Mr. Speaker, in the five minutes left to me this morning I should like to summarize what I said last evening. You will recall, Sir, that I had been dealing specifically and by name with reports on Nusas, Wilgespruit and the University Christian Movement, with particular emphasis on the report relating to the last of those bodies. You can imagine, Sir, my surprise and despair when I saw the Cape Times this morning, their report of the debate, the headlines relating to it and the editorial, where I am depicted as having related my remarks solely to the Christian Institute, a body which I had deliberately at no time mentioned in the debate because I was not here when it was debated in this House and I have not yet had time to read the report relating to that body.

Are you in favour of its being declared an affected organization?

You have heard the standpoint of the United Party over and over again. [Interjections.]

Order!

As I say, I have only about three minutes left and I have still a greater accusation to make against the Cape Times, that pillar of self-righteousness. It deliberately suppressed the information relating to the involvement of the hon. member for Pinelands. That was dealt with fully in all the other morning papers the morning after the report was tabled, particularly by the Rand Daily Mail, which openly supports the Progressive Party, and I commend it for having published those facts. But where it is of the utmost concern to the readers, here in Cape Town and in Pinelands in particular, that story was deliberately suppressed by the Cape Times. I believe that that is not only a disservice to the newspapers in general, but also a grave breach of newspaper ethics.

Now let me try to summarize the situation. After this report had been tabled, the hon. member for Pinelands made a statement to the Press and, once again, precisely the same criticism which I have levelled against the Progressive Party can be levelled in respect of that statement by him. Whether one looks at the statement in the Natal Mercury, the statement in Die Transvaler, or the statement in The Argus, in every one there is no word of condemnation by the hon. member for Pinelands, in his own right or speaking on behalf of the Progressive Party, of these events.

They are permissive.

Yes, they are permissive. Over and over we find in these statements by the hon. member for Pinelands, even when he is speaking on behalf of his party, this and here is the report—

What is their attitude, Sir? Their attitude is that because the man is now dead, you need not have any inquiry into the killing.

But you do not hang him posthumously.

Order!

Sir, I believe the position can be summed up as follows in regard to that party: The Progressive Party is soft on Communism, and it is soft on those who are attempting to break down the free enterprise economy, and it is soft on all those things which are outlined in these reports and which are inimical to the interests of South Africa.

And you are soft in the head.

Mr. Speaker, on a point of order: Is the hon. member allowed to say that the hon. member for Umhlatuzana is soft in the head? He is implying that he is insane.

The hon. member must apologize.

Apologize? [Interjections.]

The hon. member must withdraw and apologize.

I am not prepared to apologize.

Then the hon. member must leave the Chamber forthwith.

Whereupon the hon. member for Pinelands withdrew from the House for the remainder of the day’s sitting.

Mr. Speaker, in short, the Progressive Party lives in South Africa and it operates in South Africa, but their values are not those of South Africa.

Mr. Speaker, two voices were heard from among the ranks of the Opposition members, which one could not fault. The one voice was that of the hon. the Leader of the Opposition who said in his speech that the stories of coalition were absurd. I should like to associate myself with my hon. colleague who dealt with this matter yesterday, and who said that this kind of tactic, at this juncture in South Africa, would not contribute to causing confusion. The National Party is strong enough, to deal with its own affairs. It is growing by the day and is gaining support outside the boundaries of Afrikaans-speaking South Africa. In addition, the National Party does not need to try out coalition recipes out of weakness. Therefore, I agree with the hon. the Leader of the Opposition in this regard.

Although for other reasons.

In the second place, I agree with the hon. member for Umhlatuzana’s character sketch of a phenomenon in our public life, namely the Progressive Party. Some time ago I referred to the Progressive Party in this House and said that they were the intercessors for certain elements in the country, elements which are not associated with orderly Government and orderly development.

I told you that it was untrue and it is still untrue.

The hon. member for Umhlatuzana gave a character sketch of them, and referred to their conduct in regard to the UCM. However, he did not refer to their conduct in regard to the Beyers Naudé Institute, but I should now like to refer to this institute which, in the name of Christendom, used foreign money to initiate subversive activities in South Africa. It is the same Progressive Party which, in this Parliament, is the intercessor for Mandela, who was charged with treason against South Africa. It is the same Progressive Party who took up the cudgels for the Saso leaders, who wanted to further the Black Power movement in South Africa to overthrow orderly government in South Africa.

Yes, the offspring of Nationalist policy.

It is the same Progressive Party which, as the hon. member for Umhlatuzana said yesterday evening, is the intercessor for the people who indulged in unsavoury activities at Wilgespruit. I agree with the hon. member in this regard. Of the Progressive Party I want to say, and with that I want to leave them at that— that they … [Interjections.]

Order! The hon. member for Smithfield must contain himself.

The Progressive Party is a phenomenon which can never come into office constitutionally in South Africa, and which can never come into office in South Africa with the help of patriots. For that reason I agree with the hon. member for Umhlatuzana that it is a phenomenon which we hope will disappear from South African society.

However, I want to remind the hon. member for Umhlatuzana of something, and he must not take this amiss of me now. A few years ago I told him and other hon. members in this House that they should rid their system of certain elements. The hon. member for Umhlatuzana then made a speech, and so did other hon. members on that side, in which he joined The Cape Times, which he condemned this morning, in waging a campaign against me. And all the time he was sitting with these elements in his party. They brought one of the leaders of that element to the by-election in Caledon, and with great acclaim they allowed him to speak at meetings there as the new hero from the Transvaal. They allowed him to speak in Sea Point; they allowed him to speak at other meetings in the Cape, and he drew large audiences because he was the new shining light from the North. Where is that leader and the elements that are behind him today? On the way to the Progressives. Will the hon. member for Umhlatuzana now admit that he had elements in his party which he should not have had there? Would he admit that, together with The Cape Times, he made common cause against me when I warned them against those elements?

What about the elements in your party?

Where are these elements? I shall leave it at that for the moment, and shall subsequently return to another point in regard to this matter.

The hon. the Leader of the Opposition described this session as having been a remarkable session. I agree with him that it has indeed been a remarkable session. On the one hand there was a Government, a Government party, which came forward with one measure after another pertaining to the orderly government of South Africa, to the tackling of problems and in steps forward to help South Africa further along its road of development, growth and stability. On the other hand we had an Opposition with members who vied with one another and quarrelled among themselves to see which of them could become an effective Opposition. The hon. the Leader of the Opposition has now said: “Ministers have been busy outside Parliament. Which Minister was not here when Parliament called him to account? Which Minister was not here when his Vote had to be discussed? Which Minister was not here when he had to participate in some discussion or other? Which Minister was not here when a Bill had to be introduced? Not only do Ministers have obligations in this House, they also have obligations outside this House. The hon. the Leader of the Opposition is constantly accusing us of living in isolation in the world, and I want to ask him whether, if Ministers receive official invitations to other countries, they should accept them or not? Seated over there is the hon. the Minister for Sport and Recreation. He received an invitation to visit a certain country, and I want to know whether he should have stayed away. If so, the Leader of the Opposition could have said: “We are isolated.” The hon. the Minister of Water Affairs also received an official invitation. Should he have stayed away? I myself received an official invitation to a specific country. Should I have stayed away? The Opposition levels the accusation that we are isolated, but when we do go overseas, we are reproached for having done so. What kind of argument is that? The fact of the matter is that Ministers are able to perform their duties here, and fulfil their obligations outside as well because the Opposition is so powerless that they are unable to pin the Ministers down here. I agree that this was an extraordinary session, but this attribute was to be found in the ranks of the Opposition. We held an election and the principal role which the Opposition played in that election was to say: “You must not elect another Government; you must elect an effective Opposition.” Ever since the election they have been competing among one another to see who should become the effective Opposition. They put me in mind of what Langenhoven said about the unicellular animal which multiplied by division. They also put me in mind—I tried to find out last night what seed this was—of the tamboti seed which has a little worm in it, so that when one touches it, it jumps. The hon. the Leader of the Opposition has quite a number of seeds like this in his party. If one touches him, he jumps, and each time he jumps a little closer to the Progressives. I want to tell the hon. the Leader of the Opposition that there are still other seeds like that in his party.

They are not all there.

They are not all there, but there is at least one sitting over there. He comes from some “vale” or other, and if one touches them, they jump. The hon. the Leader of the Opposition adopted a standpoint on the latest report, in regard to which two of his leading members, together with Government members, adopted a standpoint for the sake of South Africa. This is appreciated, and I do not want to take advantage of this in any way. I have the highest regard for those hon. members who, together with members on this side of the House, adopted a standpoint on a matter of so much importance for the sake of good order and peace in South Africa. I now want to ask the hon. the Leader of the Opposition whether he can say, with a clear conscience, that every hon. member sitting behind him is in agreement with those two members.

How does Waterberg feel about your sport policy?

I am asking the Leader of the Opposition for he said that this was a remarkable session, and I agree with him on that score. But I want to know whether he can say, with a clear conscience, that every member in his party supports the hon. member for Green Point and the hon. member for Mooi River in their standpoint? [Interjections.] The hon. the Leader of the Opposition knows that he is unable to say, for he has tamboti seeds among his members. If one touches them, they jump—and they are going to jump. There are still other remarkable difficulties in store for the hon. the Leader of the Opposition. The hon. member for Yeoville, with his four chicks …

Three.

Are they not four? The hon. member for Yeoville is on his way to the Progressives.

They are already there.

Can the hon. the Leader of the Opposition say, with a clear conscience, that there are not more members sitting behind him who sympathize with them?

How may Herstigtes are sitting on that side of the House?

All I want to say to the hon. member for Hillbrow is that I am talking to the hon. the Leader of the Opposition. He may still become leader; but he is not yet the leader. When the hon. member for Yeoville and his chicks declare their constituencies vacant during the recess, is the hon. the Leader of the Opposition going to pick up the gauntlet? They are going to create vacancies to test him. Apart from Randburg, they are going to create other vacancies. I want to ask the hon. the Leader of the Opposition what his party is going to do in respect of those vacancies. It would be interesting if the hon. member for Yeoville could give us the answer. But I shall leave it at that.

Admittedly this has been a remarkable session, and I agree with the hon. the Leader of the Opposition that it was very remarkable.

The mistake the Opposition makes in their whole approach in South Africa, is that when they want to hit out at the Government, something which they are fully entitled to do, when they want to criticize the Government, also something which they are fully entitled to do, there is one thing they omit to do, an important opportunity which a patriot like the hon. the Leader of the Opposition ought not to miss. I am specifically saying “a patriot like the hon. the Leader of the Opposition”, for I have no doubt about his patriotism and his decency. I am saying to the hon. the leader that I differ with him fundamentally, but I do not doubt his patriotism, nor the patriotism of certain other members of his party.

All.

I am sorry, I cannot say this of all. I do not doubt the patriotism of the hon. the Leader of the Opposition and of some of his members, nor do I doubt the decency of the hon. the Leader of the Opposition. It is beyond any suspicion. However, there is one fundamental mistake he makes when he attacks this side of the House, which is that he does not take into account the circumstances in which South Africa, together with other countries in the free world, has been placed, through no choice of their own. What I mean by that is that circumstances are being created around South Africa and other countries of the free world which stem from a power bloc which has been established and which will not rest until it has achieved complete world domination. Recently talks were held in France between people of prominence from various Western countries. I do not want to mention names in this regard, but these were important people from various Western countries, among whom a profound fear, as well as a profound concern, exists that the free world does not always realize what it is dealing with in these days, and that there is insufficient vigilance in many free countries against the powers which are being unleashed against them. I want to quote only one paragraph which appeared in one of the documents. This meeting was held on 22 November 1974 in Paris. On that occasion passages were quoted inter alia from Pravda, and as the hon. the leader knows, Pravda speaks with an authentic voice. I quote—

I am going to quote nothing further from this passage. However, I want to tell the hon. the Leader of the Opposition that when he, as a patriot, hits out at this Government and expresses an opinion of South African matters, he must bear in mind that circumstances have been created around South Africa and other countries of the entire free world, circumstances over which we have no control, but which we are indeed encountering, and that we should not, through what we do and say, play into the hands of those powers which are on the increase in the world.

The hon. member for Umhlatuzana, when he described the speech made by the hon. the Leader of the Opposition, said he wanted to sum up the speech made by the hon. the Leader of the Opposition in two words—“South Africanism”. But since when have these words become the property of that party? Who succeeded in having the motto “South Africa first” accepted in this country? Who else but Nationalist South Africa formulated this motto? Who bore the message forth when it was scorned? It eventually became the property of the whole of South Africa, and today everyone who wants to be popular, now speaks of “South Africa first”. [Interjections.]

Order!

I am very pleased when the hon. member for Umhlatuzana speaks of “South Africanism”. I agree with him, there has to be “South Africanism”, but that concept was born here, out of the struggle of a people which made South Africa its own.

What did Louis Botha strive to achieve?

The difficulty with the Opposition is that they want, under these difficult circumstances, to share power. They hope that they will be able to stand firm by sharing power. I received a document relating to the policy of the United Party. I do not want to deal with it today. But this is another new document which differs completely from the document they recently presented to us. This is an official document. There are things here which one does not understand at all. I do not understand them …

Insufficient intelligence.

… the Opposition does not understand it, the voters do not understand it. That is why the Opposition is sitting there in three parts. They want to share power but they are dividing themselves all the time. They say that they want to leave the ultimate say to a referendum among the White voters. Suppose the White voters say “no”, and the other people say they want it? What then? Are they prepared to enforce the will of the White voters by violent means? [Interjections.] I am coming to that now. The hon. member need not anticipate me. The Government believes in the division of power and in the creation of channels for consultation.

We believe that this is the only way to prevent domination of one by the other. However, this does not mean, as the hon. member for Umhlatuzana said here yesterday, the rejection of the Black people. This means the recognition of the right of the Black people to self-determination, and this in accordance with the splendid principles embodied in the U.N. charter, that each nation has the right to self-determination.

They have no choice.

Oh, please stop nagging now. You do not usually carry on like the hon. member for Houghton. So sit still like the decent fellow you are.

End of session nerves.

The hon. the Leader of the Opposition said that the mistake the National Party makes is that it is an Afrikaner party, and that it is compartmentalizing Afrikaners. He heard this from the hon. member for Mooi River, who wrote a very fine article, but did not go far enough because he did not think far enough.

What is the National Party? The National Party is not merely Afrikanerdom. The National Party is an instrument of Afrikanerdom. The National Party is not more important than Afrikanerdom. Afrikanerdom is more important than the National Party. That is why the National Party is an instrument in the service of Afrikanerdom. But I want to go further and say that Afrikanerdom has never yet been exclusive in its views. For that reason names such as Kestell, Cachet, Hayward and numerous other surnames have been associated with Afrikanerdom. Throughout our history Afrikanerdom has never been exclusive and the people who presented Afrikanerdom as being exclusive and who ranged themselves alongside our imperial opposition, did Afrikanerdom a disservice.

It is not correct to say, as the hon. member for Pinelands said here yesterday—of unfortunate memory—that the National Party was born out of fear. The National Party was not born out of the fear of Afrikanerdom. The National Party was born out of the will of a people to control their own destinies. On what authority do you say that the Afrikaner people are an apprehensive people? One need only consider their history. They have also had traitors along the way, but every nation has its traitors. And it still has traitors, but they are, thank God, becoming fewer. We did not walk a path of fear in this country; in this country we walked a path of courage. The National Party was born out of a desire for self-determination among us. But what we demanded for ourselves, we also granted to other peoples in this country. I want to tell the hon. member for Mooi River that I have very high, regard for him. I think we differ fundamentally with one another. I do not think he can detach himself from the Briton in him. I want to tell him that he should not allow the Briton in him to stand in the way of his South Africanism, and his respect for the Afrikaner. One of our writers wrote a book entitled, Saul, die Worstelheld, and he said of Saul that he waged a personal struggle with him self. The hon. member should not become like the man in this title. The doors are open to him. He need not call upon the Boers. The Boers are where they belong. He must come and build the future together with the Boers. [Interjections.]

Order!

In the remaining five minutes at my disposal I want to say a few words with reference to the termination of the Simonstown Agreement. The termination of this agreement is not a tragedy for us. It is a challenge for us. We shall continue to improve our facilities, but we do not want to do this in any other way than in a spirit of independence. Therefore we shall, in the first place, improve the facilities we envisage improving at Simonstown, Walvis Bay, Durban and Port Elizabeth, to provide our growing navy with its own facilities in the first place. We are developing Simonstown for our own purposes, and for our own safety in the first place. We shall place it at the disposal of others who wish to develop it in a spirit of mutual respect and co-operation in the service of freedom. As far as I am concerned, however, a unilateral agreement with one country will not be entered into again. We shall co-operate with all friendly countries on common tasks, but on our own conditions. This is the spirit of independence; it is the spirit of self-respect; it is the spirit of a country that knows that it has a task to fulfil. Simonstown will not be bled to death by the termination of this agreement. We are finding the manpower to build up Simonstown; we are finding the electronic equipment; we are finding the arms, we are finding the ships; we are finding the air-draft for maritime defence; we are finding the goodwill of other countries, and we shall take up our position within the free world as long as we are spared to do so.

Mr. Speaker, I should like in the first instance to react to what the hon. the Minister of Defence has said in regard to the ending of the Simonstown Agreement. I think it is obvious that the termination of that contract, if I might use that term, was inevitable and I think we therefore accept it. Quite obviously, however, I feel that we should also accept the fact with some regret that a long-standing arrangement of this nature has of necessity had to come to an end. Nevertheless, this is a regret that one has to tinge with reality, the reality of a present situation. I agree with the hon. the Minister that we must build up our own defence system standing on our own two feet because I believe that in this world, that is the only way to do it. However, I also think we need to look for other defence associations. Whereas we have looked traditionally to Europe and to the Western powers, I want to commend to the hon. the Minister that he should perhaps look across the Atlantic towards South America for what may perhaps prove to be new defence associations, and also, as Africans that he look to Africa for our defence associations of the future. I think that as far as our future is concerned, we must look beyond Europe and the West.

*There are also another few words which I should like to address to the hon. the Minister. I want to say that I have no objection whatsoever to the National Party being in the service of the Afrikaner nation. I think this is how it has grown and that this is its task. I want to tell him, however, that in the political world of today, a political party which wants to be the Government of South, Africa ought to be in the service of South Africa and not only in the service of the Afrikaner nation. I think this is important; this should not be forgotten. I hope the hon. the Minister will not forget this either.

†Mr. Speaker, this has been said to have been a strange session, which I think it has been. However, the question which we must ask ourselves and which I think the electorate is entitled to ask is: How much happier, how much safer and how much better off are the people of South Africa today than they were when this session of Parliament started? Have solutions to the problems of peaceful co-existence in Southern Africa been found? Have the foundations been laid on which to fight inflation? Are we on the road to establishing sound relations with Africa and the Western world? Sir, I regret to say that we have not provided many answers to this during this session of Parliament. Let us not deny that there have been changes in the last six months, and those changes have been for the better. The Prime Minister has tried to normalize relations with African States. We have had gestures to Blacks, such as returning to the 1967 land tenure situation; to Coloureds by opening the Nico Malan, to Indians by removing certain restrictions on movement, and to sportsmen by allowing a multi-racial invitation team to play the French. Sir, one should not minimize the value of many of these improvements and I do not intend to do so. But perhaps the most significant has been the shift of attitude on the part of the Government over South West Africa and Rhodesia. The reality of Rhodesia’s having a majority Government is not only acceptable to this Government, but in the hope that it may assist in bringing about peace in Southern Africa, the Government has been prepared to use its influence to bring the parties to the conference table. Over South West Africa the Government has not only moved significantly, but has moved faster. Self-determination is an accepted principle. A constitutional conference is to be held within a relatively short time, and moves are afoot at a fast pace to remove the outward trappings of discrimination. Sir, these steps are significant for South Africa not only because of international and African politics, but because they are in the nature of experiments. If the removal of discriminatory practices is acceptable in South West Africa, why not in the Republic? If South West Africa can change its pass provisions, why not South Africa? I believe, Sir, that South Africans should therefore watch what happens in South West Africa carefully, for the acceptance of changes by the White community there could be the forerunner of more action of the same kind in the Republic. Sir, the actions of the Government during this session, however, have been mainly tokens. They have been tokens to test the water. Only if the water is warm enough will the Government jump in, and even then it will still stay near the edge so that it can climb out if the temperature should cool.

Sir, let us examine some specific problems. We applaud the Prime Minister’s endeavours to achieve détente, and I believe that it is the duty of everyone to assist him. This is why, right at the beginning of this session, I for one did not have it in my heart to vote against the amendment in the No-confidence Motion, and I took the consequences of my action. Sir, the message received so far from Black Africa, in the words of the Dar-es-Salaam communique, is clear: Détente and dialogue at this stage are out and only discussion on limited subjects is in. Sir, let us face one fact squarely. As long as we do not change our internal policies to remove colour discrimination in its broader sense, we will secure neither future peace internally, nor will we secure it externally. The word “apartheid”, whether we like it or not, has become a symbol in the world. This word has become a scourge in so far as South Africa is concerned. The man who coined it rendered a disservice to our country. It can rally opposition to South Africa on almost any occasion. What is needed in South Africa today is a symbolic act. I think that we as a Parliament should agree that apartheid should disappear in South Africa. This symbolic gesture to our own Black, Coloured and Indian people, to Africa and to the world, is something that is required, and it is required now. But, Sir, not only must the symbol of apartheid disappear. With it must disappear discrimination, and with its disappearance, respect for human dignity and equality of opportunity must become the sincere aim of the South. Africa of tomorrow. Sir, this is the dramatic act which South Africa requires to give its people hope and to restore its credibility in the African and international community. If White South Africa can convince the Black. Coloured and Indian people in our land that not only the symbol but the concept of discrimination has been abandoned, we will in one wonderful act in this Parliament have obtained not only the goodwill of all our people, but we will have gone well on the way towards achieving our rightful place in the African and Western communities of nations.

There is another matter I should like to touch on, and that is that Government spokesmen have repeatedly stated that they accept the concept of self-determination. The Government has obtained a mandate from the White voters as to the form that the Whites would like such self-determination to take. Sir, the Government has no mandate from the Blacks, Coloureds or Indians as to the form of their self-determination. They have never voted or otherwise decided upon separate or parallel development as being the form of development of their choice. On the contrary, for example, the Coloureds in the last election firmly rejected the concept of separate development. They made it clear that they were not satisfied merely to have a say in the form of governmental machinery provided for them. They want a say in determining the sort of constitutional set-up that will apply to them. Sir, when Black leaders of the homelands meet with leaders in Africa, they have to face the argument that their homelands are the creation of apartheid. It is not the Black people themselves who have chosen this type of development. If local and world credibility is to be given to self-determination of peoples in Southern Africa, the form of self-determination will have to be agreed by all the people.

On a point of order, is the hon. member conforming to Standing Order No. 102?

Order! The hon. member may proceed.

Who wrote that speech?

The constitutional structure has to be arrived at as a matter of consensus. All the people must play a part in the creation of the machinery which must be an expression of their desire as to the form of the ambit within which they wish to express their self-determination. If this is not done, the independent States created by the homelands and the form of development, whatever it may be, of Coloureds, Indians and urban Blacks, will forever be stamped as the creation of the White man, the product of apartheid, the arrogance of men who decide for others. Sir, what is needed and what is needed as a matter of urgency is a constitutional convention for South Africa, a convention at which the leaders of all race groups who truly have the support of their people, meet together to decide upon the form which South Africa’s constitutional development is to take, the ambit of the self-determination of each group, the formulae to be evolved to avoid domination and yet give self-expression. If this is done, the policies to be applied will have the goodwill of all responsible people and we can face the world with a plan for the constitutional development of our country which we can justly say is the will of all the people. Sir, the need to have this convention is urgent. Obviously the Government, with their mandate from the majority of White voters, is the correct body to take the initiative to find this type of blueprint for our future. Sooner or later such a conference will have to take place.

Sir, I prefer to see it happening sooner, because while we are strong and while we can influence the time-table and can act because it is morally right to do so and not because we are under pressure, is the time for us to do this. If the Government does not take this initiative then perhaps other people of goodwill may have to do so, but it will not have the same meaning as will the actions of those actually in power in South Africa. The one problem that we face here throughout is that whereas the Government has been prepared to get to grips with isolated matters, prepared to make gestures, prepared to make token gestures, prepared to open the Nico Malan, prepared to do things of that sort, it has not got to grips during this session with the reality of what needs to be done. It has not got to grips with the problems of a ¼ million Coloured people who need housing and it has not got to grips with the acceptance of the principle of equal pay for equal work. It has not got to grips, for example, with the constitutional situation as far as the Coloured people are concerned. So we can go on and list the token gestures that have been made by the Government without them this session of Parliament having got to grips with the reality of what has to take place.

The difficulty is clear, namely that the Government is only able to apply palliatives because of its own problems within its own ranks and because it has to carry with it a right-wing mass of thinking within its party. The best example of this— I want to call it the dinosaur politics of 1975—came from the Administrator of the Transvaal the other day. He now talks of the fact that people are going to pay with cheques because they do not want to stand in mixed queues. He alleges that parks are empty because people do not want to go to parks which are mixed. Those are examples of the dinosaur politics in South Africa. Those are the politics that are holding back the leadership in the Nationalist Party from making the dramatic moves which the party knows must be made. The sooner we reject these dinosaur politics of South Africa the better it will be.

In the few minutes which are still available to me, I want to turn to the attacks which have been made by both Government speakers and by United Party speakers on people who sit in these benches. The hon. the Minister of Sport and Recreation who is not here now has indicated that he does not mind if people disagree with him but he wants people to accept his bona fides. I am prepared to accept bis bona fides but the tragedy is that when we who sit in these benches and who see the dangers which loom for South Africa offer our bona fide solutions and our bona fides, they are not accepted and we are subjected to the type of attack that has come, for example, from the hon. member for Umhlatuzana and other hon. members during the course of this debate. The hon. the Deputy Minister of Bantu Administration and Education spoke about the danger which we constitute to South Africa. The biggest danger to South Africa are the people who do not want to see what has to be done in South Africa to put matters right. It is no good making the kind of attack which doubts the patriotism of some people and lauds the patriotism of others because they happen to say things that please one. Sometimes one has to be a patriot and say something which is unpopular in relation to something about which one must tell the truth. When one does so then one’s patriotism is attacked in this House and then the smears and the attacks of this nature follow. Sometimes one has to stand up and allow yourself to be attacked just because one is a patriot.

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

No, I am not prepared to reply to any questions.

Tell us about your stand on communism.

I shall come to that in a moment. Let us make the position clear. One must be entitled to have a different view in this House and to put one’s case without having one’s patriotism and South Africanism attacked by people who should look into their own hearts in regard to their attitudes towards South Africa and to what is needed. Let me express my regret and my sorrow at what was said, for example, by the hon. the Leader of the Opposition. I speak here more in sorrow than in anger as far as he is concerned. He gets up in this House and talks about the fact that there are representatives of Whites in this House who side with the Blacks against the remainder of the Whites in South Africa. I do not know who wrote his speech for him, but he himself condemned that type of attack when it was made by the hon. the Minister of Bantu Administration and Development on his own party. He said that that was not the sort of thing that one did in politics in South Africa.

I can quote no one better than himself who condemned that kind of attack that can only do harm to South Africa and to all of us. We have seen the attitude of hon. members and have heard the questions that have been asked. The hon. member for Umhlatuzana is here by courtesy of the fact that somebody else did not have a proper postal vote organization. Otherwise he would not have been sitting here at all … [Interjections.] … because the people have no confidence and no hope in him … [Interjections.]

I was opposed by a verkrampte UP man when hon. members on my right put up against me. [Interjections.] I had to fight him at that time, that is the truth of it. [Interjections.] I object to the impertinence of the inferences that were drawn here in relation to the question of communism, I make no secret of the fact that I am opposed and have always been opposed to communism, and that I will certainly not support the legitimization of a political party that has its object the overthrow of the State. [Interjections.] I have said that and they know what my attitude is.

Hon. members know what my attitude has been in the caucus. They know that I condemn violence and that I condemn sedition, but they employ this kind of smear tactic in order to try and destroy peoples’ credibility, because they are desperate. We are seeing the death throes of a political party, and in desperation they want to do as much damage as they can in the last moments of their survival. This kind of excessive behaviour is not something which is going to do them any good. If South Africa could have seen what they were saying and doing here last night in this House, not even the 30 votes that got the hon. member for Umhlatuzana in would have been available to him. They know that these are the actions of a party in extremis. I make no secret of the fact that I was in the United Party for 27 years, where I served them, whether they like it or not, loyally and devotedly. I am not ashamed of that. What worries me is what has now suddenly happened to the United Party, as is illustrated by the attitude of revenge and desperation which they now have. To those in the United Party who are left, who are balanced and who know what is going on and what South Africa is looking for, I want to say: Do not use these excesses and these smears and do not use the tactics that you yourselves condemn, because you will destroy your own credibility in the eyes of the public.

Mr. Speaker, I want to agree with hon. members that this was a very strange session. Nevertheless, many interesting things happened in the course of this session. For example, we knew that the Reformists and the members of the United Party were cross with one another, but we never knew that they were as cross with one another as we have just heard from the hon. member for Yeoville. I do not blame the hon. member for being as cross as he is, but they are probably just as cross with him. The hon. member accused the National Party of the National Party and the Government not being realistic. In the same speech the hon. member tells of how he devoted himself to the United Party for 27 years. I want to ask the hon. member whether or not he was a realist in that period of 27 years for which he sat in the United Party.

When I was sitting there, yes.

The hon. member says he was a realist when he was sitting there. Now I want to ask the hon. member whether today he regards himself as being a realist while he is sitting here.

Yes.

Now the hon. member is a realist again. I want to put a further question to the hon. member. During the session there was another major event which took place. This was, to be specific, the consolidation of the homelands, which we on this side of the House regard as a milestone in the further development of the National Party. When the hon. member was sitting on that side of the House as a realist, did the homeland leaders accept and support the policy of the United Party?

They rejected it.

I knew the hon. member for Bryanston was going to say this. The policy of the United Party is rejected by the homeland leaders. This is so. Does the hon. member for Yeoville agree with the hon. member for Bryanston that this is so?

I shall reply to that at a later date.

The hon. member will say this at a later date, but the hon. member for Bryanston said that the homeland leaders rejected the policy. I think we have this fact very clear now. One of the most important reasons why the United Party and the Reformist Party reject separate development, is that it is not acceptable to the homeland leaders. We heard this often in the course of this session. Recently in a speech, the hon. the Leader of the Opposition quoted the words of homeland leaders to prove that they did not accept separate development. If it carries so much weight with them that they cannot accept separate development—in fact, reject it—because the homeland leaders reject it, I want to ask them whether the homeland leaders accept the policy of the United Party. Can the hon. member for Edenvale tell me this? Do the homeland leaders accept the policy of the United Party?

As far as I know, yes.

Now the matter is becoming interesting to me. In that time when the hon. member for Yeoville was serving his 27 years in the United Party, he was one of the big negotiators with homeland leaders. The hon. the Leader of the Opposition had so much faith in him as a negotiator, that he allowed him to go to Natal to conduct negotiations, and the Natal leader of the party was ignored.

That is rubbish. He was not ignored.

The hon. member must not misunderstand me. It was not the hon. member for Yeoville who ignored the leader of the party in Natal, but the hon. the Leader of the Opposition as a result of the faith he had in the hon. member for Yeoville. Surely this is perfectly logical. For that reason he sent the hon. member for Yeoville to conduct those negotiations and to sign the declaration of faith. When that declaration of faith was signed, however, it attracted a great deal of attention in the Press, not with regard to what had happened amongst the members of the United Party themselves, but because the United Party had formulated its federal policy in such a way that it was also acceptable to the homeland leaders. The contents of that declaration of faith, were, after all, what made the policy of the United Party acceptable to the homeland leaders. Now, however, members of the Reformist Party say that this is not so and that the homeland leaders reject that policy. It is a pity that the credibility of people becomes involved as regards matters of this kind. Who are the Whites to believe in South Africa, the Reformists who were directly involved in the negotiations and the drawing up of the declaration of faith and who say now that the homeland leaders reject that policy or the United Party who says that the homeland leaders accept its policy. What is being prejudiced in the times in which we are living and in which the Black man is looking to the White man to lead him to a dispensation which will also bring him happiness and eventual self-determination in South, Africa, is the credibility of people. Because this kind of game is being played by the Opposition, relations politics in South Africa are becoming polarized as a result. So am I wrong when I tell you today that it is only the National Party that can solve the relations problems of South Africa because it is only the National Party that has been following a course with the non-Whites which has not been a course of deceipt? Therefore it is not only the Black people, the Brown people and the Yellow people who should accept this in South Africa. The White people accepted this a long time ago in South Africa. For that reason the hon. member is sitting where he is—i.e., in the ranks of the small group of divided people.

There is, however, another aspect with regard to credibility which I should like to deal with. After the election last year the hon. the Leader of the Opposition moved a motion of censure here in this House, and in the speech which he made, he expressed his sorrow because the United Party had fared so badly in the election. He presented reasons why they had fared so badly and he said, inter alia, that one of the reasons was the minor and insignificant internal disputes in their ranks. He said that the Progressive Party had gained a few members in this House, as a result of the protest vote which had been cast because of the dissension in the ranks of the United Party. However, the hon. the Leader of the Opposition also said, “We have returned in smaller numbers, but we are sitting here as a unit now; we are sitting here as a party which is united and which enters the future as a united Party”. Do hon. members know when this was? This was in October 1974. The hon. the Leader of the Opposition said to the electorate that they could once again put their trust in the United Party because the United Party was sitting in Parliament as a unity party to implement and advocate the parties policy. I will shortly return to this matter again.

We have the reports on the Christian Institute and the UCM and I do not want to repeat what was said by the hon. Leader of the House. Last year, however, we also had reports, for instance the report on Nusas. The Opposition implied—and that which they implied they used during the election —that they, as a party, accept the reports and support them. This was possibly the correct thing to do. They supported the report as a party and not as individuals. Did the people who are now Reformists support those reports or not? The hon. member for Edenvale will probably know. Did they support them?

Do not ask me.

Did the hon. member not know at that stage what was happening in the party? Perhaps I can ask the hon. member for Mooiriver, if I can get his attention, whether that splinter group supported the reports? Did the Reformists not support the reports?

Ask them; where are they now?

They are all gone now. You will, however, agree with me, Sir, that they did not support it. This was one of the bones of contention in the ranks of the United Party. In October 1974 the United Party said that it was sitting in Parliament in unity with these people, who have now formed a splinter party, and that they all agree. A few months after that they ran away, however. Why did the hon. the Leader of the Opposition create the impression among the people that his party adopts a standpoint with regard to the Nusas and other reports? Would it not have been more honest for the hon. the Leader of the Opposition to have said: “Members in my party stand by that report and accept it”.

I said that the hon. the Leader of the Opposition said in October that they are united and in agreement on policy matters and on standpoints which have to be adopted. Now the hon. the Leader of the Opposition comes along—I hope I am not making an incorrect statement—and says that they are still a united party and that they got rid of the stones in their stomach, as the hon. member for Durban Point said yesterday. He knew, in October last year, that they had a stone in the stomach. Now he says they got rid of the stone in the stomach—except the hon. member for Durban Point himself, who has just entered the Chamber. I am glad to see that he got rid of the stone in the stomach. Now they are a united party again. Since we have reached the end of the session, I want to ask them whether I or any other member can go back to the voters and tell them that the United Party is again united as an official Opposition on the opposite side?

Yes.

I am very glad that it is the hon. member for Durban Point who says “Yes”. We can say they are united now. However, what value can one attach to the words of the hon. member for Durban Point when he says that? In October last year he also said here in this House that—it is recorded in his Hansard—that their disputes had been ironed out and that they were a united party. Did he speak the truth in October or was that merely what he was thinking?

I believed I was dealing with honest people.

The hon. member says he believed that he was dealing with honest people. This is very interesting. [Interjections.] He believed he was dealing with honest people, but when he thought he was dealing with honest people, it was a stone in the stomach to them.

The question is: Who is honest?

I am glad the hon. member asks that question, because I did not want to ask it. The credibility of the United Party is one of the reasons why the United Party is what it is today. The credibility of the United Party is also one of the reasons why they have not yet finished breaking up.

I want to conclude by warning them about another aspect with regard to the ethnic relationships in South Africa.

We do not need your advice.

The United Party should stop playing this game in these times in which we are living in South Africa. It affects the continued existence or the non-existence of our White Parliament in terms of their policy. I think this is a foregone conclusion and we accept it now that the White Parliament will disappear. It is interesting to note what the United Party has to say about the position of the White Parliament. When they speak to the leftists and the elements who are still in their ranks, the stones who are still in their stomachs, they say that the White Parliament will simply be there to regulate the implementation of the policy in practice. However, when they speak to the conservatives, with the people in the Afrikaner fold to whom the hon. member for Mooi River referred in an attempt to entice them to leave the fold, they say: We have a firm grip by means of the White Parliament. The Parliament will be a parliament with the supreme power. The sovereign power will be vested in this Parliament. When they speak to the other people, they have a different story, however. Therefore, we cannot, unfortunately, go back to the electorate and tell them that the United Party is indeed following a definite cause; we can only go back to the voters and tell them that if the United Party has ever gone astray this is what it is doing now.

Mr. Speaker, in the course of my speech I shall come back to deal with the role of this Parliament in the future that lies ahead, as dealt with by the hon. member for Bloemfontein East. Let me just say to him that if he cannot understand this, then he has been in the wrong party too long—I am referring to the fact that our commissioners on the Schlebusch Commission have the support of the caucus, but we do not expect every member of the caucus or every member of the party to agree with every factual conclusion reached by them … [Interjections.] … in exactly the same way, as the hon. member for Green Point has already pointed out, as judges of the Supreme Court having heard the same evidence very often come to different conclusions.

Tell that to the marines.

What about the recommendations?

I say that they may come to different conclusions on facts. In so far as their presence on the commission is concerned, they are backed not only by the caucus but by the central head committee and, in fact, also by the central congress.

The caucus does not seem to back them unanimously.

In fact, they were also backed by that hon. hitch-hiking member for Yeoville. [Interjections.]

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

No, you cannot. I do not talk to people who have no credibility whatsoever. [Interjections.]

Order!

I should also like to deal with the hon. the Leader of the House who delivered a speech relating to South Africanism. I want to say this to the hon. gentleman …

I do not think you are one.

I want to say to the hon. gentleman that he should know more than anyone else in this country that we will never achieve our destiny in South Africa …

Mr. Speaker, on a point of order, is the hon. member for Yeoville allowed to allege that the hon. member for Durban North is not an hon. gentleman?

What did the hon. member for Yeoville say?

I said that he was not one when reference was made to being a South African.

“An hon. gentleman”.

Sir, I know what I said. The hon. member referred to South Africanism and I said: ‘T do not think you are one.”

The hon. member for Albany must accept the word of the hon. member for Yeoville. The hon. member for Durban North may proceed.

What the hon. member for Yeoville thinks is of no consequence.

I was dealing with South Africanism. I said that the hon. the Leader of the House knows better than anyone else that we cannot achieve our destiny as a country, as a people, unless every single person in this country, White, Black or Coloured, regards South Africa as his country and is prepared to fight for and defend it. My hon. leader made it quite clear that the situation we have is a symbiotical situation, that state which we have in biology where there are two organisms which cannot live one without the other. Take the one away and the other dies. However, that is our ultimate security, that is the only guarantee we have. When we can achieve that end and are all South Africans and all belong in one country and are all prepared to defend it, then we will have security and we will have no fear from anyone in the world, Black or White, big or small, as to our future.

No one will doubt that to achieve this end, leadership is needed. The leaders of South Africa and the leaders of this subcontinent are the White people and they and only they can ensure the goal which was sketched by my hon. leader when he opened this debate on our behalf. Sir, it is precisely in that field that the federal plan of the United Party, as outlined by my hon. leader, provides for this leadership, for development and for the regulation of the future. If the White people fail this country and fail to give that leadership, then there is no hope for anyone in this country. Some people have already given up hope. The Nationalist Party is sitting around now waiting for the Blacks to say what they want, and then they go into convulsions when the Blacks say what they do want. Sir, If any evidence is needed of the lack of leadership of this Government, it is to be found in the answer given by the hon. the Prime Minister to a speech which I made here some time ago and which is known as the “it is what it is” speech. Sir, it would profit hon. gentlemen to read that speech and the hon. the Prime Minister’s reply to me, in which he said that if the homelands would not take independence, then the situation would remain exactly as it is. Sir, with one exception, every one of the homeland leaders so far has said that he has no intention of taking independence and cutting himself off from South Africa. Where is the leadership; where is the policy? Where are they going to?

Sir, one does not have to deal with the odds and ends on our left. They have given up leadership already. Under their policy there will be a Black majority instantly in every single one of these States. Sir, how is leadership going to be achieved under their policy? We have had not one word from them in this debate. The hon. member for Yeoville spoke here this morning but we have not yet heard one word from them about their policy. Sir, they have been here for two full sessions in their large strength, and not once, despite the invitation, have they dealt with their policy, and I have no doubt that they will not deal with it in the rest of this debate either.

They are running from it like the plague.

It is the plague.

Sir, in a country of radical extremes, moderation and realism are seldom recognized as an agency for change unless introduced by the governing party. If it is done by the governing party, then it is acclaimed, but if it is postulated from outside, then it is called compromise. If it is postulated by us, then it is called compromise and we are told that we are not taking a firm stand on principle. The test seems to be that unless the alternative is as radical as the evil being combated, then it is a compromise. Sir, this is not a South African attitude.

What we need, as my hon. leader has said, is a new purpose, not to grovel before the views of sections of Blacks or sections of Whites, but to face up to the realities and all the problems of our country, problems made much more difficult by the attitude of the extremists, and especially by some organs of the Press, both English and Afrikaans, who postulate and can see only the two radical extremes. Sir, for that purpose leadership is required. It there is a message for the Government, for the odds and ends, and for the country, that has come out of modern Africa recently, then it is that you do not set up a constitutional machine and then leave it to itself because then you will get chaos. That is the lesson that has come out of Africa, and that is exactly why we provide for a regulating force to ensure that the development of this greater South Africa will in fact take its course and that chaos will not result. In the circumstances, because one cannot anticipate what will happen, one always keeps control and one keeps one’s options open. Sir, the second lesson that has come from Africa in more recent times is that if you are wise, you will meet the legitimate aspirations of the people before you come to the point where you have not got any bargaining power to deal with them, and their aspirations.

In the short time left to me, I want to deal with what has become a sort of catch-phrase with some people, viz. the important question of the rule of law. This phrase has been used more often in the course of this session, especially by the odds and ends, than any other phrase. I don’t think they understand what they are talking about. Perhaps Wade and Phillips in their work Constitutional Law gives as good a definition as one can find in the light of the type of constitution we have. They say—

Then they go on to say this—

Let us now examine this in the light of our situation and let us get one thing straight. One cannot talk about the rule of law and one cannot apply the rule of law unless one can do it within the framework of law and order. That is a prerequisite. Indeed, in the many discussions over the years about the rule of law there were some who felt even that Dicey’s concept meant just law and order as opposed to anarchy. Within that framework, then, you can apply your principle of the rule of law. But let me say that the maintenance of law and order and the maintenance of our security are not the responsibility or the prerogative of the Government alone; it is the responsibility of all of us and it behoves the hon. members who sit on my left to remember this and to demonstrate it.

Now we are told by the Progressive Party and also by a number of organs of the English-language Press that our record in relation to the rule of law is not good. Sir, our record in relation to the rule of law, if that is the definition of it, is second to none; it is a record to be proud of.

The hon. members over there, as my hon. leader said, have gone overboard to the exclusion of the question of security. What happened when we had the so-called Poqo Act, the 90-day Act? There was a judicial commission which reported that unless steps were taken immediately and legislation passed to deal with Poqo the Government would lose control of the urban African townships and that there would be no law and order but in fact, anarchy. In such circumstances our first duty is in fact to secure the security of the State, and what did we, in fact, do? We supported that principle at the Second Reading but the hon. member for Houghton did not. She and her party have never had any balance in regard to this. But we opposed the 90-day clause. It was the United Party which opposed it, and amendments were made to it as the result of pressure by the United Party.

Let us take the question, for example, of training outside the country for unlawful purposes, for example sabotage. What was our attitude? Our attitude was that certainly this must be an offence for which the death penalty could be imposed and, furthermore, we were prepared to make it retrospective because they caught a lot of these people. But what was the attitude of that party? They opposed it. “Let them go,” they said, “because the rule of law has not been applied.” That is absolute nonsense, Sir. What lack of responsibility.

But then we come to the absolutely classic case when in 1966 a provision was introduced by this Government providing that if you took someone in for interrogation you could detain him for 14 days only and then you had to get the permission of a Supreme Court judge to detain him further.

What better example could there be of the rule of law being applied, where the action was not arbitrary and where the courts came into the picture after 14 days? What was the attitude of the hon. member for Houghton? She opposed it. Why? What does she mean by the rule of law? How does she expect to apply it if she is not prepared to be responsible in regard to it?

I mean that no one should be deprived of his liberty without it being done by a court of law.

So I can go on and on. I shall tell hon. members what worries me most of all. This is a very precious and very important part of our Constitution. The hon. the Minister of Indian Affairs said as much the other day. What worries me is that if this concept is going to be used as a political gimmick and as a party-political tool for the short-term benefit of some people, mostly the Progressives and the Reform Party, the danger exists that if that is the way it is to be prostituted without responsibility and without sense, it will lose its meaning and its feeling for the people of this country. That would be a great disservice to our country.

In the one minute which is left to me. I want to say that we have heard a lot of nonsense about the Affected Organizations Act. The first organization to be declared an affected organization in terms of that Act was Nusas. When that happened, it was the United Party that moved the adjournment of the House to debate the matter and it was the United Party which raised the question as to what kind of inquiry there had been and whether both sides had been heard. The hon. member for Houghton took part, and everyone else in the House was present at the time. What did she say about it? She fluffed around and she tried to have a little dig at the United Party and its participation on the commission, but not once did she complain about it. That is why I and my leader are entitled to say that their making a fuss at this stage about the Christian Institute is in fact political opportunism of the worst possible kind.

Mr. Speaker, I should like to say a few things about the speeches made by the hon. the Leader of the Opposition and other hon. members, but first I just want to refer briefly to the hon. member who has just spoken.

†It has happened very seldom in the past that the hon. member for Durban North has said something which I could appreciate. I want to congratulate him on the fact that he said something today which I can appreciate. If I understood him correctly—I sincerely hope that I did …

I am getting worried now.

Who is getting worried?

The Whip.

I hope the Whip will not be worried. The hon. member referred to the coherence and the unity which there should be between all sections of the Whites in the interests of South. Africa. He said that it was in the interest of South Africa with a view to defending our country, upholding our civilization, etc.

I said everyone, the Whites, Blacks, Coloureds and Indians.

Yes, in the first instance, the Whites, and if you take it in a bigger sphere, also the other groups. I have full appreciation for those words of the hon. member. That is what I referred to just now. This, to our pride, is the result of many decades of influence and work by the National Party, and it is gratifying to hear that from an hon. member of the Opposition of the type which the hon. member for Durban North is. With the words “the type of member” I imply nothing bad whatsoever. I think this is a positive result and an achievement which can be ascribed to the National Party, because for years hon. members opposite have fought severely against the spirit of saying “South Africa first” in every respect. I associate myself completely with what the hon. the Minister of Defence said just now when he referred to the concept of “South African first”, and to the person who coined the motto.

The hon. member for Durban North referred to the African States and, by inference, also to the Bantu States in South Africa which might become independent in terms of our policy. He said that in terms of the United Party policy African States or Bantu States in South Africa would not be left to themselves.

I wish to stress the fact that in accordance with National Party policy, i.e. multinational development of all the various Black nations in South Africa, we very strongly believe that the inter-dependence between the Whites as a nation in South Africa, the Republic of South Africa as an organized State and the Black States in an independent or semi-independent form within South Africa, will always be very strong and will grow even stronger in future. Although we do not intend and although it is not part and parcel of our policy to try to regulate the internal matters of an independent Bantu State in South Africa, it must be accepted, and it stands to reason that it will be so, that there will always be influences from the Republic of South Africa upon them and there will always be ties between them and us and that we in the Republic of South Africa will always come to their assistance. That must have a very strong influence on them. In terms of our policy it is improper to try to regulate the internal matters of an independent State.

*Mr. Speaker. I want to begin at the beginning, in other words, with the hon. the Leader of the Opposition. I am not going to, nor do I need to discuss everything he said, for other hon. members on this side have already done so very effectively. But when one is listening to the hon. the Leader of the Opposition, and when, to use his own imagery which he has used so often, he goes into orbit, then one finds that one is listening to a real “ping-pong” of words, of fine-sounding hollow phrases. After I had listened to his entire speech, right up to the end, I jotted down something in my notebook here, but I then decided to delete one word because it was a rather ugly word. I then jotted down another word in its stead. I wrote: “A perfect party, but with many defects”. According to the hon. the Leader of the Opposition his party is perfect, but from the one extreme to the other it is full of sheer defects. His party is so perfect that it is creating a heaven on earth, as he depicted it. But there they sit. They are splintering all the time. If that party of theirs is so perfect, why is it not attracting more and more people? It is because it is a play on words, a lot of hollow sounding phrases.

I wanted to elaborate on this in far greater detail, but it is not necessary now because the hon. member for Pretoria Central did so very effectively last night, particularly with reference to the federation concept of the Opposition. I am simply asking, for the sake of continuity: Where in all the world has the federation concept as such succeeded in keeping various peoples together in one national context for the purpose of governing that country? Where in all the world has this succeeded? Last night the hon. member for Pretoria Central enumerated a whole series of examples where this had not happened. Here, very near to us beyond our own northern borders, we had the most resounding example of a federation which, before it was able to find its own course, first had to split up into three separate States. As we know, problems are still being experienced in one of those three. The hon. the Leader of the Opposition must realize that a federation is perhaps possible among homogenous people, people who have a centrifugal urge, who think and feel alike, and who have an affinity for commonality, but not among various nations with various languages, various cultures and various futures, and on that basis, with various future destinations. The hon. the Leader of the Opposition should mention such examples to us. I know that six, seven years ago we frequently heard the example of Cyprus being mentioned by hon. members on the Opposition side. But we never hear that example any more. Why not?

What about Switzerland then?

Switzerland is in a completely different group to that which the hon. member for Pretoria Central mentioned. The hon. the Leader of the Opposition also discussed other matters, to which I also want to refer briefly. He referred to what certain commentators had said, according to a certain Sunday newspaper, after a visit they had paid to Bantu homelands in South Africa. There was a great deal of comment on that visit, as there has been on many other visits. I do not want to dismiss those people in disparaging terms. Nor is this the first time we have encountered something of this nature. There are many examples of idealists, of people without a practical approach, and of people who are in too great a hurry to achieve a goal, who have said such things. But there were other comments as well to that self-same visit to the Bantu areas of the Northern Transvaal, radio comment, part of which I also heard. I am not saying this because I think that the person whom I have in mind now always makes the most favourable comments, but why could the hon. the Leader not also have quoted to us what Dr. Jan Moolman, who in fact arranged that tour, had had to say about these matters? No mention was made of that.

It appeared in Rapport.

Why did I then encounter it in other sources? Surely the hon. the Leader could also have encountered it there.

The hon. the Leader of the Opposition referred once again to the consolidation of the homelands. In the previous debate I discussed this matter and said that the ideal situation would be for each, of these homelands to form one geographic unit However, the ideal is not the requirement. It is in fact easier, but many people have to make do with many things which fall short of the ideal position. I just want to tell the hon. the Leader of the Opposition and other hon. members—I have also said this elsewhere, and I shall keep on saying this— that it is no way to argue to try to be disparaging or shout out that it is nonsense that there are other countries in the world which do in fact consist of separate parts. There are many examples of other countries in the world in which this is the case. One of the greatest countries in the world, namely the United States of America, consists of separate parts of both kinds, i.e. separated by land and by sea. I repeat what I said here during the discussion of the consolidation proposals here, namely that in the case of the Bantu homelands, when they are located in different areas and separated by territory of the Republic of South Africa, it is far better for them to be separated by the territory of the best friend they have in the world, namely the Republic of South Africa, which is already helping them today with more than R600 million per annum, as well as with labour, advice, employment, etc., than to be separated by the ocean which is navigable on and below the surface by the vessels of both friend and foe alike. Hon. members may shout and jeer about this as much as they like, but these are facts. It is no use trying to deny or ridicule facts. When these scattered Bantu areas are being discussed, it is said that they are supposedly not viable.

May I ask the hon. the Minister a question?

Yes, if it has a bearing on the point I am now dealing with.

Does the hon. the Minister mean by this R600 million per annum that they are receiving money from the Capital as well as the Revenue Account?

Both. This is the assistance which is being provided only by my two departments. A great deal is also being done by Railways, the Department of Transport, the Police etc. I did not even take this into account. In addition there are bodies such as Escom and other semi-State bodies. The more than R600 million per annum relates only to my two departments. At the same time the hon. the Leader of the Opposition referred again, of course, to the areas which are allegedly not viable. I want to repeat what I said previously, namely that the remoteness of areas does not in itself have a detrimental effect on the viability of a State. I want to mention examples of this. What is the most important criterion according to which one has to determine scientifically whether a State is viable or not? I want to mention four categories, although I concede that there could be more. However, the four most important are in my opinion the following: (1) The natural yield inherent in those areas; (2) the administrative technique in order to administer those areas; (3) the carrying capacity of those area—i.e. how many people the areas are able to carry; and (4) the enterprise of the people inhabiting those areas. Those four aspects are of decisive significance for making any area in the world an area with a high or low viability. Bophuthatswana consists of various parts, and so does Lebowa. The hon. member would do well to ascertain what the mineral yield of those two areas is. Is the hon. member aware that the various parts of Lebowa produce almost half of the world’s chrome? Does the fact that Lebowa consists of various parts, and the fact that Bophuthatswana also consists of various parts, make those areas less viable in respect of all the minerals which are found there? Surely there are not less minerals to be found there for that reason. Because those areas consist of various parts, are there in consequence, then, fewer industries and a smaller agricultural production? The other day I used Bophuthatswana as an example in the Other Place. There is an area to the north of Kimberley known as the Taung area. As much irrigation as possible is being applied in that area. Does the fact that that area is detached from the Mafeking, Kuruman, Vryburg and Rustenburg parts, reduce the irrigation potential of those areas? Surely that is not the case. Surely the remoteness of that area does not affect the inherent productive possibility of the area. I shall now consider the next phase, that of administration. I repeat that it would have been easier if two areas were contiguous, but I remind hon. members what I said a moment ago. Having the territory of the Republic of South Africa between the areas of one Bantu homeland does not make it impossible to administer those areas. A country is administered over long distances, and we shall always render assistance to Bantu homelands—whether they are independent or not—in regard to the movement of people from the one area to the other through the territory of the Republic. The reverse situation is also applicable. We shall also have to move through their areas from the one area to the other. I see the hon. member for Griqualand East is listening very attentively to me now. If people want to travel from Kokstad to East London …

[Inaudible.]

No, wait. Do not wake up now. If the friends of the hon. member for Kokstad want to travel from the vicinity of Kokstad to East London, would they really have to travel via Harrismith and Bethlehem in order to avoid all the Bantu areas? Oh, no!

[Inaudible.]

Surely arrangements will be made. I am so pleased the hon. member for Griqualand East agrees with me to such an extent that he is actually sitting there frowning. However, this is the point I am trying to bring home to the people on the opposite side, namely that it is possible to make administrative arrangements so that persons from a homeland which consists of various parts are able to travel through the territory of a good neighbour for administrative purposes.

Then this must also happen in respect of Port St. Johns.

Yes, they will also be able to drive from there.

[Inaudible.]

The hon. member must not be superficial now. Let us think about these matters in an earnest and scientific manner. Why should we now become foolish and superficial?

But you used another argument as well.

The third point I mentioned, was the carrying capacity of the areas. We know that a desert has no carrying capacity for people. We know that it is impossible. However, what is the case in respect of the Bantu Areas in South Africa? As has been said here so frequently, the Bantu homelands comprise the best rainfall areas in South Africa. The carrying capacity, the natural elements of the areas, for example the soil, water, winds and location, make of them some of the best parts of South Africa. Then we also have our development projects there, such as schools, universities, agricultural concerns, and so on. There is very little lacking in the carrying capacity of the Bantu areas.

This brings me to the fourth point, which is an extremely important one. Therefore I should prefer not to say very much, for I know the hon. members in this House know enough about this matter. I am referring to the enterprise of the people inhabiting those areas. What is involved, therefore, is the human initiative which is being displayed there. This is the achievement drive which, people must have, and the possessive urge which they must have to own and to acquire things. This is extremely important in order to make any country in the world viable. In this respect there is probably a lot which, still has to be learned by us as a White group in South Africa, but particularly, too, by each of the population groups in the various Bantu homelands. I want to ask the hon. members of the Opposition not to refer so derogatorily to the Bantu homelands while they are being developed within the possibilities of what is practical, for it does not contribute to goodwill among various peoples if we belittle the territories of our neighbouring peoples. It contributes nothing to that, just as little as we should like to hear the Zulu, the Xhosa or the Tswana referring disparagingly to certain areas of our own national territory.

The hon. the Leader of the Opposition said something about discrimination to which I wish to lodge a strong objection. He said that discrimination would never be entirely eliminated by us because it forms part of the Government’s policy. I deny once and for all, and most vehemently, that discrimination is an integral part of our policy of multi-national development.

What about the Indians?

The hon. member must contain himself a little now. I deny once and for all that discrimination has deliberately been included by us as a measure in our policy of multi-national development. Discriminatory practices did perhaps originate in the past, but many of them originated as a result of convention, or spontaneously. There may even be items of legislation which could be so interpreted, but nowhere has this deliberately been done with the object of discriminating against the people concerned in an injurious manner. It should also be borne in mind that too many things are called “discrimination” which are not discrimination at all in terms of our policy. There is one thing that hon. members on the opposite side must understand very clearly. I have discussed this so frequently, particularly with reference to my good old friend, the hon. member for Umhlatuzana, who can make good speeches, for example the speech he made last night, but who too frequently adopts the policy of his party as a premise for criticizing my policy, instead of criticizing the success of the policy of my party in terms of our policy and on the basis of the premises of our party policy. There are things which are called “discrimination” which are not really discrimination, but are in fact differentiation between people. We have said so frequently that discrimination is, after all, to accord unequal treatment to people who have equal claims to matters, and to deceive and outmanoeuvre them, as is the case with the White leadership policy of the United Party which gives the other peoples equality on paper, while in practice other things are then done on the sly. That is discrimination. It is a discrimination which is also being practised in certain other parts of the world. As opposed to that, we have differentiation.

Differentiation means a distinction between groups of people who do not have equal claims in one area. This is not discrimination. In this way we say, for example, in terms of our own policy, that Bantu persons do not have the franchise in White South Africa, just as we, as White persons, do not have the franchise in the Bantu homelands. Therefore, in terms of the arguments of hon. members on the opposite side, it is discrimination if I cannot vote in Bophuthatswana. I cannot vote there because in terms of our policy I cannot become part of their political system. The same applies to the Black people in White areas, and it applies in respect of land ownership and such matters. When we say, under our system, that unequal rights exist, it is not a distinction which is being drawn, and not a question of our outmanoeuvring one another.

Sir, I must now make haste. The clock is marching on a little too quickly, and I should like to deal with the hon. member for Mooi River. I should like to relate his words to what the hon. the Leader of the Opposition said here yesterday. The words of the hon. the Leader of the Opposition put me in mind of the fine article which the hon. member for Mooi River wrote in Die Burger last Friday. It was a fine article, with certain reservations. The Leader of the Opposition referred scornfully to the regroupings which are being advocated in South Africa, and said that the policy of the United Party, its programme and its politics, were the ideal. But at the same time the hon. the Leader of the Opposition must take cognizance of the fact that the hon. member for Mooi River, in this article which he wrote last Friday, was gazing with big, wide-open eyes in the direction of the National Party.

He invited the Afrikaners to come and join us.

Sir, to use an English idiom, the hon. the Leader of the Opposition is letting the cat out of the bag now.

You did not understand him properly.

I understood him very well. I read the article at my leisure in the fresh sea air, and I understood him very well. The hon. member for Mooi River is very clearly directing his gaze at the National Party, and then he says that the door of the National Party should be thrust open. My colleague also referred to that just now.

Then you escape.

Sir, just see how superficial a grand old man like the Leader of the Opposition can be now. Push home the bolt (grendel); do not be so superficial.

You should push home the bolt, otherwise your people are going to escape and cross over to our side.

It seems to me that somewhere the Leader of the Opposition has acquired much jollity so early in the day.

Yes, I listened to you.

Now you are worse than Helen Suzman. Sir, I want to tell the hon. member for Mooi River that the door of the National Party is open to anyone, and has always been open. The hon. member is quite wrong when he states in that article that, by definition, English-speaking persons are excluded from the National Party. It is perhaps a little difficult to understand what he meant by those two words “by definition”, but he will not find this in our constitutions. He would do well to look at article 12 of our programme of principles, which is in force in all five of the National parties of South Africa. I took another look at the party constitution of my own province. He would do well to take a look at how it is stated there in article 4 of the constitution. This contains the declaration which every person has to sign. It is stated there that he supports the principles of the National Party as the national political front of Afrikanerdom and of the White nation in South Africa. This includes both. What is wrong with the National Party being the national front of Afrikanerdom?

Nothing.

Yes, there is nothing wrong with that. Other hon. members have also said so. Now I say that the hon. member went altogether too far when he said that certain persons are excluded “by definition”.

It is true.

No, Sir. I want to tell the hon. member for Mooi River that I have great appreciation for that article. I am in full agreement with him in respect of 70% or 80% of what he wrote in that article. I am grateful that the hon. member thinks in this way, but he made a few major errors. I now want to remind him of something else, as my colleague also did a moment ago. Admittedly not by definition, but by way of deterrence and by way of social conscience and veto, English-speaking persons are being kept away from the National Party. As much as I should like to receive the hon. member for Mooi River within the National Party, and as much as the National Party members in Natal would like to receive him within the National Party, he will not dare cross over to the National Party. Why not. Sir? I may just say that, to be able to cross over, he need not become an Afrikaans-speaking person. However, he will not cross over, because he fears the social conscience of his own English-speaking group. He will not cross over because they will not tolerate him if he does. What has our experience in this regard been? English-speaking persons have crossed over to our party, and they are very cordially welcome here in our party. They are treated very well— also in the ranks of Afrikanerdom. But what happens to those people among the ranks of the English-speaking sector? Could we allow the Horwoods to tell us a little of their experience in this regard? Could we allow the Warings to do so? Could we allow the Trollips, the Worralls, the Lewisses and the Odells to do so? My dear friend, Mr. Odell, would not take it amiss of me if I told you that Mr. Odell was very frequently unable to understand what was happening in the caucus of the National Party when Afrikaans was spoken there. But, Sir, he has told me times without number that he is now spending his happiest political years in the National Party. Why, Sir? It is because the National Party is big enough to accept the nationalism of all who are South African nationalists, on the basis of co-existence. [Interjections.] Sir, hon. members can try to shout me down if they like, but it will not help them; the facts remain.

In the few minutes which still remain. I want to go further into what the hon. member for Mooi River said. He said inter alia that the National Party sees only itself. This is not true. The National Party has ensured South Africa of a reality which is very sound. The National Party has recognized the people of South Africa as God Almighty created them. The National Party has perceived that there are Xhosas. Zulus, Vendas, Shangaans and all kinds of other peoples in South Africa, which the United Party never previously recognized and perceived in this way. Therefore they did not base their policy on this. When they subsequently adapted their policy to this fact, they adapted it on the strength of what the National Party had done to open the eyes of South Africa to this fact. It is one of our great achievements in respect of the ethnic variety that we have perceived, identified and pointed out that ethnic variety in South Africa, even to the Opposition of South Africa. [Time expired.]

Mr. Speaker, during the past two or three weeks I attended two congresses which dealt specifically with change in Southern Africa and in South. Africa in particular. One of the debating points which was of concern to me and which we discussed at length, was whether White politics were still playing a role in any way. I entered into arguments with most of the people with whom I conducted debates, especially those whose attitude was fairly hostile towards South Africa, and I said that White politics did in fact have a role to play. But, Sir, I must be frank and say that I myself, having listened to the debate conducted here for the past eight hours or more, am beginning to have my doubts in this regard. One thing is true; never before have I witnessed anything of this kind. With a few exceptions the speeches were meant either to besmirch or to convey aggressive self-satisfaction or they were made to throw suspicions on people. Very few of the speeches dealt with the real political problems confronting South Africa today. I mention specifically the speech of the hon. the Deputy Minister yesterday which by no means contributed to a remotely reasonable debate on the political problems of South Africa, and in this regard I also refer to the efforts of the hon. the Minister of Defence. I do not even want to mention the type of attacks one had from the United Party. But I do want to make one exception, Sir, and that is the hon. the Minister of Bantu Administration and Development, who tried this morning at least to give an indication of what aspects of the policy of the Government may possibly lead to a solution of the problem. One of the aspects he touched upon, one which we had debated earlier, was the question of consolidation. Sir, I have already discussed this whole question of consolidation with a considerable number of enlightened, influential Nationalists. They tell one, in private of course, that a possibility of the Government’s policy succeeding does exist, but that one would have to part with much more land for that to happen, not only agricultural land, but urban land, as well. They say that if we really want to progress dramatically, we shall have to start thinking of places such as East London and Durban, etc. The hon. the Minister said he believed the ideal was to have one consolidated homeland for every so-called nation. This is the ideal, but that ideal cannot be realized, because there are Xhosas in Zululand and because there are Zulus in other areas. In any event, this is the ideal which the hon. the Minister set himself. Sir, if this concerns the continued existence of the Whites, as the hon. the Deputy Minister said …

Do you not believe in that?

Of course I believe in it, but if the hon. the Deputy Minister is in earnest about this, why is it not possible to realize this ideal to which the hon. the Minister referred? I shall tell you why, Sir. For the plain and simple reason that those people on whom the Government is dependent for their political support, will not allow this. Just ask the hon. member for Marico, because he said in the debate on the question of consolidation, “not one inch of land more”. He said that that land should be divided; that the areas should not be consolidated otherwise the people would constitute a threat to the Whites. [Interjections.] Sir, this is recorded in Hansard: the hon. member may go and read it there. The point I want to make is this: If we are not going to take this aspect of the Government’s policy with regard to land seriously, then this is the biggest political bluff not only as far as the Black man is concerned, but also as far as the Whites in South Africa are concerned. There is at least one thing which we in these benches have in common with the Government, that is that we believe that the issue is the regrouping, the rezoning, of South, Africa, for we believe we should try to create decentralized areas.

†Mr. Speaker, this is what the hon. the Leader of the Opposition has called the “map trap”. He says that the Government has fallen into the map trap and that we have fallen into the map trap. Underlying this map trap problem is the fact that we recognize that there are people who have to have viable areas in which they can live in an economically prosperous way. The hon. the Leader of the Opposition, on the other hand, argues that his party somehow escapes this problem of domination with their race federation policy. I think one should investigate this simply in terms of its constitutional implications. If I am correct—and he can correct me if I am wrong—then in the federal council, which stands in a subordinate relationship to Parliament, there will be 145 members. I think, 45 of whom will be nominated by the legislative assemblies, and the rest will be nominated in terms of their contribution to the GNP. Sir, this is the most beautiful euphemism for Whites that I have ever come across in South Africa—“their relative contribution to the GNP of South Africa”. You will therefore in any case have a White-dominated federal council …

And a qualified franchise.

If not, you will have a Black-dominated federal council.

Where do you get those figures from?

I will show the hon. member the documents. I got them from the United Party itself. The problem of domination is there as well; they do not escape in terms of their policy. It seems to me that the choice lies between struggling with the problems of the map trap and indulging in political claptrap. This is exactly what we have from the United Party. [Interjection.] If the hon. member for Umhlanga would just save up his interjections, he might be able to make a speech with them. But what I found most disturbing this session was the fact that now once and for all the United Party has decided to move, in what might be called White politics, to the right completely indiscriminately and to attack the Progressive and Reform Parties not in terms of their policy and not in terms of the position they adopt, but in terms of personality and of character assassination and in terms of “Swart gevaar” arguments. There were “Swart gevaar arguments used right through the speeches I listened to yesterday, and especially in the speech of the hon. the Leader of the Opposition when he used the word “domination” the whole time. The argument of domination was the central theme in his speech. Sir, I am honestly filled with apprehension when I listen to something like that because I know that in the next election some of the members of the United Party will move into their constituencies—I do not say all of them— and exploit the prejudices and the ignorance of people by using scare tactics. [Interjections.] This to me is symptomatic of a party which cannot see a political role for itself any more. But I think it is also symptomatic of another fact. That is that I think traditional White politics as we have known it in South Africa is dead. It is not longer a question of “Nat” and “Sap” and it is no longer a question of Afrikaans and English.

*It is very plain to me that it is clearly said from the Government benches that we no longer want this division, and I support Government members who say this. I no longer want that division between English and Afrikaans either, because this is traditional, dead politics which, for the past 27 years, have been killing debates in this House on the central political problems which we have to solve in South Africa. That is why I should like to see English-speaking people supporting the National Party openly identifying themselves with that party, and even if the Opposition is to be reduced in number, we shall at least be able to conduct a political debate in this House. The biggest danger facing us in South Africa in White politics, is our allowing that political parties sit on both sides of the House with elements who are going to exploit the ignorance and prejudice of people in constituencies.

The Government in particular may gain all the seats, but while they have all the power, they will be powerless to solve the problems of South Africa. And why will they be powerless? They will be powerless because that power which they obtain from the electorate renders them powerless. They go to the electorate and tell them the Progressive Party wishes to make Sea Point Black, whether it is true or not, and they gain that support, but then they throw open the Nico Malan. Then the poor hon. member for Namakwaland has to go back and explain to his people on the basis of an absolutely frustrated logic what fold in the unfolding of the policy that step was. This simply means that it is becoming impossible for that Government to move as it knows it should move, for the very reason that the way in which it obtains power and support makes it impossible for the Government to bring about the essential changes in South Africa. But this is the very same trap into which the official Opposition, judging from the speeches to which we have been listening for the past eight hours, has now also fallen.

They no longer care what the solution to South Africa’s problems is. They no longer care about conducting a responsible debate. Now they simply want to employ any little bit of prejudice, any small piece of irrational conviction. [Interjections.] That is why we have been hearing all the old arguments again, for example, “we are soft on Communism”, “we are soft on dagga and we are soft on this and that”. These are all the old arguments. [Interjections.] But the real point which should be stated to every party in this House is that the policy of no political party, even if it is the ruling party, can succeed in South Africa if it does not have the support of the Black people. There is no other way. This is the source of political pressure which we experience in South Africa.

I should like to come back to the hon. the Minister of Bantu Administration and Development and suggest something to him, and that is that no matter what academic definition we attach to discrimination, no matter whether our definition soothes our consciences and no matter our spelling out the potential of the homelands in terms of future possibilities, in the final instance the existence or the non-existence of discrimination is dependent on the reaction of people who feel that they are being discriminated against. For so long as this exists, for so long as there will be political conflict and political pressure. The hon. the Minister may justify and define discrimination, he may wax lyrical about our not having this and about that not forming part of the policy, but hard reality is that there are people in our cities who believe that they are being discriminated against, and we shall have to negotiate with them.

The second point I want to make, is with regard to the homeland policy, indeed, the homelands as consolidated at the moment, which, according to the Minister is final. That policy is only meaningful and can only make a contribution to the solution of the problems if we may reasonably expect the support of the urban Black man. The hon. the Minister and hon. members on that side of this House know they do not have it.

Do you have it?

That does not matter. There lies the rub and that is where the political future of South Africa is to be determined.

I want to conclude by referring to the hon. the Deputy Minister of Bantu Administration and Education, who is not in the House at the moment. A party which bluffs on these matters, becomes a party which acts a lie, and a party which acts a lie in South Africa, will lead its White population on the road of death. As against this, a party which is prepared to talk about these things and which is prepared to face these things, can still play a part and can still make a contribution to the solution of the problem in South Africa.

Mr. Speaker, I do not want to follow up on everything the hon. member for Rondebosch said, except to say that I expected him, as an intelligent person, to attach a different meaning to the words the hon. the Leader of the Opposition used in his speech yesterday. I honestly cannot understand where he saw any Black peril propaganda in that speech. But I could possibly come back to that later.

I want to discuss three subjects in my speech this afternoon The one is the report of the Le Grange Commission on the Christian Institute. I want to state my standpoint in connection with this. Secondly, I want to deal with all the references to my political affiliations and thirdly, I want to refer to aspects of Government policy.

With regard to the report of the commission of inquiry on the Christian Institute. I have stated my standpoint very clearly in this House and also on other occasions. I also want to make it quite clear that I do not doubt in any way the bona fides and integrity of the United Party members who served on that commission. I want to emphasize that, after a thorough study of the report and on the basis of my personal knowledge of Dr. Naudé, I could not associate myself with the conclusions and the recommendations of the commission. In the third place, I want to say that I reject with great contempt the idea that an element of poor patriotism is linked to my rejection of the report. To the hon. the Minister of Defence, who is not here now either, I want to say that there is definitely no need for him to tell me who is a South Africa patriot and who is not. I reject this with the greatest contempt at my disposal. I also want to point out that it has happened on several occasions before now that other reports have been rejected. For instance, the Government on the opposite side rejected the Tomlinson Commission in essence in 1954.

You are exaggerating.

The Government also rejected the Botha report on Black trade unions.

You are exaggerating this as well.

Therefore, there is no such thing that a report should be regarded as infallible. Furthermore, I want to say that there have also been other cases in which people who dared te differ from Government policy were accused of poor patriotism. When we differed from Government policy at the time with regard to the application of White capital and the utilization of private initiative in the Bantu homelands, we were accused of being un-South African. Today it is the policy of the Government. We can discuss those concepts at great length, but I do not intend elaborating on the matter any further on this occasion. I want to say that I am really convinced that no matter how important the work of this commission might be, I regard this as being of passing importance when I consider the real problems we are being confronted with. [Interjection.] I said that I would like to deal with three matters. After I have dealt with those three aspects, I should like to reply to some questions. All kinds of reflections have been cast and reference has been made to some kind of bean. I want to make it quite clear that I entered politics last year on this side and as a candidate of the United Party. I am in the unenviable position …

That was Harry’s party.

I shall reply to the hon. the Minister later on if he wants me to. I did not interrupt him. Will the hon. the Minister also give me a chance to complete my speech? I am in the unenviable situation that I am told by all and sundry, whether the hon. friends opposite want to believe this or not, but I am getting ready to cross over to the Nationalist Party. [Interjections.] From other quarters it is being said that I am preparing to cross over to the Reform or the Progressive Party. I want to make it quite clear so that there can be no doubt, that I came to this Parliament as a member of the United Party. I have come here because on balance, with all the facts at my disposal, I believed that I see in the United Party the best embodiment of those things in which I believe. I made this quite clear, and I want to repeat this, that as long as the policies and the standpoints in the United Party are of such a nature that they agree in general with my basic principles and integrity, so long I see no reason for leaving this party for any other party. I have friends on the opposite side of the House as well as on my left. When our friends, the Reformists, broke away from the United Party, no principles were at stake. I, in fact, waited all along to see whether there were any demonstrable differences which developed between them and the United Party up to this stage. In all honesty—I am still waiting for them. The only difference which arose, is the constitutional proposals which I tried to understand, but could not. I was very surprised about the attitude of the hon. member for Rondebosch in this regard. I took it that we would have to wait until he, with his great and indisputable intellect would be in a position to come forward with a more rational policy.

It therefore seems to me as if he was forced into a situation where he has to forget about his own contribution and about his own work. It is quite clear that both the Nationalist Party and the people on my left hoped the United Party would split on (a) the consolidation proposals and (b) the report on the commission. And now it is being predicted that the United Party will split when the Prime Minister’s proposals relating to a particular security commission are announced next year. It is quite clear that the expectations that the party would split on the consolidation proposals or on the report on the Christian Institute did not materialize and that they will never materialize either.

As a junior member in this House I tried to refrain from making any personal attacks of any kind whatsoever. I honestly hope I will be able to continue not to do so. But I do want to express my profound disappointment with the repulsive behaviour —to my mind it was repulsive, and unacceptable—on the part of hon. members who were members of the United Party before.

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

I gladly withdraw the word “repulsive”, Sir. What I meant was that I found the behaviour unacceptable and incomprehensible. It often happens that when people have been married for a long time and a divorce takes place, some people find the temptation to wash dirty linen in public becomes too strong. I do not want to take part in this. However, I found it shocking that those hon. members did not behave in a more responsible manner.

When the House adjourned I was expressing my disappointment with the way in which former members of the United Party behaved towards the United Party, both in this House and outside. I can understand this to a certain extent, because they had to try to create a gap between them and the United Party at all costs. They had to try and create an identity for themselves at all costs. This I can understand. But what I really find difficult to understand, and this I say in all honesty and love, is that political expediency, so it seems to me, takes preference to political principles in this regard. I want to refer in particular to the debate on the consolidation proposals. I as a junior member of this House found it completely incomprehensible that a party could come along with amendments on Government proposals, reject those proposals on every point of principle, oppose them with every possible means and when their amendments are rejected in the end, vote with the Government in favour of the proposals. [Interjections.] This is something I cannot understand at all. In all honesty, I simply cannot understand this. Probably I have not been in Parliament long enough to understand procedures of this kind. What also surprised me, and I think the hon. member four Houghton repeated it again yesterday morning by means of an interjection, is that the United Party’s attitude in connection with those consolidation proposals was misrepresented here by the hon. members on my left. All of us were present in this House when it was stated quite clearly that the United Party subscribes to the obligation to implement the 1936 legislation. Our opposition to the consolidation was not opposition against the implementation of the 1936 legislation, but was based on 13 of the 74 cases. We stated that as a result of the opposition on the part of local people, these proposals ought to be referred back to the Government. It was however stated quite clearly by every United Party speaker that the obligation to implement the 1936 legislation is being accepted. I simply cannot understand that it can be suggested in all honesty that the United Party adopted a different attitude in this regard. The same applies to the removal of the Bantu in terms of these proposals. I was really surprised that the Progressive Party and the Reform Party, after all the objections they had to the compulsory removal of people, really granted permission in respect of the measures of this Government as well as in respect of the removal of people who still have to be removed in terms of the 1973 proposals. Between 400 000 and 500 000 people have to move. These are the sober facts. Then they should not tell us that their standpoint on the removal is clear, but what they wanted to do was to confirm that they support the Government in the implementation of the 1936 legislation. Then they could also have said that their standpoint on the 1936 legislation is clear, but that they reject this enforced removal of people.

I also want to say that the way in which the attitude of this party in connection with the report on the Christian Institute was presented here by my friends on my left, is one which I honestly think is not a reflection of the true facts.

On which point do you differ from them? [Interjections.]

Order! Hon. members on both sides of the House should now give the hon. member the opportunity of delivering his speech.

I want to say quite clearly that in terms of my political conviction—I have come a long way and am not a chicken any more and I also say this in all modesty to the hon. the Minister of Defence—I will not allow myself to be dictated to or told what to think …

You did allow yourself to be dictated to.

To the hon. the Deputy Minister I want to say that I will neither allow myself to be shouted at to make me adopt a particular standpoint in which I do not believe in principle. This I want to make quite clear. I have no political ambitions and do not aspire to anything higher. I found these things very unattractive, but what I found almost more unattractive, was the undisguised wooing which took place on the part of the National Party of members of the United Party yesterday and today. This was a courtship which surpassed a strip tease performance by Glenda Kemp. I am grateful that all this talk of coalition has finally been squashed. I however agree with the hon. member for Rondebosch that if the old dispensation should be seen as one between Afrikaans-and English-speaking people, we have now passed that stage. If people feel that they ought to belong to another party on the grounds of their convictions, they should cross over to that party. I believe people should act in terms of that which they believe is right for them and in terms of the principles which a particular party confesses. There are many hon. members on the opposite side, although they will not admit this openly, who know what I am referring to now. The hon. the Minister of Bantu Administration and Development referred to social pressure. He knows, after all, what pressure is exerted upon one the day one feels one is no longer able to associate oneself with a policy of the National Party. There are Afrikaners who, although they will not admit it at this stage, will indeed, in terms of the policy measured against the interest of this country, be more at home in the United Party than in the National Party. Let us however return to the predominating matters. These matters with which we are now occupying ourselves, are child’s play.

We can do what we like, but the predominating problem remains race relations in South Africa. I want to associate myself with what the hon. member for Rondebosch said in this regard. In the remaining time at my disposal I want to make it very clear that in spite of the fine attempt the hon. the Minister of Bantu Administration and Development tried to make to defend this so-called consolidation he knows as well as I do, firstly, that those consolidation proposals were unilaterally enforced upon the Blacks. Secondly, he also knows that in spite of the rationalization those consolidation proposals have absolutely no potential as a constitutional arrangement for South Africa. I am referring to this as a political arrangement now, and the hon. Minister should not refer to viability now. I have never said that economic viability is a prerequisite for constitutional independence. As a constitutional arrangement this is one which will simply not succeed. I want to tell all the hon. members who hoped for many years—perhaps I am one of them—that one could really give the Bantu in the homelands an opportunity to attain independence by means of a measure of that kind that this, as the hon. the Leader of the Opposition indicated, is a blind alley, unless the Government agrees to think radically of a redistribution of land. In addition I want to say that the problem of the urban Bantu is not solved by these formulae. I want to associate myself with what the hon. the Leader of the Opposition said, namely that we are engaged in escapist politics if we honestly think we can solve the problem of the urban Bantu by simply linking them to the homelands on a political basis. I am really convinced that this is an effort to escape the essence of the problem. Because I lack the time I cannot take this matter further, but I want to repeat that the National Party policy offers us no answer in regard to the Coloureds and the Indians. I want to express my surprise at the fact that the hon. member for Piketberg, after all these years of National Party rule, should still say now that we are standing at the starting point. It may justifiably be asked, not only by me, but also by every Coloured and Indian, along what course they are being taken. Where are they being taken? What rights may they have in this country of ours? Is it then of any avail to say that they should have courage, for we are now standing at the starting point, and this after nearly 30 years of National Party rule? I am not saying this in bitterness, but it is very clear that the formula which we have applied up till now, is unsatisfactory in all regards.

The whole of Africa is standing at the starting point of constitutional development.

I appreciate the things which are being done by our hon. the Prime Minister with regard to détente. I also appreciate the greater level-headedness which is being displayed by the National Party. I appreciate the fact that it is being said that we should move away from discrimination. But can we not indeed do more than talk about this? We say that we will not injure people’s dignity as human beings, but why is a Brown man told in post offices for example that he may not stand here or there, and cannot be served here or there? How can we say we wish to preserve human dignity and remove discrimination if we are still persisting with those things? I am simply asking. I am asking in all honesty that we do something about this matter. I would like to continue, but owing to lack of time, I shall have to end here.

Mr. Speaker, I should like to take the argument advanced by the hon. member for Edenvale further, because I really feel a little sorry for him. How was apologizing so for the standpoint he adopted that I wondered whether he felt very much happier there than did a certain other member at a stage when he was still saying very definitely that he certainly would not join the Progressive Party. The hon. member for Edenvale associated himself with the Director of the Christian Institute. He did so on the grounds of personal knowledge and so on. Let me tell him that for precisely the same reasons, namely personal knowledge awareness of his viewpoints and awareness of what took place under his régime in the Christian Institute and the associations which cling to that body, I dissociate myself from the Director of the Christian Institute and I have no sympathy with him. The hon. member for Edenvale came here as a member of the United Party, and he intimates that as long as United Party policies are followed which correspond with his, he sees no reason to leave the United Party. There sits a man who keeps all his options open. All his options are open. He is far more open than a certain other man was.

But do you have principles?

Wait now! That young man could learn a few things from me about clergymanlike good behaviour. I now want to quote something said by an hon. member who sits, literally and figuratively, a little to his left. I shall say in a moment who he is and where he said it. He said the following with great bravado—

And what was that? I quote further—

The man whose brave words those are is the hon. member for Yeoville. Mr. Speaker, they were spoken as recently as in February 1974 in the Provincial Council of the Transvaal. I wish the hon. member for Edenvale greater success than that.

Mr. Speaker, I should like to react to two matters. The one is the subject touched on here by various members of the United Party to which this side has already reacted, viz. South Africanism and co-operation between Afrikaans-speaking and English-speaking people in South Africa. The second relates to the concept of pluralism in South Africa. Earlier this session, the hon. member for Green Point dragged me in with reference to a speech made in Bloemfontein. On that occasion I said that the Afrikaner was not a freak phenomenon among the nations of the world. I said that the Afrikaner refused to be swallowed up in a South Africanism. The hon. member for Green Point then became terribly concerned about this and said—

He misquoted me—

That is not what I feared. I feared the phenomenon of people wanting the Afrikaner to be swallowed up in South Africanism. The hon. member did not weigh my words carefully. Sir, other members have said notable things in this regard. In 1964 the hon. the Leader of the Opposition still included everyone in his concept of nationhood. At that stage, his South African nation included White and Brown and Black and Yellow, everyone who made up the population of the state of South Africa. Is that correct?

Citizens of South Africa.

No, the South African nation, not citizens of South Africa. He referred to his nation. However, in 1970 he suddenly acquired greater wisdom; at that stage, deep in South West Africa at Keetmanshoop, he said that he wanted to put it very clearly to the governing party that his nation consisted of the Whites of South Africa only.

That has always been the case.

Hon. members opposite had better settle that point for us, because listening to the panegyric of the hon. member for Green Point on Newlands, it seems to me that his nation is best demonstrated at Newlands when a mixed invitation team is playing, but what happens after that—each in his own residential area—does not matter. To him, Newlands is a picture of South Africa. Sir, he is making a very big mistake. My nationhood is not displayed there. Sir, hon. members on that side follow a certain pattern of thought which is nothing new in South Africa. Even in the years before Union we had it, in the consolidation politics of Gen. Botha and the actions of Gen. Smuts, until the stage when Dr. D. F. Malan had to say, “These days we are not asked to give up our nationality; we are merely asked to be obliging enough to do nothing to prevent its loss.” That was the tactic adopted at that time.

Do you believe that?

That hon. member might as well listen; he knows nothing about Afrikanerdom. There was another hon. member on that side of the house, too, who gave expression to that party’s ideas concerning the relationship between Afrikaans-speaking and English-speaking people and the preservation of identity. I quote to you from The Cape Times—

Sir, what does that really mean? He says this to us, we who want to preserve our identity. If the Afrikaner wants to preserve his identity within the United Party, then he should not react against us, because then this statement becomes entirely meaningless. What one deduces from this is that he is telling his English speaking friends, “Please do not stab us in the back; do not murder us; we shall commit suicide. Do not murder us politically; We shall commit cultural suicide.” That is the standpoint of that side of the House. Sir, one gets those same utterances from Prof. Guy Butler, who also ventured to talk about the apartheid between the cultures which had to disappear, and then—the hon. member for Albany should take note of this—he jeers at the maintainors, at the lager trekkers and at the Afrikaners who still value identity, and in the course of his argument he campaigns for precisely the same thing as far as the English-speaking person is concerned, but then he has to ensure “by business and by politics” that the identity of the English-speaking people is preserved. In other words, what kind of politics is one getting now? One is getting this kind of politics: Charge against the Afrikaners’ lager in the name of South Africanism, but retain one’s English-speaking lager to fall back on. [Interjections].

Sir, if that is the idea of the hon. member for Mooi River, namely that the Afrikaner should emerge from his lager, then I want to make the statement that the reason he is not in the National Party is the fact that the lager he is in has a hold on him which prevents him from leaving it.

Since its foundation, this party has opened its ranks to English-speaking people who agree with us on a political basis. We have not demanded that people repudiate their cultural identity. On the contrary, we specifically laid this down in our programme of principles and we practised it in the party. We laid down that we sought a broad national unity, but that the cultural and national ethos of each individual should continue to be preserved and maintained. [Interjections.] It is for that reason and against that background and the extracts I have quoted here that Dr. D. F. Malan said as far back as 1950 that it did not amount to racism if any part of the population insisted on the love and the furtherance of its own special linguistic and national identity. He also said—

Now in view of this, I want to accuse the hon. member for Green Point of racism, because he begrudges me as an Afrikaner the right to tell my people, when I appear before an Afrikaans audience, that we maintain our identity. Since he is now shaking his head, I do want to ask him not to repeat what he said, and furthermore, he must not rise in this House again and say, “I am disturbed at the fears of the hon. member for Waterberg”. Then he should rather forget about those fears of his.

You are a “bitterbek”.

Order! Did the hon. member for Pinetown say “bitterbek”?

Yes, Sir,

The hon. member must withdraw that.

I withdraw it.

Sir, that hon. member is still young; he will still learn. He simply knows too little Afrikaans. He speaks a few words of Afrikaans and as a result he thinks he understands the heart of the Afrikaner people, whereas he knows nothing about them. He knows just enough of the language to use it to insult other people. Sir, as far as this matter, viz. the relationship between the two language groups is concerned, we should rather leave it to the language groups themselves to decide which, methods they want to follow to preserve their identity, and if anyone from the other language group tells me that I give them offence when I plead that my language group should be preserved and that I want to cherish what is mine, then I say that he is on the level of racism, he is engaged in racism.

Is it the hon. member’s view that in a broader South Africanism it is necessary for the English-speaking section or the Afrikaans-speaking section to give up their culture and their identity? [Interjections.]

I can set the hon. member’s mind at rest at once. That is precisely the standpoint the National Party has taken since its birth. But I have just quoted to you what the standpoint of that party is. It was against that party and its spiritual forefathers that we had to act. It was in respect of those people that Dr. Malan, when he delivered his farewell sermon at Graaff-Reinet, had to say, “Ask the people to lose itself in another existing people, or a people which does not exist at present, and it will reply, in ‘God’s name, certainly not’”. Why was it necessary for him to say that? Because that party’s spiritual forefathers took the standpoint that Afrikaans speaking and English speaking should merge and amalgamate in one nation and one culture.

Sir, let me read what a respected author, Prof. F. E. J. van Rensburg of Johannesburg, had to say. He states (translation)—

This is a sweeping statement, but I think it is true, because at the moment, Afrikaners have to teach English to English-speaking children at school. He goes on (translation)—

Then he goes on to say (translation)—

We are South Africans. I need not become one because I am already one. He goes on to say (translation)—

That is the language we listen to here.

Just to sum up: If the issue is the interests of a specific group and cultural community in South Africa, then people would do well to leave it to that community to determine which honourable means and methods they will utilize to remain in existence, to maintain their identity and to live in correct and harmonious co-operation with other communities in South Africa.

As long as it is a “bywoner” status.

Is that hon. member a “bywoner” in South Africa? To me that does not seem to be so.

You want it to be so.

As the hon. member himself said, he is a “moderate consumer”, but he certainly does not create the impression that he is a “bywoner” in South Africa. [Interjections.] I am merely quoting his own words.

A great deal has also been said here about pluralism. In our politics a great deal is made of this concept, too. The hon. Leader of the Opposition referred to this. The premise is apparently that wherever one has pluralism or a plural structure within a population, it is applicable, as is, to the situation in South Africa. I want to refer hon. members to a very thorough and scientific article written by Prof. Ben Vosloo which appeared in Politikon, in which he points out that there are various “models” of pluralism. He states that one of these is the conflict model. In it there is a variety of ethnic and race groups which are unacceptable to each other on a social and political level. Thus, when one forces them into the same system, one creates cumulative, mounting conflict within that one system. A second model is the consensus model, the so-called American model, in which there is a striving for a higher degree of integration and consensus, where the divisive factors are Suppressed and eliminated and where people are encouraged to belong to more than one group across the lines of group affiliation, and in this way to achieve relaxation of tension. In passing, this reminds me of the man who was travelling in America and said that he had never seen so much hatred between White and non-White in South Africa as he had seen in the north of the United States of America. The hon. Deputy Speaker who agrees with, me in this regard, has travelled there himself. When he came to the south of America, he came across a farmer who only had Whites in his employment. He asked him, “How is it possible that you only employ Whites, whereas the act provides that one has to employ a certain percentage of Negroes?” The farmer told him, “Let me tell you, my boy, I hire them and I fire them.” That, now, is the model of consensus! Is that the image which hon. members want to force upon us in South Africa—“bussing”, the enforced integration and the enforced elimination of differences between various ethnic, language and cultural groups? A third model of the pluralistic structure is what is called the consociation model. As an example of this they mention Switzerland, the country which hon. members are so fond of holding out to us as a model for South Africa as well. In the consociation model, too, there is diversity of ethnic, language and cultural groups. They live alongside each other in fairly watertight compartments on a social level. There is little membership across the borders, but the contact between the various groups is effected by means of a number of different organizations and federal links. In this way they try to intercept the conflicts between the various groups.

Prof. Vosloo said that looking at South Africa, one sees that it is not suited to any of the other models. South Africa’s model is the conflict model because there is such a large number of divisive factors here within the total population. He mentions the various factors. The first is race, the second is ethnicity, the third is nationalistic sentiments, the fourth is religion, and to that one could add the history of the various groups and the sentiments and traditions they have accumulated. He states that the divisive factors are such, and have so much weight in our South, African society, that if one were to force the groups together in social and political life, one would be creating cumulative conflicts.

It is for that very reason and against that background and in view of the basic facts in South Africa that the National Party comes forward with its policy of separate freedoms. This embraces the elimination of domination of the one by the other and the granting of authority and power to the various components of the broad South African population. With that I have come to the end of my time.

Mr. Speaker, it is not every day that I get the chance to follow the hon. member for Waterberg in a debate of this kind. I have listened very closely indeed to what he had to say hoping that I would get some lead as to precisely what he is thinking. Well, I must confess that I find myself bewildered by the multiplicity of words and the multiplicity of ideas. I am not slow and I have listened very intently indeed but I have yet to find out if the hon. member regards me as being a South African who is equal to himself and whether he is prepared to accord me full rights and full citizenship equal to what he demands for himself as a member of the Afrikaner group. [Interjections.]

Obviously.

Nobody can say “obviously” to me, because I was listening very carefully and was trying to find out. I want to thank the hon. members on the other side who have been kind enough to react to a certain article I wrote. I want to tell them that it is something which I have had in my heart for a long time. It is not something which I did lightly. To me it is like marriage. It is not to be entered into lightly or wantonly. As hon. members know there is a marriage, a wedlock in process in the House and it was suggested by the hon. member for Umhlatuzana that while this was going on, in view of the attitude of certain parties to the report of the commission, that we should perhaps ask the Rev. Basil Moore to write a liturgy which would help with the marriage service. [Interjections.] I am sure he will have some ideas which will help to smooth the process to the state of bliss desired by those hon. members.

In the article that I wrote I was speaking not to members of the Nationalist Party, because as far as I am concerned, the hon. members of the Nationalist Party, in this House are committed to a cause and I do not expect them to agree with what I say. What I hope to do is to speak to the Afrikanervolk outside the Nationalist Party and try to bring home to them that … [Interjections.] That is a pleasant reaction, because I know that the hon. members cannot consider the Afrikanervolk without thinking of the Nationalist Party in the same breath. The Nationalist Party is only a political arm of Afrikanerdom. To say that they are automatically the only political arm or political movement in which Afrikaners can be, and if it is true—and the reaction of the hon. members to what I have said indicates that it is so—then I would say that there is no place for people like myself, conservative English-speaking South Africans, in politics in South Africa. We have the hon. the Minister of Defence and the hon. the Minister of Labour and the hon. the Minister of Bantu Affairs and other hon. members who insist on Afrikaner unity at any cost.

You cannot have the two things together. You cannot have Afrikaner unity at any cost and still have a place for me and people who think as I do because, by definition, the word the hon. the Minister of Bantu Administration and Development did not like, I am not a Afrikaner nationalist. I cannot be an Afrikaner in the cultural sense of the word. I can have all the love in the world for the Afrikaner people and I can do what I can to participate in Afrikaner culture and literature, but by definition I am not part of the Afrikaner movement and I cannot be a part of it. I want to say to Afrikaners that there is a future for them which is greater than that the Nationalist Party can offer them today because the Nationalist Party has taken the Afrikaners as far as it can take them.

Politically.

They have reached the summit of political power in this country. They hold exclusive political power in their hands. I want to say to the Afrikaner people that there is something more than the National Party can offer them. The whole object of my article was to say that the world is waiting for what we have to offer, together, they as well as us.

Join us.

It is hopeless to say that I should join the Nationalist Party. I cannot join the Nationalist Party. I have been approached by hon. members on the other side in the lobby and elsewhere who have said: “Come and join the National Party.”

Join the Broederbond.

I have a question in this regard: Can I become a member of the Broederbond? Hon. members will say: “Dit is nie politiek nie,” but that is the crux of the whole political scene. [Interjections.] How can I join a certain party where I will be party to certain discussions and where I will know that somewhere where the hoods nod important decisions will be taken.

Our party stands on three … [Interjections.]

Order! Hon. members must give the hon. member a fair chance.

This party stands on three important principles which were mentioned by my leader.

Your heart is not in that speech.

The principles on which we stand are firstly, the sovereignty of the group, that is group identity entrenched in the legislative assemblies which we propose to set up. This is precisely the thing the Nationalist Party and the hon. the Deputy Minister on the other side have been talking about for years, viz. the sovereignty of the White group. Why cannot the Coloured, Indian and Black people have the same thing entrenched in their own legislative assemblies? We also believe that to bind together the different sovereign identities there should be a factor which is a federal factor and which will be set up by the surrender to that factor of only that sovereignty which the groups are prepared to give up by negotiation and agreement in order to make a viable Government. There has to be some kind of body—even the Nationalist Party can see this—which binds together the various peoples in South Africa, whether that body is a Cabinet committee or something else. However, there must be some kind of federal body to bind them together.

This party says, thirdly, that in this country there must be the influence of the White man. One can call this civilized government or Western civilization or what one will but the climate of thought which includes capitalism, free enterprise and the whole system which we regard as Western, including Western values, is something which this party says has to be maintained in the interests of the Black people and the White people of this country. As I have said so many times, we have taken the mind of Black South Africa; we have given Black South Africa a completely new picture; we have set it going in a new direction, a direction which is vital for Black South Africa, for Africa and for the world. We are experiencing here a totally new creative process which the rest of the world wants. This is what the rest of the world is looking for. Where does the Nationalist Party differ from us in regard to these three principles? They stand for group identity. They do not stand for a federal principle and they are prepared to abandon the influence of the White man and White thought over vast areas of South Africa. In abandoning it in those areas they are abandoning it in Africa. That is my problem. They are abandoning it here in this country where we have the opportunity to reach out to the mind of Black Africa here on our own borders, to take hold of that mind and to lead it in the sense that the Black man wants the leadership that we have to offer. The Government is abandoning this struggle which has got to be fought out in Africa. I believe that there is one factor which is of primary importance and that is that we have to maintain that climate of thought. How one describes it is immaterial.

Why not call it White leadership?

The hon. member can call it White leadership if the phrase suits him. It is a good term.

White “baasskap.”

“Baasskap” is something of a totally different nature.

I am quite happy where I am.

Are the others happy with you?

Mr. Speaker, I can understand that the hon. member for Carletonville is happy where he is because he is so far on his own … [Interjections.]

Order! The Chair will be happy if the hon. member for Carletonville interrupts less.

Mr. Speaker, this brings me to the point that I made in the article which I wrote. I spoke about a cultural wall which I say has been built around Afrikanerdom by the Nationalist Party. I do not ask that that wall be broken down. I do not ask the Afrikaner to abandon his cultural identity. All that I ask is that there should be a door in that wall. Although I am English-speaking I regard this party, the United Party, as being the door in the wall of the English-speaking community because we in the United Party, which we regard as being a South African party which allows complete cooperation …

And Edenvale is the Trojan Horse!

The hon. member speaks about the Trojan Horse. You will remember, Sir, that the walls were broken down and the Trojan Horse was taken within the walls. I am not asking for that to happen.

I am asking for a door to be opened so that people can still retain their wall. They can still retain that fortress which is their strength but they can come out and cooperate with the English-speaking people so that we can work together to create something which is bigger than Afrikaner nationalism, which is bigger than English nationalism and which will promote a South African nationalism. I have already said and I want to repeat that the world is waiting for the leadership that we have to offer. Through the leadership that we have to offer here in South Africa we can give inspiration to the nations of the West in the fight which they are going to have to wage against Communism. The hon. the Minister of Defence mentioned Communism. He said that Communism was a danger which the nations of the West had not fully appreciated. I do not think they have either. I do not think they realize how absolutely dedicated and determined the drive is of those people to seize and take control of the world and in doing so to obliterate every single thing that we stand for in this country today. They want to force the minds of men into a mould to be used by a small self-perpetuating group of people for their own ends. That is my understanding of Communism. I believe that there is one thing we have got to understand.

We have something in common which can be bigger than mere Afrikaner nationalism or mere English-speaking nationalism and which can be of vital importance to Black Africa. One of the things that struck me in all the investigations we did in this commission was the recurrent theme that Black South Africa is not ready for revolution. Each one of those reports undertook certain activities, for example literacy training and wage campaigns, designed to bring to the mind of Black South Africa what we can call politicization, that is making them aware of their political position, of what they could demand and of their political strength if they would get together and work against the White community. In other words, they were aimed at bringing confrontation. The word was that the Black people were not ready for revolution.

I am absolutely opposed to any kind of organization which will go out of its way to create in this country the sort of confrontation which that sort of activity can bring about. We have a far better answer than any of those organizations can possibly offer. We have what we are doing now. We are today active; we are doing it now. My only plea is that we should realize that on both sides of this House we have so much to offer. I want to make an appeal to the Afrikaner people to consider the three principles on which my party stands. What is there that they find so absolutely abhorrent? When we go canvassing they say: “Ons gaan nooit Sap stem nie want julle is die Engelsman se party.” Hon. members know that this is absolutely true. On the basis of those three principles on which we stand and the attitude we have towards South African Nationalism, drawing the best from both sides, what is it that determines that we are now “die Engelsman se party”? I want to repeat my appeal and say again to the Afrikaner people over the heads of the Nationalist Party: “Kom, boere.”

Mr. Speaker, one thing is certain, having listened to this debate over the last two days, and that is that having been a member of the Schlebusch/Le Grange Commission has had strange effects on people. In the case of the hon. member for Mooi River, it has turned him into the Guru of the United Party. He is now spouting an entirely new philosophy which I think is as obscure to his own members as it is to us on these benches. Of course, other ex-members of the Schlebusch Commission have benefited. We can now say “ex”, because that commission, the cost of which I have not yet been able to ascertain, although no doubt I will learn it next year, has now packed up, I am glad to say. For them it has been a very fortunate stepping-stone. A number of the members of the Schlebusch Commission are now sitting in the Cabinet and others are Deputy Ministers.

Are you jealous?

No, I am not jealous but I have a sneaking suspicion that the hon. members on this side of the House who were members of the Schlebusch/Le Grange Commission are feeling rather jealous about that. They are fixing the hon. member for Yeoville with a few envious glances.

Not Yeoville, Turffontein.

Of course; I am sorry. I mean the ex-hon. member for Yeoville. I hope he realizes that he owes a lot to the present member for Yeoville. He would not be on those benches otherwise. We have listened, from the side of the official Opposition, to speech after speech attempting to justify the presence of these members on the commission. It is obvious, this being the last debate of the session, that they are making a desperate attempt to extract the hook on which they impaled themselves some three years ago when, against my advice, offered gratis and for nothing, they decided that they would participate on that commission.

I now want to deal with some of the things the hon. member for Umhlatuzana said last night. That hon. member started off as a member of the commission. When he was promoted to leadership of the United Party in Natal—or whatever the reason—he got off the commission and some other unfortunate member who is no longer with us, the ex-hon. member for Orange Grove, replaced him. [Interjections.] Well, anyway, somebody replaced him. It may have been the hon. member for Mooi River, but it makes no difference. That hon. member was, however, one of the members of the Schlebusch Commission. Despite all the calumny he heaped on the head of the hon. member for Pinelands and on myself, I do not see any reason to change any of the opinions we expressed about the reports which the Schlebusch Commission issued. I must say that sitting next to the hon. member for Durban North has somewhat infected the hon. member for Umhlatuzana with an old fault of the hon. member for Durban North, the learned friend of the hon. member for Umhlatuzana. He has infected him with suggestio falsi, if I may be so bold as to use a legal term although I am not a legally trained person, and suppressio veri. One has to be very careful in this House these days that one does not discuss law unless one is trained in law and that one does not, for instance, discuss the Christian Institute unless one is a Christian. That, at least, was the impression I got from the hon. the Deputy Minister of Bantu Administration last night. If anybody takes the trouble to read the Hansard from which the hon. member quoted last night, they will see that the member for Umhlatuzana left out rather large and important parts of what I had to say at the time about the Wilgespruit goings-on, which I in no way condoned. What I said was that I knew very little about that particular subject. I agreed, however, that the sensitivity training appeared to be taking place without proper scientific guidance. I have not shifted my opinion in the slightest. I still think that that report was a lot of pornographic rubbish and I leave it to …

Oh, rubbish!

That is correct, rubbish it was. I leave it to the members of the commission, these grown-up men, to get their enjoyment from reading all those salacious little bits that they can find throughout the report.

Who provided the material?

I am not interested. I do not think that the goings-on of this hippy group had anything whatever to do with national security. [Interjections.] As for the UCM, as far as I am concerned that was a defunct organization three years ago. The only thing I have to say about that, is that it preceded the United Party as a defunct organization by only a few years. I remain concerned with the Schlebusch Commission only in that it subverts justice. That is all. As an officer of the court that is what should have concerned the hon. member for Umhlatuzana. Also, he should have been concerned about the sickeningly frequent occasions on which his own party, the so-called official Opposition, has stood by, year after year, and without protest, indeed supported the Government as it undermined the whole concept of habeas corpus in South Africa. I may say that for the first time we got an actual admission from the hon. member for Durban North that they supported the 90-day law. Those are the things he ought to be concerned about. One would have to search Hansard with a fine-tooth comb to find any protest from the official Opposition about these wretched detainees who are still being held under the Terrorism Act. Some of them have been held since September last year.

That is untrue, and you ought to know it.

One would have to search Hansard with a fine-tooth comb to find any real protest or questions about banishing and banishment. Those are the things that concern us on these benches, and not hippy orgies.

The hon. member for Umhlatuzana still has not told us whether he does or does not agree with the findings and recommendations of the Schlebusch Commission concerning the Christian Institute. What I heard from him was that the United Party had made its views absolutely clear. Well, I am sorry, Sir, to me they are not clear; I am a simpleton.

You have admitted it at last.

I admit it unreseredly; I am a complete simpleton as far as the views of the United Party on the re-commendations of the Schlebusch Commission are concerned. As far as I know, we have heard four different opinions from the United Party. Firstly, they did not like the procedure that was used. Secondly, they did not really recommend arbitrary action. Thirdly, they did agree with what was recommended, and then, Sir, we had several members, in the shape of the hon. member for Edenvale and the hon. member for Bezuidenhout, actually dissociating themselves from the recommendations and the findings of the commission. Sir, will somebody tell me what is the official view of the United Party on the recommendations of the commission relating to the Christian Institute? Tjoepstil!

You would not understand. You are a self-confessed simpleton.

That brilliant member on the back benches who makes very few speeches but large numbers of interjections …

So do you.

I make large numbers of interjections, but I also make a large number of speeches. That is the difference. That hon. member has the opportunity of making a speech and telling us what is the official viewpoint of the United Party on the findings of the commission with regard to the Christian Institute.

Are you prepared to sit down while I do it?

Sir, I want to tell hon. members of the United Party that nothing can redeem them as far as their association, implication and complicity with the Schlebusch Commission is concerned. I want to remind these hon. members that at the last election they brought out the whole bag of tricks that the hon. member for Umhlatuzana brought out today—the Commie bit, the dagga and drugs bit, and the hon. the Leader of the Opposition even brought out the bit about my objection to Smith and his band of rebels. Interestingly enough, it has suddenly become very popular now, Sir, to talk about Smith in very different terms from the terms in which people were talking about him 10 years ago. Sir, all that was brought out. The United Party brought out a special issue of Volkstem in February 1974, just before the election, and what was the headline? The headline was: “The day Helen fell and took the Prog. Party down with her”. It is an entire recapitulation from the intense questioning to which I was subjected by the hon. the Leader of the Opposition on my views on drugs, on Communism and on Rhodesia. Sir, what happened in the event? I won by a majority of nearly 4 000 votes. The Progressive Party at the election took five extra seats from the United Party, and the hon. member for Pinelands took a seat at the by-election shortly afterwards which the United Party had won by 2 500 votes just a short while before. And, Sir, what happened to that upstanding keeper of the public morals, the hon. member for Umhlatuzana? First he lost Zululand, then he shopped around madly looking for a seat, and nobody would give him a seat because, as was said by the hon. member for, I think, Umhlanga—it was certainly one of those bright boys on the back benches, one of whom was expected to stand down for the defeated Natal leader “I can’t give up my seat; there are no more safe United Party seats”. How right he was, Sir. How right he was we shall show him at the next election. Eventually when the leader of the United Party in Natal got somebody to stand down for him, it was a seat which the United Party had won by over 4 000 votes at the general election, and what happened? The hon. member won it by a squeak; he won it by 30 votes. The general public of South Africa, which is Opposition-minded, has long ago “skorsed” the whole of the United Party; it no longer thinks of them as being an Opposition. They can stand on their heads about the Schlebusch Commission, and they can stand on their heads about the Christian Institute and the UCM and Wilgespruit and all the goings-on there and about Communism and drugs and the lot, but they are done for. If there is one good thing, Sir, that has come out of the report of the Schlebusch Commission, it is that it has accelerated the rate of demise of the United Party.

You wait and see what you look like when Harry is on your side.

Sir, the interesting thing about that remark is that the only forward steps which the United Party has taken, were in fact taken when the hon. member for Yeoville was the Transvaal leader of the United Party. I refer to the question of trade unions, Coloured faces in Parliament, the Immorality Act, etc. All these decisions were taken while he was in the United Party. But, Sir, as the hon. member says, we will wait and see what happens.

Now I want to come to the hon. the Deputy Minister of Bantu Administration and Education [Interjections.] Well, unfortunately I cannot come to the hon. the Deputy Minister of Bantu Administration and Education because I have used up too much of my time already on this defunct party. What I want to say at once is that as far as I am concerned these past crucial six months during which everybody thought we were going to see so many changes in South Africa have been disappointing, particularly in one respect. That is that although they may be meaningful, as my hon. leader pointed out yesterday, in terms of White politics in South Africa, they do not mean a row of beans to the average Black citizen of South Africa except for one or two exceptions, viz. the 30-year lease for urban Africans and the increased mobility granted to Indian people. For the rest, the Nico Malan, having mixed sport and all the rest do not mean a thing as far as the average Black person in this country is concerned. That, I must tell you, is what people outside this country and Black people inside this country were looking for. The hon. the Minister of Mines who pleads with us not to talk against South Africa must not expect us on these benches to confuse patriotism with not telling the truth. Let me tell him that the hon. the Minister of Information, who has just been overseas, in an excess of patriotism has been telling people overseas the most extraordinary things, inter alia, that the Chinese here have almost equal rights with people who are white, and that we have practically done away with race discrimination. Sir, we are not prepared to do that on these benches and I want the hon. Minister for Sport to know that right away. I think he made a very appealing and sincere speech last night on this particular subject. However, there is one thing that has been the most disappointing of all. I am leaving aside the obvious things which could have been done, even within the context of separate development, like halting group areas removals until something has been done about the housing shortage, like a massive housing programme for the Africans in the urban areas, like a call-off of pass law arrests where 400 000 people were convicted of pass law offences and similar obvious steps that could have been taken. There is one cardinal area where I believe an enormous amount of goodwill could have been bought in South Africa by the expenditure, initially, of little money and eventually, of quite a lot of money, and that is in the field of education for our Black people and more particularly for the Africans. The hon. the Minister of Bantu Education told me it would cost R15 million to give free school books to every African child in the country and he said that he hoped he would be in a position to do so by 1977.

May I ask a question?

No, I do not have the time. [Interjections.] Sir, my point is this. He spoke about R15 million for the supply of free school books but we are spending R3 million a day, and more on defence. Do hon. members really not think we will experience more internal security in this country if tomorrow the announcement is made that every African child like every Coloured child and every White child and every Indian child will obtain free school books in South Africa? The second important point on Bantu education is the beginning of compulsory education for African children. As far back as 1951 the Eiselen Commission stated that a target of four years of compulsory schooling for Africans should be aimed at and it fixed 1959 as the target date. Here we are in 1975 and the hon. the Minister of Bantu Education is not yet in a position to announce the beginning of a target period for compulsory Bantu education. He says it remains their ultimate aim and I think it is a disgrace in this day and age. I want to point out the dire consequences to this country which is suffering today because of 20 years of pitiful neglect of Bantu education. Why did the hon. the Minister of Mines have to stand up and complain that there are not enough technically trained people in South Africa to keep our mines and our other major export industries going? Why is every businessman in the country complaining about the shortage of technologically trained men? It is because we have neglected the education of 70% of our children for 20 years, because to keep them at school for less than four years is a complete waste of time and money. That is not my finding; it was also a finding of the Eiselen Commission which stated that less than four years at school is a waste because the child does not end up even functionally literate. Everybody knows that the vast drop-out of African children from school is before Std. 2. A ¼ million children have dropped out before then. This is an utter waste and since most of the children at school are in those first four classes, it would not cost a great deal of money to introduce compulsory education for them so to make sure that they stayed at school for at least four years. The hon. the Minister of Mines waxed eloquent about our great wealth. In fact, he told us such a marvellous story about treasure trove that I thought all those little Red Chinese would be leaping into their aeroplanes and ships immediately to come and take over South Africa. He said that the whole …

That is wishful thinking.

Oh, come on! He knows that that treasure trove will remain unexploited, undeveloped and stagnant unless we have the properly trained people to do it. One cannot teach people who are not functionally literate to foe skilled workers. That is the lesson we should have learnt over the last 20 years but we do not learn lessons from these things. I do not say that there have been no changes; there have been a number of changes; but the major changes which should have taken place in this country unfortunately have been sadly neglected. Before somebody stands up and tells me what enormous amounts we are now spending on Bantu education in comparison with previous years, I want to say that we used to spend a miserable R13 million per year but now an amount of R42 million appears on the Estimates for the White areas alone. The amount is very much larger if one includes the homelands. But I want to point out that the gap is not just a gap between the R28-50 per Black child as against the R440 per White child that we spent in 1973–74. The gap is miles wider than that because the average White child enjoys 11 years of free schooling, 10 of which are under compulsion. Therefore before each White child goes out into the wide world we happily spend R4 800 on his school education. Before an African child, however, goes into the world he might have had not quite four years of schooling and we would have spent an amount of R115 on his schooling. That is the real gap. In other words it is 10 years of schooling at R440 per year for a White child as against no compulsory period of schooling for Black children but simply an average of three years at school at R28-50 per annum. That is a real disgrace. [Interjections.]

I want to say that the hon. the Prime Minister raised a lot of expectations in his speech during last November. He raised them abroad and he raised them here in South Africa. I want to warn this country that there is nothing more dangerous than expectations which have been raised but which have not been fulfilled. What we should not do is to sit back satisfied and smug because of the Nico Malan and the other changes which have been introduced and imagine to ourselves that the life of the average Black citizen in South Africa has been changed in any way over the past six months.

Mr. Speaker, I do not intend to react to what the hon. member for Houghton said, or to her quarrel with the United Party. I want to tell her at once that since she has now taken the hon. member for Yeoville under her protection, it would perhaps be as well for the common law wife relationship between the Reformists and the Progressive Party to lead to something legal. In the second place I want to tell her that she and her party are the last people, in the South African context, who should speak in terms of the creation of expectations which cannot be, or are not being, fulfilled. Thirdly, I want to tell her—and I want to leave her at that—that the Progressive Party, together with the other alliance which is evidently being envisaged, are only relevant in the sense that they form a link and an association with everything which is un-South African in South African politics.

That is rubbish.

It is true. The hon. member knows that they are in fact the people who, together with other bodies and persons with whom they associate themselves, are engaged in …

Such as whom?

The hon. member for Yeoville must give me a chance. They are in fact the people who are going to bring about the revolution of unfulfilled expectations in South Africa. The hon. member also said that the hon. the Prime Minister had created certain expectations. Let me say at once that the hon. the Prime Minister offered South Africa nothing which was not policy. The hon. the Prime Minister did not present the policy followed in South Africa in regard to group relations and relations politics in a different way to that in which he presents it within the borders of South Africa.

I shall come back to the hon. member for Mooi River and the hon. the Leader of the Opposition. There are two other matters I want to deal with first. The one is something I spoke about yesterday too, namely the methods by which we can combat our economic disease, inflation. I expressed the hope that this would be a collective and responsible action by both sides of the House. However, what occurred in the ranks of the United Party while we were debating this subject and the programme for collective action? The hon. member for Pietermaritzburg South expressed his opinion about an increase in the price of margarine. I think it is important for me to say just a few words about this. What did the hon. member say?

A price increase of more or less 25%.

I wish the hon. member for Green Point would keep quiet. Let me just quote; “One of the United Party’s chief spokesmen on agricultural matters, Mr. Warwick Webber, today labelled the decision as ’scandalous’ ”. On what grounds does he state that this is scandalous? He does not tell us. I read further—

Those hon. members opposite are the champions of free enterprise, not so? They make themselves out to be champions of a reasonable profit motive for private enterprise, not so? I ask the hon. member for Constantia: Is that true? Everyone says “yes”, except him.

He said “of course”.

I had expected the hon. member for Constantia or any other hon. member on that side to repudiate this hon. member. What are the facts? The facts are, firstly, that as far as this commodity is concerned, the labour costs have increased by 60% since July last year, whereas the prices of plastic packaging material have increased by about 80% and the basic price of peanuts and raw materials such as sunflower seed have increased by 30% and 25% respectively. Now I ask whether this is what we are to expect in future from hon. members opposite when we have to carry out this collective programme.

I now refer to the hon. member for Constantia, who reacted yesterday to the programmes which were announced. Every second sentence he uttered constituted a misrepresentation of the facts. I must refer to this. In the first instance the hon. member states that it is the Government’s programme. That was his first mistake.

Whose programme?

If the hon. member is unable to hear, then I cannot help him.

Do not get excited.

The hon. member states that it is the Government’s programme and that is where he makes his first mistake. It is not the Government’s programme. It is a collective programme of all the bodies involved. Furthermore, it does not only involve steps to be taken by the Government. It involves steps which must be taken by everyone in the private sector too, and it applies to industry and trade and the consumer and the worker. The second mistake the hon. member makes is to say that the programme contains measures which are in conflict with Government policy. I now ask him, in all fairness, why he wants to indulge in this type of politics on this subject, since his statement is factually incorrect. The final programme, as approved by the Government and amended by the Cabinet and agreed to with the private sector last Thursday, contains the specific statement that the measures accepted are in accordance with the basic policy of the Government. I do not want to spend much time on this, but I just want to tell the hon. member that if this is how he and his party approach this matter …

You are protesting too much.

No, I am not protesting. It is just that I expect a little more responsibility.

The hon. member for Mossel Bay asked yesterday about the development of Still Bay as a harbour. He is correct. Still Bay is known as one of the harbours with the most consistent fishing catches and I have instructed my department to look into the matter.

I want to thank the hon. member for Verwoerdburg for having replied to the arguments advanced by the hon. member for Hillbrow in regard to Iscor. I want to thank the hon. member for Rustenburg for having, inter alia, adopted a standpoint in favour of decentralization which I endorse. This applies to the hon. member for Springs as well.

Now I come to the hon. the Leader of the Opposition. This was not only a strange session. In my opinion it was also an historic session, because we are not going to assemble again with the United Party as it is today. Next year it is going to look very different.

Much stronger.

I hope someone creates vacancies in certain seats so that we can test that statement. He came here at the beginning of the year with four members more than he has this afternoon, four members who swore allegiance to him and declared their loyalty to him as the Leader of the Opposition with the same acclamation as the hon. member for Edenvale did this afternoon. If anyone is protesting too much, then I want to tell the hon. member for Edenvale that he is protesting too much.

I want to tell the hon. the Leader of the Opposition that that is not all which is historical. The dissolution of the United Party, which began and is still continuing, is also of historical value, and I think it is important that we should take cognizance of this today The question occurs as to why the United Party has become historical ballast in South African politics. The question occurs as to why this mighty party has become totally irrelevant in South African politics. The question is why they are dwindling in number and why people are leaving them to the left and to the right. One can find the answer to this in many reasons and considerations. If I were to furnish an answer in the short time at my disposal, I should want to say that the most important reason is that the United Party has ceased to be a party with a vision of the future for South Africa.

I should like to take stock of this party, and I do so, not in a spirit of sadism, but in a far more serious spirit than that, since our parliamentary institution is affected by the factual statement I am making. The second reason arises out of the first and it is that the United Party has not only lost a vision for South Africa, but that it no longer sees its role in South African politics as an Opposition should. Last year, there was a competition between the official Opposition and the Progressive Party. The question occurs as to what this competition was about. Did it concern the direction in which the various parties wanted to take South Africa? Did it concern the fundamental differences in standpoint concerning how they wanted to get South Africa there? The reply to both of these questions is, “No”. The role which these two components played last year in South African politics concerned the issue: Which of them was best qualified to oppose the Government. In essence, this explains the internal and inherent collapse of the United Party; it has reduced itself to an opposing force in South African politics. The role which the party selected for itself was not selected last year, but the culmination of what has happened to the United Party over the years.

The United Party relinquishes its role as the alternative Government because when it looked at the problems of South Africa and looked for solutions to the problems in the past, it did not seek alternative solutions for South Africa, but alternatives to present to the voters so as to muster support. These complications and developments did not go unnoticed by the voters. This situation is not welcomed. I remember that all the hon. members opposite cast themselves in the destructive role of an opposing force. And let me say that there are enough destructive forces in South Africa and in the world today. There are enough opposing forces in South Africa and in the world, whereas there are too few creative forces. The United Party associated itself with the opposing forces and with the most basic things, namely appealing to people’s selfishness, instead of appealing to their idealism and their vision.

[Inaudible.]

That hon. young member should just bear in mind that this is not a debating society and that one should concern oneself with the truth here. I know that he of tens find that very difficult.

One should be responsible, too.

The rest of the Western world seeks freedom, but what do they get? Enslavement! People seek leadership, but what do they get? Imitators! Countries and people seek independence, but they are enslaved. Against the background of world events and against the background of events on the continent of Africa, with which South Africa and its future are so closely linked, and against the background of South Africa’s complicated relations questions, I believe that this year will be decisive in many respects in regard to the success and effectiveness of our inter-state relations with the Western world in the first place, and, in the second place, with the countries in Southern Africa which concern us, and the inter-nation and inter-group relationships within our own fatherland. Without wishing to be guilty of over-dramatization, I do wish to emphasize that I believe that the creative power and creative ideas of the patriotism which exists, not only in the ranks of the National Party, but the patriotism, too, of the South Africans in our country, is dominating relations politics in general on the international and South African level with new momentum, at an accelerated tempo and with realistic optimism. There is a growing awareness among the people of our country that if we want to play our part in the outside world and in the international sphere, then we must understand that the domestic and foreign spheres are interdependent and that events in the outside world over which we have no control often determine internal action. There is no place in South African politics for people who, in their narrowmindedness, think that there is only place in South Africa for certain population groups, because there are people who think that there is only place for promoting the interests of certain population groups. On the other hand, nor is there place in South Africa for those who want to bring about a revolution by awakening in people unfulfilled and unfulfillable expectations. I have barely enough time to do so, but I want to come back to the hon. member for Mooi River. I look at, and listen to, the hon. member with sympathy, not because I want the hon. member to cross over to us, because that is not the issue. The issue is a different one, namely the question which he is unable to understand and which we as Nationalists, and I as an Afrikaner, ask: Am I serving South Africa best as a member of my people in the context of a culture or do I serve it best in the absence of a culture?

Why should he be without culture?

The hon. member must please remain silent, because my time is very limited. The hon. member maintained that the Afrikaner had built a wall around himself and he regards the National Party as being only the instrument of the Afrikaner.

That is what the Leader of the House said.

He did not say so. I have his speech here before me. He said that the National Party was an instrument of the Afrikaner, but also that it was not exclusive. The fact that there are English-speaking people in its ranks proves that it is not exclusive in that sense. I want to say in this House today that the National Party is exclusive in another sense. Its exclusiveness is determined by its patriotism. I want to repeat that if it is true that the National Party, as an instrument, brought about those things for South Africa which could form the basis of a broad South African nationalism, then that makes it exclusive. The National Party has never, since the time of its establishment, excluded people on the basis of their language or their cultural links. The National Party states very clearly that those people who endorse its principles, but who also put South Africa first under all circumstances are welcome in its ranks. This statement runs like a silver thread through the history of the National Party. It does not make it perfect, but the National Party has excluded no one except those people who do not agree with it. To conclude, if the hon. member for Mooi River sees the National Party as a wall without doors around the Afrikaner, then he fails to perceive the essence of the Afrikaner or the National Party.

Mr. Speaker, in the limited time at my disposal I must say that the speech by the hon. the Minister of Economic Affairs did not surprise me under the circumstances. The same applies to speeches by other hon. members on that side of the House. This hon. gentleman is in fact the Minister who is responsible for telling the general public what the Government is going to do in order effectively to stabilize the cost of living in South Africa. We heard on previous occasions, for example, a few years ago through the hon. the Minister of Planning and the Environment, when he was tackled on this matter, that they were going to make a plan. And now, in the past 24 hours, the hon. the Minister had to announce that a collective programme was to be launched Even during the recess the hon. the Minister, with the assistance of the hon. the Minister of Finance, helped to give the cost of living in South Africa an enormous boost. That is why it does not surprise me that Die Burger should have stated on 17 May that the consumer should steel himself to endure shock after shock. According to the programme announced by the hon. gentleman, they expect all bodies to assist and lend the Government a hand. But unless the hon. the Minister of Economic Affairs does his share, the cost of living in South Africa is not going to come down let alone be stabilized. All the signs are that inflation’s grip on South Africa is going to become ever tighter and the responsibility for this rests on the shoulders of that hon. gentleman and the Government. Consequently I am not surprised that he made a speech here about patriotism. It does not surprise me that he spoke about the patriotism of the National Party, which is supposedly so exclusive. What really makes it exclusive is its great patriotism. I want to ask that hon. gentleman and the Ministers opposite whether people in this country can live on patriotism. They must tell the general public, and one of these days they are going to have an opportunity in Caledon.

I challenge you.

They will have to tell all the people in Caledon whether they can live on patriotism. [Injections.] That, of course, is the aim of his speech.

How many candidates do you have in Caledon?

The aim of the speech made by the hon. the Minister and the hon. the Leader of the House was to tell the general public that they should not be concerned about the cost of living but that they should be concerned about the dissolution of the United Party and about patriotism in South Africa. They did so because they knew that as far as bread-and-butter matters in South Africa were concerned, they had acted most unpatriotically in this country. We shall force that down their throats during this election at every opportunity. [Interjections.] I am pleased that the hon. the Minister of Defence …

How many candidates do you have in Caledon?

Let me tell the hon. the Minister that I have one candidate.

Mr. Speaker, this debate, which, is now approaching its end, was characterized by a great variety of speeches. Some of those speeches of a very high quality and others were of a lesser quality. There were speeches with which I can fully associate myself and speeches in which statements were made with which I completely disagree. I should like to single out two speeches, although it is always difficult to do that. But the speech we heard from the hon. the Leader of the House this morning was a particularly authoritative explanation, in a few words, of the policy of this Government. It was a brief and concise explanation of our policy and as such, in my opinion, it was a masterpiece. I should also like to refer to the speech of the hon. member for Umhlatuzana. In my opinion it was absolutely shattering as far as the Progressive Party is concerned. I do not know how that party will ever be able to hold up its head again after this.

You would be surprised!

It is beyond me, in view of the report of the Schlebusch/Le Grange Commission, that a political party in South Africa should not immediately dissociate itself completely from the leftist student group, the Christian Institute and especially the University Christian Movement. I must say, with all due respect, that I believe that the Progressive Party stands totally discredited in our public life.

Sir, as far as the financial and economic issues and arguments are concerned, especially as far as they concern the budget, the main criticisms which were levelled against us are, firstly, that the Government apparently does not do enough to combat inflation, or perhaps that what it is doing is not being done efficiently enough; secondly, that public expenditure or Government expenditure is too high; and thirdly, that our priorities are wrong. Sir, you will allow me to refer briefly to these statements, but before I do that, I should like to say something about the economic world in which, we presently find ourselves and of which we in the Republic form a part and an increasingly important part. I should just like to make a few remarks by way of providing a background for you.

†I believe that the world in which we are living today, particularly the economic and financial world, is in a state of disarray, the like of which we have not seen since the years of the great depression in the early ‘thirties. If you look at the employment position, you will find that even a country like West Germany, which has been held up as the model of a full employment economy ever since the war, today has an unemployment figure of something life 1,4 million people, causing the greatest possible concern in that country. The employment figure in Great Britain is over 1 million; in France at this rate the unemployment figure will soon be ¾ million. In the United States, which we are told is the great leader of the Free World, with the world’s most powerful economy, there is an unemployment rate of 8½%, with nearly 9 million people unemployed Sir, this is unheard of since the 1932 period. If you look at the balance of payments position, you will see that largely as a result of the crisis brought about by the huge increase in oil prices in the last year or 18 months, the 24 main industrial countries of the world are at this moment running an aggregate payments deficit of 40 to 50 billion dollars. If you look at the growth rate, Sir, you will find that the position is even worse. You will find that even in a country like West Germany the vice-president of the Bundesbank has just recently said that he fears a situation where Germany might even run down to a zero rate of growth unless this world-wide recession is halted. You find that in the United States industrial production has dropped for seven months in succession, up to May. If you look at the position from the point of view of inflation, Sir, you will find that Great Britain has an inflation rate of well over 20%. You will find that Japan, which until recently was: held up as a country with a model economy, not only has an unemployment problem and a balance of payments problem of a very serious order, but that Japan has an inflation rate of well over 20% as well. Sir, one could go on listing these grave recessionary tendencies throughout the world, and this is the world in which we live and in which we trade with these countries, both as to imports and exports. If we look at the international payments position and the international monetary position we will find it is just as bad. The weaknesses and the uncertainties are all there and they have been worrying the world for some years now. If we look at the position of sterling we find that sterling is something like 26% or 27% lower now than at the time of the Smithsonian Agreement in December 1971, when the era of floating exchange rates really began, and sterling is still depreciating. When we look at the latest situation where the Interim Committee of the International Monetary Fund met last week in Paris, where there were great hopes that they were going to thrash out a new deal for the world’s monetary and currency system and get away from all these payments difficulties which have been plaguing the world, what do we find? There was an absolute head-on clash of views, particularly between the U.S.A. on the one hand and France on the other. No decision was made and no accord could be reached as to the role of gold as a monetary asset, which the United States is trying to phase out of the system. They got nowhere on that. There was no agreement on the disposal or the possible disposal of the International Monetary Fund’s gold reserves. The United States felt that it could put forward its proposal and succeed in carrying it through, but it failed. There was no final decision even on the quotas of member countries, where the quotas have been increased for the Arab countries and where the United States refuses to bring its quota down below 20% of the total. There was stalemate on that and, perhaps most important of all, there was stalemate on the attempt emanating from the Common Market countries to allow central banks to buy as well as sell gold on the free market. No progress was made there either. So it is really against the background of very serious disagreements and very serious weaknesses in the world’s economy that we stand today. One of the worst features, to my mind, and one of the most disquieting, is the continuing almost dichotomy but certainly widespread disagreement prevailing between the United States on the one hand and the countries of Europe on the other. What I have said about the Interim Committee’s recent meeting is a very good case in point. Until these leading countries find some measure of consensus on these extremely important issues, we are going to face a very difficult world situation.

In all this, one asks oneself where this country stands. We had a growth rate last year of 7¼% in real terms, one of the very highest in the world, for which we are very thankful. It has eased off since then, but it is still at this moment one of the highest in the world. That is the first point. The second point is that we have a balance of payments situation which is sound. There are stresses because we have to import a great volume of capital goods the cost of which has risen enormously; we also have to import oil the cost of which has risen enormously; yet we have, as I say, a sound and stable balance of payments position right up to this moment. In regard to employment, one can say that there is unemployment here and there, but when one compares the position with that of the rest of the world, it is fair to say that there is really no unemployment in this country worth mentioning. Those are the facts. So one can go on. I say that we can be very grateful that we find ourselves in this position. It is against that background that I would like to return to some of the criticisms that have been levelled at the policy of this Government in the light of the budget and the budget debate.

The first one is in regard to inflation. No one will deny, as the hon. the Minister of Economic Affairs has also said within the past day or two, that the inflation rate in South Africa today is far higher than we would like to see it. We are concerned because it causes hardships among those sections of the population which can least bear these hardships. However, let us look at this position. Inflation is usually regarded as demand inflation on the one hand and cost or cost-push inflation on the other hand. When we compare our position with that of the rest of the world we find up to this moment and for some time that although we have experienced heavy inflationary pressures we have not had demand inflation. Whatever may be said about this Government and its economic and financial policy, that is to the credit of this Government directly. It is this Government’s monetary policy which has saved us the further hardship of demand inflation because we have managed to keep bank credit and the quantity of money within reasonable bounds in relation to the rate of growth. Having mentioned the rate of growth, I just want to remind the hon. House that we have a problem in this country which possibly no other country has to the same degree. This arises because of the exceptionally heterogeneous composition of our population, who are at different stages of development. Whether we like to recognize it or not, we have to face the facts. Our great problem in this country is that we have to combat inflation but at the same time we dare not do anything to prejudice a high rate of economic growth because we have to ensure rising living standards for all our peoples, many of whom are at a particular stage of development. That is what we have to bear in mind all the time when we talk about the onslaught against inflation. It will be grossly unfair and unrealistic not to take this into account. Against the background of this important consideration, this Government has been and is taking the most concerted steps in collaboration with the business world, consumers, trade unions, manufacturers and traders in order to find common ground where we can contain the trend of rising costs. In addition to this we are doing a great deal from our side to stimulate productivity and greater production. When one looks at this budget and at the budgets of recent years one sees the extent to which this Government has been encouraging more training and educational facilities for all classes of our society. One also sees how the Government has been giving concessions to manufacturers so that they can invest more in order to step up production. All these measures can be tabulated and listed to make a most impressive catalogue.

On the other hand we have the incidence of inflation which I have mentioned and about which we are concerned. This Government is concerned that certain people in this country are suffering hardship as a result of inflation. The result is that we have stepped up our food subsidies to the highest rate we have ever had in this country. Our food subsidies are being increased to over R130 million this year. As far as pensions are concerned, it is easy to say that pensions should be higher. We are giving an increase of R7 per month to social pensioners with effect from October and there will be corresponding increases for the other national groups. It will be the highest monthly increase which has been given up to now. Let us also look at the position of the civil pensioners, a matter which was quite rightly raised by my friend the hon. member for Paar. For civil pensioners there was a 10% increase from 1 July 1973 and there will be another 10% increase from 1 October 1975. If we add them together we find that the pension increases only for one full year amount to R58 million. One can go on tabulating these things but still we have not contained this inflation to our satisfaction. However, we are taking other steps as well. One of these is that I have recently been handed a report of a committee which was asked to investigate building norms and standards for hospitals in South Africa. I believe that this report is one of the most valuable reports to come my way for some time.

In that report it is set out in the greatest detail how we can save on this important kind of public building. It shows how we can save millions of rand on a single hospital. I would wish to extend this type of inquiry to other types of public buildings such as university buildings and others as soon as possible in order to ensure that we are in fact laying down adequate and reasonable standards to provide buildings which will be valuable and useful and which will be a credit to the country, but which will nevertheless cut down waste to an absolute minimum. I believe that in the next few years we are going to save not merely a few million rand in this respect, but that—I am certain of this—we are going to save hundreds of millions of rand of the taxpayers’ money simply in this field alone. I can assure the House that I propose to move ahead with that as fast as I can.

There is a last point I want to make in regard to inflation. Costs are high, but we must look at costs in relation to incomes. If one does that, one cannot get away from the fact that incomes have been and are rising faster than costs. That is the one bright feature in this rather sad story of inflation, which is a world phenomenon. Last year on the average wages for the non-White groups increased by over 9% in real terms, and for all groups, including the Whites, by 4% in real terms. If I may repeat what I said on a previous occasion, if one takes the average gross national product per head of the population, man, woman and child, one sees that it rose by 7% in real terms in 1973 and again by 7% in 1974. I have been trying to find the comparative figures for other countries for purposes of comparison, and there is no country on my list where the increase in the standard of living, as measured in this well accepted way, compares with the increased standard of living in South, Africa. The fact of the matter is that, despite the rising costs and prices which I deplore, at this moment in time the living standards in this country are rising beyond any shadow of doubt. That is why it disturbs me to see what newspapers are reporting. I refer particularly to The Cape Times of Saturday morning which carried a huge headline and a report in which Mr. Murray of the Trade Union Council told the country that living standards for all South Africans were shrinking steadily. That is an absolutely incorrect statement.

Who was incorrect? Was it Mr. Murray or The Cape Times?

Mr. Murray was incorrect and his statement was given great publicity. This was also tied to a report which the Stellenbosch Bureau for Economic Research had put out. However, the Stellenbosch Bureau’s report said that it had canvassed large numbers of consumers and, whilst the body of consumers said that they expected prices to rise further—that is after all a reasonable expectation, because one cannot reverse the process overnight—they said that they were nevertheless satisfied that price rises would take place at a slower rate than previously. In other words, the general expectation was that the rate of inflation was now reaching the stage where it would taper off. One hopes very much that that will in fact come about.

I come to the second of the three main grounds of criticism which I have simply singled out, and that is that the Government is spending too much.

Mr. Speaker, may I ask the hon. the Minister a question?

The hon. member had a chance to speak, but let him ask his question.

I ask this question now because the hon. the Minister is moving from one subject to the next. Can we take it that in the light of what the hon. the Minister and his colleague, the Minister of Economic Affairs, have said, the rate of increase in money is now going to be brought down very significantly from the tendency that has prevailed over the last three months?

I can assure the hon. member for Johannesburg North that if there is one thing that is looked at with the greatest care by people who are really experts in this field, viz. the Reserve Bank and the Department of Finance, it is the quantity of money in relation to the growth rate. As those tendencies are clearly pinpointed and defined, so we shall carry further the policy we have been carrying on for years, a policy which, as I mentioned earlier, is to the great credit of the Government as a whole in that we have avoided demand inflation in a world which has found it extremely difficult to do so. I merely want to say that that is under daily supervision and strict control.

To come to the question of the increase in Government spending, I want to say that we are a country whose economic growth is burgeoning. We have to finance that economic growth, because more and more people want more and more services and infrastructure—these basic capital projects of all kinds to allow us to develop our growing economy. All that costs a great deal of money. However, I want to draw the attention of the House to the fact that in this latest budget the aggregate expenditure, compared with the expenditure during the previous year, is up by just over 18% in so far as both, the capital and the current accounts are concerned. In the previous year compared with the year previous to that, it was 24%, and that was at a time when inflation was lower than it is now. This fact should be borne in mind because the rate of inflation is higher now than during the year before. Despite that, the Government’s aggregate expenditure is rising at a lower rate compared with the previous year and the year prior to that. I think that was quite a substantial achievement. What would the current inflation rate be? Let us take it, seasonally adjusted, at a rate of 12½% and I do not think I am very far out. This increase is 18%. That leaves a few per cent over, but one should bear in mind that this is the case in a country in which growth is taking place with great strides all the time.

I should merely like to say that we have had to put aside a very large amount of money consciously and deliberately for defence and security and for the creation of infrastructure as well as for the purchase of land for the Bantu Trust under the consolidation proposals for the homelands. However, let us leave that out and take just the money appropriated for the creation of infrastructure and for defence. If you take those amounts out and also the expenditure during the previous year under those headings, you will find that overall there is in fact in real terms a slight drop in Government spending. I think that is quite an achievement. Even if you take out the amounts appropriated for the creation of infrastructure and for defence in this budget and you compare the situation with that of the year before, you find that the increase is 13%, and then you must bear in mind that there is a rate of inflation of about 13% by and large. How much more must we cut than that?

The question that always arises is: “Where precisely do we cut?” We publish, in great detail, particulars of the capital expenditure and the current expenditure and I say quite seriously that we would always be pleased to have anyone come to us to suggest how we should cut here or there. If we do receive such suggestions, we will look at them at once.

Finally, on these three main grounds of criticism, there is the question of the priorities of the Government. What are our priorities at this moment? They are defence and security, economic infrastructure, education and the development and consolidation of the Bantu homelands. Those are our four great priorities in this budget. I have listened to the debates in this House ever since the budget was presented and I have heard several members say that the priorities are not correct. However, I have not yet heard a considered statement from anybody telling us what then they should be. I believe that in this world we are living in today, this is probably as good an order of priorities as we are ever likely to assess for this country.

Where does inflation come in?

I think in this respect it is very significant—I therefore want to mention it again—that in respect of these criticisms no one can point a finger at us either on the score of economic growth or on the question of employment, which is so easy to do in so many countries of the world. So I want to turn to what I believe are some of the great positive economic achievements of this Government. In this connection I should like to emphasize once more the sustained rate of economic growth in a world in which one finds recession and declining rates of growth almost everywhere. This is the first point I want to make. If one looks at one of the biggest industries in this country the motor industry for example, one finds that whereas there is grave recession in the motor industry in the great industrialized countries of the world, in South Africa the industry is going from strength to strength. Only two or three days ago I saw the latest production figures, which are actually up on those of last year. That takes some doing in a world where it has been assessed that, generally speaking, in the main industrial countries there is a 25% drop in motor vehicle production at this moment. I would suggest that what we really are seeing is a country in which there is development and progress and in which there is prosperity. This stands as a great monument to the economic and financial policy of this Government in a very difficult world.

I would like to go slightly further and say that South Africa stands today as a great bastion of peace, prosperity and security in the Western world, not only economically, but in other respects as well. No amount of misrepresentation and no amount of deliberate distortion of the facts, either at home or abroad, on the part of our enemies or hostile critics of the true state of affairs in South Africa and of the immense effort on the part of the Government to uplift all sections of our heterogeneous population and to ensure civilized living standards for all our people, will avail, because I believe that the wheel is turning even at this moment and I believe that the truth is filtering through to the outside world more and more. There are sure signs of a better and a fairer understanding in the world at large of our position at the southern tip of Africa—better than there have been for many years. We recently had the opening of the Suez Canal and overnight the Indian Ocean has acquired enormous significance, not only for South Africa, but obviously for the whole Western world, the world we are concerned with. South Africa stands athwart the greatest sea route in the world—whether the Suez Canal is open or not. The opening of the Suez Canal need not concern us in South Africa in any particular economic sense. However, it is because of the enormous importance the Indian Ocean has now assumed that hon. members will now more than ever appreciate the reason for our making defence our first priority.

Despite problems and despite the inflation which is facing us, it is not the economic and financial problems or issues as such which really concern me. For many years this Government has shown that we can handle the situation. I would even go so far as to say that it is not strictly the political issues which concern me, because this Government and this party which I have the honour to represent, has shown throughout the years that it can handle these issues as well. What does concern me as a South African is the undermining activities of people within this country, some of whom operate under the mantle of parliamentary respectability, while others operate under the mantle or protection of academic respectability, and still others operate, worst of all, under the mantle of religious respectability. And even still further, there are those who operate under the mantle of the so-called freedom of the Press. I do not mean the whole Press. Fortunately we still have newspapers which are a credit to us. It is those elements I am specifically referring to, those people who are gravely abusing their position in a free society in South Africa, who concern me and cause me to worry about the future. Can anyone wonder why the electorate of this country—particularly in the last election—has reacted in the decisive manner it has by showing its revulsion and its repugnance at the utter lack of patriotism involved and the all-consuming obsession of these elements of our population to destroy the White man in South Africa?

That is the issue in my humble opinion—nothing else and nothing less. My hon. friend, the hon. Minister of Mines, in an eloquent plea yesterday appealed to these elements to be responsible, to assist their country and to stand in the breach, and I do the same. I would like to say to these elements in our society, in view of the dangerous and uncertain times in which we live, and I am sure that I am talking for everybody in the party which I have the honour to represent, and certainly I talk for the Government, that the time has come to cease and to desist from this headlong madness, or face the consequences. That is the position. I will now be told that I am threatening people, but I am not threatening people. I stand here as an ordinary South African who is proud to be a South African, but at the same time a South African who is concerned to ensure that in future this country should be the great and peaceful country which it deserves to be and, in fact, can be if we do not have this sort of undermining that we have here.

In this debate we have heard talk about the position of English-speaking South Africans. The House may perhaps feel that I, as an ordinary English-speaking South African, can say something on this issue. I certainly feel that I have some small qualification to talk on this issue. I want to say—and I hope the hon. member for Mooi River, for whom I have great respect, and his colleagues, will listen carefully—that it is not a case of the English-speaking, the United Party, or whoever might be a member of the United Party as an English-speaking South African, not being welcome or at home in this party. Of course, any English-speaking person in this party is encouraged to retain and cherish his own culture and traditions. That is the position. I wish that we could have a clear and unbiased assessment in public and in some of our newspapers of the tolerance to be found in this party, which is so much maligned. The hon. member for Mooi River said that he would not be welcomed here as an Afrikaner, that he could not be an Afrikaner. I think that that is what he said in essence.

I regard myself in all humility as an English-speaking Afrikaner and I am very proud of it. I have never felt that I did not belong here, from the first day I came here. I want to suggest that it is time in this country that we look at this issue because fortunately—I say “fortunately” because this is where our future is involved—more and more English-speaking South Africans are coming in under the banner of the Nationalist Party. I can talk, because I go out of my way to discover what is happening, especially in Natal where I happen to be the leader of the party. I can assure the hon. member that if I were to list the names of people who have come to me only in the last year and said: “Really, we feel that we have to back the Prime Minister and the Nationalist Party,” it would be a very impressive list.

Why did you not fight an election?

Let us be quite honest on this issue. I wanted to fight in the last election and my colleagues can bear me out. But the party and the hon. the Prime Minister felt that it would be better for me to be free, as it were, to roam the field as a whole. [Interjections]. I can assure the hon. member that as far as I am concerned, when it comes to fighting an election, I have in a sense fought every election in Natal because I have fought actively in every constituency, particularly in Eshowe and Port Natal. What happened there? [Interjections]. The hon. member should not talk nonsense. Does the hon. member wish to tell this House that I stand back for any member on that side and that I am afraid to face them? [Interjections]. To use an old phrase, he can tell that to the marines.

I do not want to keep the House any further. I think this has been a very interesting and important debate. On this note of true national unity, I want to say that the only hope for true national unity in this country—this is percolating and permeating through every day to all South Africans—lies in this party which I have the honour to represent. That being so, on what better note can I end this debate? With the greatest confidence I move the Third Reading of this Bill.

Motion agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

As is customary, an explanatory memorandum on the Bill has been made available to members and the draft Bill has also been submitted to the financial groups on both sides of the House for their consideration and comment. Tax legislation is usually of a technical nature and it should receive the attention of experts in this field before being discussed here, so that difficulties as to its meaning may be ironed out in advance. I have not received any comment as yet which requires any drastic change and my department has furnished explanations where these were asked for. Consequently I take it that hon. members understand the Bill and I shall only elaborate on a few matters. By far the greater part of the Bill is devoted to amendments consequential upon the proposals which I announced in my Budget speech. They are as follows:

The rates of tax as contained in clause 1 and the Schedule to the Bill. Basically, the rates of tax for individuals and companies remain unchanged, and only the loan levy in respect of all companies except diamond mining companies, has been increased from 2½% to 5% of a company’s income tax before the addition of the surcharge.

Clause 5 increases the special abatement for persons over the age of 60 years from R400 to R600. As I said in my Budget speech, the effect of this concession will be that a married person over the age of 60 years who does not support any children will only become liable for income tax when his taxable income exceeds R1 800, compared with R1 200 for a married person under 60 years. Unmarried persons will become liable for income tax when their income exceeds R1 300 instead of R1 100.

Clause 6 inserts a new section 7A into the Income Tax Act, which deals, inter alia, with the question of bonuses paid to national servicemen, and which at the same time places the payment of antedated pensions on the same footing for taxation purposes as that in respect of salaries granted with retrospective effect.

Clause 8(l)(d) deals with the increase in the exempted retirement benefits in respect of certain retirement gratuities paid to an employee by an employer, while clauses 34 and 35 contain provisions relating to lump sum payments from pension, provident and retirement annuity funds.

Clause 9 further provides for an increase in the deductions in respect of the current contributions to pension and retirement annuity funds as well as for an increase in the amount which an employer may deduct in respect of the erection of dwellings for his employees. The increased investment allowances as well as the extension of the period during which machinery must be brought into use or the period during which the erection of the industrial building has or improvements have to commence, is dealt with in clauses 11 and 13, and since the effect of the increased allowances has already been dealt with in my Budget speech, I shall not elaborate on it any further, except for saying that I trust that this very valuable concession in regard to investment allowances will generally serve as an incentive to industrialists to increase their production capacity.

Fiscal measures aimed at encouraging the benefication of minerals in the Republic are incorporated in the provisions contained in clause 15. The incentive takes the form of a benefication allowance which will be allowed as a deduction in addition to the normal investment allowance, or, in the case of a mine, the write-off of capital expenditure. The allowance will be granted on a selective basis and will be calculated on the cost of machinery or plant or buildings used in a benefication process and will amount to a maximum of 20% of the cost of machinery and plant or 15% of the cost of a building or the improvements to a building.

The benefication allowance will not be deducted from the cost of machinery or plant or buildings for the purposes of calculating the wear-and-tear allowance, and when the assets are sold, any recovery or recoupment of amounts granted as a deduction under this heading will not be included in the taxpayer’s income, in terms of clause 7(1 )(b).

I do not want to elaborate on the increased annual deduction from the earnings of a married woman, which is introduced by clause 17, since this matter is receiving the attention of my department, in co-operation with the Standing Commission on Taxation. However, I want to say that this concession is not so insignificant as is sometimes alleged. Tax relief resulting from the R750 deduction may vary from R67,50 to R472,50, depending of the size of the couple’s combined income. For example, where the joint income is R3 750 and there there are no children, the tax reduction is R79 or 30% of the tax which is payable; on R8 000 the reduction is R159 or 17% of the tax payable; on R12 000 it is R205 or 10% and on R18 000 it is R300 or 7,3% of the tax payable. Bearing in mind the fact that the relief is not so much aimed at compensating the family for the additional expenditure it has to incur because the wife has to go out to earn a salary, but is designed to adapt the tax payable by the family unit to its ability to pay, the concession is very reasonable.

The last of the concessions announced in my Budget speech which I want to deal with is the reduced rates of tax on the forced sale of livestock or plantations as a result of the sale of a person’s farm to the South African Bantu Trust. The amendments which give effect to this concession are contained in clauses 30 to 33 of the Bill.

Clauses 30 and 32 introduce amendments in regard to existing provisions in respect of the levelling rates of plantation and other farmers in order to exclude the abnormal plantation and livestock profits from the amounts on which the levelled rates are calculated, while in terms of clause 31, the definitions of “plantation” and “forest produce” will also apply to the new provision introduced by clause 33.

Clause 33 inserts a new paragraph 20 into the First Schedule to the Income Tax Act in order to provide the machinery in terms of which effect may be given to the concession.

As I said in my Budget speech, the purpose of the concession is to ensure that the farmer who, as a result of the sale of his farm to the Bantu Trust, is forced to sell his livestock or his standing plantations, does not have to bear such an increased tax burden as a result from the increase in his rates of tax arising from the extraordinary addition to his taxable income that he is hampered in recommencing his farming operations elsewhere.

Hon. members will agree with me that the relief is justified, particularly if one bears in mind that the sale of the livestock or plantation does not form part of the farmers ordinary activities, but deviates from his normal pattern.

It is also justified for tax to be levied in the normal way on that part of his profits from his livestock or plantation which may be regarded as“normal”—in terms of his average operational results in this regard in previous years—since it may reasonably be assumed that if he had not sold his farm, the farmer would have had such an income.

The method for determining livestock profits as well as the average livestock profits is set out in the explanatory memorandum and illustrated by way of examples. Although the result achieved in this way will be equitable in the vast majority of cases, cases may arise to which special circumstances are applicable and which cannot be resolved satisfactorily by means of the prescribed method, because of factors which are unique to a particular case. In order to cover those exceptional cases, it is being provided in the proposed new paragraph 20(3)(f) of the First Schedule that the Secretary may in such cases determine the livestock profits or loss or average livestock profits in such manner as he may consider appropriate. Such redeterminations will take place either to protect the farmer when his farming pattern has been influenced by exceptional circumstances or to protect the Treasury when irregularities have taken place.

†Mr. Speaker, I now come to a few of the amendments designed to improve existing provisions or which are administrative measures which are necessary for the efficient administration of our income tax law. There are a number of amendments in the Bill relating to assessments and refunds, namely clauses 4(l)(a) and (b), 25, 26, 27, 28 and 29.

The amendments are, broadly speaking, designed—

1. (a) to state clearly when the three-year “prescription” periods provided for in section 79 (as to assessments) and section 102 (as to refunds) must be regarded as commencing;
2. (b) to make the three-year “prescription” period for refunds under section 102 applicable to taxes paid on declaration i.e. non-resident’s shareholder’s tax or to non-resident’s tax on interest, etc., as well as to taxes payable on assessment;
3. (c) to make the three-year “prescription” period for additional assessments applicable to taxes paid on declaration and also to assessments of undistributed profits tax; and
4. (d) to give taxpayers the right to object and appeal against the calculation of tax, in addition to the determination of the amount on which tax is calculated.

The three-year “prescription” period is fair to both the fiscus and the taxpayer and none of the proposed amendments (except the amendment introduced by clause 28) has the effect of limiting existing rights of taxpayers; on the contrary, the provision relating to UPT in fact provides for a limitation against the fiscus which does not exist at present. The exception I have just mentioned relates to the “prescription” period of three years applicable to refunds. Although in strict law this period does not apply to refunds of taxes payable on declaration, the view was held for many years that it did apply. The amendment restores the long-standing practice upset by a court decision. There must be finality in these matters and it is illogical to have a period of prescription applicable to taxes payable on assessment, usually by taxpayers living in the Republic, and at the same time not to apply that principle to taxes payable on declaration, usually by persons resident outside the Republic. The amendments introduced by clauses 4(l)(c) to (g), 7, 22 and 24 which relate to dividends do not depart from the principles laid down in 1974 and merely amplify those principles or relax the rules laid down or are designed to clear up difficulties of interpretation.

The amendments are explained in the memorandum and perhaps the only provision calling for further comment is that introduced by clause 4(l)(f). The definition of “dividend”, as amended last year, is designed to tax shareholders on benefits they receive when those benefits accrue rather than on bookkeeping entries made by a company. It has come to my notice that it may be possible to circumvent the underlying intention by taking advantage of certain provisions of the Companies Act. The new paragraphs (iiA) and (iiB) inserted by clause 4(1)(g) make it clear that certain methods of altering a company’s share capital will not be of any avail.

The amendment introduced by clause 10 relates to the abnormal discounts which qualify for the exporters allowance. The allowance granted in respect of this item can be valuable to exporters but at the same time it could also be very easily abused if not properly controlled. My department has experienced some difficulty in the administration of this provision and rather than remove it completely at this stage, the Departments of Inland Revenue and Commerce have come to an arrangement whereby the latter department with its specialized knowledge in this field will quantify the amount of the discount which will qualify for the allowance in each case.

The situation will, however, be watched and if the concession is abused or is not effective, consideration will have to be given to deleting this item from those marketing expenses qualifying for the exporters allowance.

In conclusion, Mr. Speaker, I should like to deal with a matter which has recently arisen and which in my view calls for measures to safeguard the fiscus against unwarranted and unforeseen loss of revenue. Clause 20 introduced an amendment to section 22(5) of the principal Act which deals with the valuation of trading stock on the LIFO—i.e. last in first out—basis. The provision was originally introduced in 1956, together with the other provisions regarding the valuation of trading stock at cost price, to provide for those taxpayers, mainly share dealers, who were following the practice of valuing their trading stock—i.e. shares unsold at the end of the tax year—on the LIFO basis.

The only requirement laid down for adopting the LIFO basis is that the taxpayer must satisfy the secretary that he maintains satisfactory records in respect of his trading stock but once he has elected that basis, his election is binding and may not be varied by him in any subsequent year save with the consent of the secretary and subject to such conditions as the secretary may determine. Since the provision was enacted my department cannot recollect having received requests from traders to value commodities, other than shares, on the LIFO basis until very recently, when, following articles in trade journals in which the obvious advantages of this basis in a time of rising prices was pointed out, a spate of applications for a change-over to this basis was received.

Where LIFO is consistently applied it will have a cushioning effect against higher replacement cost of stock while commodity prices continue to increase and it is not sought to prohibit this form of stock valuation. The ultimate effect of LIFO, if consistently applied, is a deferment of tax and not, over the long term, a loss of tax. Where, however, a change is made from one method of accounting for stock to another, it could and does have the result of reducing the taxpayer’s trading results, and therefore his taxable income, quite considerably from what they would have been on the conventional basis and this will have a detrimental effect on the tax yield in the year of change-over.

It must be clearly understood that the decrease in trading results will not be occasioned by a regression in trading activities but merely by a chance in accounting practice in changing the basis of stock valuation. An inordinate tax loss as a result of this is, in my view, not warranted, especially where this method of valuation is not used for ordinary financial reports to shareholders or for the information of creditors but is merely used for income tax purposes. In this connection I should like to quote a paragraph from an article which appeared in a professional journal in regard to LIFO—

In the same article a comparison is given between the trading results based on the LIFO method and that based on conventional methods. On the same set of figures in regard to sales, purchases and expenses, the LIFO method showed a substantially lower net profit than the conventional method.

What is being proposed in the amendment is that the secretary be given authority to agree to a change to the LIFO basis under such conditions as he may determine, having regard to the circumstances.

This will be in accordance with the law and practice already in force in regard to a change from the LIFO basis or where a farmer wishes to change the livestock values adopted by him.

Preliminary discussions with the accounting profession about the problem have already taken place and I should like to assure hon. members that further consultations will take place to enable the secretary to formulate a policy which will be fair and reasonable to both the fiscus and the trader. In matters of this nature one cannot at the outset lay down hard and fast rules as there are many variations to the theme, and in the interest of all concerned it is best to have manoeuvring space to arrive at a just solution to the problem.

It is proposed that the amendment be deemed to have taken effect from the commencement of years of assessment ending on or after 1 January 1975.

Mr. Speaker, first of all I should like to express the appreciation of this side of the House for the very detailed explanatory memorandum which has been provided to us. It obviously required a lot of work and trouble on the part of the Department of Inland Revenue, and I should like to say that it has been of inestimable value to us in studying and appreciating some of the more complicated aspects of what is a fairly technical measure and one which is not readily understood by laymen.

The Bill which we are now discussing provides for the payment by the private sector of the economy to the public sector of the economy of the huge sum of R3 438 million, of which R102 million will be provided by non-residents. The amount is R439 million more than the amount which was provided by last year’s measures. This huge sum represents two-thirds of the total revenue which the Government and the provincial authorities need to run the country. It represents one-sixth of our total national income. I think it is important, therefore, that we get the size of this measure into its proper perspective, because we are dealing with the transfer of funds from the more productive sector of the economy, namely the private sector, to the less productive sector of the economy, namely the public sector. To put it in simple language, necessary as expenditure by the State may be, the side effects of a measure like this are to lower and not to raise the productivity of the economy. That is a fact and I know of no better way of stressing the desirability of keeping Government expenditure and Government taxation under control and certainly not allowing it to increase at a faster rate than the national income than to stress the fact that the transfer from the private sector to the public sector does lower the productivity of the economy as a whole. Let us not argue about the relative productivity of the public and private sectors. To my mind it is common sense that the private sector is the more productive sector. If that is not acceptable from me, the Government has before it support for my statement from the best authority and that is the Franzsen Commission’s report.

I think we should also keep in perspective the fact that taxation of this magnitude is a fiscal measure which has far-reaching effects on the economy. It is a measure which can be used to assist the economy in its general economic objectives but, if it is not used in that way, it is a measure that can hinder the attainment of those objectives. We on this side of the House would like a measure such as this, which deals with so much money, to be of such a nature that it encourages the real growth of the economy primarily through encouraging investment by the private sector. This would provide jobs for our expanding population, it would encourage greater savings in the economy and it would help the liquidity position of businesses. We would like to see a measure of this nature include effective steps to combat inflation. I do not think the measure we have before us fits very happily into the collective programme for combating inflation which was presented to the House by the hon. the Minister of Economic Affairs yesterday. We would like to see a measure of this nature giving real help to those members of the population who are least able to cope with the crushing burden of inflation.

On many occasions in the past hon. Ministers of Finance have been in a position to do what I have just described. In other words, they have had the flexibility to use the Income Tax Bill and other taxation measures to assist in solving economic problems. They have been in a position where revenue has been buoyant and expenditure has been kept in check. The fact that they have had surpluses which have given them flexibility in their fiscal measures has not always been taken full advantage of, not even by the hon. the Minister’s very able predecessor. This year, however, we have a different position in that the Minister is in a complete strait-jacket. He needs every cent of the revenue that is going to be raised under this Bill to meet current expenditure. Even then he is not going to have sufficient and he is going to have to draw on his reserves. This is unhappily so at a time when the economic situation calls not for small measures but for bold measures. The Minister, because he is in this straitjacket, has been able to give away under this Bill what I can only describe as crumbs.

He has been able to give away a total of R12 million which, expressed as a percentage, is 2% of his revenue.

Mr. Speaker, I would like to deal, first of all, with the position of the individual taxpayer under this Bill. The individual is going to be required to pay by way of income tax, a total of R1 250 million in round figures, R160 million more than last year. Expressed as a percentage, it is 15% more than last year. We on this side of the House are grateful that there have been some crumbs that have fallen from the rich man’s table. We are grateful for the concessions by way of increased abatements to aged persons. We are grateful for the minimal additional concession that has been given to married working women. We are grateful that the bonuses of national servicemen are going to be spread over a three-year period, if desired, for tax purposes, although we would have preferred to see those bonuses exempted from tax altogether. We are grateful for the concessions that this Bill includes in regard to lump sum retirement benefits. These are all going to help, but when you put-them in their true perspective, they add up to the miserly sum of R8 million.

We are also grateful for the concessions in regard to contributions to pension funds and retirement annuity funds, which are going to help in regard to the savings of the relatively high income group. Half of these savings will go back to the Government and other institutions by way of prescribed investments.

What is provided in this Bill as an incentive for saving, is not sufficient. I do not think the hon. Minister should be misled by the substantial increase in personal savings and incorporate savings that took place last year. This was a very welcome development, but I do believe that it was probably a flash in the pan, for the reason that personal savings increased very largely as a result of abnormally high farmers’ incomes and the very steep rise in salaries and wages which took place last year, and corporate savings increased as a result of the prosperity that was enjoyed by business last year, a great deal of which was due to inflation and was represented not by real prosperity and real profits but by paper profits.

I believe that there is room for much more to be done in regard to encouraging savings. This is an important aspect of the fight against inflation. I have already spoken in previous debates of measures that I think should be taken, such as an index-linked bond and conversion issues of tax-free bonds that have been repaid. I would like to make the suggestion to the hon. Minister that he should consider a voluntary loan levy that could be paid at taxpayers’ own options and choice either with PAYE payments or with provisional tax payments or both. The loan levy voluntary paid in such a way should qualify the taxpayer for some additional abatement, or some abatement irrespective of the level of his income, from his taxable income. I believe that that would be a considerable incentive to encourage savings at a time when they certainly need to be encouraged.

As far as individuals are concerned under this Bill, I still regard as the worst feature of our income tax structure at present the steeply and progressively rising scale of tax. In a time of inflation this progressively rising scale has the effect that to enable persons’ real incomes to keep pace with inflation, their monetary incomes have to rise at a higher rate than inflation. If that is not in itself a highly inflationary factor then I do not know what is. When one adds to this the fact that taxpayers are falling into the higher income tax brackets more rapidly, where the marginal rate is so high that it acts as a disincentive to effort, then this whole question of the tax scale and the progression of the tax scale needs looking into very carefully.

I would now like to make some remarks about the position of companies other than mining companies as they are affected by this Bill. Apart from the profit squeeze which companies are generally experiencing as a result of increased costs not being balanced by corresponding increases in turnover or activity, the biggest problem that businesses are facing at present is the financial problem of liquidity. Businesses are having to rely on borrowed funds to a growing extent and this is steadily weakening the relationship between equity capital and borrowed capital; in other words, there is a weakening of the financial structure of businesses in general. The prime reason for this happening is, of course, the inflationary situation. The income tax legislation aggravates the position because tax is being collected on artificially boosted book profits and not on real profits and the tax is making no allowance for the fact that replaceable assets cost much more money to replace than they originally cost. If we take this Bill and the way it affects businesses in its full perspective, we will see that it is aggravating the position of businesses rather than helping it.

Firstly, it gives away a few relatively small concessions. It gives away R2 million in investment allowances and, while this step is welcomed, it is hardly likely to set the investment market alight. It relieves the position of companies in respect of undistributed profits tax which is another welcome move and one which we have been calling for for a long time. It repays to companies with interest the 1968–’69 loan levy—an amount of R19 million—which, because of inflation, is worth very much less in real terms than the R1 million which was originally paid in those years by those companies in loan levies.

Having made these relatively small concessions, it imposes a new loan levy amounting to R48 million which in seven years’ time is going to be repaid in depreciated specie. To me, the arithmetic of this budget as far as businesses are concerned is that it will result in a severe drain on corporate liquidity and, despite the investment allowances and the undistributed profits tax concessions, it will leave companies with much less money to invest at a time when investment by the private sector is paramount.

Finally, I would like to refer to an important provision on innovation in this Bill, viz. the treatment of excess profits which are made by plantation and livestock farmers when they sell their farms to the Bantu Trust. The amendments in themselves are welcome. Farmers who are expropriated or who have to sell against their will, can be very heavily penalized when they have to pay high taxation rates over a short period on excess profits made on realizations at the time of sale. As we see the position, there are anomalies in the provisions as they appear in the Bill at present. I hope that the hon. the Minister will give attention to these anomalies. Firstly, why should this particular and favourable treatment of excess profits on expropriation or forced sale to the Bantu Trust not also be extended to all other forms of expropriation?

Discrimination.

There seems to be no reason of equity as to why a sale to the Bantu Trust should be treated on any basis other than that of a sale under similar circumstances to any other authority. I would also like the hon. the Minister to consider the position of a farming company in regard to excess profits under these circumstances. It seems to me that excess profits made by a farming company on realization will attract company tax and when they are paid out, they will be treated in the ordinary way as dividends. Companies are specifically excluded in this Bill from the provisions relating to excess profits under these circumstances. Other speakers on this side will examine other aspects of this Bill and will speak further on this particular aspect of excess profits taxation, and we shall be moving an amendment in this regard during the Committee Stage. At this stage, I would like to say that we on this side of the House will not oppose the Second Reading.

Mr. Speaker, I am grateful to hear from the hon. member for Constantia that they will not oppose the Second Reading of this Bill. Unfortunately, one gains the impression again, having listened to the hon. member, that the Opposition take quite some time just to say that they agree and will therefore not oppose the measure. Now that we have debated the Appropriation Bill for more than one hundred hours, it will certainly not be necessary now to conduct a very long debate on one of the subdivisions of the Budget, viz. income tax.

I am grateful to hear from the hon. member of Constantia that he is grateful for a whole number of very fine aspects of the Income Tax Act. However, there are a few of the hon. member’s statements which cannot pass unanswered. For example, he made the far-reaching statement that income tax was a transfer of money from the more productive sector of the economy to the less productive sector of the economy. If one takes this argument advanced by the hon. member, to its logical consequences, one must abolish our whole state machine, because the whole state machine, with all the expenditure it incurs to provide services to the community, is the less productive sector of the economy according to the hon. member. Therefore, if one takes the consequences of the hon. member’s statement all the way, one should abolish the state machine altogether. The hon. member is shaking his head, but I should like to know how else he wants to have this done. If he objects to money being transferred from the private sector to the public sector, a sector which is allegedly less productive, it means that one should simply not transfer money to the Government sector, because we are dealing with the less productive sector of the economy. Of course, it is a fact that there are many items of expenditure in the public sector which are not at all productive, nor economic.

I want to mention an example of that. The hon. member said that he was very grateful for the larger concessions being made to social pensioners. Payments to social pensioners are not economically productive, but an essential service which an advanced, highly civilized community renders to the less fortunate and more needy part of that community. The hon. member also said that this Bill did nothing, or not enough, to encourage saving. I want to say immediately that the most important thing which we can do to encourage saving is to reduce the rate of inflation drastically. This responsibility surely does not rest on the State alone. People easily argue that it is not longer worthwhile to save, as savings become worthless by the day. Therefore the most important thing which one can do to encourage saving, is to reduce the rate of inflation drastically.

I want to agree wholeheartedly with the hon. member for Constantia that it is essential that we encourage saving, because in a free enterprise economy, capital is necessary from the private sector, and one can only have capital if one has savings. However, we must not encourage saving in the way which the hon. member suggests. I also want to agree with the hon. member that one of the most important ways in which we can encourage saving is the levelling off of what the hon. member calls the “progressively rising scale of income tax” the levelling off of the scale for the higher income groups, because we usually find that it is in those sectors of the economy that we find the largest amounts of savings. But now I have a problem with the hon. member for Constantia. His speech is recorded in Hansard. We shall reach a stage where the hon. the Minister of Finance might introduce an improvement in the last increments of the scale and then it will be that the hon. Opposition which will accuse the Government of presenting a rich man’s budget. I sound the warning here today that that will happen. It is recorded in Hansard. I should like to see the Opposition’s reaction when the Government comes along with a reduction of the rates in the higher categories.

I just want to refer very briefly to a few aspects of this Bill, a Bill to which I want to give my very strong support. I refer in the first place to the benefication allowances in respect of the further benefication of our minerals. For years we have been advocating that we should refine our ore here instead of exporting it. Now I want to express my very great appreciation for the fact that we now have these further allowances to encourage the benefication of our minerals here. On the one hand, it will help the industrial sector a great deal and on the other hand, it will help to earn far more foreign exchange. Therefore I want to express my great appreciation for the fact that the hon. the Minister of Finance and the Government have found it possible to introduce these allowances.

I also want to refer to the special abatement which has been increased from R400 to R600 for persons over sixty. Here I want to refer to what I said yesterday afternoon during the Third Reading of the Appropriation Bill. I am not happy about the fact that this is being made applicable to persons over sixty. I should far rather have seen it being made applicable to persons over sixty-five, as the position was in fact four or five years ago. We cannot afford to encourage people to retire at sixty years of age, most definitely not! In these times in which we are experiencing a manpower shortage, we can definitely not afford to encourage people to retire five years too early.

Therefore, I want to ask again that attention be given to this. The age-limit of sixty should be raised. Even if it cannot be raised to sixty-five years at once, I feel that it should at least be raised to sixty-five years in due course. Since the State will save money by raising the age-limit from sixty years to sixty-five years, that saving can be used for making greater concessions to retired people. I have spoken about this many times in this House. With the almost annual increase of social pensions, the State, of course, recognizes the effect of the erosion of the value of our currency. From time to time, adjustments are also made in respect of civil pensions, but the self-employed person who does not belong to a pension fund, but has to live on his savings and the interest on his savings, obviously cannot receive a concession from the State. Obviously the only concession which he can receive is a tax concession, and therefore I advocate that we should raise this age-limit from sixty to sixty-five years and that in lieu of that we make a considerably improved concession to people over sixty-five years.

In the third place, Sir, I want to refer to the reduced scale of taxation on the enforced sale of livestock or plantations, to which the hon. member for Constantia also referred. I do not know whether the hon. member eavesdropped on the discussions in our caucus a few months ago, but I just want to tell him that I raised this matter in our caucus at that time. I agree with the hon. member that there is no difference in principle between people who are obliged to sell land to the Bantu Trust and people who are obliged to sell to the State for other reasons. I am not talking about expropriation now. I am speaking of all cases where people are obliged to sell because of action by the State, the provincial administrations or even local authorities through the provincial administrations.

Sir, surely it is clear that we are dealing here with a group of people who have made very clear representations to the Treasury, while other people have not made those representations. I want to assume that the Treasury will-investigate this matter very thoroughly, especially in respect of the concept of expropriation, and that, in due course, it will introduce an extension of this principle, as it is embodied in this Bill before us. I trust that this will be done. The Opposition must not say again that it is being done because they have asked for it, because this request has already been made to the Government long ago, although it has not been done in this debate.

Sir, I want to conclude with these few remarks, because I believe that having debated this whole Budget for more than 100 hours, it is not necessary to spend much more time on it, particularly in view of the fact that the hon. member for Constantia said that they did not intend to oppose the Second Reading of this Bill.

The hon. member for Paarl said th.at we on this side of the House had said we were very grateful for the concessions which had been made here. I just want to rectify that. The hon. member for Constantia said that we were grateful for concessions, even if they were very small. He spoke of the small crumbs which had fallen from the rich man’s table. I think that we on this side of the House are all in agreement that these concessions are really very small ones. We are glad that this Bill embodies the principle of concessions, but I think that is as far as our gladness goes.

The hon. member also spoke about the transfer to the public sector of money taken from the private sector. He said that he did not agree with the hon. member for Constantia, who had spoken about the transfer to the public sector of money taken from the private sector. He said that he could not agree with the hon. member, because if he were to agree with him, it would mean that the State would eventually cease to exist as an institution. Of course, he was wide of the mark again. The point which the hon. member for Constantia made, was that where the State took money from a sector which was extremely productive and transferred it to a sector which was not so productive, the State must be very circumspect in dealing with that money; that it could not do as it pleased with that money and that it must also be very careful in imposing taxation on the private sector. Sir, that was the point and I hope that the hon. member for Paarl now understands what the hon. member for Constantia said. The next point which he touched upon, was in connection with the pensioners. He said that he would agree readily that a pensioner was not actually a productive part of society. But what he forgets, is that a pensioner is a person who has contributed to the national product throughout the years he was working and that he has contributed to the money which has been saved in the country in all the years he was working, and that he surely is entitled to a pension when he reaches old age. Why does the hon. member for Paarl want to refuse him a pension and tell him, “No, you are only 60 years old and you must work for another five years”? If the man has reached 60 and he wants to retire then, why can he not do so? The other proposal which the hon. member for Paarl made, viz. that greater concessions be made to the pensioner who retires later and does not ask for his pension at an earlier age, is not new. That principle is already there. It is already in the legislation. You know yourself that when a pensioner does not draw his pension at 60 years of age, but only at 70 years of age, the monthly payment which he receives is R11 more than when he takes it when he is 60 years old. The principle is already there and I would rather that the hon. member for Paarl were to advocate that the difference be made much bigger: that it be R25 or R30 instead of R11. Then I would have agreed with him. But to say that a principle must now be inserted into the legislation is, of course, not right, because the principle is already there.

Then there is the question of the levelling off of the higher taxation rate. The hon. member says that if he were to advocate this and were to agree with the hon. member for Constantia that there should be a levelling off, and if the hon. the Minister were to say next year, “I think the two hon. members who argued here on 17 June had a very good case and I accept it and I shall level off the rate”, we on this side of the House would then say that in spite of the fact that we had advocated this last year, we rejected it now. Surely that is nonsensical. How can one use such an argument? The argument that there should be a levelling off of the rates, has been repeated for years by this side of the House, and I think I have heard the hon. member for Paarl saying something about the same subject only once before. Therefore, I think that we are far ahead of the hon. member for Paarl in this respect.

Then the hon. member for Paarl wants to disclose a caucus secret. I do not know whether this is a new development in the National Party for caucus secrets to be disclosed, but I want to tell the hon. member that it does not matter one iota to me who had this bright idea. It makes no difference to me if there is an amendment on the Order Paper which I want to move in the Committee Stage in connection with the subject of expropriation and the taking of afforested land or land used for livestock farming, whether such land is expropriated by the Bantu Trust or by any other agency of the Government. It makes no difference to me who thought of the bright idea first; I should just like to see that such an amendment be made to the legislation. Sir, you will remember that during the discussion of the Second Reading of the Expropriation Bill, I asked the hon. the Minister of Agriculture whether he would whisper into the big ear of the hon. the Minister of Finance, who is not even listening to me now. Of course, I am speaking a little louder than a whisper now. I asked then that he should ask him whether he would not think of amending the legislation so that that concessions could also be made in the case of expropriation. I do not know whether the hon. the Minister spoke to the hon. the Minister of Finance, but I feel very strongly on this point.

†I believe I have covered most of the points the hon. member for Paarl has raised. Sir, I believe a great deal more attention should be given to the individual taxpayer. I think the individual taxpayer is having a very lean time at the moment because he finds that he has to pay a very large tax because his income, as in the case of companies, is in many cases a paper income and not a real income. Unfortunately as far as the Secretary for Inland Revenue is concerned, as long as the taxpayer’s return shows that he has an income, and after reduction of abatements he has a taxable income, he is subject to tax at the appropriate rate. It does not matter whether it is a paper taxable income or whether it is a real taxable income. That does not affect the Secretary for Inland Revenue in any way. He only applies the rules. I think the hon. the Minister should devise some means of dealing with the individual taxpayer. In many cases an individual who runs bis own business has the same problem as larger businesses. In many cases an individual taxpayer is a man who earns a fixed salary but who also get bonus additions or some other perks. It is only because the man gets these additions and these perks that he is able to survive in these very, very difficult times. I do believe that there is a case to be made out for the individual taxpayer, and I should like the hon. the Minister to look into the matter and see whether he cannot do something to combat the effect of inflation on the actual income of the individual.

While talking about the individual taxpayer I also want to talk about the woman taxpayer. As long as a woman is unmarried and earns, she is fine because then she is taxed as any other individual. The moment she marries she is at a great disadvantage. In many cases her husband will not let her work because he does not believe that the additional income which she is going to earn is going to be of any benefit to the joint estate. I know that a committee of the hon. the Minister is inquiring into this matter. I do believe that this committee must go into the matter very deeply. I do not know what its exact terms of reference are, but I am hoping they are very broad. I wonder whether this committee which is going in upon the question of taxation on married women, will also go into the question of taxation on divorced women. I believe that here there is also a problem which we have to face up to. At the moment the position is that whilst the widowed woman is taxed as if she is a married man, a divorced woman is taxed as a single woman. Yet she has obligations because she has children, a family to look after. But she gets no tax rebate at all. I do believe that a good case could be made out for these people and I trust the hon. the Minister will go into these matters, which I mentioned in last year’s debate as well. However, I do not believe that any attention has been given to it.

I should now like to come back to the question of taxation of excess profits. I believe there are two principles involved here. The first one is that excess profits which arise merely as a result of outside influences and not through the actual will of the taxpayer, should be dealt with on a separate basis. I believe that is the underlying principle of the new provisions contained in this Bill.

I think there is a second principle and that is that where a taxpayer is a company and his farming operations come to an end, he is not dealt with in terms of the new principle. In other words, he is penalized. It is a very common practice today for most farmers to conduct their businesses as companies registered under the Companies Act. This tendency is increasing day by day. I believe it is grossly unfair for the fiscus to say: “We do not mind your conducting your farming operations as a company because it is far more beneficial for you and for your family. One day when the major shareholder passes on and the other shareholders have to take over, it is far more advantageous. It is also more advantageous from a transfer duty point of view and from a number of other points of view, but we are going to make it quite certain that you are not going to benefit from the point of view of the sale of land to the Bantu Trust or from the point of view of expropriation in any other manner.” I understand that the argument underlying this attitude is that because the individual has a progressive scale of taxation the individual must have relief while a company, not having a progressive scale of taxation, is not entitled to relief. The company tax at present is fairly high and there is no saying that it may not be a little higher next year for instance. In the meantime, when such a company comes to an end because of the sale of its only asset to the Bantu Trust or because of expropriation of the farm which is the only asset of that company, that company has to be liquidated or wound up. A distribution is then made after which the excess profits which have already been taxed in the hands of the company are taxed again in the hands of the individual shareholders who are going to be paid their final distribution. When that happens, those shareholders, as individuals, are going to pay on a progressive scale.

There is a second principle which should be considered here. I believe that for the purposes of the first principle I have mentioned, viz. the question of the progressive tax on the individual, when a company has to be liquidated as a result of the expropriation of its only asset, a shareholder of that company should also be regarded as a taxpayer for the purposes of the relief that is granted. I do not want to go into the matter any further because I will be dealing with it again during the Committee Stage. The main amendment I intend moving in the Committee Stage deals with this aspect. I also have another minor amendments, but I do not propose to discuss it now.

Mr. Speaker, the hon. member for Wynberg crossed swords here this afternoon with the hon. member for Paarl. I have the dubious privilege of speaking after the hon. member for Wynberg for the second time within a week. It is always reasonably easy, because he speaks of things to which one does not need to reply at all extensively. This afternoon, he kicked up a row with the hon. member for Paarl again, and it was very clear to me that he did not understand at all what the hon. member for Paarl had said. He obviously did not have the vaguest notion of what the hon. member for Paarl meant. I am not going to follow the same method which he followed by explaining the hon. member for Constantia’s speech: I think that the hon. member for Paarl spoke quite clearly enough. The hon. member for Wynberg said that the ordinary man’s taxation represented a very large percentage of his income. I should like to pause at that statement for a moment. I have a table here which indicates-the effective rate of taxation for a married person with two children. When we consult that, we see that such a person who has a taxable income of R2 500, pays a tax, expressed as a percentage of his taxable income, of 1,08%. If he has a taxable income of R3 000, the percentage is 2,4, but if he has a taxable income of R5 000, the percentage is 5,66. If he has a taxable income of R6 000, the percentage is 7. Surely it is very clear to everyone that the percentages are not very high.

In the course of his Second Reading speech, the hon. the Minister gave a very clear explanation of the concessions announced by him when he made his Budget Speech earlier this year. From the Bill we notice that the concessions which he announced then are now being made applicable in practice. One sees repeatedly that the Budget was very good and, above all, exceptionally well balanced.

I only want to refer to a few of the clauses. Clause 5 deals with the special abatement for persons over the age of60 years. The abatement is now being increased from R400 to R600. Our older people, also our pensioners, are in this group, the people who really need relief. We are accused of doing nothing for these people, but when the hon. the Opposition asks us to increase pensions, then they forget, for the sake of convenience, that considerable relief is brought about by means of these provisions as well.

Next I look at Clause 6, which regulates the payment of tax payable by national servicemen on the bonus which they receive after completion of their national service over a period of 18 months or 24 months. The tax which a national serviceman then has to pay, is spread over three years. I think it is a very good and fair arrangement which will contribute to encouraging our national servicemen to complete their training over a period of 18 months or 24 months. It will also help a young man who is at the beginning of his career, because he will be able to make good use of that amount of savings.

Clause 8(1)(b) extends an existing exemption from tax flowing from the provision of housing to the provision of all kinds of residential accommodation by employers for employees. In the course of the session, we have often heard that the Government does too little to provide housing for people. I think that this is a definite encouragement for employers to provide housing for their employees themselves. Employers who put the shoulder to the wheel themselves to provide housing for their employees will benefit to a large extent from this exemption from tax. I think the hon. the Minister should also be congratulated for this incentive.

I only refer to a few clauses, and now I come to clause 9, in which the maximum amount which may be deducted for contributions to any pension fund is being increased from R1 250 to R1 500. What is the effect of this? Apart from the fact that it means that a person will need to pay less tax, it also means that it will serve us an incentive for people to make provision for their old age themselves and not to expect the State to look after them one day.

Clause 16 deals with donations to universities and colleges. An existing arrangement is now being extended further, so that it will also apply, for example, to educational institutions in the Bantu homelands. Once again, it is an incentive which cannot be disclaimed. We are encouraging people who have the necessary funds to put money into the Bantu homelands as well, so that the educational institutions there may be launched and extended with still greater success.

Clause 17 is a very important clause, as the hon. the Minister also said. It deals with the deduction of the income of the married working woman. The amount allowed as a deduction is being increased from R600 to R750. At first glance, this does not look like much, and it has been urged that it be increased still further. What is it really worth? The hon. the Minister also referred to this, but I want to mention two more examples. A person who is married, but does not have children and has a taxable income of R5 000, will henceforth receive a tax concession of R87 or 22% of the taxable income. If he has an income of R6 500, the concession amounts to R126 or 19,8% of the tax payable. What deductions can one make from this? From this one can deduct, inter alia, that the tax relief is the greatest in the lower income groups. This is exactly where the people’s ability to pay tax can be relatively weaker. The reverse can also be true. The tax is adjusted in accordance with the ability of the tax payer to pay tax. A conservative estimate puts the loss of revenue to the State as a result of the tax relief of R750 at approximately R30 million per annum. As the hon. the Minister said in his Second Reading speech, this is no minor concession. It does not come anywhere near being one of the “crumbs” as the hon. member for Wynberg described it.

He is a crumb himself.

Although we need women very badly in the economy of South Africa and although I am of the opinion that we do not pay our women enough in South Africa—a woman, in my opinion, ought to receive the same salary as a man if she does the work which a man does—it is nevertheless essential that we maintain a sound balance in this respect. The woman also has a vitally important role in domestic life. It is not in the limelight, but there she is involved in the education of people who have to govern the country tomorrow and the day after, and also have to sit in this House. To my mind, a sound balance in this respect is of cardinal importance, a sound balance between the number of women who are economically active and the number of women who also do their duty at home. Excessive tax concessions can create immeasurable sociological problems for us and, if possible, we should avoid these.

However, there is another aspect in connection with the tax which women pay, which I should like to look at briefly. We have heard more and more people insisting more strongly on the married woman being regarded as a separate entity for the purposes of taxation and, consequently, being taxed as an unmarried person. Let us look at this more closely. If a man earns R2 000 per annum and his wife earns R1 750 per annum, their total taxable income is R3 750. At the present rate for married persons, they will pay R178. If they are taxed separately, they will pay R289. Therefore, there is a difference of R111 which is how much more they will have to pay if they are taxed separately. We can take another case. If a man earns R5 000 and his wife R3 000, their total taxable income is R8 000. As a married couple, they will pay R777 in tax, while, as unmarried persons, i.e. separately, they will pay R881. Therefore, there is a difference of R104 which is how much more they will have to pay in the latter case. However, it is interesting to notice that in the case óf a man who earns R8 000, while his wife earns R5 000, a total of R13 000, they will benefit if they are taxed separately. As a married couple, they will have to pay R2 089, while they would have to pay R2 000 if they were taxed separately; a reduction, therefore, of R89. Therefore, it appears that when a married couple earn in the vicinity of R12 000 or R13 000 together, it will be to their advantage to be taxed separately. The largest part of the tax-paying population in South Africa, however does not fall into this category. I think if we were to make a survey of the average income of our people, we would find the average to be in the vicinity of R5 000 to R8 000. In that case it is definitely to the advantage of the woman who works to be treated as part of the joint household, together with her husband, and to be taxed in that way.

Now I have mentioned a few cases where, to my mind, very positive steps have been taken by the hon. the Minister by means of this Bill, and where these will be of considerable benefit to our people. These are definitely not only the crumbs of which the hon. member for Wynberg spoke. There are still many others, for example, the farmers who receive great relief, to which the hon. member for Wynberg and others also referred. However, I do not want to elaborate on these matters, the figures are there for everyone to see. I think that the proposals of the hon. the Minister deserve the support of all of us in this House.

Mr. Speaker, the hon. member for Verwoerdburg referred to certain aspects of the Bill which he found important. I have no fault to find with the majority of what he said, except that I do not think that the hon. the Minister has tackled the real basic problems that we have to tackle, namely: How does one go about producing a proper fiscal policy in these days of escalating inflation? I think that the hon. the Minister is aware that I have utilized every opportunity that I have had during this session to bring to the attention of the Executive the necessity to re-think basic concepts when we have to deal with fiscal and monetary policies in this climate of escalating inflation. I must say that I have been encouraged by one or two things which the hon. the Minister has said. He has referred to the fact that he has put to his interdepartmental commission on taxation the whole problem of corporate taxation. I think that this is a step in the right direction and it is welcomed. While we are on that subject, I would like to suggest to the hon. the Minister that he should consider taking a further step in this direction, namely to establish a standing committee of this House on public revenue to complement the standing committee on Public Account. I am sure the hon. the Minister will agree that the standing committee on Public Accounts does very valuable work when it comes to expenditure and I am sure that a committee to consider revenue proposals would be equally worthwhile, and I commend that to the hon. the Minister for his consideration.

In the meantime, we have to react to the Bill before us as it stands, and I can only hope that this is the last time that we will have to consider tax proposals which are so totally unsuited to the needs of our economy. These proposals are unsuited to the needs of our economy. These proposals are unsuited to the needs of our economy firstly and primarily because they are neither intelligent nor sensitive, considering the problem of inflation that we have to deal with. Secondly, they are clearly no more than a means to provide the Executive with funds in a way that is financially most rewarding and politically most convenient. I do not think that any real endeavour has been made to use this mighty fiscal tool which the hon. the Minister has to direct the economy in these troubled times. Thirdly, even with the limited objectives of these taxation proposals, much could have been done to provide relief to deserving sections of our people and our economy at very little cost to the Exchequer. I want to record the disappointment of those of us in these benches that in this respect again the Government has unfortunately done too little too late. In the fight against inflation, I am sure the hon. the Minister will agree with me that the most important thing is to encourage the creation of new capital, in other words, savings. This is the most important thing and this is where all our efforts should be directed. When it comes to considering savings, we must accept that savings are only possible once sufficient funds have been generated to finance inflation. Inflation, by definition, is money growth and it must be financed like real growth, by the utilization of more money. To use an example—I have mentioned the example before in this House—if we were to take a company carrying on business in an economic climate where you have an inflation rate of 15% that company would have to make, net, after tax, 15% of its capital employed before it could even begin creating any new real capital and before it could even begin having any savings at all. These are enormous figures which are far beyond what is possible at the present moment, and I think that the recent statistics which we have had all indicate that this is the position. One of the worst factors is not that the companies do not generate the money themselves; it is the fact that they are taxed on their historical monetary reported profits, and as a result of that they find themselves in this bad liquidity situation. Therefore, you have a distortion in our economy which is basically brought about as a result of our tax system, because it levies taxes on historical monetary reported profits. Savings in the case of many companies are not only impossible, but in addition these companies also have to deal with a liquidity problem that either forces them to reduce their level of production in real terms or to borrow. If they borrow money to overcome their liquidity problems, not only will they have to pay dearly for the limited credit available, which will of course add to their cost problems again, but they will probably end the year with an even more serious liquidity problem requiring even further external borrowings. They will have no alternative but to increase the price of their products. Of course, this will not help because everyone else is in the same boat. Everybody is doing exactly the same thing, resulting in a higher inflation rate and further illiquidity. It is a spiral which continues.

A typical example of what is happening to a vast majority of manufacturing companies at the present moment can be seen in the statistics I referred to previously in the debate which have been compiled by the Department of Statistics. As a result of the corporate tax structure, companies are not only unable to save, but are in effect running into a very serious liquidity problem. We have to ask ourselves what this is in fact doing to South Africa and what road we are on when we consider this. The answer is in fact quite straightforward. Apart from fanning the fires of inflation, if we look at the position in other countries which have trodden this path before us, we see that if the same happens to us, large sections of our economy will initially have to cut back on dividends. As a result of this, they will be unattractive as investments; they will become under-capitalized, then under-invested, and finally insolvent or nationalized. This has happened before. One need only look at the classic example of what has happened to the Leyland Corporation in the U.K. at the present moment to see this trend. Another factor is that in this whole process productivity falls. The capacity of companies to produce is reduced, and should the Government endeavour to inflate the economy by the classic method of injecting new money, the result would be to widen the gap between the money supply and the provision of goods and services, which again would result in further inflation. This means that our economy will become even more sensitive to inflation and it will become virtually impossible to pull it out of the eventual nosedive into depression. Eventually nationalization will become the only answer and capitalism will be threatened in South Africa. This is what is happening elsewhere, and this is the serious threat facing us today because of the distortion which exists in our present tax structure.

I think it is important to repeat what I have said before during this session, namely that because of inflation, profit margins and savings must go up or the standard of living and productivity will go down. This is an absolute equation and you can absolutely bank on it. Therefore, if we wish to avoid the effects of escalating inflation, under-capitalization, under-investment, insolvency and nationalization, we must accept the reality of that basic law, and when we devise our fiscal laws we must take that into account.

It is easy to be negative and it is far more difficult to be positive. I hope to spend a few moments trying to put some ideas to the hon. the Minister as to how I think he ought to be going about tackling this particular problem. What are the objectives we wish to achieve with our fiscal measures? I think it is important only to tax people on real profits. I think it is important that taxation should provide incentives to save. We want to create a situation where we will increase liquidity without aggravating consumer demand. We want to increase productivity, thereby fighting inflation, and we want to decrease the proportion of Government expenditure in relation to private expenditure. I am not saying we want to decrease the amount of expenditure, which we do say—but for other reasons; I am referring to the proportion of public expenditure in relation to private expenditure. Various countries are looking at various ways of trying to achieve this. Inflation accounting seems to be one of the most obvious ways under consideration. In the United Kingdom I believe there is the Sandilands report, which is being considered by the British Government. The British accounting profession produced their report in May last year. It was produced by the Accounting Standards Steering Committee and was called “Accounting for Change in the Purchase Power of Money”, the so-called CPP Report. I do not think there is any need for me, at this stage, to go into the differences between CPP accounting and ordinary, conventional accounting. CPP accounting provides for adjustments in the loss of holdings in monetary assets and the gain on moneys owed, while the other, of course, strictly refers to the exact monetary position. Out of interest, let me say that I have had a set of CPP accounts uses on one of the companies which I happen to be involved in. In ordinary monetary terms this company shows a profit of something like R200 000 and pays R90 000 in tax. On a CPP basis, however, it has in fact lost about R400 000. So here we have an actual case of a company which had to pay R90 000 in tax for the benefit of losing R400 000 in real terms. I am absolutely convinced that if there were an investigation of many of the quoted companies on the industrial board of our Stock Exchange, and if a set of CPP accounts were taken out for those companies, their figures would deteriorate enormously. I think we would all get a tremendous shock if we saw those results. I am convinced that very few companies, especially on the manufacturing side, are making real profits today, and if we continue with this form of taxation even fewer will be making real profits tomorrow. I think that an investigation would show that corporate tax, paid collectively by the manufacturing section, of our economy probably exceeds their profits made in real terms. That means that all the profits in real terms which that section of our economy is making are going to the Inland Revenue, and perhaps even a bit more. If this is true, it is a very bad state of affairs. My information is that that is probably what the situation is. I therefore think that we can accept the fact that the situation is serious and that with taxes in excess of real profits companies are being plunged into liquidity problems. They are being forced into debt or they are being forced to reduce productivity while the money they so desperately need is being used by the Government in what is quite often very highly inflationary spending. This process will hasten our economy along the path trod by other economies in other Western countries.

If we continue with the tax structure incorporated in this Bill, capitalism in South Africa will undoubtedly be insidiously destroyed. This is the initial stage now. We have seen the same kind of tax proposals used elsewhere in the world, and if we continue with these tax proposals, I have no doubt that the insidious destruction of capitalism will also take place here in South Africa.

It has been suggested that we should introduce CPP accounting here in South Africa, and in that way ensure that we only tax real profits. There is no doubt that this would help. However, I doubt whether it would comply with all the prerequisites necessary to stimulate savings. While it would ensure that taxes are only paid on real profits, I doubt whether it would adequately promote the needs of the economy, which are mainly to increase profits and savings. I think we must look for the answer in another direction. I think we must reexamine completely the whole way in which we consider taxation. We must redefine the meaning of profits in an inflationary economy. We must rethink the whole basis of deriving Government revenue. Radical initiatives are required to nip in the bud a situation which we have seen in other countries leading other economies into desperate straits.

I accept that it is very easy for me as an Opposition back-bencher, without the responsibility of actually implementing new ideas, to come out with new principles. However, I do think that the Government should think about them and I think that there is some food for thought. Profit as presently taxed—even with the introduction of CPP accounting principles—is only a hope or a promise. It only becomes a reality when it is transformed into cash in hand, and therefore expendable for personal benefit. The only measure of true profit is to be found in the act of spending for personal satisfaction. A company therefore, in terms of this definition, makes no profit until it declares a dividend and then the profit made is only equal to that dividend. A fair and logical form of company tax therefore would be a tax levied on dividends declared. This may seem impracticable as far as the Government is concerned, but on analysis I think it is viable. Firstly, the companies would overcome their liquidity problems. They could save and expand their production base and dividends would only come out of genuine surpluses. Dividends would have to be paid, because investors would demand a return for their money. The Government’s choice may eventually prove to be either taxation in this form which I have suggested, which will ensure ever-increasing Government revenue from companies over a period of years, whilst at the same time it will help to destroy inflation and guarantee a healthy capitalistic economy, or otherwise sucking the economy dry in the short term as we are presently doing and ending up by having to nationalize industries and having to cope with raging inflation as we have seen in so many other economies overseas at present.

So far as individuals are concerned I think the same principle should apply. Again income should be re-defined. Only net expenditure should be recognized as taxable income. Money invested or reinvested is not income until it is disinvested. In other words, it should only be taxed when it is spent for personal benefit. Admittedly these suggestions would drastically cut Government revenue from taxes in the short term, but the benefit would be that all this deferred taxation would go to providing capital for production, job opportunities and savings. Not one cent would be used as spendable income for individuals. The result would be to combat inflation by forcing down prices whilst increasing production to provide increased living standards and to entrench the capitalistic system. The Government would obviously have to borrow heavily in the short term to see it over the time-lag between the introduction of a scheme of this nature and the time when the deferred taxes start coming back to the exchequer, but in time the money will come back and although the share the Government would get could well be a smaller piece of the cake, the cake would be much larger, whilst on the existing system the Government’s share of the cake will grow enormously, but the cake will become relatively smaller. Over the medium to long term I think the Government could well score on this basis. As I say, Sir, these are just ideas which I put forward. I think they are important and I think it is this kind of thinking which is necessary to save us going along the path we have seen other countries go because of the fiscal measures taken by those countries.

Mr. Speaker, I do not want to react to the speech made by the hon. member for Rand burg. In fact, if I were to do so, I would probably have to reopen the whole of the Budget debate. I should like to say that I represent a constituency where people are still grateful, and on behalf of my constituents, I should like to express our thanks to the hon. the Minister and to the Government specifically in respect of three aspects. The first of these is the increased pensions for the aged. Rest assured, Mr. Speaker, that the increased pensions are highly appreciated, that they are deserved and that they mean a great deal to the aged in this country in these days, especially in the light of what they could have expected in the days when a United Party was in power.

The other matter which I want to mention, is our gratitude for and appreciation of the abatements in respect of estate duty, especially with regard to insurance. This, too, is worth a great deal to us. This question of estate duty is, as I have indicated in another debate, a matter which is becoming pressing and I think we may in the course of time have to consider changing it. I am not in favour of abolition, but in view of the appreciating values of property, I think that the time will perhaps come when we shall have to look at it again in order to make the necessary adjustments.

The third matter which I want to raise with great appreciation, especially in view of the fact that representations were made to the Government and to he hon. he Minister in this connection, is this concession in respect of excess profit tax which is made in this legislation in connection with the sale of immovable property and, accompanying that, the sale of stock and plantations by owners.

The hon. member for Wynberg mentioned the idea that this concession could also be made applicable to ordinary expropriation. Personally I have no objection to the extension thereof, except that I want to indicate that in this specific case with which we are dealing at the moment it is a non-recurring situation which has now arisen with the purchase of land by the Bantu Trust and that many specific and pertinent representations were made to the fiscus for concessions in this connection, and for very good reasons. I also want to point out that all these purchases—and I think this was said recently by the hon. the Deputy Minister of Bantu Administration—were effected by means of mutual, private transactions and there was, in fact, no expropriation. I also foresee in this connection, if this principle is to be applied in general terms, that there might be certain implications which will have to be taken into consideration. We think, for example, of the fact that in the present situation and in the amendment with which we are dealing, we are dealing with the sale of farms as a whole, virtually, and that in the normal course of affairs in expropriation, one may have to deal with very small expropriations, etc. Moreover, one must bear in mind, if one is to expropriate for a railway line or for a road only, that one may have to apply other norms, so in my opinion this is an aspect which will have to be considered in far more depth.

The hon. member for Wynberg also argued that companies ought to be brought in under this. I want to point out that although I would have no objection in principle to this, the position is nevertheless different, when one is dealing with a company, for obvious reasons; in the first place the fact that a company is not subject to estate duty and, in the second place, that a company’s income tax is fixed on a basis and remains there while the tax which is payable by the individual is determined on a sliding scale. This measure is being ordered in this way for the very reason of avoiding excess profit tax and of preventing the person who sold to the Bantu Trust from having to pay super excess profit tax.

Now I want to express my thanks for the concession which is being made here and I just want to say that it is appreciated, because we are dealing here with people who in this process, have made great sacrifices in the interests of South Africa, for very understandable reasons. It is a matter which sometimes aroused great emotion. Therefore I think it is correct, fair and reasonable that these people’s position be taken into consideration in this way.

I want to point out that virtually all these properties were bought by means of mutual agreement and not by means of expropriation. What this involves, is, in fact, the sale of the land; but more than that—it must also almost automatically involve the sale of the plantation in the case of plantations, and the sale of stock in the case of stock farmers. In both cases, we have the situation where a man is obliged to realize his assets, to sell that which he has built up in his lifetime as his life-work. He must sell immediately that which, in the normal course of affairs, he would not yet have sold, because the plantations are still not yet fully grown plantations, and because, in the case of stock, it is young stock which he would not yet have sold. In the case of a plantation, for example the relative valuation of the young plantation will be relatively low when young trees of two or three years of age have to be valued.

However if one leaves this for a further period of say three years until such time as the plantation has reached maturity it will have a far greater potential value which means in this case that it has to be sold at a loss. In the case of the stock and also in the case of the plantations these sales consequently involve the owners in heavy losses. Therefore I feel that as a result of this obligation to realize it is quite right and fair that he should have this concession particularly in view of the fact that in the case of the stock farmer he will be obliged to consider the rearrangement of his whole farming operation. The man who had previously farmed in the highveld as well as in the lowveld will now possibly be obliged to adjust his whole farming operation so as to farm in the highveld only.

Therefore he may possibly be obliged to spend more money on the purchase of more expensive stock than he would otherwise have done. He will possibly be obliged to buy stud stock instead of ordinary stock. For these reasons we welcome this concession. It is given on the absolutely minimum basis of 9% in respect of the excess profits and I believe that it cannot be lower and that tax payers will have great appreciation for the way in which it is calculated. When we consider the net results and when we consider the examples in which it is calculated in terms of clause 33 then we find that according to the examples which are mentioned an ordinary tax assessment of R16 800 will be reduced to R5 211 in terms of this formula which is applied in this regard. It is a reduction of over 50%. We find that the tax of a man who would have had to pay R104 000—it is quite possible that this may happen at the realization of a timber farm—will only be an amount of approximately R40 000 in terms of this new formula. This is a major concession for which we are grateful and, on behalf of my constituents in that vicinity who are radically affected by this, who are radically influenced by this and who will, in fact, reap the benefits of this, I want to express our thanks to the hon. the Minister and the Government.

Mr. Speaker, I believe that the hon. member for Ermelo has made a valuable contribution to this debate. However, I want to ask him why he cannot go the whole hog. Why cannot he accept the proposal of my friend, the hon. member for Wynberg? Why is the hon. member not able to accept the proposed amendments as printed on the Order Paper today? These amendments will be moved by my friend, the hon. member for Wynberg, during the Committee Stage. I agree with the hon. member entirely. He mentioned the example of a timber farmer who under the existing scales of taxation would pay R104 000 in tax. Under the new deal which is now being proposed in this Bill that tax will be reduced to R40 000. I support the hon. member wholeheartedly in thanking the Government for this concession to the farmers. However, why limit it only to those farmers whose farms are expropriated in the interests of carrying out the ideologies of this Government? Why limit it only to those people whose farms are expropriated for ideological reasons? Why should this concession not be given to other timber farmers as well? What about the timber farmer who has his land expropriated for the building of a railway line or a road or for any such development in the interests of the State by local authority, provincial administration or some other department of State? Why should those farmers be prejudiced? Why should such a farmer pay R104 000 whereas a farmer in the constituency of the hon. member for Ermelo whose land is to be expropriated in pursuance of the ideologies of this Government will only have to pay R40 000? These are the questions which the hon. member must ask himself. I commend to the hon. the Minister the thoughts expressed by my hon. friend from Wynberg in this particular respect. This is a new principle which is being introduced and it provides tax relief which I believe to be entirely reasonable and responsible.

The hon. member for Verwoerdburg used certain examples here this afternoon in trying to refute the argument of the hon. member for Wynberg regarding the taxing of the income of married women separately from that of their husbands. The hon. member quoted the example of a married couple with a combined income of R8 000. He said that on their combined income they would pay together an amount of R777 but that if each were taxed as a single individual they would pay R881. In other words they would pay R104 more. I agree with him; his figures are quite correct. However, I want to say to him that this is not what we suggested and what we said. We have never suggested that all individuals should be taxed on one scale or that there should be only one scale of taxation viz. a single scale. We have not done so because there is no provision in the abatements for families. That is why we have two scales. What we have in fact said is that such a couple should both be taxed separately but on the married scale. What is the difference there? The hon. member quoted figures for a family with two children. I do not have those figures with me but I can quote to him the figures for a married couple without children where the taxable amount of the husband is R5 000 and that of the wife R3 000. On the combined taxable amount of R8 000 at the present rate they would pay R1 000 in tax while, if they were both assessed as individuals but at the married rate, they would only pay R810, a saving of R190. Where the combined taxable amount is only R5 000, the saving is R40, viz. R480 as against R520. I want to say to the hon. member that he must be reasonable in his arguments in relation to what my hon. friend has said.

I was very surprised to see that the hon. member got himself into trouble because he took his example too far. He arrived at a point where he had a husband earning R8 000 and a wife earning R5 000, making a combined total income of R13 000. He said that at that stage the trend was reversed. If they were both assessed as single persons they in fact saved R89. For how many years have we argued with hon. members opposite and with this hon. Minister’s predecessor and with this Government regarding this very point of the marginal rate? Was not this the point made by my friend, the hon. member for Constantia, this afternoon? That is why we have said before that there are people today who are living in sin because it is cheaper, particularly those in the higher income brackets.

Never.

The hon. the Minister of Finance says “never”. An example of this was given by a member on his side in relation to a combined income of only R13 000 in respect of which. R89 could be saved.

They are not living in sin.

Ah, but there are couples who are. There are many who are doing so for this particular reason.

Business suspended at 6.30 p.m. and resumed at 8 p.m.

Evening Sitting

Mr. Speaker, when business was suspended, I ended on a note of sin which I am afraid the hon. the Minister did not like, but I want to talk to him now about the original sin, and that is about women. He had an opportunity this year, this Year of the Woman, to do something for women, and more particularly for married women. With women’s lib, and all these things, Sir, I did think that the hon. the Minister, being new to the job and perhaps being a little more progressive than some of his predecessors, might have done something to help these ladies, but unfortunately this has not happened. It has been mentioned that he has made certain concessions to these ladies in these provisions, and I refer particularly to the provisions of clause 14 of the Bill, but exactly what is the hon. the Minister giving them? I am constrained to say to him again: Big deal! Because exactly what has he done? Where the wife has an income and the combined taxable income of the couple is R3 000, or R250 a month, what concession has the hon. the Minister given them? Do you know what it amounts to? This concession amounts to R15.

And what tax does he pay?

Sir, I am afraid I did not work that out. But that does not alter the fact that this big deal of the hon. the Minister’s, this thing that was announced with such a fanfare, allows this family a reduction of only R15. Where the combined taxable income of the couple is R4 000, there is a reduction of R16-50. Where the combined taxable income is R6 000, or R500 a month, there is the magnificent rebate of R21. I must say that I had hoped he would take his courage in both hands and that he would do something for the women in this Year of the Woman, but unfortunately he did not have the courage to do so.

Sir, I want to refer particularly to the provisions of clause 29, particularly as read with other provisions of this Bill and as read with the provisions of the Income Tax Act of 1962. We find that the hon. the Minister now wishes to allow the Secretary to serve any notice, document, demand, form or any other communication by means of ordinary mail, whereas in the past it was provided that these should foe served by registered mail or, under the new system that we have in the Department of Posts and Telecommunications, by certified mail. Sir, we are not very happy about this provision whereby certain documents will now be served by ordinary mail. I refer particularly to the new subsection (3) of section 106, which is to be inserted in this Act, and in terms of which it shall be deemed that any person to whom the article was addressed, received such article. Sir, on the face of it, this appears to be a reasonable presumption, but when we look into the Act we find that this is not a reasonable presumption, because there are certain offences which flow from the failure to respond to a notice from the Secretary or from his department. I submit that under those circumstances it should be necessary to register such an item in order to prove that the item was received by the taxpayer concerned. Sir, it is all very well having a presumption here which is rebuttable, but I want to ask the hon. the Minister how one rebuts such a presumption. How do you prove that you did not in fact receive the item concerned? I submit that the only way in which you can prove that is to go to the Dead Letter office and to dig it out there. But, having had experience of that particular section of the Post and Telecommunications Department, I want to say to the hon. the Minister it is impossible to do that. I do not believe that it is possible for a person to rebut such a presumption. The hon. the Minister provides in subsection (4) that if the Secretary is satisfied that the taxpayer did not receive the notice, he can withdraw that notice, re-issue it and have it served on the taxpayer in some other way. The hon. the Minister therefore has conceded my point. I want to refer him particularly to section 75 of the Income Tax Act. Subsection (l)(b) reads, inter alia, as follows—

Mr. Speaker, this is all very well when it comes to the rendering of a return of income. It is all very well even in the case of assessments, where the practice has been that a person receives his assessment through the ordinary mail. I cannot, however, accept that it is reasonable for the hon. the Minister to allow the Secretary to deliver such a demand through the medium of the ordinary post, and at the same time to have the presumption which is raised in the new subsection (3) to section 106. In this connection I must remind you, Sir, that failure to comply with such a notice creates an offence. When we look at this further, bearing in mind the amendment in clause 4(l)(a) of the Bill, in terms of which “assessment” now means “the determination by the Secretary, by way of a notice of assessment served in a manner contemplated in section 106(2)”—which again is the provision which allows the Secretary to serve such a notice by ordinary mail—and we read that together with the provisions of clause 25(b), which deletes section 77(4) of the Act, subsection (4) being that the notice of assessment “shall be sent to such person by post or delivered to such person in such other manner as the Secretary may consider necessary or convenient”, then I believe that it is unreasonable to tie to this the presumption which, is created in the new subsection (3) to section 106. I can accept that the hon. the Minister, from the point of view of the practical administration of his department, would require these notices to be sent by ordinary post, but I cannot accept that that should be tied to the presumption which is now being raised.

Sir, I notice that the hon. member for Yeoville is now in the House. I feel that, in the interests of the rule of law, of truth and of honest reporting, I should draw your attention to an article which appears in tonight’s Argus, Sir. The final paragraph reads as follows—

To the best of my knowledge, and I am sure to the best of your knowledge, Sir, no such amendment was moved this afternoon by the hon. member of Yeoville. I sincerely hope that when he follows me in this debate, he will take the opportunity to put the record straight, because I believe that the Press have published this in good faith on notes supplied by him.

Mr. Speaker, at the end of his speech the hon. member for Pietermaritzburg South raised an interesting point. It seems to me that that is just about all he had to say in his speech. It seems to me that the hon. member for Yeoville is looking rather nettled. He will probably furnish the House with a reply shortly. Before the adjournment the hon. member for Pietermaritzburg South tried, with reference to a speech by the hon. member for Verwoerdburg, to make the point that a man and a woman who were unmarried and who had an income of about R13 000, would save about R89 annually on income tax.

The hon. member for Pietermaritzburg linked his standpoint and that of his Party to this by saying that it was on those grounds that people lived in sin so that they could save R89 per annum on a joint income of R13 000 per annum. It is usual for the hon. member for Pietermaritzburg South to listen only to himself and not to anyone else who speaks in this House. I should like to indicate, on the basis of those particular facts, that when young people marry they usually do not have a large income. Furthermore, I am going to indicate this in a moment by referring to this table. The tax on the joint income of a young married couple falls into a far lower income category. According to the latest statistics, the income of 79,3% of unmarried people is less than R3 000 per annum—the hon. member for Pietermaritzburg South referred to a joint income of R13 000 per annum, and the saving of R89 in income tax—94,6% of the income is less than R5 000 per annum and 98,8% of the income is less than R8 000 per annum. The joint income of the vast majority of young people about to marry will therefore be less than R8 000 per annum. Their total tax as married persons, therefore, will also be less than what they would have to pay as unmarried people.

I want to make the statement that it is speeches such as that made by the hon. member for Pietermaritzburg South here this evening which drive young people to sin. I have far more confidence in our young people than that and I am convinced that our young people will not live in sin for the sake of a saving of R89 per annum on an income of R13 000 per annum. This is a ridiculous statement which the hon. member has made here this evening and on those grounds his whole argument collapses. I want to tell the hon. member that where there are still such young people who live on the basis here mentioned, they do so either in ignorance, or on the basis of speeches such as the one made by the hon. member here this evening.

Let us take a look at the facts. If the couple has an income of, say, R7 000 in the case of the man, and R5 000 in the case of the woman—a total of R12 000—the tax payable is R1 811. If the couple were to be taxed as unmarried people, they would have to pay R129 less. This is on an income of R12 000. But on the facts I have put before you, if the man were to earn R4 000 and the woman R2 500, viz. a total income of R6 500, they would together pay R508. If they were to be taxed as unmarried people, they would pay R104 more on that basis.

I also want to state certain facts here with reference to what was said by the hon. members for Wynberg and Constantia. The hon. member for Wynberg said that they were grateful for the small concessions, but that they asked for more. Where must the more which must be given, come from? We would hear the hon. member for Wynberg complaining all night if we were to boost taxation. The hon. members opposite omit to mention that over the past two years there has been no increase whatsoever in the personal income tax of our people. I think it is necessary, too, for one to put this fact in its proper perspective, particularly, too, in view of the fact that the hon. member for Constantia said that this was a “disincentive” tax measure. One can never earn less as a result of the increased tax payable exceeding the amount by which one’s income is increased. If a married person with two children earns R3 500, the tax payable by him is R27. Let us say that he earns R8 000. Then his tax is R680 and he retains R7 320. His taxable income is R9 000, he pays R974 and retains R8 026. The tax never becomes so much greater that he reaches a scale on which he retains less income than he had done on the previous scale. That is precisely the initiative which will be retained on this basis. The intention is that our people be encouraged to increase their income, because even though they were to pay more tax, the amount they retain is always more than what they would have retained previously with their lower income. To me, a favourable aspect of this system is that it will never smother initiative.

Mr. Speaker, the hon. member for Klerksdorp talked about the position of married couples in this country in so far as tax is concerned. I should like to refer to that later in my speech. He made a point which is a fundamental point although he made it rather in reverse. The point which should be borne in mind in regard to taxation is that taxation is simply a means of financing the Government. Therefore the reverse is also true, namely that if the Government does not require further revenue the level of taxation certainly does not need to increase and it will probably decrease. If one wants to put the question of taxation simply, it is a question of the level of expenditure the Government happens to approve of and the level of expenditure it chooses to bring to this Parliament in a particular year. If the hon. the Minister of Finance were to come to this House next year and to propose a reduction in expenditure by the Government, it would be a happy day for South Africa because very shortly afterwards it would become abundantly clear that we could also reduce taxation. This simply reflects the fact that taxation, as has already been pointed out this evening, is a transfer from the private sector to the public sector. What the Government is saying is that as they have certain levels of expenditure which they deem to be in the national interest and which they deem to be for the social good presumably of all South Africans, they must therefore devise a method or means of garnering to themselves the revenue in order to finance that expenditure. That is the fundamental point which nobody should ever forget. I should like to come back to the level of taxation at the end of my speech and I shall refer to what this Government will ultimately be forced to do unless they are prepared to change what they deem to be in the national interest. This is nearly always followed by the dangerous ominous phrase—if I may call it that—“within the framework of Government policy”. The second thing …

Mr. Speaker, may I ask the hon. member a question? Does the fiscal policy not also have other objectives such as the influencing of the economy which has nothing to do with the financial requirements of the Government?

The hon. member is entirely correct; I shall not argue that. What I am saying is that the level of expenditure is in the first instance the level which ultimately determines what is required to be paid by means of taxation by all South Africans. There are a great number of factors within that fundamental framework. The Government can choose between A and B or the hon. member can choose between A and B. That I am not arguing. What I am asking hon. members to bear in mind is the primary step the Government takes which is confirmed by the hon. the Minister when he introduces his Budget. When one reads the Budget proposals one sees that that step is to set a level of expenditure by the Government and afterwards to work out how it will be financed. It is in that sense that I ask the hon. member for Durban Point to accept the point I have made.

The second point which I think needs to be made about the level of taxation or the form of taxation, which is equally important, in any country is that it will only survive and be accepted over a reasonable period of time if, in the first instance, it is seen to be fair and equitable and if, in the second instance, it is seen not to reach a level where it discourages the people who are being taxed from making a further effort to work and thereby increase their income which naturally will also be liable to taxation. Another way of putting it is to say that the level of taxation in any particular country becomes self-defeating when it gets to the point where it discourages incentive. I have no intention of saying that at this point in time this stage has been reached in South Africa as far as individuals are concerned. Certainly, if one wanted to take an average of the incremental rates of tax around the world, I would not think our country comes out too badly. However, I want to put one caveat on that. I want to come back to the question raised by the hon. member for Randburg in the particular circumstances in which South Africa finds itself at this point in time regarding corporate taxation. We on these benches have made this point before and it has been made in a different sense by the hon. member for Randburg. I want to repeat the argument of the hon. member for Randburg in the hope that the hon. member for Sunnyside will understand it this time because he indicated that he could not follow the argument of the hon. member for Randburg.

Yes, explain it in greater detail.

What it ultimately boils down to—this is quite basic, I am sure the hon. the Minister will agree with me—is that either a country cuts its coat according to its cloth in the sense that it lives within its means or does one of two things: Either the Government must cut the rate of increase in its expenditure or else it must increase the level of taxation. I do not want to spend much time on this because we have made this point a number of times before and, presumably, the hon. the Minister of Economic Affairs, after yesterday’s announcement, will go to the heart of this matter.

When one come to the particular circumstances prevalent in South Africa, it is not important to dot the i’s or cross the t’s. All that is important and must be borne in mind at this point in time is that the rate of inflation in this country is intolerable for the Whites of South Africa and even more intolerable for the non-Whites. In fact, it is the worst thing that could happen to our country in respect of our 25 million people in this country. For the sake of the hon. member for Sunnyside and the hon. member for Smithfield, who has some practical business experience, I want to repeat the argument of the hon. member for Randburg and I hope these two hon. members will tell me at what stage they fail to follow the point we are trying to make. Let us assume that a company with a capital of R10 million should earn approximately 15% on its capital before tax is deducted, i.e. R1 500 000. I do not think that can be considered unreasonable. I emphasize the point that that is what is earned before tax is deducted because I think it is not unreasonable that that amount should be earned on a capital of R10 million before tax is deducted. The point we are trying to make is that in the present situation that company will then have to pay tax at the rate of 40%. If it pays tax at the rate of 40% on R1 500 000, the hon. members for Sunnyside and Smithfield, who are much quicker at this than I am, will realize that that amounts to R600 000. That company will then show a profit of R900 000 after tax. I think that so far we are ad idem. The point we made is that R900 000 is simply 9% on R10 million while the rate of inflation in this country is well in excess of 9%. Therefore, companies in that position are actually reducing their real production and their real capital.

Order! The hon. member must address the Chair.

I apologize, Mr. Speaker. If one assumes that the rate of inflation is 15%, they are in effect losing capital in real terms at the rate of 6% per annum. That is the only point we are trying to make and I think it is a very valid point to make, because it affects a very great number of people indirectly through being shareholders and directly through being involved in the management of public companies.

We have said before, and the hon. Minister will know this, that a survey was made by a department at Stellenbosch University. They simply took a sample of some 139 or so public companies listed on the Stock Exchange in South Africa and found when they applied this rule of looking at what happened to companies in real terms as opposed to what I would describe as fictitious profits, that 96% of them were actually running at a loss. Let us be quite clear about it that the end result of this poses a very grave and a very real risk to South Africa. We heard over and over again from hon. members on the other side that they believe in a capitalist society. I assume from that that they believe in a mixed economy because we on these benches certainly do not believe in laissez faire. Therefore, we are simply pointing out to them what is happening at this particular point in time. Having made these general remarks I think one must also bear in mind what the hon. the Minister proposed in his budget this year. Having evaded the question early on this afternoon as to what is going to be done specifically to reduce the rate of inflation, the hon. the Minister comes forward with a budget which amounts to the imposition of an additional tax of 2% on public companies. I want to make the point that the majority of the companies that are feeling the pinch as of now are the smaller public companies and the private companies. Basically, the larger companies are better equipped because they can see this happening and have a leverage available to them which is not available to other people. The hon. the Minister of Finance is perfectly aware of this. We can only hope that the Government will see that the writing is on the wall and that they will make up their minds that they cannot go on, to use a phrase which is used by hon. members on the other side when it comes to mining companies—I am not talking about mining companies in this instance—simply putting to death the people who are making a very large contribution towards this country and from whom the Government is reaping benefits.

When we look at this particular Bill we would like to have some information from the hon. the Minister. We have read the explanatory memorandum as carefully as we can. As the hon. member for Constantia said, we are indeed grateful for it but there are certain points which are still not clear. I want to ask the hon. the Minister about certain of these proposals. He has proposed a certain reduction in undistributed profits tax. If I am correct, and I hope the hon. the Minister will confirm it, what he is in effect saying is that in so far as the trading profits of public companies are concerned, if, for example, one assumes that a public company earns R100—it does not matter what unit one chooses—it would then pay tax of the order of 40%, which will leave it with a balance of R60. After that, there is an abatement of 25% before undistributed profits tax is paid. When one looks at this from the point of view that a public company basically earns its profits from trading as opposed to dividend income, then the tax—the hon. the Minister can tell me whether I am right or wrong—is of the order of between 3% and 5% its trading profits. Could I ask the hon. the Minister to tell me what the revenue to the Government is from undistributed profits tax in respect of public companies? I am omitting an aspect which I understand very well, i.e. divided income which is treated rather differently. When we come to private companies where a clear distinction is drawn by the hon. the Minister in so far as tax treatment is concerned, can he tell me firstly, what revenue would be lost, if undistributed profits tax were simply abolished and secondly, what revenue would he forgo if private companies were simply treated as public companies? This is a distinction which we find …

Order! Hon. members are conversing too loudly.

… some difficulty in following. Earlier on this afternoon the hon. the Minister spoke about the importance of productivity, training and education. I think he was talking primarily about what I would call technical education as opposed to formal education. I assume that the hon. the Minister of Economic Affairs would agree with that. The hon. the Minister was asked whether consideration had recently been given to making donations for educational purposes, other than donations to universities, colleges for advanced technical education, the National Study Loans and Bursary Fund, and registered welfare organizations, deductible from taxable income. The reply to that question was perfectly clear. It went to the heart of the principles of taxation. Earlier this afternoon the hon. the Minister spoke about the importance to this country of increasing productivity and therefore the importance of giving training and extending education. I know that in so far as public companies are concerned, grants for such purposes are free of donations tax. Is consideration being given to the question of donations from public companies for the specific purpose of increasing the productivity of our work force—White, Black or Brown; I am not concerned about colour being free of income tax—or has the door been shut in the sense that such grants will not be allowable as a deduction against corporate income tax.

I want now to quote from the hon. the Minister’s budget speech in connection with the position of married couples. I do not want to go into the question of whether, for tax purposes, it is better to live in sin or not. The hon. the Minister said the following:

He said that the matter had been referred to the Standing Commission on Taxation which would inquire into the problem at greater depth. I wonder, however, whether we could ask the hon. the Minister to tell us what the anomalies are. What are the aspects which cause him to differentiate between married couples who are earning the same level of income—for example, Mr. and Mrs. Jones or Mr. and Mrs. Smith or whatever the case may be. Where do the differences lie?. We find this very difficult to understand. We are, of course, grateful for the fact that the hon. the Minister has increased the allowable deduction to R750.

Let us be quite clear about it. We would like to ask the hon. the Minister whether he honestly believes that that sort of allowance or increased allowance or greater concession is going to persuade people of the opposite sex from me to go out to work? Does he really think that it amounts to something which is going to persuade some able people to go out to work, after their children have grown up and gone to school, as opposed to staying at home? I ask this because this Government has been emphasizing the need for productivity in this country. We are grateful for this, but we are looking for an answer from the hon. the Minister in this regard.

The next point I would like to raise is whether the hon. the Minister will tell us whether he has considered and simply discarded or whether he is still considering the fact that Black South Africans, in certain circumstances, pay a higher incremental rate of tax up to a certain level than Whites do.

Not under certain circumstances but under all circumstances at the lower rates.

I hope the hon. the Minister will tell me that the matter has not been shelved, but if it has been, I hope he will tell me the reasons why it has been shelved. If it has not been shelved I hope the hon. the Minister will tell us when he will make a proposal in this House in this regard. It seems to us on these benches—and I think this feeling will be shared by all members in this House—that there is absolutely no justification whatsoever for the fact that Black South Africans at certain levels of income pay a greater tax to revenue than White South Africans. All we are asking for is for the matter to be put on a par. The Government has said that it wants to get away from discrimination and we heartily support it in this. I do not think any member on the other side of the House can in any way justify a situation where Black South Africans at a particular level of income pay more tax than White South Africans.

The next thing I would like to ask the hon. the Minister—and I hope he will be able to give an answer to me in his reply—is in regard to the abatements which are very welcome. A number of them are going to apply to particular sections of the tax-paying population of South Africa which are in dire need of them. Could the hon. the Minister possibly give us an approximate figure if he cannot give us a precise figure as to how many people in South Africa are in fact enjoying the benefit of these abatements? Who of the taxpaying public of South Africa—White and Brown—are in effect receiving the benefit of the increased abatements which the hon. the Minister has proposed? These abatements are welcomed but it is interesting to see that after a certain period of time the level of what constitutes taxable income, once one passes the abatements, rises extremely steeply. I am referring here to the amount which is to be taxed by the Government in relation to what is retained by the individual.

There are only three other points I would like to raise. These are particular items in relation to this Bill. Page 16 deals with an earlier clause. I have read the explanatory memorandum in regard to this. I am dealing now with the effect of the amendment which is being proposed by the hon. the Minister. This puts into some doubt the possibility of claiming the three year limit from the Receiver of Revenue in respect of the reassessment of companies for undistributed profits tax. If one looks at the explanation on pages 3, 4 and on the top of page 5, in regard to this particular amendment, we assume that this amendment is being effected because in the past the Receiver of Revenue has not been prepared to issue a nil assessment for the purposes of undistributed profits tax. What we would like to ask the hon. the Minister, because we are not quite clear about it, is whether this clause is merely a confirmation of the position which obtained in the past or whether it amounts to a change in the law. We would also like to ask the hon. the Minister for confirmation that in the future the Receiver of Revenue will be prepared to issue nil assessments in respect of undistributed profits tax. We all know that for income tax or indeed for undistributed profits tax purposes, any person who brings information to the department has to make adequate and full disclosure for those purposes. This is particularly true for income tax purposes. One then receives an assessment which may or may not be nil but which, in any event, for income tax purposes cannot go back further than three years. All we are asking is for an assurance from the hon. the Minister that what he means by this is that firstly, one will be in a position to obtain a nil assessment from the Receiver of Revenue; and secondly, that in so far as undistributed tax is concerned, which is almost certain from the explanatory memorandum, that neither he nor his department is going back further than three years. The next point that we would like to turn to is the clause which broadly deals with the advantages that are going to be given for the benefication of minerals as described in this particular Bill as a benefication allowance. If one looks at page 48 and at the earlier clauses which affect that one can say that in terms of the benefication allowance that it may not be granted in respect of any mining operations carried on by the taxpayer or any company associated with the taxpayer, unless the hon. the Minister is satisfied that the benefication process in question, is additional to processes which, are normally carried on by the taxpayer. All I wanted to ask the hon. the Minister—and I can quite well see all the difficulties from his point of view, namely that it is difficult to put a tax advantage back into the past—is the hon. the Minister entirely satisfied that it is equitable in so far as particular companies are concerned which have already introduced these benefication processes. What in effect is happening, is that you are giving an advantage to the entrants who come into the field late as opposed to those who have been in a particular field and who have been involved in this process before. I would like to draw to the attention of the hon. the Minister the question of the coal industry of the country. It is an industry of which the importance to South Africa at this stage, is difficult to over-estimate. [Time expired.]

Mr. Speaker, in these last hours of the session I find it very pleasant that we have been able, since four-thirty this afternoon, to discuss such an important and technical Bill such as this so calmly and peacefully here. By its nature it is a dry subject, and I appreciate hon. members of the Opposition having discussed it so extensively this afternoon. Sir, I prepared a speech., but my entire speech was decimated by previous speakers, who put certain questions here to which I shall now have to reply. Sir, even our journalists do not have a very easy task reporting a debate of this nature because it deals with highly technical matters, while they have been trained in another sphere, but I do nevertheless want to refer to one journalist this evening, namely Mr. Classen, the head of SAPA, who will retire after this session after a period of service of 30 years in the Press Gallery. I think that I would be doing justice to everyone in the House this evening if I were to thank him very, very sincerely for his many years of faithful service to Parliament. Since he is leaving us, we wish to express the hope that he will enjoy a calm and peaceful life, away from the hustle and bustle of Parliament.

Sir, in my previous speech I levelled quite a good deal of criticism at the hon. member for Constantia, but I want to tell him that he made a very good speech this afternoon. Unfortunately his assistant, the hon. member for Wynberg, let him down, for he did not make a very good speech. Sir, during the course of my speech I shall refer to various points which were raised here by hon. members, and I want to tell the hon. member for Johannesburg North that I shall reply to him as well. The hon. member for Constantia said that we should reduce Government expenditure. That is correct; that is the policy of the National Party; it is our policy to curtail Government expenditure wherever possible. But, Sir, the hon. member must tell us which of this expenditure is unnecessary. In this Budget no provision is being made for any unnecessary expenditure. The Cabinet itself went out of its way, and the departments went out of their way, to cut down on expenditure, and when we adjourn here and return to the Transvaal, the Departments will have to submit their estimates for next year, and the Minister of Finance will reduce the estimates of each department by a certain percentage. Each department will be asked to motivate their proposed expenditure and to do everything in their means to cut down further. I want to give the hon. member the assurance that the Government is doing everything to curtail Government expenditure. Sir, the hon. member made one practical suggestion here, which was that voluntary loan levies should be introduced on which the tax payer could then demand a tax rebate. I think that the hon. member came forward with a very sound suggestion here, one which, deserves consideration.

Sir, the hon. member for Constantia also said that the profits of companies had declined as the result of higher costs, etc., but when I page through the Financial Mail and other newspapers, I find that most companies were, during the past year, able to boast of profits which were 30% to 80% more than their profits the previous year. It is true that there are also many companies whose profits during the past year had declined. Sir, if the profits of the companies had not been higher, this would have been reflected in the revenue which the State receives from company tax, for the taxation tariff is a consistent tariff which is the same for all companies. As a result of the fact that the companies are constantly yielding greater profits, the revenue of the State from company tax increases every year, which will again be the case this year. Sir, it is not part of the responsibility of the National Party or of this Government to ensure constant growth in company profits. It is not only taxation which is involved here. There are a hundred and one things which are involved. Taxation is only involved in the end. The other factors which are involved are that there should be proper management. Management has to ensure that its workers are productive. If it is a production company, it has to ensure that its production line is kept so busy that no time, money or material is wasted. It has to ensure that the maximum is produced in the minimum time, and that unnecessary costs are eliminated. Costs may be saved in many ways, i.e. by mechanization, automation as well as by amalgamation, which companies have frequently resorted to in recent times. In this way a great deal can be done by the specific companies to boost their profits without any prominence being given to the aspect of taxation. The hon. member also said that taxation should be calculated on inflationary profits, and not on real profits.

In addition it was advocated that the hon. the Minister should assess the companies on their real profits. Surely it is an impossible task to do this. How can a company or an individual be assessed on real income? The income received by the State is not real income either. The money which it receives and the expenditure which it incurs is also inflasionistic. It also has to pay more, as in the case of individuals and companies. It is infeasible to do this. Perhaps it is a good thing for such ideas to be raised but I just want to point out that this idea is quite infeasible.

The hon. member, as did the hon. member for Pietermaritzburg South, discussed the Bantu Trust and the concessions that were made, namely that when land is expropriated, certain concessions will be made in respect of stock and also in respect of forestry. The hon. member for Ermelo and others have already replied on this matter, but there is a further point I want to make. The hon. member for Pietermaritzburg South stated very specifically that this was ideological legislation. I want to point out to the hon. member that this National Party gives thorough prior consideration, in all respects, to everything it does. This is always done before the Government introduces any legislation or makes any concessions. As the hon. member for Paarl made very clear, this matter has been discussed for a long time. However, there are many other things involved. I just want to mention a few examples to the hon. member. When farms are expropriated, this is purely and exclusively farming land. This is the land of people who are farming. However, when land is expropriated for a railway line it is not inevitable that a farmer’s entire farm will be expropriated. Perhaps only a piece of his land is affected, a piece which he might not be using at all. It may be the case that the railway line will run across a piece of land which the farmer is able to relinquish, or which belongs to an urban area. It is not the case that the farms, as in the case of the Bantu Trust lands, are all being ruined to such an extent. In the case of the Bantu Trust, land, an entire farm is for example transferred to the Bantu Trust, and not only portions of it. I concede that there are certain cases in which it may happen, for example in the case of land expropriated by the Department of Water Affairs for the purposes of a dam, that an entire farm is expropriated. However, this is definitely not in exactly the same category as expropriations in the case of Bantu Trust land.

The hon. member for Wynberg said that they were very grateful for these minor concessions, but that that was as far as it went. I want to tell the hon. member that if it is true that we are not making enough concessions, and that we have done nothing which the public could feel pleased about, this would surely be to the advantage of the United Party. Surely they can now tell people in Middelburg that it is the National Party Government which is acting in this manner. They can tell the voters there that the Government is making no concessions, it is only imposing taxes. If they do this, they can try to win the election. We are playing into their hands, only they are not aware of it.

I want to return briefly to what the hon. member for Paarl said. The hon. member asked specifically that we should try to employ our people for longer periods. He requested that they be allowed to retire at the age of 65, and not at the age of 60. The hon. member for Wynberg misunderstood this completely. It is not a matter of pensions. The hon. member would probably agree with me that we need a great deal of manpower in this country. If a young, strong, fit and healthy man of 60 is still able to work, why should he retire and do nothing. Let that man work if he wants to. He is then earning a salary. He is earning far more than he would receive as a pension. What is more, any person who is able to work to the last, will remain healthy and retain his interest in life. The Lord knows, Mr. Speaker, that the day I turn 60 I do not want to sit with my arms folded, doing nothing. When a person turns 60 he is still a young man. His whole life is still ahead of him. That is what the hon. member for Paarl was advocating. There are many people who get married for the first time when they are 70 years old. If the hon. member for Wynberg says that he misunderstood the hon. member for Paarl, I will accept it. However, if he says that he understood the hon. member for Paarl correctly, and he is advocating the opposite of what the hon. member for Paarl advocated, then it is beyond my comprehension.

May I ask the hon. member a question?

Certainly.

Is the hon. member aware of the fact that the principle which he is now advocating has already been incorporated in the legislation?

The hon. member for Paarl requested this, but the hon. member for Wynberg was opposed to it, and he took it very much amiss of the hon. member for Paarl for having addressed such a plea. Surely the hon. member for Wynberg is also opposed now to the principle which has already been incorporated in the legislation.

The hon. member for Wynberg made another point as well. He said that more attention should be given to individual taxpayers. He made out a case to the effect that people are paying too much tax. We have what I could almost call our blueprint, namely the Franzsen report. I quoted the figures the other day, and it seems to me I have to do so again now. I pointed out that our individual tax in South Africa is not very high at all. When I draw comparisons between our tax and that in other countries, I take the 1974-’75 tax-year. In South Africa a married man with two children and an income of R5 000 per annum paid 5,7% of his taxable income in taxation that year. In the United Kingdom a married man with the same income and two children paid 17,9% of his taxable income in taxation; in Australia 13.2% in New Zealand 17,2% and in Canada, 12,4%. When we draw such a comparison surely individual taxation in South Africa is by no means too high. I want to take this matter even further. I am referring to the first report of the Franzsen Commission, which appeared in November 1968, and in which the following appeared in paragraph 16 on page 4 under the heading “The Contribution of Income Tax on Individuals”—

Of course this includes both Whites and non-Whites. Therefore only 8% of the entire population was paying tax.

This really seems to be a different kettle of fish. I quote further—

Therefore the position in 1967 corresponds to a large extent with the position in 1974–’75, to which I have just referred.

When we consider this, hon. members really cannot say that the hon. the Minister and the Government is making the individual in South Africa pay too much. I quote further—

When we consider this, surely it is clear to us that our people are by no means paying too much in tax. This, then, as far as direct taxation is concerned, and I shall return later to indirect taxation.

I want to return to the question of married women. Several speakers discussed the position of the married woman. There is a business undertaking which approached me at the beginning of the year to plead the cause of the married women. The hon. member for Johannesburg North quoted a speech made by the hon. the Minister in which he had said—

The hon. member for Johannesburg North asked what anomalies there were, and he said that he should like to have more information in this regard. I shall gladly furnish the hon. member with this information. Let us consider what the position is in the case of married women. Take as an example a woman who does not work at the same place at which her husband works. At the end of the tax year her husband submits their income tax forms jointly, and is granted a rebate of R750—it used to be R600. This rebate is not merely to compensate for the additional clothes and so on, it is actually an allowance as a result of the fact that the woman does not always return home in the evening before her husband and children. Now I want to tell the hon. member where the anomaly comes in. Suppose the hon. member for Johannesburg North has a company. He is an industrious man and he has a hardworking wife, who works for him in his company. He pays her R2 000 as well, but at the end of the year when I receive the rebate for my wife who has been working, he receives nothing, whereas his wife worked equally hard and also came home late at night and had to spend more on clothes. Now I am asking the hon. member whether this is fair to him, even though he is a wealthier person than I am. No, it is not fair. That is what the hon. the Minister was referring to as one of the anomalies.

That is not the point.

The hon. member is saying that he still does not understand. The point is that if the woman was working for another company and not her husband’s company, her husband would have been able to receive that rebate, while he is unable to receive any rebate if she is working for the company in which he owns all the shares. If she is working for her husband’s company, he does not receive that rebate at all. In my opinion this is unfair. The hon. member was unable to understand this, and I have now explained it to him. I am pleased that he now understands it. He can explain it to other hon. members later on.

There are many other cases as well, of which I could enumerate a whole series. Take the example of a husband whose wife does not go out to work, but remains at home. The husband goes out to work, and is away from 7 o’clock in the morning until 6 o’clock at night. After work he bolts his supper or buys himself a sandwich or something of that nature in town, and then goes to his second job at which he works all evening until 10.30 or 11 o’clock. Such a father has not seen his children all day. Now I wonder who is happy and who is satisfied if the father is never at home. It is not only the children who are unhappy, the wife is also unhappy. This too, is unfair. The hon. the Minister also referred to this, and this is one of the matters we have to rectify. If the hon. the Minister is going to make concessions to everyone, we are going to have tax evasion. A person can very easily say that his wife was paid a salary from his company funds although she never worked. This will happen, but how are we going to counteract this kind of thing? I have a document in my hand in which other proposals have been made. I want to submit this to the hon. the Minister for consideration, particularly since the Standing Commission on Income Tax is working on this matter all the time. The proposal which is being made is that the husband should be assessed separately on a married scale while the wife is assessed separately on an unmarried scale. They take as an example a case in which the husband is earning R8 000 per annum, and the wife R4 000 per annum, giving a total of R12 000. If they are assessed in accordance with the present taxation scale for married persons, they will pay R2 014 in income tax. If the husband is assessed separately as a married person and the wife separately as single, they will jointly pay an amount of R1 368, which is a saving of R646. This is in fact what they want. However, if both of them are assessed as single persons, they will jointly pay R1 843, which represents a saving of R171. They say:

The difference between the rebate which they propose and the rebate which is in force, is only R250.

I want to return to the hon. member for Pietermaritzburg South. I think that the hon. member should be called to account for the statement he made this afternoon concerning our young people. I have a constituency in which young people and unmarried people are living in their thousands. That hon. member says that they are living together in sin simply to save a few rand in taxation. I want to tell the hon. member this was irresponsible and uncalled for. I do not think this is the way in which he should refer to such matters here. I cover my constituency from one flat to another and from one room to another, and I invite the hon. member to accompany me. He will not be able to show me one such case. I am coming up for my constituency, and for the young people of South Africa. I do not think that the hon. member has grounds for making such a statement here. Nor do I believe that it behoves him to say this.

I have already replied to what the hon. member for Pietermaritzburg South had to say about homelands and about married women. The hon. member for Johannesburg North wanted information, and asked quite a number of very good questions. I have no quarrel with that, and I have already complimented the hon. member on them. One statement which he made was that the taxation in South Africa has now reached such a stage that it is no longer arousing any enthusiasm for work, and that something has to be done about this. Surely we are not in such a terrible situation? I have quoted figures to compare the taxation which we pay with the taxation which is being paid in other countries. I pointed out that while our people are paying 5,7%, people in England, where the hon. member comes from, are paying 17,9%. Surely the hon. member is able to see that our taxation pressure is far lighter. There is still an incentive to work. Things are going well. Things are going so well in South Africa that professional people and businessmen are able to reach a point where they are able to earn R28 000 per annum, while working only three days a week. After that they need not work any more, for then their marginal rate is already 60%. All is going so well therefore that if a person has worked three days per week, he is able to reach that level. I do not think that the position in South Africa is that bad at all.

I want to return to the question of a company with a capital of R10 million, to which the hon. member referred. When the hon. member for Randburg was discussing this matter, I asked him please to explain it a little further, for it was not clear what he wanted to say. Then the hon. member for Johannesburg North immediately said: “I shall explain it to you”. I deduced from that that he had written the hon. member for Randburg’s speech for him. Consequently I want to thank the hon. member for having given me the additional information. The figures which the hon. member mentioned, are correct. In other words, if the company shows a profit of 15% on its capital before tax, then an amount of R900 000 remains after tax has been deducted. However, what happens in the case of companies that perhaps make no profit? In any case, the 40% tax on companies in South Africa is not too high. I can tell the hon. member that there are countries in which the tax is probably far higher. In addition personal tax is still far higher in those countries than it is in South Africa. The hon. member said that the profit of the company was not worth very much because of inflation, but what about individuals who …

It is not really a profit at all.

If this had applied to a private person whose turnover was R10 million, he would not have had a profit either. If the State had received that money, it would not have had a profit either. The hon. member’s argument does not hold water. The money of the salary earners in South Africa is also worth less, but if one really takes everything into consideration, things are still going very well with us in this country.

The hon. member asked several questions on various clauses, but I shall not reply to them now, for I think we can discuss the separate clauses far more fruitfully in the Committee Stage. I do not have the clauses in front of me now, but we shall consider these in the Committee Stage. I have already replied to the points the hon. member raised with regard to married women. I now want to return to the Blacks who pay tax in South Africa. Unfortunately I did not know that the hon. member would raise this matter here, otherwise I would have brought along the Bantu taxation rates. Surely one cannot carry all these things around with one in one’s head. The hon. member said that on a certain level the Bantu pay more tax. I do not know precisely what level that is. I think the hon. member referred to one level on which the Bantu are perhaps paying R2-50, or whatever it may be. Be that as it may, it could perhaps be on a low level, but is the hon. member now trying to make us believe that the Black people in South Africa are paying tax to any appreciable extent? Hon. members put questions in regard to income tax last year, but unfortunately I do not have those particulars at my disposal now. In reply to a question on how much tax each section in this country is paying, the information has been furnished. When one considers how many millions of non-Whites there are in this country, and how much tax they are paying, one realizes that they are paying almost nothing. How many things are the non-Whites not receiving from the Whites? They are receiving their salaries, but in addition they are also receiving concessions in respect of housing, food, clothing, etc. From the budget we observe that they are also receiving transportation subsidies. The Whites are paying for these benefits with the taxation which they contribute, and not the Blacks. We are proud of what the Whites in this country are doing for the Blacks. I promised the hon. member for Houghton that I would get to grips with her in my first speech next year. [Interjections.] She made a few statements this afternoon, and I am itching to furnish certain information next year. Unfortunately I could not do so during the discussion of this Bill.

May I ask the hon. member a question?

I am sorry, but I have too little time at my disposal, and there are still quite a number of other matters I have to deal with. The hon. member should rather put the question to me after the debate. As far as Black people in South Africa are concerned, apart from everything which is being done for them here in White South Africa, whether by the various municipalities or the provincial councils, or in the sphere of education, the Department of Bantu Administration and Development and the Department of Health are also performing a great task among these people. When my wife has to attend a hospital for maternity purposes, I have to pay through my neck for those services, but what does a Bantu woman pay when she goes to hospital for the same purpose? Only 50 cents to have herself registered. That is all she pays. The Black people are not paying tax to provide these services. We can also consider what the Government is doing in respect of the Bantu homelands. When one tells visitors from overseas what this Government is doing for the Black people they find it difficult to believe for it sounds too good to be true. As I said a few days ago, the Government has, during the past few years, spent more in the Bantu homelands than the U.N. has spent in all the Black African States during the past ten years.

It is not good enough.

The hon. member is saying it is not good enough. After three million people have spent more in eight states than the U.N. has spent in all the Black African States, that hon. member maintains that it is not good enough. I want to thank the hon. member for having such a high opinion of us, namely that we are capable of spending even more. The hon. member also asked how many people derive benefit from these concessions. Unfortunately I do not have the information at my disposal, but I think he will agree with me that there are many people who benefit from these concessions.

In conclusion I just want to ask one question. All hon. members ever want is economizing, but I am of the opinion that we should seriously look for sources from which we may earn additional revenue. There is one source of additional revenue which I want to recommend to the Minister, namely the various sporting bodies. When I go to a cinema, I do so for recreation. That cinema owner pays tax. When I go to an hotel, I have a meal there, enjoy a drink and relax. That hotel owner pays tax on his income. However, when I go to Newlands on a Saturday afternoon to watch Western Province play, I simply sit there and relax. Occasionally I ask myself how it is possible that my income is taxable when I sit in the bioscope, the hotel owner’s income is taxable, but when I watch a rugby match, the entrance fee is not taxable. In the case of such a sport as all-in wrestling, the promoter also pays tax on his income. I wonder whether the people in South Africa who are so rugby mad should not also be taxed when they attend matches as spectators.

The cricket players as well?

I am referring now to rugby, cricket and all the other branches of sport. However, when a person practises sport, I am prepared to say that he should be paid an allowance. In this way there would possibly be fewer people who simply sit in the pavillions, drinking and making a noise, and more people practising sport. In this way people will consequently get more physical exercise. I am not opposed to sport. I am opposed to those people who simply sit and watch and do nothing, but simply take things easy.

What about bowls?

Bowls included—all branches of sport. We could work out a formula with the Minister. I would rather say that the spectators should be taxed, thus alleviating the position of the people who practise sport. [Time expired.]

Mr. Speaker, a certain matter was raised by the hon. member for Pietermaritzburg South, and while not strictly relevant to the debate, I should like to deal with it as a matter of personal explanation. I am indebted to the hon. member for drawing my attention to the point. In the newspaper report he quoted there is reference to the fact that I am alleged to have moved an amendment. I had, in fact, intended to move an amendment but on inquiry it was made very clear to me that while it is perfectly legitimate to move an amendment in the Third Reading, it has not been the practice in this House over many years to do so. In passing a copy of my notes to the Press, … [Interjections.] I am not ashamed of the fact that I give my notes to the Press. In passing the notes to the Press I did include a copy of a draft amendment which was never moved. To the extent that anybody has been inconvenienced, I tender my apologies. It was a matter of inadvertence and I am sorry that it has occurred.

May I put a question to the hon. member? Is that the reason why he always reads his speeches out so accurately?

Order! I am not allowing any further question on this matter.

I now wish to come to this particular debate. The debate has already covered a wide range of subjects. I would like to, if I may, deal specifically with taxation as a fiscal tool in order to achieve growth and to restrain inflation. I would also like to refer to the anti-inflationary campaign which has now been adopted by the Government and to indicate that as far as both inflation and growth are concerned, this particular Bill which is before us now does not substantially encourage growth nor does it act as a disinflationary measure. For growth in particular I think that what we need is firstly an incentive to work, secondly an incentive for productivity and thirdly an encouragement to save.

The encouragement of saving is a matter which concerns one even more in these times than it normally would, because in inflationary times, when people are not able to save adequately, businesses as such finance themselves by means other than savings which are generated by the public. They finance themselves by self-generating cash and borrowing and in these circumstances the stake which the ordinary people have in businesses tends to be reduced. If the stake which the public has in the equity capital of the companies which conduct business in South Africa tends to be reduced, it means that a distribution of wealth is created which tends to concentrate the wealth in the hands of those who already have it. In other words, those who have the equity at present, by means of using savings generated in the business itself, and by borrowing, tend to become richer and there is less of a spread in the community as such. One of the things that worries me about this question of a lack of saving is the concentration of wealth which takes place. In the present circumstances, with the equity market in the condition in which it is, there is virtually no incentive to invest in equities. In a free enterprise and a capitalist system this is, in my opinion, a most unsatisfactory situation. Here we have the worst of both worlds. On the one hand we are not encouraging savings as an anti-inflationary measure and on the other hand there is this greater concentration of wealth, which is an unhealthy phenomenon in these circumstances.

Sir, in regard to the anti-inflationary programme which has been announced, the Inflation Subcommittee said that fiscal measures should be introduced with the object of obviating erosion of capital and keeping capital intact in periods of rising prices. What is significant is that that was not accepted in that form—and I wonder if the hon. the Minister would not deal with this—because in the programme announced by the hon. the Minister of Economic Affairs it was merely stated that fiscal and monetary measures to encourage savings should be adopted, but the whole question of obviating the erosion of capital and keeping capital intact was left out. Is that significant, or was it left out of the statement of the hon. the Minister of Economic Affairs accidentally? His statement merely referred to the use of monetary and fiscal measures to encourage savings. The rest was left out of his statement. Sir, that may have been accidental or it may have been deliberate. I have a feeling somehow that it was not an accident, because it seems to me that in fact the intention was not to commit the Government to adopt measures in respect of savings where there would not be an erosion of capital. I wonder, Sir, whether the hon. the Minister would not deal with this, because I think it is significant in the context in which it is put at the present moment.

Sir, there is one other matter in regard to savings that I would like to raise. We virtually have a situation in South Africa today where Government and municipal stock is almost entirely taken up by institutions and not by members of the public. I wonder whether we should not encourage a greater taking up of Government stock of an ordinary nature by members of the public. I am not talking now about special tax-free issues, but ordinary Government stock. Perhaps members of the public can be encouraged to take up Government stock by treating that Government stock in the same way for taxation purposes as dividends so that the taxpayer gets a rebate on taxation. This would encourage the ordinary person to take up Government stock and it would increase the ability of the Government to get its investments taken up in the community.

Sir, then I want to touch on the question of productivity, and here I do not want to go into the question of married women, which I think has been adequately covered in this debate. But I would like to remind the hon. the Minister again of one of the recommendations contained in the report of the Franzsen Commission, and that is that the marginal worker should be attracted into the labour market. I quote—

Sir, this is an important factor and my difficulty with the proposal of the hon. the Minister is that not only in respect of married women but generally there is in fact not enough incentive for the marginal worker to take up employment. I made certain suggestions in this regard last year and I do not want to repeat them because they can be found in Hansard, but with great respect, Sir, in this age in which we live at the moment there is a concentration on leisure. People want more and more leisure, whereas in fact at a time when you are trying to fight inflation, you should be encouraging more people to work. I think in respect of this conflict which exists between the desire of people to have leisure and the need of the community for people to work, the hon. the Minister of Finance has the key if he will only encourage people to work by making it attractive for them to do so from a tax point of view. There is much talk, Sir, about marginal rates of taxation. The hon. member for Sunnyside claims to be an expert in this field, but let me give you some figures and statistics for comparison in respect of marginal taxation which I have taken out of a recent issue of an English publication. Do you know, Sir, that the marginal rate of taxation in the United States is 43 %? In Germany it is 50%; in France it is 24%, in Belgium it is 55%, and in Italy it is 22%, so our marginal rates of taxation are pretty high. Admittedly, Sir, when you compare our marginal rate with that in Great Britain, where it is 83% on earned income and much higher on unearned income, then we are in a different category, but when we compare ourselves with some of these countries I have mentioned, I do not think that we shape very well. There is another factor to which I would like to draw the hon. the Minister’s attention. In many of the other countries, the level at which, the marginal rate commences is very much higher than it is in South Africa. In our community the marginal rate starts at R28 000. Surely, Sir, that R28 000 under the existing inflationary conditions should be lifted, and instead of R28 000, one might even suggest a marginal rate which commences at R40 000, or a graduated scale up to a certain level where the final rate will then come into force. I believe that in so far as the entrepreneur in South Africa is concerned, he certainly is not going to be encouraged to work harder by these high rates of taxation with the marginal rate commencing at a relatively low level.

If I may, Sir, I would like to refer to another matter, and that is the question of capital gains tax. We all know that the Franzsen Committee recommended a capital gains tax. This recommendation was not accepted by the Government at that time. But we have recently had what I might describe, to say the very least, as a straw in the wind. Sir, this term is not intended to refer to the person who made this statement. In a speech made by the Secretary for Inland Revenue at the Afrikaanse Handelsinstituut in Windhoek, he is reported—I assume correctly—to have stated that the lack of a capital gains tax in South Africa indicated a gap in its taxation system and warned that he would work for its introduction. Sir, the Secretary for Inland Revenue is not only an able but also a respected and influential person in this community of ours, and the fact that he is working for the introduction of this system obviously gives rise to the thought that a capital gains tax is about to be introduced. I would like to make a number of remarks in this connection and ask the hon. the Minister to deal with this matter. Firstly, on the issue as to whether or not a capital gains tax is desirable, I want to say, while I do not want to go into the merits of it at this stage, that the last investigation that there was into this was at the time of the Franzsen Commission. I believe that circumstances have changed in South Africa. I think we should look once again at what is happening in other countries where the tendency is more and more to tax wealth. If in fact the hon. the Minister intends to introduce a capital gains tax at all, I would appeal to hi first to have another investigation into this matter by an impartial body which can go into the question of its application and the manner of its application in South Africa if it is to be introduced at all. Sir, there is much to be said against a capital gains tax and there is much, to be said for it. It is a question of knowing with certainty whether transactions are of a capital nature, or whether they are of a revenue nature. Until now the whole taxation system in South Africa has been on a revenue basis. I think the only taxation which is not on a revenue basis is the estate duty, which is in quite a different category. I do not anticipate that the hon. the Minister will be able to say tonight whether or not he intends to introduce a capital gains tax, but I would ask him whether he would not be prepared to have another thorough investigation into this matter by a commission before we get involved in this type of taxation in this day and age.

Then, Sir, I would like to deal with the question of our relationship with other States in respect of taxation. I should like in particular to deal with double taxation agreements. As far as we are concerned, I believe that our taxation structure should be designed in such a manner as to encourage investment in South Africa. We can do that in two ways, firstly by dealing with the matter in double taxation agreements, which quite obviously we have to negotiate because they are bi-lateral, but we can also do it in respect of the structure of companies in South Africa of which, the only shareholders are non-resident. At the present moment you have certain concessions in respect of the undistributed profits tax, where non-residents control the company. But I would like to suggest that in respect of companies which are wholly owned by non-residents, in other words, where 100% of the shareholding is non-resident, interest derived from Government bonds, local Government stock, Iscor and Escom stock, should be tax-free. If we did that we would in fact encourage investment in this type of stock in South Africa, with the earnings perhaps being retained in South Africa so that we would in fact encourage a new flow of capital to South Africa for advantageous purposes.

When it comes to double taxation agreements in particular, I would like to ask the hon. the Minister two things. Firstly, are we in fact in the process of negotiating further double taxation agreements, because there are still countries with whom we do not have them? Secondly, is there a policy in regard to double taxation agreements with countries where they have a holding company system where there is no tax payable by the holding company? This again becomes important, because if you had this type of double taxation agreement, you would be able to attract capital from those countries into South Africa on an attractive basis.

There is one last question I would like to ask. Is there any intention to renegotiate the terms of double taxation agreements with any of the countries with which we have that type of agreement, where there is a 5% tax when there is a 25% holding in the company? I also think the whole question of the double taxation situation between ourselves and Great Britain needs to be looked into very carefully. However, it would take a long time for me to deal with this in detail and I think the department is obviously aware of the problem. I do not want to waste time by going into detail in this regard.

If I may I would like to touch, upon one last thing in respect of the question of exporters. We do endeavour to encourage exports and we give incentives in this regard. This particular piece of legislation again gives a number of incentives in this regard, but I wonder whether the hon. the Minister would consider a matter I have touched upon previously, viz. the question of giving a form of insurance in order to cover exporters, who have long-term contracts, in respect of rising costs.

In Great Britain there is to be a scheme in terms of which 85% of any increase over 10% is covered by the Government against a premium. This applies in the case of contracts of £2 million or more which run for more than two years. Similar schemes exist in France and in Italy. It does seem to me that with this drive for export this would be an advantageous situation for us to be involved in at the moment. These are the matters. I would like to raise with the hon. the Minister. I think the other matters I wanted to raise have already been adequately covered and, therefore, I will not take up any more time.

Mr. Speaker, the hon. member for Yeoville made a very interesting speech, and I think that cognizance can be taken of various aspects he mentioned in the course of his speech. The hon. member raised quite a number of interesting subjects, and these certainly deserve attention. I should like to refer to two of the matters which the hon. member raised. The one is the question of a capital gains tax. This is certainly something which should be investigated thoroughly. Personally, when considering this matter superficially, I am rather inclined to be in favour of capital gains tax. If the Secretary of our Treasury made such a remark I welcome the idea that this matter will be considered again. In South Africa we already have capital gains tax to a large extent, but this operates in a particular manner which does not give one any certainty as to whether or not one can indeed be taxed for capital gains tax by the Receiver of Revenue. Because uncertainty arose as a result of certain court decisions on the question as to whether or not a person can be taxed for capital gains tax, one finds that various plans are made by people who think that they may be liable to such tax in the future; this they do for the very reason to avoid capital gains tax. I think that this may lead to greater certainty in our whole tax structure if we can, once and for all, get clarity on this particular matter.

As the hon. member for Yeoville, I am also aware of the fact that this is a matter which should not be treated lightly, and I will be the first one to admit that I have made no thorough study of the matter. Although I can think of quite a number of advantages this may have, I can also imagine that this may entail various disadvantages. I want to suggest that a Select Committee of this House may possibly be appointed next year, which could go into the matter more thoroughly, or that the services of some experts or other be engaged to submit a proper report on this particular subject to this House, so that we could consider and discuss this matter in a more comprehensive debate. I think it will be a good thing in this regard if we could consider the question of capital gains tax again. I feel that if we have greater certainty in this sphere, it might have the effect of persuading by means of income tax, people who are at present involved in the service sector of our economy where capital profits could be made without its being tax, rather to make their services available in a more productive sector of our economy. I think this could be one of the more advantageous effects of a capital gains tax in South Africa.

The hon. member for Yeoville also referred to another aspect, namely the incentives for increased production. He adopted the standpoint that the whole solution of the problem of a lack of incentive, if there is anything of the kind, among our working public, lies in the hands of the Minister of Finance, the Minister who will, by means of tax concessions or tax incentives, be able to encourage people to work harder and to earn more and in this way to make a greater contribution towards the national income. I think the hon. member for Yeoville is quite wrong if he thinks that this is only a matter for the Minister of Finance. This is also a matter which concerns our national pride; this is an emotional matter, and I think that far more should be done than simply to hold out material incentives to our working public, or to our entrepreneur class in South Africa. You should know, Mr. Speaker, and I think the hon. member for Yeoville will admit, that we in South Africa, especially in the White sector, do not have any unemployment. There is full employment. There is, therefore, to a certain extent a lack of competition. All these factors contribute enormously to the fact that people do not wish to take on anything more. Therefore, more than tax concessions alone will have to toe provided and in all spheres, on the part of the public, on the part of this House, on the part of the Government, on the part of the various political parties, on the part of our cultural organizations in the country, appeals will now have to be made, to try and solve this problem of inflation once and for all by means of hard work. We will also have to appeal to trade unions not to insist upon shorter working hours, and everything that goes with it. I think it will now be a question of a joint effort on the part of all sectors in South Africa to squash this monster of inflation.

Apart from these two matters, there are also three other matters which were raised in the debate this afternoon and tonight. The first matter I want to refer to, is the remark which, was made by the hon. member for Constantia. He said that the measure serving before us at present, does not take sufficient cognizance of the fact of inflation in South Africa, that it does not make an adequate contribution to contain that inflation. Mr. Speaker, everybody in this House that concedes that practically the only way in which we can overcome this inflation bogey is by means of increased production. If I consider the measure before us, I notice that at least clause 11, clause 13 and clause 15 contain provisions which are directed at bringing about increased productivity. Clause 11 contains, in any case, provisions which are aimed at combating the impact of inflation by means of allowances which are granted in certain years in connection with machinery which is purchased and for the construction of buildings. This is contained in clause 11. Then, in clause 13, we find buildings, “building investment allowance”, and in clause 15 we find, I think, the question of the enrichment of minerals, enrichment of metals in terms of which the enrichment of metals, the further processing of metals, is encouraged toy means of tax concessions in South Africa. In this regard, I think, the measure before us most certainly took, cognizance of the fact of inflation, and it endeavours to encourage production. Put it does not end there. If we look at clause 20, we notice that a new accountancy concept, the so-called LIFO basis, is introduced in terms of which the stock can be determined at a specified rate which is advantageous when we are dealing with an inflationary period. Here we have introduced the first principles of inflation accountancy in South Africa and in our tax system, and this, read in conjunction with clause 11, gives a very clear indication that the Government has a notion of the position in which companies, manufacturing companies, find themselves, in view of this continuous inflation which is constantly pushing up the cost of the replacement of stock and the cost of the replacement and machinery, to such an extent that it swallows up practically all profits. I agree with hon. gentlemen, also on the other side of the House, who say that, as a result of increasing inflation, the position has become practically unbearable for numerous companies and that, in terms of the inflationary pressure on the replacement of machinery and the replacement of stock, there is not sufficiently left to them, after they have paid their income tax, to pay the increased replacement costs. This is a real problem which faces our industry, a problem which was pertinently brought to the attention of the authorities during the past two years.

As I say, we have already taken cognizance of this to a certain extent in the measure before us, i.e. this LIFO approach of stock evaluation, and also in connection with the previous section 11 which I referred to, and in terms of which certain allowances are granted for machinery and buildings which are put into commission after specified dates in particular areas. This is possibly still inadequate and we should possibly consider this matter again, because we cannot allow the private sector to get into the situation where it can no longer create new employment opportunities in South Africa at all. The position is not to keep the Whites employed. Our major requirement in South Africa is constantly to create new employment opportunities for our non-White population in South Africa as well. This is one of the major tasks we have in this country in which we are living. It is not the responsibility of the Government alone, it is not only the responsibility of the Bantu Investment Corporation or the Xhosa Development Corporation. It is also the responsibility of the private industrial sector. Therefore I think we should take a very close look at the extent to which inflation is having such a detrimental effect on industry in South Africa that it can no longer save sufficiently out of its profits, after taxation, to afford the replacement of machinery, the replacement of buildings, the replacement of goods, stock and raw materials. This is one point I should like to make in view of the remarks made by the hon. member for Constantia this afternoon. The hon. members for Constantia and Johannesburg North also said something about “the transfer of funds from the private sector to the public sector”.

†They seem to regret the need for such transfer and the hon. member for Johannesburg North implied that these funds were required for Government expenditure. Of course they are required for Government expenditure. However, it is not such a simple matter. All expenses of the Government do not come directly from taxation. There are such things as loan funds and others which are acquired indirectly and not directly from taxation. As was indicated by way of a question, the taxation policy is not only aimed at finding funds for the Government’s expenditure, but some of these funds are also directed at steering the economy of South Africa in a certain direction. These are other aspects of the budget which have to be taken into consideration. Both these hon. members, who indicated that one should be careful of taking money from the private sector and putting it into the public sector, will admit that it is absolutely necessary for the public sector to have this money available for its various services. The only question is whether this money is being spent correctly by the Government. Not one of the hon. members indicated at all—not this evening nor in the months during which we debated the various Votes in committee—that they do not agree with the money being spent under the specific Votes. They have accepted that we are going to spend on defence, they have accepted what we are going to spend on education—as a matter of fact they never voted against any of the Votes. The point is that they have not indicated during the debate this evening, nor before, which money is being wrongly spent by the Government.

The third point which I want to raise is about matters raised by by the hon. member for Johannesburg North. He says that Blacks in South Africa pay more tax at a certain level than the White taxpayers and wants us to change this state of affairs and to bring Black taxpayers into conformity with White taxpayers. The measure which is before us this evening has nothing to do with separate taxation for Blacks and Whites in south Africa. There is only a simple schedule for taxation which will apply to both White and Black in South Africa. Of course, there are other laws which deal with the taxation levied on Black people, but it has nothing to do with the income tax legislation.

May I ask the hon. member a question. If a Black South African and a White South African both earn an amount of, say, R5 000 per annum, will the hon. member agree with me that they should pay the same rate of tax?

In terms of the measure which we are dealing with this evening, they will be paying the same tax. There is, however, another law in this country which deals with what we generally call poll tax or a per capita tax for Black people but this is something which is totally different.

I am not arguing that.

That money is not put into the Consolidated Revenue Account but is specifically used for the improvement of Bantu homelands. It is specifically applied for their benefit.

But they pay the same rate of income tax.

Yes, but what they pay in terms of the measure which is before us, will apply to Blacks, Whites, Brown Indian or whatever colour a person may have. There is no discrimination as far as that is concerned and, therefore the impression the hon. member wants to leave that in this regard we have discriminatory measures in South Africa, is completely false and unfounded.

*The truth of the matter is that—do not forget that 95% of the income tax in South Africa comes out of the pocket of the White taxpayer—R500 million is taken from the pocket of the White taxpayer every year to improve the standard of living of the Bantu homelands.

R600 million.

I beg your pardon. I am being corrected. R600 million is contributed annually to the improvement of living conditions, employment opportunities, amenities, and so on, in the Bantu homelands. If one should spread that amount among the number of Whites in South Africa—not only among the White taxpayers in South Africa, but on a per capita basis—I think that every White man, woman and child would make a contribution of more than R130 per year to the development of our Bantu homelands. If I may compare this to, for instance, the foreign aid programme of the Americans, which amounts to $2 500 million per year, this means that, if one spreads this on a per capita basis among the population of 213 million, an annual contribution of $15 per year per person is made to foreign aid in America.

And per taxpayer?

I am not speaking of the amount per taxpayer, but of the amount per capita. I mentioned this because I was afraid that the remarks which were made here by the hon. member for Johannesburg North, could leave a wrong impression.

Mr. Speaker, I think you will agree with me that we have had a detailed discussion on this Income Tax Bill. Quite a number of questions were put and a variety of opinions expressed. While I am thinking about it, I should just like to refer to the point raised by the hon. member for Yeoville in connection with his hon. colleague’s statement on inflation. As I understood the hon. member, he said that we omitted the reference to “maintaining capital intact”. However, that is not true. I have a copy here of the statement, and I should just like to quote from paragraph (iv) at the bottom of page 5: (translation):

It is, therefore, included in the statement.

It is different; it is not the same.

Well, my colleague, the hon. the Minister of Economic Affairs, assures me that this is the statement he made.

I shall tell you later on what was, in fact, said.

I also want to refer immediately to the position of married women, something to which reference was often made in this debate. I want to clarify the statement I made during my Second Reading speech. What it is really concerned with is not the implications of the increase of R150 as far as the deduction is concerned, but the meaning of the deduction of R750 compared with the deduction of R600. If one considers it in this light, one will appreciate what these latest concessions really mean. Where the joint incomes, for example, amount to R3 750 and there are no children, the tax reduction is R97, or 30% of the tax payable. Even on a joint income of R3 750 it is practically one third of tax payable. The hon. member for Pietermaritzburg South referred to the case of a husband and wife whose joint income amounts to R3 000 and said that this concession means a benefit of only R15 to them. However, this R15 is a considerable percentage of the tax they have to pay, because on such an income they pay very little. That is how I see the matter.

The hon. member for Pietermaritzburg South said that he intends moving an amendment to clause 29. The other amendment is, of course, that of the hon. member for Wynberg, which appears on the Order Paper in connection with expropriation. I should like to discuss these amendments during the Committee Stage, because it would be more sensible to do so then. We shall better be able to argue the matter during the Committee Stage.

†As far as the hon. member for Constantia is concerned, I appreciate his kind remarks about the explanatory memorandum. I quite agree with him, it is as useful to me as it is to him. These documents take a considerable time to prepare and I am very pleased to hear therefore that hon. members of the Opposition also find them useful. The hon. member for Constantia talked about the tax revenue involved here and said that it was two-thirds of the total revenue or one-sixth of the total national income. He said it was a considerable amount and mentioned how important it was for any funds transferred from the private sector to the public sector to be properly used and productively spent. He also made the point that in his view money used in the private sector was more productively used than money used in the public sector. I do not wish to get into an argument on that point with the hon. member, but I think he must look at this in a very practical way. If you compare the money spent on a post office with the money spent on a factory manufacturing some article or other, it may well be that the factory earns a considerable profit, or return on its investment which it can see immediately. The post office is in a different category because it is not a profit-making establishment as such. But I am sure the hon. member will agree that unless we are simply building post offices for the sake of building them, on the assumption that these things are gone into carefully and built only when they are absolutely necessary, then in the sense that you have to have that post office to serve that community, it must be productive nevertheless, because the factories in that vicinity could not operate properly unless they had proper postal facilities. I think we must look at this thing not just in the sense of a more immediate index of productivity by way of profit on investment, but in fact in terms of the necessity to have them. That is how I would approach that particular point.

The hon. member for Constantia also mentioned that nearly R2 million was involved in the additional investment allowances granted to companies in the budget. But of course this refers to the additional amount which is foregone in this particular financial year. In a full year, the additional relief in fact amounts to R11 million. I may point out that the revenue sacrifice on total investment allowances is now estimated at R88,5 million per year. This is the aggregate amount involved which, I think the hon. member will agree, is quite a substantial figure.

Then the hon. member spoke about the possibility of a voluntary loan levy. It is a very interesting suggestion, but I have some doubt as to the practicability of this proposal because the actual amount would, of course, be paid over at the whim of the member of the public. There would be no certainty as to what would be coming in, and accordingly the amount would obviously vary considerably from month to month, or whatever the period may be. Of course, it would undoubtedly entail a tremendous amount of administrative work. We feel that we have tax saving schemes which are operating successfully, and we will certainly have to look at this very thoroughly to see whether the additional amount of work would justify such a scheme. Then the hon. member suggested that we ought to consider reducing the progression in the tax rate. The tendency is, of course, for the rate to increase as income increases. That is something which is being debated at great length in taxation journals and similar quarters but the fact remains, of course, that a Government, or the Minister of Finance if one prefers, has to have a certain amount of money within a certain period. He looks at the taxpaying public’s ability to pay. That is really the guiding principle in practice. It is on that assumption that income tax has been made a progressive tax because it is felt that as the income increases, the ability of the recipient of that income to pay tax increases. As the hon. member knows, of course, that is the theory underlying the matter. The hon. member may, of course, come up with some other rationale and we could certainly take a look at it. This of course also implies marginal rates of tax as one goes up to the top of the scale. I will come back to that very briefly in a few moments.

*The hon. member for Paarl referred to the position of the aged. He referred to the concession in respect of persons of over 60 years of age and asked that the age should be raised to 65 years. This, of course, is something that already exists in the Act. The principle has been embodied in the Act for a number of years. This is only an improvement of the concession.

What about 70 years?

Seventy is rather high. The hon. member for Paarl also referred to the concession he felt we could consider in respect of expropriation. I shall deal with that again during the Committee Stage.

†The hon. member for Wynberg talked about the need to combat the effect of tax on inflated income. I think that was the point he was making. This is, of course, something which is being studied very carefully. It must be looked at of course in the light of budgetary requirements. The whole question is very much under consideration in any case. He also thought that more attention should be given to the position of the individual taxpayer. One tries to give effect to the so-called canon, or fundamental principle of equity in taxation. On the other hand one has got to try and raise a certain amount of money to finance what are regarded as minimum requirements of the State. That sets a limit on what one can do for the individual taxpayer.

The tax on divorced persons, in contrast to widows, is something which is also raised from time to time. At the moment we regard the divorced woman as taxed on a single-person basis. We can certainly look at this further in the Standing Commission on Taxation, but I would not be able to commit myself any further on that. I shall deal with the amendment of the hon. member in the Committee Stage. The hon. member for Randburg talked about the tax of companies on inflation profits, largely or to some extent paper profits. It is an issue which the hon. member for Wynberg raised in a slightly different context and it is something which the Standing Commission on Taxation is looking into. The commission is in fact looking into the whole question of inflation amounting, particularly with, reference to taxation, and perhaps by next session we will be able to discuss this further.

If I understood the hon. member correctly, he was pleading for the abolition of company tax and to confine the tax to dividends. I think that was the gist of it. The hon. member wanted more emphasis on the dividend when it came to company profits. This is a pretty far-reaching aspect. Again it is a question of the tax base. If the hon. member can give me some indication of what this will really mean in terms of revenue, we can take it further On our system, it is a fairly radical suggestion. However, as the hon. member can see, I have made a note of it and perhaps we can take it further one day.

The hon. member for Johannesburg North was at his inquisitive best tonight. He set me an almost unlimited number of questions in a short time, so much so that I could not keep up with, him. I have a few of his questions recorded and I will do my best to deal with some of them. He, too, raised the question of the tax on married people. Incidentally the hon. member for Pietermaritzburg South wanted the two people—husband and wife—to be taxed separately, but each on a married person’s basis. Is that correct?

Yes, because there is no provision for special abatements for married persons.

So the hon. member wants to have his cake and eat it.

Of course I want to!

That is right. The hon. member for Johannesburg North did not go quite as far, but I want to suggest to those hon. members who have taken a particular interest in this and who are rather critical of what we have done, that they ought to look at a rather useful publication in which by question and answer I dealt with this recently. It is a publication called Pro-Nat, which is a very objective publication and which sets this out very carefully. I can recommend this to hon. members on the opposite side, not only for its wisdom on tax matters, but in all respects. It will be a very valuable investment for them to buy it regularly, and indeed to subscribe to it. I do hope hon. members take the hint.

The hon. member for Johannesburg North has been replied to very substantially by the hon. member for Bellville on the question of Black versus White taxation. The hon. member for Johannesburg North is inclined to see things very much in terms of Black and White, but he puts the emphasis so much on the Black that he loses the balance. [Interjections.] This Bill—as the hon. member for Bellville has said—used to cover anybody who earned income subject to tax. But as the hon. member also said, for Blacks over the years the system has diverged from this system which is set out in the Bill. It is a long process, because one has to look at the history of it. We cannot simply throw our tax system overboard overnight. These things do not happen arbitrarily; they happen over a long period and form part of your fiscal system.

Will the hon. the Minister agree to look into this question if I can produce the actual evidence—I am not talking about poll tax or any thing like that—that in certain brackets simply on the basis of income tax, the Black South African pays more than the White South Africa?

I can assure the hon. member that we have the full information in front of us, but if he wishes to put any further information before me or to make any representations, I will always be prepared to look at it. I have tried to explain the position as it has arisen over the years and we think the present system is working rather well.

The hon. member for Johannesburg North asked me how much revenue is earned in the form of undistributed profits tax from public and private companies. This figure is not known. Because of the indirect benefits involved, it is extremely difficult to determine such a figure with any meaning, but the revenue collected from UPT does, of course, reflect the success of the measure. The smaller the yield of the undistributed profits tax as such, the bigger the success in forcing out dividends, which are taxed, into the hands of the shareholders and that is something I think the hon. member for Randburg will look upon with approval; he wants dividends to get into the hands of the shareholders. I should like to draw the hon. member’s attention to the reaction to the increased plough-back we made in the Budget for undistributed profits tax, which in effect means today that operating companies are absolutely free of this tax. This is regarded in business circles generally as an enormous concession in the right direction. I have received some very interesting letters and have indeed been told personally by some important businessmen that this is one of the most important single elements in the whole Budget as far as they are concerned. Further, in connection with UPT, the question of prescription was raised, and more particularly the introduction of the three-year prescription period. This is an alteration of the law and it is an alteration in favour of the taxpayer. The three-year period will run from the date of the normal tax assessment. That is how it will actually be done. The hon. member also asked about “nil” assessments and I am afraid I must say that “nil” assessments will not be issued, because such assessments would add enormously to the administrative work.

But you can get a “nil” assessment for income tax purposes; why can you not get it for UPT?

We cannot possibly extend this. We say that in effect the issue of a normal tax assessment is treated as if a “nil” undistributed profit tax assessment had been issued at the same time. That is the position.

The hon. member also asked whether the door had been closed to public companies to receive tax benefits on donations for educational purposes. I should like to point out merely that at present the provisions of the Income Tax Act are regarded as sufficient to meet the situation and that there is no justification for making an exception in regard to donations made by public companies. Further, the hon. member wants am approximate figure as to how many people get the advantage of abatements. The precise figures are not available but the hon. member will appreciate that the total will include all persons who have an income and who are not liable for tax because the abatements would make them non-liable. The estimate of the department indicates that something over 80% of taxpayers receive either the full or a diminished abatement.

In regard to the benefication allowance, the position is that old installations are out, but extensions to them, where such extensions are aimed at exports, will, of course, qualify for the allowance. I want to point out that this is an incentive allowance in order to encourage taxpayers to introduce new benefication plants.

I want to refer now to the question of the marginal rate of tax because this has either been mentioned or implied by quite a number of hon. members in their contributions to this debate. In this respect it is again a question of what the State has to obtain in the form of State revenue as a minimum. That is a judgment which the Treasury has to make and in doing so they take all the relevant facts into account. Obviously, a Government does not want to tax more heavily than it has to because we know that taxation is never popular. In this connection I should like to point out that we have in South, Africa—I think this fact is quite remarkable—fewer sources of tax revenue than in most developed countries or countries which have reached our stage of development. Furthermore, our ratio of income tax payers to the total population is probably the lowest of all developed countries. I think that must be borne in mind. The Franzsen Commission stated that 8% of the total population pay income tax as against 30% to 40% in most of the other developed countries. Of that 8% the majority pay tax at relatively low rates. Hon. members can therefore see the concentration of the tax burden on the shoulders of comparatively few people in our country. Although the marginal rate of tax, which is 63% at the top, may be higher than some people might like, the fact is that we constantly have it under review and we have brought it down over the past few years from 72% to the present 63%. I should like to point out that as a result of the progressive rates of tax, various slices of income are taxed at progressively increasing rates of tax. The various bracket of income are taxed at progressive rates and the total income is not taxed at the rate prevailing at the top. It is an accumulative total taxation which is applied income bracket by income bracket at a progressively higher rate. I think that is a point which we should bear in mind because people like to assume that a man earning say, R30 000 is taxed at 63%. This is not the case. What I am saying is that we must have regard to the overall or effective rate of tax imposed on the total or aggregate income, as disposable after-tax income is that part of income remaining after the tax thereon has been deducted. Let me just give a few figures as I have virtually completed my remarks on this point. Due to our low commencing rates of tax the overall tax is not as onerous as it is sometimes made out to be and I should like to give some examples. On an income of R30 000 a married man pays R10 500 or 35% of his total income by way of income tax. That leaves him R19 500 after tax. Some people say that this rate of taxation is 63%, but it is not so. This rate of taxation is 35%. Although the top R2 000 of the income is taxed at 63%, the average overall works out at 35%. If one takes an income of R50 000, the taxpayer pays R23 100 by way of tax, in other words 46%, which leaves him with an amount of R26 900 which is free of tax. I can give other examples. One can compare these after-tax results with the fact that 52% of the tax-paying population—in other words more than half—have pre-tax incomes of less than R5 000 per annum, 84% have pre-tax incomes of less than R8 000 and 99% have pre-tax incomes of less than R18 000. Again one can see the concentration of the tax burden upon the shoulders of a relatively small number of people.

*I think it is necessary that we see this matter in its true perspective, because the great majority of our taxpayers are, of course, not taxed at a rate of 63% at all.

I want to leave the matter at that. We hope to come to the Committee Stage now and then we can take the debate further and discuss the amendments that are moved.

Motion agreed to.

Bill read a Second Time.

Mr. Speaker, with leave, I should like to, on a point of personal explanation, say that during the speech by the hon. member for Durban North today I used the words “I do not think you are one”. In using these words I intended to refer to the hon. member as a South African. I have since had the opportunity of seeing the Hansard and listening to the recording of the debate and it is clear that my words, while not so intended, can in the context be regarded as referring to the hon. member as a gentleman. In the circumstances I wish to withdraw the words.

Mr. Speaker, during the Third Reading debate on the Appropriation Bill I referred to an hon. member as having no credibility whatsoever. I hereby withdraw the words “no credibility whatsoever”.

Mr. Chairman, in respect of this particular clause, which deals with the question of the LIFO system, I should like to raise two questions, and I would appreciate it if the hon. the Minister could deal with them.

The first is that the major point of the amendment is really to enable the Secretary to impose such conditions as he deems appropriate. This is the major object of the amendment. Bearing in mind the conditions which have been sought to be imposed before the amendment and in respect of which, apparently, there was no authority, there are two points which arise. The first is that it appears that before the system can be applied, the assessing officer will have to be satisfied that the change to the LIFO basis will not be prejudicial to the fiscus. I can understand that in the long term this should not be prejudicial to the fiscus, but part of the reason for the application of the LIFO system is that when you bring it into operation, it is quite clear that in the initial stages there will be some reduction of tax and that it then evens out as you go along. What I would like to know is what is actually meant by the concept that there must not be prejudice for the fiscus. Is it during that year or is it over a period of years? The second question, if I may put them both at the same time, is that if one is going to apply the system one will have to alter the basis of stock taking not only at the end of the year but also at the beginning of the year. This creates some problems, because obviously when one alters the basis of stocktaking at the beginning of the year it must affect the stocktaking at the end of the previous tax year. The question is whether the revenue authorities will allow an alteration in the stock at the beginning of a financial year without reopening the stock position at the end of the previous financial year for tax purposes.

Mr. Chairman, I want to deal with the first question, that is, what the effect will be of a change-over to a LIFO method of valuation and what effect it will have on the fiscus. Of course, in a period of rising prices, if this were done on any scale it would obviously mean a decrease in tax revenue. The matter is, therefore, a short-term problem. It is a deferment of tax and it tends to adjust itself as one goes along, that is, if that tendency continues. This provision therefore seeks to safeguard the fiscus against any substantial change-over in the basis which could involve a considerable loss of revenue. That is the position. I need a little time to consider the second question. I will come back to it during the Third Reading debate. It is a technical point and I would like to go into it. It is something which, I understand, is being looked into in detail by the department. However, I shall throw further light on this matter during the Third Reading debate.

Mr. Chairman, I am indebted to the hon. the Minister and I will wait for the Third Reading to see what his reply is. May I just get the picture quite clear on the first point? Does it mean that the mere fact that there may be prejudice to the fiscus in the first year in that there will be an initial reduction in revenue will not necessarily mean that the Secretary will not permit it? Does it mean that he will merely look at the position to see what the reduction will be over a period of years?

Mr. Chairman, that is correct. There is nothing dogmatic about it at all. The Secretary will have the discretion to examine the position to see what in fact the indications are.

Clause agreed to.

Clause 29:

Mr. Chairman, I wish to move the following amendment standing in my name on the Order Paper—

1. (e) in the case of a demand, if despatched by registered post.

The whole point of this amendment is to take cognizance of the fact that the department sends out a number of notices every year which notices have a special meaning in terms of the Act. They are also sent out at different times which everybody is supposed to know about. It does not really matter whether those notices are delivered on time or not. If they went by ordinary post and they were lost it would not make a great deal of difference to the administration of the department and neither would it make a great deal of difference to the taxpayer. We on this side of the House, however, believe that a demand should be sent by registered post as we feel that a demand is sent by the department only in those cases in which certain action is demanded of the taxpayer.

Business interrupted in accordance with Standing Order No. 23.

House Resumed:

Progress reported and leave granted to sit again.