Mr. SPEAKER and members met in the Assembly Chamber at 9h35.

By direction of Mr. Speaker,

The Secretary read the following Proclamation of the State President, dated 25 June 1976, summoning Parliament to meet today:

No. 119, 1976.]

Given under my Hand and the Seal of the Republic of South Africa at Pretoria, on this Twenty-fifth day of June, One Thousand Nine hundred and Seventy-six.

N. DIEDERICHS,

State President.

By Order of the State President-in-Council,

P. W. BOTHA.

Mr. SPEAKER announced that during the recess a vacancy had occurred in the representation in this House of the electoral division of Algoa owing to the resignation, with effect from 1 September 1976, of Mr. J. J. Engelbrecht.

Mr. SPEAKER announced that the vacancy in the representation in this House of the electoral division of Algoa had been filled on l December 1976 by the election of Mr. Francois Daniel Conradie.

Mr. F. D. Conradie, introduced by Mr. N. F. Treurnicht and Mr. A. van Breda, made and subscribed the oath and took his seat.

Mr. SPEAKER announced that a letter had been received from the Secretary to the Prime Minister, stating that the State President would open Parliament at 11h00 today in the Assembly Chamber.

Proceedings Suspended AT 9h40.

Members met in the Gallery Hall at 10h30 and accompanied Mr. Speaker to the Assembly Chamber to attend the opening ceremony.

Proceedings Resumed AT 11h50.

Mr. SPEAKER took the Chair.

Mr. SPEAKER stated that at the opening ceremony he had received a copy of the State President’s Address to members of the Senate and of the House of Assembly, which was in the following terms:

MR. PRESIDENT AND MEMBERS OF THE SENATE:

MR. SPEAKER AND MEMBERS OF THE HOUSE OF ASSEMBLY:

It may justifiably be said that 1976 was a watershed year for the Republic of South Africa, a year characterized on the one hand by far-reaching developments on the international scene and on the other by the emergence within the Republic of elements who believe that the attainment of meaningful political rights for all our peoples is only possible by totally destroying, if need be through violence and bloodshed, the existing political, economic and social order.

World attention is being focused increasingly on developments in Southern Africa. In the present circumstances, further confused by the steadily encroaching Marxist political and military danger in the southern hemisphere, and specifically in Southern Africa, an acceptable solution in Rhodesia, as well as agreement among the peoples of South West Africa, has become an urgent necessity. Ironically, the way to peace is impeded by the United Nations, which, despite the fact that it was founded for the specific purpose of maintaining international peace and promoting co-operation among nations, is constantly engaged in actions frequently resulting in unrest and even violence. The Western nations often create the impression that there is no co-ordinated strategy to counter the Marxist expansionist threat.

Although recently there was general and well-founded optimism concerning the prospects of a settlement in Rhodesia, this has now given way to serious doubt, and it is essential for confidence to be restored as soon as possible. First, there must be visible evidence that agreement reached round the conference table will lead to the cessation of violence. Secondly, all parties must be prepared to honour their undertakings. In this connection the eyes of the world are on the efforts of the British negotiator, the British and American Governments, and the African Presidents involved, on all of whom rests a great responsibility. South Africa’s readiness to assist in the solution of these problems has been clearly demonstrated and she remains willing to do her part in terms of her oft-stated policy of non-interference in the domestic affairs of other countries and of goodneighbourliness.

The leaders of the peoples of South West Africa are determined to work out for themselves a constitution and a peaceful future in terms of the principles embodied in their Declaration of Intent. Good progress has already been made and we hope and trust that their efforts will be crowned with success in the near future.

In striking contrast with the situation in many other parts of the world, the Republic of Transkei last year achieved its independence by constitutional and democratic means. Bophuthatswana is now also well on the road to independence and, as in the case of the Republic of Transkei, we shall do everything in our power to make possible the early achievement of their ideals.

The debates in the United Nations last year were once again characterized by virulent and unbridled attacks upon South Africa. On this occasion the true facts were even more cynically disregarded than in the past, and the principles of truth sacrificed even further to the dictates of political expediency. The Government has no intention of yielding to pressures of this kind.

The Government will continue to strive for the normalization and maintenance of good relations with its neighbours.

At the explicit request of the Governments of Ovambo, Kavango and Caprivi, as well as of all the representatives at the Turnhalle Conference, it has become necessary for us to maintain an increased military capability on the northern border of South West Africa to prevent terrorist incursions from that quarter, and to protect the local inhabitants against acts of terrorism. Should the terrorist onslaught escalate, the counter-terrorist effort will demand greater sacrifices in terms of labour and material resources, and it may well be that increasing demands will be made on our manpower in the Permanent Force, Citizen Force and Commandos, as well as in respect of National Service.

Measures to step up the preparedness of the South African Defence Force, including improved methods of Civil Defence, will be introduced in Parliament.

Unmistakable though the underlying political motive is, it is ironic that in the very year when the Government carried its policy of separate freedoms through to its logical consequences, first with the granting of independence to the Republic of Transkei, to be followed shortly by Bophuthatswana, the forces of subversion instigated widespread riots, particularly in Bantu and Coloured residential areas, which led to senseless destruction of property, tragic loss of life, and disruption of the community life of the peace-loving majority.

Although the police displayed the utmost restraint during the rioting, at times in extremely dangerous situations, they were often compelled to use force in order to protect lives and property and to restore order. It is to the credit of the South African Police that they have maintained law and order at all times, to the benefit of all. Since a judicial commission of inquiry is going into the root causes, further comment on this aspect would not be appropriate at this stage. The Government wishes, however, to express its sincere sympathy to those who were injured as a result of the riots, those who have lost loved ones, and those who have suffered material damage. May the message be brought home to everyone that violence offers no solution.

But where lies the road ahead? Every responsible person is alive to the fact that, in this age of mass communication and interdependence, no country or people can exist in isolation, and that from time to time social, economic and political adjustments are necessary. Justifiable changes of this nature have in the past been made as a matter of course and are at present being made by the Government with a view to a better and brighter future. Law and order must, however, be maintained at all times to allow orderly development and progress.

In the political sphere the Government’s approach is that there must be joint consultation on the course development is to take. Regular consultations with homeland leaders and the establishment of a joint Cabinet Council, whose members include Coloured and Indian leaders are an outcome of this approach.

The report of the Commission of Inquiry into Matters relating to the Coloured Population Group not only pointed up the great progress made by the Coloured community in recent years, but also underlined the tremendous possibilities for further development. After having made the necessary study and analysis in depth, the Government will table a final White Paper during this session, stating its standpoint on the great number of recommendations in the report.

The past year has seen spectacular progress with the provision of housing, especially for those population groups whose lack of proper housing is an acute problem. There is still a backlog, however, and greater demands are expected to be made for the financing of housing projects, which it is hoped to meet from alternative sources.

In order to speed up the provision of housing for Bantu persons in White areas, especially so far as home ownership is concerned, the co-operation of employers is being enlisted in connection with the housing of their own employees.

The Government has further decided that Bantu persons should have greater opportunities of managing their own community affairs in urban Bantu residential areas. The existing system of urban Bantu councils and the Bantu advisory committees will accordingly be replaced by community councils with greater executive powers.

*During the past year the Republic has faced balance of payments problems of a cyclical as well as a structural nature.

Factors which contributed to the relatively large deficit on the current account of the balance of payments during 1975 and the first half of 1976 were the depression in South Africa’s principal export markets, the successive increases in the oil price, the decline in the price of gold and the increased imports of defence equipment.

As a result of the strict budgetary and monetary policy applied by the authorities, and of the import deposit scheme introduced in August 1976, imports declined, and from the third quarter of 1976 the current account of the balance of payments showed a substantial improvement which is still continuing. The recovery in the gold price further contributed to this positive trend.

Since the second quarter of 1976, however, the political disturbances in Southern Africa as well as the slower growth rate of the Republic’s economy and the tight conditions prevailing in the international capital market have resulted in a decline in the net inflow of foreign capital, compared with the very high level attained in 1975. Nevertheless, our successful borrowings from the International Monetary Fund and other international sources have once again underlined the Republic’s high credit rating abroad.

As the lower level of the inflow of foreign capital may continue for some months, and because it is desirable to continue to repay certain short-term loans and also to build up the gold and other external reserves to a more satisfactory level, it is clearly necessary to maintain the strict fiscal and monetary policy. Despite its restraining influence on the growth rate of the economy this policy has to be maintained until the overall balance of payments shows a substantial and lasting improvement, for only then will a sound and sustainable economic recovery be achieved.

The conservative financial policy has brought about a considerable decline in the rate of increase in the money supply and this is likely to make an important contribution to the campaign against inflation. In spite of encouraging progress, the rate of inflation has not yet been reduced to an acceptable level and it has therefore been decided to extend the collective anti-inflation action programme. The Government considers the reduction of the rate of inflation to be of vital importance to its policy of maintaining economic stability and strengthening business confidence generally.

In the meantime few things can be more important than a vigorous export effort. The expansion of South Africa’s merchandise exports will not only improve the current account of the balance of payments, but will also stimulate the expansion of local production and create more employment opportunities for all sections of the community.

The slow-down in business activity is spread throughout the South African economy, and secondary industry has for some considerable time experienced a decrease in the demand for manufactured goods and has accordingly to contend with losses as a result of under-utilization of capacity and distorted cost structures. All these factors and the difficulty of procuring investment funds have contributed to the slowing down of expansion in the secondary sector.

At the same time the Government has understandably been obliged to cut down on expenditure to a large extent. This line of action has resulted in delaying or postponing the planning of certain essential projects, while the financing of projects already approved has in some cases had to be curtailed.

It is essential, however, to limit restrictions on the provision of the necessary infrastructure to the minimum, especially so far as public services and export facilities are concerned, so that there will be no backlog when the expected upswing in the country’s economy occurs.

In these circumstances a measure of unemployment was to be expected, and a few sectors which have been severely affected by the present economic climate have in fact been compelled to reduce their number of employees. Despite the decrease in employment opportunities and local training programmes, however, the demand for certain skilled workers continues. Although less overseas recruitment was undertaken, a satisfactory influx of manpower was maintained and it was possible to augment the country’s labour force with properly trained persons to a large extent.

Relations between employers and employees continue to be characterized by a spirit of goodwill and co-operation, and there is constant negotiation with a view to the better utilization of the existing manpower. In order to keep pace with present and future technological developments, apprenticeship conditions are revised from time to time. The future growth and progress of our country will largely depend upon the way in which our available manpower is utilized.

Notwithstanding the more difficult conditions which prevailed in manufacturing industry, considerably better results were achieved with the decentralization of industries during the past year than in previous years. This was due, inter alia, to the substantial advantages which have been available since June 1975.

The Republic will introduce a comprehensive containerized shipping service between South Africa and Europe towards the third quarter of this year.

The steadily increasing demand for the Republic’s metals and minerals has resulted in another record sale of metals and minerals during 1976. Despite the fact that the price of gold was depressed throughout 1976, the sales value of all other metals and minerals achieved such large proportions that it justified the ever-increasing confidence placed in this sector of the mining industry.

The amount of development funds secured for high capital-intensive mineral projects and the continuing search for new mineral deposits is indicative of the confidence in South Africa’s future.

An off-shore drilling programme for the search of natural oil is in full swing and will continue during the year. Knowledge of seabed geology has been extended considerably by systematic studies of existing borehole and seismic data, encouraging finds have been made and a number of promising drilling sites have been located.

The exploitation of uranium expanded considerably last year. In addition, a promising new technique for the recovery of uranium from deposits now being exploited has been developed by the Atomic Energy Board in collaboration with the uranium industry and is under consideration for incorporation in new uranium plants.

On the whole physical conditions have again been favourable for agricultural production. Unfortunately certain regions are now being ravaged by heat waves and drought. Good grazing conditions, coupled with the relatively favourable prices for livestock products over the past few years, have given rise to a steep increase in the volume of livestock production. In contrast, excessive rains in various regions last year affected field crop production so severely that the volume of summer cereal production dropped further, although the supply was sufficient to meet the local demand and to provide for exports on a more limited scale.

Farmers’ gross income reached a record level, but as a result of the higher cost structure, net farm income showed a decrease for the second consecutive year. While the industry until recently was in the fortunate position that larger supplies were absorbed at rising prices, virtually the opposite applies at present, and problems are being experienced with the marketing of certain products at the ruling prices.

The compilation of the computerized population register is now so far advanced that it will be possible within the next eighteen months to use it to compile parliamentary voters’ rolls, and then a general registration of voters will no longer be necessary.

The Government is highly appreciative of the way in which public servants have served our country and our people in the past year.

The year 1977 will make exacting demands and face us with formidable challenges. We South Africans tend to be either over-optimistic or over-pessimistic. Are there not too many of us at the moment who are unduly pessimistic? It is essential for us to keep our perspective and our equilibrium. There are so many factors in our favour. We have some of the richest and most important resources in the world. We have the manpower potential. Our country offers opportunities and challenges as stimulating as any other country. South Africa continues to be characterized by political stability. The interests and needs of all are watched over judiciously. Sufficient food for a growing population, sufficient energy for our industries and transport systems, and sufficient employment continue to be matters of earnest importance to us.

In the difficult times in which we are living, the spiritual resources and strength of our people, young and old, are of cardinal importance. It is our confidence in ourselves that will give us the strength to build a good and secure future for those who will come after us. We must never allow others to destroy our confidence in ourselves and our faith in our future. For if we do that, we ourselves will strengthen the forces that seek to prevent us from achieving the great and fine things of which we are capable.

The survival of a nation is determined among other things by its will to maintain itself, by the value of its contribution to mankind, by the excellence and quality and ingenuity of its national education, its system of education, its science, its research, its art and its culture. Through achievements in these spheres South Africa can be of service, her importance will become apparent to the world, and the sense of mission of her people will take concrete shape.

The Government’s aim is to build up South Africa so strongly in all spheres, political, financial and economic, spiritual and cultural, that she will continue to be an asset to the world, and as such should be maintained, accepted and sustained.

The Government is firmly resolved to create for all our people, irrespective of race or colour, a dispensation that will secure peace and ensure human dignity and opportunities for all.

People all over the world are alive to and fear the problems arising from the uncertain times in which we are living, but the knowledge and faith that Almighty God guides and controls the destinies of peoples and nations will give us the strength to face the future unafraid.

MR. SPEAKER AND MEMBERS OF THE HOUSE OF ASSEMBLY:

Additional estimates of expenditure for the current financial year and estimates of revenue and expenditure for the ensuing financial year will be laid before you.

MR. PRESIDENT AND MEMBERS OF THE SENATE:

MR. SPEAKER AND MEMBERS OF THE HOUSE OF ASSEMBLY:

I pray that the blessing of Almighty God may guide and sustain you in your labours and deliberations.

I now declare this the Fourth Session of the Fifth Parliament of the Republic of South Africa to be duly opened.

Mr. SPEAKER announced that Mr. President and he had on behalf of Parliament accepted a souvenir carved in American redwood and presented to the State President by President Ford to mark the celebration of the Bicentenary of the United States of America.