Mr. Speaker, right at the beginning I believe it is perhaps appropriate that we should move an amendment to the motion of the hon. the Minister of Finance so that it can become clear what our approach to the hon. the Minister’s proposals is and what our approach is to the Government policy.

Accordingly, I move as an amendment—

1. (1) has failed to—
   1. (a) take adequate steps to combat inflation and in particular has failed to act to contain rising prices of food and other essentials;
   2. (b) safeguard the living standards of the aged;
   3. (c) adequately protect the nation’s health;
   4. (d) take appropriate action to deal with the acute housing shortage;
   5. (e) ensure that the ordinary citizen is adequately protected against violence and other crime;
   6. (f) combat poverty in both the urban and the rural areas of South Africa;
   7. (g) encourage job creation at a rate sufficient to keep up with increases in the economically active sections of the population; and
   8. (h) formulate and implement plans for the long-term security and prosperity of the Republic;
2. (2) has jeopardized the economic welfare of the community by persisting with unnecessary ideologically based expenditure and practices; and
3. (3) has placed its own party-political interest before the well-being of the community.”.

It is within that ambit that we propose to conduct this debate. [Interjections.] Let me point out right at the beginning that this budget is an exercise in bookkeeping; it is not an exercise in fiscal management. Transfers have been made to the Stabilization Fund in an arbitrary manner with an arbitrary amount of R1 242 million. It could readily have been R70 million less, which would have meant that we would have had the money available to avoid the higher bread price. The surplus was, by this mechanism, reduced to R309 million. This was further reduced by R172 million being transferred to the Special Defence Fund, which figure includes an unexplained debit of R160 million from previous years, and R12 million in compensation for the sale of certain fuels stores, something which is again unexplained. R80 million goes to South West Africa, R17 million to the development bank, and, hey presto, the surplus of R1 551 million becomes only R40 million, by a simple bookkeeping exercise. Similarly, the deficit of R5 659 million is dealt with by a series of matters ending in a figure of R314 million, which could have been as readily marginally lower or higher, and in the latter case could have provided for some other urgent needs of the community which need relatively small allocations of funds.

If we look at the increases in indirect taxation, it seems that those are designed to raise R110 million. This amount, I say, could readily have been raised either by additional loans of a non-inflationary nature or by a slightly different bookkeeping exercise. In other words, it can be clearly demonstrated on an analysis of the figures that the increase in indirect taxation is unnecessary in the circumstances. That is quite clear. Whatever the merits or demerits of taxes on liquor and cigarettes may be, I have considerable sympathy with those who drink beer—even though I do not—especially those who are not normally in the upper income groups.

Do you drink whisky?

I do not drink that either, as the hon. member should well know. [Interjections.] I also have sympathy for those who have been unable to shake off the need to smoke. The hon. the Minister, however, refers to the increases of sales duty as being “mainly on less essential items such as jewellery, photographic equipment, furs and the like”. The items he has mentioned appear to have been carefully selected by him to indicate their luxury nature.

The hon. the Minister and I may have differences of opinion about what is a luxury and what is not, but it is a pity that he did not mention some other examples which he could have mentioned in respect of which taxes are in fact going up, such as, for example, toothpaste, women’s toilet preparations, domestic radio and television sets, motor cycles with a capacity in excess of a specified figure, or sun-glasses, watches and clocks.

I might also add that apparently, in the hon. the Minister’s view, if we refer to mainly less essential items, such as toothpaste … well, it may well be that toothpaste is less essential to some other hon. members and others, but I regard toothpaste as being an essential item in our community. [Interjections.] What is also interesting is that the hon. the Minister has increased the taxation on the engagement and wedding rings which young servicemen and others may buy for their fiancees and brides to be. [Interjections.] That is the nature of the taxation, and that is what the truth is. [Interjections.]

Mr. Speaker, you can hear the squeals now.

[Inaudible.]

Of course, the hon. the Minister treats this with contempt.

I am laughing at you.

Well, if it comes to laughing it appears to me as though the hon. the Minister might be laughing on the other side of his face before this debate is over. [Interjections.]

There are four criticisms of these increases. Firstly, some of the items are not luxury items. Secondly, the budget could readily have done without this extra revenue. Thirdly, at a time when consumer demand is cooling off this does not appear to be the best time to impose such a levy, particularly on locally-produced goods. Fourthly, in respect of those items which by common agreement fall outside the category of luxury goods, the increases will add to the general burden of increased living costs in South Africa. On an independent calculation these items alone will add approximately 0,5% with immediate effect to the consumer price index. I therefore ask the hon. the Minister to reconsider the entire increase that he has asked for, or at least to exclude those items that by common accord are not in the luxury category.

If one looks at the budget one of the things that even the hon. the Minister will concede is that certainty is an important ingredient in business planning. In an uncertain world, to have a budget that is a holding operation certainly cannot be helpful. Charles Dickens in his book David Copperfield created a character called Mr. Micawber, a well-spoken gentleman, described as a great speechifier and always waiting for something to turn up. This budget is full of fine phraseology. When things were good and suddenly the situation changed, when the current account of the balance of payments turned from a large surplus to a deficit, when the rand instead of maintaining its value dropped substantially, when some interest rates to finance trade doubled in less than a year, then the hon. the Minister calls it going from growth and strength to “consolidation and adjustment”—to use his phraseology—and then waits for something to turn up. Mr. Micawber could not have done better, and the hon. the Minister’s name would appear to come close to that. Instead of really getting to grips with both the short and medium-term problems and laying the foundation for long-term solutions, this post-election budget waits to see how events will move. It ignores the fundamental truth that the more one allows a situation to deteriorate in economic terms, the more drastic the measures that will be required to remedy the position. That lesson has been apparent in the handling of the money supply last year, about which I shall say more later. One would have imagined that that lesson would have been learnt, instead of which Mr. Micawber now waits to see what will turn up. It is perhaps of interest to say that Mr. Micawber eventually—hon. members might be interested to know, if they remember their David Copperfield—left his country and emigrated to Australia. I am not suggesting what the future of the hon. the Minister might or might not be. It is matters that will turn up that he is waiting for. He is asking: Is the gold price going to increase? Will the economies of the major trading partners improve? Will the high dollar interest rates go down? Certainly we all hope for improvements in these fields, but what if they do not? In any event, some of our most serious problems, such as inflation, will not be solved by a change in these events. The Government has both the fiscal and monetary tools available. The budget is a fiscal mechanism to be used, and by deciding to wait and see it will make the medicine all the harsher in the future.

Already the questions are being asked, not about this year’s budget, but about the next. How is the deficit going to be financed in 1982-’83? There are forecasts which relate to lower growth in that year, where deficits of up to R5 000 million are seen in that year. How are they going to be financed? What will happen to the current account of the balance of payments? What will happen to the interest rates? None of this uncertainty is good for the economy and this budget adds to the uncertainties in a world which is certainly not short of that particular commodity. But the hon. the Minister gives the budget a meaning. He says it is a budget of “consolidation and adjustment”. What does it really mean? Let us look at what we have got. We have high inflation, lower growth, tighter money, higher interest rates, a deficit on the current account of the balance of payments, a slowdown in consumer spending, a weaker rand, a continued inability to absorb new work-seekers, a shortage of skilled and semi-skilled labour and escalating labour unrest. That situation the hon. the Minister describes as “consolidation and adjustment”.

Mr. Speaker, you will forgive me if I refer the hon. the Minister to another author, to Lewis Carroll, and to his book Alice through the Looking Glass—

In other words, consolidation and adjustment mean nothing. It is a fancy phrase designed to cover up a situation which should be apparent to anybody who is aware of the real situation in South Africa.

Who is your literary adviser?

It certainly is not that hon. Minister, Sir. I had a quotation from Confucius which I wanted to give to the hon. the Minister, but I was told that you, Sir, would rule it as being unparliamentary. It is, however, in my mind at the moment, and he knows what he can do.

Perhaps the most important function of these estimates—and for that matter any estimates—is the allocation of resources, the relative importance of various activities of the State and of the private sector which need State encouragement. From an analysis of estimates, one can determine the State’s order of priorities, whether there is a holding operation and whether there is some long-term plan for the country’s future.

The hon. the Minister prides himself on his restraint on State expenditure. This year’s budget, he said, is 16,8% higher than the revised estimates for 1980-’81. After listing certain expenditure he says—

He also states elsewhere—

It is a fashionable demand by economists and others to call for cuts in Government expenditure. The question, however, which needs to be asked is: What does the Minister mean by this. On what services has he really cut back? He talks about taxation, but in fact, he has not increased taxation. When we deal with taxation and cut-backs in Government expenditure one must bear in mind that these are not the same thing, because despite the keeping of taxation at particular levels, or despite tax cuts, Government expenditure is continuously on the increase due to the fiscal drag, because in absolute terms, more money is still being collected by the Government. The Government borrows to finance deficits, and these, in fact, could offset reductions in revenue, if there were any. In this case there are no reductions in revenue; in fact, there are substantial increases.

In planning for the future of South Africa, we need to ascertain where Government expenditure could be cut back, where it is unnecessary and in respect of the remainder where the priorities lie and what the cost of achieving stability will be. In this particular budget we have very serious disagreements with the Government on the priorities for the allocation of revenue. We believe that stability should be a major ingredient of any Government policy. This stability is achieved in large measure, not only by a feeling of contentment with an existing situation by the population as a whole, but also by a conviction that under an existing system there are concrete plans, both formulated and being implemented, which will remedy shortcomings and so fulfil reasonable expectations. In the economic field this means, inter alia, reasonable levels of housing, satisfactory feeding and clothing, moderate prospects for the improvement of the quality of life and fulfilment of aspirations to improve education and status.

In the past we have spoken at length on the problems concerning living standards, on the rising food prices, the unwillingness of the Government to subsidize essentials, particularly bread, to a greater extent and the need to remove GST from foodstuffs. More will be said about these things during the debate.

There is, however, one aspect to which I would particularly like to refer the hon. the Minister. A characteristic of rising income is that the consumer concerned uses a lesser proportion of his income on the essentials of life, particularly on food. This phenomenon, referred to as Engels’ law, is to be seen in South Africa, not only in looking at relative income positions, but because of the structure of the income of different race groups in establishing relative spending patterns on a race basis. With rising incomes in the Black community over the years, particularly since 1975, expectations arose that a greater percentage of income could be spent on non-essentials which would tend to improve the quality of life, and a lesser percentage on purely life-sustaining commodities. The result of inflation, however, particularly the rising cost of food, clothing, transport and other essentials, has to a certain degree prevented the fulfilment of these expectations and, as a result, has caused frustrations which have a destabilizing social effect in an already brittle situation. Subsidies on food, transport and housing, and the abolition of GST on food and other essentials, would, therefore, in our view, be an important ingredient of expenditure to stabilize the economy and could be placed in a similar category to other expenditure which has, as its objective, the maintenance of peace in the community.

Our young men are on the border to face the enemy and protect the country, and we vote ever-increasing amounts for defence in an escalating military situation. There is another enemy, however, perhaps an equally dangerous enemy, and that enemy is back home. That enemy is poverty, lack of housing, unemployment and frustration. [Interjections.] To secure peace that enemy needs to be defeated, and if it were defeated, it would make our soldiers’ task so much easier, but if it is not defeated, it would make our soldiers’ task virtually impossible in the prevailing circumstances.

Since I am talking about the allocation of funds and resources, let me couple this to housing. The amount provided for housing this year is a meagre R256,7 million, an increase of only R25 million on last year, or 10,78%, which is not only less than the overall inflation rate, but probably less than half the anticipated increase in building costs during the year. The situation, however, is even worse than this. In a White Paper tabled by the Department of Community Development there is the following statement—

and the White Paper quotes an amount of approximately R290 million. That there is a vast housing shortage is beyond question. That the demand, particularly for Black and Coloured housing, will escalate with population increases, cannot be disputed. It is also an accepted fact that urbanization is growing. We only have to look, for example, at Soweto. The failure to tackle the housing problem in Soweto, over a period of years, is unexplained, and I challenge any hon. Minister to explain to us in this House why the houses that should have been built have not been built in Soweto. There has been neglect in this regard, and there has been an unbelievable mass of red-tape and bungling. That is something that is indisputable.

Let us look overall at the department’s own estimates. It anticipates annual expenditure of R882 million by the public sector to deal with the backlog as well as the natural increase, and this seems to be a conservative figure. In other words, the estimate is R882 million per year, but look at what is actually being voted. How can the problem be solved by the present funds being allocated? We take the view that adequate housing is a vital ingredient in stability. By not providing the necessary funds, the peace and security of the Republic is being jeopardized. The hon. the Minister of Finance must explain why he has not been prepared to include more funds in the estimates, and the hon. the Minister of Community Development will have to explain why his normally persuasive ability has had no success in this instance, that is if we assume that he has tried to persuade the hon. the Minister. It is, however, no use just being destructive.

There must be a plan to deal with this problem, and we believe that there are four avenues of approach, in particular, for dealing with this matter. Firstly we ask the hon. the Minister, in the supplementary estimates, to grant certain additional funds for housing. Secondly the private sector, particularly employees, should be made to play a greater role in the provision of housing. On the assumption that one is going to allow the administration boards to continue to exist, and since those boards have the necessary funds, they must be prodded into action. It is a sin to sit on that money, which is there to be used in the townships, and not to spend it. The procedures in connection with housing schemes should be streamlined and the administrative delays that have occurred —and Soweto is one of the best examples—must be eliminated. Lastly I believe that we should have a special loan issue which should be raised in the capital market in South Africa in order to provide money for the housing we urgently need at this stage.

The argument has been advanced, and was repeated in the Press over the week-end by the Minister, that there are bottlenecks in the building industry and that therefore the allocation of larger funds would be non-productive and might even cause costs to escalate. At first sight, this argument has some validity, but that is not the answer. Let me rather pose the rhetoric question: At this stage of our lives, is it more important to pour money into large State buildings as, for example, we have been pouring into the building of the State opera house in Pretoria for years, and into office blocks?

Are you against it?

Yes, I am against it. What is necessary for South Africa is that our people should be housed first, and then one can talk about opera houses. One does not talk about opera houses until people have roofs over their heads. The same applies to the grandiose office blocks. Is the hon. member for Rissik in favour of all these grandiose office blocks going up all over the country? Now the hon. member is silent. [Interjections.] He is silent because he always lies down when the moment comes to deal with the issue. The issue here is that one has to get the priorities right in South Africa. Before one builds grandiose office buildings, one should build shelters for the homeless; it is an essential in our society. It is in the allocation of limited resources that the true test of good government lies, as well as in the need to evolve self-help schemes which do not create slums. It is in the need to evolve methods of mass production and new methods of building houses that solutions need to be found. Finally it may be said that if one pursues policies based on an ideology which causes bottlenecks in skilled manpower, how can one then have the effrontery to use those self-created bottlenecks as an excuse for one’s inability to solve urgent problems. The allocation of resources in accordance with actual priorities is a vital aspect of budgeting, and the Government fails in that particular objective.

Let us look at the salaries in the Public Service. The competition between the private and public sectors for scarce manpower is a reality. Part of the cost increases in recent times has been caused by the outbidding by one employer of the other, both within the private sector itself and the public sector. The response of the public sector has, inter alia, been the average increase of 12% which was announced earlier this year. Does this, however, solve the problem at all? Does it not merely mean that somebody else is going to bid a little more? In any event, what does an increase of 12% actually mean? It is below the prevailing inflation rate and is added to pre-tax income, whereas the increase in the consumer price index is related to the actual cost of purchases, which means that any increase to keep up with inflation should be an increase of disposable after-tax income and should take into account the higher tax brackets into which the individual is moving in respect of his marginal income. Therefore, to talk about an increase of 12% being a solution, is, with great respect, not of any substance whatsoever.

On the same issue of the employees of the State, I also want to raise the issue of the relationship between the State and its employees. To be in the Public Service should be a desirable occupation. It should carry status, and the relationship between the State and the employee should be one of confidence and respect. However, what do we get? I want to read two quotations to hon. members. The first is a headline in Die Transvaler of 6 August which reads—

The report reads—

I want to read another quotation, this time from Beeid. The headline reads—

What is the date of that?

It is 3 August. I have the cutting here.

I hope it is this year.

I shall only quote part of the report—

These quotations are not from Sunday newspapers; they are not from English newspapers. They are from Die Transvaler and from Beeid.

Relevant newspapers!

I say that this situation is more than unhealthy. Little wonder that State services in almost every department are below strength, that 34 000 White posts in a public service of 77 000 are inadequately filled and 17 000 not filled at all. I say that this state of affairs requires action on the part of the Government. There should be high priority given to the relationship between the State as an employer and the public servant as the employee to ensure that that relationship is on the basis of mutual understanding and trust, and there should be no reason for reports of the nature I have quoted to be published.

Harry, are you enjoying yourself reading?

Yes, are you enjoying it?

I want now to deal with some further priorities. Let us talk about the question of health. When we last debated the question of health in this House the last thing I remember is the hon. the Minister of Health, Welfare and Pensions telling us across the floor that he was going to get us. When a case was put in this House by the hon. member for Parktown in respect of the nursing situation we had an absolute tirade from the hon. the Minister in reply. However, within a few days of that statement by the hon. the Minister the whole of South Africa saw flashed on television the statistics in relation to the shortage of nurses which showed that the hon. member for Parktown had been right and the hon. the Minister had been wrong.

He is always wrong.

It proved, Sir, that our fears were not without foundation because the figures were actually even worse than those mentioned by the hon. member for Parktown.

The hon. the Minister does not eat too well, that is his problem.

From members of the provincial executives to superintendents of hospitals to specialist medical men—all support the case that we put here in respect of nurses and their salaries. [Interjections.]

You should change your diet, Lapa.

One cannot solve a problem by pretending it does not exist, and that is what the hon. the Minister is doing. The provinces are crying out for more funds and perhaps in his reply the hon. the Minister of Finance will deal with the remarks of the Administrator of the Transvaal who pointed out the dangers in which the provinces find themselves. This also affects the health of the nation. Hospital wards are being closed. What is going to be done to deal with that situation? When we look at the figures in this budget we find that in fact very little is being done in order to see to it that the health of the nation will be improved.

Let us look at another priority. Let us look at the question of law and order. The Police Vote has been increased by just over R40 million, which is about 12,68%, a figure which is below the average increase in the budget and below the inflation rate. The hon. the Minister of Police nods his head in agreement.

Good administration.

However, Sir, police salary increases are a secret. If one wants to know what the salaries of the police are, one has to read an HNP newspaper! [Interjections.] This hon. Minister refuses to tell us. Will the hon. the Minister tell us how he proposes to recruit prospective members of the Police Force by showing that conditions of service are more attractive if he keeps those conditions secret? How will he do it?

Is he ashamed of the conditions?

The increase in the incidence of crime in some of our urban areas gives the ordinary citizen great cause for alarm. The statistics of crime for the Republic as a whole do not tell the entire story as many urban areas, Black, White and Coloured, have a high concentration of crime as opposed to other areas of the Republic. However, even taken as a whole, the recent report tabled by the Commissioner shows a substantial increase in certain crimes of violence and against property. The deteriorating crime position in urban areas is not only a destabilizing factor in itself, it is also the precursor of more serious politically oriented violence. Destabilization is dangerous. Increased crime means less faith in law enforcement, less respect for the law and less confidence in the authority of the State. We demand that greater protection be given to the citizen against crime. We demand this in the interests of the people and in the interests of the stability of South Africa as a whole.

Give me the manpower and I shall do it.

Pay them decent salaries.

Inflation is public enemy No. 1 and this fact is made worse by Government mismanagement and by ideological constraints. The most important need for action on the part of this Government is in respect of inflation. It is destabilizing and it is a frustrating factor in the economy. It hits hardest those who in any event are already disadvantaged. The list of price increases is seemingly endless. One day there is an increase in the price of meat, then in the bread price, then rents increase and now mortgage repayments are becoming a burden. The hon. the Minister sits there unconcerned when building societies have to pay 18% for money for 12 months and when they have mortgage rates which vary from 121/2% to 14¼% and when the public are crying out because they now have to pay more and more to pay off their houses.

The hon. the Prime Minister’s Economic Advisory Council urged the Government to give very high priority to fighting inflation. This urging comes after seven years of annual double figure percentage increases in the consumer price index and after a year in which we suffered the highest increase in the consumer price index since 1924 and the second highest only since Union. The debate which we challenge the Government to conduct at this time is the following: What does this budget do to control inflation; what can be done which has not been done to deal with this evil; what circumstances contribute to inflation over which the Government genuinely has no control and what circumstances under the Government’s control contribute to higher costs; and to what degree are increasingly high costs due to the mismanagement of the economy and/or due to the constraints of self-imposed political structures which have serious adverse economic consequences?

As I have said, this budget does very little to combat inflation; and the indirect taxation, in fact, puts it up immediately. The expressed intention to finance the budget deficit by non-inflationary means has still to be seen to be implemented. The increase in State expenditure is at a rate in excess of the current inflation rate. At the kindest this budget can be called “neutral in this inflationary situation”. It is clear that the Government is relying more on the use of monetary tools.

Here the record of the Government’s immediate past is certainly not particularly good. At this time we are experiencing a period of high interest rates as well as a contraction of liquidity. Should we not, however, ask why steps were not taken earlier to deal with this situation? To use the hon. the Minister’s own words—

That is an admission of failure, because he admitted that the policy which he had adopted was not in all respects satisfactory. He goes on to say—

Correct.

That is right. In other words, he did not do the right things.

Let us look at some of the facts which can be indisputable. In the March 1981 Reserve Bank quarterly bulletin appears the following passage—

Accepting for a moment the desirability of removing the ceiling, but knowing the state of liquidity as he must have known in August 1980, was it then the correct timing, the correct judgment to do it at that moment in time? There were warnings a plenty to take action on the money supply. I quote but one from Assocom—

The hon. the Minister must now tell us whether Assocom warned him. Did others warn him? Why did he not act? There are reasons why he did not act, and maybe they will become apparent.

We know that timeous action with moderate measures can remedy a situation; delay and deterioration make the task more difficult and often need unpallatable medicine which in the economy can have long-term adverse effects. I ask the hon. the Minister again: Why was there a delay? We are entitled to ask another pertinent question: When the gold price moved up and the current account showed signs of a large surplus, were those not warning signs for anybody to see and to take action in respect of the liquidity build-up? Were there not warning signs? Why did he not do something?

Economists tell us that there were a number of options open. There could have been a relaxation of exchange control or the rand could have been allowed to appreciate further. There were other options as well. We must ask ourselves the question if it would not be better to have a lower inflation rate even if it would have meant a reduced current account surplus. Would it not have been better to have a much longer but slower upturn than the almost sudden upturn in the economy which we have experienced? It is significant that in 1980 personal income grew by 5%. Even more significant is the fact that real consumption grew by 8%. This can only happen when you actually use either your savings or if you get credit extended to you. In retrospect it is clear that it was the extension of credit which has caused this. Bearing that in mind, what actually happened in 1980? It is a case of the morning after the night before. Interest rates are now reaching towards what may become historically high levels as against the abnormally low levels due to the higher degree of liquidity which prevailed last year. Not only is money more expensive; it is also far less readily available. The rand has depreciated, especially against the dollar. This might help the gold mines and other exporters but it has a very serious side to it in that it imports inflation. 1980 was a heady year, but when there were signs of a quick turn around we were plunged into a premature general election, salary increases were announced and Christmas came again in February, 1981. That was the mood piece for the election. I said it then, and I repeat it now, that it was a case of voting now and paying later, and we are now paying. A senior official of the S.A. Agricultural Union, and I can quote his name, was reported as conceding before the election that many price increases scheduled for that time of the year had not come through because of the pending election.

Rubbish!

It is true. Of course he said that. He also said that this could give a false slant to statistics. A senior buyer of a major supermarket group before the election predicted increases in the prices of foodstuffs after the election. I quote from his statement—

How true this was! Every consumer now knows that whether he voted for or against the Government, he now has to pay. The hon. the Minister now says that economic policies can often exert only a marginal effect on the pattern and intensity of economic events. In other words, when things are going badly, you can only exercise a marginal effect, but when things are going well, then it is he who has done it. We do not blame him for extraneous things, for the vagaries of the gold price, the world energy situation or the economies of our main trading partners or for the economic policies of Mrs. Thatcher or Mr. Reagan, but we blame him for his own mismanagement and we blame him for the fact that the party was put before the people before the election. That is the real blame which this hon. Minister should carry and has to carry in these circumstances.

There are other causes for high prices which go beyond economic mismanagement and political opportunism. This is a country rich in resources and manpower; it grows vast quantities of food and has untold riches beneath the soil. We have got almost everything going for us in South Africa. But despite all these resources, are not many of the causes of the high prices due to laws, practices and conventions which exist in South Africa and which have existed for years? Some of them are in the process of being removed, but others remain. Let us not pretend that these are not causes of high costs in South Africa, because the truth is that they are. There is a lack of skilled and often semi-skilled manpower and here we talk about the change in education. It takes 17 years to get a child through matric, which is incidentally the average age approximately of persons living in Soweto. Look at the consequences of that. One must look at the education processes that have been existing. While the percentage of the population wanting to be educated and being educated dramatically increased, the percentage of the gross domestic product allocated to education failed to meet this demand. The ratio of the increase in domestic product spent to population being educated was 3:5. The rate of increase in school attendance was in fact far greater than the population growth. Talk started about training before the people were given the basic education which they needed before training could be a practical proposition. The educational system continued to concentrate, as it does today, on academic as opposed to vocational training and has on a cost-effective basis failed in many cases adequately to educate the young workseeker for his career and hence for his contribution to the economy. Perhaps the two greatest challenges which face the educational system are the reappraisal of what the purpose of education is and, having accepted the principle of equality in quality of education, how such equality is to be achieved. Will expenditure on education be virtually tripled, as it needs to be, to achieve this equality and, if so, what will be the source of the funds?

The question must be asked whether the resources have not been, and are not continuing to be, squandered because of the implementation of political policies, e.g. the restrictions on the mobility of labour, the removing and resettling instead of building for those in need, the decentralizing of industry in economically non-viable situations, and creating jobs at unnecessarily high cost. Tax concessions and incentives are very nice, but they merely mean that someone else has to foot the bill. Then there is the vast bureaucratic machinery to deal with race laws when in fact there is a shortage of manpower in the public and private sectors alike. At some time all of these things must be paid for. They are being paid for in higher costs and it is the structural aspects of the economy which keep the costs at this high level. If we are going to fight inflation, let us also be frank about some of the reasons for high costs. There is a price to be paid for apartheid not only politically but also economically, and we cannot forget that.

There is one other aspect in regard to inflation I want to deal with. One does not have to be a monetarist to accept that the money supply is material to the inflationary problem, but there are also other factors. Cost factors are relevant and high profit margins in South Africa need attention. In inflationary conditions the tendency to add on a little more to cover expectations of further increases is only too often found. People get used to rising prices and so the consumer is exploited. Monopolistic situations and price fixing have not been removed from the economy, and the Government has failed to take the stern measures against exploitation which this situation demands. Instead it pays lip service to the so-called market mechanism acting as a correcting force when it is clear that the market is imperfect and is loaded against the consumer.

A good example is to be found at present in respect of cigarettes. I am not a cigarette smoker and I do not encourage people to smoke, but has the hon. the Minister not seen that the increase in the excise duty on cigarettes resulted immediately in an extra ½ cent being added for every 10 cigarettes when there has been an increase of 3 cents for 20 only a matter of a month before?

So what?

“So what” says that hon. member. When the manufacturer is asked to explain, he says it helps the retailer. I do not understand, and nobody can understand, how it can help the retailer if the manufacturer makes a greater profit. I want to ask the Government: Where is the strong action that is needed against exploitation in South Africa? Why has it not been taken? We demand that the Government should protect the consumer in these circumstances.

I want to end, if I may, on what is perhaps a somewhat more positive note. [Interjections.] Sometimes in South Africa one is overcome by a sense of helplessness. One sort of feels that problems cannot be solved, that in the end the extremists are going to win and that in the end there is going to be conflict. I have taken five incidents which I want to refer to shortly in order to demonstrate why I think there is hope for South Africa if we tackle the matter in the right manner.

The first of them is a statement by our Vice State President, made on 6 July this year, in which he said South Africa should make it easier for the Reagan administration to defend its new relationship with South Africa. I believe the Government should heed those words and should embark on its reform programme in a more meaningful fashion in order to give effect to these words of the Vice State President.

The second of these is an article which was written by Bishop Tutu, in which he relates two incidents which affect two individuals. I am going to recount those incidents. He says the following about these incidents—

What are those two incidents? I think they are moving and very meaningful incidents. The first is of a Mr. Mangaliso Skweyiya who is an ordinary man. He knocked on the door of the Chief Justice of South Africa, unannounced and unexpected, in order to plead for his son who had been sentenced to death and in whose case every other remedy had failed. The Chief Justice listened to this ordinary Black man who had knocked on his door. I wonder in how many places in the world an ordinary man can knock on the door of the Chief Justice. The Chief Justice called for the papers and took the trouble himself to phone this man the following Monday and to tell him that the refusal for leave to appeal had been set aside. Eventually the process of the courts took place. Justice was done and the old man’s son walked out of the condemned cell a free man. I think it is a moving story, a very important story.

The second story he tells is of a group of Church representatives who were on their way to Germany. One of them, a lady by the name of Mrs. Dolly MaKau, from Soweto, took ill during the flight. In Nairobi she had to be taken off the plane in order to be admitted to hospital. With her went a lady, an Afrikaner lady, the wife of a Dutch Reformed Church dominée. I can mention her name. It appeared in the Press. She is Mrs. Jeanette Lubbe. She left the aircraft, stayed with this Black woman, nursed her in a country which is not normally pleasant or friendly to a lady of her origin and background. They became friends and there was a commitment which arose as a result of that. I think these are two beautiful stories, which give hope to South Africa.

The third one I want to mention as an example concerns the hon. the Minister of National Education. That is the commitment he stated that education of equal quality will be provided for all racial groups. I do not think the significance of this commitment and all its implications, financially and otherwise, has been fully appreciated. In the light of this statement and the expectations raised as a result of it, we are awaiting the execution of this vast and important undertaking. It is significant, however, and it is also something which gives one hope.

Furthermore, I should like to relate an incident of which I have also been told. It is a story which puts the often maligned servant of the public in a different light. The employees of the Joubert Park post office in Johannesburg decided to brighten the lives of the elderly when they drew their pensions. These employees themselves, at their own cost, decided to provide the aged on pension day with tea, coffee and sandwiches, and also collected money to give them presents at Christmas. They also arranged to give them further presents in the future.

The last incident relates to a letter that comes from the church commissioners to a company in the United Kingdom, which has a subsidiary here in South Africa. We know, of course, that the church commissioners in England are not regarded as our friends in that context. They say—

They then go on by saying in the second paragraph—

I have given these five incidents because they give me hope that South Africa’s problems will be solved peacefully. I hope they give the same spirit to the House, and I should like to end on that note.

Mr. Speaker, if it had not been for the last three minutes of the speech by the hon. member for Yeoville, I could have described it as a toothpaste and engagement ring speech.

Confucius say Government is flying upside down.

The hon. member for Yeoville stated last week in this House that the Opposition must support the Government when it introduces measures which are in the interests of South Africa. However we had very little of that support from the hon. member for Yeoville here today, very little that was constructive about a budget which was generally very well received by the public. During the last few days I took the trouble to ascertain how newspapers and also economists reacted to the budget. I have before me an article which appeared in the Argus of 13 August. This is a newspaper which is usually not very kindly disposed towards the Government. What does this article say? It reads—

and here it refers, for example, to the hon. member for Yeoville, because he is so negative—

Inflation is already there.

This does not tally with the amendment submitted by the hon. member for Yeoville. The article continues—

In his speech the hon. member for Yeoville said they want certainty and confidence, but a newspaper which is by no means well disposed towards the Government acknowledges as the hon. member himself should have done if he intended to keep the promise he made last week—that—

Is this not the ideal for which one strives, namely for the pressure of a budget to be equally distributed between the rich and the poor? This budget contemplates an equal distribution of tax pressure. The poor are not being placed under greater pressure.

Almost without exception, appreciation has been expressed for this budget. The Federated Chamber of Industries said—

Even one of the aspects which is particularly sensitive, is supported by this body.

The president of Assocom said—

This is a wonderful testimonial for this budget at a time when it is more difficult than ever before to maintain the fine balance between the stimulation or slowing down of the South African economy, and it is extremely difficult to determine priorities. We are part of the international capitalistic system which is in a crisis situation. As one writer expressed it—

This situation is occurring throughout the world. It is not South Africa which is in a crisis situation. The entire international economy is in a crisis situation and everyone is looking after his own interests.

Allow me, Sir, to express my thanks to the top officials of the Department of Finance, not only for their contribution to this budget, but also for the fact that they place their services at the disposal of the Government. All these people would be much better off financially if they were to join the private sector. None the less—and we are grateful for this—they remain in the service of the State and do a wonderful job. This is true patriotism.

This immediately brings me to something I have on my mind, viz. the serious wage gap between the public and the private sectors. It is no secret that there is a serious manpower shortage in the public sector. Despite substantial salary adjustments in the public sector, the gap is still widening, because every percentage increase in salaries in this sector is stymied by an equivalent or larger adjustment in the private sector. Because the Public Service is lagging behind and has in fact always lagged behind, the gap is widening. Managers of relatively small undertakings, undertakings with annual turnovers of about R50 million, today tend to earn more than any Minister or even any Director General. This is a fact. Accordingly I wish to make an earnest appeal to the private sector today to discipline themselves in this regard. We know there is a serious shortage of properly qualified executive staff, but we cannot allow the serious “brain-drain” from the Public Service. The State is not and will never be in a position to compete with the private sector. I do not think it ought to do so either. The private sector must therefore discipline itself in this regard.

This brings me back to the budget as such. Although some people may describe it as neutral, I feel that it is an extremely responsible budget for the times we are living in. It is a budget in which the hon. the Minister clearly indicated that he does not intend to deviate from his discipline of the past four years and that he is still aware of the realities of the situation in the Republic. I think the problem on the other side is that they take insufficient account of the realities of the South African economy. On one occasion I congratulated the hon. the Minister on his handling of the difficulties encountered by the South African economy a few years ago—I think he will still recall this—and I then expressed the hope that the hon. the Minister would be equally successful in handling prosperity. We then had unprecedented prosperity, and it did in fact cause problems with the massive increase in the supply, calling for measures which were unpopular but none the less essential. In my opinion the hon. member for Yeoville is acting very unreasonably by reproaching the hon. the Minister and alleging that he did not take the necessary steps timeously. It is by no means an easy task to accommodate an unprecedented inflow of approximately R4 billion into a relatively small economy such as ours, because—and one should not lose sight of this—the measures which the Treasury and the Reserve Bank had at their disposal of necessity take time to come into operation and to take effect. One cannot immediately withdraw an enormous amount of money from the country’s economy. The measures take time to take effect and those measures are now in fact taking effect. For this reason there are clear indications that the money supply is now reaching more normal levels. I believe we are succeeding in controlling the money supply and in due course the alarming trend towards demand inflation will also decrease, because it took place as a result of the excessive liquidity we were faced with. People just did not care how much they paid. They simply stopped making calculations. For example, people made the strangest demands of the motor industry. If a man wanted a car on a certain day, he wanted to take it home with him that very same day. If the car was not available he did not care if it cost him R100, R200 or R300 more to have the car fetched from a long way away because a local company did not have it in stock.

How many cars are sold every year?

This is the sort of problems one has when there is an excessive supply of money in the country. [Interjections.] The problem with a relatively small economy is that it is inclined to over-react to stimulatory or deflationary measures. We have that problem in South Africa, and for this reason we are often accused of having a sort of “stop-go” economy.

No, “go-stop”.

The problem is, however, that we have a relatively small economy which reacts violently; it is actually inclined to over-react. The larger the flywheel, the more uniform its speed, and the less it is affected by restraining or accelerating forces.

This budget contains a large number of very positive aspects. I wish to refer to a few of them. In the first place there is the increase in our defence expenditure to R2 465 million. This amount represents 15,5% of the total expenditure account. It could be argued that this is an increase of 30% and that it is too drastic, but in real terms, adjusted to the inflation rate, it is an increase of only 15%. Is there any hon. member in this House who wishes to maintain that we must not increase our defence expenditure? Is there any hon. member in this House who will allege that the threat to South Africa is decreasing, that the Russian expansionists are no longer interested in South Africa? It is essential that we regard our defence as the country’s top priority. This pressure, this Russian expansionist urge, has nothing to do with NP policy. Even if the Opposition were in office the pressure would still be there, because it concerns South Africa.

A second important positive aspect of the budget is the expenditure on training. I have already mentioned the shortages in the Civil Service. We are also aware of shortages in industry. We are aware of the manpower shortage in general. This has been given high priority. R2 902 million has been set aside for this purpose. The total amount set aside for this purpose represents 18,2% of the total, or an increase of 158% over five years. This gives an indication of the serious light in which the Government regards this problem we have to contend with. Over a period of five years—the Government operates in the long term, because these matters cannot be dealt with in the short term—there has been an increase of 158%. This gives an indication of the serious light in which the Government regards the entire manpower situation. One can only hope that the private sector will also accept its responsibility. I have already referred to the fact that the private sector also has duties and must not lure officials from the State to such an extent that the Public Service experiences problems. The private sector also has a specific duty to provide and train manpower.

A third important aspect of the budget, one which is not receiving enough attention, is that throughout the world the financing of local authorities is creating a specific problem. This is also the case in South Africa. There has been a commission of inquiry into the financing of local authorities. The hon. the Minister of Finance has now granted a concession, namely, that the State will also pay municipal rates. What does this mean? I wish to quote from what was said in an article in the Financial Mail about this important concession—

As regards a city such as Durban, they have the following to say—

Sir, do you know what this means to small towns where much of the rateable property comprises Government buildings such as schools, hostels and hospitals? It can go a very long way towards relieving the difficult financial position in which local authorities find themselves. This is also something which has its effect on the taxpayer, because taxes do not consist only of taxes paid to the central government; they also consist of rates paid to municipal authorities. They also consist of divisional council rates in the Cape. This is therefore a very important concession which should receive more attention.

A fourth important aspect of this budget is the amount made available for national housing funds. The hon. member for Yeoville kept complaining that this amount was insufficient. Let us just take a look at the statistics for a moment. They cover dwelling units erected between 1 April 1976 and 31 March 1981. These are dwelling units erected by the Department of Community Development for Whites. The number of units is 18 584. The number of dwelling units erected by the private sector is 121 118. This gives us a total of 139 702 units. The percentage of this total supplied by the department is 13,3%. For Coloureds, a total of 82 264 dwelling units were erected of which 84,8% were supplied by the department. For Asians, 26 180 dwelling units were erected, of which 61% were supplied by the department. For Black people, 37 248 dwelling units were erected of which 92% were supplied by the department. These are large figures for a relatively small economy.

How many houses were erected in Soweto during that period?

This is the number of dwelling units erected and it speaks volumes. We know that housing for Coloureds and Blacks in particular received top priority; we also know that there is a backlog in this connection. We do not deny it. But is it the sole responsibility of the State to provide this housing? This is the question I want to ask. Is it the responsibility of the State alone? I do not think so. One does not wish to play off the various sectors of the economy against one another. I want to say this, however: in the agricultural sector of the economy the employers supply all the housing needs of their employees. But what about the industrialists? Are they not just sitting back and waiting for the State to provide housing? They want to benefit by this. Is it not time for industrialists to have an obligation to supply housing for their employees? [Interjections.]

If one listens to the criticism of the hon. member for Yeoville, he says there is only a 10% increase. This is a large amount that is being made available. I want to tell you, Sir, that I suspect that if we increased the amount we would not have built so many additional houses; what would have happened was that the price per house would simply have increased. I have a vague suspicion that the cost increases in the building trade are too high and that too large a profit goes into the pocket of the building contractor. I think it is time for the building trade to put its house in order.

There is a further extremely important positive measure in the budget, and that is the development of the multi-national Regional Development Bank for South Africa. We are speaking of long-term planning; here is the start of a long-term project which will be of enormous benefit to our country. The initial R17 million in the budget is a start, but it confirms that the Government is taking this project seriously and it forms part of the hon. the Prime Minister’s initiatives.

While speaking of this there is something else I want to get off my chest. I am tired of the insinuations by the English Press that the hon. the Prime Minister’s initiatives have now supposedly come to a standstill. I am absolutely sick and tired of this. I think they are playing a very mean game. In his speech in the course of the censure debate the hon. the Prime Minister spelt out his policy clearly enough for anyone to understand. I want to quote from his speech because I feel it is necessary that we draw attention to it pnce again. On Monday, 3 August, the hon. the Prime Minister said (Hansard, 1981, col. 49)—

The hon. the Prime Minister went on to spell out clearly the economic policy of the Government and listed eight points which are in absolute agreement with his policy as he announced it at the time of the Carlton conference. I challenge anyone to show me an undertaking made by the hon. the Prime Minister at the Carlton conference which he has backed down from. What is he no longer prepared to carry on with? This is petty politicking in order to get at the hon. the Prime Minister.

The welfare level or standard of living of the average South African has risen during the last 20 years. I think we must now stop complaining. To return to the argument of the hon. member for Yeoville that our people are having such a hard time of it, I draw attention to the following statistics: In 1960, the average White had to work for 6,4 minutes to afford a loaf of white bread, as against 3,9 minutes in 1980. In 1960 he had to work 13,8 minutes to buy a packet of cigarettes as against 6,5 minutes in 1980. These statistics apply in respect of all the population groups. The exception is petrol. Over that we have no control. As regards clothing and the type of product which one needs every day, it took less time to earn it in 1980 than in 1960 or even 1975. I have the statistics to prove this. I think we must stop complaining. An increase in prices does not necessarily mean that our people are suffering more than in the past. Lower prices do not necessarily mean prosperity. We must show a little realism.

Wages and salaries rose by an average of 18% in 1980, and on this basis the Receiver of Revenue expects an increase in taxation. [Time expired.]

Mr. Speaker, the hon. member for Malmesbury, who has just sat down, commenced his speech by referring to many of the press reports which appeared in the press recently and he used these to indicate that there was large scale favourable response to certain aspects of the budget. I shall concede to the hon. member that there are certain aspects of the budget which I also find favourable; for example, I am also pleased that the rate of general sales tax has not gone up. I think that the whole country is happy about that. I think it would be a disaster for the hon. the Minister if there were not certain aspects in his budget which were acceptable to many people. I want to put it to the hon. member for Malmesbury that we cannot look at the annual budget as an annual event on the economic calendar of South Africa. I also want to say to him that neither can the annual budget be viewed as even reflecting the immediate and short term needs of the economy, the individual or companies for that matter, as is often the case with public reaction. Regrettably, this is what happens all too often. The public look on the budget in this way: How is it going to affect me now, today? How is it going to affect my budget? In this regard I think the media are also to blame, because the media, i.e. television and the press, tend to examine the budget in that light. I believe that in some respects this is regrettable. I believe it is time that we as a Parliament and the media in South Africa started to look at the budget on a much longer term basis than we have done in the past. [Interjections.] I must say that I find the budget depressing. [Interjections.] I really do, and I hope that by the time I have finished hon. members on that side will concede that there is cause for a certain measure of depression in this regard.

In other words, you are trying to depress it!

I say this because if one takes a longer view of this Government’s performance, for example, the past ten years, and then looks into the future bearing in mind this Government’s present attitude towards many of the problems in South Africa, especially its neuroses which it exhibits from time to time in respect of the needs and the problems of South Africa and particularly when we consider what is going to happen in this country within the next 10 or 20 years, I believe that one cannot help but experience a certain degree of depression. I believe that this is especially so when one considers where our economy must be in five years’ time, 10 years’ time or 20 years’ time if we, our children and all those outside this House are to continue to maintain the standard of living and the quality of life to which we have become accustomed. I sincerely hope that the hon. member for Malmesbury will consider these points during the time that I have available to put across some thoughts to him. Hon. members on that side of the House and the hon. the Minister have in recent times been cock-a-hoop over the economic growth rate of some 8% in 1980. However, I want to ask the hon. the Minister what it will be this year. Can he sustain this type of growth? What will it be next year? One can only wonder what will happen if the price of gold does not improve and if the economy of the West does not recover from the recession that it has been experiencing in recent times. [Interjections.] I want to say: “Pasop, South Africa”, if these two factors do not move in our favour next year.

What I believe the hon. the Minister must ask himself and also has to ask his Cabinet colleagues is: At what levels must our economy grow during the next five years, 10 years or 20 years in order to secure a peaceful and prosperous South Africa for all our peoples? This, I believe, is the major economic priority and consideration in South Africa today. Last week we heard some rather awesome and disquieting statistics about what the future holds in store for us. We heard it during the debates on labour legislation. We heard that last year our population stood at 28 million people and that within 19 years, at the turn of the century, the population will increase to 48 million. That is an increase of 20 million people, an increase of 73,4%. This projected growth means …

So?

The hon. member says “So?”. This projected growth means that every year between now and the turn of the century our economy will have to grow at a rate that will create 430 000 new jobs annually.

Sure. So?

The question we must all ask ourselves, and especially the hon. the Minister of Finance and the Cabinet, is whether or not, in the light of the Government’s past record, South Africa’s economy is going to be able to grow sufficiently to cater for this massive population growth.

In Western countries with a zero population growth economic growth is equivalent to prosperity for the nation. In South Africa with a population growth of close on 3% economic growth means survival. [Interjections.] We are discussing the budget and whether we can survive under present circumstances. This, I believe, is the overriding issue and should be the overriding consideration in all our deliberations. It is in this respect that I believe the Government’s performance has been depressing. We know from statistics that we require an average growth rate in real terms of 5% between now and the year 2000 in order to maintain unemployment at an acceptable level.

How are we doing at the moment?

At the moment it is 8%. The hon. the Minister of Industries asks what the position is at the moment. It is 8%, a flash in the pan.

When one studies the statistics contained in the hon. the Minister of Finance’s Economic Review—I want to congratulate the hon. the Minister and his department on this wonderful book of statistics which has been a great help to me—what does one find has been the average growth rate in South Africa over the past 10 years? I think the hon. the Minister will concede this. It was 3,4%. What has it been over the past five years? Can the hon. the Minister tell me? It has been 3%. These figures show that the Government has fallen way behind its own Economic Development Programme. Is that not correct? I ask the hon. the Minister.

What about the world economy?

I am not concerned about the world economy. [Interjections.] I ask the hon. the Minister to consider Taiwan’s economy, Japan’s economy or Malaysia’s economy in terms of the world economy. They have achieved their aims but this Government has in fact failed. It has failed over the past years to have South Africa’s economy grow at the critical rate at which it should grow. In this respect I believe the Government has failed despite the 8% growth rate with which the hon. members opposite are so pleased.

You have failed to depress me.

Because of this state of affairs, I wish to move as a further amendment—

1. (1) meet the critical political, economic and social challenges of the future;
2. (2) contain inflation, with dangerous consequences to both producer and consumer; and
3. (3) provide relief for those unable to meet the ever rising cost of living, including pensioners, the unemployed and those with fixed incomes.”.

The hon. members on that side may congratulate themselves on last year’s performance—obviously the hon. the Minister of Industries does so—but I say this was just a flash in the pan. One must ask whether the figure of 8% was simply a result of the hon. the Minister’s and the Government’s priming the economy in time for the 1981 elections—a most disturbing thought—and doing so regardless of the long-term negative effects on the economy resulting from the continuing high-level rate of inflation.

It did not win for some.

This priming of the economy was achieved by flooding South Africa with money. The hon. member for Malmesbury asked: “How could we contain R3 billion to R4 billion of extra money flowing into South Africa?” It is very simple. All the hon. the Minister had to do was to decide to leave that money outside the country for a while in the form of loans which would have earned South Africa high interest rates.

What has happened? The man in the street has been given cheap credit facilities resulting in a spending spree. The hon. member for Malmesbury mentioned this. People walked into garages saying: “I want a motor-car now; here is the money.” It reminds one of the days in 1969 and 1970 just before the crash of the stock market. This not only fuelled inflation, but we find now that we also have many people who borrowed money and who are now paying the price. Interest rates are as high as 20% or 25%. Where is all this going to end? These negative aspects have simply not affected the major companies or the major financial institutions. Many of these people do in fact hold a monopoly over the major sections of our economy. After all, they simply pass on these cost escalations to the poor public. It is the small borrower, the man in the street who is living on credit, who is the man who is going to suffer. What is probably worse is that it is the small businessman who is in trouble today. He is now paying the price for the easy credit which this hon. Minister allowed over the past two years.

I believe I can predict that there are going to be many repossessions over the next two years or so and we are going to find many small businessmen in serious trouble.

To reiterate: Despite the 8% growth in the gross domestic product last year and because of the prospect of a fall in this growth this year and next year and the fact that we as a nation are not winning the economic race which we must win against our exploding population, I believe that this budget is totally depressing.

The second reason for this budget being depressing is that it is clear from the hon. the Minister’s own projections, which are written into his budget, that he has failed to make any real impact on inflation. The fact is that inflation is going to continue to hit us at a rate of about 15%. If one studies the statistics over the past 20 years one can see the negative effect that inflation has had on our growth rate. In the 1960s, when inflation was contained at below 5%, our gross domestic product grew at a real rate of 5,3%. During the 1970s inflation soared to a double figure rate hitting a peak of 16%, while our gross domestic product crawled along at 3,4%—totally inadequate for our future.

In his budget speech the hon. the Minister admitted to the dangers which inflation poses to our economy. He said the Government view was that inflation posed a serious threat to the stability of the economy. He said further that he wanted to assure the House that so far as the Government was concerned there was no higher priority than the combating of inflation.

Do you not agree?

Of course I agree. I want to ask the hon. the Minister of Finance, however, what he has achieved during the past three years. The inflation rate has not been curbed. In fact, the hon. the Minister has allowed the money supply to explode to such an extent that despite the high utilization of the country’s productive capacity in terms of plant and people—the unemployment rate has dropped—inflation has hit the level of 16% and is going to continue at a rate of around 15%.

I should like to ask the hon. the Minister —and I want him to consider what I am going to say now—whether he has any idea of what inflation is doing to the people of South Africa at the present time. What did the hon. the Minister discover as he was doing the rounds of his constituency during this election campaign?

Which constituency?

Sorry, Mr. Speaker. I apologize. I had forgotten that the hon. the Minister does not have a constituency. I believe this is a great pity because if the hon. the Minister had had to walk the streets as we who sit here as elected members of this House had to do to find out what was happening to our people, I am sure he would have adopted a different attitude to the one he adopts today. This is why I believe elections serve a very good purpose. They enable politicians to speak to their people in order to find out what their problems are.

I made a promise to one of my constituents during the election. I promised to pass on a message to the hon. the Minister of Finance. The person to whom I made this promise is a retired executive of a public corporation, an honest and intelligent man. He spent a lifetime doing hard and loyal work for public corporations. He saved his money, he paid into a contributory pension scheme and a few years ago he bought a retirement home in my constituency on the South Coast. He has to spend the twilight years of his life with his wife in comparative peace and comfort and certainly not in an extravagant manner by indulging in luxuries. On the contrary. His home is of modest means and he has been living within the means for which he budgeted throughout his life for his retirement. But where is he today? I want to tell the hon. the Minister that when I knocked on this man’s door he almost slammed it in my face when I told him I was coming around because of the election. He has become totally disillusioned. In fact, what is worse, he has become cynical about our entire system, our economic system and also our political system. I want to tell the hon. the Minister on behalf of this gentleman that he is fed up with this Government and he is fed up with this hon. Minister because he has been unable to contain inflation. [Interjections.] The reasons for this is that over the past years since he went on pension he has found … [Interjections.] Hon. members may laugh but there are thousands of retired people in South Africa who in recent years have found their standards of living, despite all their savings, gradually being eroded through inflation, to the extent where their standards of living are dropping lower and lower. This has happened to such an extent that when I visited this man he was clearing a portion of his plot to have it subdivided in order to sell it. He has now started to live off capital. What is worse, at his age he is seriously considering having to go out and work again.

These are the facts and this is the message to the hon. the Minister of Finance that I want to put across from this gentleman. This man has been robbed. He has been robbed of a lifetime’s saving and he has been robbed by this Government.

What rubbish!

I therefore want to ask the hon. the Minister: Is inflation theft or is it not theft?

Do you have no responsibility?

Mr. Speaker, on a point of order: Is the hon. member entitled to accuse the Government of theft?

Order! The hon. member may proceed. He is not accusing the Government; he is accusing inflation.

I said and I want to repeat that inflation is theft. I have this on good authority. “Stop thief”, say the headlines of the Sunday Tribune of 26 July this year. And who said this? It was none other than a NP member who sat in these benches, one of the top bankers of South Africa, viz. Mr. Jan Marais. He says—

This is the theft I talk about.

Repeat those words.

The bank economist, Dr. Johan Cloete, agreed by saying—

I shall give this to hon. members to read if they wish to read it. I repeat, this retired gentleman has found that his lifetime’s savings have been stolen through inflation. This inflation is caused through the mismanagement of the economy by the Government. It is no use saying that we import inflation. There are other nations in the world that do not have the resources or the wealth that this country has. I refer to a country such as Taiwan which does not have the rate of inflation we have. I refer too to Malaysia and Japan.

Brazil.

I am not talking about Brazil. I am talking about the nations that do not have a high rate of inflation.

That is selective quoting.

Inflation is a lowering of the purchasing power of our currency, i.e. the salary and wage earner’s pay packet. When he goes to spend it he finds that it has a lower value than he anticipated. I might just add that, as such, inflation is an insult to the working man, and I firmly believe in this. We heard last week that pension funds are being threatened because of mass withdrawals, because young people are quitting their jobs in order to recover their contributions. They no longer have any faith in a form of saving such as a pension fund. How often do we hear today from young people: Why save? It was the hon. member for Malmesbury who said that last year people flooded into the shops in order to spend their money. I believe this was the result of the Government’s flooding the markets and certainly not encouraging people to save. It does just the opposite.

I want to put it to hon. members that this attitude is undermining the very fabric of our society. It goes against all the principles that many of us were taught to believe in, such as the work ethic, and the necessity to save for a rainy day and all that sort of thing. Who is to blame?

That is the question.

I say it is the hon. the Minister of Finance because he controls the money supply.

Prove it.

I shall prove it. He has allowed South Africa to be flooded with money, and cheap money at that, during the past two years, and we know what has resulted from it. The Statistical Economic Review of the hon. the Minister proves it. On page 13 we have the “Composition of Private Consumption Expenditure” and there we read the following—

Where did this money go? If one looks at the table on page 13, one finds that in durable goods there is an increase of 26,7%.

How do you relate it to the Government’s fiscal policy?

Is it part of the Government’s policy to encourage people to spend money on such things as personal transport equipment and furniture which are way beyond their means. This is the problem, Sir. People spent money on things which one would call non-essentials. In regard to the Minister of Agriculture, as far as food was concerned the increase in real consumption expenditure rose by only 5%. Why? When one looks at these figures one finds that the inflation rate on food alone was 18,8% and on products such as meat it was 32%.

How do we stop it?

How do we stop it? They should have taken some of the thousands of millions of rands that flowed into this country as a result of the gold bonanza and used the money to finance Sasol. By doing that the price of diesel could have been reduced by cutting the levy which finances Sasol and by so doing agricultural production costs would have been reduced. [Interjections.]

Absolute rubbish.

One finds that despite the general economy growing by 8% in real terms, private consumption expenditure rose by 8½%. But the question I want to put to the hon. member and to the hon. the Minister of Finance is whether the people could really afford to spend this money. On page 12 of the statistical report one finds the following—

Not by 8% as these hon. members were saying …

Who said so? Who said it rose by 8%?

It is all in the Minister’s statistical review. [Interjections.] Perhaps this is the problem—that hon. members on that side do not study statistics [Interjections.]

In regard to savings we read the following on page 12—

What does this mean? It means that some people’s savings dropped and other people ran into debt. This is the seriousness of the situation at the present time. A lot of people have bought homes, others have bought motor cars and all sorts of durable goods, and suddenly they are finding that they are facing interest rates in terms of homes of 12% to 15% and in terms of other goods of 25% to 30%. Where is the ordinary man in the street going to end up? This increase in the money supply certainly has not done the man in the street any favour. It has, however, favoured big business and one can see this once again from these statistics. Investment in capital goods in real terms in the private sector grew by 24½%, which I believe is good, but a lot of that was at the expense of the man in the street who, I believe, is now in financial difficulties. I want to make my position quite clear to the hon. the Minister and other hon. members on that side.

It is about time.

As a farmer and like many of us sitting here today who are farmers—two other hon. members in our benches are also farmers—I believe in a basically conservative approach to finance. [Interjections.] The hon. the Deputy Minister of Finance and I are both engineers, and as such I am sure we both understand the principles of productivity and the generation of wealth. Because of these two things, I am very much in favour of real growth in South Africa … [Interjections] … and I say this because the generation of real wealth through real growth in our economy, as I said at the very beginning of my speech, is essential for the long-term well-being of South Africa. Growth rates such as those we have been having on average for the past two to ten years are not sufficient to save South Africa by the year 2000. It is essential to get our economy geared up so that we have the money in the form of capital to do some really worthwhile spending. We do not want a large amount of it consumed by the fires of inflation or the lending of money in order to plunge a vast number of hardworking people into debt. I realize that it is only by ploughing back savings into one’s business and one’s nation that one can continue the process of generating wealth in South Africa. Therefore, as I said earlier on, it pleases me to see that there was an increase in the fixed capital investment in the private sector. However, the sort of manipulation of money that we have seen over the past two years, resulting in the developments that I have described, does not, in my view, become the hon. the Minister of Finance who claims to be a conservative in his approach to financial matters. He claims to be disciplined but he cannot tell this House today that in handling the massive inflow of capital from overseas and in distributing it in the economy there was anything disciplined in what happened. He could have controlled the money supply in many ways.

Let us hear how.

Certainly. Could the hon. the Minister not have relaxed exchange control regulations and left some of that money out of the country for a while until the whole tempo of the economy cooled down somewhat. Then he would not have had to jam on the brakes as he has had to now. Could he not have invited some of those people who made those big gold profits to invest in Sasol? After all, if I remember correctly, the first share issue of Sasol was oversubscribed 1 500 times. If he had bled off R1 000 million or more and fed it into Sasol, in the process reducing the levy on petrol and diesel which would have contributed towards lowering the production cost of food and other items—especially farm produce—would this not have redistributed money in a manner that would have fought inflation and not fed it?

But the money would still have remained in the economy.

No, it is a question of where one distributes money. If one fans the flames of inflation by uncontrolled expenditure that is not generating new wealth, there will not be the growth rate in this country that there should be. [Interjections.]

I have only a few minutes left. I believe that South Africa must have an economic development programme with a long-term average real growth rate of at least 5%. Would the hon. the Minister not agree with that? It must be at least 5% over the next 19 years. Does the Minister of Industries, Commerce and Tourism not agree with that? I am speaking about the average, in real terms. [Interjections.] I think the hon. the Minister is saying “yes”.

On the average, yes.

The hon. the Minister of Industries, Commerce and Tourism and the hon. the Minister of Finance have said at least 5%.

Nobody is denying that.

In the past ten years, however, it has only averaged 3,4%, despite two extremely large injections of money into this country. I am referring to the years 1974 and 1979-’80. That is, I think, how we must judge this Government at the present moment. We certainly do not have a lack of capital—I think hon. members will agree with that—but what we do have is a lack of trained and motivated manpower. This is what is holding back the economy. I believe that we are being stifled by too much of a preoccupation with antiquated and redundant ideology on the part of hon. members in those benches opposite. [Interjections.] We are being stifled as a nation and prevented from growing as we should by too much red tape.

You must stay on the Railways.

I want to tell the hon. the Minister that I have in my file—and I am going to take it to his hon. colleague—the case of a man who tried for two years and three months to get his daughter’s I.D. number changed as it indicated that she was an alien while she is a South African. He wanted to have this changed to indicate that she is a South African. In spite of three applications and three sets of photographs, this man and his daughter have been trying for two years and three months … [Interjections.] This is the type of red tape and inefficiency which, I am afraid, is costing the country dearly today. This red tape has to be cut drastically if the country is to achieve the growth rate of 5% on average, in real terms, between now and the turn of the century, that we need in order to survive.

Mr. Speaker, the hon. member for Amanzimtoti made a destructive speech. This is symptomatic of the situation in which the NRP finds itself at present. The hon. member referred to the record of the Government. However, with the aid of statistics I can prove how fantastic the record of the Government actually is.

The hon. member for Yeoville described the Budget as a “morning after the night before” budget. But when one reads the part appropriation in conjunction with the main budget it is clearly apparent that when the hon. member made this remark he himself was possibly in a state of “the morning after the night before”. The hon. member went further and alleged that the Government no longer cared about the ordinary working public in South Africa. This was also the purport of the hon. member for Amanzimtoti’s argument. But what are the real facts? I would like to refer the hon. members to the part appropriation that was passed earlier this year. What important concessions were made? I should like to mention a few of these to the hon. member. There was a 12% increase in the basic salaries of Public Servants. Certain groups within the Public Service were subsequently singled out and received increases considerably in excess of 12%. A record amount of R745 million was voted for the improvement of conditions of service in the Public Service. There was also an increase in social pensions, viz. R13 per month for Whites, R9 per month for Coloureds and Indians and R7 per month for Blacks. There was also a special bonus of R30 for Whites, R24 for Coloureds and Indians and R18 for Blacks. There was an increase of 12% in the pensions of other pensioners, as well as a reduction of 3 cents per litre in the excise duty on fortified wines, and apple, pear and orange beverages.

In spite of these concessions in the part appropriation the hon. the Minister of Finance has now made further important concessions in the main Budget. I would like to mention a few of these as well. The hon. the Minister approved an increase in the interest rate on tax-free investments with building societies from 8,25% to 8,75% and the simultaneous raising of the ceiling on tax-free indefinite period shares, from R10 000 to R20 000. Is this not in the interests of the man in the street? Long-term Government stock, known as consolidation stock is to be accepted by the Land Bank as security for normal Land Bank credits to farmers. This measure affords welcome relief to affected farmers and I wish to express my thanks and appreciation for this concession to the hon. the Minister. Is this not in the interests of the ordinary farmer? There was an additional bonus of R30 for Whites, R24 for Coloureds and Indians and R18 for Black social pensioners, despite the fact that the part appropriation made provision for a similar bonus. Is this not in the interests of the pensioners of our country? Although the loss on maize exports is being borne by the maize farmers themselves, the Government is assisting them by guaranteeing a bridging loan of R71 million to the Maize Board and subsidizing part of the interest on it. Is this not in the interests of the ordinary maize farmer?

Government departments, provincial administrations and Government business undertakings will accept full responsibility for the payment of assessment rates to local authorities, and provincial administrations will take over the financial responsibility for ambulance services. The hon. member for Malmesbury has already referred to this. Is this not in the interests of the ordinary inhabitant of a city or town? Yes, Sir, it is even in the interests of the inhabitants of Smithfield and other smaller towns in my constituency.

The allowable deduction from the earnings of married women is being increased from R1 200 to R1 400 during the current financial year and to R1 600 in 1982. Is this not in the interests of married working women?

People over 70 years of age receive an additional tax rebate of R80. Is this not in the interests of our senior citizens?

Tax exemption on lump sum payments to employees on their retirement is now being granted up to a maximum amount of R20 000 as against R15 000 previously. Is this not in the interests of people retiring after a life-time of invaluable service?

The elimination of requirements in regard to purchased breeding stock now means that such stock is to be treated in the same way as any other livestock. This is being done for tax purposes. The hon. member for Yeoville will not even understand this. The hon. the Minister and his department are aware that the South African Stud Book Association and I have advocated this step for many years. For this reason we would like to convey our particular thanks and appreciation to the hon. the Minister this afternoon.

A public company is now being allowed to plough back 50% of its dividend income instead of 35% and the rebates in respect of estate duties have been increased as follows: The basic deduction in respect of every estate is being increased from R37 500 to R50 000; an additional deduction where the deceased is survived by a spouse, is also being increased from R37 500 to R50 000 and the deduction in respect of every child is being increased from R37 500 to R40 000. This concession proves that this Government is constantly adjusting the rebates to keep pace with the rising value of the assets comprising the taxable value of an estate. As against all these concessions I have mentioned—and there are more—the Minister introduced only moderate increases in respect of liquor, cigarettes and luxury beverages. For this reason The Argus was correct in its editorial as quoted to us by the hon. member for Malmesbury. I should like to add to what he quoted because in my opinion what I am about to quote to you is the most important point. I am merely adding to what the hon. member for Malmesbury said. The report stated, inter alia—

And now I should like to refer to something which the hon. member for Malmesbury did not quote—

This budget is a well-balanced, well-planned budget which maintains a balance between curbing inflation on the one hand and preventing the economy from losing too much of its momentum on the other.

Let us look at what has happened in the economy since the last budget. The hon. the Minister’s strategy last year was very clearly aimed at deliberately accelerating the real growth rate of the economy. He did this mainly by making considerable tax and other concessions which were primarily aimed at stimulating private consumer spending. If we look back at the actual position and analyse it we find that the large amount in excess of R1 500 million was added to the buying power of the private consumer. Fueled by the general wage and salary increases, larger incomes as a result of increased employment and the good agricultural year, together with postponed purchases, the ample availability of consumer credit and a consumer sentiment which affected the spending decisions of the individual positively, the total private consumer spending increased by almost 23%. This was the aim of the budget. As regards real private consumer spending the figures for 1980 also show a particularly marked increase in respect of durable and semi-durable goods.

The flourishing state in which the South African economy still finds itself, is in sharp contrast to the developments in the world economy. Most of our major overseas trading partners are experiencing a recession in their economy and on close examination it would seem as though these conditions on the international economic front will still be fairly prolonged and deep-lying. For this reason we must accept that these conditions will rob South African exports, as a growth factor in the South African economy, of some of their strength.

In contrast during the past year there was particularly strong growth in most sectors producing final consumer goods. The sectors supplying intermediary products also fared well. As a matter of fact, the level of real economic activity increased sharply and real private consumer spending rose by 8,5%, real investment by 24,5% and the real gross domestic product by 8%. There was a surplus of R2 830 million on the current account of the balance of payments. As a sector, manufacturing showed particularly strong growth last year. Last year the total volume of factory production increased by 10% compared with the previous year. The construction industry and more specifically the building industry experienced favourable business conditions. There was an increase of 15,1% in the number of dwelling units completed by the private sector, and an increase of 34,3% in value as against that of the previous year.

Business conditions, too, were in general favourable. In the retail trade the value of sales increased by approximately 22,8% while the volume of sales rose by about 9,2%. The motor industry is still faring extremely well. As is well-known, the sales of new passenger vehicles and commercial vehicles rose sharply. Sales of new passenger vehicles were up 25,2% and those of commercial vehicles 25,1%.

As regards tourism, the business conditions of licenced hotels and hotels for which statistics are available can be taken as a norm for the sector. From this data it appears that the total operating costs showed an increase of 26,5% over those of the previous year, while the average room occupation increased by 4,7% higher and the average bed occupation by 6,2%.

As regards the sectoral spread of the benefits of this high real national growth rate there can be no complaints. To a greater or lesser extent almost all sectors of the economy benefitted by the higher growth rate in the economy. The multiplier effects are also filtering through to the sectors which traditionally lag behind in an economic upswing. A growth rate such as the one experienced last year did in fact alleviate certain serious problems, especially those involving the high unemployment rate, especially among Blacks. On the other hand it also created problems for us, the most important being the inflation problem, to which the hon. members also referred. No matter from which angle one approaches this question, one cannot but conclude that the inflation rate will accelerate under such circumstances, despite the measures set in motion in the budget to hold inflation in check.

Probably one of the most important priorities in the Western economy is economic growth under conditions of total employment. The disadvantage of this is that it is inflationary. Briefly this means that if inflation is discouraged, this also places a damper on economic growth and employment. However, if one stimulates employment and growth, the inflation rate is accelerated. This is the dilemma in which the world—and South Africa—finds itself. However, South Africa was compelled to grow at this high growth rate from a deep and long recession because large-scale unemployment—about which that hon. member had a great deal to say in the past—and social unrest were staring it in the face. The reasons for this recovery can be traced back to the combined effect of an exceptional export performance since 1975, the exceptional performance of gold on the various world markets, the effect of the moderate measures taken with a view to the stimulation of the domestic economy, as well as the creation of local and overseas confidence and the effect of the Wiehahn and Riekert Commissions with regard to the better utilization of labour.

It is a pity that the high inflation rate is preventing a higher economic growth rate. Restrictive measures must therefore be introduced with a resultant levelling off in the growth rate. However, this Government must guard against damping it to such an extent that we again plunge into the depths. Yet if there are unsoluable economic problems one can and must recognize them and not do as the official Opposition, the NRP and their fellow-travellers, the HNP, do. The official Opposition and the NRP blame the Government for the inflation problem without making any constructive contribution. This afternoon in this debate there were again clear signs of this. In their turn the HNP promised that they would destroy inflation within two months.

Along with the country, yes.

However, it is not that simple. Notwithstanding the official offensive against price increases—about which a great deal has been said this afternoon—success in this regard remains modest.

Mr. Speaker, what is the cause of price increases? Experts ascribe it to the fact that at current prices in the economy there is disparity between quantities demanded and supplied, with the result that the prices tend to rise and where some of these prices determine production costs, these cost increases and price increases follow one another in a continuous upward spiral. In the meanwhile it is also known that this disparity has its origin on the supply side. Suppliers can—but frequently do not want to—satisfy the demand at current prices. The labour force and the export countries are the main culprits in this connection. For example, the wages of workers rose between 1971 and 1979 by an average annual rate of 11,7% in comparison with an increase in the productivity of every worker of only 6%. At present, with far greater pressure on the available labour, the situation is far worse and there is large-scale poaching of key staff by companies.

There are various factors which hamper the solving of this inflation problem, regardless of any policy action—it does not matter which Government is in power—and I should like to enumerate these to the hon. members. In the first place, Opec obstinacy has made the inflation problem a world problem. The germs of inflation are spread by international trade links, and this ensures that the epidemic remains universal. Of course moderate success can be predicted if the rand is allowed to appreciate—at the moment this is not even happening—so that the unit costs of import goods appreciate more slowly. Two factors are however seriously restricting the scope for appreciation. On the one hand there will be pressure on foreign currency because imports will increase, and on the other hand the potential for appreciation will be limited by the extent to which agricultural and other export goods are adversely affected by this. In the mean-while the Opec countries will continue to fuel the international flames of inflation with their policy of price increases based on the rate of decrease in the buying power of international currencies. Obviously South Africa is not immune to this, no matter what Government is in power.

In the second place, as already mentioned, there is a considerable shortage in the labour market. A strong possibility exists that the demand-pull factors can begin to strengthen the existing cost-push factors. It is easy to combat inflation of any nature by sufficient deflation. It is easy, by means of the economic policy, to create a position in which merchants and manufacturers will abandon their tendency to increase prices and in which labourers will drop their wage claims so that inflation will disappear to a large extent, but the sacrifices needed to achieve this position are those of mass unemployment and negative growth. The disadvantages to prosperity are a large-scale loss of goods and services, and the psychological and sociological distress of unemployment. This must be weighed up against the disadvantages of inflation, for example relative impoverishment of those with fixed monetary incomes and people in a poor competitive labour position. To me the disadvantages of the former are relatively far greater if one considers the possibility that the mechanism has already been created to alleviate the latter disadvantages.

In the third place inflation will have to be accepted as a necessary evil, whether we want to or not, because structural labour conditions in the world and also in South Africa play a predominant role. The post-war inspired era of full employment has considerably strengthened the position of labour. Wage increases based on increases in productivity gradually had to make way for wage claims on the basis of the rising cost of living. This means that wage increases without corresponding increases in labour productivity are becoming a way of life. The resultant cost inflation is obvious. For this reason many economists do not doubt that the entire question of compensation in relation to labour productivity can only be rectified by means of a prolonged and acute recession which will have very serious and deleterious effects for South Africa in particular.

Finally there is unfortunately another factor, namely the ideological political set-up in the world, which does not promote economic realism in this connection. The ideological political set-up in the world is characterized by a strong socialistic onslaught together with a communistic advance and, with a few exceptions, relatively weak Governments in the capitalistic world.

Financial discipline in the widest sense of the word, an increase in productivity and managerial expertise, a well-trained labour force and a sound ratio between labour achievement and compensation are the keys to greater prosperity in the future. There is no substitute for these things, and the Government is devoting all its energies to achieving them.

Mr. Speaker, listening to the two previous speakers on the Government side, the most encouraging thing is that it appears that they are reading The Argus fairly carefully, particularly with regard to economic comment. It will give South Africa new hope if they would also read the political comment.

The hon. member for Smithfield will forgive me if I do not follow up his line of argument. He covered a very wide field which was also covered by the hon. the Minister of Finance.

The announcement that social old-age pensioners will receive a bonus in November is to be welcomed. Anybody who deals with old-age pensioners will know that they need every cent they can get in order to eke out an existence. We on this side of the House feel it is a pity that the bonuses are still racially discriminatory despite the Government’s avowed undertaking to eliminate racial disparity in social old-age pensions. In the sphere of pensions, however, as in the case of political change, one cannot help but feel that the Government is moving from ad hoc change to ad hoc change. In a period of total onslaught and total strategy we have the total inability of the Government to take steps now to solve some of the long-term problems facing South Africa.

We see this in regard to the problem of providing financially for the aged in South Africa. During the course of his budget speech the hon. the Minister of Finance said that old-age pensions alone, financed by the taxpayers’ money, were already amounting to more than R340 million a year. He then made a very interesting comment. He said that depending upon the assumption made with regard to population growth and the number of people claiming social pensions as well as wage rates and inflation, it had been calculated that the amount spent on social old-age pensions could well exceed R6 000 million by the turn of the century. At first this might seem a phenomenal increase but if one considers that in 1973—only eight years ago—social old-age pensions cost taxpayers R88 million and that in a period of eight years there has been a fourfold increase, it is as well for us to contemplate what social old-age pensions are going to cost us in 19 years’ time.

Edward de Bona, the creator of “Lateral Thinking”—not to be confused with the hon. the Minister of Posts and Telecommunications!—distinguishes in his latest book Opportunities between what is urgent and what is important. He says there is a tendency, particularly for governments, to concentrate on urgent, pressing issues and to ignore longer term issues which are also important. He points out that modern cabinets often become fire-fighting brigades. The price is that important issues tend to be neglected or ignored until they become in turn urgent, burning issues. Then, faced with the inevitable result of their own lack of foresight, governments rush around trying to put out the fires they created while trying to persuade the electorate how much they are doing to solve the problem.

To show that what is important is also urgent it is sometimes necessary to spell out the implications of long-term trends and to evaluate them against the country’s present resources. Failure to do so can be catastrophic, even for so-called wealthy societies. In the case of pensions, the position of New York City is well known. Consider that in Los Angeles half of taxes go to pay for the pensions of city employees. It is therefore good that we should consider the long-term implications of our present social old age pensions system now. It is only by taking action now that we will be able to alleviate future problems.

If one looks at the year 2000 there are some inescapable realities that have to be faced. The first is that there is going to be a rapid increase in the South African population. It seems that population projections depend upon which ones one is using. The figures I came to are different from those that the hon. member for Amanzimtoti quoted. I am using the figures given by the Human Sciences Research Council in their population projections for the period 1970 to 2020. They estimate, if one takes the average between their high estimate and their low estimate, that the South African population will increase from the present figure of 27,5 million to 40,3 million in the year 2000 and to 53,2 million in the year 2020. This increase will be reflected in an increase in the number of aged people in South Africa. I have used the definition that we use in the South African Statutes, namely that an aged person, if she is female, is 60 years or older and a male person is 65 years or older. I must admit that I cannot quite understand the logic of this because it is well known that women in South Africa tend to live six to seven years longer than men, yet we age them earlier. The increase in the number of aged people will be accelerated by increasing life expectancies for all race groups, but particularly for the non-Whites. For example, the Human Sciences Research Council estimates that in the period 1980 to 1985 the life expectancy at birth for a White female will be 73,8 years. That of a White male will be 67,95 years. At present the life expectancy of a Black female is 59,57 years while that of a Black male is 52,7 years. By the year 2000 to 2005 it is estimated that the life expectancy of a Black female will have increased to 67,23 years while that of a Black male will have increased to 61,59 years. The result of this is that we can anticipate that within the next 19 years there will be a dramatic increase in the number of people falling within the aged category. At present the Human Sciences Research Council estimates that there are 1,35 million aged people in South Africa. By the year 2000 this will have nearly doubled to 2,36 million and by the year 2020 it is estimated that it will have reached 4,64 million. It must be stressed that we are not talking of something that is going to happen in the future. The people who are going to be aged by the year 2000 to 2020 have already been born; they are alive now and are between the ages of 20 and 40. Unless some dramatic event takes place such as plague or war or unless people follow the dietetic advice of the hon. the Minister of Health, these people are going to be with us in the years 2000 to 2020.

Not only will the number of people falling within the aged category be increasing but their proportion of the total population will also be increasing. At present aged Whites comprise 9,68% of the total White population. By the year 2020 this figure will have doubled. At present, because of their lower life expectancy, the proportion of non-Whites in the aged category is much smaller, namely between 3,49% and 3,99%. However, here too there will be a dramatic increase. By the year 2020 the proportion of Blacks in the aged category will be 7,41%, the proportion of Coloureds will have increased to 9,47% and that of the Asian community to 11,42%. The significance of these figures should not be underestimated, particularly as far as the White group is concerned. It means that with the passage of time a smaller proportion of economically active people will have to provide the pension benefits of an increasing proportion of the population.

There is, however, another factor that is likely to affect in an important manner the number of people claiming social old age pensions, i.e. the increasing urbanization of the South African population. Urbanization is important because with urbanization comes the breakdown of what sociologists refer to as the extended family system. By this we mean the tendency for families to look after the aged people within their own community. They look after them within the broad family network rather than sending them out to old age homes or allowing them to fend for themselves. An example of this extended family system is where children are looked after by grandparents while the parents go to work in the fields etc. If one looks at the figure projected by demographers, and it varies depending upon how fast the Black population becomes urbanized, we know that by the year 2000 we are going to have somewhere between 10 million and 18 million additional people living in the urban areas. Without doubt we should be taking steps now to prepare for the old-age boom that is facing South Africa. The implications are of significance for the taxpayers of the future. We have had the projections made by the hon. the Minister of Finance. Even if there is no increase in the value of the social old-age pension paid, which is highly unlikely, over the next 19 years and one only takes into account the increase in the number of people claiming social old-age pensions because of population growth, urbanization etc., one will still find that the cost in today’s money would increase approximately sixfold. I, in fact, fed this through my Hewlett-Packard Calculator. Let me give an example in order to show the trend in this regard. In 1978 there were 17 127 new Social old-age pensions granted to Blacks; by 1980 this number had increased to 28 038. Interestingly, the number of new social old-age pensions granted to Whites over this period declined from 12 950 in 1978 to 11 300 in 1980. Obviously, if we are going to solve the problem, steps must be taken now. In his budget speech the hon. the Minister of Finance said—

It is clear that in this area there is a fundamental difference in approach between the Government and the PFP. We acknowledge that the preservation of pension rights and the transferability of pensions are important and we support this. Indeed, if the Government believes that this is the solution to the problem, we find it surprising how slowly they have acted to implement it.

Mr. Speaker, you may recall that in 1964, 17 years ago, there was a committee of inquiry into pension fund matters under the chairmanship of Mr. H. J. F. Cilliers. This committee was set up because of the concern felt at that time about the paying out of pension benefits in circumstances other than retirement or death. The committee, which reported in May 1966, was in favour of the compulsory preservation of pension benefits but against the compulsory transferability of pension contributions.

While the compulsory transferability and vesting of pensions will help to alleviate the problems, this will not solve it. The reason is very simple and it is to be found in the first report of the Interdepartmental Committee of Inquiry into Certain Specific Pension Matters. This report shows that in 1978 there were approximately 4,2 million members of pension and provident funds in South Africa. In many cases this was a duplication because some people belonged to more than one pension or provident fund. At that time it was estimated that there were approximately 10 million economically active people in South Africa. In other words, in 1978 approximately 40% of the working population of South Africa contributed to a pension or provident fund and 60% did not. If one makes the preservation and transferability of pension benefits compulsory one will only have taken steps that affect 40% of the working population. Nothing will have been done to solve the problem of making financial provision for the requirements of the remaining 60% of the working population. Moreover, it is among the remaining 60% of the working population, mainly less skilled workers, that the greatest physical increase in the number of aged people is likely to occur. For example, whereas the number of Whites within the aged category will increase by 170 000 between 1980 and 2000, the number of aged Blacks will increase by 700 000, of Coloureds by 90 000 and of Asians by 40 000. In the present context of South Africa’s political, social and economic development it is these population groups that are most likely to qualify for social old-age pensions because of a lack of financial resources.

In answer to a written question I asked in 1979 or 1980, I was told that in 1979, 99,55% of Asians who applied for social old-age pensions qualified for the maximum pension. In other words, most of those who applied, received pensions. One may argue that eventually everybody will belong to a pension scheme. That may be so but it is doubtful. The proof of this is the large number of people who, at present, fail to make provision for their retirement, despite the attractive tax incentives that are offered to them to do so. Those who do take advantage of the tax concessions are not governed so much by the desire to provide for their old age but rather by a desire to reduce the amount of tax they have to pay to the fiscus. It is no secret that since the reduction in marginal tax rates the popularity of retirement annuities has declined. Unfortunately, for many people, providing for their retirement is a decision postponed until just before retirement. By then, however, it is too late. Consequently, whereas one-fifth of the economically active people contributed to pension schemes or provident funds in 1959, by 1978 the proportion was still only 4 out of 10. If the same rate of progress is maintained, which is unlikely, we would have to wait until 2040 for everyone to belong to a pension scheme.

I can understand, to some extent, the hon. the Minister’s reluctance to accept a national contributory pension scheme, particularly after the 1976 report which recommended a pay-as-you-go scheme. Without doubt, if we had accepted that scheme, we would soon have found ourselves in a position even worse than that of Los Angeles. The financial viability of a pension scheme does not, however, depend on who runs it. Look, for example, at the top 100 companies in Fortune magazine’s list of the top 500 companies —and we are talking here of massive companies. In seven of the top 100 companies, uncovered pension claims exceeded the value of the company’s total stock. What is important is that any pension scheme should be fully funded and run on sound actuarial principles. The PFP believes that the long-term solution to the problem of providing for the aged is that every working South African should belong to a pension scheme. We believe that both employer and employee should contribute but should be free to contribute to a company, industry or civil pension scheme or a retirement annuity scheme for self-employed people. We believe that for those who do not have a suitable pension scheme to which to contribute, a national scheme should be established to meet their needs. We believe that this scheme should be run by a consortium from the private sector, as in the case of Third Party insurance. We also believe that all pension schemes should provide for the payment of a widow’s benefit equal to at least 50% of the pension benefit the person would have received if he had gone on normal retirement. Most good pension schemes do cater for this but it must be pointed out that women live longer than men and that consequently any successful solution to the pension problem must make specific provision for widows.

We accept the need for the transferability and the preservation of pension benefits. We believe that an employee should be entitled to the benefits of both his and the employer’s contributions. Let me repeat that in terms of our policy it would be compulsory for every working South African to belong to a pension scheme, just as it is compulsory for every motor vehicle to be covered by Third Party insurance. People would, however, have a choice in regard to which scheme they wanted to belong to. We believe that these steps are essential if South Africa is ultimately to overcome the problem of providing financially for the aged in society.

I can do no better than to quote to the hon. the Minister the very words he quoted from Confucious: “To see what is right, and not to do it, is want of courage.”

Mr. Speaker, the hon. member for Edenvale has apparently made a very thorough study of his subject, and in my opinion he made a very valuable contribution in regard to this very specific problem in South Africa viz. the care of the aged. I think that we on this side of the House share many of the opinions that he expressed. I shall come back to that in a moment. All I want to say now, is that he should continue to deal with a topical matter like this, which is extremely emotional in nature, in such a moderate and scientific way as he did this afternoon and that he must not allow himself to be affected by the political approaches of the hon. member for Yeoville and other people in that party. They are people who are trying to make political capital out of the state of affairs that is prevailing not only in South Africa, but throughout the world. It is for political gain that those hon. members make certain accusations regarding this side of the House, specifically regarding the Government and particularly the hon. the Minister of Finance, in connection with matters which cannot reasonably be laid at the door of the Government and of its Ministers or any individual. However, there are circumstances that determine the economy of a country and determine economic conditions world-wide, and these conditions inevitably have certain consequences. The level to which the hon. member for Yeoville has sunk on a previous occasion and today too when he delivered his speech, when he turned a matter like the issue of the aged into a political one, will boomerang back against him. I want to tell the hon. member straight out—because it is true—that he is a person to whom one can listen when he devotes himself to the merits of his case and to his specialized knowledge. However, when he starts to exploit those matters for political gain, it becomes unpleasant to listen to him, because then he pollutes his constructive debating in his attempts to score petty political points. I should like to mention an example. What makes the hon. member say that it is unfair to tax diamond rings by an extra 5%? The hon. member relates this to the national serviceman who is doing his duty on the borders of the country and then wants to become engaged to his girl friend, but is now being prevented from buying his girl friend an engagement ring by the additional 5% in taxation, imposed by the hon. the Minister of Finance. I wonder if the hon. member has thought of the hundreds of thousands of people who would load their fingers with subsidized rings if we were ever to give a hearing to the hon. member’s sentimental argument? After all, that is not honest politics that he is practising.

There are a few other anomalies and I really cannot understand how a man who is supposed to have the intellectual abilities of that hon. member, could have justified them to himself. He was absolutely contradictory in his argument when he spoke about the increase of 12% for public servants. The hon. member said that the increase means nothing, because it is not a 12% increase after tax has been taken into account. After that he scolded at the hon. the Minister of Finance because he had ostensibly become Father Christmas suddenly before the election, as if the increase was a special gift that the public servants did not really deserve, but which the hon. the Minister gave them in order to win their votes in the election. Surely those two statements do not make sense when we compare them. It does not befit the hon. member to drag in this type of thing when we are trying to struggle with the greatest destroyer in South Africa, viz. the problem of inflation and other financial issues. It does not befit the hon. member for Yeoville to practise that type of politics in this House.

The greatest destroyer is the NP.

I also charge the hon. member for Yeoville with accusing the hon. the Minister of Finance of choosing the wrong theme for his budget. The hon. the Minister’s theme for the budget was “consolidate and adapt”.

“And adjust”.

“Consolidate and adjust”. Surely this does not mean that we are consolidating with inflation as a premise. After all, there are several factors inherent in the budget which are in fact aimed at combating inflation and allaying the unpleasant trends that are in progress in the economy at the moment. It does not mean that if one wants to consolidate, one wants to include the unpleasant things in that consolidation. It means that one consolidates the positive aspects of the economy and tries to stabilize them in order to put oneself in a position to experience growth on the long term and to be able to rise above the shortcomings in the economy on the long term.

One of the hon. members showed the hon. member for Yeoville very clearly how out of step he is with the rest of the economic observers when it comes to his evaluation of the budget.

There is something else that I want to take up very seriously with the hon. member because he said that the loans should have been increased in order to make better provision for certain aspects of the expenditure in the budget. Surely we cannot continue to make loans and leave it to future generations to pay for what we are enjoying today. After all, we cannot subsidize the price of a loaf of bread to such an extent that we will be paying forever for the bread that we ate in 1981. As one goes along, one must after all be realistic about scarce items and substances that are necessarily subject to certain price increases. After all, the hon. member for Yeoville has the Appropriation Bill before him and this shows all the votes. I want to ask him and other hon. members of the official Opposition as well as hon. members of the NRP: If they had to work with the same sum that the hon. the Minister of Finance had at his disposal, what would their priorities have been? If they want to argue about the budget with us, if they are going to oppose the Second Reading of the Appropriation Bill, then it means that they question the pattern of expenditure. If that is not the case, if they do not want to re-arrange the sum and spend it in another way, then they must tell us that we are spending too little or that we are spending too much.

If I look at the things that the hon. member for Yeoville requested, then he really wants to play Santa Claus judging by the way he is acting today. He must tell us which sources of revenue must be tapped further in order to enable the budget that he would propose and which his party would support, to spend that sum. If we look at the sources of revenue, it is very important to consider certain facts. I am very grateful today that it was not necessary to increase GST. There was a great deal of pressure from various circles to increase general sales tax. We know just as well as anyone else that if GST had been increased by a mere 1% today, it would have meant an increase of 25% in the effective taxation paid by less affluent people. In spite of the fact that the hon. the Minister was under pressure from city councils and other authorities to give them additional sources of income in that way, he resisted doing so. The basis of general sales tax as it was when it was introduced and as it continues to be today, is to broaden the basis of income tax without putting a serious burden on people. That is why it is a tax that is justifiable and easily collected. If we are going to tamper with this tax by means of a difficult figure or by exempting certain articles from it, then we are imposing an unnecessary administrative burden at that point, on the shopkeeper, where the tax is to be collected, and then the shopkeeper has to appoint two or three people and increase his cost structure accordingly for the administration of the collection of this tax. Therefore, we do not view an increase in GST as a way of increasing the revenue of the State now.

I want to put this question to the hon. member for Yeoville. If one looks at the figures with regard to income tax as at 1 June this year, then one sees that those who earn more than R10 000 per year constitute 23% of the total number of direct taxpayers. Only 23% of the people who pay direct taxation, earn more than R10 000 per annum and they are responsible for 73% of the total sum of income tax that is collected. In other words, it is a fact that the income tables as they exist at the moment, bring about a meaningful, fair redivision of wealth in the sense that income tax runs parallel to the ability to pay. It is fair and it is right. If we go to just above R12 000 then there are only 15% of taxpayers earning more than R12 000 per year and they are responsible for 61% of the total sum of income tax. In other words, who should we tax more if we want to increase Government expenditure?

To which tax year are you referring?

I am talking about direct taxation now, income tax, as at 1 June this year. This is the breakdown.

But the figures are not yet available?

Mr. Speaker, the figures are available if one asks for them in time. [Interjections.] If the hon. member for Yeoville and his party now tell us that we are spending too little on this or that Vote and they are not prepared to tell us how they differ from us with regard to our priorities, then they must tell us what source should be tapped further. As far as we are concerned, an increase in GST is out.

I told you.

As far as we are concerned, further direct income tax at this stage is out too, because we are not going to put an additional burden on the higher income groups and make it counterproductive for them once again as the position was at one stage. We also want to know from the hon. member for Yeoville, who is the chief spokesman on finance for that party: How much will be enough as regards bread subsidies? How much is enough when it comes to food subsidies? He said today that we must remove general sales tax from food. What is food? I ask him: Is meat food? Must we remove GST from meat?

Of course.

Yes.

There they say yes. Now must we remove GST from a Chateaubriand steak or must we remove it from shin only? I can assure hon. members that if we remove GST from meat, an ox will consist of shin from the tip of his tail to the tip of his nose. Surely it is a fact that this is what will happen. After all, one cannot distinguish with regard to an ox that certain cuts are bought by people from higher income groups. Surely this is logical and the hon. member knows just as well as I do that it is impossible to define food precisely.

[Inaudible.]

The hon. member can grumble as much as he wishes, but the truth is that as soon as one begins to distinguish between what is a basic food and what is not a basic food, one lands up in trouble. However, if GST amounted to a figure of 8% or 10%, so that it would really have been regressive in tax terms, one could say that one should not subject certain basic foods—if one could define them, which I believe is impossible—to GST, and then one would have had a basis for one’s argument.

I want to make a statement to the hon. member in connection with social pensions. The PFP and the hon. member for Yeoville as well as other hon. members of that party, with the exception of one or two who came in by accident when the NCP and the HNP were being troublesome, represent the fat cats of South Africa. That party’s representation is in the areas of South Africa where the average income is far above the average for the rest of South Africa. Therefore, they are the representatives of the fat cats. I do not want to use unparliamentary language, but it was a cunning—if this word is parliamentary—move during the election campaign to exploit this fat cat story at the expense of the NP to such an extent, because that party does not have the monopoly on compassion for the aged in South Africa. That party does not have the monopoly on compassion for people with fixed incomes nor for people with low incomes. [Interjections.] We on this side of the House are just as concerned about the aged as those hon. members are.

But still you expect them to live on R20 per month. [Interjections.]

Objective observers, including Mr. Cronjé, the chairman of the Consumer’s Council, have said that in these specific circumstances, the consumer has been fairly treated. There has also been other commentary which indicates that the consumer has been let off fairly lightly in extremely difficult circumstances.

A matter which gives me personal cause for concern—I believe that this is the case for everyone on this side of the House—is the fact that the food price index as such has been exceeding the consumer price index in recent times. Since food is such a large component of the spending pattern of the aged person, it obliges us not to judge the social pension and other aid that the Government grants to the aged, in terms of the consumer price index as such, because the weights in the consumer price index cannot be applied to the aged just as they are. Therefore, if we allow ourselves to be led by the food price index for a moment, we see that it has overtaken the consumer price index. This obliges us to give very serious thought in the future to reaching deeper into our pockets in order to accommodate low income groups.

It is a question of priorities. No one on this side of the House feels that we are now doing “enough” for the old people, but the fact of the matter is that in the circumstances one cannot always do what one’s heart tells one to do. If one is in really difficult financial circumstances, one must do what one’s head tells one to do. This is to go about things in a balanced way which is clear from the proposals that are before the House at the moment.

There is something else that is also very important with regard to the aged and it bothers all of us a great deal. I had an example of this in my constituency. I am referring to the aged person who is not a social pensioner and falls just above that level of income that would normally qualify him for some form of subsidization or other for housing or whatever. We had a group of people who got together and obtained the voluntary support of an architect, a builder, a lawyer and other professional people. They obtained the land practically for nothing from a church society. It was a large piece of land. They intended clubbing together and pooling their annuities as well as further contributions in order to establish a scheme so that they could be sure when they moved in there, they would be able to move from the normal division to the sickbay one day. They could then be certain that as soon as they moved in there, they would be well cared for until the day they died. However, in view of last year’s interest rates, it was not an economically viable proposition. I firmly believe that the public of South Africa today is sympathetic and concerned, particularly with regard to those aged people who made ample provision, according to reasonable norms, for their old age, but whose savings and incomes have been destroyed by continued inflation over a long period. I put it to the consideration of the hon. the Minister that if these people were assisted by way of subsidized interest rates, or whatever—I cannot suggest a solution; it would probably require an intensive study—then we must also enable the public of South Africa to put their money where their mouths are. I do not want to suggest a bond for everything, but it may be a possibility for us to think of establishing a specific bond to provide for people being granted assistance on the basis of a subsidized rate of interest or tax-free interest, so that they can take care of themselves in such a way that they are not ultimately obliged to become a burden on the shoulders of the State.

We suggested that three years ago already.

I am not saying that it is a new idea. However, it is time for us to give serious attention to this matter because the basis of our policy with regard to the old age of people in South Africa is that these people must care for themselves. However, on the other hand the fact is that if one invests in annuities and one also belongs to a pension fund it is physically impossible for the average person to make adequate provision for his old age if we continue in this way, because for the next few years we will continue to have a high rate of inflation. The hon. member for Edenvale was correct when he said that many people take out an annuity not so much for the purpose of having a pension one day, but in order to avoid taxation, and in this way it is also a very clever way of forcing people to make provision for their old age.

Now one can ask whether something cannot be done about inflation. The Government is not lacking in the will to overcome inflation.

It is lacking in knowledge.

Lacking in knowledge! That is the most ridiculous remark that I have heard in my life. If there is one thing that is true, it is that all the thinking, informed people, the knowledgeable people in South Africa, are unanimous in their approach to the terrible problem of inflation and its causes. In his budget speech the hon. the Minister told us, and it is the truth, that at his inflation conference at the Carlton this year, knowledgeable people from outside politics agreed with the Government with regard to (a) its view regarding the causes of inflation and (b) the way in which it is trying to solve the problem. This is the truth. Why should we now make a political issue of this terrible problem and whip up our people outside against the Government for mere political gain whilst one’s mentality and approach with regard to the problem of inflation is one of the key-factors in solving it? The hon. member for Yeoville and his colleagues are laying the blame for this problem squarely on the shoulders of the Government: It is supposedly as a result of a lack of knowledge, a lack of this and a lack of that. What is happening now? In the process of doing so, one is destroying the will of the ordinary citizen to make his contribution too towards solving the problem of inflation.

Is it not true that the ordinary citizen who pockets a salary knowing that it is too high in relation to the production that he has produced, is contributing towards inflation? Is it not true that with regard to price policy there are many people in South Africa who are exploiting the atmosphere of inflation to their own benefit? Has the mentality not arisen amongst our people who determine prices, of gaining as much as possible out of the problem situation? Instead of basing their profit on turn-over, they base it on prices alone. Is it not also true that when the price of an article is determined, it often happens that the dealer does not do so on the basis of a fair profit on his capital, but on the basis of what the market can carry, and secondly, what the imported article, the substitute from abroad, costs?

I do not want to say that one is not entitled to one’s profit. This is the essence of the free market system and I shall support it until the day I die. However, I want to say that the mentality and approach of the employee, the public servant, the clerk and anyone else who promotes an imbalance between the money that he puts into his pocket and the production that he produces, is such that it boils down to the fact that that man is stealing from South Africa. He is the one who is the thief. The man who determines the price and is not satisfied with a fair return, is also stealing from South Africa and in particular from the aged of South Africa. That is why it is reprehensible politics—I withdraw that, Mr. Speaker—and it is unnecessarily confusing for the people outside when the Opposition lays this squarely upon the shoulders of the Government.

It is reprehensible indeed.

Let us understand inflation. One of the hon. members of the Opposition shouted out that it is due to a lack of knowledge. I want to ask him whether he knows what the factors of inflation in South Africa are. Let one of the hon. members of the Opposition rise to his feet and tell us what the underlying factors of inflation in South Africa are, in his opinion. I it not a fact that one of the models that best fits our economic pattern, is the South American model which says that there are certain underlying factors that make a country susceptible to inflation, that there are certain initiating factors that set inflation in motion and that there are certain factors that cause it to continue and prevent it from coming to an end?

I want to dwell for a moment on the underlying factors. Built into the underlying factors that make South Africa susceptible to inflation, is the social approach that people have towards their work. I have already spoken about the mentality of both employer and employee, which also plays a part. In this sphere we are once again diametrically opposed to the PFP. Once again they are trying to impose a model on South Africa which, as the hon. the Minister of Internal Affairs indicated so strikingly the other day, is based on a First World population composition instead of their seeing South Africa as a combination of the First World and the Third World. Is it not true that within a matter of one or two generations, the Black workers of South Africa have been wrenched from a Third World economy and plunged into the midst of an industrial economy and suddenly have to begin to be productive? With a shock, such a Black worker then discovers that practically his entire value system collapses. How can we then force upon him a model that makes demands of him and treats him as if he were a member of the First World? Surely it is ridiculous. If one closes one’s eyes to this in politics or in the economy, one is being equally stupid. Suddenly the Black worker discovers that the education and training that has brought his people to the present stage in this continent over thousands of years and has ensured their survival, is meaningless in an industrial economy. It is no use for him to go to the mountains in order to attend a mountain school or to learn to herd cattle; he is wrenched out of that culture and that portion of his value system and placed in a new situation. All of a sudden he discovers that he is also being wrenched away from his view of the economy, a subsistance economy that briefly boiled down to the following: He and his people stayed in a certain place and, after everything in the environment had been used up, they moved 10 km further and that is where the next generation grew up. This was what the economic life in Africa consisted of for centuries. The weather was fantastic. It was not necessary to stock pile. It was not necessary for him, as it was for the Europeans, to work for four months of the year in order to survive a winter lasting eight months. He could quite simply carry on. What a wonderful continent Africa would have been if we could have all carried on in this way!

Hennie Smit agrees with you.

Then the Westerner came along and transplanted his own economy, his own stock-piling culture to Africa, and in that way disrupted the entire economic civilization. Consequently the Black man comes to the conclusion that as far as his economic approach too is concerned, he has to give up that portion of his value system and fit himself into a profit economy, a market economy that creates a totally new environment for him. This cannot take place within two or three generations without causing a backlog with regard to productivity and with regard to one’s approach to one’s work. I wish it could still be as it used to be in olden days. I would have liked to have been part of that!

The third thing that he realizes, is that his power structures collapse. The name of the game is democracy. And what is this? In this way we can look at one aspect of one’s life after the other, simply to discover that in South Africa we have two worlds. The one is the world that flourished here before the Westerner arrived, brought his specific culture here and changed everything. Our view is that we must make plans for the future, as the hon. member for Edenvale said, in order to be able to feed all our people and care for all our aged. Particularly when we look into the future, at the year 2000, it appears that it is a practically impossible situation.

When one takes note of the basic factors that are at the root of inflation, it is no wonder, therefore, that the hon. member cries out that it is due to a lack of knowledge. He does not have an inkling of this entire cultural clash and of the real model that can work in South Africa. This is the model of compassion and of sympathy, the model by means of which everything possible is set in motion in order to make the transition of those people from their economic culture to our economic culture bearable and possible. It is a factor underlying inflation, a factor that will be with us for decades to come. We shall still be experiencing it through many generations in the future.

In conclusion, just a few words about tax reforms. This is where the value of this budget lies. When one looks beyond the figures of the budget, one must pay tribute to the hon. the Minister for the fact that, in an economic position in which he had little scope, he not only dealt with the economic questions in a masterly fashion, not only received assistance from informed people, but also took his approach to tax reform a few steps further. This does not affect the individual only, but companies, etc. as well. A few extremely important things emanated from this. I repeat that the question that general sales tax should not be used as a political football in order to supplement shortages, is an extremely important concept of reform which has been built into our economy by this hon. Minister over the past number of years. The question of self assessment for people with an income of less than R7 000 per annum, is a revolution in the process of dealing with income tax. It is absolutely in line with the idea of spending the minimum of money on collecting taxation and using the available people as productively as possible. Something else which goes hand in hand with this, is the taxation of fringe benefits, particularly the fact that it can be introduced systematically, that it can be introduced on a non-discriminatory basis, that everyone will be involved in it and that, in the words of the hon. the Minister—it will be light and moderate. Both the self assessment and the taxation of fringe benefits have side effects which will filter through the economy in time. One of the most important aspects of this is that it will no longer be necessary to involve top brain power in an attempt to side step the receiver of revenue, but that the collection of taxation will take place on a formal basis and that labour forces will be able to be utilized more productively than was the case in the past. I believe that in this respect, a word of congratulations and gratitude is owing to the hon. the Minister from this House, and not only to him, but to the Commissioner of Inland Revenue too. The Commissioner has the ability, when one asks him for advise regarding income tax, to explain things to one so well that one regrets that one cannot make an even greater contribution.

Mr. Speaker, I am pleased to associate myself with the hon. member for Florida. We are still reaping the benefits of the point of departure of financial discipline in the economy, which the hon. the Minister of Finance has been maintaining for the past few years. The overheated economy of 1979 and 1980 provided the opportunity for reckless and irresponsible spending.

If the official Opposition, through their chief spokesman, the hon. member for Yeoville, had had the opportunity to administer and manage the country financially, they would have spent money recklessly. According to him, subsidies should have been increased and there should have been further salary adjustments, on such a reckless scale that the Exchequer would not have been able to manage. It is very popular to say these things and very pleasant to listen to them. According to that hon. member, housing is far from adequate. This too is a popular, fine statement that is continually being made. He objects to the increases in customs and excise duties, but nowhere in his speech did he say where the Government should obtain that money. He does not say where the Government must obtain the money in order to combat the increased expenditure. It is easy to make promises and to butter up the taxpayer. However, it is another story to face reality and to tell the taxpayer that the Government requires so much money and that it has to find the funds. This is what the hon. the Minister of Finance had to do. There were plenty of opportunities for government expenditure and concessions. Reckless, irresponsible expenditure would have been very easy and simple while we were in a financial position like that of the past two or three years.

The Government and the hon. the Minister were criticized by the official Opposition for supposedly dealing with the past few budgets in a tight-fisted manner. I want to state categorically today that if the hon. the Minister had not acted in such a responsible manner and with the greatest degree of discipline in the past three or four years, we would not have had such a moderate budget before us now. For the past years we have had a considerable excess on our balance of trade and balance of payments. The money supply has increased and there was an extraordinary pressure upon the Government to increase Government spending, but with a responsible Government and a Minister who is financially conservative in his behaviour, the domestic economy also managed to sail past these danger points. As a result we are now able to discuss an extremely moderate and responsible budget.

It is very clear that we are experiencing a downswing at the moment. How severe and how strong this down-swing will be, is going to depend on various factors, of which I want to mention only a few. The booming economy of 1980 in particular, was stimulated chiefly by a noticeable increase in the real demand. With an excessive money supply available, this demand was the cause of an increase in the rate of inflation. The hon. member for Smithfield referred to this too. A great deal of demand inflation arose as a result. Our consumers will have to take note of the fact that an ever-increasing demand for goods, particularly luxury goods, will merely serve as a stimulus to encourage it further. The consumer, and this includes all of us, will have to come back to earth and be less reckless with unnecessary spending, for the mere purpose of spending, because this leads to an increase in the demand, which in the nature of things must influence the price. As long as there is reckless buying, as long as there is reckless spending, prices will continue to increase proportionately.

This brings us to another alternative, viz. saving. Savings have become a scarce commodity in South Africa, almost a luxury. As a result of higher inputs and spending an apathetic attitude towards saving has developed. This tendency has been displayed at practically all the financial institutions. I want to refer to one of them only, viz. the building societies. Funds at building societies have suddenly become just as scarce, overnight as it were, as they were abundant last year. There are definitely various factors that are responsible for this. I believe that one of these factors is probably the open handed attitude which the building societies displayed last year when funds were so readily available, when they had an excess of funds at their disposal. Loans were made available for luxuries, such as fences, swimming pools, paving, wall to wall carpets, etc. I am of the opinion that this is an unhealthy practice. The primary purpose of building societies in providing funds is to make possible the building of houses and not to purchase accessories. Commercial banks and other financial institutions should be responsible for this. Now a state of affairs has arisen where building societies have had to increase their rates of investment in order to obtain funds and to cover loan applications. It is true that these increases in the rates of investment have had an influence on our economy in general. For instance, they led to an increase in the bond rate, unparalleled in present-day financial activities. An adjustment of 3½% in the bond rate over the past few months will extract a very heavy toll from the bondholders in the future. Here I should like to associate myself with the hon. the Minister and ask the building societies not simply to increase the monthly premiums, but rather to increase the period of repayment of the bond. I have in my possession a notice from a building society in which a client’s payment was increased from R319 to R390 per month. This is a percentage increase of almost 22% and means an increase of R70 per month for the person concerned. An increase of that nature can be catastrophic in some households.

I want to request building societies to consult bondholders regarding any increase in payments and, if at all possible, to leave the decision to the bondholder whether he wants an increase in payment or an increase in the period of repayment of the loan. Flowing from that is another request that I should also like to address to the building societies, and this is that they should make a statement of bond commitments available to the bondholder at least once a year. Some building societies are already doing so, but unfortunately there are also those who do not do so. I feel it is desirable for the clients to be presented with such a statement; and not only desirable: it is also essential so that the bondholder can be brought up to date with regard to his obligations towards the building society. Therefore, on this occasion I want to ask the Registrar of Financial Institutions, via the hon. the Minister, to give attention to this matter.

I want to refer to another remark by the hon. the Minister of Finance. In his budget speech he spoke about the excessive competition on the part of the private sector for the staff of the Public Service. He said that this could lead to a drop in the standard of the provision of public services. That warning from the hon. the Minister comes at a very appropriate time. The private sector is continually outbidding the public sector as far as salaries and other benefits are concerned. This inevitably leads to a manpower drain from the public service. One sometimes has the feeling that they are simply waiting until the training has been completed in the public service before the trained staff are enticed away with all sorts of salary adjustments and excessive fringe benefits. The turnover of skilled labour is probably determined by supply and demand and there will probably be a continual staff drain to the private sector when we are experiencing an upswing in the economy like the one that we have been experiencing over the past year or so. However, when a levelling takes place in the economy, those people are the first ones who, as a result of their shorter period of service and more limited experience, are given the boot. They are the ones who then have to return to the Public Service, sometimes with catastrophic results. What has happened in the meantime? Pension benefits have been forfeited. They have been forfeited and the gratuity has been paid out, and now a new scheme has to be begun. Returning to the public sector in many cases means forfeiting seniority, housing benefits, etc. The disillusionment is often very great. That is why I feel it is a timely warning, to the private sector in the first place, in their over-eagerness to obtain staff, not to drain the Public Service to such an extent that effectiveness has to be curtailed in the Public Service. In the second place the warning is directed at the employee who forfeits long-term benefits such as pension, housing grants, etc. for temporary gain—immediate financial benefit.

In general, but on behalf of Pretoria in particular, I should like, in conclusion, to say thank you for the understanding which the hon. the Minister displayed in connection with the financial dilemma facing local authorities. Now that the principle has been accepted that the State will also pay tax on its properties, we are providing considerable relief of financial pressure on local authorities. This is a tremendous breakthrough and I should like to convey my heartfelt thanks to the hon. the Minister. We look forward to the final recommendations of the Croeser work group which is in the process of transforming the recommendations of the Browne report into reality. I also want to convey my thanks and those of Pretoria to the hon. the Deputy Minister of Finance who listened with a great deal of understanding to various delegations that came to see him in this regard. As a resident of Pretoria he listened sympathetically to the requests from Pretoria, and I want to avail myself of this opportunity to extend my hearty thanks to him for this.

I conclude with the wish and the prayer that, in spite of a possible levelling off, our economy will remain basically sound and that, thanks to the tremendous financial responsibility of the Government, particularly of the hon. the Minister and his department, we will be able to withstand the period of economic pressure.

Mr. Speaker, the hon. member for Gezina must forgive me but parliamentary practice does not allow me to become involved in controversy and so I cannot take part in a discussion about his recommendations.

I am most conscious of the honour that tradition has bestowed upon me in allowing me to address this House for the first time without interruption. It has always been a source of amazement to me what driving force impels us to undergo the traumas of election and to become part and parcel of this exclusive club. On my first rising to address this House, let me say that perhaps what has actuated me most, has been the belief in the speech made by Edmund Burke, one of the greatest Parliamentarians of all time, when he was first elected as the member for Bristol in England in 1774. He said—

He completed his speech in the following manner, and may I be forgiven if I misquote it to suit the circumstances—

When the time comes for me to leave the House, I pray that I may have behaved in accordance with the words of one of our greatest poets, N. P. van Wyk Louw.

*My veneration for N. P. van Wyk Louw is strengthened by the pattern of his life. Born at Sutherland in the Karroo, a son of the arid platteland; from his 13th year he was a city dweller, first as a student and later as a lecturer at the University of Cape Town. Subsequently he was professor at Amsterdam in Holland, and after that professor of Afrikaans at the University of the Witwatersrand for many years. Perhaps at first a boy of the arid platteland; but eventually he was a city dweller—Man and Prophet of the great metropolis—symbol of the Afrikaner of the future.

I want to quote from his poem “Miskien ook sal ons sterwe”—

†Let me turn now, Mr. Speaker, to matters more mundane. Each of us in the House is of statistical value. We contribute when we are born, when we die, when we participate in a Census, when we buy a car and even when we draw our salary, for we then become part of the national income. Statistics may appear dull to the disinterested but they play an important role in the deliberations of this House. It is well to remember the words of a famous American film producer as we seek solutions to our demographic problems. He said—

At the commencement of each budget speech, the hon. the Minister of Finance presents members of this House with a statistical review of the state of the economy. These statistics are the building blocks on which the budget is constructed and indicate to the House and to South Africa, the direction which the economy is likely to take. The statistical services currently provided by both the Department of Statistics and the S.A. Reserve Bank, compare favourably with those available in countries, at a similar stage of economic development both in terms of Range and in quality. Improvements are, however, possible within the scope of the present South African setup.

The first possible improvement is the provision of figures which are as up to date as possible. There is usually a time lag of some two or three months. Perhaps this could be overcome practically by publishing estimated or expected figures for the month or quarter succeeding the latest available monthly or quarterly reports, based on statistical extrapolations, qualitative judgements or any incomplete sample results, that may be available, particularly in respect of the more important National Income Series. The Governor of the Reserve Bank may fear criticism, should his forecast prove wrong. May I be presumptuous enough, Mr. Speaker, to follow the example of the hon. the Minister of Finance and quote St. Matthew in the New Testament to the Governor: “A prophet is not without honour, save in his own country and in his own house”.

Secondly, the general public are usually not conversant with statistical and economic concepts. It would appear that the Department of Statistics as well as the Reserve Bank has a responsibility to educate the South African public, including, Sir, the Financial Press and the Business Community, in the correct and prudent use of statistics. They could together issue in simple terms, a pamphlet or notes to their various publications from time to time, explaining the statistical concepts used in the compilation and manipulation of statistical time series.

Thirdly, there is the revision and updating of statistical series. The revision of important statistics such as the National Income figures have to be derevised from time to time. In addition, whenever the base year of a statistical time series is changed, it would be helpful if the Department of Statistics and the Reserve Bank could publish the relevant conversion factors.

In the fourth instance, there is the provision of unbroken Time Series covering a long period of time. In 1960 the Department of Statistics published a document entitled “Union Statistics—1910-’60”—a period of 50 years—containing all the main statistical series for that period. Is it not possible for the Department of Statistics and the Reserve Bank to produce a supplement bringing this work up to date to 1980, and containing all the main series but updated on a comparable basis?

Lastly, Mr. Speaker, there is the question of access by the private and public sector to a centralized, computer-operated Data Bank. Reuters are providing South African financial institutions instantaneously with an up-to-the-minute financial transaction statistics service of the currency exchange quotations of the various financial institutions throughout the world, merely by pressing a few buttons. Surely it should be possible with the new computer, being installed by the Department of Statistics to allow access by interested members of the private sector to a centralized, computerized Data Bank under the direct control of the Department of Statistics. This could be done in conjunction with the Department of Posts and Telecommunications. It must be available at a reasonable price and can provide both Business and Government with up-to-date statistical information as soon as that information is available.

Mr. Speaker, the whole community, who require this information for decision-making, will appreciate the possible improvements of our excellent statistical services, that are provided by both the Department of Statistics and the S.A. Reserve Bank. May I express the hope that the hon. the Minister of Finance and the hon. the Minister of Statistics jointly, will see their way clear to accede to my request. May I thank them in advance.

Mr. Speaker, it is a particular privilege to me to congratulate the hon. member for Bezuidenhout on his maiden speech. Let me say that the hon. member waxed quite poetical, particularly at the beginning of his speech. He did so very effectively, and I should like to wish him every success and a pleasant and rewarding period in this House.

It is an exceptional experience to rise in this hon. House for the first time and make a contribution to the debate. I realize, too, that it is a special privilege to represent a constituency in the House of Assembly. It is a matter for humility when one bears in mind that one has to represent this hon. House to one’s voters as well. One is also profoundly conscious of the fact that one is entering this arena as a newcomer in an era and at a juncture which we all know might be very taxing and which might demand important decisions in the future. However, one is also grateful to know that there are level-headed leaders, reliable leaders who, in those circumstances when crucial decisions may have to be taken, will have the courage to take those decisions. We are glad to have such leaders. On this occasion I should also like to convey the thanks of his voters to my predecessor, Mr. Giel de Wet, who represented the constituency of Welkom here for many years. He was indeed a pioneer in that newly developed goldfield. For that reason I should like to convey my gratitude on behalf of his voters on this occasion.

I should very much like to sketch the constituency briefly for the benefit of the House. This constituency is situated to the north of the Hex River Mountains, but at the same time south of the Vaal River.

Oh, that helps!

The two towns in the constituency, are Welkom and Odendaalsrus. Although situated in a good agricultural area, the constituency is largely urban, and the most important economic activity is the mining industry comprising 13 gold and uranium mines. This area is of particular importance to the hon. the Minister of Finance, who derives an annual income of approximately R800 million from the mines. In 1980 these mines yielded 264 tons of gold to the value of R3 692 million. The mines of the Free State yield 34% of the world’s gold. This figure will probably rise considerably in future, since new mines are now being developed. This growth is evident from and reflected by the fact that the city of Welkom showed the highest growth in the country in the past year.

I realize that it is probably not appropriate for newcomers to start out by making representations, and I shall refrain from doing so. However, I just want to say in passing that every developing area is always and to an increasing extent requesting services from the authorities. I am aware that everything cannot be done immediately. I shall only venture to ask the hon. the Minister of Transport Affairs—I know he is an approachable person—to consider instituting a South African Airways service to Welkom. The private airport at Welkom is already handling more than 60 000 passengers per annum. The success which the South African Airways has achieved with its service to Kimberley, is an indication that a service for Welkom could be equally successful, because it will also serve a region. Many years ago, when we entered the provincial council as newcomers, one of the veterans, who is today a dignified member of one of the very important councils, gave some advice to the newcomers. He told the newcomers: “There is something you must remember if you want to state a case in the Council. This applies in particular if you are going to be controversial and if you are going to criticize.” You know, Sir, that one is actually criticizing one’s own people there, because after all, we do not have people on the other side in the Free State. He told the newcomers: “If you want to state a case in that way, you must check your facts very carefully. Make sure that you have all the facts, otherwise you can expect to be given a hard time by the executive.” Then he added with a twinkle in his eye: “The only drawback is that when you investigate a case in depth, you will find that in many instances you do not have a case at all.”

Mr. Speaker, I want to refer briefly to a matter which is not contentious or controversial. Actually it concerns a small subject and small people, pupils, people who are of course not represented in this hon. House. I really appreciate and am very grateful for the fact that it is at present the policy to provide pupils with free school textbooks. However, the fact is that in recent times we have heard in various quarters that this system should be reconsidered. It is my humble but considered opinion that this system should be retained if at all possible. The system is being questioned on the basis of the following considerations: Firstly, it is sometimes branded as a socialist system. Secondly, people say that it is educationally wrong, because not all children appreciate the books which they receive on loan and consequently do not take care of them properly. Furthermore it is said that children whose parents cannot afford to buy the books, may receive free books. Because it is a financial burden on the State which is increasing due to the growing number of pupils, it is not necessary that the children of well-off parents should receive free books.

In spite of the objections the system does have merit. It would be a pity if the present dispensation were to be summarily abandoned. It is not advisable, when it is a matter of the teaching and the education of the young, to consider or judge a case purely in terms of money. I realize that public funds are not unlimited and that heavy demands are being made. These funds in the interest of the young will, however, pay dividends in that many more people will be enabled to contribute to the economy of the country. As far as the system is concerned, if this system is to be abandoned because it has a socialist flavour, then by the same token many other services will be abandoned too. I suppose it is not possible to afford all children equal opportunities in life, but it must be the aim of the authorities as far as possible to afford each child the opportunity to prepare himself for his task in life according to his abilities and his interest, regardless of his parents’ financial ability. Children do not choose their parents, and least of all do they choose them according to their bank balance. I just want to add that parents incur many other expenses as well, for example in regard to school uniforms and sporting equipment. I admit that in many cases it is probably true that books are received, but I want to say, in all respect, that the point is that this system is affording education the opportunity to create among pupils an awareness of the need to look after the property of others and of the State as well. There are various methods whereby the class teacher could promote better care of books. The re-use of books generally entails a saving. If parents buy books, they are stored away and usually forgotten. The supply of books is a very important factor in preventing premature school leaving. Sensitive children sometimes prefer to leave school rather than be singled out as receivers of free books.

If, then, it is true that the children of well-off parents also receive books, let me say that that does not worry me overmuch. If an Anton Rupert’s children receive free books, it will certainly be a drop in the ocean of the tax which he pays.

Finally, I want to plead that if this matter is given consideration, the interests of the child will be given priority. I am aware that a bigger turnover of school books is important to authors and other interested parties, and that is to be understood—one is not unsympathetic towards the financial interests of the agencies involved, but I believe that in this case the interests of the pupil should receive priority.

Mr. Speaker, in the first place it is a very great pleasure and privilege to welcome the hon. member for Welkom to this House and to congratulate him on the fine and appropriate theme he selected for his maiden speech. In the nature of things we believe that a man like that hon. member, a person who has participated in the public life of his own province for many years, will be able to make a very good contribution in this House. I regard it as an exceptional privilege to welcome the hon. member. One cannot but call to mind the referendum of 5 October 1960. The outcome at Welkom was announced when the sun went down. It was the result at Welkom that brought the change in the score of for and against the referendum. Accordingly it is a special privilege for me to welcome the hon. member. I think that for him, too, that makes it something special to be able to represent that constituency in the House of Assembly.

There are certain fundamental points of departure in the policy of the Government that are circumscribed by specific principles. In the first instance they are: the recognition of the heterogeneous composition of the South African population with the right to self-determination of every nation; secondly, an economic system as free as possible within the principles of a free market system; thirdly, the maintenance of the principle of democracy, viz. that the greatest possible degree of participation be provided for every individual in their representative governmental institutions of his own community or nation; and, fourthly, the decentralization of as many governmental functions as possible to homogeneous lower authorities. Basically, this means the national orientation of every constitutional measure affecting the people of South Africa, and in particular the Black man, and therefore also the political ties with the national States of the Black man in the White area, with a real value and content of a system in which the Black community in the White area can exercise meaningful control of its local needs from day to day.

Therefore planning, political and economic, forms the foundation on which we must base our point of departure. The concept of planning implies the creation of order, the creation of a code of conduct in the domestic system in terms of and within the confines of a specific ideal which must be achieved with scare means. When the concept is broadened to include economic planning, it would clearly be necessary to orientate these processes of planning so that full effect could be given to economic principles; viz. in striving to achieve the ideal, the planning should be aimed at the goal which would entail the greatest possible benefit for the communities in question at the lowest economic and social cost. In a process of planning the maximum knowledge must be available so that targets and bottlenecks can be clearly identified in accordance with the realities and the data concerned.

Because objectives reveal community needs, their formulation is the task of the politicians, whereas interim objectives, and particularly targets, are normally identified and formulated by experts. It is desirable to consult those who formulated the ideal of separate development.

If we consult those who formulated the supreme objectives of separate development, we note that it is quite wrong to contend that it was the brainchild of the NP from 1948. As far back as 1911, General Hertzog declared that the solution of our complex problems of a heterogeneous White and Black population was to be found in separate development. In 1911 he said—

In 1912 he said—

As a member of the Imperial War Cabinet, General Smuts had the following to say in a speech in London, in 1917, on the subject: “The White man’s task”—

Therefore this ideal of separation has been formulated by different people and Governments over a long period in order to bring about separation and development in such a way as to make possible meaningful satisfaction for both the White and the separate Black populations with regard to one another. Now we come to 1948. I have before me the NP manifesto on its colour policy, which spells out to us that as far as the policy in respect of the non-White section of the population is concerned, we have only two possible directions in South Africa, namely—

Then follows the conclusion—

In 1956 the Government confirmed its policy in a White Paper. This enabled Dr. Ver-woerd to declare in London in 1960, on the basis of these underlying needs—

That was the supreme objective set over decades, and political and economic planning had to be carried out in accordance with that objective.

That is from the point of view of the Whites. However, let us also take a look at the other side. By accepting a partial self-government in terms of the constitution of the Bantu homelands, the Black leaders and their populations in principle endorsed these objectives of separate political sovereignty and economic interdependence for themselves, too, either implicitly or explicitly. Moreover, the fact that the summit meeting on 22 January 1975 between the homeland leaders and the Prime Minister dealt chiefly with the position of various Black nations in the White territory, at the insistence of the homeland leaders, confirms the political leadership of homeland leaders over all Blacks in South Africa.

On the basis of these pronouncements these principal objectives can be regarded in practical terms as a separation of political power, with self-government in terms of the individual insight of each; the determining of definite geographical borders; that the vast majority should live and work in the territory of their political home; that the more rapid development of the homelands be purposefully planned and carried out; and that a commonwealth of States should arise based on the two principles of sovereign political independence and economic interdependence. As far as political independence is concerned, the policy has already been put into concrete effect in many respects and there is sound understanding with regard to self-government and independence of the national States.

The other leg of the objective, namely economic interdependence, is of cardinal importance in our times and ought to enjoy high priority because it involves peoples’ daily livelihood. It is their bread and butter, their clothes and a roof over their heads. That is why it is a matter of such urgent importance to us to dispose of the consolidation plans. If the final borders have not yet been drawn and the necessary land has not yet been purchased, then the creation of viable States cannot be proceeded with at the necessary tempo.

South Africa is a small country with limited possibilities. It is not physically possible to make funds available for the purchase of land rapidly enough. In recent times the hon. the Prime Minister has introduced powerful machinery to involve the private sector in the development process in the economic sphere. On the other hand, it is still a tremendous problem to expedite land purchases. In the best interests of the national States and of the White farmers involved, land purchases must be expedited. At the prevailing rate of inflation and with the consequent increase in land prices the hon. the Minister of Finance will have to find a way of making the necessary funds available so that consolidation may be disposed of as rapidly as possible. The sooner consolidation can be disposed of, the sooner we shall achieve peace of mind for both parties to the transaction.

After consolidation has been disposed of, it is of the utmost importance that planning for economic viability should continue. With a view to economic development, populations may be regarded both as an object and as a subject for planning, viz. planning must be done for the sake of and for populations in accordance with the principal objectives in South Africa, namely that the greatest possible number of inhabitants of the homelands should be within their own territory. To achieve this, a specific list of priorities must be recognized for practical purposes. The top priority is of course to establish the greatest possible number of people within the homelands on a family basis, and therefore to resettle them from White areas, and to provide them with employment within that territory. By doing this we shall be creating the nucleus of a meaningful community and economic development. While this programme must be carried out with all possible speed in accordance with existing capacity, there are still surplus numbers that necessarily flow out of the territories and give rise to the second highest priority, namely to establish the greatest possible percentage of those numbers within their own political borders, also on a family basis, and to resettle them from the White areas, and to provide them with employment opportunities in nearby White areas on a commuter basis. At a lower priority there is the migrant labourer, who is admitted to the White territory for specific contract periods on a non-family basis. This would be an acceptable basis for population settlement for which provision must be made in an interdependent economic structure.

I should now like to refer to consolidation and compensation to farmers, and this actually brings me back to the budget as such. When I referred to compensation, I referred to payment to farmers for land that has been purchased. To expedite land pur chases, the South African Development Trust paid farmers compensation partly in the form of Government bonds with a specific interest rate. Due to the rate of inflation, the farmers in question encountered many problems when they sought to purchase other land. Due to rising interest rates no bodies could be found that were prepared to discount those Government bonds. I know of only one commercial bank that was prepared to discount the Government bonds, and it would only do so at 70% of the value of the bond. In the meantime, property prices rocketed. Therefore those farmers found themselves in an unenviable position and this made these people very unhappy. We are therefore very grateful for the announcement made by the hon. the Minister in his budget speech that he had agreed with the Landbank to amend the Landbank Act so that the Landbank could accept the bonds as security in land transactions. I wish to convey my sincere thanks to the hon. the Minister for this. The farmers greatly appreciate that concession. However, I want to ask the hon. the Minister to do everything in his power to ensure that the conditions for the acceptance of those consolidation bonds by the Landbank are such that the farmers in question are not again placed in an unfavourable position. Property prices have risen alarmingly. The farmers have already made great sacrifices in the interests of South Africa by having to part with their property. We cannot allow them to have to make further sacrifices. The consolidation also establishes a line of defence for the future of our country and all its people. Therefore it is my plea that we see to it that the uprooted farmers are resettled on a proper basis and not placed in an unequal position. I, too, have dealt with some of those farmers who received consolidation bonds when they sold their land.

At this stage I should like to convey my sincere thanks to the hon. the Deputy Minister of Development and of Land Affairs. When I brought the case of those farmers to his attention and discussed the matter with him at length, the hon. the Deputy Minister listened to and dealt with the representations with the greatest sympathy. I should like to single out this matter in the budget debate because a matter of such considerable importance should not pass unnoticed. I should like to congratulate the hon. the Minister on the fact that against the background of the dwindling gold price and the corrosive effect of inflation, he was able to submit such a painless budget to this House. To submit a budget in this climate which moves within the limits of inflation without increasing pressure on the taxpayer, is truly an achievement. I agree wholeheartedly with the hon. member for Smithfield that this is pre-eminently a budget for the taxpayer. There are a few aspects I could refer to. For example, I wish to make special mention of the rebate on the earnings of married women. This is a measure which encourages higher production, particularly in these times when we have a shortage of manpower. I think that that has been greeted with general enthusiasm.

Another important aspect is the uniform taxation system for White and Black. About three years ago the hon. the Minister announced that the taxation system had to be informed and that parity had to be found between the taxation of Whites and Blacks. In these times, particularly since sales tax has been implemented with such a large measure of success, it is in my opinion very timely to consider whether parity cannot be achieved with regard to income tax rates.

Another important concession, which will mean a great deal to us as politicians in our constituencies, is the tax rebate for people above the age of 70 years. I do not think there is a single hon. member in this House who has not yet encountered the question in his constituency: Why are pensions taxed? There is of course a good answer to that. We have taxpayers who retired before 1973 and older pensioners in their eighties who retired in the late fifties and sixties with a very small pension due to the fact that they had belonged to pension schemes which did not have such a high rate nor such advantageous or favourable provisions as is the case now, and were not even able to belong to a medical fund. For that reason this concession is of tremendous importance. I think that more consideration must be given in future to the old guard in particular, those who will no longer be with us after the following decade. We must introduce a dispensation in which pensioners draw a pension which will afford them a greater leeway and which will enable them to make ends meet more easily. Therefore in the present decade in particular we must pay special attention to those pensioners who are in the last decade of their lives. However difficult it may be, I wonder whether we should not also consider accommodating those people with regard to their medical expenses. Medical expenses are very high nowadays and one can hardly cope without a medical scheme, particularly if one is old and unwell.

Mr. Speaker, while I was listening to the speech made by the hon. member for Amanzimtoti this afternoon I felt that once again this great truth was being confirmed: The more complex the problem, the easier the solution seems to the ignorant. [Interjections.] How easy the solution to all the problems of inflation was for the hon. member for Amanzimtoti.

He did furnish two examples.

What it amounted to was that the only cause for inflation in any country was the calibre of its Minister of Finance. The lower the calibre of the Minister of Finance, the higher the inflation rate, according to the hon. member.

We do have a high inflation rate.

Then I thought: My goodness, what a poor Minister of Finance there must be in countries such as Israel, Argentina and Brazil. The hon. member then went on to compare the rate of inflation in South Africa with that of Taiwan. However, the hon. member lost sight of the real position in Taiwan. There one has an enthusiastic and inspired labour force which lives and works under the predominating realization that one has to do or die, and if you do not do what you are doing well, you are going to die in any case. This is a completely different situation to the one we have in South Africa—and the hon. member for Florida has just indicated it clearly—as far as the standards and difference in approach of the labour force are concerned.

Tell us why this is not the case in this country.

In reply to that question I must point out that one can try, together with the most expert economists on inflation and its problems to explain to these people what inflation is, if they are capable of understanding it.

Yet there is one aspect in regard to which I should like to agree with the hon. member for Amanzimtoti, and on this score I should also like to associate myself with the hon. member for Florida. They spoke about the people whom I should like to call the small rentiers.

I think I should tell you the story of Jan de Vergetene. He is a voter in my constituency and I know him very well. He was a farmer, well known for his ability to work hard, his thriftiness and particularly for his way of life which was a constant endeavour to achieve independence and self-sufficiency, in that it was almost an obsession with him to pay for what he, his children and his wife enjoyed. It was a matter of pride for him to pay for the education of his children—their school fees, their board and lodging and subsequently at university, their university fees. It was for him a great achievement, a source of great joy to pay his income tax every year, because, so he argued, he was a privileged person to be able to pay income tax. He paid for his own medical services gladly. To his church he contributed in a tangible and exemplary fashion. For the cultural activities of his community, he had an open hand and an open heart. But it was all in vain!

Ten years ago this fine person decided to retire. He argued that his wife and he were still young enough to be able to enjoy what they had had to do without in their days of toil and effort. His children had completed their university training and were well-established in their various occupations. In addition, he was able to sell his farm for a very good price, for that time. So thorough was he in everything he undertook that he first, before he settled in the place where he would spend his retirement, went round to all the various towns to establish what the assessment rates were and what the basic tariffs for water and electricity were. After a thorough search he decided to buy himself a house in a small country town, leaving him with enough money so that he would be able to spend his days of rest in pleasant, relaxed circumstances. But that man became entangled in circumstances completely beyond his control. What hit him?

The petrol price. The NP policy.

In 1971 he paid R68 in assessment rates on his plot. In 1981 he paid R326 on that same plot. By the way, it was not a Nationalist municipality. [Interjections.] The basic tariffs for electricity were R2 in 1971. In 1981 they are R12. The basic tariff for his water consumption was R1 in 1971. In 1981 it is R8. [Interjections.] Now we must also remember that we cannot blame the municipality, the local authority for this phenomenal rise in assessment rates, and in water and electricity tariffs. They too were caught up in the vicious cycle of increased expenditure as a result of increased wages, salaries and so on.

And Escom tariffs. [Interjections.]

Now it is necessary to point out that the provincial authority has consented to the assessment rates being reduced by the municipality to the amount of 40% in the case of pensioners. Incidentally, this is a NP authority in the provincial administration who is making this concession. [Interjections.] For this purpose the local authority must obtain the consent of the provincial administration, because the problem is that in many cases the local authority cannot afford to grant a rebate on assessment rates by way of a concession to the pensioner.

In respect of medical expenses as well, this pensioner became the victim in circumstances over which he had no control. This man who was always so proud of paying for everything himself, of being independent, of being self-reliant, is today forced, when he needs medical treatment, to go to the outpatients section of a hospital and spend the whole day there waiting his turn. [Interjections.]

It is for this man, Jan de Vergetene, for whom we are pleading. When we plead for this man, we are not doing so with emotional outbursts, as one could do and as the Opposition would like to do. One does not extract poison from a heartbreak case—and these are heartbreak cases. That is why I feel myself free to plead the cause of these people. Their incomes cannot be increased; they have a fixed income from their investments. Nor do they qualify for any form of assistance from the State. Is it not possible to reduce the income tax of these people by the same percentage as that with which social pensions or salaries are being increased to indicate to these people that they are being given recognition in the whole planning programme? I also wish to request that an investigation be instituted into the possibility of compensating from State coffers the local authorities who have to suffer a loss in assessment rates as a result of a concession to these pensioners.

I also wish to advocate that these people be provided with free medical services. It is heartrending when such a pensioner comes up to one and says: “I do not want anything from you; nor am I asking for anything from the Government. Just tell me that if my health should suffer a serious setback, I will then be entitled to free medical services.”

Consequently I am advocating that these people, these rentiers, should be provided with free medical services, but with a proviso added. I am not requesting that all rentiers should receive free medical services. It is easy to provide that rentiers who receive a fixed income of no more than R400 or R500 per month, for example, should receive free medical services. I am speaking on behalf of those people who played their part in the development of our country, people who throughout their lives tried to be self-reliant and economically independent, and who are now entangled, through circumstances over which they themselves have no control, in a situation in which they have to be virtual beggars in their own home. Those things which he would now like to enjoy in his peaceful old age he cannot now enjoy because he does not have the means. It is my plea that we should give these people a sympathetic hearing, and that we should give them special consideration.

Mr. Speaker, owing to my temperament, and in order to steer clear of the troubled waters of contention, I have decided, on the occasion of my first appearance in this House, to discuss a subject which will in fact serve to set a watch upon my lips. That it is a privilege, and in particular an opportunity and a responsibility to be able to take my seat in this historic and very important legislative Chamber of the Republic South Africa, is to my way of thinking no platitude. In fact, opportunity and responsibility acquire an important and profound dimension in the knowledge and the belief that the same God who controls the destinies of nations, also determines the course of the lives of individuals. In view of this, and with the thought that the injunction given in Scripture to mankind finds in the word “opportunity” the possibility of discharging one’s calling in a responsible way, I wish to suggest that “opportunity” is consequently that God-given possibility to achieve the responsible fulfilment of one’s calling.

The budget which is being discussed and considered in this House at this time is in essence a method of fulfilling a calling. In this budget the Government plans the financial means which it requires to fulfil its calling, in all its diversity, in this country and for its peoples. In particular, provision is also being made in this budget for the cultural injunction, the cultural task of the Government. So we find for example that under the “National Education” Vote, reference is made under Programme 6 in particular to what is being provided for the promotion of culture, with this stated objective—

Under the “Finance” Vote, where the estimates for provincial administrations are contained, we also find what is being planned for the promotion of culture, for the provincial councils are also destined to achieve a cultural task. Owing to the scope of this cultural task, I wish to concentrate on this occasion on what I wish to describe as the traditional aspect of the cultural task. The past has significance for the present and for the future. It was the wise President Paul Kruger who once spoke these golden words: “Take from the past everything which is pure and noble, and build the future on it.” The past of a nation is part of the culture of that nation. The past, the bygone or the recent, were time and again the opportunity for creations requiring the skills and energies of mankind; these are his cultural creations. It tells of the genesis of a nation with its traditions, language, customs, way of life, commodities, education, techniques and achievements, literary works, song and art and so much more—everything which has to do with the forming of a culture of a nation. It is the bearer of its national ethos and identity. Consequently history cannot simply be ignored as though it had no meaning for the present or the future. That is why the past on one’s way to the future should never be overlooked. It is that rich treasure chest of a nation which must be preserved intact in the present so that it may also have meaning for the future. This is done in particular through the preservation of antiquities, the remains from the past, in whatever form and in whatever diversity. This makes museums very important to our people and our country. Antiquities in whatever form do not only have a historic, culture and therefore historical cultural value; they also have educational and tourist value. Although the White civilization of the Transvaal, for example, is only about one and a half centuries old, since the Voortrekkers established themselves there, the history of this area is rich and tangible achievements have been produced over the decades which cannot simply be given over to oblivion. Many have already disappeared. Because of wars, neglect and essential development, much of the importance of the past has already been lost to us.

The Museum Service of the Provincial Administration of the Transvaal, has, with its Advisory Council and with approximately 23 local authorities affiliated to this service, rendered an important service in connection with preservation and restoration during the past decades. The local authorities which I have mentioned have already established museums in each town, which attract a large number of scholars and which are also a tourist attraction, so much so that the number of visitors are already being calculated in thousands. During 1974 the provincial authority of the Transvaal purchased and restored the historic mining town of Pilgrim’s Rest, and here in particular the history and culture of the uitlander fortune-seekers during the last quarter of the previous century were extremely well preserved in tangible form. On the programme of the provincial museum service of the Transvaal there is also the preservation of the unique cultural-historical character of the Water-berg and Marico districts. Then, in particular, there is the development of the former Voortrekker town, Schoemansdal, the most northerly point of civilization and cultural centre of the Voortrekkers between 1859 and 1870, where an ideal opportunity is presented, in exactly the same way as with Pilgrim’s Rest, to preserve the life of the Voortrekkers of that time for posterity in visible form.

Then, too, there is Eurekastad in the vicinity of Barberton. The history of this town, interlinked with the saga of the gold-seekers, reads like a fairy tale. In this regard the anecdote is told of a butcher by the name of Sherwood who left Durban to settle on top of the mountain in this new town. He also built an hotel there. It was well known that he had the ugliest wife in the whole vicinity. She was given the nickname “Queen of Sheba”, and he then named the hotel after his wife, viz. the “Queen of Sheba Hotel”. Unfortunately funds for local authorities, and also for the Transvaal provincial authorities, are limited as far as the execution of this important cultural task which rests on them is concerned. Consequently it is important to take cognizance of the fact that if we are unable to obtain the necessary funds, whether for local authorities or the provincial authorities, with which to continue to render this service, we shall in this connection be waging a fierce struggle between development and transcience. Without sufficient funds the struggle against irrevocability will be in vain. However, we trust that the new National Advisory Committee for Museums will make a great contribution in respect of this aspect of our cultural treasures.

Mr. Speaker, it is a privilege for me to speak after the hon. member for Koedoespoort who has just delivered his maiden speech. It is a particular privilege for me to be able to speak after a man who considers it important to preserve the best of the past for the future. I want to tell him that as a Capetonian and a resident of Stellenbosch, I consider it of great importance that historical buildings as well as historical battlefields, in this case probably more in the North, be preserved so that our children and grand-children can learn about that history.

The level of civilization of a community—and this also follows on from what the previous speaker said—is measured according to the degree in which it cares for and looks after the aged, the poor and its youth. Measured against this, this budget is proof of the fact that the Government is shamelessly neglecting its duties. The budget has failed hopelessly in its primary goal, viz. to ensure the material prosperity of the community both on the short and the long-term. The budget fails to ensure that our people are placed in a position where they can keep body and soul together. Evidence to support this is the unbelievable price increases over the past three to four months, price increases which make it impossible for many people in the country to escape famine and for others to maintain an acceptable standard of living. Whilst we are debating the budget here tonight, there are thousands in South Africa who are experiencing the agony of an empty stomach and who are suffering from hunger. I want to warn the Government that the massive price increases, for instance of bread, are irresponsible and may possibly hold radical political implications. The Government must bear in mind that the White voter at least has the opportunity—and sometime uses it too—of indicating his dissatisfaction by means of the polls, whilst approximately 80% of our population does not have that right and depends upon other methods to give vent to their feelings. [Interjections.] If the Government continues to increase Government controlled consumer prices in an unplanned, irresponsible way, the possibility of active protest is not excluded.

Are you prompting them?

I am issuing a warning that it can happen and asking that we should be prepared for it.

Why do you not tell us how that should be done?

If this is considered to be exaggeration, I must remind hon. members of the fact that the increasing prices have caused the actual quantities of food that were consumed since 1976, to drop.

Where do you get your figures from?

In spite of a larger population, less food was consumed in 1980 than three or four years ago.

Where do you get the information from?

I shall provide the figures. What makes these facts even more alarming, is that the drop in consumption took place during a period of unparalleled prosperity. Statistics from the Department of Agriculture indicate that the per capita intake of maize products, for instance, dropped by 13% from 1970 to 1979.

Now they are eating meat.

It is amazing that the consumption of milk, for instance, has dropped by 33% per capita, a product which was once considered essential in every home, but which is considered a luxury item in many homes today. [Interjections.] It is the statistics of the Department of Agriculture that I am quoting now. During 1980 the price of many types of food increased by no less than 30%.

What type?

The hon. the Deputy Minister is aware of that himself. For instance, the price of meat increased by 52%.

And vegetables?

The price of wheat increased by 18%. [Interjections.]

And vegetables?

I am not arguing about it. The figures that I have are those from the hon. the Deputy Minister’s own department. [Interjections.]

And vegetables?

The price of vegetables increased by 35%, and that of fruit by 19%. The price of milk and milk-products increased by 12%.

And vegetables? [Interjections.]

I have already referred to the price of vegetables. Hon. members may perhaps find it very amusing. When hon. members refer to food prices in this House, mention is often made of the so-called food basket. The former Minister of Agriculture often referred to it.

Do you think the prices are too high?

That hon. member must just give me a chance, please. I should like to quote from an article in the Weekend Post of 15 August 1981—

You read the wrong newspapers.

I quote further—

That is to say here in South Africa—

Therefore, it is not correct to allege that our food prices are necessarily lower than elsewhere.

Are those also the figures of the Department of Agriculture?

Here is the quotation if hon. members do not believe it. It is a quotation from a newspaper that conducted an interview with a South African woman who would not benefit by telling stories that were not true.

Rather quote official figures.

Order!

Hon. members can believe it or not. [Interjections.] Of course, hon. members on that side of the House are not impressed by price increases.

Fat cats.

The higher income groups, in which they fall, spend only a very small percentage of their income on food. For that section of the community for whom food is a primary expense, price increases often mean the difference between their health and famine.

Are you saying that the farmers are getting too little?

What did the hon. the Minister of Finance say about the increase of 40% in the price of brown bread when he was asked what the effect of the increase would be? The hon. the Minister must say now whether he said this or not. He said—

This was the reaction of the hon. the Minister of Finance to an increase of 40% in the price of brown bread.

Where do you get that?

These are the words of a man who has never placed himself in the position of those whom he considers to be mere statistics. All I ask the hon. the Minister is: Are these words an indication of the Government’s disregard for the needs of the people?

You are hypocritical, man.

Order! Which hon. member said “You are hypocritical”.

I did, Sir.

The hon. member must withdraw it.

I withdraw it.

The hon. member for Wynberg may proceed.

Since the last election the price of practically all foodstuffs of which the Government controls the price, has been increased again. I have the list here and I can read it to hon. members if they would like me to.

I would like you to read it.

Now that the hon. the Minister of Agriculture and Fisheries is here, I want to ask him whether he knows…

I have been here all the time.

No, the hon. the Minister was not here earlier on. Does the hon. the Minister know what it costs today to bake a loaf of brown bread?

I want you to read that list. [Interjections.]

The hon. the Minister, whose job it is to know the cost of food in the country, does not even realize what the cost of producing a loaf of brown bread is. If the hon. the Minister does not believe me, allow me to quote from a newspaper which supports his party.

Read the list; don’t quote a newspaper.

The newspaper’s name is Tempo. It is a newspaper that supports the hon. the Minister’s party. The following is said in it—

What does the hon. the Minister say to that? Did he say it or did he not? Does he even know what is happening in his department?

Now he is as quiet as a mouse.

Yes, now he is as quiet as a mouse. He cannot answer that. [Interjections.] He does not know what is going on.

Who says that I am as quiet as a mouse?

Like any other businessman—listen while I am talking to you …

Order! The hon. member is really provoking the other hon. members unnecessarily into reacting.

Sir, what can I do now? The hon. the Minister must learn to hold his tongue. [Interjections.]

†Like any other businessman the farmer must make a profit, otherwise nobody will be in a position to produce food. I say; however, that it is incumbent upon any responsible Government to subsidize basic food requirements and to subsidize them heavily.

To what extent?

Listen to what I am saying and the hon. the Deputy Minister may learn something after all.

†Bread, maize and milk should be subsidized heavily. [Interjections.] It is done by every responsible Government, but this Government provides R250 million for the subsidization of food in this country, and I say it is disgraceful.

What should it be?

I am getting there. Just give me time and stop interrupting me, please.

If one provides for inflation, I believe that that subsidy may well be lower than that of the previous year. Of the total budget only 1,58% is to be spent on food subsidization. One wonders whether that subsidy is not perhaps the lowest that this country has enjoyed over the last five years or so.

And they say that we are a Third World country.

Quiet, fat cat! [Interjections.]

One must bear in mind too that the increased food prices result in more money being collected in the form of general sales tax and this increase in tax may well exceed the additional R24 million provided for subsidization in this budget. I should like to ask the hon. the Minister of Finance to comment later on this remark. If this is so, then it means that rather than having increased the subsidy, the Government has in effect reduced it this year.

It is pointless to provide R2 465 million for the defence of our borders when the war against hunger and poverty is lost inside of our borders. In all seriousness I want to urge the Government to rethink its priorities and, if necessary, to reduce the defence budget by 1% or 2% to be able to use that money to stabilize at least the price of bread and maize products.

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

No, my time has nearly expired.

†Should the subsidy be applied to white bread at all? I believe that in view of the limited funds available very serious consideration should be given to shifting the subsidy away from white bread and perhaps placing it completely on brown bread. I think this should be considered seriously.

The community that is hardest hit by the price spiral is that community which the Government, for ideological reasons, has dumped over the last three to four years in the veld in those parts of the country which are soon to become independent. This last weekend I had the privilege of visiting some of those dumping grounds in the Ciskei. As a White South African and as a farmer I was absolutely sickened by what I saw.

The English language newspapers say the same thing.

I was there myself; I know exactly what I am talking about.

†The camps at Sada, Oxton and Zwe-lindinga which … [Interjections.] If the hon. member mumbles like that I cannot hear what he is saying. [Interjections.] There are only two of three small factories.

The camps which have been erected during the last three to four years have become festering sores of soil erosion, poverty and despair. There is no food there. The veld is denuded. There is no grass left. The bush and firewood has all been destroyed. The only source of income that those people have is the little money that is sent back monthly by contract workers who are lucky enough to find jobs elsewhere. Mr. Speaker, if you ask me—as the hon. the Minister did—how many factories and jobs there are, I would estimate that there are not sufficient jobs to offer an income to 2% or 3%—if that—of the people that have recently been dumped there.

Do you support the Government’s decentralization programme?

You only decentralize misery.

Mr. Speaker, let me tell the hon. the Minister that his decentralization programme—which I will be happy to support if it is going to make any difference for these people—is going to make no difference whatsoever within the next few years. These people need jobs, not in ten years’ time, but now; otherwise they will starve.

In Cape Town?

Mr. Speaker, the hon. member for Wynberg is a stranger in Jerusalem. He came and spoke here tonight about thousands of people in South Africa who were ostensibly starving and on the point of starting a revolution. But how does he explain the influx to South Africa of thousands of people from other States to be fed and clothed here, here where there is ostensibly not enough food for the people? The hon. member for Wynberg made a great fuss about foodstuffs which were ostensibly not being adequately subsidized. Furthermore he complained about bread which was not being adequately subsidized. However, I think that hon. members on the opposite side of this House must state once and for all to what extent they are prepared to subsidize foodstuffs in South Africa. They must state to what extent they are prepared to subsidize bread in South Africa. To the best of my knowledge the subsidy on foodstuffs is at present the highest it has ever been in history.

In some circles reference has been made to this budget as being “South Africa’s siege budget”. Others consider it to be a budget of “guns before butter”, and perhaps not without reason. It is true that defence expenditure has risen theoretically by 30%. Ten years ago scarcely R300 million was allocated to the defence of the Republic. At present the defence estimates are moving towards the R3 000 million mark, R2 637 million to be precise, if one adds the R172 million from the surplus funds. Many reasons may be advanced for this increase in defence expenditure. If one excludes normal cost increases, I do feel that the increased Marxist threat to the Republic is directly related to the increase in defence expenditure. Since this onslaught is in all probability going to intensify, I think that we in South Africa must expect an inevitable rise in defence expenditure, to such an extent that it is definitely going to affect our pockets.

However, I have never gained the impression that the taxpayer in South Africa is unwilling to make financial sacrifices if it affects the defence of his fatherland. But it is a pity that the reason for this increase in defence expenditure is in some circles being linked to the domestic policy of this Government. The day after the budget speech was made, The Cape Times, for example, wrote—

That is correct.

In that case what about Angola, Moçambique and Zimbabwe?

†You are mad.

*You have a screw loose.

Mr.

Speaker, on a point of order: Is the hon. the Deputy Minister entitled to say that another hon. member is mad?

Order!

I withdraw it, Sir.

Surely the increase in defence expenditure is related to the Marxist onslaught on the Republic of South Africa. I want to associate myself with what the hon. member for Malmesbury said here this afternoon. Metaphorically speaking, South Africa is a beleaguered country. Surely it is not true that South Africa is under great pressure because it cannot get on with its neighbours or because it is pursuing a domestic policy with which the rest of the world does not agree. Surely it is true that South Africa is a target area for Soviet imperialism because the Soviet Union knows that world dominance is impossible without the strategic minerals of the Republic. The hon. member for Malmesbury pointed out that even if we were to adopt a system of “one man, one vote” tomorrow, even if the PFP were to come into power tomorrow with all the catastrophic results that would produce, we would still remain a target for Soviet imperialism. I want to go further. Even if a Black Government were to come into power in the Republic tomorrow, South Africa would still remain the target of Soviet imperialism. South Africa will be safeguarded from Soviet expansionism only when a Marxist Government is in power here, White or Black.

There is a Marxist Government in power here.

Since this almost R3 000 million is being allocated to safeguard the Republic from threats from outside, one dare not allow our defensibility to be undermined from within by means of subversive remarks pertaining to the nature of the onslaught on South Africa. That is why I think it is a pity that from time to time voices are heard, from the ranks of the official Opposition as well, to the effect that this Marxist onslaught is not really all that serious and is only being used by the Government as a pretext with which to frighten the voters before or during general elections. [Interjections.] This watering down of the Marxist onslaught in this way also emanates from the ranks of people from whom one would least expect it. Those who in the mid-sixties saw a communist behind every bush and who have in the meantime become adherents of the HNP and associated parties, are also suddenly stating, like their allies in the PFP, that the Marxist onslaught is not really all that serious. It really is strange to see who agrees with what when it suits their politics.

One can still understand that there are voices in political circles saying that this onslaught is not that serious—there are people who would do anything to win a few votes. However, what must particularly be deplored is the fact that even recognized church leaders are creating the impression in the world that the Marxist onslaught is not really all that serious and that we in South Africa must not become unnecessarily hysterical about a possible Marxist take-over.

The Bishop.

Apart from the Bishop now. The hon. the Prime Minister wrote a letter to a N.G. Sendingkerk congregation in which he warned the church leaders that they had to take cognizance of the fact that if a Marxist regime were to take over in South Africa, no church would be tolerated. Rev. King then reacted in 1980 in Gateway, the monthly publication of the St. George’s Cathedral here in Cape Town, as follows: He said that this warning of the Prime Minister’s was harsh, malicious and inaccurate. In this article he appealed for honesty and accuracy when it came to public statements and said we should not become unnecessarily hysterical about a Marxist onslaught in South Africa. He said that he conceded that there were certain things in Marxist ideology which were in conflict with the Bible. In exactly the same way, he said there were a considerable number of things in the system and the ideology of those who were opposed to Marxism, which were also in conflict with the Bible. To him it was, therefore, six of one and half a dozen of the other, the one is just like the other, and consequently one need not become hysterical about a Marxist onslaught; the church will not be all that badly off. According to him religion is merely a “nuisance”, a burden to Marxism, but is nevertheless allowed to continue unimpeded. He says the churches are full from Moscow to Warsaw, from Belgrade to East Berlin.

He is just as stupid as Horace. [Interjections.]

However, what are the facts of the matter? This statement by the church leader definitely does not comply with the norms he himself lays down for public statements, i.e. honesty and accuracy. What are the facts? Despite the fact that religious freedom is written into the constitutions of most Marxist Governments, similarly the right to anti-religious propaganda, which is consequently being applied in practice, with militant atheism as the watchword, has been written into the same constitutions. Surely it is true that in every Marxist Government Karl Marx’s slogan that religion is the opium of the people, still applies. Surely it is also true that in every Marxist Government Karl Marx’s statement that criticism of religion is the prerequisite for all other forms of criticism of society, still applies.

To take Moscow as an example, because it is being used by this church leader to demonstrate that the Church is not all that badly off, I just want to point out that before the 1917 revolution there were 600 churches in that city, which ministered to 1 million people. After the revolution a mere 50 of the 600 churches remained which have to minister to 8 million people. Surely it is true that no church building may be constructed in any new industrial city in the Soviet Union. Yet this church leader says that the Church is flourishing there.

Of the worshippers in that Marxist State 70% to 80% are elderly women, because people between 20 and 50 years of age cannot afford to become involved in religious matters owing to the danger of losing their work or of not finding any work at all. Meanwhile this man says that the Church is doing well. Surely it is true that the Church may function only if it is under the supervision of the Council for Religious Affairs, under the control of an atheist. The Church may function only if it dances to the tune of this atheistic State. If it does not do so, its doors are simply closed.

A report issued by the Keston College in London appeared in this connection. Its title was “Christian prisoners in the USSR” and it contains the names and photographs of people who are being detained in jails, in hospitals for the mentally disturbed and in asylums and concentration camps merely because they practiced religion in a way different to that prescribed by the State. According to estimates the number of these people could be approximately 2 000.

However, let us also come closer to Southern Africa now, here where the Church is ostensibly flourishing under a Marxist régime. Let us examine the situation in Mozambique. There we see that the Church has also deteriorated drastically. Evidence of this are newspaper headlines such as “Godsdiens kwyn in Mosambiek”, “Priesters gedeporteer”, “Kerke word museums”, “Kerke vol NG-lidmate—Frelimo-regering oopgevlek”.

According to Prof. Engelbrecht of the Theological Faculty of the University of Pretoria, the activities against the Church take the following form: In the first place there is an anti-religious propaganda campaign to depict the Church as a fellow-traveller of Capitalism. Church property is being alienated, nationalized and the Church is being cut off from its facilities, while membership of the Church is being hampered in that religious instruction to persons under the age of 18 years is prohibited.

No one denies that there is a strong underground Church in Marxist States, but this has nothing to do with the goodwill of these Marxists Governments. That is why I believe the hon. the Minister was correct when he issued the warning that church leaders must take cognizance of the fact that if a Marxist Government were to take over here in South Africa, their church would most definitely not be tolerated. I think Brig. Dreyer was also on target on occasion of the recent memorial service in memory of the 841 soldiers who have died on the border since 1961, when he said—

I think everyone who is in earnest in respect of religious freedom in South Africa must take cognizance of this, also those who want to decrease the proposed amount of the defence budget, merely for the sake of bread-and-butter-politics.

Given the seriousness of the Marxist threat to the Republic of South Africa, I believe that no one dare try to create the impression any longer that whether it be in the political, economic or religious spheres we shall not be all that badly off under a Marxist régime. I believe that we could pay dearly for such an approach.

Mr. Speaker, allow me in the first place to express my gratitude for the exceptional privilege of being allowed to rise in this House for the first time and make a speech in this place which is so steeped in tradition and history. When one rises here, one feels puny. When one recalls the remarkable personalities who helped to write the history of our beautiful country from this same platform, I want to pay tribute to them this evening, to those who went before us, those about whom the historians can continue to write for many years to come and whose imprints are still discernible in this place. Moreover it is an exceptional privilege to be able to know that we are sitting in the presence of people here who in my opinion are engaged in writing the most important chapter in the history of South Africa.

Allow me to take this opportunity to thank my predecessor—at present the hon. member for Sundays River—for the way in which he represented the Algoa constituency in this House. On an occasion such as this I should have liked to have told hon. members about my constituency, about the beautiful and friendly city from which I come and of the needs of that region, but the hon. the Minister of Finance made certain announcements in his budget speech which captured my imagination. Here I want to refer to the announcement concerning local authorities, the third tier of government with which our people are so closely associated and which meets their basic needs. The exceptional announcement by the hon. the Minister is going to change the whole essence of this tier of government. If we examine the recommendations briefly—other hon. members have referred to this as well—we find that the third tier of government may now tax State-owned properties situated within municipal areas. This right will mean a considerable source of revenue for local authorities, to such an extent that some of our larger cities will have an extra source of revenue, which could vary between R3 million and R10 million, particularly if the Railways and the Post Office buildings are included. However, it is not only the additional revenue as such which will influence this tier of government. It will also do a great deal to improve the standing of this level of government. Although local authorities have in the past been considered to be an independent tier of government, numerous restrictions have for good reasons been placed on the independence of this tier of government by this House as well as by the provincial councils. But the fact remains that the independence of a tier of government is determined by the extent to which it may levy taxes. With this announcement today we may actually say that we have now returned to the old way of doing things. I understand that local authorities were in fact able to levy taxes on State-owned property before 1931. Subsequently it was written into the Constitution that a lower level of government could not tax a higher level. Over the years various commissions of inquiry were appointed to investigate the finances of local government, for it was realized by this House that the financial pressure on local government was increasing, to such an extent that the taxpayer could no longer keep up. The most recent committee to investigate the matter was the Browne Committee, and its report appeared in June 1980. It was sharply criticized, in particular because it took five years to complete the report and because no financial relief was recommended for local government. I want to say in defence of this committee that in my opinion it is the most comprehensive report which has ever been compiled on the activities of local government. This committee did not recommend additional sources of revenue for local government, but what is important is that it focussed the spotlight on focal points in the financial dispensation of local government in South Africa. It gave the hon. the Minister an opportunity to appoint a working committee to analyse the report and to make recommendations. This committee, under chairmanship of Mr. Croeser, Director-General of Finance, did an excellent job of work. I think that local government ought to be very grateful to the hon. the Deputy Minister, who himself played a major part in the activities of this committee. Moreover, hon. members of this House, in particular those from the Transvaal, showed great interest in the Browne report. I am convinced that once this working committee has completed its activities, a new dispensation awaits local government in South Africa. I feel very optimistic about the future of the third tier of government. I hope and trust that with additional sources of revenue local authorities will succeed in bringing assessment rates to a realistic level.

I believe that it is the birthright of every citizen of this country who is prepared to work hard and to regard this country as his only fatherland, to own a small part of it, a small piece of land he can call his own and we must never allow a tax system to stand in the way of his achieving that ideal. Some of our elderly people do not want to become a burden to the State, but prefer to remain on in their own homes, and we shall have to give them our special attention.

It may be said that the smaller places will not benefit much by this announcement, but I must point out that, quite apart from the size of a town, there will always be a police station, a school and possible a magistrate’s office and station buildings as well which can be taxed, and this additional revenue will be of great value to those small places.

While I am on the subject of our small country towns I should like to express my gratitude to the hon. the Minister for his assistance, in the previous financial year, to the smaller country towns in the Cape that were still using diesel fuel to generate their own electricity. The R1,1 million which the hon. the Minister made available helped these people a great deal, but as a result of the new fuel prices they will be compelled to approach the Minister again, and if he were to receive such a request, I know that as usual he will consider it sympathetically.

When we examine ambulance services we find that the 1977 Health Act was applicable in the Cape and that the ambulance services in the Cape were being fully subsidized. I am very gratified to be able to observe that the Act will now be made applicable to other provinces as well.

This brings me to the concession to fire protection services which is a major breakthrough for local authorities. As long ago as 1962 a commission of inquiry was appointed to investigate fire protection services in South Africa. Minimum standards were laid down, but even now, in 1981, many of our services have not yet reached the standards of 1962. Local authorities are rendering these services with very little revenue. When budget time approaches, with all the important services to which attention must be given, it seems that fire protection services always lose out.

The greatest problem facing local government today, is, however, the lack of trained manpower. A great deal is being done on local government level to train staff, but as a result of the salary structure of local authorities, which is linked to their tax revenue resources, local authorities cannot compete with the private sector. Consequently local authorities are actually training people for the private sector. During the past few days I have had the privilege of listening here to the procedure which the Department of Manpower is adopting to improve labour relations and to train people. It was a revelation for me to hear what has already been done in the past and what is still going to be done in future. But I ask myself the question: Is it not possible for local government to become an integral part of this whole effort? I realize that the finances of the Department of Manpower are limited. Consequently I address myself to the hon. the Minister of Finance. Can we not take a look at sales tax? I do not want to ask that local authorities be exempted from sales tax as in the case of the first and second tiers of Government. I do want to ask whether the sales tax which is being paid by local authorities cannot be used for the training of staff in local government. If the hon. the Minister were to agree to that, a refund will have to be made as in the case of provincial council. A fund of this nature can be controlled by the Department of Manpower, the provinces or the local authorities themselves. However, if we could get this far, we could enhance the prestige of local authorities. We could then ask young men and women without hesitation to choose local government as their career. At the same time, however, we shall have to examine the restriction which has been placed on the salary of the chief administrative officer or town clerk. There is no point in getting a brilliant young man to qualify himself for local government if we have to tell him that although he could rise to the rank of town clerk, his salary will be limited.

Finally, I want to thank the hon. the Minister of Finance once again for the acceptance of the principle that Government levels pay each other what they owe each other.

Mr. Speaker, I should like to congratulate the hon. member for Algoa wholeheartedly on his maiden speech. I know he is going to make a very valuable contribution to the deliberations in this House.

†I do not intend spending much time attacking the policy of this Government because this has been done very adequately indeed. What I want to do is to concentrate on the manner in which it has carried out its own policies. I shall be discussing Black housing in general, but using the Eastern Cape to illustrate my argument.

In June the hon. the Deputy Minister of Co-operation and Development addressed a meeting in Port Elizabeth on housing for urban Blacks. At this meeting he accurately described the housing situation as the worst powder-keg on which South Africa has ever sat. What was at stake, he said, was nothing less than the future well-being of our entire economic system. When someone in authority makes a statement like that, one must try to find out whether it is true. Various experts give various figures for the shortfall in Black housing. It would appear to be of the order of 160 000 units. A minimum of 100 000 units are required to be built annually for urban Blacks to cater for population increase and wipe out the backlog by the year 2000. Over the past ten years the State has financed less than 12 000 housing units per annum, that is less than 12% of the total required. It is difficult to find out exactly what this has cost but it could be of the order of R50 million per annum at R4 000 per unit, against R400 million to R500 million at the same rate per unit per annum which was required. The hon. the Deputy Minister commented—and I quote—

This is not money. Is this an adequate effort to put out the fuse which leads to the powder-keg? When hon. members on the opposite side of the House are sitting in old age homes in five to ten years’ time, belatedly making out their postal votes in favour of the PFP, will their children believe that they acted strenuously enough to deal with a situation which puts at stake our entire economic system? R50 million is needed. We will spend R2 800 million on defence this year. Hon. members will notice that I talk of the Government as financing housing. It is very important that the House should realize that the money provided is not expended money in the way that money is allocated for defence. The money supplied for urban Black housing is subject to interest and redemption. It is provided on a similar basis to loans made by building societies. It is purely a financing operation but sometimes at subsidized rates of interest. On no occasion have I attacked the hon. the Deputy Minister. I have addressed myself to his problems. I feel sorry for the poor doctor. He wanders like a lost and clumsy babe in the woods through the tangle of his own department. He plucks away at the threads like a puzzled fisherman trying to undo an overwind. The problem does not lie with the hon. the Deputy Minister or with his subtle superior. The problem lies with the board of directors—in this case the Cabinet—which lays down impossible and brutalizing policies that are quite incapable of execution. A most distressing symptom of the situation has emerged recently. This is the tendency on the part of senior members of the Government to blame their problems on their staff. When the boss starts blaming his problems publicly on his staff, he is committing the ultimate, the most despicable sin of management, whether he is running a factory or a Government department.

That hurts, doesn’t it?

He appoints and discharges those people, he sets the framework in which they work and lays down the policy. If he sheds his responsibility, he should also shed his job.

I have taken pains to move among the staff of the hon. the Minister. There is nothing wrong with them. There are some outstanding people among them. They range through the spectrum of quality to be found in any organization. What is impossible, is the framework in which they must work. There is a chain of command which is confusing, an inadequate delegation of responsibility, and a frustrating and counterproductive relationship with the Department of Community Development, but primarily the task of building houses is an exercise in extravagant futility because of the planning and allocation of financial resources. What is happening in Port Elizabeth is typical of the situation. In 1976 we built 129 houses; in 1977, 1 400; in 1978, 400; and in 1979, 1 800. The only housing developments likely to take place in the next two years will result in the shortage being considerably increased.

I should like to ask the hon. the Minister of Agriculture and Fisheries—from my research he is the only Cabinet Minister who has actually done anything practical—what it would cost if in one year he was asked to plough 3 000 morgen of mealies, the next year 12 000 morgen and the following year nothing at all. This is an exact comparison. One has to build up a team of workmen, buy plant and equipment and establish an overhead, but what sort of utilization is one going to get out of this? When one says that the cost is being increased by 50% or 60% it is no exaggeration because there is no question of its being increased by 10% or 15%.

South Africa stands before a construction job of immense dimensions, a job which must be handled effectively if South Africa is to survive. A construction job of this magnitude cannot be financed on an ad hoc basis. Management must know within reasonable limits what funds it will have available for at least the next five years. I do not care whether we had Mike Roscholt, Wim de Villiers or Anton Rupert to run the East Cape Administration Board. The result would still be a hopeless botch. One cannot run a hotdog store financed on that basis. I can see why Louis Rive threatened to resign and I can understand the bitterness and frustration of senior staff.

Let us take again the situation in Port Elizabeth. Those officials are not stupid. They know what the size of the job is and what finances are required to carry it out. They have estimated that 2 500 houses per year for 11 years are necessary to eliminate the backlog of 14 000 houses and to provide for the natural increase in population. This will cost R20 million per annum, but they do not know from one year to the next whether they are going to have R6 million or R16 million to spend.

The report of the National Manpower Commission refers to the Government’s declared intention to provide equal education for all population groups. Does the Government not realize that there are other things that are total besides the total onslaught? We are dealing here with something that cannot be good in parts. The Government will make 80% of the people of the country ungovernable if they are given equality of education but expected to go home nightly to shacks in ghettos. The Government has identified itself “with the maintenance and furtherance of individual economic freedom and competition by the elimination of unjustified discrimination”. Is it beyond the imagination of that side of the House to realize that this goal without adequate housing, choice of living areas and standards of housing, is a complete contradiction?

Our society’s health, stability and attitudes are closely related to the adequacy of housing and to the possibility of home-ownership. Similarly we can have no acceptance of a free enterprise society if restrictions are placed on some that do not apply to others. What does this mean? It means that someone cannot support or even meaningfully participate in the economy unless he can own a house on which he can raise a bond, compete anywhere in business, own the premises from which it is operated and borrow against the security of those premises. I should like to know how many people in this House have never had a bond? Good heavens, there is not a residential district in South Africa which would be solvent if you put a wall around it tomorrow and said no more bonds will be allowed in that area. There is hardly a small business that does not raise its working capital against the security of its property. Money is not notes, money is credit sensibly borrowed and sensibly given. There is room for private enterprise to play a major role in the supply of houses. A necessary prerequisite for them to do so, is to accept the principle of freehold ownership rights for Blacks in urban areas. Private enterprise can then sensibly and easily assist employees to buy houses and the whole thing will be controlled by the natural law of supply and demand on an ad hoc basis. But now we have an almighty rescue operation to perform. For a start, it requires clear Cabinet directives, massive national financing that commits itself for defined amounts over the next five years plus a very strong statement of intent for the five years following on that. Spending must be planned, massive and initially heavily subsidized. It is a huge bridging operation, a task that can only be achieved by recognizing Black rights to own property. So, in the name of heaven, let us do away with the 99-year leasehold fiction. Who do we think we are fooling? The voters are not that stupid. Everybody knows that the urban Black population which was 7,5 million in 1980 will be somewhere between 18,5 million and 27 million by the turn of the century. What we see is a nation stumbling blindly away from Verwoerdian madness. His measures taken together made a whole policy that had to be changed as a whole policy. I cannot believe that more than a lunatic fringe believed that those policies were anything but a disaster for South Africa. It is nearly as lunatic to believe that one can give equality of education and equality of opportunity in the economy without simultaneously giving the right to Blacks to own their own homes. South Africa is not rich enough to house the nation unless it is done through Black home-ownership. The execution of a scheme like the one I am suggesting will create a gigantic asset in fixed capital …

Order! I think the hon. member must withdraw the word “lunatic”.

I withdraw it, Mr. Speaker.

The execution of a scheme like the one I am suggesting will create a gigantic asset in fixed capital, the development of a large skilled labour resource, a change in the work ethic of millions of citizens and will have an economic multiplying effect which will contribute to stable and sustained growth. Let us allocate to this task the resources it needs in a giant national pump-priming operation. This will lead us permanently away from the unsustainable situation where we talk in terms of doing things for large sections of our population. It can unleash the energy and creative ability of these same people so that they can become full partners in a South Africa which will stand united against the threat of any foreign intervention.

Mr. Speaker, before I come to the hon. member for Walmer I just wish to refer to the speech made by the hon. member for Algoa and to tell him that it was a privilege and a pleasure for me to listen to his speech. Hon. members may recall that my maiden speech also dealt with the sources of revenue of local authorities. That was before Browne. The hon. member has referred to the Browne report. I was not able to bring much influence to bear on that report and I hope that the hon. member will be more successful with his appeal. I hope the hon. the Minister has also listened to him.

†Mr. Speaker, the hon. member for Walmer, when he got up here, started off by saying that he had no intention of attacking the policy of the Government. He said that that had already been adequately done in the debate. My hopes rose at that stage, because I thought we would then get from the Opposition some statement setting out their policy, giving us the alternatives. But then he continued to say that he wanted to attack the way the Government implements its own policy.

He gave you some good advice.

He referred to several local matters, of which I have no first-hand knowledge. Suffice it to say that my advice to him is that, if he wants to lose the ear of the House, he must continue getting up and making speeches in the extravagant language he has used tonight.

He is irrelevant. [Interjections.]

I wish to turn to the hon. the Minister and to congratulate him on a good budget which in my opinion is the right budget, bearing in mind the phase in which the economy finds itself at the moment. The declared purpose of financial policy is to maintain a growth rate of 5% over the next decade while at the same time keeping inflation within reasonable bounds. Along with this, the actual objective is to accommodate the new entrants to the labour market. To be able to do that, sustained economic growth is essential. I think we must also accept that the workers on the market will ask for salaries and wages, and also that these will have to be adjusted and increased periodically. We shall also have to accept that we shall have to work within that framework if we are at all anxious to have a stable and contented labour force.

The Government’s watchword in its entire monetary policy is the concept of “money supply”. If I understand correctly, it is being argued, and rightly, I think, that when the money supply is limited, pressure is brought to bear on interest rates. Interest rates then rise and demand drops because money becomes more expensive. Goods then become too expensive in monetary terms. The consumers then buy less. In this way, it is argued, demand inflation is kept in check.

However, I think there is another side to the picture. Prices are determined by not only demand, but also by supply. Both demand and supply have an effect on prices.

Limiting demand, therefore, is only one aspect of corrective action. The other aspect is increasing the supply. I concede at once that when supply is increased without any regard to productivity, this can only serve to increase the cost-push inflation. The need for a stable and contented labour force immediately rules out the possibility of price and wage freezing, but the problem remains that in this country, productivity is not keeping up with the increased wages. As a result, the inflation rate simply rises even more sharply. The spiral effect of these increased costs on steel or bricks, for example, simply serves to increase the cost of housing. I am afraid that increased interest rates alone cannot limit this demand strongly enough to contain inflation.

The hon. the Minister also referred in his budget speech to his speech of last year and the agreement on the part of the inflation conference in Johannesburg as well as the Economic Advisory Board that structural anti-inflationary measures will have to be taken to find a true solution. The hon. the Minister referred to better training and also to better utilization of the labour force. As far as the latter aspect is concerned, a great deal has been done over the past year or two. Much has also been done by the authorities to motivate the private sector in this connection.

However, the hon. the Minister also spoke about the promotion of more effective competition. I do not think we can make light of the cost-push aspect of inflation. Looking at the inflation factors, I personally do not believe that we really have demand inflation at the moment. For that reason, I believe, the examples of the last few months are actually examples of cost-push inflation. The prices increases, such as those of milk, cheese, butter, bread, or cement, bricks and so forth, are all factors which are concerned with the cost-push side. We believe that serious attention should be given to this. Therefore I want to ask the hon. the Minister whether he would not please take this matter further on a co-ordinated basis.

There are several possible solutions we could suggest. We could consider promoting the informal sector in the market, for example. We could look at the question of standards. We live according to minimum standards which are very far from being minimum standards. When we look at the standards which are laid down for the quality of a road, a cul-de-sac in a new township, for example, we see that they compare with the standard of secondary roads in the USA. The formula of supply and demand, which determines supply, presupposes that the price mechanism is functioning. I believe that our commercial sector still has too many monopolistic tendencies. I think we could also give attention again to the whole philosophy with regard to monopolies. Where at the moment, by way of the Competition Board, we actually await objections, investigate them and then take action, and even then only if an alleged monopolistic tendency is against the public interest, I believe we might consider whether we should not simply enable an objector to take action against the one responsible for the monopolistic tendencies, unless that individual or group can prove that the monopoly is in fact in the public interest. However, I do not want to try to provide real answers. My request to the hon. the Minister is that he should consider appointing a commission, perhaps on the basis of the De Kock Commission, which also involved special interest groups, and which also involved the private sector directly.

On such a commission, I think, one could for example involve the Board of Trade and Industry, the Competition Board, and even the labour situation in its totality. Although trade unions do not actually form part of the price mechanism, they do in a certain sense peg down salaries and wages. The Department of Manpower, the Manpower Board, and especially the private sector itself, can be involved, because I believe that the lack of competition is still found mainly in the products market at the moment. We must specifically involve these big monopolies in such an investigation. Then, when the report appears, they must actually be involved in whatever action is taken. We need co-operation before we can really proceed to action.

Now I wish to discuss another aspect. This is actually the main debate so far this session which more specifically concerns the political aspects. I wish to make the statement that the official Opposition has not yet produced anything constructive with regard to alternatives for the problems we are faced with. They have raised quite a hue and cry about our policy and about the way in which we are implementing our policy, but they have never offered their own policy.

That is not correct.

Mr. Speaker, the hon. member for Port Elizabeth Central just waves his pen around and starts talking. He had better wait a little while, because I am coming to him specifically. He must not get upset now.

In his motion of censure, the hon. the Leader of the Opposition actually said only a few minor things regarding his party’s policy, which he called four basic guidelines for a political solution in South Africa. The first thing he said was that a constitution in South Africa would only work if it were the result of negotiations between members of all the population groups concerned. No one in this House denies that.

You deny it.

No, we do not.

You exclude the Blacks from the President’s Council.

The hon. member for Bryanston seems to have only one idea in his head, and that is that negotiation can only be negotiation if it is conducted according to the PFP’s formula.

No, that is not so.

If we do not accept a national convention, they say we are not conducting negotiations. Surely hon. members of the Opposition cannot allege that because we reject their method, we reject the principle of negotiation. Let us examine the true situation. What are the facts? The hon. member for Bryanston will recall that when the recommendations of the Schlebush Commission were announced, they included a recommendation for the establishment of a Black council to form part of the process of negotiation. Surely that is correct. In the discussions which followed, after the legislation had been passed in this House, precisely in order to get this off the ground so that this interaction between the President’s Council and the Black council could commence, talks were held with Black leaders which had been initiated by the Cabinet.

I think it is also generally known that the Black leaders intimated that they were not interested in proceeding with the Black council in this way, for reasons which they did not spell out, but some of which were clear while others were not. I do not intend to talk about the reasons either. Hon. members will also recall—the hon. member will concede this to me—that at the end of that conference an agreement was reached and a very positive statement was issued, saying that the fact that the Black council has not been accepted did not mean that all parties believed that negotiations should not continue. The principle had been accepted. And negotiations are continuing. They are continuing at a bilateral level and from time to time at a multilateral level. With that I do not mean to say that we have suddenly been released from the need for further action. What I am saying is that it is happening, it is in progress and it is a process. Negotiation is a process.

What about White minority rule?

If the hon. member would only wait a minute, I shall come to him. He is in too much of a hurry.

The second basic guideline—I say this between quotation marks—laid down by the hon. the Leader of the Opposition is the so-called requirement of a common citizenship. Having stated this, he speaks about aspects such as abuse of power, guarding against domination and a possible debate about various constitutional structures, but he still does not give us any substance. He just talks about a principle of common citizenship. He does not tell us whether, within the framework of these constitutional structures, he accepts the possibility of a structural entrenchment of the plurality of our society; i.e., the structural security of the groups who ultimately have to find an answer in the total dispensation. In fact, he does not even talk about that and about the plurality as such. He sometimes mentions the concepts of White, Black and Brown who have to negotiate and who must all have citizenship. The inference one has to draw is that he is saying that this citizenship will actually mean that everyone will be on one voters’ list and will vote for one body, irrespective of plurality and at all levels. I assume hon. members will say that is correct.

It is correct.

The hon. member for Greytown is a new member, but he says that is correct. He is probably one of the first members who has really made a study of their proposals.

Now a question arises. These protective mechanisms which the hon. the Leader of the Opposition talks about, if they are not structural, they are just on paper. Then they are the guarantees and the protective mechanisms of the constitution itself; not of the institution. It is not a constitution which has grown out of society; it is a constitution which has been thought out and has to be implemented. The protection lies in the fact that everyone attending this international convention now undertakes to protect the minority rights of other groups.

Then I want to repeat that hon. members must be fair towards this side of the House. What was the Government’s intention in separating citizenships in the Republic?

The hon. the Prime Minister has spelt it out: White domination. [Interjections.]

The hon. member for Bryanston knows exactly how that discussion went and he also knows that the hon. the Prime Minister spelt it out during that discussion and in fact during his first contribution to the debate that the intention is to create separate sovereignties for separate ethnic groups. In other words, the intention is to find a system within which the power struggle, the conflict, can be defused, so that the struggle for power may be decided. That was the intention in creating separate citizenships.

Are you saying the hon. the Prime Minister was wrong?

No, I am not saying he was wrong. In fact, I am saying he was quite correct in the implementation of this policy. If the hon. member had also listened to the hon. the Prime Minister, he would have heard that he was talking about the creation of the confederation. He was talking about possible common symbols with regard to this confederation, a common loyalty. He was talking about the possibility of accommodating the privileges of nationality as against the outside world. I repeat, we did not devise divided citizenship in order to anger, hurt and alienate other people. It was devised to provide a solution to a political and constitutional struggle. In so far as it has been counter-productive, one must ascertain what was really upsetting these people. I suggest that by looking at joint nationality and the privileges of nationality as against the outside world, one is in fact taking a step in the right direction in removing hurtful factors and restoring what people believe they have lost within the framework of the dispensation which the Government has in mind.

The third point mentioned by the hon. the Leader of the Opposition was the concept of statutory discrimination. He said statutory discrimination must disappear. At the same time, however, he said that these structural inequalities are a matter of regret to us, but we know that not much can be done about them; we understand that. What are these people really concerned about? Are they concerned about the structural backwardness of people, which is after all the essence of the backwardness, or are they concerned about the statutory discrimination? The hon. members must decide for themselves, but it is important that at the same time they should also examine the Government’s policy with regard to statutory discrimination, which has been spelt out on several occasions. In fact, one of the hon. members—I do not know who it was—quoted statements in the debate that were made by the hon. the Minister of Foreign Affairs, I believe, in 1974 and 1975.

The Government also wants to get rid of discrimination, but in an orderly manner. We want to get rid of everything which is unnecessary and hurtful. For the hurtful aspects we must devise alternatives in the structure which will not be hurtful, and the unnecessary aspects must disappear by themselves. The purpose of the continuation of discrimination in a limited sense is precisely that order may be maintained and that community life may flourish without conflict. [Interjections.] Once again, hon. members must listen. We are concerned with the removal of discrimination, but at the same time with the maintenance of order, so that every group may achieve full self-realization in its own area.

Tell us which forms of discrimination are necessary.

Necessary discrimination—I do not want to go into detail now, but I just want to explain this to the hon. member—is the discrimination which, if it were removed from the Statute Book, would cause the system to collapse. There are hon. members on that side of the House who have made speeches about this very question. The hon. member would be well advised to discuss with his own leader what forms of discrimination are necessary in terms of our policy and to uphold the system. However, this does not mean that necessary discrimination is something we have to perpetuate. In so far as it is hurtful, we must find alternatives. Meanwhile, however, we must maintain order and the structure. If hon. members understand that, they will understand that human dignity and decency can also be reconciled with the maintenance of order.

As at Langa?

The fourth point mentioned by the hon. the Leader of the Opposition was the independence of the Bench, which is to be the final arbiter between the government and the individual. The meaning of that, and of his asides to the effect that the present system is causing the Bench to be undermined, seems to be that the hon. member believes that the Bench should actually become the government.

No.

I want to come back to this. He is saying by implication that the government may not pass any legislation which will infringe on the rights of the individual, and in that respect the Bench must be the arbiter.

Quite right.

That is quite right, the hon. member now says, while he first said “No.” The hon. member must listen carefully now. The Bench now becomes the legislator and the implementer. The administration of justice by the Bench now comes between the government and the rights of the individual, because the government no longer has the power—a power which this Parliament has—to make laws as it sees fit, and according to the hon. member’s proposals, it does not even want that power. Or is Parliament still to have that power?

Parliament makes the laws.

The hon. member says that Parliament makes the laws, but surely that is what we have. So what is he complaining about? What the hon. member actually has in mind is that the bill of rights is the basis on which the arbiter must decide, a bill of rights which affects individuals, but which does not affect the interests of society. Then the Bench must step in as arbiter if the rights of individuals in the bill of rights are violated. However, the bill of rights is just a piece of paper which has also been agreed to at that same national convention of theirs may it never be held!

Every one of your laws is just a piece of paper.

It is true that every piece of legislation is a piece of paper, but the extent to which the legislation is accepted by the community turns it into a constitution.

Your laws are accepted by only 10% of the population.

I do not want to devote any more time on that hon. member. The hon. the Leader of the Opposition said that if we developed in a positive way, they would help us. With every positive step taken by this Government, he said, they would throw their weight behind us and help us.

We have proved it over and over again.

However, we must look carefully to see what they are helping us with. Those hon. members attack every single positive step taken by this side of the House, and the vehemence of their attack is directly proportionate to the extent to which it does not agree with their policy. What they will help us to do, therefore, is to carry out their policy. They will not help us to make progress or to bring about development, only to implement their policy. In that connection I could quote many examples, such as the President’s Council and discussions with Black leaders. Because the method they advocate is not accepted by this side of the House, they are not prepared to support the principle which this side of the House accepts. [Interjections.]

I just want to refer briefly to the hon. member for Port Elizabeth Central. He laid down four other requirements, two of which happened to be similar, and his proposals were supposed to provide the final solution. I actually want to dwell on only one of them, and that is the concept of “power sharing”. That hon. member did not really discuss it, because they just mention certain concepts, without saying what they mean or how they will go about matters. The concept of power sharing was devised by the Opposition in this House at a stage when the Progressive Party and later the Progressive Reformist Party still had a policy of one man, one vote in one Parliament, although on a qualified franchise basis for a few of them. What did they do, however? In a plural society, they wanted to throw groups together in one body where the majority would decide. However, they know that when the majority in a group is able to decide for the minority, and the system says that the will of the majority goes, one is not dealing with power sharing, but rather with majority rule.

Minority rule is even worse.

I concede that the Westminster system of government was originally intended to bring about power sharing, but that was in a homogeneous society where it was assumed that individuals had equal chances and equal access to influence, and where it was also assumed that the side on which the voter found himself would change from time to time. However, in a plural community this is not the case.

It does not even work among the Progs.

The reason why I am raising this point is that power sharing, as advocated by those hon. members, has actually paralysed political debate in this country because they have given the wrong connotation to the concept. They do this with many aspects. In a previous debate I referred to something similar, freedom of association. They are paralysing debate as well as development because they misinterpret concepts and then present these misinterpretations as being the concepts themselves. If power sharing implies that discussions are held from time to time and that, precisely as a result of negotiations, decisions about certain aspects have to be taken from time to time between groups that are able to maintain their own identity and position of power vis-à-vis one another, power sharing is in fact meaningful in a plural society, but power sharing in terms of a Westminster definition, or of those hon. members’ definition, can never be meaningful or practicable in any plural society where the political divisions and standpoints are regularly based on ethnic or cultural considerations. Then it is merely a tyranny of the majority, and where one does not have a majority …

What about the tyranny of the minority?

… one runs the risk of causing total instability in the process and of bringing about the total collapse of the entire system which has hitherto been in a process of development.

Mr. Speaker, in rising at this late hour to make my maiden speech I am sure I have the sympathy of the entire House. This is my first opportunity to speak in this House, and I should like to say that it is a privilege for me to be a member of this House and also to represent the Pretoria East constituency in this House.

During the recent election campaign, I was asked a question at a meeting which led me to reflect on my representative function. I was asked: “How do you see your function, for surely the constituency is fairly safe? You are going to become MP. How do you see your task? Are you going to represent your constituency in Parliament, or Parliament in your constituency?” In principle it is not difficult to answer such a question. One can simply say it is she months of the one and half a dozen of the other. As for me, I shall do my best to do justice to both these functions, and hon. members may take me at my word.

It has become traditional for newcomers to say something about their respective constituencies in their first speeches in this House. My constituency formed part of the old Pretoria East constituency. That old Pretoria East constituency was probably the fastest-growing urban area in the entire country. Over the past seven years, one school has been opened every year on average in this constituency. At the time of the redelimitation last year we had approximately 30 000 voters. This is more or less the southern part of the old constituency known as Pretoria East, and I live in its central part. The northern part has undergone a change of name and is now known as Roodeplaat. The former MP for Pretoria East is now the hon. member for Roodeplaat and he lives in the central part of Roodeplaat. So we have not ousted each other; we have helped each other there.

It is also a privilege for me to say something here tonight about my predecessor. For those of us who used to fall in the Pretoria East constituency it is a privilege to say he was our MP. He gave us excellent representation. Matters referred to him—and I can testify to this myself—he handled in an exemplary fashion. When I came here, I noticed that hon. members respected him and that he made important contributions in this House.

My constituency, Pretoria East, is a fairly compact urban one. It consists only of residential areas; there are no industries. The people living there are generally professional people; businessmen, senior civil servants, senior educationists, etc. The constituency has no specific problems, except as far as schools are concerned. The schools cannot keep up with the population growth in that region, but that is something that has to be dealt with at provincial level. Hon. members can see, therefore, that as an MP I do not have many problems. I do not have people coming to me all day with Land Bank or irrigation problems. As an MP, therefore, I shall be able to devote my time to the country’s problems in general, and I hope I shall be able to do this satisfactorily.

In this first speech of mine I wish to refer to the budget which has been submitted to us, and in particular to Vote No. 11. On page 18 of that Vote there are two amounts to be appropriated for the Atomic Energy Board and for uranium enrichment. When one adds up the subtotals, the total amounts are R76 835 000 and R173 400 000 respectively, amounting to approximately R250 million in all. This is a lot of money. Every voter and every hon. member of this House may rightly ask himself whether that expenditure on nuclear technology, nuclear energy, etc., is justified. I cannot deal with the problems of the energy situation in the country in a short maiden speech. I just want to say a few words about it, specifically to explain and to some extent justify this expenditure. After the oil price rise in 1973, many people all over the world—and I am fairly well-informed regarding world literature in this connection—made certain statements about energy policy. Unfortunately, many of the speeches added to the confusion rather than shedding light on the subject. Without wishing to suggest that I could shed much light on the subject in a short speech, I nevertheless hope that it will not add to the confusion.

It may be said without fear of contradiction that energy is one of the most important cornerstones of the development of mankind. The hon. member Dr. Welgemoed referred in his maiden speech to the transport industry and the important role it plays, but one must always remember that no transport will be possible without energy. That is only one example. Our whole society could not exist without energy. The availability of reliable sources of energy is a prerequisite for the maintenance and improvement of civilized standards. I mention this as a commonplace, but as a point of departure.

The position in our country is as follows: We are very fortunate compared with the rest of the world. Only approximately—I am talking in round figures now—one-fifth of our sources of energy is imported, i.e. our liquid fuel, our petroleum. Generally speaking, therefore, South Africa is certainly not experiencing an energy crisis. We are only experiencing a petroleum crisis at the moment. Because this petroleum crisis is very important to us at the moment, we must clearly give top priority to the utilization of possible internal sources of energy to improve our liquid fuel position and to make us as independent as possible in this field. As you know, Mr. Speaker, this is the purpose of the Sasol 2 and 3 projects; this is why people are thinking about ethanol and methanol, the two alcohols produced from coal and plant residues. That is why people are working on the sunflower oil project at Silverton, in the agricultural engineering section. I want to tell you, Sir, that I had an opportunity during the recess to visit the agricultural engineering section. As an engineer, I could talk to these people and I personally believe that that project is very promising, and in the future I shall try to say more about it in this House.

There are still other possibilities for replacing liquid fuel, one of them being hydrogen. In principle, hydrogen is actually present everywhere. As you know, water consists of hydrogen and oxygen. If we could only remove that hydrogen component of water, we would have the best fuel we could hope for. Ordinary hydrogen bums without any pollution and the end product is more water. It is a wonderful fuel from a scientific and engineering point of view. The solutions to this problem may be very close at hand and we may find them in the near future.

South Africa’s total energy consumption doubles about every 14 years, but its electricity component of that energy doubles much more rapidly, about every eight or seven years. In the long term we are faced with a crisis. I have already said that in the short term we have a liquid fuel crisis, but in the long term, over decades, we are faced with a crisis with regard to the generation of electricity. Although we have a considerable amount of coal, when we talk in terms of decades we nevertheless have limited coal resources. The only alternative large-scale source of energy which South Africa has is uranium. Our first two nuclear reactors are under construction at Koeberg, and when these reactors have been completed and start supplying energy to our power network, they will be responsible for approximately 10% of our electricity, and then the contribution of coal will for the first time decline. At the moment, coal provides about 98% of the electricity we generate. However, one cannot base one’s country’s energy programme on nuclear power if one cannot also control the technology on which it is based. It is for this reason that the Atomic Energy Board was established 20 years ago, and this board has done much to enable us to share in the privileges of the wonder of the century, i.e. the atom. The Atomic Energy Board has also been very successful in one important respect, which has received considerable publicity, namely the development of South Africa’s own uranium enrichment process. That process is at present being applied on a commercial scale by the Uranium Enrichment Corporation.

Hon. members probably know that enriched uranium is required in the fuel elements of light water reactors such as those being constructed at Koeberg at the moment. At the moment South Africa is probably one of the few countries which has the technology to enrich uranium, not only in the laboratory, but on a commercial scale as well. I think this in itself is a great achievement.

Any nuclear programme, and specifically in the uranium enrichment programme, is very capital intensive. That is the reason for the very high amounts I referred to earlier on, which are mentioned in the Estimates. The South African nuclear power programme is small in comparison with those of other Western countries. However, as far as the quality of the developments is concerned, I believe that we are second to none.

I wish to conclude this short speech with the statement that the investment which our country is at present making in nuclear technology is a premium to ensure our future independence in the energy field.

Mr. Speaker, it is a special privilege to follow the hon. member for Roodeplaat …

Pretoria East!

Pretoria East. I just wanted to make sure that the hon. member for Roodeplaat was still with us! [Interjections.]

It is a privilege to follow a newcomer who has made a speech of high calibre and thereby shown the House very clearly that he will in future be able to make contributions in his technical scientific sphere which will be of great importance not only for this House but also for the country and its progress. Hon. members on this side of the House have probably been struck by the high quality of the speeches made on this side in this budget debate today, from the very good speech by the hon. member for Malmesbury to the latest speech by one of our new members, viz. the hon. member for Pretoria East. If one compares these speeches with those by hon. members of the official Opposition, and then tries to determine exactly what the official Opposition wanted to try to say to us in this debate and to a very large extent in the censure debate as well, one cannot but believe that they have degenerated into a little official Opposition party which is only concerned with “issues”. They are interested in those vulnerable situations which are perhaps for all people a source of unhappiness or uneasiness, purely for the sake of their publicity value. Nowhere have they made an effort to support this side of the House—which is engaged in a positive programme whereby to solve the problems of this country—or to indicate what they envisage for the future in terms of their policy and whether they are going to be a sound supportive Opposition. I say that they have degenerated into a party of “issues”. The “issues” that interest them make me think of a box of tissues, because they try to attract as many tears as possible instead of seeking solutions for those problems.

I was also amazed to hear today, particularly from senior hon. members on that side, the remark that there is no such thing as imported inflation. The hon. member for Amanzimtoti tried to make a big issue out of that. If a senior member of an Opposition party stands up in this House and delivers such unfounded unscientific statements, he can expect his party, too, to fall into oblivion at some stage. I want to give them the valuable hint that there will have to be more substance to their speeches and allegations if they wish to avoid problems on the road ahead. [Interjections.]

The hon. member for Bryanston came forward with the allegation that not even 10% of the Black people in the Republic support the policy of the Government. On 4 December this year, when Ciskei accepts independence at its own request, more than 50% of all the Blacks in the Republic—one need only look at Bophuthatswana, Transkei and Venda—will at least have endorsed the philosophy of the ruling party, viz. that every nation wants its own country, its own culture and its own tradition, and wishes to cherish and develop it.

I should very much like to refer to a newcomer on the Opposition side who made his maiden speech here about three days ago and who stood up a short time ago and hurled totally unfounded allegations at some of our Ministers. I am referring to the hon. member for Walmer. I think that was extremely arrogant of him. I think it is presumptuous to conduct oneself in this way. I want to issue a very friendly warning to him that if he has any aspirations for the future, even if it be only to move to a different bench, he should be far more careful to get his facts straight.

I want to put a question to the hon. member for Walmer across the floor of this House. Over the past weekend a number of members of the official Opposition paid a visit to the Ciskei. I should very much like to know whether they had any contact with the Chief Minister, Dr. Sebe. I should very much like to know whether they liaised officially in any way with the Ciskeian State which is friendly to us. I should also like to know, with regard to the places they visited, exactly what they did there and what they were engaged in doing.

It happens to be in South Africa.

I think that the electorate will be very interested to know that this “issue-tissue” party, when it gets into difficulties with its visits to Crossroads and Nyanga, within the subsequent few days simply shifts its field of interest to the Transkei, to Dimbaza, in order to go and dredge up another issue there. However I do not find this strange, particularly when I try to determine a direction for myself and try to ascertain a philosophical basis for the way in which the official Opposition thinks, and particularly not if I bear in mind that the hon. member for Johannesburg North, who was the spiritual leader of the Young Turks, of the Reformists, drew up their programme of 14 principles for the PFP. I must say that with his knowledge of tunnel-digging he has continued to figure in the background in an undermining capacity as far as these visits are concerned.

However, I believe that the official Opposition, and the hon. member for Walmer in particular, owe it to us to say how they arranged their visits, where they travelled and what they were doing.

This evening I should very much like to make a few remarks relating to what is probably one of the most important matters raised during the censure debate, and earlier in this debate as well, by both the hon. the Prime Minister and the hon. the Minister of Finance. This is the extremely important aspect of decentralization, decentralization in the sense of a specific aspect of the policy of the Government, decentralization which must be expedited, particularly, too, with reference to areas that have already been decentralized. However, before dealing with that I wish to associate myself with several hon. members who have had high praise for the way in which the hon. the Minister of Finance compiled and presented his budget. It is probably one of the finest budgets in the most difficult circumstances for a long time. In a period of economic revival it is not difficult to draw up a good budget. However, when warning lights begin to flash here and there and when one’s projections for the future clearly indicate that there are certain bottle-necks, it is a tremendous task to draw up a budget capable of serving as a basis for future budgets. However, to introduce a budget in such circumstances which is generally acclaimed by the public at large, the Press and hon. members of this House, is truly a major achievement.

I wish to go so far as to contend that this would not have been possible if the hon. the Minister had not followed a consistent financial policy. We who have listened to him in this House in recent years and have been told by him every year that he was trying to follow a certain principle in his budget, realize that he has shown himself to be a consistent craftsman and also a practical realist as far as his financial policy is concerned. I do not believe one could summarize this year’s budget better than in the words of the hon. the Minister himself in his budget speech, when he said that this was the time to consolidate and to plan. This does not apply to the financial policy only; it also applies to the domestic situation of the Republic at every level. After the hon. the Minister had delivered his budget speech and the hon. member for Yeoville had risen to speak, I could not help finding it rather fun to see how the Opposition spokesmen, with their smooth little hands, slid down the broad chest of the hon. the Minister while, with clichés and clever sayings, they tried to make a good budget look bad. At home over the weekend, I was standing and watching a rock-lizard trying to climb up one of the window panes. He kept slipping down and could not climb up the pane. That reminded me of the hon. member for Yeoville. Figuratively speaking, he tried to do the same thing in his reaction to the speech by the hon. the Minister. The only difference between that hon. member and the rock-lizard—and this is important—is that the rock-lizard did not know he could not, while the hon. member for Yeoville did know he could not. The one does not know he cannot and the other knows he cannot, but the one that knows he cannot, makes as if he knows he can.

If we try to identify the essence of the budget speech and the speech by the hon. the Prime Minister in the censure debate, and if we consider what is on the table for South Africa as regards consolidation and planning, then there are three beacons which we shall have to use at all times in the future as regards global policy. Firstly, there is the envisaged South African Development Bank, an action which has enjoyed a tremendous amount of attention in the Press and in discussions in financial institutions, and about which—and I am very grateful for this—a great deal has been said in recent weeks, including informative statements from the Government. In the second place, the Small Business Development Corporation, and, in the third place, the decentralization policy of the Government. These three aspects really form the foundation for consolidation and for the planning of the implementation and realization of those policies. We have now reached a point at which we have no hesitation in moving forward within these beacons.

I just wish to make a few remarks about one of these aspects, viz. in connection with the expedited decentralization policy of the Government, because it is of cardinal importance. In this regard I refer to the announcement by the hon. the Minister. I also have before me the Hansard in which the hon. the Prime Minister devoted much of his speech to spelling out very clearly exactly what the Government envisages in this regard. It was gratifying to hear that the envisaged Southern African Development Bank will begin to do business as early as April 1982. It is of the utmost importance that we should understand that this bank, as an instrument of development in the framework of the hon. the Prime Minister’s concept of a constellation of States, is nothing but an instrument for development aid to economic regions on the sub-continent. This is very clearly outlined in the speech by the hon. the Prime Minister. Now for the first time development aid will be meaningfully consolidated by the intervention of the Government.

I wish to say that it will be a happy day when all the members of the Southern African Customs Union have been brought into the picture to share in the economic benefits of a geographically distributed real growth pattern throughout Southern Africa. The Government is prepared to budget an amount of R17 million for this purpose as an initial subscription, and if the member countries—and this is of cardinal importance—as well as the private sector, not only domestically but also abroad, are prepared to help build this institution, history will show that the envisaged Southern African Development Bank will have been one of the turning points in the history of South Africa as regards its economic growth and prosperity. I now wish to address myself to the official Opposition and I say that I hope and trust that with the resources at their disposal they will see an opportunity in the development of the Southern African Development Bank—and I address myself to the hon. member for Walmer in particular—to make a positive contribution so that everyone can share in the economic growth and prosperity of South Africa.

I wish to remind this House that it was the hon. the Leader of the Opposition who undertook to play a constructive role where possible where the issue was the prosperity of everyone in South Africa. The hon. member for Randburg pointed out that that should not only be so when it was a case of something which the official Opposition contemplated and advocated, but also when it was a positive matter put forward and developed by the Government. Then at least they should play the role of a loyal Opposition. They now have a better opportunity than ever before to honour that undertaking.

There is no formal formula for the solution of the country’s problems if it is not based on a healthy economic foundation. When we consider the speech by the hon. the Prime Minister during the censure debate and the budget speech by the hon. the Minister of Finance, it is clear to me that the Government is now determined to prepare the country economically for the implementation of its constellation plan. To succeed in this preparation and achieve the goal set, the Government will have to breathe life into dead areas—if I may put it like that—or, to put it more accurately, should utilize economic stimuli where necessary. One can call it decentralization or a total development plan; it remains the same thing. Particularly since we are now speaking in terms of economic goals, planning and consolidation, I believe it is important that we should also take cognizance of the fact that these things are taking place within the framework of our ethnic situation in South Africa, and this becomes very complicated when growth takes place at isolated points and is not decentralized to points more widely distributed than a few core growth points.