There are a number of points we would like to raise with the hon. the Minister of Finance. We are of course always handicapped in discussing this Vote, because we have already had a Budget debate and one cannot repeat what happened then, but there are a number of matters affecting the Minister’s Department and his financial policy upon which some light should be thrown.

The first point I wish to raise is this question of currency control. I think it is necessary to raise it, because one has to remember that currency control is an emergency measure and unless we continually refer to it and keep it under review there is the danger that we may come to accept it as a normal feature of our financial policy, which would be a great mistake. Since the Budget debate the Minister’s reserves have been steadily creeping up, with one or two setbacks, and I think he told on 15 March that the gold and exchange reserves amounted to some R460,000,000, and in the last six weeks they have increased to R741,000,000, or at the rate of R2,000,000 a week. One is entitled to ask whether the Minister has not yet some idea in his mind as to when he will be able to make some change in the present currency regulations. We have raised the point with him before, and he has been very cautious in his estimates and his ideas, and quite properly so. I think the furthest he ever went was to quote some other country, or some expert, who spoke about six months’ reserves being necessary to be on the safe side. If that is so, and if the Minister accepts that as his target, it means that on the basis of imports of some R90,000,000 a month, when we get somewhere near the R500,000,000 mark we will be getting near this six months’ limit. We would be interested to know whether the Minister visualizes some point where he can say that he now has a safe minimum and can substantially relax currency control. Of course we still have import control which is also a currency control measure, although it is also used for other things by this Government, and we have actually put it on the Statute Book now as a permanent feature of our legislation. We would like to know whether in view of the continually improving position of the reserves what his plans are for getting rid of currency control to the greatest possible degree as soon as possible. Import control is being relaxed. One knows that the Minister has authorized certain relaxations in regard to currency control. We would like to know what further measures he has in mind for further relaxing currency control in the hope that we will be able gradually to relax it, so that one day one wakes up to find that currency control is gone. There is no doubt that it is a bad mark in overseas countries particularly, and here too. It is not a good thing to have permanent restrictions on the movement of your currency. Unless we raise the question on suitable occasions—I am sure the Minister will agree with me—and give him the opportunity of keeping the House and the country fully informed as to how the thing is going, there is always a danger of its becoming permanent.

The Minister in his Budget speech said it had not been necessary for him to use revolving credit arranged with the American banks and which I think he can operate on until January 1964. Of course he had to pay quite a substantial raising fee for that loan, which has not proved necessary. Whether he was over-cautious in making that arrangement I do not know, but it looks now, as things stand at present, and with his loan position and the exchange position, and the growth of the money market in the Republic, as if it will not be necessary for the Minister to renew that loan in January. I hope he will bear that in mind and not unnecessarily renew it unless he really feels that it is necessary to do so, because otherwise it will just lead to unnecessary expense.

Towards the end of last year the Minister paid a visit to the U.S.A., which he does almost every year, to attend the meeting of the World Bank. I think this is the appropriate time to ask him for a rather fuller account than we had of what he found during his visit, because he not only attended the meeting of the World Bank, but he also had the opportunity—whether he took it or not I do not know—of discussing matters with the International Monetary Fund, and I have no doubt, with private bankers as well and with the International Development Association. The Minister, when he came back from New York, indicated that he was not very hopeful of any improvement in the price of gold. Some months have elapsed since then and I should like to know whether the Minister thinks there has been any change in that situation, and whether a rise in the price of gold is any more likely now than it was a few months ago when he visited the U.S.A. We know that the aspirant Prime Minister of Britain made a statement a few weeks ago on his return from the U.S.A., in which he said that he did not approve of an increase in the price of gold because the only countries which would benefit would be Russia and South Africa, and from his speeches it appears that he dislikes South Africa much more than he does Russia. But the Minister might have some more information which he can give the House.

The International Monetary Fund has been reported for some time to be working on a scheme whereby they would eventually become a sort of Central Credit Exchange for world finance, which of course would have an effect on the position of gold. I wonder whether the Minister had a talk with them on the subject in New York, and whether he has discovered whether it really is a practical proposition and whether they were really working on it, because such a programme might have a great effect on us. [Time limit.]

I should like to raise with the hon. the Minister a matter which I think is closely associated with the question of currency control. Three or four years ago the Minister devised the scheme by which the Reserve Bank undertook to sell 400 oz. gold bars to buyers resident outside South Africa, and also outside the sterling area. Associated with that, at a later date, the Minister also devised a scheme for the sale of kilogram bars of gold by the banks, with the concurrence of the Treasury, to approved buyers, again outside South Africa and outside the sterling area. The replies which I have had from the Minister during the course of these three years seem to indicate that there has been a falling off in the attractiveness of this scheme to the buyers concerned. I will not burden the House with details, but in regard to the transactions under the first category, the 400 oz. gold bars, the number of transactions in 1960 was 78. That dropped to 17 in 1961, and to nil in 1962. The transactions in the second category, in the kilogram bars of gold, numbered 10 in 1960, nil in 1961 and one in 1962. I am not going into the monetary aspect of the matter; I am concerned with the number of transactions, because it indicates that there is a falling off in the attraction to the external investor in this type of sale of gold. My question to the Minister is: What is the Department’s explanation for this change, and what are the profits of either extending the scheme in some other way or making a similar type of scheme applicable inside South Africa? That raises the question, of course, of making gold bars saleable inside South Africa. I know the Minister’s attitude to that in the past has been that it might be a system which could be abused to remove gold currency from South Africa. On the other hand, if its attraction has fallen off to the extent indicated by the figures, I think there should be some review of the situation with regard to the local position, because firstly, I think there should be a test of what the local demand for gold of that nature is and secondly, it will also be a means of making the public gold-conscious once more, which is an important factor.

But an important aspect of a scheme of that nature would be to confirm what the hon. the Minister has repeatedly said here, that there is increased confidence by investors in our economy. I say a scheme of that kind would not only be a test of local demand, but also a means of proving the Government’s views in regard to the economy; and finally, it will be a test as to whether currency controls are still necessary. A test of confidence of that sort is really to adopt what has been an old device used by bankers of putting all the cash on the table. That is done because the customer then goes home satisfied that there is no need to withdraw his money from the bank. It is a method of restoring confidence in the soundness of the bank, and I think it would be a method of testing the confidence of persons in our economy. Apart from the question of the banks’ gold and foreign reserves which have been rising steadily and have reached an all-time high figure, we find the position that the ratio of gold reserves held by the banks to the public is also very high. I think the latest figure I saw showed that the ratio was in the region of 90 per cent cover, which is a very high cover, far higher than the statutory limits imposed by law.

The questions I have put to the Minister have been put with a view, firstly, to get the official reasons for the apparent falling off in the attractiveness of the schemes devised, and secondly, to ascertain the Minister’s reaction in current circumstances to the question of making gold not only available to persons outside South Africa, but also in South Africa.

I left the Minister in New York a few moments ago, and I have not quite finished with New York yet. I wanted to know whether he had discussions last year with the International Development Association, because I think last year he told the House that there was the possibility that it might be a useful organization for us at some stage in regard to some of our development schemes. Of course the Minister will have a great deal of hay on his fork. He has the Bantustans and the reserves to develop and finance, and he now has the Orange River scheme about which we have been trying to get information from the Government. We still want to know—and the Minister did not reply to that in the Budget debate—who told the Department of Water Affairs that it would take 30 years to bring that scheme to fruition. It seems to me that the decisive factor in fixing the time it will take must be money, and therefore one wants to know why it will take 30 years. At that rate it means about R20,000,000 a year. We feel that if that scheme is really as good as it is supposed to be, this country should be able to finance a much bigger investment than R20,000,000 a year in it. The International Development Association is financing exactly this sort of undertaking. I do not think it has financed anything as big as this scheme before, but it certainly has financed irrigation schemes in other parts of the world, according to their report last year.

While we are on the subject of water, the hon. the Minister of Foreign Affairs has been abroad and we are told that he has been discussing, inter alia, the idea of a joint development scheme on the Kunene River, between Angola and Ovamboland in South West, and the figure mentioned in the Press was that it may cost some R40,000,000. This is not the place to discuss the desirability or otherwise of that scheme, but I think it is the place where we are entitled to ask, if the scheme is undertaken, who will pay for it; because why the taxpayers in the Republic should be called on to find R40,000,000 for a scheme right up on the Angola border will take a good deal of explaining. I think the House is entitled, if this scheme has got so far that the Minister of Foreign Affairs is having final discussions about it, to ask the Minister of Finance what he knows about it, who will be called upon to pay for it or how he proposes to raise the money. I can see nothing secret about it, but getting information out of the hon. the Minister is like opening an oyster. When you open an oyster you always hope to find a pearl inside, but I always find it very difficult to open the oyster, and I have never yet found a pearl, but one goes on hoping and it may be that this afternoon the Minister will be able to give us a pearl.

The Budget was your pearl of great price.

I want to have just a last word with the Minister on the subject of the Decimalization Board whose report was published quite recently. I think everybody feels that the board has done a very good job. Perhaps the best thing in this report is the news of the “Completion of Board’s Task”, Then it goes on to say—

This is the first time that I have ever heard a Government-appointed board ever admitting that the country can possibly get on without its continuation for ever. I think the board is to be heartily congratulated on what it has done. It goes on to say that it has already been possible to dispense with the services of a substantial proportion of the original staff and so on and then the board says—

This report was dated last November and it is quite conceivable even in inter-Government circles—I do not say it is likely but it is conceivable—that some conclusion may have been reached on this threatened action, and I wonder whether the Minister can tell us how near we are to being able to agree with the board’s statement that they have fulfilled their task and been able to close down this organization altogether because there is quite a little nest-egg in the funds of the board which I have no doubt the hon. the Minister would be glad to have to swell the enormous surplus which I have no doubt is in store for him in his Budget in the coming year because we know he has carefully calculated it and balanced it exactly.

It seems to me the Opposition are being hard put to find something to discuss under the Vote of the Minister of Finance. We have to congratulate the Minister on there being no challengeable points in the policy of his Department. I do not wish to criticize the Opposition on that account; I merely wish to say they should be grateful that the Department of Finance is being controlled on a very sound policy basis and also as regards its administration.

The hon. member for Constantia (Mr. Waterson) has referred to the Decimalization Board. I want to say here that I think this board has accomplished a unique achievement. The chairman announced during last week that they estimate that they have saved about R4,500,000 on the original estimates of the cost of decimalization. Whereas the original estimate of the costs was R18,000,000, the total cost of decimalization will now presumably be only R 13,500,000. I think the board can be congratulated most heartily on that achievement. They surely were able to economize in directions we could not foresee in the commission at the time.

The hon. member for Constantia also raised the question of currency control, a matter in which I also am very interested. Everybody is anxious to learn whether currency control cannot be done away with and when we will be able to do away with it. But there are a few factors that make it extremely dangerous to do so with currency control. One could rather relax somewhat more ones import and export control than currency control. The few factors that perturb one are, in the first place, that South African shares still are a good deal cheaper overseas than in South Africa, and if you were to do away with currency control, you may find that the South African shares to the value of R 1,400,000,000 in the hands of foreigners may reach the South African market in such a way that it may depress our reserves to a level that will make the position extremely dangerous for South Africa. That is one factor. The second factor is that according to the last quarterly report of the Reserve Bank it appears that there is still a net outflow of capital. Our trade balance is outstandingly favourable, so favourable that in spite of the fact that there is a net outflow of capital, our currency position is still improving constantly. Indeed, it is improving to such an extent that the Minister is sometimes very much at a loss to know what to do with all the short-term money lying around in South Africa. I merely wanted to point out that it would be extremely dangerous to dispense with currency control at this stage, unless these two factors change; the one is the relationship between share prices in South Africa and share prices overseas, and the second is whether there is a net outflow or a net influx of capital. It is dangerous to dispense with currency control while there is a net outflow of capital, and I think the hon. the Minister will take these two factors into account very fully.

The hon. member for Constantia also referred to the Orange River scheme. It is a scheme in which I myself am also very interested. I am sure all of us would like to see that scheme completed during our lifetime, but one cannot tackle a scheme like this too fast because one is keen to see it completed; one must tackle such a scheme with regard to the needs of one’s country, and the natural development of one’s country from time to time. We cannot try to do in a few years what should be done over a period of 30 years. This period of 30 years has been planned to fit in with the anticipated growth of population, the anticipated capital growth in the country, with the anticipated need of products, with the anticipated industrial growth along the river and the lay-out of your towns and cities. Industrial development and generation of electricity and all these things must take place in relation to supply and demand, and if we forget supply and demand in a scheme of this nature, we shall be doing a most uneconomical thing, something we shall not be forgiven for by the taxpayers outside. I just want to warn those hon. members who want us to tackle the Orange River scheme at too fast a pace, that if one is not realistic and fails to have regard to the practical needs from day to day, one may possibly put up a scheme that will be totally out of proportion to the economic requirements. It may possibly be regarded as development at the wrong place in the future. Time might teach us that it will be much more economic to have an industrial city at Petrusville, to mention an example, instead of extending Kimberley as an industrial area. All these are factors one has to determine by means of experiments, and one cannot simply come along here and plead that the scheme should be completed within ten years. It is a sound idea that we should try to obtain funds from the International Development Corporation or whatever this body’s name may be, for schemes of this nature if we require it, but I cannot see that we require it at the moment. At the present time our financial position is so strong that we can very easily tackle the Orange River scheme without that assistance, but I am convinced that if from time to time we were to find it necessary to invoke the aid of that corporation, the Government will not hesitate to do so immediately, but one prefers to tackle this kind of scheme on one’s own if one can do so, and I hope that we shall be able to bring about this Orange River development without going to look for funds overseas for this specific purpose.

There are two subjects I should like to raise with the hon. the Minister. The first is in the form of a question to which I should like to have his reply, and the second in the form of suggestions to which I should like to have his reactions. My question is this: The hon. the Minister may perhaps recall that in the Budget debate last year I asked him whether market security tax was paid in transactions between companies or between investment associations and companies. The hon. the Minister knows that the ordinary purchaser of shares pays market securities tax when he buys through a broker, and I asked him whether he would consider imposing the market securities tax on deals between institutions. The hon. the Minister said he would give that his consideration and I presume the Treasury has done so, but there was no amendment to the law in this year’s Budget.

My second suggestion is about decimal coinage, and here I join in the general congratulations to the Treasury, the Decimalization Board and more especially to the people of South Africa for the manner in which they have introduced a decimal coinage into this country.

What about the author? Why not mention him too?

No. The author’s part is the part of any reformer. He is Browning’s “Patriot” in reverse; instead of starting “Roses, roses all the way” and finishing on the gallows, he commences on the gallows and then finishes with “roses, roses, all the way”.

My second point is in regard to the second phase in the decmilization of our coinage. We have reached the first phase, the phase on which our commission was unanimous. We now come to the second phase. I will commence with the notes.

I have here a R1 note and a R2 note. I think the time has arrived, or perhaps it has not just arrived yet but will arrive later in the second phase, to withdraw the R2 note and give South Africa a R5 note—R1, R5, RIO, R20. That is my first suggestion. Again in regard to the notes, I think we should introduce notes similar to the American dollar bills which are more or less the same size and are easily packed away by those who have notes to pack away. I think the R1 note is a very fine-looking note. I do not think so much of the R2 note. I do not like the RIO note a bit.

Where do you get that?

My next point is in regard to the bronze coinage. I think we are rather unfortunate in having such a bright alloy for our cent and half-cent. I am not criticizing that because it was the aim of the Commission to have a coin of the size and weight of the penny and another of the size and weight of the half-penny. I think we have succeeded in that. But we should think about introducing a coin rather like the American cent. The hon. the Minister knows that in Australia where they have already planned the introduction of decimalization—either for 1965 or 1966—they are so flattering that they are actually introducing the system in the same month as we did in February; they are very much impressed by what we have done. In Australia there is no half-cent and of course they have never had a 25c piece; they have never had the half-crown. I would suggest that we should have in mind creating a much smaller cent coin, very much smaller rather like the cent of the United States of America.

Now I come to the silver coins. I think this is much more important. I am going to send across to the Minister three so-called silver coins. One is a silver coin which is 20 years old, and it looks like a silver coin. The other two are recently minted coins. I should like the hon. the Minister to look at them. The one is 25c and the other is 10c.

Do you want them back?

Well, I should like the Minister to look at them first and having seen them he will know to what I am referring. He will notice that the silver coin is 20 years old and it looks like a silver coin to-day. It has a high percentage of silver. But the 25c and 10c coins which are quite new coins, only about seven or eight years old, are already tarnished. The reason is, of course, that the percentage of silver in our silver coins is much smaller now than it was a few years ago. The reason for that is obvious too. The value of silver is so high now that if we were to put in the same percentage of silver, dishonest people would melt down the coins and sell the silver. The silver would be worth more than the value of the coin; the intrinsic value would be higher. I think we shall have to consider very seriously, with this rising price of silver, the question of introducing a new alloy for our white coins, as has been done in the United Kingdom and in other countries. We should consider replacing silver coins by cupro-nickel coins. I know that the Mint will not like that. They are very proud of our coins. It is most unfortunate that they should tarnish in this way. There is a technical word for this tarnishing which I have just forgotten for the moment. It is most unfortunate that that should happen but the reason may please hon. members on the other side, strange as it may appear. Metallurgical people tell us that silver is a white coin and it acts as in apartheid; it does not easily form an alloy with a metal of lower value, a base metal. It will form an alloy with gold quite willingly but it does not like to form an alloy with zinc or copper. Therefore I think we should consider cupronickel for our coins. I do not know what the hon. Minister thinks of that. It is a long-term view but I think it is a view that we should have in mind. I am very much impressed by the report of the Decimalization Committee. I think perhaps we were wise, much as I regretted the decision to exclude politicians from the Decimalization Board. I regretted it but I thought it was the right step. I should have liked to have been in at the kill, as it were, but I think it was a very wise precaution, to leave the change-over to industry, commerce, finance, agriculture, and so on. The board could then be representative of the whole country and nobody could say there were political jobs involved.

I am very much indebted to the hon. member for Kensington (Mr. Moore) for anticipating a statement that I was going to make under the Mint Vote, but this is probably as appropriate a moment as later on and I think it is probably as well that I should give this information to the House immediately. I have the statement in Afrikaans if the hon. member will bear with me.

*In recent times and particularly after decimalization it has become increasingly clear that there ought to be some change in our coins. The reasons for that are mainly as follows: The first is decimalization. The switch over to a decimal coinage system which has already been accomplished must be regarded as only the first phase. I am very grateful to hear the praise that has been expressed here for the Decimalization Board. They have done their share in the process of decimalization with great honour and distinction. But there is need for a second phase, and that is namely to wean the people from the habit of thinking in terms of the sterling system, and to get away from the accompanying habit of using sterling terms such as shilling and sixpence in connection with decimal coins. A second reason why a change has become necessary is because the existing coins have certain shortcomings, firstly as regards their appearance. The reduction of the silver content of our coins from 800 to 500 standard that has taken place since 1952, resulted in the thin layer of silver covering the coins wearing off in places and the coppery colour of the real alloy shining through and a nice coin being changed into an unsightly one. I do not wish to go so far as the hon. member for Kensington has gone by attributing it to any ideological reasons. It may be that it is only the confirmation of a general truth.

The second respect in which our existing coins are deficient is in the size thereof. Our coins, in comparison with what is regarded in other countries as acceptable sizes and weights, are too big and too heavy throughout. A third aspect is the cost aspect. To produce a 20c piece with a 500 standard silver at the present time costs 17c, whereas on an 800 standard basis the cost will be 26.1c, and apart from that the price of silver is constantly rising. A fourth reason is the time factor with regard to the increasing use of slot machines. The slot machine has been so perfected at the present time that it cannot be cheated with counterfeit coins any longer, with the result that the use of it in the Republic, as throughout the whole world, is continually gaining ground. Slot machines (and included in these are machines such as telephone boxes, parking meters, gasmeters, etc.), in their perfected form are adjusted with regard to the magnetic features, hardness, elasticity, weight, size and thickness of the coins of the country in which they are being used. It is really a fine ingenuity that has been harnessed to combat the avarice of mankind; where as is the case in the United States of America and Germany already, the number of slot machines in use is large enough, the coinage system can never be altered again owing to the colossal cost involved in the adaptation of the existing slot machines; when that stage has been reached, neither the metal content, nor the size, nor the thickness, nor the diameter nor the form of the coins fitting them can be altered. It is really a case of those countries and mankind having become the slave of the machine which was originally intended to be the slave of mankind. Fortunately the Republic has not yet reached that stage, but there is no doubt that it could possibly be reached within the foreseeable future if we do not do something, and that is why it is of the utmost importance that the steps I am now proposing should be taken as soon as possible. Those are the reasons why changes have to be made. The Director of the Mint went overseas last year to study the position in other countries. His report to me largely confirmed what we ourselves had thought and the ideas we had before he went overseas, but he also brought back new ideas.

The direction in which we are now thinking is in the first place in respect of the size. To fit in with what is generally regarded in other countries of the world as acceptable sizes, we are thinking of coins that are smaller in weight and diameter in comparison with the present ones. The diameter of the 50c coin at the present time is 38.7 mm. and its weight is 28.27 gramme; the proposed 50c coin will have a weight of 10.5 gramme instead of 28.27 and its diameter will be 28 mm. instead of 38.7 mm. The others will weigh less and have a smaller diameter proportionately. Each of the denominations must have a certain minimum size, in proportion to the next one, so that the coins cannot be confused.

In the second place our minds are working in the direction of the denominations. For practical purposes, and in order to fit in with the decimal system, we are thinking of only six denominations, namely 50c, 20c, 10c, 5c, 1c and ½c, instead of the eight now in circulation. It is impossible to think of that today unless the bronze coins can be very much smaller than the existing ones, and that is why, in the scheme we have already tested out, there are small bronze coins that will make it possible to carry a number of the lc pieces in one’s pocket without having the weight one has at present.

But in the third place our thoughts are also working in the direction of a change in the metal content. Owing to the cost involved in using silver, it is intended to use a different coinage metal. Apart from the silver alloy which we have at present—the 500 standard —the choice here is limited to (1) nickel, (2) an alloy of nickel such as cupro-nickel and (3) chrome steel for coins that are presently made of silver alloy. I am leaving the bronze coins aside for the moment. Of these nickel undoubtedly is the best, mainly because it will make a nicer coin than the other, and cannot be successfully counterfeited so readily. It is magnetic and any counterfeiting can be detected very easily. The experience has been that nickel has already been introduced in various countries. During recent years particularly it has to an increasing extent become the coinage metal in several other countries. At the present time there are 71 countries that have their own coinage system and that issue altogether 318 denominations of various metals. Of the 71 countries, 47 countries issue coins of 118 denominations containing nickel. The most important countries using nickel are Canada, Germany, Belgium and Italy. These four countries resorted to the use of nickel in the ’twenties already. They have not done so with all their coins. In some instances they are bound by the slot machine. The Argentine, France, Hong Kong, Iraq, Japan and Span—all these countries changed over to the use of nickel in the ’thirties. England has nickelled some of her coins from 1945; India from 1947; the Netherlands from 1948 and Switzerland from 1950. I find that in 1962 2,500 coins were made in the world containing nickel. That shows you, Mr. Chairman, that it has been very successful and that it is being used to an increasing extent as the metal for coins.

As far as the 1c and the ½c coins are concerned, there are only two possibilities, namely the so-called penny-bronze, which was our old penny, and aluminium bronze. The first-mentioned is thought of mainly because it is easier to process and also because it does not require specialized machinery. That is why it is proposed to revert to the old penny bronze, but it will be much smaller than the original penny.

Now I should just like to point out that the change of the coinage system will involve certain practical problems; that goes without saying. The main problem undoubtedly is the question of the existing slot machines. That is quite clear. It is proposed therefore that a small fact-finding committee be appointed —and it has been accepted—to inquire into those problems, as well as the possibility of the use of counters instead of coins as regards the existing slot machines. As I have said, the machines are so refined that it is not only a question of size, but also the other features that are involved here. I want this fact finding committee to investigate this problem for us; e.g. to what extent are slot machines presently used; whether they can be adapted and the cost in case they can be adapted. But I want them to investigate the alternative also, namely the possibility of the use of counters. These counters are bought for this special purpose only. It may be a cheaper way of dealing with this problem of the slot machines.

I have merely indicated the general direction, for this is not the time to go into all the details. I merely wish to indicate the procedure I propose to follow in this very important matter. I think that if there is one important motion we adopted, then it was this one in regard to decimalization. You have seen, Mr. Chairman, that our example has been followed already in other related countries—Australia, and there is talk of it in England, New Zealand and in Rhodesia. But I think it is an equally great reform if we could now. while the opportunity is still there, place our coinage system on a sounder basis. What I therefore propose doing is that during the recess, after the inquiry of the fact-finding committee has been completed, I shall publish the proposals in regard to the changes in the coinage system, together with the necessary explanations. The scheme and the necessary legislation to give effect to the said proposals will then also be drafted and published. Then it is my intention, when we meet in 1964, to refer the scheme and the necessary legislation to a select committee, as we did in the case of the P.A.Y.E. system. If there are people with ideas, they will have an opportunity to submit those ideas. I am quite convinced that the ideas of the Department, particularly after we have had the benefit of this investigation overseas by Mr. Malan, Director of the Mint, will be acceptable, but it does not necessarily mean that they cannot be improved upon. That is why I wish to give an opportunity for that. However, I do not want us to be overwhelmed in the meantime by people who know better, without perhaps having the experience and the knowledge we have gained. I therefore wish to request such persons to withhold their ideas and not to overwhelm us with them; they will have an opportunity to submit their ideas to the select committee.

Simultaneously with the issue of the statement—and perhaps this may now serve as advance notice—publicity will be given to the necessity for caution in the importation of new slot machines that will not be adapted to the contemplated new coins. We do not want the problem to be aggravated in the interim. Therefore people should rather retain their old slot machines and wait until the new coinage system has become a reality before they buy new ones.

Together with this and almost equally important there is also the question of our banknotes. I have already had discussions with the Reserve Bank. Hon. members are aware that we shall be printing our own banknotes in future. The new principles accepted by the Cabinet were also discussed by me with the Reserve Bank. That is in respect of two matters I may now announce. The first is the question of denomination. To fit in with our decimal system, we consider that there should be denominations of R1, R5 and R10. The R2 note is merely a reminder of the £ note. It will always be regarded as such. I also think the figure should be much more prominently displayed on the note than at present. That also applies to the coins. The fact that it is a 10c coin should not be hidden; it should be displayed prominently on the coin. Then people will forget that it is equal to the shilling of the past. Secondly, as regards size, we have already agreed that the notes must be smaller than the present ones, and there must also be a difference of plus-minus a quarter of an inch in size between the various denominations. I do not wish to say more than that, for the question of designs will be investigated later, designs for both the coins and the banknotes. I have indicated our line of thought in general, and the proposals will be published and submitted to the country at a later stage. I do not think it is necessary for me at this stage to say more about it. I think this is the point of time we should grasp to rectify our coinage system so that we shall not be sorry later on.

I think I shall now return to the questions which have been put to me. There are still some other statements that I should like to make but I can make those under other Votes. What I have just said is really in anticipation of what I had meant to make under the Vote of the South African Mint.

The hon. member for Constantia has asked me about currency control and the possibility of its total abolition or alternatively for its further relaxation. I do not know whether the hon. member has seen that Mr. Rissik, the head of the Reserve Bank, stated clearly recently that he did not think the time was ripe for the abolition of currency control. It is quite true that our reserves are showing strongly and have been showing strongly for a considerable time, but we are about to enter the lean period and we must expect a gradual reduction in our reserves. Dr. Franzen, the deputy of the Bank, has also indicated in a recent speech, that there is about R1,400,000,000 invested overseas in shares in South Africa. So hon. members will see that we are in a very vulnerable position as far as a sudden withdrawal of capital is concerned. This is not all direct investment, a large amount of that is probably portfolio investment. This can easily be withdrawn and that was why our reserves dropped so suddenly in I960 and 1961. We must also remember that even at this very high figure as which our reserves stand at the moment, in relation to our import figure—particularly now that we have relaxed import control we must expect that our imports will go up to R 1,100,000,000 or R 1,200,000,000 per annum —our reserves represent probably less than four or five months’ imports. Many countries consider that you must have six months play in that regard. Those are questions we have to consider and I am continually discussing this matter with the Reserve Bank to see what the position is and to find out when we can make further relaxations. I just want to repeat that I do not think it works very harshly on the investor from overseas. The share prices in London to-day are nearly in all cases at higher levels than before control was imposed. We have made various facilities available to foreign investors. Hon. members will remember the block rand system. Firstly, there is the five-year block rand loan which means that over a period of five years a man can withdraw all the proceeds of the sale of shares in South Africa. This is a very generous proposition although it has not been used to the extent to which we expected it would be used. We were not disappointed, however. I think it was one of those implied compliments to the strength of our economic position that people did not rush to avail themselves of this opportunity.

May I ask the Minister a question while he is dealing with that matter? Can the Minister tell us to what extent …

R14,500,000 last year. I think we made provision for about R20,000,000. Then there is this direct investment of block rand in noncompetitive industries in South Africa, particularly, but not necessarily, if they are border industries. There are certain industries in respect of which we allow the proceeds of sales of shares on the Johannesburg market to be invested in equities, like Phalaborwa for instance. We also attempted in the past to support the London market through share-purchase schemes here; there is the share-permit scheme in respect of which about R 19,000,000 is fully or partly used; then there is the arbitrage scheme in respect of which about R19,000,000 is committed. I wish to point out that under these two schemes there has been a resulting profit to the Defence Department of R3,000,000.

The hon. member also raised the question of the revolving credit. Revolving credit is a credit usually for two years’ duration. It has been in existence continuously for about 14 years. It is based on the idea that you pay a commitment fee and then you can make use of the maximum facilities at a certain interest. You do not pay the interest unless you make use of the money. You pay the commitment fee on the whole amount. The commitment fee is ⅜ per cent at the moment and the interest is 5 per cent. It is usually more or less what the prime rate in the United States is. I think there are many reasons why we must retain this. There are 11 banks in the credit to-day; originally there were fewer. New banks wanted to come in and the old banks did not want to concede any of their quota, so we had to raise the level from $20,000,000 to $40,000,000 to accommodate all the banks. I think this is a substantial standby and we want it to continue as such. It is also a very excellent link with the United States banks. I think it is of very great benefit to South Africa and I would not for a moment regard it as one of those things which you can discard so easily. When I go to the International Bank this year I shall have to discuss the renewal of this. If they are willing to renew, I shall certainly not say them nay. I think this is of great value to us as a subsidiary standby for our reserves, particularly now that we are entering a period of very heavy capital commitments.

The hon. member also asked me what the position was in regard to the International Monetary Fund and their idea to control the currencies of the world. It is quite true that they have used various means in the past for increasing international liquidity. They consider, and we agree with them, that an adequate supply of international liquidity is necessary for the smooth functioning of international trade. The rise in international trade has been greater than the rise in global liquidity. They have from time to time proposed schemes for increasing the liquidity but I do not think those schemes have been very successful. I think they are all schemes which only deal with symptoms instead of going to the root of the trouble. They started with the idea at New Delhi that if we increased our subscription to the fund by 50 per cent that would give them sufficient liquidity for the next decade. But within three years when they went to Vienna in 1961—three years later—they were again short of liquidity and they came forward with a new scheme. The new scheme was that certain of the Common Market countries should be able to put at the disposal of the I.M.F. further capital amounts when called upon to do so. They found that that was not sufficient. They had the so-called Paris Club; they had those “swop” arrangements, but all those were devices and only devices. I have made it my task year after year to tell them that that was not going to be a success and that they would have to come again with another scheme. I told them that they should get down to the root cause which was that they had an insufficient base of gold to support this pyramid standing on its head; this superstructure of international trade, a structure which is growing every year by 5 per cent to 6 per cent while the amount of gold used for reserves is only growing at a rate of less than 1 per cent per annum. The position is deteriorating every year. It is interesting to know that of the gold produced in the West less than 50 per cent has gone into reserves. The balance has been used for manufacturing purposes and for hoarding. I think over 10 years a little over 40 per cent of the gold production of the West has gone into official reserves. That shows that the breaking point will be reached one day. We hope that those who control these matters will realize that if they want to avoid the breaking point, they will have to go to the root cause. They will have to consider what I pleaded for again last year and that is a revaluation, in terms of gold, of the currencies of all the countries simultaneously and to the same extent so that there is not a question of devaluation in one country and the people holding that currency losing anything and so that there will not be speculation. Some international body must come to a decision and say: We are prepared to take this step now; we are going to revalue the currencies of all the countries simultaneously and more or less to the same extent. There may have to be small adjustments, but generally to the same extent. I think the problem is largely a psychological one and it has to be dealt with psychologically. The views of some experts in this regard are encouraging but at the moment, as far as the official view is concerned, I must repeat what I said earlier that there is no immediate prospect of the United States changing their official view. Many people, including bankers, are beginning to have other ideas about the matter and we hope this will act as a leaven and that it will work right through to the official top.

The hon. member for Constantia (Mr. Waterson) has asked me about the International Development Association and why we could not make use of that for the Orange River scheme. Let me say at once that I.D.A. was not intended for South Africa. A list of the countries was made who should benefit. I. D.A. was intended for the development of underdeveloped countries and we do not fall under that. We made our contribution of 10,000,000 dollars which we are paying in five instalments. I think provision is made in the present Estimates for the third instalment. That contribution is a token of our desire to take part in this international scheme and also as an indication of our desire, within our means, to help to develop underdeveloped countries. We have explained to them that we cannot do more at the moment because we ourselves are faced with underdeveloped areas in our own country such as the Bantu homelands and that they cannot expect us to contribute as much as a country with our prosperity will naturally be expected to contribute. We are desirous of not standing out altogether and we are taking part in it to a limited extent with due regard to our own commitments in our own country. We cannot go to them for assistance to develop our underdeveloped areas; we shall have to do that ourselves. In this case they cannot expect us to contribute more generously than we are at the moment. In any case, it is outside the constitution of the I.D.A. to assist South Africa in regard to the development of the Bantu homelands. There may have been a possibility, when we have developed sufficiently, of their being inclined to rewrite the constitution to include our Bantu homelands on a par with the development of the Protectorates, but I do not think that is very likely in the present climate. In any case I think we shall be able to do that ourselves.

The hon. member also asked why we anticipate that the Orange River scheme will take 30 years and that we could afford higher annual capital contributions. But that is not the only consideration. As the hon. member for Pretoria (Central) (Mr. Van den Heever) has already said, there are other considerations as well. This is a development which has to be fitted into our economy as a whole and that is a process which cannot take place so quickly.

The hon. member for Port Elizabeth (South) (Mr. Plewman) asked me about a scheme for the sale of 400 oz. gold bars in South Africa. As pointed out by him there is a falling-off in the sale overseas of those bars as also in the kilogramme bars. Our view is that that is due to the fact that London offers conveniences for the buyer of gold (it is still after all the world gold market) which are not available here. But we do not want to close the avenue and if any country wants to buy here, it still can be done and the price is more or less based on the London price, having due regard to the transport costs. But it is related to the world price. Nobody of course will pay a premium on the world price. As I say it is much more convenient for other countries who want gold bars to go to London. There are recognized channels and they can get whatever they want there and they are accustomed to getting it there. That as far as we are concerned is one of the main reasons why there has been a falling-off. The hon. member will remember that we also allowed the Chamber of Mines to sell coins, R2-pieces. I think I gave the hon. member the figures some time ago. About 1,000,000 pieces were sold, but it is also a question of the demand, and it is not a stable demand; it goes up and it goes down. But that is also open. We did it as an experiment. I said at the time that I did not expect wonderful results. The mining industry did gain a small premium on the sale of those coins. The hon. member has also asked whether we cannot make these gold bars available for purchase here. Well, it is largely a question of the initiative coming from the gold-mining industry. If they were to ask us, we would have to consider it. I should imagine that there are certain difficulties. But the procedure is that they come with suggestions because after all it is their gold, and we have to approve of it if they want to sell gold in any way outside the ordinary way. If they want to sell it here in the form of bars, they must at any rate be satisfied that there will be a demand. I doubt very much whether there will be a tremendous demand here among residents in South Africa to buy these 400 oz. bars or even the kilogramme bars. But still if they think that there is a market and they approach us, we will consider whether there is any objection.

Is there?

In regard to the gold coins they approached us. They said: We have a market for it, will you give us permission? We went into the matter and said: All right, if you think you can dispose of your gold in that way better than in the ordinary way, we will give you permission.

The hon. member for Constantia (Mr. Waterson) has asked about the Kunene River scheme. I prefer not to say anything about it at this stage. The hon. Minister of External Affairs will be back soon and the hon. member can then put these questions to him. But it will be obvious to the hon. member too that South West Africa is of the utmost importance to South Africa, and that any money that we spend there for the development of South West Africa is not money that we are spending in a foreign country.

The hon. member has referred to the Decimalization Board’s report, and he said that this is the first time really that a board has announced its own demise. I think there is another one, in regard to which I also am happy to be able to make a short statement and that is the Custodian of Enemy Property:

Of the R9,000,000 held by the Custodian for persons in Germany about R5,500,000 has already been released, and a further R 1,000,000 may be released by the middle of this year or shortly after. 31 May 1963 has been fixed as the closing date for the submission of claims by the former German owners of the assets.

The balance of 20 per cent of German assets was retained to cover trade and other claims by South Africans for damage suffered in Germany as a result of the war. With a few exceptions these claims have already been settled and it is expected that sufficient funds will remain over to permit a 100 per cent release (instead of 80 per cent) to the former owners in West Germany who have submitted claims.

Apart from German assets, the Custodian still holds certain amounts for certain other countries (mainly Japan and the Iron Curtain countries). The great majority of South African claims against these assets has already been settled. We are attempting to expedite the final disposal of all outstanding enemy asset accounts and I hope it will be possible to make good progress during the year, and maybe next year we will also be able to announce the passing of the office of the Custodian of Enemy Property!

How much has been reinvested in our country?

R5,500,000. Only when it is less than R2,500 were they allowed to take the money out, and also in the case of old people or necessitous people; they were allowed monthly or quarterly to take out a certain amount. But for the big institutions we have allowed them 80 per cent, but it had all to be invested here.

May I put a question to the hon. Minister in regard to the circulation in South Africa of gold coins by the Chamber of Mines and the implied inference by the hon. Minister that it was not the success that he had anticipated: Does the hon. Minister not feel that the premiums in that instance were too high and that if the premiums were lower, there would be a better chance of success?

For sale overseas?

No, in South Africa.

No, they have never been allowed to sell coins here, except to collectors. But overseas they have been able to sell coins to whoever wanted those coins, irrespective of whether it was for collectors or not. But in South Africa we have never allowed the sale of coins for ordinary purposes.

Did the hon. Minister say that at the request of the Chamber of Mines he might give consideration to the sale of coins in South Africa?

No, that is not what I said. I think the suggestion of the hon. member for Port Elizabeth (South) was that the sale of the 400 oz. bar and the kilogramme bars should be allowed. He did not refer to coins. I think the sale of coins has already been turned down by us in the past. But this idea that we should allow the sale of bars to South African residents is a new suggestion. I can see that there will be difficulties, but at any rate we have not been approached for that as yet.

The hon. member for Pretoria (Central) (Mr. van den Heever) a few moments ago suggested that there was nothing to criticize under this Vote. In the initial stages we are concerned in putting questions to the Minister and getting the answers. But what I suggest to the hon. Minister for his attention is some improved form of Treasury control, particularly with regard to Loan Votes. It may be that it is outside the powers of the Treasury to control the applications for these loans. On the other hand we are concerned when we see in the Auditor-General’s report dealing with the excess provision in relation to ultimate expenditure that there was a surplus of R26,133,o0o surrendered on the Railways and Harbours Votes. It seems to me that when you have an amount of this nature which involves some 20 per cent surrendered of the amount provided for Loan Votes, it makes it considerably difficult for the Minister to estimate his interest rates for the year in question. You see, Mr. Chairman, here you have the Minister of Railways asking for so much on Loan Votes. The Treasury commits itself to provide those funds, and then the amounts are not spent. I fail to see how the Minister or his staff can calculate efficiently the interest burden each year when there is underspending of such an amount. That possibly accounts for some of the surpluses. It is natural that the Minister’s Department will make its calculations on the anticipated amount to be provided. When the Departments concerned do not utilize the funds provided, then it throws out all the calculations. There are various spending Departments and they require considerable amounts from the Treasury; the Railways are probably the biggest spending Department. We believe that there is a suggestion that the Post Office should have greater autonomy. I do not want to go into that now, Mr. Chairman, but these Government Departments that are going to ear-mark large amounts for capital expenditure are going to run into trouble if they earmark far more than they can spend in any particular year. But we will find the Minister coming again and again with inaccurate Budgets or unreliable Budgets, unless he gets the co-operation of the various spending Departments. I suggest that the Minister should give consideration to the question of sanctions in respect of those Departments who do not comply. It is very easy for a Department to put down on its estimates big loan amounts when it has no hope of spending the amounts during the year. Cannot the Treasury exert more control than it exerts at present? Because it does seem to me that when they are out by 20 per cent, it is unreasonable. We notice from time to time that these Government Departments make applications for large amounts of money which they do not utilize. The hon. member for Constantia has referred to the Orange River scheme. Large amounts will have to be provided for that from time to time. But in any case each year very large amounts are voted for Loan Funds and if we are going to have accurate budgeting it is essential that the Departments concerned should take great care in the calculation of their requirements and do not land the Minister with surrendered capital amounts at the end of the year.

I want to draw the Minister’s attention to another matter in regard to which I would like some information. I refer to page 52 of his Vote “Actuarial and Advisory Services and Inspections carried out in terms of Various Acts administered by the Treasury”. Last year provision was made for R 1,500 and this year the amount is R13.500. I should like the hon. Minister to indicate to us in the course of his reply the reason for that substantial increase in this particular Vote.

We on this side share the hon. Minister’s sentiments as far as the gold price is concerned, and we also hope and trust that it will not be too long before there is an increase in the price of gold. It is rather regrettable to see that the Leader of the Opposition in the United Kingdom regards the gold price as a political matter. I think he will find, like so many politicians, that in the end economic realities break through all political fallacies. Of course it is an experience that is awaiting this Government too in regard to some other aspects of policy which I cannot raise now. I think the hon. Minister can rest assured that there are powerful economic forces working in the world towards a higher price of gold. One of the rather remarkable reasons for the increased liquidity (as we all know the chances of an increased price for gold depends largely on world liquidity) in the world in the post-war decade has been the unfavourable balance of payments of the two great currencies, sterling and dollar, and both those Governments are of course firmly determined to reverse the strength, and of course the more successful they are, we on this side think the better the chances will be for an increase in the price of gold.

Mr. Chairman, I was struck by the complete revolution that seems to have taken place as far as the Minister’s policy is concerned in respect of control over the outflow of capital from this country. The Minister will recollect that about two years ago at the opening of the Stock Exchange building in Johannesburg, he made the proud claim, quite justifiably, that South Africa never in its long history had imposed control on the repatriation of foreign capital from this country. Of course that is a very strong point to induce overseas investors to invest in a country like this. At the time when the Minister made that claim, I think most of the gentlemen present there that night thought it was the Government’s policy as far as was economically practicable not to impose control over the outflow of capital. At that stage, when that was the Minister’s policy, our foreign exchange reserves were only of the order of about R150,000,000. Foreign investment in this country at that stage was considerably higher than what it is to-day. The Minister gave the figure at the time. We find that in the last two years for reasons I need not go into, the Government was compelled, despite the previous policy of the Ministers of Finance not to impose capital control on the repatriation of foreign capital to impose such control, and since then our foreign exchange has risen threefold, and it now stands at R470,000,000 compared with R150,000,000. Yet the Minister now gives as a reason why we cannot think at this stage of abolishing capital control the fact of the large foreign investment in this country. Surely that was also present two years ago. Therefore one can only conclude that confidence in South Africa on the part of foreign investors has deteriorated very rapidly in the last two years. Otherwise on the basis of the policy that applied two years ago, we should at this stage have no capital controls. Of course if the Government genuinely feels that that is the reason, one cannot blame them. If on the other hand they feel, as they tell us day after day, that their policies are creating more and more confidence in South Africa, then I would suggest that the Minister’s answer was very unsatisfactory. It is true that the Minister has said that there is some rule of thumb apparently in this type of matter, namely that a country is entitled to keep controls until one’s foreign exchange reserves equal at least six months of imports, and from what I could gather from the hon. Minister we have not yet quite reached that figure. But this matter is important as far as South Africa is concerned and as far as the foreign investors are concerned, and in view of what the foreign financial Press thinks of South Africa. What the foreign financial Press actually thinks is very clear from an article written a short while ago by Lombard in the Financial Times, and I am afraid I have to quote quite considerable portions of this article to the Minister because I think it is so relevant to the debate here to-day. The Minister will admit that Lombard is one of the most sympathetic financial writers overseas as far as South Africa is concerned, a man who has never really lost his confidence in South Africa and the great prospects South Africa holds out. This is what Lombard wrote at the time of the Budget debate—

And this is the reason he gives—

That is why I say that it is largely a question of confidence. Then he goes on to say, and this is where he becomes critical—

This is an accusation he makes. He says that the Government allows foreign investments to build up whilst using the opportunity to repatriate foreign investments in South Africa. Then he goes on to explain from what the Minister said in his Budget speech that the reserves would be much higher if the Government had not allowed a considerable amount of overseas investment partly by allowing banks to hold balances overseas and partly by allowing private investment overseas. After having explained that he goes on to say—

And these are the questions of principle that he then states—

Then he goes on and this is the important part—

As I say, he has always been a very sympathetic financial writer as far as the Republic is concerned. And he ends like this—

His main criticism is that it appears to the foreign investor that despite the very healthy condition of the foreign exchange reserves controls are being used to repatriate foreign investments at cut-rate prices, as he puts it. I do not think that the answer that the hon. Minister has given us to-day will entirely remove the apprehension that seems to be rising overseas in this connection. Can the Minister not tell us at what stage of the reserves, at what figure, he will consider a further relaxation? The point that the hon. member for Port Elizabeth (South) made earlier on was that the very fact that South Africa is prepared to meet foreign claims against it by foreign investors will induce confidence in the country. [Time limit.]

It is quite interesting to listen to the hon. member for Jeppes (Dr. Cronje) when he so fully quotes the criticism of the otherwise sympathetic Lombard. We are acquainted with that. But it would have been more interesting to us, as the Opposition after all is the alternative Government, to hear what their policy would have been under present circumstances.

That is not under discussion.

We are discussing the Vote of the Minister of Finance. You criticize him with reference to the exposition he gave us this afternoon. But you do not tell us what you would have done in its place. Since we introduced exchange control, we have always had the most violent opposition on the part of the Opposition, but on not a single occasion, not even when we made concessions, did we hear from the Opposition what they would have done under present circumstances. The hon. the Minister this afternoon rightly quoted what the Governor of the Reserve Bank says about this matter. After all, he is a person who is not influenced by political considerations in his views, nor possibly by lack of confidence or no confidence. He judges the position quite soberly, and he is the person who advises us in respect of the policy we must pursue here. Now the hon. member has quite rightly quoted what Lombard says. But I could also quote persons who say that they are grateful that the currency control measures have been applied, and that they are grateful that they kept their investments in South Africa at a time when all the winds of change were blowing against us and the outside world lacked confidence in us. They are thankful that they were compelled to keep their interests in South Africa, to their great benefit to-day. Of course we could have expected that the hon. member for Jeppes would simply reduce the very complicated problem to the simple proposition “lack of confidence”, That is the whole position: “The Government does not want to remove the control measures because there is lack of confidence overseas.” That is the conclusion the hon. member has come to on the basis of what the Minister said this afternoon in contrast with the speech he made at the time of the opening of the Johannesburg Stock Exchange Building. I see no change in the policy, for what the Minister subsequently said and did was for the protection also of the investments made by the foreign investors in South Africa. It is not only in respect of the outflow of currency, but the control is also for the protection of the investments there still are in South Africa at the present time. If the hon. member refers to lack of confidence in South Africa, I should like to quote from a pamphlet issued recently by a banking institution:

We could bring plenty of other proof. May I draw the attention of the hon. member to what the well-known Mr. Randall said repeatedly not so long ago, apart from the articles he wrote in many well-known American papers. We could mention numerous instances of investments that are being made to an increasing extent in the Republic at the present time, but no, he says in respect of the one measure we have applied in the form of exchange control for the protection not only of our own investments in South Africa, but also for the protection of the investment of the foreigner in South Africa, that there is lack of confidence in South Africa. I could submit to the Committee numerous reports published from time to time by the hon. member’s bank, and which preach the exact opposite of what the hon. member was advocating here this afternoon. The views in those reports surely must meet with the approval of the hon. member as chairman of the Board of Directors. In many respects we do find criticism in them but in most cases confidence is expressed. When the hon. member rises here, as the representative of Jeppes, he is very pessimistic. It would have been very easy for us, had we not realized our responsibility, to have yielded to the criticism of the hon. member as expressed here this afternoon, and to have removed these currency control measures. But I repeat it would not be in the interests of the internal as well as the external investor, and to make use of this one small point and to say it is a glittering example of the lack of confidence is refuted by all the other facts at our disposal. The Minister pursues this policy consistently on advice he receives and the guidance he gets from particularly the Governor of the Reserve Bank, who is wholly objective, and in accordance with which the Minister will also change his policy as circumstances require. But basically it is imperative that we should constantly retain it for to tell the honest truth, when there was some relaxation, there was not such a rush of sellers overseas that it could have been an indication that they did not have confidence in South Africa, and that they would have been in favour of the complete removal thereof. In my opinion, it is a policy that should be maintained in the interests of the internal as well as the foreign investor.

I am sorry the hon. member for Mayfair (Dr. Luttig) has seen fit to drag politics into this debate, because the remarks of my colleague the hon. member for Jeppes (Dr. Cronje) were perfectly straightforward and economically sound. But the hon. member for Mayfair now asks us: What would you do if you were in power? The answer is quite simple. Had we been in power, this position would never have arisen. We would never have passed one piece of legislation after the other until we got the country into such a mess that we lost the confidence of the world. We would have allowed the dust to settle. I do not want to talk politics, but that is a fact, and may I just point out in passing that we were able to lend a great country like Britain R 160,000,000 in gold when we were in power and she was in a tight corner. That is the difference between a good Government and the present one.

But the point is this. An economist once said that a country is only really free when its currency is free, and not controlled. In view of our political unpopularity abroad, it is amazing to me that our economy is so strong and so inherently sound that the country is able to stand up to it, and that at a time when, a few months ago, all the other stock exchanges in the world were falling, and bears were in the ascent, whilst in South Africa the bulls were in the ascent; and that our economy was so sound that the market could keep on rising instead of falling. In view of this, I hope the Minister will consider seriously what the hon. member for Constantia (Mr. Waterson) advised him to do, and that is to do away with currency control and in that way to increase economic confidence abroad. There is nothing that will so quickly restore confidence as that.

I was interested to hear the Minister telling us about the ⅜ per cent committal fee on the foreign revolving credits. That is a very fair rate and I think we are lucky to get it, because if one thinks of the millions of rand that have to be held by the banks in a liquid state, to be on call at any moment, at ⅜ per cent for a large loan at 5 per cent at a time when money might become very much dearer, I think it is a very fair rate.

I see in the paper this morning that the Prime Minister of the Federation is coming down here and will probably go fishing with the hon. the Prime Minister. Now, before he becomes too deeply involved in this pastime, I hope our Minister of Finance will take the opportunity of discussing with him the financial position in the Federation and particularly in Southern Rhodesia. I trust that he will have talks with him, because as things are developing it appears obvious to me that Southern Rhodesia must look south for her future. I am not talking about the two northern provinces of the Federation, because I do not know anything about them, but Southern Rhodesia will have to look south and we must be ready to help. While opening a big investment institution building in Salisbury some months ago, I suggested to them that they turn their statue of Rhodes round and with his finger pointing south instead of north and saying, “There lies your hinterland”, to show that there lies the future of Southern Rhodesia. I feel that we should get as close as we can to Southern Rhodesia at a time when she is passing through a very difficult period. The way to get close to a country is to discuss finance with her and if possible to help her in her difficulties, particularly as they now feel, I think, that they have been badly let down by Britain. In view of this, I wonder whether the Minister will encourage South Africans to invest in Southern Rhodesia to develop their industries, and to relieve the control somewhat and to let our investors move in there to show our friendship and goodwill for them, because I think it is essential for both to have friendship and understanding.

There is just one point I want to raise before I sit down on the question of the new coinage. It was interesting to hear what the Minister said and I think it is very sound. Why should we be held to ransom when silver is at a high price and when in most of the world the silver coins are being debased and nickel is being used? But the question of the cent is difficult. Our present cent can so easily be taken for a 20c piece. I would suggest that there should be a hole in our cent piece, like in Kenya, or in India, to make it easier to recognize.

The only other point I want to make is this. What hurts me a great deal with all this talk we have heard about decimalization— and how successful it has been—and there is no doubt about that; considering we set an example to many other countries and Australia is following us—and while I must admit that I was not in favour of it at the start, probably because I was old-fashioned and had grown up with £ s. d., it is surprising that the Minister of Finance and the Government have never given his real due to the man who inspired and initiated decimalization, the hon. member for Kensington (Mr. Moore). If anyone should get full credit for it, it is the hon. member for Kensington.

Let us give him a title.

Yes, Lord Rand. Never once has anyone on that side of the House paid tribute to the work done by that hon. member.

That is not true.

I think it would be only fair to have given him credit for it. For instance, when these notes were issued, why was he not given, or allowed to buy, some of the first issues of these notes? It is a reflection on the Government that they have not shown the honour due to the hon. member.

I think the point raised by the hon. member for Jeppes (Dr. Cronje) in regard to our foreign investments is one that should weigh with the hon. the Minister, because there is no doubt that there is a contradiction in terms in having currency control on the one hand and an amount of money going out of the country on the other. I hope in his reply the Minister will tell us what the policy of the Government is in relation to overseas investments. I know that one can approach the Treasury or the Reserve Bank, and one is told that each case is treated on its merits, but that is a very elastic term and it would be appreciated if the Minister would tell us in simple terms what his policy is in regard to foreign investments.

The second point I want to raise is that for some time there have been certain anomalies as between banks, building societies and other investment institutions, and I understand that some time ago a technical committee on banks and building society legislation was set up to investigate these anomalies and to report to the Minister. I understand that that support was furnished some time last year, and perhaps the Minister could tell us whether that report will be tabled, and what action, if any, he contemplates taking in terms of it.

Now I want to come to a very much more serious matter, and that is the question of the vast sums of money being lost by the public through investment with organizations which are not covered by the Financial Institutions Act. We find that in terms of that Act, banks, building societies and various other institutions are covered, but we have had a series of tragedies, and I use the word very advisedly, in respect of such organizations as estate agents and other companies who are merely borrowers. I would like to make it clear that there is no attack by me on those old-established, reputable organizations which have been doing this type of business for many years. We are faced with this position, which is common whenever interest rates drop, that the average person who has a certain amount of money to invest starts looking for a higher rate of interest than the normal one paid by banks and building societies. They want a little more, and when they want a little more they start taking risks. We have had some very serious situations developing. We know that in Johannesburg alone we have had cases of large organizations where the public invested money—I suppose “invested” is the wrong term to use; they have lent these organizations money, and they in turn have invested it in all sorts of schemes and ventures, with the result that the individual lost his money. I know there are grave problems in controlling these matters, but I hope the Minister will tell us that this matter is being considered by him.

Another aspect that needs attention is the position of estate agents. The position regarding estate agents is that when one buys a property the usual term in the deed of sale is that X amount shall be paid to the estate agent. In the event of the insolvency of the estate agent, that money is lost, and the person who has paid it in becomes merely a concurrent creditor. In the same way, when a property is sold on one’s behalf, the estate agent receives the money and you depend on him for payment. What has been happening is that in the case of one estate agent in Johannesburg, which I am sure is known to the Minister, tens of thousands of rand which have been paid in as deposits for the purchase of sale of properties by the clients of this agent have been lost. There is nothing which provides that an estate agent shall have a trust account in which to keep deposits or any moneys received, and everything is put into one common account. The other problem is that when a widow or an innocent person sells a property for a few thousand rand, he will ask the estate agent to invest it, and the agent says he will take it and invest it and guarantee it. In respect of the one organization that collapsed in Johannesburg, that estate agent had signed guarantees for nearly R4,000,000. In other words, practically everyone who had lent money for investment under his guarantee lost their money. I know it is very difficult to deal with this matter and I hope the Minister will not ask me what I suggest should be done, because it is very difficult when a person lends money to someone who guarantees it to say that the guarantor must disclose what his other guarantees are, because that would disturb the entire basis of business, but I hope the Minister will focus attention on these problems. There is too much money being lost by the innocent investor, and it is usually the person like a widow or an aged person who is caught by these organizations. In many cases the money is taken originally with no nefarious intention, because a person starts a business and hopes it will succeed. But just like the investor who invests to get a higher rate of interest, so the person who has taken the money for investment decides that he would like a greater return, and so the pyramid builds up until you find that the basic investor has lost his money. I hope the Minister will give his attention to this very serious matter.

I wish to express my appreciation of the fact that the hon. member for Parktown (Mr. Emdin) has just raised this aspect. I do not want to go into that any further. It is a most difficult matter to solve, but undoubtedly it is one that should receive the consideration of Treasury.

There are two other matters I should like to bring to the attention of the Minister. We are now experiencing the first year of the P.A.Y.E. system, which is a tremendously revolutionary adaptation of our income-tax system. But otherwise than in the case of a comparable revolution, such as the decimalization of our coinage system, a separate body has not been created to keep an eye on the operation of this new system of income-tax collection. The Treasury and its officials are the only responsible persons. I should like to ask the hon. the Minister whether departmental consideration cannot be given to a special study being made of the operation of this new system of collection, and whether the Minister will consider making available to the House and to the public a report in the form of a White Paper or a departmental report on this specific subject after a year has elapsed. I think it will be of great interest to us as the Legislature to be able to have a report and to see exactly what problems have arisen as a result of the new system, and it will also be valuable to the public.

Order! The hon. member must discuss that under Vote 16.

I am very pleased that the hon. the Minister has not simply resorted to the negative argument in regard to the suggestion that the purchase of the smaller gold bars should not be withheld from South African citizens. My suggestion of course was very largely actuated by the fact that this was an opportunity for the Government itself to show its trust in the restoration of the confidence of foreign investors in South Africa, and I think therefore the Minister might go further and not simply leave it to the goldmining industry to come forward with suggestions, but might advance suggestions himself. Most speakers on this side have indicated by sincere argument that serious consideration should be given to removing currency control or to relaxing it considerably. We certainly want to get away from leaving an impression overseas that in South Africa we adopt the motto that “what is mine is mine, and what is yours is also mine”,

The second thing I want to deal with is the coinage under our decimalization system. I was very sorry that the Minister made no mention of the one coin which is more South African than any other. I think the most South African coin is the “tickey”. Probably it is the only one which is uniquely South African. Because it has a particular place in our coinage system, I ask the Minister to reconsider this matter because there is a grave danger that if we get rid of the “tickey”— formerly the threepenny piece and now the cent piece—the cost of living and the basis of charges will also go up. Once you have a ½ cent in a decimal system, it seems to me that logically you must also have a 2$ cent piece, or tickey, and I would certainly like to see it called a tickey still. What the origin of the name is I do not know; various suggestions have been made, but it is the one coin which is entirely South African.

Then I want to take the argument of the hon. member for Parktown slightly further and ask the Minister to give the House a sort of progress report on the functioning of the section of his Department which is concerned with supervisory duties over the various types of financial institutions. The House will remember that recently the Minister introduced legislation to add to the powers of the persons charged with that duty because it was felt, he said, that the existing powers were not sufficient. The Minister also indicated to the House last session that the situation had become serious and that therefore he was taking steps to increase the staff as well. There is no indication on the current Estimates of any increase in the staff controlling financial institutions. A disturbing situation has arisen in the meantime, and it seems to be growing worse, in so far as some of these institutions are concerned. As the Minister knows, there have been a number of cases before the Supreme Court in recent times dealing with institutions of that nature, and once that happens it introduces a very disturbing factor to the investing public, but particularly to those persons who are small depositors and who put their savings into such institutions. I hope the Minister will therefore give the House a progress report as to what has happened since last session in order, if that is possible, to reassure the investing public. I have indicated before that as the powers of control by the Government become greater, so the public becomes entitled to look upon such control measures as a guarantee of their interests, by the Government. It places on the Department therefore an added responsibility to ensure that the interests of the public are adequately protected.

Order! I must draw the attention of hon. members to the footnote immediately under Vote No. 11 referring to “miscellaneous loans and services”, R103,365,000 on the Loan Vote. I propose to put the Loan Vote immediately after Vote No. 11 has been agreed to.

May I reply to some of the questions which have been raised. The hon. member for Pinetown (Mr. Hopewell) has referred to the large surrenders under the various Loan Votes. He spoke with almost all the feeling that one would expect from the Minister of Finance himself! It is one of the burdens which the Minister of Finance has to carry, and I am very glad to find that there is some sympathetic response on the part of hon. members of the Opposition. Most of the Departments are sinners, but I think the greatest sinner has been my colleague next to me. However, we have spoken to him very kindly as the Treasury always does, and we are hopeful that things will go better in the future. They have better financial control in the Railway Administration at the present time and I hope that this will be reflected in the steps that they will take to see that there is no repetition of large surrenders every year, which puts my Loan Budget quite out of joint.

He has not asked for any less this year, has he?

No, he has not asked for any less. I think there is a very good reason for that. He probably expects to spend more than last year and therefore did not ask for less! At any rate the hon. member also spoke about the possibilities of sanctions. Well, I would like to know what sanctions could be applied? I have always found that Ministers of Finance are traditionally long-suffering and soft-hearted and they could scarcely be expected to take a very strong attitude towards their colleagues who transgress from time to time! But if there are any suggestions as to appropriate sanctions I shall be only too glad to consider them.

The hon. member for Pinetown has also asked me what the reason is for the big increase under the heading, “Actuarial and Advisory Services and Inspections The provision under the item “Actuarial and Advisory Service and Inspections” has been increased by R12.000 in order to make provision for the expenditure in connection with a more extensive programme of inspections and inquiries that will be undertaken as a result of the coming into operation of the Inspection of Financial Institutions Act. That is also partly the reply to the points raised by the hon. member for Parktown (Mr. Emdin) and the hon. member for Port Elizabeth (South) (Mr. Plewman). Perhaps I might explain here how the staff position has been affected as far as this Financial Institutions section is concerned. All the posts in this section except the clerical posts, have been converted from administrative to professional posts. As the result of a Public Service inspection the establishment has been enlarged by three. This seems a very small increase from 40 to 43, but these three additional posts which are now recommended by the Inspector are in a higher bracket which, together with the conversion of posts to the professional division and the re-allocation of work of a purely clerical nature, will result in much better use being made of the knowledge and experience of the professional men. Of the professional officers 14 are in a position to undertake inspection duties, while professional men outside the Public Service can also be employed temporarily in terms of the Act to undertake inspection duties as circumstances demand. I think that shows that the position is being considered all the time and I am hoping that there will be a gradual improvement in this very difficult matter.

The hon. member for Parktown has raised the question of estate agents. I do not know whether that is not more properly a subject to be discussed under the Vote of the Minister of Justice. It is not one of the financial institutions which fall as yet under the Registrar of Financial Institutions. There are quite a large number of them and I think the Registrar has his hands full with the existing number of institutions.

The hon. member for Port Elizabeth (South) has asked what the position is with regard to the tickey. I mentioned last year in the Other Place that the tickey has its fate in its own hands. There has been an accumulation of the surplus coin which we have had to take in and if there is no demand for the tickey, we are not going to keep it in existence for purely sentimental reasons. There is the further point that it really has no place in a decimal system. Together with the 25c it really does not fit into the scheme of things, but I am not going to decide the fate of the tickey here and now; we have made our proposals and they will be laid before the public, and if there are people who want to plead the cause of the tickey—perhaps the lost cause of the tickey by then—they will be at liberty to do so. But I want to say that in other parts of the world the trend is towards a reduction in the various denominations. Although they still mint certain coins, they are not used extensively, and they have ceased minting others although they are still in circulation because there is not a demand for them. This whole question will depend to a large extent on the question of demand. Most countries find that all the needs of small change can be met with six denominations, and it is really unnecessary to have more than six. However, I do not want to be dogmatic about this matter now. I am only saying that that is the information which the Director of the Mint has brought back as the result of his visit overseas.

*The hon. member for Kempton Park (Mr. F. S. Steyn) also supported the idea that we should give the small investor protection as far as possible. I think all of us agree with that. I have just said what we are doing, but I wish to warn once again that no warning and no departmental supervision can protect every person against himself. It is simply a matter of attempting the impossible. One just cannot protect a person against wasting his money on something that ostensibly seems to be a very good bargain. So there are limits to the protection that can be given by legislation in this connection but we do utter warnings from time to time, as I am now uttering here, that one should not always believe that all is gold that glitters. I am almost inclined to say that the bigger the rates of interest one can obtain on a deposit, the more dangerous it is to risk your capital in it.

The hon. member for Jeppes (Dr. Cronje) misunderstood me completely. I did not speak about political reasons for the attitude towards gold; I spoke about psychological reasons.

I said that.

But I think in the case of the hon. member for Jeppes the two terms are perhaps interchangeable! Sometimes his politics affect his psychology and vice versa.

On a point of information, I never claimed that the Minister had said that it was for political reasons. I said it was for political reasons, so the Minister’s whole argument falls away.

Then apparently the hon. member did not misunderstand me, but I still think that it is a psychological question, because it is not one party only in the United States that has this view: we have had successive governments holding that view, and I think it is wrong to think that this is purely a political question. Politics may play a part in it; international politics may perhaps play a part in it, but I want to come to the main basis of what the hon. member said because that surprised me very much. The hon. member referred to the control measures which we took in June 1961. If the hon. member has a proper appreciation of the position in which we then found ourselves, then he must realize that if we did not take those measures, particularly in respect of the speculative portfolio holders, we would have harmed the interests of bona fide investors not only in shares and equities but also in direct investments. In the period of 18 months which preceded this, we lost R 120,000,000 just through the purchase of our own shares overseas. People were in a state of alarm—unnecessarily, one of the big banks in America said. They said that they understood what Sharpeville really meant; that they knew that it would be blown up by interests which were inimical to South Africa, and that they as a bank were not disturbed by it at all. But in fact it did create a feeling of mistrust and that was manifested in the willingness to sell South African shares at what South African citizens regarded as bargain prices. The repatriation of our own shares is an excellent thing, but when you have limited reserves and you find that within a period of 18 months you lose R 120,000,000 in capital—a net loss—then you can see how vulnerable your reserves are. It is all very well to say that our reserves are relatively so much better to-day and that therefore we ought to go back, but what we have now and what we did not have before 1961 is experience of how vulnerable these portfolio investments by speculators can be. We have had a very sore experience, and if we were to forget that experience and say that we can now throw open the door again, because we have bigger reserves than we had at that time, then we would be forced again into the same position where in order to save direct overseas investments here we would have to take measures of this kind. It is much better to let the position remain as it is at present. People who know anything about this matter —and I have been in consultation with them —are in agreement that although we can introduce ad hoc relaxations as we have done from time to time and also on a wider scale, as I have illustrated, it would be dangerous in view of our vulnerable position with this very large portfolio investment in South Africa in relation to our reserves, to throw open the door and to adopt the irresponsible attitude that our reserves are stronger than they were before 1961 and that therefore we can now return to whatever the position was at that time. Hon. members must realize that it would be most irresponsible to introduce relaxation now and then find that shortly afterwards you have to withdraw those relaxations when there is a recurrence of what happened when there was this large outflow of capital. I am not prepared to be irresponsible in this matter. I am prepared to be guided by the advice of these men who know more about it than hon. members over there or than I do, and I am also prepared to be guided by my own sense of responsibility towards foreign investors as well as our own investors in South Africa. No country can last long if it finds its reserves dwindling away. It has to take steps to prevent that, otherwise its own investors and foreign investors will lose, and that is what we want to prevent.

The hon. member has read certain criticism of Lombard. I am very well aware of that and I appreciate it, but I was rather surprised that the hon. member should mention it. Much of that criticism is not well-founded. Much of the criticism of what Lombard called the capital that we have sent out, really applies to cases where the businesses are in South Africa and the owners are overseas and we have allowed South Africans to buy those businesses here. The money has gone overseas but it is not as though we have gone to invest money overseas. The money is invested here; the business is here, and instead of being overseas-owned we now make it home-owned. There are a few cases in which Lombard is quite correct, in which we have sent money over for investment in other countries. One is the example given by the hon. member for Green Point (Maj. van der Byl) and let me assure him that it is still our policy to allow direct investments in the Rhodesias for bona fide development. To a certain extent that may incur the wrath of Lombard, but that has been the traditional policy for a long time and we still stand by it and we will continue to do so as long as circumstances permit. I said I was surprised that the hon. member for Jeppes should be the one to raise this point, because there are only two other cases in which we have really fallen foul of the criticism of Lombard. The one case is the case of the Netherlands Bank, of which the hon. member for Jeppes is the chairman. The Netherlands Bank came to us and asked us for money to invest in their overseas bank, not only for repatriation. There are only two cases as far as I can remember and the one is the case of the Netherlands Bank and therefore it surprises me that he should come and raise this point here. I think that is another example of the Dr. Jekyll and Mr. Hyde attitude of the hon. member! If hon. members had heard the speech of the hon. member for Jeppes, at the Diamond Jubilee of the Netherlands Bank, they would not have recognized it as a speech coming from the hon. member for Jeppes who makes the sort of speech that we hear here every year. Why does the hon. member not make the same speeches in this House? It would be excellent for confidence in this country. I do not think the criticism of Lombard is justified. There are certain very exceptional cases in which we have allowed investment abroad, where we thought that it was in the interests of the country. The Netherlands Bank, for instance made out a very good case and in the circumstances we had no objection to allowing a large amount of South African capital to go out for investment overseas. But we had a very good reason, in the interests of the country. It was for investment in one of the Common Market countries, and we thought it would be an excellent thing if we could have some kind of foothold in the Common Market countries. It was for that reason that we approved, and that is really one of the only two matters in which there is any justification for Lombard’s criticism. There is one other case where we also thought the circumstances justified out departing from the ordinary rule.

What was that other case

The other case was that of a South African company which has world-wide ramifications—Rembrandt. Rembrandt has wide ramifications and we allowed it in that case. As far as I know those are the only two cases, apart from Rhodesia. The other case that was mentioned by Lombard was the case where our banks are allowed to keep amounts temporarily in London. That was chiefly allowed by us to relieve the position of hyper liquidity in South Africa. That was one of the main reasons for it. We allowed that money to go there because we knew that they could recall the amounts within a reasonably short time, and as a matter of fact half of the amount which we allowed has already been repatriated to South Africa. Let me also tell the hon. member for Jeppes that the slack that we have allowed for the repatriation of foreign capital invested here has not even been taken up. We have made it possible for them in various ways to repatriate their capital. They have not even made the fullest use of that. It seems to me that until there is pressure from that side and until they have taken up the slack that we have provided for them to take back their money, it is idle for us to speculate here and say that we are going to lift all controls or introduce further relaxations. If there is a case for further relaxation we will grant it. If a proper case is put up and we think it is in the interest of the country to allow investment abroad, as in the case of Southern Rhodesia, then we will also make ad hoc allowances in those cases. I do not think that the criticism of Lombard is well-founded, and it was certainly not with any idea such as that suggested by him that we followed in this course.

*The hon. member for Kempton Park (Mr. F. S. Steyn) has asked whether it is not possible for us to make a statement on how the course of the P.A.Y.E. system is shaping. I shall reply to that when we come to the Internal Revenue Vote. I think it belongs there more aptly.

The hon. member for Green Point referred to confidence. I do not know whether he read in this morning’s paper what Dr. M. S. Louw has said. The number of applications from people overseas for fixed investments in South Africa at the present time is twice as much as it was a year ago. One is simply astonished when one sees how much foreign capital wants to come to this country. These foreign investors know what the position is in South Africa in respect of our measures of control, but they are nevertheless prepared to invest their money here. I think we can safely say that it is not a question of lack of confidence at all, because if they had no confidence in South Africa they would have availed themselves of the golden opportunity they had to remove their money from here. Instead of that, they are now pumping more and more money into the South African economy. That I say is the best proof of the confidence there is in South Africa overseas. I do not wish to mention all the names here; some have been mentioned here, but there is not one big business man who has visited South Africa in the past year, who has not on his departure from South Africa testified to the investment possibilities of South Africa. I think that is something we can be very proud of on both sides of the House, that we have gained the confidence of the overseas investor, and if we do not act recklessly, we can retain that confidence.

Confidence in spite of the Government.

I think it was quite unfortunate for the hon. the Minister to become personal in respect of my colleague the hon. member for Jeppes (Dr. Cronje). If we all started becoming personal the Minister himself would not be invulnerable, and if the Minister did want to refer to it why did he not tell the whole story.

If a representative of Rembrandt had made the same irresponsible speech, I would have told the same story here.

I am not concerned with what the Minister might have done; I am concerned with what the Minister did say. I think it was quite unworthy and unnecessary for him to say what he did. The Minister knows perfectly well what the position was. Why did he not tell the Committee that the Netherlands Bank was really carrying out Government policy? The Minister wants South Africans to have a big shareholding in banks in this country, and the object of the deal was to enable lots of Netherlands Bank shares to be made available in South Africa …

That is not the point.

What is the point?

The point is that the hon. the Minister, in the way he put it made a perfectly ill-defined, vague insinuation against the hon. member for Jeppes.

No, just his inconsistency; that is all.

What the Minister said was an innuendo which you cannot possibly pin down and which you cannot pursue, and it was an innuendo which was quite unnecessary and quite unworthy of the hon. the Minister.

You are very touchy to-day.

We are always touchy when our honour is at stake.

He would not understand that.

There are two points that I want to refer to. One is the staff on the State Tender Board which has undergone considerable alterations in the course of the year. You will notice that principal executive officers have been increased from five to nine and the senior administrative officers from eight to 16 and the other staff from 126 to 140. Those of us who have been sitting on the Public Accounts Select Committee in recent years know that there has been a good deal of re-organization in the State Tender Board and I imagine that these increases are as the result of the re-organization which has taken place. I think it is in the public interest that the hon. Minister should give this Committee some account as to just what re-organization has taken place in that board about which there has been criticism in the past. There are two points; the other point is under E Miscellaneous Expenses—Actuarial and Advisory services and inspections carried out in terms of various acts administered by the Treasury, which is increased from R1,500 to R13,500. I should like to know whether that means whether one particular investigation has been a very expensive one?

Order! The hon. member must ask for the reason for the increase; he must not suggest it.

I am asking for a reason, Sir. What I want to know is whether the increase is due to one particular investigation in respect of which there has been a great increase or whether the increase is due to larger activities over a larger spread range.

The hon. member for Constantia (Mr. Waterson) has insinuated that the hon. the Minister has not told the full story. I challenge him now to tell us the rest of the story. It is logical and consistent on his part always to come to the assistance of his colleagues, but that hon. member knows that the hon. member for Jeppes (Dr. Cronje) tells two stories, one story outside and one story inside this House when he discusses the economy of the country. I now want to ask the hon. member for Constantia to tell the rest of that story, and he must prove it. He must prove to us where the Minister has not told a part of a story. However, I can understand that the hon. member is frustrated, for his bench-companion from Wynberg is gone.

As we have so often heard that the countries overseas have lost confidence in South Africa, I should like to mention only one incident in connection with Mr. Cyril Lord who has several factories in England. If he did not have confidence in South Africa, why is he prepared to dismantle one of his factories in England and to fly it out to South Africa? He has so much confidence in this country, that he has chartered three Boeings of the S.A. Airways for this purpose. He is going to spend R2,000,000 to establish that factory here. If that is not proof of confidence in South Africa then I should like to know what is.

I should like to raise another point. I wish to express my thanks to the hon. the Minister for the information he has given us in regard to the coinage system and the new coins we are going to have in future. However, I should like to tell the Minister that we are very anxious that the 2$ cent coin, the so-called tickey, should not disappear. If that happens, the cost of living is going to rise steeply, for the following reasons: We need the 2½ cent for public telephones and we need it for all the parking meters in the big cities. If it dis appears it will mean that our telephones and parking meters will be altered and that will be expensive. It will also lead to a rise in the cost of living, and also because we shall have to use the 5 cent coin for the telephone and parking meters unless we could use the 1 cent coin in which case again the State will be the loser.

I should like to associate myself with what the hon. member for Parktown (Mr. Emdin) has said in regard to financial institutions. Last year we placed the Inspection of Financial Institutions Act on the Statute Book in which the Minister was given the power to have inspections carried out at certain financial institutions when it is deemed necessary and it may also be done throughout. Unfortunately we have had the position in recent years that in some of these financial institutions there was a small group of persons who were robbing and defrauding these financial institutions. Because of the fact that these financial institutions and other companies also are so big that it is difficult to carry out these investigations, these people can suck one institution dry and then slink away to another institution. It is difficult to nail them down. They slink from one institution to another and suck both of them dry. I should like to ask the Minister whether he will not consider making use of the services of professional people outside in future to institute a rapid and speedy investigation so that those people will not have so much time at their disposal to camouflage their own deeds and to go to other institutions and rob and defraud them also. If these inspections can be followed up quickly, those persons could be called to account so much sooner. There are independent auditors at every company and institution, but these people who rob the institutions are like Poqo at the present time; they are cunning crooks and it is difficult to follow up the clues from the one company and to link them up with the other company. If these inspections could be carried out speedily at two or three different companies, these people could be brought to book so much sooner. That brings me to my final point: I wonder whether the time has not arrived that third party insurance should also fall under the Minister of Finance, and no longer under the Department of Transport. I feel there is overlapping. I think it is in the interests of insurance in general that third party insurance should fall under the Department of Finance. If the Minister is not able to give the reasons against it now, I should like to hear them from him at a later stage.

I wish to support the hon. member for Constantia (Mr. Waterson) and impress upon the Minister of Finance the necessity of providing finance for the development of our major schemes in this country. We appreciate the complications regarding international finance. I regret the hon. Minister’s remarks in connection with a possible revaluation of gold.

What!

I understood the Minister to say that gold would eventually be revaluated.

I spoke about the revaluation of currency in terms of gold.

Does that not amount to the same thing? Does that not mean the same in a different language?

No, no.

That was how I interpreted it and I regret if I am not in keeping with what the Minister said.

What we need, Sir, is some major scheme that will herald a general march forward in the finances of this country similar to that which happened in regard to the discovery of diamonds and gold. We have in our approved Programme of Works a scheme of this nature. I should like to quote something from the “South African Digest” of 2 May what the Administrator of the Free State said in his opening speech at the Orange River Conference of the South African Association for the Advancement of Science last week. He said—

I am not pressing for irrigation schemes in the interests of irrigation but in the interests of the general development of this country. My question is whether the economy of this country can permit a delay in the completion of the Orange River scheme of an estimated period of 30 years? Within this period our population will have almost doubled itself and we shall need some major development to cope with the demand for employment. This scheme is of major importance. It will attract world interest and its value to our economy in this country will be inestimable. I should like to impress upon the Minister that we should have a scheme of such proportions that it will have an impact on the world; it must become an item of world news. I deprecate our present system of development which I think is similar to the carrying on of a cold war. We already have this complex amongst the public about schemes that are on our books and are never brought to fruition. I am so afraid that the same thing will happen in the case of this Orange River scheme, a scheme which is a great project and one which should fire the imagination because of its spectacular development, development which we need in a young country. I should like to impress upon the Minister the necessity of being more emphatic as regards the development of this scheme. It offers something enormous to us; it offers us increased territory because it will bring an enormous area which is desert to-day into production; it will create avenues of employment because, as the Administrator of the Free State says, it will effect 20,000,000 people eventually. This scheme is something worthy of this country and I do hope this Minister of Finance will prove himself worthy of something very big in the interests of the development of our economy.

When I listen to my hon. friends opposite, one would say that they had something to do with the Orange River scheme. Those are the poor people who always come forward with the old Tom Bowker scheme. That little scheme was nothing but a big dam. The country had to wait for a strong Government, such as the Nationalist Government to come to light with a great scheme. When it was decided to carry on with this Orange River scheme, the little scheme of the hon. member for Albany (Mr. Bowker) fell away completely and he withdrew his motion. In spite of that he is now trying to influence the public into thinking that he had something to do with this scheme. It was our Prime Minister’s great idea to do something really big for South Africa. He decided to establish not only the Fish River scheme, but to develop the Great Orange River scheme. One can compare this scheme with the Tennessee Valley although our scheme is going to be much greater. The Tennessee Valley scheme was started in 1933 as an auxiliary scheme. That was 30 years ago, and they are still engaged on extending that scheme.

As we know, the Department has issued a White Paper in which the plans for the first phase of the scheme have been set out, and in regard to which the Government has already committed itself to spend more than £80,000,000 Does the hon. member realize what that money will mean to the country once it comes into circulation? It is not only the irrigation aspect that will be important, but also the power that will be generated. Under his little scheme he never even thought of power; he was merely thinking of a tunnel. This scheme promises a very great future for the Eastern Province and for the Free State. The depopulation of the rural areas will be stopped. The tunnel alone will cost millions of pounds, and many people will be employed. Does he not realize that the planning for the tunnel alone took months and months? I should like to thank the officials of the Department of Irrigation most heartily for having worked so hard just to give us the plans for the tunnel alone. That tunnel cannot possibly be completed before 1968. I assure the hon. member for Albany that the Eastern Province is rejoicing because of what they are going to have. When the United Party was asleep, the Nationalists of the Free State and of the Northern Cape came together and they helped to bring the scheme into being. The United Party never considered this scheme. The hon. member for East London City (Dr. Moolman) said that we should really first ask Basutoland before we use that water. That was the only contribution from the United Party. The Prime Minister said he did not merely want to build small dams he wanted to do something big …

If it was the policy of the Government to establish that scheme, why did the hon. member for Fort Beaufort (Dr. Jonker) in 1961, say in his election manifesto that this scheme was dead?

During the election of 1958 I told Cradock that the scheme was alive. The scheme has developed since 1958. The United Party has done nothing at all for this great scheme. The one who came closest to it, is the hon. member for East London (City) who said we should first go and ask Basutoland.

The hon. member may discuss this subject under Agriculture.

I did not start it, Sir; the other side of the House raised it. I have in any case said what I wished to say.

The hon. member for Parktown (Mr. Emdin) as well as the hon. member for Sunnyside (Mr. van Zyl) have made reference to certain malpractices which have been taking place, particularly amongst estate agents as such. I rise to react to this criticism in order to defend the position of estate agents. As the Minister knows an organized group of estate agents, known as the Institute of Estate Agents and Auctioneers of South Africa, have on a number of occasions tried to get legislation passed in this House in order to avoid the malpractices which have been mentioned by the hon. members for Parktown and Sunnyside. As recently as 1960, this organized group of businessmen tried to get a Bill introduced in Parliament whereby the misappropriation of funds would have been prevented, and whereby a trust fund under legal control would have been instituted. Each time, for technical reasons, it was not possible to get that form of legislation accepted.

Order! The hon. member cannot discuss legislation in the Committee of Supply.

What I then want to say is this: Could the hon. the Minister suggest anything to overcome the impasse in which these people find themselves in the control of their affairs? I do hope the Minister will be able to make some suggestion in that regard.

A trust fund may be a way out of the difficulty. If it is felt that something along those lines could be introduced and given effect I to, I am sure it will be welcomed by the profession. Whilst talking about the financial institutions under the control of the Minister, I should like to ask him if he will take steps as soon as possible to overcome a problem which is now existing amongst building societies. From a recent judgment given in Pretoria in terms of the Building Societies Act, it is clear that whereas building societies have been lending money to house owners and other members of the public in the past for the building of their homes, for getting re-advances, and for purposes other than “adding to, or altering or maintaining a dwelling”, all that has been declared illegal. Building societies as such have no authority to lend money for any other purposes to mortgagees. This judgment has obviously thrown the building societies into confusion, and is restricting them to lending money on mortgage only for the purpose of “adding to, altering, or maintaining” existing dwellings. We should like to know from the Minister what he intends doing in this matter, in order to legalize the position and in order to make it possible for building societies, on the broad and comprehensive scale, to lend money to the public as they have done in the past. Unless something is done quickly in the direction I have recommend, I think we shall reach a stalemate in the building society movement.

I am sorry that the hon. member for Jeppes (Dr. Cronje) is not here. I just want to say that I had no intention at all of casting any reflection on his sincerity or honesty. What I said was not an innuendo; it was a fairly direct charge of having failed to understand the criticism that he read there. If he had understood that criticism at all properly, he would not have raised this matter because the Bank of which he is chairman of the board of directors is one of the few cases which may elicit criticism. There as nothing dishonest about it. I said that a very good case had been made out for it. This is not the only case. It is not as though I told only half of the story, as the hon. member for Constantia (Mr. Waterson) suggested. If the representative of any other company falling within the criticism of Lombard had made such a speech, I would have passed precisely the same comments on it— that the speaker did not have a proper understanding of the criticism that he quoted here; he could not have understood it otherwise he would not have quoted it under the circumstances of which he is aware.

I want to deal with a few questions that were put to me. The hon. member for Springs (Mr. Taurog) asked me what had become of the Technical Committee. I think that I owe another hon. member a reply in this connection. This Technical Committee inquired into the relationship between the banks and the building societies. It is quite true; the Committee did bring out an interim report. That report was then sent to interested persons for comment. If the Committee had received any comments it would have submitted a final report to me. I have not yet received any final report.

In regard to the point mentioned by the hon. member for Springs the position is that after this judgment in the Transvaal, which I understand differs from a judgment given in another province on the same point. I gave an undertaking that I would introduce legislation to restore the status quo pending the receipt of this report from the Technical Committee. I do not know whether they are dealing with this matter or not. It may be that they are dealing with it. I do not want to give the impression that I have already made up my mind. The building societies can carry on business in the Transvaal in the same way as building societies in other parts of the country. They must not be hampered by that judgment. When I have this report, I shall be able to decide whether the legislation I intend introducing will be of a permanent nature or not. At the moment, however, I want to peg the position until I have the report of this Technical Committee.

The hon. member for Sunnyside (Mr. van Zyl) referred to the question of third party insurance. When he told me that the time had come for this matter to fall under Treasury, that remark was greeted by a particularly loud “Hear, Hear!” from an hon. member. I do not know whether the hon. member for Springs realizes who it was. It was the Minister of Transport. A case can perhaps be made out for placing all insurance companies under one particular Department so that there will be no divided control. There is a great deal to be said for that. I cannot say at the moment under which Department this control should fall. I must first discuss the matter with my colleagues in the Cabinet.

The hon. member for Constantia has asked me about the Tender Board and the increased amount that is provided for in the Estimates and in what sense there has been a reorganization of that Board? The State Buyers Office was formerly divided into small sections on a commodity basis. This has now been reorganized on a functional basis which will eliminate much duplication and lead to better co-ordination and the standardization of purchases. The increase in the amount is largely due to an increase in staff which has been necessary to cope with a considerable increase in Government purchases, particularly for the Department of Defence. That is the reason for the increase.

The reason for the increase in actuarial services has already been advanced by me, namely that it is for the additional work connected with financial institutions.

*The hon. member for Albany (Mr. Bowker) says that we must aim at a great and imaginative Orange River scheme. That is precisely the case. I think that if we look at this scheme to-day and at the original so-called Orange River scheme, we will find that the only thing that the two have in common is perhaps the fact that both deal with the Orange River. What we now have in mind is something that has gripped the imagination of the world. It is so much greater and more imaginative than the original idea of an Orange River scheme with a tunnel through the Fish River that it is a scheme that is perhaps more comparable with the Tennessee Valley Scheme. It is a colossal scheme and it will be my task to find the capital for it.

What are you doing in this connection?

This may perhaps be an appropriate moment to take the House into my confidence in connection with our plans for the local issue of debentures during this year.

On 15 May a loan of R24.200.000 falls due. This is held almost entirely by banks and money-market institutions who would not be interested in a long-term conversion loan. We are therefore offering conversion only into a three-year loan to be issued at par at a rate of interest of 3⅞ per cent. We are doing this because there is such a strong demand for short-term loans by the money market to-day. There is a shortage of script for those purposes. So we are converting this entirely into a three-year loan. On 1 July a further loan of R16,500.000 is repayable. We intend to offer conversion into a three-year and a long-term 15-year loan and to invite cash subscriptions to these loans. The terms will be fixed at a later date.

These two are the only two loans actually falling due during this year. This is one of the exceptional years. But next year we are faced with an exceptionally heavy concentration of loan repayments. Exclusive of the five- year tax-free bonds which become repayable next year and the amounts held by the public debt commissioners, no less than R 133,000,000 must be repaid in South Africa, as compared with R38.000,000 during the current year (the two loans that I have just mentioned). Some of the loans falling due next year can however, at the option of the Government be redeemed at an earlier date. In order to spread the burden of redemption the Government has decided, as already announced in the Press, to exercise this option and to redeem on 15 August 1963, that is one year before the final date of repayment, a loan totalling R70.000.000, of which R11,000,000 is held by the public debt commissioners. A three-year and a long-term loan will again be offered for conversion, and possibly also for cash subscriptions on terms to be decided later on.

Hon. members will recall that in my Budget speech I foreshadowed no net stock borrowing from the local market during this financial year, that is no borrowing above what is required to replace stock falling due and not converted. If the response to our loans is sufficiently good, and if it appears to be in the general interest to do so, we may, however, accept some net new loan money. In this case we may either reduce our borrowing from other sources, that is from overseas, or else carry over a balance in the Loan Account to the next financial year.

I may mention that I propose to include a clause in this year’s Finance Bill to enlarge the State’s borrowing powers. At present the law permits the Treasury to borrow such sums as may, in addition to the amount of the credit of or accruing to the Loan Account, be required to defray expenditure from this account or to repay loans on maturity plus an amount of R30.000,000. Those are the loan powers we have at the moment. This last amount was intended to give the Treasury a measure of flexibility in its loan operations. That amount was fixed 12 years ago, in 1951, and is under present circumstances rather small. We expect to be faced with considerable expenditure on Loan Account—the hon. member has put that point—in future years in connection with the Orange River and other projects, and if the capital market is favourable, it may well be to the advantage of the State to borrow in advance, within limits, in anticipation of this expenditure. Furthermore when there is a state of over-liquidity in the capital or money market, as was the case until recently and to a slight extent is still the case, it may be in the national interest for the State to borrow in excess of its immediate requirements in order to stabilize the market. It is therefore proposed to raise the additional borrowing powers from R30.000.000 as laid down in 1951 to R60.000.000. That proposal will be contained in the Finance Bill that will be laid before the House later on. I think it is very essential where we will have these very large concentrations of capital expenditure in the near future, that we should make this timeous provision in case the market is favourable, so that we can take advantage of a favourable market. As far as the rest is concerned, if we need money, I anticipate that we will be able to get the necessary money for the projects that are now on the stocks. I will see what our needs will be this year when I go overseas, but I anticipate no difficulties.

May I put a question to the hon. Minister? When he was discussing the raising of a loan in August, did he refer to an internal loan or to an external loan?

All local loans.

Because I wonder why the hon. Minister is waiting as long as August, because the money market is favourable to-day, but does the Minister not think that in five or six months’ time money is going to become more expensive? Does he not expect that the interest rates are going to rise and that he will not get money quite as easily as he can to-day, and at a cheaper rate? My feeling is quite frankly, from the information I have, that money will slowly become dearer if confidence returns and investors are prepared to invest risk money which is at present lying on deposit or on call with institutions, or in the banks. One sees how people have been investing in shares, pushing equities above their value so as to get some interest on their idle money. Will it be sound to wait so long?

I can just say that that is certainly not one of the considerations that has guided us here. It is pure speculation. All that I can say is that there is so much liquidity still lying about that it would require a tremendous spurt of economic activity to absorb all that capital and to make money dearer.

Vote put and agreed to.

On Revenue Vote No. 16.—“Inland Revenue”, R4,689,000,

I feel that I would like to say a word or two about the common man after listening to all these millions of rands and gold bars weighing 400 oz, and that sort of thing, and I would like in that connection to deal with one aspect of our income-tax collections. I have here a case which because I think it is going to be the prototype of much trouble ahead of us, I bring rather to this forum than deal with it as I normally would deal with a case of this kind, taking it to the Commissioner of Inland Revenue. Sir, I believe that we are in for a lot of trouble in regard to the refunds of income-tax under the new system. I believe that most taxpayers will find that they will have to get refunds, and that there is going to be a lot of trouble about it. In this particular case that I have here, I am dealing with the case of a young man who happens to be a kinsman of mine. In this particular case there are two points that I want to make. The first is that this young man was by agreement with the Department of Inland Revenue at the end of last year in writing informed that he had been over-assessed and he was told that he could apply for a refund of R79, which he subsequently did on the appropriate form on 12 January this year. He subsequently sent them a couple of reminders and got no reply to either the official form nor the reminders. He then came to me and as his Member of Parliament asked me to take up the matter and see whether I could get a refund. I wrote to the office of the Receiver of Revenue concerned, and eventually on 25 March I got a letter which I want to read, simply omitting the names for the moment. In my experience it was one of the most curious official letters that I have had the misfortune to read. The name and the official file number are given (in the light of what is coming, I stress that it gave the official file number)—

Surely this is a most extraordinary state of affairs. Because there was not a covering letter accompanying the official form, a letter to say “this form means that I want my money back, as approved of”, he did not get an acknowledgment. Apparently if he had written a covering letter and said: “This form that I am sending you, is your form No. So-and-so, and this form is to ask you to give me my money back,” then it would have been acknowledged. No notice was taken of the two reminders. Then I took the matter up officially. But in the meantime I had sent a reminder, because I had not had any reply. A week later, or rather four days later, I got a second letter—

That is perfectly correct. It crossed mine in the post—

They had the file number all the time and they quoted it to me, but they could not find the papers.

I repeat: As I see the present system working now, the collection in respect of practically every employee from an employer in terms of the new Act is going to lead to a demand for a refund, a demand for a refund which is justified, in many, many cases. And if this case I have mentioned which was in respect of the 1961-2 income-tax year, is an indication of the attitude of the Department of Inland Revenue towards applications for refunds, then we are in for big trouble. And I want to say at once quite frankly that while I am prepared to accept that the Department of Inland Revenue is entitled to its money, it is not entitled to hold one penny-piece of a member of the public any longer than when it is proved that it does not belong to the Department. When once it is proved that the Department of Inland Revenue has no right to certain moneys, they should be refunded immediately. It does not belong to them. It would never be permitted in regard to any other business organization in South Africa that such a state of affairs should arise, but because we have got laws protecting our inland revenue, protecting the revenue of the state against all attacks from all sides, this seems to have created an atmosphere that they are exempt from all ordinary considerations in regard to the private possessions of private citizens. The private citizen is just as much entitled to get his money back when he has over-paid as the Department of Inland Revenue has the right to demand payment due to it from time to time. I take the strongest exception to this kind of attitude towards an application for a refund. I hope that this is not going to be the basis on which the Department under the Minister is going to deal with the inevitable flood of applications for refunds that will come in, and as for the kind of courtesy that is represented here, I think it is deplorable. It is the kind of thing which should never be permitted in a Government office, particularly when they are dealing with another man’s money that they have to refund to him.

When did he first apply for a refund?

At the end of 1962 before December. The Government and the people concerned went into the matter and the Department said “You are quite right, we have over-assessed you, the amount you will have to get back is R79”.

Has he not got it yet?

No, not yet. As a matter of fact, I have asked him to send me a telegram if by chance during the period between a few days ago when I phoned him and to-day he should get the money, because I intended to raise this matter. I have received no telegram and so I must take it that even now, notwithstanding the letter of 25 March (six weeks ago) that the Commissioner of Inland Revenue would forward a cheque, it still has not come. This is what we are facing. As I say never mind about the millions or rands, a member of the public in a case of this kind is entitled to get his money back, and in this case it should have been a straightforward routine matter to return the man’s money. What sort of Department is this that keeps the matter back until a Member of Parliament comes along and asks when are you going to give the man his money? And what kind of reply: “We had a big job in finding his papers.” But they did not have a big job in finding his papers, because they were quoting his file number all along. If actually they did have a big job in finding his papers then the muddle in the Department is a darn sight bigger than I imagined that it was. The thing should be put on a proper basis, because the business of the State is a big business and a protected business, that is no reason for this kind of treatment being meted out to a taxpayer.

I also wish to raise a matter affecting the common man in the street, after the discussions on high finance. I wish to refer to a matter which I have raised in this House on former occasions, and which, I understood from the reply the hon. Minister gave me at the time, is a matter he approaches sympathetically, because his reply was in terms that he would refer it to his officials and give some consideration to the matter. I refer to suggestions I have made in the past in regard to the present system of allowances in respect of income-tax for children of taxpayers. May I say a word for a minute in regard to the whole conception of how such allowances originally arose. They originally arose, Mr. Chairman, because in the society in which we live and as we know it, it was considered that by giving allowances to a married man for his children, would be a means, an incentive to increase the population of the country. In dealing with the principle of these allowances, they were granted by the Government, as I have said, as a motivation for a married man to increase his family with a view to increasing the general overall population. That is how the original conception arose of granting these allowances. From time to time through the years, those allowances have either been reduced or increased by the largess of Ministers of Finance from time to time.

The suggestion I wish to put to the hon. Minister is this. That the concept of granting these allowances on that basis is outdated, and that the Minister should consider in future when he determines the allowances to be made the principle of other motivations for granting these allowances, and that they should be granted on an entirely different basis. I wish to suggest to the hon. Minister that he should consider a system of granting the allowances on a sliding scale. Because it seems palpably ridiculous that a taxpayer who has a child of one week old should get exactly the same privileges as a taxpayer who has a child of 18, 19 or 20 and is putting that child through a university.

There is a lot of expense during the first week.

The maintenance expenses of a child of one to six years is far less than in the case of a child of 16 to 18 years of age. We in our country apart from the necessity of increasing our White population, should recognize that there is a very great necessity that we should give the future generation greater opportunities for higher learning. When you look at the standard of our university education, it is a grave reflection to find that the children attending our universities are more the privileged children— by that I mean privileged by reason of the income level of their parents—whilst people in the middle or lower income brackets, still taxpayers, often cannot send their talented children to places of higher learning because they cannot afford it. I would ask the hon. Minister again that he should now introduce a system of allowances based on a sliding scale. In other words, if a taxpayer is prepared to make a sacrifice and to use a large proportion of his income to send his children to places of higher education, he should be placed in a privileged position as compared with a parent who does not have the same sense of responsibility. The parent who is prepared to make such sacrifices should enjoy a greater privilege by way of income-tax allowances than the parent who is not prepared to make those sacrifices. The State should create the incentive in that regard, and the Minister of Finance can help a great deal by accepting the suggestion that I place before him of a possible scheme of things, which of course would need investigation, but a system where allowances to the income-tax payer by reason of the fact that he is a married man with children would be based on a sliding scale. There is an alternative suggestion too that the hon. Minister may consider and that is a principle followed in other countries. It is followed in Canada and if I am not mistaken also in New Zealand, young countries like ourselves, where taxpayers who are prepared to accept the additional financial burden of sending their children to places of higher learning, are entitled to deduct the total of the university fees for income-tax assessment purposes from their gross income. In our country the only proposition we put before the people in that regard is that companies should get some rebate if they are prepared to make a donation to a place of higher learning. The incentive should come in the first place from the State and the Minister of Finance in that regard can do a great deal, with no loss at all to the State’s revenue, or very little loss. I mention this because there is one important factor that I think all sides are agreed upon, the important factor of the maintenance of the White man’s position in Southern Africa, and that cannot be achieved by legislative protection. The security for the White man in Africa and the White population that we represent in this House is that we can lead the White man to accept higher positions of responsibility by way of learning and education. We are not going to protect ourselves in Southern Africa by legislative protection or legislation which may be introduced in this House protecting the interests of the White community. The only chance we have of protecting ourselves is to raise the entire level of the White man to be able to assume his responsibilities here in Southern Africa, and the only way we can do that is by adequate and proper education. If the hon. the Minister professes to hold those views, and I believe he does, then he can give an incentive in that regard to prevent waste of talent. I know what the position is in my constituency. I know of people who pay tax in my constituency but who as a result of the burden of the cost of living cannot afford to send their highly talented children to places of higher learning. They have to send their children out to work in order to maintain their standard of living, even although they are income-tax payers. I know of cases where these children are sent to university by the gracious act of some important men in finance and business in the city of Johannesburg who are prepared to do it as a form of contribution to the future of this country. The Minister of Finance is in exactly that same position. If he so wishes he can open the doors by accepting my suggestion—he can open the doors to many taxpayers who wish to send their children to places of higher education, talented children. He more than any Minister on the Government side is in the position to be able to open that door, and my plea to the hon. Minister is that he should give some consideration to the two alternatives that I have placed before him.

Before the adjournment the hon. member for South Coast (Dr. D. E. Mitchell) had raised a very important point in regard to the refunding of over-payments of taxation by the Department of Inland Revenue. Such cases of course occur from time to time and there are similar cases which one could also quote. There is one particular case I know of where a person was over-assessed and found the error himself, and after bringing it to the notice of the Department, he was informed that he would have to pay the full amount and wait for a refund. Well, this person was obliged to pay the full amount of the tax and he had to wait six months before receiving the refund. During that period of six months he suffered severe financial hardship due to a change in his financial circumstances, which meant that the amount he had overpaid, R86, was urgently required by him. After repeated appeals, the refund was made after six months. I believe that the Minister should look into this whole question. These are vital matters affecting the lives of ordinary people and I believe that it is my duty to bring them to the notice of the Minister. I am sure the Minister will realize that these delays in refunding over-payments of taxation cause considerable hardship to the taxpayers.

Another important matter is that with the introduction of P.A.Y.E. it is an acknowledged fact that when finally the taxpayer is assessed it will be found that in almost all cases the ordinary wage-earner has over-paid his taxation. Surely the taxpayer can expect a refund with the least possible delay because he needs that money urgently and severe hardship can be experienced, far more than under the old system, because the introduction of the new system aggravates that position.

While discussing P.A.Y.E., I do not know whether it has been brought to the notice of the Minister that there have been Press statements to the effect that a great deal of difficulty is being experienced by the Minister’s Department in the initial stages. I do not want to ask the Minister to supply figures in regard to employers who have not yet submitted returns. I have a question on the Order Paper about it to-morrow and I hope the Minister will reply to that question, but I think this is an opportune time for the Minister to give some indication as to what these difficulties are. Cases have been quoted where employers pay the income-tax of their employees after deducting it, by cheque, and their cheques have been dishonoured by the banks. The employee has had the amount deducted from his wages and afterwards it is found that his employer’s cheque has been dishonoured. I think this is the opportune time for the Minister to give some indication as to what these difficulties are and how they are being tackled.

The other matter I wish to raise with the Minister concerns the question of tax concessions and rebates, the point mentioned by the hon. member for Turffontein. The position in regard to taxation, as the Minister has pointed out on previous occasions, is that to encourage marriage and family life certain steps are taken in regard to taxation. Last year a most important report was tabled of the committee of inquiry in regard to family allowances, which covered certain aspects of tax concessions. I wish to draw the Minister’s attention to a particular section in this report which concerns his Department. On page 82, under income-tax concessions, certain criticism is voiced in the report of the present system of rebate, and in paragraph 322 it mentions that numerous representations were made to the committee for granting additional income-tax concessions in respect of children. It goes on to say that it was suggested, however, that the present system of rebates, i.e. the deductions from taxation, contains certain important weaknesses. In the next paragraph it states that the present system of rebates is inferior to the system of abatements or deductions from the taxable income which was in force in this country prior to 1941 and is at present in force in the United Kingdom, Canada, New Zealand and Australia. It also mentions that Australia previously had a system of tax rebates with regard to children which was altered in favour of this system of abatement whereby it became deductable on the taxable income. The report then covers a large field in regard to the necessity for making a change in this system, and the final recommendation is the following—

Under the section dealing with recommendations, the one that specifically affects the Minister’s Department states—

Now, these are important recommendations aimed at bringing about larger families in South Africa, and it is within the power of the Minister of Finance to take certain action in this regard. So my question to the Minister is whether cognizance has been taken of the recommendations contained in this report and whether any action has been taken by his Department in this regard. I realize it is not something new because if one looks at the First Report of the Committee which inquired into the Income-Tax Act, one finds that this Steyn Committee made a similar recommendation as far back as 1951. So it is not a new matter, but it is a vitally important one, because, as the hon. member for Turffontein pointed out, it will encourage taxpayers, particularly those of the middle income group, who are unable to afford higher education for their children because of economic factors. We all know how important it is that the children of South Africa should have every opportunity to further their education, and there is a step which I believe can be taken to assist particularly those in the middle income group so as to permit them to allow their children to continue with their education beyond primary education. I hope the Minister has given consideration to this point because I believe it is an important facet in the administration of his Department.

I do not think the hon. member for South Coast (Mr. D. E. Mitchell) will expect me to go into details, but in so far as there has been any discourtesy—whatever the teething troubles of the new system are, it does not justify any discourtesy. If he will hand the papers to the Commissioner, he will go into the matter. There has been a certain amount of delay. I anticipated that there would be a certain amount of trouble while the P.A.Y.E. system was set in motion.

I quite understand the Minister’s position. He says that if I will send the documents to the Commissioner, he will go into it. My point is that I do not think that is altogether fair. I was dealing with this case as an example of many other cases. I am not sure whether that particular Receiver of Revenue is concerned as a person, and that is why I did not mention the place. What I have said may be taken as personal criticism of him, but I was really dealing with the principle.

I am dealing with the principle, too, but it may be a thing on which to hang a general homily in regard to the necessity for courtesy in all these matters. But I apologize to the hon. member for any discourtesy by my Department, if there was any, and I promise him that the Commissioner will go into it very thoroughly, and that he will also deal with it on a broader basis than this individual case. The trouble of course is that with this system just getting into its stride, I anticipated trouble and I asked hon. members to exercise a certain degree of patience. But as I said, that does not excuse discourtesy, and that is why I want the matter to be brought to the notice of the Commissioner. That also applies to the cases mentioned by the hon. member for Umbilo (Mr. Oldfield). As far as his further remarks are concerned, the report will naturally be referred by the responsible Minister to this Department for comment and then we will go into the matter. Of course it has always from time immemorial been a difficult matter to decide, as to whether a rebate on income-tax or an abatement of the taxable income is better. As far as medical expenses are concerned, we take the reduction on the taxable income. As far as children’s allowances are concerned, we work on a reduction in the amount payable. I want to point out that, broadly, the abatement system where you merely reduce the taxable income is much more in favour of the man in the high-income bracket. An abatement of R200 on his taxable amount probably amounts to a tax of R100, whereas it is much less for a man in the lower income group. So there are relative merits. I do not know how one can meet this point. It will have to be considered when the report as a whole is considered. In regard to the general point about education, I think hon. members will remember that in reply to the Budget debate I went very fully into that matter, as to the assistance the State is giving to education and particularly to higher education, in this particular Budget. I mentioned that the State contributes over 70 per cent to the expenses in connection with a university student. That is a very high percentage. I gave the figures for other countries also, and I think they showed that in our country it was amongst the highest. I do not want to go into that again except to say that there is a lot of dispute as to the relative merits of the system of making a deduction from the taxable income, or a reduction in the actual tax. No finality has been reached on it. We use both systems, but I understand from what the hon. member has said that he would like an abatement, a certain amount to be deducted for each child from the taxable income. As I say, that favours the man in the higher brackets more than the one in the lower brackets.

The example given in the report refers to the man in the middle income group.

I have not studied that report yet, but generally an abatement favours the man in the higher income group, and a rebate is more inclined to favour the man in the lower income group. We use both systems, and it is a matter of convenience, to some extent, but I suppose these particular paragraphs dealing with my Department will be referred to us when the report is considered.

Those recommendations were also contained in the report submitted in 1951.

And was any action taken by the responsible Minister? I believe not.

The only other point I have to deal with is the one raised by the hon. member for Turffontein, who submitted two alternative schemes. I do not want to go into detail, but I think the basis the hon. member suggests, for children’s allowances, would be open to very serious abuse and it would require very extensive administrative control. That is the point which my Department stresses. To a certain extent provision is already made for children who are full-time students at the university. Originally the age limit was 18 years and it has now been raised to 24 years in the case of a full-time student at the university, and it is also for the child who is wholly maintained by his parents up to the age of 21. So it has been greatly extended, these children’s allowances. What the hon. member suggests is really a form of subsidy of higher education for children of parents in the lower income groups. But the income-tax is not the place for that. There have been anomalies, and I admit that, but that is no reason for introducing further anomalies. If a case is made out for a subsidy _to be paid for higher education, it must be in the form of a direct subsidy, as it is already. But I think it is contrary to the very nature of the principles of the Income-Tax Act to use it to ensure that various schemes of social reform are assisted through the medium of income tax. These things can be subsidized out of the proceeds of income-tax, but the Income-Tax Act itself must not be so adjusted that it itself is a machine for channelling assistance into various social directions. That is contrary to the first principle of the Income-Tax Act.

If that is so, why is the principle included in the Income-Tax Act of granting allowances for children?

I have already said that there are certain anomalies, but that is no excuse for allowing further anomalies to creep in, and I am setting my face against that. It is difficult to change the position entirely, but in any case I must prevent as far as possible further use being made of the Income-Tax Act for those purposes. That is not what it was meant for. As I have said, the Government already makes a very substantial contribution by way of subsidies for higher education, much higher than in most other comparable countries, and if a case is made out it will have to be done through further subsidies. But I also made this point when I last spoke on the subject, that if hon. members say they want further subsidies, above 75 per cent, they must not still argue that the universities should be autonomous, if they are to be run on such a large contribution by the State. As far as the incentive for increasing families is concerned, I fail to see the argument. I do not see what incentive there is for a young married couple to start a family when they can only get the maximum deduction for the child when it is 18 years old! They would like to get it at birth, and that is the incentive we give at the moment. When a child is born it gets the exemption.

I want to associate myself with the remarks made by the hon. the Minister and the idea that in discussing the new P.A.Y.E. scheme we must bear in mind that we are still in a transition stage and that many of these growing pains will probably disappear within a short while. But in the light of representations that have been made to me recently by quite a number of persons I want to associate myself with the remarks of the hon. member for South Coast (Mr. D. E. Mitchell) and others that in a considerable number of cases there is apparently an over-deduction for tax purposes. The position is that we must educate the public to accept the new system and one is embarrassed when people approach one and say, “You recommended this new system and we have heard of a reduction in taxation this year; how then is it possible that we now have to pay more?” There are a few cases that I want to bring to the attention of the Commissioner, but I want to say that this does inconvenience people, particularly pensioners. I am speaking now about teachers and others on pension. I know of cases where they now have to pay 80 per cent more than their normal tax out of a comparatively small pension. That is why I hope that this matter will receive attention because it simply gives the Department unnecessary work to collect money which has to be repaid subsequently. I mention this just to show that apparently there are quite a number of cases that ought to be given attention.

I want to draw attention to a problem that I often have to deal with, and that is that there is apparently a lack of co-ordination between regional offices and the local revenue offices. One finds that one is given the choice on the tax form to pay the tax at the regional office or at the local office. One pays one’s tax at the local office and after a few months the regional office writes to say that that tax has not yet been paid. One then writes to the regional office to tell them on what date one paid the tax and that fact is then acknowledged and the matter is rectified. But then one is informed that the tax for the following year has not yet been paid and one has to write again in this connection. This results in unnecessary correspondence for the taxpayer and if it happens in many cases, it means a tremendous amount of correspondence for the offices concerned, while if the local office receives the tax, it appears to me to be quite reasonable and practicable for it to inform the regional office that the tax has been paid. I mention this simply because we all want to co-operate in an endeavour to iron out similar problems and shortcomings.

Then there is another matter that I want to mention in regard to the new system and that is that I want to suggest to the hon. the Minister that he should give employers some rebate in regard to the collection of income-tax from their employees; that they should receive some commission, as Escom for example allows a commission for the collection of accounts. I mention this for two reasons. The first is because a great deal of work is heaped upon the employer. When a person has a few hundred or even a few thousand employees, particularly people who are paid weekly, those people have to do a very large amount of work for the Receiver of Revenue. Since this work is done outside of the Department, I think that some measure of compensation should be given to the employers. There are other problems as well. The Receiver of Revenue is rather struggling at the moment to collect money because people are not up to date and they do not always have sufficient trained people in their service. This is really a practical difficulty. If a rebate is granted it will also be an incentive to the employer to send in that money timeously. The hon. the Minister made an urgent appeal to industry and to private employers to co-operate and to assist the Receiver of Revenue in the collection of taxes and I think that a scheme of this nature can be fruitfully considered as an incentive for the expeditious collection of taxes.

I want to be very brief. I just want to bring one matter to the attention of the hon. the Minister and ask him to give consideration to it. This is in connection with pensioners who have to pay income-tax. I want to ask whether something cannot be done to relieve those people of that obligation. There are some of them receiving small pensions but they still have to pay income-tax and this also results in their having to pay personal tax as well. I want to ask the hon. the Minister to go into this matter. I want to thank the hon. the Minister and his Department for the improvement that has been effected in social pensions, old-age pensions and war veterans’ pensions. I want to assure him that those people are very grateful and that they need the money badly. But the hon. the Minister will agree that in spite of this we feel that matters can be further improved and I do not doubt that as soon as the opportunity arises and the financial position permits of it, this matter will again be considered.

I just want to tell the hon. member for Langlaagte (Mr. P. J. Coetzee) that he must make his representations for an increase in pensions to the hon. the Minister of Social Welfare and Pensions. As far as the exemption of pensions from tax is concerned that is of course completely in conflict with the law. Not only would it require an amendment of the law—and I cannot discuss this now—but also a change in the whole principle that tax is paid on money earned. I am afraid therefore that I cannot give the hon. member any assurance on this point.

The hon. member for Piketberg (Mr. Treurnicht) also spoke about certain cases where, perhaps as a result of the growing pains that the new system is experiencing, some people may have been unfairly treated. I also want to ask him, as I asked other hon. members, to bring these matters to the attention of the Commissioner and we will see whether something can be done. But I have already said that we must exercise a certain amount of patience. This is a new system and we must expect that there will be trouble in the initial stages. He also suggested that employers be paid some commission. I do not want to say anything about the question of costs and the increase in taxation that would bring about but it is a matter which was carefully considered by the Select Committee on this legislation and the Select Committee came to the unanimous conclusion that no case had been made out for commission to be paid. We know that there are many stop-orders; that money that is deducted to suit employees. We know that to a large extent this system is one which satisfies the employee. The extra work done by the employer in collecting this money is the price that he has to pay for the better relationships between himself and his workers than would otherwise be the case. I am afraid that I cannot agree to that request. In any case it would require an amendment of the law and neither he nor I can therefore discuss this matter.

I am sorry I omitted to answer one of the questions put by the hon. member for Umbilo, as to what would happen to an employee who has had his tax deducted by the employer and then the employer fails to account for it to the Commissioner.

The first steps which will be taken will be taken against the employer himself who by this neglect has made himself guilty of a criminal offence. Immediate steps will therefore be taken against the employer. The employee, however, will get his credit whatever the outcome of the case may be. He cannot be expected to pay a second time. In making up his final assessment he will be given full credit for what he has paid to the recognized agent of the Department.

Vote put and agreed to.

On Revenue Vote No. 17,—“Customs and Excise”—R6,580,000,

Mr. Chairman, may I take this opportunity of making a statement in regard to the Brussels Convention on Nomenclature. Hon. members will realize that this is a very important matter and that now that the Pay-As-You-Earn system of income-tax collection has been introduced and is in operation, I would like to report to the House on developments in another field of taxation, namely customs and excise, which has not been neglected.

Hon. members will recall that the Viljoen Commission recommended in 1958 that the possibility of adoption of the international Brussels Nomenclature be investigated. The advantages of the international Nomenclature were obvious and I am happy to inform the House that the Committee appointed to transpose the present tariff to the international form has nearly completed its task and what remains to be done is the implementation of the tariff.

Before dealing with the question of implementation, I would like to give the House some particulars of the Brussels Nomenclature. It had been realized for a long time, more particularly since the Second World War, that existing customs tariffs were too rigid and too limited to keep abreast of modern industrial technological developments and trade practices. In 1947 certain governments set up a Study Group with the task of standardizing customs tariffs and this led to the signing in Brussels in 1950 of three Conventions, two relating to customs matters, namely tariff and valuation, and the third to the establishment of a Customs Co-operation Council with its headquarters in Brussels. Briefly the Council was intended to administer the other two Conventions and to secure harmony and uniformity in customs systems.

The Government has decided to sign the Conventions concerned with the Nomenclature and the Customs Co-operation Council which has become a technical organization of world-wide scope. An officer of the Customs Department has already been appointed to represent South Africa on the Council.

The advantages for the Republic can hardly be explained in a brief statement, but will be clear to hon. members if it is considered that the Republic will now adopt the same tariff form as most of her trading partners. Most European (including Britain, France, Germany, Italy, etc.) and some American countries have adopted the Brussels Nomenclature or a tariff based thereon. More than 60 countries, inter alia, 22 in Africa, 8 in America 9 in Asia and 17 in Europe are presently using it or a variation thereof. This is of particular value to our exporters.

Another very great advantage is that effective protection of our industries calls for a flexible, well-constructed tariff. These requirements are fully satisfied by the Brussels Nomenclature.

Adoption of the Nomenclature will also enable South Africa to publish her trade statistics on the basis of the “Revised Standard International Trade Classification” with much: more facility and certainty since the two systems have been correlated.

All the information, experience, library material, etc., accumulated by the Customs Co-operation Council will also be available to our representative and will be used in full to consider the numerous customs problems with which the Department is faced from day to day and to bring them into line with international practice as far as circumstances allow. The value of international contact I accept in this field will be appreciated by hon. members.

Mr. Chairman, before dealing with the implementation of the new tariff, I would like to explain briefly that the Brussels Nomenclature is merely a tariff form and that recasting of the present tariff into the new form does not entail changes in the tariff rates, except that certain proposed refinements of the tariff will be laid before the House for consideration in order to avoid perpetuating anomalies and bad framing. While our present tariff classifies goods into 14 classes, the new tariff classifies goods into 99 chapters according to certain well-defined principles. For example: Take the case of flannelette. This may be considered as flannelette in one country whilst not in another. Here is now an international standard with all its sub-divisions.

Coming now to the implementation of the new tariff, it must be realized that all other customs provisions must also be revised and brought up-to-date. The provisions of the General Agreement on Tariffs and Trade (G.A.T.T.) and other circumstances also compel the Department to keep excise tariffs and procedures constantly in mind when dealing with customs matters and to secure uniformity of classification and interpretation. In view of these circumstances, it has been decided to review all the customs and excise legislation and provisions, and to combine the two Acts in one Customs and Excise Act which will be so framed as to eliminate as far as possible the present diverging principles and the old obsolete provisions, which can hardly be justified to-day and merely cause friction.

It is the intention to introduce the Bill containing the new tariff next session. The exact modus operandi has not yet been decided, but it is hoped that the Department will be able to publish the Bill for information some three months before next session. Importers and clearing agents will in due course be invited to show the new tariff items alongside the old items on their customs clearances, so that the new item numbers can be checked by the customs examining officers and all concerned will become familiar with the new tariff. A key between the old and the new tariff will also be provided although the new tariff is so clear and precise that this will hardly be necessary.

Hon. members will appreciate that the customs tariff changes from week to week and the switch-over will be a matter for fine timing. An appeal is accordingly made to the public to study the draft Bill as soon as it has been published and to raise any difficulties they foresee before the start of the session.

The Department has an immense task, but it is confidently expected that it will succeed in removing the difficulties which sometimes have been encountered in the way of smooth administration. I have been given the assurance that adoption of the Brussels Nomenclature will eliminate most of the difficulties in regard to classification which are presently caused by a tariff designed for other times.

I thought it advisable to take the House into my confidence in this regard at the earliest possible moment.

Vote put and agreed to.

Precedence given to Revenue Vote No. 19 (Transport) and Loan Vote 4.

On Revenue Vote No. 19,—“Transport” R 17,265,000,

I rise to invite the hon. Minister of Transport to pay an urgent visit to East London Airport in order to look into to what appears to me to be a matter of national urgency on account of the condition of the airport at East London. The apron in front of the old terminal buildings has now caved in entirely and aircraft are now stopping at the new apron which has been constructed right at the other end of the airport. This necessitates passengers for East London and the Border area and through passengers having to be taken a distance of something like a mile right across the airport. When aircraft land you always find there a regular circus of vehicles running right across the airport to the landing strip on the other side of the airport. That necessitates any other planes trying to land to remain in the air until the runways are clear. While fuelling is being undertaken passengers have to stand outside and wait in all types of weather—rain, wind and sun— without any time to go over to the old airport for a cup of tea. These conditions are serious. There are no conveniences there and for that reason I should like to emphasize that the matter is one of urgency. Something should be done.

There are three ways of dealing with this situation: (1) to leave the matter entirely alone. This I am sure will not happen in view of the Minister’s reputation for dealing with urgent matters urgently; (2) the old apron can be repaired; but this I feel will be a waste of money seeing that a new apron has already been constructed; (3) the other alternative will be to get on as soon as possible with the construction of the new airport buildings. The effect of that will be to reduce the distance passengers have to travel to and from East London by something like three miles. It will also eliminate the necessity of using the old gravel road which is in a terrible state of disrepair owing to the fact that neither the Municipality, or the Divisional Council nor the Public Works Department is prepared to take responsibility for it. In consequence passengers are put to very great inconvenience when using their own cars and the airport’s own vehicles no doubt also sustain quite a lot of damage over that road.

It would seem that the only solution is now to cut through the usual formalities in order to get the work done so that the new airport buildings can be started immediately. I notice that there is a sum of R260,000 on the Estimates but only R50 is shown for expenditure this year. This is nothing more than a token amount.

I hope the hon. Minister will take this matter in hand and will be prepared to make a statement on it because not only passengers for East London and Border areas, but all through passengers are complaining bitterly about conditions there. The inconvenience being caused to through passengers there is undoubtedly causing the South African Airways to be subjected to a lot of unenviable publicity.

I want to make use of this opportunity to draw the attention of the hon. the Minister briefly to a matter affecting our coastal roads and particularly the coastal road along our western and eastern coastlines. I do this on the one hand to associate myself with a report which appeared in the Press to-day or yesterday in connection with a meeting held with the Administrator of the Cape in regard to the possibility of the building of a road along the west coast. During the past year we have also had reports in our newspapers of the Russian ship lying off our west coast and engaging in certain activities of which we could give no account. But this did quicken the interest of the public. Furthermore, it emphasized a possible future danger to us. The position is that we do not have a good coastal road along the west coast. This fact has of course greatly hampered the development of the west coast over the years. I do not want to place the blame for this upon the hon. the Minister because it may perhaps be our own fault in that we have not emphasized this matter sufficiently in the past. Present-day circumstances, however, require us to ask that an urgent investigation be made into this whole matter. Although in most cases we build our national roads in the interior, it is also necessary for us to give special attention to the building of roads along our coastline. I want to emphasize the importance of this matter as far as the defence of our country is concerned. Because of the absence of such roads our coastal defences are hampered to a large extent. I am of course aware of the fact that the building of such roads will cost a great deal of money but I still feel that it will be worth while. Indeed, I feel that the hon. the Minister should give attention to this question as a matter of urgency.

We have of course experienced a great development in our fishing industry over the past years, particularly along the west coast. In my opinion any further development possibilities depend to a very large extent on good roads. For this reason too therefore— the further development of our fishing industry and what this development can mean to us and to our country in the future—the building of such a road is very important. We are at present giving the Transkei a fairly large measure of self-government. The east coast is one of the most beautiful parts of our country and the building of a coastal road there is also necessary. The fact that we do not have those roads there to-day is one of the major shortcomings in that area. I have already pointed out that these roads can be justified from a defence point of view. These roads are necessary if the Republic wants to have full control over what may happen in the Transkei. That is why I take the liberty of drawing the attention of the hon. the Minister to this matter in all earnestness in the hope that he will give serious consideration to this question and that the building of coastal roads, particularly along our west and eastern coastlines, will be undertaken as soon as possible.

There are certain matters which I should like to raise under this Vote. Firstly, there is the question of tourism. I should like to discuss the policy which is being followed in this regard but the hon. Minister will realize that we have certain difficulties in doing so at this stage. Although an announcement has been made that a Minister of Tourism will be appointed, such an appointment has not been gazetted as yet but despite that fact we are being asked here to vote something like R500,000 for tourism on this Vote. In the past the Minister of Transport quarrelled continually with the Minister of Railways because the Minister of Railways did not want to give the necessary money for the operation of the South African Tourist Corporation. Consequently the Minister of Transport is now only too willing to hand over this matter to the Minister of Information. But we are not at all sure now that the Government still intends giving the control of this matter to the Minister of Information. As I have already said, the appointment of a Minister of Tourism has not yet been gazetted. I wonder whether that means that the Government is having second thoughts about handing over control of tourism to the Minister of Information. We have understood that the Bill will be introduced this Session transferring control of these matters from the Minister of Transport to the Minister of Information. If that is done it will give us a further opportunity of taking the policy in regard to tourism a stage further.

Meanwhile, there are some other matters which I should like to discuss with the hon. Minister. First of all there is the question of Government transport. This item is reflecting an increase in costs. On the basis of 1962 figures it appears that the operation of Government transport has risen approximately 1c per mile or 10 per cent over 1961. But while that is so, the revenue accruing on the basis on which the service is now being operated is less than ½c per mile. In other words, Sir, the increase in costs does not appear to be proportionate with the amount of revenue accruing. I should like the hon. Minister to give us an explanation of this. I should like him too to take it one stage further and to comment upon the possibility of applying a policy of greater subsidization of private transportation used by Government officials. Here I have in mind such officials as field officers operating under the Department of Agriculture. Would it not be more economical to subsidize private transport for them rather than to meet the direct costs?

A further issue of some importance is the Weather Bureau. This is a most important bureau and I have raised matters in regard to it already on former occasions. Hon. members will appreciate that too many members of the public seem to have the impression that the main function of the Weather Bureau is to say whether it is going to rain within the next 24 hours or not. But its functions are much wider than that. As a matter of fact it has two other very important tasks, one of which is in regard to communications. It seems to me that the Bureau is at present suffering under certain disabilities in regard to supplying information in so far as communications are concerned. Therefore I should like to ask the hon. Minister whether there is a shortage of metereological assistants in this Bureau as a result of which the Bureau finds itself in considerable difficulties in the compilation of suitable weather reports in order to supply adequate information to the Civil Aviation authorities. I understand that the Bureau to-day co-operates in certain respects with the South African Air Force assessing high temperatures and wind directions and that this co-operation with the South African Air Force is largely being handicapped by a shortage of suitably qualified staff in the Bureau. Whilst I do not intend dealing with the supply of information by the Bureau to the Civil Aviation authorities in so far as the internal aspects of civil aviation in our country are concerned, I certainly wish to raise certain issues with the Minister in regard to the supply of adequate and up to date weather reports to aircraft operating beyond the borders of the Republic and for aircraft from the time they enter the Republic and land at Jan Smuts Airport. With the development of nonstop runs between our country and Europe it has now become necessary for the Weather Bureau to supply adequate metereological reports to the aircraft operating across Africa, supplying them with information about conditions throughout the route followed by that aircraft. Here I have in mind the hop from Jan Smuts Airport to Athens once a week.

I am sure the House will appreciate the importance of these aircraft being supplied with adequate and exact information in order to ensure a high safety margin not only in respect of our own aircraft but also in respect of aircraft of other international lines operating to and from Jan Smuts. This information depends upon the Weather Bureau taking exact information from its field stations. In this connection I should like to ask the hon. the Minister to tell us whether difficulties have been experienced by the Weather Bureau in obtaining adequate information from its field stations in order to enable it to compile adequate reports for the aviation authorities at Jan Smuts Airport. I should also like the hon. Minister to state what steps are being taken by the Weather Bureau now to ascertain the extent of radio-active material or fall-out as it is generally known and its world-wide distribution as a result of atomic explosions for experimental purposes conducted by the great powers. Quite a number of smaller nations have already made assessments on a worldwide basis in order to determine the extent of this fall-out and the possible effect it may have on health, agriculture, etc. I understand that the Bureau has been conducting preliminary experiments in this regard and I think the time has arrived that the Minister should give us some indication of the extent of these operations by South Africa itself.

Dealing with the air services between South Africa and Europe and the importance of supplying those services with adequate weather reports, I think it should be pointed out that it has become a matter of great concern to the public of South Africa and also to those other international airlines operating to South Africa who have to get a great percentage of their passengers from South Africa, as to the threats that are presently being made by other countries in Africa, threats which according to newspaper reports which aim at the denial of landing facilities to South African aircraft. It seems also to be the intention to bar airspace over these territories to South African aircraft. I realize, Sir, that this is a ticklish matter and a matter which might have some international consequence for our country. I raise the issue for this reason, namely that we are a member of the Southern Africa Transport Commission. We are one of the foundation members thereof. As I understand that there has been no conference called for this Commission during the past 12 months I should like the hon. Minister to say whether he or his Department has had any negotiations at all with other member countries of the Commission. Hon. members will remember that the foundation members of this body are the United Kingdom, South Africa, the High Commission Territories, the Federation and the East African territories which include Kenya and Tanganyika. Ghana, Sierra Leone and Zanzibar. [Time limit.]

I also have a matter that I want to bring to the attention of the hon. the Minister in connection with the Weather Bureau. At the outset I want to express the gratitude and appreciation of the farming community to the hon. the Minister’s Department for the very good service that is performed by the Weather Bureau in regard to weather forecasts. It is a pity that the Weather Bureau cannot also make rain when we experience drought!

Secondly, there is the question of regional classification in the announcement of anticipated weather conditions. When one listens to the weather report in the morning, one finds that the Transvaal, is divided up into four or five regions for the purposes of weather forecasts. Thereafter the Weather Bureau gives the weather forecasts for the Free State and the North-Eastern Cape. I simply cannot understand this. These are two completely different regions which have practically nothing in common with one another climatically. The North-Eastern Cape and the Free State do have similar climatic conditions with perhaps the same amount of rainfall, but in contrast to this the Eastern Free State has different climatic conditions entirely. This matter is a source of irritation to the farmers. I recently attended a farming circle where this matter was raised. The farmers feel very strongly that this matter must be rectified.

That is why I ask the hon. the Minister to use his influence to ensure that the weather forecast that is at present given for the area of the Orange Free State and the North-Eastern Cape area given for the North-Eastern Cape, the Western Free State, and the Eastern Free State separately. I am quite sure that even the rainfall in these two regions differs so widely that the Weather Bureau will agree with me that the present classification is wrong.

I should like to discuss the Minister’s policy in regard to roads. The report of the National Transport Commission which I have here reveals a wonderful pattern of national roads to be constructed within the coming years. I think we can be very proud of our national road system in this country and I think we can congratulate our engineers who have been responsible for the construction of these roads for the forethought they put into their planning. The aspect of roads which I should like to discuss is the costs thereof and where the money is to come from.

Now, Mr. Chairman, as you know, the money for building these roads comes from the road user who pays R27,500,000 approximately, for this purpose. In addition to this, however, the motorist also contributes something like R39,000,000 to the Consolidated Revenue Fund. This being so, I think a larger amount should go into the building of our national roads than that allowed for under the present Act.

But there is another anomaly in the financing of our roads. The hon. Minister’s colleague, the Minister for Railways, is one of those persons who has a very fine deal. The roads used by vehicles of the Railway Administration are roads which have been constructed and are maintained out of funds contributed by the ordinary motorist in the form of fuel tax. As you know, the Railways pay no tax on fuel in the way of excise or customs tax thereon They have an advantage in this respect therefore, over the ordinary road user. Neither do they pay licence fees but an agreed amount to the various provincial administrations for their 5,350 vehicles that operate on the roads. They pay the Cape Administration R 145,620, the Transvaal Administration R72,780, the Orange Free State Administration R31,540 and the Natal Administration R22,930, a total of R272,870 towards their road funds. This is only a small amount. If the Railways had to pay a licence fee on their vehicles they would have to pay something like R1,500,000. I say it is all wrong that one section of the community should be called upon to maintain roads for the Railways. As I have said before I should like the hon. the Minister of Transport to speak to his colleague, the Minister of Railways, and see whether he cannot get him to contribute more towards the cost of the construction and maintenance of roads. You see, Sir, the more we get in the way of cash to build these roads, the sooner they will be built. The National Road Fund is also going to be used for the construction of by-passes and ring roads for our large cities and a considerable amount of capital is required. I feel that the Railways should play their part. I was glad to learn that the S.A. Agricultural Union had the following to say in respect of their road building programme—

The Minister of Railways is not going to build a Railway line because of the cost and the maintenance. Why should he build that line when somebody else, like the motorist, pays a tax to construct a road and maintain it for the use of his vehicles? He pays nothing in the way of customs or excise except for a very small amount towards the provincial revenue fund. I think it is all wrong that one section of the public, the motorist, should be called upon to subsidize a nationalized transport system such as our Railways I know the Minister of Railways himself has told us that he is not prepared to construct a Railway line unless he is assured that it will pay. He takes a businessman’s viewpoint, but at the same time I feel that something should be done and that the motorist of this country should not be asked to carry the burden of having to subsidize the Railways. The motorist when he buys his car he pays a duty on it, when he buys tyres he pays a duty. All down the line he pays an indirect tax on his particular vehicle. Whenever he puts a gallon of petrol in his car he pays an indirect tax to the Government. I think it is all wrong that the motorist should be called upon to pay all this. I feel that he should have some relief in that direction.

Mr. Chairman, the northern Cape has always been known for its poor roads. The position has now become untenable and I want to bring a few matters to the attention of the hon. the Minister in this connection. In recent years there has been a tremendous amount of development in the northern Cape, particularly in the district of Postmasburg and Kuruman as the result of the mining of iron, manganese and asbestos. The Divisional Council of Kuruman has found itself in a particularly unenviable position because most of the mines are situated in that Divisional Council area. As you know, Mr. Chairman, the town of Kuruman has no direct Rall link and is completely dependent upon road motor transport. Roads are accordingly the main artery of the development in that area. The Divisional Council of Kuruman is responsible for a total distance of 1,267 miles of proclaimed roads. Then there is also a large number of secondary roads. I regret that I am unable to give the mileage in this regard. The function of Divisional Councils is undoubtedly the building of roads, but the Divisional Council of Kuruman finds itself in the unique position of being on the same subsidy basis as other divisional councils and yet it also has to provide for the development of the mines there. The amount allowed to divisional councils in the northern Cape per mile is the lowest in the Cape Province. I just want to point out that provision is made by the State when mines are developed in a province but in this case the burden is placed upon the Divisional Council which derives its revenue from taxes levied on the ordinary members of the community and on the subsidy from the Provincial Administration. I want to make a special plea to the hon. the Minister to assist us in that part of the country so that we can asphalt our roads. I want to make a special plea in regard to three roads—the road from Kuruman to Koopmansfontein and the road from Kuruman to Hotazel. This is the last station on the line which was built there a year or two ago. The road for which I want to make the strongest plea is the road from Vryburg via Kuruman to Upington. That road is a main road and it is at present being given a permanent surface. I understand that 15 miles of the road from Vryburg to Kuruman has now been completed and 30 miles of the road from Kuruman to Vryburg has been completed. I also understand that about 20 miles of the road from Upington to Kuruman has been completed. I want to ask the hon. the Minister to declare that road a national road. It is of national importance. That road connects no fewer than three provinces—the Transvaal, the Cape and South West Africa. That road is of economic importance to the State as far as mining expansion is concerned. From a military point of view it is also of strategic importance. It is the road to the west and to the Protectorate in the south. In time of trouble that road will be very important to us. If the hon. the Minister will declare that road to be a national road, the Divisional Council with the assistance that it receives from the Provincial Administration will be able to asphalt the road from Koopmansfontein to Kuruman as well as the road from Kuruman to Hotazel. The reason why those roads must be asphalted is because the traffic along those roads is very heavy. As you know, all the passengers travelling by train to Kuruman or to those parts of the country disembark at Koopmansfontein. All the parcels are offloaded there for transport to Kuruman by road motor service. So the traffic along that road is very heavy. It is also the road to Kimberley which is the nearest large city to Kuruman and I think it is absolutely necessary that this road should be a good road. The road from Kuruman to Hotazel is just as important. Virtually all the mines are situated in that area. I think there are no fewer than 13 mines in the vicinity of Kuruman. Those mines cannot use the schools at Kuruman or the other facilities offered at Kuruman because they do not see their way clear to establish a regular bus service along that road with the result that mining towns are coming into being there. There are no fewer than 236 children in three of those small towns. I predict that in the near future they will ask for high schools there. This also makes for decentralization. Kuruman can supply all their needs and they will make use of Kuruman if the road is improved. Those people have to take their things to Hotazel and the traffic along that road is heavy. I say again that the Kuruman Divisional Council will asphalt that road itself provided that it is relieved of the responsibility for the road from Vryburg via Kuruman to Upington. I want to make a very earnest plea to the hon. the Minister to try to assist us in this respect.

I want to plead the cause of intermediate airports to-night. These airports form a very vital network throughout the Republic and will, of course, from time to time be called upon to play an important role in the defence of the country. Air Commandos can operate from them and police can be landed there in emergencies. We should do all we can to see that these airports are safe and efficient and brought right up to date. I want to make a special plea for the airport at Pietermaritzburg. It is most disappointing to see that the capital city of Natal has not got a proper airport. I do not know what our forefathers will think of this pioneer city, this Voortrekker city, of Natal. The Pietermaritzburg Corporation recently built two new hangars and spent quite a lot of money to try to bring the airport up to date but that is not enough. That airport is going to play a more and more vital role in future. Pietermaritzburg is strategically situated and will be needed, I am sure. The airport covers about 105 acres. It has two runways of a length of 3,000 yards and can handle aircraft up to the size of a Dakota. What is urgently required is the hardening of the runways, a control tower, night flying equipment and also radar facilities.

In recent months four gallant young men have lost their lives at the Pietermaritzburg airport and something must be done to remedy this serious position. We cannot expect our young men to join the Air Commandos and be subject to unnecessary risks. I want to ask the Minister to look very carefully into this matter and see if some help can be given.

One is struck by the fact that one hon. member after another has stood up to talk about roads. As the hon. member for Kuruman (Mr. H. R. H. du Plessis) has correctly said, roads form the main artery of all development and progress. In this connection I want to refer to an important practice that has apparently been accepted in the past by the National Transport Commission and that is to make a subsidy or allowance available to the National Parks Board for the development of roads in our parks. I notice that in the 1961-2 Estimates an amount of about R81,000 was voted for this purpose and in the following year, 1962-3, an amount of about R60,000. I think that these facts are worth mentioning. In the first instance it is not the task of the National Transport Commission to develop or maintain roads in these parks. Nevertheless, this practice has developed and I want to express my appreciation of this fact. To my mind this is an important admission on the part of the National Transport Commission of the importance of tourism. I want to know whether it is not possible to lay down by means of a specific formula that the development of roads must be regarded as the specific task of the National Transport Commission with a view to promoting tourism. As you know, Mr. Chairman, the Cape is bigger than the whole of the Transvaal plus two Free States plus two Natals plus a further 1,000 square miles. It is a fantastically large province and one of its most important assets is its tourist potential. There are large complexes in this province which are as yet completely undeveloped as far as tourism is concerned. A country like England makes more out of its tourist industry to-day than it does out of its motor industry. The Cape is on the threshold of tremendous development in this connection. When it comes to the question of money for the development of roads, particularly from the point of tourism, then the money is simply not available. I know that I will be asked immediately where the National Transport Commission is to obtain the money. It is true that the National Transport Commission receives its revenue from the 5.35c per gallon levy on motor fuel. I just want to suggest—I do not know whether this suggestion will be acceptable—that the hon. the Minister should ask the Treasury to increase the levy on petrol by a small amount which the National Transport Commission can then use with the specific purpose of developing roads with a view to promoting tourism, particularly in the Cape. I have made my own estimate and I find that the amount which the National Transport Commission presently receives from this levy is about R27,000,000, and if this extra levy of, let us say, .15c per gallon, is added, it will immediately receive an additional amount of R800,000. I wonder whether the hon. the Minister will not be prepared to ask the Treasury for such an additional levy per gallon to be paid to the National Transport Commission so that this money can be used exclusively for the purpose of developing our roads with a view to promoting tourism. I am thinking particularly of the Cape and its great possibilities in this direction.

I want to plead with the hon. the Minister this evening to resolve an issue which has been one of dispute for a very long time and that is the question of a National Road subsidy in regard to the entries and the through-roads of the Durban complex. Durban is the premier port of South Africa, with due respect to the Cape’s claims which we have just heard. It is the point of entry of many thousands of tourists and it is a vital link in the Minister’s further capacity, namely in his capacity as Minister of Railways and Harbours. This dispute between Durban and the National Transport Commission in regard to the percentage of subsidy which Durban shall receive has been going on for a long time. As the Minister knows, the exit of Durban to the west requires very little work to be done to it and it has been held up now for over a year pending settlement of this dispute. The earth work has been completed as well as the bridges, it merely has to be surfaced and linked, but the Durban City Council does not see its way clear, and I think with justification, to load the citizens of Durban with the very heavy burden of a road which is not only going to serve the citizens of Durban. It is a road system which will serve the north and south coast and the whole hinterland of South Africa. It is unfair that the ratepayers of Durban should be expected to carry the burden which is expected of them in regard to this. As a result of that deadlock nothing has happened. The exits from Durban to the north and to the south are a disgrace to a modern city in relation to what they should be and in relation to what a city like Cape Town, for instance, is doing in regard to its main entries into the city. The Minister knows that Cape Town has the advantage of a greater percentage of subsidization together with Divisional Council and Provincial Council assistance.

I hope the Minister will take this opportunity to tell us that he has decided that this issue must be resolved so that the legitimate request of the City Council of Durban will be met in regard to the help which can be given to them. The whole of Durban’s traffic from the centre of the town is blocked because of this holdup. There are traffic jams with accompanying danger to life and limb and machine. If, for instance, there was any need for military activity Durban’s northern and southern exits will be quite hopeless for high speed movement. If the Minister tries to get out of Durban any afternoon of the week he will find himself in a bottleneck. I hope he will do something about this dispute. I trust he will go further—and I should like to make this suggestion to him. He is probably aware that other State Departments have siting problems which are also interfering with the main exits from Durban, particularly the northern exits. There is the question of the gaol and the Natal Command Headquarters. The solution of those problems is vital to the further planning of the national roads. I hope the Minister will take the lead and get together with his Cabinet colleagues and try to expedite decisions on these matters. There is also the question of the shooting range where Defence is involved. The Minister could well take the lead, bring his colleagues together, and both from the financial and siting aspect, resolve these issues. Thereby he will be rendering a service not only to Durban but to the whole country. I do not want to take this matter further, Sir. The Minister has read the Borgenhagen report. He probably knows all the details better than I do. I could quote all the recommendations to him and the views of different organizations but I do not think it is necessary. If the Minister wants to he can deal with this. If he refuses to then no amount of talking or quoting will help. So I leave the matter there and trust that the Minister can give us good news for Durban and those who use those roads.

I just want to refer briefly to two other matters. I am sorry the Minister of Information is not present. One is an appeal to the Minister, on behalf of the South African Federated Hotel Association, to give them representation as an organization on Satour. They did have a representative who has unfortunately died …

He did not die; he left the position.

I believe he has since died. He went to Rhodesia and he died quite recently. The Hotel Association is a body which represents one of the vital links in tourism. It seems only reasonable that they should be represented on the body which controls tourism. Even if it is necessary to expand the size of the board to create an additional post so that the hotel industry can be represented it would be worth it.

The other point which I wish to raise is in connection with another aspect of the Minister’s complex of portfolios and that is airports. I should like the hon. the Minister to give the House information on developments in regard to navigational aids and instrument landing systems. We regard Jan Smuts as the entry port for aircraft from all over the world and we have instrument landing facilities in regard to one runway only. If the wind happens to be wrong aircraft have to over-fly. There has been occasion after occasion when Jan Smuts has been closed to landing. People fly to-day because time is important to them. They fly somewhere because they have an appointment and they want to save time. People who rely on this means of travel should be able to count on getting to their destination when they are due to get there. I myself, and probably every member who has used the airways, know that there have been occasions when a plane has not been able to land and important engagements have had to go by the board.

Never in the case of Jan Smuts because of a lack of instrument landing facilities on all runways. The reason is usually bad visibility.

But on many occasions the visibility is not so bad as to prevent instrument landing. [Time limit.]

I want to say something in connection with the Weather Bureau. I want to pay tribute to the work done by the Weather Bureau. I think many of us are under the impression that the Weather Bureau concerns itself only with forecasting whether there will be a wind or a heavy thunderstorm, etc., but few of us realize what important work the Weather Bureau really does and to what spheres it extends its activities. I think, e.g., of the valuable assistance rendered by the Weather Bureau to our Department of Water Affairs. To-day not a single dam can be built, or a large irrigation scheme established, without the help of the Weather Bureau being called in. A good valuator of land will not undertake to make a correct valuation of land unless he has the scientific data of the Weather Bureau. I think of the valuable help given by the Weather Bureau to our civil engineers, in connection with laying out townships, in connection with problems of drainage. I think of the valuable assistance rendered by the Weather Bureau in the erection of factories, and the valuable services rendered by it in connection with the cultivation of sensitive crops which are very susceptible to changes in climate. Here is an article in Panorama, which I should like to read to make hon. members realize what valuable work the Weather Bureau does. It says—

Then I want to say that the Weather Bureau, through people placed on the various islands far distant from Cape Town, renders valuable assistance. I think of the men at Tristan da Cunha and Gough Island and Marion Island, and I think of our Antarctic Expedition. I therefore repeat that the Weather Bureau does very valuable work. The hon. member for Turffontein is laughing now. He farms in the Marico district under very difficult circumstances. due to many factors, but he is very dependent on the forecasts given to him every day by the Weather Bureau. Therefore I just want to break a lance for the Weather Bureau. One often hears criticism that the Weather Bureau confines itself to weather forecasts only. That is not so. It operates on a large number of important spheres.

I want to come to a second matter and to ask the hon. the Minister whether the time has not arrived for us to get a few feeder services to our main airports like Jan Smuts and D. F. Malan and General Hertzog.

Order! That falls under Railways.

On a point of order, the reports of the Civilian Aviation Committee deal with feeder services. I therefore think that the hon. member is in order.

Private feeder services.

I want to mention a third matter. I really think the time has arrived for us to have a definite policy in regard to national roads passing towns and cities. I want to mention a specific case, and I think there are numerous similar instances. We have the case of Potchefstroom, where now for more than a decade there has been argument and consultation in regard to the question whether the road should go through Potchefstroom or by-pass it. If we have a firm policy we will know what the position is. Then if a road has to by-pass a town we will abide by it. Have we not reached the stage where we should have a definite policy in regard to roads by-passing the towns?

I want to dispose of the few matters that have been raised before we adjourn because the debate will not be resumed before Monday, and hon. members will realize that these matters might become stale in the intervening period.

I want to say that I am aware of the conditions at the East London Airport. Due to the unprecedented rains they have had there, the old apron has become undermined as a result of soggy ground and it cannot be used at the present time. As the hon. member rightly stated passengers have now to be conveyed by bus to and from the planes. There is a possibility that when the ground dries out, the old apron might come into use again, but as the hon. member rightly stated, it would be quite uneconomic to repair or to rebuild the old apron and the only permanent solution would be the erection of a new terminal building. Unfortunately that is a matter that does not fall under me. The Public Works Department is responsible for the erection of the building. I can give the hon. member the assurance that I have made repeated representations to my colleague and to the Department to expedite the erection of that building. More than that I cannot do. It is entirely out of my hands, and I am afraid that from the information I have received we must take it that it will still be some considerable time before the building will be finally completed.

Could a marquee tent or something of that kind not be erected?

I do not think passengers would like that.

It is better than standing in the rain.

If it is raining, they of course can remain in the plane. I will instruct the Department to allow them to remain in the plane if it does rain. I quite agree with hon. members that it is most inconvenient for passengers if they have to stand outside in the rain. I will also ask the Department to go into the possibility of erecting a tent.

*In regard to national roads, I must say that if all the roads have to be built which have been asked for to-night, the income of the National Transport Commission will have to be trebled for the road fund. Hon. members know that the National Transport Commission is responsible only for national roads and that they pay 70 per cent of the construction costs of special roads. In addition, certain amounts are given to the National Parks Board and subsidies are given to the large municipalities for the building of through roads and ring roads. The revenue of the National Road Fund is limited to the levy on petrol. This fund receives no additional income and it must therefore adapt its expenditure to the revenue it receives, and that is done every year. The National Transport Commission cannot spend more than it gets in.

They allege that the revenue is inadequate.

I agree that it is too little, but the position is that that is the revenue allotted to the National Transport Commission, and with that it must try to do what it can to comply with all the requirements. It costs a tremendous amount of money to build roads. The new plan which has been approved of provides for the building of a number of new national roads and also for the proclamation of a number of special roads. I agree that there is still a great need to build additional roads, such as, e.g., the one referred to by the hon. member for Piketberg (Mr. Treurnicht), the West Coast Road. That is an important road. Then there are the northwestern areas of the Cape where the roads leave much to be desired, and also the northern area referred to by the hon. member for Kuruman. There is a great need for new and good roads with a hard surface, and if I had the money I would have them all built, but the funds are limited. In regard to the decision to declare a particular road to be a national road, or a special road, that is done in cooperation with the Provincial Administration, concerned. In other words, in regard to special roads the initiative must come from the Provincial Administration, which must apply to the National Transport Commission for the proclamation of a particular road as a special road. Then 70 per cent of the cost of building it is borne by the National Transport Commission. Its maintenance is the responsibility of the Provincial Administration concerned. The same applies to the proclamation of a national road. There is an Advisory Roads Board on which the provinces are represented, and this board receives representations from the various provinces. They themselves investigate where the need is greatest and where it is most essential to build such a road, and then their recommendation goes to the National Transport Commission for the proclamation of that road either as a national road or as a special road. But the majority of the roads are still built by the various provinces. The National Transport Commission is responsible only for the financing of national and special roads. Therefore in regard to all the roads asked for the Provincial Administration should in the first place take the initiative, and then it depends on whether there is enough money available to build those roads. Therefore I can make no promises, however sympathetic I may be. It is just a matter of money.

The hon. member for Moorreesburg (Mr. P. S. Marais) suggested a special levy on fuel for the building of roads to promote tourism. The National Transport Commission is doing something in that regard. For example, the road to the Cango Caves has almost been completed, and that is mainly a tourist road. Then, as the hon. member correctly said, a certain amount is also paid over every year to the National Parks Board. That levy is naturally a matter which rests with the Minister of Finance and the Cabinet. I should like to get as much money as possible and I should like to place a larger levy on petrol so that there will be more revenue, but the Treasury has so many obligations that they simply find that more money cannot be diverted to building national roads.

May I just ask whether the hon. the Minister will support the request of the National Roads Commission for more funds? According to your statement, it seems as if you are supporting what the National Roads Commission says in its report.

I can assure the hon. member that I am continually asking for more money, but the Minister of Finance is as difficult a man as the Minister of Railways when it comes to giving money. A request was made here that the Minister of Railways should also give a larger amount to the provinces and that he should also contribute towards the building of roads, but as I say, the Minister of Railways is just as difficult a man when it comes to parting with money as the Minister of Finance is. That also applies to the subsidies to the larger urban areas.

I think that on the whole the National Transport Commission is very generous in regard to subsidizing the larger municipalities. I understand that the Durban Corporation has been offered a subsidy of RIO,000,000 but they find it insufficient. Negotiations are still proceeding, and I understand that the Corporation is submitting a new scheme. The National Transport Commission has to cut its coat according to its cloth and there are many commitments.

But Durban gets a lower percentage than Cape Town and Johannesburg.

Every case is treated on its merits and I can give the hon. member the assurance that there is no deliberate discrimination against Durban.

The Durban schemes amount to R24,000,000.

Yes, and the National Transport Commission has offered a subsidy of R 10,000,000, almost 50 per cent.

That is lower than in the case of Johannesburg.

That is possible, the circumstances may be quite different. There is no deliberate discrimination. After all Cape Town, Durban and Johannesburg are all three controlled by United Party City Councils, so there cannot be discrimination on political grounds.

May I ask the hon. Minister whether he will try to expedite the negotiations which he referred to?

I will do that. I will instruct the Department to expedite the negotiations and come to a satisfactory decision as soon as possible, so that the matter can be finalized. The hon. member for Turffontein referred to the increase in the Vote for Government Transport. The hon. member probably realizes that the Department of Transport is merely a supplying agent. The other Departments submit their requirements to the Department of Transport for transport and that must be supplied. As a matter of fact, there is at present a back-log in regard to the supply of new vehicles. The activities of all the Departments are increasing year by year and consequently their demands for motor transport also increase. The revenue received is based on so much per mile and that is paid into the Consolidated Revenue Fund. It does not go to the Department of Transport.

That is appreciated, but the revenue is too small in comparison to the increased cost.

The running costs of old vehicles are, of course, always higher, and there is a shortage of new vehicles. Treasury has cut down the allocations almost every year as far as the purchase of new motor vehicles for Departments is concerned. There are many vehicles which have done over 80,000 and 90,000 miles. The hon. member knows that the older a motor-car gets, the more expensive it is to run that motor-car.

In regard to the Weather Bureau, I can inform the hon. member that there is a shortage of qualified staff, but I have received no complaints in regard to the supplying of adequate information to aircraft.

I referred to the field stations and possible inadequate information.

It is not a question of inadequate information being supplied, but the number of field stations is insufficient. That is why our weather reports are not so reliable as in Europe for instance. There are so many more field stations in Europe, and they are at a closer distance from each other than in South Africa, but the information supplied to aircraft seems to be satisfactory and reliable. I have received no complaints. The weather reports supplied to aircraft outside the Republic are, of course, again dependent on the information received from those territories over which the aircraft fly. The hon. member spoke about the threats to deny South Africa landing facilities and to bar air space to South Africa. I can only inform the hon. member that that matter is receiving attention. I cannot say any more at this stage. I am perfectly well aware of the position and the consequences, but I do not think there is anything to fear. That is all I can say at the moment.

*The hon. member for Bethlehem (Mr. Knobel) asked that the Free State should be divided into two areas for purposes of weather forecasting. I shall ask the Department to go into that matter. I agree that there is a difference between the climatic conditions of the east and the west. I will ask them to consider giving forecasts for the two areas separately.

What is the position in connection with the Transportation Commission for Southern Africa? Has it fallen flat?

No, but the Commission has not been convened for an appreciable time. But, as the hon. member ought to know, that Transportation Commission as such has nothing to do with the prohibition placed on aircraft to fly over certain areas. As the hon. member knows, the S.A. Airways has as its partners Central African Airways, as well as East African Airways and also the B.O.A.C. There is close co-operation in this regard between these airlines.

The hon. member for Pietermaritzburg (City; (Mr. Odell) made a plea for assistance to intermediate airports. These are not really intermediate airports, they are municipal airports, and the only assistance given by the Department of Transport in respect of this type of airport is a certain subsidy for the levelling of the ground. To supply navigational aids and build hardened runways is a very expensive undertaking and is not justified. That is entirely the responsibility of the municipalities. The Department of Transport is only responsible for the national airports. All the airports at the bigger cities are, or will be, national airports very shortly. Negotiations are still taking place in regard to the taking over of the Port Elizabeth airport. But East London has already become a national airport and Kimberley has been taken over. Johannesburg, Bloemfontein, Cape Town and Durban are national airports.

You contribute to the levelling of the ground?

Yes. The hon. member for Durban (Point) (Mr. Raw) pleaded for representation of the Hotel Federation on the Tourist Corporation. That is a matter that my colleague, the Minister of Information, will have to deal with when he takes over the new Department of Tourism. He will be responsible for the Tourist Corporation. There is, however, no provision in the Act that any particular body must be represented on the Tourist Corporation. There is, however, the position that somebody must be appointed with knowledge of the hotel industry. The man that I appointed, Mr. Penzhorn, has a very extensive knowledge of the hotel industry. But if my colleague decides to increase the membership of the board of the Corporation as a result of representations made by the Hotel Federation, he is at liberty to do so.

*The hon. member for Ventersdorp asked that a firm policy should be laid down in connection with bypass roads in the case of cities and towns, and mentioned Potchefstroom as an example. In regard to Potchefstroom, a decision has already been taken as to the route the road will take through the town. That decision was taken by me 12 months ago already after I had consulted the Provincial Administration and the Department of Transport. But in regard to other towns and cities there is no firm policy that the national road should bypass every town. Every case is treated on its merits. In certain cases it is quite practicable for the national road to go through the town, whilst in other cases it was necessary for the road to bypass the town.

The one matter I still have to deal with is in regard to navigational aids at our airports. I can give the hon. member for Durban (Point) the assurance that it is my policy to provide the most modern and the best navigational aids at our airports. The safety of the planes and the safety of the travelling public comes first. I have instructed my Department that it must not be a question of cost, but that the best and most modern aids must be installed, so that the air transport is made as safe as possible. Jan Smuts, I think, is one of the best-equipped airports in regard to navigational aids. At Jan Smuts, for instance, we have the following modern equipment and aids in operation: We have the non-directional beacons, very high frequency omni-directional range, distance-measuring equipment; we have the instrument-landing system, very high frequency direction-finding equipment; we have radar, radio-telephony, teleprinters, wireless-telephony, radio-teletype, lighting approach; and then the new system called VASI, a visual approach slope indicator, which has been installed, but is not yet in operation.

Have you got all the aids at all the large airports?

No, this is at Jan Smuts Airport. At some of the smaller airports we do not have as many navigational aids and equipment. I have received no complaints from any of my pilots that our airports are insufficiently equipped, and the hon. member can rest assured, seeing_ that South African Airways is my responsibility, that if any of our air crews find that there are insufficient equipment or aids at any of the airports, it will receive immediate attention. But they are satisfied with the equipment that has been provided. As a matter of fact, at the D. F. Malan Airport the new radar system that has been installed, and has been in operation for the last few months, costing over R400.000, is one of the most modern systems that it is possible to obtain to-day. On the whole our airports are well equipped, although they do not have all the aids and all the equipment that Jan Smuts and D. F. Malan Airports have.

I want to thank the hon. the Minister for his clear exposition, but I hope he will not hold it against me if I point out that while we understand his difficulties very well we in the northwestern part of the Cape Province are faced with large and difficult problems. It is a very large area. The police district of Vryburg is as big as the whole Free State and that is only Vryburg and Kuruman. There is no national road running through that vast strategically situated area to the west. I want to ask the Minister not to lose sight of the strategic importance of a road running from the east to the west. If we have to wait in this country until the money and other things are available we shall get nowhere. We cannot expect another Railway line to be constructed in that sparsely populated area to encourage development. We have to rely on road transport in future. That is why I want to plead with the Minister to give special attention to those sparsely populated and distant areas. I do not think it is fair in the case of such a vast area to apply the same basis of counting as is applied in the case of thickly populated areas to determine whether a road should be declared a special road or a national road. A large number of people may travel 15 or 20 miles in a densely populated area, whereas a person may have to travel about 170 miles in that area to get to a town. The farming community there is dependent on that development and whereas the Road Transportation Board views the needs of an area from a national point of view, I do not think justice has ever been done to this area. I want to plead seriously with the Minister that, in spite of the facts mentioned by him, consideration should nevertheless be given to that area and that we should be at least given a road from the east, from Vryburg via Kuruman to Upington, so that there will be a link between the east and the west, and to construct a special road as speedily as possible from Vryburg to Terra Firma. That road is indispensable to our farming community, who are between 170 and 200 miles distant from the Railway line. This is all I want to say at the moment, because I do not want to take up more time. I do, however, appeal to the Minister to consider this carefully.

I would appreciate if the hon. Minister could inform the House how transportation boards operate. Is there any attempt on the part of these boards to co-ordinate their policies and is there perhaps a code by which they are guided? For instance, here in Cape Town there is no differentiation between Coloured and White taxis. They render their services to both Coloureds and Whites, whereas in many country towns, or most of our country towns, strict apartheid is applied as regards the taxi services. The unfairness of this in our smaller towns is that where the clientele is smaller the service rendered suffers. The operators suffer and the public suffer, because they do not have a sufficient service. Taxi drivers in towns that I know have had to give up their business. Permits too are difficult to obtain, even where they do not seem to compete with Government road services. The hon. Minister has dealt with the Weather Bureau, but I want to point out that many farmers imagined that when the Weather Station was established at Marion Island there was a prospect of weather forecasts of, say, for a week in advance. This would not only be of assistance to farmers, but would also assist business in general, and would no doubt bring about savings of many thousands of pounds, especially to fruit and lucerne producers. I would ask the hon. Minister perhaps to give us some information in this regard. Is there any prospect of fairly accurate forecasts? The hon. Minister, of course, has often heard of Mr. du Toit, who used to give us weather forecasts. Well, lucerne growers at Vaalharts paid him a fee to have weather forecasts so that they would know when it was most advisable to reap their lucerne hay. That, of course, was quite laughable. It was equivalent to daylight robbery. But I would imagine that with the development of Weather Bureau services and with the larger range over which they operate the Minister might be able to assure us that research in this direction takes place and that farmers can look forward to a longer forecast with regard to our weather.

At 10.25 p.m. the Chairman stated that, in accordance with Standing Order No. 26 (1), he would report progress and ask leave to sit again.