Mr. Speaker, I move—

Agreed to.

Mr. Speaker, I move—

The purpose of the Bill now before this House is to request Parliament to make provision for the financing of Government expenditure as from 1 April 1981 until such time as it will be possible to promulgate the main Appropriation Bill for the 1981-’82 financial year. The main Appropriation Bill will be dealt with in the session later this year, and it will therefore be necessary to provide for up to eight months’ expenditure in terms of section 4(1) and (2) of the Exchequer and Audit Act, 1975.

I wish to stress to hon. members that the amount of R8 900 million which is being requested cannot with any degree of certainty be used to speculate on the possible aggregate expenditure for the full 1981-’82 financial year. Not only is there a considerable fluctuation from month to month, but seasonal expenditure patterns normally result in heavier spending during the first few months of the financial year than during later months. As is customary, the money provided by the Part Appropriation Act may only be spent on services for which statutory provision exists or on services which have already been approved by Parliament.

As I will not be able to present a full Budget for the 1981-’82 financial year during this session of Parliament, it may be appropriate for me on this occasion to offer some remarks on the current and expected economic and financial scenario in South Africa.

State Finances

Before doing this I would like to deal very briefly with Government finances for the current and the ensuing financial year. It is of course not possible, some six weeks before the end of the current financial year, to provide a detailed account of revenues and expenditures, but it is already abundantly clear that Government revenue will be considerably higher than originally budgeted for.

In my Budget Speech of March last year, I estimated that total Government revenue would amount to R10 856 million. Due mainly to the unexpectedly high average gold price and the high growth rate in the economy as a whole, tax revenues are expected to exceed this estimate by a fair margin, and this notwithstanding substantial reductions in tax rates for the 1980-’81 tax year.

Hon. members may recall that I stated at that time that a higher than estimated gold price and growth rate would not cause me undue concern, since I provided for an automatic stabilizer by proposing that amounts borrowed in excess of spending requirements be transferred to the Stabilization Account. This transfer would then put us in a position to offset some of the expansionary monetary impact of other forces at play. I am in the process of putting this policy into effect in order to provide for the purchase of oil and other strategic materials at escalating costs and, at the same time, by this form of financial restraint, to counter the inflationary pressures in the economy.

On the expenditure side I am thankful to be able to report that, on the whole, our efforts to contain unnecessary Government expenditure have been largely successful. The House will shortly receive details of unavoidable additional expenditures in the Additional Appropriation Bill.

Taken as a whole, the deficit before borrowing, estimated at R2 227 million in March last year, will have shrunk considerably by the end of March 1981, thus contributing to the disinflationary effect of the Budget.

Looking at expenditure in the coming financial year, there is no doubt in my mind that our policy of financial discipline must remain in force. We shall once again give high priority to defence and security matters, to manpower development and education and to essential infrastructural development, but this will inevitably mean that a number of other services will have to be assigned a lower priority. It is manifestly impossible to assign top priority to all the functions of Government, however important they may be.

As to revenue expectations on the existing basis of taxation, non-gold revenues promise to show another healthy increase during the next fiscal year, but the estimation of gold mining revenues will be more problematical. I deem it my responsibility to sound a note of caution here. It would certainly not be prudent at this stage to anticipate another large increase in the average gold price during the next fiscal year.

As to the longer-term outlook for gold, I am decidedly bullish, but would not wish to base short-term fiscal policy on too optimistic a price. Our policy during the current year of basing our revenue estimates on a conservative gold price has stood us in good stead, so much so that at current gold price levels we are able to fund Government expenditures, expressed at current prices, in a healthy and disciplined manner.

In concluding this brief review of the State’s finances, I should like to refer to the new issue of National Defence Bonds which will become available as from 1 April 1981. It will be recalled that the present issue offers a taxable return of 8%. As a result of the recent sharp rise in interest rates the yield on this Bond has fallen out of line with market rates and the issue will consequently be withdrawn at the end of this month. The new series of National Defence Bonds will carry interest at 9% and will pay an additional bonus interest of 5% at redemption after five years, which is tantamount to an attractive rate of approximately 10% per annum to redemption. As is customary, the new Bond will be marketed through the Post Office and prospectuses will be available at all Post Offices and from the Treasury by 1 April.

I now turn to an assessment, albeit briefly, of the economic and financial situation in South Africa.

Economic and Financial Situation

In looking at the performance of the South African economy over the past year there is much to enthuse about. Indeed, in the economic and financial field 1980 stands out as one of the best years ever experienced since World War II, with the many positive developments far outweighing the less favourable tendencies.

The typical economic picture in virtually all non-oil producing countries in 1980 was one of low and declining growth rates, high and increasing inflation rates, and serious balance of payments problems. By contrast, South Africa experienced one of the highest economic growth rates ever recorded in a single year in this country, while at the same time a remarkably strong balance of payments was maintained. Virtually the only dark spot in this generally bright economic picture was the inflation rate, which remained stubbornly high here, as elsewhere.

Complete statistics for the full 1980 calendar year are not yet to hand, but indications are that the real gross domestic product increased by some 8%, just about double the rate recorded in 1979.

For the man in the street, the growth rate in the real gross domestic product may be a rather abstract concept. He may feel that it probably bears little direct relation to his own wellbeing. There are, indeed, certain groups in our society which have participated to a lesser extent than others in the recent wave of prosperity in South Africa. Every effort is being made to alleviate the burden of these people as much as possible, often at considerable cost to the Exchequer, and therefore to the taxpayer. Food subsidies this year alone amount to about R250 million, and if no adjustment to bread and other commodity prices is made, will far exceed R300 million in the 1981-’82 financial year. Escalating direct transport subsidies for bus and rail passengers will exceed R150 million this year and could easily exceed R200 million next year unless fares are adjusted. To these amounts should be added an indirect subsidy of at least R175 million in respect of exemption of interest payments by the Exchequer on capital invested in passenger services by the South African Railways.

For the great majority of people in the Republic the high growth rate has meant significant increases in average earnings and after-tax incomes, increases which exceeded the inflation rate at times by handsome margins. At the same time there was a substantial increase in the number of new jobs created.

In the first three quarters of 1980 total non-agricultural employment was on average about 3,4% higher than in the corresponding period of 1979. This made a significant dent in the unemployment numbers, a matter which had become a cause for concern during the recessionary years of the middle ’seventies.

I have just said that the high economic growth rate also made possible significant improvements in earnings. In the first three quarters of 1980 average earnings per worker outside agriculture were 17% higher than during the corresponding period of 1979. This increase exceeded the increase in consumer prices, and even though the inflation rate rose sharply during the fourth quarter, there is no doubt that there was a significant increase in average real earnings during 1980 as a whole. If one adds to this the substantial lowering of income tax rates in the Budget last year, it is obvious that living standards rose generally, in many cases to a marked extent.

In addition, the relatively free availability of consumer credit meant that consumers were actually able to improve their standard of living to an even greater extent than that indicated by the rise in real earnings alone. This is apparent from the estimated 8% rise in real private consumption spending in 1980, which was more than three times the rate in 1979, and also about three times the rate of increase of the population.

An aspect of the high growth rate which was particularly heartening was that it was accompanied by a strong acceleration in fixed investment. After having shown a declining trend between 1975 and 1978, and increasing by only 2% in 1979, real gross domestic fixed investment—expressed at constant prices—rose by no less than 13% in 1980. Moreover, this welcome increase took place for the most part in the private sector.

The soundness of the balance of payments in 1980 was indeed remarkable at such an advanced stage of the economic recovery. In the past it was quite normal for the current account of the balance of payments to move increasingly into deficit as the growth rate of the economy increased. This time round the current account still showed a large surplus, even though the economy was in the third year of its recovery phase.

In other respects, however, the balance of payments did exhibit tendencies normally associated with an advanced stage of economic recovery. In particular, merchandise imports rose by about 47% in 1980, reflecting the strong rise in gross domestic expenditure, particularly in fixed investment. As has often happened in the past at the comparable stage of an economic recovery, the rate of growth of merchandise exports declined, and although the total value of exports in 1980 was still about 10% above the corresponding figure for 1979, it actually also declined on a seasonally adjusted basis from quarter to quarter throughout the year. This was partly the result of the relatively weak economic performance of our major trading partners and partly of the upsurge in domestic demand, which caused potential exports to be deflected to the domestic market. Similar tendencies were observed in the services account of the balance of payments.

The rise in imports and the declining tendency in merchandise exports were more than neutralized by the sharp rise in the value of the net gold output, to over R10 000 million in 1980, compared with about R6 000 million in 1979—an increase of almost 70%. Consequently, the surplus on the current account of the balance of payments amounted to between R2 500 million and R3 000 million, almost the same level achieved in 1979.

The capital account of the balance of payments fluctuated substantially during the course of 1980 with net outflows of both long-and short-term capital recorded in the first two quarters, followed by a large net inflow during the third quarter. These movements in the capital account provide no cause for concern. They reflect mainly the responsiveness of the financing of South Africa’s foreign trade to changing differentials in interest rates here and abroad, and to adjustments in the discounts on United States dollars in forward exchange transactions.

The strength of the overall balance of payments has also contributed to a substantial improvement in South Africa’s international credit rating. Proof of this was provided by the success of the public bond issue of DM120 million which was floated by the Republic in June last year and managed by a group of leading European banks, and of the syndicated credit of $250 million obtained from an international consortium of banks in the second half of the year. These loans, as well as those taken up by other South African public sector borrowers were obtained on much more favourable terms than was possible a few years ago.

The strength of South Africa’s balance of payments is also reflected in the movement of the rand exchange rate. At the end of 1980 the effective exchange rate measured against a representative basket of currencies of South Africa’s main trading partners was 10,9% higher than at the end of 1979. Although the rand has recently depreciated marginally against the United States dollar, this is not an indication of a weakening in the general standing of the rand, but rather a reflection of the strengthening of the dollar against other currencies.

I come now to what I called earlier the one dark spot in the otherwise bright economic picture in South Africa, inflation. Between December 1979 and December 1980 the consumer price index rose by 15,7%. One aspect of the general price rise in 1980 which caused particular concern was that it tended to accelerate during the course of the year. Thus, taken at a seasonally adjusted annual rate, the rate of increase of the consumer price index moved up from 8,6% in the first quarter of 1980 to 22,3% in the fourth quarter. Another worrying aspect of the inflation is that its effect on the lower income groups has been more severe than on the higher income groups, mainly because of the increase in food prices.

There can be no doubt that, like the rest of the world, South Africa ran into a serious problem of inflation during the ’seventies, and that this problem has not yet been solved or mitigated. In part, the high inflation rates which South Africans have had to endure during the past few years have been initiated by international developments over which we have no control. Amongst these have been the world-wide cost-raising effects of the successive increases in the price of crude oil and world-wide inflationary tendencies brought about by international monetary mismanagement, which resulted in excessive liquidity creation. This vexed problem of world-wide inflation is extremely unlikely to be resolved until such time as the United States dollar is restored to it’s pre-August 1971 state of convertibility, and official recognition is given to the essential monetary role of gold.

While recognising the role which these international forces have played, we must, of course, not be blind to the factors in our own economy which contributed to the high inflation rate we are now experiencing. In this respect a distinction is customarily drawn between “demand-pull” and “cost-push” inflation. In my view it is quite clear that for several years during the ’seventies the high inflation rate in South Africa was not caused by excessive aggregate demand. This is demonstrated by the fact that the rate of increase in the consumer price index stayed above 10% from 1975 to 1977 despite a continuing increase in surplus capacity in manufacturing and in unemployment during that period, conditions which can surely not be associated with excessive aggregate demand.

The main reasons for the stubbornly high inflation rate of recent years must therefore be sought in certain structural features of the South African economy, such as the absence of effective competition in certain sectors of the economy, the pursuit of self-sufficiency in strategic sectors where this was achieved at higher cost than would otherwise have been the case, and the tendency amongst various groups in society to attempt to extract more from the economy than their own productive contributions can justify. Against this background, the anti-inflation struggle has not benefited from the deliberate policy of narrowing the wage gap, however desirable that may be for other reasons.

It was only in the course of 1980, when unemployment amongst the more skilled categories of labour had virtually disappeared and capacity utilization in manufacturing was fast filling up, that excessive demand started to pose a potential inflationary danger.

Before turning specifically to fiscal and monetary policies, I wish to emphasise that inflation is not a matter for the authorities alone to combat. Not all the wisdom—and not all the responsibility—rests with the authorities, and by no means all the remedies are in their hands. The Government has for this reason consulted regularly with the private sector, including organized labour, on appropriate ways and means of dealing with this cancer. These consultations have been valuable and have influenced the formulation of anti-inflationary policies.

I am of the opinion that the time has arrived for calling a meeting of top level representatives of the business sector, of organized labour, of consumers, of academics and of the public sector to discuss the inflation problem in depth and to agree on ways in which each and every one of us can make a more significant contribution to the solution of this all-pervading problem. My predecessor. Dr. Diederichs, called a similar meeting several years ago. It served admirably to focus public attention on the dangers of inflation, helped to gain public understanding for its causes, assisted in identifying appropriate countermeasures, and mobilized active and co-ordinated support for the continuing struggle. Arrangements to set up such a meeting will be made by my Department, and the details will be announced as soon as is practicable.

Fiscal and Monetary Policy

From the facts I have presented it is evident that the official economic strategy of recent years has produced favourable results. The key to the correct interpretation of this strategy lies in recognition of the fact that it has aimed largely at promoting economic growth where it could be most productively done, in the private sector, while preventing the emergence of general demand inflation, and that, to this end, unnecessary government spending has been restricted. At no stage during the past five years have we attempted to stimulate the economy by means of increased government spending, partly or wholly financed by bank credit. To have done that would have been deliberately to pursue an inflationary policy. What we have done is to promote sound growth predominantly in the private sector by means of reductions in tax and loan levy rates, specifically designed to offset the effects of “fiscal drag”, i.e. the increase in the real tax burden on the community brought about by the combination of a progressive tax system and inflation.

It should be a source of satisfaction to all that this policy has achieved its main objectives. The prophets of doom, who a few years ago predicted that because of political uncertainties and a general lack of confidence, the South African economy would be unable to achieve high rates of growth and investment, have been confounded.

It is particularly gratifying to note that the elements of “built-in” or automatic stability contained in last year’s Budget have exerted their desired and anticipated influence, and that substantial amounts have been transferred to the Stabilisation Account. Fiscal policy has therefore played its intended role of encouraging sound productive private sector expansion while helping to prevent the emergence of general demand inflation.

This does not, however, mean that I am satisfied with all aspects of our economic policy. On the contrary, I wish to focus renewed attention today on a disturbing development to which I have referred on several previous occasions, namely the undue increase in the broad money supply in 1980. It is a phenomenon which has plagued not only South Africa in recent months, but many countries, some of them for much longer periods.

Between December 1979 and December 1980 the broad money supply increased by about 27%. This accelerated increase in the money supply was undesirable because it increased the danger of general demand inflation, a state of affairs often described as “too much money chasing too few goods”. The term “money” as used here is not a synonym for “income”, “wealth” or “prosperity”. It denotes mainly short and medium term deposits with banking institutions, as well as bank notes and coins. If too much of this money is created, it encourages or facilitates excessive spending on goods and services, resulting in undue price increases and a decline in the value of the monetary unit.

As I have already pointed out, the inflation in South Africa a year ago was still mainly “cost-push inflation”, rather than “general demand inflation” of the kind I have just described. At that stage the emergence of general demand inflation did not appear to be inevitable, particularly in view of the discipline applied to government spending and the scope for rising imports to add to the supply of goods in the economy. However, as the year progressed, the unduly rapid increase in the money supply and the accompanying low level of interest rates made the general financial situation increasingly conducive to general demand inflation. The result is that the threat of “too much money chasing too few goods” has now become very real, particularly since most of the surplus capacity in the economy has in the meantime been absorbed and the shortage of certain kinds of skilled labour remains a serious constraint.

When general demand inflation occurs in any country, it is often caused mainly by excessive government spending financed by money creation in the form of bank credit. This has not been the case in South Africa. Although fluctuating substantially from quarter to quarter, net bank credit extended to the government sector actually declined by R434 million over the year 1980 as a whole. This means that the Government’s financing operations served to offset some of the expansionary effects on the money supply emanating from other sources.

One of these sources was an increase of R386 million in the net gold and other foreign reserves, which not only contributed directly to the increase in the money supply but also served to augment the liquidity of banking institutions, and therefore their money creating ability. This factor was crucially important during the third quarter of 1980, when the net reserves rose by over R1 100 million. However, over the year as a whole, the major “cause” of the substantial increase in the money supply was an increase of R3 240 million in bank credit extended to the private sector.

The substantial rise in the broad money supply and in the liquidity of the banking sector was accompanied during most of 1980 by a level of interest rates which was exceptionally low, not only in relation to overseas rates but also in relation to the domestic rate of inflation. For most of the year the situation was also characterised by distortions in the relative structure of domestic interest rates and by a substantial increase in off-balance sheet financing or grey market activities. In these circumstances there is clearly a need to improve our techniques of controlling the quantity of money.

It was because I foresaw this need that I asked the State President some three years ago to appoint the De Kock Commission to carry out a thorough investigation into monetary policy in South Africa. The Commission is now nearing the end of its inquiry and hopes to have its final report completed before the main Budget is introduced in August this year. In the meantime, as is evident from the steps taken in recent weeks, policies which are likely to be in line with the Commission’s recommendations are already being applied and are already taking effect.

It was in accordance with this new approach that the Reserve Bank, after the usual consultation with the Treasury, increased its bank rate from 7 to 8% with effect from 3 February 1981. This step signified both official recognition of the recent upward tendency in domestic interest rates and the determination of the monetary authorities to attain better control over the money supply.

The increase in interest rates should be viewed as a natural and inevitable consequence of improved monetary and credit control. Although borrowers would naturally prefer lower interest rates to higher interest rates, it is appropriate in present circumstances that savers in general should receive a higher rate of interest and thereby be at least partially compensated for the erosion of their real income brought about by inflation. South African interest rates are in any event still low in comparison with rates in the United States, the United Kingdom and most other industrial countries. Indeed, if allowance is made for the rate of inflation, most South African interest rates are still negative in real terms. The South African monetary authorities will therefore not hesitate to allow interest rates to rise to their natural market-determined levels to the extent that this forms an essential part of an effective anti-inflationary policy.

Prominent among the new techniques of monetary policy which we have in mind are more active public debt management by the Treasury and extended open-market operations by the Reserve Bank. In the months ahead the Treasury will continue to sterilize funds in the Stabilization Account. At the same time, the Reserve Bank will be more active in buying and selling government stock and other money market paper in the open market, first to ease the expected seasonal tightening in the rest of February and March resulting from the large movement of tax funds from the private to the public sector; and then, during the rest of the year, to prevent any undue easing of the money market and an excessive rise in the money supply.

Of course, in controlling the money supply, account also has to be taken of changes in the balance of payments. To this end, the Reserve Bank is making judicious use of the discount on forward dollars as a means of influencing capital movements which result from the switching of trade financing between foreign and domestic sources. In this regard, we have also reassessed the role of exchange control, and it is to this subject that I now turn.

†Exchange Control

This House will recall that, in accepting the interim report of the De Kock Commission, the Government committed itself to the objective of gradually dismantling exchange control on non-residents and of relaxing and simplifying it in the case of residents. I wish to reiterate today that this remains our policy. In addition, while exchange controls are still in existence, every effort will be made to simplify and stream-fine them and to eliminate all unnecessary “red tape” involved in their application.

While exchange control has its uses under South African conditions, the authorities are conscious of its many disadvantages and deficiencies. Apart from conflicting with market principles, one of its main drawbacks is that it discourages foreign investment and participation in the South African economy. The broadening of the old securities rand into the new financial rand two years ago has done much to improve the position in this respect, but has not removed the inhibitions and fears of foreign investors completely, particularly since financial rand transactions are still subject to extensive regulation. In addition, exchange control places a heavy administrative burden on the Treasury, the Reserve Bank, the authorized foreign exchange dealers, business enterprises and the general public, thereby raising costs of production and contributing to inflation.

The authorities are also aware that the effectiveness of exchange control is limited in a reasonably sophisticated and developed economy like that of South Africa. In such an economy there are many ways in which capital can enter and leave the country without being affected by exchange control. These include the well-known “leads and lags” in current foreign payments and receipts, and undesirable practices such as over-invoicing, under-invoicing and so-called “transfer pricing”.

The crux of the matter is that, if our fundamental fiscal and monetary policies are not appropriate, exchange control cannot be relied upon to keep the capital account of the balance of payments in order. And if our fiscal and monetary policies are appropriate and result in realistic and market-related exchange rates and interest rates, we should have little need of exchange control in the long run. In accordance with this approach I have therefore decided to bring about a series of measures to relax exchange control and streamline its procedures.

One of the measures which has given rise to numerous complaints is regulation 3(1)(f), in terms of which limits are imposed on the local borrowing activities of foreign-controlled companies. It has for some time been felt that the definition of local borrowing applied in the regulation is inadequate and needs to be amended to include the various forms of “off-balance sheet” financing. This will be attended to. More importantly, the limits themselves have become very restrictive in today’s circumstances and I have therefore approved a substantial relaxation—in fact a doubling of the credit limits in respect of regulation 3(1)(f). I regard this as a very important measure.

This adjustment in the formula should create substantial additional scope for foreign-controlled companies to use local credit facilities if and when needed. Although I do not foresee that there will be an immediate large-scale switching by these companies from foreign to domestic financing sources with a concomitant drain on our foreign reserves, the greater flexibility which this relaxation will afford should substantially enhance South Africa’s attractiveness to foreign investors.

In accordance with the recommendations of the Technical Committee on Exchange Control appointed last year, I have also decided to relax and simplify a number of other individual exchange control measures. For example, the adult travel allowance to countries other than neighbouring countries will be raised from R3 000 to R4 000 per annum and the business travel allowance from R5 000 to R7 500 per annum. Since time does not allow me to list all the relaxations and simplifications in detail here, further information will be made available shortly in the form of a Press release. Authorized dealers will, of course, be notified of the changes by the S.A. Reserve Bank in the usual manner. I have directed that these measures be brought into effect as far as possible not later than 1 March 1981.

Before leaving this important subject, I would point out that I do not regard these relaxations as a substitute for the more fundamental revision and phasing out of exchange control proposed by the De Kock Commission. Such a revision will of necessity have to await the final report of the commission simply because it should form part and parcel of a major modernization of our monetary system and policy and not be dealt with piecemeal or in isolation.

Gold Coins

I should now like to say something about Krugerrands in the domestic market.

This House may recall that I have on several occasions in the past expressed dissatisfaction with the present method of distributing the various denominations of Krugerrands in the domestic market. I have pointed out that although our gold production should primarily be available to acquire foreign exchange as and when needed, South Africans should also be afforded a reasonable opportunity to acquire gold coins.

As a first step to improve the situation I as recently as September last year agreed to a 44% increase, from 104 000 to 150 000 ounces of fine gold per annum, in the quantity of gold which can be sold locally in the form of gold coins. Despite the freer availability of Kruger coins today there are still indications of an unsatisfied local demand, as is evidenced by the high premiums prevailing in the local secondary market.

My department is still in consultation with the Chamber of Mines and Intergold on improvements to the present distribution system, but I have in the meantime decided to double immediately the quantity of gold— from 150 000 to 300 000 ounces per annum—available for the domestic distribution of gold coins. This in itself will substantially enhance the local supply of Krugers and assist in bringing down the present high premiums. Details on improved distribution methods will be announced as soon as agreement is reached with the Chamber of Mines and Intergold.

Pensions

In inflationary times such as these, I feel it appropriate that we look timeously again at those of our senior citizens who have not been able, to the same extent as those of us still actively at work, to protect themselves against the ravages of inflation. Assistance to these deserving people cannot be postponed until the main budget is presented in seven months’ time.

I am, therefore, glad to be able to inform this House that the Government has once again found it possible to grant meaningful concessions to pensioners and other social beneficiaries.

Full particulars of the proposed concessions, which will, as is customary, take effect on 1 October 1981, are set out in a document which I shall table this afternoon. The concessions include an increase in social pensions of R13 per month in the case of Whites, R9 per month for Coloureds and Indians and R7 per month for Blacks. This gives increases for the four groups in the proportion of 100 to 70 to 54. Until recently these proportions were 100 to 50 to 25.

In addition, I am pleased to propose that the same special bonus benefits as were paid in November last, namely R30 for Whites, R24 for Coloureds and Indians and R18 for Blacks, be paid again as soon as it is possible to do so, that is in April 1981, to all persons receiving social pensions and allowances.

In respect of war veterans the present additional allowance of R10 per month will be increased to R15 per month for Whites. This increase, together with the R13 per month rise also applicable to war veterans, means that such persons will receive an additional R18 per month. Coloured, Asian and Black veterans will also receive corresponding increases.

In order to encourage persons who qualify for social pensions or grants to remain economically active for as long as possible, it has also been decided to grant a further concession in respect of the means test for income derived from earnings. The result will be that persons with higher incomes from employment may in future still qualify for a social pension or grant.

Military pensions will be increased by 12% with effect from 1 April 1981. At the same time, adjustments will be made to the compensation paid to those who are receiving compensation in terms of the Occupational Diseases in Mines and Works Act, 1973. Other allowances administered by the Department of Health, Welfare and Pensions will also be increased.

The total cost of all these concessions, excluding the special bonus to social pensioners, will amount to approximately R65 million in the 1981-’82 financial year and to R127 million in a full year. The special bonus payments in April will entail a further R23 million in the 1981-’82 financial year, bringing the total Government commitment under this heading to R150 million. If, as I hope, the state of the country’s finances warrants the payment of another round of special bonuses in the latter part of the year, it will mean that the aggregate cost to the Exchequer of all these pension increases and other concessions will be no less than approximately R173 million in a full year— by far the biggest amount ever to be set aside for this purpose.

As far as civil pensioners are concerned, the Government is well aware of the problems experienced by retired former employees of the State and has accordingly decided to grant an increase of 12% to former officials and other civil pensioners with effect from 1 April 1981. The previous adjustment took effect just a year earlier.

Preservation of Pensions

While on the subject of pensions, I regard it necessary to clarify a few matters in respect of the first report of the Interdepartmental Committee of Inquiry into Certain Specific Pension Matters, chaired by the Registrar of Financial Institutions. I tabled the report in the middle of last year and am of the opinion that it reflects a thorough in-depth study of the pensions problem, containing, as it does, important recommendations for action to preserve and transfer pension rights.

The Government has not taken and will take no final stance on this sensitive matter until all interested parties have been given a full opportunity to discuss and analyse the proposals. I have directed the Registrar to draft the relevant Bill, taking cognizance as far as possible of all comments and criticisms received, and to publish the draft Bill with an invitation to all interested parties to submit their considered views to us.

It is my conviction that we must try to find a new pension dispensation for South Africa which will avoid the socialistic cradle-to-grave approach on the one hand, but on the other attempt to preserve private pension rights in order to support the employee to the maximum extent feasible when he most needs support, that is as a pensioner in his old age.

I am aware that there are employees who regard their pension contributions purely as a “temporary savings account” which they feel entitled to draw on as and when needed. Such a view to my mind is extremely shortsighted and hard to justify as in their old age these employees will become a heavy burden on the taxpayer.

I do not, however, intend recommending that we force the unwilling under all circumstances to preserve their pension rights. I feel an important responsibility rests on employers to convince their employees that it is in their own interest to opt for such preservation measures and that resigning from a job simply to lay one’s hands on a lump sum in order to spend it, is invariably not in the best long-term interest of the employee himself. This is, I fully realize, a slow educational process, and we will have to find ways and means of bridging in the meantime the gap between the present indefensible position and the much improved proposed new position.

There is no reason for any employee to fear that anyone, least of all the Government or his employer, will deprive him of his rightful pension moneys. These funds are his and his alone.

Karoo Flood Disaster

From those in need in their old age, I wish to turn the attention of this House for a moment to those who suffered so cruelly recently from nature’s destructive powers. I refer, of course, to the recent tragic loss of life and property of the inhabitants of Laingsburg and surrounding areas in the Karoo. The spontaneous and magnanimous reaction of South Africans of all races and creeds, of organizations and of business, reflects the compassion felt for the people of Laingsburg and the afflicted areas.

The Government at once initiated a comprehensive assistance and reconstruction programme, and great credit is due to the South African Defence Force, the South African Police, the Cape Provincial Administration, the various Government departments involved and the many private organizations and individuals for their effective and generous assistance in this time of need.

The Government is committed to provide immediate and tangible assistance. Thus, as has already been made known, an amount of R2 million has already been made available to provide suitable temporary accommodation, and a further amount of up to R8 million will be provided for housing and for the redevelopment of the town of Laingsburg, as well as for rebuilding and renewal in other affected areas.

Agricultural damage, which is substantial, will be dealt with in the first place by the Department of Agriculture and Fisheries, and the Cape Provincial Administration will give assistance to local authorities. As the full effect of the damage becomes apparent, the Government stands ready to play its full part to bring relief and aid to those afflicted.

I now wish to deal with certain inland revenue and customs and excise matters.

Income Tax Matters

Although legislation in regard to taxation matters will not be introduced during the current session of Parliament, I deem it advisable at this stage to make known certain proposed amendments so that the House may have an early opportunity of pronouncing upon them, if it so wishes.

All the good news first!

My proposals in connection with income tax are the following:

1. (a) Lump sum payments from his employer received by or accrued to an employee or the holder of an office by way of a bonus, gratuity or compensation upon retirement due to attainment of the retiring age or due to old age, ill-health or any other infirmity, are, subject to certain conditions, at present exempt from income tax up to an amount of R15 000. It is proposed to increase this amount, with effect from the year of assessment commencing on 1 March 1981, to R20 000.
   • I shall presently deal briefly with lump sum benefits from pension, provident or retirement annuity funds.
2. (b) Back-dated contributions to pension funds and retirement annuity funds:
   • Since 1978 back-dated contributions to a pension fund by an employee were deductible from his income up to a maximum of R1 000 per year. It is now proposed that the maximum deduction be increased to R1 500 per year with effect from the year of assessment commencing on 1 March 1981.
   • Where employees have since 1978 made back-dated contributions by way of lump sum payments exceeding R1 000, the amounts in excess of R1 000 were disallowed. It is proposed that in such cases the excess amount be carried forward for deduction in subsequent years up to the maximum amounts allowable in respect of such years. It is, furthermore, proposed that the concession should be made retrospective to the 1978 year of assessment.
   • In the case of a member of a retirement annuity fund who discontinued his contributions prematurely and was subsequently reinstated as a member by making additional contributions to compensate for the discontinued contributions, I propose to make a similar concession in regard to the additional contributions made since 1978.
3. (c) Tax-free portions of lump sum benefits from pension and provident funds:
   • Since 1961 the exempt portion of a lump sum benefit paid by a pension or provident fund not established by law has been calculated in accordance with a formula based mainly upon the employee’s period of pensionable service and his highest average remuneration during five consecutive years in the employ of the employer concerned.
   • Because the formula has remained unchanged for a considerable period, I have asked the Commissioner for Inland Revenue to review this aspect, and I trust that it will be possible to propose a significant improvement during the next session of Parliament.

In the course of the tax reform programme we have so far concentrated on the improvement of the tax structure. Other matters which could serve to modernize our income tax system and to streamline procedures must not be neglected. My department is therefore actively engaged in seeking ways and means of reducing the volume of tax returns which must be processed so that the available manpower can be more productively employed.

Two measures are contemplated: Firstly, the raising of the tax threshold, that is, the income level at which income tax will become payable by individuals; and secondly, the development of a system of final deduction of PAYE in respect of remuneration to a level yet to be determined. This latter measure will have the result that a large number of persons whose incomes consist wholly or mainly of salaries or wages from which PAYE has been deducted, will not be required to render further income tax returns. This will entail the provision of more accurate deduction tables than those at present in use and could even lead to the introduction of differentiated tax rates, that is, a small-income rate and rebate on the one hand, and a different rate for incomes in excess of the small-income limit, on the other.

As far as donations to universities and colleges are concerned, hon. members will recall that the relevant provision in the Income Tax Act was amended last year to empower me to extend that provision to embrace also other educational institutions. Unfortunately, due to practical difficulties encountered in implementing this provision, its extension to certain secondary educational institutions has not as yet been completed. It is, however, expected that finality will be reached shortly.

The Standing Commission on Taxation has also recommended to me, and I have approved in principle, that donations by South African taxpayers to universities and colleges in independent states which formerly constituted a part of the Republic receive the same tax treatment as that which applies to donations to South African universities and colleges.

The question of the tax treatment of fringe benefits has not yet been finally considered by Government.

And it won’t be before the election!

I have been asked by certain interested parties to consider further representations. I am prepared to do this prior to the taking of a final decision, which I hope will be …

After 29th April!

… before the next session of Parliament.

Tax Deduction Tables

While on the subject of income tax, I would like to offer a few remarks on the new tax deduction tables. This House will bear in mind that the fiscal or tax year runs from 1 March to the ensuing 28 February.

Sensational banner headlines have recently appeared in one or more newspapers announcing tax “shocks” as if this was an unknown event suddenly sprung upon an unsuspecting public. My colleague the Deputy Minister will in the course of this debate, comment more fully on the background of the new employees’ tax tables.

Personal income tax was substantially reduced last year. The employees’ tax deduction tables to give effect to these reduced tax rates came into operation on 1 July 1980 and not only reduced the deductions in accordance with the lower tax rates but also adjusted for the higher deductions for the first four months of the tax year when the previous year’s, that is, 1979-’80 tables, were still in use. As a matter of fact, I specifically emphasized this in my Budget Speech last year when I said that the taxpayer would receive the full benefit of the reduction in the 1981 tax year instead of having to wait for a refund of the higher deductions until the assessment was issued.

In my Second Reading speech on the Income Tax Bill on 13 June 1980 I said, inter alia—

I want to repeat: There is absolutely no change in the tax rates. The deductions over the tax year will closely match the actual tax payable. I trust, therefore, that we will no longer have these exaggerated and irresponsible statements on an ordinary administrative measure which is in the interest of all taxpayers. [Interjections.]

Customs and Excise Matters

I next wish to deal with a few customs and excise matters.

Since 1977 the excise duty on unfortified wine has been reduced by 4c per litre whilst the excise duty on fortified and sparkling wine has been reduced by only 1c per litre.

As the sales of the wine industry as a whole have not come up to expectations recently, I propose that the excise duty on fortified and sparkling wines be reduced by 3c per litre so as to restore the duty margins on wines to the 1977 levels. However, in order not to disturb the relative position of each in the overall picture, the excise duty on fortified and sparkling fermented apple, pear and orange beverages and the customs duty oh imported goods of a similar class or kind will also be reduced by 3c per litre.

The loss of revenue for 1981-’82 is estimated at R1,85 million.

Representations have also been received from the wine industry to increase the maximum gauge pressure of perlé wines. At present perlé wines with a gauge pressure above atmospheric pressure exceeding 200 kilopascal at 20°C are classified as sparkling wines, in which case they attract higher rates of excise duty. In order to meet the industry also in this respect, I propose that the maximum gauge pressure in the case of perlé wines be increased to 300 kilopascal.

Government Notices to give effect to these amendments will be published tomorrow. The amended duties will become effective on 17 February 1981 and be applicable to the imported goods concerned which have not been entered for home consumption before tomorrow, and on the excisable goods concerned which by tomorrow have not been removed from the premises of the manufacturers and owners of warehouses licensed by the Commissioner for Customs and Excise.

Limitation and Disclosure of Finance Charges Act

A further matter which I should like to draw to the attention of this House concerns the implementation of the amendments made to the Limitation and Disclosure of Finance Charges Act during the last session of Parliament. As is the case with the Credit Agreements Act, which was also adopted last year and bears reference to the aforementioned Act, I propose to implement the amendments of the Finance Charges Act from 2 March 1981.

After due consultation with the Reserve Bank I have, in terms of the provisions of the Act, decided to fix new maximum finance charge rates. A Government Gazette notice with full details will be published shortly.

In order not to inhibit the charging of market rates, I have decided to establish the new rates at levels appreciably above those in effect at present. These rates are maximum rates—they might even be called usury rates; I must stress that—and are designed to prevent abuse and at the same time to ease the present position of the smaller and less creditworthy borrower who experiences serious difficulties in obtaining loan funds. The hon. the Deputy Minister of Finance will deal with this matter in more detail in the course of this debate.

The Browne Committee Report

Before honouring an undertaking which I gave on behalf of the Government early in December to announce salary improvements when introducing the Part Appropriation Bill, there is an important matter to which I should like to allude. It concerns the finances of local authorities.

Because of the reported difficulties encountered by many municipalities in balancing their budgets under the prevailing conditions of inflation, the Government some five years ago appointed a committee of inquiry under the chairmanship of the then Secretary for Finance, Dr. Gerald Browne, into the revenues and expenditures of local authorities and the effectiveness of their administrative procedures. The committee, after a thorough and comprehensive investigation, submitted its report to me last year, and my department immediately began an in-depth study of the report, its recommendations and their implications. In the meantime, important developments were taking place, such as, for example, the rationalization of the Public Service and various aspects of the public sector as a whole and an investigation into possible ways and means of amending and improving the Constitution, which clearly could also impinge on local government and its financing.

In these circumstances, after consultation with the United Municipal Executive and other interested parties, the Treasury decided late in 1980 to set up a representative working group to make a comprehensive and critical review of the entire Browne Committee report and its recommendations against the background of the latest developments. The working group, under the chairmanship of Mr. Gerhard Croeser, Chief Director of Finance, comprises inter alia representatives of the United Municipal Executive, the Office of the Prime Minister, the Commission for Administration, and certain other departments, with power to co-opt experts in specialized related fields as the need arises.

Already the working group, in whose activities the Deputy Minister of Finance is also taking a keen interest, has endorsed, and in some instances amended, more than two-thirds of the report’s recommendations and reported to me accordingly. The aspects remaining relate to some of the most intractable financial problems of local government in the Republic at the present time, and are the subject of on-going in-depth studies by the working group and certain specialized sub-committees set up by it.

I am confident that the reports now reaching me from the working group are authoritative contributions to the solution of some thorny problems, and I can assure this House that neither I nor the Government has any intention other than to put all such proposals as are accepted, into effect as early as possible. The Browne Committee Report, with its wealth of statistical tables and analyses, may well be the most comprehensive document yet to appear in the important field of local government finance in South Africa.

Improved Conditions of Service

I now wish to deal with the necessary adjustments to wages and salaries of civil servants and certain occupational groups.

In a Press announcement on 5 December 1980 I conveyed the Cabinet’s decision that the salaries of all employees who are directly or indirectly on the payroll of the State, would be adjusted simultaneously from 1 April 1981, and I also intimated that the Cabinet’s decision on salary adjustments would be made known when I introduced the Part Appropriation Bill in the present session of Parliament.

After thorough consideration of the requirements of the staff concerned and the position of the Public Service, on the one hand, and the prevailing inflationary conditions on the other, it has been decided to make an amount of R720 million available for the financial year 1981-’82 for the improvement of salaries and conditions of service. This is very substantially the largest amount ever made available by the Government for this purpose.

We need more elections. [Interjections.]

The additional burden to the Exchequer has to a large extent arisen as a result of the substantial and in certain cases excessive increases in salaries granted in the private sector and the resultant need to safeguard the public sector in order to maintain essential services. The public sector salary increases should therefore not be seen by the private sector as a new round of salary and wage increases.

The basic salary improvement will amount to an average of 12%, with greater percentage increases for lower paid staff and smaller percentage increases for higher paid staff, tapering down to 9,2% in the upper echelons.

In addition to the basic salary increases, and in line with the Government’s policy of vocational differentiation, certain groups have been singled out for special treatment on the grounds of personnel problems peculiar to those groups, as well as the results of intensive investigations carried out during 1980. These groups include education, the military, the police, prison officials, health and nursing personnel and the judicial staff in the Department of Justice, as well as certain smaller vocational groups.

What percentage?

The policy of vocational differentiation necessarily implies that due to the nature, demands and circumstances of occupations, as well as the supply and demand situation in the labour market, the various vocational groups cannot all receive the same percentage increase. Even within the same vocational group, structural adjustments necessitate that members of the same group do not all receive the same increase.

In the case of the teaching profession, for example, certain structural and progression problems peculiar to the profession have evolved over the years. The Government has therefore awarded a considerable share of the funds available for vocational differentiation and structural adjustments to this group. The extent of these adjustments, including the basic salary increases, may be judged by the fact that fully qualified teachers, together with those in the upper grades, will from 1 April 1981 be paid on average upwards of 20% more than is currently the case. For certain classifications the increases are even higher and, indeed, can be significantly higher.

I should mention that in coming to their decision the authorities gave very serious consideration to the representations of the personnel associations, and the report of the Study Committee of the Department of National Education was considered in depth. Adjustments for vocational differentiation, over and above basic salaries, have also been made in respect of the other groups mentioned earlier.

The Commission for Administration is at present processing the mass of detail involved for all groups and is also engaged in protracted consultations with interested parties. This is a time-consuming process, and the commission must be given the necessary opportunity to complete what amounts to a very detailed exercise.

I wish to assure this House that the Cabinet has given very serious consideration to the adjustment of salaries and conditions of service in the public sector and that the record amount allocated is the furthest that the Treasury could conceivably go if there is not to be a grave risk of fuelling the fires of inflation still further. What is needed now is the greatest possible measure of productivity and efficiency from every sector of the economy. The Government is convinced that there are solid grounds for believing that the process put in motion by the Prime Minister’s personal intervention some time ago has now been brought to a satisfactory conclusion.

Conclusion

The year 1981 is clearly going to be a difficult year for the world economy. South Africa, too, will be confronted by economic challenges. All things considered, however, the prospects for the South African economy in the year ahead are decidedly favourable. Since most of the slack in the economy has now been taken up, the real rate of growth in 1981 will, of course, be lower than the abnormally high rate of 8% in 1980, but could still reasonably be expected to be in the vicinity of 5% to 6%. This would represent an excellent “growth on growth” performance and would imply an increase of something more than 13% in real gross domestic product over two years. At some stage, of course, there will again be a temporary downward phase of the normal business cycle, to be followed, in turn, by the next upswing which could carry the economy to new record heights.

The overall balance of payments position should remain sound throughout 1981. Even if—which I do not personally expect—the current account itself were at some later stage of the year to move into temporary deficit—and much would depend on the behaviour of the gold price—this should be comfortably offset by an improvement in the capital account, partly as a result of the increased foreign financing of South African imports and exports and partly by a general inflow of investment capital.

The main economic problem facing South Africa in 1981 will almost certainly be that of inflation, particularly in view of the pressure on scarce skilled labour resources. To pretend that there is an easy or quick solution to this problem would be naive. What is clear is that if we fail to maintain fiscal discipline, and to reduce the rate of increase of the money supply to the required extent, the rate of inflation in 1981 and thereafter might well be higher than that of 1980. On the other hand, if we succeed in adding monetary discipline to the existing fiscal discipline, we should in due course, with the co-operation of the private sector, succeed in reducing the rate of inflation to more acceptable levels.

The economic problems facing the country now are basically problems of prosperity, but dealing effectively with these problems is just as vital to the future well-being of South Africa as solving problems of recession and stagnation. The question is whether we have the will and the ability to do so. I believe the answer is in the affirmative.

Finally, I do not wish this opportunity to go by without paying public tribute to two individuals who, each in his own area, have been pillars of strength in our financial system and who are soon to retire.

First of all let me refer to Mr. Wynand Louw, the Registrar of Financial Institutions. In him I and my predecessors found a calm, capable and extremely knowledgeable person who, since 1957 and particularly for the past 11 years as Registrar, has guided and monitored the destinies of all financial institutions in South Africa. He has served our country in an outstanding way, and I wish to convey to him the grateful thanks of the Government, and pray that he and his wife may enjoy an active and happy retirement. Mr. Louw will be succeeded by his deputy, Mr. E. W. van Staden, as of 1 May 1981.

Secondly, I wish to pay a warm public tribute to Mr. J. M. C. Smit, Managing Director and Chairman of the Board of Land and Agricultural Bank, who has decided to retire at the end of June 1981. He has been associated with the Land Bank for a record period of 55 years and assumed his present position as Managing Director and Chairman some 14 years ago. Hannes Smit, as he is affectionately known to all, has the gift of understanding the farmer, of effectively combining the principles of sound agricultural financing with the special problems and requirements of the agricultural sector and of doing this in a manner that promotes the financial well-being of the agricultural sector as a whole. I wish to assure Mr. Smit that his contributions in these basically important fields over the very long span of his working life will stand as a monument to the service of agriculture in South Africa. We wish him and Mrs. Smit a well-deserved and happy retirement. Mr. Smit will be succeeded by Mr. T. C. de K. Pienaar, at present Joint General Manager, on 1 July 1981.

Mr. Speaker, in the 12th century there was an author called Henry of Saltrey who is responsible for a legend called “The Descent of Owen”. It concerns the story of a knight who, by way of penance for a wicked life, had to go through purgatory. Sir, I wonder what penance the hon. the Minister of Finance will have to do for what he did today. There is no doubt that when one looks for the proper adjective to describe his speech today, one should perhaps call it “hornswoggle” or maybe “thimblerig” or maybe call it the selling of a bill of goods or simply a “bunko game”. What has happened here today, is that the hon. the Minister of Finance has grossly underestimated the intelligence of the people of South Africa. He thinks that by dividing a budget into two sections and coming here today in the most remarkable manner and presenting all the tax concessions he could possibly think of, going right across the board and announcing everything that is good, while keeping everything that is bad until after 29 April, he is taking in the people of South Africa. But, Sir, the people of South Africa are more intelligent than to be taken in by this kind of trickery. As my hon. colleague interjected a little while ago, perhaps some people in South Africa can say: “Thank goodness we have elections every three years instead of every five years”. No doubt there will be great celebrations in the circles of the hon. the Minister, because I have just been passed the document that champagne will be cheaper as from tomorrow. That is in fact the symbolism: Champagne will be cheaper as from tomorrow!

Are you sorry about that, Harry?

As you know, I do not drink it. I do not even drink the whisky you owe me. [Interjections.]

Order!

The reality is that the slogan of the NP in this election is: “Vote now, pay later.” No doubt that is the reason why he introduced the whole concept of the Limitation Act into this budget as well. When one analyzes it, however, and one looks at the build-up there has been in the NP Press and the NP SABC for this speech, if one had listened to the publicity about this tremendous thing that was going to happen today, it was a build-up followed by a let-down. The question that the people of South Africa can ask themselves is: “Is what the hon. the Minister has done today going to bring the teachers back to the classrooms, is it going to bring the nurses back to the wards and is it going to bring the policeman back on the beat?” The reality is that the policy of the Government is to try to close the stable door after the horse has bolted. But they do not even have the courage to close the door completely; they can only do something in a relatively modest manner.

The hon. the Minister, in his manner, gets up here and boasts grandiosely: “Look how we are increasing the salaries: the Public Service is going to get 12% . . .”. However, he does not in the same breath tell us what the reality of the inflation rate is. He does not tell us what has happened to food prices in South Africa. He does not tell us what these people have had to bear over the period that has just passed. By not telling us precisely what the teachers, the policemen, the prison officials, the military and the judicial staff are going to get, by being vague in his terms, he thinks he is going to be able to escape from this debate unscathed. The contrary is true. Like the Owen of old, he has a purgatory he is going to have to walk through, and that purgatory has got fires that burn and without a doubt they will burn him. [Interjections.]

When we look at what the package is which the hon. the Minister is trying to present, we see that the reality is that he has actually tried to deal with every single one who may possibly not want to vote for the NP. I am quite sure that the hon. the Prime Minister, with his mechanical, organizing brain, fed all the grievances into a computer and came up with the following answer. He said: “Look, I have trouble in the Western Cape with the wine farmers”, and the answer was “You give them something.” So it went on. “I have got trouble with the teachers.” “You give them something.” “I have trouble with the policemen.” “Give them something.” He has trouble with the Opposition, but I want to tell him: “We are going to give it to you!” [Interjections.] That is one of the things the hon. the Prime Minister did not feed into his computer. That is one of the things he left out of the computer. [Interjections.]

When are you returning to the Bill?

Sir, I always listen to what the hon. the Prime Minister says. Would he like to repeat what he said?

When are you coming back to the Part Appropriation Bill?

Sir, the hon. the Prime Minister is very well informed about many things but he appears not to know that we are dealing with a financial debate. He seems to have been living somewhere else. I think he is living in a sort of HNP dreamland which appears to distort his problems. Let us therefore not worry him. [Interjections.]

Let us deal with the reality of this budget. I think there are some fundamentals we need to touch on and which cannot be left aside. I want to ask the hon. the Minister of Finance to deal with a number of factors and answer specific questions in relation to the salary increases. Does he contend that teachers were not entitled to a salary increase earlier than 1 April? In other words, does he argue that the teachers have actually been well paid and that their grievances are completely met by giving them an increase from 1 April? In other words, is it his argument that we should not have increased the salaries earlier? The reality is that, if we consider the income of teachers for the period from 1973 onwards, at the end of 1979 the teachers were worse off in terms of real purchasing power than they were 10 years ago. Why then wait until now to announce salary increases? Secondly, will he tell us whether the increases he has now announced are the product of agreed negotiations with representative bodies? In other words, is this something that has been agreed upon or is he now granting what he says is adequate and suitable in the circumstances?

The third question I want to pose to him is: Does he think that these increases are going to be sufficient to attract the staff to fill the vacancies, particularly the vacancies in the teaching profession, the nursing profession, the Police Force and the Defence Force? I ask that question because he will have to come back when the statistics are known and then it will be demonstrated that what he is doing now is not really solving the problem.

The fourth question I want to ask him is this: Why has he not given some incentive at this time and in this particular era in which we live to people to become more productive? I also want to ask him whether he has not considered that salaries are not the only thing to be attended to but that conditions of service generally should also be attended to and dealt with? Let me give him a simple example to which I want an answer. Let us take the Police Force. The hon. the Minister of Police issued an instruction to the effect that there was no more money available for overtime.

Mr. Speaker, may I ask …

I have seen it. That is what he said.

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

No, Mr. Speaker, the hon. Minister must get up and speak in this debate because I want him to tell the policemen what he has done. [Interjections.]

Order! The hon. member is not prepared to answer a question.

I will not answer him. What the police have been told is that there is no more money available for overtime. Has he not heard that there is such a thing as Additional Estimates? Can it be said that there is no money available to policemen to pay for overtime? That is the reality of the matter and that is how they handled this situation. [Interjections.]

Is the problem in South Africa that when one increases salaries in the Public Service the private sector will do likewise? The reality of South Africa is that it has a pool of skilled labour which is inadequate. That pool needs to be increased and long term educational schemes should have been announced today to solve this problem and, likewise, intensive short term training programmes should have been announced in order to deal with the problem. The very first thing that should be done is that all education in South Africa should be placed under one Ministry and the same opportunities and the same standards should apply to all children in South Africa. That is one of the things that we require. To have a situation where everyone is competing for the same small quantity of skills in South Africa is clearly inflationary. What is required is that we should increase the number of people who are skilled in South Africa so that they will be able to contribute towards solving the skilled manpower problem. Those are the sort of things that are required and those are the things we want.

The hon. the Minister today also announced increases in the pensions of social and civil pensioners. Is it not unheard of that one announces an increase in pensions in February which will only become effective from 1 October this year?

[Inaudible.]

I will give the hon. the Minister a chance. What did he say?

Must we make it twice a year?

What he is doing is actually tantalizing the pensioner who today is battling to make a living, to survive and to exist instead of being helped by the hon. the Minister. [Interjections.] He is tantalizing him and saying to him: “Vote for me and you will get an increase in October”. [Interjections.] That is the immorality of it.

Is the hon. the Minister prepared to take his increase in October?

What does one say to a man who is hungry? What does one say to a woman who is hungry? Should one tell them that they can eat in October? The increase in the inflation rate is 30% as far as food is concerned. That does not wait until October; it is happening now, at this very minute. If one looks at these increases and one takes into account the rate of inflation it is clear that pensions are not keeping up with inflation. That is the reality of it and that is what is taking place. To do this to people and to tantalize them in that way, is not a humane approach. It is a characteristic of this Government which does not care for people. [Interjections.] It is a Government which does not care, a Government which is the great “I” Government—“I” and “we”— the arrogance of it!

However, there are other “I’s” that one has to take into account, for instance the “I” that stands for inflation, the “I” that stands for incompetence, the “I” that stands for inefficiency, the “I” that stands for insecurity and the “I” that stands for instability. Those are the characteristics of this Government. [Interjections.] The South African people …

What about the “I” for intelligence?

Yes, we have it but with you it is missing, do not worry.

What about “I” for idiot?

Mr. Speaker, I object to the hon. member for Langlaagte being called an idiot. He is a little above that. [Interjections.] The South African people cannot afford a Government that tailors its economic policies solely to serve party-political interests as they arise from time to time. It is this arrogance that has developed here and it is this inefficiency, incompetence, insecurity and instability that we have to deal with. The reality of the matter is that the Government is endangering the security of the people of South Africa. It is in fact endangering their safety by not seeing to it that we have an adequate policemen and by not seeing to it that we have an adequate number of people in the Permanent Force. It is endangering the security of South Africa. It is patchwork; there is no plan. They tell a joke about the hon. the Prime Minister, and I hope he will forgive me for telling the joke. In his own party the right wing says that they are not worried about the fact that they do not know what P.W. is going to do after the election. What they are worried about is that he does not know himself. That is the reality of what is going on in his own party.

That is the greatest joke of the year.

No, but it is true. That is what they are saying. There are some more jokes I could tell you personally, but they would not be fitting in this House.

Do you know what jokes they are telling about you?

I challenge the hon. the Prime Minister to get up and tell the country what he is going to do after the election. Either he knows what he is going to do, in which case he has to explain it to his caucus, or the joke is true that he does not know what he is going to do and that it is all patchwork that goes on in that party with ad hoc decisions being made from time to time. The reality of the matter is that the NP is threatening the stability that South Africa requires in these very difficult times.

The hon. the Minister dealt at some length with the problem of inflation but he did not actually offer us any solution. Oh, the one thing that he did do was that he acceded to our request to have an anti-inflation campaign in South Africa and, miraculously, just before the election he is going to call a meeting of all these people. That we are in favour of. We wanted this, we called for it, we demanded it, but he delays until there is a real problem and then he decides that he will do something about it. But what has he actually said about other things that we need in South Africa? I have referred to the fact that there has been inflation in food prices which reached 30%—astronomic heights by South African standards. What is he actually doing in respect of food prices? He has told us not one word about this and yet we all know that the price of bread is likely to go up. We also know that the price of maize products is likely to go up. We have not heard a word from him in regard to the subsidies that are going to be paid in order to ensure that the prices of basic foodstuffs do not go up. We have also heard nothing about general sales tax. General sales tax is running way ahead of budgeted figures and yet the hon. the Minister is not prepared to reduce or abolish—and abolish is the correct procedure—general sales tax on basic foodstuffs so that there will be some relief to the people. That he will not do. He will not accept it. That sort of thing he is not prepared to deal with and yet those are the things that really need to be done.

There are other things that he has not mentioned. We appreciate the reality of the matter when we look at the situation in so far as it concerns meat prices in South Africa. We as consumers have to face a floor price where prices cannot go down but where they can go up. We have to read in the newspapers about public companies whose profits have doubled in a period of 15 months, and in the meantime the meat prices go up. We have to listen to the cry about free enterprise but when we talk about farm products we are told that farming is not applicable in so far as free enterprise is concerned. Free enterprise is no good for farmers; it is only good for other people. That is what we are told. But what is the reality? The reality is that the consumer of South Africa at the present moment is faced with the highest increase in food prices that we have seen for decades and decades. In spite of this, however, the Government sits back and does nothing about it and the consumer has to suffer.

Let me tackle another matter. The hon. the Minister of Industries, Commerce and Tourism sits there. What is he actually doing about the exploitation of the consumer in South Africa? What has he done in regard to the Trade Practices Act? What has he done in regard to the abnormal increases in prices, where people have climbed on the band wagon because of the inflation syndrome? Nothing has been done in South Africa to stop the exploitation of the consumer and the Government sits there, in the knowledge that tomorrow the price of champagne will fall. That is symptomatic of the approach of this Government.

In reality, in regard to taking any active steps to combat inflation, we have had very little in South Africa and very little is being done in order to cope with the situation.

Let us ask, however, what the situation is in regard to inflation. What has the Government done about it over the past 12 months? One thing is clear and that is that the money supply has been allowed to rise to extraordinary levels. What is even more important —and not one word of this was mentioned by the hon. the Minister—is that this question is material, not only to the actual money supply but also to the velocity of the money supply as such. In other words, the question is: How often is it turned over? During the past year a situation was allowed to develop in which the money supply reached levels which were, to say the very least, unhealthy. This happened as a result of the liquidity created by the high gold price—something which anybody could have foreseen—and also as a result of the deliberate stimulation by the Government of demand. As far as the Government was concerned, however, it did very little in connection with that, and the only thing the hon. the Minister could say today was that he did transfer money to the Stabilization Fund. In regard to the other actions, however, the so-called discipline that is said to be applied to our economy was in fact absent. No appropriate action was taken in order to control the money supply.

There are four factors that one normally takes into account in connection with the money supply. The one is the net gold and foreign exchange reserves. These appear to be heading downwards irrespective of the actions of the Government and unrelated to them. The second factor is the net claims of the banking sector on the Government which should also decline because of the buoyant revenues. Thirdly, the long-term deposits with the banks may increase at a slower rate because of the increased interest rates the hon. the Minister mentioned. Money supply growth, however, will be subject to certain self-adjusting activities. The one thing that needs to be looked at is the credit extension to the private sector. That is a problem area and, as restrictions in this respect can have very serious consequences for the economy as a whole, I believe that the Government must take further steps to restrict its own borrowing activities in order to allow the private sector to continue its employment creating activities so that problems in that regard can be obviated.

One of the other major factors that has not been dealt with is the question of the skilled manpower bottle-neck. Here we have the continuing situation in which, at a time when there is substantial unemployment, there is still a shortage of manpower in the field of skilled labour. We have to thank the NP Government for that situation because it is a price we are paying for having had an NP Government applying ideology divorced from reality. The excuse is often made that this is something that just happens. The reality, however, is that for 30 years the NP has applied policies that have prevented the skilled labour problems from being solved, and only in the past year or so has it decided that it will make changes in regard to labour patterns in South Africa. We are paying that price today because it takes years before one can educate children, it takes years before one can train people, and therefore, we have to pay this price.

The hon. the Minister advanced the argument of imported inflation. I was rather staggered that he should advance this argument at this stage because, firstly, the reality of the situation is that only about a quarter of the wholesale price index is related to imported goods and secondly, the latest figures that are available show that the prices of locally manufactured goods have been rising at a rate much higher than those of imported goods—about 17,25% as against 14,7%. Therefore, the hon. the Minister’s argument in relation to imported inflation certainly does not apply in the present circumstances.

There are some major matters that I believe we have to deal with. I feel that there are some major matters in regard to the question of conflict avoidance in our society which relate to the activities of the hon. the Minister of Finance. I say this because in a situation where we are seeking to avoid conflict one needs a number of things. Firstly, one needs to maintain law and order and, if we do not have a police force that is fully staffed, if we are not in a position to suppress crime, we cannot maintain law and order adequately in our society. Secondly, Sir, we are told repeatedly that we need a strong Defence Force. However, owing to the actions of this Government our Defence Force is in fact understaffed. Thirdly, we have to give each community a stake in a society that they are asked to participate in and to defend. I want to give one simple example in this regard. One only has to look at the incompetence that has been demonstrated by the Administration Boards, the refusal to grant freehold tenure and even the delays in regard to the 99-year lease. There is a fourth matter which is the collective responsibility of the whole of that Government and that is that we are supposed to accept the fact that everyone who has to assist in defending the country and to see to it that it flourishes, should be citizens of that country, and yet this Government steadfastly refuses to accept the fact that all South Africans should be allowed to be citizens of this country. The final point is that we have to bring about a negotiated solution to the constitutional and political problems of South Africa. This Government has consistently refused to have Coloured, Indian, White and Black around the same table and by so doing refuses to commence the negotiating process when it is able to do so from a position of strength. History has shown that life is full of disappearing options and the question that is going to have to be asked is: Who is actually responsible for endangering the security of South Africa?

Mr. Speaker, at this stage I wish to move the following amendment—

1. (1) combat inflation;
2. (2) care for the aged and other underprivileged persons;
3. (3) bring about efficient administration of the machinery of government; and
4. (4) ensure the safety of the people of South Africa.”.

In conclusion, Sir, I just want to say what I believe we need in South Africa and what we should like to put to the people today. We want to maintain living standards in South Africa; we want to combat inflation; we want an efficient and considerate public administration; we want jobs created so that people can be employed; we want to care for the aged and infirm; we want to preserve freedom in South Africa; we want to have respect for human dignity and to remove discrimination; we want to maintain law and order and we want to negotiate for and maintain a peaceful future. These are nine fundamental aspects which we believe are vitally important and it is a tragedy that the proposals of the hon. the Minister of Finance do not go any way at all towards achieving these objects for South Africa. I say, Sir, that without adequate living standards, without a public administration that is efficient and considerate, without jobs for people, without freedom for the individual, without, in fact, a respect for human dignity, without law and order there can be no peaceful future, and the responsibility for this lies four-square upon this Government.

Mr. Speaker, the hon. member for Yeoville reacted exactly as we had expected him to. When the hon. member is in trouble, he creates a fuss. The hon. member said that the hon. the Minister had underestimated the intelligence of the public of South Africa. No, that is not true. I, in turn, think that the hon. members of the Opposition and their newspapers are underestimating the intelligence of the public of South Africa. When a newspaper—I believe in co-operation with the Opposition —places a report under the heading “streamlined out of pocket” in which it gives an account of how new houses are now being built for Ministers which are to cost approximately R1 million because flats are being built in order to make provision for people who have to be accommodated due to the establishment of the President’s Council, and then think that they are going to win an election with propaganda of this nature, they are mistaken. The public of South Africa too well-informed to kick up a fuss about essential expenditure amounting to R1 million when there is a budget of R16 milliard. To expect such a reaction, borders on the ridiculous.

The hon. member for Yeoville has a formidable task. For lack of other means with which to get at the NP, he must try to design a political strategy for his party in the economic sphere. But that is very difficult to do. I want to tell him that he did not fare too badly, but it was not good enough.

Oh, goodness, it was rotten! [Interjections.]

The hon. member for Yeoville spoke of the hon. the Prime Minister as one who supposedly faces many problems. Sir, if the Prime Minister has problems, the PFP is certainly not one of them. [Interjections.]

Before dealing with certain aspects there are a few things I want to say to the hon. the Minister of Finance. Unfortunately I cannot react to everything he announced of which we took cognizance with gratitude, but there are certain matters which I must broach. The first is that the hon. the Minister spoke frankly to the people of South Africa. He did not hesitate to mention by name the problems which we are facing.

The hon. the Minister spoke frankly about the problem of inflation. In his amendment the hon. member for Yeoville asks that the Government take steps to curb inflation, but did he make one single recommendation as to how we should set about it? [Interjections.] It is easy to say inflation is the problem. We all know that. The hon. the Minister said so as well. What is the solution? I believe that no one in the world has a solution to this problem. Let me quote a brief extract from a speech made by the president of the Bundesbank—

One can go to any country in the world and one will find that all of them are facing the problem of inflation. This is not foreign to us, but what we should like to hear from the official Opposition is how we should deal with this problem. But we hear nothing from them in this regard. However, the hon. the Minister put it clearly to the people of South Africa that despite all the fine things he could announce, despite the upswing in the economy, all the benefits which they might enjoy in future, they would have to continue to guard against inflation. And this is not the task of the Government alone, but also that of the private sector. I shall refer to this again at a later stage.

We welcome the announcement by the hon. the Minister as regards the relaxation of exchange control, a matter which already has a long history. We also welcome the assistance to be accorded the disaster areas. The people in the areas in question have great appreciation and gratitude for the announced assistance as well as for that which is still to be announced.

Most of the fine things which the hon. the Minister announced today, far from being a pre-election ploy as the hon. member for Yeoville sought to imply, are the result of investigations which in some cases have extended over years. We may examine a number of the announcements made by the hon. the Minister and we shall see that they are the result of investigations which have spanned considerable periods of time, and whether or not an election was to be held, these results would in any event have been announced today. The question of teachers’ salaries, for example, is not a matter which was broached today for the first time. It is a matter which has been under discussion for a long time now. This applies to exchange control as well. I repeat that most of the announcements made by the hon. the Minister this afternoon are the result of investigations by commissions and reports by other bodies and persons.

It is, of course, easy to keep asking for more and more. The hon. member for Yeoville makes out as if that the poor pensioners will have nothing to live on from today until they receive the announced increase. Surely that is untrue; he is creating a false picture. After all, these people are being looked after, and concessions are being made to them. Surely this is not the first concession made to them; it has been done constantly over a period of time. Let me quote what the director of the London School of Economics, said recently—

Self-discipline is something we must never forget. If the nation is not prepared to discipline itself, if the private sector is not prepared to discipline itself, we shall not be able to solve the inflation issue.

In the economic sphere the Republic of South Africa is today the wonder of the First and the Third Worlds. Despite problems of which we have to take cognizance, there is no reason to be as pessimistic or alarmist as the hon. member for Yeoville. Today South Africa offers a better standard of living to the whole population than was the case ten or even a few years ago. Nobody is going to tell me that any person in South Africa today who is prepared to work is worse off now than he was a few years ago. The standard of living of all of us has increased. However, by saying this one is not implying that there is no one who is having a hard time of it. Of course there are poor people, and there will always be poor people, but the National Government is sympathetic towards those who are lesser privileged. The Government pays an amount of R250 million in food subsidies—the hon. the Minister mentioned this in his speech this afternoon— which is going to increase to R300 million. The Government pays R200 million in subsidies for the conveyance of workers. Is this, then, a Government which is unsympathetic towards those who are having a hard time of it? The world’s financial and economic opinion-formers look at South Africa today and envy us our stability and prosperity. My experience has been that in the economic world outside South Africa today there is a tremendous amount of goodwill towards us. In my opinion the economic prosperity and stability serve as the best propaganda to break down existing false images of South Africa. We must only use these more effectively still, but it is difficult to do so when the impression is constantly being created from among our own ranks that we are supposedly unsympathetic towards those who are lesser privileged.

Internally the sound economic situation promotes good attitudes among races. Prosperity creates opportunities for the non-White groups. As a result of staff shortages resulting from the growth of the economy— which is a natural process which I shall come back to if time permits—it becomes essential to appoint persons of colour to an increasing extent to more responsible positions, and there is no doubt that over the past few years tremendous progress has been made and that a considerable Coloured middleclass has developed as a result of this. This is evolutionary development as advocated by my party. Surely this is what the NP advocates. It is the result of the stated policy of the NP for the upliftment of the population groups of colour, a natural process of growth and development. The hon. member for Yeoville has a formidable task to provide his party with financial and economic ammunition for the coming election. However, he does not have much to go on. Every time he and his Press come forward with “shocking” facts, it is evident that it is merely transparent propaganda. The problem of the hon. member for Yeoville is that there are so many positive things in the South African economy which grip the imagination of the business world.

A positive disaster!

He may not admit it in this House, but I believe that he would do so in private conversation. After all, one cannot convince a man that he is struggling if he knows full well that he is doing well. How does one tell a rich man: “My friend, I feel sorry for you because after all, you are really struggling?” But this is what the hon. member for Yeoville is trying to do. He is trying to say that he is extremely sorry for South Africa, for the country is really having a very hard time of it.

You think all people are as wealthy as you are?

I am not wealthy.

Your party is the champagne party.

Let us take a look at the positive aspects of the economic picture. [Interjections.]

Order!

In 1979 we had a growth rate of 3,7%. It is now over 6%. This is unique in the world. But what does this in reality mean to us? What does the high growth rate mean to the people of South Africa? It means improved living conditions for everyone.

Depends who is getting it.

It also means more employment opportunities for everyone. I need only refer to the building industry, the manufacturing industry and the motor industry, together with their related industries. Without exception we encounter the nuclear reaction of revival as a result of the high growth rate, and this is to everyone’s benefit. This is a positive point in our economic set-up. Employment figures are far better than they were. This has enabled the hon. the Minister to afford many of our people tax relief.

In the fourth place, this has meant increased real fixed investment. During the latter three quarters of 1980 the total fixed investment was as high as 9%. Various foreign companies with interests in South Africa have announced major expansion schemes, i.e. they are prepared to invest additional capital in South Africa. This increased real investment is being done by the private sector. They are responsible for as much as 23% of our total fixed investment: not the public sector, but the private sector. A positive aspect of our economic structure is higher company profits. One need only look at yesterday’s newspapers to see headings such as: “Sappi stoot sy winste op met 78%”; “Bears groei met 48%”; “Rentmeesterversekeraars se beleggingsinkomste styg met 43%”; “Protea verhoog hul dividend”; “Barclays oortref vorige rekords”; “Anglo-Alpha vermeerder aandelewinste met 110%”, etc.

Harry says that is bad.

Surely this is good for the country. The dividends being paid by these companies which were reported on, probably go only to individuals according to the hon. member for Yeoville. But surely they have an effect throughout the economy. Surely the dividends are paid to all shareholders in this country. Everyone derives benefit from them.

A further plus point in the South African situation is that the attitude between the authorities and the private sector is better than ever before. To what is this due? It is due to the philosophy and the actions of the hon. the Prime Minister, who, since he came to power, has made positive efforts to involve the private sector. I wonder whether the hon. Opposition takes cognizance of that. I know they derive benefit from it, but I wonder whether they always take cognizance of it. The private sector is today playing an extremely important part in arms production in South Africa. The arms embargo has in practical terms been broken and no longer poses a threat to us. The private sector-oriented Small Business Development Corporation has already held its first meeting. What is more important is that the Advisory Programme Council was established a few days ago. This Council, under the chairmanship of Prof. Fourie, will identify problem areas of the small business undertakings and make recommendations to assist the small business undertakings, and will co-operate closely with the SBDC. This is progress. It is a further demonstration of the co-operation between the private sector and the Government. The Foundation for Management Studies is another example of co-operation. There are so many positive factors.

A seventh factor I want to mention is the greater contribution which the non-gold sector is making to the current account. Personally, I was always concerned because in my opinion we leaned too heavily on gold, but it now really seems that a structural change has taken place which makes us less dependent on gold. Recently the Bureau for Economic Research of Stellenbosch reported that even if the gold price were to drop considerably, this would not stop growth. Is the energy policy of the Government not a tremendously positive factor in our economy? For most Western countries their greatest single problem is the energy problem. What was also a threat to us inspired us to become far more independent, and the NP Government must be thanked for this.

Our trade with Africa is constantly increasing. Besides the financial benefits this entails for us, it also entails a political advantage. One cannot trade with people without dialogue between purchaser and seller. What is very important is that South Africa is self-sufficient as far as foodstuffs are concerned. What is more, not only do we meet our own requirements, but we also provide our neighbours, and the rest of the starving world with food. We ought to be proud of our farmers, but our farmers can also be grateful for a NP Government which is continuing to look after them.

Mr. Speaker, I should like to commence by associating myself and my colleagues in these benches with the good wishes the hon. the Minister expressed to Mr. Wynand Louw and Mr. Hannes Smit, both gentlemen who are now retiring after many, many years of loyal service in their respective departments. We sincerely hope they are going to enjoy a long and happy retirement.

The hon. member for Malmesbury started his speech by saying that the hon. the Minister spoke straightforwardly to the people of South Africa about the fight against inflation. I want to ask the hon. member what the hon. the Minister said we should do about it.

He said we should be more productive.

The hon. member says we must be more productive. What I do know is that the hon. the Minister is going to call a conference of the business sector and other interested people to see what can be done to fight inflation. I can recall that some five or six years ago the then Ministers of Finance and Economic Affairs called a similar conference. I cannot recall how many millions of rand were spent by the State holding conferences and publishing documents on how we should fight inflation, but I want to ask: What did it all achieve? Absolutely nothing. Now we are going to have a repeat performance.

The hon. member for Malmesbury also said—and here I agree with him—that there must be self-discipline on the part of the people and the private sector. I accept that the Government has exerted a certain degree of self-discipline in the public service over the past few years. However, I want to ask the hon. member for Malmesbury whether in the history of South Africa the public service has ever been in the disarray it is in today. Have there ever been as many registrations from the public service as there have been during the past year? Something like 25% in some departments, of the skilled manpower has resigned from the public service. Never before have the public servants in South Africa been so hard-pressed financially. Never before has a Minister of Finance, as the hon. the Minister himself admitted, had to give as large an increase in salaries as he has given today in order to keep the wolf of inflation from the door of the public servants in South Africa. I ask the hon. member for Malmesbury: Is he saying that the public servants have not been exercising a certain degree of self-discipline over the past few years?

I did not say that.

The public servants, the teachers, the police and the nurses have done more than their share in fighting inflation over the past few years. The fact is that the Government has been unable to contain it. Now the hon. the Minister has given a belated increase to these public servants. What about the past few years? Are these public servants ever going to be repaid for what they have lost?

This increase is simply an election gimmick and if one were a cynic one would say that the public servants have been purposely denied their increases in order to make this huge increase a nice plum just before the election.

In yesterday’s Sunday Tribune there was a front-page headline which read “A lollipop for the election”. The reporter said—

I want to say to the public servants that while the Press may call this a pre-election lollipop, they should not be caught for a sucker in this election. I say this because within 15 months they are going to find that the increases they will be receiving will have been completely whittled away by inflation. I believe that within the next 12 to 15 months we are going to have an inflation rate which is going to exceed 20%.

Are you against the increases?

Mr. Speaker, we are certainly in favour of the increases but we are against the inability of this Government to control inflation.

Now that a general election has been called we find that the NP—as with this budget—is trying to encourage, I can almost say dupe, people to vote Nationalist by manipulating purse strings, as they are now doing, and also by exploiting old fears. They are raising fears in the minds of people just as they did in 1977. I want to take this opportunity to warn the voters of South Africa that, in the next 10 weeks, they are going to be bombarded with propaganda, talks about terrorists, communists and the total onslaught against South Africa. This has already started. However, our people in South Africa have already proved their mettle when it comes to dealing with terrorists. Our boys on the border have done it and South Africans within South Africa itself have proved their mettle in this regard. I believe they deserve more from the Government than to be bombarded with the sort of propaganda that they are being bombarded with at the present time. Because of this, and for other reasons which I will explain later, we are going to oppose this Bill and so I wish to move as a further amendment—

1. (1) clearly and specifically defines the direction in which it intends to take South Africa, with specific regard to joint decision-making by all race groups, including non-homeland Blacks, on matters of common concern and the lessening of racial tension;
2. (2) guarantees an economic strategy to ensure that all citizens of South Africa can maintain a decent standard of living, by reducing the crushing effect of rampant inflation on the people.”.

We hear all this talk of terrorism but I believe that there is another form of terrorism that we have to combat and that is economic terrorism. Economic terror is facing many of our people today because of the evil of inflation which this Government has spawned, which it has allowed to grow and, as we have seen during the past year, which it is totally incapable of controlling. I want to concentrate on inflation during the few minutes that remain because I believe that inflation must be beaten in the South African economy.

The average South African citizen—the man in the street—is today like a little mouse in a treadmill. No matter how hard he tries he can never make any real economic progress. If there has been a boom as the hon. the Minister has claimed, then there are many people in South Africa who have not had their fair share of that boom, especially elderly people and the ordinary working man. Other people may have reaped the benefits of this boom but these people have not. Inflation is caused by what I would like to call economic terrorists and the first of these terrorists is the Government. No matter how the hon. the Minister of Finance may argue this issue, ultimately the financial buck must stop at his desk. It is the Government that controls the money supply, as the hon. the Minister himself has admitted, and it determines exchange rates in respect of other currencies. The hon. the Minister went to great lengths to tell us about the control of the bank rate and that it is the Government that decides when and how to tighten up or relax credit facilities. It is the hon. the Minister and his colleagues who decide how much they are going to squeeze out of John Citizen in taxes.

More important, it is this hon. Minister and his colleagues who decide how much the people are going to pay for certain commodities, for example maize, fertilizer, bricks, cement, etc. I do not for one moment suggest to the hon. the Minister that to deal with these issues is a simple matter, but I do submit that these are the responsibilities of government, and this Government, by the hon. the Minister’s own admission this after noon, has failed in all its declared intentions to curb inflation. This is borne out by the hon. the Minister’s statement that inflation last year rose to 15,8%. But what I think is indefensible is a statement that came from the Department of Statistics in which it was said: “It is almost now unstoppable”. Surely this is an admission by a Government department of total failure on the part of the Government to control inflation. The hon. the Minister has many advisers to advise him and I am sure that he gets good advice. Yet he had to admit that the money supply got out of control during the last year or so. He added that this was largely due to the inflow of foreign exchange. But, surely, there have always been measures and answers to the money supply.

I did not say it was out of control.

The hon. the Minister says it was not out of control, but it certainly was so far out of control that it was a large contributory factor towards the inflation rate. Why has the hon. the Minister not exercised the powers he has and used some of these answers to the money supply problem? I believe the hon. the Minister has been very timid in using these measures. He could have eased exchange control a lot earlier so that our surplus funds could have been drained off to a greater degree. This could have been done on a controlled basis, as he is now proposing to do, especially if he feared that there would be a tremendous outward flood of funds. I believe this is the Government’s fear, namely that if there was a relaxation of exchange control, large amounts of money would flow straight out of South Africa. If this is correct, then I believe it is a terrible reflection on this country whose finances are basically strong. I believe that such a fear is an admission of just how unacceptable the Government’s political policies are to the people in South Africa.

I have mentioned that the Government is the first economic terrorist with which we have to deal. But there is a second, and that is the terrorism that is exercised by monopolies and cartels which manipulate prices. They do this usually, not in the over-all interest of the national economy or of the people, but primarily for their own selfish interest. When one talks about a free economy and a free enterprise system in South Africa I should like to ask the hon. the Minister just how free the economy is in South Africa today. Just how much competition do we have in South Africa today to do what this Government and what Milton Friedman tells us every week on TV to do, viz. to have the freedom to choose? The hon. the Minister was aware that a year or two ago we passed the Competitions Act in this House. I want to ask him just how much he and his colleagues have used the provisions of that Act to promote competition in South Africa over the last year or two. We read in the Press—I am sure we all do— almost daily of huge increases in profits of large national companies. In fact, the hon. member for Yeoville mentioned them earlier on today. We read of take-overs and mergers, we read of expanding production, we read of the shortage of material and labour and then again we read of cries for tariff protection against the import of cheaper goods.

I want to put a number of questions to the hon. the Minister, questions which I think concern the average man in the street. Firstly, why is it necessary to import bricks into South Africa today? After all, we read in the Press that in South Africa our major brick producer is the second largest brick producer in the whole world. Yet we have to import bricks at a time when the activity of our building sector, according to the building survey of the Bureau of Economic Research of the University of Stellenbosch, dated January 1981, in terms of the usage of materials, i.e. cement, bricks and stones, has not yet reached the boom periods of previous years. Why do we now have a brick shortage? Does the answer to this question not perhaps lie in the fact that there is too much Government control in this particular sector, that there are too many take-overs by large companies, monopolies and the closing down of smaller, independent brickfields? Is there too much protection of monopolies and cartels and big business in South Africa? I want to put another question to the hon. the Minister. I read in the Press over the past weekend that people who want to have houses built over the next 12 months in Natal, will be forced, if they want facebricks, to pay R330 per 1 000 instead of R130 per 1 000 for locally manufactured bricks. I want to ask the hon. the Minister whether this price of R330 per 1 000 will become the acceptable price or the norm within the next year or two? If so, what effect will this have on inflation?

I want to put another question to the hon. the Minister. Why does South Africa have to import chickens? Virtually all materials required for the production of chickens originates here in South Africa and here again we are told that South Africa is one of the largest if not the largest broiler producer in the world. One of the largest broiler producers in the world is located here in South Africa and yet we have to import chickens. I want to ask the hon. the Minister: What has happened to our smaller producers? I believe that these producers could satisfy our market at a lower price than the consumer is having to pay for chickens today. Have these smaller producers not been wiped out by the giants in the industry who manipulate the price and who manipulate feed prices to serve not the interests of the consumer but, if I may put it this way, the interests of their own avarice?

I can continue in this vein but I do not have the time. However, I believe that a typical example of what is happening in South Africa today is contained in a press report that I have here that appeared in The Sunday Times of 18 January of this year. The headline is: “Metro Boss Won’t Raise Mealie Price”. I am pleased to see that the hon. the Deputy Minister of Agriculture and Fisheries is here because this should interest him. I do not know whether he read this article. The subheading to this article reads: “ ‘Don’t Threaten Me’ Katz Roars at Tiger.” The article goes on—

Tiger Oats is a major shareholder in Metro and is a major miller and supplier of mealie meal. Does the hon. the Deputy Minister of Agriculture and Fisheries know what this is all about? It deals with the selling of mealie meal in the Northern Transvaal. Metro was prepared to sell this mealie meal there at a lower price but the milling giant, Tiger Oats, that supplied them with the mealie meal refused to supply them with the goods to sell because the giant wanted to manipulate the market.

What about the free market mechanism?

Mr. Speaker, the hon. the Deputy Minister speaks about the free market mechanism. What utter nonsense when this Government controls the price and the marketing of maize! [Interjections.] No, Sir. There are monopolies that are controlling these products at the highest level.

My time is short, Sir, but there is a third group of terrorists to which I should like to refer, people who are terrorizing our economy.

In the sugar industry!

That hon. member made a real hash of his speech the other day about the railway line on the South Coast and I think I should allow him some of my time so that he can also make a hash of what he knows about the sugar industry, which is absolutely zero. [Interjections.]

The third group of terrorists that is terrorizing our economy consists of businessmen and workmen who, because of the lack of competition in South Africa, are not managing and supervising their businesses and doing their jobs as efficiently as they should be doing them. These businessmen and workmen simply pass on the cost of their errors and inefficiency to the public, and this cannot always simply be blamed on untrained and unskilled labour. A very important reason for this is the lack of proper supervision and the lack of a proper and ethnical commitment to the customer. This is so, Mr. Speaker, mainly because of the fact that there is a lack of competition in South Africa today. I know that the hon. the Deputy Minister of Finance will agree with me in this regard, because he believes as I do, in the free enterprise system, and therefore, we must ask ourselves why is it that we have so little competition in South Africa today? I say it is because there is too much Government control.

To summarize, I believe that this Government and this hon. Minister have so totally mismanaged the economy that the average man in the street has been terrorized by inflation. Until the hon. the Minister does something about this and stops passing the buck to another committee that will sit and discuss matters for hours on end and achieve absolutely nothing, until he accepts the buck and does something about it we shall continue to suffer an inflation rate, as I say, of something of the order of 20% during the coming year. It is for all these reasons, Sir, that I have moved my amendment.

Mr. Speaker, it is indeed a great privilege for me to address this House once again today after an absence of several years during which I was a member of the former Other Place. I also want to convey my sincere appreciation to those who were responsible for my being here today.

What we have just heard here I can only describe by the saying: More heat than light. That is indeed how I should like to describe the speech by the hon. member for Yeoville. The hon. member for Amanzimtoti spoke about certain types of terrorism, terrorism at certain levels at which the term is totally irrelevant. What he did was to exaggerate the true situation beyond measure.

However, before I go further I wish to convey my sincere appreciation on behalf of hon. members on this side of the House to the hon. the Minister of Finance and to the Government for the fine part appropriation submitted to us here today. I believe that the hon. the Minister has indeed met the existing needs, which are, in the first place, to make provision for the needs of the lesser privileged group, for those who are hardest hit by inflation, viz. our pensioners. It will be generally acknowledged that the contribution announced here today by the hon. the Minister is a fine contribution. In the second place, I also wish to express my appreciation for the excellent increases in the salaries of all our public servants, particularly our teachers, who are going to have an average increase of 20%. Although one can never give enough to our public servants and our teaching staff, I believe that they will indeed have to show a spirit of gratitude. They ought to show a spirit of gratitude because in these times of high inflationary pressure, the Government has seen its way clear to assisting them to that degree and giving credit where credit was due. I should like to place on record my appreciation in that regard.

In the third place, I should also like to express my appreciation to the hon. the Prime Minister for the fantastic contribution he has made over the past number of years, for the way in which he has placed our system of private enterprise in the forefront here and achieved recognition for it. If there is one thing that has become crystal clear from the debate thus far it is the equivocation of the Opposition. On the one hand they say that they are in favour of encouraging private initiative. On the other, however, they conjure up all kinds of spectres such as terrorism, monopolies, cartels etc. It amounts to total exaggeration.

However, the NP Government has the answer to all those dangers that could possibly occur. One of those dangers, for example, is exploitation. These dangers could occur. However, the Government has an answer to all these dangers, due to its twofold strategy. One of the positive strategies the Government adopts in answering these challenges is by assisting small businesses in the country. There could be no finer example of the Government encouraging and arousing and achieving competition than this. The Government is not guilty of the practice of encouraging private initiative while at the same time curbing it unnecessarily. The Opposition wants to assist private initiative, while at the same time curbing it constantly. After all, that cannot work. We know that it cannot work.

Then, too, there is the legislation on competition, which the Government constantly gives due consideration to prevent too much exploitation from taking place. However, no Government in the world can prevent exploitation from taking place occasionally. One cannot accept a system of private initiative with all the advantages but without the disadvantages it involves. There are few things in the world that are purely advantageous. Most things also have disadvantages. However, the pluses far out number the minuses. Unfortunately, one cannot obtain and retain the pluses if one is not prepared to tolerate minuses too.

I should also like to express my appreciation for the fact that more Kruger rands, are to be made available to the public. In years past South Africa has made a vast contribution to world prosperity and wealth. In one of the latest editions of the Financial Times of London it is stated that at the end of 1979 the five foremost gold-owning countries had added wealth totalling $180 milliard to their monetary reserves. They did so purely by virtue of the revaluation of their monetary reserves. It is as well that the hon. the Minister should afford South Africans an increasing opportunity to possess the gold themselves. I appreciate this.

There has been talk today of the inefficiency of the Government and its administration, but the contrary is true. If we are inefficient, then surely it must show somewhere. However, what does the outside world have to say? In West Germany a study was carried out recently into how the world sees the various countries. This study was carried out by 223 experts and their findings were published recently in the Financial Times of London. What was their conclusion? They considered 75 Western countries on the basis of three criteria. The first was: How good is the country as an investment country? The second was: How does it fare as an exporting country? The third criterion was the political stability of the country. It is interesting that notwithstanding all the unfavourable publicity that South Africa receives from time to time, South Africa achieved 83 points out of a hundred as a good investment country. As an exporting country it achieved the fine total of 73 out of a hundred points. As a country of political stability South Africa was awarded 67 out of a possible 100 points. This is South Africa’s image in the outside world, and the Government can be proud of that image. Our country and its public can be proud of that image created under NP rule.

However, what have hon. members of the Opposition been telling us over the years? They have said that the NP will break the country economically until eventually the country is economically bankrupt. That is the story they told. However, what is the true state of affairs? South Africa is one of the most prosperous countries in the world. The inflation we are experiencing at present—we admit that it is a serious problem— is, inter alia, a product of prosperity.

I want to come back to South Africa’s image and submit a few statistics to give an indication of that image. It is on the basis of that image that the electorate must judge us in the year 1981. Since the last election in 1977, our total reserves of R788 million have increased to more than R5 milliard. The relationship between our foreign assets and domestic liabilities has also improved. Formerly the situation was that for every R1 we possessed abroad, we owed R4, but within two years that ratio has improved from 1:4 to 1:2. That is a model of remarkable progress and greater liquidity and wealth. Never in the course of South African history has so much been achieved. In 1980 our current account reached the remarkable figure of R2,8 milliard. From time to time one hears that we are supposedly undermining the image of South Africa, but over the past two years our export trade with the rest of the world has increased by 120%. Our export trade with African countries has increased by no less than 70% over the first six months of 1980, if one compares it with the first six months of 1979. I say six months because not all the comparable figures are yet available. Our export channels are wider open than before. In times past, in the times we are living in and the time that lies ahead, this is of immeasurable importance for South Africa. If there is one thing that can help South Africa through difficult times, it is its economic power and possessions. That part of our national economy must be developed with all the strength at our disposal. Whatever the Opposition says, they will ultimately have to admit that the NP has succeeded in making of South Africa an economic power.

I could mention, for example, that over the past two years savings have increased by 65%. Our fixed investments, which determine future prosperity, have increased by 40%. As far as the increase in food prices and the problem of inflation are concerned, I admit that these are points of difficulty, but the hon. members of the Opposition do not know what is going on. They say that this is not important, but they probably have not read yesterday’s Sunday Times which expressed itself as follows—

They will not believe it—

Now they are dead quiet.

The report goes on—

And then there is a beautiful picture of an old man sitting and smiling with food in his mouth and saying: “Tuck in and smile.” [Interjections.] This beautiful picture was not published by Rapport or one of our other newspapers but by the newspaper that supports the Opposition. However, that is the true state of affairs.

South Africa is faced with an inflation problem, but it is in part the result of prosperity, prosperity in a world which is faced with adversity, inter alia, the highest rate of unemployment in years and the lowest growth rate experienced in decades. However, other countries are faced with the problem of stagflation. On the one hand they are experiencing zero or close to zero growth rates; some are even experiencing a negative growth rate, and at the moment it is being asked whether that fine European country, Germany, is the sick man of Europe. In six European countries the total unemployment figure is at present 40 million. The rate of unemployment has increased over the past year by 67% in England, 29% in Germany and 21% in the USA. And what has been the average rate of inflation in the EEC countries over the same period?—13,8%. Accordingly there has been a very low growth rate on the one hand and an extremely high unemployment rate and inflation on the other.

A nation can be rendered no greater service than the opportunity to work, to earn its own living, and in this South Africa is undoubtedly succeeding. Indeed, we have a steadily growing shortage of workers, and one of the biggest tasks and challenges we must tackle in the ’80s is to train people. Productivity involves three important aspects, and one is the ratio of capital to labour. In America, 21,5% of the higher growth rate is ascribable to growth in the latter factor; knowledge is responsible for 35% and the quality and attitude of labour for 43,5%. The Government of the Republic has a tremendous task to bring about an improvement in this regard and the NP is on its way to doing so. I truly believe that at the end of this century we shall be able to look back with great satisfaction on the progress that South Africa will have made in this sphere.

Mr. Speaker, just as one does not behave antagonistically and argue with the Opposition when one rises to deliver one’s maiden speech in this House, it is probably also not fitting that I should be antagonistic and launch a full-scale attack on the Opposition when making my last speech in this House. I had far rather address the hon. member dr. Visser who has just resumed his seat and say that we take great pleasure in welcoming him back to this House after an absence of approximately ten years, is it not? Just as he made a valuable contribution in this House in the years 1966 to 1970, he showed signs this afternoon of making a very valuable contribution in this House in the future, and I wish him every success.

The hon. the Minister of Finance remarked recently that he and I speak the same language, and that is necessarily the case because both of us come from farms in the Paarl district where people are conservative financiers. However, he again gave evidence this afternoon of the fact that that he has the finances of this country fully under control, and for that we can only convey to him our heartfelt thanks.

Over the years I have been very interested in finance, throughout the 23 years that I have sat in this House. Accordingly it is a great pleasure for me to thank the hon. the Minister of Finance this afternoon for having given a sympathetic hearing, as in the past, to representations I have made. Again this afternoon he complied with a plea I addressed to him approximately a year ago in this House. I referred to the question of the strengthening of the Stabilization Account. A year ago I said here that we had placed R57 million in the Stabilization Account, but that in the years ahead far more would be required, because as sure as the sun comes up in the east and goes down in the west, periods of recession will recur, and when that happens we must have a strong Stabilization Account to draw from. Alternatively we would be obliged to increase taxes in the middle of a period of recession, and that is the last thing one ought to do because by doing so one curbs one’s economy at the very time when one should be stimulating it. I thank the hon. the Minister for having intimated here this afternoon that that account will be considerably strengthened.

Another cause to which I have always lent my support is the position of our less well-off people, particularly retired people. In this period of very high inflation it is this very group, the retired people, who are hardest hit as the hon. the Minister indicated this afternoon, because the salary of the person who is still working is adjusted. Even the pension of the civil pensioner is being adjusted by way of contributions from the State coffers. However there is one type of retired person whose cause I have often championed in this House and on whose behalf I must put in another word this afternoon. When the hon. the Minister spoke about a special bonus to social pensioners this afternoon, he said: “… to all persons receiving social pensions and allowances”. Bonusses are being paid to all persons who receive social pensions.

He went further—this is also a cause I have championed in the past—and said that social pensions should never be increased or bonusses paid without increasing the means test as well; otherwise anomalies occur. If when one increases social pensions, one does not simultaneously increase the means test, then one encounters the situation that a person who has himself made provision for his old age may be worse off in his old age than a person who has not made provision for his retirement. Accordingly I want to ask the hon. the Minister of Finance, in all humility, and as a parting request: Please do not increase social pensions for, and pay bonuses to, people who are already receiving social pensions without also increasing the means test.” The hon. the Minister has complied with this request, as he announced in his Second Reading speech this afternoon—

But why is this only done in respect of income derived from earnings? Even the man who still works after he has reached the age of 65 years, to whom a concession is now being made, reaches the stage when he can no longer work and has to live off a pension and the interest on their savings which they have set aside over the years while they worked. Why are these people excluded? Why is the means test only increased in respect of income derived from work and not also in respect of income derived from money which people have saved throughout their lives? I asked the hon. the Minister in all humility, to give attention to this.

Another matter which immediately strikes me is the case of the man who has retired and who does not fall into the category of those whose pension is adjusted by the State. I am now referring to those who have to live off their savings. Once a man has reached that stage he can never increase his capital again, and in the meantime the purchasing power of his capital dwindles. He can never increase it, except in one way, and that is by investing his savings skilfully in such a way as to be able to increase his capital. But then he has a problem with the Receiver of Revenue. The Receiver of Revenue will want to know from him: “Have you sold shares this year?” If he answers in the affirmative, the Receiver of Revenue says: “Now I have to assess you for capital profit, because you are a share dealer.” This is all very well for the man who is still working, but cannot the poor fellow who has retired and is unable to increase his capital in any other way, be exempted from this action on the part of the Receiver of Revenue?

Sir, I must make haste, because unfortunately my time is very limited. I shall no doubt be permitted to convey a few words of thanks. I want to begin with all my colleagues in this House, from the hon. the Prime Minister and the Cabinet to the hon. member who became a member of the House most recently. I want to convey to all of them my sincere thanks for all the goodwill I have enjoyed here over the years. Politics is often cruel, but fortunately it also offers much by way of compensation, and the greatest compensation offered by politics is the wonderful cameraderie in this House, the wonderful goodwill one experiences here from people with whom one was previously unacquainted and with whom one becomes good friends.

There are many other people, too, that I wish to thank, but unfortunately I shall not be able to mention them all. Permit me, however, to convey my sincere thanks to the Hansard staff and the Press, who often cause one’s speech to look a great deal better than it did when one delivered it. I cannot omit to thank Hansard and the Press for having been so merciful to me in this respect over the years, because I must admit that when I read my speeches at a later stage, they were very often better than when I delivered them. Many thanks, then, to Hansard and to the Press.

Then, Mr. Speaker, I must of course thank you, too, for the patience you have often exercised towards me. I understand that you, too, have retirement plans. May we have more time for one another’s company and friendship after we have both retired. It would be to my benefit and I should enjoy it.

Nor can I omit to wish all my colleagues who are remaining behind and who will come back again after the election, everything of the best for the years that lie ahead. Perhaps the sorrow of parting, if I may put it that way, is not quite so bad for me because I can give this House the assurance that the man whom my constituency will send to this House in my place is a man of the highest calibre. I am sure that he will acquit himself here with honour. To him, too, I wish to convey my very best wishes for the future. To everyone, and particularly to the hon. the Prime Minister, who has taken upon his shoulders such an enormous task and who is performing it with such distinction, my best wishes for the good of this fatherland of ours.

Mr. Speaker, the hon. member for Paarl, in his farewell speech in the House after many, many years of dedicated service …

It may be your farewell speech as well.

… told of us abiding interest in financial affairs. I think I can say on behalf of every member of the House and all his colleagues over the years that we shall miss his thoughtful contributions in financial debates. For many years he was Chairman of the Select Committee on Public Accounts and a leading speaker on finance matters on that side of the House. I think we shall miss him.

Coming back to the mini-budget before us, I want to say that one of the worst aspects of Government mismanagement has been the great food price scandal. The escalation in food prices has been so rapid and so extreme that it has become quite apparent that the Government-supported marketing systems are failing. Control boards are failing to stabilize prices. What is more, in certain instances they are not only failing to stabilize prices, but they are aggravating the inflationary spiral to such an extent that both the farmer or primary producer on the one hand and the consumer on the other are getting a very raw deal indeed. Government-supported control boards have in certain instances driven farmers off the land, because the gross incompetence of those boards has made it just not worth their while to carry on.

Do you want to abolish them?

They have failed to ensure that the gap between what the producer is getting for his produce and what the housewife is paying is fair and reasonable. They have allowed “fat cat” monopolies to flourish.

We in the PFP realize that, to ensure some sort of stability in the agricultural sector, a measure of long-term planning is necessary, but not the monstrous control boards the Government has created. They do not answer to the problem at all. Just look at their record. Food prices last year, as other speakers have mentioned, escalated at the rate of just under 30%, about double the increase in the consumer price index. Is this stability? Is this what the control boards were created for? In spite of higher wages throughout the country, the average housewife is at her wits end trying to balance her budget. The poor, the people on a fixed income, pensioners and the like, are just not able to cope. Foodstuffs such as meat, butter and eggs have been pricing themselves out of the market. Will this benefit the farmer in the long run? Of course not.

You must leave the farmers alone.

In answer to that hon. member I want to make it quite clear at this stage, before what I say is misinterpreted by speakers on the other side, that the farmer is not to blame. This side of the House does not blame the farmer. We blame the Government’s meddling which has upset free market mechanisms.

Where, for instance?

I am glad to see that the hon. the Deputy Minister of Agriculture and Fisheries is in the House. We blame their meddling and I am going to detail some of that meddling. He will hear about the meddling. When he says: “Where, for instance?”, I can tell him that there are examples all over the place. I shall mention just a few of them.

One of these days the farmers of South Africa will realize that they have been taken for a ride by this Government. When that happens the NP had better watch out. Why have we reached the stage in South Africa where we have to import certain foodstuffs such as chickens and eggs? Why is this necessary? Are we incapable of producing sufficient for our own needs? Why have we reached the stage when, in spite of the hon. the Minister of Finance’s contention that we are on a wave of prosperity, housewives can no longer afford to buy the meat, butter and eggs that they need to buy? Why are farmers like the hon. the Minister of Transport Affairs being pushed out of the dairy industry? Is this the sort of situation that the control boards are supposed to bring about? [Interjections.] Typical of the marketing policies of control boards—this is an example for that hon. Deputy Minister—is the nonsensical Dairy Board policy of raising prices when there are surpluses. In a free market system prices go down when there are surpluses.

Give us the solution.

If that hon. the Deputy Minister will just be quiet for a little while, what has the result been? There was a fall in the demand for butter and cheese and butter has never recovered its percentage share of the market. Was this good for the dairy farmer in the long run?

Boerehaters!

Yes, they are “boerehaters”. One can say nothing more about them. Time has proved that their policies are nonsensical. When we come to a more classic example, when we come to meat, we come to a chapter of mismanagement and inefficiency that will be very hard indeed to beat. Firstly, the Government has allowed middleman monopolies to flourish and grow fat. The Government has allowed them to carry on in spite of the fact that there is anti-monopoly legislation on the Statute Book. The Government has not used this legislation to control those middleman monopolies. As the hon. the Deputy Minister knows, the bulk of meat sold in South Africa is sold in controlled areas. In the past year producer prices rose very nearly 90%. This has been described by the Meat Board as a market adjustment. There is no doubt that some sort of market adjustment has become necessary but I do not believe for one moment that an adjustment of this size was needed. This is far too much.

The reason for this unbelievable jump lies in years and years of mismanagement by the Meat Board. For years it was apparent that the permit system was not working adequately. Farmers were unable to get permits to send their cattle for slaughter and cattle had simply to remain on the land for long after they should have been slaughtered thus raising producer costs. Also there were proven cases of dishonesty and the bribing of Meat Board officials in the handing out of permits both in SWA where this was particularly bad and here in South Africa. Many farmers were forced to sell out to feed-lot operators who somehow or other managed to get permits when farmers could not. Another middleman. Once a permit had been obtained cattle and sheep were sent to large and costly centralized Government abattoirs which should never have been built in the first place. Smaller, decentralized abattoirs should have been built. This would have cut down on the expensive transporting of livestock over tremendous distances.

I think the hon. the Deputy Minister will appreciate that and I think that he will accept that what I say is now being proved. Perhaps it is easy to be wise in retrospect but this side of the House has been saying this all along. Buying rings operate in these huge centralized abattoirs and there are very few small butchers who are able to buy direct. Regulations enforced for transporting meat from the abattoirs are so unnecessarily tough that a small butcher cannot afford to buy a vehicle costing R50 000 or R60 000 to transport his meat from the abattoirs. It is just not possible. Retailers are forced to use wholesalers and those wholesalers are making excessive profits. The big three in the meat industry are making excessive profits.

I should also like to deal with the activities of the Meat Board who claim that they do not actually fix prices. This is not true. The support price system effectively fixes prices. Dr. Lombard of the Meat Board states that the object of the support price is to limit excessive and unacceptable price fluctuations —hon. members must remember this phrase “unacceptable price fluctuations”— over the short term, but, of course, it goes far further than this. If a shortage occurs at any time and prices go up, for example as they did over Christmas, they take weeks to come down again because of support prices.

Prices came down over Christmas.

It does not work the other way when we talk about “unacceptable price fluctuations”. They do not apply when it is the consumer who is the one that is suffering. When the consumer has to face unacceptable price fluctuations, what does the support price do for the consumer? It keeps those prices high up at levels which the housewife, the consumer, cannot afford to pay. I do not think that the Meat Board ever really considers the consumer. I think that they forget about the interests of the consumer. They regard themselves as totally devoted to the meat industry and the farmers but largely the Meat Board consists of many of the fat cats in the meat industry who in fact are getting Government backing to exploit the consumer.

That is grossly unfair. You know it is not true.

The support price is an artificial price. I do not know that that is not true at all. It is perfectly true and that hon. Deputy Minister knows it is true.

Of course it is not true and you know it.

If that hon. Deputy Minister would just open his eyes he would see it going on in front of him.

Prove it.

The answer and the proof of it lies in the price of meat at the moment, which is a proof of failure on the part of the Meat Board and that hon. Deputy Minister who claims to know a lot about meat.

Is the price too high?

It is much too high at the moment.

We are a bunch of vegetarians over here.

The support price is an artificial price which is forcing prices to the limit. The shortage of slaughter stock—I think the hon. the Deputy Minister must listen to this because this is why prices are so high—I think he will accept is one of the reasons why prices are so high.

Oh!

Does the hon. the Deputy Minister tell me it is not? So there is enough slaughter stock?

Make your statement.

Now the hon. the Deputy Minister is a little quiet. He says I must make my statement. The shortage, and I believe there is a shortage, has been brought about because so many farmers in the past were forced out of business because they could not make meat farming pay. [Interjections.]

Now you are contradicting yourself.

Order!

This is clearly an indication of the failure of the Meat Board. The farmer could not get a fair price for his product. Dr. Lombard says that in the past it was impossible to increase prices and that meat would not have sold. Why is the situation different now? Why is it now possible to increase prices to this degree? The fact is that they were holding the lid on for so long that it exploded. Is this stability in the agricultural sector? Is this what control boards do? Do they introduce stability? There has been nearly 100% increase in producer prices in one year. I believe that the Meat Board has been an utter and complete failure. We have a commission of inquiry looking into the matter, and overdue that was. It was appointed only after continual appeals from this side of the House and we only hope that it will achieve positive results. But in the meantime, as an interim measure, I believe that the support price system should be abolished.

When it comes to retailing we discover that the big monopolies who are able to fix increasingly higher wholesale prices are also involved, directly or indirectly, in retailing through supermarkets and because the smaller retailers are unable to buy direct. Frequently wholesale prices to retailers bear absolutely no relation whatsoever to the actual price paid at auction and price fluctuations downwards are not handed on to the consumer. That does not happen at all.

That is the free market system.

Is that hon. Deputy Minister an exploiter? [Interjections.]

Mr. Speaker, the free market system is only a free market system as long as monopolies are controlled. We have always made the limitation on the free market, the necessity to control monopolies. The answer is—and this is quite clear—that it has driven hundreds of farmers off the land and has failed to ensure stability in the industry. Meddling with market mechanisms has resulted in artificial shortages and artificially inflated prices.

Let us look at the situation in the poultry industry. Let us take a quick look at that. Last year I told the then hon. Minister of Agriculture that he had made a mess of that, which he had. We now even have to import chickens as well as eggs.

That was foul play! [Interjections.]

The one area that does need control is the area of monopolies. However, absolutely nothing has been done in this respect. I should like to forecast one thing. The pre-election pay increases and more, given by the hon. the Minister of Finance appearing in the guise of an out of season Santa Claus, will not be enough. Nothing he gives in the way of pay increases can possibly be enough as long as the spiralling cost of living continues at the present rate. Public servants are to receive 12% when last year we had a 15% increase in the consumer price index, a figure which is likely to rise to 20% this year.

I should like to lodge one appeal with the hon. the Minister, if I may. It is that he should please remove general sales tax from staple foods. The poor and the unemployed in South Africa—and we have hundreds of thousands of unemployed at the present time in South Africa—are suffering because general sales tax is inforced on staple foodstuffs. Let the hon. the Minister remove it. If one positive thing comes out of this budget let it be the removal of general sales tax on staple foodstuffs.

I regret to say that I believe the Government is totally out of touch with the people of South Africa. If the hon. the Minister really thinks that people have been fooled by his display of open-handedness today, why does he not offer himself for election? [Interjections ] Here is an opportunity of testing what the electorate think of the budget. Let that hon. Minister, who has never fought an election in his life, offer himself for election. That hon. Minister is the leader of the NP in Natal. [Interjections.] He is the leader of the NP in Natal. Why does he not offer himself for election in Natal?

In Durban North.

Let us see how we do when that hon. Minister stands for office. Let him test it himself. Could I suggest to him that he come and fight me in Durban North? [Interjections.]

Order!

Will he not like to come and do that? Or is he going to run away from that as he has run away from elections all his life? Let him come and stand for election in Durban North.

Are you standing in Natal? [Interjections.]

Order!

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

I have no time to answer questions now. The hon. the Deputy Minister is wasting my time. [Interjections.]

Order! The hon. member does not want to reply to questions.

I hope the hon. the Minister of Finance is now going to take up my challenge and fight me in Durban North. [Interjections.]

Order!

I should like him to show that he is not afraid to do so. [Interjections.]

He is chicken. [Interjections.]

Order!

Mr. Speaker, I think I shall leave the hon. member for Orange Grove in the hands of the hon. the Deputy Minister of Agriculture and Fisheries. He will know how to deal with the hon. member. The hon. the Deputy Minister will be able to reply to all the points raised by that hon. fat cat Eloff Street farmer, the hon. member for Orange Grove. [Interjections.] He challenged the hon. the Minister of Finance to oppose him in the forthcoming election in Durban North. I should like to challenge the hon. member for Orange Grove however, because he is looking for a constituency, to come and challenge me in Wonderboom. [Interjections.] He seems to be very tired now. [Interjections.]

*I should also like to refer to the hon. member for Paarl. I am sorry that he is not present in this House at the moment, because I think we listened with sadness to his last speech here this afternoon. I will be permitted to say that the hon. member was the first hon. member whom I met as a newcomer in the lobby. On that occasion I addressed him very formally as “u”, but his immediate reaction was: “Los die ‘u’; ek is Wynand Louw.”

“Wynand Malan.”

That is what I meant to say, but I have just as good a relationship with Wynand Louw and I will have something to say about him as well in just a moment.

Sir, you will permit me to say to the hon. member for Paarl in his absence that we on this side of the House wish him and his wife, now that he has reached the retirement stage in his career, many blessings and much strength, good health and joy in the years to come.

As regards the hon. the Minister of Finance I give him the assurance that during the few years I have been here I have come to one conclusion: The better the budget, the weaker the Opposition. [Interjections.] I think we have had a beautiful example of an excellent part appropriation today on which the official Opposition and their chief spokesman, the hon. member for Yeoville, had absolutely no comment. According to what we know about his knowledge of economic matters, I believe the hon. member for Yeoville ought to feel thoroughly ashamed of his speech here this afternoon. I think it is the most superficial economic speech or reaction to a budget proposal which I have ever experienced. His speech revealed a total lack of knowledge of the economic factors which gave rise to this budget.

What do you know about it?

The hon. member has just put his foot into the problem. I have only been involved in the financial operation of the State for a very short time, but with the little bit of imperfect knowledge which I have acquired during this time I think he ought to be ashamed of himself for the lack of knowledge he revealed of the background and economic factors which gave rise to the budget the hon. the Minister introduced here this afternoon.

Let us look at a few aspects. He kicked up a terrible fuss about the position of pensioners. As luck would have it, I had sent for a letter from one of my files, one of the many letters which I received from my constituency. A pensioner writes—

There are numerous such examples from my constituency. The hon. member revealed a total lack of knowledge of what gave rise to these aspects in the budget.

The hon. member also remarked on capital investment and asked the hon. the Minister to see to it that the State spends less. The hon. member need only have taken the trouble to glance at the statistics on our investment pattern, for he would then have seen that the fixed investments of the corporations declined by 3% last year or in relation to the 1979 figure, and that of the Government by 4%. For a long time now the hon. the Minister has been doing these things he is asking for.

He referred sneeringly to the budget as a champagne budget. I think the grape farmers in this country are laughing about that reference of the hon. member, because it reveals that he does not have the faintest notion of what gave rise to that particular announcement by the hon. the Minister. Surely the hon. member knows that a budget does not fall out of a clear sky; surely a budget is based on specific economic factors. Those economic factors are evaluated before the budget is prepared and that evaluation then serves as a basis. Surely a budget is not a political blueprint for the country, but an economic blueprint within a political framework.

I think the hon. member made such a superficial speech this afternoon that if I, as a professional engineer, were to run my engineering practice as superficially, the shower in the bathroom would have started to operate when I switched on the television set. I think that is the problem the hon. member has: He pressed the economic button and then ran outside immediately to see where his political brickbats were falling, because he linked every argument he raised to political aspects pertaining to the election.

I want to leave the hon. member at that, but what I said about him also applies to a large extent to the hon. member for Amanzimtoti. I do not want to be too rough on him because we are both, after all, professional people in the engineering profession and I would prefer to be on a completely friendly footing with him.

Unfortunately the hon. the Minister gave me certain instructions in his Second Reading speech which I must now carry out in the few minutes still available to me and I shall therefore leave hon. members at that for the moment.

The first instruction concerns certain interest rates in respect of the Limitation and Disclosure of Finance Charges Act, 1968. I know that the hon. the Minister does not like the word, but for me the Act has such a nice name, “Ladofca”. Perhaps someone could indicate whether I am pronouncing the word correctly. Before I make the announcement about finance charges, I must give a short summary of the background so that we can see these interest rates in their correct perspective.

Firstly, the legislation on finance charges is what succeeded the former so-called Usury Act in which the interest rate percentage was fixed at 12, and which applied only to loan transactions. The Act to which I have just referred, extended this and not only gave prominence to loan transactions in section 2(1), but also referred in section 2(2) to credit transactions and in section 2(3) to leasing transactions which then became involved in interest rates. To obviate any misunderstanding about these rates which are going to be announced, I must, however, make it very clear that they are absolutely maximum interest rates. That is the first point. Secondly they are effective interest rates which actuaries, in other words the experts who make the calculations, use to compile tables for added rates by means of which the additional sum can be calculated and added to the principal debt so that the monthly instalments which the person who enters into the contract must pay, can be calculated for the period.

When the new added and effective rates are fixed and applied in practice we should like to believe that market orientated rates will be used by dealers. These rates must, therefore, be seen as usury ceiling rates. Mr. Wynand Louw and I thought up this term this morning and I should therefore like to call these rates usury ceiling rates.

For the record I shall now announce the rates: Previously the rates for money lending transactions up to R200 were 21% per annum, for more than R200 up to R400 they were 17,5% and for more than R400, 14% per annum. Credit transactions of the principal debt was 21% per annum for any amount—there was no limitation. These rates and the amounts involved are now going to be changed as follows: As regards money lending transactions with a principal debt of up to R500, the rate is 24% per annum; on amounts between R500 and R1 000, 21%; and on more than R1 000, 18% per annum. As regards credit transactions with a principal debt of up to R5 000, the rate will be 24% and on more than R5 000, 21% per annum. With regard to leasing transactions: For those with a principal debt of up to R5 000 the rate will be 24% per annum, and for those with a principal debt of more than R5 000 the rate will be 21% per annum.

In enumerating these rates, I think it is important to sound a note of warning to dealers, because they tend to make use of the maximum rates in their contracts with buyers. I think it is important to warn them that this is a malpractice. What the dealer does in practice, is to discount the contract at a bank at a lower rate of interest than the rate concerned. The difference is then paid over to the dealer in the form of the so-called “kick-back”. I think this is a malpractice which we must warn against. I think we must tell the public that when they enter into hire-purchase transactions they must be careful to ensure that the added rates are not based on the maximum rates, but on the market rate prevailing at that stage. So much for the maximum interest rates and the Limitation and Disclosure of Finance Charges Act.

I should then like to make a few observations on the Browne report. A lot of criticism was levelled at the Browne report. As the hon. the Minister announced in his Second Reading speech, I think we have made a great deal of progress towards reaching unanimity among all parties involved on how we are going to deal with the recommendations of the Browne report. The recommendations of the Browne report are based on one of the most scientic investigations which has so far been undertaken in respect of local authorities. Therefore, I wish to associate myself with the hon. the Minister’s statement that the recommendation which will emanate from this study group will be comprehensive and may be far-reaching in the total structure of local authorities in South Africa. The Browne group has already evaluated more than 80 recommendations. Nearly 40 of them are possible to implement and nearly 32 of them laid down guidelines in respect of which the efficiency, the organization and the functional classification of local authorities can be dealt with. The balance of one third deals with aspects of financing.

However, the important point I should like to mention is that from the study group of the Browne Committee a few specialist commissions have already been appointed. The first is investigating the financial and proclamation aspects of the establishment of townships, aspects that present a very serious problem in the cost of housing. This commission has already been appointed and is working on the problem under the chairmanship of Dr. Du Plessis.

There is a second commission as well, looking into all the facets of assessment rates. This commission is investigating the standardization of assessment rates, the socio-economic aspects of such rates and the rate structures with regard to land as against land plus improvements.

The third commission is examining the financial resources of local authorities— available resources and possible new developments that can take place in this regard.

The study group has recommended that a productivity institute for municipalities be established to advise smaller municipalities who cannot afford to pay for it. For this purpose we would in future like to make available R125 000 per annum for three years, so that this institute can get off the ground.

Then there is the fourth commission—this is the last in respect of the Browne Report— and this is investigating the limits under which smaller municipalities can acquire loans from the local Loan Fund. Not only the limits are being investigated, but the financing of these loan funds as well.

I should also like to say a few words about what the hon. the Minister of Finance said in his Second Reading Speech in regard to income tax tables. I just want to put the matter into perspective. I shall do so very briefly. In his Second Reading speech the hon. the Minister very clearly sketched the background to the tables which are going to come into effect on 1 March. I should like to summarize the matter briefly on the basis of a few examples so that there will be no doubts in peoples’ minds, as the hon. Opposition and their Press are trying to raise by saying that there are now going to be tax increases. The tax tables must ensure that the amount which is deducted corresponds to real liability for income tax in every tax year, and consequently that is also what happened for 1981. That there are not going to be tax increases is clearly evident if we take the case of a married tax payer with two children earning R600 per month and whose liability for tax has been reduced, because of concessions that have been granted, by 55,7%—from R460 for the 1980 tax year to R204 for the 1981 tax year. I can enlarge on this, but unfortunately time does not allow me to go into details. However, we can point out that the new tax tables that have been announced are based on the rate of taxation passed by Parliament, which the hon. the Minister announced in his budget speech last year. The new tables are an administrative process which amounts in the first instance to our ceasing to demand more tax from a person on the basis of the old tables which compensated for the excess deductions in the first four months of the 1981 tax year, and that the actual rate of taxation distributed over the full tax year is applied to him. I think it is important to mention three examples just to put the matter into perspective, because the matter has been repeatedly wrenched out of its context by the hon. Opposition and their Press. The hon. member for Yeoville in particular was guilty of this. In the case of a married person without children earning R400 per month the tax concession compared to the tables which applied a year ago is 37,98% according to the new tables. If he is earning R1 500 per month he pays 28,35% less tax. I now come to the most important example, the case of a married person with two children, who is earning R400 per month. In his case the reduction in tax according to the new tables is 100%. On a salary of R600 per month the reduction is 56,03% and if such a person earns R1 000 per month, the reduction is 28,75%.

I mention these few figures briefly in the hope that the position with regard to the new tax tables will as a result be placed in its correct perspective. The concessions with regard to the 1979-’80 tax scales are still astonishingly large, as proved by the examples that I have mentioned. The Opposition, together with their Press, should stop trying to make petty political gain by expounding half-truths instead of putting the whole matter into its correct perspective.

Mr. Speaker, there is a story about a man who took a second bond on his house to buy a new car. Later he mortgaged his car to buy a boat and a trailer. Later he mortgaged the boat and the trailer to buy an outboard motor for the boat. During the last transaction the moneylender asked him whether he would have enough money to buy fuel for his car and his boat. He replied: “Well, anyone who has his own house, his own car, his own boat and his own trailer will probably be given credit to buy fuel.”

Sir, this series of transactions could take place and remain valid only while the man still had a house. If he did not have a house, everything would have fallen about his ears.

Sir, I am not referring to the house of the official Opposition that is in the process of falling about their ears. Their house is worth a mere 376 votes in the Swellendam constituency. Since the hon. member for Orange Grove is so free with his challenges and is also looking for a place to settle, Swellendam invites him to stand there if he cannot find anywhere else.

I refer with compassion to the symbolic house of those who suffered in the recent disaster. If one’s house disappears, help is sought diligently, help to re-erect what has been destroyed, help to re-establish the source of life. In the case of a lack of any other source of help because one’s house has disappeared, such help can be sought and received from the State alone.

It was reassuring to hear in the address of the hon. the Minister of Finance that over and above the R10 million that has already been made available for rebuilding Laingsburg, the Government is also prepared to assist the farmers who have suffered millions of rands of damage.

On 25 and 26 January this year one of the greatest disasters, if not thé greatest, struck agriculture in South Africa. The Laingsburg flood did not simply swallow up three-quarters of a town, nor did it simply claim the lives and possessions of people. The 32 inches of rain which, ironically enough, fell in the driest part of South Africa’s agricultural area, viz. the Moordenaarskarroo— rushed through Laingsburg, flooded the Floriskraal Dam to the south of Laingsburg, hurtled through the Buffels River poort below the dam into the course of the Groot River. On the way it also collected eight inches of rain from the mountains surrounding Ladismith. It also gathered up the flood of the Touws River, the biggest flood of that river in living memory, as well as the flood-waters of the Prins River. This mass of water flowed through Vanwyksdorp and washed away everything in its path. The flood caused by the excessive waters, caused unprecedented damage in the agricultural industry in the flooded areas of Ladismith. Apart from the total loss of large areas of irrigated land on many farms, there was also a tremendous loss of flooded land that has to be reclaimed, of small and large stock that was washed away, of vehicles and implements that were washed away, and of feed supplies and other farming necessities that were carried away by the flood. Similar conditions were also created in the Montagu, Ashton, Koo, Vinkrivier and Nuy areas and environs. To begin with, the effect of the disaster on the people concerned was dejection and despair. Seasoned farmers no longer had the courage to begin again. Seasoned farmers stood with tears in their eyes, gazing in dejection at what had happened to their possessions.

The firm, purposeful behaviour of the Government and its related departments; the early visit by the hon. the Minister of Health, Welfare and Pensions and by the hon. the Minister of Defence and the aid that they granted; the visit by the hon. the Minister of Agriculture and Fisheries and his Deputy Minister, by the hon. the Deputy Minister of Finance, the Director-General of Agriculture and other officials; the visit by the hon. the Minister of Water Affairs, Forestry and Environmental Conservation and of other Ministers with their departmental heads; all the other people who visited this disaster-stricken area, each one with the aim of providing help; the firm action of the Postal Services, of Escom, of divisional councils and of the provincial administration, that did everything in their power to restore the infrastructure to the best of their ability as soon as possible so that work could continue—all of this gradually made an impression on the people concerned and helped them to lift up their heads once again, to gather courage once again, to face the future once again. All they need, is to be helped to do so. That is why they are so grateful in the knowledge that the State is prepared to help. That is why they are grateful in the knowledge that there is a Department of Agriculture and Fisheries, that there is a Department of Finance that will help them in their need. On their behalf I also want to thank the hon. the Minister of Finance for the assurance that he gave here today. In the first place, the direst needs of these farmers are to have the source of their farming restored and to restore the courses of the river so that they can utilize it under the new circumstances that are prevailing. We must understand that as a result of the flood the river has scoured its bed deeper in some places and has silted it up in other places. There are cases where existing irrigation canals are now a metre and more above the original diversion weirs which distributed the water through the canals. The House will realize that to a large extent, this is disrupting the entire basis upon which irrigation farming in this area is based, viz. the course of the river itself. Financial assistance will also be necessary in this respect. That is why I am asking politely for this to be looked at as soon as possible because—and once again this is ironical—within three weeks to a month after the flood trees are dying of drought because the available water cannot be brought to them in time.

The other necessity, the other aid, is more practical in nature, in the sense that we will also need money to assist the department concerned, in this case the Department of Water Affairs, to redevelop the irrigation systems that were damaged, as soon as possible so that the farmers can irrigate their lands once again.

If I am to sum up, what it amounts to is that a flood caused a tremendous amount of damage to agriculture in South Africa, but that it is the Department of Water Affairs that will have to assist in repairing that damage. In this debate I also want to ask the hon. the Minister to do everything to enable the department to provide that assistance.

Then I also want to convey the sincere thanks of those in my constituency who were affected, to all those who helped so bravely and so quickly to repair things as soon as possible. On behalf of my constituency I want to address a special word of thanks to the hon. the Prime Minister for the important role that he played in speeding up these services, particularly to have the infrastructure restored and also for the courage that he inspired in people who were despondent, people who could no longer face the future as a result of this disaster. We thank him for the courage that he gave to the people again, the courage to lift up their heads once again so that already today they can say: We are going to put right what is wrong and we know that the Government will help us to do so.

Mr. Speaker, we have all listened very carefully to the hon. member for Swellendam. At this stage I should like to express to him and ask him to convey to the people of Swellendam the very sincere sympathy of the NRP in the tragic and shocking disaster which has struck his particular area. We know that this must have been an experience which those people will never again wish to have, and certainly the people of South Africa do not wish a similar tragedy ever to befall an area so beautiful and so productive as that of Swellendam.

It is somewhat ironical that the hon. the Deputy Minister of Finance a little earlier mentioned the fact that the maximum rate of interest on contract agreements would be increased and he appealed to the entrepreneur and to the businessman to apply a rate of interest that would be current that is the current market rate of interest rather than the maximum limits that he had just laid down. I want to tell him that I believe he is dreaming if he believes that the businessman under the present circumstances is going to apply any rate less than the maximum rate. This will certainly have the effect of tightening spending in the country but it will also make it even more difficult for the man in the street to purchase the necessities of life such as furniture etc. for setting up a home. I think this is particularly pertinent here because there will perhaps be dozens or even hundreds of people in the Swellendam and Laingsburg areas who will again have to set up their homes and establish their farming enterprises. They will obviously have to rely upon contractual agreements with businessmen and they are now going to find themselves faced with increased finance charges, something which is going to make it even more difficult for them to re-establish themselves. I believe that this adjustment which the hon. the Deputy Minister has mentioned here is not going to be satisfactory to the country. I believe that the rate of interest should be retained as it is at the moment.

I now wish to deal with another matter, namely the consolidation of the homelands. I believe that part of the money that is being asked for today by the hon. the Minister of Finance is going to be devoted to the payment for land for the consolidation of the homelands. I want to put the views of the NRP to this House this afternoon in regard to the consolidation and development of the Black national States, and particularly the amount of money to be spent in those particular areas.

Firstly, as a basis, we accept that the national States which have not yet become independent have been given the firm undertaking by the Government that they may opt for independence if they so desire after negotiations with the Government. Secondly, we accept that these national States which accept independence will receive financial assistance from the South African Government after they have become independent. Thirdly, that there will be no insistence by this Government that any of the national States will be forced to take independence against the wishes of the people of those particular national States. It is in the context of this background and the undertakings given by the Nationalist Government that we as a responsible party would approach the status of the national States in our formula for a future based on the confederal-federal situation. Briefly stated, we are committed to a confederal relationship between the federal common area of South Africa and the self-governing national States, as well as—and I emphasize this—any independent neighbouring States which might apply for membership of that confederation. Two of the essential elements of our philosophy are that the confederation should have as part of its institution a common confederal citizenship and a single economy to which all would have access by agreement. This agreement would include defined, open industrial and commercial areas in all the States which would be open to all members of the communities for ownership and employment, without discrimination, subject, however, to certain essential socio-economic safeguards such as community services and housing requirements.

As far as agricultural land is concerned, we believe that we should endeavour to obtain the acceptance by organized agriculture of the principle of freehold ownership of agricultural land in all areas by any person of any race who is financially and agriculturally qualified to farm efficiently. Clearly under this policy the consolidation of the homelands will not become necessary. To add more land to the homelands will not be necessary. It will not be necessary to spend the millions of rands that we are aiming to spend, as appears from Government statements, on more consolidation of the homelands. We are convinced that our policy will defuse the pressures regarding the constant demand by the national States for more land and the consequent uncertainty in the minds of the people throughout the whole of the Republic in regard to where and when and what their future means to them. The NRP regards the commitments of the Union Government of 1936 to be commitments made at a time when land was of paramount importance to the Black people of this country to afford them the opportunity of employing themselves in the manner to which they had traditionally become accustomed, namely, that of subsistence farming. One must also not forget that we had at that time just come out of the most dreadful depression period and that it was essential that the Black people be given opportunities of employing themselves.

Over the past 45 years there has been an evolutionary change in the economic situation in South Africa. The Blacks are becoming more and more oriented towards industrial and commercial ventures, as well as towards professional occupations, and we believe that it is in this direction that the Government should devote itself, particularly in regard to the expenditure of money. It is our considered opinion that the 1936 commitment of land, after it has been met, can be translated into a commitment to provide infrastructures inside the existing homelands. In any event, the areas of land that still have to be allocated in terms of the 1936 commitment are fairly minimal. It is apparently 21 000 ha in Natal, 18 000 ha in the Cape Province, 22 000 ha in the Transvaal and a mere 100 ha in the Orange Free State. If this is so, there remains to be given to the national States some 61 000 ha. We believe it is totally unnecessary to add any additional land to the existing boundaries of the national States over and above the 1936 allocation.

The question arises—quite interestingly— of how much it cost the Republic of South Africa to give Mafikeng to Bophuthatswana. Surely there are other solutions. The Government seems intent on adding large tracts of ground, apart from the 1936 allocation, to the Black States. For instance, 137 000 ha were proposed to be added to the Black States in the Cape Province in terms of the recent recommendations of the Van der Walt Commission. That means that this is in fact 119 000 ha more than was promised in terms of the 1936 Act.

The hon. the Minister of Co-operation and Development, in reply to a question, blandly stated that this comprised only a little less than 100 farms and some smallholdings—100 farms in one of the most productive and beautiful grassland areas in our country! We say to the Government: Stop it now. There is much land still to be paid for. In terms of the 1975 decisions we still have to spend some R80 million on buying the land which we decided to buy in 1975. We have no option but to buy that land immediately and to declare to the nation, to the Republic of South Africa, that the policy of drawing new lines for the consolidation of the homelands has now finally and absolutely ceased.

The regional economic development plans of the Government are sound in concept and they present in microcosm the principles of the NRP. We say the Government must implement this plan. It must appoint, as a first step, a highly qualified and dynamic official to act as a co-ordinator in each regional economic development area. There will be money available if we stop the spending of money on the purchase of land and land only. I cannot stress urgently enough the necessity to implement this Government plan.

Finally, I want to assure the Government that the people of the Border area, the farmers in that rich grassland area, the businessmen, the industrialists, the labourers in East London, in King William’s Town and other towns in that area, are sick and tired of living on tenterhooks; they will not accept incorporation into any homeland at any price. They have, since the early 1800s, developed that part of South Africa, facing trials and tribulations of which we are all aware, and they are not prepared to become expatriates. They want to remain in South Africa. They want to be able to select their own leaders and legislators. They want to govern their own lives through their own people. They are quite happy, however to allow other people also, people with different ways of life, their opportunities of governing themselves in the same way. For this reason I believe that in the general election that is going to take place in April th is year, the people will show that they believe in the practical policies being enunciated by the NRP.

Mr. Speaker, the hon. member for East London North made his first election speech this afternoon and he tried to raise the emotions of the people on the land issue. The hon. the Prime Minister and the hon. the Minister of Co-operation and Development, however, both dealt extensively with the acquisition of new land.

*I have been listening to the debate this afternoon and I find it remarkable and ironical that whereas South Africa is at present enjoying one of its most prosperous postwar years—in any event, the best in the past 15 years—not one of the Opposition speakers spoke with real gratitude about this achievement of the South African economy. Not one stands up to state with gratitude that the South African economy is strong and vigorous. When listening to their speeches, one gains the impression that one is standing on the edge of a bottomless abyss.

There are aspects which the hon. the Minister of Finance also referred and which are of equal concern to this side of the House. There is the high rate of inflation and there are price increases, but the inflation that we are experiencing is a direct result of the high growth rate, a direct result of the prosperity that we have enjoyed in recent times. It is certainly not necessary for me to spell out how important it is for South Africa that we should grow in order to overcome our serious problems as regards the provision of employment. A Government which when at the helm can enable the economy to grow at a rate of 8% may look back with gratitude on the economy.

It would have been possible for the hon. the Minister of Finance to take drastic measures in order to break the neck of inflation, but at what price? It is possible to control this wild horse, inflation, but one has to be careful not to break its neck in the process. Our rate of inflation is too high and the hon. the Minister said as much in his speech this afternoon. We have an inflation rate of 13% to 14% but at the same time we have a growth rate of 8%. We have growth in inflation; the rest of the world has inflation without growth, it has stagnation.

The fact that our economic growth rate accelerated to 8% during 1980 did at least result in a considerable decrease in unemployment among all the population groups. Next to inflation the provision of jobs remains one of our most important objectives. The latest figures indicate that the number of unemployed in October 1980, compared to the corresponding month in 1979, decreased as follows: Whites, 30% fewer unemployed; Asiatics, 29%; Coloureds, 23% and Blacks, 5%.

It is true, therefore, that this high rate of economic growth goes hand in hand with an alarmingly high inflation rate and that prices have increased across a broad front. Of particular concern is the fact that in the course of last year, from the beginning of the first quarter to the third quarter, the rate of inflation increased so considerably. It is disturbing, too, that in the course of the year the consumer price index increased to up to 15,8% in comparison with that of the previous year. Food prices, to which several references have been made this afternoon, showed an increase of 29,5% and contributed most to the increase in the consumer price index.

Meat prices increased by 57,2% and it was this increase in particular which made the biggest contribution to the rise in food prices. However, I must point out to hon. members that over the previous five years beef prices have increased by an average of only 8% per annum. But it is most important to note that if increases in the meat price are not taken into account food prices for all income groups increased by a mere 12% in 1980. [Interjections.] Food price increases were thus less than the inflation rate and this was so despite the fact that the agricultural producer had to contend with enormous cost increases. As I have said, I do admit that food price increases are causing concern among all of us and that we on this side of the House are aware of the problems they entail, particularly for the less affluent. However, to single out one link, viz. food price increases, in the inflation chain, as hon. members of the Opposition are doing, and debate that here is obviously aimed solely at scoring a few cheap political points.

Would you take my wife shopping? [Interjections.]

The hon. member should do his own shopping.

*Mr. Speaker, before making a few remarks about the ’eighties, I should like to underline once again the enormous achievement of our economy last year by quoting a few statistics. What makes this feat even more impressive, is the fact that South Africa achieved this under circumstances of continued political and economic pressure from certain quarters abroad.

Let me refer briefly to a few sectors of the economy: The manufacturing industry has for some time been constrained by relatively low levels of production and utilization of capacity but has nevertheless grown by 13,4% while employment in that sector has increased by 5%. The building industry has had a particularly vigorous year in which building plans for the private sector approved during the first 10 months of 1980 increased by 95% more than in the same period in 1979. Similarly, the value of buildings completed in 1980 increased to 31,3% more than that for the previous year. The value of retail sales increased by more than 26% during 1980 which, after the elimination of price increases, still constitutes an increase of 11,9%. The motor trade has had a record year, and if we bear in mind that the motor industry, with such a wide variety of subsidiaries and auxiliary industries, plays such a key role in our economy, this achievement, too, is symbolic of the vitality inherent in the South African economy. During the first 10 months of 1980, 30,4% and 29,7% more passenger cars and commercial vehicles respectively were sold than in the same period in 1979. That broke all previous records. And if I add to that the fact in the first eight months of 1980, more than half a million residents of South Africa, 595 999 to be exact, travelled abroad on holiday or business or for study purposes, then that gives us some idea of the prosperity we are enjoying at the moment.

We are entering 1981 and the ’eighties riding on a wave of prosperity. Business confidence is at a high level and the economy is moving ahead at full speed. There are of course danger signs. Particularly for an economy that is moving ahead, it is necessary to perceive the danger signs timeously and responsibly, and that is what the Government is doing. Indeed, the hon. the Minister of Finance referred to that. There are the danger signs, such as inflation, and there are also labour bottlenecks ahead, but we can enter 1981 and the ’eighties in general with great optimism. The economic growth will undoubtedly level off in the course of this year, as will private consumer spending, but an economy that could grow by 8% in 1980 and which can continue in 1981 to show an expected growth rate of 5% is a top achiever in the international league. There is no reason for pessimism or for all the lamentations and scare stories of the Opposition. No, there are many plus points in our economy, which enable us to enter the rest of 1981 and the ’eighties in general with great confidence.

I should like to refer to some of these plus points in our economy. The first is that the present economic upswing has a far broader basis than any previous upswing. In other words, it extends over a much broader front. The improved distribution of economic activity, of economic muscle, makes our economy more resilient and adaptable, and affords a sound basis for further growth in this decade. A second plus point is the extremely favourable energy position in which South Africa finds itself and which is a factor in the great strength of our economy. The oil and energy crisis of the ’seventies has today resulted in South Africa today being, probably one of the most self-sufficient countries in the world in the field of energy, after the primary oil-producing countries. A third plus point is that notwithstanding the high level of economic activities, the balance of payments remains healthy to the core.

There are prophets of doom that seek to compare the present situation with that of 1974, to indicate that the economy will pass through the same phase and that we shall have the same problems as we experienced in 1974. However, the one important, essential difference is that our balance of payments is not under pressure, as it was in 1974. It is also important to note that South Africa is beginning to be less dependent on its gold, in that the non-gold exports in general have increased by 9,4%. South Africa’s non-gold exports and earners of foreign exchange have increased by almost 10%, notwithstanding international recessionary conditions and a strong rand value which has prejudiced our competitiveness on the export markets. This is a notable achievement and in itself attests to the inherent vitality and vigour of our economy.

Despite the fact that our economy is doing better than it ever has and our economic base is broadening, there are hon. members opposite who come along with an endless stream of criticism and prophecies of doom. I should like to quote what an international expert on the South African economy and its economic strength has to say. I refer to an article written by Mr. Chester Crocker in Foreign Affairs of 1980-’81. He is speaking about the South African economy, and the critical and objective analysis he makes of the South African economy attests to more confidence and understanding of what is happening in this country than is discernible among hon. members of the Opposition. I quote—

What does he say about apartheid?

A further important plus point in the South African economy is the emphasis the Government lays on a free market economy . . . [Interjections.]

Order!

. . . with less State interference and the reduction and elimination of unnecessary regulating and controlling measures. I intend carrying on with this policy in all earnest. All administered prices will be assessed from time to time in the light of this approach to determine whether there is not sufficient reason to allow the market to determine the price levels of those commodities. There is a false impression that if the State administers prices, cost increases can be kept at a lower level. That is a false impression, because at one stage or another, price backlogs catch up with the consumer; indeed, they catch up with him with a vengeance. There is only one mechanism that can determine the price to the greatest advantage, and to the advantage, too, of the consumer, and that is a sound, competitive market situation. There are adequate instruments to curb exploitation, and the Competition Board can keep an eye on and expose monopolistic situations. Earlier in the debate various hon. members referred to the Competition Board and asked critically whether this board answered its purpose at all. The Competition Board has never been as busy as it is at present. Apart from various informal ad hoc investigations which the board has undertaken from time to time, three major and important investigations have already been completed. I have received the reports thereon and I hope to table those reports shortly. I refer here to the investigations into certain building materials, fertilizer and poultry. The board is at present engaged in 14 other investigations, eight of which concern commodities subject to price control, for example tyres, cement etc. Then, too, the board is working at full steam on three further investigations, namely an investigation into the liquor trade, an investigation into price discrimination—alleged abuse of purchasing power in the retail trade—and an investigation into explosives. The board has also decided at its own initiative to investigate travel agents, the flower trade and electrical contractors.

Sir, I now wish to give the hon. members of the Opposition a little advice. Instead of coming and speaking in this House about matters about which they appear to have information, namely matters relating to unfair competition, they can submit them to the Competition Board so that the board can further investigate those matters and eliminate improper competition in the market situation.

The Government lays a great deal of emphasis on a less regulated economy, viz. fewer regulations, conditions and prescriptions which often restrict development, growth and competition. I trust that local authorities and provincial authorities will also take cognizance of this attitude on the part of the Government. This approach on the part of the Government is one of the reasons why foreign and local entrepreneurs have confidence in the South African economy and are motivated to tackle long-term projects here.

A fifth plus point is that the State at present has funds to tackle the most important and urgent projects and carry on with them, projects which seek to enhance not only the prosperity but also the welfare of the people of South Africa. In this regard I call to mind the provision of sufficient training and education facilities for all the population groups, housing and the provision of an economic infrastructure. The State is able to tackle these projects, without borrowing funds to such an extent that not enough remains for the private sector, and without using the printing press to balance its books.

I want to refer to one final plus point, one which perhaps constitutes the most important positive aspect of the South African economy. The economy can never be isolated from the political milieu and climate in which it functions. For businessmen a stable and relatively peaceful political environment is of course of the greatest importance. The biggest plus point for the South African economy is the fact that South Africa is the model of a country where security, order and stability prevail. South Africa is an anchor of stability and order in the turbulent sea of nations of Southern Africa. Where would many of our neighbouring countries and our friends in Africa have been today, countries which have much that is unpleasant to say about South Africa in the international forums, had it not been this bastion of power and strength in the south of Africa?

The developments in South Africa in the economic, but also in the political field, create confidence in the future. Under the guidance of the hon. the Prime Minister, the Government has instituted processes of constitutional reform and renewal which make possible a free and just political dispensation for everyone who wants to work peacefully to achieve that. South Africa is facing great challenges, but possesses the means and the will to win. With the NP at the helm of affairs, we can enter the ’eighties with the greatest confidence.

Mr. Speaker, it is a pleasure for me to be able to react to the speech of the hon. the Minister of Industries, Commerce and Tourism. He delivered a very good, well thought-out speech here. Since tonight is probably the last time that I will speak in the House, I want to tell him in advance that we are looking forward to the day, when the House meets again later this year, when he will be the member for Cape Town Gardens and will represent that constituency on behalf of the beloved NP, to which I have belonged for 41 years already.

There is a start to one’s life and it reaches an end too, and between those two poles a great deal takes place. I want to say thank you for having had the privilege of delivering my maiden speech in this Assembly Chamber approximately 15 years ago. It is an equally great privilege for me to be able to deliver my last speech in this Assembly Chamber now. I am grateful that it was my fate to be here. This is a wonderful place. In this period there were also times when one felt that things were not going well. However, I can assure hon. members that those times comprise a mere 1% of the entire period. As far as the remaining 99% of the time is concerned, one felt: It was a privilege to be here.

Sir, the Whips probably thought it was a good thing for the hon. member for Paarl and myself who are both retiring, to speak after other members on our own side of the House, probably to prevent me from succumbing to the temptation to react to a speaker on the other side of the House.

Mr. Speaker, when the House adjourned, I was saying that it is a good thing that I did not have to follow up the speech of one of the hon. members of the official Opposition. However, I want to tell the official Opposition and the other parties that I leave this House without any feeling of hatred or enmity towards them. It is their democratic right to be represented here, but I want to say this to them: It is always worth while to sacrifice something for one’s country and one’s people, to serve one’s country and people and to be honest to the core in one’s political dealings. However, I have my doubts about this as far as the official Opposition is concerned.

It is a pleasure for me to say thank you tonight, but the question is: Who are all those that one should thank? Firstly I say thank you that in his wisdom and mercy my Creator thought fit to grant me the privilege of sitting in this House for 15 years. Secondly I say thank you to the NP, a party which, as I have already said, I have served for 41 years and I also say thank you for being one of the candidates of that party in this House. It was a privilege for me, and I want to say thank you to you, Mr. Speaker, in the Chair, to the Press and everyone involved in the administration of this great building. I say thank you to the typists, the telephonists and the old messengers. To the young men who order the old messengers around so that they have to run up and down so much, I want to say: Be grateful. These are the sons of the depression who did not have the privileges that our young people have today.

I said that it was a privilege for me to be here. Many of the young men on my side of the House have asked me why I am resigning. The announcement of a general election by my beloved Prime Minister has completed my plan like the final piece in a jigsaw puzzle, and I thank him very much for this. For anyone else I may not have been so mad as to resign. After many years I have now settled this matter for myself. I should like to see this place as a place where one debates, and that is why we must dispense with the many lectures that are delivered here. It is a place where we should state policy against policy, where we should fight like a Government and an Opposition. May this be a place where we forget about our petty concerns. I would not like to see this House being turned into a kindergarten in the future, but on the other hand it must not become an old-age home either. I stand by this.

Are you listening, Helen?

Yes, Mr. Speaker, I believe that hon. member is listening. I think some people also want to go and relax. That is why I am leaving this place without any frustration. Very often during my political career—particularly in recent times—I said that I wished I could sell my seat to someone outside. I would have found many people who would have paid a high price for it. Many wanted to come here, but it was not their fate to do so. Many came to change everything here, but they are no longer here today. This teaches one that one should simply do what comes to hand and that one should not fly higher than one’s wingspan will carry one. One must not fly higher, particularly not today because Escom’s powerlines are spread across the entire country and it may happen that one could fly into one of them.

To the Minister of Finance I want to say that he has a difficult task and that he introduced a wonderful mini budget today. The two of us have built up a good friendship over the years. When I look around the House, from the hon. the Prime Minister, to the last hon. member sitting here, I am convinced that South Africa can be proud of its sons that represent it. We cannot all be equally fond of one another. I am no hypocrite. However, there are those that one is sorry to take leave of. I want to tell the hon. the Prime Minister that since my young days I have had the privilege of knowing all the Prime Ministers from Dr. Malan to himself. In those early days the stations were few and far between, to put it that way, and the trains were not so frequent that one could board at every station to serve the National Party. I knew all those great men. South Africa has been blessed with great men. We have had good leaders. I believe that in the future our leaders will do the best for this country, considering the circumstances with which we are faced. A very great task lies ahead for us. Sometimes when sleep eludes one at night, one lies and thinks of all these things, and one struggles with the question of what is going to happen. However, I can say that I believe in predestination. What must happen, will happen. I must just do my duty as a person. I must do what I can.

When the hon. the Prime Minister takes the pruning shears and prunes the tree of the NP, I believe it will be good and right if he does so in the correct way. I believe that a tree must be pruned. This tree too must be pruned so that the NP can bear its fine, good fruit. If we allow the party to grow unchecked, we will not have a harvest. The fruit will fall long before it is ripe.

Mr. Speaker, thank you very much for the time and patience. Thank you very much to every young hon. member, as well as every old hon. member in this House. It was pleasant to be here. It was a time that passed quickly, but I am leaving while people still have a high opinion of me. One must not leave when people are already praying for and looking forward to one’s funeral. If one waits until then, it is a sorry day. I say goodbye to all hon. members. I am pleased that my Creator planned things in this way for me. Thank you very much.

Hear, hear!

Mr. Speaker, like the hon. member for Stilfontein I also intend to make my farewell speech here tonight. The hon. member for Stilfontein is an old friend of mine, and I find it a pity that he saw fit to question the patriotism and loyalty of hon. members of the official Opposition. I do not think it was fitting. I also think it was a mistake. Nevertheless, because we are old friends and colleagues, I want to wish him everything of the best and happiness and prosperity in future.

†As I have already said, this is probably my last speech in this House. I am leaving this place with a good deal of regret, not because I see any obstacles or have any compulsion to leave. I leave indeed with regret, but also with much gratitude for the many courtesies and kindnesses that I have received, and only because of my personal wish to give more time now to other interests.

The past eleven years in this House have impressed me deeply with the value of Parliament to South Africa, with the sense of our good fortune to have inherited, through an accident of history, an institution which, while not perfect, is the nearest to it in mankind’s long search for a democratic lawmaking system. In nine centuries of evolution, of trial and error, it has evolved methods, rules of order, tacit conventions, checks and balances, and a manner and a style of conducting public affairs that together form a system which is the proud tradition and the precious inheritance of our Afrikaans and English-speaking population alike.

Recently we have started looking around for new methods of extending this system to other sectors of our population. It has been agreed that the Westminister model is no longer entirely suited to our purpose. But let us make no mistake about this: It is the basis of representation, i.e. the unitary winner-take-all-system, that we have agreed to change, and not the time-proven conduct of our affairs when we sit in Parliament assembled. It would be a matter for great concern if in this latter respect also we should decide to depart from our great parliamentary traditions. I believe, regrettably, that we are doing so, not because we are deliberately setting out to destroy them, but because many of us are perhaps too ready to accept authoritarian practices in the interest of efficiency and expediency. Being in a valedictory mood, I say this more in sorrow than in anger, but say it I must, and I am not alone in saying it either.

*Let me quote a few extracts from a recent article by Willem de Klerk. He says—

Ek is nog daarvan oortuig dat ’n amptelike woordvoerder al die dinge sal kan sê. Maar is ek in dié stelling geloofwaardig?

†Mr. De Klerk also asked other questions which I have not quoted, because I now wish to add a few of my own. Are we still acutely aware in this Parliament, as direct representatives of our voters in Parliament, that it is our prime function and duty to be their guardians against maladministration, corruption or inefficiency by the executive arm of government? Is it then in the interests of parliamentary independence that we depart from the long tradition of direct election by permitting the executive to select and appoint its own men as members of this House? Is it right that our Select Committees, appointed by Parliament to investigate specific issues and to report back to Parliament, are often for mere administrative advantage or convenience converted to State commissions which report not to Parliament but to the executive? Why is it that in recent times we have seen socalled parliamentary commissions consisting of members of this Parliament, selected and appointed by the executive, to carry out tasks of the executive’s choosing in order to report back to the executive? Is this in the parliamentary tradition? Is Parliament’s control over the money supply not fundamental to our system? Is it right, therefore, for us to pass laws which exempt secret funds from specific parliamentary allocations and from normal accounting and audit procedures?

Over several decades not only in South Africa but in all parliamentary democracies there has been a steady shift of power away from Parliament towards the executive branches of government. In practice this usually means that Parliament acquiesces in the delegation of rights to Ministers and that the latter in turn entrust the exercising of those wider rights to increasingly powerful bureaucracies. This is a dangerous trend and a number of Western countries have seen it as such and introduced new checks and balances. They acknowledge the increasing complexity of modern government and the unavoidable extension of administrative services but redress the balance by extending parliamentary committee systems, strengthening financial controls and providing fuller access to information. We have not done so in South Africa and one of our most valuable institutions, parliamentary questions, is used almost exclusively by Opposition members. This is a long way from the Westminster tradition where supporters of the Government party try to anticipate the Opposition by being as assiduous as they in ensuring that the administration is clean, impartial and efficient.

Sir, Pretoria is our administrative capital and nearly all the Ministries, corporations, control boards and other institutions of the State are based there. Their activities are widely known and discussed in that city. Pretoria has 12 MPs, all of them supporters of the governing party.

13.

13, I beg your pardon. In the entire life of this Sixth Parliament since 1977 and throughout the Rhoodie/Information scandal and various other exposes of maladministration not one of those 13 members put a question about these matters in this Parliament. Only one Pretoria MP, viz. the member for Innesdal, has asked any questions at all. His questions were innocuous but he nevertheless deserves the congratulations of this House.

There are other aspects of this parliamentary erosion that I would like to discuss but I have time for only one more question. Is it in the interests of good parliamentary government that the second House became so maimed and enfeebled that last year, as an act of mercy, we all had to agree to its abolition? I deeply hope we shall yet put in its place a vigorous new Upper House that will be more adequately representative of all sectors of our heterogeneous society and will strengthen Parliament’s checks and balances for the better defence of individual and minority rights.

If our MP’s do not stand up for themselves and their parliamentary institutions we shall have no occasion here for a total onslaught. No wonder the spy Kozlov reported his disappointment to Moscow. We shall be conducting our own total onslaught on ourselves far better than he can. I do not believe that it is the deliberate wish of any member to destroy or emasculate this great institution that we proudly call Parliament but I do believe that we are doing so by inadvertenst, by neglect and by failure to remember that this is no mere machine we have here but a living organism that can die if its cells are not nourished and defended. I profoundly believe that Governments do not grow stronger or diverse societies more reconciled when power is exercised at the expense of Parliament and democratic practice.

Sir, I thank this House for the patience with which it has listened to me now and over the past 11 years. I shall leave you all with deep regret but also with deep gratitude to you, Mr. Speaker, and to the officers of Parliament, to every member on all sides of the House for their courtesy and consideration and, in particular, to my colleagues on this side in whose efforts and aspirations for a better South Africa I have been privileged to share.

Mr. Speaker, since this is the first time I have the privilege, with your leave, of addressing this House, you will probably allow me to make a few personal observations.

As official I had the privilege of gaining an insight into the procedure and the working of Parliament, of which I now have the privilege of being a member. I also had a very close association with some of the hon. members of this House, especially with those who served in their respective Defence groups during the past four or five years, or who were members of the Select Committee on Public Accounts. I experienced the greatest measure of goodwill from these hon. members, not so much to my own person, but the S.A. Defence Force and Armscor. Consequently I wish to thank all the hon. members on both sides of this House today for this goodwill to the Defence Force and Armscor and express the hope that this understanding for goodwill to these excellent organizations will persevere during my term as Minister of Defence. These are motivated and purposeful organizations which are meeting the challenges thrown out to them, under very difficult circumstances. I am not however, advocating that the S.A. Defence Force and Armscor should be elevated above criticism. On the contrary, I believe in admonitions because I think they are a very essential element of sound, efficient administration, provided they are administered in a very responsible way.

I intend to apply the same policy and approach as that of my predecessor, firstly that the S.A. Defence Force is a national defence force and that it consists of elements which are individually of equal importance, the Permanent Force, the Citizen Force and the Commandoes. I believe that they have collective functions, because although their tasks are sometimes divergent, they nevertheless remain supplementary. Secondly I am of the opinion that national defence should be above party politics, claiming the loyalty of all language and ethnic groups in our country.

I should also like to pay tribute to the hon. the Prime Minister. I was privileged to have very close contact with him while he was Minister of Defence, and I was particularly impressed by his insight, vision, strength of purpose and an unparallelled capacity for work. These are qualities which enabled him to develop the S.A. Defence Force and Armscor into the most formidable defence combination on this continent. In fact, he transformed the S.A. Defence Force into the most feared military force in Africa. In this process he has also become the most respected and energetic political leader of his time in Africa.

The hon. the Prime Minister constantly pursued two requirements, to main objectives, long before anyone else realized how absolutely essential they were. The first was that the S.A. Defence Force should not only be operationally efficient, but that it should also be able to take successful action at any time and at any place in Southern Africa.

The second was that Armscor was required to render the Republic selfsufficient in the military sphere as rapidly as possible. What is remarkable is that the hon. the Prime Minister not only set these two requirements, but achieved both of them, and that is why the S.A. Defence Force can today take effective operational action over a broad spectrum. Let me mention a few examples of this ability.

Firstly there was the recent strike carried out against the ANC in Maputo. I think it is being insinuated that only the White population group was involved in that strike. Allow me to state, Sir, that all population groups participated in it. Allow me also to point out that the congratulations in this connection which I received in my capacity as Minister came all over the country and from all population groups.

Then there was another operation which occurred in another form, viz. the one against Swapo at Cassinga a few years ago. It was probably one of the most modern combined land-air operations ever carried out over a very long distance. That, too, was very successful. I do not know against which standards one should measure that success, but if it is casualties, it was successful because more than 1 000 members of Swapo were destroyed while we lost only one South African due to a freak accident.

To illustrate the involvement of the other population groups I can only say that the other population groups are continuously involved in military operations in the defence of our country on a 20% basis.

The other pole of Defence Force operations is its actions in times of natural disasters, of which the recent floods in the Karoo area offer a striking example.

Armscor has succeeded in building up an independent production capacity and in fully satisfying the needs of the Defence Force locally, at a time when a threat was staring us in the face. The hon. the Prime Minister entrusted this important task to me, and he did this—as I expected of him—by placing the Defence Force, equipped with only the best available equipment, in my hands. He has handed over a solvent estate to me. By the grace of God and with strength from Above I shall carry out this task to the best of my ability, with the dignity which he set as an example, for the welfare of the Republic of South Africa and all its inhabitants. I wish to assure him that it is an honour and a privilege to be able to serve in his team.

Since this is the first occasion on which it is my privilege to address this House, I am certain there are hon. members who expect me to share with them my views on the threat South Africa is facing, and to sketch to them the requirements which could be expected. Strategically the Republic of South Africa is very important, particularly owing to its geographic situation, its mineral wealth, its well-established infrastructure and its advanced and resourceful human material. Volumes have been written and much has been said about the strategic importance of South Africa, seen from the viewpoint of its location on this vitally important sea communication route between east and west. I should briefly like to state a few facts to verify this statement. Eighty per cent of the oil consumption of Nato countries, and approximately 17% of the USA’s total annual oil imports are conveyed along the Cape route. Secondly, approximately 70% of Nato’s imports of strategic minerals are conveyed around the Cape or originated in South Africa. Thirdly, 25% of Nato’s food exports are shipped round the Cape and, finally, between 6 000 and 7 000 Western ships ply annually around this very important southernmost point of our country. The Republic of South Africa may therefore be regarded as the gateway between East and West.

South Africa is also richly endowed with a large number of minerals. I should just like to refer briefly to a few of these minerals, of cardinal importance to the West, of which we are the main supplier or one of the few main suppliers. Firstly we come to the metals in the platinum group. South Africa and Russia between them control virtually the total world production and world reserves of these metals. It goes without saying, therefore, that it would be disastrous for the West if Russia were to gain control over South Africa’s reserves.

Then there is vanadium. South Africa is the world’s largest supplier of this mineral, and in the long term the combined reserves of South Africa and Russia dominate the vanadium market. The situation in respect of manganese and chrome is similar to that of vanadium. It is self-evident, therefore, that control of South Africa’s reserves of these four very important minerals could determine the prosperity or otherwise of the West, and in the long term it is of cardinal importance that Russia should not gain control of these minerals or these reserves in South Africa.

Furthermore, the Republic of South Africa is the most developed country in Africa economically, industrially, and in the sphere of communications and agriculture. South Africa has six well-developed and well-equipped deep sea commercial harbours and the best equipped naval base in Africa, i.e. Simonstown, where approximately 50 warships, including the biggest nuclear submarines, can berth and be refitted. This harbour is supported by an ultra-modern worldwide communications complex, i.e. Silvermine.

The Republic of South Africa has a strong, well-equipped Defence Force, which consists of people with the will to fight. It is backed up by a well-developed armaments industry. South Africa has the most advanced transportation, telecommunications and electricity network in Africa.

The last factor in the consideration of the strategic importance of South Africa is to be found in the enterprise of its people. The inhabitants of South Africa need take second place to no other nation in the world as far as ingenuity, capacity for work, perseverance and enterprise are concerned.

With this synopsis I have tried to indicate why the Republic of South Africa is a much sought after target for any world power. Consequently this explains Russia’s endeavours to cause this highly prized domino to topple in its favour. This strategic importance of South Africa has been known since the earliest days, and consequently South Africa has from a very early stage already been an important target for its arch-enemy, communism. As far back as 1921 communist leaders, including Stalin, set South Africa as a target. More recent leaders, including President Breshnev of Russia and President Siyad Barré of Somalia have confirmed this. President Barré stated in 1977—this was when Somalia was still an ally of the USSR—

President Breshnev went further and said in 1979—

Permit me also to refer to a press conference which President Reagan held last month, where he said the following—

Sir, these quotations reaffirm the age-old Russian aspiration to world domination and in addition confirms that the Russian President recognizes the importance of the Republic of South Africa in attaining this desire for world hegemony of theirs.

I hope the above has demonstrated what the ultimate target of communism in South Africa is. We must not be conditioned into thinking that communist intervention is going to end in Angola, Mozambique or even South West Africa. On the contrary, the RSA’s strategic importance makes of it the proverbial “cherry on the top” when it comes to communist activities in Africa. The strategy of the communists and certain African countries in respect of the Republic of South Africa centres on lending support to local terrorist movements. With this assistance and support for the South African communist party, the South African ANC and Swapo, organizations against which the Republic of South Africa is taking action, the Russians wish to establish their influence in those organizations and simultaneously enhance their standing in the eyes of the Third World. At present the Russians fear Western reaction if they were to initiate direct military action against South Africa. For that reason it is committed to indirect action. This includes the provision of arms and logistical support, military training, planning, the establishment of base facilities, financial support in helping to create terror, and also, with the help of certain African countries, the creation of chaos by bringing about schools boycotts, labour unrest, strikes and sabotage. They are attempting to manipulate the workers, and particularly the youth, to participate in this. In this way the news media, education, labour organizations and the churches are wittingly and unwittingly being dragged into the fray to give prominence to and exploit real and supposed grievances as controversial issues. Furthermore, the communists are attempting to build up world-wide pressure against the Republic of South Africa and to isolate the Republic of South Africa increasingly in all spheres. Their assigned priorities are manifested in the following: Firstly, neutralize the initiatives of the RSA, for example the creation of a constellation of States; secondly, isolate the country on the international economic level; thirdly, bring the RSA into disrepute by means of an intensive propaganda campaign; and, fourthly, tie the security forces down to the maximum extent and endeavour, after South West Africa, to open up a second front against the RSA where acts of terrorism against the Republic can be fomented more vigorously.

This was consequently one of the motives for the attack on Matola, and these motives were confirmed with this attack. I should like to furnish this House with certain data here. The stronghold there was indisputably identified as the military planning and coordinating headquarters for ANC sabotage, operations and planning aimed at the Republic of South Africa. The Sasol attack was planned and launched from there. From this stronghold the planning was carried out for the labour unrest caused by certain front organizations, which paid regular visits to the Mozambique from the Republic. These were the liaison headquarters for the ANC with members of the S. A. Communist Party, Soviet representatives and the PLO. The attack confirmed that the PLO, an anti-Semitic organization, was also involved in terrorist activities in Maputo. You must not think for one moment, Sir, that the object and aspirations of these terrorists are to acquire political rights in the Republic of South Africa. They are absolutely bent on gaining total domination, domination comparable with a one-party state, as is at present developing in Zimbabwe and has already been established in Angola and Mozambique.

Once again I wish to issue a warning that we shall, by means of our security forces, locate and destroy hostile terrorist bases, wherever they may be established.

Hear, hear!

We do not wish to look for trouble with our neighbouring States, and since the hon. the Prime Minister has in the past issued invitations to all our neighbouring States to conclude non-aggression pacts with us, I wish to urge them preferably to do so, for if there is one conflict which they are definitely going to lose, then it is the conflict against our security forces.

It would be a dereliction of duty on my part if I did not draw attention to the fact that an unprecedented build up of conventional heavy armaments is taking place in Southern Africa. It could within a short space of time disturb the balance of power here. If these weapons are manned and used by communist proxy forces, as is happening at present in Angola, it could very soon lead to a conventional onslaught on the Republic of South Africa. Let us analyse the communist military involvement in nearby Southern African States, some of which adjoin South Africa. There are statistics available in respect of the communist personnel, including military personnel. In some cases these figures run into thousands and in other cases tens of thousands. I shall confine myself to heavy armaments and quote a few figures. In Angola there are more than 300 Russian tanks, 350 armoured vehicles, 400 infantry combat vehicles, a large quantity of artillery and rockets, all types of fighter aircraft, including the Mig 21, and one of the most modern anti-aircraft missile systems. Zambia is at present receiving large deliveries of Russian weapons, including fighter aircraft of the Mig 21 type. In that country as well there is a modern and sophisticated antiaircraft missile system. In Mozambique there are more than 250 Russian tanks, 400 armoured vehicles, a very large quantity of artillery and rockets, fighter aircraft, including Migs, and also one of the most modern anti-aircraft missile systems. Mr. Speaker, I have omitted to mention the conditions prevailing in those countries. All these countries with a communist presence attained their independence in the recent past. At present economic chaos, civil war, famine and poverty are prevailing there. It seems to me as though the slogan in Africa should be: Obtain communist assistance and terrorist organizations to launch so-called liberation movements and the end result is perish in misery. We can learn from these examples that the terrorist onslaught is not aimed only at one sector of the population, but at everyone. Each and every individual is the target and everyone suffers the same fate and pays the same price.

Mr. Speaker, I have tried to sketch briefly the physical threat and challenge confronting the Republic of South Africa. The main reason why our enemies have not yet succeeded in reducing the RSA to a critical or chaotic state of affairs similar to those at present prevailing in Zambia, Zimbabwe. Angola and Mozambique is that our security forces take such rapid and effective action, with such a high morale and with the will to win. The cowardly terrorist elements and the countries which support them, that even operate against innocent women and children, will have to take cognizance of the will and perseverance of South Africans to throw heart and soul into combating this kind of onslaught successfully. In the past there were greater challenges which confronted our country. There were problems and situations which were tackled and resolved with faith, enthusiasm, courage and conviction. We realize that in future greater sacrifices will have to be made in this country. Greater sacrifices, more money and manpower will be required. In view of these greater needs and financial demands to maintain the RSA on its course of security, freedom and prosperity, I wish to compliment the hon. the Minister of Finance on his part appropriation, and from a security point of view, I wish to support it.

Mr. Speaker, allow me in the first instance to congratulate the hon. the Minister of Defence on his maiden speech and not only on his speech, but also on the quality thereof. It has always been a pleasure for me to listen to people who know what they are talking about. I also want to wish the hon. the Minister everything of the best for his future career in this very important office that he is holding.

Recently I heard the hon. the Prime Minister say in a humorous way that the reason why it is so difficult to speak in this House of Assembly is that there are 165 people here and each one thinks he knows more than all the others, thinks that it is not necessary to listen when another hon. member speaks, or considers a member rising to his feet to deliver a speech as a sign for them to go and have a cup of coffee. I understand that this apparently happens to the best, most learned speakers in this House. However, I console myself with the thought that every member in this House has experienced the anxiety of a maiden speech, even if it was many years ago.

It is a great honour for me to be a member of the House of Assembly. Then I should also like to avail myself of the opportunity to extend my very hearty thanks to those who made it possible for me to take my place here, for the confidence that they have put in me. I can simply hope that I will not betray the confidence that they have put in me. Then I also want to express a word of gratitude to the hon. the Prime Minister, through the efforts of whom I entered politics years ago and whose constituency I had the privilege of representing in the Provincial Council for the past 10 years. I want to thank him for the advice and guidance I received from him. Finally, I also want to thank the voters of George, who have sent me uncontested to the provincial council for the past 10 years.

This brings me to the few ideas that I should like to raise in the short time at my disposal. I believe I owe it to the people of George to break a lance for them here tonight and for the people of that beautiful region, the Southern Cape. When I talk about the Southern Cape now, I do not simply have my former constituency, George, in mind; I also have in mind the entire area that is roughly covered by the Mossel Bay, Oudtshoorn, George and Humansdorp constituencies. When one carries out a stock-taking in the Southern Cape, one becomes very much aware of how richly endowed with scenery that area of our country is and one wants to accept without further ado that the tourist industry is probably the most important industry in those areas. However, this is not the case.

According to an investigation undertaken in the Southern Cape by the Bureau for Economic Research of the University of Stellenbosch, agriculture and its various branches is by far the most important industry. Time does not allow me to go into detail, but what I should like to say, is that agriculture has much more potential in the Southern Cape, but then additional water supplies must be made available to the Southern Cape. The Southern Cape Tourism and Development Association, of which I have been a member for the past 10 years, believes that water can be brought successfully and economically from the Orange River scheme to the Southern Cape, but thus far we have unfortunately not succeeded in convincing the hon. the Minister of Water Affairs of this point of view.

Over and above the water problem there is another headache, viz. the fact that there are not sufficient employment opportunities for the Coloured people in the area and that the provision of the employment opportunities is not nearly keeping pace with the population growth. If one also bears in mind that the vast majority of the economically active workers are earning sub-economic wages at present, the picture becomes even more sombre. The Southern Cape Development Association is convinced that making additional water available will not only result in many new employment opportunities in agriculture, but that it will also result in a further expansion of industrial development in the area, which in its turn will also provide further employment opportunities within this sector. I also want to express the confidence that as the population of our country increases, and together with it the number of mouths that must be fed, the time will in fact come when additional water can be provided to the Southern Cape.

Another important asset in the Southern Cape is forestry, and I just want to refer briefly in passing to the fact that nearly a quarter of South Africa’s natural forests are situated here and that these natural forests provide very valuable types of timber for the furniture industry, for instance stinkwood and yellow-wood. Apart from this, the Southern Cape boasts approximately 54 000 ha of commercial timber plantations of which approximately 90% are under pines. Apart from the fact that forestry plays an important role in the economic life of the Southern Cape, the presence of natural forests as well as cultivated forests does of course make a considerable contribution towards the scenery of the area.

I should like to dwell for a few moments on the scenery, because it is chiefly as a result of the scenery that people stream to the Southern Cape in their thousands every year. A visit to the Southern Cape is an absolute necessity for every tourist. Here where nature in all its breathtaking beauty captivates and fascinates the visitor, the Creator really has created a pleasure garden and a resting place along the road for us. The hon. member for King William’s Town was so carried away when he participated in the discussion of the Lake Areas Development Amendment Bill in this House that he described the area between George and Knysna—this is the lake area—as follows (Hansard, 18 February 1980, col. 954)—

Hon. members can imagine, if this is the impression that the Southern Cape made on the hon. member for King William’s Town, what the effect of it would be on many other hon. members if they were to spend some time relaxing there. The scenery is even reflected in beautiful descriptive, romantic names. Just listen to these—are they not beautiful? Leisure Isle, Wilderness, Nature’s Valley, Avontuur and the Garden of Eden. Once one has been there, names like Outeniqua, Goukamma, Tsitsikamma and Storms River immediately take on a new meaning for one. The scenery, the picturesque beaches and the many sights, including the world-renowned Cango Caves, the wonderful climate throughout the year, the facilities for participating in sport, yachting, deep-sea angling, walking and the Outeniqua trail and many other outdoor activities make the Southern Cape a true Mecca for the tourist industry. It is calculated that approximately 350 000 holidaymakers, including many foreign visitors, visit the Southern Cape annually and spend millions of rands there too. Therefore, it is obvious that the tourist attractions and the scenery are a tremendous asset, not only for the people of the Southern Cape, but for South Africa as a whole.

Just as in the case of agriculture, the tourist industry in the Southern Cape has many more possibilities for expansion. Our population figures do not remain static. People are experiencing greater prosperity, and as life in the city becomes more frenetic, more and more people are seeking escape in nature. It is also true that improved transport facilities make it easier for people to go there. In this regard I am thinking in particular of the modern P. W. Botha Airport, which was put into operation a few years ago in George. I am also thinking of the improvements which are being made to the freeway system between Cape Town and Port Elizabeth at the moment.

Now it speaks for itself that everything possible should be done to accommodate these large numbers of visitors, and one also has an understanding for the attempts of people there to utilize the presence of these visitors to the full. The fact that I have been the MPC for George for the past ten years, as well as a member of the tourist association, has made me aware of the desire and aspirations of the people in that area. Furthermore I am also aware of the separate schemes that are being requested and planned for the future, schemes and plans which will result in great benefits and progress for that area, should they be carried out.

My time has almost expired, and I must conclude now. Therefore, since I am now taking leave of my former constituency and of the Southern Cape in a certain sense, I want to express the confidence that the representations of the people of the Southern Cape will not fall on deaf ears, but will meet with a response, even from the purse of the hon. the Minister of Finance. I am grateful that I have been associated with the people of the Southern Cape for the past ten years. May things go well with them in the years that lie ahead.

Mr. Speaker, tonight appears to be a time for saying hullo and goodbye. [Interjections.]

Goodbye, Brian. [Interjections.]

I have no intention, Mr. Speaker, of saying goodbye. [Interjections.]

Remember you have no control over that. [Interjections.]

As a matter of fact, I see the hon. the Minister of Finance laugh. How I wish he would come and fight me in my constituency. [Interjections.] Now I dare him! Now I challenge him! Now I beg him! [Interjections.] No, I want that hon. Minister to fight me in person. The name of the seat is Umhlanga. His people say he can win it. I beg him to come. He must come and show me. He must come and demonstrate it to me. [Interjections.] The hon. the Minister knows where I am from—Umhlanga— [Interjections.] That is the name of the seat. Just think how fine it would be. I shall tell the House what I will do with the hon. the Minister. I promise that hon. Minister I will never come back here if I am beaten if he promises me that he will never come back here, if I beat him; not under any circumstances. [Interjections.]

Order!

However, to the hon. members who have said farewell, I want to say we offer them our best wishes. To the two hon. gentlemen who have now delivered their maiden speeches I should also like to extend our heartiest congratulations. I congratulate the hon. member, Mr. Kritzinger. We listened with interest to what he had to say. We know that he had a distinguished period in the Cape Provincial Council, and we were very delighted to hear all the nice things he had to say about the Southern Cape. We noticed though that he did not mention Sandy Bay. That is a bit beyond his realm, however. [Interjections.]

We in these benches welcome the hon. the Minister of Defence particularly in this House. We are grateful to him for the exposition he gave us tonight, an exposition which, I believe, will go down in the annals of this House as one of the most interesting maiden speeches that has ever been delivered.

I have always looked upon that hon. gentleman—I have had the privilege of being my hon. Leader’s back-up spokesman on defence—as being someone that I will call a no-nonsense man. Tonight he gave us a clear indication of exactly that. He is a no-nonsense man and on those grounds we welcome him and wish him well in the post in which he finds himself today. We know that he will acquit himself well.

In the very, very short time available to me I want to discuss the question of security. I want to discuss the question of security in a different sense from that which automatically springs to mind in these very troubled times and on this very troubled continent on which we live. I want to talk about security as we relate it to the quality of life. I believe that if one relates security this way then our understanding of the word “security” is embodied in, firstly, the security of education for our children. After all, their futures depend on the quality of the education that we give them. Secondly, I believe that the security of my quality of life depends upon my health and the health care that I receive. It depends on hospitals and doctors and, most important of all, it depends on the good nursing that is required to restore me to good health after I have been ill. Thirdly, I believe that security lies in the knowledge that my family and my home are both adequately protected by a dedicated and a well motivated Police Force, a Police Force that is dedicated to the complete elimination of crime.

I believe that today we have finally heard the Government admit its shortcomings, that we have finally heard this Government admit its failure to provide these three basic needs that make for what I think is a secure society. Today’s mini budget is an indictment of this Government by this Government. This Government has accused itself and it has found itself guilty. It has found itself lacking. Let us look at the facts, Sir.

What of the teaching profession? The hon. the Minister of Finance has announced a 20% plus pay rise but he has made this announcement after we have lost the cream of our teaching profession. This announcement has been made after we have lost the “Mr. Chips” in our education. He has made this announcement after we have lost some of the best that we had in the education system. The Government’s and the Minister’s failure to grasp this nettle earlier has cost us dearly. We have lost years in education and we are going to be hard pressed to catch up. I say this in all sincerity. I would venture to say that we have lost almost an entire school life—ten years— because of what has happened in our education system in South Africa owing to the shortage of teachers, owing to the conditions under which they have been expected to work. These are primarily pay conditions. Exactly the same thing applies to the nursing profession. There we have a similar sorry state of affairs. We have come along here today to try to rectify the position but, Sir, it is too late.

Now, what of the Police Force, which is my pet hobby? I am pleased that the hon. the Minister of Police is here. Let us look at some facts in this regard. Let us look at the position in the city of Durban. In the city of Durban last Friday we lost another lieutenant in the Police Force, the second recruiting officer that we have lost. We lost a recruiting officer in the shape of a police captain, Arthur Willis, a year ago, who was taken by the Durban Corporation and who is today their chief security officer. We have now lost this lieutenant to the same organization. We had evidence given before the Hoexter Commission last week that the S.A. Police had a serious manpower drain with more than 2 000 resignations last year. Lt.-Gen. J. C. Visser, head of the CID in South Africa, told the commission that the resignations had created incredible problems for the police. He went on to say that in 1980, 74 officers, 36 of them with more than 10 years’ experience, had resigned from the Force and that during the same period 1 981 policemen of whom 1 097 had between two and five years’ service and of whom 258 had more than ten years’ service, had bought themselves out. Sir, this is the indictment of this Government by this Government; this is the charge that it brings against itself today. I do not want to sound melodramatic but I do want to say that I accuse that hon. Minister and the other hon. Ministers on those benches of undermining my security and that of my fellow South Africans. I want to say to the hon. the Minister that I trust and I pray that today’s pay rises have not simply been given for the crosses on the ballot papers.

What was given last year? Have you taken the trouble to find out?

I know what was given last year and I also know that it was completely and utterly inadequate to cope with inflation.

Chicken feed!

Absolute nonsense!

You still lost 2 000 policemen.

Do not give these pay rises simply for the cross on the ballot paper because I say to you, Sir, South Africa will never forgive you.

Mr. Speaker, the hon. member for Umhlanga will pardon me if I do not follow up his speech. I think he will be duly replied to by the Minister of Finance and the Minister of Police . . . [Interjections.] I have some specific points to make in regard to the speeches made by the hon. member for Orange Grove and by the hon. member for Yeoville, and that is why I do not intend reacting to the hon. member for Umhlanga’s speech.

*In my opinion, the performance of the hon. member for Yeoville is always a good barometer of what a budget is really like. If the hon. member is calm—i.e. if he can be calm—and if he discusses the budget in a slightly more meaningful way, I know he has got a point. However, when he waxes hysterical about the hon. the Minister’s budget speech, as he did this afternoon, I know the Minister has been on target with his budget. I believe the performance of the hon. member for Yeoville this afternoon is our best barometer of a good budget.

The hon. member for Yeoville, together with the hon. member for Orange Grove, saw fit to launch a special attack on the agricultural control board system in our country. And they find themselves in the good company, which I find somewhat strange, of the Housewives’ League. This league would appear to be a public arm of the PFP, for in the Rand Daily Mail of 9 February I read: “Produce Board slated over rocketing costs; The Great Food Price Scandal”, the same words used by the hon. member for Orange Grove.

†The report goes on—

When one reads the speech of the hon. member for Orange Grove one finds that he used exactly the same words. The report continues—

*Mr. Speaker, has any of those hon. members ever risen in this House and asked the supermarkets to make a contribution to the provision of cheaper food in this country? Never have I heard the faintest suggestion of this kind from that side of the House. I can tell that hon. member that I can buy cheaper meat at a small butchery today than in a supermarket. [Interjections.] This is an attack on our control board system. It is an organized attack on our control board system. It is an attack which has been well co-ordinated by the Opposition. This attack is to coincide with the coming election and it is aimed directly against the expansion of agriculture and its future in our country. I shall prove that.

The hon. member for Orange Grove always wants the best of both worlds. What did he say in the House today? In the first place he advocated the abolition of control. In the same breath, however, he advocated further control. Like the Housewives’ League, he says that the control boards are completely inefficient and should be abolished. However, in the same breath he says that we should come down on the wholesalers, because they are making too much profit. So he wants the best of both worlds. The one moment he pleads for the abolition of control and the next moment he tells us to come down on wholesalers because they are making too much profit.

I said there was no free market operating because of the monopolies.

How does one come down on a wholesaler?

Is the Housewives’ League a wholesaler?

One can only come down on a wholesaler by controlling the price he is allowed to ask for his product. [Interjections.]

Order!

However, he goes further. His and his party’s conception of the free market mechanism is derived from another planet, as far as I am concerned. He bends it to suit himself. The one moment he advocates a free market mechanism and the next moment he says that we should interfere with the activities of agriculture. He goes further, however. In response to an interjection of mine he said that the price of meat was too high. However, only two sentences before he had said that the farmers were leaving the meat industry because it had become completely unprofitable to be a meat farmer.

I said up to a year ago.

I gave the hon. member a chance, so he must please shut up now. [Interjections.]

Order!

He said the farmers were leaving the meat industry because the meat prices were too high! However, he made another very interesting allegation. He said that the Meat Board had put a lid on prices and kept it on too long, and then prices exploded. In other words, what was the hon. member advocating by saying that? He was implying that the Meat Board should have kept increasing prices.

On an even basis.

Who is he to say this to us this afternoon? That hon. member was the first to rise and object when we raised the floor prices of meat. He was the first to run to the newspapers when we raised our floor prices. As I said, he wants the best of both worlds.

What has the Meat Board done to rectify it?

I am not going to try to explain to him tonight, in the short time available to me, what the support price scheme is. I do not think he understands it. In fact, I do not think he has the vaguest idea of what it is all about. [Interjections.]

Order!

I suggest that it is precisely the free market mechanism which has allowed meat prices to rise to this extent. The hon. member said himself that there was a shortage of meat in this country. So he himself provided the reason why meat prices in this country had gone up. However, he is the one now who delivers a lengthy tirade, and he criticizes and disparages all we are trying to do in the Directorate of Agricultural Economics and Marketing.

Mr. Speaker, may I put a question to the hon. the Deputy Minister?

No, I do not have any time to answer any questions.

*The demand far exceeded the supply. This is the reason why meat prices have risen, and not any tampering with the free market mechanism, because meat is auctioned on the hoof and everyone is free to go and bid. The disposable income rose by more than 28% last year as a result of tax concessions, salary improvements and the growth of the economy. Surely this is a good reason why a commodity such as meat was suddenly in great demand. It was caused in particular by the purchasing power of the Black buyer. Hon. members should just take the trouble of visiting a butchery one day. The Black buyers in particular are buying more and more meat. On top of that, there was a herd reduction of one million head of cattle in our country between 1978 and 1980.

Why?

Why? Because the hon. member refused to allow us to raise floor prices.

Nonsense!

The hon. member rushed off to the newspapers every time the floor price of meat was touched. The only guarantee the producer has is his floor price, but every time the floor price is touched, the hon. member’s party goes running to the newspapers and they tell the world about the way we are treating the consumer in this country.

Let us take the example of the broiler industry. The hon. member blames the control system for the fact that we have had to import chickens. Who controls the broiler industry? Which control board? Is there a broiler control board? No, it operates under the free market mechanism. This hon. member makes all kinds of allegations here and then he wants us to believe them. Sir, there is no control of any kind over the broiler industry. When legislation was introduced in this Parliament in order to restrict the big companies, who fought it?

Lorimer!

We must see these things in perspective. When we interfere with the free market mechanism, we are criticized; when we do not interfere, it is said that we are encouraging monopolies—always the best of both worlds. That is what the hon. member wants.

That is true.

The hon. member for Orange Grove made another remark today which I want to refer to.

[Inaudible.]

He alleged that the Government had been instrumental in causing monopolies to develop in the meat industry. I am prepared—and I am making the hon. member an offer—to submit a copy of his Hansard to the Commission of Inquiry into the Meat Industry.

Certainly.

I challenge him to substantiate before that commission of inquiry the allegations he made here under the privilege of this House.

Why do you have a commission of inquiry?

I shall come to that in a moment. I undertake to submit to the judicial commission the very same speech he made about the meat industry today, and then I challenge him to give evidence about it before the commission. [Interjections.] If he refuses to do so, I hope the judge will subpoena him to give evidence. [Interjections.] The hon. member for Groote Schuur asked me why we had appointed a commission of inquiry. The Government has never been afraid, when there is any suspicion of malpractices such as those that are alleged to exist in the meat industry, to have the matter thoroughly investigated. If anything is wrong, it will be rectified.

He will not accept it if it is found that there is nothing wrong.

Sir, the hon. member for Orange Grove accuses the control boards of total incompetence. He says he does not blame the farmers for the problems that have developed in the meat industry, but he accuses the control board of total incompetence. Who are the members of the control boards? Who has the majority on all agricultural control boards? The hon. member does not know the Marketing Act.

He hates the farmers!

I also want to ask the hon. member who nominates the members of the control boards. The S.A. Agricultural Union nominates the members of the control boards through specialist associations, when such associations exist.

This is the second time this session that the hon. member for Orange Grove has expressed serious misgivings about the S.A. Agricultural Union and the farmers of South Africa and made allegations which he cannot substantiate.

He really does hate the farmers!

He made serious allegations against the S.A. Agricultural Union in a debate last week, and today he has said that the control boards of this country are totally incompetent and are not doing their work. We shall convey this to the South African farmers everywhere and to the S.A. Agricultural Union.

You would not do that because you know I am right.

I want to issue a challenge to the hon. member for Orange Grove tonight. He must go and make the same speech in Queenstown that he has made here today. I challenge him to do this. Then the NP will win the Queenstown constituency with the biggest majority in history.

Durban North as well!

Come to Durban North and make the speech you are making now.

Or to Groote Schuur.

I want to go further. Next to the meat industry, the greatest rise in the prices of food products has been in the fresh produce industry.

That is not true.

He can check the figures. By the way, he said here today that meat prices had risen by 90%. That is not true. Meat prices in the country have gone up by 57%, and only since August.

However, let us look at the fresh produce market. Who controls fresh produce? Which control board controls it? There is no control board in the fresh produce industry. In the vegetable industry or in the fresh fruit industry there is no control board. The “scathing attack” by Mrs. Foreshaw was concerned with the statement made by Mr. Chris Cilliers, the Director of the S.A. Agricultural Union, to the effect that he thought it was time we extended control to fresh produce as well. Then there was a historical rush to the newspapers. Fresh produce is not controlled by anybody in this country. I want to say that as far as that industry is concerned, we should be doing the consumer a great favour if we proceeded to exercise control over it.

The agriculture in South Africa rests on three pillars: The Marketing Act, the Cooperative Societies Act and the Soil Conservation Act. I was privileged to serve for three years on the Commission of Inquiry into the Marketing Act and I can say tonight without fear of contradiction that we could not find a better agricultural marketing system anywhere in the world than the one we have in South Africa. Let the hon. member mention one country in the world which produces agricultural products and where there is no interference with the marketing of these products.

In other countries they do it efficiently, whereas you do not.

I now wish to refer to our co-operatives. They are continually being singled out for attack from all quarters in the country, including the PFP. Allow me to give an example. Three decades ago, there were approximately 20 to 22 wool marketing organizations in the country. We used to call them wool brokers. What has become of them?

†I once asked one of these brokers why it is that he left the wool trade. Do you know, Sir, what he told me? He said there was no money to be made in it.

*We did not interfere with the wool industry. No one did that. The Government did not do it. It rationalized itself, with the result that there is only one co-operative today which handles its affairs. The private dealer has left it, not because he was forced out, but because he himself said, “There was no money to made in it.”

But the meat men are not saying the same.

I want to tell the hon. members that they should be grateful to the South African farmer. In spite of the control board system, as the hon. members put it, he has increased his physical agricultural production by an average of 4,1% per year over the past two decades. I am now talking about the physical volume and not about its monetary value. This they have achieved without having any more land available. They actually had less land. They achieved this in spite of what the hon. members say and in spite of the fact that less land is available to the farmer. The population is growing by 2,1% per year. I think it is an enormous achievement on the part of agriculture to have been able to increase its production by almost double the rate of the population increase. For this reason, sufficient agricultural products were produced to have some available for export as well. At the moment, there are virtually only three agricultural products we are importing on a regular basis, namely coffee, tea and rice. We are one of six agricultural countries that are net exporters of food. The hon. members should rather go down on their knees and thank the South African farmer.

He does it in spite of you.

We must also remember that the South African farmer produces under some of the most difficult circumstances one could have in any agricultural country in the world. I want to challenge that member today to look at this year’s maize production. He should look at the maize produced this year by the so-called incompetent farmers. I want to assure him that we are going to have the biggest maize production in the history of our country if nothing goes wrong. Why? Because nature has favoured us and because we have farmers who are able to put science into practice. Agricultural exports rose to R2 100 million this year. The food processing industry alone is responsible for about 25% of the exports of our manufacturing industry. Where do they get the food they process? It comes from the agricultural industry of this country.

I believe I have said enough tonight to prove to that hon. member and that party that they can say whatever they like in this House. The farmer of South Africa has never believed them and will never believe them. The farmers of South Africa take cognisance of the fact that they have been labelled completely incompetent.

The control boards are the incompetent ones.

The people serving on control boards are farmers, and that hon. member said that they were completely incompetent. We shall remind them of that wherever we go, and I want to repeat: That hon. member should make a speech in the Eastern Cape where we are going to fight an election and in that speech he should repeat the substance of the speech he made today. If he does that, we shall take those seats with the greatest majorities ever recorded in history.

Mr. Speaker, at the start of my speech I want to begin by speaking calmly before coming to the Opposition parties’ share in the coming election.

I should like to refer appreciatively to what the hon. the Minister of Finance said today as regards the Government’s determination to curb inflation with all the means at its disposal. As all of us know, the inflation problem is not limited to South Africa. It is a worldwide problem. Indeed, South Africa is one of the countries which has achieved greater success in curbing inflation than many other countries— including the United Kingdom.

By quoting a few figures I want to point out the terrible implications—although not necessarily in the long term only—of inflation if it cannot be solved. At present the cost of building a house is increasing by approximately 25% per annum. We were informed recently that the average increase in building costs has been an average of 10% per annum over the past 15 years. I want to quote figures to indicate that if we were to succeed in bringing the increase in building costs down to 10% for the next 10 years, then a house which costs R25 000 to build today—and this is one of the most inexpensive houses for the ordinary working class in the lower income group—would cost approximately R60 000 in 10 years’ time— which is not too far into the future. However, if building costs rise at the present rate of 25% for the past 10 years, a house which costs R25 000 to build today, will cost R275 000 in 10 years’ time. If one limits the increase in building costs to 15% per annum, a house which costs R25 000 today will cost R100 000 in 10 years’ time. However, inflation is not so great a problem for those who are still working and earning money, for earnings have a tendency to adjust to the inflation rate. But the person who is worst affected is the person who has saved for his old age from his own resources. That person retires at the age of 60 or 65 and still tries to enjoy life during the remaining 15 years of his life. But if inflation continues at the present rate there is no possibility whatsoever of such a person being able to make ends meet with that money and that person will be dependant on the State to try to make a proper living. I want to point out a few steps which may in my opinion be implemented. Actually I merely want to ask a few questions. Is it not perhaps a case of senior staff in particular taking too long holidays, five to six weeks or longer per annum? Is this an example to people in the industry today?

I want to put a question to the private sector as well. Are they doing their duty in training the ordinary worker, or are they tending to attract people who have already been trained by offering them higher salaries, and in that way contributing to inflation? The rapid turnover of labour which nowadays takes place every day is a further contributory factor to inflation, for when a person changes his job, he often changes his house as well. In any event there is a drop in productivity for a month or two or three. There is a loss in pension benefits, in that he changes from one employer to another. That, too involves so many losses. I want to appeal to the private sector not to entice workers away, very often from the Public Service. The other day I heard of a person, an employer, who told a senior person in the Public Service: Never mind what you are earning; I am offering you double what you are now receiving. These are things which contribute to inflation. These are things which are unnecessary.

I realize that the population explosion, among the non-Whites in South Africa in particular—at the present the population growth among the Blacks is approximately 3% per annum net as opposed to approximate 0,75% net growth per annum among the Whites—requires us to maintain a higher net economic growth rate to be able to provide adequate employment. If we do not have a minimum net economic growth rate of 5%, unemployment will increase alarmingly. But the higher growth rate also demands far more skilled labour, and very few restrictions remain in respect of the training of staff—Black, Indian, Coloured and White. I want to appeal to the private sector to make a really positive contribution as regards training workers, rather than simply to entice them away from people who have already trained them.

There is an election in the offing and I should like to refer to some political aspects relating to it. In Natal in particular, since I am a member of Parliament from Natal, I should like to hear exactly what is going on between the Opposition parties. Scarcely had the election been called when the Natal Opposition newspapers, the Daily News, the Mercury as well as the Sunday Tribune, published banner headlines maintaining that there was a danger that the NP would take over the Provincial Administration of Natal.

Hear, hear!

However, that was a ploy. It was not that they really thought that the NP was going to take over; the purpose behind it was to give the PFP and NRP such a fright that they would at once be forced into an election agreement, that they should do anything as long as it prevented this Nat danger in Natal from becoming a threat. I do not know whether they consider this to be a threat to the newspapers of Natal. But there is one thing I should like to know. I have before me a cutting from the Natal Mercury of Tuesday, 10 February 1981. It is entitled: “Vause Raw repeats offer.” [Interjections.]

I challenge you to read that report aloud here. My name does not appear anywhere in that report. [Interjections.] I challenge you. [Interjections.]

Mr. Speaker, the interesting thing is that the name of Mr. Vause Raw appears above the report as large as life—as large, in fact as the hon. member who is now seated in his bench over there.

I challenge you to quote my name in that report. [Interjections.]

Mr. Speaker, it is, however, the case that . . .

I challenge you, read my name there.

Nowhere in the report is there any reference to Mr. Vause Raw . . . [Interjections.] There is in fact a reference in the report to Mr. Warwick Webber.

Oh, the “botterbul-letjie”. [Interjections.]

Mr. Warwick Webber is the provincial leader of the NRP in Natal.

Vause, do you repudiate him? [Interjections.]

I shall quote to hon. members what Mr. Warwick Webber said. Then I should like to know from his leader, the hon. member for Durban Point, whether he agrees with what Mr. Webber said. Mr. Warwick Webber discussed the election agreement . . .

[Inaudible.]

No, just wait a minute.

Whatever you are trying to do now, you are wasting your time. [Interjections.]

Now Mr. Webber says that he has held discussions with Dr. Van Zyl Slabbert. He said—

The real point is still coming. [Interjections.] Now Mr. Warwick Webber says—

[Interjections.]

Mr. Inkatha. [Interjections.]

Now I should like to know whether the hon. member for Durban Point agrees with this statement by the Leader of the NRP in Natal to the effect that the NRP, at the request of Inkatha, ought really to conclude an election agreement with the PFP to keep the NP out of Natal. [Interjections.]

Vause, how can you do such things?

[Inaudible.] [Interjections.]

You are really being exposed now. [Interjections.]

Order!

However, another report appeared in the Natal Mercury, entitled “If the Nats take it,” in which the reporter said—

Mr. Buthelezi said that he was not at all interested, but Mr. Warwick Webber said that the senior members of Inkatha had asked that something should please be done to prevent a takeover by the NP. [Interjections.] Now someone else, an eminent Indian, Mr. Rajbansi, has the following to say—

I suspect he was referring to the PFP. [Interjections.]—

Then Mr. Rajbansi added the following—

That then is the NRP.

The sucking pig party. [Interjections.]

Now, I should really like to know whether the NRP wishes to conclude an election agreement with the PFP on the one hand, and with Inkatha on the other. And when I listen to the statements by Inkatha leaders, who apparently support the ANC, it almost seems that the four cornerstones of the opposition to the NP in Natal could be the PFP, the NRP, Inkatha and the ANC. [Interjections.]

There you have it. [Interjections.] Reply to that Vause. [Interjections.]

If the hon. member for Durban Point does not agree with Mr. Warwick Webber—until recently Mr. Warwick Webber was a member of the former Other Place; who, a number of years ago, had a seat in this House—I should like to know how the situation stands. It is being said in the Natal Provincial Council, at least by the PFP—unilaterally, it is said—that they will accommodate the NRP in order to prevent the NP from coming to power there. They will nominate candidates in Natal in only four provincial seats, which are regarded as safe Opposition seats, and they will not fight the NRP in the other seats.

Which four are those?

They are Pinetown, Durban Central, Umbilo and I think a seat in Pietermaritzburg.

And Durban Point?

Is it perhaps true that they have succeeded in concluding an election agreement at the provincial council level, since the policy statements of the Executive Committee of the Natal Provincial Administration are far more acceptable to the PFP than to the Parliamentary leadership of the NRP? Is it true that if the NRP and the PFP were to appoint a joint Executive Committee, they would then be prepared to propose that they should have mixed schools for Whites and non-Whites at school level in Natal? The present MEC for Natal who is in control of education has already indicated that they would not be averse to a local option being exercised to introduce something of that nature. If the PFP holds the balance of power and may determine whether the NRP continues to remain in power in Natal, it will surely make further demands, just as the Liberal Party in West Germany makes demands on the Socialists because it holds the balance of power there, but then I should like to know how far the NRP would go in meeting the demands of the PFP—as this Indian said: “The most liberal party”—and in accommodating the PFP’s policy there on provincial level—in hospitals and in schools.

How deep can you swim, Vause? [Interjections.]

These are questions of considerable importance to Natal. They are of considerable importance at the provincial level. Perhaps we should put these questions at the provincial level rather than at the parliamentary level, because I know that at the parliamentary level there is not much love lost between the parliamentary leaders of the PFP and the NRP in this House. It seems to me that a very full agreement on certain election methods has been reached at the provincial level in Natal.

Mr. Speaker, tonight is the third time that I have had the privilege of delivering a maiden speech—firstly in the provincial council, then in the Senate and now in the House of Assembly. I should like to express my gratitude at once towards the NP representatives in the Cape for electing me as a member of this exalted House. I have appreciation for the entire NP electoral college for voting me a member of this House.

In politics I had two of the best teachers. One was the hon. the Prime Minister in the Cape, and the other one—I know this will surprise hon. members—was the present State President in Transvaal. I pay tribute to them tonight for what they have meant to me in my political career.

I hope the Opposition will forgive me this small joke because it is something that I sincerely believed at the time. The Opposition must bear in mind, though, that I also forgave them for the fact that when I stood in front there at the Table and took the pen to sign the oath of loyalty, I heard them saying “Organizer”. Now I must tell this joke. When I was in the Transvaal during the war years, things were very difficult there. Everyone knows that the political struggle was a very tough one in the Transvaal during the ’forties. Meetings were very difficult, but when I went home at night, I truly and sincerely thought: “Only Nationalists can go to heaven.” [Interjections.]

Tonight I want to talk about planning and conservation in the Western Cape. In our striving towards peaceful co-existence between all our different population groups there are two matters that will require even more attention in future and these are planning and conservation in our domestic economy, but particularly in our communities. This task and responsibility has also been grasped by our people and the Government, which led to the establishment of the NPDP, or the National Physical Development Plan. We know that it lays down broad guidelines according to which the private as well as the public sector can channel their actions and make their contributions towards the nation’s utilization of our physical resources. The NPDP has already divided our country into 42 regions, ensured purposeful planning and analysed and utilized needs and assets to the full.

We are aware of the establishment of regional development associations and how they have already succeeded in involving the major portion of the Republic. In cooperation with local communities, the Planning Branch of the Office of the Prime Minister is doing valuable work, and amongst other things, guide-plans have already been put into operation in Pretoria and the Witwatersrand. Advisory committees have also been established and this is a second step forward. We know that this task has been attempted to provide a place to live, work and relax for all population groups in the country with their various, divergent needs. However, in a short review of planning I cannot simply say that we must plan, because we must also practise conservation.

As far as nature conservation is concerned, I must emphasize that the various population groups are not at all conservation conscious yet. I am thinking, for instance, of the pollution of our rivers, our beaches and the pollution that takes place along railway lines. I should like to make representations with regard to three aspects of conservation tonight; one of them concerns planning and the other two concern conservation.

In my opinion there is inadequate planning for the removal of rubbish dumps such as the one that one encounters on the road to the airport. These conditions disfigure the environment because from time to time papers and other rubbish flutter around in the air and right across the road. As a result of this, the foreign visitor or tourist receives a warped impression when they travel from the airport on the national road between Cape Town and the Strand. Hon. members may consider this unimportant, but we have already had the experience of birds landing up in the engines of planes, which is a danger to the passengers. These birds live off the rubbish dumps to which I have just referred, and of course this aggravates conditions.

As far as nature conservation is concerned, old Table Mountain with its historic background is top of my list, because soil erosion has assumed such proportions here that it may be impossible to repair the damage. The public is also responsible for the soil erosion on the slopes of Table Mountain because they are guilty of removing the plant life, burning the veld, chopping down trees and sawing wood in areas that are being utilized for silviculture. I do not want to say anything more about Table Mountain, but I just want to mention that the funds available for conservation projects are very insignificant. [Interjections.]

Order! It is a convention of this House that when an hon. member addresses the House for the first time, he be accorded the necessary respect and courtesy. I request hon. members to adhere to that convention.

The Cape Provincial Administration votes 50% of the R240 000 that must be used for nature conservation for Table Mountain, and the municipality of Cape Town is responsible for the balance. I am just mentioning this for the hon. the Minister’s edification because I am sure that it will enjoy attention later on. I do in fact believe that the State will make a much larger contribution in future towards restoring Table Mountain to its pride so that it can once again enjoy the prestige that it previously had in the eyes of the world.

In the second place, I should like to draw attention to the Verlore Vallei situated on the road between Piketberg, Redelinghuys and Elands Bay. I request that this lake be preserved and maintained for future generations. The lake is situated between Redelinghuys and Elands Bay and stretches over a distance of 14 km. In some places it is between one and two kilometres wide and the depth varies between 2 and 5 metres. It forms a part of the planning of the Western Cape. In actual fact the Verlore Vallei is an integral part of the planning of the West Coast and of the Western Cape. The objective of preserving the lake, at Government or provincial level, is the protection of the flora there, the heather in the area and the plant life in the water, as well as the protection of the bird life, and bringing about the return of springbok, eland and blesbok back to the lake and—Dr. Hey agrees with this—bringing back hippopotami if the fencing could be of such a nature as to keep them inside. Let us preserve the Verlore Vallei for our people and their enjoyment. I thank hon. members for their patience. It was only the hon. Opposition that was not so patient.

Mr. Speaker, from this side of the House I should like to congratulate the hon. member Mr. Dippenaar on his speech. We have already met outside the House, and I noticed right at the outset that he is a kindhearted man who loves his country, and his speech tonight has once again proved to me that the interests of the country—and particularly conservation— are matters of deep concern to him. His appreciation of Table Mountain and the other beautiful parts of our country will always enjoy my support. I thank him for what he has said about that.

I should also like to deal with another form of conservation tonight, and that is the conservation of the health of our country. I listened attentively today while the hon. the Minister of Finance talked about salaries. He referred only briefly to the salaries of nurses.

†South African medicine has much to be proud of, but unfortunately there is much that could and should be done. There is much that can still be improved. South African medicine can be divided into two main sectors, one being that of the Government sector and the other that of the private sector. This is a healthy state of affairs as long as these two complement each other, rather than oppose each other. If I have the time I should like to deal with that in greater detail later in my speech.

Our hospitals, especially our teaching hospitals, have achieved a great deal in the past. Well-staffed, well-equipped hospitals have resulted in good patient care and major medical achievements. We can be proud of this, without specifically having to name all the achievements that have taken place in past years. Rural areas, however, have unfortunately not kept pace. There is no doubt that malnutrition, resulting in starvation, and infectious diseases are still far too prevalent.

A good guide to the health of our nation, a barometer, is certainly the infant mortality rate amongst South Africans, for that matter anywhere in the world. For the benefit of non-medical people let me explain that infant mortality means death occurring in the first year of life per thousand of the population. Figures for White South Africans are on a par with the lowest in the world. In fact, there are only two countries with lower infant mortality rates. The figure is 12 per thousand. Unfortunately the incidence amongst Blacks in rural areas is much higher. Figures show a great discrepancy between Whites and Blacks in South Africa, and as I have said, the infant mortality rate is the barometer of the health of the nation. So we should compare the Whites with the Coloureds, Asiatics and Blacks. For Whites, as I have said, the figure is 12 per 1 000, for Asians 36 per 1 000 and for Coloureds 122 per 1 000. In the Black rural areas 240 infants died during the first year of their lives. These statistics only cover the period up to 1978.

There were various things I had hoped to hear about during the debate today. I had hoped that we would find some solution to our problems. I should like to deal with a crisis in our country and I do not think that hon. members on the opposite side of the House will be able to deny that we are experiencing a crisis in our country. We read about this crisis in our daily newspapers and we hear about it from authorities, people who know what they are talking about. I am referring to the crisis in the nursing profession, to the crisis in regard to paramedical staff and the crisis in regard to hospital beds. I should like to quote what none other than the Administrator of the Transvaal, Mr. Cruywagen, an authority on the subject, had to say—

That is the position today—

He also says that the position regarding Black nurses is much better—the shortage is not so critical. As far as Coloured and Asian nursing posts in the Transvaal are concerned, 778 of the 1 340 posts available are filled. What will have to happen in the future if these posts are to be filled? We shall have to have an increase in the number of men and women who present themselves to be trained as nurses. Let me quote some figures again. There has been a reduced intake of student nurses and this indicates that the shortage in our nursing staff is not a short-term problem but actually an on-going problem. Because I do not have the figures for the other provinces, I am quoting the figures for the Transvaal, but seeing that there has been no contradiction anywhere in regard to this matter, I would say that the situation in the Transvaal mirrors the situation in all the provinces of South Africa to a lesser or greater degree. The figures show that the intake has dwindled drastically when we compare the situation in 1978 with the present situation. In 1978 the intake of student nurses at the H. F. Verwoerd hospital was 360; this year there were 290. At the Boksburg-Benoni hospital the intake was 43 this year compared with 76 student nurses in 1978. At the Johannesburg hospital there was an intake of 244 this year compared with 591 in 1978.

We on this side of the House are often told that we have only criticism to offer and no solutions. I should like to quote what the hon. the Minister of Health, Welfare and Pensions offered as his solution to the nursing shortage. He said one way in which the hospital crisis could be solved would be to bring better community medicine to the people. I agree with that. I think the achievements of community medicine should be borne in mind and should be stressed. Facilities for community medicine should be increased. But community medicine is something that has to be brought to the people with a view to the future. This is no solution to the present problem because the nursing crisis and the hospital crisis have to be solved today. The patients need hospital treatment today. This problem must be solved immediately. So there are many different ways of solving this problem. One of the ways in which this problem may possibly be solved is by increasing the salaries of the nurses, paramedical staff etc. I am the first to agree that the members of the nursing profession and the paramedical people, for instance radiographers, physiotherapists, occupational therapists and dieticians, all need higher salaries. I want to tell the hon. the Minister that I really could not work out what the increase in the salaries of these people is going to be; but whatever it is, it is not going to be enough. They will want more because they deserve more; they work to earn more and they need more although it is not only a question of salaries. One nurse said she needs at least R600 per month. I cannot speak for all of them but all those who have come to me while I have been in the Transvaal have demanded much higher salaries.

I want to warn the hon. the Minister that the new salaries are not going to improve the position as regards the shortage of nurses. They are going to resign and leave as they did before. Nurses must enter the profession as they did before. As I have said, it is not only a question of salaries. What about factors such as weekends, holidays and overtime? Those factors must be attended to. These girls work long hours. They work at night and over weekends and receive very little recognition for the hours they work. These girls are sacrificing their lives, their homes and everything else to provide a standard of nursing that is unsurpassed in the world. I demand that hon. members on the opposite side of the House recognize this fact.

We have dealt with the question of higher salaries. What other ways are there of improving the position? There is overseas recruiting but overseas the nurses are as well paid as, and in many countries better paid than, they are in South Africa. It is therefore no good trying to recruit more nursing staff overseas. Many nurses are leaving South Africa and going overseas because they enjoy better conditions there. As regards the Black girls, they go overseas not only because they get better salaries there but also because they are not discriminated against there. [Interjections.]

Secondly, I want to say that the nursing shortage in South Africa will continue unless the Government removes the discrimination in salaries and the discriminatory conditions for nurses in South Africa. The shortage will never be overcome until that is done. I listened with great respect to the speech of the hon. the Minister of Defence. In his speech he quoted figures and indicated, rightly, that he was proud that members of all racial groups are defending this country. Sir, I ask you: if we can defend this country with members of all racial groups, why cannot we look after the country’s health by means of members of all racial groups? In reply to the hon. member for Durban North, the hon. the Minister of Health, Welfare and Pensions said—and I quote from Hansard—

What is wrong with that? Is it a shame?

I do not know whether he is correct. When I was a registrar from 1963 to 1966, White patients were wheeled into the operating theatre without Coloured or Black nurses in attendance. However, as soon as the patient was asleep, the Black and Coloured nurses could come in. Then it was all right. The patient could be nursed because he was asleep. [Interjections.] I want to ask the hon. the Minister whether it is not true that, when there was a shortage of nurses in intensive care units in Cape hospitals or an emergency transplant has to be performed and more staff is required to care for the patient, Coloured nurses are transferred to the intensive care units or to the transplant unit.

Their blood is a different colour.

The point they make is that it is not morally right to allow nurses in one group to nurse patients in another group. But, Sir, is it only moral when the person is asleep? Is it only moral when you need them in an intensive care unit? Is it only moral then? I challenge any member on that side to deny that in South Africa today Black, Coloured and Indian nurses are used to nurse Whites. It is therefore not the policy of the Government to stop this happening. As we have been told, the policy of the Government is to keep quiet about it; do not make it obvious, because while it is moral if it is not obvious, it is immoral when it is obvious.

Mr. Speaker, there are a great number of nurses. In Johannesburg and Baragwanath 27 000 Black girls apply every year to take up nursing, and only 1 000 are trained. There is a vast pool of Black nurses, and I plead with this Government: For the sake of our health, and for the sake of the country’s well-being, please break down discrimination. Remove discrimination from our health services and let our people live.

Mr. Speaker, the hon. member for Parktown devoted his whole speech to health matters and the circumstances surrounding nurses. This is a matter about which he most probably knows a great deal. But I do want to tell him that he should rather have remained where he was. I think he would perhaps have fared better there. I think we in this House have enough Barnards who can argue the matter.

You are not talking about S.P., are you?

One moment the hon. member was referring to the inadequacy of their salaries, and the next he said that there was too much discrimination in the nursing profession. [Interjections.] We agree, Sir; you can never pay a nurse what she deserves. We can never pay a teacher what he deserves.

You can try.

We are trying, as hon. members heard today.

You pay the Ministers what they do not deserve! [Interjections.]

There is something which I find rather strange, Mr. Speaker. We have been debating the whole afternoon. We are on the eve of a general election which is to take place in approximately two months’ time, but we have not heard any policy statements from that side of the House. Langenhoven said—

Since I have sat in this position in this House, I have seen only sour faces before me on the opposite side—except for the hon. member for Houghton, for at least she has smiled at me a little. I see only those sour faces before me, Sir.

Only when you are speaking. [Interjections.]

The only thing they have been philosophizing about the whole time is why the hon. the Prime Minister called an election. That is why they are angry. Mr. Speaker, can you imagine that? An Opposition is angry with the Government for having called an election! They now have an opportunity to compare their policy to ours. Let us take a look at their policy. I think the best way to examine their policy is to take a look at their kindred spirit, the lock-forward or the lineout player in their thinking scrum, viz. The Star. We have now had the privilege of examining The Star of 15 August 1985. This is The Star which tells us what South Africa will look like under a government free of apartheid, i.e. a Prog Government. I am referring to The Star of 15 August 1985.

Are you taking over as Madame Rose now?

No; this is the Madame Rose of the PFP. The first report from that Star is a report from Windhoek. It reads that Nelson Mandela, the leader of the Azanian Alliance Party, arrived in Windhoek on a direct flight from Umtata for the OAU conference. He was met by 20 000 Namibians.

And Barnard removed Harry’s appendix! [Interjections.]

He was also met by the Prime Minister of South West, Mr. Sam Nujoma, and the Leader of the Opposition, Mr. Dirk Mudge. Accompanied by Gen. Hendrik van der Walt—I do not know whether this is the hon. member, Mr. Van der Walt—the commander-in-chief of the Namibia National Army, he inspected the guard of honour. The posters described him as “the first president of Azania”. He was released three months ago, when his banning order was lifted, and he is now considering an offer from the South African Prime Minister to serve in the federal parliament. On the front page there is a photograph of “the South African’s Romance of the Year”. It is Fred van Furstenburg and Pratipa Patel, the 17th mixed marriage of the year. But, just to arouse that royalist attitude among hon. members a little more, it is said that Prince Philip is going to pay a visit to us one of these days. The winners of the 1985 Maths Olympiad all come from St. Stithians College, Randburg, and they are T. de Villiers, S. Ramsammy, G. Wgwenya and G. McIntosh. “Oh Calcutta” is showing at the Market Theatre and a dramatized version of Magersfontein, O Magersfontein is being presented at the new National Theatre in Pretoria. This is what South Africa is going to look like under a Prog Government. [Interjections.] Earlier, in the case Mrs. Grundy v. Pact the Supreme Court decided that it was not only the right, but also the duty of theatre to reflect our community as it is, and not only a selective side of it. A member of the Pact Advisory Board, Oswald Mtshali, declared that there was soon to be a presentation of “Paint your Ox-wagon—a story of the Great Trek in rock-opera form”. This is the South Africa of the Prog Party. And so the article continues.

And not a word about Helen?

You should go on the stage yourself. [Interjections.]

A group of Waterkloof residents join forces to buy up every property which comes onto the market following the “Abolition Act of Apartheid of 1981”.

Your comic cuts are boring us.

This is how the newspaper presents the 1985 situation in South Africa under a Prog government [Interjections.] An Indian objects to this group of people joining forces to buy up properties in Waterkloof so that the Indians are unable to buy them. They also say “Houghton and several other expensive suburbs in Johannesburg, Sandton and Randburg had assimilated Black families with no negative effects regarding property values or social standards.”

Nic, did you write that?

Lorimer becomes chairman of the Meat Board. [Interjections.]

Allow me to continue. [Interjections.]

Order!

We are for the moment going to leave this fantasy image of the PRP’s at that.

It does not really matter because you always cover up. [Interjections.]

Order!

The hon. member for Yeoville, I think, must surely really appreciate Clive Rice, that same Clive Rice who had that photograph of himself taken behind a cricket bat. That is to say, the exhibitionistic Clive Rice. I think the speech made by the hon. member for Yeoville this afternoon was as naked as Clive Rice behind that cricket bat. Apart from this fantasy of the PFP, I think that we should just take another look at its policy. I should like us to compare policies, with the view to the election on 29 April.

The naked policy.

Let us, for example, take their right of veto in a federal parliament in which a segment of the population—and the hon. member for Groote Schuur should really listen; I think that he helped to draft this constitution—will be in the hands of 10% to 15% of the population. According to the most recent census figures the Coloured population consists of 2,7 million people and the Asians a total of 0,826 million, out of a grand total of 26,8 million people. That means that the Coloureds comprise barely 10% and the Indians 3% of the total population of this country. The number of Jews is about 150 000 out of 26,8 million people.

What has this to do with the Jews? [Interjections.]

Order! Hon. members must please make fewer interjections from now on. The hon. member for Bryanston cannot complain that he has not had sufficient opportunity for interjections. The hon. member for Brakpan must now be allowed to complete his speech, and hon. members must be far more selective in their interjections.

Even such a large segment of the population as the Coloureds, the Asians and the Jews together will not even have a veto right in the federal parliament, unless in the words of the hon. Leader of the Opposition, they are able to persuade other population groups, by way of voluntary ethnicity, to side with them and to form a coalition. I would be gratified if the hon. Leader of the Opposition would on occasion elaborate on this terminology of his. He must tell us what he understands by voluntary ethnicity. A chameleon changes its colour, but remains a chameleon, irrespective of how often it changes its colour. One can change one’s nationality, but certainly never one’s ethnicity. One remains an Afrikaner, even if one has become detribalized, even if one has gone to seed. So far from the Population Registration Act causing conflict, as is alleged in this pet theory of the PFP’s, as expressed by the hon. the Leader of the Opposition, it brings only orderliness.

However, in this respect I want to link up with what the hon. the Minister of Mineral and Energy Affairs said a few days ago, viz. that the hon. members of the Opposition had no time for ethnicity, that they did not accept the concept of ethnicity, nor the concept of minority groups.

In the second instance, I want to know from the hon. Opposition whether they are now able to furnish a reply to the question whether there will be a White majority in a single geographic unit of their new federal South Africa. The 1980 census figures are now available. As far as I know there is not a single magisterial district in South Africa in which the Whites are in the majority.

In the third instance it seems to me as if the whole concept of power-sharing is merely a slogan. Indeed, this is the standpoint of Prof. De Crespigny. He had the following to say about this—

One can divide power. One can have joint responsibility, even in relation to territory. One can also divide power as regards that which belongs to one. In this way conflict can be reduced. However, when one shares power, the egg from which conflict will be hatched is as good as laid.

In the fourth instance, I should like to ask the hon. official Opposition a few questions and make a few remarks as regards the President’s Council as well. The hon. the Leader of the Opposition holds it against us that we branded his party as a boycott party. If we do that, he said, then we are also calling the rev. Alan Hendrickse and Mr. David Curry boycotters. But surely that is no argument. The PFP is the official Opposition Party in the Parliament of the Republic of South Africa. We expect certain responsibilities of them. There is no point in their lying on their backs and kicking when constitutional progress is being made.

Surely we cannot participate in your monstrosity.

Just see what Mr. Tertius Myburgh said in the Sunday Times of 5 October 1980—

Mr. Tertius Myburgh, too, is a mentor of the PFP. But Mr. I. D. du Plessis put it differently. He said: He who refuses his participation, is he who murders his nation. Like the Liberal Party in Rhodesia, the PFP is itself contributing towards its becoming totally irrelevant in South Africa, despite the stimulating contributions of the hon. the Leader of the Opposition, and on 29 April 1981 the people of South Africa will prove this.

Mr. Speaker, almost three weeks have passed since a part of our country was ravaged by terrible floods. I come from a constituency where certain areas—the agricultural area in particular— were also badly damaged. We were more fortunate than other areas because there was not so much loss of life, but many of our farmers were forced to look on while valuable agricultural land, harvests and plantations were washed away. The damage is almost incalculable. We have tried to pay a visit to as many of these people as possible and I want to thank the Whips for granting us time for that purpose. Everywhere we went people were dumbfounded, but not beaten, and the will to carry on characterized most of them. I myself, who also suffered some damage, was at times ashamed of myself for having also felt threatened during the floods. The hon. member for Swellendam, too, mentioned the almost immediate assistance rendered by the Government. In this regard I should also like to convey my sincere gratitude to the hon. Ministers in question who acquainted themselves with the circumstances in question, and convey a special word of gratitude to our hon. Prime Minister and his wife who by their visit demonstrated that the Government has the interests of the sorely tried people at heart. Our thanks to the officials who were engaged almost night and day in surveys to determine the damage. That is not to mention the Police, the Defence Force, the Traffic Police, all road departments, divisional councils, municipalities, etc., actually too many to mention. I have hardly ever experienced so much goodwill. The disaster surveys have, I believe, been provisionally processed, and we know that the Government is going to assist. The Government has always been prepared to assist when natural disasters occur, and this is going to be the case here too. Consequently, on behalf of my constituency too, I want to convey my sincere gratitude to them in anticipation. In particular I want to convey my very sincere gratitude to the hon. the Deputy Minister of Agriculture and Fisheries for the message he conveyed to Worcester at the time of our agricultural show. After that the men held their heads high again. They could also raise their glasses again, for a little of that remained too. One thing is as plain as a pikestaff to me: More than ever this country and its people have a will to survive and continue that would be difficult to equal. Nothing will ever stop us. It is a person’s will which achieves things, and I believe that our people have a national will and desire, and that by that means we shall be able to achieve security, prosperity and freedom for our country. This disaster has probably not occurred without reason, either. The economic demands of our fatherland compel us to reconsider our customs and to make adjustments. This disaster has probably compelled us to see matters in a different perspective, to display a better attitude towards others and to make more sensible decisions for ourselves. That is all I wish to say about the disaster.

Whereas this flood disaster has hit only a part of our country, all of us probably realize that much of the world would like to see disaster strike our entire country, a disaster which would mean our total downfall. I am afraid that in the political sphere we have people in our country who have the same feeling in their hearts. I want to address a warning to those people. The day they come up against the essential South African, they will regret it. To whom do they want to yield and surrender this fine country, this country which has everything? We have the human material, raw materials, roads, hospitals, schools—you name it, we have it. Above all, we have backbone.

We are on the eve of an election, and every election is very important. The voter must say what he wants and where he stands, whether he is satisfied or dissatisfied. According to Press reports a number of parties are going to participate in the election. Some of the Opposition parties have already rolled up their sleeves, but I should say not too far, for they have very little to show. I do not want to deal with the various parties. Some have blinkers on; others scurry about aimlessly; and yet others sit and kick up a row. There are one or two hon. members in the corner on the other side of the House who can kick up a terrible row, but I want to give them sound advice. Politics is just like a woman: You must not be angry and hard with her, otherwise you will get nowhere. I should rather dwell on my party, the National Party, this party with just two letters: NP. I do not believe in these three letter parties. I think that there will also be a four letter party after the election, viz. the NOTP, the Not Party. We shall simply lump them all together. They are not a reality; they are simply phenomena. They will disappear into thin air. We shall work them into a corner. I see that they are already sitting in a corner opposite. If only there were a hole we would force the whole lot through it.

The NP is a party of the people. Over the years the NP has demonstrated by its deeds that its intentions as regards its country and all its people are sound and sincere. Look at 1948 and then at 1981: It’s deeds are its monuments. I come from a home where, in earlier years, we only got The Cape Times at one time. I only skimmed through it and looked at the pictures. Even then I saw something was wrong. I can recall clearly how the people used to visit our house. There was one old man who was not very literate. He could not read and one morning he picked up The Cape Times, but held it upside down. When my father asked him: “Jan, what is going on there?” he replied: “Heavens, Hans, something terrible is going on in the Cape. A ship entered the harbour upside down.” [Interjections.] Even now I am grateful that I was able to see even then that one could turn a ship the right way up. From then on we have had Prime Ministers and Governments that have toiled to bring about sound relations in this country and to secure our future. At present we have an hon. Prime Minister and a Government which gives positive guidance and, thank heavens, on 29 April the voters will once again prove that we have full confidence in Mr. P. W. Botha and his Cabinet, in the National Government. I want to tell the voters: Use your vote to vote for a party which does not mislead its people and is not going to mislead them.

That is your best joke yet!

That hon. member must not point his finger at me in that way. I also want to tell the Opposition that if one of their hon. members thinks that the NP is in difficulties, he is badly mistaken. He is going to get nowhere. On this side there is a mighty unity. Long live the National Party!

Mr. Speaker, it is difficult to pick a quarrel after the speech made by the hon. member for Worcester. But during the no-confidence debate the hon. the Leader of the Opposition called me a “raging bull”. I am sorry that the hon. the Leader of the Opposition is not here now.

Did you ask him to be here?

No, I did not ask him to be here, but I am nevertheless sorry he is not. [Interjections.] I am now asking him to be here tomorrow. We shall then be able to have a cosy chat. [Interjections.]

Order!

In the meantime there is quite a good deal which I have to discuss with the hon. member for Constantia on the question of South West Africa and on the speech which he made here on South West Africa. In view of the lateness of the hour, Mr. Speaker, I wonder whether you would not consider adjourning the House now.

No, Mr. Speaker, there is quite a lot of time left.

Order! According to my watch there are almost two minutes left before the House has to adjourn. Therefore the hon. the Minister must proceed.

The hon. member for Constantia placed the blame for the failure, as he put it, of the Geneva Conference on the internal parties, and during the no-confidence debate he advanced this as one of the main reasons why a motion of no confidence in the Government should be moved. Then his hon. leader levelled the accusation at this side of the House that we had allegedly dragged South West Africa into the political arena. Sir, I have never come across a greater egg dance in my life. An hon. member of the Opposition makes that a part of his motion of no confidence and then, when he gets a beating, he runs away squealing that it was not they who dragged the issue into the political arena. They are not going to get away with it that easily.

That is not what I said.

Oh yes! You stated it categorically. Surely the hon. member if he cannot remember what he said is capable of reading Hansard. He alleged categorically that the events in connection with South West Africa conference in Geneva were one of the reasons why he supported the motion of no confidence in the Government moved by his hon. leader.

Yes.

There the hon. member is admitting it now. Consequently, did the hon. member turn South West Africa into an issue—yes or no? Is it or is it not an issue? Why is the hon. member using it as a issue then? Why is the hon. the Leader of the Opposition saying that I dragged South West Africa into the political arena?