announced that in terms of Joint Rule 23(4) he had referred the following draft Bill which had been submitted to him, together with the memorandum thereon, to the Standing Committee on Private Members’ Draft Bills:

Population Registration Amendment Bill, submitted by the honourable member for Bezuidenhout.

as Chairman, presented the Third Report of the Standing Select Committee on Communications and Public Works, dated 11 February 1986, as follows:

Your Committee was of the opinion that the Bill be proceeded with, and it reports accordingly.

Report to be considered.

as Chairman, presented the Fourth Report of the Standing Select Committee on Communications and Public Works, dated 11 February 1986, as follows:

Your Committee was of the opinion that the Bill be proceeded with, and it reports accordingly.

Report to be considered.

Mr Speaker, I move:

The Appropriation Act is only promulgated towards the middle of July each year. During the period between the beginning of the new financial year on 1 April 1986 and the date on which the Appropriation Act is promulgated, departmental expenditure on existing services must of necessity continue. In anticipation of the main Budget, this expenditure is legalised in the interim by means of a part appropriation. This is in fact the purpose of the Bill which is being submitted to this House today.

It is estimated that an amount of R10,1 billion will be sufficient to enable the Treasury to meet its obligations during the said period. In the Part Appropriation Act, 1985, an amount of R7 billion was approved, and the appropriation requested therefore represents an increase of 44,3%. This sharp increase is due mainly to technical adjustments in the method of financing; if these were left out of account, it would bring the increase on a comparative basis down to 10%.

The technical adjustments mentioned above are that the transfers to the three own affairs administrations now have to be voted and are therefore included in the Part Appropriation, whereas in 1985-86, the lion’s share of these amounts was paid over to them statutorily in terms of section 84(a) of the Constitution. Section 84(a) of the Republic of South Africa Constitution Act, 1983—Act No 110 of 1983—provides that amounts calculated in accordance with a formula prescribed by any general law can be statutorily transferred to the Own Affairs Accounts. In the 1985-86 financial year, the amounts were calculated in terms of the Revenue Accounts Financing Act, 1984—Act No 120 of 1984. This general act was an interim measure, which only provided for the crediting of appropriation accounts in the financial year ending on 31 March 1986. There is not yet any general law in terms of which statutory payments can be made to the Administration after 31 March 1986, since negotiations are still under way about the functional-normative formulae to be embodied in a general law to take the place of the previous one. Nevertheless, considerable progress has been made in the negotiations about the introduction of the proposed formulae. As soon as these have been finalised and accepted by the three own affairs administrations, a general law will be drafted and submitted to Parliament for its consideration. Until such time as a general law has been promulgated to regulate transfers on a statutory basis, the transfers to the said administrations have to be voted in the Part Appropriation.

As regards the amount that is being requested, I want to emphasise once again that for technical reasons, no accurate or meaningful inferences about the amount or thrust of the main Budget for 1986-87 can be drawn from the Part Appropriation figures.

†This is the first opportunity I can avail myself of informing the House about some of the major developments in the economy since the adjournment of Parliament in June 1985. In fact, these developments were of such magnitude that if Parliament had been in session during September and October 1985 it would have been appropriate to consider submitting a revised budget and economic strategy to the House. As matters stand now, sufficient options adequately to respond to entirely new sets of circumstances that develop during parliamentary recesses are unfortunately not available to a Minister of Finance. Attention will have to be given to ways and means of adapting more adequately and speedily to the major fluctuations which a modem economy invariably faces in today’s rapidly changing world.

Despite the fact that the scope for dynamic and continuous fiscal response has been limited in the economy itself sufficient scope has been created for renewed economic expansion since the current period of adjustment took effect from the middle of 1984. In this regard it may be appropriate to say a few words on the policy the Government followed from the latter part of 1984 up to September 1985. The policy aimed at eliminating the excess expenditure in the economy and transforming the deficit on the current account of the balance of payments into a surplus. That objective was achieved. By September 1985 the underlying conditions in the economy had improved to the extent that overspending had been eliminated, growth in the money supply was well under control, interest rates had declined markedly, the increase in the inflation rate had been contained and the savings propensity had been improved significantly, Government spending was within the set limits, the deficit before borrowing in relation to the gross domestic product was lower than the previous year, and the current account of the balance of payments had turned around drastically.

The upshot was that, from a sound basis, economic policy could be adjusted so as to bring relief in various fields, with the creation of job opportunities obviously the most important single need.

Where do we stand now? Five successive quarterly declines in real gross domestic expenditure up to the third quarter of 1985 clearly show that excess demand has undoubtedly been eliminated from the economy. Real domestic expenditure was about 7,5% lower in the first three quarters of 1985 than in the corresponding period in 1984. The figure for 1985 as a whole will probably show a slightly smaller decline. Accompanying this expenditure decline, the domestic savings ratio has almost been restored to its longer-term trend of about 30% of gross domestic product.

In addition, a healthy balance of payments on current account has been established by reversing a deficit of R1,4 billion in 1984 to an envisaged surplus of almost R7 billion in 1985. Aided by the lower exchange rate of the rand, merchandise exports have expanded considerably in value as well as in volume terms—from R14,4 billion in the last quarter of 1984 to about R23,2 billion in the corresponding quarter of 1985, at a seasonally adjusted annual rate, or by an estimated 24% in volume for 1985. At the same time a decline in import volume, estimated at 15% for 1985, has prevented any significant increase in the value of merchandise imports, which—at a seasonally adjusted annual rate—rose from R22,7 billion in the fourth quarter of 1984 to R23,1 billion in the fourth quarter of 1985. By the fourth quarter of 1985 imports had become approximately counterbalanced by non-gold exports alone.

During this period, however, the country’s production capacity continued to be significantly underutilised, with an obvious impact on unemployment; but, following the more healthy trend in basic indicators, steps could be taken in September 1985 to arrest this situation, since the Government judges a depressed economy and a high rate of unemployment to be conducive also to a climate of social instability—something that South Africa can well do without.

Initially during the period of adjustment, the money supply continued to grow rapidly, but from December 1984 in response to conscious policy decisions to reduce the growth in the money supply, the increase decelerated appreciably to rates well below the current rate of inflation. Measured over a period of twelve months, the growth rate of M3 declined from a peak of 24,7% in November 1984 to 20,4% in June and to 9,7% in November 1985. The growth rates of the more narrowly defined monetary aggregates slowed down to an even greater extent owing to shifts from short- and medium-term deposits to long-term deposits in response to actual and expected changes in deposit rates and the interest rate structure. The comparable growth rates of Ml and M2 decelerated from 39,6% and 28,9% respectively in November 1984 to 20,8% and 21,3% respectively in June and then to -11,3% and 7,8% respectively in November 1985.

The rate of increase in total credit extended by the banking system, measured over a twelve month period, peaked at 23,5% in March 1985, before slowing down to 15,2% in August. Subsequently, it rose again slightly to 15,9% at the end of November last year. The growth rate of bank credit to the private sector decelerated continuously from 27,1% in March 1985 to 16,9% in November last year.

The increase in bank credit to the private sector during 1985 was mainly in the form of overdrafts to companies in order to supplement smaller cash flows and, from early in the second half of the year, to cover a switch from foreign to domestic financing of international trade transactions. Hire-purchase credit and leasing finance provided by the banks actually declined during the first eleven months of 1985 reflecting the slump in the demand for durable consumer and capital goods.

In view also of the greater scope for economic expansion, the emphasis in economic policy management was shifted more towards the promotion of economic growth. Accordingly, the monetary authorities allowed, and at times encouraged, interest rates to decline. For example, between 6 May last year and 17 January this year the bank rate was reduced from 21,75% to 12%, while during approximately the same period the clearing banks’ prime overdraft rate was lowered from 25% to 15,5%. In addition to the easing of monetary policy, fiscal policy was relaxed in September 1985 by allowing additional Government expenditure not provided for in the Budget.

However, steps were taken to ensure that the additional expenditure would be covered by additional revenue in order not to increase borrowings and to prevent the deficit before borrowing from exceeding 3% of gross domestic product. The additional revenue was raised by the imposition of a 10% surcharge on imports. Special additional expenditure programmes to the value of R500 million were launched as part of the strategy to alleviate hardship and distress and to provide training and temporary job opportunities. These programmes have been most successful, and will certainly receive a good deal of attention in the course of this session.

Despite the shift of emphasis in economic policy, two major constraints still suggest a need for caution in stimulating the economy. Firstly, the rate of inflation is still inordinately high. However, this is not at present a reflection of excessive demand, but rather of the preceding sharp depreciation of the rand after July 1985 from around the level of about 50 US cents at which it had remained for six months to a level around 35 to 38 US cents during most of the period August to December 1985. This depreciation inevitably raised the cost of fuel and other imported goods and exerted cost-push pressures on the price level. The post-July depreciation was in turn caused mainly by the withdrawal of foreign bank credits and an outflow of capital in other forms, as a result of the marked deterioration in overseas perceptions of South Africa’s socio-political situation. I shall return to this matter shortly.

Now that the rand has not only ceased to depreciate but has shown an effective appreciation of about 20% against other currencies since the middle of December 1985, the cost-push effects of the earlier depreciation should begin to diminish before too long and the consumer price index will return to the downward adjustment pattern it had adopted prior to the 1985 depreciation of the rand.

An important caveat must, however, be expressed. This concerns the rate of increase in salaries and wages in 1986. There can be no doubt that salary and wage increases in excess of the inflation rate in 1986—a rate, as I have said, that is expected to decline during this year to a level substantially lower than the current rate—will exert renewed inflationary pressures in the economy. It is vital that executives in the private and the public sectors should take full cognisance of this possibility in wage determination decisions.

The second constraint relates to the need in the prevailing climate of disinvestment by some overseas investors to reduce South Africa’s foreign debt. This fact makes it imperative that the level of overall expenditure be compatible with a surplus on the current account of the balance of payments.

*Some remarks on the foreign debt standstill are called for. As we already know, it was the overseas perception of developments in South Africa and the fears arising from this which gave rise to the standstill arrangement.

In particular, a number of US banks drastically curtailed and even suspended the credit granted by them to the South African banking sector.

This abnormal withdrawal of capital after July forced us to make abnormal arrangements. We had to declare a “standstill” in respect of a part of South Africa’s foreign debt, as well as introducing exchange control over non-residents by means of the re-introduction of the financial rand.

South Africa’s debt problem is by no means a reflection of a weak economy. Borrowing abroad is healthy provided that the funds are used for productive investment and commerce. By borrowing overseas in the 19th century, the US became the economic giant which it is today. International experts agree that South Africa’s total foreign borrowings were not excessive. The country’s total foreign debt, including trade financing, amounts to approximately 24 billion US dollars. This is less than 170% of our annual exports of goods and services—a relatively low percentage compared with the average of 270% for developing countries in the western hemisphere.

In addition, South Africa’s total interest payments on foreign debt amount to only about 7,5% of our exports. When foreign dividends are added to these, the figure becomes approximately 11% of our exports. Both these percentages are relatively low. And the 11% in total interest and dividends is more or less the normal level which has prevailed in South Africa since 1946, ie over the past 40 years.

Unlike many other countries, therefore, South Africa is by no means “over-borrowed”, as it is called. As a country we have no insolvency problem. All this has recently been emphasised in public again by no less a person than Dr Leutwiler, who is acting as mediator with the Republic’s creditor banks. Nor is there any problem with the interest payments. Our trade surplus enables us to pay all the interest and to redeem large loan amounts on top of that.

What is our problem, then? It is a liquidity problem, ie a cash flow problem. Like other countries in the world, we do not have enough dollars or other currency to pay back all our short-term debts within one year. In fact, no country in the world could do that, just as no bank could pay back all its deposits at the same time. That is why South Africa told the overseas bankers and other creditors that we could and would pay back all their loans if they so wished, but that we could of course not do it all in the short term. Meanwhile we are continuing our interest payments.

There have in fact been certain shortcomings in our banking legislation and supervision which are related to the accumulation of short-term obligations in respect of foreign creditors. It was precisely in order to remove these deficiencies that a new Banking Act was passed by Parliament last year.

The basic conclusion remains, however, that the debt problems experienced since July—the possibility of which had been envisaged at an earlier stage—were not caused by the fact that we are “over-borrowed” or that our economy is unsound. They were caused by the sudden withdrawal of loans by some overseas bankers, resulting from the fact that they had formed a particular view of our prospects in the political as well as the economic sphere, an view which has since been proved wrong to a large extent, which has obviously contributed to a calmer and more realistic view of the whole matter.

It is generally know that negotiations of a confidential and sensitive nature about South Africa’s debt position are being conducted with the foreign creditor banks on a virtually continuous basis, with Dr Leutwiler as mediator. Therefore I do not consider it appropriate to discuss this matter any further this afternoon and in so doing to anticipate the negotiations. Hon members will be informed from time to time on any developments in this connection.

Mr Speaker, since I have referred to the Republic’s external financial relations, this is also a suitable occasion for making a few brief remarks about our balance of payments position and our exchange rate policy. There are those who regard the exchange rate as the most important indicator in any economic system. When one considers the emotions generated by the value of the rand in recent months, it is even more important that this aspect of our economy be put in its proper perspective and be constantly evaluated during this session.

As I have already said, we are at present maintaining an exceptionally high surplus on the current account of the balance of payments, as a result of the abovementioned increase of more than 24% in export volumes, as against a drop of 1,5% in import volumes. This surplus is undoubtedly necessary, firstly in order to provide a buffer against any accelerated increase in imports which will as usual result from the expected upswing in economic activity; and secondly, to give peace of mind to South Africa’s creditors about our continued ability to redeem our foreign debt. This, together with the more positive view of South Africa’s political and economic circumstances prevailing at present, and reinforced by the measures taken during December 1985 to ensure a steadier flow of exchange to the Reserve Bank, has already had a very positive effect on our exchange rate.

This style of management of the Government is aimed at initiating timely adjustments in order to guard against an unduly positive or negative influence being exercised over the mental attitude of participants in the market. After all, the economy is and remains a behavioural science. Moral influencing is of course an important component of the authorities’ policy instruments, therefore, but when it does not have the required effect, other more direct measures must of necessity be used.

The policy which the Government has been following for the past few months is an attempt to adapt to the changed circumstances that are being experienced, while the ultimate object of a high and sustained real economic growth rate and the creation of sufficient job opportunities on a basis of reasonable price stability and a healthy balance of payments is still being pursued. In the process, serious consideration is being given at the moment to the high level of inflation and the dangers which a too rapid economic upswing could hold for us, namely that our balance of payments surplus could be exhausted too quickly. Furthermore, serious attention is also being given to imaginative steps aimed at promoting exports in order to enhance the possibility of sound growth. Naturally, the quickest possible return to normality with regard to our international financial relations and our access to capital markets also plays a decisive role in our ability to continue supporting our growth phase.

The Government’s economic policy is not conducted on the broad macro level only, however. It has a personal dimension as well, and when individuals suffer, the Government is aware of that. That is why assistance is being rendered in an imaginative way where it is really needed. The philosophy which is increasingly emerging from this is that real needs are being identified and that quantifiable assistance is then being rendered directly to those in need of it, on the basis of sound financial principles. In view of the limited resources of the Republic, it is essential that the available aid should be concentrated on the right targets rather than being applied by way of general relief measures.

It is very clear that the monetary and fiscal policy which has been followed for the past 20 or more months is certainly not getting the recognition which it deserves, for great success has in fact been achieved in several key spheres. The restrictive policy has undoubtedly exacted a high price, but the success which is being achieved with it is becoming increasingly clear and is making the sacrifices worthwhile. We are still looking for an adjustment policy which will not have any painful side-effects, but it is obvious that such a policy does not exist.

Naturally, certain external factors have also contributed to the improved economic prospects which South Africa is experiencing at the moment. Agricultural prospects are relatively good compared with the past number of years, and the prospects of a normal maize harvest are good. It is a fact that good rains have the effect of changing not only our agricultural prospects, but the entire community’s perception of its circumstances of life, and after the good rains, a much more positive attitude may be observed among South Africans. The economic activities resulting from a good agricultural year, and the ripple effect of these, must certainly not be underestimated.

The drop in the international oil prices could contribute significantly to a further strengthening of our balance of payments. In addition, it could also serve to stimulate further the economies of our major trading partners, which could in turn have a positive effect on our balance of payments as well, and could even have a moderate stimulating effect on the South African economy.

There are sound reasons for believing that the recent rise in the gold price is not merely a short-term phenomenon, but that it will be possible at least to maintain the present higher tendency in the foreseeable future. In motivation of this, the expectation of a continued depreciation of the dollar and a further decline in interest rates in the major economies of the world may be put forward, as well as the expectation that gold will once again become an alternative investment medium to an increasing extent—partly as a result of fears that the lower oil prices may cause the international debt crisis to intensify again as far as the oil exporting countries are concerned. It is likely that international political developments could also have a positive influence on the gold price.

All these positive aspects are expressed in an anticipated real growth rate of 3% in 1986, which represents a significant turnabout after the real decline of approximately 0,5% in 1985. Moreover, the growth will probably be spread throughout all sectors of the economy, which could promote job creation over a wide front. The ambitious job creation project which the Government embarked upon last year and which it will carry over into the coming financial year should continue to produce good results.

With this positive survey I am by no means implying that the country is not still faced with serious problems. Indeed, the Government remains concerned about the inflation rate and the unemployment problem. After what has been said, however, it should be clearer that the Government is firmly resolved to try to overcome these problems as well by means of the most appropriate measures.

†Sir, before I close I should like to make an announcement concerning the rates of interest payable in terms of the Limitation and Disclosure of Finance Charges Act of 1968, the so-called Ladofca or usury rates. With effect from tomorrow, 11 February 1986, the maximum rate that may be charged will be reduced to 29% in respect of money-lending, credit and leasing transactions not exceeding R2 500 and 24% in respect of money-lending, credit and leasing transactions exceeding R2 500. Transactions of which the principal debt exceeds R50 000 are to be excluded from the provisions of the Act. The required notice in this regard will be published in the Government Gazette shortly by the Registrar of Financial Institutions. This decline is in accordance with the general decline in interest rates that has taken place during the past few months and is considered necessary in order to enforce lower rates where individual dealers have delayed adjustment of their rates in accordance with market trends.

I wish to emphasise that these rates are maximum rates. There is no such thing as a “Government rate” which must be charged. Potential clients should therefore shop around actively for the lowest possible rate before concluding a hire-purchase transaction with a financial institution or trader. The Ladofca legislation is merely there to use in cases where exploitation takes place while at the same time ensuring that credit will still be available also to those with a relatively low credit rating. It still remains the bounden duty of all consumers to protect their own interests by not simply accepting any particular purchase price or for that matter the maximum interest rate sought for a hire-purchase transaction, but always to seek the most advantageous transactions for themselves.

Judging from the facts I have presented, it is clear that South Africa is poised at the start of a new phase of growth, which can with delicate and judicious handling provide the inhabitants of this land with increased prosperity and opportunities. Let us not lose this chance for we have sacrificed much to achieve the stable platform we can now use to our mutual advantage.

Second Reading resumed

Mr Speaker, I move the following as an amendment to the motion of the hon the Minister:

1. (1) take more effective steps to deal with the serious economic problems facing the country and its people; and
2. (2) initiate meaningful steps to bring about genuine power-sharing and freedom of association in a constitution brought about as a result of a process of negotiation in which all population groups participate.”.

Mr Speaker, I should like to touch very briefly on a number of issues which the hon the Minister dealt with in his Second Reading speech. Firstly, the hon the Minister referred to the question of the large amount that was being asked for in this part appropriation. He informed us of the technical reasons for it and, inter alia, said that negotiations were still taking place in relation to the formula. What he did not tell us of course was who was negotiating with whom. After all, we should like to know where those negotiations are taking place, who is negotiating, who are parties to the negotiations and with whom the negotiations are being conducted. These are matters which concern us, Sir. I would have imagined that the correct place where those negotiations should take place is the Standing Committee on Finance. Yet that committee has no knowledge whatsoever of these negotiations.

It will go to the committee.

Yes, eventually it will go to the committee, but only after someone else has already agreed. The actual negotiation process, however, should be taking place in the standing committee. Yet it is not taking place there. If that, Sir, is the attitude which is being adopted by the Government it is obvious that what is happening in practice is that the standing committees are indeed only brought into the picture once agreement has been reached on issues, and then it is only done in order to use them as rubber stamps. That, Sir, is not what was intended or what was promised when this whole system was introduced. [Interjections.]

Contempt of Parliament!

Secondly, Sir, the issue is raised in connection with the question that there needs to be more manoeuvreability because decisions have to be made while Parliament is in recess. In fact the hon the Minister says in so many words that it might have been better if Parliament had been in session during September and October of last year. We agree with him. Indeed we asked for it, and we could not have it. Now he must address his complaint to the Government of which he is a part. It was after all that very Government which refused to have Parliament called together at the time. One of the problems which exist is that Parliament is not called together when there are matters of national importance to be discussed. Not only is Parliament not called together but when there are financial matters those are not referred to the Standing Committee on Finance, and again I am saying that the system is not being used to the advantage to which it should be used.

The third point I should like to make is the following. It relates to the appeal the hon the Minister makes in regard to restraint in respect of wage and salary demands. One has no quarrel with that appeal, subject of course to one qualification. That is that one cannot expect people not to demand increases in wages and salaries if one allows inflation to escalate at the rate at which it is doing now. Sir, that is a ridiculous situation. People are asked to accept a lower disposable income, asked to accept lower purchasing power, while the fight against inflation appears to have almost been abandoned by this Government, as the statistics clearly show. If the hon the Minister is indeed serious about his appeal in respect of salaries and wages, he really has to do something about inflation, which is becoming a major problem, and which may well assume most serious proportions in time to come despite the little hiccup of going down every now and then.

Before I deal with some other financial matters, however, I must state that I was fascinated to read that the hon the Minister said the following, and I quote him—and he is welcome to correct me if I quote him incorrectly: “I am not getting involved in the debate on apartheid.” I find that really fascinating indeed because the reality is that he is involved in the debate on apartheid. All of us are involved in that debate, and if one is concerned about the finances of South Africa, if one is concerned about the economic position of our people, one will be concerned about the debate on apartheid. [Interjections.] Sir, let me tell hon members something. Let me show them something. It is a really fascinating thing. I have here the Financial Times of Saturday, 1 February of this year, and I quote the following headline: “Botha pledges a framework for equal opportunity”. In the report that follows the State President is quoted as saying that we have outgrown the outdated colonial system of paternalism as well as the outdated concept of apartheid. This, Sir, is stated in bold headlines. We receive glowing reports about reform in South Africa. Glowing reports, Sir! The hon the Minister can borrow my copy of the Financial Times if he should like to read those reports because I am sure they will give him some comfort. Yet, Sir, he is not involved in the debate about apartheid!

Last Saturday’s issue of the Financial Times has the following headlines “Botha rebukes Minister on Black President remark”. That is the heading of the front-page lead in the Financial Times of 8 February this year—a publication which is read by every banker in the world! Yet, Sir, the hon the Minister of Finance is not involved in the debate on apartheid! [Interjections] One of the things he has to tell us today, Sir, is where he stands because that is what he is going to be asked when he goes abroad to talk with international bankers. He will be asked where he stands in relation to the difference of opinion between the hon the Minister of National Education and his Cabinet colleagues on the one hand and the hon the Minister of Foreign Affairs, who has gone to sit in the mountains of Switzerland in order to think about his future, on the other hand. Where does the hon the Minister of Finance stand in relation to that dispute? That question is going to be asked. He is going to have to answer the bankers of the world. Is his answer to them also going to be that he is not interested in the debate on apartheid? [Interjections.]

Sir, with great respect to the hon the Minister of Finance, that one is not going to wash. There is no hope of it ever washing! I want to put to the hon the Minister a simple premise to which I want his answer—his personal answer as a member of Parliament and as Minister of Finance. If the constitutional structures to be evolved are based on power-sharing—and he says he believes in power-sharing—whether it be on a group basis, either compulsorily allocating individuals to the group as some of his colleagues want to do, or on the basis of voluntary individual choice and adherence, or whether it be on the basis of complete freedom of association, the choice of the head of state must be open if the concept of domination by minority or majority is rejected. I assume that he rejects the concept of domination either by a majority or by a minority and, if that is so, then the nature of the constitutional structure which is evolved and negotiated may result in a head of state which is ceremonial or which is executive. However, if there is to be power-sharing without domination, irrespective of the nature of the structure how can the office of the State President be reserved for any particular group whether compulsorily or voluntarily constituted?

Sir, I want the hon the Minister to answer that, and I think he needs to answer it because, even under this very constitution under which we are operating, it is perfectly possible for a Coloured or an Indian man to become the State President of South Africa.

In 1977, under the constitution that some of the gentlemen sitting in these benches next to me agreed to, Mr Vorster said that it was in fact possible for a Black man to become the State President of South Africa. [Interjections.] He did not want it but he said that it was theoretically possible under that constitution.

Yet now, suddenly, we have the spectacle of the hon the Minister of Foreign Affairs being openly reprimanded in this House, and not one of the gentlemen sitting on that side of the House has the courage to say: “I agree with what the Minister of Foreign Affairs said.” Not a single one has the courage to say that! [Interjections.]

Order!

The question that has to be asked is whether the power-sharing pie that the hon the Minister of Finance is thinking about is the one horse, one rabbit pie. Is it that pie? If it is, then that pie is indigestible not only for the Black community but for South Africa as a whole.

I want to make it quite clear that to me the colour of the State President is of no importance. What is important to me is not what race he belongs to but the nature of the constitution under which he acts, and whether he has and applies free-world values or other values, and that under his government there is no domination, no oppression, and freedom of association, freedom of religion, freedom to work and freedom of enterprise. [Interjections.] That is what counts—not skin colour!

I believe that this is an issue to which every single member of this Parliament has to address himself and has to say where he stands. I do not believe that we can allow that issue to go by. I do not believe that we can let this impasse continue in this House, and I think this is the opportunity to debate it. People on the Nationalist side should now say where they stand and what they believe in, and not leave that one man isolated, sitting on top of that cold Alp whilst they have been encouraging him to take the stand that he has taken. [Interjections.]

However, let us be fair. Last Friday some other events also took place in this House, and I do not think it is fair to ignore them and I do not think one can. I just want to express a point of view which is mine and which I want to make quite clear. It is a personal view. I, as the member for Yeoville, say the following: Firstly—the acting leader of the party will speak just now and I doubt whether he will disagree with me but I want to express the view of the member for Yeoville—I have a mandate from the voters in my constituency and, while I have that mandate, I am going to remain in Parliament.

Sir, I am a parliamentarian and however imperfect may be this system, however flawed may be this system, however much I believe there may be a necessity for a different constitution, a much better one than the present one, I believe if one believes in peaceful change—and I do—the only way in which the laws of the country can be constitutionally changed are by the acts of this Parliament. [Interjections.] That is what is necessary. I can understand the frustrations of any individual who believes that he is right and that the Government is wrong, and he is unable to persuade the Government. Sir, I have had those frustrations for years and I continue to have them with the hon the Minister of Finance among others. I have those frustrations, but it is my job as a member of the Official Opposition to endeavour to persuade the hon the Minister that he is wrong but also to persuade the voters of South Africa that they are wrong in electing the Government which in fact is in power. [Interjections.]

That is what we as a party have to do, and what we have to do is to persuade the voters because I accept that the Government have not been elected to carry out PFP policy. They have been elected to carry out their policy. Sometimes I get a bit confused as to what they are doing, but the reality is that we have been elected on our policies and they have been elected on theirs.

I want to make it clear that suddenly to be left leaderless is not a pleasant experience, but make no mistake, within minutes there was an acting leader who has the full confidence of our caucus, and the machinery to elect a new leader has been brought into operation. We shall have a new leader and as far as I am concerned he will lead us outside and inside Parliament, but he is not going to lead us out of this Parliament, he will keep us in this Parliament. [Interjections.]

If you want to know—and I shall say it publicly—I am not a candidate; it is known who has my support. [Interjections.]

Order!

I want to make it clear that I think there is a need for an Official Opposition in this House other than from the right. I believe there is a need for us to continue to question and to criticise and to present viable alternatives and to be the bridge for negotiation between the real leaders in South Africa in order to find a solution. I believe that we shall carry out that task in this House in the years to come. [Interjections.]

Sir, if I may go to other financial matters now there is one particular matter I should like to touch on, because I think it is actually not even political—and I think we should agree on it. That is the question relating to South Africa’s foreign debt. It is perfectly true that we believe that the Government ignored the warnings on the link between politics and economics and discovered the link too late. It is true that they failed to appreciate the strength of the campaign which was being conducted against South Africa. They failed to realise the importance of stability as a factor in the judgement of the bankers. Here I have a quarrel not so much with the hon the Minister—perhaps just a little bit—but mainly with his predecessor because we were promised in this House that there would be monitoring in regard to the foreign debt of South Africa, particularly in regard to the banks, and it was not carried out.

That is one of the reasons for our problem. I do not want to say anything which in any way will hinder or prejudice the negotiation. I want to make it clear that all I know about the proposals is what I have read in newspapers. I can tell you that if those newspaper reports are correct those proposals are not acceptable to me. They are not acceptable to me for a very simple reason, and that is that South Africa cannot afford to become a capital exporting country. We cannot afford it, because part of what is needed in South Africa is that we have to create jobs in South Africa and we need capital in South Africa and we cannot do it on our own; we need to borrow from abroad.

If the arrangements as reported in the Press do not involve the lending of new money to South Africa but merely the repaying of old money so that there is no flow of new money into South Africa, I want to tell you, Sir, that that is not an acceptable settlement. It is no good if, in order to prove to the banks that have let us down that we can repay, we actually prejudice stability in South Africa and prejudice our ability to create jobs in South Africa. If they want to get their money back, they need stability and they need to have the people off the streets and back in the factories. If they want to get their money back at once, it means for us that we will be unable to create those jobs.

I say to the hon the Minister—he must have no illusions about this—that I do not want him to return to this House—because he has not taken us into his confidence as he should have done with a proposal that will result in South Africa becoming a capital exporting country. I do not want it because it is not in the interests of the country.

I have only a few minutes left. I feel I owe the hon the Minister of Administration and Economic Advisory Services in the Office of the State President a few answers. He said that I had generalised in regard to the question of the mismanagement of the economy. He said that this was a lot of nonsense—to put it mildly—and he tried his usual whitewash job. In the few minutes left to me, I would like to quote a few persons who I feel know a little more about economics than that hon Minister.

Dr Fred du Plessis said: “Die Suid-Afrikaanse ekonomie word bestuur sonder ’n langtermynstrategie. ”

Nonsense!

He says “nonsense”. Let me read another quotation. Mr Aubrey Dickman says: “My own view is that economic management has been deficient.” What does the hon the Minister of Finance say about that?

Nobody is perfect. [Interjections.]

That is an admission or a confession. The trouble is that some people are less perfect than others. Let me go further. I quote:

I want to make it clear that I have left out an immaterial proportion from the quotation. He goes on to say:

He goes on to deal at length with what has happened since 1981. I quote further:

Is this again a case of “nonsense” or of not being perfect? That quotation was from Barclays Bank.

I have a list of about 10 instances where the hon the Minister went wrong. There is the question of the exchange control for non-residents. There is the question of the financial rand.

Please elaborate on the first matter.

If the hon the Minister will give me a few minutes from his time as my time is almost up, I will elaborate on it on a very simple basis. As a result of the removal of exchange control, money flowed out of the country. Big businesses were sold in South Africa and the money flowed out. The hon the Minister then borrowed money instead. He also abolished the financial rand at a time when we warned him not to do it. He then had to reintroduce it and eat humble pie. As the hon the Minister of Finance has said, nobody is perfect, but they certainly take the cake!

Mr Speaker, important changes took place last year. Mr Ellis retired as the Auditor-General and Dr De Loor was appointed in his stead while Dr Stals is the new Director-General of Finance. We wish to thank Mr Ellis in absentia for the faithful, outstanding service he furnished in various capacities. We wish to congratulate Dr De Loor and Dr Stals heartily on their new appointment; we wish them every success and a fruitful period of service.

In October 1979 the PFP appointed a commission of inquiry under the leadership of the hon member for Yeoville. Their terms of reference were as follows:

Two years later, in 1981, the commission actually submitted its so-called “Charter for Social and Economic Progress”. On page two one finds the following:

It is 1986 now and we have heard nothing further about that charter. After listening to that hon member, it became very clear to me that he and his party still found themselves in the same dilemma. Instead of doing a clinical, in-depth analysis of the current difficult financial conditions and then coming forward with well-considered, concrete solutions, he provided only destructive, unjustified criticism and meaningless verbosity. All I can say is: “He was not open to make any economic policy proposals not consistent with the party’s constitutional policy.” This does not really achieve anything at all.

The hon member for Yeoville also indicated that he would not be available for the leadership of his party. I wish to give him some good advice: He should not declare himself available as he would be the worse for it. Like his erstwhile leader he should desert the sinking ship before it is altogether too late even if he were to remain in Parliament—as he put it.

The economic implications of the inability of South Africa to honour its international debt obligations on due date and the negotiations to reschedule the debt have recently dominated the economic and financial scene. It is true that the South African foreign debt obligations have increased rapidly in relation to the growth in the national product. Viewed objectively and compared with that of other countries, however, the foreign debt has not risen beyond manageable bounds. According to Die Volksblad of 23 January 1986 Dr Leutwiler made the following comments:

He described the debt problem of the country as a classic liquidity problem and the report from which I have just quoted continued:

In fact, South Africa has continued to honour its dividend and interest obligations to foreigners with the greatest of ease. Interest obligations to foreigners, in relation to the export of goods and services, amount to approximately 10%. This at least in no way places the country in the category of South American countries in respect of which comparative figures were furnished in the September 1985 edition of World Financial Markets. These figures reflecting interest as against the export of goods and services were given as follows for the year 1984: Mexico, 37%; Brazil, 38%; Chili, 44% and Argentina even as high as 56%. No country can repay its short-term foreign obligations in three or six months just as no commercial bank can repay its short-term deposits all in the short term.

There is no doubt that the South African economy has made heavy weather over the past few years. From the nature of the case some of the reasons for this have been beyond the control of the country, but it is equally true that South Africa and South Africans themselves have not always pulled their weight. Basic economic realities which I have pointed out over the years in my speeches have been ignored for a long time. Among other factors in particular savings have been inadequate resulting in excessive spending on consumer expenditure. Productivity was not and is not as desired. An effort was also made to maintain a certain standard of living and in addition spending patterns developed which took little or no cognisance of the increase in production. In a nutshell, South Africans lived above their means for some years.

Domestic production did not keep pace with expenditure either and this kept the import account of the country high and was also largely responsible for foreign loans to finance the deficit. Nevertheless suitable and adequate steps were taken by the hon the Minister last year to rectify these problems. Judging by the fact that South Africa is already living within its financial means, a certain degree of success has been achieved to date.

Internal riots and the subsequent state of emergency brought about negative economic developments with attendant detrimental effects. This situation was aggravated by sensation-seeking international mass media projecting a one-sided, distorted and negative image of South Africa which left one dumbfounded. This appreciably exacerbated political pressure on South Africa; the voices of political pressure groups became increasingly insistent and they were successful. In particular they succeeded in convincing certain banking groups in the USA to suspend or curtail credit lines to South African banks. This unfortunate action was therefore the chief cause of the outflow of funds. In this respect I should like to refer to a speech made by Dr De Kock on the occasion of the Frankel—Kruger conference on 4 February 1986 in Johannesburg. I quote:

It therefore appears that there can be no doubt that these incidents were a great blow to the South African economy. The country is being confronted with a situation which should not be underestimated. So South Africa is caught up in a situation which makes the choice of economic policy no easy task at all. The country is faced with a low economic growth rate in conjunction with a stubborn, relatively high rate of inflation but the low external value of the rand is the greatest single contributor to the prolonged high inflation rate. This has caused prices of imports to rise at the higher rate.

Deliberate restriction of domestic demand with a view to curbing inflation can therefore even be counterproductive. On the other hand, there should be an attempt to maintain the surplus on the current account of the balance of payments on as high a level as possible for as long as possible with a view to repayment of foreign debt, financing of imports and strengthening of foreign currency reserves. Measures to be taken should be chosen with caution especially in the light of the following factors: Firstly, the uncertainty on the possible course of the international business cycle; secondly, developments surrounding the debt of less-developed countries and developments arising from these; thirdly, how the rescheduling exercise of South African foreign debt is going to turn out; fourthly, possible political developments and their implications for South Africa; in the fifth place, uncertainty on the course of the gold price and in the sixth case, whether South Africa will have a good agricultural season this year.

Governmental choices of policy were therefore drawn up according to the components of domestic demands such as private investment and consumption expenditure. The purpose of this was to utilise existing surplus capacity and promote higher production, more employment opportunities and economic growth. This good decision was taken only after weighing economic consequences and the alternative possibilities thoroughly against one another.

Fortunately there are a considerable number of positive aspects discernible in our economy at present of which the following are the most important: Firstly, conditions in the agricultural sector appear more favourable than they have been for years. The fact that this sector is responsible for about 5% of the total economic activity of the country means that even the slightest improvement has a positive effect on the growth rate. In addition food prices represent approximately 25% of the consumer price index and favourable agricultural prospects will contribute greatly in curbing the upward pressure on consumer prices from this direction.

In the second instance there is strong, sustained growth in the value of merchandise exported—excluding gold. Exceptionally large increases characterised coal, ferrochrome, iron-ore and wool exports. Although a sharp depreciation in the exchange rate of the rand increased export prices perceptibly, there was also a substantial rise in the volume of exports. From the third quarter of 1983 to the second quarter of 1985 export prices rose for example by 38% in rand values whereas the volume of exports increased by 50% in the same period. This tendency is still persisting.

Thirdly, there is the declining tendency in short-term interest rates in conjunction with easier internal liquidity conditions.

In the fourth case, South Africans have learnt to save again and not to live above their means according to a poll run recently by Sake-Rapport among financial institutions. The latests figures on savings indicate that the salaried person is saving 11 cents for every rand of disposable income available; this is the highest level of saving since 1980.

In the fifth instance the country is exhibiting a strong consumer resistance for the first time in many years. Consumers are simply cutting back on certain expenses if sharp price rises occur. According to the managing director of one of the largest financial institutions there is even a slight decline in the consumer debt to the bank as reflected by hire-purchase figures.

Further positive aspects are a decrease in the oil price, a moderate increase in the gold price, a hardening of the rand and a large surplus in the balance of payments account.

In the light of these positive economic tendencies the economy is moving into a new cyclical upswing and there are clear signs that 1986 may be a year of further growth in employment opportunities.

Challenges in the economic sphere are great and problems serious. By the application and implementation of basic economic principles at both the macro and the micro level of the economy it can be placed on the right road. The Government has the political will and also the management expertise to attain these objectives. Above all, South Africa has the resources and the human potential to meet these challenges.

Mr Speaker, I wish to associate myself with the hon member for Smithfield in expressing our thanks to Dr De Loor for the years of service he has rendered and also in congratulating him on his new position. At the same time we want to extend our best wishes to Dr Stals and express the hope that he will fare well in this post. It will be difficult but we wish him every success.

The hon member for Yeoville proposed an amendment here and I wish to say to him that I have no fault to find with the first part of it but reject the second part in toto. It is in consequence of that type of policy that the PFP is being rent apart and their leader has beaten a hasty retreat.

What is your majority in Sunnyside?

I shall get to that in a moment. The hon the Minister made a Second Reading speech in which he lauded South Africa. I do not know where that beautiful country is he is talking about—he does not seem to me to be in South Africa. [Interjections.] He reminds me of someone proposing a toast to a bridal couple who has eyes only for the beautiful bride and nothing further. [Interjections.] I shall refer to the hon the Minister again later in my speech.

Before proceeding to this, I move as an amendment:

1. (1) the Cabinet has failed—
   1. (a) to take effective steps to combat inflation and price increases;
   2. (b) to keep unemployment in check;
   3. (c) to maintain law and order and to combat uprisings, arson, murder and violence effectively; and
   4. (d) to render the necessary assistance to certain sectors of agriculture in a meaningful way; and
2. (2) the Government is continuing with its policy of power-sharing with the Black peoples without having any mandate for it.”.

On 18 March last year the hon the Minister made a statement in his Budget Speech. I quote his exact words—I do not wish to distort them or use only certain parts of his speech. He said the following (Hansard 1985, col 2977):

The hon the Minister receives a complete zero for all three of those ideals. [Interjections.] He has not succeeded in one of those aims but the hon the Minister comes to laud the South African economy as if everything he predicted has been fulfilled and all his objectives attained.

What has happened, however? During the past few years the annual increase in Government expenditure has appreciably exceeded the amounts envisaged in the various Budget speeches. The annual increase in Government expenditure has been as follows: According to the Budget Speech for 1980-81 Government expenditure was to have increased by 14%; in truth the rise was 18,4%. In 1981-82 an increase of 16,8% was budgeted for but it was 20,3% in reality. For 1982-83 an increase of 11,5% was budgeted for; actually it was 17,5%. For 1983-84 an increase of 10,3% was provided for but it was in fact 16,3%. During the financial year 1984-85 this hon Minister was in office. There was provision for an 11,7% increase in Government expenditure but it rose by 21,8%. In his Budget Speech for the financial year 1985-86 the hon the Minister said there was provision for an increase of 11,5%—they would in no way exceed this. As we calculate the increase at present, Government expenditure will rise by at least 21,5% for this financial year—it may even by more. I obtained this information from the Volkskas Ekonomiese Soeklig of January 1986.

Let us examine capital expenditure. During the period of 1980-84 Government consumption expenditure increased by 142,6% which is equal to 24,8% per annum. This represents total Government expenditure. It is difficult to establish from the Government what capital expenditure was but for the same period, namely 1980-84, the total amount representing capital expenditure declined by 34,8% which means an annual decrease of 10,1%.

Capital expenditure is essential to provide an infrastructure, to create employment opportunities and to further economic growth. The hon the Minister of Finance could not achieve one of these in consequence of the fact that the Government’s current expenditure has soared. Once again it has had to finance wages and other expenditure with the aid of loans or additional taxation.

What has happened as a result of this excessive expenditure? When Government expenditure becomes totally uncontrolled and the hon the Minister applies no financial discipline, there are serious consequences. In 1984 we even approved legislation in terms of which the State President headed a committee which would see that the various departments did not overspend. What did the Priorities Committee do? They wasted their time on various matters but the economy of the country was of no importance to them—they devoted no time to it. As a result of this—when the Government expenditure was too high—the tax increase of a 10% surcharge was priority number one. The Government then had to borrow money further and also create more.

The Government was then faced with a great dilemma. On 8 October—according to The Transvaler—they said they wanted to assist the country with R600 million and mentioned certain matters on which money would be spent and for which would be budgeted. What happened in effect, however? We now and then become aware of an announcement which then supposedly forms part of this R600 million. If one had kept up after six months with the money spent, one would think R1 200 million had already been spent. How much of the R600 million has not yet been spent?

We are concerned. The State has assisted certain sectors for which we are grateful. We are grateful for certain matters that have been attended to, especially in the case of the unemployed who have received assistance.

I also wish to raise another matter here which concerns one of the worst and most devastating plagues of locusts ever to ravage the country. It is rampant now in the Karoo and in the North-Western Cape. The CP regards this matter in so serious a light that our chief whip, the hon member for Kuruman, Mr J H Hoon, requested permission yesterday, in terms of section 21 of the Standing Orders—to hold a special debate with a view to rendering assistance to those suffering in consequence of the plague of locusts.

The CP requests the Government to use all means at their disposal in assisting the farmers to destroy this plague. [Interjections.]

I do not wish to draw comparisons but if there is one thing to be annihilated it is this plague of locusts.

May we overspend on that?

If money were not squandered on other matters, it would be possible. For example, R4½ million has been spent on Tuynhuys and R11 million on the Union Buildings in Pretoria. It would not take R11 million to combat a plague of locusts.

In consequence of this reckless extravagance on the side of the Government, in its inability to govern the country and maintain financial discipline, our White population has been impoverished. The entire population has been impoverished, especially the Whites.

Let us examine what happens to savings. The hon member for Smithfield spoke of saving. Let us see what took place in this period. Personal savings as a percentage of personal income declined sharply. In 1980 it was 11,5%, in 1981 5,6% and in 1982 3,3%. When we were kicked out, it simply dropped. In 1983 it was 3% and in 1984 3,3%. I maintain that at present it is even lower.

As people are unable to save, the Government extracts money from the public in another manner. This is done by means of higher taxes in the form of direct taxation of individuals; it is enormously high. Direct personal taxation of individuals rose over the three years from 1981 to 1983 by 131,2% or 32,5% per annum.

How can a man save in the face of such an enormously high assessment?

The hon the Minister said he needed money so he levied the 10% surcharge. He would have done better to omit this and reduce income tax. It was no solution to take that money out of the hands of the public and redistribute it in another manner. Government policy is the redistribution of income; their policy is aimed at impoverishing the White.

In 1984 alone the income of individuals rose by 17,5%. Direct personal taxation increased by 41,9% in that time. If one adds general sales tax to that, one realises the ordinary man can no longer pay it.

Direct personal taxation expressed as a percentage of his income looked like this: 1981—7,5%; 1982—8,6%; 1983—9,3%; 1984—11,2%. This was his direct taxation expressed as a percentage.

How are companies placed, however? The individual is taxed but companies obtain relief. In 1981 when individual tax was only 7,5%, company tax was 17,3%; in 1982 it was 16,1%; in 1983 it was 15,3% and in 1984 it was 10,9%. [Interjections.] According to income statistics received this year, the individual will pay 30,5% of direct taxation and companies 23,9%. I hope more grace will also be extended here.

In my opinion Whites are in the process of impoverishment and I should like to repeat something said by Mr Harry Oppenheimer in the Leadership Publication of June 1985. He said Black wages had risen by 95% between 1970 up to an including June 1985 whereas White wages had risen by 11% over the same period. In addition Whites pay 92% of the direct personal taxation in this country. We do not begrudge every population group its share but one group should not be destroyed in the process as in so doing everything will come to nothing in time.

What about GST?

I am talking about direct personal taxation. That is what I said and I want no ambiguity on this. [Interjections.]

We contend Whites are being impoverished but the hon the Minister said the country was faring well; the hon member for Smithfield said it was wonderful but let us look at insolvencies in the country. According to Central Statistical Services, there were 979 insolvencies in the three months from September to November 1985 as against 566 for the corresponding months in 1984. This means an increase of 413 or 73% but it gives no indication of the number of people as a company counts as one even if there are 100 partners. If one adds the number of liquidations of companies for the relevant period—there were 605—one arrives at a total of 1 584. This means that more than 17 undertakings or individuals went under and went bankrupt daily. [Interjections.]

Not only the Government discriminates against Whites; the private sector out there does so too. It is the policy at the moment that the free-market mechanism should triumph; in other words the money market determines price. The Government no longer controls any prices; they are not even aware when the price of milk or fuel rises.

I have in front of me a news sheet from the Consolidated Employers Medical Aid Society in which they indicate inter alia members’ monthly contributions. According to Table A, which applies to Asians and Whites—it surprises me that these two groups, at least, are linked now—a contributing members with four dependants and earning a salary of R1 000 per month pays R173,90 per month. A Black member with four dependants and an income of R1 000 per month, however, need pay only R63,20 per month. [Interjections.] Against this a Coloured member with four dependants and earning R1 000 per month pays R112,50 per month.

I also wish to discuss the ever-increasing rate of inflation; it now stands at 18,4% and it will not decline as there are costs not yet indicated in these statistics. If one examines the production price index for December 1985 one sees the producer price of all merchandise intended for use in South Africa increased by 21,3%. The producer price of locally produced merchandise rose by 18,7% and the price of imported merchandise by 30,7%. This gives an average increase of 21,3%.

What has happened to fuel prices? It certainly appears reckless if one thinks that the crude oil price has recently decreased to approximately half of what it was five years ago. Over the same period the petrol price in South Africa has risen by no less than 84,7%. [Interjections.] For example it has risen from 54,4 cents per litre to 100,5 cents per litre—actually it is 102 cents per litre now. This cannot go on.

As regards foreign debts, is our position so wonderful that people have no more faith in South Africa! They do not wish to extend further credit to us—banks refuse to furnish us with any further credit. What has happened? Last Friday the State President delivered his address here in which he said the world was open now; we were to take the Blacks into the main dispensation. In its front-page article of the issue of 1 February the London Financial Times said the following:

I also wish to inform the hon the Minister that the Institutional Investor is a magazine which publishes a quarterly survey of the creditworthiness of the various countries of the world. The issue I have in my hand deals with African countries of which South Africa was always well in the lead but it has sunk to second position—Algeria is above us now. They have the following to say, inter alia:

I say the Government should now start paying great attention to its affairs to bring them into order. It will be of no avail for the State President simply to repudiate the hon the Minister of Foreign Affairs and think that in so doing he will put everything right. This cannot happen.

Mr Chairman, before I direct one or two remarks to the hon member for Sunnyside, I should like to say that the hon member for Yeoville really had me guessing for the first time in seven years today. After his speech I did not know whether he had improved his chances in his bid for the leadership or detracted from them. I should like to see later what the result is. [Interjections.]

As regards the hon member for Sunny-side, I have to say honestly it is one of the best speeches I have heard from him in a long time. [Interjections.] No, I mean this sincerely. I am very honest concerning this and I wish to tell hon members that I understood certain of his arguments very well but I did not follow some others too successfully.

Perhaps I should pause for a moment to put a question to him to which he or other hon members could reply later. I understood the hon member’s argument regarding the plague of locusts; I comprehended it completely. It is a serious matter and I could see he was au fait with that subject. [Interjections.] There are locusts everywhere and, on looking round, I see a few in this House as well.

Concerning the hon member’s argument on the rate of inflation, he told the hon the Minister with acclamation that it would not drop. I accept the hon member is very sincere and very honest and argues from complete conviction. [Interjections.]

Order!

May I ask the hon member for Sunnyside if he is entirely convinced of his argument? Because if he is, I wish to put this question to him: Is he prepared to gamble his political career and his political future on that argument of his? [Interjections.]

I shall reply … [Interjections.]

The hon member should just say “Yes” or “No”.

In addition I also wish to say to the hon member that, if he is completely convinced of it and if he is honest and sincere, he should stand and tell the hon the Minister that it will not decline and, if it has not declined by the end of the year, he will tell the hon the Minister that he is not a good Minister. If it has, in fact, dropped, the hon member should be prepared to walk out. [Interjections.]

I should like to tell the hon member that unfortunately he is right when he says the Whites in this country are being impoverished. The position is worse than he put it, however, as everyone is in the process of impoverishment. Surely the current economic and financial climate in this country has not favoured us over the past 12 to 18 months. Surely the hon the Minister has worked hard and already tasted the fruits of his labours.

If I listen to the hon member for Sunny-side and read the hon the Minister’s speech, I have to say honestly I do not know whether the hon member for Sunnyside was present when the hon the Minister made his speech; I say this with every respect toward him. I find in the hon the Minister’s speech:

He then went on to enumerate several instances in which there had been an improvement. He continued:

Mr Chairman, may I put a question to the hon member?

No, I am not prepared to take a question. I shall continue reading from the hon the Minister’s speech:

Surely this is self-evident and these are matters of import. I wish to congratulate the hon member on a good speech but I think there is a mistake somewhere and therefore I advise him to re-examine the hon the Minister’s speech and take note of the facts mentioned there.

I should like to put a few points to the hon the Minister. The first deals with the fact that a few years ago I enquired into the possibility of revising the Customs Union Agreement with neighbouring and surrounding states. I should like a decision on that. The purpose of my request is that, when one views the structures surrounding one and one sees company tax abolished in certain places whereas in others sales tax is not levied and so on, the question arises whether the situation is not so serious that this should be reviewed.

In addition I wish to ask the hon the Minister whether the time has not arrived for South Africa, the greatest gold producer in the world, to venture into the gold markets of New York and other places. I know some people are convinced that this futures market is only a gamble. In spite of this one asks oneself whether it is not incumbent upon us to participate in that situation.

Hear, hear!

I am gratified the hon member thinks I am making a good speech.

I wish to put it like this: Its extent is of such a nature that its importance can never be overshadowed by the false notes sounded about it. If my facts are right, it comes down to this that the market in New York can trade the annual gold production of South Africa each week. If that is the truth, I say it is time to give this our serious consideration.

I have heard the criticism expressed that South Africa, to quote:

†Secondly the criticism was used against us that our passive attitude in waiting for better prices was only speculation. Thirdly it is said that the only attempts which we have so far made on the question of manipulation have been public declarations.

*I reject this criticism. I do not vouch for their truth but I am putting forward the same arguments used towards me. I should like to see the hon the Minister shed a little light on this in the sophisticated situation in which he and his department deal with these matters. I know he should not do it fully but he could give a measure of reassurance so that satisfaction can be given outside that we are, in fact, addressing this matter and are dealing with the situation thoroughly.

The last aspect on which I wish to address the hon the Minister deals with the market in Kruger rands. In consequence of the collapse in the market over the past number of years, one of the factors arising from this means approximately 100 people at the Mint have become redundant. If that is one of the facets and if it reflects the gravity of the situation, I wish to quote the stock phrase, “If one cannot beat them, join them.”

By this I mean that, fortunately for our gold market, in spite of boycotts of our gold coins by Americans and other countries, at least we have the opening that the Americans are going to strike their own gold coins now. If that is the case, we may as well forget what we are losing on the one hand and concentrate on compensating for the loss by what we could gain. We should stimulate the development of that market as far as possible because, when all is said and done, it is true that more than 70% of the gold to be used in those coins will come from South Africa and, as far as we are concerned, it is a plus factor for our gold industry.

In my opinion the one problem which is coincident with the current situation is the monopoly we granted traders who market the Kruger rand.

That is correct, and it is a shame.

If that hon member and I agree further, I shall terminate my speech! [Interjections.]

I have never liked concessions which cause monopolies and that type of privilege to the exclusion of the rest of the market. I have been in contact with the hon the Minister on this: Firstly the objection has been raised that the levy of 4% is too high. The second objection is that in places where the present merchants are not trading at the moment, they have placed a restraint of trade on other people to do so. If that is so—I do not accept all the arguments used per se—I wish to say I believe it is perhaps possible that we should also investigate whether in this connection the monopoly may be lifted and the market opened a little—after all, we advocate privatisation.

Mr Chairman, at the outset I should like to comment on the remarks made by the hon member for Yeoville and congratulate him on his statement to the effect that he had a mandate to be in Parliament. In fact, I should rather like to see him here now. There is no doubt in my mind that it is very important that this should have been said by a member of the Official Opposition because it is vitally important that the status of Parliament should be maintained unequivocally. It is to be hoped, therefore, that that is the general opinion of the majority of the hon members in that party.

Another point that was raised by the hon member for Yeoville was the hon the Minister’s not wanting to become involved in matters relating to apartheid. Of course, this is very understandable on the part of the hon the Minister although I think he must know just as well as anybody else that there is absolutely nothing in this country that does not have apartheid brought into it in one way or another. In our opinion it is very, very sad indeed that a situation should have developed as developed on Friday when the hon the Minister of Foreign Affairs was so publicly humiliated and castigated for having mooted what was obviously a possibility if the statements made by the State President were in fact to be taken to their logical conclusion. It distresses me intensely to feel—as has already been said by the hon member for Yeoville—that there was nobody who was prepared to say that the hon the Minister’s statement was true and that it could happen if Government policy were taken to its logical conclusion. That is all I wish to say on that issue.

I hope the hon member for Vasco will pardon me if I do not follow his train of thought. Being a member of the governing party he must obviously find this budget a very good one thus wanting to say only nice things about it. Again, that is quite understandable. However, the hon member did make one point that I shall be taking up with him a little later in regard to the seven points for eliminating excess expenditure as part of Government policy. I shall deal with this matter a little later on.

As a part appropriation has to cover a period of three months in a financial year, it is reasonable to assume as a rough rule of thumb that it represents approximately 25% of what the main Budget to be presented later in the year is going to involve. In fact, this has indeed been the case over the past few years. So that would indicate to us that the main Budget is going to involve an amount of some R40 billion, which is quite a heavy burden that we are going to have to bear.

As indicated by the hon the Minister the 40% increase in the part appropriation is as a result of technical changes in the system of financing. It is not very clear to me how this comes about, and I am afraid that the hon the Minister’s Second Reading speech did not make it quite clear how this technical change affected those figures. It is very clear to me though that in the meantime the public are going to have to pay this extra percentage and it does not seem to indicate any serious reduction in Government spending. As we all know, there were major and dangerous developments in our economic situation which manifested themselves shortly after Parliament rose in June last year. So serious were those developments, said the hon the Minister, that had Parliament been in session he would have revised his Budget. He stated, however—and I quote him—that insufficient options were available to him to respond to new sets of circumstances that had developed during the parliamentary recess. I believe, Sir, this is a shocking state of affairs. This country was almost brought to its knees by perfidious banks refusing against all precedent to roll over short-term loans. The rand fell so low that the bottom almost dropped out of its value. It dropped to the extent that it was sarcastically referred to as Mickey-Mouse money, and a total economic collapse could have occurred, yet Parliament was virtually ignored. Not even the Standing Committee on Finance was brought into the picture.

Sir, I consider this to be quite a shocking indictment of the system of government we have, and also of the executive. I firmly believe that in the future we should never again accept such an excuse. I am prepared to accept that what the hon the Minister has said is perfectly true—that he had limited options. He must, however, in the course of this year see to it that there are further options made available to him. Can you imagine, Sir, what would be the position had a commercial undertaking landed itself in such a position? I believe the directors would have been accused of criminal negligence at the very least, and would have been called upon to resign. I am not calling upon the hon the Minister to resign because I believe he is suffering in his capacity as a result of the sins of his predecessors in office who sanctioned so much in the way of short-term loans. I believe anybody who runs any sort of a business—and running a country is tantamount to running a very, very large business—would have known it was risky to have so much of our debt in short-term loans.

I believe he is also suffering as a result of the profligacy of some of his more spendthrift colleagues in the executive, and is being further held to ransom by various world banks because of the race policies of this Government. I may, however, add in respect of the latter portion that he is indeed part of the Government and must accordingly bear a certain amount of the blame for that himself—unfortunate, as it may be. Fortunately the economic shock has at least registered upon this Government to the extent that they realise that even our inherently strong economy cannot be abused indefinitely and that world opinion must to some extent be appeased.

Fortunately our position in the international scene has improved consequent upon an improved balance of payments situation, an increase in the price of gold and—last but perhaps most important of all—assurances by the State President in connection with the demise of apartheid. Whilst our economic position may have improved and whilst we may have moved away from the critical stage, we are still very much in danger. Further reform retractions, as were made last week by the State President and by the hon the Minister of National Education, can cause a relapse, and that danger should not be forgotten.

Furthermore, the resignation of the Leader of the Official Opposition, on the grounds of frustration with our parliamentary system, did not help the matter very much either. The hon the Minister has made a valiant attempt to give the Government credit for having brought the country around.

This is where I come to the points referred to by the hon member for Vasco; they were made by the hon the Minister in his address. He referred to the 7 points where overspending had been eliminated. It is to a large extent true that overspending has been eliminated but why has it been eliminated? It has been eliminated because the people are so broke they cannot afford to buy anything! That is one of the reasons why overspending has been eliminated. Costs are so high that they cannot afford to buy.

“Growth in the money supply was well under control”, the hon member for Vasco said. Well, if people were not spending money, there was no need to have any more issued. Perhaps that is the reason for the money supply being under control.

“Interest rates have declined markedly.” In terms of internal borrowing I am afraid that for some time there has been a tendency towards a decline in interest rates but I do not really believe that the Government can claim much credit for that. Banks will get the maximum that they possibly can get. They in fact had to reduce the interest rate so as to get people to borrow money.

Another statement was that the increase in the inflation rate had been contained. That is a very dicey sort of statement to make because the other day even the Governor of the Reserve Bank made it clear that inflation had not been contained and that it was in fact likely to rise for the next two or three months or more. [Interjections.] I do not think the hon the Minister would be attempting to create the wrong impression but, as I understand it, the word “contain” in this sort of context would normally mean that it had been held and, in fact, was on its way down. However, the inflation rate has not been contained—it is still on its way up. It will be contained when it reaches its peak.

“Government spending was within set limits”, the hon member for Vasco also said. In respect of Government spending being within set limits one must presume that it will be within the Budget. I assume that that is the set limit. Well, I cannot see any great credit due for that, because is it not the very object of creating a budget to stay within a set limit? However, I rather suspect that somewhere along the line we are going to have to find some more money. It may become clear when we deal with the additional appropriation.

“The current account of the balance of payments had turned around drastically.” Now, of course the balance of payments has turned around drastically. Again, this cannot be ascribed to any action on the part of the Government at all. This actually happened because the bottom dropped out of the rand and, first of all, foreign imports were becoming too expensive to buy and, secondly, South African exports were so cheap on the external market that we could not help but sell our products. As I read the situation, this is basically the reason for this turn around. With due respect, and with all the goodwill in the world, I can give the Government very little credit for this particular change in the situation.

Therefore, I believe it was really quite unreasonable that these points were raised by the hon member for Vasco should be put forward as proof of the Government having been capable of improving the economic situation.

One can go on criticising the situation as far as the Government’s economic affairs are concerned and the handling thereof, but I do not think it will serve any useful purpose. However, there is one further point I should like to make in this regard and I think one of the hon members did raise it. That is in respect of the price of petrol. I know this is not directly the function of the hon the Minister of Finance, but I believe it is part of the overall economic situation in the country. Surely, in view of the fact that the bottom has again fallen out of the price of oil—it has gone down to the lowest price for heaven alone knows how many years—that the rand is rising in value—it is apparently a lot better than it was when we found it necessary to make this substantial increase in the price of petrol to the consumers recently—it is now time to give very serious consideration to a substantial reduction in the price of petrol to the motorist and fuel oil generally, because this is one of the major issues causing inflation in the commercial and industrial world. Not only is the high fuel price a burden to the joy-riding motorist but right through the business structure with the transport required for commerce and industry, the Railways and all the rest of it, this is really hitting the public. I believe as the Government is right on the ball when it comes to putting the price up when it is necessary to have an increase, they should be just as much on the ball in putting the price down when things becomes a little better.

I believe that the private sector is suffering. Unemployment is unacceptably high. Inflation—this inflation which is “contained”—is eroding capital savings where such capital savings exist. What is really worrying, extremely worrying, is the number of businesses that are folding. For a country such as ours, this is a ridiculous state of affairs. We have abundant natural resources in South Africa; possibly one of the very few things that we do suffer a shortfall in is oil. However, apart from that we have abundant natural resources, a substantial professional and technical population and a huge labour force.

Furthermore the need for housing and the other necessities and requirements of our population have nowhere near been met. In other words, there is a great need for what can be produced inside the country without expending a great deal of foreign currency and yet, in spite of all that, our building trade is absolutely on it’s knees. It is idle, and our factories are nowhere near their optimum production capacity.

This is a ridiculous state of affairs. We have all that is necessary within the country to generate a considerable amount of prosperity. I know that we require certain overseas capital for development in certain areas, but a great deal can be done by the intelligent application of normal basic business principles.

What is the cause of this stupid situation? I believe it is because we have to cope with an unrealistic ideology and that we have had to cope with it over so many years; that the needs and desires of the non-White population are not the same as those of the White population; and that the tax structure kills initiative and makes it impossible for businessmen to save for a rainy day or even to expand their businesses without heavy borrowing. This has been the prevailing situation for a number of years.

We in these benches, Mr Speaker, obviously will not be supporting this Bill and at the same time we shall be calling upon the hon the Minister and the Government to stop profligacy such as the R2,5 million spent on houses for Ministers in Durban. Yes, there are five Ministers’ houses being built in Durban and I want to quote from the tender documents of the Master Builders and Allied Trades Association where these have been put forward. Five houses, maybe six—there is some doubt about this—are involved. However, in either case it is ridiculous because if five are involved the cost is R457 000 odd each, or if it is six, the cost is R400 000 odd each. This is for houses for Indian Ministers.

It is for palaces.

Yes, there is no doubt that they are palaces. I am not commenting on this fact because they happen to be for Indian Ministers; I would have the same comment to make about any Minister.

I would go so far as to say that it would perhaps be a good thing—bearing in mind that Natal is a small province—to give a little thought to how the members of the Natal Executive have existed over the many years since Union. To this very day the Natal members of the Executive Committee do not have houses provided for them by the State. [Interjections.]

It is not necessary for the Indian Ministers to obtain these houses. All of the five hon Ministers in the House of Delegates live in or close to Durban, therefore they already have homes. I therefore have to ask what sort of nonsense this is.

We believe that profligacy of this nature must be contained, that the bloated State departments must be reduced and that the public must get some value for the huge sums being extracted from their pockets.

We will not support the Bill but we will support the amendment moved by the hon member for Yeoville. We cannot support the amendment moved by the hon member for Sunnyside because of paragraph 2.

Mr Chairman, we have listened to the hon member for Yeoville, who spoke about the high inflation rate and our overseas debt. We heard from the hon member for Sunnyside that we had become a great deal poorer. We also heard that Government expenditure had increased out of all proportion.

The hon member for Sunnyside is an accountant. I now want to ask him the following question: When the rand/dollar exchange rate drops from 130 to 80, to 50 and to 37, what is the effect on the economy, the inflation rate and the petrol price. Does the hon member think that the petrol price should remain unchanged? [Interjections.] The price of the Mercedes Benz will go up.

It must be added that Government expenditure is partly too on imported products. We need only take as an example the military purchases of the Government. With overseas loans on which the Government has to repay interest, in dollars, the payments rise if the value of the rand drops.

Let us consider what caused the decline of the rand from 130 American cents to 80, 50 and 37 American cents. The hon member for Yeoville mentioned this. Let us consider the most recent decline, when Mr Butcher, the general manager of Chase Manhattan Bank, announced one morning that they were no longer going to extend any credit to us.

Why not?

We are coming to that. [Interjections.] The effect was that the European banks, almost against their will, had to suspend or drastically reduce their loans as well.

It is interesting to see that certain American banks went even further. Here in South Africa they called in their loans to multinational companies. This ran into millions of dollars. What confidence can any multinational company ever have in the American banks again?

I want to go further and refer to what the American banks did in regard to the debt of Brazil and African States? Most of these American banks lent far too much money to the Third World countries.

If one considers the Great Depression of 1932, one finds that it followed after the American banks got out of South America and an Austrian bank went insolvent as a result. One should ask oneself when the American government is going to bring about stability in their banking sector.

We are grateful to companies such as General Motors, IBM and pharmaceutical companies which, in spite of tremendous opposition in America, have stated that they are going to remain in South Africa. We are grateful to those organisations.

What lesson can we learn from the episode of last August? Perhaps this is also a message to my hon friends in the CP. We are not totally isolated from the rest of the world. We are able to carry on with out them, if we are prepared to become poorer, but we cannot increase our growth rate and improve our standard of living if we have no links with the international world.

I found it interesting to listen to an old hostel mate of mine in Wilgenhof, the hon member for Sasolburg. In my days, of course, he was still a liberal.

You were a Sap. [Interjections.]

He spoke about the problems he had with us. During the election campaign he spoke in the town of Kragbron about the mixed couple ostensibly living there in a caravan. He described it as a sin and an evil, and goodness knows what else. He stirred up the unfortunate inhabitants of that town completely. A large percentage of those people work at Escom. Consequently I want to ask the hon member whether, when he returns to that town, he is going to tell them that Escom, owing to its problem in respect of overseas loans, is going to curtail its capital works. The problems Escom is experiencing, is going to influence the standard of living of the inhabitants of Kragbron in future.

That has been said to them.

At that stage they had not yet felt the effect of Mr Butcher’s announcement.

We can also refer to the PFP. I find it interesting that the PFP is denying here that they were ever in favour of Black majority rule, but their slip is always showing when they hold report-back meetings. At one such meeting Mrs Irene Mennel said: “We must bite the bullet and accept majority government”. If “majority government” is such a good thing, why is Zimbabwe not receiving the money all of us expected it would receive? Zimbabwe has a few major supporters in the PFP. A short while ago a report appeared which pointed out that the American banks no longer wanted to lend money to African countries. Now my question is this: If on the one hand we have blatant racism—to put it bluntly—and on the other hand a sell-out, where are we going to find capital?

The problem we have here, which was caused by Mr Butcher, is serious. It is a problem which no country expects because, in all honesty, it is partially caused by irresponsibility on the part of certain banks. That, however, is not the only reason why the exchange rate declined.

After the Bretton Woods system of fixed exchange rates was gradually demolished, we had a system of floating exchange rates in the Western World. A seminar was recently arranged by Congress in Washington with Mr Kemp, one of the future presidential candidates, as organiser. He said that the floating exchange rate was causing chaos in the Western World. Admittedly we still do not know what the solution is. However, it is the developing countries in particular that are being hard hit by this, because they do not have buffer reserves to counteract this upward and downward fluctuation of rates. I want to ask the hon the Minister of Finance, since a dialogue is in progress, whether we could also make a contribution on behalf of developing countries. They must be protected against this fluctuation of rates. Basically the international monetary system is not really in a state of chaos, but it is having major problems.

A further point is the long-term economic problems our country is experiencing. Very often these are ignored. One such problem is that the prices of the raw materials we export have risen to a far lesser extent than the prices of the finished products we import. This is not the case only in our country, but also in most other countries exporting primary products. [Interjections.] I can confirm this with figures: In 1957 the exchange rate index of the countries exporting primary products was 100, while it was only 65 in 1985. The exchange rate therefore declined from 100 to 65. This was the case in regard to our country and in regard to Australia.

Order! The hon members must please lower their voices.

I want to tell the hon member for Sunnyside that no country can prevent this kind of decline. Let us see what effect it had on our farmers. The farmers’ exchange rate, or rather the ratio between what they pay for their equipment and what they receive for their finished products, dropped from 100 in 1957 to 84,7 in 1984. That is how it deteriorated. This deterioration is part of a world tendency which we cannot stop.

We can take this matter a step further. For example we are a major mineral exporting country. For four out of the past five years world trade in minerals has weakened. Only in one year was there a moderate increase.

Another point which I could state is that the developed countries have erected a “protective wall” against imports from undeveloped countries. At present developed countries are applying non-tariff restrictions on 20% of their imports from undeveloped countries. Let us consider only the case of our country and the USA. In our exports to the USA we are limited in respect of products such as steel, clothing, meat, sugar, textiles and peanuts. That is the problem we are experiencing, yet the industrialised countries boast of their free market or free-trading philosophies.

By way of conclusion I want to mention that Australia surely does not have an apartheid government, or at least, to judge from what we have heard, they are not applying an apartheid policy. In any event, what happened in Australia? There was a decline in the value of the Australian dollar of American $1,25 in 1982 to American $0,63, and the value is now fluctuating around American $0,70. They have the same problem we do. Their foreign debt has increased as a result of the decrease in the price of the Australian dollar from 17% of their Gross National Product to 33% of their Gross National Product.

We have our problems in this country, but I do not think all of them can be attributed to internal factors. Seen in the light of the past four years and so seen in the light of international developments, we have, as far as people’s standards of living are concerned, not really deteriorated. I believe that our economy will, in the months to come, recover and grow again.

Mr Chairman, the hon member for Waterkloof referred in the early part of his speech to factors relating to the drop in the exchange rate of the rand. He pointed out that it was a very serious matter for this country. I am sure we all agree with that. I should like to point out to him, however, that the drop in the exchange rate was not merely an act of God. He pointed out the problems arising out of the actions of Chase Manhattan Bank, and in that respect he is quite correct. Their actions, however, merely represented the last straw because our position has been deteriorating over many years.

The fall in the average value of the rand, over nearly a decade, from the equivalent of US $1,44 to a low point of US $0,35 is the result of many factors. Two of the most important of these factors were the rampant inflation that the Government allowed to persist—we have experienced double-digit inflation in South Africa for more than a decade—and the lack of confidence in the NP’s ability to meet the challenges of the times in South Africa. These two factors resulted in a steady depreciation and then a rapid fall in the value of the rand towards the end:

Frequent mention has been made by Government spokesmen of the enormous financial demands being made on our resources to meet the development needs of South Africa. I am sure the hon the Minister of Finance is well aware of this and I think he has referred to it from time to time.

Not the least of these needs is Black education. The State President, in this regard, committed the Government in his opening address to “the just division of resources between the different communities”. He went on to confirm the goal of parity in education and to say that “it will place great pressure on the Treasury in the future”. So far so good and it was quite accurate too.

In the advertisement that has appeared in the Sunday and daily Press for which all taxpayers are obliged to pay whether they want to or not, the Government commits itself “to equal opportunity for all” and “equal treatment”. We are also promised in respect of education that “not millions, but billions are being and will be poured into a programme that will mean equal education for all”. That, we are told, is reality.

After the State President’s speech on Friday when he told everybody to read exactly what he had said, I re-read that advertisement closely. I was a little perturbed to notice that where they say “Not millions, but billions are being … poured into a programme” they do not actually say millions of rand or mention money. So I hope it is not merely words. That, the Government claims, is the reality.

However, what is the reality? My contention is that Black education is not being given the priority that it deserves. Great play is made by the Government of the big increases in expenditure on Black education. What is happening, however, compared with developments in White education?

We should all know by now that nearly six times as much is spent per capita on each White child compared with each Black child’s education. This is something that the Government likes these days to write off as a sin of the past which they are going to correct.

Let us rather look then at some recent developments that have taken place since the hon the Minister became the Minister of Finance. In the current financial year an extra R938 million was allocated for all education in the various budgets. Of that sum, 56% is being spent on White education and only 29% on Black education. So, of the extra amount of nearly R1 billion being spent in this current financial year on education, 56% is being spent on Whites and only 29% on Blacks. Does that sound like equal treatment? No, it does not and it is not, but that is the reality.

The actual increases themselves, in terms of increases in White education and increases in Black education, amount to 24,6% for Whites and only 24,4%, that is slightly less, for Blacks. That is surely not striving for the goal of parity. I would like to ask the hon the Minister of Finance, if he is increasing the amount spent on White education, even percentage-wise, by more than Black education, could that possibly be called striving towards parity? I see that the hon the Minister does not answer and he should be able to answer because he himself was Minister of this department not very long ago. It surely is a department with which he is well acquainted and is not just one of many departments in his terms. That is one of the other realities. The goal is supposedly striving for parity, but when one looks at the figures it is not happening. It is also not what we read in the NP advertisements.

I would like to ask the hon the Minister of Finance on whose side he is on. Does he believe in separate schools and separate teacher-training colleges or not? Does he go along with the line that separate schools and separate training colleges are definitely the only thing we must have in future or does he believe we should be more flexible? I would like to ask him. He nods his head so he will answer me. I thank him. Does he, in his capacity as Minister of Finance, believe that teacher training colleges and schools—both extremely valuable and expensive assets—should be left empty or half-empty because they have the wrong racial classification? I hope he knows that that is what is happening in many places right through South Africa. There are empty schools and half-empty teacher training colleges, merely because they have the wrong racial classification.

The Government should remove its apartheid blinkers and stop wasting valuable time and money, something that South Africa can ill afford. For example, the hon the Deputy Minister of Education and Development Aid talks of building ten new Black teacher-training colleges in the urban areas. That sounds very commendable and sensible until one realises that there are numerous empty and half empty White teacher training colleges all over South Africa which could be used at little or no capital cost. [Interjections.] Mr Chairman, I have educated my caucus well. [Interjections.]

Cape Town, Port Elizabeth, Johannesburg and Graaff-Reinet are just four of the places where teacher training facilities are available but are not being used or fully utilised because they are for Whites only, and there is no shortage of White teachers in most subjects at present. I want to know from the hon Minister of Finance whether that makes sense to him.

I will check your facts first. [Interjections.]

Mr Chairman, may I then ask the hon Minister whether, if my facts are correct, as I believe they are—although I accept that anyone can make mistakes—it makes sense if that position prevails. [Interjections.]

The hon the Minister of Finance made reference in his speech to the important interrelationship between sound economic growth and political and social stability. The hon the Deputy Minister of Education and Development Aid this week wrote in the Sunday Press: “The acceptance of the Government’s good intentions is essential for the restoration of order and stability in education.” I agree with him. I also agree with the comment made in that article that money is by no means all that counts in education; on the contrary, in fact. However, when it comes to money, the Government’s rhetoric is light-years away from its deeds. That is the reality.

Separate education will always be unequal and Black education will remain inferior for as long as there is no freedom of choice. One may have a well-meaning Deputy Minister doing his best, but the plain fact is that the Government as a whole continues to place the demands of its racial ideology before the educational needs of Black children. That was made quite clear on Friday by the State President himself. I might add that that applies to the educational needs of all children—Black, so-called Coloured, Asian and White children. That is the reality. Until that attitude changes, no Nationalist has the right to claim that everything is being done to give Black children the best possible educational opportunities. No Minister of Finance can claim that he is managing the financial resources of this country to best effect and in everyone’s best interests. That is the reality.

I have pleasure in supporting the amendment of the hon member for Yeoville.

Mr Chairman, I want to refer briefly to what the hon member for Cape Town Gardens had to say about Black education. We admit that there is a backlog in Black education. It is an unfortunate state of affairs that such a backlog exists between Black education and that of other groups.

The Blacks must contribute something!

You keep quiet! [Interjections.]

Order! The hon member for Langlaagte must contain himself.

I am merely asking that the Blacks should also make a contribution.

Order! The hon member for Gezina may proceed.

The willingness of the hon members on this side of the House to establish a readier degree of parity must not be overlooked, but the reality of the demands on the State coffers must also be taken into account in such a search for parity. It is a very pleasant task to stand here as an Opposition and to insist on parity in education, yet it is this side of the House that has to accept the responsibility of attaining that parity. It is this side of the House that has to accept the responsibility of having the necessary funds available. It is not all that easy to acquire those funds in order to eliminate this backlog.

I want to repeat that the willingness and the good intentions of this side of the House as far as Black education in South Africa is concerned should not be called in question.

The 44% increase in the total amount of the Part Appropriation is caused by the transfers to the various own affairs administrations that have to be made. I do not want to refer to that now. On a later occasion it will be appropriate to discuss this matter in the Part Appropriation for own affairs.

When adjusted, 10% more than last year is being requested. This is a reasonable adjustment, but it should not be seen as a means of ascertaining the pattern of the Main Budget. That would be unfair.

However, there are specific economic and financial tendencies which can be taken into account and can be used as a basis on which to work. The first inference which may certainly be drawn is that the economy is readying itself for the next upswing phase. The downswing phase has, I think, already been completed. Furthermore it is also true that the downward movement was relatively steep. It cut deep. The economy must extricate itself from this position.

It is definitely not going to be a simple and easy exercise to climb the steep walls out of this deep depression. The lowest turning point of the cycle was too deep and too sharp for that. Nevertheless the indications of a new life in our economy are unmistakeably present.

It would seem as though the hon the Minister, in co-operation with the other Government departments, has to a large extent succeeded in limiting Government spending.

Furthermore, interest rates have dropped substantially. Consumer spending has been restrained. It was 7½% lower during the first three quarters of last year, compared with the corresponding periods of the previous year. The balance of payments and the current account have improved dramatically.

If one compares it with last year, the picture seen in its entirety this year is completely different. Consequently there is sufficient reason to display a measure of careful optimism. We must also tell one another straight away that the awakening of this declining economy will not necessarily take place smoothly. The recovery will not take place without pain and certain specific adjustments.

An awakening economy is going to make specific demands. Firstly there is going to be the demand on the money supply. There is going to be a demand on the available manpower in a strengthening economy. There is going to be a demand on the tendency to save among individuals. There is also going to be a demand on the spending discipline of the consumer.

Let me refer briefly to the demand on the manpower position. Firstly I want to thank the Government for its sound judgement and far-sightedness in having made it possible for persons to be trained and retrained during this low point phase of the economy. It is no use training persons only during a growth period when they should in fact have entered the market already. It is therefore necessary to apply those energies and resources during a declining economic position in order to train persons. Skilled manpower is not necessary only when the economy is prospering. People must be involved in training programmes when things are not going well. It is no use hiring when things are going well and firing when things are going badly with the economy. The private sector will have to sweep before its own door here and ask itself to what extent it was guilty of firing when things were not going all that well, for in some cases wages and salaries were pruned in a reckless way. This was a method which the private sector used rather frequently to effect a so-called saving on expenditure. In the same way the hiring method is going to be a solution for them to acquire staff during the growth period which lies ahead.

Unlike the private sector the State was not able to cut back by dismissing people. The State had to retain its officials in spite of the difficult economic situation, and there were few opportunities to cut back on salary expenses. The State was only able to freeze posts in which vacancies arose, and cut vacation bonuses by a third. The measures adopted by the State afforded public servants great security. This security compensated for the sacrifices of the past two years, because for two years public servants have not received a general salary increase. I shall have a few more words to say about this at a later opportunity. It is sufficient to say that officials were prepared to adjust financially to the difficult circumstances we have been experiencing in recent times. They did this with a large measure of responsibility and patriotism.

We will soon be entering the so-called hiring period, the firing period is probably over and the private sector is going to begin bidding for new labour again. Offers are going to be made ever more enticing in order to attract people to the private sector and the temptation for the established worker to move to greener pastures will once again become very strong. Established security and established pension benefits are going to be thrown overboard by certain people in order to accept better offers. I want to issue a warning today against these temptations which are going to arise if our economy improves in future.

I also referred just now to consumer spending that has to a large extent been curbed. The consumer has pruned his spending pattern to such an extent that he has ceased to purchase unnecessary luxuries. Only those items which were needed the most could be purchased, and this becomes particularly apparent if one makes an analysis of consumer spending over the Christmas season.

In the meantime the exchange rate gremlin has reared its ugly head. If it were not such a serious matter, it would be almost laughable to see how the weak rand is blamed for the increase in prices of consumer goods. In certain cases linking the weak rand to price increases was probably justified, but how an increase in the price of South African manufactured tins of canned fruit can be attributed to this cause, is beyond comprehension.

The question which is at present being asked—and certainly with justification—is whether the weakening position of the rand is not being used as a general excuse to increase prices. Was it not seized upon as a pretext for subsequent price increases? Now, with the firming of the rand and the improvement in the economy, this pretext is disappearing.

Today I want to ask commerce and industry whether they would be in favour of reducing the prices of goods if the position of the rand continues to firm. What they so willingly laid at the door of the weak rand, in order to increase prices, has now disappeared. Can the consumer, who has become punch-drunk from the continuous economic blows in recent months, rely upon those so-called justified price increases now being reversed? If they were honest during their initial consideration of this factor in order to increase prices, I trust that they will display that same honesty when the effects of the improved exchange rate have worked their way through the economy.

Mr Chairman, at this stage we do not know whether the hon the Minister of Foreign Affairs has gone abroad to … [Interjections.]

Order! If the respective hon Whips have something to say to one another, they must refrain from doing so by shouting at one another across the floor of this House. The hon member for Sasolburg may proceed.

As I have said, Mr Chairman, we do not know whether the hon the Minister of Foreign Affairs is at present overseas to lend a hand in the attempts to have South Africa’s enormous short-term debt deferred. We do not know that. Nor do we know whether he is at present overseas to consult with his kindred spirits and his cronies in the outside world about the tremendous political dilemma in which he finds himself.

What we do know is that the events in this House last Friday indicate a very serious and growing crisis in the entire movement to the left among the Whites in South Africa.

Dr Van Zyl Slabbert for example, who until Friday was the leader of the PFP, granted an interview to the Sydney Morning Herald only six days after the by-elections in October. I do not think that hon members of the PFP are aware of this, but when they put the following question to him: “Do you believe that peaceful political change is possible in South Africa?” he replied as follows:

Then he went further, and in reply to the question “How would you assess the constitutional reforms of 1983?”, he said:

Over the years we have been led to believe that it was apartheid, or racial separation, which caused these things. Then this arch-prophet of the left-wing, the blue-eyed boy of the left-wing, came along and said that it was this tricameral constitution of ours that was causing the problems. [Interjections.] Since that time he has found himself in a spiritual crisis. The headline to that article in the Sydney Morning Herald of 6 November 1985 read: “Slabbert gloomy on peaceful change.” Now the gloom is not confined to Slabbert only; it is lying like a pall over that entire political party to which he belonged. [Interjections.]

What was the reason for that? The reasons which Dr Slabbert presented for his sudden resignation were not really accepted by anyone. The reason for it—and this is why he spoke as he did to the Sydney Morning Herald, six days after the by-elections—is the massacre of the PFP at the polls.

In Springs, for example, they polled a total of 3 209 votes in 1981, compared with only 1 716 votes in the October by-election—a massacre of almost 50%. That is what lies at the root of the lack of confidence, the collapse, the gloom which we find in Van Zyl Slabbert, and which has now infected his entire political party. [Interjections.] The left-wing movement among the Whites in South Africa is not, however, being led by the Progs alone. Sitting inside the National Party is a group of people who are as assiduously moving to the left. The situation in the National Party, as a result of this swing to the right among the voters, is even more serious and could assume greater proportions than in the PFP. For years the hon the Minister of Foreign Affairs was the driving force to the left in the ranks of Afrikanerdom. He is the person who has for years been held up as the left-wing hero. In 1978 he was even candidate for the Prime Ministership. He is the person who has, day in and day out, been held up to Afrikanerdom by the media as the great pioneer for the entire movement to the left—the great leader of that movement. [Interjections.]

Of course he had reason to feel reassured. By the end of August last year the hon member for Randburg had already said that there could one day be a Black State President in South Africa. For five months no one from the ranks of the governing party repudiated him. The Sunday Star even quoted him. In the Sunday Star he said, and I am quoting from that newspaper:

That is what the hon member for Randburg said: “All the announcements”! The hon member therefore said quite correctly that the whole stream, the whole tendency, the whole movement in the National Party behind the hon the Minister of Foreign Affairs was heading for Black participation and the eventually possibility of a Black State President. And for five months—in spite of our challenges at the time of the by-election in Sasolburg—no one repudiated him. Of course the reason for this is clear. The State President did not think it was necessary to do so, until he too—like Dr Van Zyl Slabbert—was struck by the results in the by-elections. In the by-elections the flow of voters away from the Government to the right was very close to 20%. Do you know, Mr Chairman, that in all the years prior to 1948 the flow of votes away from the old United Party was never greater than 10%. The Government is therefore continuing to lose support at a doubled rate now.

The indications in the recent by-elections are that the Government is losing votes at double the rate at which the old United Party had to forfeit votes prior to 1948.

Therefore, Sir, I say—and I do not have much time left—that the left-wing movement among the Whites of South Africa is grinding to a halt. What is more, nothing can give it renewed momentum. They can devise all kinds of plans in the outside world; they can attract Buthelezi to them—nothing on earth, however, will again enable them to gain renewed momentum to the left. The momentum, Sir, which the Americans describe as grass-roots momentum, is relentlessly to the right. That is why the future in the political life of South Africa belongs to the right-wing, and the days of the left-wing are numbered. [Interjections.]

†Gloom has settled in their midst and gloom will reign in their ranks for a long, long time to come. [Interjections.]

Mr Chairman, permit me, in the first place, to express my sincere thanks and appreciation to you and to hon members for the very friendly reception which I received in this House. Permit me also on this occasion to pay tribute to my immediate predecessor, the late Dr Nak van der Merwe—firstly on behalf of myself and secondly on behalf of my constituency—for the valuable and unselfish service which he rendered to that constituency.

Dr Nak van der Merwe will always be remembered in this House and in his constituency, and in particular in the Free State, as a very exceptional person.

Hear, hear!

It is a very great honour and privilege for me to be able to succeed him in this House as representative of the Bethlehem constituency.

As all other constituencies probably are, Bethlehem is also an important constituency, which has been represented by the National Party in this House since 1914. Bethlehem is not only a go-ahead agricultural district; it is also the main town of the North Eastern Free State, from which numerous regional services are rendered. Furthermore, Bethlehem is not only blessed with wonderful people, and agricultural land with a high potential; it is also one of those parts of our country which is endowed with beautiful scenery. There are inter alia the Golden Gate Highlands Park, the Maluti Mountains, the Rooiberg and Drakensberg mountain ranges, and probably one of the most beautiful dams in South Africa, the Sterkfontein Dam. That is why I consider it to be a blessed privilege to be able to represent such a constituency here—particularly in the times in which we are living, times in which major challenges are being made on each one of us. These are times in which problems ought not to be problems to us, but should rather be seen as opportunities and challenges, so that together we can work out a prosperous future for all who must live with us in this beautiful country.

Sir, allow me also on this occasion, here, from the backbenches, to convey my sincere congratulations and thanks to the State President, after he delivered what was one of the most important Opening Addresses ever heard in this Parliament. Consequently I wish on this occasion to express my full loyalty to and support for the State President—in particular in regard to his reform initiatives and his purposeful leadership.

I should like to turn to the subject of taxation. Taxation continues to remain the most important source of revenue for the State—in whatever form it is levied. It is a matter which probably affects every person in this country. As is the case in the constitutional sphere, constant reforms and adaptations must be effected as far as the levying of taxation is concerned, so that all sources of taxation will be utilised to best effect without discrimination against any organisations or against any individuals. We must adapt continually in order to meet the demands of the times.

For many years motor vehicle tax has been collected by the provinces in South Africa in the same way. If there is one form of tax collection in which, in my opinion, there is great room for change, reform and improvement, it is motor vehicle insurance, firstly because it is discriminatory, and secondly no longer meets the demands of the times and the circumstances in which we are living at all. I maintain that it is discriminatory because those, for example, who use a car only in a town or a city, where the building and maintenance of streets are covered by other forms of taxation, pay precisely the same tax as the person who regularly covers long distances on provincial and national roads. How can we allow commercial travellers, who earn their living with their cars as it were, to pay the same tax as pensioners, who use their cars to go on holiday once or twice a year to visit their children?

Furthermore the tax on vehicles differs from one province to the next. In the Transvaal tractors are exempt from tax, while in the Free State they are taxable. Even within the provinces there are also differences in respect of certain types of vehicles, and I can enumerate many examples of this.

According to the present system the tax levies bear no relationship to the degree to which the roads are being used or damaged, and the annual licence fees paid for vehicles can virtually be seen merely as registration fees.

Roads—national roads as well as provincial roads—in South Africa are a tremendous asset to our country. This year, for example, the provinces budgeted for an amount of R909 million for the building and maintenance of provincial roads, and an amount of R525 million was appropriated by Parliament for the building of national roads. Against this, the total amount collected by the provinces in the form of vehicle tax amounted to R355 million.

The present costs of building a primary road are on average more than R300 000 per kilometre. That is why a tremendous backlog already exists in the building as well as the rebuilding and maintenance of provincial roads in particular. More funds will therefore have to be urgently found, especially in view of the fact that there is a tremendous increase in the traffic on our roads, particularly traffic from the independent and self-governing states, as well as neighbouring states which, according to the present system, make virtually no contribution.

As regards heavy vehicles there is, as in all countries of the world, also a tremendous increase in road transportation. It is true that heavy vehicles, particularly overloaded vehicles, do tremendous damage to the surface of our roads. This matter has already been discussed in this House, and during 1984 the Financial Relations Act of 1976 was amended in such a way that provision could be made for a special levy on heavy vehicles, which could be collected and provisionally paid into the provincial road building funds for two years.

It has never, however, been possible to collect this levy because, firstly, it was decided that the levy should be charged on the gross vehicle mass, and with the exception of perhaps a single province, the provinces do not have this data at their disposal.

Secondly, it is not very practical because it is going to place a tremendous administrative burden on the provinces, and it is going to place an impossible financial burden on the transportation contractors, bus services and farmers in particular, a burden which they will find very difficult to bear, particularly if it takes place in the form of a annual levy.

Thirdly, it does not eliminate the discrimination or inequality because firstly it is not directly connected with the degree to which the roads are being used, and also does not make provision for vehicles used only in municipal or local authority areas, and also does not make provision for farmers who for the most part have to make use of poor gravel roads. Nor does it eliminate the inequality between provinces, because no relationship exists between the number of heavy vehicles and the number of roads in a province.

We are engaged in reform in order to adapt to the demands of the times. Therefore an urgent need for reform exists in this area as well.

The Department of Transport is at present engaged, in co-operation with the CSIR, in establishing a central register for motor vehicles. There is an imperative need for this and I trust that it will soon be possible to put the register into operation because we can no longer allow almost 10 000 people to die on our roads annually, and thousands of other to be injured and maimed.

Together with this, let us now review the question of vehicle tax as well. On this matter I should like to leave a few thoughts in your midst. Firstly, in order to retain the necessary control, and to keep the registers to which reference has already been made up to date, the registration of vehicles must be renewed annually—and not necessarily at the beginning of the year as is at present the case—upon payment of a nominal amount which will be the same for everyone. The necessary administration for this already exists. Together with this, proof must also be presented of the roadworthiness of the vehicle. According to the present system we are also registering wrecks and in many cases murder weapons annually—I want to repeat—annually. Consequently we can in this way, too, make a major contribution to improving considerably the road safety situation in South Africa.

I suggest that the existing levy on fuel, which is being paid into the National Road Fund, should be increased to make provision as well for the building and maintenance of provincial roads and even where necessary for assistance to local authorities so that the tax on vehicles will be in direct proportion to the use of roads. As regards heavy vehicles, the levy on diesel fuel can be adjusted in such a way to make proper provision for damage to road surfaces. As regards agriculture, provision can also be made in that case, since diesel for agricultural purposes is already being supplied on a differentiated price basis.

It is also true that the fuel consumption of heavy vehicles is not proportional to the damage done to road surfaces. This can be off-set by simply adding an axle levy or an axle registration to the normal registration for more than two axles, since according to the ordinance there is a restriction on the axle mass of vehicles of 8 200 kilogrammes per axle, and the use or damage to the road surface is in direct proportion to the number of axles.

I know that the levy on fuel is a very sensitive matter, particularly among certain senior officials, but I maintain that this is the fairest and most effective form of taxation on vehicles. Priority should be given to this matter.

Third party insurance is now being added to the fuel price, so let us now put motor vehicle taxation where it belongs. Since we hope that there will in the near future be a reduction in the fuel price, we hope that this matter will first receive attention from the hon the Minister before a final decision in this regard is taken.

Mr Speaker, on behalf of this House I should like to congratulate the hon member for Bethlehem on his maiden speech. It was very clear that he knew what he was talking about; I assume that this is owing to his expertise which he acquired in the previous place in which he served. I want to wish him everything of the best for his stay in this House.

I think there is a little river running through the hon member’s town, called the Jordan. However, I do not want to spend any more time on the Jordan, but get back to the Rubicon. I want to refer to the State President’s speech, which became known as the Rubicon II speech. [Interjections.]

Before I come to this speech, however, I first want to refer to what the columnist “Duwweltjie” had to say about the Rubicon I speech in the periodical Finansies en Tegniek of 27 September 1985. I hope that his use of language will fall within the rules of Parliament. He wrote as follows:

[Interjections.] It would seem as though the Rubicon II speech is perhaps an even greater “op” for the State President than the first speech. In his opening address the State President made the statement that we had outgrown the obsolete concept of apartheid. That was his statement, cut and dried. Another statement which the State President made was that the peoples of South Africa formed one nation and, he said, he also foresaw one citizenship. The State President also announced the establishment of a national statutory council, on which representatives of self-governing national states and the leaders of other Black communities and interest groups would be able to participate.

The following Sunday, on 2 February, the State President confirmed with an advertisement in a Sunday newspaper what he had said in his opening address. He also went further and said: “No South African will be excluded from full political rights”. In a further paragraph he said that there were people who had said to him that he had not gone far enough. To this the State President replied: “I will go further.” [Interjections.]

The hon the Minister of National Education enthusiastically confirmed the State President’s speech in its entirety. The hon the Minister emphasised certain aspects, however, namely group security. As an element of this he mentioned an own community life, which according to him would consist of own residential areas, own schools and also other separate institutions.

The following Thursday the hon the Minister of Foreign Affairs told the Press, on the basis of what the State President had said, that South Africa could have a Black State President. [Interjections.]

The next day—that was Friday, 6 February—the State President came to light with the most destructive repudiation which, to my knowledge, had ever befallen any Minister in this House. It was ten times worse than the previous repudiation of the late Dr Albert Hertzog by the late Mr John Vorster. The State President repudiated and humiliated his Minister of Foreign Affairs before this forum, before the public in the Public Gallery, before the Press in the Press Gallery and before the ambassadors and other ambassadorial staff on the gallery.

The hon the Minister of Foreign Affairs was repudiated here in no uncertain manner, and everyone is saying that the hon the Minister of National Education won. [Interjections.] The hon member for Yeoville also says so. Why did the State President repudiate his Minister of Foreign Affairs? Because he told an untruth—a lie? No, Sir. Because he made a statement at variance with NP policy? Let us see what the State President himself said concerning the statement made by the hon the Minister. He said:

He then went further:

“Serious problems of interpretation!” The State President did not say that it was wrong or that it was a mistake. He did not say that it was not NP policy. He merely spoke about “serious problems of interpretation”. He then made his third point. He said:

“Any speculation on or discussion of … does not represent the policy of my party.” All this, in Huntington’s language, is: …ambiguity, concealment and deception …”

He then came to his fourth point, and he said:

In other words, the issue was not the compromise, but the prior consultation. I say that the State President repudiated his hon Minister because he was right and was telling the truth; because in a moment of clarity he made a clear, correct interpretation of what the State President had said. The State President in his letter, which was merely a side issue of Rubicon, said the following:

What are “full political rights” in South Africa? To become State President is one of the political rights of a person who has full political rights. That is why I say that the hon the Minister of Foreign Affairs was repudiated by the State President because he was telling the truth and was correct, and because he misinterpreted. This was done because it had become imperative for the NP, as a result of feedback, from the reactions of the general public, to deal out another blow to the left, after it had already taken two or ten paces to the left. This is the kind of politics we have in South Africa at the moment: “Make bold steps to the left, and give a slap to the left after those steps.”

I am sorry that the State President, the hon the Minister of National Education and the hon the Minister of Foreign Affairs are not here today, because I want to ask the State President whether he will state categorically today that in his plan for South Africa there is no room for a Black State President. I also wanted to put this question to the hon the Minister of National Education. Now I shall simply ask the hon the Minister of Finance whether, in his reply, he will make the categorical statement, to the hon member for Yeoville and the hon member for Sunny-side with reference to their amendments, that it is not true that a Black man can become State President of South Africa. [Interjections.] The fact of the matter is that the hon the Minister of Foreign Affairs was probably talking about one of the most pertinent aspects of his Government’s policy. He was speaking in a personal capacity as Minister and as executive member of the Transvaal NP, and he was harshly repudiated. The fact remains, though, that the hon the Minister remains on as member of the State President’s Cabinet. [Interjections.] I scribbled a note to my hon colleagues that day, in which I said that this was the most serious repudiation I had ever heard and any man—and I want to emphasise the word “man”—would leave after such a repudiation. However, I undertook, I wrote to them, to assure them that the hon the Minister of Foreign Affairs would not leave. [Interjections.] A serious aspect of this matter as far as South Africa is concerned is this: What credibility does the hon the South African Minister of Foreign Affairs who at this critical time in the history of South Africa communicates almost daily with the outside world, have when he talks about South Africa?

He is abroad at this very moment. [Interjections.]

If he said this to the Press in South Africa in his personal capacity, what has he not already said behind the locked doors of chancellories in his personal capacity or in his official capacity? [Interjections.]

After the Rubicon I speech the hon the Minister of Foreign Affairs was in tears, people who were in the know said. After that speech it was said that if one wanted to know what the Rubicon I initially contained, before other people intervened, one had to take into consideration what they had told the President of the Ciskei, what would be said plus what was said in Durban plus what the hon the Minister of Foreign Affairs had told the representatives of certain states in Vienna, or wherever he was. But the problem of the hon the Minister of Foreign Affairs now is that when he goes overseas he will have to take with him a written certificate of authenticity in respect of every statement he makes. [Interjections.] I think this is an absolutely untenable situation for South Africa at the present juncture. I am saying this in particular to the hon members of the Cabinet, as well as to the other hon members on that side of the House. How can we tolerate such a situation in South Africa? [Interjections.] What upsets me as Afrikaner is that South Africa’s prestige and credibility abroad before Heads of State, before Foreign Ministers and before important people in the financial world is in tatters; and as long as that hon Minister is in the Cabinet, the situation cannot improve.

I want to tell the hon the Minister of National Education that as long as that hon Minister is a member of his party, as long as he and his 30 or 35 are sitting there—whether this was in writing or by word of mouth; and I see with what glee the hon member for Randburg is smiling—a Black President for South Africa is a practical possibility. In any event it is a practical and foreseeable possibility in terms of their present course. [Interjections.] I want to ask the hon members for Randburg, Innesdal, Krugersdorp and Helderkruin whether they also say that a Black President for South Africa is a possibility or not. [Interjections.]

I now want to deal with another aspect of the Rubicon speech. The State President said that he was prepared, for humanitarian reasons, to release Mr Mandela. He attached vague conditions to that—it was not clear whether these were conditions or parallels—in respect of the release of inter alia one of our soldiers who was taken prisoner in Angola. I now say to him that I take very strong exception to the fact that he associates the conditions of release of a South African soldier, a man who went to another country, in the execution of his duty and under orders and who was captured for whatever reason, with the conditions for the release of a man who was convicted in this country of high treason. [Interjections.] Furthermore, Sir, concerning this entire debate on Mr Mandela, there is an aspect which gives great publicity to South Africa in the entire international community. When I read today’s Citizen I read “Mandela Won’t be Released Today”. What we have here is another game of semantics and a setting up of straw dolls, which is not going to get us anywhere. [Interjections.]

My request to the State President is that we should not open Parliament in such a way, make such speeches and play such political games for the sake of the outside world in the times in which we are living. I also want to put a question to him in respect of Mr Nelson Mandela. If Mr Mandela is elected member of the National Statutory Council by Soweto or by another group of activists, is the State President going to release him and allow him to serve on the National Statutory Council? After all, the State President is going to allow any interest groups to participate in the National Statutory Council. I would be pleased if we could receive a reply to this question during the course of this debate. [Interjections.]

Mr Speaker, since this is the first time I am addressing this House, I wish, firstly, to express my sincere thanks for the opportunity that has been afforded me to come to Parliament as a nominated member of the House of Assembly. Since I was able for a long time to observe and participate in the workings of Parliament at close range from another angle—as private secretary to a Minister for ten years—I am profoundly aware of the great responsibilities, but also the opportunities to render service, which this office entails. I also wish to express my gratitude for the very friendly reception which I have thus far, as a new and the most junior member, received in this House.

I am grateful for the opportunity to be a member of the House of Assembly for another reason as well, which is that I am firmly convinced that Parliament will be in the forefront of the exciting reform movements we are at present experiencing under the leadership of our State President. I believe, too, that the solutions to the problems of our country will be found in this Parliament and nowhere else.

I should like to respect the convention that a maiden speech should not be of a politically contentious nature, and I therefore wish to refer briefly to a matter which extends beyond all political dividing lines and in which every citizen of this country has an interest, namely the conservation of our environment.

We all have an interest in this matter because I do not think it would mean very much if we were to solve the constitutional problems, but were unable to succeed in halting the degradation of our environment with its detrimental consequences for mankind.

†Mr Speaker, we should consider the words of a familiar and very popular song:

This is in fact such a beautiful song that if the rules of the House allowed it and I had a better voice I would have been tempted to sing it for you! [Interjections.] But this is more than just a catchy tune—it is a deadly serious warning to us. Consider just the following two facts.

Firstly, I have about ten minutes for this speech and when I resume my seat one hundred ha of arable land will have turned into desert. That adds up to 6 million ha a year and that spells even more starvation worldwide.

The second fact is that at the end of the ten minutes of my speech, 200 ha of forest will have been cut down, and that adds up to 11 million ha a year or three times the area of Switzerland. We know that the destruction of forests leads to erosion, flooding and unpredictable changes in climate.

Regrettably, environmentalism is seen by many people as a sort of fashion fad or a form of do-goodism. These same people are usually the ones who ask why we bother about the environment when there are many other problems which seem to be more pressing and immediate.

The answer is a very simple one. We must put the message across that wise management of natural resources is essential to provide for basic human needs. Conservation is in effect an insurance policy for the future. It is not a luxury; it is a prerequisite for survival. A very eminent and world-renowned conservationist, Sir Peter Scott, said:

If the degradation of the environment continues, man himself will be the endangered species.

What is the solution? According to the World Wild Life Fund annual report and our own White Paper on a national policy regarding environmental conservation, the answer lies in the first instance in environmental education so that all individuals and institutions have the right attitude towards the environment. We must ensure a broad public awareness. Abraham Lincoln said:

I would submit that this is particularly true of environmentalism, and in South Africa that public opinion is the opinion of every South African, irrespective of his race, colour or creed. Conservation is ultimately everybody’s business.

*The Government, and specifically the Minister of Environment Affairs and Tourism and his department, have already made great progress in the sphere of conservation during the past few years, but the responsibility is not only that of the Government. In this connection I should like to quote the words of the State President which formed part of his address last year in August before a function of the South African Natural Heritage project. He said the following:

The President concluded with the following words:

To give effect to this vision of the State President the establishment of a national conservation strategy for South Africa is of vital importance. Everyone who has the interests of conservation at heart, looks forward to the realisation of this ideal, and I am advocating this today.

In conclusion I want to make a friendly appeal to every hon member of this House to promote the cause of the conservation of our environment, not only by word of mouth, but also by deed and example, in the interests of our country and all its people.

Mr Speaker, I have heard of a maiden speech, and a maiden’s prayer, but never of a maiden song. Therefore it is a great privilege for me to congratulate the hon member Mr Schoeman on his maiden speech and not his maiden song, with which he threatened us for a while.

*It is a speech with which I am in complete accord, of course. As a matter of interest, my maiden speech also dealt with environment affairs. I spoke about the sea and pleaded for its conservation. We can only agree with what the hon member said about taking pride in and conserving our environment.

I should like to draw the attention of the hon the Minister of Environment Affairs and Tourism to something which I heard on the radio this morning in connection with nature foundations. In Natal, where that hon member comes from, they involve schools in clearing up litter. They go around and pick up all the litter which is found everywhere in our beautiful environment, and they put it in bags and take it away to have it destroyed. These pupils remove thousands of bags full of plastic bottles and other unsightly litter. For that reason I congratulate the hon member. He will always make a good contribution in this Parliament.

†The hon member for Cape Town Gardens put a number of questions to the hon Minister of Finance about facilities in education. I wonder whether I can ask him similar questions about health?

As regards health I would like to ask the Minister whether he believes in separate facilities for the various racial groups. Does he believe in separate facilities, for example, the separation of patients in the wards? Does he believe in separate hospitals for patients in South Africa? I think this is an important question because the hon the Minister must realise that with the new constitution, health has been divided into three separate own affairs departments. Then of course there is also the Minister of National Health and Population Development. We in South Africa now have, in this Parliament, five Ministers of Health. We have one Minister of National Health, his deputy and three own affairs Ministers of Health.

I would like to ask the hon the Minister just to think about a possible situation in South Africa. In South Africa the Prohibition of Mixed Marriages Act has been scrapped and therefore it is now possible for a Black man to marry a White woman. Conception can take place and the White wife will have to choose a hospital for her confinement. It is possible for this White wife to choose the Johannesburg General Hospital, where she would then have her confinement. It is general practice and desirable in medicine that the husband accompanies his wife and is present during the stages of labour. The labour continues, and the Black husband in the White hospital faints during this period, hitting his head against the wall and is concussed and cut. He will then have to go to the Baragwanath Hospital. The baby, meantime, is born and has respiratory distress. The baby is Coloured and therefore would have to go to the Coronation Hospital. The family unit will be separated by this Government on racial lines in that the father would have to go to a Black hospital, the mother will be in a White hospital and the child will have to go to a Coloured hospital. Hence, I would like to ask the hon the Minister whether apartheid is outdated in South Africa.

It is living in the hospitals!

I have sympathy for the hon the Minister of Foreign Affairs who, we noticed, was repudiated here a few days ago. I felt very sorry for him because he has to sell these things overseas. He has to explain to people the laws of a country where this sort of thing can happen. I want to ask the hon the Minister again whether he approves of this. Does he approve of or realise how costly this separation is? Does he know by how much this increases costs, in money and manpower terms, in efficiency and equipment? Does he realise how much it costs? Does this Government realise that there is a tremendous escalation in the cost of health care? This is due to a large degree to this supposedly outdated apartheid in our medicine.

I would like to tell the hon the Minister that everybody in the field of health suppliers is against the own affairs separation and the fragmentation of our medical services.

That is not true!

Everybody who counts, and the CP certainly does not count because it is also obsolete. [Interjections.]

Order!

I would like to tell the hon the Minister that the Medical Association is against this fragmentation. This is true for all the various smaller branches of the Medical Association. Even the Orange Free State branch of the Medical Association is against this. I would like to tell the hon the Minister that the health suppliers are against it, as well as hospital administrators and deans of medical schools.

There is only one group of people in favour of the racial separation of health services and that group is made up of the racists in the NP and the CP. They are the only ones.

I would like to warn the hon the Minister—and I see that there are two Ministers of Health present here today—that this own affairs racist medical future of South African health is going to cause the medical profession of South Africa a great deal of trouble overseas. Just as the hon the Minister of Foreign Affairs is unable to sell apartheid overseas, so our doctors are also unable to sell apartheid overseas in the health field. I want therefore to warn the hon the Minister that if the Government continues with own affairs in health matters, which simply means health on a racial basis, it is going to find itself in deep trouble because doing so is completely against the terms of the Geneva Convention. The Geneva Convention adopted by the World Health Organisation is opposed to discrimination in any shape or form in health. I want to warn the hon the Minister again that if the Government persists with its policies in this regard, the South African Medical Association is going to be expelled from that world body as sure as I am standing here. [Interjections.] The Medical Association of South Africa is aware of it and all the health suppliers in South Africa are aware of it. They are beating a steady path to the door of the hon the Minister of National Health and Population Development. I want to ask that hon Minister to use his influence to ensure that health matters generally are looked upon as one department for all South Africans so that the racial connotation can be removed.

Private hospitals in South Africa are permitted to admit Black patients but they have to be treated in private wards. However, Black nursing sisters are permitted to tend all the patients in such a hospital. I want to repeat this. A Black patient can be admitted to a private hospital as long as he is accommodated in a private ward while the Black nursing sisters are permitted to attend to all the patients. If such a nursing sister is attending to White patients in a public ward and she faints and break a leg, she has to be admitted to a private ward. She cannot be nursed among the people she is presently nursing. [Interjections.] When that Black nursing sister who has devoted her whole day to nursing White people goes home in the evening, she is not permitted to stay in the nurses’ home. She has to go back to the Black township which is 20-30 kilometres away. She has to get up at 5am in the morning to be at work by 7am, and she leaves at 5pm and arrives home at 7pm.

Is apartheid outdated? No, Sir! As far as the Government is concerned apartheid is alive, and it is our duty to say it. [Interjections.]

I should like to conclude on a personal note. My name has been mentioned as being in doubt about my future as an MP. I believe that apartheid is still alive and for that reason I shall stay here to fight the Government to the best of my ability. [Interjections.]

Mr Speaker, it is a privilege to speak after the hon member for Parktown, particularly when he has made such a positive remark that he is still going to be here for a long time. It is pleasant to work with him here and I am glad that he has given me the opportunity today to assure him—he knows this, he has borne witness to it all the years he has been here—that tremendous changes and improvements have been made in respect of the nursing profession as such during the past few years. We can talk about this during the discussion of the relevant vote, but as far as the new hon Minister is concerned I should like to say that he is capable in future of making the very best of this situation for all those involved. We leave it in his competent hands; he will see to this.

I want to say a few words about agricultural financing in general, but with a single specific reference to the affected areas, the so-called 50 kilometre strip in the North-Western Transvaal Bushveld. I want to start by saying—I am glad that the hon the Minister of Agricultural Economics is in the House—that the agricultural financing has become a science during the past few years. Nowadays one cannot apply only one norm in respect of agricultural financing for the whole of South Africa, exceptions must be made with regard to the specific needs of separate parts of the country. Last week the hon the Minister announced during the Lanvokom Congress that dramatic changes in respect of agricultural financing were in the pipeline. This was an extremely important speech delivered by the hon the Minister and I believe that all of us who are involved in agriculture and are also interested in finance, should take a very close look at it.

The great problem today, apart from the contributing factors such as the drought, depression, etc., is to a great extent the result of the tremendously high interest rate the farmers have to contend with. Virtually every farmer in the country has fallen prey to very serious financial and cash-flow problems.

Two years ago when I also dealt with this subject—I have the speech which I used on that occasion here with me—I made an appeal to the hon the Minister that as far as agricultural financing was concerned a very close look should be taken at a possible short-term subsidy system to help the farmers out of the precarious position in which they found themselves. I mentioned that between 1980 and 1983 the tax burden rose from R275 million to R1 500 million. This is a tremendous rise. I wonder what it stands at now. I do not have the most recent figures.

I should like to thank the hon the Minister of Finance and his colleagues who assisted and supported him in this connection most sincerely for the wonderful announcement which was made recently. With regard to the designated areas—ie the Northern and North-Western Transvaal Bushveld within the 50 kilometre strip—a 10% subsidy on the interest on Land Bank loans was announced. The rate is 14%. In effect this means that if a farmer meets the requirements of the new system, in that, in the first place, he is not in arrears with his payments and, in second place, he is occupying or letting his farm, he qualified for this interest subsidy on Land Bank loans. I think this is a fantastic arrangement which has been made, and I want to thank the hon the Minister of Finance as well as the hon the Minister of Agricultural Economics and his own affairs colleague most sincerely on behalf of the farmers in those areas.

But I have one thing to ask of the hon the Minister of Finance in this connection. I travel about a great deal in that part of the world and when one speaks to the farmers, they all ask one whether an adjustment cannot be made with regard to the provision that only those farmers who are not in arrears with their payments qualify for the 10% interest subsidy. I am requesting this for a short period. This measure has been introduced for five years. The farmers’ argument is that it is in fact the person who is in arrears with his payments who needs the assistance. I am not suggesting that we assist the person who is 10 to 15 years in arrears with his payments. There is not hope for him. But I want to plead the cause of those persons who are approximately two years in arrears with their payments. If we can include them in the scheme, this would mean two years or in effect four seasons during which they could harvest their crops. This could enable them to meet the requirements laid down by the hon the Minister and the Land Bank.

We must not forget that at the present time those areas are still experiencing tremendous drought conditions. They did not get the good rains which the rest of the country got. If one goes to Dwaalboom, Derdepoort or Rooibokkraal today, it looks almost like a desert, not a man-made desert but one that can be created, and to which reference was made here in a maiden speech. This is as a result of a four year drought which is prevailing in those areas. It is appalling to see what it looks like there.

The recessionary conditions of the past four years, coupled with the tremendously high interest rates, have made it almost impossible for those farmers to survive without our help. I really want to plead their cause with the hon the Minister because I know that he is familiar with that part of the world. He visits that part of the world regularly. [Interjections.] No, not only to hunt; under other circumstances too. [Interjections.] Yes, that hon member absconded to the Free State. He is a deserter, the hon member Mr Theunissen. [Interjections.]

I am asking the hon the Minister please to give positive and careful consideration to that provision in order to adapt it so that those farmers who are more or less two years in arrears with their payments, can also be included in this scheme. I want to thank him very much for this in advance because we are aware of the fact that as Minister of Finance he had proved that he has a soft spot for the farmers, that he is a good friend of the farmers. We also know that he has a farm in the Bushveld, in those Waterberge, but his MP does not even know that.

Order! I shall now be soft-hearted and excuse the hon member from making the rest of his speech. The House is adjourned.

In accordance with Standing Order No 19, the House adjourned at 18h30.