Mr. Speaker, so far in this debate the budget has been looked at from different points of view. I am convinced that seldom during the past few decades has there been a budget with such an unambiguous message to the people of South Africa as this one. This budget does not underestimate the security risks involved in our survival. It is a budget which tells us, in no uncertain terms, that the seven years of plenty are something of the past for the time being, and that we have reached a stage in South Africa when things must first go badly before they can go better once again. It is a budget which exhorts us to review and change our way of life as well as some of our attitudes towards life drastically. At the same time it is a budget which establishes a sound basis for long-term stability and growth. It is evident from any budget that the economic, political and social systems are interwoven to such an extent and have such a complex interaction that it is impossible to evaluate a budget simply from one angle.

Against this background I should like to point out a few of the socio-economic signals of this budget in brief. The first signal of this budget is the increasing security risks of our existence in South Africa. This is the reason for defence expenditure being increased by 39,9%. There are few people who will doubt the security risks in respect of our existence in Southern Africa. There is therefore little criticism of the increased defence expenditure. In the light of our particular exposure in Southern Africa, we must realize, however, that a 40% increase in defence expenditure in real terms represents a much smaller increase than it may seem. We must bear in mind that a large share of this amount of R1 350 million is intended for purchases of military equipment abroad. The buying power of the 40% will therefore be decreased by the 18% devaluation and the increasing prices in the various countries, so that the 40% is in reality a much smaller percentage. Therefore the increase in defence expenditure is by no means such a dramatic increase as it may seem to be expressed as a percentage. If I understand the message of this budget correctly, and if I evaluate the situation in South Africa correctly, we shall have to be prepared in future to spend much more still on defence. It would be unfair and also very pessimistic to compare our economy in South Africa to a wartime economy. It is undoubtedly so that there is no reason to become pessimistic and to lose confidence, even if times are serious. But it is necessary—and I want to emphasize this—for everyone to realize that defence expenditure at such a high level is extremely unproductive. It can affect the balance of payment very negatively and it is also of an inflationary nature. Military expenditure of this order must be supported by the highest possible degree of identification by the public with our defence effort.

However, let me formulate it in another way. The negative features of an economy with such a high level of defence expenditure, must be balanced on a large scale by a quid pro quo on the part of the public, who must become increasingly defence-orientated. Although our economy cannot rightly be compared to a wartime economy, those who follow the programme “The World at War” will remember how the British public brought their pots and pans in a loyal attempt to keep the demanding wartime economy going. I am convinced that the time has now arrived for the South African public to become psychologically mobilized in order to counteract the economic imbalance, which inevitably results from such a high level of military expenditure, by means of personal identification with our defence effort. Such identification also means a willingness to make the necessary sacrifices. In this connection the public can, in the first place, make a meaningful contribution by buying South African products as much as possible. In fact, the hon. the Prime Minister made such an appeal to the public yesterday, and I am very sorry that far more publicity was not given to that appeal. Defence expenditure has a high import content, and the private sector will have to cut back its imports severely to balance it. A full-scale campaign to promote a “Buy South African” attitude has not for a long time been as necessary as it is now. Such a campaign would also serve to stimulate South African industry. In any case the competitive position of the South African industrialist, has of necessity had to improve to such an extent, since the devaluation of September 1975, that he is now able to compete on the internal market with any foreign product. An appeal to buy South African is not only an appeal to national loyalty, but is also justified by the high quality of the local products. There are no grounds for maintaining that imported furniture, clothing, shoes, or whatever products they may be, are of such a high quality that they cannot be compared with the local product. From a functional point of view, from a consumer point of view, the local product is at least as good as the imported. I should like to see the public in South Africa being motivated to contribute towards a campaign of “Buy South African” with the same devotion as that with which the British brought their pots and pans.

A second field in which the public can counteract the negative effect of such a high level of defence expenditure, is by saving fuel. Naturally defence is highly petroleum intensive, and therefore it will affect our imports as well as our balance of payments, as I have already mentioned. The private sector can balance the economy to such an extent, by means of judicious and thrifty use of petrol, that in spite of our high defence expenditure we can continue to grow. In this regard I am convinced that what we need in South Africa is a complete change in our way of life. It seems to me that in spite of the high petrol prices people simply continue to travel as they were accustomed to do in the past. They travel at high speeds. They travel to work alone. They still undertake long-distance holiday journeys by car, and they hop into the car for the smalles trifle, to drive to the cafe, the shop or to a friend for example. These examples could be multiplied. The increase in the price of petrol which the hon. the Minister announced in his budget speech, is without doubt also intended to discourage the excessive use of petroleum products. The Minister used the price mechanism and in a capitalist country the price mechanism ought to still have meaning. The Minister used the price mechanism to try to promote an essential saving of fuel. The high petroleum price is, inter alia, intended to promote a more economic consumption of petroleum products. By means of a more disciplined consumption of this scarce, but essential resource, the private sector and the public can work together to maintain a sound economic balance despite our high defence expenditure.

A third field in which the public can show that they are determined to sponsor the security of South Africa, is by participating in the defence bond issue. The hon. the Minister has not yet announced the particulars of the bond issue, but I trust that the bond will be marketed as prestige bonds. In my opinion the bond issue should be linked to a marketing campaign which identifies with participation in a scheme with a national security campaign. This will offer people in South Africa the opportunity to contribute in a tangible manner to our security and continued existence. The defence bond issue will indeed compete for the savings of the public and in that respect it may influence the flow of money to other financial institutions, such as building societies. This is correct, but if we are able to attract only a portion of that money which is used for luxury housing, I believe that it will definitely contribute a more realistic utilization of housing funds in South Africa. In view of our scarce, limited capital resources, and of the nature of the times in which we are living, it is very difficult to justify the luxury housing, which has almost become a feature of our life-style, any longer.

The budget may indeed be described as a harsh and stringent budget for the taxpayer. However, this is the only way to ensure a sound basis for future stability and growth. I have already said that we have reached the stage where in the short term things will first have to go badly with us before they can go better in the long term. It is of course a natural human reaction to give preference to the short term, but when a country is approaching a national security crisis, one can wreck one’s long-term stability and growth by laying exaggerated emphasis on short-term material advantages.

From personal experience, we all know that sacrifices and personal discipline in the short term often yield a premium in the long term which make those sacrifices doubly worth while. In this connection the Minister of Finance must be congratulated on presenting an uncompromising budget. He made the long-term soundness of South Africa his first priority and in order to achieve that objective, made no compromise in the short term. His message to us was that we are living in serious times and that, first of all, responsible conduct and a responsible life-style is necessary before we can once again begin to look forward to the years of plenty. The effect of the medicine which the hon. the Minister has administered will, however, only be successful if undisciplined salary increases over a broad front do not nullify the effect of the intensified taxation measures. The entire effort of the Minister will be frustrated if everything is nullified by undisciplined salary demands. Then the disciplinary measures which the hon. the Minister will be compelled to adopt next year will have to be far more serious and far more stringent because then the infection will already be far more widespread. In this connection we can be grateful that we have trade unions in South Africa which in the past displayed great responsibility in regard to these matters. The misery into which the unbridled demands of trade unions have plunged England, should serve as a warning to everyone in South Africa, employer and employee alike.

To this it should of course be added that a general increase in productivity is an essential cure for our problems and inflation. Inflation will be kept in check not only by living within our means and our incomes, but also by working according to our incomes and means. In this connection I think that we can definitely work far more in this country.

The importance of the budget for foreign countries has perhaps not been sufficiently emphasized during this debate. This budget will undoubtedly be interpreted abroad as the action of a Minister and of a Government that are not afraid to administer unpleasant medicine when necessary. The attention which has been given to military preparedness in this budget will ensure the foreign investor that the necessary precautions are being taken to ensure stability here and in this way to safeguard his investment.

At the beginning of my speech I referred to the fact that the interaction between the economic, political and social systems is so complex that the budget should not only be seen as an economic signal, but also as a social and political signal. The Budget underlines the urgency of a large-scale national security effort. Without a trace of panic the budget informs us that we are living in serious times, and we know this. National security is undoubtedly our highest priority. But national security is not only concerned with armaments, but also with relationships between people. Indeed our future in South Africa can only be safeguarded if our internal patterns of relationships are such that we get to know one another as allies and not as problems and enemies. For that a profound change of heart among White, Brown and Black is necessary. We as Whites will have to regard the Brown and the Black people as less of a problem and a danger and more as a person and an ally. In the same way the Brown and the Black people will have to discover that the Whites are not only rulers and oppressors, but in fact friends and co-workers who want the best for their future. We shall have to build mutual confidence and understanding, otherwise distrust will turn into hate and our future in South Africa will become one of great horror.

Our Defence Force is sufficiently prepared to make short work of any terrorist who violates our border, but the terrorism which grows in the hearts of people, cannot be destroyed with an RI rifle. It is for the Government judiciously to take the necessary steps to promote sound relations, and the Government is indeed doing so. But there is an extensive area in which the individual, the local government, the businessman, the church—yes, especially the church—has a responsibility to live up to in this connection. Sir, if I may express it figuratively: If the old wineskins of traditional use and of traditional customs are no longer capable of receiving the new wine of new relationships we shall have to find new containers for that wine. The guarantee of our continued existence in South Africa depends inter alia on our ability to live with the realities of Africa, of which we are an inseparable part. There are two realities in particular which we may not overlook and to which I want to refer briefly. These are two realities which this National Party Government is indeed taking into consideration. The first is that one nation cannot rule another indefinitely.

And what do you do with the Coloureds?

Any form of domination, especially when it is associated with colour, is untenable in the long run and ultimately wreaks its own vengeance. This is why the Government’s policy in respect of the Coloureds and the Indians, for whom there is no homeland, also provides for a say and ultimately a joint say in matters of common interest by means of a Cabinet council. [Interjections.]

The second reality which we have to take into proper consideration is the particular sensitivity which exists in the Coloured person concerning his human dignity. There are many obvious historical reasons for this and it can be traced back to the colonial period. However, the fact remains that the new generation of learned, educated and civilized Coloured people finds it totally impossible to accept discriminatory measures which are based entirely on colour. The problem becomes more serious when we deal with population groups, such as the Coloured and the Indians, who share the same borders with us and whose citizenship must receive content alongside that of the Whites and within one and the same South African geographical area. The correct and responsible handling of this problem has as much to do with our security and safety as the increased defence budget. Therefore it is the policy of the National Party to move away from discrimination and, while maintaining distinctiveness, to give content to the justified political and social aspirations of all the inhabitants of this country.

Mr. Speaker, I conclude. This Budget demands the necessary discipline and co-operation from every loyal citizen to ensure safety and stability in every sphere so that we can enter a peaceful and prosperous future.

Mr. Speaker, it is not often that I can look across to the hon. member for Johannesburg West and say that he is beginning to see the light and that he is doing some good. But if one were cynical, I suppose one could say it is post-Alberton and pre-Durban North. Nevertheless, we are very delighted to hear such sentiments coming from a person sitting on the other benches. Let us look at what he said. He said we should not underestimate the security aspect of this budget. That is impossible to do, but he went on to say—which is surprising coming from those benches—that the security aspect was not simply arms, but was connected also with human relationships, a point which we have made over and over again. [Interjections.] He also said things were going to get worse before they were going to get better, and we agree with that. He said there was a necessity to motivate the public, and here again he made the point about human relations, and also the point about the essential nature of increased productivity. Sir, we agree with all that. It is only a pity that it is the hon. the Minister of Finance who is at present carrying the ball and not the hon. member for Johannesburg West. Mr. Speaker, let us admit that the hon. the Minister of Finance had a hard task when it came to the compilation of the budget he presented last Wednesday. But let us also be clear that the sympathy which one might feel for him in those circumstances should be reviewed tempered in the light both of the past performance of this Government and what can be seen or anticipated for the future. Sir, a single budget is of course of great importance in itself as it is concerned with the financial position of our country as it stands now, but it must also be judged according to the criterion whether it demonstrates changes in direction to meet the requirements of the future. The answer to the first is that the hon. the Minister has partially seen the light, and for that he must be given credit, but the answer to the second is “No”. The hon. the Minister has simply reacted in what is becoming increasingly the normal behaviour pattern of this Government when confronted with realities. It has been forced to deal with the immediate symptoms of the illness and has done practically nothing, and has given no indication whatsoever of having the intention of doing anything, to build a growing, healthy economy for our country in the future. Now, Sir, a growing, healthy economy for the future is something which I would have thought was desired by all: by those who sit on the Government benches, by us and indeed by every one of the 25 million people who live in our land. Therefore the question needs to be asked why has the Minister done nothing. The answer lies in the stated economic objectives of the Government which, as we have heard so often, are: a strong balance of payments, full employment, growth, an acceptable level of inflation, separate development and apartheid. These are the prongs of the dilemma on which this Government has impaled itself for 27 years and on which it remains transfixed. The harsh fact is that these five things are incompatible in the sense that they cannot be achieved at one and the same time. The first four objectives are common to the free world and we all know what difficulties the free world has had in dealing with them. The fifth, separate development and apartheid, is peculiar to our country and it is imposed upon us by this Government, by this hon. Minister. It is interesting to note that it has not always been so as far as the hon. the Minister is concerned, because the hon. the Minister said this on 26 March 1960, when he issued a statement listing inter alia, as urgent requisites of economic and political stability for our country, and I quote—

The hon. the Minister said that and, on 27 April of that year he went further and warned, and I quote further—

We on these benches have no fault to find with that. The hon. the Minister was actually past the age of 40 at that time, hardly the age of indiscretion, one could say. All that we can say is that it seems that the hon. the Minister, like Esau, has sold his birthright for a mess of pottage. It is separate development and apartheid which has caused this Government to oscillate back and forth between attaching at any one time overriding emphasis to one or more of the other stated economic objectives. Of course one would have expected temporary variations, because one cannot follow a cohesive and a consistent course of action if over time one’s five objectives are unattainable. This budget sets out one thing clearly for everybody who lives in this country. It sets out that the Government’s present concerns are the balance of payments and defence and the rest can go to the wall; the other objectives can go to the wall. Let us be clear on this matter. We on these benches have always said that this country must equip itself so as to be in a position to deal with any external aggression, but we also continue to believe, like the hon. member for Johannesburg West, that that is not simply a question of military force, but in great measure turns on our internal policy, a question to which I should like to come back. And I shall come back to it later in the course of my speech.

We also subscribe to the necessity of a strong balance of payments and one has only to look at the figures which have been released by the S.A. Reserve Bank about the apparent net reserves. By that I mean the figures for the gold and foreign exchange reserves of our country less the foreign loans, a matter which has been touched upon by my colleague the hon. member for Yeoville. The net figures read as follows: December 1974, R704 million; January 1975, R517 million; September 1975, R426 million; December 1975, R341 million; and February 1976, R184 million. It would appear from the weekly figures that the net reserve position has improved during March, quite apart from the swop arrangement with regard to part of our holding in gold. Of course we recognize that our imports of oil and defence materials are factors in the balance of payments position as indeed is the increased cost of our imports in general. It is, however, a serious and disturbing trend, which needs to be subjected to the closest scrutiny because from it all else in this budget flows.

When one looks at those figures, there are two other underlying factors of crucial importance that should be brought to the attention of every citizen of this country and for which the hon. the Minister in this budget has simply pleaded guilty on behalf of the Government to both charges. These are, firstly, the imprudent and reckless assumptions made in his budget last year as to the revenues he would receive from gold and from agricultural produce. He has learnt his lesson in so far as that is concerned and for that we give him credit. Indeed, it appears that he may have gone too far in the opposite direction. His pendulum may have swung and he may have become so conservative that it will also have an adverse effect.

The second simple fact is the expenditure of this Government. They have been living beyond their means. Let us not forget that the reason why all of us who live here are now faced with the necessity to foot the bill through substantially increased taxation and through sales tax and various other methods, is a direct consequence of that. Let us take only the last five years of this Government. In 1970-’71 Government expenditure amounted to R2 707 million. In 1975-’76 it was R6 816 million and is projected to rise a further 11,1%, to R7 574 million, when the concessions to pensioners etc. are included. It is worthwhile remembering what the annual increases have been, namely 29,3%, 8,5%, 19,9%, 24,3% and 20,4%. If one takes 1971 as being 100, the index would now be—before we go into this financial year—about 250. That is to say that Government expenditure has risen by approximately 2 times over the last five years. Total public spending—current Government spending and investment of the public authorities and the public corporations—as a percentage of our gross domestic product in current prices has risen from 21,9% to 28,8% in 1975. What does that mean, Mr. Speaker? It means quite simply that the Government has taken those resources away from the private sector and used them for their own less productive account. It has not been voluntary. The Government has compelled it. There you have it. This is the fount from which all our troubles spring, and the hon. the Minister in fact confirmed this in his speech, and I quote this from his budget speech (Hansard, col. 4236)—

What is the hon. the Minister telling us here? What he is telling us is that we could not afford to pay for the Government’s expenditure at the time it was incurred last year, and that he is now going to make us pay. He recognizes that consumption was low last year and that there was minimal, if any, growth in private investments. The 1% which he mentioned is in fact included in the increase of 4% of the total real fixed investment; so the actual growth or increase by the Government must have been higher. There is no doubt that investment by the private sector is more productive than that by the Government. The past is bad enough and indeed it fits very oddly, if at all, with the statement of the hon. the Minister of Economic Affairs last Friday that our country might be the last country to practise true capitalism.

Let us look, however, at what the hon. the Minister proposes for the future. He has set out that his estimate of the deficit before borrowing is R1 780 million, and in order to meet that, leaving aside for the moment the question of what he anticipates he will be able to raise in the way of loans for the Government, either internally or externally, the hon. the Minister comes with proposals to raise no less than a net figure of R711 million. The breakdown of that figure shows that he is looking to garner directly from all of us R275 million from the additional taxation on beer, tobacco, wines, spirits, sales duties and petrol and through an increase in the loan levy and surcharge on income tax on both individuals and corporations to the extent of some R438 million. If one looks at that, the writing is simply on the wall, because the translation of what the hon. the Minister is saying amounts to this: (1) That the private sector must recognize that where there is a conflict of interests between it and the Government, the private sector is going to lose; (2) That the rate of inflation is going to rise. It is bad enough that the wholesale price index has again turned upward. The hon. the Minister confirmed this himself when he said that the effect of the devaluation may not yet be truly reflected in consumer prices. He went on to say that it must be accepted that certain administered prices would have to be raised or adjusted upwards, and that the increase in Government expenditure of 11,1% was below the anticipated rate of inflation. Even then, Mr. Speaker, it was still awaiting a final decision on Iscor.

The third thing is that unemployment is going to rise, that we will all have to accept a lower standard of living and that its impact is going to be most severe, if not intolerable, for the poorer amongst us: the old, the pensioners and those who live off fixed incomes. In the next instance, Mr. Speaker, this Government has washed its hands like Pontius Pilate, and is simply telling us we must wait for Uncle Sam, the United States of America, to get us out of trouble. He has gone on record as having said that the provinces are in dire trouble.

I did not say that at all!

The hon. the Minister had this to say, and I quote—

Mr. Speaker, it goes without saying that the provincial administrations are responsible for roads, buildings, schools and hospitals. It actually goes further than that. As we have already shown, this Government is taking the line of “We have made the mistakes in the past, and now all of you must pay the bill”. All of us are in fact already paying the bill, and the authority for that is the hon. the Minister himself showing what I can only describe as his inherent characteristic of telling something less than the total truth. I quote—

Now, Mr. Speaker …

The hon. member must withdraw the phrase he used in relation to the hon. the Minister of Finance, the phrase “his inherent characteristic of telling something less than the total truth”.

I withdraw it, Mr. Speaker. In truth, these figures mean that the increase in salaries and wages of Whites was only 13,2%. To put it in another way: The real non-White earnings, including mining, improved by 10,6%, while those of Whites decreased by 0,03%. To be fair, if one excludes mining, the real increase for non-Whites was only 2,1%. This situation cannot endure in so far as either the White workers or the Black workers are concerned.

The hon. the Minister omitted—deliberately or not deliberately—any mention of salary increases for the Civil Service. Practically all workers in this country are likely and understandably going to press for increases, with all that that entails for inflation. Mr. Speaker, there are even more serious implications. Indeed, there can be nothing more telling of the economic scenario than the likely outcome in the present circumstances, of this hon. Minister’s budget: Rising unemployment, falling profits, little—if any—private investment—all of this due to the credit squeeze and the budget. It is against that background that the increase in Government expenditure of 11,1% should be seen.

Our country, it appears, is likely to be going to have stagflation. Rising prices due to cost-push inflation, falling employment and a level of growth, if any growth, for the second year in succession below the margin of safety—all these factors create a spectre of serious labour unrest to which I would like to come back later. Whatever the Government may say, our country has always, even in good times, needed capital from overseas. Earlier this session, those who sit on the Government benches were upset when I pointed out that we could not continue to rely on getting it in the same way as we had in the past.

The hon. the Minister has at least got the message. He may try to ascribe it to the present political instability in southern Africa,and undoubtedly, that is part of it. However, let there be no misunderstanding. If we did not practise apartheid, discrimination on the basis of colour, we would have been immeasurably better placed, because we have a matrix of potential resources which have been given to few, if any, other countries.

What are you doing here?

You do not belong here!

In the budget, Mr. Speaker, the hon. the Minister has made the assumption that he can only raise a net figure of R120 million from overseas. Despite all the promises by the hon. the Prime Minister and all the promises by our ambassador to the United Nations that discrimination is something that must be eradicated—mentioned also by the hon. member for Johannesburg West—all one has to look at to see the true situation is the position in regard to pensions. The pensions being proposed are simply increasing the gap.

The hon. the Minister also proposes that both the surcharge and the loan levy will apply to gold and coal mining companies. In total, he visualizes that he will get in some R240 million from companies from this source. In so far as the coal-mining industry is concerned, its present level of profitability is inadequate, as the Petrick Commission pointed out. To increase the tax burden can therefore only make matters worse. It will discourage the new investment which is urgently needed to supply the domestic needs for coal in our country. It will, of course, have the same effect on exports. I hope that the hon. the Minister will tell us in his reply what he anticipates he will receive by way of increased taxation from the gold mines. Again, the figures should be weighed against the likely consequences. It will, of course, have a severe impact on marginal mines, and will cause ore that would otherwise have been mined to be left in the ground. That is quite enough in itself, but in addition this hon. Minister has reneged on an undertaking given by his predecessor to overseas investors that the gold-tax formula would not be varied, that it would not be tampered with. Partly on the strength of that, billions of rands have been invested in South Africa and in gold-mining companies, particularly by Americans. Just look now what this Government has done to these investors. The increase in taxation will now reduce the future stream of dividends that will be available to them, and if one takes into effect the devaluation of last September, overseas investors who bought in the first half of last year have now had their likely expectation of dividends reduced by between 25% and 50%. That is hardly likely to improve our country’s reputation overseas, and if the Americans decide to sell, it requires no imagination to know what that would do to the Johannesburg Stock Exchange. All of this at a time when it seems reasonable to assume that the price of bullion will generally move between $120 and $140 in the immediate future.

Mr. Speaker, the lost and missed opportunities are something to be regretted, but the cardinal point is whether this Government has the courage to get our economy off the treadmill on to which they put it over the last 27 years. Or do they merely want to stop it for a period, and then continue as heretofore? The one will be self-defeating and futile and will inevitably lead to the day of reckoning. We must therefore move towards the creation of a framework wherein all of us—Black, Brown and White—can build an increasingly united country. It is in the interest of every citizen to do so. It is in the broader national interest that it should be done, and therefore all obstructions in its way should be eradicated. All must have the opportunity to earn for themselves whatever their abilities demand. We simply cannot afford to do less. It may already be too late unless we hurry to broaden the base of those who get benefits from the private enterprise system within our economy. Mr. Speaker, this is where we now stand: We have a land of vast potential wealth, but unless the doors are thrown open for all to benefit, it will neither be realized nor will the system endure. Mr. Speaker, the front lines of that battle which must be won, lie in education, in housing and in transport, and it is precisely here that this Government and the hon. the Minister have failed. This, Sir, is the other side of the coin and in the end it is more important than arms. Our country will only be secure when the vast majority of us who live here have concrete evidence which demonstrates to all of them that what they have here is something which is preferable to the alternatives proffered by those who come against our land because of apartheid. The laager will not survive and if this Government continues to move towards it, it will simply signify that they have learnt nothing from the events to the north.

Mr. Speaker, let us look at these three key things—transport, housing and education. The Minister has put up the price of petrol. The hon. the Minister of Transport has already raised his tariffs, so that we have already had trouble and boycotts with the increases in bus fares in Springs—and Puteo is still to come. This budget proposes only to raise expenditure on education for Black South Africans by the miniscule amount of R8,9 million to R77,88 million. Sir, that amount, we are told, covers 70% of what is spent on the education of Black children in this country. It is just below 1% of the total estimate of expenditure in this budget and approximately one-third of 1% of the gross domestic product. I would also like to quote the figures given by the hon. the Minister of Bantu Administration and Development in reply to a question from the hon. member for Pinelands. The question was—

The answer was R39,53. That must be compared with the average expenditure of R457 per White pupil in 1973.

Finally, with regard to housing, the hon. the Minister mentioned an increase of 38,3% for national housing, that is an increase of R25,l million to R91,8 million. Mr. Speaker, that is not going to get us very far in relation to the need. An increase of R34 million out of a total increase in spending of R758 million is a disaster when that increase is accompanied by increased transport charges. One would believe that those who sit on the Government benches have no children. If this Government continues to act as if they have no children, if it continues to fail to act for the future, if it continues to refuse to recognize that Black and Brown South Africans are not going to be satisfied until they can participate freely in the whole fabric of society, then they are placing the future of all our children in increasing jeopardy. That, Mr. Speaker, is what it is all about. To judge this budget, the key question is: “Does it serve to improve racial harmony within our land?” The answer can only be “No”.

Mr. Speaker, the hon. member for Johannesburg North is a total negation of the speech that he has just made. The hon. member really makes me think of Black Africa which is continually telling us that we treat the Black people in this country so badly, and then we have the utmost difficulty in trying to keep the Black people from other African countries out of South Africa. In spite of the prophecies of doom which he has again uttered in regard to South Africa, the hon. member came to South Africa during the term of office of this Government and made this country his home. He is a total negation of everything that he said here this afternoon. This is typical of the speeches which we have had during this Budget debate from all the speakers on the other side. I think that we reached a peak in the statement of the hon. member for Yeoville when he said here with much gesticulation that there was no confidence in this country. He said: “There is a crisis of confidence”.

In that Minister.

He did not say that there was no confidence in the Minister; he said that there was no confidence in this Government. Sir, has the hon. member been sleeping here over the past few weeks just like a Rip van Winkle? Does he not know that we have recently had an election in Alberton? What happened at Alberton? Did not the voters of Alberton, who after all form a cross-section of the voters in South Africa, not move a resounding motion of confidence in this Government, to such an extent that both the Opposition parties which dared to put up candidates, forfeited their deposits? That hon. member’s party did not even have the courage to put up a candidate.

Did you put up a candidate in Griqualand East?

Sir, the hon. member’s party did actually put up a candidate in Durban North. When the election is held there we shall see whether the electorate of Durban have much confidence in his party. We can discuss this matter again after the result at Durban North.

Mr. Speaker, the speeches of hon. members opposite once again followed the old pattern, the pattern of double-barrelled shotgun politics. On the one hand they support the defence expenditure but on the other hand they complain about the taxes that have to be levied in order to cover the defence expenditure. On the one hand they complain about how the lower income groups are going to struggle as a result of the increased sales tax, but on the other hand—the hon. member for Yeoville did the same thing yesterday afternoon—they complain about the high marginal rate which the higher income groups now have to pay.

You also complain about it.

I certainly do not complain …

Of course you complain about it.

No, I shall tell the hon. member what my attitude is. It is a pity that there should be such a high marginal rate because it can have the tendency to smother initiative. However, in the present position where we have to deal with a world situation which compels us to incur high defence expenditure, I believe that every patriotic voter in South Africa will be willing to make his sacrifice. In this regard, however, I am talking about patriotic voters. Every patriotic voter of South Africa will be prepared to make his sacrifice, even those people who now have to pay this higher marginal rate.

Mr. Speaker, the hon. member for Constantia complained about the high inflation rate which South Africa is experiencing today, namely 11% as against 4,8% in the United States and 5,3% in West Germany, and so forth. However, will the hon. member admit that that low inflation rate has been gained at tremendous expense, namely, enormous unemployment? Does he want us to reduce our inflation rate in this country just as drastically, with the same result in South Africa, namely, an enormous unemployment figure? When we ask where the money for the higher defence expenditure must come from, the Opposition say, as was said by one of the hon. members there, that we should have had a deficit budget. However, if we had budgeted for a deficit, we would in fact have been promoting inflation. It is true that we do have problems in our economy but we certainly do not have a sick economy. We have problems because we have to deal with two basic factors over which we have no control.

The one is the Nationalist Party.

Sir, if it is the National Party, why did that hon. member’s colleague behind him immigrate to this country, because, after all, the National Party is governing this country? [Interjections.] Mr. Speaker, that hon. member is trying to distract me from making my speech. The clock ticks on and I am not going to devote any further attention to him.

It is a fact, Sir, that our defence expenditure has increased by more than R900 million over the past three years. Our foreign currency payments in respect of oil imports alone are today four times what they were three years ago. If we could only eliminate these two factors, we would not have the “sick economy” which hon. members opposite intimate that we have, and we would not have found it necessary to increase taxes. In fact the hon. the Minister of Finance would have found it possible to grant tax relief. I say this on the basis of our defence expenditure which has increased by more than R900 million and on the basis of our payments for oil imports which are now four times as much as three years ago.

Sir, I should like to make a few remarks in regard to the increase in the levy on petrol. The increase in the levy on petrol is described as being a terribly cruel step. The hon. member for Constantia spoke of a “savage increase”. If ever there was an increase in this budget which is a desirable one, it is this one, Sir, and I shall tell you why. As I have already indicated, we have to deal with an enormous increase in the payments which we have to make for our oil imports. The Government has repeatedly appealed to the public to conserve petrol and has taken steps to reduce petrol consumption. However, I want to make the point that low speeds of themselves are not going to solve this problem. The only way to solve this problem is for all of us, I included, to make plans to do less driving. We must not only drive more slowly although this is something that we can also do. We must concentrate specifically on driving less. A farmer told me yesterday that there are five families on his farm and that it often happens that on certain days five cars drive to town from his farm. He said to me: Has it not become necessary to introduce petrol rationing, because then those five families would arrange their affairs in such a way that they would only use one or two cars to get to town instead of using all five cars to drive to town?

Sir, I myself am not in favour of Petrol rationing because to my mind this is tantamount to a motion of no confidence in the ability of our people to discipline themselves. If we can no longer discipline ourselves even petrol rationing will not help any more. We shall have to discipline ourselves more and make plans to do less driving because this enormous increase in our payments for petrol imports presents us with a very serious problem. If we cannot discipline ourselves we are left with only two alternatives to combat this problem. The one is petrol rationing, that is to say, compulsory physical rationing, and the other is a higher price, a price which is so much higher that we will feel it and will therefore have to make plans to do less driving. There are two ways in which the public can react if a higher price is announced. The first is of course the undesirable one, the one which always comes to mind first, and that is that it will be stated that we should all demand higher salaries and wages because we have to pay more for petrol. This, sir, would of course be fatal to our economy. It would totally frustrate the whole purpose of a higher petrol price. The other solution is that we shall have to discipline ourselves and drive less. I ask myself this question: Is it really necessary that our students living in hostels on campuses should run cars in their thousands? Is it really necessary? Is it necessary for us to use our roads in our tens of thousands on a Sunday afternoon? I live next to the national road and each Sunday afternoon I see the cars in their tens of thousands driving by. Is this really necessary? Is it essential? If we are really in a crisis situation, as hon. members opposite wish to imply, it is necessary …

It seems to me that you no longer want me to come to visit you!

That is why, Sir, I want to make an urgent appeal to all our people to ask themselves seriously: Is every journey that I undertake urgently necessary? Is it really necessary for me to use my car? Is it really necessary for me to drive alone? Or, Sir, have we had it too good for too long under the 28 years of Government of the National Party? Have we had it too good too long under this Government so that we can no longer discipline ourselves? Must everything continue to be plain sailing?

You drive 80 miles every day.

I have already said that it is not a question of driving more slowly. What is important is to drive less.

Sir, I come now to the questions of pensions. One of the cruellest results of the high inflation rate that we have experienced over the past years has been the effect that it has had on those people who can no longer work and who can no longer earn. The man who is still working can ask for a higher wage or a higher salary but the man who is no longer working because he has become too old, cannot do so. This Government has a very good record in regard to the treatment of our old people, our aged persons who have retired. In the budget last year and in that of this year increases of R7 and R8 a month, respectively, were granted to our social pensioners; at any rate, the increase for this year has to be approved. This represents an increase of 26% in two years.

What are the railway pensioners in the old scheme going to receive?

I am coming to them. The hon. member must just exercise a little patience. I readily admit that the amount of R72 per month which our social pensioners are now going to receive will provide a very precarious livelihood, but it must always be remembered that this amount of R72 per month is only the contribution of the taxpayer to the livelihood of those people. It is after all the duty of every citizen to make provision for his old age, and this amount of R72 is only the contribution of the taxpayer over and above what that person himself has provided for his old age. The Government also has a proud record in regard to civil pensioners to whom the hon. member for Durban Point has just referred. Last year was the only year in which they were perhaps overlooked because of an oversight, but the position is being rectified this year. In the case of civil pensioners we are dealing with people who make provision for their old age themselves. That is why it is right that they should not be treated less advantageously than the social pensioners. That is why it is right that they should also receive a 10% increase now.

I want to ask the hon. the Minister today whether he will not consider making an additional concession in respect of those civil pensioners who retired prior to 1968 and who are really struggling today. I want to point out that this concession to which I have referred only comes into operation on 1 October. Unfortunately, these people received nothing last year. I do not know whether it is administratively possible but, if it is at all possible, I should like to ask that, with immediate effect, a further concession of 10% be given to those pensioners who retired prior to 1968. I mention this for the hon. the Minister’s consideration, if it is at all possible. I am sure that it will not cost us too much.

In conclusion, I want to refer to those retired people who do not receive a social or a civil pension but who have made provision for their old age by way of interest, rental or dividends. As a result of the high interest rate which accompanies a high inflation rate, these people receive a higher income. However, this by no means compensates them for its erosive effect on the capital that they have saved for their old age. I want to say in all humility that I can only see one way in which the Government can assist these people, and this is already being done. In this budget the hon. the Minister has again announced that the income rebate in respect of these people is being increased from R600 per annum to R700 per annum. I want to thank the hon. the Minister for this on behalf of these people. This is actually the only way in which the interests of these people can be taken care of. I want to thank the hon. the Minister for having looked after the interests of people who have saved for their old age, in the way in which he has done so. The National Government has been following this method since 1969. Originally it was an additional income rebate of only R200 over the basic rebate of R1 000 per annum. In 1970 this was raised to R350 and together with the rebate in respect of medical expenses of R250, these people did not pay tax until they had an income of R1 600 per annum. A weakness in this system was that as soon as their income reached R1 600 per annum, this rebate disappeared completely. Fortunately, this shortcoming was removed in 1971. Now the income rebate over R1 600 does not disappear completely but is gradually reduced by R2 per R10 income up to an amount of R5 000. A further improvement was effected in 1974 when this reduction in the rebate only started above R5 000. In terms of the proposals which the hon. the Minister is making in this budget, the rebate will only disappear completely at an income of R14 500. This is a considerable amount and I want to express my very hearty thanks to the hon. the Minister in this regard.

I want to ask the hon. the Minister to improve this system even more, although he and his predecessor have repeatedly improved it since 1969. The further improvement for which I ask is that we should get away from the idea that a man of 60 years of age should retire and then receive a rebate. I say this because our medical services have improved greatly and because the life expectancy of our people has risen accordingly. We expect people to work until they are 65 years old and that is why, as far as rebates are concerned, we should also wait until a person reaches the age of 65 years. It is obvious that one cannot raise the age of 60 years to 65 years immediately because then people in the group between the age of 60 years and 65 years may be detrimentally affected and will have reason to be dissatisfied. That is why my proposal is that we should raise this age gradually each year by one year until we reach the age of 65 years. This will save the exchequer a large amount of money because it will then only be necessary to give this rebate to fewer people. I want to ask that the amount which the exchequer saves in this way should be utilized in the form of a larger concession to those people who make provision for their old age. This concession can be given in two ways. Firstly, that the amount of R700 be increased and secondly, that the amount will not reduce after a certain amount. In other words, I should like it to remain the same throughout just as in the case of a married woman who is granted an income rebate to an amount of R700 irrespective of how much she or her husband earns. I ask this with due deference and I am convinced that, because he is so capable, the hon. the Minister will be able to work out ways in which this can be brought about.

Mr. Speaker, as you know, it is a great moment for every new member to rise in this House and present his maiden speech, and it is so for several reasons. I want to mention just a few of those reasons. This House is the highest debating chamber in the Republic, a place where great and decisive moments in the history of South Africa were enacted, and where the future of nations and individuals is determined. On this occasion please allow me first to make a few personal observations before I come to the theme of my maiden speech. I want to tender my thanks to my immediate predecessor, Mr. Piet Aucamp, for the services he rendered to the constituency, and I wish him everything of the best in his new post. I also want to pay tribute to another predecessor of mine, the late Minister Basie van Rensburg, whose name lives on in the constituency.

All the hon. members are thoroughly aware of what a newcomer has to go through in this House, for all of them were once in the same position I am in. In mitigation of my circumstances I want to quote a few statements. In the collection Oes van ’66 the hon. the Prime Minister wrote inter alia as follows—

The late ex-senator P. O. Sauer, who was a member of this House for an unbroken period of 41 years, and therefore a great authority on the House, its traditions and customs, said the following on 18 July 1970 in the supplement to Die Volksblad—

Mr. Ben Schoeman, who has also had ong experience of this House, stated in an interview with Rapport on 9 April 1972—

In his series of articles, giving his reminiscences of the House of Assembly, entitled “Ek Onthou”, Mr. Herman Rooseboom, former editor of Hansard, said the following—

The hon. member for Middelland, in his series “Die Parlement en sy Tradisies”, had inter alia, the following to say about a maiden speaker—

However he goes on to say these extremely encouraging works—

With an awareness of all these problems, pitfalls and statements, I discussed these matters with my colleagues in this House, and listened to what they had to say. It is remarkable—in fact very significant—that each one of them, unaware of the others, arrived at the same conclusion in more or less the following words: Remember, you are here where history is being made; regard it therefore as a great privilege.

I now want to express a few thoughts on this history which is being made. I want to ask: What significance does history have? What will the outcome of world history be? What position does South Africa occupy in world history, and what is the destiny of South Africa in world history? There is no doubt in my mind that hon. members have a great love for history. As hon. members also know, the Free State has played a meaningful role in the history of South Africa. Moments and national figures from our history are wonderfully concentrated in my constituency of Bloemfontein East for example. From this one may and ought to gain a better understanding of our future history. Therefore I should like to cause this history, which so uniquely enriches my constituency, to flash kaleidoscopically past our mind’s eye and just mention a few of the salient features.

There is the first Raadsaal which was built by Major Warden. There is also the Presidency, which served as official residence for the Presidents of the Orange Free State. There is the fourth Raadsaal, the last home of the Volksraad in the days of the Model Republic. It is now the seat of the Provincial Council of the Orange Free State. There is the historic Twin Steeple Church that had the well-known Rev. Andrew Murray as its first minister. That is also where the last three Presidents of the old Free State Republic made their oath of office. There is the horse-and-rider statue of Gen. C. R. de Wet, and the Gen. Hertzog Square, with its statue of that great Afrikaner and South African. There is the H. F. Verwoerd building of the provincial administration, the literary museum and archives and the impressive Vrouemonument. Here one finds those impressive sculptures of Anton van Wouw on the pedestal—two women and a child. According to the connoisseurs this is his masterpiece. The expression of pathos and sadness one sees in the two female figures is moving and unforgettable. The late Dr. J. D. Kestell once said of the older woman in this group of sculptures that she stares into the future “soos een wat die Onsienlike sien”. This also proceeds to the Christian’s view of world history of the past and future. The Christian sees behind world history the Unseen which controls and determines everything. Without any doubt mankind is facing one of the greatest hours of crisis in the history of the world. Because it affects every person on this earth, it naturally affects South Africa as well. In such times in history, when the clouds of confusion, uncertainty and doubt hang over the world, one ought to and one must take stock of the purpose, the meaning, the destiny and the end of mankind and his history.

What should we expect from the future? What is the meaning of the events? These are questions which have been posed by every generation over the course of the centuries and have been debated by every generation. Essentially there are only two views in this regard. On the one hand there is the view which eliminates God Almighty from history. This is represented in many schools of thought, inter alia, in those of the Greeks of heathen antiquity. Then there are others who even deny the meaning of history. They regard it as being simply a meaningless game without any purpose, in other words merely as nihilism. Some, such as Oswald Spengler in his book The Decline of the West, believe on the other hand in ultimate decline—fate cannot be escaped. Instead of God, “fate” determines world history. Then, in addition, there is communism, with its own view of world history—the inevitable course of dialectic materialism which eliminates God. The strength of the Marxist conception of history is situated in particular in its absolute certainty concerning a future realm of peace which will in due course be achieved as a result of the immanent historic process. The communist’s ideology, he believes, is destined to conquer the entire world. That is why it is to him a life-and-death struggle. To him the ultimate object of world history is a classless society—communism. According to Marx and those of his school of thought it is inevitable and inavertable. The entire communist world is built on this. In short: The communist view of history is atheistic—devine providence is eliminated. But enough of this.

On 13 November 354 A.D. 17 centuries ago therefore, a boy child was born in Numidia, North Africa. He was to become the first great Christian political philosopher. His name was Aurelius Augustinus. He did not belong to his own time only, but to all the ensuing centuries—to our 20th century as well, and also to South Africa. In his immortal work De Civitate Dei, the City of God, he gives us a truly Christian view of the ultimate goal of history, which still forms the foundation of the Christian vision. In accordance with this vision history begins in eternity with God, passes through time and ends again in eternity with God. The content of history is the great struggle between the Civitas Dei, i.e. the City of God, and the Civitas Terrena, the Secular City. The citizens of these two “cities” live intermingled with one another, but are like pilgrims journeying to the eternal City of God. Throughout human history, from the beginning until the end of time, there has been, there is and there will be an unrelenting conflict between the kingdom of God and the realm of darkness. The final and ultimate conflict will be waged between these two conflicting forces. That is why the Christian should be girded for the final struggle. Not only will there be spiritual weapons, but military weapons as well. No individual, no nation, no country can stand aloof from this struggle. It affects everyone. If he remains neutral, he has in fact already sided against Christianity. Please note, no compromise is possible between these two conflicting forces. The world must know that as a Christian country we entered in the past, and are at present entering and will in future enter this great decisive struggle on the side of the Civitas Dei of course, even if we stand alone. Like a Nehemia of old, we shall continue to build in South Africa with a trowel in one hand, a sword in the other and our hearts lifted on high. The course of history, the ultimate goal of history, the meaning of history, the future expectation of history, is the final triumph of Christ, of the City of God over the City of Darkness.

To sum up: The ultimate goal of everything is the fulfilment of God’s plan, the ultimate victory of the great Conqueror. This view of future history is dynamic and optimistic. Mr. Speaker, the communists in the outside world must hear this. The communists must hear that we do not align ourselves on their side, but on the side of the kingdom of God. We do not question the ultimate destination of the temporal reality; we do not doubt who our Conqueror will be. We, the children of South Africa, still believe in the Christian view of Augustinus of North Africa—North Africa and South Africa. May the message of Augustinus run like a golden thread through the whole of Africa and the world, and may Africa and the world cling to and uphold the centuries—old vision and insight of Augustinus of North Africa.

For that reason I dedicate myself and my constituency of Bloemfontein East to the service of South Africa, to the service of God and of the Civitas Dei.

Mr. Speaker, the hon. member for Bloemfontein East has chosen a serious historical subject for his maiden speech in this debate, and he has taken part in a historic debate. As regards his delivery, his depth of thought and his sincerity of expression, I believe I speak on behalf of all members of the House when I congratulate him on his maiden speech. We believe he has a contribution to make to serious thought in South Africa and we wish him well in his future career.

Mr. Speaker, the hon. member for Paarl in his speech dealt at length with two main subjects. He dealt, first of all, with the question of the higher petrol price, about which I shall have considerably more to say later. He also made use of the opportunity to discuss the pensioner and the pensioner’s problems and endeavoured to indicate the extent to which the Government has helped the pensioner. Let me say that we on this side of the House stand second to no one in the efforts we have made on behalf of the pensioner. We believe that whatever contribution the Government makes, is insufficient. When we come to consider the quality of life of our older citizens living under the present harsh conditions of inflation, any contribution this Government makes is insignificant in terms of the purchasing power of the pension payments received by our elder citizens.

I believe I should, however, say that the speech of the hon. member for Johannesburg West was of far greater significance. I believe it was of even greater significance than the speeches of the hon. members for Ermelo and Sunnyside, although they are senior speakers on finance topics on the Government side. I believe that what in the final analysis stands out very clearly, is that economics and economics alone will determine the eventual course of politics in this country. The days when an hon. Minister of Finance could say that the Government would bend the economy in order to suit its ideologies are gone. They are way behind us. One only has to read of Mr. Willem de Klerk’s attitude on the need for change with regard to the Nationalists’ policies of race discrimination and apartheid, to realize just how important the economic welfare of our country is becoming for bringing about change in the Government benches.

The debate which is taking place in the House today is a historic one. We believe that a budget debate must take account of the years behind us and also look to the future. With regard to the amendment to which we are speaking—let me say that I give my serious and earnest support to it—we want to be clear about where and on what we differ from the Government. It is only right that at this stage of the debate we should again stress that the United Party differs from the Government in that we take exception to the policies of the Government which subordinate the economic needs of the people to the promotion of Government ideology. We should also realize that this Government in the past has mismanaged the economy of this country to the extent that the cost of living at the moment continues to rise and shows no signs of abating. We also believe that the Government has failed to adopt the necessary measures to provide for the full utilization of the immense human and material resources of this country. I say this in the light of the 24 million odd Africans in this country who, after all, are part of this country and whose circumstances are economically undesirable in the harshest sense of the term. I believe we should view the present Government as a watershed in history. I believe it is only right that I should say that the hon. the Minister inherited a hot seat from the former Minister of Finance, Dr. Diederichs.

I believe that South Africa will never be the same after this budget. We should see this budget as the end of an era—one can almost say the end of the gold era, the end of an economy in which things could not go wrong for South Africa. We have always said that South Africa was economically wealthy, not because of the Government but in spite of it. It is important in the consideration of this budget that we should realize upon what frail foundations our economy rests. First of all, there are the vagaries of climate and the vacillation of the gold price and the value of gold. As far as the vagaries of climate are concerned, we have enjoyed years in which the agricultural sector of the country has carried the economy through distressing times. On other occasions the gold price, while it was rising, has been able to stifle the disastrous effects of many of the policies of the present Government. I believe that we must also see this particular budget against the climate which the hon. member for Johannesburg West endeavoured to describe and ask ourselves whether the hon. the Minister of Finance has sufficiently motivated his budget when he dealt with the most important item of them all, viz. the defence item. I think he glossed over it and said that in the serious times in which we are living and because of the pressures on our borders, we have to prepare ourselves for the higher expenditure on defence. The hon. member for Johannesburg West went further and indicated that we must create a psychological attitude in the minds of our citizens to prepare themselves, in his words, to bring forward their pots and pans and throw then into the common weal as did the Britons during the last World War. I believe the hon. member is right and that the hon. the Minister of Finance could have gone further in order to bring to the realization of all South Africans the situation in which South Africa finds itself, particularly as we know that Gen. Webster is on record as having said in public that we as South Africans must appreciate that at the moment we are living in a warlike economy and that the war on our borders—a war which was then hotter than it is now—could escalate from a cool war into a medium scale conventional war. Against this background we in the UP can claim that year after year it has been our plea across the floor of this House that the Government should have so activated its policies as to ensure the maximum prosperity and the soundest possible base for the South African economy. The hon. member for Sunnyside referred to the Financial Mail and indicated that that paper said “Hats off to Prof. Horwood”, but I want to make the point that the Financial Mail is in effect talking after the horse has left the stable and the stable door has been closed. It should be “Hats off to the UP” … [Interjections.] … because this Government should have listened in the no-confidence debates of previous years to the hon. the Leader of the Opposition who is on record as having said time and time again that our military strength depends entirely on our ability to create the maximum welfare from our economy. It was the hon. the Leader of the Opposition who said in previous debates that we should have a crash programme for the training of our labour force and it was the hon. member for Durban Point who pointed out to the Government the need to take into account the available Black forces in South Africa and to train them as soldiers so that they could play their part in protecting the borders of our country.

Against this background I want to say that the UP has always had as its motto “Preparedness”—preparedness in the economic sense and preparedness in the military sense, because we realize that only through economic preparedness can we support the military forces to the increasing extent to which we may be called upon to do so. It is important, leaving ideologies apart, that we must realize at this stage that if as a country we have been isolated and our borders are being threatened, we must not pretend for one moment that our manpower as such, our White manpower, our troops in the field standing alone without the most modem arms and weapons, can do justice to the defence of our country. Those hon. members who have watched the programme “The world at War” on television will appreciate the seriousness involved in such a situation. War today is an expensive undertaking and it is for this reason that we do not play politics when we say that we in the UP have no quibble whatsoever against the increased defence expenditure that is called for in the budget.

However, we want to go further and we want to say that we are entitled to criticize this Government for what it has done to South Africa because of the compounding of its political errors of the past. The error of apartheid hangs like a rock around the neck of the Government trying to swim up the economic stream. It is reported in every newspaper one cares to read that the world at large cannot reconcile the economic potential of this country with the political philosophy of the Government which has prevented it for so many years from allowing our economic machine to use itself to the utmost.

We believe, too, that the question goes further. It was only last year that the hon. the Minister of Finance was able to speak about the rand being one of the strongest currencies in the world and just prior to that, Dr. Diederichs, as Minister of Finance, was able to say that our economy was so strong that we could withstand any economic depression. Then came the tragedy of devaluation for whatever cause and our imports became that much more expensive with a corresponding impact on this budget. The fact that our largest imports today may well be concerned with the vital defence imports and that the volume of imports we require will then have to be cut back because of the decrease in the value of our money, shows the seriousness of the situation.

I want to commend the hon. the Prime Minister today for the stand he has taken as was reported in The Argus yesterday. He declared openly that, in the light of advice given to him by his Economic Advisory Council, he intends seeing to it in future that the Government will adjust its spending in order that there will be no drain on our resources. It does not take an economist to say that the main cause of inflation—I think here the hon. the Minister of Finance will agree with me—has been excessive Government spending during the last decade or so. I hope the hon. the Minister will acknowledge the visit to this country of Prof. Milton Freedman, because when he was here, he saw a large number of businessmen, a large number of members of the Government and of the Opposition and he also appeared on television. He has made certain authoritative statements of which many were dictatorial, but on the other hand, many of which were true. I believe that the hon. the Minister of Finance should react to these statements and indicate to what extent the Government agrees or disagrees with the professor. I mention this particularly in view of the fact that Prof. Milton Freedman came out loudly and clearly in his statement on SATV that the efforts of the anti-inflation campaign were to be absolutely discarded since they were negative and useless. We believe differently to the Government. We believe that psychologically, in the endeavour that all South Africans stand together in moments of stress, the anti-inflation campaign can play an important part and must continuously be allowed to play an important part. Prof. Milton Freedman’s opinions have been given great publicity and I have been approached by many people to find out whether the money being spent on the anti-inflation campaign is being well spent or not. I think the hon. the Minister should react thereto.

I want to welcome the fact that the hon. the Prime Minister has seen this budget so seriously that he has warned against increasing unemployment. Again we know—and the hon. the Minister of Finance knows this better than any of us—that if we are to curtail inflation, unemployment is an inevitable result. Which is the greater danger: Unimpeded inflation or increasing unemployment in a country such as ours where unemployment has a special connotation in that it can lead to racial unrest? I want to remind the hon. the Minister that only last year there was talk in the Bureau of Economic Affairs of an inflation rate which could be brought down to 8,5% during the current year. I want to remind the hon. the Minister too that if America continues to succeed with its present battle against inflation—I think the figures which the hon. member for Constantia gave yesterday were 4,4% for America and 5,5% for Switzerland—we will have to win the battle against inflation. If we do not win the battle against inflation, the inevitable result will be that in the course of time we will have to devalue our currency again. If prices drop in America and in Germany and in Europe and our prices go higher, it can mean only one thing, namely that it will be to the detriment of our export development programme. Therefore I believe that it is essential that this budget should be so designed as to ensure that we do maintain maximum productivity. Here I want to make a brief reference to the excise which was levied on petrol. I take issue with the hon. member for Paarl. I believe that for one reason or another the motor-car in South Africa is a fact of life; it is a necessity. Due to our completely inadequate public transport system, in terms of world transport systems in major developed countries, the South African needs a motor-car, and all this talk about running around on Saturday afternoons reflects such a minute proportion of the money spent on motor-cars that it is negligible. The farmer, the city-dweller and those in the suburbs cannot do without petrol, but the ripple effect of this harsh tax—and it is a harsh tax, apart from all the other additional taxes—is going to mean an increase in the cost of living for all South Africans.

I want to go further and talk about the sales tax as it effects motor-cars. I have no comment to make this year about the increased local content, but in The Cape Times of today one sees that the motor-car industry has had discussions with the hon. the Minister of Economic Affairs on the subject of the pressures which are now affecting the motor industry. The motor industry was seen in the 1960s as the catalyst which would make for economic growth of our industries in South Africa, and the whole programme of local development was designed for this. Now, I believe that the motor-car industry has been milked by the Government. Whenever there is a fiscal stress, the industry is taxed. The motor-car and the sale of the car are taxed, either through increased purchase tax or excise tax or a tax on petrol or tyres and batteries or what have you. Sir, this country must have economic growth. The motor industry is the third largest industry in South Africa, after mining and farming, and if we are to have economic growth and not a recession which we will not be able to stymie, we must ensure at all costs that the treatment of the motor industry is such that it will continue to stimulate the economy naturally. Its ramifications extend to tyres, glass, batteries, chemicals and through the whole gamut of sales organizations and the distribution force. If the motor industry crumbles, it will be the beginning of the crumbling of most of our economy.

Then I want to come to a subject which in Government circles I know is like a red rag to a bull, and I want to appeal again for less Government interference in private industry. Hon. members like the hon. member for Sunnyside nearly had high blood pressure yesterday, and he attacked the hon. member for Mooi River for having raised the subject. Sir, it is the Afrikaanse Handelsinstituut particularly which year after year, through its various chairmen, raises the subject of the need to protect and give greater credence to private enterprise. This year Mr. Martin van den Bergh, managing director of Interbank, said at a graduation ceremony that the danger of increasing socialism in the economy is generally acknowledged in South Africa and we must take steps against it. He said we must use the free market more fully, and that “economists slate State interference”. Sir, do you realize that while this budget shows up the shortage of cash available in this country and our unsatisfactory balance of payments position, the hon. the Minister has made no comment whatsoever on the necessary borrowings overseas by State corporations. At a time when he is endeavouring to borrow a couple of hundred million rands, the State corporations are needing three times that amount. This is equally a drain on that money which would otherwise be available to private enterprise to develop the private sector of the economy. I repeat that it is only that if we in South Africa see ourselves as a community of 24 million people, with an economic market of 24 million people, and if we gear ourselves to make the most of this, there may be some hope for the budget presented to the House at present. Unless it does so, I have great pleasure in supporting the amendment now before the House.

Mr. Speaker, the hon. member for Cape Town Gardens has raised one matter which calls for comment, and that is his concept of this country as being isolated and as having no chance in the future. Sir, I want to state categorically that this nation is a nation of believers, and even if we are isolated, the enemies of South Africa will have to contend with a nation which is able to hold its own. If it is true that we are or have been isolated, it is a question of time before the West, too, will have been conquered by communism, for in the West one is not only faced with the threat of communism from outside, but one finds it within the nations of those specific countries as well. I have no doubts about the future. I have the confidence that is inspired by faith. The hon. member for Cape Town Gardens shocked me when he said that we were isolated and that there would be no hope if we were to be attacked. Sir, we have unshakable faith and I have no doubts in my mind.

The hon. member for Johannesburg North said here that the hon. the Minister had sold his birthright. That was a very unpleasant personal attack. Through you, Mr. Speaker, I want to tell the hon. member for Johannesburg North that he can have his birthright back free of charge. I would not have said this if he had been an hon. member who had shown any sign of sincerity towards this country. He made comparisons here to make the matter seem contentious. He spoke of what was being spent on the training of Blacks, on education for Blacks, in comparison with White education. But he knows the facts. He knows that as far as White education is concerned, one has capital expenditure which entails costs, and that is why it seems as if much more is being spent on White education. He knows this. He also knows that there are farmers all over the Republic of South Africa who support farm schools and who make a contribution from their own pockets to the education of the Black man. It is shocking when a man makes statements while he knows what the factual position is. It is not our fault that the Black man has not reached the level of the White man as far as numbers in the high schools are concerned. This is one of the reasons why more is spent on White education. The hon. member for Johannesburg North knows these things, but he wants the message of venom to spread from this House all over the country and abroad. He went further and he made accusations to the effect that a previous hon. Minister of Finance had given the assurance that there would never be any increase in the tax structure affecting the gold mines. I challenge him, Sir. South Africa and this Government have a proud record. We have always paid our debts in full and we have always acted honourably, and previous Governments under the United Party have done so too.

South Africa is known for its honour and integrity in the rest of the world and I challenge the hon. member for Johannesburg North to prove that this is not so. What he is trying to imply is what happened when the price of gold suddenly shot up and when some of his friends among the Americans began to think that there would be tremendous profits. Then they were afraid and they thought that the State would intervene and take all the profits. Then the assurance was given that the normal taxation would in fact be levied but that the companies would receive their rightful share. Now it is being stated in a different way. Now the hon. member for Johannesburg North says we have broken our economic word. This is scandalous, Sir, and I want to tell you that the people who have confidence in South Africa may be shocked at this behaviour on the part of the hon. member. And the tragedy is that he is a director of one of the large companies in South Africa and that the words he uses here may therefore have an influence on other people who would like to invest in South Africa. For him to start attacking the hon. the Minister all of a sudden because the gold price has gone down is not right. Last year he was the big optimist in regard to the price of gold. In his speech he said that he had every confidence that the price of gold …

You are talking nonsense.

Oh yes! I challenge the hon. member to prove the contrary, that any Minister of Finance in this country ever gave any assurance as far as taxes are concerned. That is an irresponsible statement to make.

The present Minister’s predecessor did.

Through you, Mr. Speaker, the hon. member for Johannesburg North ought to correct that statement and to admit that no such assurance has ever been given in the past. During a visit to the United Kingdom we were very proud to learn that the foremost economists in the United Kingdom, some of the foremost industrialists, people who invest money in South Africa, have great appreciation for the economic stability in South Africa, and for the political stability in South Africa. Leading financiers speak with appreciation of the position here, i.e. economic and political stability. The Opposition is adopting a negative attitude during this Budget debate. They say derogatory things and they are always expressing destructive criticism. The Progressive Party, or the Progrefs—I think it is really the Prog-Freak Party—is adopting an absolutely negative attitude. The hon. member for Yeoville spoke of window-dressing. The Progrefs have yet to learn that a party is not built by venom and destructive criticism. And they are a freak party. The Progressive Reform Party is a freak party which will disappear from the whole set-up in South Africa, and I shall prove on a later occasion that this will be the case.

Sir, what did the Sunday Times say about this budget? I quote from what was written by Fleur de Villiers in the Sunday Times on 4 April 1976—

The Opposition is not magnanimous enough to endorse this recognition of the budget written by Fleur de Villiers in the Sunday Times. However, what is the true economic position today? South Africa is a trading country. Our survival depends on it. Our position in this country is still one of nett import. Now our trading partners have to contend with a depression which in my humble opinion is worse than the depression of 1933. During that depression there was an abundance of production and people were eager to work. People with degrees worked on the roads. There was a will to work. What is the present position in the Western countries? They are faced with continual strikes. The trade unions overseas, the people themselves, resist the idea of working. There is a psychosis among the people of the West which makes them unwilling to contribute to the development of their respective countries. The situation is much worse than the one which obtained in 1933. They are our trading partners. From the nature of the case, therefore, this must affect South Africa’s whole economic set-up. There must be no doubt about that. Another aspect is the lack of stability in regard to the whole economy, in regard to the currencies of countries. Gold is the only commodity which disciplines the economy of the world and if ever they remove gold from the monetary system, the consequences will be dire. More and more social obligations have forced countries to make a larger supply of money available, and no discipline has been maintained in the sense that it must be covered by gold. I want to state today that time will show that it will never be possible to remove gold from the monetary system and that gold will have to resume its rightful place before stability will be regained in the economic sphere all over the world. In holding this opinion I am in good company. What did the Business Argus of 3 April 1976 say under the heading “Corder sees end to S.A. Inflation”? I quote—

And what did he say with regard to gold? I quote—

I have no doubt in my own mind about this. We are living through an interim period at the moment. Gold deserves the confidence of the world because it is the only liquid asset which can be transferred from one country to another and which inspires confidence. Surely this is logical. Gold will remain one of the most important elements in the prosperity of South Africa. What is the norm? This is the question I ask the official Opposition as well as the Progref Party. They cannot deny this. The United Party is an ailing party, and I find this a pity, because I feel that the hon. the Leader of the Opposition is an honourable man. I believe that an Opposition has a duty to fulfil. But what is the dilemma in which they find themselves? They find themselves in the dilemma that they are not prepared to comply with certain norms set by the people of South Africa. This has been proved repeatedly, in every election and in every by-election. The people of South Africa set certain norms, and they have the right to do so. What are the norms of the people of South Africa? There are five principles. An identity of our own as a White nation is the first one. This is our right; it is our cultural heritage—no one can deny this.

One White nation or two White nations.

One White nation. And the hon. member for Simonstown is very welcome to that White nation. Secondly, we believe in the right to self-determination of other nations. We believe that we must contribute to that, that we must further the evolutionary development of those nations. Thirdly, we believe in economic preparedness; fourthly, in military preparedness for South Africa, and fifthly, in State security. The United Party refuses to comply with some of those norms and this does not impress the public. The United Party fails to comply with certain of those norms and the Progref Party fails to comply with any of those norms. I want to state categorically today that the United Party must come to its senses. The hon. member for Jeppe is a clever man—he only pretends to be so obtuse—so he knows that what I say is true. I say that the hon. members Jeppe, Durban Point and Simonstown must get rid of the hon. members for Bezuidenhout and Von Brandis before they are completely consumed by them.

Why are you so concerned?

They must get rid of that element and let them take their places where they belong, in the PRP, then they will become a strong party again. Grant permission to the hon. member for Green Point as well as to the hon. member for Mooi River to participate in State security in South Africa. Then the electorate of South Africa will recognize them again. But they are trying, in regard to the Progs …

The electorate knows that it can trust us.

Mr. Speaker, I do not want to get personal and therefore I would rather refer to Alberton. Alberton furnished the indisputable proof of absolute confidence. Alberton exemplifies the sense of responsibility of the electorate of South Africa. In spite of a climate which was quite wrong for an election, the National Party was victorious in Alberton. There is a lesson to be learnt from that for the United Party. What is the problem of the United Party? Their problem is that the electorate does not know what they are doing. At this stage they are trying to out-Prog the Progs. This is tragic, but the Progressive Party is really a freak party in South Africa. It is a party which will disappear. It is a party which must disappear because it gives a place, a platform to the enemies of South Africa— whether it knows this or not. That is what is being done by that party which is sitting there. The hon. member for Yeoville is very sensitive when patriotism is mentioned. I accept his bona fides when he alleges that he would like to be a good patriot. But if he does want to be one, he will not be able to remain in that party very long. I believe that he will not be able to remain there very long. I do not think he agrees with them when they fulminate against our military operations in Angola. The hon. member for Orange Grove sits there with a chronic smile on his face, but I doubt whether he and the hon. member for Yeoville are altogether in agreement on this matter.

It is interesting to see how that hon. party and the HNP—the extreme left and the extreme right—are united in their belief that we should never have taken military action in Angola.

They are blood brothers.

Mr. Speaker, what does the future hold for South Africa? We have a Government which is not prepared to run into debt in order to raise the standards of living. This is what the hon. Opposition would like to see, of course. We are not prepared to run into debt in order to raise our standard of living in South Africa. If we were to do such a thing, it would be bound to lead to economic chaos. Eventually the bubble would burst. This kind of thing is irresponsible. This is what happened in Britain. They went into debt to raise their standard of living. This kind of thing is irresponsible. It may gain a Government temporary popularity among its voters, but one need never be ashamed of temporary unpopularity when one has acted in the interests of one’s country. I believe that South Africa faces a splendid future. We have the inherent potential for growth. We have the mineral riches. We have the development potential that is required. The greatest challenge for this nation today is its task of capital formation. This is what the hon. the Minister is engaged in. The committee on building norms which he has just appointed is going to save this country millions of rands. No matter how strong a Government is, no matter how strong a country is in the economic sphere, it remains the task of everyone to economize where it is possible. This is an inherent duty because there are always priorities in regard to the spending of money. I want to mention the splendid example of building norms. Aesthetical values are hypothetical. What appeals to the hon. member for Welkom does not necessarily appeal to me. All we need is the utilization of the right factors. The formation of capital will continue. The development of South Africa on an efficient basis will continue. It is continuing at the moment. The tremendous saving effected by this latest budget, a saving of R800 million, is an achievement.

However, provision has still been made for maintaining an infrastructure in South Africa. People speak of the low ebb at the moment in England. The British took the unfortunate course of raising their standard of living by going into debt. In spite of this, I believe that they will recover, that the world economy as such will recover and that money will be available again. As soon as this happens, South Africa will be ready to contribute its share to the further development of a country which believes in its people and in its future.

Mr. Speaker, I have listened with special interest to certain speakers in this House. A number of matters have been raised, but I believe that one thing which should really give this House food for thought is the attitude adopted by certain members when they appear in public, wherever that may be. The hon. member for Johannesburg North recently took it upon himself to launch violent attacks on South Africa.

[Inaudible.]

I think the hon. member over there would do better to remain silent.

[Inaudible.]

Brother, I will talk to you on Sunday. [Interjections.]

*I think the time has come for us to put South Africa first. [Interjections.] I think, too, that the time has come for us to realize that the discordant noises sometimes heard in this House have widespread repercussions. [Interjections.] It is necessary for us to realize that we are living on a continent which has been characterized by instability in years past. The country we are living in, however, has always been stable. Whether it has been under Nationalist rule or not is beside the point. From 1910 up to the present this Government has had strong governments. The hon. member for Johannesburg North speaks about a banana republic. [Interjections.] Where is that hon. member’s loyalty? I think I can put the same question to the hon. member for Sea Point. After all, he speaks about a “redistribution of wealth”.

What is wrong with that?

Just listen! “What is wrong with that?” In other words, the hon. member agrees that we may tax Oppenheimer, and not only tax him, but take his wealth away from him and give it to Buthelezi.

[Inaudible.]

The hon. member speaks about taxation. [Interjections.] However he is not going to get out of this so easily. [Interjections.] The hon. members have made their bed and now they must lie on it. The fact is that the Progressive Party is engaged in burning its bridges and is venturing onto a terrain on which they can only come to grief and which can only cause harm to South Africa. Fortunately there are still some of their members, the hon. member for Yeoville, for example, who still have enough patriotism to try to call a halt.

Mr. Speaker, the hon. member for Sea Point made a statement in connection with the redistribution of wealth. He maintains that we must take from the rich and give to the poor. [Interjections.]

You are three debates behind!

He never said that we should … [Interjections.] Why does the hon. member complain when the tax on the mines is increased slightly? How many different yardsticks do they want to use? However, I want to point out to them that they now are not dealing with unsophisticated non-Whites. They are saying things in this House which they will have to account for to the country. The hon. members are forgetting … [Interjections.] The hon. member for Johannesburg North speaks about a man’s birthright, about the hon. the Minister’s birthright. Has he ever heard of Scottish Nationals? Does he know that there are such people in the British Parliament? Have they perhaps, or those who “flounder in good positions” here, sold their birthright? We are sick and tired of arguments of that kind. Anyone in South Africa has the right to criticize this Government. However, to maintain that anyone has thrown away his birthright is one of the most ridiculous things I have ever heard. I ask the Progressive Party to kick out their leader and not to be afraid to put the hon. member for Yeoville in his place. That is the position he ought to be occupying. The problem with the Progressive Party is that they are racists and that they do not want certain people in positions of leadership.

Mr. Speaker, when discussing South Africa and its potential, one has the feeling that one must be careful. How do matters stand with South Africa? In recent years the Republic of South Africa has gained the confidence of foreign investors. The yield on the investments of foreign investors in South Africa has varied from year to year, but has nevertheless always been high in comparison with the yield on investments in other countries. In recent years the American investor has gained 19,3% on his investment here in South Africa. Gold shares, which have risen by more than 400% since 1963, have nevertheless paid a dividend of 8% to 12%. Britain earns a yield of more than 12% in South Africa, compared with 8,9% on American investments, 6,6% on Australian investments and 5,1% on Canadian investments.

What does that mean?

It means that it pays Britain to invest in South Africa. That hon. member must not pretend to be stupid now. If he wants to pretend to be stupid, then I shall withdraw the suggestion I made that they make him leader of the party. Looking at the advantages of investments in South Africa today, we must consider South Africa’s economic record. Whereas South Africa comprises only 5% of the continent of Africa and its population constitutes 6% of the total population of Africa, its industrial production comprises almost 50% of the total production of Africa. The production of our factories, which number almost 25 000, was estimated at about R5 000 million in 1974. 50% of all foreign capital invested in Africa comes to South Africa. This shows what confidence countries overseas have in us. South Africa is responsible for 60% of the electricity generated in Africa. 60% of all railway freight in Africa is handled by South Africa. The South African telephone system comprises 46% of all telephones in Africa. The average real growth of 5% per annum since 1910 is undoubtedly higher than in any other country in the free world. The gross domestic product has tripled in the past 12 years. In 1962 it was R6 000 million and at present it is R22 000 million.

The standard of living of all South Africans has risen by 2,2% per annum over the past 60 years. This is particularly praiseworthy if one takes into account that we have had a rate of population increase of 2,4% per annum. Sir, in what other country with a similar increase in population does one come across the same progress? Direct and indirect investments by foreign investors in private businesses alone are increasing by 11% per annum, and rose from R2 286 million in 1966 to R4 700 million in 1972. Over the same period domestic investments rose from R1 141 million in 1966 to R2 169 million in 1972—a real growth of 11%. The additional overseas investments from 1966 to 1972 amounted to R2 414 million. This represents 21,5% of all investments in the private sector during the six years in question. At present it is estimated that R9 000 million is invested in both the private and the public sectors. About 50% of this is from the sterling area. Large countries like America have confidence in South Africa and invest in South Africa.

It is calculated that by the year 2000 we shall have a population of about 50 million. Of these, 20 million will be economically active. In financial terms the gross domestic product will exceed R85 billion in the year 2000. Of the utmost importance for the foreign investor is the infrastructure of a country. Hon. members opposite are always complaining about over-expenditure by the Government. They fail to realize that we are engaged in building a strong infrastructure. In order to utilize the potential of the Economy to its fullest, large sums of money have had to be spent on services such as the provision of electricity, telecommunications, railways and harbours, the provision of water, etc. The provision of electricity requires R1 000 million in the first three years. Railways and Harbours expect to spend R4 000 million until the end of 1978. The Post Office expects to incur development expenditure of R1 500 million over the next 10 years. A total of about R10 000 million will be spent on the infrastructure before the end of 1977. Valuable developments such as Sasol 2 only help to inspire increasing confidence on the part of foreign investors. Our secondary industries are undoubtedly obvious growth points. The manufacturing industry is probably one of the keys to economic progress. Firstly, employment for thousands of non-White workers will be provided. The gross domestic product will undoubtedly rise from the present 24% to 36% by the year 2000. In my opinion, the best sales in these sectors will probably be as a result of the processing of food and steel.

Outstanding growthpoints will probably be the following: Television; Materials for the development of the infrastructure; textiles; the processing or refining of minerals; motor cars; chemicals; containerization and the mechanization of the mining industry. Here again I want to talk to the hon. member for Johannesburg North. The hon. member gives out that he has a great deal to do with the mines. I think that if there is one sector in South Africa which is still fairly old-fashioned as far as mechanization is concerned, then it is the mining industry.

Speak English.

I prefer the language in which I am speaking. I retain my birthright. The hon. member for Johannesburg North will agree with me that over the years very little has been done by the gold mines to eliminate their Bantu labour and mechanize a little more. Not enough has been done in this connection. Many years ago, when I, too, used to go and visit the mines now and again, we had certain machinery capable of cutting out, and extracting a substantial amount of ore. Up to now I have not yet seen this machinery in use in any of the mines, and one wonders whether the mines are not perhaps using Bantu labour as a method of evading tax or of reducing tax to a minimum by keeping large compounds.

Mr. Speaker, this industry and secondary industry are equipped to utilize the investor’s investment properly and to assist in the development of this country of ours. In my opinion the mining industry has a tremendous future. We in South Africa have been endowed with many minerals. It was recently ascertained by the Federal Institute of Geophysics and Raw Materials that the USA, Canada, Australia and South Africa provide 30% of the world’s raw materials. If one takes into account the fact that America is one of those countries which uses most of its raw materials itself, it will be seen that the free world will in future rely heavily on South Africa for its raw materials. We have a great future, and if we take into account the major development at Richards Bay, for example, then our people ought to have confidence, including those who speak in this House.

We also call to mind, for example, that last year we produced two-thirds of the world’s gold, and we did so in spite of the mines. [Interjections.] Sir, that was only a joke. It is undoubtedly true that the biggest deposits in the world occur in South Africa. We have 25% of the world’s uranium oxide, and extensive deposits of asbestos, manganese, lime, coal, copper, platinum and iron ore. This is a country with a future, a country with the raw materials, a country with a labour potential second to none in the world, and yet we get these lamentations on the part of members of the Opposition, particularly the members of the Progressive Party. Mr. Speaker, in recent times I have done some travelling in Europe, and nowhere, in the few months that I was overseas, did I see the development which I saw in Richards Bay in the course of a single day. I did not feel the greatness of a nation and of its people that one feels when one comes to a place like Richards Bay. There one sees the hinterland that lies before one, with an open harbour to the sea and the necessary machinery. Capital has been invested there by the Germans, the French, the Americans and other nations of the world. When a speech is made there from a public platform by a Dutch investor, that says a great deal for South Africa.

Whose coal is it?

It is the coal, the black gold of South Africa, belonging to its people, who have never had their share yet.

*The people of Langlaagte have extracted more gold than the hon. member was ever able to obtain in Scotland over the years. The distribution of wealth has never taken place in respect of the people of Langlaagte. [Interjections.] It is possible that in the next eight to 10 years, R40 billion to R60 billion will probably be invested in all sectors of the economy. As has already been stated, we have the ability and the knowledge, and what is also important is that we have shown over the years that we have the integrity, to take action to protect the foreign investor and his investments. There is a feeling among foreign investors that our exchange control is detrimental to them. Sir, there are so many people who speak about this. An hon. member opposite overstepped the mark in this regard today and because I want him to understand what I am going to say, I shall speak to him in English.

†He has acted today as a bear. I have had the feeling for a long time that there are people in South Africa who, when gold goes down, act as bears and try to have sellers on the market. At this moment there are people who are looking out for cheap shares.

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

Please sit down. I do not have the time.

*Mr. Speaker, it is a fact that today, in the American sector alone, there is an investment of something like R7 billion in gold shares. We have a payments reserve of R1 600 million. Can anyone, Milton Friedman or anyone else, ask that there should not be exchange control?

†It is absolute nonsense. Where in the world do you find a country with no exchange control?

I agree that there should be exchange control, but there are many countries that do not have it.

There must be exchange control; they all have some form or other of controlling the in-and outflow of money.

*Mr. Speaker, this is one of the matters about which we are attacked here to a certain extent, but if we consider the amount of coal, minerals, etc. which we can send abroad over the next few years and the foreign exchange we can earn with it, and if we also take the potential of our own country into account, then it must be very clear to any foreign investor that South Africa is the country in which he must invest. It is the country with a future. But, Mr. Speaker then we hear it said in this House that people have become afraid and that there is a state of war. Where are we in a state of war? We have never been better off than we are at this moment. Five years ago the West did not know us as they do today, after the events in Angola. America did not possess the acuity of vision to see South Africa in the right perspective. I predict that in the next seven years more will be invested in South Africa by America and the Western countries than ever before. West Germany has invested more in South Africa over the past five years than in the previous 25 years, and this will increase. We shall become the country which manufactures everything which Africa requires. I also want to point out that I told the hon. member for Prieska two years ago that the gold price would drop to less than 150 dollars. The hon. member is present; he will confirm it.

Why did you not tell the Minister?

Because you told him that we should revalue.

*It has been asked why we do not switch to the private price of gold. That is what the hon. member said.

I did not say that.

I said to the hon. member for Prieska: “Do not buy now. When we come back here again, you will be able to buy Randfontein at R18, less than a third of the present price.” I now say that within 18 months, gold will again reach a price of 200 dollars. Just wait and see. One of these days the Arab countries will start doing what America has been doing with Russia all these years. The free dollar price and oil will cause the Arab countries to see that they will have to concentrate on gold to get real value for the oil which they have but which is fast running out. In the next 18 months you will see that gold will be restored again.

Mr. Speaker, the hon. member for Langlaagte read out to us a long list of the achievements of our country, South Africa. We are very proud of those achievements and what makes us even more proud is the fact that we accomplished those achievements in South Africa despite the maladministration of this Nationalist Government. The hon. member spoke at length, but it seemed to me that someone had written his speech for him beforehand and that the writer of his speech had unfortunately not explained to the hon. member what it was all about. The hon. member for Rustenburg told us that he was deeply shocked that the hon. member for Cape Town Gardens, had reputedly said that we in South Africa were isolated. I do not know whether the hon. member for Rustenburg listened to the speech of the hon. member for Johannesburg West, but if he had listened to it, he would have heard the hon. member for Johannesburg West, who, as far as I am concerned, delivered one of the most important speeches in this debate so far, saying that we must guard against isolation. Therefore, it appears to me as though the hon. member for Rustenburg did not actually follow what the hon. member for Johannesburg West said here. I want to suggest that the hon. member for Rustenburg should study the speech of the hon. member for Johannesburg West. Perhaps he will then be able to take part in this debate next year. Unfortunately I do not have much time to devote to the important speech of the hon. member for Johannesburg West, but I do want to say to him that I followed his speech very carefully and that up to the point in his speech where he congratulated the hon. the Minister, everything he said sounded to me like the policy of the UP.

I want to congratulate the hon. member on having persevered for such a long time in advocating UP policy here even though, I and other members and, perhaps, the hon. the Minister of Finance thinks, he is a good member of the Nationalist Party. It is heartening to me and hon. members on this side of the House to hear such a speech. We were especially glad to hear the hon. member say that a complete change in our way of life was necessary, that there must be a change of attitude in regard to our internal relations and that we must be the partners and the allies of the Brown and the Black people in this country. We agree wholeheartedly with this and I want to congratulate the hon. member on his speech.

†Now, Mr. Speaker, in regard to this budget, we have to ask ourselves: What have we done to deserve such a ghastly budget? When one asks oneself that question, the answer, I believe, that one gets is that despite the warnings of the United Party that this Government was leading this country into economic stagnation, there were too many people who were prepared to play along with the Government and who hoped that the economy would improve. I do not think I am the only one who says that, because I saw an advertisement a moment ago given out in connection with the Anti-inflation campaign and at the foot of that advertisement it says: “Things are going to be better; they may have been a lot worse, but they are going to get better.” It is that sort of hope, Sir, that a lot of people have been living on; they have been hoping that this improvement would take place. In fact, there has been gross mismanagement of the economy, and we know that for four years the Government has spent more than it could afford, relying on a gamble that the gold price would keep pace with the over-spending. I think that has been quite clear from most of the speeches made in this debate so far. But that gamble did not come off and the result is a chronic balance of payments deficit, with a massive devaluation of the rand last year and the ugly spectre of a further rise in the cost of living now looming.

What disturbs us on this side of the House is the fact that although we have been asking for this for many years, there has been no improvement in the direct tax base. It is estimated, as the hon. member for King William’s Town said yesterday, that approximately ½% of the population pays two-thirds of the income tax. The United Party has urged for many years that urgent attention be given to broadening the tax base so that the direct tax burden is distributed over a larger number of taxpayers.

You mean the poorer people must pay more?

No, not the poorer. If the hon. the Minister would listen, he might learn something. I thought he had learned last year, but apparently he has not. A broadening of the base requires the upgrading of workers so that more of them can contribute towards direct taxation. If the hon. the Minister would pay attention, he might be able to talk to some of his colleagues in the Cabinet, because the upgrading of workers involves something which he is not alone responsible for. It involves planning employment opportunities. It involves primary and secondary education for those who do not yet enjoy those facilities. It involves a massive training and re-training programme, and it involves occupational and geographical mobility of labour, and also it involves quite a lot of reshuffling in the Cabinet, namely the scrapping of the present system whereby the Department of Bantu Administration and Development, the Department of Planning and the Environment, the Department of Health and the Department of Mines all have a finger in the labour pie. If this is unscrambled, and all this sort of control which I know hon. members opposite love referring to as “oorhoofse beheer” is done away with, we will then find that labour matters will be dealt with as they should always have been dealt with, namely under the Department of Labour. Perhaps when that bright day arrives, we might find that the labour force of this country is involved in all the things I have just mentioned and that we will have an upgrading of the workers with the result that we will be able to broaden the direct tax base and that we will find that as a result of that, more people will be contributing towards direct taxation in this country.

Now, Mr. Speaker, there has been a gross misdirection of the domestic policy of this Government. The Government is still wedded to ideological fictions, notwithstanding that the country cannot afford to pay for them. The Government still persists in grandiose schemes like Atlantis. You know, Sir, at Atlantis the Government is creating out of the bare veld, for no economic reason, but solely for an ideological reason, a new industrial city, and the Government is paying millions of rand to attract industrialists to it. These industrialists are attracted away from the established industrial areas where there is an infrastructure which is completely adequate and where they can carry on their industrial undertakings without costing the Government a further cent in additional provision of infrastructure. Not only is the Government pouring money into Atlantis—and we have been told, Sir, that the sky is the limit—but it is also providing very expensive tax holidays for industrialists, for 10 years. By doing this the Government is crimping the already slender tax base still further. I believe that these are subjects which are most germane to a discussion of the budget, because I believe that unless the hon. the Minister is going to talk to his colleagues in the Cabinet and ask them to mend their ways, he will not be able to produce a budget next year which will not hurt everybody to such an extent that the country will find itself going backwards and that the standard of living will drop very considerably. Recent events in Southern Africa and in Africa have shown that South Africa is on her own as far as her defence is concerned. I should like the hon. member for Rustenburg, if he is about, to come and listen to me because this is what he was so shocked about earlier this afternoon.

You are talking non-sense.

The hon. member for Worcester talks about “nonsense”. I wish the hon. member would think back to some of the speeches he has recently made in this House and would ask himself whether some of them do not fall in the category of “nonsense”. The recent events in Africa have shown that nobody will raise a finger to help us. I believe the Government has realized that no Western power will raise a finger to help our country should it be attacked. That being the case, defence expenditure must increase as it is essential that the country should be able to protect itself in every eventuality. In these circumstances the colossal defence expenditure is an absolute necessity. I and hon. members on this side of the House have no quarrel with it. Lest there be any mistake, let me add that we do find ourselves wondering why we in South Africa are in this awful position. We have come to the conclusion that the Nationalist Government has gone out of its way to create the position and climate for our economic plight. The blame lies squarely on their shoulders for the labour policy which is being followed. For more than a quarter of a century the Government has tampered with labour matters. Ideology has been the criterion for the labour policy. Job reservation has been the keynote of that policy. A restrictive labour policy has led to a restrictive industrial policy. The country still imports one-third of its needs. A free-enterprise industrial policy would have gone a long way towards making the country self-sufficient.

Although the Government instructed its ambassador to the United Nations to announce a new era in South Africa, viz. an end to discrimination on the grounds of colour, it has failed to implement it. Petty apartheid still abounds, and statutory apartheid still remains firmly entrenched on the Statute Book. Western powers, hearing the announcement, were hopeful that it would be carried out quickly. They accepted the announcement in good faith, only to be grievously disappointed when nothing was done to implement it. The Nationalist Government ignored the fact that Western powers were looking to the implementation of non-discrimination as a reason for becoming the friends of South Africa. The announcement made by our ambassador to the United Nations was in fact a promise, and that promise has been broken. As we all know, broken promises between acquaintances certainly do not help to build firm and close friendships.

The budget shows clearly that there is a national emergency. The conditions and climate created by the Government cannot be changed overnight. They will continue, but we in the United Party are prepared to do whatever we can to help put them right.

Why do you not table your speech?

The hon. the Minister has only just walked in. I am making a fairly lengthy speech and he now asks me to table it. Had he been here earlier, he could have made that suggestion to quite a number of members on his side of the House, and particularly to the hon. member who preceded me. In fact the hon. the Minister in my case has this advantage that at least I do know what I am saying, whereas the hon. member for Langlaagte did not know what it was all about.

Mr. Speaker, before the hon. the Minister interrupted me, I was saying that the United Party is prepared to do what it can to help put these conditions right. The United Party has always rallied to the cause of the country in times of emergency, and we shall do so again.

What does the country need? In the first place the country needs absolute frankness regarding the stark reality of the situation. The hon. the Minister of Finance must leave his pedestal of financial mystique, which may be good and well during international symposia when financial gnomes must be impressed. What the country needs least of all at this time is financial jargon. Let the hon. the Minister stop talking of “leads and lags”, which no one understands.

Do you not understand it?

Yes, I do. Rather let him tell people what faces the country, with currency speculation operating against the rand. He must tell the people that, despite the last massive devaluation, the effects of which have not yet worked through the economy, the country owes the outside world more than she can export and that it is getting more and more difficult to pay for our imports. He must tell them that our standard of living has dropped and that we will have to be prepared to suffer a further drop in our standard of living.

You must not talk nonsense like that.

Of course there is going to be a drop in our standard of living. There has already been a drop in it There was a drop in our standard of living last year and there is going to be a further massive drop this year. The hon. member for Johannesburg West said so this afternoon. I did not hear the hon. the Minister questioning him when he said it. The hon. the Minister should tell the people how he scraped the bottom of the barrel for tax income and that he does not know where to find new sources. He must enlist their support for painful remedies which will have to be applied to restore the economy of the country. If the people are called upon to tighten their belts, they will respond if they are properly motivated. The hon. the Minister must tell the Public Service what he has in mind for them. He cannot leave them in the dark. He must put his cards on the table so that they know what their role will be. He should tell them exactly what he means to do in connection with their salaries. Unless he does so and lets them know how he proposes assisting them to meet the increasing cost of living, he will lose many of the younger members of the Public Service as they do not know how to make ends meet at present. The Government must bring about an immediate change in its ideological direction. First of all it should immediately carry out its promise of non-discrimination on the grounds of colour. It should also make the changes now in its ideological policy, changes which it had hoped could be put off until the turn of the century. The Government must be frank with the people in regard to South Africa’s position in a hostile world. It must tell the people what it expects on our borders. It must tell them that South Africa can expect no help from the Western countries and that we are on our own. It must explain to the people what effect its ideological policies have had on the Western world and what effect this has had on the budget.

At the same time the Government must take urgent action in regard to a number of matters. It must accelerate progress of the self-determination of South West Africa. Decisions must be taken now; not in a year’s time. It should do everything in its power to make firm and close friends of the Western powers. The Government should stop allowing Ministers to make damaging ministerial statements. In this connection I refer to the hon. the Minister of Bantu Administration and Development and of Bantu Education who made that astounding statement last week that there was one doctor for every 45 000 Black people. Surely, the hon. the Minister knows that it is not only Black doctors who look after the Black people of this country. There are any number of doctors of other colours, including White doctors, who look after Black people. [Interjections.]

It is tragic to think that the people of the USA do not know what South Africa has done to uplift its less privileged people. It is not only under this Government that less privileged people have been uplifted; they have also been uplifted under previous Governments. Very little is known of what steps we have already taken to improve the lot of the Coloured, Black and Indian peoples in South Africa. No concerted effort has been made to ensure that most of the decision-making Americans know how we have gone about resolving some of our peculiar difficulties. We have a dedicated diplomatic corps of career diplomats, but the Government has failed to use them to best advantage. We also have a Department of Information, but I believe that the methods we have employed in disseminating information are rather stereotyped. We need a crash programme for making friends. We must use articulate people and we must have an imaginative and intensive diplomatic offensive. We must use popular figures in the political and non-political fields to build our image in the USA. The Government must enlist the support of leading financiers and industrialists to tell the American people about us and make them eager to make friends with us. The UP is prepared to play a significant role in the promotion of South Africa’s image abroad because it believes that South Africa’s isolation is costing the country dear.

Mr.Speaker, I watched the hon. member for Wynberg and the hon. the Whip opposite. The hon. Whip made a very nice sign on the one side of which there was written:“Stop now”. The Whip stopped the hon. member for Wynberg. I do not know whether he stopped him because he made a bad speech or because his time had expired.

His time had expired, but I actually stopped him because I pitied the hon. members opposite because he was hurting them so badly. [Interjections.]

The hon. member for Bloemfontein-East made a very profound and fine maiden speech on which I want to congratulate him. The hon. member spoke very well on history and I hope that I will also be allowed to go back in history a little. By chance I found a book on my bench—I did not fetch it myself—Hansard, Vol. 82, 1953. Mr. S. F. Waterson was the UP chief speaker on finance and economic affairs at the time and I shall quote what he had to say in col. 409—

1. (a) to reduce substantially the incidence of direct and indirect taxation including the heavy burden of living costs on the lower and middle income groups

However, this year the hon. Opposition is asking us to broaden the tax structure. Mr. Waterson continued as follows—

1. (b) to restore confidence both at home and abroad in view of the fact that the Government’s drastic taxation proposals are necessitated by the serious shortage of capital in the Union caused mainly by the Government’s actions and policies since 1948.

That was 23 years ago, but the essence of the UP’s amendment on the to-day’s Budget has remained the same. In the meantime however, South Africa has grown phenomenally. I had a very interesting experience this afternoon and you will allow me to tell the House about it. A good English-speaking friend and ex-colleague of mine, who in 1953, the year in which Koos “Promise” was completely defeated in an election,—the UP got rid of him as their leader shortly after—moved to Canada with his wife and two children because our country supposedly did not have a future, arrived at the House of Assembly this morning. He lived in Canada for 12½ years and he told me that he could not afford to buy a house in Canada; he had to build himself a house with his own hands. Ten years ago he returned to South Africa, but I saw him today for the first time in 23 years. He assures me that there is only one country in the world and this is South Africa. As it happens, he lives in the constituency of Durban North. When he left the country he was, if I remember correctly, a supporter of that side of the House. I knew that in those days he was not on my side. Therefore when I saw him again, I asked very carefully:“My friend, which of the four candidates do you favour?” He then said that he had been to the meetings of all the candidates and had written off all except one. It was really a pleasant surprise for me to hear this. This is the type of confidence with which even those people who went looking for greener pastures, returned to admit candidly that this is the best Government in the whole world. After all, this is the Government which has now been in power for 28 years. The UP is committing a gross blunder because they are playing on the mercenary feelings of the voters. The hon. member for Wynberg advocated a change in our ideology, but it is our ideology which has returned us to office every year from 1948 to the present. The measures which flow from the ideals of our ideology are the measures which we are applying. They are continually wooing the voter through his pocket, but they will achieve nothing in this way. That party will decline because they are going to the voters’ pocket and not to his heart. They must hold up an ideal to the voters as the NP does. However, there are few ideals which they can hold up because we have them all. Therefore I feel very sorry for them.

I also want to refer in passing to this tiny splinter party, for in essence that is what it is. The vast majority of those people were first members of the UP, but then they ran away. They deserted. In my eyes that party is a splinter party. That party is a luxury which we cannot afford in South Africa, and I shall explain why in a single sentence. In the words of one of their former supporters: “It is a rich man’s party with a guilty conscience.” That is what they are. [Interjections.] Over the years they have exploited the less well-to-do to an appalling extent and now they want to buy those peoples’ favour for political reasons. They are not interested in the well-being of those people. They do not really want to share their wealth with those people either. Nor will they ever share their treasures with the less well-to-do. But they want the less well-to-do to help them politically. I hope the world will be able to see what is behind their little games. [Interjections.] The UP—to say nothing of the PRP—underestimates the patriotism of the South African citizens. Over the years there have been times when this Government had to call upon its people to make sacrifices. The Government has always done this in the confidence that the people would understand and would make the sacrifices, and that is what they did. The Government does not want to buy cheap votes. If the Government has to take unpopular steps then it does so, and the people trust it. However, they do not trust the hon. Opposition because they know that it only wants to buy votes. If they were ever to come into power one day, things would be as they were before 1948. Then there was nothing.

The UP has criticized this budget unfairly. The hon. member for Piketberg, however, explained the necessity of the present budget very well, and I agree with him. The Government did what it had to do. However, the Opposition is now making unfair comment. I should like to mention a few of the patriots to whom I referred previously. Dr. Martin van den Berg, managing director of Interbank, said the following—

This is a person who has a positive approach, and he is managing director of a very large bank. He continued—

He is therefore refuting the arguments of those hon. members in advance. However, I may also mention the negative aspects of his comments. He said—

Mr. Jan Haak has been quoted by a previous speaker. Therefore I shall not quote him. Mr. Van Rensburg, chairman of the Johannesburg Chamber of Commerce said that it is apparently the aim of the Budget to finance State expenditure in a non-inflationary manner. That is a testimonial for the hon. the Minister. I could quote further but I do not think it is necessary. Let us look at the actual hard figures of the Budget. The current expenditure for the coming financial year is estimated at R3 110 million, in round figures. Capital expenditure is estimated at R329 million and the transfer payments are R4 353 million: A total of almost R7 800 million, a net increase of R1 113 million. This is an enormous sum of money. As far as the expansion of the existing services is concerned, defence expenditure is being increased by R379 million, in round figures. Hon. members all agree that in the situation in which South Africa finds itself it is essential and imperative that the country should be able to hold its own in the sphere of defence. Provincial administrations are receiving over R82 million more, and hon. members know what the provinces need this enormous sum of money for. It is for education and for all other services which have to be provided. Hon. members do not begrudge them that. The Railways and Harbour fund is receiving R73 million and payments to the Governments of the Bantu areas amount to R36 million. Do hon. members habe any objections to this? Surely hon. members do not object to that money being given to them. I am mentioning only the most important figures.

Additions to the capital of the national housing fund amounts to over R25 million. Aftei a11, hon. members want more houses for the population and therefore do not object to this increased expenditure. In respect of wheat one can mention the figure in respect of the bread subsidy, something which Mr. Waterson also referred to, namely R20 million. The Cabora Bassa project requires almost R20 million. Do hon. members object to South Africa ensuring its future in the field of energy? Surely hon. members do not object to that. Assistance to the gold mining industry amounts to R90 million. Does the hon. member for Johannesburg North object to that? I do not think he objects to that. Gold is a very important commodity and I should like to agree with the hon. member for Rustenburg, who in my opinion made a very good speech on the future of gold. Gold has an intrinsic value which will remain over the centuries in spite of upward and downward fluctuations. These fluctuations are caused by factors other than the economic value of gold. An additional R18 million is being voted for the exploitation of strategic minerals. Financial aid to National Supplies Procurement Fund amounts to R16 million. Do hon. members object to our purchasing strategic goods? Surely hon. members do not object to it, but nevertheless complain about increased taxation. There were also decreases in respect of existing services. This year there is an amount of R120 million which does not have to be spent on Iscor shares. Fiscal transfers to Posts and Telecommunications is almost R40 million less than last year. Nothing is being requested for this year. The Post Office is standing on its own two feet. Payments to neighbouring countries in accordance with customs and excise agreements amount to R15 million; loans to the Richards Bay coal terminal, R10 million; loans to Community Development funds, R8 million less; and fiscal transfers to Land and Agricultural Bank, R7 million. I know that the hon. the Minister of Agriculture thinks that it should be more. The amount which is necessary for occupational diseases in mines and works is less this year because the people are healthier.

Mr. Speaker, I should like to mention to you very quickly what the State is spending the money on. The Treasury is receiving R2 035 million. This is intended primarily for the provinces. Defence is receiving R1 350 million; Bantu Administration and Development and Bantu Education, R520 million; Agriculture, R327 million; Social Welfare and Pensions, R323 million; National Education, R261 million; Public Works, R206 million; Community Development, R204 million, and Coloured Relations, R193 million. Hon. members must not forget these figures.

Why do you not table your speech?

The police are receiving R177 million. We all want to feel safe. I can continue in this way. It is very interesting, if we look at this list, to see that Parliament is 36th in order of importance, the third last on the list. The figure there is 2,2 million. I also appreciate the minimum contribution which comes from the Opposition. South Africa is extremely fortunate that the administration of the country, the policymakers, require an amount of only R2,2 million out of almost R8 000 million. This is what it costs the taxpayer to have us here. I should like to see what it costs in other countries.

Mr. Speaker, now I would like to mention the sources from which the revenue is obtained. Tax on income brings in R3 571 million. Hon. members need only look at the figures. They are very enlightening if only they are arranged properly. Then there are excise duty, R627 million; interest and dividends, R493 million; other tax receipts, R485 million; imports, R340 million; sales duty, R220 million; departmental and miscellaneous receipts, R207 million; loan levy, R104 million; repayments of loans, R55 million, and miscellaneous, R4 million. This is in aggregate more than R6 000 million. The hon. the Minister was compelled to find more money to cause the budget to balance and to finance essential services. Where did he find it? For companies the increased loan levy is R160 million. Company tax in South Africa is still among the lowest in the world. Persons, individuals, like you and I, are paying an increased loan levy of R130 million; companies an increased surcharge of R80 million and persons an increased surcharge of R65 million; and tax on foreign shareholders, R3 million. This gives a total of R438 million. In his attempt to find more money, the hon. the Minister obtained it over the whole broad spectrum. He did not say that only the companies had to pay the whole amount or only persons or only foreigners. The direct tax and file loan levy does not affect everyone. The Opposition’s complaint is that there is a small percentage of people who provide the largest percentage of the taxes. This is in fact one of the reasons why sales duty was introduced, i.e. so that the broad masses may also make a contribution, however small it may be.

The source from which the increase in customs and excise, the additional R263 million, is going to be obtained, are for example petroleum products, R137 million. Now we hear the complaint from the Opposition that we are depriving individuals of the privilege of owning motor-cars. The hon. member for Cape Town Gardens, if I remember correctly, said that a motor-car is no longer a luxury item; it is a necessity. I want to concede that. It is a necessity in our system today in South Africa. If I concede this, and say that the first car is necessary and perhaps a second as well, what am I to say if, after a while, there is a third and a fourth car as well?

There are many people who own four cars. There are many families who own three cars.

Those are the rich people.

Yes, I know, but the hon. member will be surprised at how many people whom the hon. member would not consider to be rich people, own three cars. On the N3 freeway near Johannesburg a traffic count was made. On the busiest weekday, when people work and drive to work and back, 40 000 cars travel along that road. But on Sunday, the day of rest, 65 000 cars travel along it.

Are they not allowed to drive?

They are allowed to drive. Now I return to the petroleum products. The import of oil costs this country approximately R1 100 million in foreign exchange. It is therefore only fair that the voter, the citizen, the consumer should make his contribution.

He is already paying.

I know he is paying. In the situation in which we find ourselves today, it is necessary for everyone to do his part. Does the hon. member know that the voters of South Africa, if the Government were to introduce rationing, would welcome that, too? They will know that it is necessary to do so in the interests of South Africa. They have full confidence in the Government. It is the problem of those hon. members that voters do not have confidence in them. Anything which they propose the voters will treat with contempt However, the voters have confidence in what the Government does. Sales duty has been increased by R66 million per annum. Spirits will provide an additional R28 million; cigarettes, R24 million; cool drinks, R6 million; and wine, R2 million. This gives a total of R263 million. I think the hon. the Minister of Finance acquitted himself very well indeed of his task of tapping all possible resources from which taxes could be obtained. However, concessions were also made. The hon. the Opposition is also pleading for the less well-to-do, but this Government’s record in respect of the less well-to-do in South Africa is excellent. Even in the difficult period of this year, the concession in respect of social and civil pensions is no less than R40 million per annum, which is an excellent record. There is the concession to aged people over 60 in whose case the non-taxable amount of R600 has been increased to R700, i.e. an increase of 75% over four years. There is also the social pension which has been increased by R8 per month, and the increase in Civil Service pensions.

It seemed to me as though there was very little confidence in the economy of South Africa on the part of the Opposition. Their speeches testified to a great lack of confidence which, in my opinion, is unfair. The hon. members on the other side are sitting in this House and one can understand that they have to make a little political capital out of something. They are struggling to achieve it at the ballot box and have to seek their consolation elsewhere. Let us look at what Mr. Jan S. Marais of Trust Bank says. He is well known for his objective view of matters. In a letter to the big American newspaper, the New York Times Supplement, he wrote the following, “Sound Long-term Economic Progress”. The UP reproaches the Government—I am not speaking of the Progs—that there is no progress. I now want to read to hon. members what Mr. Jan S. Marais said—

I concede that hon. members on that side of the House governed for a while—

I should like hon. members to take note of this—

It is an immense achievement that this country with its small population is able to spend twice as much as the entire UN on underdeveloped people, but then they still criticize us. I read further—

This is the view of a financial expert who has confidence and faith in his country. This is the way in which one should sell one’s country to the world and not the negative way in which the UP does it. I should like to quote more figures, even though it is to the disadvantage of the UP. Gross internal investment increased steadily during 1975. The greatest contribution to this increase, namely 56,8% was provided by the public sector chiefly as a result of increased investment by the S.A. Railways and Escom …

Order! Hon. members must be more quiet.

In agriculture, forestry and fisheries there was a fixed investment of R438 million in 1975. This was 40,8% more than in the previous year. In mining and quarrying R692 million was invested during 1975, and this was 58,5% more than in the previous year. An amount of R1 353 300 was invested in the manufacturing industry, which is 17,5% more than in the previous year, and this was not satisfactory. In general there has been very good investment and it does not constitute the ugly and miserable picture which the UP holds up. As far as electricity, gas and water—i.e. infrastructure—is concerned, R468 million was invested in 1975, which is 32,2% more than in the previous year. In the construction industry—i.e. the contracting industry—R143 million was invested which is an increase of 41,6% over the previous year. The R334 million which was invested in retail and wholesale, refreshments and accommodation shows a 4% increase on that of the previous year. An amount of R1 337 million was invested in transport, storage and communication which is 44,1% more than in the previous year.

In the field of finances, insurance, immovable property and business services there was an investment of R1 309 million, which was 7,5% more than in the previous year. In social and community and personal services there was an investment of R1 326 million, which was 22,1% more than in the previous year. The total fixed investment was R7 400 million, which was 24,7% more than in the previous year. This testifies to the confidence which the private sector as well as the public sector and this side—I cannot say the same of that side—has in the future of South Africa. Just as the hon. member for Rustenburg does, I also have the fullest confidence in the future of South Africa. No country without a future and no Government without confidence in the future of its country, will continue to create this infrastructure to the advantage of all its people. This applies to all 26 million people in South Africa, and not only for one sector. So I can continue and also produce much evidence in the field of foreign trade that South Africa is considered to be a valued trading partner by all the important countries of the world. I have figures at my disposal which I can show hon. members.

The PRP members spoke of the redistribution of wealth. Let us look at the distribution of the net national income. In 1965 the national income was R6 477 million and emoluments to employees amounted to R4 103 million. The rest received R2 374 million. The employees’ earnings as a percentage of the net national income was 63,3. Ten years later, in 1975, the net national income was R21 030 million of which the employees received R13 682 or 65,1% of the national income. In other words, while the employees received 63,3% in 1965, they received 65,1% ten years later. In other words there has been an increase in favour of the employees. The most permanent manner to ensure the distribution of wealth is to remunerate the labourer who is worthy of his hire for the work he is doing. It does not help to dispense alms. [Time expired.]

Mr. Speaker, the hon. member for Germiston District ran like an athlete from the implications of this budget and did not deal with the implications of the budget at all. I do not blame him because he had a very difficult task. He spoke without conviction and I am sure he did not want to take part in this debate, but the hon. the Minister of Finance needed some assistance as he always does. The hon. member said that we have had growth in the last 23 years. Mr. Speaker, I would like to ask you in all sincerity: Of course we have had growth in the last 23 years, but can you imagine the growth we would have had if it had not been for the ideology of the National Party? We have, in fact, gone through a period of stunted growth.

If it was not for the ideology of the National Party we would have been one of the greatest countries in the Western world as far as our growth rate is concerned. The hon. member for Germiston District, like other members of the National Party, refused to come to terms with the cold hard facts of the South African economy. Both the Government and the Opposition are in agreement on defence expenditure. The difference is that the United Party believes that we must become economically far stronger in order that we can afford the military expenditure. The increased military expenditure is going to become a fact of life for South Africans and it is going to be increased every year. In fact, five years from now it will probably be double what it is today. We must be economically far stronger if we are to adequately maintain our military defences in this part of the world.

*The hon. members on the Government side are trying to explain away the fact that the Government have planned and managed the financial matters of this country so badly. This budget demonstrates the inefficiency of the Government in managing the economic affairs of the country. The Government has imposed crippling burdens on the taxpayers and the less well to do. Inflation is as great a disaster in South Africa as a war. With the problems we are facing it is unthinkable that the Government has landed us in the mess we are in today.

†This budget is an admission of failure after 28 years of economic mismanagement of South Africa by the National Party. Price increases will resound right through the economy. The Government has obviously thrown in the towel in the fight against inflation. The poorest will be hit the hardest. I know the hon. the Minister is smiling, but his life-style will not be changed at all by this budget; in fact his life-style will probably improve.

He still has his television.

I am coming to the television. We strongly deprecate the increase in the price of petroleum products as this will fan the flames of inflation all around us. The Government has passed the buck to the man in the street and they now expect the man in the street to carry the can for their mistakes. I told the hon. the Minister in a previous debate that he had gambled recklessly on more income from gold. The hon. the Minister will remember that he interjected and that he said: “Very clever. Why do you not wait for the budget?” I have now waited for the budget, but I am more convinced than ever that the hon. the Minister of Finance and the Government took a massive gamble on more income from gold. The hon. the Minister pulls up his head, but I can call two witnesses. Witness No. 1 is the hon. the Minister of Finance himself and exhibit No. 1 is the present budget. Just look on the first page, four lines from the bottom, and on page 2, eight lines from the top and then look at the 1975 budget speech—Hansard, Vol. 56, col. 3389—where the hon. the Minister said he expected more money from gold. As witness No. 2 I call the hon. the Minister of Transport, who is not here at the moment. As exhibit No. 2 I refer you to Hansard, Vol. 55, col. 1272, where the hon. the Minister of Transport predicted an income of R3 000 million from gold.

Unfortunately, we received approximately R445 million less than had been anticipated. The hon. the Minister of Finance was taken by surprise. He, in fact, calculated on R3 000 million. In this regard he was led like a lamb to the slaughter. He was led up the garden path. Mr. Speaker, the hon. the Minister of Finance made this fatal mistake during the first year of his appointment, an appointment which has become a disaster for the country. [Interjections.] It is obvious that we need to borrow more money abroad. I would like to ask the hon. the Minister of Finance to consider whether we can pledge a portion of our gold reserves as collateral to borrow more money. I believe Italy did this. They borrowed money from West Germany at $120 an ounce.

The hon. the Minister of Finance has called upon the country to make sacrifices. I have no doubt that those who can will make sacrifices, but two questions arise. Firstly, no one expects pensioners and the needy of South Africa to become the sacrificial lambs of this Government. It is a shocking state of affairs that, for example, social pensioners have received a mere pittance of an increase. Any country that neglects its poor, its old, its sick or its needy, is a country that has lost its sense of priorities. Pensioners, under this Government, must literally starve whilst specially picked fat cats receive R2 million compensation at Port St. Johns. [Interjections.] Mr. Speaker, is this not a shocking state of affairs? This Government has gone absolutely mad and has taken the votes of South Africa for granted.

There is a second point I want to make in connection with sacrifices. Some young South Africans have made the supreme sacrifice on and over the border. Other South Africans are prepared to make sacrifices within the country. Let us examine what sacrifices the hon. the Minister and the Government are prepared to make. I notice that he is looking at his watch. Six o’clock is the start of TV time. Mr. Speaker, let us start with a small item. Let us deal with television sets. What possible justification is there for providing television sets at a special price to Cabinet Ministers and others? The hon. the Minister is laughing, but before the end of this debate the people of South Africa will want an assurance from him that he and others who enjoy special rates on television sets will pay in full for those sets. [Interjections.] It is an absolutely disgraceful state of affairs that these people, who are in privileged positions, have provided themselves with television sets in the way they have. [Interjections.] They ask the rest of the country to make sacrifices and those sacrifices must be made in order to provide the hon. the Minister of Finance and other Cabinet Ministers with cheap television sets.

We have seen newspaper reports on the opening of the SABC’s television centre in Johannesburg. It has been mentioned that R500 000 was spent on that opening. Mr. Speaker, in the times in which we live, to spend that amount, or any amount, on such a grandiose opening is a public disgrace, a public scandal. We would like to hear from the hon. the Minister of Finance whether he authorized the spending of that amount of money. [Interjections.]

Mr. Speaker, the expenditure of over R200 000 on two houses for members of the Orange Free State provincial executive committee is absolutely scandalous. In the times in which we live, it is impossible to understand how this could have been contemplated. All the members of the Orange Free State executive committee were a party to this decision, and all those members should be called upon to resign immediately, and those houses should be disposed of. [Interjections.] During the last debate we asked the hon. the Minister of Finance what his attitude was towards this expenditure, and he remained as silent as the tomb—as he is at the moment. He did not consider it worthy of a reply. This time we urge him to tell us what his attitude is towards that sort of expenditure. [Interjections.] Mr. Speaker, preferential payments of over R2 million to speculators at Port St. Johns while South Africa bleeds, is an absolute disgrace. The failure to answer questions on land deals put by the hon. member for King William’s Town and by other members is part of the total arrogance of this Government. The Government is dealing with trust funds, but refuses to account to the public and to the representatives of the public in this hon. House. [Interjections.] This shocking state of affairs should be investigated by a judicial commission. I notice the hon. the Minister of Finance is again looking at his watch. He obviously wants to go and look at TV. [Interjections.]