Mr. Speaker, a shock or a disaster is usually followed by relief. One tells oneself, “It could have been worse”. We expected—and I believe the country expected—the Railways to suffer a loss of something in the region of between R40 million and R50 million during the current financial year, but that it would be an amount which could be covered by the Rates Equalization Fund. Except for a few Nationalist newspapers, which were apparently well informed about Railway affairs, there was, however, little expectation of the shock which did come. This Budget, Mr. Speaker, remains, after careful analysis, a total disaster in our opinion. There is no ray of relief or of hope. It is full of nice words, appreciation, congratulations and a few achievements. There is appreciation of the staff, self-congratulation, and promises, but predominating these there are the hard, relentless figures which are contained in these three books, the Green Book, the White Book and the Brown Book. I said on Wednesday that the hon. the Minister had cast a stone into the economic water and that this would have a ripple effect, but after analysis we find that those ripples are in fact waves which could do a great deal of damage to the economy.

This Budget is a disaster, firstly, for the credibility of the hon. the Ministers of Finance and of Economic Affairs. In the first debate of this year the hon. the Minister of Finance made the following pronouncement (Hansard, col. 189)—

In the same debate the hon. the Minister of Economic Affairs said the following (Hansard, col. 206)—

In the debate on the Part Appropriation Bill the hon. the Minister of Finance said the following—

This is what the two Ministers of Finance and of Economic Affairs had to say. If, however, we take a look at what the hon. the Minister of Transport said, we find a speech that is full of pessimism. There is no hope of the position recovering in the present year. There is no relief; the figures in respect of inflation are 42%, 37% and 25% on various items. We find that a total amount of R200 million more has to be taken from the people and the country. Where is the credibility of the hon. the Minister of Finance and of the hon. the Minister of Economic Affairs?

This Budget also is a disaster for the economy as a whole, because the Railways constitutes 13,5% of the gross domestic product.

It is also a disaster for the consumer, and in particular for the lower income groups.

Lastly, it is a disaster for the collective contract against inflation for which that hon. Minister, who is smiling so, is responsible. I shall ask him later what this Budget is doing to his contract.

Mr. Speaker, we welcome certain signs of realization of the causes of the Railways’ problems. One is always pleased when one’s guidance is accepted. I mention our amendments of 1974 and 1975 as examples. For instance, we asked for a planning board, the conversion of the commission into a planning board. Last year the hon. the Minister announced the establishment of a national advisory committee, but it has had little effect on his Budget. We advocated modern managerial methods and a modern organization. This year the hon. the Minister said in his Budget Speech (page 29)—

This is something we have been advocating for the past two years. We advocated relief in respect of the burden of socio-economic services. This year the hon. the Minister said, in this Budget (page 37), with regard to open competition—

We also advocated, Sir, a separate control over harbours. A separation of responsibility was introduced administratively, which did work to the advantage of the harbours. Because of that, we have a better picture in this regard this year. Our theme, at the time of the previous Budget, was the role of the Railways in Southern Africa, its role in détente, the role which the Railways could play on this sub-continent in the interests of South Africa. We welcome the contribution of the Railways to the Victoria Falls Conference, and we approve of the expenditure incurred in that regard. We also welcome the role the Railways has played in keeping open our rail links with Maputo, or Lourenço Marques. I think we are entitled to expect the assurance from the hon. the Minister that the safety of our people who are working there, as well as that of the equipment which is there, is guaranteed and that steps have been taken to ensure the safety of South Africans and South African equipment in the present uncertain times. We are grateful for and welcome the contribution of the South African Railways in respect of other countries in Southern Africa. Now, however, a new situation has developed; a new situation with new problems.

†I refer, of course, to the closing of the Mozambique/Rhodesian border. South Africa’s attitude is clear. This attitude was expressed by the hon. the Prime Minister last Thursday; we condemn and are opposed to boycotts or sanctions in principle, in any shape or form. The Rhodesian traffic through Mozambique is worth R150 million per annum to Mozambique. This is a matter which cannot be ignored. At the moment the hon. the Minister’s budget indicates that South African traffic is in the doldrums and that it is R200 million short, an amount which is to be recovered from the public. Richards Bay will be opened next month and will relieve our harbours. Our other harbours are considering reverting from two shifts to one shift work. It is, therefore, natural that South Africa should welcome the possibility of new traffic to keep its operations busy. This is quite apart from the natural desire which I believe most South Africans have, to want to help a friendly neighbour and to want to do what we can to help those who are our kith and kin and who are our friends.

For this reason I was shocked and unbelieving when I read the report in the Sunday Times yesterday, and I expected the denial which came.

Did you listen to the radio this morning?

If my hon. friend from Carletonville would wake up, he would have heard me say that I expected the denial which came. [Interjections.] The question is: What was the motive for the story? What was the motive behind the Sunday Times story, unless it was intended to undermine the morale and the spirit of the Rhodesian people? I want to record our condemnation of irresponsible and dangerous journalism which can harm the relationship between South Africa and other countries. I believe it is irresponsible and that it can only harm the interests of our country and our relationship with other countries. From the Railway point of view, it is a simple economic issue: “We want traffic. If the traffic is available, then it is in our interests to carry that traffic.”

Mr. Speaker, I now want to turn to the budget itself. In order to pin-point our criticism and to give our positive approach, I move as an amendment—

1. (1) it imposes excessive tariff increases on all sectors of the South African public;
2. (2) it subverts the collective campaign against inflation by initiating a spiral of price increases in all the essentials for daily living;
3. (3) it reflects the Government’s failure to transfer the financial burden of uneconomic socio-economic services from the Railways Administration to the Consolidated Revenue Fund;
4. (4) the Administration has failed so to streamline its organization as to enable it to counteract or reduce the effect of traffic fluctuation”.

Let us look at the four legs of the amendment. Tariff increases, euphemistically referred to as “aanpassings”, of 11,2% bring about an increase of R207 million, and this is called “mere adjustments”. However, it is in fact an increase in tariffs right across the board with hardly an exception. Let us look at it. In the case of passengers—I shall not give all the details, because I have too little time—the price of season tickets has been increased by up to 20% and in some of the resettlement areas, the increase is as high as 49%. There is a 10% average increase for the lowest paid, the lowest economic group of the S.A. Railway users. These are the people who can least afford to carry it. What is going to happen to a man whose weekly season ticket goes up by 49%? Those increases wil bring in an additional R14 million. In the case of high-rated goods, the goose that lays the golden egg, the increases were from 8,9% to 17,2%. The increase in respect of low-rated goods averaged 17,4%. Calculated against the budget, it brings in R148 million extra. Other figures are: livestock, 50%—R7 million; coal, 17,5% —R17 million; harbours, 4%—37%—R8 million; Airways, 10%—R26 million. Then we come to pipelines, another goose. Actually, it is not a goose, because what can one call it other than a parasite feeding on the motorists of South Africa, a parasite sucking the blood of transport in South Africa. Despite its present high profits we have an increase of 13,5% —R13 million. This gives us a total of R233 million, and not R207 million. Add to that the forecasted increase in traffic, therefore in revenue, and it amounts to another R115 million. That is R348 million more which the Railway Administration will obtain. It will receive an extra R348 million, and not R207 million as claimed. Expenditure is up by R278 million which means that we have been overcharged at least R70 million more than the Administration required. It is R70 million more than we needed to be charged, because the claimed income, added to the increase in traffic, produces that much income more than is required. The hon. member for Maitland and others will deal with this further. What sort of budgeting is this to present to this House?

Now let us look at the effects of this budget on inflation. Passenger rates are a direct charge, but they will lead to wage demands. The hon. the Minister of Labour will know, and the whole Government knows, that the increase on passenger rates, the direct charge on passengers, will lead to a demand for wage increases. Increases on tariffs for exports will weaken our balance of payments. The hon. the Minister of Finance was so concerned about this, that he devalued our rand so that he increased the cost of all imports by 18% in one blow. Those are direct charges. When one comes to all the others, they are doubled or trebled charges. Let us take livestock. A leading meat wholesaler and agent has worked it out that the livestock increase will be, on the hook, 2 cents a kg from a 300 km radius and 4 cents a kg from South West Africa to Cape Town. As a result of that, the prime cuts—that is after removing the bone and the waste—the meat which is normally sold over the counter, will increase from a minimum of 10 cents to 15 cents a kg. This is a practical example, checked again and rechecked.

Who worked that out?

I warn that hon. friend who has doubts to wait until his wife goes to the butcher towards the end of April to buy meat.

Let us take coal. Coal goes up 17%. This means that the price of electricity goes up and electricity is one of the means of production in every factory in South Africa. Already the hon. the Minister of Transport complains that there has been an announcement of a 30% increase in the price of electricity. That is before his rail rates have increased the price of coal. Before the effect of this budget is felt he already has a 30% increase in the price of electricity. I refer him to pages 48 and 49 of his own Budget speech. Petroleum will go up and with it the basic cost of production to the farmer, industrialist and transport throughout South Africa. The hon. the Minister complains that his fuel has gone up 42% since November 1974.

I do not know how he calculates this figure, because petrol, as far as I know, has gone up 5,7 cents since then, but according to the Minister’s calculations it has gone up by 42%. An increase in the cost of road transport will result in an increase in the price of food. An increase in the price of raw materials will result in an increase in the price of every industrial product produced in South Africa. The price of manufactured goods supplied to the wholesaler will go up and will go up again when resupplied to the consumer. Conservatively, the R200 million which this hon. Minister has imposed on South Africa will double to R400 million if not more than that, even up to R600 million, by the time all the escalation factors are applied. There are 25 million people in South Africa, about 5 million families, at an average of five per family. That means between R80 and R120 per year extra on their cost of living. I do not have the time to give examples again. We have done so before, and it does not get through the minds of some members. When the transport cost of ore to make tin sheet goes up, the tin sheet goes up as well. When the cost of transporting that sheet to the can manufacturer goes up, the can goes up as well. When you transport the can again to the canner, that requires further transportation, and the price goes up again. Then everyone adds his profit margin at every level. At each level of commerce the price goes up and up. This budget is a foul body blow to the collective contract which will emasculate the whole campaign.

Let us look at the socio-economic services. I quoted the hon. the Minister’s speech in which he stated that the Railways must be relieved of these in order to compete freely. We agree on the principle, but fundamentally disagree on the method. When I mentioned a subsidy on Wednesday there were horse-laughs from Government members. “Wat is die verskil”, they said. Have they not got any knowledge of commercial practice? Are they totally ignorant? Do they not realize that if you increase the price of something by railage, at every level, from the manufacturer to the wholesaler to the retailer, each takes his profit on top of the rail increase? So it escalates, not merely the cost increase, but the increase plus the profit at each level. When you add this to the tariff it means that the consumer at the end finds one rand doubled to two rand, through profits added at each stage of production and distribution. When you have a subsidy from Consolidated Revenue to the Railways, the Railways calculate their economic cost, the Government calculates what they believe the socio-economic price should be and they simply pay the difference—once only with no escalation.

There is another difference. When you burden the consumer, you burden every consumer equally, irrespective of his ability to pay. If you subsidize from Consolidated Revenue, you are doing it out of taxation, and taxation is based on the ability of a man to pay. Those who can pay, contribute to central revenue whereas, in the case of tariff increases, everyone pays, whether he can afford to pay or not.

I do not have time to deal with the fourth leg at any length. Others will expand on this. This is the failure to streamline the organization. There is at least a glimmer of hope that there is some understanding now for the need for modern management techniques which can cope with the demands and requirements of modern business. When you add to it some of the other facts in this budget, you will see why we ask for streamlining. The Railways have absorbed nothing of the costs in terms of the collective contract against inflation. Inflation is calculated at 12%, yet expenditure has gone up 21,6%, and even if one takes the 7,5% hangover from last year, the Railways have added to the average rate of inflation in their costing and in their expenses. They have not made any contribution towards the collective contract. The problem is their inflexibility to adjust, for example, by taking a 40-ton truck to fetch a 5-ton load, or by taking a 50-seater bus to transport two passengers from the airport to the air terminal.

Mr. Speaker, these are not only increases of traffic costs. Administration has gone up nearly 22%. The General Manager’s office administration has gone up by 25,7% and data processing by 29%. The hon. the Minister has got all the aids he wants. The costs for his administration are going up. We had to cope with this budget without computers worth millions of rand. We had a little hand calculator. The hon. the Minister had everything at his disposal, and still he could not produce the flexibility to deal with the change in traffic.

Mr. Speaker, I have not even touched on containerization—R375 million in three years. I forecast now—we shall deal with that at a later stage in this debate—that containerization is going to be a shambles. I shall tell the hon. the Minister why: Because it is once again the old idea that the Railways must control and handle everything.

Mr. Speaker, I want to conclude by saying that this budget will become known as the “black” budget in Railway history. In this time of economic difficulties it is a disservice to South Africa to so add to our inflation spiral as this budget has done.

Mr. Speaker, the hon. member for Durban Point is really a very colourful personality in this House, colourful because of his technique of presenting his case with emotion, drama, fanfares and with a choice of words such as “a weak budget”, “a shock budget” and with similar tactics and methods. In my opinion the hon. member for Durban Point is a colourful personality for other reasons as well, especially when what he says tends to be rather risky and a mischievous smile plays around the corners of his mouth. Then I know that he is at his play-acting best. In considering the Budget before us, there are a few factors which one must take into consideration if one wants to do justice to it. In this respect my hon. colleague on the other side of the House failed very noticeably. The most important factor is the circumstances in which this budget is being presented. Besides that there are the actual shortages which we are dealing with here, and one expected the hon. member to mention examples of shortages which could be eliminated, and if so, in what way. Furthermore he could possibly have suggested steps to eliminate the large deficit which was budgeted for, inter alia by economizing methods, or capital loans, or increased productivity. But he did not touch upon any one of these aspects during the course of his speech, and I hold this against him. The hon. member also has the habit of making certain incorrect and hypothetical statements and the trying to reason logically towards a conclusion which could serve his opportunistic aims. I shall refer to a few of these in the course of my speech, Sir. The hon. member was effective, and I actually enjoyed seeing how pleased he was to discuss a budget like this, but now, after he has spoken, I want to tell him that I am pleased that he is not a member of this side of the House at this juncture and does not have to introduce such a budget as this. If we want to talk of a “royal smash”—that would have been one. I remember that it was not long ago that they, when they were still sitting on this side of the House, brought a single ambitious project, namely the Hex River tunnel, to this House. One of my respected colleague’s relations was also, according to his own testimony, involved in this. The point is that if one takes into consideration the circumstances under which a budget is drawn up, then one finds that when the Railways were bankrupt under their régime and did not have wagons to cope with the traffic, and did not always have the money to pay the wages of the officials, they came forward with this ambitious project, the Hex River tunnel.

Mr. Speaker, it was probably intended to convey ore to Saldanha and coal and mealies to Richards Bay and ore to St. Croix! Sir, the hon. member has nothing to say in the matter. [Interjections.] It is completely beyond him. The excuse at the time was that they had presented this scheme in order to provide for the demand for improved services in Cape Town harbour, but before this their priorities were other important services. They also had another excuse. Everything was covered under the multi-coloured patchwork quilt of:“There is a war on.” I just want to remind the hon. member that their former ally is today fanning the flames over the continent of Africa and our fatherland. The summons to the hon. member is: Come out of hiding and dare to face this time of crisis with us. [Interjections.] Yes, I am a Nationalist.

Sir, the fact with which we are faced and which must be argued out in the days which lie ahead, is that we are experiencing circumstances in which factors such as the continued high inflation rate in the economies of South Africa’s most important trading partners—therefore not a poor policy on the part of the Railways Administration or its Minister, but factors beyond our control—are the reason for these conditions. There was the increase in the oil price. This was not a result of the policy of this Administration or the Minister, and there was the devaluation of the rand, which counteracted the levelling off of internal price increases. The relatively high inflation rate, together with the direct result of devaluation on the prices of imported capital goods, had an unfavourable effect on the Railways’ expenditure. These are practical and realistic facts which stand out clearly, and have nothing to do with the hon. the Minister or the Administration. These are factors beyond their control. In addition to this we have had the slight, or practically non-existent increase in State expenditure, something with which they agree and are advocating today. There are no immediate prospects of an increase in the consumer demand either, and this, together with a relatively poor balance of payments position, an exceptional inflation rate and no early incentive for exports, makes the chance of a powerful recovery of the internal economy rather slender. These are the circumstances against which we should measure this budget. It is expected that the economy in South Africa will only show an improvement by the end of 1976. As a result of all these circumstances the expenditure of the Railways showed a sharp rise, and not as a result of the policy or any action of the Administration. It was the result of factors beyond our control. The rise was so sharp that it reached R269 million in the previous financial year. This represents an increase of 20,24% and is largely attributed to salary and wage increases with effect from July 1974, the rationalization of the salary structure during the second half of 1974-’75, and the increased overtime and Sunday-time. Other contributory factors were: The appointment of additional staff, primarily at the main harbours; the introduction of a pension fund for non-Whites; and the greater volume of traffic conveyed.

Then there was also the rising cost of material due to persistent inflation, and an increase of R27 million in interest paid on capital during the past year. Can any speaker after the hon. member for Durban Point tell me what they want eliminated here? Should we have reduced salaries instead of increasing them? Should we have borrowed capital so that we would have had to pay more interest? Should we have conveyed fewer goods? Come on! Hon. members must be reasonable now, argue point by point and do not tell us about a bus which conveyed one passenger from Jan Smuts to Johannesburg as if this were the policy of the Railways Administration. This is childish. One speaks about that kind of thing to little boys who play marbles, but one does not raise them in the circles of this House. Which of these items do hon. members want eliminated? The hon. members have a choice: A reduction in salaries or a reduction of the staff. Hon. members should merely say which, and then we can argue about it. As a result of the circumstances which I have just mentioned, the hon. the Minister had to budget for a deficit of R199 million. This is the reality which we have to face and this is the problem which we must try and solve in this debate— today, tomorrow and the day after.

How is this R199 million made up? It is shocking and it is a “black” Budget, says the hon. member for Durban Point. However, he did not analyse it. If he had analysed it, we would have been able to discuss it. Then he would have been able to make a constructive and positive contribution here. What does this deficit consist of? The following: Betterment Fund, R10 million—does the hon. member want this to be abolished and can it indeed be eliminated?—Sinking Fund, R0,2 million; Auxiliary Fund, R1,2 million; Home-Ownership Scheme Subsidy—should this be abolished?—R1,5 million; Rationalization of non-White salaries, R20 million—should this be abolished? But hon. members have been pleading for this for so many years. Just say which, then we can discuss it. Then there are the usual scale increases for staff, R14 million; and interest on capital, R75 million. Mr. Speaker, you will still remember very clearly how the hon. member for Maitland fulminated about the interest charges in a debate here last year. I see, according to the report of the General Manager, that the burden of interest is only 13% of the total expenditure, therefore completely normal. He is making a mountain out of a molehill. Depreciation amounted to R25,5 million. Would the hon. member have liked this to have been more or less? Insurance amounted to R2,4 million; the materials account, R12,6 million, and the increase in prices of materials as a result of the pressure of inflation, R58 million. We could debate this to some purpose. In this connection we can make a contribution and furnish the correct information to the public and to those of us in this House who need it. But we should not sow confusion and angle for votes in Durban North. We should not take advantage of people’s grievances. One of the hon. member’s statements was that the increase in rates was not justified, especially not in view of the anti-inflation manifesto. I shall react to that in a moment. He also said that the rates increases would have a tremendously adverse affect upon the country as a whole, and especially on those sections of the population who could least afford it. I shall dwell on that, too. The hon. member went on to say that by making use of compensation by the State, of socio-economic services and rationalization, it would have been possible for the Government to avoid rates increases.

There is something else which we should take into consideration in a discussion of this Budget and which the hon. member disregarded for the sake of convenience. I am referring to something which is actually an instruction in our Constitution. What does the Constitution Act state in connection with the control and financing of the Railways? According to the Constitution Act the Railways should be managed on a business basis. Therefore the Railways cannot continually run at a loss and it is necessary to avoid any loss that may occur, by means of increased revenue, which should be obtained in such a way that it has as little effect as possible on the inflation rate. The problem with which the hon. member was faced as a result of the circumstances which I have sketched was this: “Here I have a shortage of R199 million as a result of devaluation, inflation, increased prices, a drop in exports, etc., and I have to make good that shortage. The Constitution requires it of me. I cannot keep on running the Railways at a loss. ’ ’ Where should the revenue come from? Should he borrow the money?

Let him cut his costs.

If he borrowed money would that not, as the hon. member for Maitland said, be inflationary?

No, I did not say so.

The hon. member can tell us in a moment whether the hon. the Minister should borrow money to wipe out the deficit. Should he perhaps save money in order to do this? If so, how should he do it? Should he reduce the salaries of Railway officials, or reduce his staff, or should he in the critical circumstances in which we are living, hold back aspects of the infrastructure, for example the Richards Bay project, containerization and others? We heard this morning how this insight, far-sightedness and planning may benefit this country and its neighbouring states at any time, starting from tomorrow. Do the hon. members on the other side want to hold this up to us as a reproach? Let them say so then.

We shall still tell you.

Do they criticize this planning and this far-sightedness? Sir, in all reasonableness I say this: The Railways Management has, all things considered, succeeded in doing what the Constitution, the times in which we are living and the future require of them.

In this respect there are other authorities who agree with me. The first authority I should like to quote, is Dr. McCrystal. He is the chairman of the Collective Action against inflation.

Are you going to hide behind his skirts?

As he put it to Die Transvaler—

Reference was made here to a faulty streamlining by the Administration. It sounds to me as though wat Dr. McCrystal said, directly contradicts that point of view.

You should find somebody a little better than that.

I quote again—

I can continue in this way to quote Mr. Benadé of the Federated Chamber of Industries and Mr. Haak, the chairman of the Afrikaanse Handelsinstituut, as well. They are all positive and they all accept that these increases in tariffs will have an effect of only 1% of the gross national product.

Do you believe that?

Here we have the case where, unlike the hon. member for Durban Point, 250 000 Railway workers were prepared to see these circumstances in their entirety and in perspective and hold back their wage demands. I think that the hon. member for Durban Point should take into consideration who he is representing in this House— Railway workers or non-Railway workers. It seems to me as if we are still going to miss the previous member for Umhlatuzana.

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

Mr. Speaker, I did not interrupt the hon. member, and my time is just as limited as his was.

When are you going to make your speech?

The hon. member for Durban Point said that the rates increases were not justified, especially in view of the anti-inflation manifesto. This statement can in general terms be refuted as follows: The rates increase which will come into operation on 1 April 1976, as the hon. Minister indicated in his Budget speech, was essential. There is no other method by means of which the expected deficit of approximately R199 million can be made good. The Railways does have a Rates Equalization Fund of approximately R80 million, of which R67,8 million had to be used to wipe out last year’s deficit. This, therefore, leaves us with a balance of approximately R20 million. This R20 million will not even make a dent in the R199 million. The assumption and the meaning was that the Rates Equalization Fund should serve as a reserve and a trust so that the salaries of Railway officials would not have to be reduced in difficult times, and also so that when the deficits were within limits, they could be made good out of that fund. For that reason it is expected that the fund should last for an average of two years. After making good the previous year’s losses, the hon. Minister now has a reserve of only R20 million which in no way satisfies the existing demands on this fund. Therefore the hon. Minister had no other choice but to apply himself to the possibility of rates increases. Another possible solution is that the Minister should borrow money. However, this is so radical and so wrong that it does not warrant any further comment at this stage.

The average rates increase which the Railways is applying, amounts to 11,2%. This compares very well with the expected increase of 16,3% in the retail price index since the previous rates increase, because it is still under the mark. No encouragement, reinforcement, or unnecessary stimulation is given to inflation or price increases. If it is thought that the previous rates increase—that is that of 1 November 1974—possibly made too much provision for expected losses, I may just mention that the rates increase at that stage was 10,9% as against an increase of 23,2% in the retail price index since the previous rates increase. The difference in amounts between the increase in the consumer price index, which is a reflection of the general cost pattern of the country, and the rates increase of the Railways, is proof that the Railway rate? are only increased when it is absolutely necessary. This is as plain as a pikestaff; it is irrefutable.

The Railways has been experiencing the pressure of this cost burden for a long time, and had to operate at a loss throughout almost the whole of last year so that its Rates Equalization Fund was totally depleted. The depletion of the Rates Equalization Fund is consequently the contribution made by the Railways to give effect to the contents of the anti-inflation manifesto. I am saying this in reply to the question of the hon. member: What is the Railways doing to combat inflation? The contribution of the Railways over the past year was approximately R67 million. This resulted in the depletion of the Rates Equalization Fund, in case the hon. member for Durban Point did not know. In any event, the anti-inflation manifesto did not call for 30% of all increased costs to be absorbed, but only for the operating costs to be partly absorbed if the profit percentage of the organization reached a certain level. The profit percentage of the Railways is in fact negative, a minus. In spite of that the Railways was nevertheless prepared to make its contribution towards fighting inflation in fulfilment of the resolution to which it had bound itself by signing the anti-inflation manifesto.

“The rates increases will have an extremely adverse effect on the country as a whole and will fit those layers of the population in particular who cannot afford it, ’ ’ says the hon. member for Durban Point with great bravado. I have already said that the effect of these increases on the gross national product will only be 1%. I know it is idealistic for us to expect everyone to do so, but if the result of the increase is 1% at the first point and remains 1% throughout until the last point, then the result on the end product is still only 1% and not as the hon. member maintained last year. I should like to put him straight in this respect. Last year his story was that the influence of the rates increase would result in an additional expenditure of between R250 and R400 per family. I notice that this year he has amended this to between R80 and R120 per family. The hon. member chops and changes quite a lot and is therefore rather uncertain of his standpoint as far as this is concerned as well. I think the hon. member ought to find another calculator and not use only the small ones which one operates with the touch of a finger. I think that he would do well to go to the Railways, because they might be able to help him.

Disprove my allegations!

If the rates increase of the Railways is used as an excuse for general price increase, is it the fault of the Railways who had no other choice than to increase the rates? Should the Railways be blamed if commerce, with or without justification, in fulfilment of the anti-inflation manifesto or not, raises its prices as a result of the rates increase? Why should the blame always be laid on the Railways? According to the provisions of our Constitution, the Railways has to be managed on a business basis. It must be able to cover its costs and may not borrow unnecessarily. It does what it can to increase productivity. What else can it do besides increasing its tariffs? Surely this is all it did.

It is very difficult to calculate the effect which devaluation had upon the expenditure of the Railways. One can nevertheless say that it was the following: On foreign material, R8 million; on fuel, R17 million; and on local material, R7 million. An increase therefore of R32 million merely as a result of devaluation in a relative sense. We must remember that the Railways, as sole consumer consumes 8% of the petroleum products, 5,3% of the coal and 6,4% of the electricity in this country. Furthermore, the Railways consumes 15% of the steel produced by Iscor. Surely the Railways is not a fish and chips shop! [Interjections.] The escalation of costs as far as electricity is concerned, amounts to 30% and if one applies this to the Railways consumption of electricity, one can see what a phenomenal effect it must have on the cost structure of the Railways. Once the hon. member for Durban Point has absorbed this in and thought about it, we could discuss the matter together and perhaps make a contribution.

Your time has almost expired; are you going to refute my statements?

I have already refuted two and I am now coming to the third one, that is, the allegation that the tariff increases adversely affect those layers of the population who can least afford it. In this respect the following applies: The increase in the rates on certain goods and passengers has purposely been kept low. In the case of main line and third class passengers the increase was only 0,6%. The rates increase in the case of first and second class passengers has also been very limited—an average increase of only 2,2%. This means that anyone who goes to work by train will only pay 2,2% more on an average. On the other hand the rate which applies to third class commuters has not been increased at all.

What about season tickets?

The interests of people who could possibly have been hit hard by this increase have therefore been considered. This is the category of people whom the hon. members wants to drag in, but if I were him I would not feel very happy about dragging people for whom we have always had every consideration across the floor of the House in this way and trying to make political capital out of the situation, with an eye on a by-election in Durban North, which his party will lose in any case. Further there was the request that the State should intervene and compensate the Railways for all losses, for example, passenger service losses. A request like this is just as ludicrous as it is uncalled for. He is playing with words like “socio-economic concern”, “rationalization”, and so on. What are socio-economic tariffs? What do they mean? We must first thrash it out among ourselves.

Ask the Minister; he knows.

What do we mean by “rationalization”? We must first get our terminology straight. We must determine which services are affected. As far as I am concerned, at this stage a mere compensation from the State Treasury for losses suffered by the Railways, cannot be considered at all. This would result in the Railwayman of today being deprived of his keen initiative which is so praiseworthy. This would simply cripple him and result in his being unable to make a positibe contribution, as he has done under these circumstances. This will result in a subsidization of the Railways which could never be justified. The hon. member for Durban Point can take me up on that: My “never” lasts for a long time. Something like this can simply not be considered because it is unhealthy and practically impossible. The only possible consideration is to subsidize particular products and/or services, as is being done today with the establishment services. The question whether it is indeed a socio-economic service, must be thoroughly and properly thrashed out beforehand.

Savings were also an issue. It was said that the Administration, the control and the management, was poor. However, what have the Railways done with respect to petrol saving? After the most recent price increase the Railways petrol costs amounted to approximately R3 million per month. Aircraft now fly at a lower speed and seating capacity has been enlarged so that there need be fewer flights. This is also being done to save on staff. A permanent internal committee has been appointed to control and investigate fuel and lubricants. Official journeys of officials are limited in cases where alternative public transport is available. [Time expired.]

Mr. Speaker, the first thing the hon. member for Witwatersberg did was to make a few wide detours around the hon. member for Durban Point. Having done that, he dealt with the Budget and said there were two reasons for the deficit of R199 million, i.e. inflation and devaluation. The hon. member threw up his hands and asked, “Who’s fault is it?” I wondered what the hon. the Minister of Transport said or thought when he was sitting in the Cabinet meeting while decisions were being taken on devaluation. The hon. the Minister is the first person who should have known that he would be the first to suffer should devaluation be agreed to. Did the hon. the Minister speak out firmly on that occasion? I shall not ask the hon. the Minister to admit this, but I do not think he was happy about the matter. Devaluation is a step taken by the Cabinet, the Government of South Africa. If someone is to blame for this, it is the Government. The first major account we now have to settle as a direct result of devaluation, is the deficit incurred by the Railways.

However, there is another possibility which I fear. The hon. the Minister said they were going to increase tariffs. I am afraid the hon. the Minister of Economic Affairs will say before long that the action programme against inflation went “very well”. Unfortunately, we have now seen that the Railways has increased its tariffs. I really hope the hon. gentleman will try to get around that point. I know the hon. the Minister as a very good debater and I presume he will try and circumvent this point.

I rather want to leave the hon. member for Witwatersberg at that. He posed a few questions which I might just as well refer to in the course of my speech.

The fact of the matter is that no hon. member in this House nor any other person with any knowledge of the Railways has expected a large surplus at the end of the present financial year. In fact, all of us expected a deficit. However, I was surprised at the extent of the deficit. It is no less than R67,8 million. To me this was an indication of the kind of atmosphere to which the hon. member for Witwatersberg referred, the kind of atmosphere in which one had to compile the estimates for the ensuing year. We had the circumstances here, circumstances in which those things we had been dealing with in the past year had to be taken into consideration. As I said before, the Railways has at its disposal a management which is familiar with statistics and therefore knows what this is all about. The hon. the Minister is a member of the Cabinet and is therefore aware of the economic climate long before anyone else. I also know that the management of the Railways maintains a fine liaison with the economic advisers of the Prime Minister. Circumstances were therefore known.

Now, let us consider the matter. The hon. the Minister comes to this House and says he has a deficit of R199 million and that he has to get it somewhere. In a case like this one can do only one of two things: One can either increase one’s revenue, or, if one does not succeed in doing that, reduce one’s expenditure. One could perhaps try and do both things, but then one may still have problems in the end. I believe the hon. the Minister of Transport gave no proof of having made an attempt to increase his revenue. I believe the hon. the Minister at present has a case as he has never had before in the history of the Railways, because the hon. the Minister himself said that the Railways were no longer in a position to bear the socio-economic burden placed upon the Railways by Government policy. The hon. the Minister of Transport is not to be blamed for this personally, nor is the management to be blamed for this. It is as a result of Government policy. The Railways is the prisoner of NP policy. Surely, we know this.

This has been the case for years, also under UP policy.

Wait a minute. I repeat: The hon. the Minister had an opportunity as he has never had before to increase his revenue. He has a sound case, because he could have told the Minister of Finance, possibly with the assistance of the Minister of Economic Affairs, that his socio-economic burden should be alleviated so that he would be able to make ends meet. If he were to increase the tariffs, he would be doing something directly in conflict with the attempts of the Minister of Economic Affairs to combat inflation. No one can dispute this. Once the increased tariffs have had their full effect, we would see a doubling and even a fourfold doubling of costs. Surely, we know that this is so. It is no use the hon. member for Witwatersberg quoting a few figures. He knows only too well who is going to foot the bill. There is no doubt about that.

If the hon. the Minister were unable to give assistance on the socio-economic level, he had only one other way out: He had to increase tariffs to increase his revenue. However, if he were to do this, he should know that he was taking a step which is in direct conflict with the anti-inflation campaign in which the whole of South Africa is involved. To my mind this was the last thing the hon. the Minister should have done.

What other alternative does the hon. the Minister have? He either cannot or does not want to increase his revenue, or the Government does not want to help him to do so. There is only one other alternative: He has to cut down on his expenditure. If he wants to act in the best interests of South Africa and in the interests of the anti-inflation campaign, he has to cut down on his expenditure. I want to dwell on this for a moment.

The largest item of expenditure is not interest on capital, nor contributions to depreciation which the hon. member for Witwatersberg referred to. The largest single item of expenditure is labour—between 40% and 45% of the total amount of R2 211 million. Under the circumstances which the hon. member—not I—referred to, there is one essential step no one should lose sight of. When there is a relative economic slump, when one finds that one’s traffic is not what one hoped it would be, when one finds that people outside do not appoint people as they have to or want to, one’s first step would be to keep one’s staff constant, in other words there should be no extension of one’s staff. Does anyone disagree with me basically? Basically one should keep one’s staff constant. Have the Railways done this? No, but they budgeted for a staff increase of 22 000—the biggest increase during the last decade, an extension of almost 10%. And the other departments are reducing their staff, and I hope they are not going to do this on too large a scale. I am not saying that staff should be reduced as it was at the end of the current year. But I do say that, under the economic circumstances prevailing in South Africa, an attempt should have been made to keep the Railways staff constant at 344 000. However, the Railways do not only not keep their staff constant, but increase their staff by 22 000.

In addition, they take yet another step: They start rationalizing. This is a beautiful word, a word I discovered the other day for the first time. However, what happens in this respect? Practically the same as with socio-economic factors. What do we find? The hon. the Minister says he is going to rationalize. He increases the staff and he says: “I am going to rationalize.” What does rationalization mean? To me it means only one thing, i.e. that a firm, a major employer such as the Railways, with a constant staff and constant wage sheet, is going to organize its internal operations in such a way that its efficiency and productivity will increase. This is rationalization.

You should be ashamed of yourself.

No, wait a moment; I am not running the Railways down. On the contrary, I have great respect for the organization. However, to the Railways rationalization means that its staff is not only increased to 266 000, but on an average they receive a sum of money equal to a per capita increase of almost 10%. In other words, a salary increase of almost 10% is granted on an average. However, we know thousands have been left out in the cold. We know that all the people have not been affected by rationalization. If there are 10 000 who have not been affected—and I think this is a low figure—the increase on an average does not mean 10%, but in fact 15%.

That is the work of the little computer again.

Yes, the little computer comes in very useful. Let us consider what this so-called rationalization means in the rate of increase in respect of staff in the various departments. We start with the increase in respect of the staff of the System Manager at Kimberley. It is not 9,1%, but 13,89%. In the case of the staff of the System Manager in East London the increase is 15% and not 9% or 10%, for every member of his staff. In respect of the staff of the System Manager, Pretoria, it is 15%. Let us go further and see how these departments compare. I come to motive power operating expenses. That department shows an increase of almost 18%, and now hon. members should bear in mind that there are dozens of employees who did not receive anything. These percentages do not amount to 18%, but nearer to 25%. This is rationalization. It is a dangerous word of which we should be careful, because if the Public Service were to discover what this magic word means, i.e. increases without anyone knowing about it, or if the Post Office were to discover what this magic word means and if the private industries outside were to discover what rationalization in these terms means, nothing would be left of the anti-inflation campaign tomorrow. In the atmosphere and under the circumstances prevailing on the Railways, I would be the last person to say that we should not increase the salaries of the staff, because there are some of them in my constituency and I know what battle life is for them.

Why then do you criticize it?

No, wait a moment; keep quiet and listen. Keep the staff constant and still increase their salaries by 10% on an average. Then it would not cost R153 million, but only R80 million. It would mean a saving of eighteen million to the Railways. Subtract R80 million from R199 million and R119 million is left. There is no reason for the staff increase. We have a period of a relative economic slump. The traffic of the Railways is not what it should be and what we would have liked it to be, but we nevertheless find that staff is being appointed at a rate such as never before in the history of the Railways. The hon. member says I am not allowed to mention this. I have nothing against these increases, but let the men who were there have them. In view of the economic circumstances, how could the hon. the Minister appoint 22 000 additional people? The hon. the Minister says he uses the economic slump to obtain people, but what I want to know is this: Why should there be additional staff?

Did you not complain last year about the amount of overtime worked?

I shall come to that. [Interjections.] I am so glad the hon. the Minister reminded me of that, because it almost slipped my mind. The hon. the Minister said he was able to obtain the people because there was an economic slump, but the people are available because they cannot be productive in private industry, and how on earth can the Railways make them more productive? The hon. the Minister had to incur a loss and it had to be expected in view of an appointment figure like that. However, there is more to it than this.

As far as overtime is concerned, we here have an Administration—of which I am as proud as the Minister is—which is the biggest employer in South Africa. Its staff has been increased as never before; Railway staff is being better paid than ever before and, in addition, their wages for overtime and Sunday time are increased, not by 5%, but by 32,8%. This is an increase of R43 million. The hon. the Minister says I complained on the previous occasion, but I want to tell him that overtime is expensive time. Overtime is tired time; it is not productive. An organization such as the Railways should go out of its way to minimize overtime. Of course, there will always be overtime and Sunday time, but are the Railways sure, and is the hon. the Minister convinced of the fact that there is nothing he can do about this incredible figure?

In consequence of what the hon. member says, i.e. that he takes it amiss of the hon. the Minister that R43 million is allocated to overtime and Sunday time, and the fact that he should not extend the staff, what does the hon. member want?

No, wait a moment; do not confuse the facts. If the Minister had approached me and said: “The hon. member for Maitland is wrong; I pay an additional R43 million because my staff is only 244 000 instead of 266 000,” the hon. the Minister would have had a point. However, the number of staff is increased by 22 000 and in spite of that overtime and Sunday time is increased by 32%. No matter how the hon. the Minister views this, overtime is the most expensive time any organization can pay. I do not begrudge the railwayman anything, but the wages one pays one’s employees should be such that the minimal amount is paid for overtime. Overtime is expensive and unproductive, and I want to know how the Railways can afford this. It is also unreasonable, because many people are unable to work overtime. Let us consider the figures again— my computer worked again. In the case of the System Manager, Cape Town, 12,3% overtime was paid as a percentage of the total wage bill. Other figures are: Kimberley, 10,8%; Johannesburg, 14%; Pretoria, 15%; Motive Power Operating, 37%. More than a third of the total wage bill exists of overtime. I can continue in this vein. I have noticed another one. These are the tarpaulin people, and I am pleased to see that we have a fine example here where wages have been increased by 17,13%. I hope they will receive more or less 25% when pay-day comes. It does my heart good to see that the hon. the Minister had 150 and has reduced them to 115. However, after the numbers have been reduced, the Government pays these people 25% more. However, it seems to me as if it is going to benefit from this in the end. I can continue in this vein to quote the frightening overtime figures. I honestly believe it is time for the hon. the Minister to reconsider this matter. In all humility and in all seriousness I want to suggest the time has come when the Railways should instigate a proper commission of inquiry into the payment and operation of overtime and Sunday time in the Administration. We can no longer continue in this way, and I cannot condone this, even though I want to. A proper examination of the matter in order to ascertain where the fault lies, is required, because the Railways, as an organization, cannot continue in this way. If the Railways had adopted a conservative approach, if the Railways had seen that economy of South Africa was like a motor car running in low gear, the hon. the Minister should not have travelled by airplane; he should also have travelled in a motor car running in low gear. Then he would have said he was limiting the number of staff to 244 000 and in this way save R80 million and R43 million in overtime. This would have given him R122 million. Then he could have taken a further R20 million from the Rates Equalization Fund.

The hon. the Minister could say that if he had done that, he would have depleted the fund. But of course, Sir, and why not? If I were to weigh up that depletion against the possible effect of the increase in tariffs in the light of the anti-inflation campaign, I say every time: Deplete the fund. Mr. Schoeman did so a few years ago. Now we already have R123 million plus R20 million, i.e. R143 million. The Minister requires R199 million. Where is he going to get the balance from? Firstly, I would have said I have confidence in the economy of South Africa—and I am sometimes perturbed that the Minister does not show signs of this more often, but I think he has confidence in the economy—and that I am therefore prepared to budget for a deficit of R30 million. Why not, Sir? After all, it is not such a terrible thing if we compare this with previous years. In this case, I would have been left with R153 million, or rather R173 million, and I would have had to add a little more to get R199 million. Remember, I do not want to increase tariffs. Then I would be doing what the hon. gentleman’s predecessor had done. We took it extremely amiss of him, but he was unable to get money anywhere, because the Government did not want to assist him. He then said that if he was not going to get any assistance, he would take the money from his Depreciation Fund, and he did take R17 million from the Fund at that time. By the way, he has not returned the money yet. If I remember correctly, the hon. the Minister has more or less R150 million in his Renewal Fund, and I have no reason to believe that that fund cannot provide him with an additional R25 million or R30 million. If the hon. the Minister had listened to the atmosphere, the circumstances, held out by the hon. member for Witwatersberg, and if the hon. the Minister had seen that there would be a deficit of R67 million compared with the previous year, the Minister ought to have adopted a conservative approach. Then it would not have been necessary for him to increase the tariffs by one single cent and he would not have treated the Railwayman in such a poor manner either.

Mr. Speaker, it was very interesting to listen to the hon. member for Maitland. In the first place I want to reply to the statement he made concerning the staff. It is all very well to mention a figure of 266 000 here, viz. the establishment as it appears on the budget. But what is the true position? How much staff does the Railways employ?

I cannot give you the figures now.

The hon. member is unfortunately unable to provide the figures now. I want to assist the hon. member. On 1 September 1975 there were 112 000 Whites, to the nearest thousand, and 139 000 non-Whites. If we look at the number of staff in 1971, we find that it was 112 000 Whites— viz. exactly the same as in 1975—and 116 000 non-Whites as against 139 000. Now we all know that there is certain bread-and-butter work on the Railways which we are unable to have done by Whites today and that that work, with the co-operation of the trade unions, is done by non-Whites. This is the reason for the increase in the number of non-Whites.

Are you saying that the figure of 244 000 quoted in the budget is incorrect?

I am not saying that it is incorrect. There is, of course, a fixed establishment, but that is not to say that where a certain establishment is allowed, that is necessary the number of people in service. The factor we have to test is the productivity of the Railway workers. Just take those figures I have furnished here, the figures for 1971 and 1975. As against these, the tonnage conveyed has increased by more than 18,2% between 1971 and 1975 as far as the Railways are concerned, and by 66,4% as far as the Airways are concerned. As against this there was an increase in the establishment amounting to a mere 10%. That is the test. This proves the level of productivity that has been reached. The other statement which the hon. member thinks he can get away with so easily is the overtime which he wants to do away with so lightly. Surely we know that there is a shortage in certain key grades. On 16 September 1975 there was a shortage of more than 8 000 workers in those grades. Of course, the staff will have to work more overtime in those circumstances. Nevertheless, they are the people who complain all day long that the railwaymen have to work too much overtime. They complain that these people become exhausted and that accidents are caused as a result. This is the kind of thing they do and then this hon. member comes along with this ridiculous argument. Sir, I leave him at that because I want to come back to the budget.

When we are dealing with the S.A. Railways it is perhaps necessary for us just to take a brief look at the scope of this gigantic undertaking. It is important, too, to consider what influence the S.A. Railways has on the economy of the Republic of South Africa. I say that if it were not for this transport organization, South Africa would have been an inferior, small and insignificant country, isolated from the rest of the world. That is what the position would have been. This national transport organization came into being on 31 May 1910. Let us consider what the scope of this organization is today. If we bear in mind that this organization has to serve a total route distance of more than 22 000 km and rolling stock like locomotives and wagons …

What page are you reading from now?

If you had done your homework, you would have known. The rolling stock, i.e. the number of wagons, etc. amount to more than 184 000. Over the past year, 114 million tons of freight and 619 million passengers were conveyed. I want to mention here, because I think it is important, that of all the 619 million passengers conveyed, only 16 were killed and 16 injured in train accidents. What a wonderful achievement! We can only convey our sincere congratulations to the S.A. Railways on this high safety factor. Two and three-quarter million passengers were conveyed by the Airways. The total capital expenditure of the Railways is more than R4 000 million. It employs 244 000 staff and the total amount paid in salaries and wages varies between R700 million and R800 million per annum. The annual domestic expenditure on the purchase of goods comes to more than R400 million.

Surely we can see now what an enormous stimulus the Railways represents for our economy. These statistics show us, in the first place, that we are dealing here with an enormous organization, probably the biggest business organization in the Republic. In fact, I do not believe that there is a bigger business undertaking than the S.A. Railways. I have already referred to the stimulation of our economy by the Railways. According to our Constitution this organization is in the first place State-owned and must be administered as a Government department. Furthermore, it is also laid down in the Constitution—the hon. member for Witwatersberg referred to this— that the Railways must be run as a commercial organization, as a business organization, with the proviso that due account should be taken of the agricultural and industrial development of South Africa. Those are the only provisos laid down. In other words, this organization is not profit-oriented. In the first place, this organization is there to support itself, but above and beyond that, this national organization is also there to create the necessary traffic and communication infrastructure in South Africa where necessary. Even in times of inflation, if it is necessary to create that infrastructure it must be created. That is the task of this organization.

It is in the light of this task, as the hon. member said, that we must consider this budget. Before I say anything further about the budget, there is another matter I want to rectify, a statement made by the hon. member for Durban Point. I do not see him here at the moment. This hon. member said that he had carefully analysed the three documents tabled and that he had a calculating machine on which to do his calculations. I think he should get himself a new machine. On Wednesday he said that he was unable to congratulate the Minister because the increased cost amounted to 21,6% and that this would be demanded from the taxpayers. Now, what is the true position? I do not know whether he did it for the sake of convenience, but he omitted to include the R104 million additional expenditure, about which he and that hon. member had so much to say, in this figure of R1 818 million which was estimated as expenditure under the original budget. The expenditure for the financial year is therefore R1 922 million and not R1 818 million.

Now, the hon. member is working on a difference of R393 million and gets this percentage increase of 21,6. But that R393 million does not really represent the increased expenditure because an amount of R104 million has to be deducted from that, leaving R289 million. Then the hon. member can make his calculation, and he will then find that the percentage is not 21,6%, but 15%. Why did he give the country that mistaken impression? Why did he say that the increase was 21,6% whereas in fact it was only 15%. Surely that is a misrepresentation of the facts to the public. We know that the hon. member has made such errors in calculation before, too. This, therefore, is not the first time and consequently we do not find it strange. I want to give him this good advice: If he wants to make calculations again in the future, he should go to the hon. member for Maitland; he would then be better able to cope with the figures and would not create these mistaken impressions among the public. After all, it suits him to leave out figures when it is convenient for him.

You are very unfair.

No, why is it unfair? After all, he said that he had analysed the books carefully, and made a study of them. One expects someone who makes such a thorough study, to quote the correct figures in this House.

You were not listening properly.

No, you might as well go and read his Hansard. It is stated there.

It is necessary for us to begin by looking at the additional estimates. If one does not look at the additional estimates or the revised estimates, one cannot analyse the budget for this financial year which is now being submitted to the House for consideration. One finds that in the revised estimates, whereas originally a surplus of R6 million was estimated, we are now faced with a deficit of R68 million. In other words, something has gone wrong somewhere. There is a hitch somewhere. Where is the R74 million? We must put a finger on it. If we look at the Railways, we find that its revenue was R30 million more than was estimated. On goods, however, there was a deficit of R15 million. Consequently there was a net profit on the Railways of only R16 million. There was a few million rands’ profit on harbours, a few million on pipelines and a few million on the airways. There was an increase of R30 million on the revenue originally estimated but the deficit was still R68 million. This must be ascribed to the additional expenditure of R104 million which, in turn, as stated in this House, can be ascribed to increased steel prices, electricity and other cost items. Not one of those hon. members took this into account. This gives us an indication of where the fault lies, with the goods traffic. Why is this so? If one carries out an analysis and studies the books to which the hon. member referred, one will find that up to November this year the high-rated traffic has increased by only 2,5% or 2,6%. This was far less than last year. The low-rated traffic increased by 13,6%.

Does that include export?

It is particularly the importation of manufactured goods, which are high-rated traffic, which did not enter the country. This was as a result of devaluation and inflation. That hon. member who is now so clever, reproached the Minister, when we were dealing with the additional estimates, by asking: How can you come along with an additional R104 million in an additional appropriation? Why do you budget so badly? Surely you should have known that devaluation was coming and surely you should have known that inflation was coming?

I still say that.

Yes, you still say it, but then you must not complain if there is inaccurate budgeting. You cannot have your bread buttered on both sides. This is an indication that the bottleneck lies, in the first instance, in the goods, in other words there is too much low-rated traffic and too little high-rated traffic. This, basically, is where the fault lies, and this was very clearly pointed out in the additional estimates.

Let us come back to the budget. I agree with the hon. member that there are only three things which can be done in terms of the Constitution. If there is an imbalance of R199 million between one’s revenue and one’s expenditure, one can do only three things, as he said, and that is correct. One has either to cut down on one’s budget or find the additional revenue, and if one cannot do that, one has to do it in another way. Those other ways which they have in mind do not fall within the provisions of the Constitution. That is why this is not a consideration which the Railways can take into account. One has to take into account what is permitted under the Constitution of the country. We should be out of order were we to argue that we should obtain those funds elsewhere. We must first change the Constitution before we can argue along those lines.

But after all, that is not the laws of the Medes and the Persians; it can be changed.

That is at present the law of the land, the Constitution, and we must abide by it. It is pointless for the hon. member to become dramatic and highly emotional. One can only make ends meet if one takes the true facts into consideration. I want to come back to those Votes and take a look at the budget. I want to come back to the first item, viz. the staff employed by the Railways, and the wages and salaries paid. I ascertained that the figure was 38% of revenue. In my opinion this is quite low. On that basis I get a figure of R841 million. I worked out the percentage on the basis of details furnished in the annual report. That is the labour wage, and I think that it is a fair wage. The hon. member made certain proposals as to how savings could be effected, but his arguments do not hold water. He set up straw dolls and shot them down again himself. He furnished no factual data. These are the people who state year in and year out that the Railways pays too little. There was a question on the Order Paper, put by the hon. member for Berea, asking whether the hon. the Minister intended to increase pensions. The Minister replied to him on this score. If we had acceded to those requests—and I have the greatest sympathy for the Railways’ pensioners—the Railways would have had to increase its direct expenditure on salaries. Depreciation amounts to R167 million—an increase of R21 million. A few years ago—it was when a far smaller amount in respect of depreciation appeared in the budget—the hon. member accused the Minister of disguising his deficit. That was what was said.

He did it, nevertheless!

That is what was said, and now, when we have had to provide for R21 million more, then that is not good either. He says that he would use those funds. Just imagine, using those funds for the redemption of expenditure, and doing so despite the fact that depreciation is calculated in accordance with a fixed formula. In the first place, those funds are intended for replacement. The Betterment Fund amounts to R80 million. That is R10 million more than before and is calculated in accordance with a stable, fixed formula. Take all this expenditure, include the Sinking Fund, and you get an amount of R1 417 million out of the R2 111 million. No suggestions are made by the other side except those relating to salaries which that hon. friend made. However, he based them on figures which he had got wrong. We are waiting for them to come up with other suggestions, to give us a definite idea of what they want. They must state the facts, not advance ridiculous arguments.

We can prune capital expenditure, but I want to tell the member for McIntosh … [Interjections.] Sir, the hon. member for Pinetown. That hon. member placed a question on the Order Paper in which he requested the hon. the Minister of Transport to order an investigation into suburban transport services in Durban. If we were to accede to those requests, the interest burden of the Railways would undoubtedly become even heavier. In 1974, in the debate on the Railways Budget, the hon. member for Durban Point stood up and, making a great fuss about it, maintained that the Railways was unable to use the estimated capital at its disposal. This was the accusation levelled here by the hon. member for Durban Point. If we had responded to that, the interest rate would not have been only R324 million. It would have been far higher.

The hon. member for Maitland is always droning on about interest and calculates that it amounts to R55 000 or R550 000 per day.

You are still on last year’s speech!

Even the interest, in comparison with the revenue, amounts to 14,4% this year. Over the past 15 years it has varied between 12,8% and 14,8%. That is well within limits.

That is knocking down straw dolls.

It is not knocking down straw dolls. Those are facts. This gives us an indication of the percentage of revenue it represents. We had expected of these hon. members rather to have approached the capital programme in accordance with a priority list, to have ascertained which expenditure was urgent, which less urgent, and which essential, or whatever. No suggestion along these lines, either, has emanated from any of those hon. members. There has been absolutely nothing from their side. [Interjections.]

You should rather make a speech about the rinderpest!

Order!

I want to refer to the bigger capital expenditure, because this, too, is one of the things to which the hon. member for Maitland objected.

When?

Are you trying to get away from your policy, then? [Interjections.]

Order!

Are you running away from your original objections? [Interjections.]

Order! The hon. member for Maitland has already had a chance to speak.

In 1945 the total capital expenditure amounted to the following: Interest-bearing, R369 million; interest-free, R60 million. In 1975 the amounts were the following: Interest-bearing, R3 600 million; interest-free, R422 million. [Interjections.] Really, that hon. member understands nothing. We can therefore excuse him.

[Inaudible.]

If we were to look at that figure …

[Inaudible.]

Order! The hon. member for Umlazi must restrain himself.

… and were to consider it in relation to the revenue, we should see that in 1945 the revenue amounted to 27% as against the present 39,8%. In view of this analysis, there is only one solution, viz. selective tariff increases. I have already pointed out that the difference between low- and high-rated traffic is a factor which gives rise to difficulties.

From April to November last year the Railways conveyed 16 million tons of high-rated traffic. The revenue earned was R320 million. Over the same period, 46 million tons of low-rated traffic was conveyed. The income earned was a mere R236 million. From this it is clear that the difference between low-rated and high-rated traffic causes the difficulty. In terms of the recommendation of the Schumann Commission, therefore, it is quite fair to increase the cost of low-rated traffic by 17,4% and that of high-rated traffic by 11%. The necessity for this increase is made clear by a thorough analysis of this budget. There are other statistics, too, that prove this. During the years 1966 to 1975 the tonnage of high-rated traffic increased from 21% to 25%, and the revenue earned increased from 53% to 55% of the total revenue. Over the same period, low-rated traffic dropped from 78% to 74% owing to adjustments which had to be made from time to time in order to narrow the gap. The revenue earned in this way, accordingly dropped from 42% to 38%. This shows that we are on the right path.

After all, we know what our deficits are. The Railways’ deficits have for many years been more than R50 million annually. Now, however, we also know that one of the things which is very popular among hon. members opposite, one of their hobby-horses which they regularly ride here, is the oil pipeline. It is remarkable that up to now they have not discussed that this year. In the past they used to ask us to reduce the tariffs for the pipeline because according to them there was a surplus of R92 million.

The hon. member for Durban Point is one of those who advocates that we reduce our oil pipeline rates. However, let us take a look at the revenue from the oil pipeline. Hon. members opposite forget that more than 46% of our fuel is conveyed not via the pipeline, but by rail. Even if we were to convey all our fuel free—the fuel we convey by rail and that which we convey through the pipeline—the drop in the price of petrol at the pump would amount to a mere 0,77 cents per litre. That is all. Now those hon. members are creating the impression that this is such an enormous amount with which we are burdening the taxpayer. According to them a reduction in the oil pipeline rates would really be a tremendous concession. If we were to reduce the tariff for the conveyance of petrol through the oil pipeline by a single cent per litre, the drop in income would amount to R45 million per annum. If we were to reduce the rate by one cent per litre in respect of petrol, aviation fuel and dieseline, the loss would be R87 million per annum. If, therefore, we were to give way to those hon. members, it would mean that we should have to recover that deficit of R87 million per annum from other services. We should then be acting in a way prejudicial to the consumer, and then—as the hon. member is so fond of saying—people would climb on the bandwagon. If one were to give up this figure of R87 million with regard to the petrol pipeline and recover it elsewhere in the Railways, inflation would be boosted. This would contribute directly to an increase in inflation.

It is very clear to me, after a thorough analysis, that there is only one solution, and that is the selective increases proposed by the hon. the Minister. It is pointless to want to be popular, because it is through popularity and double-talk that the Opposition is sitting there today with their meagre 37 seats in Parliament. They no longer represent Railways officials. The Railways officials are sick and tired of the United Party because they know that they can trust the National Party. The Opposition seriously underestimates the integrity of the railwayman in South Africa, and the railwayman understands this. We can only convey the greatest appreciation towards the railwayman and the Railway trade union, who consider these matters soberly and judiciously. We have the greatest respect for them. They do so because they love South Africa, they do so in the interests of the continued existence of their own fatherland, and not like those hon. members, who want to stab it in the back at every turn.

Mr. Speaker, I have listened to the excitable speech of the hon. member for Vanderbijlpark, and it is indeed of very great interest to me to hear both him and the hon. member for Witwatersberg talking about the fact that the Railways should be run on economic lines and in a business like manner. This is the first time I have heard that from that side of the House since I have been here and in the many speeches I have read, going back over a period of years. Criticism of that nature has always come from this side of the House. However, I shall be dealing with this a little later in my speech. [Interjections.]

Order!

At the very outset I feel bound to express the shock of the members in these benches at the huge tariff increases announced by the hon. the Minister a mere 15 or 16 months after the tariff adjustments which became effective, I think, on 1 November 1974 and which were announced in September of that year. That was not even two years ago. We know from hard experience that increases of this nature lead to increases in the cost of virtually every commodity on the market. The result is an immediate increase in the cost of living, a drop in living standards and an acceleration of the inflationary spiral. This is a highly inflationary budget and the hon. the Minister’s failure to cut Railway expenses has really delivered a knock-out punch to all hopes of successfully curbing inflation. It has made a laughing stock of the whole anti-inflation campaign. Like the hon. member for Witwatersberg, I noticed that Dr. Lawrence McCrystal, chairman of the action committee against inflation, has said that the increases will be inflationary but that this will be minimal. I am afraid, however, that I cannot agree with this gentleman and I am going to say why. He points out that rail rates of the order we are talking about are not a substantial element in the final consumer price. Regrettably we know only too well from past experience that this is not so in practice. Transport cost increases are the excuse for price increases which are often out of all proportion to the amount involved, and I am sure that time will show that this is going to be particularly true on this occasion. The reason is not difficult to find. How can our Government expect businessmen and manufacturers to exercise voluntary restraint when the Government itself is not prepared to restrain its own spending? By its example this Government should be leading the way towards discipline and moderation. The credibility of this Government has suffered a severe blow. A budget of this nature simply neutralises any good intentions the Government might have had. The Government has simply been unable to cut its own spending on railways, and this is spending we simply cannot afford.

What shall we cut?

Let us just look at the amounts we are spending on capital and betterment works this year. The amount involved is R862 300 000. When I asked a question of the hon. the Minister in the House not long ago, in fact, on 27 February, part of the answer to that question involved “curtailment of Loan Fund requirements” and the curtailment amounted to a total of R47 million. R47 million out of a total of R862 million? That would have been on top of the R862 million, I presume? Surely that is not cutting back? That is not restraint. Whenever one makes criticisms of this nature, the reply is always put in the form of a question: Do you want to cut down on the building up of an infrastructure? Of course, we do not want to cut down on the building up of an infrastructure. Nobody likes that sort of thing. Nobody likes the idea of cutting down on development spending, but when one does not have the money, one must cut one’s coat according to one’s cloth. We are now in a position where we do not have the money and where money is simply not available, and rather than taking the easy way out by raising tariffs, we should be absolutely ruthless in cutting down on the basis that the money is simply not available. I must say I feel a certain amount of sympathy with the hon. the Minister in the dilemma in which he finds himself. The escalation of costs as a result of devaluation has been enormous, as we have all heard. One remembers with a certain bitterness the expressed conviction of the hon. the Minister of Finance, that hon. Minister’s colleague, that devaluation would not lead to a drop in living standards. This ridiculous statement has certainly been given the lie by this budget submitted by the hon. the Minister of Transport. He said in his speech on the introduction of this Appropriation Bill, and I quote—

That is quite right; devaluation has done this. The hon. the Minister of Transport has proved that the statement of the hon. the Minister of Finance was absolute nonsense, and I really do not believe that this country can afford to have someone who speaks such unadulterated rubbish at the helm of the financial affairs of this country. There is no doubt in my mind that prices will jump as a result of increased transport costs and that there will be a need for tremendous vigilance on the part of the price controller to ensure that any increases are justified. We know that people take advantage of a situation like this, and there must be strict attention by the Government to control this sort of thing. Unfortunately, with the climate engendered by the lack of restraint at Government level, the price controller will have a tremendous job on his hands.

I would say, Sir, that it is an ill wind that blows no one any good. One thing in which the hon. the Minister is to be encouraged is a further move towards the rationalization of tariffs, i.e. towards a cost-orientated economic tariff. As hon. members are no doubt aware, and we have heard it on a number of occasions in the debate so far, the Constitution Act provides that the South African Railways and Harbours should be run on business principles. With all due respect, however, this has not been the case in practice. The Railways themselves have run at a substantial loss over a number of years and this is certainly not sound economic practice. However, after the report of the Schumann Commission in 1962, the decision was taken to move towards economic tariffs, and it is important that this should happen as fast as it is practicable. I think the one good thing that can be said about this budget is that it is, in fact, moving towards this sort of rationalization. On several occasions in the past I have expressed the opinion in this House that it should not be the responsibility of the Railways themselves to carry the burden of uneconomic tariffs which are in effect a subsidy. I believe this hidden subsidy should be the responsibility of the departments concerned or the Consolidated Revenue Fund. It should definitely not be the responsibility of the Railways. I should like to remind hon. members of one of the recommendations of the third report of the Franzsen Commission, 1970. I quote paragraph 10 of Chapter II, “The Forward Planning, Co-ordinating and Control of Public Spending”—

We all know the considerable amount the Railways does for other departments without getting a penny for it. There are instances, of course, where the Railways do get paid, but on many occasions goods are transported at uneconomic rates at the cost of the Railways as a result of which the Railways incur a tremendous loss. I do not believe that this practice is correct. It should be the responsibility of the departments concerned, be it the Department of Economic Affairs, the Department of Mines, the Department of Agriculture or just general subsidies from the Rates Fund. I believe it is absolutely unfair that the Railways should be expected to subsidize so many aspects of our economy. I am not arguing at all the need for such subsidies. They may well be completely justifiable and in the public interest, but in terms of reasoned and sound financial planning the lost of the Railways becomes absolutely impossible if generalized subsidies are the order of the day. How on earth can any business organization be run on a sound economic and profitable basis when, as in the case of the Railways, it is running much of its traffic at a loss?

Is this loss due to incompetence on the part of the Railways? Are the Railways grossly inefficient? Do the management of the Railways lack ability? I think it would be grossly unfair even to suggest that either the General Manager or any of the thousands of Railway workers throughout the country are inefficient. On the contrary, I believe that by and large the whole organization has reached a reasonable level of efficiency. Certainly, there is much that can be criticized, but nevertheless they are reasonably efficient and I believe that the organization is extremely well served by its management. Thousands of railway workers throughout South Africa do a first-class job. But in spite of all this, they carry the stigma of being part and parcel of an organization that loses a tremendous amount of money. It is clear that the overriding reason for losses incurred by the Railways is that certain goods are carried at uneconomic rates. I am fully aware of the provision in the Constitution Act that “due regard shall be paid to the agricultural and industrial development of the country”. However, I do not believe that we should read into this an instruction to subsidize certain commodities from Railway funds. It is an unfair burden and the moves taken by the hon. the Minister towards rationalization will certainly receive the support of the members in these benches.

While we are on the subject of subsidies, I want to urge the hon. the Minister and his colleagues to rethink their withdrawal of the subsidy on rail fares to the resettlement areas. Rail fares have gone up as far as the resettlement areas are concerned. At the time of the last tariff increases in 1974, fares to and from resettlement areas were raised by 12,4% They are now to go up further by an average of 10% and in some cases by as much as 49,2%. I should like to ask the hon. the Minister why this has happened. This does not concern money going back into the pocket of the Railways. It comes from other sources as the hon. the Minister knows. I want to know how the hon. the Minister has been talked into taking this step. I believe that it is absolutely inexcusable that this subsidy should be cut. Government policy shifts thousands of Black people far away from urban centres right into the back of beyond. Black people are forced to live there through no choice of their own. It is grossly unfair that thousands of people, whose earnings are already inadequate and in many cases below the poverty datum line, in the face of rampant inflation should have to put up with this added burden. It is scandalous that this should be allowed to happen.

It is dangerous.

It is dangerous too, as the hon. member for Houghton says.

Do not take any notice of her.

Why should the poorer sections of the community have to pay for this bit of Government ideology? It is grossly unfair. The commuter fares for Black people have only increased marginally—we are grateful to the hon. the Minister that the increase has been so small—but even this places a tremendous strain on people who are already in a desperate situation. Could I ask the hon. the Minister please to review this decision which, to my mind, is really indefensible.

Reverting to the need to cut Railway spending, I studied with a great deal of interest the reply given by the hon. the Minister to a question put by me on Friday, 27 February of this year. I asked what steps had been taken since 1975 to effect economies in order to combat inflation. One of the measures taken by the Railways according to the hon. the Minister—I should like the hon. the Minister to listen to this very carefully because he may have forgotten it—was the following (Questions, col. 395)—

What does the hon. the Minister mean by this? That “non-Whites are employed in positions previously occupied by Whites” is fair enough. We have urged the hon. the Minister over a long period to do exactly that, especially when “White labour is no longer available”. However, I want to know what the hon. the Minister meant when he added: “with resultant higher productivity”. What is he saying? Is he saying that non-Whites are more productive than Whites? This is what his answer says. I see he is shaking his head.

Non-Whites are more productive than Whites who are not there.

Then I read the reply in Afrikaans just to make sure that I had not made a mistake. In Afrikaans, the reply read as follows (Vrae, kol. 402)—

What does the hon. the Minister mean by these words?

†Perhaps he expressed himself badly and what he is saying is not that non-Whites are more productive than Whites, but in fact that he is able to pay non-Whites less and is therefore getting more for his money. Is this wat the hon. the Minister was saying? Is he in fact exploiting Black people by paying them less than he pays Whites for similar work?

You are spoiling a very good speech, Rupert.

Is this just a simple matter of exploitation and discrimination? I think the hon. the Minister must have another look at the answer he gave and must explain it because it is certainly most unclear what his attitude is. We in these benches are not prepared to accept the implied contention that non-Whites are more productive than Whites. Nor are we prepared to accept that productivity increases when you exploit people by paying them less. If this is what the hon. the Minister was referring to when he spoke of rationalization of wage and salary structures, I begin to be very suspicious indeed of exactly what all this rationalization is about.

What did the hon. the Minister in fact mean?

He will not answer.

I shall tell you.

Well, I am very glad that we are going to get some sort of clarity on this. Is the whole operation designed to run the Railways more cheaply by employing Black labour who do not have to be paid as much as Whites? I think that the Railways staff associations as well as the public at large deserve an explanation because the hon. the Minister expressed his appreciation to the staff associations for their co-operation. I do not believe he will enjoy their co-operation for very much longer if he cannot motivate his answer. Unless he can do this adequately, he certainly will not be their pin-up boy for very much longer.

On this whole question of labour on the Railways, I should like to quote a certificate from the Annual Report. I refer to the “Certificate Respecting Permanent Way, Works and Buildings” signed by Mr. Holahan, the Chief Civil Engineer. This certificate, which appears on page 120 of the Report, reads as follows:

What does this mean? One’s mind boggles at the thought of what this could mean. Is the permanent way being maintained adequately or is it being allowed to deteriorate? Just how badly is the staff situation affecting the maintenance of our whole Railway structure? I really believe the hon. the Minister must answer these questions because it is most disquieting that the Chief Civil Engineer believes that, before signing a certificate, he has to limit his area of responsibility by saying that he cannot be responsible for things in respect of which he does not have the staff required to do the job. This is most extraordinary.

It is mysterious.

It is very mysterious and we should like the hon. the Minister to amplify exactly what he means by this. It is most disquieting indeed.

I want to turn to the question of harbours and the increase in harbour dues which the hon. the Minister is introducing. We know that harbour costs are going up, but at the present time our harbours are working at a healthy surplus and profitability is very fair indeed. There is nothing wrong with the profitability of our harbours; in fact, I shall go so far as to say that profits on our harbour operations cover up a multitude of sins elsewhere. The estimated surplus of more than R59 million for the year ending 31 March 1977 more than covers the estimated loss of R55 million on the railways. I just have a feeling that the hon. the Minister is in danger of killing the goose that lays the golden egg. The hon. the Minister should be content with a fair profit rather than an unfair exploitation to finance deficits elsewhere. An even worse situation exists in regard to pipelines. Revenue is estimated at R107 million and expenditure at R15 million. This amounts to a selective taxation on inland motorists which is very unfair indeed. Nobody can quibble at a fair profit being made. It was interesting to hear the hon. member for Witwatersberg—I think it was he or was it the hon. member for Vanderbijlpark—talking about profits. He said that we must not see the Railways as a profit-making organization; as long as it is run on a sound business basis and pays for itself, that is all we want. I say that is fine, but let us look at those things in isolation. The harbours are making a profit a more than fair profit, in fact. Their profit is tremendous. The pipelines are making a tremendous profit, an unfair profit in those terms. The Railways, however, show a tremendous loss. Last year we had a good contribution in profits from the Airways too, but we are losing that this year. This is not a fair profit; it is highly excessive and there can be no justification at all for a situation where motorists of the Witwatersrand and Pretoria should be picked on in isolation to finance losses which are incurred on the Railways. These motorists have good reason to complain about the price they are paying for their fuel. The hon. member for Vanderbijlpark talked about 0,77 cents per litre making very little difference to the average motorist. However, in terms of the total amount that this means in the economy, it represents a tremendous amount of money. He told us what that amount was—R87 million. Why should motorists have to suffer this unfair and selective taxation? Why specifically motorists? I really do believe that something should be done in this connection. The whole situation with regard to profits from harbours, pipelines and the Airways leads me again to express a viewpoint which I have expressed in the past.

I believe that the four operations should be separated into different departments—a department of marine, a department of railways, a department dealing with airways and a department or public utility company controlling the pipelines. Firstly I believe that the size of the present combined organization is unwieldy for maximum efficiency and secondly—this is very important indeed—I believe that if the railways were seen in isolation and without the profits from other departments, there would be a little more concern about profitability and overspending. I have spoken a lot about overspending today and I can go into detail. It is our intention to do so at greater length in the Committee Stage. I am not prepared to believe that it is absolutely impossible for the railways to cut spending. At a time when loan capital is available only on the short term and at high interest rates I believe that it is inadvisable for the Railways to use that sort of loan capital. I believe we are putting our head into a noose and I believe we are doing the future of the railways a tremendous amount of damage by behaving in this way. I think the hon. the Minister should try to exercise restraint by looking at the amount of money available and saying: “Well, this is what we have to spend; we cannot afford to increase tariffs in an inflationary situation and we will restrict ourselves to the amount of money which we have to spend”. Nobody likes having to restrict ourselves like this, nobody likes to cut down on infrastructure spending, nobody wants to stop work on things which are obviously of importance to South Africa’s future, but I believe that South Africa is being more damaged by overspending at the present time and by the acceleration of the inflationary spiral than it would be if we cut down on infrastructure spending.

Mr. Speaker, in the course of my speech I shall deal with the hon. members for Orange Grove and Maitland. I do not know how it is that they can be sitting in two different parties, because in fact they are birds of a feather. I say this with reference to speeches they have made in the House, both now and during the previous Railway debates which, unfortunately, I was unable to attend. However I shall come back to that later.

The hon. member for Durban Point made a tremendous fuss and said that this was a black budget. The hon. member for Maitland, too, raised a tremendous hue and cry about the increased tariffs. A tremendous hue and cry was raised, too, about the inflationary conditions we are experiencing at present. However, I do not wish to deny any of that; I do not begrudge them that bit of pleasure. If I had sat on that side of the House, I should perhaps have done a little better, but let us leave it at that.

What shocks me is the fact that the UP and the hon. member for Orange Grove, the chief spokesman of the PRP, this afternoon intentionally departed from one of the most important principles in accordance with which the S.A. Railways was run in the past under UP policy and, to date, under NP policy. I am very disappointed in the hon. member for Durban Point. I have heard him make a number of speeches in the House in the past, but I think that this time the hon. member failed to do his homework. Not a great deal remains for me to reply to with regard to the points raised by the hon. members for Durban Point and Maitland, because the hon. members for Waterberg and Vanderbijl Park dealt with them very effectively. However, I want to tell the hon. member for Durban Point that he departed from one of the basic principles of the old UP Government. I want to quote from a speech made by his then Minister, Mr. Sturrock, on 1 March 1946, since it is also being maintained this afternoon that the Treasury should cover the deficit in one way or another, whether by way of a subsidy or in some other way. The hon. the Minister was attacked owing to the increase in the rates, but after all, he has to get the money somewhere; he cannot go and steal it. The hon. members then said that he should obtain it from the Treasury. On 1 March 1946 Mr. Sturrock had the following to say (Hansard, Vol. 55, col. 2756)—

Earlier in the same column, the then Minister said—

I say that up to the present the S.A. Railways has always been run according to that principle. On 26 February 1947, the then Minister went further and made the following very important statement (Hansard, Vol. 60, col. 91)—

That is precisely the opposite of what that side of the House is now saying. That is why it is a fixed principle, too, that uneconomic services must be provided because they provide an income for the Railways and enable the Railways to utilize its labour and equipment to the utmost. That is why I say that hon. members should do their homework before coming here with proposals. I have not heard a single constructive proposal here this afternoon, except for a proposal which is the exact opposite of the old United Party policy and which was stated as follows by the late Mr. Paul Sauer, the then Minister of Transport, on 22 March 1949 (Hansard, Vol. 67, col. 2682): To bridge the gap between expenditure and revenue the “only feasible course open to the Government is to advance Railway charges”. In my opinion, too, Mr. Speaker, this is the only solution. There is no other solution. Perhaps I am making a mistake. There is another solution. The late Mr. Sauer referred to this too, viz. the retirement of staff or reducing of the wages of Railway staff. But this method is unacceptable to the present Government.

That is what the hon. member for Maitland advocated.

The hon. member for Watersberg specifically asked the hon. member for Maitland and the hon. member for Durban Point whether that was what they had in mind. In view of the by-election in Durban North, the hon. members should not be cowardly now, but should reply to this. What are you going to tell the voters of Durban North? Sir, I want to predict that they will again go and hawk the idea of Sunday time and overtime among the railwaymen. What is the United Party’s point of view in this regard? Must we go back to the days of the rinderpest, as they call it, in 1921 and 1922, when Mr. Jaeger, the then Minister of Railways, deprived the railwaymen of cost of living allowances, docked salaries, took away overtime, dismissed Whites and employed Bantu? Must we do that in order to cancel out the deficit? Must we go back to those days?

Were those the days when the Nationalist Party was the friends of the Communist Party?

Sir, it is also necessary on this occasion, when the Minister is being attacked so flagrantly with regard to tariffs, for us to mention the fact that it was insinuated here—and I am pleased the hon. member for Maitland is listening so attentively now—that the Minister had budgeted incorrectly, that everything had gone wrong with the Railways. But let us just pause for a moment and consider the days when the United Party was in power. I am not going to go back very far. At that time the hon. member for Orange Grove was also a United Party supporter.

I have never been a United Party supporter.

Then the hon. member was probably a Labourite or a Liberal. The surplus under the United Party Government was £1 684 000 in 1940, £2 667 000 in 1941 and £4 641 000 in 1942. The surplus rose, therefore, but in 1943 the surplus dropped to just over £2 million, and in 1944 it dropped further to £196 000. Then the expenditure began to catch up with the revenue. And what did the then Minister of Transport do? He waited for Parliament to adjourn, and in the recess he imposed a levy of 10% on tariffs. In 1945 the deficit was £228 000. Then things began to look ugly. In 1946, the deficit was £1 870 000, and again that hon. Minister waited for Parliament to adjourn and placed a further 10% levy on all tariffs. [Interjections.]

At that time they did not even give Parliament the opportunity to discuss the matter. We are accused of faulty bookkeeping. In 1947 Mr. Sturrock showed a surplus of £ 140 000 but, unfortunately for him, the Auditor-General stated that if the bookkeeping had been sound, he would have found that that calculation was quite wrong and that there was a deficit of £1,5 million instead of a surplus of £140 000. Now I ask, Sir: Who are the people who can afford to come and attack the hon. Minister here this afternoon? The facts are that in 1948, when we came to power, we inherited a Railways deficit of £609 000. In the last four years of United Party rule, before the electorate of South Africa saved us from them, they ran the S.A. Railways at a deficit of £ 11 042 000, viz. an average deficit of more than £2 million per annum. Thus there were deficits at that time, too, and they, too, increased rates. [Interjections.] After all, we are today living in different circumstances and in an entirely different situation. That is why I say that the pot cannot call the kettle black. People who live in glass houses, shouldn’t throw stones.

I did not have the privilege of being here last year, but I did look at Hansard. This afternoon I have heard very little in this House about overtime and Sunday time. The hon. member for Durban Point has not uttered a word about it, and I shall tell you, Sir, why he has not done so. Nor will he ever discuss Sunday time and overtime in this House again. We shall talk about it outside this House, yes, but not here. On 12 March 1973 he said (Hansard, Vol. 42, para. 2429)—

Work which could have been finished at 5 p.m. has to be left until after 5 p.m. so that in this way one can work a few hours overtime.

Highly irresponsible.

Not only irresponsible. He indirectly accused the railway staff of theft. I said this in my constituency and every railwayman believes me. I do not want to contest the fact that overtime and Sunday time are increasing every year and every month, except in January 1976, as the Minister indicated in the Railway Budget, when it dropped by R3 million. I was very pleased to hear that. I do not want to contest this, but I want to address the hon. member for Maitland and the hon. member for Orange Grove. Last year in the Railway debate, on 10 March 1975, the hon. member for Maitland stated (Hansard, Vol. 55, col. 2223)—

I still say that.

What has been the record of the United Party in the past with regard to non-White labour? I become afraid when I read these things. I had a fright when I read these words. I thought that all that had happened was that the hon. member for Maitland had once again said something which he should not have said, as he has already done in the past. But what is the United Party’s record with regard to non-White labour? I need only look at the last ten years of their rule to make the point which the hon. member for Witwatersberg has also made: The White voters of the Republic, the railwaymen, will never trust the United Party. You cannot trust them, because their record is black, and here is their record. I refer to the Hansard of 29 March 1950, column 3857. It concerns the increase in the basic wages of Whites and non-Whites under United Party rule. The married Whites received an increase in salary of 35% and the unmarried, 47%. On the other hand the Bantu received 77%. That was during the last ten years of United Party rule, and I repeat this for the benefit of hon. member for Simonstown. As far as the Bantu are concerned, their average wage was increased by 306% in comparison with that of the Whites in the last ten years of United Party rule, from 1940 to 1948. What is more, under United Party rule a boy of 18 years received £12. 18s. 10d. whereas a Bantu started on £18. 1s. 10d. Those are the facts. That is why the White workers and the railwaymen of the Republic were sceptical about the United Party.

I want to come back to the hon. member for Maitland. Last year he made a statement and, although he did not consciously do so, created the impression that the railwayman was merely a machine who was only interested in the money he could earn, in other words, in his salary and overtime payments, and that he had no sense of duty whatsoever. The railwayman is not like that. We need only look at the fine railway centres and at the role palyed by the railwaymen in the religious and cultural spheres. The Ossewatrek of 1938 was the brain child of a railwayman. Then, too, there is the A.T.K.V. [Interjections.] Yes, that is true. It is an Afrikaner institution and the railwayman has contributed a great deal towards it. I do not believe that they deserve the allegation made in the House that they are underpaid.

It is the truth nevertheless.

In an indirect way the hon. member for Maitland attacked the integrity of the railwaymen, White and non-White. There is only one logical conclusion to be drawn from the statement which the hon. member made last year, and that is that the railwayman is underpaid. The hon. member said it; it appears in col. 2426 of Hansard, Vol. 55—

If one works overtime on the Railways to make a decent living, then one is underpaid. That is the attitude of hon. members.

That is correct.

I am coming to that. However, what did we find this afternoon? The hon. member for Maitland rose and told the hon. the Minister that the staff had never been as well paid as they were now. The hon. member excluded overtime and Sunday time. These, therefore, are two statements which contradict each other. I want to tell the hon. member for Maitland that we must reach agreement. The deficit must be eliminated. I hope the hon. member has the courage of his convictions and will stand up and say, or ask the speaker after me to tell the Minister, that he should double the tariff he is now going to impose and give the railwaymen an increase in salary. After all, the railwayman must no longer work Sundays or overtime! I do not say this, but do you say it? That is certainly what the hon. member implied.

The statement by the hon. member for Maitland to the effect that we should employ non-Whites in order to eliminate Sunday time and overtime, is totally unacceptable. It is and will always be the aim of the Railways to limit overtime and Sunday time to the absolute minimum. In the nature of his work the railwayman is obliged to provide a service 24 hours out of every 24, and although more than 15 000 non-White workers are already employed to perform work which was traditionally done by Whites, it is wishful thinking to expect the Railways to use non-Whites in the foreseeable future to occupy the innumerable posts which up to now have been occupied by Whites, for example the grades of station foreman, signalman and driver and innumerable other technical grades. It is particularly in the grades concerned with the running of trains that, owing to the shortage of Whites, the Railways are forced to keep the services operating by paying overtime and Sunday time. Even if the White staff were at full strength—and this is important—the overtime work could not be eliminated entirely. Apart from what I have said, it is quite impracticable to make use of the services of non-Whites in order to counteract the payment of overtime and Sunday time to Whites, because this would result in mixed working and the non-White is not yet equal to such work.

I should like to compare the hon. members for Orange Grove and Maitland in one respect.

They are both short-sighted.

Yes. I quote from Hansard of 10 March 1975, col. 2224. The hon. member for Maitland said—

with regard to the employment of non-Whites. In the same debate the hon. member for Orange Grove said on 11 March 1975, col. 2393—

The two hon. members said one and the same thing.

What do you have against that?

What I have against it is that you want to open the door and because I am afraid of your immigration policy which you would apply if you were to come to power. In conclusion, I want to ask the hon. members for Maitland and Orange Grove: If non-Whites are employed in order to eliminate overtime or to fill existing vacancies, will the non-Whites be on the same grades as the Whites? I should like an answer to my question.

Why not?

The hon. member for Orange Grove asks: “Why not?” He has the courage of his convictions to say this. And the hon. member for Maitland?

He does not have the courage of a cat.

If the associations in question refuse to grant their permission for such a step, what would the United Party do? Hon. members must not come along with the story that the United Party’s judgment is so super. They even lack sound judgment in their own party. If non-Whites were to be employed, would they be permitted to join a staff association or would they be able to have their own separate staff associations? There is another question I want to ask: When non-Whites are employed in order to eliminate Sunday time and overtime and to fill vacancies, will this also be done in regard to key grades such as the grades of checker, stoker, conductor, station foreman, cartage services driver, apprentice and so on? These are the question to which I, and the voters I represent here in the House, would like to have answers. What answer do hon. members provide to this question? I can tell you now what the Progressive Reform Party’s reply is, because the hon. member for Orange Grove provided it, and I am grateful for that. I should like to know what the United Party’s reply is to these questions which arise out of the fact that hon. members on the other side of the House stated that we should eliminate Sunday time and overtime, and that the hon. the Minister should make use of all the available labour and throw open the flood-gates.

Order! Before calling upon the next hon. member to speak, I just want to say that I have consulted Hansard to determine in what connection the hon. member for Vanderbijlpark stated that certain members of the House were prepared to stab South Africa in the back. In the light of the context in which it was said, I think the hon. member should withdraw the words concerned.

Mr. Speaker, I withdraw them.

Mr. Speaker, we have heard a most humorous speech from the hon. member for Uitenhage. I am sure that the voters of Durban North are going to be most interested and amused that this hon. Rip van Winkle has finally woken up. It was obvious that he was asleep whilst the hon. member for Maitland was speaking. The hon. member for Maitland criticized the Government for having budgeted for an increase in the labour complement of the Railways to the extent of 10% for the coming year. He actually advocated that there could be an increase of 10% in the salaries of workers and not a decrease, as the Rip van Winkle who has just sat down mentioned. I would have thought that he would have been more concerned with the topic that is of most interest to the public of South Africa at the present time, i.e. the circumstances in which South Africa finds itself, especially in the light of the tremendous inflation rate which we are experiencing at the moment. I find it quite interesting to listen to the experts on that side of the House telling us about the Railways and how good a Budget the present one is. However, I was most disappointed when they mentioned the name of Dr. McCrystal. I think it is regrettable, because Dr. McCrystal is a highly qualified man. Besides, he is from Natal and must, therefore, be very good! I find it regrettable that Dr. McCrystal is finding himself in a position where he has to contradict the very principle which he has laid down to the public of South Africa. It is obvious that he is under pressure from the hon. the Minister of Economic Affairs on the one hand and now, obviously, under pressure from the hon. members on the Railways Select Committee on that side of the House. After listening to this, I wonder whether this is the reason for the definition of an expert which one hears from time to time. It goes like this: An X is an unknown quantity, and a spurt is a “drip” under pressure. I wonder whether this is what is happening on that side of the House when this particular budget is being debated.

We on this side of the House have acknowledged that the problem which faces South Africa today, is the problem of inflation. I think that we have indicated, by our actions, that we are entirely sympathetic with the Government in this problem. We want to see this problem cured and we want to see it conquered here in South Africa today. To do this means that South Africa has to have a commitment to this problem. I reiterate what my hon. colleagues have already said, namely that these tariff increases which have been announced, are going to be as fuel to the conflagration of inflation which we are experiencing today. The peoples of South Africa are now going to have to endure greater suffering and they are going to find themselves in still greater difficulties. For this reason I cannot understand why the hon. the Minister has at this time decided to sabotage the collective action campaign which has been conducted throughout South Africa. It seems almost unbelievable to me. The Government has launched a tremendous propaganda campaign; we hear it on the radio and we read about it in the Press. This campaign is designed to motivate people to work and strive towards curing South Africa of the evil of inflation. We support this campaign, because we believe it is the partriotic thing for all South Africans to do at this particular time. I like to think that the public of South Africa are becoming aware of this problem and that they are working to cure South Africa of this evil. We see that the public, trade, commerce and industry are becoming more aware that there has to be a rearranging of priorities and a reorganizing of their spending pattern away from the luxury and the non-productive spending of the past towards spending on productive items. It means there has to be a tightening of the belt. There has to be a greater emphasis on savings. It also means that expansion programmes have to be financed more out of Revenue Account and less from Loan Account. If we are really to beat inflation, our growth in South Africa must be financed with real money, backed by national productivity and not by paper money which simply flows from the Government Printing Press. It is only in this way that South Africa will be cured of inflation.

On the other hand, there is the saying that prevention is better than cure. Our citizens, as well as commerce and industry in South Africa, cannot prevent inflation in the first instance. Just as they are now heeding the national call from this Government to help cure inflation; just as they are following the lead given by the hon. the Minister of Economic Affairs, even if this lead is only in word, and not in deed, as is obvious from this Budget, so too were these people drawn into the inflationary evil by the lead which this Government has given over the years through its fiscal and financial policy. Only the Government can really prevent inflation in the first instance. They have the power to set the pattern and therefore they are the ones answerable for the state of the financial affairs in South Africa. If the Government has not been responsible enough to do this; if it has been more interested in spending vast sums of money on ideological programmes for national, social or political reasons, for example, the consolidation of the homelands; if it has embarked upon grandiose building schemes, the expansion of State-owned corporations, and tremendous national infrastructure development, which I believe it would be most admirable, Sir, but only if we were a nation which could afford it and if it was within the wealth-generating ability of this country to do so; if, however, this Government has done all these things with the knowledge that, in so doing, it was feeding the inflationary octopus—as we believe they have—then it is clear that this Government has failed in its very basic duty to this nation.

Can you prove it?

Just a moment; I shall. That duty is to ensure a stable, balanced and viable economy for South Africa. I believe this Government has in fact failed in its duty to prevent inflation. The hon. the Minister has told us how the growth rate in South Africa has been lowered in the last year, that inflation has been imported from overseas, that it is the result of other countries’ inflationary policies, and of the high petroleum prices and of the devaluation. We have heard all these things and I would like the hon. member for Witwatersberg to know that we appreciate and accept these things. But surely, seeing that the Government is obviously aware of these things, it should be practising what it has been preaching to the nation over our radio and in our Press, or is it a case of: “Do what I say and not what I do”?

South Africa is today facing one of the most crucial periods in the history of this nation. We are not only facing a tremendous erosion of the nation’s wealth through inflation, but we are also facing the greatest threat of armed aggression against our borders that we have ever known. We are facing it in the sure knowledge that there is no “big brother”, no rich relation across the sea who is going to bail us out if we should run into real trouble. We are threatened in such a manner that those in the positions of power should be doing everything possible to turn the economy into what I would like to see, a fit, trim fighting machine to combat the financial and violent forces which are challenging our future prosperity and indeed, our very sovereignty at this present time. Therefore I say that this budget must be condemned in the strongest possible manner, because as the amendment of the hon. member for Durban Point states, it has subverted the national collective action campaign against inflation. I say this, because in the first instance I think there is today among informed people a general consensus that this particular budget is going to result in another round of inflationary price rises.

Secondly, after studying this budget in great detail, I find very little real evidence that there has been a serious endeavour to exercise minds in order to take positive action and to solve the financial problems of the S.A. Railways in such a manner that tariffs would not have to be increased. In doing so, it would have been an act against inflation.

I do not want to appear entirely negative in this regard, but I would like to substantiate what I have said, for the information of some of these members. I do this in the full knowledge of the Constitution Act and what it says with respect to the fact that there must be due regard to the agricultural and industrial development of South Africa. This last point about the development of South Africa can place difficulties—as has been said on a number of occasions today—on the Railways, because socio-economic considerations result in financial loss to the Railways on certain operations. Our stance in this regard has been made very clear by my hon. colleagues, namely that we believe these losses should be made up from the Central Revenue Fund. How else can the Railways be run on business principles if it has to play Father Christmas to the development and social needs of South Africa, however valid these might be? If the principle is that it has to be operated according to business principles, as I believe the entire South African economy should be, then the Railways must abide by the same rules that all other business enterprises are forced to abide by. The hon. the Minister of Transport must play the game according to the same rules that the hon. the Minister of Economic Affairs lays down for the private sector. Those of us who are involved in the private sector are not tarring our parking yards and putting up shelters against the sun at this time; we are pulling in the belt in order to fight these inflationary trends in South Africa. What are the facts? I would first like to take a look at the Brown Book. I fully appreciate that it is the duty of the hon. the Minister to ensure a growth in the nation’s transport infrastructure in order to match the growth of the South African economy. I am prepared to accept that, in these troubled times, cognizance must also be given to the problems and needs of our neighbours in the interests of South Africa’s relations with Africa and with the world. We as a responsible Opposition, as patriotic South Africans, accept these facts, but we believe that the acceptance of these things implies a greater need for a sense of responsibility and a sense of commitment to ensure that the South African economy, and particularly the available development funds, are properly managed. For instance, in 1970-’71 the Railways spent R169 177 000 on capital works. Four years later, in 1974-’75, it spent R453 150 000, an increase of 168%. This is an average annual compounded growth rate of just under 28%. During the past two years, taking the figures up to the estimates of the present budget, namely R862 300 000, expenditure has been increased by a further 90%, which over the two years has given a compounded annual growth rate of just under 38%.

Can you prove that that was not really necessary?

It is not a case of whether it was necessary or not; it is a case of whether the nation can finance it and whether it can afford it and whether we are going to go down the drain in the not too distant future.

Please confine yourself to my question.

I ask the hon. member just to sit and listen for a bit. If we take the six-year period, from 1970 to 1976, we find that the average annual compounded growth rate on capital expenditure of the South African Railways is just on 31,2%. If we project this rate just three years hence, namely to 1979-’80, it will be R1,95 billion. It is interesting to compare this with the six-year Economic Development Programme projections which are presented to the hon. the Prime Minister by his advisory committee. This projects that the total capital expenditure needs for South Africa for 1979-’80 are going to be, if you take into consideration the inflation rate or the CPI over this period and project it to 1979, R11,272 billion. If the Railways continue in the way they have in the past three years into the following three years, they will be spending something like 17,3% of our nation’s total projected capital fund requirements. To give you some idea of what is happening in the Railways, Sir, in 1973 they spent 5,4% of the nation’s capital funds; this year they are demanding 10,6% of the nation’s capital funds, and if they continue in this way, in 1979 they are going to take 17,3% of the nation’s funds. This tremendous spending of our nation’s capital resources by the Railways is adding to the costs of the production of our real wealth. Let us face it, the Railways is purely a service operation and not a producer of real wealth. This tremendous increase in the expenditure of capital has to be viewed in a realistic manner, with a view to ensuring that our economy does not overheat as a result of it. If it does that, it will cause rampant inflation and that is what has happened.

To sum up, the Railways are the nation’s largest single employer and because it is not a productive enterprise in the true sense of being a creator of real national wealth, its growth rate must be such as to meet the transport needs of the infrastructure of South Africa and that alone, no less, no more. It has to meet the needs of the nation’s growth as a whole, and not carry on in the rampant fashion it is at the present time. Its capital expenditure programme must be commensurate with the economy of the country as a whole and it must be subject to the same controls which the hon. the Minister of Finance and the hon. the Minister of Economic Affairs places on the other sectors of the South African economy. I believe that the Railways’ present capital expenditure programme is burning up valuable development funds which would, under a United Party Government, be better utilized in productive endeavours, especially in this period of inflation. It has already been said that we need an added Railway infrastructure to cope with our nation’s growth. I ask you, Sir, to compare the Railways’ capital expenditure growth rate in terms of real monetary value with that of our nation’s economic growth rate, which the hon. the Minister himself has set at only 2% to 3% in the coming year. The hon. the Minister admitted in his opening speech that there was a very gloomy future immediately ahead for South Africa. The immediate past was also very gloomy and I am sure that if the proper priorities had been set, and if, under the present economic circumstances, the sharp pencils had been taken up, this capital budget could have been cut by far more than the R47 million or 5,4% mentioned by the hon. the Minister. Private enterprise is being forced to toe the line by the hon. the Minister of Finance through his credit squeeze. In this budget we see the typical trend of the big spender, the big State spender which carried on regardless, which spends this nation’s hard-earned capital and hard-earned money. To them I give a warning: Remember the plight of New York City and take heed. I believe at this crucial time one of the main objectives of the department is to meet the operating and the growth needs of South Africa without increasing tariffs, and in so doing, to combat inflation. This capital budget is going to feed inflation, and the Minister should ask himself firstly whether the Railways’ growth is exceeding that of the nation as a whole, and, secondly, whether the projects envisaged are too grandiose. Are the standards far too high for the South African economy? Or, if they are not, thirdly, is there any evidence of wasteful expenditure? That is to say, just how efficiently and how economically is this capital of ours being spent? My experience is that in every single budget there is a built-in amount of fat. Departmental managers in all businesses are past masters at that.

In times of economic pressure, as South Africa is experiencing today, the economic survivalists will ensure that the sharp pencils come out and that the fat is removed and that the machine is trimmed and tuned for action and that it becomes an economic winner, not an economic burden, or as has happened in some nations of the world, an economic disaster. I would like to feel confident that the hon. the Minister has done just this, but looking at the Brown Book, item by item, I have a feeling in my bones that this has just not happened. There must be scope for considerable savings which could have resulted in a reduction in the contributions from revenue into the Betterment Fund by some R10 or R20 million instead of the R10 million increase which has been budgeted for in this particular budget. This would have been a major contribution to meet the deficit of which the hon. the Minister has spoken. This increase in capital spending is a major cause, for instance, of the increase in interest alone of R70¼ million per year, which is a 28,4% increase in one year. The question which I believe South Africa must now ask is: Has this been a wise budget? Has it given urgent attention to the needs of South Africa in the situation which we are presently facing? I believe that the answer is no.

I would now like to talk briefly of the Expenditure Account, and in this connection I am most puzzled. The hon. the Minister told us last week that in the current financial year the South African growth rate will be less than the 4% he budgeted for last year. He was obviously over-budgeting last year as far as the current year is concerned, and now the hon. the Minister sums up the coming year in a most gloomy manner. He gave the most gloomy forecast, a very sorry picture indeed, one which would make any businessman worth his salt get cracking to adjust his business operations accordingly. What do we get from the hon. the Minister in this budget? After all the gloomy news which he has presented to us, he presents us with a budget which has all the appearance of one which has been designed for boom times. For instance, the hon. member for Maitland has already spoken of the fact that he is budgeting for an increase in labour of 10% or 22 300 men. Wages alone have gone up R153 million, or 19,78%. The cost of these additional employees represents, based on an average earning per employee, just on R78 million. Yet the hon. the Minister states that in October and November last year they made great economic progress because the staff dropped by 345 and 388 units per month respectively.

Mr. Speaker, if this is converted to an annual decrease, it represents 4 398 men. Yet he is now budgeting for an increase of 22 000 men. I would like to know who is kidding whom. The hon. the Minister, in his speech, compared the increase in traffic to the increased labour establishment, and claimed that there had been an increased labour efficiency. Further on, in respect of research, he mentioned the research going into rolling stock, standardization and the long trains of 2,2 km. He has done this in the past as well, which all indicates that there should be a tremendous increase in labour productivity. When one also takes into consideration the vast sums of capital which have been spent in South Africa in recent years on computerization, mechanization, containerization, training and the like, which should allow for tremendous economies, we now get this tremendous increase in labour.

I would like to ask, finally, what is happening. Is it a case that there is a lot of empire building going on in the Railways? Let us start at the top, in the General Manager’s office. Here we find that he is increasing his staff by 174, which is going to cost the nation R3,25 million—an increase of 18%. I see that, instead of having one Press relations officer costing South Africa R9 900, we are going to have one public relations officer this year at the same salary, but an additional seven assistants, which is going to Cost South Africa an additional R63 000.

Mr. Speaker, I believe that this budget has certainly not taken the needs of South Africa into consideration. I therefore support the amendment proposed by the hon. member for Durban Point.

Mr. Speaker, for political reasons this is the kind of budget the Opposition likes very much. It enables them to level all-out criticism at everything, knowing full well that they will never have to render an account of the implementation of those things they are advocating. The hon. member for Amanzimtoti has just levelled criticism at the additional capital expenditure, but he ought to be aware that one of the provisions in the anti-inflation manifesto made it clear that there would be no curtailment of capital expenditure on the development of the infrastructure. Surely this is one of the provisions of the manifesto. He also knows that if there should be a radical cut-back with regard to the expansion of the infrastructure, many private companies would go bankrupt.

It is very clear that when it comes to debates on defence matters the hon. member for Durban Point acts in an extremely responsible and constructive manner.

Just as he also does when it comes to the Railway Budget.

Then he is prepared to accept that there are going to be cost increases, and so on. The Railways is probably just as important a factor in the economy, the stability and the security of South Africa as defence is. In this case one could in all sincerity expect the United Party to display as positive and constructive an attitude towards the development of a sound and economically strong Railways organization in South Africa. Mr. Speaker, it is wrong of the Opposition to level such negative criticism as it has done here today. In that way they will definitely not be able to make a contribution to the establishment of a healthy Railways organization.

Last Wednesday already the hon. member for Durban Point indicated that the United Party was in favour of the rationalization of the rates structure, but that increases should be averted by means of subsidies. The hon. member for Durban Point is displaying an ambivalent attitude here. Two weeks ago the hon. member for Mooi River accused all of us on this side of the House very dramatically of being socialists. With that he made it apparent that he was opposed to socialism.

Yes, that is so.

Now I should just like to know whether he commits his colleagues to the same standpoint. Are they also opposed to socialism?

Of course!

Are they in favour of a sound, competitive and free economic system?

Yes.

If that is the case, then they must now desist from making use of their expedient two-faced (tweegatjakkalsagtige) attitude here. [Interjections.]

Order! The word “tweegatjakkals” is considered to be unparliamentary. The hon. member must therefore withdraw it.

In that case I withdraw it, Mr. Speaker. In any event they should now adopt a clear standpoint and prove to us whether they are opposed to socialism or whether they are in favour of it. [Interjections.] Mr. Speaker, they can …

Order!

Mr. Speaker, is it now your ruling that the word “tweegatjakkals” which has been permitted all these years, is now unparliamentary?

It is contained in the list of unparliamentary terms. If the hon. Chief Whip wishes to see the list, I shall show it to him. [Interjections.]

Mr. Speaker, with all due respect, the word “tweegatjakkals” does not refer to the jackal itself. It refers to the ground. [Interjections.]

Mr. Speaker, I think there must surely be limits to the political opportunism of which a political party may make itself guilty. In a period of a world-wide economic depression there is all the more reason for a rationalization of rates. Then there are no fortuitous windfalls which may occur in the form of unexpected traffic which has to be handled as a result of an economic upswing. At present there is a world-wide depression in progress, and under these circumstances the United Party must surely expect inevitable rationalization of rates to take place in order to keep the economic structure of the Railways in its entirety on a sound footing. However unpopular the rates increases may be, therefore, I am afraid that the Railways has no other choice. It should also be taken into consideration that the proposed rates adjustments certainly do not as yet make provision for any improvement in the salaries of the Railway staff. It is known that talks in this regard will be held with the staff associations next month. The staff have rendered good services. There has been increased productivity per capita. They have also suffered as a result of the high rate of inflation, which during the past two years has been more than 20%.

In my opinion it is therefore logical to accept that a faithful and loyal staff should be treated fairly and justly. The Railways Administration and its staff is also co-operating in the campaign against inflation and are also endorsing the declared principle that they will themselves absorb at least 30% of the increase in costs. It should therefore be accepted that, as far as salary increases are concerned as well, there will not be a full increase, in an attempt to counteract the high rate of inflation of the past two years.

However, I should like to know what the attitude of the Opposition would be if further rates increases were perhaps announced later this year to make provision for salary increases for the Railway staff. If they wax so indignant at these rates adjustments, while the Railways staff have as yet received no salary increases, I wonder what their standpoint will be if salary increases are in fact announced later on. It is essential that the Railways, in accordance with the Schumann Commission report, should convert their rates structure to a cost orientated basis. For that reason the rates on high-rated goods, i.e. rates categories 1 to 10, were increased by an average of 11,7%. For the low-rate traffic—categories 11 to 15—the increase was an average of 17,4%. That is also why the rates for first and second class main line passenger services are being increased by an average of 7,4%, while third class passenger rates are being increased by 0,6%. That is also why it was unfortunately found necessary to increase the livestock rates by 50%.

Let us examine several of these aspects more closely. With the latest proposed increase of 50%, the gross increase, based on the rates four years ago, will be 284%. This is a very large increase over a period of four years, but in spite of that and even with the latest 50% increase, only 76% of the present costs will be recovered. With the inevitable and constantly escalating cost structure, the cost recovery by the end of the financial year, according to the expectations of the Railways Administration, will only be 66%. In spite of the exceptional increase, therefore, it still remains an uneconomic service which the Railways is rendering. The cost of the conveyance of a head of cattle from the north of South West Africa down to the Cape, say from Grootfontein down to Maitland, is being increased from R18,58 to R27,86, an increase of R9,28 per animal, or approximately 4,2 cents per kg. Although there has been a 50% increase in the railway rate, the effect of that is an increase of less than 2½% in the price of beef—and now I am referring to conveyance from Grootfontein to Maitland. But as a result of the cattle marketing system, the immediate result of the rates increase will have no effect whatsoever on the consumer price. This cost is being borne exclusively by the producer, and until such time as an increase is introduced in the floor price of beef—and in my opinion it is necessary—the consumer will not be affected by the 50% rates increase. If the animal is slaughtered in the producer area in South West Africa and conveyed in a refrigerator wagon over the same distance, the cost per carcass even after the increase will be only R16,45 as against R27,86, i.e. R11,41 less, or 5,2 cents per kg. less. That is if the slaughtering is done in South West Africa. There would be other benefits as well. With the conveyance livestock per rail over long distances there is inevitably a considerable loss of mass while they are being conveyed by train for days on end. There is also a loss in quality. With the bruising which the animals undergo, and the possible death on route, there are inevitable losses. After the long journey it is sometimes established at the abattoirs that the animal has measles or some other disease. Then the transport costs have to be paid, and the farmer loses on the final price. All these losses and the risk may be eliminated if the slaughtering is done in the producer area rather than in accordance with the present system.

Recently a television interview was conducted with Mr. Chris Cilliers, the director of the S.A. Agricultural Union. He expressed the opinion that subsidies, for example on wheat and other agricultural produce, are at present being included under the Agriculture Vote, while they are in their entirety a subsidy for the consumer. He said that because there was no Ministry of Food, the subsidy should not be placed under the Department of Agriculture, but rather under the Department of Social Welfare and Pensions, for it is a welfare service that is being rendered. It is also my opinion that the losses in respect of cattle are not primarily the responsibility of the Railways. In my opinion talks ought to be held between the Minister of Agriculture, the Minister of Transport, the Minister of Economic Affairs and the Minister of Finance to establish whether this matter could possibly be dealt with in some other way.

I come now to the passenger services. The pattern of passenger traffic is constantly adapting to rapidly developing circumstances. Just as overseas traffic is moving increasingly in the direction of air traffic, so long distance internal traffic in this country is undergoing a similar change. The Railways is engaged in a comprehensive investigation to establish precisely what the service requirements of prospective passengers are, in order to provide a better service and to identify the social nature of the passenger traffic. The latest rate changes for passenger services are not primarily a question of an increase in fares. The main object is the rationalization of the fare structure. The object is to promote the co-ordination of air traffic and rail transport. First-class rail traffic is the most uneconomic traffic, while third-class rail traffic is the most beneficial to the Railways economy. Investigations have already indicated, however, that seven out of every ten first-class passengers would prefer to travel by air if the fares were approximately the same. The rationalization of fares will therefore result in an evolutionary transition of first-class passengers to the air-services. The cost of standard air journeys between Johannesburg and Cape Town is not yet completely on a par with that of first-class railway journeys. The standard rate for air journeys is R114, while it is R90,40 for first-class train journeys. Although they cost R23,60 less, it means a longer travelling time of two days and four nights. With the introduction of excursion fares on certain flights the air journey between Johannesburg and Cape Town will be R91 return and on the night flight R83 return as against a return cost for a first-class train journey of R90,40.

According to the statement of the estimated revenue of the Railway passenger services, the total revenue for the ensuing financial year will be R150 million. What is disturbing, however, is that the expected loss on passenger services for the past financial year, i.e. the financial year ending on 31 March, will be R148 million. This means that there is an average cost recovery of less than 50%. It means that the cost recovery on first-class services is probably in the region of 40%. The Railways is therefore rendering a social service here at a very high subsidized rate, and it is therefore natural that a transition to the air-services will be encouraged by the rates adjustments of passenger services.

I come now to the catering services on the Railways. The losses in respect of catering services rose from R960 000 in 1965-’66 to ½ million—in round figures—in 1974-’75. The largest single component of these losses is the dining-car services. During 1973-’74 the cost coverage of dining-car services was only 52%.

Are you referring only to services on trains now?

Yes. The average loss per meal ticket is R1,72.

It is your fault, Sarge!

During a recent parliamentary tour through Germany, Switzerland and Austria, we made use of the dining-car on the train during a train journey from Munich to Zürich. An ordinary evening meal on the train cost the three of us R25. We had half a bottle of red wine, and this cost us an additional R6. I had been told that the dining-car services on the European trains have been contracted out to private enterprise. It is clear to me that there will possibly have to be a rate adjustment in future in this social service.

Cut down on the amount of food. There is far too much.

I have referred here to several examples of why rates adjustments were essential. This is not a popular step, nor is it popular to have to defend the increase. The question that has to be answered is whether the rates increases could have been avoided by greater efficiency on the Railways or by a better economic policy, taking the present circumstances into consideration. In both cases I would reply: “It is unlikely.” The Management and the Administration throughout is as efficient as can be expected. I pay tribute to the loyalty and productivity of the railwayman. The economic structure of the Railways is in competent hands and, unless we want to aspire to a completely socialistic system, rates increases under the present economic circumstances are inevitable.

There are a few other matters which I should like to touch upon briefly. I want to request that urgent attention be given to the expansion of the carrying capacity of the railway lines between the Rand, Durban and Richards Bay. We are all aware that when South Africa was refused landing rights in certain parts of Africa, we had landing places away from the west coast of Africa prepared. The circumstances are of such a nature that we must inevitably ensure an increase in the carrying capacity of the railway lines between the Rand, Durban and Richards Bay. The harbours are able to carry more traffic, but I understand that the carrying capacity of the lines is already at present being utilized almost to the maximum.

I also want to request that we institute a long-term investigation into the possibility of high-speed railway traffic between the Witwatersrand and Durban. When certain of us were overseas on a parliamentary journey, we went to see a high-speed train at Krauss-Maffei which travels at a speed of 400 km per hour. This is a completely revolutionary idea, but in my opinion it is a possible alternative to alleviate to a certain extent the pressure on the air traffic between the Witwatersrand and Durban by means of rail traffic, for in that case we do not have to rely on fuel, but on electrical power. The great advantage is that the traffic goes from city centre to city centre. It would be as fast to travel with such a train from the city centre of Johannesburg to the city centre of Durban as it is at present to travel by plane. I do not know what the cost would be, but for the distant future this is in my opinion something which ought to be considered. Particularly for the service between Durban and Johannesburg, where we have almost a flight an hour in both directions, high speed train traffic is something which we are going to need in future.

All of us accept that, owing to the rates increases, this is not a popular Budget, but it is nevertheless sound economic common sense to present this Budget in the form in which it has been presented. It is therefore my pleasure to give it my full support.

Mr. Speaker, the hon. member for Klip River concentrated on trying to justify the tremendous tariff increases. Before replying to his speech in a general sense, I want to answer a question he asked. He asked whether the Minister had had any alternative to increasing the railway tariff.

Now we are going to hear the solution.

The solution is quite simple, if one only looks at the figures. Let us look at them. We see that the Minister suggests that the staff will increase by no fewer than 22 000 units during this financial year. The establishment will increase from 244 000 to 266 000. These are not my figures, but those of the hon. the Minister.

Are these people, Boet?

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

What is even more alarming is that when we look at last year’s figures, we see that the staff increased by 13 000 during that year. In other words, over a period of 18 months the staff of the Railways has increased by 36 000 members. And there the hon. the Minister of Defence is sitting. These people add up to two and a half divisions, while there are only 12 000 Cubans in Africa—and they make the Progressives tremble. But the hon. the Minister of Transport has no qualms about appointing 36 000 additional people on the Railways. We could have fought three wars in Africa with the extra people appointed on the Railways within two years. [Interjections.] Then the hon. members ask me why the Railways operates at a loss. I want to ask any reasonable man in this House: If a department appoints 22 000 people every year, can it ever make a profit? Let us have a look at what this all is costing. According to this Budget, the staff is going to cost R153 million more, i.e. 19,7% more than the last year.

Are these the 36 000?

No. The hon. member must not be facetious. I hope that the hon. member for De Aar is going to speak and plead for the farmers in this debate. I predict that he will not open his mouth, because he is too fond of his political job here. As I have said, it is going to cost R153 million more. Let us look at the figures for last year. Last year it also increased by R150 million. [Interjections.] The tariff increases amount to R200 million. If all these additional people had not been appointed on the Railways, surely the tariff increases would not have been necessary. The irony of the whole matter is that the hon. the Minister said there was a slump in the economy. He referred to the loss of R67 million and said that there would be a loss of R199 million this year if these tariff increases were not introduced. Well, if there is a slump at the moment, surely there is a smaller amount of goods to be transported— not more, in any case. This being the case, what does he want to do with all the additional workers? There the hon. the Minister of Agriculture is sitting. He is a farmer, and we farmers understand this kind of thing. Does the hon. the Minister mean to tell me that if he had a slump in his farming operations and his income went down, he would appoint 22 000 more people? Surely this is no way for grown-ups to go about their business.

I really entered the debate to take up the cudgels for the wronged part of the population of South Africa, i.e. the forgotten part of the population, the neglected part, the defenceless part of the population. [Interjections.]

Order!

Did an hon. member ask: “Who are they?” Does he not know then who the victims of this Budget are?

Who?

The farmers of South Africa, the agriculturists of South Africa. Is the hon. member not aware of the tariff increase of 50% …

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

The hon. member can make his own speech. However, I predict that he will never make a speech. He speaks in the ten-minute debates and then only about once every three years. I want to come to the injustice which has resulted from the increase of 50% in the tariff for livestock, an increase which the hon. member for Klip River has tried to justify here. The hon. member admitted that there had been a tariff increase of 60% on livestock in 1973, another increase of 60% in April 1975, and now we have another one of 50%, which brings the total increase within a period of three years up to 284%. Do hon. members want to dispute that figure? The hon. member for Klip River, who does know a little bit about Railway matters, admitted this, but now there is another hon. member who disputes it. It has been 284% in a matter of three years. The hon. member for Klip River tried to justify it by saying that it would cover only 76% of the cost of the Railways.

But is that not true?

Whose estimate is that? The Railways says that it is uneconomical for it to transport it, but I have just pointed out to you that this Minister of Railways is never able to show a profit and is never able to operate on an economic basis. It is said that the Railways cannot transport it economically, but why does he not give the private conveyor, who would dearly love to do it at this tariff, the opportunity of doing so? Why does he prohibit him from doing so?

He can have all the livestock, not just half of it.

He cannot. He must get a permit from the Road Transportation Board, and they do not want to give him a permit.

I repeat that he can get everything.

Then the applications must go to you.

What about milk?

If it is true what that hon. member says, that it is uneconomical for the Railways—and I am not at all conceding this, but suppose this is the case—then I want to refer him to the Constitution of the Republic of South Africa, which says (section 103(1))—

But the hon. member for Maitland says it should not do so.

The hon. member for Maitland did not say so at all. All that the hon. member for Maitland said was that the Government should provide for it. If the Railways is not operated at a profit, the Government must subsidize it, as it does in the case of the resettled Bantu, and as it does in the case of the border industries. Sir, as far as the border industries are concerned, this Government subsidizes them with a Railways rebate of 41% and it is a good thing. [Interjections.] The border industries get a rebate of 41%, and it is a good thing and it is right because one wants decentralization and one wants the industries to be established there. But now I want to ask: Where would you find better decentralization than in the rural areas, the farming population of South Africa? If one keeps the Bantu and the White people in the rural areas, one need not build thousands of houses for them in the cities, as one has to do at present, and if one can do this for border industries, why not as far as food is concerned? Surely it is absolutely ridiculous to raise the railway tariff on livestock by 284% in a matter of three years.

With whom are you quarrelling now?

I am quarrelling with the whole Cabinet. Sir, what I find so alarming is this: There the hon. member for Graaff-Reinet is sitting, a leader of the farming community; there the hon. member for Bethal is sitting, and I know him to be a leader of the farming community as well. Where are the other farmers? They are not even present. They are not interested. There the hon. member for De Aar is sitting. He is laughing. To him this is great sport. There the hon. the Minister is sitting, the friend of the farmers, the hero of the farmers. Are they going to rise and plead for the farmers of South Africa? What did he do in the Cabinet? Where was he when these decisions were taken, or did he not care? While I am on the subject of the Cabinet: Where is the hon. the Minister of Economic Affairs? What did he say about the fact that his whole campaign against inflation has been torpedoed by this budget? Did he have no say, or did he not care? Besides, he is not even here today. [Interjections.]

Meat is not the only article that has been affected and I want to proceed to show what has happened to the farmer of South Africa. I see that vegetables have been increased by 16,4%; butter by 15,1%; eggs by 10,3%; maize by 16,8%; maize-meal by 16,8%; phosphates by 17,8%; and anthracite by 17,5%. Once again this must be read together with the previous increase. The increase on vegetables in 1973 was no less than 57%; on butter it was 31,7%; on eggs, 59,2%; on maize, 36,4%; and on maize-meal, 36,4%. In 1975 it went up again. Let us look at the position as far as maize is concerned. Maize was increased by 36,4% in 1973, by 20,9% in 1974 and now it has been increased by 16,8%.

Are those the Railway tariffs or the new maize prices?

The Railway tariffs. If one takes them together, one increase after another, they add up to no less than 92% within three years. This is what has happened to the staple of the major part of South Africa’s population. [Interjections.] This is what has happened. But those hon. members laugh.

What did you add to arrive at a total of 92 %?

One has to take the increases one after another. This is what happened to meat as well. Meat was increased by 60%, by 60% and then by 50%. Eventually the increases add up to 284%. However, it is far beyond that hon. member’s intellectual capacity to understand this. There is no single factor which contributes so much to the cost of living as our Railway tariffs. I do not know what is going to happen in the future. The increase in the railway tariffs has dealt this country a fatal blow.

I now want to come to the requirements of the fanner. We find that wire has been increased by 16,4%; droppers by 16,4%; creosote poles by 16,4%; machinery by 10,9%; stock remedies by 10,1% and so forth. There the hon. the Minister of Economic Affairs is sitting now. [Interjections.] I thought he was weeping. If I had been he I would have wept. His whole campaign against inflation has been torpedoed by the hon. the Minister of Transport. Surely this is disgraceful. Surely food is a strategic commodity in South Africa. Does the hon. the Minister not realize the nature of the time in which we live? Does he not realize what has happened in Africa? Does he not realize that on the same day that Samora Machel declared his so-called war against Rhodesia in a blaze of publicity, he asked Rhodesia for 10 000 bags of maize? Does he not realize that food can be a strategic commodity in Africa? However, what is the hon. the Minister doing? He is ruining the farmer on a scale which is unprecedented in the history of our country.

I want to conclude by saying that the Government has stripped the farmer of South Africa naked like a Glenda Kemp and they do not even have a python with which to cover him up.

Mr. Speaker, the speech of the hon. member for King William’s Town reminds me of the gentleman who took his car to a garage. The advice of the mechanic was:“Well, Sir, keep the car moving, because the moment you stop, the cops will think that an accident has taken place.” While the hon. member was attacking the Minister, we all thought there was going to be an explosion or collision, but then there came a sudden stop, which did not even appear to be an accident, a stop caused by the carburettor and the spark plugs.

*When we look at the contributions that have been made by hon. members on that side of the House, one cannot help coming to the conclusion that railway administration is not understood by hon. members on that side of the House or that it is ignored for the purposes of the debate. The hon. member for King William’s Town is one of the hon. members who used to insist that everything should be run on business lines. When he talks about the Railway tariffs for livestock which have been increased, we on this side of the House want to tell him at once that we too are sorry and disappointed about this. What the hon. member forgets, however, is that this too is a part of the business of the S.A. Railways. When one pays attention to one single aspect, one finds that 80% of all livestock trucks are occupied from one point to another, but that the occupation in the opposite direction is only 9,8%. This is the kind of problem which makes it difficult for the S.A. Railways to balance its budget.

The hon. member said that we should realize that food is a strategic commodity, and I agree with him. We in South Africa realize this and we have long accepted—and I think the hon. member for Klip River has already referred to this—that safety has a price. The public also accepts to a large extent that food has a price, except when it comes to the price of bread. However, we must also accept that relaxation and entertainment have a price. I must have been reading newspapers for the past 25 years, and I cannot remember once having seen a report dealing with the problems of an increase of the price of tennis racquets, golf balls or fishing rods. However, when there is an essential adjustment, we get attacks which are often not very responsible, as we had from that side of the House this afternoon.

There are hon. members on that side of the House who want to suggest that the S.A. Railways must be operated according to business principles, with a slight difference here and there. It must be accepted, and we in South Africa will have to accept it, that there is one very important facet which is a part of our economy and of the administration of a business which one cannot ignore, a facet which cannot always be blindly adhered to by the Railways. The principle of supply and demand cannot be blindly adhered to, because in spite of market research and in spite of future projections, the S.A. Railways is always faced with unforeseen factors, which cause the unpredictable factor to remain one of the most difficult risks for which provision can be made within the administration of the S.A. Railways. Floods, for example, can disrupt projects for days. There are borders which may be closed, as a result of which it may be necessary to divert freight from one direction into another in order to get it to a harbour.

I want to return to an aspect which I believe should be mentioned. I suppose that we in South Africa have already accepted that defence is priority number 1. In some cases one wonders whether survival is not priority number 1. We accept that food is very important to us. However, the time has come for us to realize that there must be movement and that movement must also enjoy a high priority in South Africa. It is very easy to assume that everything may come to a standstill in a state of war. It is logical that a hungry nation cannot be productive. It is also true, however, that when there is no movement, particularly movement on the part of the S.A. Railways, the country will be paralysed, and this will cause chaos as in virtually no other sphere. For this reason I believe that we can lighten and facilitate the task of the responsible Minister, the General Manager and the officials concerned by advancing constructive arguments and making practical suggestions so that the problem of inflation can be somewhat alleviated.

I want to come back to the fact that one has to accept that the S.A. Railways cannot follow all economic laws blindly. The impression has been created during the past few days, by newspaper reports, amongst other things, and by hon. members of the House—such as the hon. members for King William’s Town and Maitland—that the S.A. Railways is not fulfilling its obligations under the anti-inflation manifesto. It is being said that the Railways is increasing its staff by approximately 20% during a period of recession. In this connection I refer specifically to the period from approximately the middle of 1974 up to the third quarter of 1975. This allegedly creates the impression that the Railways takes no heed of economic conditions and that it is not acting in the best interests of the whole country. The statement that the Railways has increased its staff by 20% is correct. The staff employed by the Administration included 19 670 more members in October 1975 than in June 1974, i.e. an increase of approximately 8½%. In evaluating the figures against an economic background, however, one must bear in mind the fact that there is no direct correlation between the economic situation on the one hand and the total physical performance of the Railways on the other. Although the economy was showing signs of a definite recession as far back as 1974, the total tonnage handled by the Railways showed no noticeable decrease until October 1975. As far as the Railways is concerned, therefore, there was no recessionary condition during this period. For this reason the attacks from that side of the House are not logical.

On the other hand one cannot expect the Railways to show the same tendency as other sectors during a period of subnormal employment and growth, because there was a general recession in the economy during the period concerned and the supply of White labour was much more abundant than usual. The result is that during this phase the S.A. Railways tried to alleviate its chronic, staff shortage, especially in the bread and butter grades. And of course it is possible, when there is a substantial supply of labour, to fill a larger number of the vacancies. In spite of the increased supply, the Railways could not be competitive enough to fill all its vacancies. Because the Railways was unable even in these circumstances to get the required number of Whites to fill important vacancies, it proceeded with the declared policy of making greater use of non-White labour. In fact, during this very period which has come in for so much criticism, this aspect gained a great deal of momentum. The result is that of the 19 670 additional workers that were employed, no fewer than 13 489 were non-Whites.

For this reason, the capitalization during the period of economic recession, which was aimed at improving and strengthening the staff position of the Railways, has benefited not only the S.A. Railways, but the country as a whole. By employing additional members of staff during a period of recession, the Railways is preparing to handle without any disruption the traffic which will be offered during the expected boom. One of the most important facets we must bear in mind is that workers are not productive immediately after having been employed. They must first go through a period of training before being able to render the necessary services. This necessity for expanding the capacity of the Railways during the period of recession is recognized in the inflation manifesto. The manifesto specifically indicates that in spite of the appeal, there must be reductions in all sectors and the infrastructure must be developed to such an extent that all cost-increasing bottlenecks in the infrastructure can be eliminated as far as practicable in the future. In this respect the S.A. Railways has fulfilled its responsibility. In accordance with that instruction, the Railways continued during those months of recession to develop its infrastructure to such an extent that it was able to keep pace with projects that were completed. The Richards Bay harbour project and the coal mine were virtually completed during this period, and in addition they had to be staffed as well. To create the necessary infrastructure in our harbours the Railways had to have recourse to a two-shift working system to get the work done. It is true that with the recession which followed later, they changed back to a one-shift system. This will mean that the harbours will not be able to handle the capacity during the next phase of expansion, the signs of which are already visible. However, we must concede that there is a limit to the possibility of employing more staff economically. The South African Railways reached this critical limit round about the end of September or the beginning of October last year. Since then there has been a decrease in the total traffic and the staff has not been expanded any further. In fact, the total staff was smaller in October and November 1975 than in September 1975, and once again this defeats the arguments of that side of the House. For this reason we believe that this staff increase was justified from the point of view of the Railways and that to a certain extent it was in the national interest as well.

Another aspect which one should not forget is that the S.A. Railways, unlike a business organization, is not in a position to fill certain strategic posts by buying people. Because of its salary structure, its entire structure, the S.A. Railways is unable to buy a promising economist from outside. The same applies to engineers. Where one had expected in recent times that because of the uncertainty in our economy there would be a greater influx to the South African Railways, it is alarming to note that during this time engineers continued to be enticed away from the S.A. Railways. We also find it difficult to fill the position of economists. We want to concede at once that not only can the S.A. Railways offer an economist a brilliant career today, but that this field also offers many opportunities to the adventurous young person in the economic sphere. Let us look for a moment at the other aspects which affect the S.A. Railways, such as the fact that unlike any other commercial enterprise, it cannot simply ignore the less profitable or unprofitable facets. We on this side of the House, and I believe the Railways Administration as well, do not complain about this problem for one moment, because we accept, as does the Railways Administration, that it has a certain role to play, that it has a certain responsibility to fulfil. It is true that in certain fields a profitable level will never be reached as long as tariff adjustments are of not such a nature as to have a disruptive or financially crushing effect on certain sectors. For this reason it is a pity that it has been necessary to increase the tariffs applicable to livestock after it had been ascertained that they covered only 51% of the cost. We regret the fact that a change had to be made to the tariff for long-distance passenger traffic. These losses we are experiencing on main line passenger services at the moment are not merely a local phenomenon. When we look at what is happening in other countries of the world, we find figures that are just as alarming. When we look at the main line passenger services in the USA, these dropped from 77% in 1930 to approximately 6% in 1973. For this reason the private railways in the United States was unable to absorb these losses and a state-controlled organization had to be introduced, and this state-controlled organization took drastic action—something we do not want to do in South Africa if it can be avoided—and simply curtailed uneconomic passenger services. In spite of this, the losses on passenger services in the United States only dropped from approximately 400 million dollars in 1963 to approximately 182 million dollars in 1972. We find the same phenomenon in European countries, in Japan and in Canada. For this reason it was essential to conduct the in-depth market research referred to by the hon. member for Klip River. We have come to the stage in South Africa where the Railways has to look after the consumer of the service more than ever before. In looking after the consumer of the service, one cannot cling blindly to the past. One must also consider the future and the requirements of the future. When one considers South Africa’s position, one sees that during the financial year of 1974-’75 there was a loss of approximately R75% million on the main line passenger service. The uneconomic transportation of first and second class passengers was responsible for 92% of the loss.

The most important reason for this lies in the structural imbalance between the supply and demand of first and second class passenger services. When we look at the statistics, we see that this imbalance has been increasing sharply since 1945, and it is true that we transport fewer passengers in the first and second class on main line routes today than we did before the war. This tendency, to which one cannot just close one’s eyes, took place for certain reasons, and one of the most important was the poor competitive position of the passenger train in comparison with the other methods of transportation, to which the hon. member for Klip River also referred in passing. The market survey to which I referred at the beginning showed that more than 90% of the people who do not make use of the train service do make use of motor transportation. The second place is occupied by the aeroplanes. This also shows, amongst other things, the tremendous rise there has been in the standard of living in South Africa over the past three decades. The dilemma of increasing passenger losses assumes greater proportions when the inflationary pressure on the cost of providing the service is considered. In a loss situation, first class passenger fares would have to be increased by no less than 131% a year under the present inflationary conditions just to keep the losses constant. For this reason one appreciates the new tendency which can be observed in this Budget, and that is to do more to divert the transportation of main line passengers to the S.A. Airways. Because the S.A. Airways is an umbrella organization, it is particularly well suited to this purpose. Then there is another field which one must not lose sight of, because the S.A. Railways still aspires to the ideal of efficiency. When one looks at our main line passenger services—and then one need not even look at the luxury services such as the Blue Train and the Drakensberg Express—one finds that their occupation from Cape Town to Johannesburg over the past few months was round about 62% to 63%. From Johannesburg to Cape Town it was round about 59%, from Johannesburg to Durban about 70%, and from Cape Town to Durban about 55%. What people also forget is that because the Railways always wants to cause as little inconvenience as possible to passengers, it makes use of the system of side-tracking goods traffic so that these faster passenger services may pass. When we have reached the phase in South Africa where it has become essential for movement to take place rapidly and for goods to be conveyed rapidly from one point to another, I do not believe we shall be able much longer to afford a delay in the consignment just because of the tremendous number of main line passenger services. Where it is possible at the moment to travel more cheaply by air than by train between Johannesburg and Cape Town, for example, we hope and trust that the public will make use of the excursion service as well as of the night service, where the tariff is approximately R7 a head lower than the first class passenger fare.

When we want to criticize, and when we are perhaps a little disappointed in some respects after this Budget, because it has been necessary to take painful measures, we must accept that the strategic role played by the S.A. Railways in South Africa cannot be disregarded. Then we must recognize, too, that nothing must happen in South Africa to damage this transport service. May we express the hope and the confidence that the S.A. Railways will enable South Africa to make swift progress towards a phase of economic prosperity and to make swift progress towards a happy community.

Mr. Speaker, I hope the hon. member for Bethlehem will excuse me if I do not comment on his speech. I have a very short time at my disposal, and I want to raise a matter of policy with the hon. the Minister. I will not give him more than two guesses to say what I am going to talk about.

I have here an advertisement that appeared in The Star towards the end of last year. It reads as follows—

Applications had to be in at a certain time. I have here also a dossier containing proof that a certain applicant fulfills all the requirements of the advertisement. This applicant is a South African citizen, has matriculated with the required subjects and is within the age limit. This person is in possession not only of a commercial pilot licence with instrument rating and a minimum of 500 hours of flying experience, but in fact qualified in 1967, has been flying since 1963 and also has a despatcher licence—which, I understand, is something rather special—and has 1 700 hours Jet flying experience. I have here photostats of various employment agreements which have been concluded over the years between this person and some airlines. I have photostats of certificates in connection with training and testimonials as far as the efficiency of this person is concerned. And yet, Sir, what happened when this applicant answered the advertisement? The applicant was not even granted an interview with the South African Airways. And why not? Because the applicant was a woman. [Interjections.]

Disgraceful!

Yes, it is disgraceful. Sir, if this is a country where merit is to count for anything, then surely an applicant with these excellent testimonials, flying experience well beyond that required in the advertisement and every other qualification which is also demanded in the advertisement, should have been given an interview and should have been, I say, employed by the South African Airways. I am prepared to wager that, in view of the testimonials of this applicant and her experience, she was probably far better qualified than the vast majority of people who were in fact considered for the job. Yet she was not considered simply because she was a woman.

My friend, the hon. member for Orange Grove, put a question to the hon. the Minister on 6 February …

How can you allege that she was better qualified than any of the other applicants?

Well, look at these qualifications: 1 700 hours of jet-flying experience, flying since 1963, qualified in 1967 …

What happens when she is in a cockpit?

I am prepared to say that, if she is not better qualified, she is at least as well qualified, but she is probably better qualified than the majority of the other applicants. In any case, that did not even come into it. She was not even granted an interview, because the minute it was discovered that the applicant was a woman, there was nothing further to be said.

The hon. member for Orange Grove put a question to the hon. the Minister on 6 February asking: Whether it is the policy of the South African Airways not to employ women as pilots; if so, (a) when was this policy laid down and (b) for what reasons? The hon. the Minister replied that it was the policy of the South African Airways not to employ women as pilots. He added that it had always been the accepted policy. He then went on and gave a long explanation as to why this policy had been adopted. He spoke about the training being extremely expensive. In this particular case, of course—the case of the applicant I am referring to—this lady was already trained. The question of training did not enter into it at all. The hon. the Minister said that the S.A. Airways could not afford to spend time and money if there was a likelihood that full productivity would not be obtained from a person. In the case of females matrimony, and subsequent motherhood, which would render such a person unfit for duty, even if only temporarily, could not be ruled out. I grant the hon. the Minister that that is a hazard, a decided hazard. A woman pilot may get married and she may subsequently become a mother. She may therefore not be employed, but only temporarily. However, I would like to point out that male pilots are also out of service temporarily, although not for the same reasons. [Interjections.] They are out of service, and I may say that some of them get up to six months’ sick leave. That hazard exists in the case of any human being, and I do not believe that that ought completely to rule out women applicants for consideration as far as the hon. the Minister is concerned.

Next, Sir, the hon. the Minister gave a very extraordinary reason. He said that in airline planning it was projected that every first officer taken into the service later on became a captain. That might be the idea, but can the hon. the Minister inform me whether every first officer in fact ultimately becomes a captain? I am sure that that is not so.

It is not so.

No, of course not. Many first officers remain first officers. Therefore, Sir, this is not a reason. One can at least take these women on and let them remain as first officers—if the hon. the Minister likes— until public confidence has been gained and probably until the airlines are convinced that they are capable of being promoted to captain. They can at least be considered for the post of first officers. I cannot see anything against that. I must say that the reason given was extraordinary.

If a woman cannot become a captain, is that not discrimination?

Yes, but I merely say that this could be a temporary measure, because we have to do everything so carefully in this country of ours. “Stadig oor die klippe”, lest everything should go haywire. [Interjections.] At least, Sir, as an initial step, there should be nothing against the employment of women as first officers, and subsequently there should be nothing against employing them as full pilots. I certainly believe that the whole question should be considered as one depending on merit, and not on anything else.

Who will look after the babies?

Well, Sir, lots of people look after the babies while the women are doing other jobs. Women are found in employment in all sorts of occupations throughout South Africa today. Their babies are being looked after, and there are crèches and schools. That is the way modern life is run.

As the hon. the Minister knows, more and more women are entering commerce, industry and all the occupations and professions that men formerly used to monopolize. For various reasons the situation is different today, and in South Africa in particular the services of women are being more and more required in the professional field. The hon. the Minister gave a very old-fashioned reply to part of this question. He said that on large aircraft a crew of 20 was employed and that situations might arise where strict action from the commander was imperative. He added, very tactfully, that, while not disputing the capabilities of females to control staff and handle emergency situations—I should jolly well think so, Sir—it was considered that in commercial flying, males would be the better persons to be in command. The hon. the Minister also said that, as far as was known, no leading airlines employed females as pilots.

I might say that this woman has been employed as a pilot by a number of airlines. I might also say that it would be a very good thing for South Africa to take the lead in some direction, anyway, and not always to be lagging behind. Then, of course, the hon. the Minister could not resist having another crack, when the hon. member for Orange Grove asked a supplementary question, arising from the reply given by the hon. the Minister. The hon. member asked him whether he did not consider that his reply and the policy of the Administration smacked considerably of male chauvinism. Does the hon. the Minister remember what he said?

I do remember.

He does remember.

What was my reply?

The hon. the Minister’s reply was: “I should like to know from the hon. member why the hon. member for Houghton is not the leader of his party”. I think that was a very silly reply. [Interjections.] The answer is that we choose our leader on merit, and the hon. gentleman who sits next to me is an extremely good leader. [Interjections.] I believe, Sir, we have made the right decision.

I do not think he is better than you are, Helen!

Well, I think he is a lot better than you are! [Interjections.]

I really think it is time that the hon. the Minister changed his policy in this regard. It is absurd in this day and age, where women are taking up flying, where the army and the air force are going to need women in all sorts of capacities, for the South African Airways to lay down as policy that they do not take women pilots. Here I have an excellent case in point, of a woman with hours of training, with first-class experience and with excellent testimonials, a woman who meets all the requirements of the advertisement, and yet she was not even given an interview. I believe that that is male chauvinism of the very worst kind. It bears out exactly what was said at the International Convention of Women in Grahamstown, at the end of last year, and that is that what South Africa badly needs, is an Equal Opportunities Commission similar to the one that has been set up in the United Kingdom, to see to it that there is not discrimination against women purely on the grounds of sex. I am for merit as the yardstick.

I further want to ask the hon. the Minister whether it is the policy of the S.A. Airways not to employ Blacks as pilots. Is that also our laid-down policy? Is no consideration beinr given at the moment to the training of Black people as pilots? This is something that the hon. the Minister is going to have to think about very seriously. We in these benches have pointed out over and over again that one cannot run a country of 25 million people on the skills of four million. I want the hon. the Minister to tell me whether it is his policy to train Blacks for positions of authority, to train them for positions of skill in the Airways in South Africa.