as Chairman, presented the Seventh Report, 1985, of the Standing Select Committee on Home Affairs, relative to the Publications Amendment Bill [No 86—85 (GA)], dated 7 November 1985.

Report, proceedings and evidence to be printed.

Bill to be read a second time.

as Chairman, presented the Fourth Report of the Standing Select Committee on Environment Affairs and Tourism, dated 5 March 1986, as follows:

Bill to be read a second time.

Mr Speaker, I move:

INTRODUCTION

If one looks back on the financial year now drawing to a close, there are three aspects, in particular, which featured prominently. Firstly there was the effect which the setback, experienced with overseas loans, had on the Post Office, on the one hand in so far as it caused a considerable increase in its expenditure owing to the depreciation of the value of the rand and, on the other hand, in so far as it resulted in a sharply increased need for domestic loan funds. Secondly there was the favourable circumstance of a large inflow of funds to the Post Office Savings Bank which assisted the Post Office in obtaining adequate domestic loan funds to meet the enlarged requirement. The healthy inflow of funds to our savings services was due not only to more savings funds being at the disposal of the public, but also to concerted efforts by our staff to stimulate investments in our savings services. In addition, we did not experience any cash-flow problems owing to the good support we received from institutional and other investors in Post Office stock and from local banks. The third feature of the year was that, in spite of the recession which led to a decrease in the frequency of use of some of our services and detrimentally affected our revenue, the demand for additional telecommunication services, in particular, remained high, and we could therefore not reduce investment in our infrastructure.

In 1985-86 the Post Office continued its approach of applying financial discipline and curbing expenditure on the operating side by means of such austerity measures as were practicable without adversely affecting the standard of services rendered whilst, on the side of capital spending, taking steps to ensure that investment kept pace with the demand for services. The waiting list for telephones has again been reduced, but remains high. Although the electronic revolution compels the Post Office to devote a great deal of effort to the technological upgrading of its systems in order to keep abreast of developments here and abroad, it remains our aim to improve basic services and to avoid indulgences. An example of this is a new telephone instrument designed for those subscribers who require basic facilities only. I shall come back to this at a later stage.

I should now like to deal with the functions and the finances of the present financial year and to inform hon members of what is envisaged for 1986-87.

TELECOMMUNICATIONS

The Telephone System

As hon members know, we installed the four-millionth telephone in Reservoir Hills, Durban, during December 1985. The number of telephones, including extensions, call-offices and miscellaneous services, is expected to total 4 065 800 at the end of March 1986. This represents a growth of 176 000 telephones over the past year. Approximately 95% of the total number of telephones will be linked to automatic exchanges by 31 March this year. The waiting list for telephone services is estimated at 185 000 for the end of March, a decrease of approximately 38 000 or 17% compared with the figure for the previous financial year. The decrease can be attributed mainly to the completion of several large projects that were already started during 1984-85.

The capacity of the automatic telephone system as a whole was expanded by approximately 290 000 lines during the current financial year. A further extension of the capacity by about 300 000 lines is planned for 1986-87.

Digital Transmission Links

Good progress is being made with the provision of digital transmission links, by way of both microwave and optical fibre systems, between all the major centres in the country. These routes will consist of systems operating at 140 megabits per second, each system providing up to 1 920 channels. Civil works by private contractors are already in progress and will be completed during the next two years.

The total expenditure on these major routes will be in excess of R500 million over a period of four to five years, with some R100 million destined for the provision of optical fibre systems. The digitisation of the transmission network in urban areas is also progressing well and it is expected that from 1986-87 over 90% of new circuit requirements will be provided by means of digital systems.

Motorphone Service

The installation of the new and larger motorphone service for the PWV area has been completed. The acceptance tests have reached at an advanced stage and the system will probably be commissioned during the first half of 1986. Initially provision will be made for 2 500 subscribers.

Beltel

The market test phase of the Beltel Service, which commenced in October 1984, will come to an end shortly with the introduction of the service for the general public. Initially the new system will have sufficient capacity for 15 000 users and 10 000 information and service providers. The service makes provision for a wide range of facilities such as an electronic mail service and home shopping and banking services and also offers users access to the most recently available information in many fields.

Telex and Teletex Services

By making use of common exchanges in Cape Town, Durban, Pretoria and Johannesburg, the switching equipment of the Telex and Teletex networks has now been made fully electronic. A further exchange, which also incorporates the public telegram “store-and-forward” service, is being used for the Telex Service in Johannesburg.

On 31 March 1985 there were 32 014 telex subscribers in South Africa, and this figure is expected to reach approximately 32 650 by the end of March 1986. There was an increased demand for Teletex Service during the current financial year and it is estimated that there will be more than 1 200 Teletex subscribers by 31 March 1986.

Data Transmission

It is anticipated that approximately 8 000 additional data services will be provided during this financial year, which represents a growth rate of 13,8%. Data modems and data transmission equipment to the value of R6,6 million will be purchased for departmental purposes during the 1986-87 financial year.

It is planned to make available the diginet service—the Post Office’s digital data transmission network for high-grade data transmission—to data users in Johannesburg and Pretoria from May 1986. The service will be extended in due course to Durban, Cape Town, Bloemfontein and Port Elizabeth. Diginet is operated separately from the existing analogue network and the pilot network has operated on a trial basis since March last year.

Prepayment Coin Telephone

Prepayment coin telephones were installed on a large scale during the past financial year and can now be found in many places such as airports and large railway stations and also in rural areas. Initially it was the intention to have the replacement programme completed over a period of five years, but due to the persistently increasing demand for coin telephones, this aim will now probably only be achieved at a later stage.

One of the most exciting developments in the field of coin telephones is the card-operated version. At present the Department is investigating various overseas models with a view to a possible field trial. This type of public telephone operates in the same way as the new coin telephone except that a card is inserted into a card reader for payment purposes. This card can either be a credit or a debit card.

Erica Telephone

In the light of the estimated demand for a basic, low-cost telephone without advanced facilities, the Erica telephone has been developed by the Post Office in collaboration with a private firm. Cost effectiveness has been achieved by extensive use of modern technology, simplification down to absolute basics, attention to detail, such as the ergonomics of the instrument, and restricting the range to one colour.

The Erica has been developed in accordance with the Post Office’s declared policy of supporting South African Industry, and the local content of the telephone will therefore be high, with maximum use being made of locally-manufactured electronic components. The first model, which will only be suitable for use on lines connected to electronic exchanges, will become available during the first quarter of the 1986-87 financial year, while the type suitable for use in electromechanical exchange areas will be phased in during the second quarter.

†International Telecommunications Services

Direct international dialling for telephone subscribers in South Africa has been extended to a further 12 countries during the year and subscribers at automatic exchanges can now dial direct to 60 of the 205 foreign destinations to which telephone service is available at present. Further extensions to the direct dialling facility are being planned. It is estimated that international telephone calls with a total duration of some 102 million minutes will be made by subscribers during this year. This represents a growth of approximately 2,5% as opposed to a decrease of 1% the previous year. The international telex service is at present available to 196 destinations, of which 118 can be dialled direct by our subscribers. It is expected that almost 17 million call-minutes will be made in this year, which represents an increase of 5,2% compared with the 3,8% of the previous year. Our international teletex service has been extended further and is now available to a total of 7 countries. Further extensions will be effected as and when circumstances demand.

PERSONNEL

General Staff Position

There is continued growth in most spheres of the department’s activities, but in the light of the prevailing economic climate and the necessity to curb spending, we are still endeavouring to restrict growth in the staff establishment to the absolute minimum by means of work simplification, increased productivity and the optimum utilisation of labour-saving devices. These measures result in the staff once more taking stock of work methods so as to eliminate duplication and unproductive tasks. As an indication of the success achieved by the department in this regard, I may mention that the total number of staff members—permanent and temporary—during the twelve months ended 31 January 1986 increased by only 0,9%, as against a growth of 3,2% during the previous twelve months. During the former period 5 100 officials resigned from the service, whilst 1 312 were reappointed, compared with 7 327 and 1 937 respectively the previous year.

Housing

The departmental housing loan scheme that was introduced in 1981 is now well established. Since the scheme generates its own funds it is becoming increasingly less dependent on annual appropriations. Because of the need to curtail expenditure wherever possible, an amount of R10 million is being budgeted for in 1986-87, as against R30 million in the previous financial year.

As far as official housing is concerned, an amount of R10 million is being requested for the financing of projects already in progress, as well as for the ad hoc purchase of housing units where there is no other alternative.

Personnel Research and Development

Notwithstanding the effect the recession is having on the Post Office as a business undertaking, our optimism that a rapid recovery in general economic activity in the country will take place is reflected in the fact that the department is earnestly pursuing, and in some cases expanding and accelerating, its training programmes. A service-rendering undertaking such as the post office cannot afford to neglect the training of its staff during times of economic recession, as it is imperative for its work force to be able to cope with the full impact of an economic revival. With this in mind, courses and training strategies have been adjusted and developed in such a way so as to ensure that new entrants to the service are adequately equipped for their task. The development of officials in the supervisory and management sphere also remains a matter of high priority and continued research in the field of human-resources management ensures that our training programmes and development projects always meet the new and changing demands in this field.

POSTAL SERVICE

There is still an increase in the volume of mail handled despite the economic recession. Just over 2 000 million postal articles were posted at post offices or received for delivery from abroad during the past financial year. The department still strives to render a faster and more efficient service and consequently the latest technological developments in the field of mechanised mail-sorting are employed. The mechanical mail-sorting equipment installed in the sorting offices of Cape Town, Johannesburg, Durban and Pretoria, for example, is capable of jointly sorting approximately 2,8 million postal articles per day.

New services are continually being introduced and existing services expanded to meet the particular needs of mail clients. The priority-mail service is now available at 21 offices in the republic, while thirteen countries are at present linked to the international priority-mail service, with another three possibly joining shortly.

Although the aforementioned service meets a real need, there is a growing demand, especially by the business community, for a same-day service, ie a service that guarantees delivery on the same day on which an article is mailed. Such a service was recently introduced on an experimental basis between Pretoria and Johannesburg and will be expanded as and when required.

MONEY SERVICES

Last year the post office and three other financial institutions took the first step in establishing a country-wide, integrated money transfer system with the founding of multinet. Multinet is South Africa’s first communal teller-machine network whereby telebank card holders and card holders of the other participating institutions can make cash withdrawals and balance enquiries at some 900 automatic teller machines countrywide.

The post office has also acquired a shareholding in Saswitch, a private company which is jointly managed by the major commercial banks, building societies and the post office and which, by means of modern computer technology, allows for the mutual sharing of automatic teller machines and point-of-sale terminals.

The development of the interface between the telebank system of the post office and Saswitch is currently receiving attention and is expected to be completed during this financial year, thereby significantly increasing both the geographical area covered by telebank and the number of service points. The linking of telebank to Saswitch will increase to almost 2 000 the number of automatic teller machines to which telebank clients will have access.

Payment of Telephone Accounts through Telebank

From 1 April this year the post office will offer its telebank clients an additional facility which should prove to be very popular. From that date telebank card holders will be able to pay their telephone accounts by means of telebank. This will reduce payments at counters and also the suspension of telephone services because of unintentional late payment of accounts.

FINANCES

Before outlining our financial position specifically for the present and the next financial year, I should like to say something about the degree to which loan funds are used by the post office to finance its capital expenditure, and about a few other matters.

Financing Policy

On the recommendation of a committee under the chairmanship of Professor D G Franzsen which, as hon members are aware, specifically examined post office financing, we have since 1972 aimed at financing approximately 50% of new capital investment from borrowed funds, and the balance from our own funds. Since, on the one hand, the extent to which tariffs can be adjusted to increase the self-financing component of capital expenditure is limited and since, on the other hand, it is the post office’s stated objective, in the national interest, to keep tariff increases below the inflation rate, an increasing portion of capital investment has, in recent years, been financed from loan funds. Since 1969-70 the average contribution to capital expenditure from internal funds has been 35,8%, while the loan component amounted to 64,2%. The self-financing component of capital expenditure is now estimated at only 12,7% for the current financial year.

Last year I referred to the need for a close look at the self-financing component of capital expenditure in order to ensure sound and efficient financial management in future. An in-depth investigation has since been launched to determine what self-financing ratio would be suitable under present circumstances. This investigation is still under way. It has already become evident, however, that an approach whereby a particular self-financing percentage is pursued as a fixed objective will no longer suffice. Rather, a more flexible policy should be followed whereby the most appropriate level of self-financing is decided upon each year in the light of changes and trends, at that time, in the financial structure of the post office, its solvency, the ratio between its debt and net fixed assets, the return on investments and other related aspects. In our investigation the policies pursued by other comparable institutions in this country and overseas are being looked at. The national consultative committee on post office affairs, which has been formed by organised commerce and industry and which has already made certain recommendations regarding the financing policy of the post office, will also be consulted in order to ensure that the specific guidelines ultimately decided upon will, in our particular circumstances, be in the best interests of the post office and its clients.

Loan Redemption

We have made some changes to our budget document this year, and I should like to refer to one or two of them. Up to last year the amount in respect of loans to be redeemed in a particular financial year was included in the estimates for appropriation. In terms of an amendment to the post office act, 1958, approved earlier this session, payments made to redeem loans which mature in any particular year will henceforth be deemed to have been appropriated and budgetary appropriation for the particular amounts will no longer be necessary.

Loan redemption varies annually as more or fewer loans are redeemed in a particular year, and in order to spread the burden of loan redemption more evenly over a reasonable period, it has been decided to create a provision for loan redemption which will replace the appropriation for loan redemption payments shown thus far in each particular financial year. The average redemption period for all post office loans is approximately 5,4 years at present, whilst the average depreciation period of assets is nearly 26 years. It is our aim to bring the average terms of loans closer to the depreciation periods of assets. The introduction of a provision for loan redemption is the first step in this direction. In order to determine more realistic depreciation periods, the post office is presently investigating its asset-depreciation policy. I shall report further on this aspect next year. The change in policy in respect of loan redemption will result in our reporting reflecting the financial performance of each financial year more accurately and will facilitate more effective financial planning. An amount of R207 million has been included in the estimates for 1986-87 as a provision for loan redemption. This provision is based on an average loan maturity of 10 years.

Investments in the Post Office Savings Bank and in National Savings Certificates

Since the take-over of the post office savings bank and national savings certificates from the treasury on 1 April 1974 these investment facilities have been shown in the budget document as an ordinary post office service to the public, initially included in “savings and money transfer services” and later separately as “savings services”. These investments are, however, being used solely as a source of finance in the same manner as loans and stock, and it has therefore been decided that in the budget document, and for the purposes of reporting, savings services will no longer be regarded as services operated on a profit and loss basis, but purely as methods of financing. The interest due to investors in the post office savings bank and in national savings certificates, and the revenue earned on the reinvestment of surplus funds, are now being apportioned to the ordinary services rendered by the post office to the public in proportion to the extent to which the invested funds are used by each service for financing its capital expenditure. In practice “savings services” will disappear from the budget document as an ordinary service and the operating results of the other post office services will now be reflected more accurately:

Price and cost increases over a wide spectrum, the depreciation of the rand against other currencies, and the consequences of the standstill with regard to the redemption of overseas loans have made heavy demands on Post Office finances during the present financial year. The lower value of the rand has, in particular, considerably increased expenditure on equipment imported from overseas, payments to overseas administrations in respect of postal, telecommunications and money transfer traffic as well as interest payments on overseas loans. However, all possible steps have been and are still being taken to restrict expenditure over which we have control to the minimum, reconcilable of course with the rendering of reasonable service and the need for the creation of productive infrastructure.

Total expenditure for 1985-86 is estimated at R4 674,8 million, which is R297,4 million or 6,8% higher than the original appropriation of R4 377,4 million.

Revenue from all sources is expected to total R3 074,6 million or R25,8 million—0,8%—lower than the amount of R3 100,4 million originally budgeted for. The decrease arises from a slight decline in the use of the telephone as a result of the downturn in economic activities. We originally budgeted for an operating surplus of approximately R68 million and a self-financing ratio of capital expenditure of 32,9%. However, as a result of the effect on expenditure of price and cost increases, the depreciation of the rand, and the higher overseas payments in respect of interest on loans and overseas postal, telecommunications and money transfer traffic, together with the reduction in expected revenue, an operating deficit of R162,9 million is now expected. After defraying the deficit from the provision for depreciation and higher replacement costs of assets, this will leave an amount of R182,87 million which can be contributed towards the financing of capital expenditure. The self-financing component of capital expenditure will amount to a mere 12,7%.

Standstill with regard to the Redemption of Overseas Loans

The announcement of the redemption standstill in August last year obviously also had an effect on the overseas loan situation of the Post Office. I should briefly like to inform hon members of the position in this regard.

It so happens that at present the foreign loan portfolio of the Post Office is structured in such a manner that there is a fairly good balance between short-term and medium-term loans. The shorter-term loans consist mainly of syndicated bank loans, each of which is being rolled over every three or six months over an agreed term of a few years at floating interest rates—the so-called Libor-linked loans. The few really short-term loans with European banks have been arranged for bridging purposes and the call-up of these loans would not have caused significant problems. We are therefore glad to be able to say that our position is well under control.

We originally envisaged borrowing between R400 million and R500 million overseas in 1985-86. Only one foreign loan, a public issue of DM 200 million—nearly R131 million—was taken up prior to the announcement of the standstill. The standstill would therefore have compelled the Post Office to turn to the domestic capital and money markets in 1985-86 to a much larger extent than previously. As has also been the case with other financial institutions, however, there has been such a good inflow of investments to the savings facilities of the Post Office that an amount of approximately R560 million is now expected, compared with the original estimate of R100 million.

Although the Post Office, like all other South African borrowers, has been adversely affected by the standstill, I am also pleased to be able to say that we still maintain good relations with our bankers in Europe and in the United Kingdom and that they understand our problems.

*The 1986-87 Financial Year

Capital expenditure for 1986-87 is estimated at R1 724 million, which is R286 million or 19,9% higher than the revised figures for 1985-86. In real terms, however, the capital programmes are no bigger than the programmes for 1984-85 and 1985-86, and are regarded as the minimum reasonably needed to meet the demand for additional services and to maintain existing services. The higher expenditure in rand terms is mainly due to cost increases and the lower exchange rate of the rand against other currencies. The further scaling-down of capital expenditure is not practicable as this could lead to the disruption of essential services with its concomitant traffic congestion, breaches of contract where ordering levels cannot be maintained in terms of suppliers’ agreements, and harm to the local telecommunications manufacturing industry.

The expected total operating expenditure of R3 421 million is R517 million or 17,8% higher than in 1985-86. This is mainly due to normal growth, cost escalation and exchange rate adjustments. In addition, appropriation is required for the provision for loan redemption, staff housing and the increase of standard stock capital which will total R255 million.

Revenue for 1986-87, at present tariffs, is estimated at R3 165 million. This represents a growth of only 2,95%. The lower growth is mainly due to expected lower interest earned on the reinvestment of surplus funds, lower profit-sharing with the agreement suppliers and a decrease in telecommunications traffic.

With operating expenditure of R3 421 million and expenditure of R255 million on other appropriations—R3 676 million in total—we would have had to budget for an operating deficit of R511 million. Furthermore, there would have been no operating surplus available to contribute towards capital expenditure and the self-financing component of capital expenditure would have declined to 8%, even with the new provision for redemption being added to internal funds.

Tariff Increases

I indicated last year that tariffs would probably have to be adjusted during 1986-87 and that the extent of, and even the necessity for, the adjustment could be influenced by various factors. In the meantime, as I have mentioned, the downturn in economic activities has had a negative effect on Post Office revenue, while expenditure has increased considerably as a result of factors beyond our control. In the circumstances a tariff increase is unfortunately unavoidable. It has been decided to increase Post Office tariffs with effect from 1 April 1986 to an extent that will increase total revenue by approximately R475 million during 1986-87. The proposed adjustments will not be sufficient to eliminate completely the estimated operating deficit of R511 million to which I have referred, but will reduce it to R36 million.

I trust that in these circumstances hon members will accept that this increase is the minimum that can reasonably be introduced. If the present cost escalation of more than 21% per year on the specialised equipment used by the Post Office is taken into account, the proposed tariff increase is moderate indeed. Details of the tariff adjustments will shortly be published in the Government Gazette and are also now being made available to the press.

I should like to inform hon members of some of the more important adjustments. The inland postage rate on standardised postal articles is being increased from the present 12c to 14c, while the postage on a parcel in the first mass step which is 85c at present, will be R1,00 in future. Various service fees in respect of the Postal Service are being reviewed and the present discounts of 30% and 15% on bulk-posted presorted and unsorted letters respectively are being reduced to 25% and 10%.

The unit charge for automatically dialled local and trunk telephone calls is being increased from the present 10c to 12c and will also be applicable to telex and teletex calls. As far as automatically dialled overseas telephone calls are concerned, technological development of the past few years makes it possible to adjust the tariff only marginally from R4,10 per minute to R4,20 per minute. Telephone rental will increase by between R1,50 and R2,00 per month, whilst installation fees will be adjusted from R75,00 to R90,00. The cheaper installation fee of R25,00 applicable to social pensioners is, however, being left unchanged.

Regarding the tariffs for payphones, I am glad to say that as a concession to people without telephones and to national servicemen and pupils at boarding-schools who telephone their homes, it has been decided that the cost of a payphone unit will remain unchanged at 10c for the present. The smallest coin that can be used in a payphone is the 10c piece, and should payphone tariffs also be increased now, it would mean that the unit charge would rise from 10c to 20c.

The present tariff of 10c in the old terminology was only a “shilling”, and if it is borne in mind that when payphones were introduced to this country at approximately the turn of the century, it cost a “tickey” for a call, there is probably not one service or very few services or commodities, of which the cost has increased by so little over almost 90 years.

However, hon members will appreciate that the tariff cannot remain at this low level indefinitely and it will therefore probably be necessary to increase it to 20c in due course.

The estimated additional revenue of R475 million, expected from the tariff increases, will increase total revenue for 1986-87 to R3 640,1 million. Loan requirements are estimated at R1 140 million, of which R400 million will come from investments in the Post Office Savings Bank. The portion of capital expenditure financed from internal funds, including the new provision for loan redemption, is expected to come to 35,6%.

CONCLUSION

In conclusion I should like to thank the Postmaster-General, Mr Ridgard, to the four Deputy Postmasters-General and to each member of the Post Office staff and management for their dedicated efforts during a difficult year. I have every confidence that the future will be brighter and that, with the people at its disposal, the Post Office will be able to meet all the challenges ahead.

Second Reading resumed

Mr Speaker, we in the Official Opposition are and remain implacably opposed to the latest increases in tariffs announced by the hon the Minister in his Second Reading speech, because we believe they are both excessive and unnecessary. Accordingly, Sir, I move as an amendment:

1. (1) to revise the tariffs announced on 3 March 1986 so as to relieve the intolerable burden which has been placed on the consumer, the rate of inflation and the economy generally;
2. (2) to revise the financial policy of the Post Office so as to—
   1. (a) reduce the temptation to increase tariffs so frequently;
   2. (b) cope with the fluctuations in the economy from time to time; and
   3. (c) control expenditure in keeping with revenue; and
3. (3) to instruct the Standing Committee on Communications and Public Works to investigate and, after calling for and considering representations from all interested parties, to report on the advisability or not of the privatisation of services directly concerned with the administration of posts and telecommunications.”.

Mr Speaker, one can now predict with almost monotonous precision the annual tariff increases resorted to by this hon Minister. Every year he comes to this House to present us with the Post Office Budget we can tell in advance that there will yet again be a spate of tariff increases. The hon the Minister has really perfected his hat trick now. We have already had three of those tricks of his in a row. How long is this still going to continue? [Interjections.]

The accuracy of the hon the Minister’s estimates leaves much to be desired. In the 1984-85 financial year the hon the Minister budgeted for a deficit of R131 million. What happened? He ended up with a surplus of R29,4 million. That means of course he was R160,4 million off the mark. In the following financial year—that of 1985-86—the total expenditure of the Post Office amounted to R297,4 million, or 6,8% more than the amount originally appropriated, whereas revenue from all sources amounted to R258 million, or 0,8% lower than the initial appropriation.

The hon the Minister budgeted for an operating surplus of R68 million, and finished with an operating deficit of R162,9 million.

In this year’s Budget the hon the Minister is asking for an extra R517 million for operating expenditure, which is 17,8% more than last year. The tariff increases announced as from 1 April 1986 are expected to bring in another R475 million during 1986-87, and the hon the Minister is budgeting now for a deficit of R36 million. That figure is important. It is anybody’s guess what we will end up with at the end of the year but it definitely will not be a deficit of R36 million. The hon the Minister says that since 1969-70 the average contribution to capital expenditure from internal funds has been 35,8% while the loan component was 64,2%. The self-financing component of capital is now estimated at only 12,7% for the current financial year. On this basis the self-financing component of capital expenditure would have declined to 8% but with the increase of tariffs it is expected to come to 35,6%.

Hon members will note from what I have just said that the hon the Minister has constantly referred to the formula of the Franzsen Commission. Year after year ever since I have been participating in this Post Office debate I have called on behalf of the Official Opposition for a review of the Franzsen Commission recommendations, stating that the economic situation which existed in 1972 was completely different from what exists this year or the past year. I have called for reviews. In fact we moved an amendment last year in which I actually asked that a financial study group be appointed to examine and revise the financial policy of the Department of Posts and Telecommunications. I called on the hon the Minister to review and revise the recommendations of the Franzsen Committee of 1972 with a view to applying a financial policy sufficiently flexible to keep pace with the prevailing conditions in the economy from time to time. We were shouted down and our motion was rejected by the Government side.

One positive note was sounded in the hon the Minister’s Budget speech, where he said the following:

Congratulations! This is what we asked for a long time ago and at last the hon the Minister has seen the light.

The policy of the Post Office desperately needs review. One cannot go on soaking commerce, industry, and the individual person with increased tariffs, particularly on two important aspects such as telephones and postage. These are the two most vital links of communication used almost daily by practically the entire community in the country. The hon the Minister has chosen these two particular items, raising each by 2 cents—that is 2 cents on the stamp and 2 cents on the telephone unit—which means an increase of 16,5% and 20% respectively.

The consumer is reeling under the blows of increased tariffs for transport, the higher cost of living and the high rate of inflation. Trade and industry is suffering because of the exchange rate. The rate of unemployment is increasing. People who retired some years ago cannot possibly come out today on the pensions that they are receiving. When one goes shopping, an avocado pear costs R1,68, one nectarine costs 68 cents and three potatoes cost R1,00. How does one expect people to live and come out on the money they receive?

The hon the Minister’s approach to the Budget is unbelievable. The Post Office first decides how much money it is going to spend, and then it decides how it is going to raise that money. It then decides to increase the tariffs in order to raise the amount that it is going to spend.

The Post Office is a monopoly; it has no competition. It has the force of law behind it in the form of an Act of Parliament. Parliament then approves of the Budget. There is no one to contest the efficacy of the Budget once it has been presented to and passed by the NP caucus. I have never heard of an NP caucus ever rejecting a budget presented by a Minister. The increase in tariffs even has the approval of the Cabinet. The Government is therefore collectively responsible and liable for this increase in tariffs, and it must carry its share of the responsibility. It would be laughable indeed if any member of a responsible household, wanting to balance the household budget, were to go about it by deciding first of all that what the family needed was plenty of food, luxury holidays and expensive electronic equipment; and having decided to buy the food and equipment and make the holiday arrangements, only then thinking about where he was going to get the money from. How can a family live that way? Similarly, a business cannot work on that basis. If it decides that it has to raise its price structure to a level which is beyond that which the consumer can afford, it will go broke.

The Post Office, however, can go on willynilly doing exactly that and the poor old consumer simply has to pay. The poor old consumer simply has to find the money because it is very difficult to do without essential services like postage and telephones. [Interjections.]

It is vital, therefore, that we take a new look at the financing policy of the Post Office to see whether we cannot just consider the needs of the consumer sometimes and rank that as equally important to the needs of the Post Office. When we consider the increased Post Office tariffs, we see not only that they cause financial embarrassment to the people I have mentioned but also that they exacerbate the rate of inflation, which is at present enemy No 1 in South Africa. It is as high as 20,7%.

Does the Government not realise that our money is decreasing in value year by year, and, at the current rate of inflation will ultimately be valueless? If we compare the rand’s present purchasing power with its purchasing power even two years ago, we will see that what the rand could buy two years ago it certainly cannot buy today. If we carry on like this, our financial structure will become like that of a banana republic; and then we may as well take our paper money and paste them against the wall for wallpaper. [Interjections.]

It is no good the hon the Minister saying that the increases are below the rate of inflation. That is no excuse, Sir. After all, the Government is responsible for the present rate of inflation. If the rate of inflation goes as high as 30%, is the hon the Minister going to get up here and say that he is justified in raising tariffs by 29%? We cannot go on like this! I must say I have great reservations—and I should like to draw the House’s attention to this—regarding the accuracy of the Budget, not only in respect of the deficit I mentioned a few moments ago, but also in respect of the actual estimates from year to year. Are hon members aware that this Budget was framed in August last year? Yes, it was framed in August last year.

In answer to a question I posed on the standing committee, we were told—and hon members present will bear me out—that this Budget was pitched at an exchange rate of 41 cents to the dollar. Already the exchange rate is 50 to 50,1 cents to the dollar and so the calculations relating to the Budget are already out by 25%.

This escalation must, for example, radically affect the R15 million allowed for the item of exchange rate adjustments. Notably, it must also affect the figure of R147 million which provides for higher replacement costs of assets. It must also affect the cost of loans, in respect of which the figure is R28,3 million. It must affect the capital expenditure of R506,3 million for telephone switching equipment—most of which is purchased overseas—as well as transmission equipment to the value of R309 million.

These amounts alone total R1 005 million. If one takes 25% of this figure, then this alone accounts for half the deficit of R517 million and is seven times more than the deficit of R36 million which this Budget provides for.

Further miscalculations to which I can point, relate to the revised figures for 1985-86 as compared with the estimated figures for the same year as presented in the schedule before us. Permit me to quote a few examples.

Staff expenses were underestimated by R10 million. International commitments were underestimated by R52 million. Losses were underestimated by R5 million. Hon members will note also that under the heading of losses last year’s total estimate was R67 million, as compared with only R15 million this year. This is a substantial change. The figure for depreciation of assets was underestimated by R19 million. The provision for higher replacement costs was underestimated by R9 million. The increase in standard stock was underestimated by R40 million. How can this Budget measure up to any degree of accuracy when it was framed in August last year? In order to prognosticate what will happen to the economy between April 1986 and April 1987, the deficit of R36 million is pitched at an exchange rate of 41 American cents to the rand. In other words, the future state of the economy is being guessed at for as far as 18 months ahead. Surely this is nonsense.

We have welcomed the news of the end of the state of emergency and of changes and, we hope, a possible settlement in SWA/Namibia. Perhaps there will be a new dispensation for the Blacks later in the year after the federal congress of the NP, and maybe there will be a referendum later this year too. Upon the strength of this, however, the hon the Minister sees fit to raise tariffs at this particular time.

Let me make myself clear about this. I sincerely hope—as we all do—that things will be better. I sincerely hope that the rate of exchange will improve and that the price of gold will increase even more favourably. However, in those circumstances, in the event of the economy brightening, is this hon Minister prepared to reduce tariffs during the year to make up for his mismanagement and the deficit in the Budget for which he is pitching the Budget at this stage? It must be clear—the hon the Minister himself has admitted it—that the financial policy of the Post Office must be reviewed. Let us regard this as a priority instead of having to come with further increases in tariffs year after year. One wonders at this stage how Mr Rive, when he was the Postmaster-General, and previous Ministers in this portfolio, managed not to increase post office tariffs for a period of five successive years. How did they manage then? The economy changed from time to time.

Another difficulty I have with regard to the balancing of the Budget is the loss on postal services normally referred to by the hon the Minister, as opposed to the profits made by the telecommunications services, together with the whole question of cross-subsidisation. A glance at the schedule shows that the operating expenditure for postal services is estimated at R522 million whereas the revenue is estimated at R414 million. In other words, on the face of it there seems to be a loss of R108 million. However, when we compare this with the item on page three of the schedule, we see that telecommunications services show an operating expenditure of R2,8 billion as opposed to a revenue of R3,1 billion. That means that there is an operating surplus of R342,5 million.

I want to submit that these figures, although not inaccurate, are completely misleading as far as what the hon the Minister has had to say about cross-subsidisation is concerned. In the past, the hon the Minister has often used this disparity by saying that there should be more of a levy on the postal side to match up with the telecommunications side. I wish to debunk that argument. I say it is totally erroneous because the staff expenditure indicated in the Budget as R1,4 billion covers the staff involved in both telecommunications and postal services; it is impossible to separate the two. One cannot, therefore, say that the figure I have just quoted is in any way an accurate reflection of the position of the postal services as opposed to telecommunications services.

The revenue obtained can, I believe, be accepted but the expenditure certainly cannot. It is therefore time we stopped, once and for all, talking about cross-subsidisation as far as the postal services and telecommunications services are concerned. It is quite clear that in any one post office, personnel deal with both telecommunications and postal services, and so they cannot be separated.

I have referred to the inaccuracies in the approach to the Budget before us and I am worried that they have led to the increase in tariffs. If my submissions are correct, and the hon the Minister is free to dispute them if he can, then the public have unnecessarily been called upon to pay additional tariffs, and I think this is an extremely serious situation.

The Budget provides for a deficit of R36 million. The hon the Minister has already admitted in the House of Representatives that we could, in fact, have a small surplus in the end. Can one believe what he said in answer to the debate on his Budget? He said (Hansard: Representatives, 6 March 1986):

The hon the Minister has therefore already admitted, even before finality has been reached on this Budget, that we will not end with a deficit of R36 million. I wish to take this argument further. In spite of this he sees fit, to increase postal tariffs on letters by 2 cents. Since 1 cent yields a revenue of R17 million, 2 cents will yield R34 million, and that alone wipes out this deficit of R36 million. How can he now justify the 2 cent increase on postage stamps? [Interjections.] It is scandalous in these circumstances to have imposed the 2 cent increase in the face of the deficit of R36 million being wiped out on the admission of the hon the Minister himself in the House of Representatives.

I do not see any provision—to take this matter further—being made in the expenditure for the payment of a payroll tax or a turnover tax. The regional establishment levy is known as the “turnover tax” and the regional service levy is known as the “payroll tax”. It is suggested that the payroll tax will carry a levy of 0,25% and the turnover tax a levy of 0,1%. I am under the impression that the Government, the State and every institution will be liable for these two taxes which are likely to come about this year.

I do not believe that the Post Office will be or is in fact exempt from the payment of these two taxes. As it appears likely that these taxes will be implemented during the current financial year, the Budget is even more inaccurate in not having made provision for them. Staff expenses alone amount to R1,4 billion, including salaries and wages amounting to R884 million. If the 0,25% for the payroll tax is levied, this alone will require—according to my calculation—a minimum of R2,2 million. However, when it comes to the establishment tax, it is impossible for me—certainly as a member of the Official Opposition without access to all the figures—to work this out, because if 0,1% is to be levied on all the revenue obtained, not only from what is sold, but also from the renting out of all telephones, switchboards and other services of the department, the Budget will be even more inaccurate. Perhaps the hon the Minister can tell us what this will come to and what the effect of these taxes will be on the Budget in the current financial year. In all these circumstances, how can the hon the Minister say that the Budget is accurate, and that being so, what justification does he have for raising the tariffs?

Much has been said by the hon the Minister about the productivity committee and about the 0,8% increase in staff but, unless there is going to be a reduction in staff, one cannot argue that productivity is a plus factor.

In reviewing the Post Office’s policy, one must also look at the policy of privatisation. The hon the Minister of Administration and Economic Advisory Services has requested us to make suggestions with regard to privatisation. In fact, he sent out a letter to all of us, as far as I know, dated 6 December 1985. In this letter he said:

Coming from a Cabinet Minister, I take this to be a direction by the Cabinet. However, I did not notice anything in the speech of the hon the Minister of Communications that referred to privatisation.

On the standing committee we were told that under the item transport services a sum of R116 000 was used to pay private contractors to carry mail from the Post Office to the station because there was simply no organisation.

I believe one should take a very careful look at the whole question of transport services which, after all, amounts to R101 million. In this regard one should consider privatisation but any consideration of this matter should take place in conjunction with the hon the Minister of Transport Affairs and his department. Thus one may come to an agreement whereby private contractors can handle, inter alia, the conveyance of mail. This would eliminate a number of expenses such as vehicle licence fees and other levies on vehicles. I accept the fact that a certain number of vehicles will still be required but one could look into that aspect.

We should also consider the subject of the electronic conveyance of mail. There are a number of firms in South Africa that could handle the system of the electronic conveyance of mail and thus relieve the Post Office of the workload in this regard. It would actually become an added source of revenue to the Post Office because it would result in an increase in the use of telex machines and telephones.

Under the circumstances the hon the Minister should not hesitate at all in supporting the third leg of our amendment. If he supports it, the Standing Committee on Communications and Public Works will be able to investigate and report on the advisability of privatisation.

If he does not, we will deprivatise him!

As far as telephones are concerned, since every telephone now brings in a revenue of R496 and, since we are now going to have 4 million telephones, we are looking at a figure of R1 984 million. Therefore, we should concentrate on the division of telephones and work at eliminating the existing backlog. We should give priority to telephone services. We must fish in waters where there are fish and I want to refer to Soweto. In Soweto, as at 31 December 1985, there were 17 118 on the waiting list, but only 6 711 telephones were installed.

Some years ago we had Operation Soweto. I call for another Operation Soweto, not only because it will be productive for the telephone service but also because it will bring about peace and tranquility to the area of Soweto and will enable the people to feel more secure in Soweto. I believe the telephone service is an essential method of communication which will give the people of Soweto that form of security.

I want to end up by commending the Post Office and its directors for the outgoing manner in which they have tried to keep up with modern communications methods. We have entered an electronic age of microchips and optical fibres, and the link with Saswitch is appreciated. Motorphones are also referred to, but too many people are on the waiting list and one cannot get them. Beltel, data transmission, pay telephones and the development of the Disa telephones are all doing very well indeed and we appreciate that. I am still seeking clarity with regard to the standstill arrangements on the Leutwiler agreement and perhaps the hon the Minister could tell us how our loans are affected.

In conclusion I take the opportunity firstly to convey the Official Opposition’s thanks to all the Post Office workers throughout South Africa for their dedication and service to the community. We appreciate that. To Mr Ridgard and his directors, we wish them well in their task. We have found them co-operative at all times, we have found them knowledgeable, we have found them keen to do their best for the Post Office and the community. We have found the discussions on the standing committee most helpful towards understanding the Budget and seeing what the problems and perhaps the weaknesses are in the Post Office. I want to conclude by wishing them well and trust that the years ahead will bring about a better dispensation and more relief for the consumer public of South Africa.

Mr Speaker, if I were to attempt to list the various errors of argument of the hon member for Hillbrow it would take up the entire time available to me. Let me mention but one example. The hon member says that the extent to which the postal services are being subsidised by the telecommunications services has been distorted by the fact that staff expenditure is listed under one item at R1,4 billion, and that by doing so the Post Office admits the fact that cross-subsidisation may be unnecessary. However, the hon member has been spokesman for the Official Opposition for a long time. He knows that if there is any distortion whatsoever because of the lumping together of all staff expenditure, that distortion is in favour of the postal services. In fact, it minimises the extent to which the postal services are being subsidised. After all, the hon member knows just as well as I and other hon members in this House do, that the labour intensive services are the postal services and not the telecommunications services.

One of the undoubted advantages of the new tricameral parliamentary system is that it affords the spokesmen for the various parties in all three Houses an opportunity of dissecting a budget such as this for a full period of two days after the Budget Speech by the hon the Minister. The hon member for Hillbrow and the other member of his party had ample opportunity last week to elicit information from all the officials of the Department of Communications. In passing, I should like to congratulate the Postmaster-General, Mr Ridgard, and his officials for the way in which they conducted themselves and for the answers which they gave on the occasion of the standing committee meeting last week. I say that the hon member for Hillbrow had every opportunity to elicit from the Postmaster-General and his staff those items on which money could have been saved in the Post Office during the past year. However, he failed to do so because, throughout his entire speech, he was unable to mention one single item of excessive expenditure during the past year.

I have been a member of this House for nine years now and I have yet to discover a single circumstance in which the Official Opposition could find an increase in tariffs justified. In fact, one gains the impression that if the PFP had its way our postal services would still have to be run on the income derived from the old Cape triangular penny stamp, and this despite the fact that in the period 1981-1985, according to the latest annual report, the total plant investment per telephone increased from R786 to R1 188, an increase of 51%, while the number of telephones in use increased during the same period by 33% to four million. Yet the Cape Times has the temerity to criticise the 20% increase in the capital budget by suggesting that capital growth be frozen for a year in order that inflation may be curbed.

These armchair specialists do not seem to realise that such a freeze will deny all South Africans the expansion of infrastructure on which any economic revival must be based. I say that this criticism, apart from being stupid, reflects utter hypocrisy coming as it did only three days after this paper’s Sunday stalemate had increased its price by 20%. [Interjections.]

The Sunday Tribune, the Sunday paper of the Argus Group in Durban, also quietly followed suit. That, however, is not all. In March 1985 the Sunday Times cost 58c plus tax, but now, 12 months later, the price is 89c plus tax, an increase of 53,5% in 12 months. [Interjections.]

Let us consider these two great institutions in our society—the Post Office and the Press, both pillars in the modem democratic information society, both run on business lines, neither receiving one cent from the taxpayer. The one, the Post Office, has to run the whole gamut of public censure, has to go through parliamentary debate and at the end of each year has to submit its books to public audit if it adjusts its tariffs by so much as just one cent. The other raises its retail price by a whopping 54% in a single year with impunity and still arrogates a free say on all cost increases, from a postage stamp to that of Parliament itself.

We on these benches appreciate the need for regular tariff increases in order to keep abreast of modern technology and to meet the ever-growing demand for more and better postal and telecommunications services. Unlike the opposition parties, Sir, we are grateful for a number of major achievements on the part of the Post Office:

We applaud the fact that tariff increases have been kept down to an overall 15% while capital expenditure will be increased by more than 20%.

Furthermore, Sir, we congratulate the Post Office on a magnificent achievement in installing more than 1 000 new telephones per working day, culminating in the provision of the four millionth telephone in December 1985. We further note with gratitude that the demand for new telephone services, which is after all the source of more than 50% of the income of the postal services, still shows no sign of abating. This fact, together with the fact that consumer demand for new telephones reflects an ever-growing Black waiting list, constitute the best possible answer to opposition claims that our telephone charges and telephone rentals are too high.

Furthermore, Sir, we commend the Post Office for the fact that as from 1 April 1986 it will be the first Government employer to attain parity in salaries and wages in all its sections as far as White, Coloured and Indian employees are concerned.

In the fourth instance, Sir, we are deeply grateful for the innovative way in which the Post Office mobilises domestic savings so that the expected income of R100 million has in fact become as much as R560 million.

Finally, Sir, we are proud of the Post Office’s productivity rate which has not only earned high praise in recent times—I referred to this last year—but has again resulted in such a modest staff growth that only a 0,9% increase is reflected in this Budget over the past twelve months. In this respect I should also like to refer to an excellent interview with the Postmaster-General which was published in the Financial Times in October 1985. Apart from the modest staff growth in the Post Office it must be remembered—and it is reflected in the article to which I refer—that through its policy of entering into partnership with suppliers in the private sector the Post Office has helped to establish and stimulate a local communications and electronics industry. In this way the Post Office effectively supports eight major manufacturers with a total number of employees exceeding 10 000, placing local orders to the tune of R700 million per year.

I have said before and I say again that, compared with our trading partners in the Western World, our postal and telephone tariffs are too low. They can only be justified on account of a relatively large developing part of our population. When all is said and done a truly efficient and modern postal and telecommunications system depends on its tariffs, given the other achievements in the field of productivity and frugality to which I have referred.

Let us just briefly consider the alternative forms of funding to tariffs to which the Post Office could turn.

The first one is a system of Government subsidies. It is common knowledge that there exists a considerable degree of cross-subsidisation in the Post Office. The telecommunications network has to subsidise the postal services and even within the telecommunications system the densely populated regions generate income which must make up for shortfalls in the remoter areas and in the border areas. Consequently a case could easily be made out for Government subsidies on the grounds of our population distribution and the socio-economic needs of a large section of our population. Such an expedient would seriously curtail the Post Office’s freedom to determine its own priorities and policies and would destroy the basis on which the income of the Post Office rests and that is the post office customer himself. I am convinced that no political party in this House or in either of the other two Houses would seriously advocate that the Post Office be funded in such a way.

In the second place I come to the item the hon member for Hillbrow has referred to and that is privatisation. This issue is also dealt with fairly extensively by the Postmaster-General in his article in the Financial Times. He says—I think this is justified—that although privatisation where practicable is Government policy one must not lose sight of the fundamental socio-economic differences between our society and that of Europe, Britain or the Americas. Most basic services have long been provided in those developed societies. Capital expenditure is only needed insofar as replacement needs dictate them so these expenditure items can largely be met from Revenue.

In South Africa basic infrastructure has still to be provided in many rural areas. Where they do exist capacities have to be enlarged by the installation of modernised plant. Moreover, in our society strategic needs bring heavy communications needs in our border areas.

These facts mean that in the absence of Government subsidies with their concommitant disadvantages, indiscriminate privatisation could limit expansion and investment in all but the more profitable areas. This will be to the detriment of the overall development needs of the country and all its people.

A third source of revenue apart from tariffs which the Post Office could turn to is loan funding. I submit that 1985 has illustrated only too clearly the risks involved in becoming too heavily dependent on foreign loan capital. Overseas perceptions are after all so distorted that even the Post Office, an organisation which has long since phased out apartheid and which is on the threshold of complete parity in wages, could still be held to ransom by overseas loans.

For this reason we welcome the hon the Minister’s determination shown both in his Budget Speech and in the Budget documents to reduce the Post Office’s dependence on foreign loans. Loan capital should firstly be found from domestic savings. Here there is considerable scope for improvement. Of the R68,7 million saved during the past year at banks, building societies and the Post Office, the Post Office attracted only R2,3 million, which is 3,3%. While much has been done in the field of the training of staff as investment advisers, in the field of improvement of savings facilities, and in the field of promotion and advertising campaigns, I think we should aim to increase our share of the local savings from 5% to 10%. Only then will it be possible for us to fund a substantial percentage of the provisional capital budget which is estimated at R11 000 million in the next five years from local sources.

In this respect, I think one final remark would be suitable. If we consider the fact that our Post Office savings capital has fluctuated during the past three years between R50 million on the one hand and R560 million on the other, we will realise that substantial tax incentives will have to be offered to would-be savers in order to ensure that the local capital market will display an acceptable level of consistency.

Even so, tariffs and tariffs alone remain the only basis on which the Post Office’s income can with complete reliance be raised. In the light of these considerations, we have no hesitation in agreeing with the hon the Minister that he had no alternative but to increase the tariffs, and so we wholeheartedly support this Budget.

Mr Speaker, we thank Mr Ridgard and his staff throughout the country for the hard work that they have done over the past year, and for the fine work they do everywhere in South Africa’s post offices. [Interjections.]

We know the Post Office has a problem. The cause of this problem is the central Government. It is the Government’s financial and political policy that is the cause of all these problems. I therefore move the following as a further amendment:

1. (1) will reduce the inflationary tariff increases resulting from the Government’s total inability to combat inflation effectively and will announce no further tariff increases during the financial year; and
2. (2) will make a contribution in the Cabinet to persuade the Government—
   1. (a) to pursue a proper and planned economic and financial policy and to combat the waste of public money; and
   2. (b) not to implement further power-sharing in respect of Blacks, which is fatal to White self-determination and peace among the peoples of Southern Africa.”

All the appropriations and additional appropriations that we have had up to now, follow the same trend in that they contain no good news for the public. The man in the street simply has to pay and in some cases he pays more than he can afford. [Interjections.]

We have recently been experiencing a depression of the worst kind which we shall not easily forget. I am sure it is much worse than the one in the thirties. There is unemployment. People are going hungry. People are suffering. On top of this we are experiencing terrible drought in certain parts of the country and our inflation rate has already exceeded 21%. Prices are simply soaring sky-high. Apart from natural disasters such as the drought, the Government can be blamed for most of these things.

For the locusts too! [Interjections.]

One receives the impression that things have gone so far that they cannot be halted at all.

Our currency has very little value today. The Government of the day has got caught up in one of the biggest financial catastrophes ever. It is probably worse than anything any of us have experienced in our lifetime.

Posts and Telecommunications has also fallen victim to the Government. We therefore know in what a dilemma the hon the Minister and the Post Office staff must have been when they budgeted. Never before, as far as I can remember, has this once prosperous country and earlier on South Africa definitely was a prosperous country had to ask a financial expert from another country to go and plead with its debtors for deferment. This is a terrible position to be in. This reduces a country’s bargaining power when it comes to making purchases. As a result of the fact that we were late in paying our debt, a situation has developed where our country has lost its bargaining power entirely. Any businessman would confirm that the sooner a client settles his debt, the more discount he is likely to get and the better the services he is given. No one likes a risk factor at all. We do not want to be considered a risk factor. May the depression we are in at the moment, pass as quickly as possible. It is the duty of everyone in this country to assist in bringing this about.

The further possibility also exists that we will not be granted discounts because of late payment. The position is that instead of discounts, interest on interest has to be paid, which worsens the situation even further. When we discussed the Appropriation in the standing committee, it was pointed out to us time and again that the weak dollar-rand ratio was the cause of the increase. That is a fact. The Appropriation we are dealing with now, strikes a hard and penetrating blow. This pushes inflation up by approximately 0,5%. It is usually the last straw that breaks the camel’s back. One cannot help but feel oppressed when thinking of the Main Appropriation that is to be submitted in a few days time.

If one looks at the Appropriation before us, one sees there is absolutely no service under the head Operating Expenditure for which more has not been budgeted than in the previous year. The same tendency is apparent in capital expenditure. On page 8 of the Estimates there are only four items for which less money was budgeted than for the previous year. The cost of all the other items has increased. We know Bonus Bonds have been discontinued, but it led to a significant loss in revenue for the Post Office. We are not in favour of Bonus Bonds. We are pleased they have been scrapped. The Post Office, however, has lost a considerable amount in revenue because Bonus Bonds were abolished. It is a pity that the Post Office lost this revenue. Perhaps we should consider other sources of revenue. When one thinks of agency fees in television services, for example, one wonders whether a higher service fee could not be charged for television services without this devolving upon the viewer. The television services in South Africa has, however, degenerated into a medium for propaganda which does not augur very well for South Africa at all. I have no sympathy at all with our television services.

Nat propaganda!

I should also very much like to know who pays for the stationery used for the collection of television fees. We also know that it is the job of Post Office inspectors to look for pirate viewers. To go and investigate every home is virtually an impossible task and must cost the Post Office a vast amount of money. In the past one could spot the high antennas, but these days mainly bunny antennas are used and inspectors have to go from house to house to find unlicensed television sets, perhaps in the possession of people who are lodgers or who rent the homes. To trace pirate viewers in this way is a tremendous job. If more revenue could be obtained, however, without it devolving upon the viewer it would be a good thing.

As this Appropriation was drawn up as far back as August last year, as we gathered in the standing committee, changes could very possibly have taken place in the meantime. Since August the dollar/rand relationship has improved and we are very pleased about it. It may result in certain tariff increases having to be readjusted. I am, for example, thinking of telegram costs, postage costs and telephone installation costs that have increased tremendously. I am pleased that in the case of installation costs for social pensioners there has at least not been an increase. I thank the hon the Minister for that.

Virtually everything else has increased. The increase in the cost of telephone calls is detrimental particularly to poor people who do not own cars and are entirely dependent on the telephone. They now have to pay 20% more. In this case an exception could be made. The Post Office knows exactly who every social pensioner is, because these people or their representatives draw their pensions at the Post Office counters. Provision could be made that these particular people’s tariffs remain the same—although they are high as it is. It could happen that dishonest people have a telephone installed in the name of a pensioner, but a safeguard could be built into this by limiting the number of call units. If the limited number of call units is exceeded, the increased tariff could come into effect. I think this could be done.

I am grateful that R50 000 has again been budgeted for a donation to the Afrikaanse Taal en Kultuurbond of Posts and Telecommunications. I want to ask the hon the Minister that this Afrikaanse Taal-en Kultuurbond remains unchanged and exclusive. If others ask for something similar, we have nothing against it; on the contrary, it is their right. We, however, want to retain that which is our own.

We should also guard against privatisation, so that the character of the Post Office remains intact. We are in favour, however, of the Post Office’s providing work for many other firms—as the hon member for Umlazi said.

Mr Speaker, this is an interesting amendment the hon member for Nigel has moved, because it would seem to me as if the CP has undergone a change in policy. I shall quote the amendment so that we can gain clarification on it. After saying that this House declines to pass the Second Reading of the Post Office Appropriation Bill unless and until the Minister gives the assurance that he will make a contribution in the Cabinet to persuade the Government to do certain things, (b) reads as follows:

Is the CP implying by this that they are in favour of power-sharing with the other groups?

No, what you want to say is incorrect! [Interjections.]

But that is how we interpret this! [Interjections.] We therefore accept that they have finally come to that conclusion. [Interjections.] They do accept the principle of power-sharing with the other groups, but this one aspect they do not want to accept. I think the hon member for Sasolburg should pay attention to this. [Interjections.] I think as far as these two parties are concerned the honeymoon was over this afternoon. [Interjections.]

When one listens to these two parties, with the PFP giving its standpoints on why this budget should not be passed and the CP putting forward its standpoints, one asks oneself—if one is arguing scientifically—which of the two parties’ standpoints could be valid, because they are poles apart from each other. If one were to reject this Post Office Appropriation on the grounds of their political arguments, things would surely fall through. [Interjections.] Surely that does not get one anywhere. This is once again bears out the fact that the arguments hon members of the Opposition raise in Parliament when discussing a Post Office Appropriation, have no substance.

The hon member for Hillbrow came along here with a string of suggestions and points of criticism, and to my mind the hon member for Umlazi dealt very effectively with them. In fight of the fact that the hon member for Hillbrow said we are trying to predict what the state of the economy would be in 18 months time, let me just tell him that he does he, after all, know just as well as I do that in this Post Office Appropriation we have made provision for the fact that equipment has to be bought. Sometimes equipment costs us R900 million. If we plan ahead for the delivery of such equipment over 5 years, surely we cannot only look at how the economy itself is going to do. We bear it in mind, but once we have placed the orders or entered into contracts, we cannot cancel them. These goods are delivered year after year, and we have to pay for them. And so I want to tell the hon the member for Hill-brow that he should not put forward such weak arguments. He is a seasoned member; with far more experience of the Post Office than I, and he should know that this is the way in which the Post Office manages its budget. When we then get together in a standing committee, we should look at those costs and try to get sources of income to recover those costs, because as a Parliament we decided a long time ago that we were going to enter into the field of electronic systems of telecommunication. We planned according to that; we are involved in long-term planning. We are in the process of erecting a network countrywide which we have to maintain and pay for. We therefore have to budget in this way.

I could carry on speaking for hours, but I also want to say a few words with reference to all this criticism as reported by the media. It was not only the political parties who had comments to make. Comments also came from the Freemarket Foundation and the Consumer Council. They dealt particularly with privatisation and these high tariffs. I want to link up with what the hon member for Umlazi said. Has it not become time for us to show the public at large exactly what is happening abroad as well?

Our critics should not merely just repeat the same criticism over and over again every year. What I said about political parties, also applies to the NRP, because in their statements to the papers they also said it had to do with the poor management. Later on this afternoon I should like to hear to what the NRP’s reply to this is going to be. All the Opposition parties have thus far referred to the “shocking” tariff increases announced by the hon the Minister. We on this side of the House find that extremely irresponsible, because if we draw the Post Office into a political debate, no one wins; neither those of us in this House, nor members in other Houses. South Africa would definitely not benefit from it, because we would be harming the productivity of the Post Office. The Post Office’s productivity goes hand in hand with that of the rest of the economy of this country.

The standing committee members will bear me out that there were intensive discussions between the members and the Post Office’s management to establish precisely how this budget balances. The standing committee should be regarded as the watchdog committee of Parliament that checks to ensure that what the hon the Minister has recommended does, in fact, need to be done. We as members of the standing committee, unanimously agreed that we went along with it. We could not find scientific reasons why we had to support other tariff increases—or no tariff increases.

That opposition against this would come from the direction of the opposition parties in this House, as well as from the private sector, is of course understandable. We have seen in the past how the private sector reacts when tariffs are increased. The hon member for Umlazi a moment ago pointed out what happened in cases of that nature. That is why we are able to state that they would always find 110 reasons why their product prices would have to increase accordingly. That is my reason for repeating my comment on this organisation every year, and that is that we as politicians in Parliament should endeavour not to debate in such a way that we use the Post Office, which is one of the finest organisations in the country, as a political football. As politicians we should distance ourselves from behaviour of this kind. If we were in any way to create that impression here, we would in no way be promoting the interests of the Post Office, but would really only be advancing our own political parties’ standpoints, and I even wonder if we would succeed in doing that. The Post Office in fact plays a leading role in the productivity of this country. If we could get away from the archaic systems, which we have come across in the Post Office, and could succeed in building on the new electronic systems of telecommunication and other postal services, we would merely be developing the distribution of information in a faster and much more productive manner. This of course would also stimulate the economy of the country.

If we as politicians were to join in the unfair criticism, we would merely be contributing to the weakening of the Post Office’s productivity, and we would soon be following in the footsteps of the Russians. We saw this recently on television, and I think we should certainly take note of that. We should refuse to go along with everything the media says, as the hon member for Umlazi pointed out just now. If we did so, we would not be advancing the arguments used by the Post Office to try to motivate this Budget and the tariff increases.

I think the reasons for my statement are obvious. These tariffs that are causing such complaints are so ridiculously low, that in my opinion an increase of 50% in some cases was too low. We should perhaps have considered a higher tariff adjustment. In this connection I want to refer, for example, to the ridiculously low tariff that one pays to rent a post office box for a year. One cannot even go and buy a little plastic post-box from the OK Bazaars at less than R15. Our tariff for renting a steel post office box in a strong, sturdy building is R15 per year. I do not think that we ever recover the money that we have to spend on such a post office box. The price is low in spite of the fact that there is—so I think—a waiting list of more than 6 000 names for those post office boxes. Why should we rent out a post office box at R15 per year when an amount of R10 per year amounts to a rental of three cents per day? I challenge any opposition member to mention any commodity that we can hire in this country from the private sector at three cents per day. This is what it amounts to—three cents per day! One cannot park a car for half an hour for less than 50 cents.

[Inaudible.]

I am speaking of cases where the private sector rents it to me; not where it is a service provided by the municipality, because in that case the tariff is usually low as they are also subsidised. The hon member should therefore pay attention to that. [Interjections.]

The private sector and some politicians sitting opposite me, complained about the installation costs of a telephone which amounts to R90. This morning I made enquiries in Cape Town concerning the installation costs of TV antennaes. In Cape Town one cannot have a TV antenna installed for less than R95. If it is to be mounted outside, it costs R140. To me the installation of a TV antenna is comparable to that of a telephone. If the private sector cannot manage it more cheaply, why does the Post Office have to? Last week I bought a piece of furniture that had to be delivered to my home three km away from the hypermarket. I had to pay R30 for the transport cost. When the Post Office installs a telephone, it must pay the transport costs and the technician. Why should we, the other consumers, pay for the installation of a new telephone? One could carry on giving reasons why it was necessary for us to make certain tariff adjustments.

The private sector and members of the opposition are continually campaigning for privitisation of Post Office services. I now want to say something about that. I wonder whether the private sector, as I was saying just now, would be prepared to do it for R90. People who attack the productivity of the Post Office would do well to go and read the annual report. They will be able to read that the NPI is in agreement on the Post Office’s productivity. I shall enlarge on this later to show that the private sector, in my view, would not be able to manage it.

Let us see whether the criticism that the Post Office has to endure, is justified. The Post Office’s establishment rose by 1,8% last year. So 1,8% more people were employed in comparison to the 5,2% of the previous year. On the other hand, 37% more telephones were installed last year than in the previous year. And is that that unproductive? Is that something the private sector could compete against?

The replacement of 32 manual exchanges resulted in trunk calls that had to be put through manually dropping by approximately 6 million. This means that somewhere in the country there were a number of officials who had to operate manual exchanges. Their services can now be employed more fruitfully elsewhere because they have been replaced by automatic equipment. Because of that automatic equipment we are now asking the user to pay 2c more per unit per call than before. Because the user can now put a call through immediately, I think the public is content to pay the extra two cents.

That is how one should make progress in a country. In Parliament one should not merely echo the opinions of others. One should rather reach out to the public and show them what they are getting for that two cents.

Teletex has grown by 180% and this resulted in the call units increasing by 420%. This is another reason why we can say one should go back to the voters, the members of the general public who use telephones, and show them what they are receiving for this tariff increase. If our people complain about increased tariffs, the opposition should not back away. They should rather support the Government because we could lift this country out of its problems with a better posts and telecommunications system.

The consumer should know that we suffered a loss of R85 million on the postal service. We shall have to tell the consumer this; and we should tell him that we suffered this loss in spite of installing automatic machines that can sort 18 000 letters to 104 destinations within an hour. In spite of this fast method of sorting, the postal service still suffers that loss. And so we must communicate with the consumer to inform him.

When we revert to a position in which we have more funds available to us from our own sources, it will more quickly be able to extricate ourselves from this dilemma we found ourselves in last year. One could not budget meaningfully then because one did not know what increases there would be in the foreign loans that one had to pay. I therefore support the hon the Minister’s statement that we should return as quickly as possible to the position in which we, according to the findings of the Franzsen Commission, had a 50%-50% allocation of funds.

It is loudly propagated that postal services should be privatised. The Post Office has been doing so for a long time in the private sector. Yesterday’s Rapport referred to the fact that some of our largest multinational companies have said that the Post Office could not possibly be completely privatised at this stage. Data modems—the hon members who served on the standing committee or are involved in the Post Office will know about this—were, however, privatised a year or two ago. This was a singular source of income that the Post Office gave up. Last year, for example, the Post Office obtained revenue of approximately R50 million from it. We privatised data modems because we said we should place it in the hands of the private sector.

The building of manholes and the laying of these new optical fibre cables is being privatised and is subcontracted as far as possible. If we have to become privatised on a large scale, I should like to put a few questions to the private sector. Would they be prepared to train people in the way the Post Office is doing at present? On 31 March 1985 there were 7 000 technicians and students in the Post Office. Year after year we train these people to provide telecommunication services. Year after year the private sector poaches them from us. Is it prepared to train people in this way? Are they prepared to take on the non-profitable training role played by the Post Office? No, they are not. Trained staff are continually leaving the service of the Post Office, but the Post Office has never complained about it. The Post Office regards it as part of its policy, as part of its contribution to augmenting of the country’s manpower as well as expanding the telecommunications industry.

We train staff who are later seconded to neighbouring states. Now let me ask hon members what company in this country would be prepared to do this kind of thing? What company would be prepared to train people who would later on be taken over by neighbouring states, people who help to place South Africa’s telecommunications network on a sounder basis? That would not do, short-term profits are what the private sector are pursuing and it would therefore not do the kind of things that the Post Office does.

There is something else I want to state. Sixteen per cent of the fulltime staff left the service of the Post Office last year. Less than 8% of these people, however, were trained technicians. Now one may ask why it is that something like this happens in these economically difficult times? It simply shows once again that it is not the Post Office’s policy to lay people off during financially difficult times. The Post Office keeps those people in service and provides job opportunities, in spite of what the CP claims. As soon as we experience hard times, the private sector shrinks back and does not do the kind of things that the Post Office does in fact do and which makes it such a fine department.

We unfortunately also have to continue establishing the communications system not only in the interest of our country, but also in the interest of the private sector and of everyone who is going to have a share in it. This includes both the profitable as well as the non-profitable people. One of the other hon members also referred to this. The profitable sections of the Post Office are here in the metropolitan areas, but the non-profitable sections are to be found on our borders and we also have to make provision for security there. I want to know whether the private sector would see to that. Would it be safe in the CP areas of Waterberg and Soutpansberg? Would the private sector do that for them? Never!

If the private sector does not want to take over these nonprofitable services from the Post Office, I want to say to the hon the Minister: Keep it up. We on this side of the House have made an intensive study of why this Budget has been submitted to us in this form and why there have to be certain tariff increases. We are in agreement with it, and I should like to support this legislation.

Mr Speaker, the hon member for Boksburg always tackles his task with great enthusiasm. I was rather fascinated by the way he defended the amount payable for the rental of post boxes, as if everyone in this House were attacking this provision. He hotly defended this tariff and told us that it only amounted to a rental of 3 cents per day. He asked how we dared even mention it. I cannot recollect anybody on this side criticising that rental in any way, shape or fashion.

[Inaudible.]

Thank you for enlightening me, but then of course, that gentleman and his party would criticise just about anything. I am sure he would probably argue with that hon member as to what colour people who use post boxes should be. That would be his problem.

I intend to reply to the hon member regarding the comment he made apropos my Press statement. I will do that during the course of my address.

Tariff increases are becoming the rule rather than the exception, and we have come to accept that we are faced with these inevitable tariff increases each and every year. I think the hon member for Hillbrow congratulated the hon the Minister on a hat trick, because for three years in a row there have been tariff increases. It is a pity that we have to be faced with bad news each year. I sincerely believe that these “automatic” adjustments reflect a lack of imagination, because these adjustments are invariably coupled with clichés such as “the falling value of the rand”, which is the modern one, the one for the 1985-86 financial year. Previously we had another cliché, namely “the rising cost of fuel.” Incidentally, now that the cost of fuel is dropping, apparently it is not as important a factor as it used to be. When the cost of fuel was rising it was responsible for all cost increases, but now that the cost of fuel is dropping, we hear that the effect is minimal and that has very little effect on anything in our lives.

However, what I have to say now, is going to upset the hon member for Boksburg and, I know, the hon the Minister. It has upset him before. There is one incontrovertible fact we have to face, and that is that South Africa’s economic ills are directly attributable to the Government’s unacceptable political policy and its attendant lack of positive economic direction. [Interjections.] One cannot get away from that. The hon the Minister got terribly upset during the additional appropriation debate when I told him that when we started to paddle in the Rubicon on 15 August last year, the rand went for a dip. That is a fact of history! It is a fact of history that when, in Durban City Hall a gentleman stood up and suggested that we had crossed the Rubicon the value of the rand dropped. I was sitting in the City of London, and my heavens, I saw the results of that comment the very next day, 6 000 miles away! Our rand went for a dive, and it stayed low until approximately three or four weeks ago. [Interjections.] One cannot deny that.

Was that after his second speech?

No, it was after his first speech. Let us remember what happened to the rand after that momentous non-event in our history.

[Inaudible.]

Oh, please! Always we are reminded of the second speech. Look at the damage that was done on 15 August. [Interjections.] We are going to take a long time to recover from that.

For the benefit of the hon member for Boksburg, I should like to quote what I said in my statement: “The blame for the inflationary spiral must be laid fairly and squarely at the door of this Government’s maladministration of the political and economic affairs of our country.” To substantiate this, I move as a further amendment—

1. (1) it fails to meet the criteria of sound business management in that it resorts almost exclusively to tariff increases in order to balance the Post Office budget;
2. (2) it introduces unnecessarily high tariff increases in respect of telephone units and standardised mail charges; and
3. (3) it will further aggravate the inflationary spiral.”.

Listening to the hon the Minister’s Budget Speech convinced me that we do indeed show a lack of imagination because, once again, we have tariff increases across the board that must be borne by the South African public and business sector. I honestly do not believe that we have applied sufficient self-examination in order to explore other areas. I think that we indulge each year in long-standing budgetary practices that have caused us to get into a rut where we only look at tariffs as a panacea for all our ills. To illustrate what I am saying, I should like to refer to the estimates for agency services on page 11. The revenue accruing from television licence fees is R5 560 million. The Postmaster-General and his staff pointed out to the members of the standing committee that the department does, in fact, make a small profit on the collection of television licence fees. This sum represents that profit, and it is approximately 5½% to 6½% of the total amount collected. This leads me to ask if the Department of Posts and Telecommunications is a charitable organisation. I want to assure this House that the Post Office does not, as far as I know, enjoy any beneficial tariff from the SABC when it advertises its wares on that medium. As I understand it, the SABC charges the Post Office what it charges anybody in the commercial sector, and advertising time costs something of the order of R20 000 per minute. Why, then, are we rendering this service to an organisation which, for want of a better expression, I shall call a parastatal. The Post Office is giving away its services.

I ask myself, therefore, if other Government departments are paying their fair share for services rendered by the Post Office. Do they all pay the equivalent of 12 cents per item of standard mail? We are flooded with official envelopes. How is postage paid on these and how is the figure arrived at? Is the Post Office getting its fair share? This information is not reflected anywhere, and I think the time has come for us to know what each department is paying. We should be told whether or not, in the considered opinion of the people who count—by which I mean the Post Office—they are getting their fair share. I understand that Government departments certainly pay for telephone calls, but I should like to know whether they are charged the current rate of 10 cents per unit and if not, what they are paying. Can it be said that Government departments are paying the correct tariff when one considers that, for at least the past 12 years, the Post Office is supposed to have been run as a business concern? If it is run in this way, it should be making the correct margin of profit from all its clients. It should not have a certain profit margin from the private individual, taxpayer, businessman or farmer and have another from within its own ranks.

There is no shadow of doubt that we have a postal and telecommunications service of which we can be justly proud. Equally so, I think one must accept that it is a very expensive exercise to keep ahead of the game, particularly when one thinks of the advent of electronic switchgear as opposed to the old electro-magnetic type. As our technology and the availability of services improve, should we not be looking seriously for greater volumes while at the same time making every effort to maintain our tariff structure?

The hon member for Umlazi says we must appreciate the need for regular tariff increases in order to keep abreast of modern technology, but I honestly and sincerely do not believe that we have to do this. We should instead be increasing volumes. When telephone charges are increased by 20%, it immediately results in economy drives in businesses and private homes. I should imagine that every husband and a couple of wives in this place went home and said: “From 1 April, you just take it easy on that telephone”. That is not the object of the exercise. We should be encouraging more use of the telephone, and I think we are wrong with these tariff increases in that they dissuade the user from utilising what is an excellent communications service. We should be making it easier for him, because I think the end result would be the same.

I think we should look seriously at providing an even more efficient and readily obtainable service to more and more prospective clients. We should be going out into the marketplace, providing services to more and more people. If we increase turnover with a smaller profit margin, we shall achieve the same or even better trading results. That is a fact of business and of commercial life.

[Inaudible.]

I am talking about the possibilities of approaching a budget from a different direction. I am not talking about what the hon the Minister has done here. In my honest opinion the hon the Minister has committed a cardinal sin here for the third time. I am pleading that we look at it from a different angle next time around. I say again that this is where, I believe, there is a lack of imagination. We rely on outmoded and outdated statistical information, and we look at growth patterns and anticipated growth. We then look at the required income figure and by dividing the one into the other we come up with a new tariff for the ensuing year. That is what we are doing year after year.

These comments apply equally to mail items. I do not think we should discourage the volume of mail; we should seek to do the exact opposite which, in the long run, would achieve the same end result plus the attendant benefits of additional employment and job opportunities, because that is a labour-intensive exercise as the hon member for Umlazi pointed out. We should not discourage junk mail; we should encourage it. However, by increasing tariffs by 16,6% we are going to discourage it. This year, all right, it has been done, but I am asking the hon the Minister to think again before he does it next year.

In conclusion, I want to say that our Post Office has come a long way. It has, under successive administrations over the past 15 years, improved its image and its service greatly. However, I sincerely believe that the time has now come for it to re-examine carefully its budgetary practices as well as its approach to the business ethic and the profit motive. While no one will deny that the Post Office must make a certain amount of profit in order to upgrade its services constantly, we in these benches sincerely believe that there should be a different approach with regard to the method.

Mr Chairman, the hon member for Umhlanga raised a few interesting points and I shall follow them up in the course of my speech. There are certain facts we have to place on record during this debate and I do not think there is anyone in this House that would differ on the following few statements. Firstly, no one questions the need for the Post Office to continue with the expansion of the telecommunications infrastructure in the interests of the country. There are definite limits with regard to the resources that are available for the purpose, and the hon member for Umlazi referred to these a moment ago.

It is the bounden duty of the management to ensure that production factors are employed to the best possible advantage. In the international context the flexibility and versatility of a country’s telecommunications network are becoming increasingly important. South Africa cannot afford to be left behind. If South Africa wishes to maintain its position against overseas competitors in the field of trade it is essential that we keep abreast of the rapid developments in the technological field. We must aim to have all services in the future—telephones, data, telex services and so on—carried by a single network. Fortunately we are rapidly moving closer to this stage of development.

During the 1984-85 financial year capital expenditure reached the record level of R1 137 million, R997 million of which was appropriated for the extension and modernisation of the telecommunications network. This is truly an achievement of which one can be proud. Moreover, during the past financial year the cash turnover exceeded the R10 billion mark for the first time.

The possible privatisation of State-controlled services has become a topical issue during the past year. The provision and maintenance of data modems, and the possibilities of private automatic branch exchanges and motorphones, have been mentioned in this connection. Maximum use is also made of the services of private contractors and consultants for the provision of a large variety of goods and services. As far as the Post Office and this department are concerned, this is perhaps the groundwork for the future.

Over the past weeks unnecessary criticism has, in my opinion, been levelled at this department and at the tariff increases. Three amendments have been submitted to us today. To sum up, I can say that there are complaints regarding tariff increases, privatisation and the rotten Government. I have listened to the content of the amendments, but the arguments being advanced to give substance to those amendments are not really arguments. We are in fact addressing ourselves to other departments. We are addressing ourselves to the economy of the country and the world, but we are not confining our arguments to this department. This department is a subdivision of the broader machinery of government. As a mere subdivision, this department has to stand on its own two feet here, and budget. This gives an indication of the circumstances forcing it to budget it in such a way. [Interjections.] In the process of preventing it from falling behind, and becoming a banana republic—as many of our opponents want to see it…

After all, you say the Whites stand in the sun. [Interjections.]

I want to come to privatisation, but my opponents in the CP are shouting things at me here. I simply want to tell them …

You said the Whites stand in the sun.

Oh, Sir, the hon member for Rissik must please go and read my speech. I shall leave it at that, however, because the poor man cannot understand what is being said in this debate. [Interjections.]

Order!

The hon member for Nigel expressed the criticism that people are hungry and that there is no good news for the general public. This should, however, be seen in the context I have just sketched. We are not deliberately trying to impoverish people. We are not increasing tariffs simply for the sake of the increase! I think that if the public were to ask us where their money was going, we on this side of the House would be able to stand up and justify the increases, and I shall presently refer to that in more detail. [Interjections.]

Much has also been said about privatisation. We have to be careful that the word “privatisation” does not become a buzzword. It could easily become a word used completely out of context. I think there is something we should state unequivocally to one another today. This department cannot be privatised, as many people want. The communications network of South Africa cannot be left in private hands, because no private enterprise, whoever it may be, could maintain the achievement, and effect the expansion, this department is striving towards.

We should then also tell one another that we should not summarily do away with privatisation and forget about it. Within the infrastructure that this department has already built up, privatisation can take place. With this I should like to associate myself with what the hon member for Umhlanga said. The Post Office is a business concern. Let us make it truly a business concern. Let us expand it. Let us regard it ultimately as a semistate institution and model it on institutions such as Iscor or Sasol. Let us make the Postmaster-General a Director-General or the chairman of a board of directors, and all Postmasters-General directors of a large enterprise. In this way we can take this department to still greater heights, to South Africa’s advantage. In the same way that Sasol and Iscor make use of private people, this department could make more use of their services, and make further use of their expertise to the advantage of the Post Office. Our opponents must understand this. Let the public at large, who are so keen to tell us to privatise, come to the fore and then privatise within this infrastructure.

Much is being said about tariff increases, and then there are the arguments on behalf of the aged who need telephones. Before I am misquoted again, allow me to say for the record that I support the worker in South Africa. I support the Post Office worker in South Africa, regardless of race, class, language, culture, or whoever he may be. We support these people. Not one of my hon colleagues on this side of the House does not endorse these words. We realise our responsibility towards the general public. We shall fulfil that responsibility. We should then, however, stop making a debate of this department’s affairs, and making this debate a plea for the lowering of tariffs, and a little bit of this and of that. We are not unsympathetic towards these people but, after all, our country does have a Department of National Health and Population Development at its disposal. We can apply to them for an increase in pensions and for an increase in subsidies for the aged. The Post Office cannot justify this. Unfortunately—however much the Post Office wants to serve these people, too—we are not able to do this.

There is a lot of talk about tariff increases. Like the hon member for Hillbrow, I do not want to refer to figures here. This can become dangerous because when one first begins to play with figures, it can become very dangerous. Reference has been made to the terrible increase in prices. Even the former Postmaster-General is appealed to come and testify to this; in Mr Rive’s days there were no increases, and now suddenly there are increases. Is the hon member casting aspersions on the present management of the Post Office? I know the hon member to be a good person and I do not think this is his intention. Let us look, however, at certain figures and at those years to which the hon member is referring. In April 1971, a litre of milk cost 13,1 cents. Today it costs 83 cents. In the years to which I am now referring—from 1971 up to today—the price of an ordinary timber pole, which the Post Office uses in our backyards every day, rose by 288%. The price of the ordinary telephones on our desks or in the home has risen by 335%. Staff expenditures and their salary increases—which are their due—rose by 423% over that period. Tariff increases, however, rose by only 300% over that period. I think this is adequate proof that the Post Office is not exploiting people.

I believe the Post Office has attained an achievement of which it can be proud. Unfortunately my time is running out, but—because I believe it is good and right—I still want briefly to place on record certain of the Post Office’s achievements. In the first place, the Post Office attained an outstanding achievement regarding the provision of telephone services. It is expected that during the present financial year, an additional 176 000 telephone connections will be completed. At the moment 830 manual exchanges still exist in the Republic, to which approximately 200 000 services are linked. It is the endeavour of the Post Office to substitute those manual exchanges with automatic telephone exchanges as soon as possible. Nevertheless the Post Office envisages the substitution of 300 manual exchanges by automatic exchanges during the 1986-87 financial year.

I do not have to tell hon members here what it costs to convert a single manual exchange into an automatic exchange.

As a result of the Post Office’s achievements, the teletex service has expanded to the extent that we in South Africa can establish contact with practically any part of the world today. I therefore want to tell the hon the Minister, and particularly the Post Office itself: Carry on in this way. We are supporting you. Show all your opponents that the Post Office has a sound basis, and that it will continue to render great and sterling service to South Africa.

Mr Chairman, there is another reason why the postal tariffs must be increased. It is because the practice of listening in on telephone conversations is increasing. [Interjections.] On 31 January of this year we wrote a letter to the Postmaster-General in which we told him that we had reason to believe that telephone conversations of leaders of the HNP were again being tapped. We asked him to give us the assurance that this was not the case. His reply reached us on 18 February, and in it he said:

Mr Chairman, what does this mean? It means that the whole of South Africa, including all those people the Post Office is boasting about now—boasting because it has now supplied them with telephones—now has another additional service. Tape recordings are being made of their telephone conversations. [Interjections.]

Of course the HNP has a great deal of experience when it comes to the tapping of telephone conversations by the Post Office. In 1968, when I was still a member of the caucus of the National Party, the then editor of Die Burger, Mr Piet Cillié, told me personally at that year’s congress of the National Party that he knew what I had said to Beaumont Schoeman, the then assistant editor of Hoofstad, in a telephone conversation. Incidentally he was quite correct. His version of the contents of that telephone conversation was quite correct.

At that stage I was a member of the caucus of the National Party. Consequently I was not a danger to the State; I was not committing any crime—yet my telephone conversations were tapped.

Today I want to tell the supporters of the hon the Minister of Foreign Affairs and of the hon the Minister of National Education that they must not think that their telephone conversations are not being tapped. The hon member, Mr Koot van Staden, cannot possibly keep up with informing the State President of what all his supporters are thinking and saying. [Interjections.] Besides, he is getting old. He is no longer young. [Interjections.] His days are passing swiftly. Now he must sit there working overtime, but fortunately a solution was self-evident: “Tap everyone’s telephone conversations!” [Interjections.]

Mr Chairman, in the same way that we in our time did not have any guarantee that our telephone conversations were not being tapped, the separate groupings in the National Party today cannot have any certainty that their telephone conversations are not being tapped. [Interjections.]

This House, and particularly the people outside, will remember what a sensation Mr Jaap Marais caused by producing the so-called telephone tapping document in the no-confidence debate of 1970. In the Supreme Court here in Cape Town—with a very loyal supporter of the Government on the Bench—Mr Jaap Marais was found guilty of ostensibly acting irresponsibly as regards that telephone-tapping document. We eventually took this case to the Appeal Court in Bloemfontein. There Judge of Appeal Piet Wessels—I think it was him—gave a ruling in which he said precisely the opposite, namely that Mr Jaap Marais and the Herstigte Nasionale Party, who had been prosecuted and dragged through the courts—it cost us between R15 000 and R18 000 for all the court cases; in the days when a rand was still a rand—acted in an extremely responsible way as regards that telephone-tapping document.

In 1978 the “Boss” agent Arthur McGiven revealed what was being said on the telephones of the HNP. It then came to light that the Post Office thought that they were tapping the telephone of the editor of The Afrikaner, but they then found that they were also tapping the telephone of the HNP, because from the outset—the Advocate-General was wrong about this in his report—we had the same telephone number. Since the formation of the HNP and from the time when Die Afrikaner appeared, our telephone number was 26-9076. When they discovered that they were tapping the telephone of the HNP, they simply carried on doing so. It did not worry them. The Advocate-General had to reprimand them about this.

We instituted lawsuits against the present State President and the then Minister of Posts and Telecommunications, Mr Hennie Smit. What is more they did not want to go to court and asked us to settle the matter out of court. This we also did. In that year, in September 1981, the hon member for Hill-brow asked the State President and Mr Smit in Parliament who was paying the costs they were incurring. I can now tell the hon member for Hillbrow—here I have the letter from the attorneys—that the cheque came from the State. They tap their opponents’ telephone calls at State expense and then the State must pay for it. I think this is a crime being committed against South Africa! The Government is tapping people’s telephone calls because it is politically afraid.

What I cannot understand is that the Post Office which is being praised so highly today, distributes communist literature from Prague virtually free of charge—as far as I know free of charge. I have a document here in my hand. The hon members must just hear what is said about the Government in it:

Here it is in my hand, posted in Prague—here it says Praha—without any South African markings on it. Without any markings from the Post Office stamp it is being distributed to South Africans by the World Federation of Trade Unions. This is plain, blatant, communistic propaganda, being distributed by the Post Office which is controlled by the NP.

The Government is tapping the telephone calls of its political opponents at enormous expense and—as far as I can see—they are providing that postal service to communists abroad to distribute communistic propaganda against the Government itself in South Africa. This is a hopelessly disloyal, inefficient and incompetent Post Office, as bad as one can get in the Western World.

Mr Chairman, the story is told about a grandson who asked his grandfather whether the grandfather had been with Noah in the ark. The grandfather replied that he had not been there but then wanted to know from his grandson why he had asked that. The grandson replied: “But Grandfather, why did you not drown?” Now I also want to ask the hon member for Sasolburg with his stories about the sixties: “Why did he not drown?”

I do not know whether or not the telephone tapping which the hon member said was going on at that time took place. But in his book, Vorster se 1000 dae, Beaumont Schoeman wrote about the time when the hon member for Waterberg, then the editor-in-chief of Hoofstad in Pretoria, was fully informed telephonically every Wednesday—or whenever the caucus meeting was held—by the hon member for Sasolburg—then the member for Worcester—on what had happened in the caucus meeting of the NP. [Interjections.] I want to know whether that is true.

What is wrong with that?

The hon member reveals what is said in caucus meetings and he asks me what is wrong with that! [Interjections.]

Two matters received a great deal of attention in this debate, namely tariff increases and privatisation. Perhaps it would be a good idea for us to look at the Appropriation itself.

But first I want to get back to the allegations about telephone tapping made by the hon member for Sasolburg. On 19 March 1985 the former Leader of the Official Opposition asked the hon the Minister of Communications about his department’s policy in connection with the tapping of telephones. I am willing to lend it to the hon member if he promises to return it to me.

Whatever the policy used to be it is now the policy to listen in.

No, it is not.

It has always been the policy to listen in.

I now want to get back to the increase in tariffs by the Post Office. I think that 14c for a letter is excellent value for money. [Interjections.] If at the increased tariff we are still budgeting for a loss of R107,6 million …

Order! If hon members want to go and talk outside the House they are very welcome to do so. They are making it very difficult for the hon member to make his speech. The hon member may proceed.

Mr Chairman, this is not listening in to a conversation but taking part in it.

If we are budgeting for a deficit of R107,6 million in the Postal Services, I maintain that the tariff increase of 2c on a postal article is perhaps too small. An amount of 14c for the service which is supplied to get a postal article from Cape Town to Pretoria is excellent value for very little money. No one else can supply this service. Such a postal article is handled by 43 people and transported by four vehicles plus an aircraft.

Unfortunately the service subsidising this is our telecommunications service, for which a surplus amount of R342,5 million has been budgeted. I think the hon member for Umhlanga or another hon member said—and I agree with this—that we should rather bring the services operating at a loss, particularly the Postal Services, closer together in order to make them cost effective rather than to subsidise the telecommunications service to such a great extent.

I think the hon member for Umhlanga was quite right when he said that we could increase the tariffs of the agency services, for which a loss of R2,6 million has been budgeted, so that at least we can break even there in future.

The hon member for Umlazi and other hon members have already said that the services provided by the Post Office are amongst the cheapest in the world. I want to agree with that. It is an excellent service. Hon members in the ranks of opposition have said that the costs should not be increased, but not one of them indicated how we could economise and how these services could be supplied more cheaply.

The National Productivity Institute proved to us that the productivity of the Post Office staff was amongst the highest in the country. Consequently, to say only that the tariffs are too high and inflationary, or simply to level all other kinds of criticism at the Post Office without offering a solution of any kind, is in my opinion not fair. I do not think that is right. To tell the truth, I think it is fairly irresponsible. [Interjections.] If hon members think that we are going to solve the problem by privatising the Post Office, they are making a mistake, because the Post Office is after all a private enterprise. [Interjections.] To whom does the Post Office actually belong.

The Minister! [Interjections.]

No, the Post Office does not belong to the hon the Minister. [Interjections.] The Post Office belongs to the people of South Africa. The Post Office does not owe the State a cent; and the State does not owe the Post Office anything either. The Post Office belongs to the people of our country. It is also the hon member for Hillbrow’s Post Office; and the telephone service is also the hon member for Sasolburg’s telephone service. Yes, Sir, it is our people’s Post Office. Consequently, I think that the best thing we can do, is to be more loyal to the Post Office and its people because the Post Office belongs to us. I do not think that by shying away from tariff increases we must end up in the situation of having to go hat in hand to the hon the Minister of Finance to save the Post Office.

The Post Office is keeping pace dramatically with the most recent developments in the world. Our telecommunications services are amongst the most modern in the world. An authority in this field claimed recently that South Africa was competing with the two countries which were leading the way with regard to modem techniques in respect of telecommunications. With the tremendous development in microtechnological techniques, we can be proud of what has been achieved in that field in this country.

The critics of the Post Office in particular would benefit from studying what is really going on behind the telephone equipment. A glass fibre cable as thick as the lead in a pencil, has a core with a carrying capacity of 2 000 simultaneous telephone conversations, for example, compared with the carrying capacity of the ordinary copper cable of 15 conversations. What is more the core can be manufactured in 12 different colours, and each separate core can transmit 2 000 simultaneous telephone conversations. Consequently, this means that 24 000 simultaneous telephone conversations are transmitted by a glass fibre cable as thick as the lead in a pencil. This is development in the field of microtechnology which few countries in the world can equal!

A wonderful development in this field which was announced recently, was the introduction of the Post Office Savings Bank, which did extremely well during the past year. It was estimated that an amount of R100 million would be invested, but actually R560 million was invested. Consequently, I think that in future the Post Office Savings Bank is going to play a far bigger role—it should play a far bigger role! Particularly because the interest earned is taxfree I think that more and more of our people—particularly our pensioners—are still going to find that the Post Office Savings Bank offers a very attractive way of saving their money.

Since the incorporation of automatic teller machines into the Multinet system, the Post Office Savings Bank is now linked up with three other financial institutions. After its incorporation into Saswitch, it will be linked up with a further 12 institutions. Bearing in mind the present developments to join these two systems, I maintain that there are exciting times ahead as regards the payment of salaries, pensions, allowances and so on. In future, this will bring about great savings in expenditure.

Mr Chairman, I also want to say a few words about the technological wonders which we are witnessing these days, and I should like to relate these to the financing policy.

Before doing so, however, I want to ask the hon the Minister, in connection with bugging, whether there is not perhaps a machine available which can use a longer tape. It is most frustrating when one is cut off in the middle of a long conversation and can only start listening again when another tape has been inserted.

†Mr Chairman, in support of the amendment to scrap the increases and to review the entire financing policy of the Post Office, I want to refer to the technological advances in our modem society.

Although these technological advances appear to be a blessing to mankind, it seems that in South Africa they are something of a burden, judging by the way they are handled by this hon Minister and his department.

The microchip, optical fibre and computer technology have together made possible a quantum leap in communications and information systems. The capacity and output of systems have increased out of all proportion to the size of the equipment. This is evidenced by the fact that the small desk-top personal computer of today can easily equal the output of a room-sized computer of the early 1960s. A small box on the wall of any large office today can replace a whole country town exchange of yesteryear.

In the automotive industry, increased output is normally achieved through disproportional cost increases. For instance, the additional 50 km/h—or 20% increase—in the speed of a Porsche over a Corolla, was achieved at an increased cost of approximately 500%. As a further example, I can replace the carrier bearing of my 1935 Morris with that of a modern 1984 model Corolla. Therefore in the automotive industry, we may speak only of different examples of progressive steps in technology. [Interjections.] However, in the technological field of telecommunications and information equipment, we do not find mere progressive advances. What we have, in fact, is new generation equipment.

The benefits which this new generation of equipment provides for mankind, is that increased output is in fact achieved at a tremendously reduced cost. What does this mean in terms of Posts and Telecommunications budgets and tariffs? It means that we are not just dealing with the replacement of existing networks at the end of their normal functional life. It also means that we are not simply expanding networks with the same type of equipment. It means that in order to remain efficient, we may even have to replace equipment which has become obsolete before its functional life has expired. Our whole telex system has been replaced with such new generation equipment. At this stage, however, only 20% of our switching equipment and distribution network have been replaced with new generation equipment.

The question arises as to how does one handle these benefits and also the problems of redundancy in financial policy. It seems to me that, compared with the hardware and software of the department, which certainly reflect this exciting new world, the financial policies of the department look like something out of the distant past. It seems that in the office behind all the flashing lights sits an old accountant with an ink pot and a quill, counting the historical entries of the past on the fingers of his two hands. Before the ink is even dry on the first entry, however, I suggest that any whizz kid with access to an Apple—for the hon the Minister’s information, I am not talking about what is in his lunch-box—could tell one that the capital employed per line of communication will in fact reduce drastically over the next twenty years. Why is it then that we, the current generation, are not sharing the benefits through reduced tariffs?

The answer quite simply lies in the hon the Minister’s speech and items 1.9 and 3.1 of the Budget. The hon the Minister tells us that the average period of depreciation of equipment is 26 years. He also tells us that the average loan redemption period is 10 years. If there is one lesson that most bankrupts can teach us, however, it is that there is no better way to land in financial trouble than to fund long-term assets with short-term funds. When we add to this the statement that internal capital funding from revenue will amount to almost 36% this year, as compared to last year’s figure of 33%, these two statements together tell us that the current generation is expected to pay too much towards the benefits future generations will be able to enjoy.

Why is it that we must also have the additional burden of the “provision for higher replacement cost of assets” when it is patently obvious that most of these assets, in terms of equipment, will in fact be replaced by equipment at a much lower cost to achieve the same output?

It is further patently obvious that we can expect an exponential growth in the demand for telecommunications services both from the sophisticated part of our economy and also from the emerging Third World and informal sector. Both of these types of services fall in the economic category or in a category of cost advantages because of new technology. Therefore, in the near future there will be many more times the number of subscribers who can and should pay their fair share towards development costs.

In these pioneering days when telecommunications systems are entering the new world of tomorrow, I believe we can no longer afford the policies of yesteryear. The Franzsen Report belongs in the history class. Therefore I support the recommendation that the financial policy be revised in such a way that the current generation can now start sharing in the benefits of new technology rather than its being a burden on them.

The next aspect I want to look at is that of wage increases. I title this aspect: “Wage increase of 10%: Who is fooling whom?”

At a stage when inflation is running at an all-time high of 20%, many people felt a twinge of sympathy for the workers of the Post Office and other public servants when the 10% increase was announced. The immediate conclusion, against the background of an inflation rate of 20%, was that the average worker would be worse off by about 10%. When one studies the figures more carefully, however, it appears that this sympathy is rather misplaced. When one considers further that not a single employee was laid off during this recession while in the private sector lay-offs, bankruptcies, wage freezes and even wage reductions were the order of the day, I think it is quite cynical that public servants, and the Post Office workers in particular, are having a pretty smooth ride through the economic storms caused by their political masters. The truth is, in fact, that purely in terms of cash, the average Post Office worker will be earning 21% more in 1986 than in 1985. The average worker earned a salary of R7 700 in 1985, while benefits such as pension, medical assistance, housing subsidy and overtime brought his total package to R13 114. In 1986, his salary will be R9 270 which is 21% up on last year, and his total package including benefits will be R15 000 which is a 19% increase. This, I am told, is the effect of notched increases, restructuring and certain so-called adjustments and consolidations of benefits, as it is called in bureaucratic jargon.

Occupational differentiation.

The difference between this so-called 10% increase and the real increase adds R122 million to the total wage bill. Therefore the average worker is, in fact, 20% better off than he was last year.

One can only hope that this applies equally to workers at both ends of the scale. If any worker who is on a fixed salary scale should find that he is only getting the 10% increase, he must realise that one of his colleagues will, in fact, be getting a 30% increase. Can the hon the Minister, on the other hand, assure us that increases for those at the bottom end who suffer most under inflation make up for the discrepancy between the announced 10% and the real 20% increase?

The last matter I which to discuss is apartheid in the employment practices of the Post Office, particularly the alarming ratio that still exists of White to non-White workers. For every 100 White workers there are but 80 non-White workers. This ratio has certainly changed since 1975, when there were only 61 non-White workers to every 100 Whites, but one wonders, firstly, whether the department has an active programme to correct the situation so that the ratio in the Post Office labour force more closely reflects that of the South African society as a whole.

We need a Black Minister of Communications.

I would say that the Post Office, exactly like the SATS, is still cornering for itself the lion’s share of the White workforce, and this the economy can no longer afford. I daresay that the total wage bill could, in fact, be reduced if the hon the Minister made a serious attempt to enter the wider labour pool through job simplification and other management techniques.

It is also a fact that the White labour force has bargained itself into a position of inflated wages and demands for benefits because of its exclusive access to the public service. Inflationary tendencies because of these demands could be moderated if the hon the Minister ensured that he opened up his workforce.

One very serious demand is for housing benefits. It is no secret that, with the property market in its present depressed state, all an estate agent can hope for is for a worker from the Department of Posts and Telecommunications or some other part of the public sector to come house-hunting. Because of these generous subsidies, people are able to afford houses well above their ability to pay if the benefits were fully taxed. For a worker earning about R18 000 per year, who can now afford a bond of some R60 000, it would mean that in the private sector, or if those benefits were fully taxed, he would have to earn about R43 000 per year to afford his own house. It means quite simply that either the worker will not in due course be able to afford his own house, or that the hon the Minister will not be able to afford his worker. The department should have a serious look at this potentially dangerous situation. The ceiling benefits must be pegged in order to help us prepare for the future when peace will only come to South Africa if we can all assist in getting rid of the gross inequalities existing in our society. I think these housing benefits certainly need to be looked at.

Mr Chairman, the Post Office was a forerunner with the announcement that on 1 April parity in salaries would be achieved. In this connection I want to congratulate the Post Office on having done such pioneer work in comparison with the other departments. As far as the removal of discrimination is concerned, the Post Office also did pioneer work. When the hon member for Sunnyside was still with us, he approved our opening up the post offices. I do not know what his present-day attitude is. I am also grateful for the fact that in these times in which we are living the Post Office also looks after all its workers, that it is willing to phase out discrimination and compensate all in accordance with the services they render.

I am very sorry that the hon the Leader of the CP is not present this afternoon because I want to refer to a recent Press report in which he criticised the SABC for allowing Chief Buthelezi to appear too frequently on television. [Interjections.] In South Africa at the moment the situation is such that we should not talk to one another from platforms, nor talk to one another over the telephone—we should rather talk to one another face to face.

Is Buthelezi going to become President?

It is that hon member’s hobby and also the hobby of the hon member for Sasolburg to whip up racial feelings in an endeavour to win votes. I am saying this is not in the interests of our country. In speaking about race relations, I particularly want to speak about Chief Buthelezi because we come from the same province and because his name was mentioned, but what applies to him, applies equally to the other Black leaders in South Africa. I regard Chief Buthelezi as a fellow-South African. What is more, he is my neighbour, because we live next-door to each other. I have known him for the past 30 years and can therefore say something about him.

Is Buthelezi going to become President of South Africa?

Never mind, I shall be replying to the hon member. Chief Buthelezi is a fellow-Christian, an exemplary Christian, and a valuable citizen of South Africa too. As a fellow-South African he does more than his duty dictates, and that is why he features so prominently in the headlines. Chief Buthelezi has done more to combat disinvestment and sanctions against South Africa in all the countries of the world than many an hon White member sitting here. That is a fact.

I owe him a personal vote of thanks and commend him for it. He is the leader of his group. He is the leader of Inkatha, and in these times in which it is difficult for a Black man to say what he would like to say, I think he is fearless in expressing his opinion. He and his people are disciplined. [Interjections.] He says that in these circumstances in South Africa he is prepared to share power with us …

Mr Chairman, on a point of order: I am in some doubt about the relevance of the hon member’s speech.

Order! I want to point out to the hon member that I have read the hon member for Nigel’s amendment. It reads as follows: … not to implement further power-sharing in respect of Blacks, which is fatal to White self-determination and peace among the peoples of Southern Africa …” I am not sure whether the hon member is speaking to that portion of the amendment, but I shall keep a sharp eye on him. The hon member for Vryheid may continue.

I think that this Black leader has a meaningful role to play in South Africa. He is the leader of the largest group in South Africa. He does not speak from a position of weakness and is truly sincere when he says that he is striving for peace. He is trying to bring about peace in South Africa. We on this side of the House appreciate the action he has taken abroad.

Mr Chairman, on a point of order: May one ask whether the third leg of the amendment, as it stands, is in order?

Order! I was not in the Chair when the amendment was submitted. Mr Speaker allowed it to be moved. This is a very late stage of the debate, and we shall therefore proceed. The hon member for Vryheid may continue. [Interjections.]

Specifically with regard to the shortages of post offices in the Black areas in South Africa, and in the national States, Chief Buthelezi can play a very important role. At this stage we must be grateful for the fact that someone like him is extending the hand of friendship. He wants to talk to us in South Africa about all the problematic issues. Amongst other things Chief Buthelezi said:

We are grateful for the fact that he adopts this attitude in this context. The Government does not want to force the principle of association onto groups in a harsh fashion.

Then I want to come back to my own province, Natal, and say something about the liaison taking place at the present moment between Natal and kwaZulu. [Interjections.] These negotiations also include negotiations involving telephones.

Order! I think the hon member for Vryheid is now stretching the topic quite far. The hon member must now come back to the subject under discussion. [Interjections.]

As far as that is concerned, there are definitely certain needs in the Black communities, and I do not blame the Black leaders for wanting to discuss such needs with us. There is a certain backlog in regard to postal services in the Black communities, and those are matters we should discuss with one another. [Interjections.]

At the present moment the NRP specifically wants to speak about that and to negotiate. [Interjections.] The NRP of Natal says it is entitled to speak about the postal services, but that is a general affair, so they cannot single themselves out to speak about the postal services. Because four of the NRP’s representatives in this House come from Natal—there are 12 representatives from that province on this side of the House—Mr Frank Martin cannot simply say that he alone can speak on the postal services and all related matters on behalf of that province. I dispute that. I am saying that hon members in this Parliament can speak about those matters, not that hon member exclusively. He does not have the sole right. When it comes to postal affairs and South African politics, I regard the NRP’s role as being a last-ditch stand. One only needs to look at the members of the NRP’s executive committee sitting there. They are older than 65 years of age! They are the men of yesterday, not of today. They cannot therefore speak about me and about the future. [Interjections.]

It is essential for us to have communication in this country and for us to talk to one another. [Interjections.] It is unnecessary for us to fan the flames of further mistrust amongst ourselves and cast suspicion on one another’s motives. It is, for example, unnecessary for a man like Mr Frank Martin to say that he is the one who extends the invitations for negotiations on all matters in Natal. He says:

He is the one who extends an invitation to us to negotiate with him, but how can we negotiate with such people? [Interjections.]

Mr Chairman, on a point of order: Is the hon member entitled to make use of the bush-telegraph here in Parliament? [Interjections.]

Order! The hon member for Vryheid may continue. [Interjections.]

I want to come back to the hon member for Sasolburg. He said that whilst they were still NP members he regularly provided the hon the leader of the CP, who was still a member of the National Party at the time and also editor of Hoofstad, with reports. That claim is made in Beaumont Schoeman’s book. The hon member asked what was wrong with that. Let me focus on that. It is a fact which the hon member has acknowledged. The confidentiality he is able to maintain is suspect at the moment, and that is the reason why he is no longer a member of the NP today, or welcome in NP circles. [Interjections.]

In South Africa we have a great deal of common ground with that hon member for Sasolburg. Brother Stofberg and Brother Abramjee have a great deal in common with each other. They were both raised by Coloured servants. It is a fact, after all, that we have a great deal in common with one another, and that we should talk to one another, that we should keep the channels of communication between us clear. In this country we must stop trying to make political capital out of the merest trifles, thereby polarising Blacks and Whites—in this province, in every other province, especially in Natal.

Mr Chairman, the hon member for Vryheid spoke for ten minutes, but in seven of those ten minutes he was merely singing the praises of Gatsha Buthelezi. No government could give that man more abundent praise than this hon member did this afternoon. Does the hon member have instructions from the hon the Minister of Foreign Affairs to “boost” this Black man as the next State President? [Interjections.]

I have a problem. Here in front of me are two rows of benches—17 seats for the NP, but there is only the hon the Minister sitting there. Not a single hon member of the NP; they are not interested in Post Office matters. They are no longer interested in White South Africa. Where are they? At one stage this afternoon there were two hon members of the NRP sitting in that row—the old United Party members who have now turned National—but not a single member of the NP. I think the time has come for us to have live television coverage here so that the voting public can see how interested the NP is in the Whites of South Africa. They are violating the very sole of the Whites in South Africa; they do not care about the Whites. Hence the paeans of praise of the hon member for Vryheid. He did not have a single good word to say about the Whites.

So I shall turn around and thank the Post Office for its wonderful service over the past year. Without the Post Office officials, who rendered such excellent service—Heaven help us!—where would the Post Office have ended up? At the moment the NP has only a diabolic tricameral system that is only wasting money. That is why I take my stand with the hon member for Nigel.

I want to come back to the hon member for Boksburg. In this House one must have command of two official languages. The hon member, however, cannot even read. Has he, one wonders, at least passed matric? He quotes, saying that we accept this new dispensation, that we accept power-sharing. Here it is in black and white. He cannot, for example, read what we said to the hon the Minister about endeavouring not to implement any further power-sharing with the Blacks—which would prove fatal to the self-determination of Whites and to peace amongst the various peoples of Southern Africa. No further power-sharing! With the other two population groups we already have power-sharing. Does the hon member not know that yet? He wants to tell the man in the street that there is nothing wrong yet, that we are just as separate as ever, that Whites decide their own affairs. That is what the NP does. The Whites have not relinquished an iota of their sovereign power yet. That is what hon members of the NP say.

I want to come back to a few other matters. The hon the Minister submitted a budget, and there is nothing wrong with his integrity and competence, but Heaven knows, he is caught in the steel trap of a Cabinet to which he does not have the courage to say he is leaving and is not going to go on selling White South Africa down the river. I have studied the Appropriation, but there is one point I want to discuss with the hon the Minister. In this Appropriation the Ministerial allowance has been increased from R22 000 to R26 000. This is on page 4, item 1.1.2.6. I compared this with the previous year’s allowances. This figure appears on page 3, item 1.1.2.6, a figure which was increased from R19 000 to R22 000—an increase of 15,8%. This year the increase is 18,18%. I must say, Sir, it seems very strange to me. So I immediately made some inquiries. I was then informed that this did not merely embody the ministerial staff, also including certain clothing allowances to certain members of the ministerial staff. That could, of course, be the case, but if that is so, why does the hon the Minister allow this to go through? Has he never scrutinised this? If the department made a mistake, surely he ought to have discovered it. Does the hon the Minister ever read these documents? Does he ever examine them or does he simply let them pass unnoticed?

[Inaudible.]

Very well. If that is indeed the case, why does the ministerial staff…

You were, after all, a member of the National Party for a long time. At the time the Post Office Appropriation was the same as it is now, was it not.

No, Sir, all the hon Ministers receive allowances of R19 000 each. If it is true that the relative amount is intended for the staff, what amount did they receive prior to 1985? Were they then receiving nothing? As far as I know, prior to 1985 there was no decision of this kind. Why did the hon the Minister treat them so shabbily and unfairly by not having allowed them to get anything prior to 1985. [Interjections.] No, just listen to that, Sir. Just listen to that roar of laughter! We know how it goes. When things are not going well for the Whites, when we speak here in the House of the distress of the Whites, those hon members of the National Party roar with laughter. They rejoice at the distress of the Whites. [Interjections.] The hon member for Overvaal proved it again today.

What do you say, Oom Jan? [Interjections.]

I want the hon the Minister to give us a clear picture of what is going on here. We want to know exactly why this was not done previously. I do, just by the way, want to protect the hon the Minister. His own hon members are not doing so. [Interjections.] If this amount is not a personal allowance for the hon the Minister himself, where are his own hon members then? Why do they not protect him? There are 125 of them as against the few of us in this party. They do not, however, look after the hon the Minister. They are not interested. The hon the Minister could just as well go under; they are not interested in him. [Interjections.] This matter must be put right. There must be a clear indication that the hon the Minister’s allowance does not exceed R19 000 and that the remainder is needed for other things. This must immediately be put right.

I now also want to focus attention on a few other matters. This year the hon the Minister budgeted for a tremendously large percentage of increases. Tariffs have been increased by an average of 16,7%. Post office box rental, for example, has been increased by 50%. Hon members of the National Party say that post office boxes cannot be rented elsewhere for that amount. We have always paid R10 per annum rental for a private post office box. That, however, was before the National Party completely destroyed South Africa’s finances.

Was that when you were still a member of the National Party, Jan?

It was previously R5 per year.

Thank you! The hon the Minister has corrected me. Previously it was even cheaper. It was R5 per year. [Interjections.] Yes, the hon the Minister and I help each other. We are in the same fold. We stick together. [Interjections.] Telephone rental has increased by 22%. Installation costs have increased from R75 to R90—an increase of 20%. Let me also tell this hon Minister what I told the hon the Minister of Transport Services earlier: He must be careful not to allow his tariffs to increase to an impossibly high level.

The Post Office would, of course, be in a much better position if we did not always have to subject ourselves to the dictates of this poor Government. That is why, in my view, it is quite correct for us to have made our proposal.

Now I just want to focus on one further aspect. The hon member for Overvaal said we were not sympathetically disposed towards the people of the Post Office because we criticised their appropriations. How on earth can it be said that I am unsympathetic to the Post Office when I criticise the Government on the poor salary increases?

Oh, you are talking absolutely bunkum!

Sir, the hon member for Overvaal was born in bunkum. Let me tell him that it is from a completely positive stance that we criticise these Post Office increases. We think of the public, of the millions of members of the public. In the same breath we also consider the Post Office officials. I cannot speak of them in anything but praiseworty terms. Just think of the ladies in our own telephone exchange. Just think of the service their office furnishes to us here in Parliament. I can also think of two small rural areas with which I am involved—Koedoeskop and Northam. I can attest to the fact that the Post Office staff there, and also at the other place I happen to call at from time to time, deserve nothing but the loftiest praise. Their eagerness to serve any member of the public is simply wonderful.

Now the hon member for Overvaal contends that the tariff increases amount to only 300%.

I did not say that! Oom Jan, you are completely mixed up now. Rather sit down!

Daan, do give him a hand there! [Interjections.]

Sir, it was in any event one of the National Party speakers who said so. One of them said tariff increases amounted to a mere 300%. Meanwhile the increase in staff expenditure and other expenditure was 335% and 423%. It would not have been necessary for the Post Office to allow staff expenditure to increase to such an extent if the inflation rate were not 21%. The Post Office cannot be blamed for that, because the Post Office did not do a single thing to push up the inflation rate. It is the NP coalition, a mixed Government obsessed with only one thing, that of saying “yes, Boss” to America and Black power there, which must be blamed for that. On the one hand they walk arm in arm with Big Business, whilst on the other walking hand in hand with the devil.

The CP thanks the Post Office for its service. We advise the hon the Minister to tell his hon colleagues in the Cabinet: “Look, this far and not a step further.”

Mr Chairman, I take it the hon. member for Sunnyside is a member of the Standing Committee on Communications and Public Works. I am not a member of that committee and therefore do not know whether he is asking the questions involving financial commitments for the first time today or whether he also mentioned this matter in the standing committee.

Mr Chairman, on a point of order: The hon member is not telling the truth. He is telling the House and the public at large that I am a member of the standing committee, whilst in fact I am not a member of that committee.

I was merely asking whether the hon member was not a member of the standing committee. [Interjections.] In the debate on the Transport Services Appropriation the hon member tried to get at me, to launch personal attacks. I do not, however, take any notice of that. Nor do I take any notice of what he said today about the Whites. We mean a great deal more to the Whites than he thinks. The only words hon members of the CP are familiar with at the moment are words like “integration” and “selling down the river” and so on, but they do nothing to solve this country’s problems. What have they done lately? What mention did the hon member make in his speech about the rights of the Whites? Let him say what he has done and what kind of a fight he has waged. I am now really getting sick and tired of the hon member’s incessantly derogatory remarks. [Interjections.] Let me put it to the hon member that the NP will straighten things out, in spite of all the difficulties.

Without it.

The CP, however, is distorting relations in this country, and I blame the CP very much for that. We are not going to permit them to go on doing so.

I want to come to the PFP.

Oom Sporie, have you crossed the Rubicon yet?

We have crossed the Rubicon. The hon member can be assured that we are crossing, but if he wants to remain behind, he is welcome to do so.

The point I want to make here is that the hon member for Hillbrow had a great deal to say.

Mr Chairman, may I ask the hon member a question?

No, wait a minute, Sir, too much of my time has already been wasted and it is now too limited. Hon members are now afraid of my being able to tackle the PFP. The hon member for Hillbrow tried once more to criticise the hon the Minister. What I find so interesting is that the PFP seeks communication. Members of the PFP realise that their advertising campaign in the Press was a total failure. Particularly after the lengthy advertisements no one is paying any attention to them any more. Now they are having recourse to telegrams, telephone calls and finally to letters. The party no longer has any communication with the electorate.

I am now referring to what the hon member for Yeoville has just written. I realise that letters, telegrams and the telephone are efficient means of communication. I quote from the long portion of what he wrote:

Now listen to this interesting statement:

Here he is therefore implying that he does not give any attention to his Yeoville voters. They must now write to another member of the House of Assembly. I quote further:

He acknowledges that there is only one way to keep in touch, and that is by way of telecommunications. He does not mention the fact that that letter, telegram or telephone call is going to be more expensive.

When they eventually telephone one, one finds that those voters are dissatisfied with the PFP. This was again apparent in the recent by-elections. In Yeoville, Bezuidenhout and Hillbrow—that area where the fraternal triplets live—there are voters who at length approach us in the NP and tell us what they want because they are no longer satisfied with the PFP and the other opposition parties. Those voters will eventually approach us and ask for further information about the NP. They will tell us they want to join the NP and make a contribution. [Interjections.] That is the frame of mind of the people there.

In the short time at my disposal I should like to thank the hon the Minister for what he has already done in my constituency, Rosettenville. There were unsatisfactory working conditions in the post office and inadequate service facilities for the public. Now, at long last, a new building for the post office is to be erected on the corner of Daisy Street and Albert Street. It will have a surface area of 1 982 square metres and will be situated only 500 metres from the present building.

The land was purchased at the time for R107 000. In 1984 it was estimated that the building would cost R580 000 and that it would eventually contain 3 000 private post office boxes.

It now seems to me as if the planning has been delayed by a year. We had hoped to have this new post office inaugurated by the end of 1986, but it now seems as if the building will not be completed before the end of 1987. What I find interesting is that the lease expired on 31 August 1985, but I suppose it could have been extended by a year.

I am not sure what is going to happen to the post office in Townsview. The idea was that it could be transferred to the one in Rosettenville, but that post office’s lease expired on 31 July 1985. From what I have gathered, there was no extension of that lease. I should now like to know what that hon Minister is going to do in the interim period when the old contract has expired but the new post office is not ready yet.

I want to come back to the Post Office Appropriation. There is a clear link between the investment in telecommunications services and our country’s economic development. One cannot separate the one from the other. This link between investment and economic development is proved time and again by international studies. The Post Office is aware of its responsibility for creating an efficient means of communication.

Let us take our telephone exchanges as an example. In March 1981 there were 2 900 000 telephones in the country. In March 1985 there were 3 900 000. Between 1981 and 1985 there was consequently an increase of more than one million telephones. Is it not an achievement on the part of the Whites, the Blacks, the Coloureds and the Asians that they have developed the telephone service to such an extent in this country with all its challenges?

Is the erection of telephone exchanges not an achievement for the Whites too? Is it not something the Whites have done to benefit this country and the NP Government? In March 1981 there were 559 automatic telephone exchanges in the country. In March 1985 there were 762—an increase of 302 telephone exchanges within four years.

Let us look at the trunk lines. Linking 20 cities there are 22 000 trunklines. By the year 1990 the number will be increased to 49 000, ie by more than 100%. What is more, 22 additional microwave towers will soon be completed. Is that not an achievement for the Whites in Southern Africa too, although our friends in the CP do not want to acknowledge that anything is, in fact, being done for the Whites in this country? The microwave towers will eventually be completed at a cost of R22,8 million.

For these achievements, in particular, the NP—the National Party Government—including the hon the Minister, the Postmaster General, Mr Ridgard, and his staff, deserve our thanks for what they are also doing for the Whites in this country.

Mr Chairman, when we talk about the Department of Post and Telecommunications, we find that the main emphasis actually lies on communication, because that is the basic need this Department caters for.

Communicating is a need characteristic of the individual and of every group in this country. By way of communication one acquires knowledge, gives expression to one’s longings and desires and also reveals one’s interests and needs. One also learns to know and respect the interests, needs and wishes of others.

Communication is indispensable in every sphere, in the family, the church, society, the business world and in all organisations, including the State and all it’s branches. A lack of communication can do a great deal of damage and harm. As a result defficiencies and misunderstandings occur. A lack of communication can even lead to violence, inexpressible sorrow and misery. History teaches us that the communication gaps that have existed have even lead to wars.

This department is the specific institution providing for these very important basic present-day needs. This department presents an opportunity for communication not only by means of the written word, for example letters, but also via rapid means of communication such as telexes and telegrammes. An even faster service supplied by the Post Office, one which enables a person to get in touch with other people or organisations within seconds, is of course the telephone. So now decisions can be taken much more quickly. Misunderstandings can be eliminated or corrected more efficiently before they can do too much damage.

Unfortunately the converse is also sometimes true. If we think of the convenience and the service we receive from this department, we see the necessity for conveying to all the officials, including the workers in the service of the department, our sincerest thanks and appreciation—from the Postmaster-general down to the person who delivers the letters to our mail-boxes at home each day. We sincerely thank those people who perform these services, even in the far distant little post offices in the rural areas, for those individuals who need the services so badly. They furnish an efficient service, a good service, in those remote corners of our country.

Hear, hear!

And the telephonists—whether male or female—have made a comic and humoristic contribution to our own culture and way of life in this country. We have many old anecdotes about farmline telephones and eavesdroppers. I am not talking now about bugging, telephone tapping or listening in. The only difficulty we sometimes experience is, in fact, that we get crossed lines. Next thing one knows, there are two groups of people on the same line. We experience this problem on the East Rand, in particular.

I now come to the telephone and postal tariff increases. We are nevertheless glad there are some people who do not have their own telephones—for example national servicemen, students and pupils in hostels—and will therefore not find themselves subject to an increase. The tariff remains 10 cents per call. If it were to move up to the next category of 20 cents—there are only 10-cent and 20-cent slots—this would represent a 50% increase, which would, in my view, have wide ramifications. [Interjections.]

It is 100%.

Pardon me, it is 100%. The fact of the matter is that it has been a long time since I taught mathematics at school. It was probably twelve years ago that I last did so.

For the most part, however, those telephones are out of order. Or else there is a tremendous overload. It is sometimes so frustrating when your child telephones you, because you hear him depositing the money but he cannot get through.

We have great sympathy for another group of people, ie our senior citizens and pensioners. Particularly those who can no longer get around very easily are so dependent on communication via both letters and the telephone. These tariff increases, let me say, have a tremendous effect on these people. Often their lives are very lonely and they suffer great inconvenience. The only ray of sunshine in this monotonous existence of theirs is to be found in the letters they write and receive. If their longing grows too acute, they can even have recourse to a telephone and telephone their children, their families and their friends. That is why these increased tariffs are, in our opinion, absolutely unacceptable to those people because it takes another great bite out of their already dwindling pensions. Their pensions are dwindling because essentials such as food, clothing, housing and other things as it were gobble the money up. There is very little left. Communication is actually very good for the spiritual welfare of these people who have to suffer such physical deprivation. It is indispensable to their spiritual welfare. The increases are therefore going to be very keenly felt.

For these people, it is true, the installation fees are very much lower than for others. The installation fee remains R25, whilst the ordinary installation fees are being increased to R90. This is, however, a one-off concession. The other increases are extensive. After all, these aged have been part of the development programme in this country over the years. They have worked hard. They did, after all, make a contribution. I feel it would now be a tragedy for them no longer to be able to afford the benefits and the convenience resulting from this development. For them this specific commodity has become a necessity. It is a means of communication for them with the outside world, the world beyond their small little rooms or houses. They can thereby make contact and obtain life’s necessities.

Tariff increases are also out of all proportion to salary increases for officials. Salary increases do not nearly measure up to the price increases of essential items. Nor do they measure up to these tariff increases. We acknowledge the development in methods of communication, and our thoughts go back many, many years to a time when things were not as convenient for us. Things were not all that efficient.

I want to say nevertheless that efficiency suffers because of a lack of proper planning and economising. We cannot afford luxuries at the cost of necessities. We shall have to confine ourselves to the basic needs, leaving the luxuries for better times. We shall have to leave them for times when we do not have unemployed who are suffering hardships. I therefore want to advocate having second thoughts about all this with a view to making the lives of these people a little easier.

Mr Chairman, the hon member for Germiston District spoke about two matters, in particular, and they were communication and tariff increases. Her remarks on communication apply equally, of course, to discussion in general. Her comments also apply to communication with other population groups, and she could also address her remarks about that to her party. At a later stage in my speech I shall return to the question of tariffs, which she also spoke about.

We have come to the end of the second reading debate on the Post Office Appropriation. Apart from a few positive remarks made by the hon member for Umhlanga, on the part of the opposition there was no constructive contribution, with no alternative being put forward for the solution of the Post Office’s problems. That is why I think the hon the Minister and his staff can feel satisfied with the budget they submitted last week.

He must just resign and then all our problems would be solved.

I think it is time for that hon member to resign and subject himself to the test of his constituency again.

I should like to evaluate the Post Office as a business undertaking. Prior to 1968 the Post Office was financed like other Government departments, with its revenue paid into the Treasury. Since then the Post Office has been administered as a business undertaking. Not only was the Post Office granted full autonomy by way of legislation, but its finances were also separated from those of the Treasury. This gave the hon the Minister and the staff board control over the conditions of service of the staff. The administration of the Post Office is under the control of the Postmaster-General who is subject to the authority of the Minister. The Postmaster-General is assisted by four Deputy Post-masters-General controlling the various departments, ie those of finance, staff, telecommunications and marketing. The Post Office has a fixed capital of R199 million on which it pays 6% interest to the Treasury.

Prior to 1972 all capital expenditure was financed by way of operating profits and Treasury loans, but since then the Post Office has been empowered to seek and negotiate loans on the local and overseas money markets to finance its capital expenditure.

As far back as 1972 the Franzsen Commission recommended that the Post Office endeavour to provide at least 50% of its loan capital from its own funds. Owing to various problems the Post Office has thus far not been able to manage this. The Post Office is nevertheless making every effort to finance 50% of its expenditure from its own funds. South Africa is a developing country and a great deal of expansion is taking place. Large capital works are expensive. For that reason the objective of a 50% contribution has not yet been possible.

The Post Office’s terms of reference were to provide for the country’s postal, telecommunications, savings bank and money transmission transactions and services. Although the Post Office’s services differ from those of the rest of the world, the Post Office endeavours to furnish commerce, industry and the foreign business community with an effective and modem postal and telecommunications system modelled on business principles.

If one bears the vast reaches of our country in mind, one realises the difficulty involved in comparing a country like South Africa with European countries, or even a country such as the USA, particularly as far as capital investment is concerned. It is not merely a question of the installation of those capital works, but also their maintenance and the provision of service.

How do the tariffs of the Post Office compare with those in the rest of the world? It is very difficult to draw a line between the two, and there are many factors we have to take into account. It is not a simple comparison, but generally speaking our tariffs are amongst the lowest. A 1982 survey of 69 of the foremost countries proved that in 61 countries telephone tariffs for trunk calls over a distance of more than 100 kilometres were higher than those in South Africa and that in 63 countries the telephone rental tariffs were higher than in South Africa.

As far as postal rates are concerned, we are doing very well in comparison with the rest of the world. A new rate of 14 cents was recommended for this year, whilst the comparable tariff in Australia is 59 cents. It is 81 cents in West Germany, 73 cents in France, 62 cents in Switzerland, 64 cents in the United Kingdom and 36 cents in the USA. In comparison South Africa’s tariff makes a very good showing.

I should like to say something about research, because the Post Office is a highly technical department. To keep abreast of new developments, the Post Office has its own research station in Pretoria known as Potelin. Here research and studies are carried out on telecommunications, in particular, with a view to improving the system and eliminating bottlenecks. One problem, for example, involves damage caused by lightning. At present optical fibre conduction is used on a large scale to eliminate problems involving lightning, water and interference. What is more, optical fibre presents greater possibilities in that more calls and data can be routed through a smaller conductor.

The Post Office also played a major role in the development of the electronics industry in South Africa. Because not too much competition could be permitted, it was agreed that there would be approximately eight contractors supplying apparatus to the Post Office. Those firms provide work for 10 000 people in South Africa and are dependent on the Post Office for their revenue. Use is made chiefly of local material, and only a few components still have to be imported. In the present financial year the Post Office hopes to place orders totalling approximately R700 million with these firms.

As an employer the Post Office also plays a prominent role, particularly as far as the quality of its employees is concerned. With a staff complement of approximately 95 000 attention is given, in particular, to the proper training of the technicians. Although the present recession has had an effect on the Post Office, which is a commercial undertaking, as far as training is concerned the Post Office has not fallen behind, nor has it been sitting still. The Post Office realises that as soon as there is another economic upswing, its workers will have to be equipped to accept new challenges.

It remains Post Office policy to increase the productivity and optimal utilisation of its staff so as to curtail costs. Proof of this lies in the fact that in the past year the staff complement has only increased by 0,9%.

Today there is a great deal of talk about privatisation. The question that is asked is why the Post Office cannot be privatised. The fact of the matter is that in other countries where telecommunications concerns were privatised to a certain extent, their capital works had already been completed. They could therefore finance new capital works from their revenue. South Africa is still a developing country and we therefore still have even greater capital needs before all the necessary services are installed.

In South Africa there is very positive cooperation with the private sector. The new Erika telephone, for example, was developed in conjunction with a private firm.

If we look at the task and the objective of the Post Office, it is with pride that we can feel free to say that the Post Office comes up to scratch. It tries to solve problems through planning and even improves its services.

Mr Chairman, I have listened carefully to the hon speakers who have participated in the debate, and I shall reply tomorrow afternoon, as agreed. I therefore move:

Mr Chairman, may I ask the hon the Minister a question?

Order! It has been moved that the debate be now adjourned, and the hon member may not ask a question now. It will have to stand over until tomorrow, otherwise we shall have to hear the cricket score on the radio.

With respect, Mr Chairman, the game will be over tomorrow and Clive Rice will have taken the Curry Cup back to the Transvaal. [Interjections.]

Question agreed to.

Mr Chairman, I should like to thank hon members participating in the debate for their contributions.

I also wish to refer to the hon member for Walmer’s speech in which he covered a considerably wider field than the clauses under discussion. I do not think this the occasion to respond to his argument therefore he will pardon me for replying to only a few relevant points. Unfortunately the hon member attempted using the debate for an attack on the Government’s economic policy instead of confining himself to the content of the legislation.

I wish it to be recorded that the Government is exceptionally sympathetic toward the unemployed in this country and that we went a long way in voting an amount of R600 million to relieve their position to some degree. I also wish to mention that we used R75 million of that R600 million to reinforce the Unemployment Insurance Fund.

The hon member for Walmer referred to the fact that the Unemployment Insurance Fund exceeded its income monthly in consequence of expenditure. I should like to say that this declined by between R4 million and R5 million in January and February this year. Unfortunately there is a large number of contributors who have not yet transferred to the increased rate of contribution applying from 1 December 1985. As soon as this is accomplished, the deficit should decrease still further. I hope we may soon reach the position in which the expenditure and income of the fund balance.

The hon member for Walmer also made the following statement: “Blacks are widely excluded from participating in the Unemployment Insurance Fund.” As the hon member most probably knows, the Unemployment Insurance Act does not distinguish between population groups and all workers are treated exactly the same except for the exclusion of certain sectors as well as workers earning in excess of R26 000 per annum. Nevertheless this applies to all population groups and both sexes.

The hon member for King William's Town also said Blacks were excluded. That statement is factually inaccurate in the first place as there is no provision in this Act excluding or including anyone on the grounds of colour or sex. That is the point—there are no such provisions. Unfortunately these hon members cannot debate if they cannot involve colour in it. They always have to involve Blacks or people of colour to be able to make a little political capital but then they should establish their facts. Surely it is irresponsible to make such statements in the House.

Mr Chairman, may I ask the hon the Minister if his officials could possibly tell us how many Blacks derive benefits from the UIF as compared with the number of Whites, Coloureds and Indians?

Because of the fact that we are not racist oriented we do not keep such statistics on a colour basis as far as the fund is concerned. [Interjections.] That hon member has colour on the brain! He cannot think without having the Blacks on his mind.

Mr Chairman, in view of the fact that the hon the Minister has said that they do not keep statistics on colour, may I ask him whether it is not correct that the monthly return form for the UIF does, in fact, ask for statistics based on the race of the employees?

Yes, Sir, but it does not concern us whether they are Black or White because there is no stipulation anywhere in the Act to the effect that certain benefits from the fund are available only to persons of a particular colour. There are only members, and there are only employers.

The monthly return form has those categories.

If that is so, then it is of no concern. [Interjections.] It may be a form which some official or other has drawn up. The fact is that as far as the Act and benefits are concerned, such benefits are based on the member’s contribution and not on his race.

These hon members who are always making the allegation that the Government discriminates against people on the basis of colour are just giving ammunition to the enemies of this country because that allegation is substantially untrue. [Interjections.]

Mr Chairman, in the light of this argument with the PFP, may I ask the hon the Minister whether a Black man may become the Minister of Manpower? [Interjections.]

Sir, I have known this hon member for a long time; he also has a colour complex. [Interjections.] What relevance does a question on the colour of a Minister have as regards legislation on unemployment insurance? [Interjections.] Faced with a lack of substantive arguments to oppose this legislation, they are also attempting to make a little political capital.

Answer my question!

The hon member for Rissik wants to politicise this again. [Interjections.] He has no argument because the fact is that the legislation before the House was unanimously recommended by the Unemployment Insurance Board on which people of the respective colour groups serve. The trustees—those who deal with the contributions of employees and employers—do not have time for political colour games. This is a serious matter to them. Here in Parliament, however, there are people with complexes about colour who will seize every possible opportunity for a bit of scavenging. [Interjections.]

I now get to the hon member for Brakpan. [Interjections.] He referred to the delays in payment of unemployment insurance benefits—specifically on the Witwatersrand. [Interjections.]

Order! No, hon members may really not carry on like this across the floor of the House. The hon the Minister may proceed.

It is true that in the past there were bottlenecks in the Witwatersrand area but it is encouraging to be able to say that, thanks to the dedication and planning of the staff of the Unemployment Insurance Fund, about 90% of all applications for benefits received in this area now are paid within six weeks. I wish to pay tribute today to officials in the service of the Unemployment Insurance Fund. It is a fact that the number of registered unemployed in South Africa doubled in 1984-85. The volume of work has doubled and those people have made a gigantic effort; they work with dedication. They work under a performance assessment scheme. They do everything in their power to ensure that the unemployed are paid promptly. We are continuing to enlarge the personnel of the fund, we will be entering the fund on a new computer within the near future and we hope we will eliminate nearly all delays in that way.

It is equally true that there is a small percentage of individual cases creating problems which lead to delays. I should like to mention that the application is often not completed correctly or the card is not signed properly by the employer. In such a case the claims officer is not empowered to finalise that claim; there has to be correspondence with the employer again which often leads to delays.

I should like to tell the hon member for Brakpan that he would probably agree with me that it was a good performance if one takes into account that during 1985 120 000 applications for benefits were approved in the Witwatersrand area and that 360 000 people were paid benefits amounting to R106 million. The hon member will agree that this was a good performance especially against the enormous increase in the volume of work which naturally placed a great burden on the officials involved.

Mr Chairman, may I ask the hon the Minister—he mentioned that when people’s applications were incorrect it caused delay—whether those mistakes are made as regards essential or non-essential aspects and whether a distinction is made between these aspects. If a person has made a mistake regarding a non-essential aspect, surely the benefits may be paid out meanwhile and the mistake then corrected. Is any distinction made in reply to this question?

The claims officer applies a measure of discretion but, for the purpose of general information to the House, I say we have to exercise very strict control over those payments because there have been cases in which people have tampered with their unemployment cards. Consequently they imply they are entitled to greater benefits than is actually the case. Unfortunately there have been irregularities which we were obliged to hand over to the police and at present people are serving sentences as a result of fraud. In consequence these officials have to be most meticulous as there are quite a number of people who take chances of extracting money from the fund. Officials can therefore not summarily approve and pay claims; they have to be very careful. Nevertheless the claims officer has a measure of discretion.

I also wish to return to the hon member for Constantia. I have just received the information from my department that various forms in the possession of employers are currently out of date. The new forms which have been printed and distributed make no difference as regards colour.

I wish to re-emphasise that actual delays are chiefly attributable to employers, not completing the contributor’s report card correctly. Salary groups and periods of service are not always entered accurately—to cite an example. The truth is that the fund is perpetually taking active steps to reduce the waiting period as emerges clearly from the amendment in clause 4 in which the main aim is to contribute to the obviation of delays in payment of claims by improved staffing.

The hon member raised a problem as regards the provision in clause 4 concerning the value of administrative services furnished by the Department of Manpower on behalf of the Unemployment Insurance Fund. As the Treasury will in future no longer have to make finance available to the Department of Manpower in advance to defray the expenditure of the fund, it will mean that the financing will be no longer be linked to the departmental appropriation. Determining the value of the services rendered by the department to the fund is presently done in consultation with the Treasury because the State advances the necessary finance for this in the departmental appropriation. As this financing will be removed from the departmental appropriation in future, the role of the Treasury therefore falls away.

The important aspect, however, is that the value of services is reflected in fixed amounts and that in consequence there is not actually a controlling function in this respect. They include inter alia expenditure on salaries, accommodation and transport allowances, pension fund contributions, unemployment insurance contributions, housing subsidies, PSMAA contributions and also disability contributions which comprise known and specific fixed expenditure. It is also a fact that these are privatised monies under the control of a body from the private sector consisting of an equal number of employers and employees—namely the Unemployment Insurance Board.

It is also necessary for a report on the activities of the fund to be submitted to Parliament annually and the attendant annual accounts have to be audited by the Auditor-General. Then there is also the Parliamentary Standing Committee on Public Accounts which services as the final watchdog as regards this expenditure. I therefore believe the hon member need not concern himself on the fairness of the amount established for the value of services because, as I have indicated, adequate checks and counterchecks have been built in to provide the necessary preventive measures.

The hon member also referred to clause 5 and the matter of the appointment of Blacks to the Unemployment Insurance Board. Board members are appointed from nominations by the main employer and employee organisations. The board itself also has a say in the matter and the final decision on appointments rests with the Minister of Manpower.

An important consideration is that members are appointed according to merit on the basis of possessing the greatest ability of representing the interests of employers and employees and I therefore believe the hon member’s concern is unfounded.

This brings me to the hon member for King William’s Town. I assume the registration of farm workers to which the hon member referred takes place through another department and not that of Manpower. What I can tell the hon member is that the entire question of the inclusion of farm workers as contributors to the Unemployment Insurance Fund is receiving attention at present regardless of problems arising from it. I appreciate circumstances sketched by the hon member but I am equally sure he will understand there are rather difficult practical and logistical problems concerning this.

In addition I should also like to refer to the contribution of the hon member for Carletonville. As the hon member so justly said, the legislation before us is the product of the unanimous recommendation of the Unemployment Insurance Board on which employers and employees have equal representation. The hon member also stated that it actually came down to a form of self-government—which it actually is. Employees and employers can decide themselves on how the money in the fund is to be applied—subject naturally to the Minister’s approval.

The hon member also raised the point of delayed payments. I think I have replied satisfactorily to that. I merely repeat that we are doing everything in our power to obviate the occurrence of delays and backlogs.

The hon member for Maraisburg also contributed and I wish to thank him for his support. His sound contribution was proof of the study he had made of the Act for which I thank him.

Question agreed to (Conservative Party and Herstigte Nasionale Party dissenting).

Bill read a second time.

Mr Chairman, I move:

I should like to thank the Standing Committee on Manpower for its willingness to consider the additional amendments contained in the Unemployment Insurance Second Amendment Bill, 1986, and the speed with which it did so.

The purpose of clause 1 is to enable the Unemployment Insurance Fund to raise loans from private institutions when the Treasury is unable to make advances available to the fund instead of selling investments, ie in Government stock and semi-Government stock at a loss in times of a sharp economic downturn when expenditure on the payment of benefits continuously exceeds income. Such loans will be raised, by the Director-General: Manpower after consultation with the Unemployment Insurance Board and the fund’s actuary, on strictly financial considerations, and in each instance it will be determined, from a financial angle, which avenue will be the most beneficial for the Fund. So as to build in further checks and balances I shall move in the Committee Stage that this power which is to be given to the Director-General is subject to the concurrence of the hon the Minister of Finance.

The existing section 49 provides that the training expenses of contributors who received training under an approved training scheme may be paid out of the Fund. It is not the main purpose of the Fund to finance training, but to pay out unemployment insurance benefits. As the Manpower Training Act now provides for training, it is deemed advisable to eliminate duplication through rationalising by way of repealing this section.

Mr Chairman, these are the envisaged amendments and I trust that they will meet with the approval of this House.

Second Reading resumed

Mr Chairman, the Unemployment Insurance Amendment Bill that we have just dealt with, dealt with comparatively mundane matters such as the inclusion of brokers as employers, the method of financing monthly administrative expenses and things of that nature.

However, we are now empowering, under the measure that is before the House at the moment, the Director-General to raise loans for the Unemployment Insurance Fund from private institutions.

Clause 1 inserts into the Act section 9A which gives him this power should Parliament be unable to appropriate those moneys. This is a very far-reaching step and one must look at one or two points in connection with it.

Firstly we must examine the Government’s handling of the economy. We must do this because the number of unemployed applying to the fund for assistance depends on the Government’s ability to manage the economy and generate economic growth. Over the past five years it has failed to do this and the average growth rate over these five years has not even been 1%.

We must also examine the Government’s handling of the economy because the resources needed by the fund are in direct ratio to the number of unemployed. We also have to do it because the type of safety net we can afford for unemployed depends on the health and strength of our economy.

Secondly we must ask whether the administration of the fund gives us confidence that it can predict and provide for calls on the fund that arise in so badly managed and topsy-turvy an economy. The Government’s failure to establish a healthy economic environment results from its failure to appreciate that a free enterprise system cannot operate in an unfree society and also that we have a political economy. Politics and economics are interdependent and one cannot separate the one from the other. The result of this failure of the Government is most visible in two things, ie inflation and unemployment. Inflation promotes unemployment in that it directs investment resources into assets which do not create jobs. An example is fixed property investments like major city blocks where the entrepreneur will buy something that creates no employment but he hopes in this way to preserve the integrity of his capital against inflation.

A significant stimulus of inflation is Government spending and particularly spending on salaries and wages for the Public Service and parastatal organisations. That is where one in three White South Africans now are employed. Salary increases have been limited this year to 10%. This has incurred the wrath of the SATS staff.

I feel sorry for anybody who has to live in an environment where the inflation rate is running at 20% due to the mismanagement of the Government. We must be aware of the fact that it is not the Public Service that bears the burden of this mismanagement but the private sector. It is the private sector that is the wealth-creating sector in the country. One must not forget that the Public Service performs a service function to that wealth-creating sector.

Government employees’ wages have increased by 40% over two years on their 1983 levels. In the same period manufacturing wages have increased by only 20% and mining and quarrying wages by 26%.

When one hears that public servants’ remuneration levels have been frozen for two years one feels they have been hard done by. Private sector managers are immediately sympathetic but this issue is deliberately clouded by the Government. It simply does not tell the truth.

There is a fundamental difference in approach between the way that the private sector organisations give salary and wage increases and the way in which the Public Service does it. When the chief executives of some private organisation want to give a remuneration increase they decide that 12%, for example, is a reasonable level. Different branch or section managers of that organisation will then be given a chunk of money equivalent to 12% of their total remuneration and they are told to spread this among the staff. This they do, bearing several things in mind such as merit.

Government departments reward the Public Service in a totally different way. They award annual routine notch increments. They can promote people within a classification, for example a second grade clerk can become a first grade clerk. They attempt to give a blanket annual increase to allow for inflation. In addition public servants get fringe benefits of immense after-tax value and a job security unavailable in the private sector. It is this practice that accounts for the fact that the inflationary burden of Government spending escalates in spite of salary increases that appear quite modest at first.

So one reads that the SATS workers cannot be blamed for demanding a salary increase of 25% this year as their salaries have been frozen for two years at a time of high inflation. The statistics, however, suggest otherwise. The SATS did indeed manage to cut back on staff without any dismissals—from 247 000 in 1983 to 232 000 in 1985. At the same time its wage bill increased from R2,1 billion to R2,78 billion in 1985. That is based on an annualised average for the past eight months. The average annual wage for a SATS worker in 1983 was R8 500 per annum. In 1985 it was just under R12 000. This means an increase of 41%.

While the Public Service is complaining about salary increases that are more like 20% than 10%, private sector employees are being dismissed by the hundreds of thousands, and that is no exaggerated figure. Those who are eligible approach the Unemployment Insurance Fund for assistance at a rate of 60 000 per month.

When one looks at the South African political economy objectively one sees a whole range of initiatives being taken by formal and informal bodies that indicate desperation in the face of Government ineptitude. Organised industry and commerce employ eminent political scientists and economists to produce constitutional alternatives. This is something that they would normally not concern themselves with at all. Businessmen brave official obstructions and open direct communication with Black leaders and business leaders in foreign countries.

City councils, in the agony of their frustrations, plead for the opening of our residential areas and our beaches. Then the hon the Minister of Constitutional Development and Planning, in unequalled contempt for democracy, gives himself the power to remove their duly elected representatives.

Blacks in the townships reject improved structures of local government, resist the forces of law and order, and boycott White business.

What does all this mean to us? Surely it means that South Africa cannot stand idly by and watch a slide into mindless violence because a government stands paralysed on a wobbly rock in the middle of a rising river.

In these circumstances the Unemployment Insurance Fund does not have a chance of keeping ahead of demands for assistance. Unemployment is a symptom of our failure to expand the economy. Apartheid is not a recipe for cheap labour and White opulence but a burden which no economy can carry and no society should tolerate. [Interjections.] In the past five years, with an almost static economic growth rate, the number of jobless people has increased by in excess of 1 million. No ability to borrow from the private sector will enable the Unemployment Insurance Fund to cope with this task—particularly when the inflation rate is running at over 20%!

The solution to our problems does not lie in measures that give the Director-General easy access to credit facilities. Claims against the fund have been increasing by 60 000 per month. The solution lies rather in dealing with those matters that inhibit economic growth and create unemployment. Examples of actions that inhibit growth are: Increases in Government spending, particularly wage and salary increases; disruption of the market for ideological purposes—one thinks in this respect of cross-subsidisation on rail transport and of inordinate decentralisation incentives to establish factories where these have the least comparative advantage; the nonsense of separate states, especially their financial requirements and lack of financial control; and the conscious creation of a serious depression in an attempt to rectify an economy which Government self-indulgence has allowed to become far too overheated. We cannot afford that as a measure to try to rectify the situation, for it creates the kind of unemployment problem that has in one year reduced by 50% the assets of the fund we are talking about.

Finally, Sir, the ability of the board to forecast in these circumstances does not give cause for much confidence. The assets of the fund have dropped by nearly 50% in the course of a year. Contributions by employers have been increased by 233% and by employees by 40%—in one hit! Now the hon the Minister has just told us that the difference between the income and expenditure of this fund over the past couple of months has been very much better. So it should be! After all, its source of revenue has been increased in one instance by 233% and in another by 40%. As a businessman, I wish my business’s income could be so easily increased. However, we have a problem. We have to go along with the provision of the Bill allowing the board to borrow from the private sector now that the two additional amendments have been brought in. These do give us some security at least namely that money can now be borrowed only with the agreement of the board and its actuary whereas previously they had merely to be consulted. Moreover, such borrowings must now not exceed the total accumulated assets of the fund.

On that basis, we give our reluctant support to this Bill.

Mr Chairman, if I am not mistaken, the hon member for Walmer is now the Official Opposition’s chief spokesman on manpower. His new position arose, I believe, as a result of the resignation of the hon member for Pine-lands. I should like to congratulate the hon member for Walmer on his appointment, particularly as he is from Port Elizabeth. At the same time, however, Sir, I must say that he has probably stretched your patience to a greater extent than I would have imagined your patience could be stretched. It was pointed out to the hon member during the debate on the previous Bill that he had exceeded the limits of the Bill. It was pointed out to him at that time that in amending legislation, one must debate only what one is seeking to amend.

The hon member did not take the Chairman’s previous remonstration to heart because, once again, he has exceeded the limitations proposed in this Bill.

[Inaudible.]

If the hon member for Houghton were more audible, perhaps I could reply to her.

Order!

Mr Chairman, on a point of order … [Interjections.]

I am not … [Interjections.]

Sit!

Order! A point of order is being put. Will the hon member for Port Elizabeth North please resume his seat.

Mr Chairman, I was going to suggest that that hon member was bringing discredit upon the Chair in reflecting upon a ruling from the Chair. However, I see that he is doing so again.

Order! The hon member merely referred to the patience of the Chairman. The hon member may proceed. [Interjections.]

Mr Chairman, the fact is there is one clause before the House as regards this Bill. The new principle it contains is that the Director-General may take up a loan from the private sector upon consultation with the actuary and the board to promote the objectives of the fund. To my mind this is obviously a sensible arrangement in that the fund could at that stage perhaps have made investments of millions of rand whereas a trifling amount was required for example to settle two or three monthly claims. Under those circumstances I do not find it strange that the standing committee approved this legislation without amendment. The hon member for Walmer was not present when those discussions took place otherwise he would probably not have unleashed the tirade he delivered here today. [Interjections.]

A few amendments were proposed by the representative of his party to the standing committee but they were all negatived and I believe those proposed amendments submitted to us here were also negatived with justification.

In the first place the Director-General is obviously the accountable official and, in his being expected to request permission from the actuary, a senior official is actually asked to obtain the permission of a junior. I consider this illogical. Secondly, the State must certainly finally guarantee the Unemployment Insurance Fund. There have been many representations requesting that the Unemployment Insurance Fund be operated by the private sector but Parliament decided otherwise at the time; it decided that the Unemployment Insurance Fund should be operated by the State. Over the past year the State has provided an amount of R75 million in order to reinforce the fund, which I understand was also required of it on a previous occasion. Under those circumstances I again found it purely logical that the proposed amendment be negatived.

Finally I wish to point out that, if this Government is being accused of ineptitude owing to unemployment in the country, it must also be ineptitude which makes unemployment a worldwide phenomenon of modern life. Is it also to be ascribed to the ineptitude of all those governments in all those states? One thinks of Germany and England, for example, both with an unemployment rate of approximately 13% and of America which also had a high unemployment rate a few years ago. Surely those governments were not accused of ineptitude as is contended in this case. In addition South Africa has a different type of problem. The population growth rate in the countries I have just mentioned is much lower than is the case in South Africa. Add to this our problem in this country as regards education. I therefore think the comparison drawn by the hon member for Walmer is in no way applicable; I regret having to say this of my hon colleague in Port Elizabeth.

Mr Chairman, I find it significant that the hon member for Port Elizabeth North did not actually attempt to reply to the argument of the hon member for Walmer. The hon member for Walmer alleged that South Africa’s current problems could be ascribed to the fact that the Government was still clinging to apartheid and that one could not separate politics and the economy because of their inter-relationship. The hon member for Port Elizabeth North did not reply to this because he is in the uncomfortable position that NP members of Parliament do not know what is going on at present. They do not know whether apartheid is disappearing and is really an outdated concept and whether something is going to be put in its place. At present there is doubt in the ranks of hon members of the NP who are not in the Cabinet on where South Africa is heading.

It is not apartheid which has caused economic recession. The reason for this is the lack of confidence on the side of employers, investors and everyone interested in the economy of South Africa under normal circumstances. That is the basic reason for unemployment and the deterioration in the economy. The hon member for Port Elizabeth North, for example, said the unemployment rate in West Germany was 13% and that it was very high in other countries as well. Nevertheless those countries have succeeded in controlling their inflation rate in the process; there is no galloping inflation rate in the rest of the world. They control their economies whereas there is no longer any control in South Africa; the rate of inflation increases from month to month.

Are you talking about Israel or Argentina now?

We are heading for Israel.

But I thought you said they were under control.

Economists say that when the inflation rate of a country exceeds 20% it has reached the stage of runaway inflation. I should like to know whether the hon member for Randburg has some plan of curbing that galloping inflation.

He is first looking for a Black president.

I was glad to hear the hon the Minister say that we were reaching a stage in which the income of the Unemployment Insurance Fund was in balance with expenditure. This was naturally as a result of the demand for increased contributions but it is encouraging that that situation is now being reached. It is very important to us all that the Unemployment Insurance Fund should rest on a firm foundation; after all, this is the fund which benefits workers and furnishes a measure of security. There were times when this fund was very well in credit and we are concerned that it is experiencing difficult circumstances now; nevertheless it was encouraging to hear the hon the Minister’s statement. We also know the hon the Minister takes great personal interest in the unemployment situation because he himself will have to apply for unemployment insurance benefits after the next election. [Interjections.]

The CP supports this measure but as regards this matter we wish to ask the hon the Minister whether the Unemployment Insurance Fund is obliged to invest all the funds at its disposal with the Public Service Commissioners and whether it has a greater degree of discretion to invest funds in other enterprises as well. Let that suffice.

The CP supports the legislation.

Mr Chairman, the hon member for Brakpan said my hon colleague was unable to respond on the matter of the apartheid question. I think, however, if the hon member for Brakpan were to confine himself more closely to the manpower legislation, he would have to concede that all discriminatory measures as regards the manpower situation were removed as early as in his time. He therefore participated in the entire process. [Interjections.] I can well understand that the hon member for Rissik said he did not form part of that process because he had not formed part of the NP for a long time although he had pretended to be a member for outside consumption. [Interjections.]

This legislation has a twofold purpose: In the first instance clause 1 provides that the Unemployment Insurance Fund may take up loans from private institutions when the Treasury is unable to make advances available to the fund. In this way Government and semi-Government stocks do not need to be sold at a loss in times of sharp economic downswing. When expenditure attached to the payment of benefits exceeds current income, the fund may take up private loans which will be to its greater advantage.

The Unemployment Insurance Fund was instituted in terms of the Unemployment Insurance Act of 1946 which became operative on 1 January 1947 with the subsequent substitution of an amended Unemployment Insurance Act as from 1 January 1967. In the first place the income of the fund is derived chiefly from contributions by employees who contribute in terms of the Act; secondly, from contributions by employers and lastly from an annual State contribution which is based on the total amount in contributions by employers and interest on investments.

The principal objective of the fund is therefore in some degree to ensure contributors for a fixed term against the risk of the loss of earnings in consequence of unemployment—because of termination of service, illness or pregnancy—and to provide for the payment of a lump sum to the dependants of deceased contributors.

Payment of unemployment, sickness and maternity benefits to contributors continues for a maximum of 26 weeks during any period of 52 successive weeks. In the case of payments to dependants of deceased contributors, the amounts payable are equal to the benefits for a maximum of 26 weeks.

As regards the extent of the activities of the fund concerning unemployment, 204 984 applications were received in 1984 whereas there were 216 797 applications for benefits in 1983. The total amount paid in 1984 was R104 793 618, representing an improvement of approximately R287 000 as compared with 1983.

As regards sickness benefits, during 1984 more than 42 000 contributors received payments at a cost of over R35 million. In respect of maternity benefits, the percentage of recipients of such benefits as a percentage of the total contributors was 1,50% in 1984 as against 1,57% in 1983. An amount of a shade over R41 million was paid. In respect of payments to dependants of deceased contributors, an amount in excess of R14 million was paid to 11 000 dependants during 1984.

Total expenditure by the fund exceeded R208 million in the 1984 financial year. Employers are obliged to pay their own contributions together with those of their employees over to the fund monthly. During 1984 the number of contributions amounted to just under 5 million compared with just over 4,7 million in 1983. The total amount paid into the fund during 1984 was a shade over R166 million which represented an increase of more than R26 million on the 1983 figure. It is interesting to note that the State contribution ran into approximately R7 million.

An interesting aspect emerging from these contributions to the fund is that the Unemployment Insurance Fund must be one of the best examples of privatisation in the Republic of South Africa. The fund may be described as a self-help scheme brought into being by employers and employees and may be compared with an insurance fund in which only policyholders may participate.

As regards control over loans, the attention of the House is directed at section 11 of the Unemployment Insurance Act—Act 30 of 1966.

The second aspect this legislation deals with involves clause 2 which provides for the repeal of section 49 of the Unemployment Insurance Act. It is not the principal objective of the fund to finance training but to pay unemployment insurance benefits. As the Manpower Training Act now provides for training, duplication is being eliminated by the repeal of this section. I take pleasure in supporting the Second Unemployment Insurance Amendment Bill.

Mr Chairman, this amending Bill arises from a set of circumstances which are, to say the least, something which we hope will give us some practice at meeting circumstances that may well be an ordinary feature of our lives in the future when one looks at the tremendous unemployment rate that could stare us in the face, not simply because of economic depression, but because of the tremendous increase in the population. Really, with the HSRC looking at the whole system of social security, one anticipates that they will be looking into the future as to the nature of our society and how we can in fact afford to bring about proper social security under very, very difficult conditions. One would like to think that the warnings that go out to us as a result of the sudden tremendous increase in the demands on the reserves of this fund will set all the best brains in the country in this field to work to ensure that we can meet the circumstances which undoubtedly we are going to have to face. I say this because this Bill is an emergency measure when no additional funds can be appropriated by Parliament for the purpose of assisting the fund over a bad period.

When it was proposed by a member in the standing committee that the wording of the proposed new section 9A inserted by clause 1 be changed from “after consultation with” to “with the agreement of", the NRP felt that because of the fact that it was an emergency situation, one might run into trouble with that wording when one needed funds to get one through a difficult situation. When one looks at the membership of the board and one looks a little into the future one would perhaps be on fairly firm ground in suggesting that the bodies represented on the Unemployment Insurance Board might well be extended in the future which might bring about a situation where that agreement might not be reached very easily. So whilst the intention to change the wording in that respect was good as a safeguard, by the same token that safeguard can work against us. One might find oneself with certain employers’ organizations that are there to make things difficult and, right at the moment when the Director-General: Manpower and the hon the Minister wish to make sure that the money is available to pay out, people might want to use that as a lever to achieve other goals entirely unrelated to this. It is therefore quite a tricky situation and I feel one must take one’s hat off to the hon the Minister for seeing fit to include it. One hopes that it does not go awry and that people will not use it in that way.

For that reason we felt it was better to have a more fluid situation where that sort of disagreement would be made public in any case. The board and the Director-General would suffer the sanction of the Press and all the other organisations. These are facts that would well know and take cognisance of.

We agreed with the second amendment which the hon the Minister has accepted. We did not move this amendment ourselves but we agreed to it. It reads:

That is of course very obvious and reasonable. It is merely a question of crossing t’s and dotting i’s. I doubt whether a responsible body would at any time do that but unless one has it written in the law there is a feeling of a lack of security.

It is on that point that one should perhaps dwell a little because one is moving into a totally new field as far as the funding of this fund is concerned. One has to go into the open market. Although one has the benefit of a great many notable and well-respected institutions of employers and employees—I am thinking for example of the Afrikaanse Handelsinstituut, the Social and Commercial Employers of SA, the Building Industries Federation, the Chamber of Mines and so forth—one is entering the open market for funds under circumstances where one has one’s back against the wall. One desperately needs money for disbursements in order to prevent one from having to realise at a loss investments made by the Public Investment Commissioners. One might find oneself very disadvantaged. Because of high interest rates the money one is having to borrow will in fact be very expensive money, and one has to balance the interest on the money borrowed against the money realised from investments, possibly at a loss.

I think, therefore, that the board should perhaps review its current method of investing its funds through the Public Investment Commissioners. Perhaps the board could consider investing its funds—not necessarily all of it, but certainly some of it—in a manner that would secure the highest possible rate of return. Both because of their very nature and because they strive—correctly so—to attain a high degree of security and stability, statutory institutions adopt a conservative financial approach. Indeed, that is the approach one should adopt when one is dealing with public money. If, however, one has to enter a totally new financial arena and play with the “big boys” and do so, moreover, in an emergency situation or a situation in which one does not have much time, one would at least like to think that one was not operating on a losing scale and suffering a net loss on each transaction.

It seems to me, therefore, that we are just going to have to make the fund, in those times when its reserves are high, work a little better for us. In order to do that, however, we are going to have to ensure that if we borrow money at very high rates of interest, we also receive the highest possible return on our investments. It always appears—particularly now in this country where we have floating interest rates—that in times of economic stress those who have money make a lot more money while those who need money have to pay through the nose. I just have the feeling that this might well happen as the fund is moving into a totally new field. The fund has actuaries, naturally, and, as I said, it has a responsible board. Notwithstanding that, I feel that if the fund does experience hard times for a particularly long period of time, it may well find that those high interest rates have a very negative effect. I would therefore like to suggest that perhaps the method of investment is an area in which we could offset that factor.

With those few observations, we on this side of the House have pleasure in supporting this legislation. We do so in the hope that the fund will continue to grow as the hon the Minister has indicated and that we will not necessarily have to make use of this clause. We also hope that the report of the HSRC in respect of this type of social security will soon be forthcoming. Perhaps the hon the Minister would care to give us an indication in his speech as to when that will be. Moreover, it is to be hoped that on a general level, we are moving into an era in which social security will be able to keep pace with the very turbulent society in which we are living; that the circumstances surrounding this amending Bill are well taken; and that we examine very carefully the future role that the fund will have to play.

Mr Chairman, permit me to refer to clause 2 of the Bill which comes down to the repeal of section 49 of the principal Act. Provision is made in that specific section for the application of certain finance of the Unemployment Insurance Fund for training purposes. This was especially important in the retraining of the unemployed in order to make them better suited to the labour market and also to combat unemployment.

It is a fact, however, that in these recessionary times large-scale use is made of these special measures arranged by the Government to curb unemployment. These specially voted funds are being drawn upon on an enormous scale. It is also true that provision has been made for this in the legislation on manpower training so it is unnecessary for this section to be retained in the principal Act. I think it contributes to streamlined legislation if there is no duplication of such matters. In addition, little use was made of the provision concerned so we take pleasure in supporting this Bill.

We also thank the hon member for King William’s Town who has just spoken for his support.

I wish to refer briefly to the statement made by the hon member for Brakpan that the heights reached by the South African unemployment rate were attributable to the loss of confidence in the Government by the public of South Africa and people overseas because it had lost control over the economy. If the hon member is unaware of this, I wish to inform him the NP has no desire to control the South African economy; we do not believe in central control of the economy but it did not surprise me that he spoke of a centrally controlled economy. Now that the AWB is cracking the whip over its leader, he will have to crawl to that body and it becomes essential to adopt such a standpoint as that of a controlled economy. That is unbridled socialism so we appreciate the hon member’s standpoint in this regard.

Hon members on this side of the House do not believe the economy should be controlled. In a free-market system or in circumstances closely approximating that ideal, the Government ought to manage the economy at the most; that is what this Government believes. We believe market forces should determine economic tendencies and that those should be the dominant factors determining the state of the economy. [Interjections.]

We appreciate the hon member for Brakpan’s standpoint. Eugene Terre’Blanche negotiated with his party last week and that is why we are aware that he was forced to adopt that type of standpoint here in the House.

With these words I take pleasure in supporting the legislation.

Mr Chairman, I shall shortly discuss the point raised by the hon member Dr Odendaal but I first wish to ask the hon the Minister a pertinent question. What is he going to do about the state into which the South Africa economy is developing? In April 1985 the hon the Minister himself pointed out that the Unemployment Insurance Fund was exceeding its income. On that occasion he said in one of the other Houses that the Unemployment Insurance Board had been obliged to sell R20 million in assets over the previous financial year to obtain finance to cover the payment of benefits, subsequently Mr Jack Scheepers, the commissioner of the fund, said the following in the Sunday Times of 29 September 1985:

I want to question the hon the Minister very seriously about this. Mr Scheepers also said the following:

“Unchanged”, Mr Chairman!

According to Rapport in May of last year there were in excess of 100 000 unemployed Whites and the central fact against which the Unemployment Insurance Fund has to review its future—it is the hon the Minister who has to deal with the matter—is that the position is worsening. Mr Tony Ewer, Chairman of the Transvaal Chamber of Industries, said the following in The Sunday Star of 2 March 1986:

The entire point made here by Mr Ewer is that there is no economic recovery. One should note his words.

From Afrikaner ranks Dr Wassenaar said in Rapport of 14 April last year: “Die depressie is grootliks te wyte aan die Regering se hantering van die land se geldsake” and not because of good or poor conditions abroad. That is what Dr Wassenaar said. The Sunday Star of 23 February 1986 reported as follows under the headline “SA now at point of breakdown—Government turning us into a penurious banana republic, says Wassenaar”:

It is not only a deteriorating condition; it is a “breakdown”—

Dr Wassenaar then continued by saying:

That includes salary increases to hon members in this House and the Cabinet—

It is not only the State President who had to cross the Rubicon; the Government has to carry the entire economic condition across the river! Authoritative people—people who know their business and what they are talking about; I am thinking of someone like Dr Wassenaar—say:

Not apartheid or integration but the Government—

If this is said by such people, we want to know from the hon the Minister what his plans are. If the situation develops as predicted by Dr Wassenaar and such men, we want to know what plans he has of then providing the South African unemployed with benefits from the Unemployment Insurance Fund.

I recently asked the hon the Minister of Finance what broad guidelines he advocated—what four, five or six basic plans or ideas he had—to lift the South African economy out of this mess in which the Government had plunged it. He could not give me a reply; in fact, he did not even attempt to do so.

Now I ask this hon Minister—he need not concern himself about the economy in general as that is bad enough—merely to tell us what he plans when he shortly reaches the stage when he can no longer maintain the Unemployment Insurance Fund. Apart from the fact that the Government is the cause of the problem …

Order! The hon member has digressed considerably. He must please confine himself to clauses 1, 2 and 3 of the Bill.

Yes, Sir. I am pointing out the total impression of the situation to the hon the Minister …

Order! The hon member for Sasolburg had better get there a little faster. He must confine himself to clauses 1, 2 and 3 of the Bill.

If the hon the Minister wishes to find the solution to the problem facing him, he should note what the hon member Dr Odendaal said a short while ago. That hon member said certain hon members desired a controlled economy; he also said the NP believed in a free economy. The hon member Dr Odendaal should read the series of articles appearing in Die Afrikaner at present. [Interjections.] He should read that series of articles and he will find that we—the HNP and our friends in the CP—are not in favour of a socialist South Africa. We are not interested in total control of the South African economy. We have never felt this way but South Africa does not have a First World economy; it has an economy with certain structural characteristics which allows it to border on an economy lying outside that of the First World.

In the past people realised this. The Department of Finance realised in the past that we in South Africa were in favour of a free economy but that certain control measures had to be applied, although not in general—absolutly not—otherwise the South African economy would head for the present mess because that hon Minister, the hon the Minister of Finance and the hon the Minister of Transport Services failed to appreciate this elementary point which the entire economic history of South Africa has taught all its great economists including Dr Wassenaar. As they are too stupid to realise this, we have this crisis.

That hon Minister should give us an indication this afternoon of how he proposes saving only the Unemployment Insurance Fund while the Government continues allowing the South African economy as a whole to struggle on until it reaches the point described by Dr Wassenaar: “We are a penurious banana republic”.