though it is developing into an industry —consideration will probably have to be given to legislation or regulations to ensure that only the best quality game meat is marketed. A study of overseas markets is also something that could well be made. It is known that New Zealand’s game fetches prices that are 75% higher than those for the beef imported from that country to West Germany.

Mr. Chairman, I want to say one thing to the hon. member for Kimberley North and that is that I hope he does not invite the hon. member for Carletonville to his game farm.

I want to bring this debate back to the level it was on a little earlier. [Interjections.] I believe that we have the opportunity this afternoon to talk to the hon. the Minister of Agriculture about the whole question of the cost of living. I am not going to disappoint the hon. the Minister this afternoon, because I am going to talk about the whole question of the dairy industry. We read in the report of the Secretary for Agricultural Technical Services on page 115—

I want to ask the hon. the Minister and his deputy what exactly they are doing to assist the dairy farmer. I do not believe that they have even really taken cognizance of what is required. Do they know what is needed? I quote from the Agricultural News of 23 May—

This is entirely in line with what the Secretary for Agricultural Technical Services said further in his report—which I will quote a little later. I want to point out to the hon. the Minister that Dr. Joubert advised him that what South Africa is going to need at the turn of the century is a national herd of 1 million cows of which each will have to produce at least an average of 15 litres a day over the full lactation period. That is the requirement. The hon. the Minister knows what we have got today and I want to ask him what he is doing about trying to improve the situation. The Secretary for Agricultural Technical Services continues in this report—

Then he makes the most remarkable statement—

The question I want to ask the hon. the Minister is: What is he doing to assist the farmers to do exactly what the Secretary for Agricultural Technical Services says in this report? If the Secretary of the hon. the Minister’s department can make this statement in a recent report to the hon. the Minister which is tabled in this House, viz. that this … [Interjections.] Those parrots must be quiet. If the Secretary can make that statement in a report tabled in this House, then I believe that he is in i effect saying to his Minister: “You have failed to help the farmers to do this.” [Interjections.] There is one aspect that has been left out by the Secretary and that is the whole question of economics. What is the hon. the Minister doing about lucerne?

I’m speaking to the bull, that’s what I’m doing! [Interjections.]

Let me say that that is a lot of bull! This is exactly the reaction I expected of the hon. the Minister. The reason why the people of South Africa are paying too much for their milk is because the hon. the Minister does not have the patience to listen to their problems and to get down to it and do something for the farmers and indirectly for the consumers of South Africa. The farmer in South Africa is getting an average of 15½ cents per litre for fresh milk. Has the hon. the Minister ascertained whether or not that is a fair price for the farmer? Has he conducted an investigation to find out how efficient the farmer is and how efficient he is allowed to be in the light of other circumstances such as the increased railage tariffs, the wages that he has to pay and the high prices that he has to pay for fodder? Hon. members heard from the hon. member for Green Point the price one has to pay for a bag of yellow maize today and hon. members heard from others what the cost of lucerne and all these things is. What is the hon. the Minister doing about those factors which are all instrumental in increasing the production costs of the dairy farmer? There is an even more important factor which I believe the hon. the Minister should be considering. That is: What happens after the farmer delivers the milk at 15½ cents a litre to the distributor? While the farmer gets 15½ cents per litre, what does the housewife find? She finds that the cheapest price she can buy fresh milk for in the Republic is 24½ cents, in other words a difference of 9 cents. Has the hon. the Minister taken the trouble to investigate that additional amount of 9 cents which is charged for a litre of milk? Has he taken the trouble to find out whether they are making too large a profit or not? When last did he investigate their scale of profits? I believe that these factors are tremendously important to all the people in South Africa, to both the producer and the consumer.

You” know that is a superstition.

As my friend from Green Point pointed out, the producer is getting a bad name in the eyes of the consumer. The housewife is saying: “It is the damn farmer who is getting all the money,” whereas I do not believe it is. Something is wrong somewhere, something stinks in the State of South Africa.

They have got a lot of bull around here.

I believe that the hon. the Minister is in a key position in this country because if there is one member of the 24 members of the Cabinet and their deputies in this country who can do more to promote good relations in this country, not only between Black and White but between person and person, it is the hon. the Minister of Agriculture. He talks about food for peace. I agree with that but what is he doing about it? When we talk like this, all I believe he is doing is that he is trying to keep one section of the public happy. I believe that he is trying to keep the farmers happy. I know that at the moment he is considering—I want to get away from milk for the moment and deal with an aspect which is of importance to everybody—an application for an increase in the price of eggs. I want to warn the hon. the Minister in exactly the same way as I warned him before he increased the price of milk that if he allows an increase in the price of eggs it will be the greatest disservice and injustice ever to the consumers of South Africa because he knows of the tremendous surplus of eggs which is being produced at the moment. I have a question on the Question Paper— I am waiting for the reply from the department—asking for the latest figures. It is no good my quoting the figures which appear in the report because these figures only go up to the end of June last year. When the hon. the Minister answers the question it will be shown that a tremendous surplus of eggs is being produced in the country. Last year the surplus was exported at a loss of over R3 million. Under those circumstances no consumer of eggs can accept that there should be an increase in price. They say that the farmers should rather stop producing eggs at a loss so that we do not have to export.

Who said that the price of eggs will be increased?

Will the hon. the Minister give me an assurance that he will not allow an increase in the price of eggs?

I will tell you on Monday. [Interjections.]

Will the hon. the Minister give me an assurance that he will not allow an increase? That is the point.

To come back to the dairy industry, hon. members have often heard me warning the hon. the Minister in this House, However, it is not only a question of milk shortages. There is the hon. the Minister of Indian Affairs and of Tourism. I can recollect the night when that hon. Minister was still sitting on this side as an ordinary member and when I warned the hon. the Minister of Agriculture when he was still a Deputy Minister, and his predecessor, that there would be a shortage of fresh milk in this country. The present hon. Minister of Tourism came to me then and asked me: “Warwick, are you sure of your facts?” I told him: “Marais, I am sure of my facts.” Today that statement has been vindicated because we have already had the situation where milk has had to be rationed in Pretoria. All that Minister does is to warn the people of South Africa that they will either have to pay more or face rationing.

He talks to the bull.

Yes Sir; as my hon. leader says, the problem is that he talks to the bull instead of talking to the cow. Milk comes from the cow and not from the bull. Sir, I want to warn again today. In terms of the latest report that I have from Landbounuus, it would appear that our reserve stock of dairy products, namely butter, cheese, condensed milk and powdered milk—let us forget about fresh milk for the moment—are at a dangerously low level. Millions of rand were spent by this Minister as an election fund for the National Party at election time last year, when they reduced the price of butter. There was a surplus then, but by the end of June we were in a state of shortage and butter was being rationed to housewives. Today our reserves are lower than they were then. [Time expired.]

Mr. Chairman, the hon. member for Pietermaritzburg South saw fit to commence his speech on a personal note. Now, I shall also begin with him, and I want to assure the hon. House that I know the hon. member better than that; for he is not as bad as he appears. He is simply doing himself an injustice. The hon. member tried to play politics with a few matters. Because that hon. member does not take a rational and objective view of agriculture, and because he is a political maniac, he has to make use of every opportunity to threaten the Minister and to bring the Government into discredit.

Order! The hon. member must withdraw the words “political maniac”.

I withdraw them, Sir. The hon. member made two statements. In the first place he asked the Minister what he was doing to help the dairy farmers in South Africa. He then said that feeding is the most important cause of the production being so low. He quoted certain passages, and went so far as to try to imply that the Secretary for Agriculture had criticized the Minister. Now I want to ask the hon. member whether he is not aware of the fact that the Agriculture Department is the biggest research institution in South Africa. Nowhere in the world will one equal the knowledge which this department has on the feeding of cows. This is what the Minister and what the Government are doing. That is the first point. But the hon. member does not know this, for he asked what the Government were doing. The second point is that in respect of stock diseases, which have a great influence on milk production, Onderstepoort is the leading body in the world. Then the hon. member asked what the Minister is doing. Apparently he does not know what he is doing. The hon. member then referred to the difference between the producer price and the consumer price. He asked what the Minister was doing about that, and he said the situation stank. Does the hon. member not realize that the Marketing Council investigates the margins of the distributors every year, and that the Marketing Council and the Department of Agricultural Economy advises the Minister when those prices are determined? Does the hon. member not know that? But, Sir, what is more important, and what is alarming, is that that member is a member of the commission of inquiry that has to investigate the Marketing Act. He is a member of that commission, and he does not know these things. Now I ask you, Sir: What contribution can that hon. member make to such an important investigation? I clap my hands together, and say to that hon. member: I know he is not as bad as he makes himself out to be. He must simply refrain from playing politics to such an extent again, for he is running his own reputation. He is capable of better than that.

The hon. member for Newton Park said that that hon. member was going to make an important announcement today. He was to have told the Minister how he should subsidize milk. Sir, I do not know whether the hon. member still wishes to deal with that, or whether he is going to deal with it subsequently, but he did not deal with it today. He did not tell the Minister how he should subsidize milk. However, I suspect that he is going to do it next week, or on another occasion. That hon. member has advanced the argument before that fresh milk should be subsidized, and the hon. member for Newton Park says that a start should be made with this. Sir, there are only a few regions in South Africa which fall under the control of the Milk Board. The other areas fall outside this control. Those people who require a subsidy, are the low-paid people in South Africa. Point No. 1, now, is that all the Bantu living on farms will be excluded. They will not be able to share in that subsidy. All the Black people living in the homelands, will be excluded. Three-quarters of the Bantu population of South Africa therefore will not share in the subsidy. I come next to the farming population of South Africa. There are 3 000 fresh milk producers, but there are 82 000 farmers.

May I ask the hon. member a question? Would the hon. member tell me how many of the Bantu in the rural areas are buying subsidized butter, for example?

The Bantu working on White farms do not buy butter because, together with the farmer, they make use of the products of the farm.

Then the same applies to milk.

Sir, as I have said, there are 82 000 farmers, and 3 000 of them are fresh milk producers. They do not buy their own milk, and the other farmers produce their own milk. Those people are all excluded from the subsidy the hon. member is now advocating. But it is not only them; the same applies in respect of the small rural towns in which there is no milk distributor. Those people buy their milk from the farmers, or they make their own local arrangements. All those people are excluded from the subsidy.

But now I come to the important point. The subsidy which the hon. member is advocating, is for the well-to-do urban consumers. If he subsidizes them to a greater extent, what will happen? I am referring now to places such as Houghton, where the chairman of the Housewives League comes from. He now wants to subsidize them, but what will the effect of this be? Consumption among them will increase. This will have the effect that the demand for milk will increase and that the price of milk for those people who do not share in the subsidy will rise even further. In other words, the effect of this will be that the less well-to-do people, for whom he is ostensibly pleading, will ultimately have to pay a higher price. That is how those two hon. members wish to promote the subsidization of milk in South Africa. But, Sir, I want to go further. The hon. member says that this can be done in England.

Do you not wish to encourage consumption?

Of course, Sir. The hon. member need only consider what the consumption of milk in South Africa is. In 1962-’63 the consumption of milk was 62 litres per capita per year. In 1973-’74 it was 66 litres per capita per year. The consumption is increasing, and I shall now tell the hon. member why it is increasing. It is because the salaries and wages of people in South Africa have risen far more rapidly, and are still rising more rapidly, than the food prices. The salary increases are higher than even the greatest food price increases. In this regard I wish to mention an example. The latest figures I was able to obtain in respect of the total current income before tax, mainly salaries, wages and profits people make, money which is available, indicate that between 1970 and 1974 this increased from R9 121 million to R15 941 million. This represents an increase, on an index base of 100, to 174,7. The consumer price index during that same period in respect of all items rose from 100 to 114. In the case of food the consumer index rose from 100 to 141. Meat prices have shown the steepest rise, and we must remember that meat is not controlled by the Government. A free market price applies in respect of meat, and the price is determined by supply and demand. In the case of meat the index has risen from 100 to 170. Even that increase was therefore lower than the increase in salaries and wages. In the case of fish the index rose from 100 to 149. In the case of milk and milk products and eggs, it only rose to 123. This is very low. With last year’s increases taken into consideration, milk rose to only 159. I shall furnish the hon. member in a moment with the figure of the rise due to the recent price increases. In the case of vegetables and fruit the index rose from 100 to 145. Now I say to the hon. member that the consumer is able to pay these prices. However, that is not all that has to be taken into consideration when one is dealing with the controlled price. One also has to consider the production costs, and one has to consider the question of supply and demand. These aspects must have a bearing on one another. I want to put it in this way: When the price of a product is controlled, one cannot in the long term ignore the normal economic laws which would have played a part in a free market economy. They continue to play their part. All that one does is to remove the short-term shocks.

Business interrupted in accordance with Standing Order No. 23.

House Resumed:

Progress reported and leave granted to sit again.