It is my privilege to announce that the House of Assembly is today honoured by the presence of Their Excellencies Khosikhulu P. R. Mphephu, President of the Republic of Venda, and Mrs. Mphephu. On behalf of the members of the House of Assembly I wish to welcome Your Excellencies most sincerely to our Parliament. May this visit contribute to the further promotion of good relations between the Parliaments of our two countries.

Hear, hear!

FIRST REPORT OF SELECT COMMITTEE ON PUBLIC ACCOUNTS (ON UNAUTHORIZED EXPENDITURE)

as Chairman, presented the First Report of the Select Committee on Public Accounts (on Unauthorized Expenditure), as follows:

Mr. Speaker, as regards the business of the House for next week, I wish to inform hon. members that the State Administration and Statistics as well as the Education and Training Votes will be discussed on Monday, 7 September. The Internal Affairs Vote will come up for discussion on Tuesday, 8 September and be continued on Wednesday, 9 September, while the Transport Vote will be discussed on Friday, 11 September. If time permits, the House will also continue to deal with the legislation on the Order Paper.

Mr. Speaker, I move—

Mr. Speaker, the Post Office, is the artery through which the lifeblood of the economy flows. It keeps the heart of South Africa pumping and supplies its brain with the vital and necessary contacts and information without which neither the business world nor the arms of the Government could function. A clotting or stoppage of the flow can render vital limbs immobile with crippling effect. It is therefore our function to keep this patient of ours healthy and sound. Once a year it comes to us for an annual check up to enable us to make a critical analysis of it, assess its performance and give it a prescription for the year ahead.

This year, however, because of the general election, we were obliged to carry out a preliminary examination. Nevertheless, I think we examined the patient thoroughly but were only in a position to give it a prescription up to September of this year. Where it is presenting itself for examination today, we are obliged to rely on the same record as contained in the annual report for 1979-’80. It is on that record that we can now compare its performance to date and set out its programme for the next ensuing six months so as to ensure that it is able to cope with the physical demands made upon it and make it stable enough to cope with its financial needs. We must therefore ensure that the money we are to provide will be spent wisely and prudently in keeping it healthy so as to enable it to give of its best.

It is not surprising, therefore, that this is—as I said last night—a mark-time or half-time budget. However, we do welcome the fact that there are no further tariff increases and that the substantial increases provided with effect from 1 February 1980 will carry us through. I can only hope, Sir, that this is not a keep quiet now but pay later situation. Although the economy is slowing down now, the growth rate for the past year was 5% on average. The economy was buoyant, there was cash galore and so the profits made by the Post Office through its various arms must have benefited from the increased turnover and volume of business that resulted in pursuance of such buoyant economy. The hon. the Minister of Finance is on record as saying that the real economic activity rose sharply in the course of 1980, with increases of 8,5% in real private consumption spending and 24,5% in real private fixed investments, and a growth rate of no less than 8% in the real gross domestic product.

Although it is anticipated that the growth rate will slow down to between 2% and 3% in the following 12 months, nevertheless the rate in itself, although much lower, should be sufficient to generate enough operating surplus into the coffers of the Post Office to enable it to withhold further increases to those made on 1 February 1980 and to maintain itself safely through to the next fiscal year.

Now I want to turn to the budget. In the light of the background which I have just sketched, we want to examine the affairs of this department that has now reached its 12th year as an independent viable body in terms of the Wiehahn Commission’s report. The hon. the Minister has been active in his department and he has paid many visits to various areas. We wish him strength in the task that lies ahead of him.

We pay our tribute to Mr. H. O. Bester, the Postmaster-General, Mr. Raath and the senior staff for the magnificent job they have done. We pay particular tribute to Mr. Bester who stands in the giant shadow cast by his predecessor, Mr. Rive. I should like particularly to convey my personal thanks to the staff, especially those in Johannesburg where they have received numerous applications from people about their telephones. They have shown nothing but unfailing courtesy and on behalf of the public there we thank them.

Looking at the finances, and particularly those of the 1979-’80 financial year, I want to point out that the Postmaster-General refers to unequalled growth in virtually all fields of the department’s activities. Let us have a look at the financial standing of the Post Office. In February 1981 the revenue was 3,9% or R43 million more than had been estimated. The operating expenditure was 1,5% or R14 million more than had been estimated. This left a surplus of R29 million or 2,4%. Now the results show the following: The revenue is R35 million higher, the operating expenditure is R12 million higher, the capital expenditure is R19 million lower and this leaves us R42 million to the good. The total operating surplus after loan redemption and increase in standard stock capital is R110 million. This, I think, is clear proof that the finances are healthy enough not to justify any tariff increase.

Let me turn to the question of subsidy. We note that the loss carried by the postal services has increased by R51,1 million to R84 million. This item deserves the attention of the House. The Postmaster-General is on record as stating—

The hon. the Minister referred to this matter yesterday and said that there should be a gradual adjustment in the tariffs for services operating at a loss in order to limit the subsidy to 10%.

I want to submit that should he take such a step, it would indeed be a pity; in fact, it would be wrong to do so. Furthermore, this should not be the policy of his department as it would be detrimental to the hundreds of thousands of people who use the postal services and it would deal a crippling blow to those organizations who rely almost entirely for their business on the Post Office. Here I am thinking particularly of mail order houses.

We have discussed before the question of the subsidy to the United States Post Office. There a different situation obtains because they are not dependent for any revenue upon telecommunications services while we are. We can utilize the profits made by the telephone department to subsidize or make good any loss on postal services. In addition, the electronic devices which are being installed will enable the Post Office to function more easily and to operate with fewer staff. Other modem equipment used for the transmission of information such as Teletex and Videotex, may well result in a decrease in the use of postal services. What are we talking about? We are talking about a subsidy in this budget of R100,3 million in respect of losses, on the postal services, the money transfer section and Gentex. If we applied the 10% formula as suggested by the hon. the Minister, we would have to find another R76,7 million from increased tariffs on these services. If the postage on one letter is increased by one cent, this brings in approximately R15 million. We would therefore have to add another 4 cents to the postage of each letter to meet the loss on these services alone. I do not think that we can do this to the economy of South Africa.

In 1979 the surplus on telephone services, after deduction of expenditure, was R115,7 million. In February 1981 it was R182,8 million, and now we see it is estimated at R155 million. I submit that that is a substantial figure. As I have already mentioned, this is a viable department and we should not change our policy.

Turning now to the telephone department which is our biggest moneyspinner, the Postmaster-General’s report referred to a record number of 206 070 additional telephones being connected to the network. According to information given on 9 February 1981 the number of applications pending was, in fact, 120 974. In answer to a question I put to the hon. the Minister in August this year, I was told that as at 30 June 1981 the number of applications for telephones outstanding was 148 654. In Cape Town alone the number of applications increased from 16 000 in February to 21 399 as at the end of June. In Durban the number of applications increased from 12 000 to 16 164 within four months. There are just as many applications for telephones outstanding in Soweto as there are in Durban, namely 16 821. At the annual general meeting of industries and trades held on 30 April in Benrose, the Postmaster-General spoke about 270 584 telephones having being installed. This is obviously a sign of the increasing expansion of the economy and the need for telephones and I believe that it should be this department’s number one priority to see that the backlog of applications for telephones is dealt with as expeditiously as possible because not only is this service the biggest money-spinner but is of vital concern to both the individual and the business world. However, the hon. the Minister was pleased to take the 3 millionth telephone installed into service, on which we congratulate him and trust that he will now be able to do something positive. Indeed, I want to ask him what he intends doing about the waiting list, how he intends tackling it and on what basis he is going to give priority to outstanding applications.

One commends the department for the two Operations Soweto. In this area there are poor communications and also poor police protection and business there requires a new impetus and thrust. I trust, therefore, that the hon. the Minister will consider another Operation Soweto in order to deal with the applications for telephones expeditiously.

Whilst I commend the department for the Protea and Disa telephones, I must point out that there are problems. People complain that they applied some time ago and are still waiting for telephones. On the other hand they also complain that there is interference with the telephones; for instance, that there are crossed lines and one has to wait a long time to get the dialling tone. I believe, therefore, that we will have to examine the question of the functioning of telephones so as to meet the various complaints.

This brings me to the question of telephone interference by way of tapping, and in this regard I want to refer to section 118A of the Post Office Act. I refer, of course, to the out of court settlement with two senior officials of the HNP who sued the hon. the Prime Minister and the Minister of Posts and Telecommunications for putting illegal security taps on their office telephones. I understand that the costs payable in regard to this court case were estimated at between R30 000 and R50 000 and I should like to hear from the hon. the Minister whether he is going to pay this amount or whether he expects the taxpayers to foot the bill. I should also like to know who gave authority for the tapping of the telephones of Louis Stofberg, the general secretary, and Beaumont Schoeman, the editor of Die Afrikaner.

Are you their attorney?

Yes, I am their attorney.

†These gentlemen each received R10 000 damages plus costs.

Where did you get that from?

That appeared in newspaper reports.

Well, then, tell us what happened.

We are giving the hon. the Minister an opportunity to put this right. The hon. the Minister must tell the House why he did not see the case through. Why did he reach an out of court settlement and why did he leave the public under the impression in coming to a settlement that in fact he was not able to proceed to the final outcome of the case? Would the hon. the Minister please tell us what the costs are, where the money will come from and whether he himself will pay it? Obviously, the plaintiffs relied upon the disclosure of certain evidence given by one McGiven. He said that the documents showed that BOSS, as it was then, had monitored the activities of opposition political parties. The report of the Acting Advocate-General, Mr. Justice Van der Walt, dated 22 April 1980 and tabled in this Parliament, contains the following (paragraph 4.1)—

An extension was, however, granted for a further year until 16 February 1981. The Acting Advocate-General went on to say (paragraph 7.1)—

The Advocate-General then set out how section 118A(2)(b) should be read in conjunction with section 118A(5) of the Post Office Act. The important fact is that the relevant section expressly requires that the functionary must exercise an independent discretion on the basis of the reasons placed before him. The Advocate-General found, however, that the functionary had not, in fact, exercised the discretion vested in him by section 118A and had therefore not functioned as a second control as envisaged by that section of the legislation. The Advocate-General said that if no reasons had been placed before him, his discretion would merely have been ostensible discretion and, in fact, would not have been exercised lawfully and would therefore be invalid. It was only upon the Advocate-General’s interpretation being conveyed to the official concerned that the interception of telephone calls was immediately stopped.

The other mistake, which was fortuitous, was that in the 1979-’80 Pretoria telephone directory, which appeared during the second half of 1979, the address of the Die Afrikaner, and the relevant telephone numbers, remained unchanged, although the address of the HNP had been changed to that of Die Afrikaner with the same telephone number, i.e. 29076. That indicates to me that improper care was exercised, even though an extension of time was granted.

Do you have a brief from them?

Paragraphs 11.0, 11.1 and 11.3 of the report state, and this is important—

The Advocate-General then recommended that the section should be amended so that interception can take place only in consultation with the Minister of Posts and Telecommunications and that the word “functionary” should be defined so as to include the Postmaster-General and his deputy or deputies only. As the Advocate-General pointed out, a Minister who is a member of the State Security Council established in terms of section 4, can order an interception of communications without the knowledge of the Minister who is responsible for the department. Furthermore, it was pointed out that the functionary should always be of an equal or a higher grade than the applicant and that the person designated as an applicant by the State Security Council should have the standing of a head of department or his deputy. These recommendations were, according to that report, to be forwarded to the commission of inquiry into security legislation for consideration of these aspects, and I should like to know whether this has been done.

I should also like to refer to the Hansard in which the hon. the Prime Minister dealt with this matter and stated specifically that such action should have judicial approval. I quote what he said in Hansard (volume 85, col. 244)—

Although we in the Opposition are dead against the interception of telephone calls or postal items because we consider this to be an act that infringes the basic privacy of an individual, we do accept that there can be occasions when the interests of the State could be affected, and then priority must be given to speedy and efficient action.

Let us take, however, the word “judicially” as mentioned by the hon. the Prime Minister. It is our view that in the amendment to the law which should take place, it should be stated that any application for the interception of telephone calls or post should be done judicially. The head of a department should go to the Minister concerned and that Minister should go to the hon. the Minister of Posts and Telecommunications who must then make an application to a Judge-in-Chambers. The evidence must be heard in camera. The applicant must motivate the reasons and the judge, having considered the matter, can then decide whether or not the application should be granted, for how long it should be granted and what conditions should be attached to the granting of such an application. All of this has taken place over a long period of time and I should like to know what steps the hon. the Minister of Posts and Telecommunications, who is in charge of this department, has taken to amend the law as suggested by the Acting Advocate-General. When can we expect an amendment to the law on this basis? Furthermore, while we are dealing with this, perhaps the hon. the Minister will give us an assurance that no hon. member of Parliament or any political party in South Africa is having their telephones tapped and that neither is the mail of any hon. member of the House or of any political party being intercepted. We should like that assurance from the hon. the Minister during this debate.

I should like to turn now to the question of staff. The critical staff shortage has brought the Post Office’s telecommunications service to quote “the edge of chaos”. Those are not my words; those words come from the S.A. Telecommunications Association. The association says the situation is so bad that unless urgent and drastic steps are taken to improve salaries and fringe benefits such as housing subsidies, the Post Office will not succeed in averting total inefficiency in telecommunications services. The Post Office’s competitive position is seriously weakening so that it cannot even compete with other Government departments—not to mention the private sector—when it comes to attracting and retaining staff. On the contrary, the association says, the exodus of highly trained personnel with years of experience is increasing daily.

I understand that during May 1981 the Post Office appointed a special six man committee under the Deputy Postmaster-General Mr. William Ridgard. Mr. Ridgard is on record as saying—

We would, of course, like to know more about that—

And we would like the hon. the Minister to tell us what success he has had with overseas recruiting—

Mr. Ridgard also pointed out that a major problem was a shortage of people with the right qualifications to enter telecommunications services and the solution would come when more and more Blacks are trained in this direction. He said—

This must be done against the background of 17 204 full-time officials who resigned from the Post Office during the 1979-’80 financial year, and again the background of a shortage of 1 440 trained technicians, draughtsmen, electricians and electronic engineers of all population groups on the Witwatersrand.

I hope the hon. member for Sunnyside, who is usually quick to follow me, will not object to the employment of Blacks as he objected to the employment of Blacks as air-hostesses.

What is the date, please?

Without this, we will cripple the services.

What is the date of the report?

This apparently does not completely satisfy the hon. member for Sunnyside, so when he jumps up to follow me just now, I should like him to tell the House why there is no critical shortage, why he gets excited and says that there is no critical shortage when everybody says there is. I should also like him to tell us why a subcommittee has been appointed and why the association has made remarks about it. He must also tell us why the hon. the Minister in his speech only yesterday, did not tell us that there was a decrease of 0,1% in the number of full-time staff.

What is the date of the report?

Whilst I accept that as a result of the staff position there has been a general breakdown in administration in many sectors of the Public Service today, including the Department of Justice, the magistrates’ courts, the Office of the Receiver of Revenue etc., I nevertheless feel that we are dealing here with a viable arm of the Public Service, one not dependent on the Commission for Administration. Whilst the hon. the Minister will and does take the kudos for the wonderful things that have happened in the Post Office, particularly on the technological side where there were vast improvements, he must also take the blame for the things that have gone wrong. He must take the blame for the lack of proper planning that has led to a crisis situation in regard to staff. Therefore he must eliminate the gap that exists between the percentage of White staff and those of the Coloureds, Indians and Blacks.

I want to conclude by praising the staff for their achievements in every sphere of the Post Office’s activities from top to bottom. They very often have to work under difficult circumstances as they are short staffed in various departments.

I move as an amendment—

1. (1) to attract and to concentrate on the recruitment of staff, priority being given to technical and professionally trained personnel; and
2. (2) to expedite the installation of telephones in order to eliminate the substantial backlog of outstanding applications.”.

Mr. Speaker, I am pleased to associate myself with the hon. member for Hillbrow—this may sound strange—since he expressed his gratitude towards the hon. the Minister and the department yesterday for a very brilliant, excellent budget. It is indeed brilliant. It is excellent. I also want to associate myself with him for the fact that he made an exception—I personally want to thank him very much for doing so this year—of thanking and paying tribute to the hon. the Minister and the staff of the Post Office for what they have achieved in South Africa in the sphere of telephone services, etc.

This budget definitely is a brilliant one. The Cape Times carried a full report on it without passing any comment on it, and this speaks volumes. Die Burger also carried a report on it and paid tribute in its editorial to the hon. the Minister and the officials of the department. In fact, everyone in South Africa shares in their joy and gratitude that, despite the difficult conditions which this department has been experiencing for many years, they have achieved as much as they have in fact done. On behalf of this side of the House—and I think I am also doing so on behalf of the Opposition—I should also like to express my gratitude towards the hon. the Minister and the Post Office for the fact that we were able to visit a post office and a factory too on 21 August.

While I am on the subject, I should like to ask the hon. the Minister if possible, to have a television programme made as soon as possible on the postal sorting machine and such of the Post Office. It is worthwhile to see what the staff of the Post Office are achieving and the speed at which this machine works. Millions of postal articles are sorted by this machine, and the staff that work with it, are extremely competent and accurate. It also requires technical knowledge in order to be able to do so much good work in the Post Office. Therefore I also want to pay tribute to the Post Office for the services that it renders in South Africa. In peace time and in war, day and night, in winter and summer, the Post Office provides a national and international service which in my opinion, has never yet been properly appreciated in South Africa. The matter is very clearly set out in an article in Posts and Telecommunications, which I have at hand here. I want to recommend all hon. members to read this article. It is a brilliant magazine. It is also said in this brilliant article that it is considered in developing countries that 50% of the national product is produced by those who deal with information. Now my question is: Who handles more information and provides more facilities for the distribution of information than the Post Office does? In South Africa a brilliant service is being rendered by the Post Office to 24 million people, people who are spread over a territory larger than France, Germany, Italy and Portugal put together. This service has to be rendered under difficult circumstances. Nevertheless it is a brilliant service, for which we say thank you very much. Now we can ask ourselves what the Post Office is actually doing and in which spheres it is active. I am mentioning just a few of the categories of service that are rendered by the Post Office. We only have to think of the postal service, the telephone service, the radio service, the television service, and many more besides.

There is one aspect to which I want to refer in particular today. It is the system of telephone conferences and video conferences for which facilities are now being made available. I do not think we have a proper realization of what the extent and the importance of this service is going to be to us in South Africa in the future. Experiments are already being carried out in this regard in South Africa. Once again, this is a sphere in which the staff of the Post Office has proved what brilliant service can be rendered. I shall refer to this again later.

Now I first want to talk about the telephone services of the Post Office. It took 50 years before there were 1 million telephones in operation in the country. Eleven years later the number of telephones was 2 million, and a mere six years later there were 3 million telephones in operation. In the international sphere too, the Post Office has made brilliant achievements. The trivial criticism which the hon. member for Hillbrow raised, was constructive in general. However, I shall refer to this again during the course of my speech. I should like to touch on a matter where the hon. member really missed the point. There are 199 countries in the world to which we can dial at the moment. Thirty-five of these can be dialled direct. It is very easy for one to dial McHenry now. Just one, two, three, and one reaches him. [Interjections.]

I now come back once again to the telephone and video conference facilities. At the moment, six participants on each side can participate in such a conference between Pretoria and Cape Town. Now I should like to ask the hon. the Minister how long it will be before all the major cities in South Africa can be included in this service. I should also like to know when we will be able to utilize this facility on an international basis. I do not know if we fully realize what this facility means to South Africa. For instance, we can think of how it can be utilized by businessmen. It is very easy for six businessmen today, for instance—in fact they have no other choice—to pay a sum of R228 each in order to fly from Johannesburg to Cape Town simply to spend one day here and then to fly back home again. With this new service, the same businessmen can now settle all their business within an hour or an hour and a half. It is a reliable service. No one can listen in. It is private and confidential. This is only one of the spheres in which the Post Office is doing a tremendous amount for the businessmen of South Africa, and at the same time of course, for the economy of the country as well.

I can think of another way in which this facility can be put to very good use. For instance, people in Cape Town can very easily communicate with their relatives in Pretoria in this way. It could even save them a week or two of their holidays and save on travelling expenses. Then there is also the work which the Government departments have to carry out during Parliamentary sessions. By making use of this facility, the staff of the Government departments can now remain behind in Pretoria, and it is no longer necessary for them to travel to Cape Town every few months for the duration of a Parliamentary session. Conferences and discussions can be held by means of this service on a daily basis, or whenever necessary, between the heads of Government departments and their Ministers, as well as between members of staff of departments here and elsewhere. Such conferences and discussions can even, if necessary, take place between members of the Government and members of the Opposition. It is a facility that can be used by study groups too and which could even be put to good use in education. It really is a revolutionary service, and we do not yet have a proper conception of its total extent.

Recently we spoke about the promotion of tourism in South Africa. In that sphere too, a tremendous amount can be achieved by means of this new system. It can contribute towards promoting tourism and in the process advertising South Africa on a national and international basis. With regard to the security of our country too, a great deal can be accomplished by means of this facility. That is why I want to say today that we are delighted that the Post Office and its staff have made such tremendous progress.

The hon. member for Hillbrow spoke about the staff of the Post Office. I just want to refer the hon. member to page 75 of the latest annual report by the Post Office. The entire question of staff is dealt with extensively there. In actual fact, I want to convey our gratitude once again today to the Postmaster-General and the top management of the Post Office, as well as to the hon. the Minister, for this brilliant and excellent annual report that we have received. We have also referred to this during the session earlier this year. This brilliant annual report provides us with so much information that it is actually quite amazing. There is almost too much to be used. However, it is very useful to all of us.

If we look at the staff that is in the service of the Post Office, we see that on 30 June 1981 there were 43 290 Whites, i.e. 57% of the total number of staff. The people of colour amounted to 32 702, i.e. 43% of the total of 75 942. If one thinks of the extent of the activities of the Post Office and the problem of retaining staff, I think we must take note of the problems and offer suggestions for helping to solve those problems. However, we must not adopt a very critical attitude in this regard.

Let us look at the business world. I am not going to say that they do not deserve criticism, but nor do I want to berate them, if they do in fact deserve it. But the private sector is in fact that sector which draws and lures the people away from the Post Office, but I do not want to be too hard on them. However, when they start murdering the Post Office and draw people away to such an extent that this pillar of our infrastructure is in danger of collapsing, then I say: “Whoa, no further.” The State has a responsibility with regard to the training of our people in South Africa. One can mention a whole series of training institutions, for instance universities, primary and high schools, technikons, Manpower Utilization, technical institutes and colleges. Money is voted for this purpose and the people are being trained. The State does not train these people for the Post Office, the Railways and the various Government departments alone, but for the private sector too, and therefore for the country as a whole. The whole must be seen as a unit. The people who are trained and enter the private sector, must produce and keep the economy in motion. Whether it is in agriculture, commerce and industry or wherever, the people must be there, and it is the duty of the State to do its share in that regard. The Post Office, small as it is, is doing its share too.

According to the magazine published by the Handelsinstituut in July 1981, the Post Office is the 14th largest company in this country to assets. The Post Office is in very high repute if we look at the people that it trains and provides to South Africa, whether it be for the private sector or for the Post Office. The Post Office does its share, but we must not sabotage it by drawing all its people away.

How important are posts and telecommunications, in fact, to the economy of South Africa? This brings me back to the private sector, and I say that they too must do their share and train their people. We are very grateful that the hon. the Prime Minister has led the private sector very definitely in this direction over the past two years, viz. that they should train their own people. The Department of Manpower has done its share.

Just think of the influence of the Post Office on our population with regard to education, health, security, defence, recreation, transport and the production of food. No matter what one mentions, if the Post Office and its staff were not there, it would have been a tragedy for South Africa. Nothing can progress without telecommunications. That is all there is to it. It is one of the most important assets that we have.

This brings me to training as such. I agree with the hon. member for Hillbrow that we should have more people. Training is expensive and it takes time, and that is why we must make sure that we obtain the people that we need in good time. That is why I want to tell the hon. the Minister that one of the most important things that we must do now, is to encourage trained staff to immigrate to South Africa. There is an economic recession abroad at the moment and we now have the opportunity of recruiting people there. It is also true that a great deal of recruitment is taking place within the country at schools, universities or wherever. I do not know whether there is already a team abroad and whether one is going there. I should like the hon. the Minister to enlighten us in this regard.

As far as recruitment within the country itself is concerned, a great deal is being done. We are aware of this. I think the hon. member for Hillbrow referred to this too. However, I think it is essential that we should make a bigger, more concentrated and more drastic effort in this regard, at schools, universities, and other institutions. This recruitment campaign must be tackled by the department and it can make use of all the media such as television, radio, newspapers and magazines for this purpose. The department should also have stalls at various shows so that we can recruit these people. We are proud of the Post Office staff. They are efficient, they are loyal. They are also productive as the hon. the Minister himself showed us. The hon. the Minister told us that over the past year, the staff has decreased by 1 017 members, but in spite of that the staff has brought about growth in the Post Office in the financial sphere, the technical sphere, and with regard to services that were rendered. We simply have to think of the services that have been rendered to South Africa over the past year. Were it not for this efficient service of the Post Office, surely our economy would not have grown to such an extent. Where would our economic growth have come from if this pillar of our infrastructure, this Post Office of ours with its television services, radio services and all its other facilities had not been available to us? I also ask: In what sort of position would we have been during the election if we had not had the facilities of the Post Office? We say thank you very, very much for this.

I now want to come back to the question of finance.

[Inaudible.]

The hon. member who has just interjected, always thinks of one thing only. He is only thinking of when he will be able to let his squatters squat on his front stoep again! [Interjections.]

Our working expenditure increased by more than R214 million over the past year, and this, as the hon. the Minister spelled out to us, was due to salary increases, etc. This sum of R214 million does not sound much for South Africa’s postal services, but the salary increases were good. The Post Office staff are satisfied with them. We are not going to analyse the salaries of the Post Office staff across the floor of this House. I want to tell the hon. member for Hillbrow that the Post Office staff themselves, the public servants themselves, the teachers themselves, requested this. They do not want these details to be dragged across the floor of the House. The hon. the Minister and his top management and the staff associations are satisfied. They are happy. If they are happy, Sir, then you and I must be happy. We must not try to make political capital out of this matter and to drag it across the floor of the House. I think the hon. member for Hillbrow will agree with me on this.

I did not talk about that.

No, I said the hon. member will probably agree with me.

He did speak about them last year.

Yes, he did so last year. If we think of transport expenditure, we know that this money has been spent on additional transport facilities. We know that the price of fuel is high. We know that there were other expenses with regard to vehicles.

Let us look at the growth of the telecommunications system. It is included in this amount of R214 million. There is also the question of the maintenance of buildings, material, supplies and services. All of this is additional expenditure for which this sum of money was required. There were also increased foreign payments with regard to the increase in traffic and we are pleased and grateful that the foreign traffic has increased to such a large extent. The main item remains inflation. Sir, this amount of R214 million represents a mere 22% and hon. members know that our rate of inflation has been extremely high in recent times.

There was a surplus of R94,1 million, and we want to say thank you very much to the hon. the Minister and his top management for the fact that that surplus was utilized in the following ways, inter alia: An amount of R11 million with regard to redemption of loans. This reduces our loans, it reduces our burden of interest and in future budgets, our interest on that amount will also be decreased. It also contributes towards tariffs not being increased again. We know that supplies are very difficult to obtain due to inflation. It is very expensive to obtain extra supplies today. We are very pleased that the supply figure has been supplemented so that sufficient supplies can now be purchased, because if prices increase again, the Post Office will be in a very favourable position. With regard to the Post Office housing scheme, there is an allocation of R26 million. This is one of the best ways of retaining staff. If someone does not have a house and he can obtain a better salary across the road, he will leave the job that he has had up till then. We understand this and we accept it. He must stay at a place which enables him to afford his house. That is why this allocation is a very good thing and we are very grateful for it. We want to tell the Post Office that we are pleased about it.

Furthermore, there is a transfer of R41,441 million to capital expenditure. I am amazed that the hon. member for Hillbrow did not have a great deal to say about capital expenditure and the percentage expenditure. I think this is a good thing and it shows that he left it as he did in fact leave it.

The hon. member spoke about “tapping”, and I shall come back to that again a little later. I bow humbly before his superior knowledge; he knows everything about “tapping”, and I know nothing.

As far as capital expenditure is concerned, I want to point out that when excessive sums of money have to be borrowed in order to tackle capital works and/or improvements, the burden of interest is increased. Of course, this means an additional burden in the future. The funds are then withdrawn from the private sector and in addition to that, the private sector does not have a market where it can borrow money. One must afford the private sector the opportunity to borrow money. The same applies to bodies such as the Land Bank, Escom and Iscor, because they must also be able to borrow money in order to continue with their activities. I want to ask the hon. member whether we should borrow the money abroad. Of course money can be borrowed abroad, but this complicates matters.

Let us look at the budget, because I want to make further points in regard to capital works. R565 million is available for capital works. If the hon. member looks at statement 6 on page 16 of the Estimates of Revenue and Expenditure, he will see that the telecommunications division requires R470,069 million of the available amount of R565 million. We must bear in mind that some of the items that are purchased for telecommunications purposes, have a lifetime of a few years only. After all, one cannot borrow money on the long term, say for five years and more, in order to finance the purchase of such goods, because if one does so, bankruptcy will be around the corner. If one borrows money on the long term for the purchase of assets that will last for a long period, then one is on the right track. One should really not borrow money for the purchase of assets with a lifetime of a mere two or three years. That is why it is good and right that the largest portion of the financing of these capital assets comes from the working expenditure.

A mere R62 million is required for land, buildings and houses. Of course, there are also maintenance costs with regard to the houses and buildings. As far as this is concerned too, one cannot borrow money on the long term and one must make provision for this in one’s working expenditure. This is why I am saying that one cannot simply borrow money for financing capital assets.

I now come to the following item, viz. vehicles. What is the lifetime of a vehicle today? If it has lasted for five years, then it has lasted a long time. These days they make these things in such a way that they last for three years only. If one requires R19 million for vehicles, one cannot borrow it on the long term.

If one looks at the elements comprising the budget, it is clear that one cannot borrow money in order to finance short-term assets. There is also an item “office, data processing, mail handling and stores equipment” for which R13 million is required. We cannot borrow the money required for that either, because these two are short-term assets.

The hon. member for Hillbrow must not think that he is going to escape today. He will recall that at the beginning of the year, when we came to the Third Reading of the Post Office Part Appropriation Bill, I was on the point of leaving. He had informed me beforehand that he would attack me, but fortunately my plane was leaving a little later and I was able to listen to him. The hon. member paid me a tremendous tribute, because he quoted practically half of the speech that I had delivered. I think it was a brilliant speech, and I thank him for doing so. We all like to read a fine speech for a second time. However, the hon. member also made a few mistakes. Amongst other things, he referred to a certain matter and then hinted that I was an accountant who does not know how to work out percentages. I refer the hon. member to Hansard, 25 February, 1981, column 2380. After he had made a statement to the newspapers and tried to disparage the annual report, I told him that it was a disgrace. I quoted figures from the annual report and pointed out to him that the tariff increases were a mere 12,78%. The hon. member quoted me, and I just want to refer to where I said that the postal charges on letters were increased from three cents to five cents. To that the hon. member replied that although I am an accountant, I cannot even work out the percentages, because an increase from three cents to five cents is a very large percentage. However, it is stated in the annual report that the average increase was 12,78%. Are we now going to try to make political capital of it across the floor if the hon. member cannot read what is stated in the report? I was referring to all the increases, i.e. the average.

The hon. member went on to refer to my speech, and I quote what he said in Hansard, 26 February, col. 2553—

The hon. member mentions the total and says it covers Soweto too. I wanted him to point it out specifically and indicate that Soweto had received a certain number of telephones, because his attack was based on the fact that the Blacks do not receive telephones. The hon. member goes on to say—

They say they have one identity only, and I should like to know what that identity is. The hon. member must please define this idea for us. He must please tell us whether everyone is the same and whether there is one identity only in the country. Should everyone attend one school and live in one residential area? Should everything be equal? “One man, one vote” too? The hon. member must point this out clearly for us.

The federal system.

He must spell it out for us, because it does not tally with his party’s policy. I am sorry that the hon. the Leader of the official Opposition is not present now. I wonder whether the hon. member for Yeoville can tell me whether he agrees with the hon. member for Hillbrow with regard to this question.

No, I am busy.

I respect the hon. member for Yeoville. He is busy and I too would have been busy because I could not reply to such a ridiculous statement.

The hon. member will participate in the debate once again later on, and I shall therefore appreciate it if he will spell out his standpoint clearly for us. At the same time his leader must please also tell us what his standpoint is in this regard and how he interprets one identity.

Is that the best you can do, Jan?

In conclusion, I just want to say that we in South Africa are definitely fortunate, in the midst of all the problems with which the world is faced, to have a Post Office today which can forge ahead peacefully both locally and abroad, in the international sphere and in all sectors. Unfortunately, I have not yet received a copy of the hon. member’s amendment and therefore I cannot reply to it. All I can say is that the hon. the Minister and the department are working hard on this matter. Surely a backlog of 140 000 telephones is a trifle if one looks at everything that has already been achieved by the department. We must bear in mind that there are 24 million people in South Africa and nevertheless there is a backlog of a mere 140 000 telephones. We must also take into account that this figure is already obsolete and that many of those telephones have already been installed. In many cases the installation of a telephone is a small job that can be completed very quickly. Therefore, I am sure that all that work will be dealt with sooner than the hon. member thinks.

Mr. Speaker, I think I should leave the hon. member for Sunnyside and the hon. member for Hill-brow to sort out their identity crisis and get back to matters concerning the Post Office.

Are you suggesting a reduction in his salary, Brian?

I do not think that hon. member should get a salary at all, quite honestly. We on this side of the House welcome the fact that this Post Office budget, presented here yesterday, has managed to stave off any increases. We believe that this is attributable to the hard work, dedication and loyalty of the staff of the Post Office. We also believe it is due to a well-motivated staff. I have spoken about this before, but I want to say again that whilst travelling around the country, and more specifically in my constituency, I have met a number of people who work in the Post Office, and I am impressed by the degree of motivation that there is amongst Post Office staff members. I am also impressed with the pride they take in their work. I shall say more about this later on in my speech this afternoon, but I do extend our heartiest congratulations to the Postmaster General, his top staff echelons and, in fact, to every staff echelon throughout the service, all the way down to the humble individual who used to hold up a red flag between the Durban station and the Durban post office to allow the trolleys to cross the road. Every single one of them has played a part in the budget before us.

There are, however, areas of concern, and it is those areas that I intend to discuss here this afternoon. There are areas in which I think there is room for improvement, and I hope to be able to offer constructive ideas as well as criticism, because I believe that criticism should, wherever possible, be constructive.

The first area of concern is that of the mail service. There is not a shadow of a doubt that the mail service does not, in any way, keep pace with the needs of a modern-day economy. There is a tremendous amount that can and should be done to speed up mail deliveries and to make the handling of mail more efficient. We are well aware of modern-day technological advances in this particular field. The hon. the Minister has told us of new equipment that is constantly coming into operation to update existing equipment. We have seen the latest sorting equipment that we have in our main centres. We are also aware of the fact that owing to the zip code system being employed, much has been done to speed up deliveries. There are, however, definite areas which afford commerce in general some cause for complaint, and it is commerce that I am concerning myself with to a greater degree, though this also concerns the mail of private individuals, even though to a lesser degree. Commerce complains that mail is not being handled as quickly as commerce would like to see it done, and the private individual, in his own right, often feels that his mail does not get to the intended destination in the time that it should take it to get there. In order to do something in this connection, perhaps one should consider the separation of classes of mail, because visits to mailsorting areas have demonstrated the enormous amount of junk mail—if I may use that phrase—that goes through at all times of the day. I believe that mail should be given different treatment from that meted out to private and normal commercial mail. There is no shadow of doubt that there is an ever-increasing volume of junk mail, and I am not using the term in a derogatory sense. It is the popular terminology used when one refers to the sort of thing where even the advertiser will tell one that he does not expect more than 3% of the people receiving it even to look at it, much less read it. I am referring to the mail from mail order houses etc. that 90% of people throw into a wastepaper basket and possibly 3% look at and read. I think that mail, which is delivered to private homes and to business houses, should be treated differently. I accept that it is commercial mail in the sense that it usually advertises a product, but we must also realize that it can slow down the delivery of normal mail or mail of a far more urgent nature. Perhaps we should consider handling it on a different basis. Perhaps we should consider dealing with it only during certain hours of the day, perhaps in the late afternoon or early morning during the slack hours, if there is such a thing as a slack hour in the main sorting offices in the cities of the Republic. Perhaps consideration should be given to late-evening shifts being worked specifically to deal with just this type of mail in order to clear it so that on the following day the normal mail can be dealt with and junk mail will not be looked at again until later in the day or during a late shift when it will be cleared once again. The hon. the Minister may care to think about these suggestions and comment on them. I think the hon. the Minister should institute a complete re-evaluation of the present system and, together with his staff, consider a means of overhauling the mail handling and delivery service in order to obtain greater efficiency.

The second area of concern—and the House will note that we agree with the two specific areas dealt with in the amendment moved by the hon. member for Hillbrow—is the ever-increasing backlog in telephones. I know only too well that the hon. the Minister will always argue that any developing country must have a backlog in telephones because, if it does not have a backlog in telephones, there is no growth. I accept that as an argument but it is the level of backlog that concerns me. I accept that there is no way in which a country such as ours can ever be without a backlog. I am not suggesting that we can ever eliminate that backlog entirely to the point where the minute a person walks into a new home, a telephone will be installed as quickly as he is able to turn on his light or turn on the tap and have water available. I am, however, suggesting that we could reach the stage where the telephone service could be made available in a matter of days or, at the very outside, a fortnight.

It all depends where.

I appreciate that.

Sometimes it takes only a couple of hours.

I appreciate all that but far too often we have a situation where many people have to wait, sometimes for months, before being provided with a telephone service. There are still people who have to wait for months and there are people who have been told that they will not get a service before such time as certain major works have been undertaken. This is a cause for concern. Let us accept, as I said earlier, that there always will be some measure of backlog. We must not, however, allow a situation to be perpetuated where the backlog increases percentagewise year after year.

That is not correct.

I am merely saying we must not allow that situation to arise. The hon. the Minister must not be oversensitive.

I am not.

We must find an acceptable level and we must maintain that level. I do not see any reason why this cannot be done. I think there will be standards acceptable to all and in any economy there must be certain limits within which we can work when talking in terms of the time that an applicant will have to wait before receiving or enjoying a telephone service. I also accept that one has to deal with exceptional circumstances when it comes to a new area that is developing rapidly. I think this is what the hon. the Minister was referring to a few minutes ago. In such circumstances the Post Office is not able to keep up with cable laying in order to provide the basic services where required. However, where there are cables in existence or when one can see that there is development taking place, when it is obvious that development is going to take place, I believe that the Post Office by means of careful and diligent planning can put itself in a position where it can be ready to provide services at the shortest possible notice. This is the goal at which we should aim. I think we must all accept that telecommunications are bread and butter to the Post Office. Surely it is then in the best interests of the Post Office that its best-seller, its fastest-moving line, its merchandise which shows a quick turnover and gives a good profit, must be readily available, because this is the merchandise that gives the Post Office the wherewithal to budget more effectively and enables it to introduce the kind of budget we have before us today. I think it is also true to say that efficient telecommunications services which are readily available are a means to an end in that once we can provide this service without delay we shall be able more effectively to balance the books year after year. If the hon. Minister can achieve this, I think he will make himself the most popular Minister on the benches opposite and I firmly believe that then industry and commerce will smile benignly upon him at all times.

I should now like to deal with that hardy annual, the shortage of staff and particularly of trained technical staff. The hon. the Minister and his predecessors have over the years constantly complained of the Post Office’s loss of trained technical staff to the private sector. They complain of this happening in respect of ever-increasing numbers of staff as the years go by. This is indeed a sad situation but it is not one that one can really condemn because, after all is said and done, we live in a free-enterprise economy with market forces at work, both in respect of the product and of manpower. If a trained technician sees a job available to him at better remuneration and offering better prospects than those he currently enjoys, he will move on and we cannot blame him for that, neither can we blame the people who offer him such a position. We cannot take exception to this because it is part and parcel of a free-enterprise economy. The fault, I believe, lies in the fact that the Post Office is not able to keep pace and be competitive in this particular market, the manpower market, when it comes to the trained technician.

Let me elaborate on this. I know that, in doing so, I am going to tread on a very tender corn. The Post Office has, with our blessing, become a business concern. We have encouraged it to do so. We have encouraged it to become a concern run on business lines within the State economy. It certainly has achieved magnificent results. The proof of the pudding is in the eating. One has but to look at the results that have been achieved since this initiative was taken. However, the next step must now be taken in order that the Post Office may truly become a business concern in its own right. I believe that the Post Office should be put in a position where it is able to control its own staff and determine for itself what it is prepared to pay its staff. It must not be bound by the Commission for Administration. There is to a certain degree—by the allegiance of the State to the Post Office and the Post Office to the Commission for Administration—a link tying one to the other at all times. That causes some sort of a resentment. Therefore I believe this is the time to break away from that allegiance entirely. The Post Office must break away from this entirely. I know this is going to cause a storm in a tea cup but I believe that the only way in which this business is going to be competitive and the only way in which it is going to remain efficient is by becoming completely independent in respect of its staff, its treatment of its staff and its payment of its staff. The Post Office has to be completely independent and answerable only to itself in this regard.

Has the hon. the Minister ever given them an increase when the Public Service personnel have not had one?

There is a good question for the hon. the Minister to answer. My hon. leader asks whether the hon. the Minister has ever awarded an increase to Post Office personnel when the Public Service has not awarded a general salary increase to its staff. That is the point I am trying to make. There is this interaction between the two.

I awarded an increase that was higher than that of the Public Service.

That is not an answer. That does not answer the question at all. The hon. the Minister is keeping this pace all along.

The hon. the Minister has reported that he is experiencing difficulties in recruiting technical staff abroad, and in commenting on this he said …

When did I say that?

The hon. the Minister said so himself. He said it in an interview on television yesterday evening. The hon. the Minister said he was experiencing difficulties recruiting technical staff abroad.

No, I did not say that at all. Did you listen to my Second Reading speech yesterday?

I am referring to what the hon. the Minister said in a television interview last night.

Go and read my Second Reading speech again.

I shall do that. I shall have another look at it. Irrespective of that, however, the hon. the Minister has said that the maximum amount of work is being given out to contractors, to private entrepreneurs. Has he not said that? May I ask the hon. the Minister why he is doing this? Why is he doing this if he is not having difficulty recruiting staff abroad?

Did you not listen to my speech yesterday?

I listened to the hon. the Minister’s speech yesterday.

Well, go and read it again then.

I believe we should be giving more work out to private enterprise. I believe we should be doing more. If we are unable to get staff, if we are unable to pay staff then, I believe we should give out the work to private enterprise. In heaven’s name, do not allow things to fall behind and do not allow delays in providing telecommunications services! I suggest also that coupled with staff shortages—and I believe I heard the hon. the Minister correctly when he spoke about the staff shortages—there is also the very real problem of housing. It is gratifying to note that the hon. the Minister has reported on the situation both in respect of official housing and in respect of a staff housing scheme. I do think, however, that this is an area in which possibly more will have to be done in order to assist staff who must find it extremely difficult today with the price of housing being what it is.

I am sure every hon. member in this House, particularly the city dwellers, know of instances of Post Office employees who operate post offices in the more affluent areas, in areas where there is high-priced housing all around their places of work. They cannot compete. They cannot be expected to compete and to buy homes in their immediate vicinity. They are thus faced with the problem of travelling a long way between home and work, and the cost of travel is expensive today. I believe that the management side of a post office—the Postmaster and his assistant, those responsible for the running of a post office, those people who are actually the backbone of the Post Office, if I may put it this way—are having difficulties in obtaining housing close to their places of work.

I know of instances of people who operate post offices in non-White areas where they have a very real problem which will continue to exist until such time as non-White staff become available in line with the declared policy of the Post Office to provide such areas with non-White staff. Until such time, however, these people will have to cope with that problem, and I want to tell the hon. the Minister that I know of someone—I am not going to bandy his name across the floor of the House because I do not believe it is in his best interests to do so—a Postmaster in my constituency who, because of the situation of his post office, has had to find housing for himself in an Indian area. This is not right at all and I think that we must accept that the spiralling cost of housing is causing tremendous concern to a vast number of Post Office employees. Therefore I should urge the hon. the Minister to look again at the problem of housing. This is not money that is being thrown away; this is money that is being loaned to the employee in order to assist him. I think this is an area that should be thoroughly investigated. I would urge that the department does a new survey, a fresh and urgent survey of the needs of people, not only in the Pretoria-Witwatersrand area but also in Natal, particularly in Pietermaritzburg and Durban, and in both the Western and the Eastern Cape as well as the Border area. I think that the results of this survey will cause concern to the top echelons of management in the Post Office because I think that they will see that they are running into a problem area, a far greater problem area than they possibly believe at this moment. I say this because I have been approached by a number of Post Office personnel, I have personally spoken to Post Office personnel and I know that my colleagues, whom I have canvassed in this regard, report the same to me as I am reporting to this House this afternoon. These people are trying to do a good job of work but in many instances they are being thwarted and frustrated by problems concerning housing. I think we must accept that it is a happy home life that makes for the happy worker and I am sure that there is something that this hon. the Minister and his team can do to assist these people.

I should like now to turn my attention to matters touched upon yesterday by the hon. the Minister that I believe are worthy of praise. Firstly, let me say that it is gratifying to see that the Post Office is obviously doing everything in its power to keep abreast of all the latest technological developments in respect of communications services and this for obvious reasons—in order to keep competitive in a market that is becoming more and more sophisticated internationally. We look forward to seeing the new electronic exchanges in operation and I will welcome the day when these exchanges become fully operational in all our main centres. Believe you me, to those who do not know it, when one uses an electronic exchange, particularly with the new Lorea type of telephone, the push-button telephone, one will find that the amount of time used in the dialling of numbers is reduced 10 times. In addition, it certainly does not hold up the switch gearing in the way that the old mechanical type does which is fraught with all sorts of problems and is a very high labour-intensive type of system.

I have good news for you. They will even be available in Durban this year.

Now that is really good news. That is the best thing I have heard so far. I think, too, that it is very interesting to see that the department is considering the utilization of solar and wind energy, and I think there must be a number of people who smile quietly and say that that sounds quite ridiculous. After all, how can the Post Office consider this? However, I think that when people realize that the voltage and amperage requirements of most of the equipment that is used in communications is of such a nature that the old-fashioned wind-charger could almost keep it going, they will know that there is definitely a future for this type of energy in the country areas. We look forward with great interest to hearing more about the progress in this regard.

Finally, the hon. the Minister has made reference to the fact that market research programmes are constantly used to obtain both quantitative and qualitative information regarding the market for residential telephone and business telephone systems. I think that this is a commendable way of going about things and I would commend to this House a particularly healthy state of affairs that exists in Durban, a particularly healthy relationship that exists between the office of the Regional Director of the Post Office in Durban and the Durban Chamber of Commerce.

The Chamber of Commerce issues a weekly digest and, let me hasten to add, the Durban Chamber of Commerce has the largest membership of any chamber in South Africa. It boasts a far greater membership than the Johannesburg Chamber of Commerce. In this weekly digest it has become almost commonplace to see notices or information that has obviously been given to the chamber by the Department in Natal and this is disseminated to people who really value this information. It is disseminated to commerce and industry throughout Natal in this way. I commend this to the hon. the Minister as being an excellent method of communication between organized commerce and industry and the Post Office. It is a healthy state of affairs and I suggest that the hon. the Minister may wish to ask the department to investigate further the question of encouraging more of this type of thing.

It happens in all the department’s regions.

That may be, Sir, but, quite honestly, I do not think to the extent that it happens in Natal. I believe that commerce would welcome this.

Sir, I have no doubt the time will come when the hon. the Minister will not be able to present to us this sort of good-news budget. I think that this year his budget is going to have a comparatively peaceful passage through this House but I should imagine, come next year, we are going to find that things will be back to normal in the sense that there will be a great deal more that we will have to criticize. However, as I said earlier, in the spirit of constructive criticism I trust that the hon. the Minister will consider the points I have raised and accept the fact that I have tried to offer them as being constructive ideas and constructive criticism in the prime areas where I believe we are going wrong. I think that if we can plug those areas now, if we can do something dramatic now, we shall be able to stabilize further increases in the budgets to come.

Mr. Speaker, it is a pleasure for me to follow the hon. member for Umhlanga because he made a well-considered speech, a speech in which he singled out four bottlenecks in connection with the Post Office. However, I have a problem in this respect. The hon. member singled out bottlenecks and pointed them out to us, but the difficulty is how to solve these problems in practice. The hon. member referred to “classes of mail” and he specifically referred to “junk mail”. I agree with the hon. member that a great deal of so-called junk mail is sent through the post which he and I probably never even open and which lands up in the wastepaper basket. In practice, however, I wish to ask how the Post Office is to differentiate between this so-called junk mail and ordinary postal articles. The person posting this so-called junk mail also has to affix stamps to it. How is one to differentiate in practice? That is the problem.

One cannot discriminate.

The hon. the Minister says one cannot discriminate and this is true in practice. The hon. member has a wonderful vision but in practice, one cannot really apply it. Mr. Speaker, we have sympathy for the motivation of the hon. member for Umhlanga. We have sympathy for his plea, but in practice how does one solve this problem? There is really no solution. The hon. the Minister, the Postmaster-General and his top management, and all the staff of the entire Department of Posts and Telecommunications are seeking a solution to the problem raised by the hon. member. In practice, however, one cannot really solve it. Every effort is being made in this connection, and I wish to give the hon. member an example of this. I do not only praise and thank the hon. the Minister. I do not only praise and thank the Postmaster-General. I also praise and thank every member of staff of the Department of Posts and Telecommunications. I think it is a remarkable department and I am certain that every member of staff is proud to know that he is part of this Department of Posts and Telecommunications, no matter who he may be and irrespective of race or colour or anything else. The hon. the Minister tries his best to motivate the department. There are of course his constant visits to the staff of the department, but let us consider what happened during a specific period last year. Let us consider the first two or three weeks of December of last year. Over and above the calls he was able to pay on post offices, he also visited all points in the operational area where there are 11 field post office units. All staff at Head Office and at the regional office in the Transvaal and Pretoria were visited. All staff at the regional office of the Western Cape, the Cape Town Post Office and the international exchange in Cape Town were visited personally by the hon. the Minister with the specific purpose of boosting the motivation of those people, and also to thank them and express his appreciation and tell them: Thank you for what you are doing for the postal and telecommunications services and for South Africa.

The hon. member for Umhlanga referred to a “hardy annual”. Yes, the debate on posts and telecommunications is a hardy annual, because if we do not find a motivated solution here, the economy of South Africa will grind to a halt tomorrow, because the economy of South Africa cannot meet the demands made of it without a Department of Posts and Telecommunications.

It is disappointing that the hon. member for Hillbrow has put forward an amendment. I really thought he was going to advance responsible criticism of the vote and the speech made by the hon. the Minister yesterday. But what did we get? The hon. member brought a patient to this House and asked whether the patient was “healthy and sound”. I do not know whether he himself is the patient, but if he is not, I wish to give him the assurance that the vote and the department are indeed healthy and sound. When he began, I almost stood up to ask whether he was perhaps the hon. dear heart instead of the hon. member for Hillbrow, because when he began speaking about the patient, I almost thought he was a member of a heart team instead of a member of this House. I also wish to give him the assurance that this is not a vote about which one can say “keep quiet and pay later”.

If the hon. member had really done his homework, had read through all the annual reports and the budget speeches for the past two or three years, he would have realized that the hon. the Minister and the Postmaster-General referred throughout to the possibility of tariff increases. They have constantly warned the public of South Africa that there may be an increase in postal tariffs. Owing to responsible thinking and responsible financial analysis, these people do nothing without giving prior warning. The hon. the Minister and his department are prepared to return to this House and point out that in the future there is the possibility that postal tariffs will have to be increased, but at the moment they are not prepared to place this burden on the economy of South Africa because the Post Office can still bear it. Adopting this responsible approach the hon. the Minister made his budget speech and one expected more from the hon. member for Hillbrow.

Is it necessary to defend the HNP here today? Is it necessary to refer to section 118A? Is it necessary to quote the findings in certain court cases? Is it necessary to refer to figures which the hon. member cannot prove? Is the hon. member for Hillbrow prepared to table a verified account in this House showing what the expenses per court case were of the two people to whom he referred? Can he prove this? When he was confronted across the floor of this House, what did he say? He said no. He relied on newspaper clippings. One does not expect the chief spokesman on that side to act as the hon. member did in this debate. He must adduce proof; not newspaper clippings. He must bring verified accounts and then defend Schoeman and Stofberg. The hon. member cannot motivate his arguments and he is merely conjuring up spectres. I leave him with this thought: The bogeyman does not frighten us.

We are dealing with responsible matters here. We are considering a vote which is an integral part of the economy of South Africa. When one looks at such a vote and wants to take part in such a debate, one asks oneself why everyone is advocating that posts and telecommunications must really be an integral part of our economy. If you consider posts and telecommunications from the point of view of the private individual or the entrepreneur, one asks oneself whether the department’s balance sheet, its profit and loss account is really sound. Today I feel I am justified in telling this House: “Yes, the Post Office is financially sound and hon. members can safely invest in it.”

A point was also raised here today regarding the lack of adequate telephone services and the official Opposition even saw fit to move an amendment in this regard. I consider this unnecessary, but I suppose it is their democratic right to do so. Let us consider the provision of telephone services to applicants and let us take special note of specific times and of what is worrying the Opposition. Let us see whether the hon. the Minister cannot satisfy them. I should like to prove to them and to the public that the Post Office is indeed doing its share. The Department of Posts and Telecommunications is fully aware of the problem, and is also prepared to solve it. There have been several references to the sharp increase in the demand for telephone services, but before one begins to criticize, one must consider the infrastructure and the background to the argument. Domestic services in the Coloured, Indian and Black residential areas have increased considerably during the past few years, and one does not begrudge these people the convenience of a telephone service. However, the hon. member must see the problem in the correct perspective before arguing the matter. During the 1980-’81 financial year a record number of 270 584 additional telephones were linked to the network, and this is undoubtedly an achievement, particularly against the background I am trying to sketch. This brought the number of telephones in the Republic on 31 March 1981 to 2 932 983, which represents a growth of 10,16%. One cannot therefore speak of a lack of telephone services if one does not take the background into consideration. Despite the steps taken, the number of applicants awaiting telephone services—this is apparently what the Opposition is having trouble with—increased by 36 993, from 104 337 on 31 March 1980 to 141 166 on 31 March 1981. Expressed as a percentage, this represents an increase from 6,39% to 7,89%. Is this such a major problem as the Opposition wants to make out, especially if in the light of the rapid economic development in South Africa? Hon. members must evaluate their objections in the light of the arguments advanced by the hon. the Minister yesterday in his budget speech. They must not merely quote figures, because anyone can juggle with figures. The differences must be expressed in percentages and compared with the figures of the previous financial year and in the light of the current economic set-up in South Africa. They must also be judged in the light of the infrastructure and the population of South Africa, whether it be Coloured, Indian, Black or White. Hon. members cannot merely juggle with figures here without motivating their arguments.

During the past three financial years the demand for telephone services in the Republic, i.e. existing services, services already authorized and outstanding applications, increased by 701 789 from 2 405 972 on 31 March 1978 to 3 107 761 on 31 March 1981. Notwithstanding the provision of a total of 613 425 additional telephones, the waiting list during this period increased by 79 363 from 61 803 to 141 166. The figures sound enormous, but once again one must express them as percentages. From the figures it is then clear that the Post Office is indeed providing a service to South Africa. The Post Office realizes what the problem is and is doing everything possible to meet the demand for telephone services.

The provision of services, especially in the non-White areas, is a tremendous task which has to be carried out at great expense, and sometimes under difficult circumstances which of necessity lead to delays. This has been proved in practice. I wonder whether hon. members of the Opposition have ever gone out with a team of technicians to install a telephone? Do hon. members realize what it costs and what technical knowledge is required to install a telephone? I think the standpoint of the hon. Opposition is that one merely plugs a telephone into a jack and then it works. I do not think the Opposition realizes that there are underground cables which also have to be seen to. In practice matters are not as easy as those hon. members tried to make out in this House today. I think this is an achievement worth boasting about. It is still going, to take a number of years before a normal situation is reached. South Africa must realize and accept this. The Post Office is working at full steam to meet the demands and requirements, but it is not merely a question of plugging a telephone into a jack.

One would have expected the Opposition at least to put forward figures in this budget in order to throw light on the financial aspect. One could have expected them at least to try to criticize the budget from that angle. However, we have not heard a word about that. We have not had any real criticism of the budget.

For the information of those hon. members, in my opinion it would be a good idea to mention a specific achievement in the budget. I refer specifically to supplies and equipment. I do not think any of those hon. members has really analysed this budget. I do not think they have looked at the many achievements. Material and equipment valued at R364,8 million was received during the 1980-’81 financial year, which is an increase of R61 million or 20,1% over the previous financial year, when material and equipment for telecommunication purposes valued at R329,4 million was purchased, as against R272,1 million for the year before that. Material and equipment valued at R268,8 million was supplied during the 1980-’81 financial year by suppliers in terms of long-term agreements. What is of importance, however, is that the local content of apparatus manufactured under long-term agreements, totalled 87% during the 1980-’81 financial year as against 86% the previous year. There would seem to be a difference of only 1%, but the cash value which this represents is of cardinal importance to the economy of South Africa.

We can also consider transport and fuelsaving. Let us consider one specific aspect to which the department gave attention. Vehicle testing centres, equipped with sophisticated testing apparatus, were taken into use during the 1980-’81 financial year on the premises of the laboratory at Derdepoort. The staff at this centre ensure that manufacturing specifications are met. Vehicles being considered for purchase by the department are also evaluated there for suitability and the degree to which they meet specifications. This is indeed an achievement, and by this I merely wish to prove that this department is not wasting money. As a matter of fact, this department constantly ensures that the ordinary man is not burdened with unnecessary costs. This department ensures that it only submits evaluated figures to this House so that unmotivated criticism need not be levelled at it.

Mr. Speaker, it is a great privilege for me to follow the hon. member for Overvaal after the excellent speech he made here this afternoon. It is a pleasure, too, to support this outstanding appropriation Bill.

†This budget is the budget of one of the most exciting industries in South Africa at this time. It is interesting that while posts and telecommunications combine high technology, it is also one of the oldest industries in our country and I would like to allude to that further in a moment. To study the development of the Post Office, particularly in view of the technological achievements about which we heard from the hon. the Minister, that we also see in the annual report, is to move into the realms of science fiction—the kind of thing we used to read about 20 years ago in Brick Bradford comics. That which we thought was a world of unreality has suddenly become reality. One is proud that we in South Africa have an industry which is so advanced that it can deliver firsts such as the new electronic exchange, the SA 128E that the hon. the Prime Minister will open later this year; that we are a world leader in this field and that the services which we render compare favourably with equivalent services in other countries.

Having said that, I want to allude to what the hon. member for Hillbrow said here this afternoon. He was complaining about tariffs. He said that he hoped that there would not be a gradual advance in tariffs and so on. I want to tell the hon. the Minister that I am, quite frankly, amazed that we have been able to maintain tariffs at the level we have. I want to congratulate the hon. the Minister on that and express the thanks of this side of the House to him. I want to give the House briefly a few equivalent figures. In Britain, which is a small country, where distances are small and where they have a highly developed infrastructure, a letter weighing 60 grams costs 21 cents to deliver, in comparison to 5 cents for a letter weighing 50 grams here; in Austria, a letter weighing 20 grams costs 22 cents; in Canada a letter weighing 30 grams costs 14 cents; in Denmark, which is a tiny country with a highly developed infrastructure, a letter weighing 20 grams costs 20 cents to deliver; in West Germany, a letter weighing 20 grams costs 23 cents. So one can go on. The fact is that our tariffs are not a shade lower but hundreds of per cent and in some cases thousands of per cent lower than in many of these developed countries.

I should like to give the House a very brief example of why our service is a remarkable one. I have taken the trouble to attempt to trace the progress of a letter posted in the Maitland constituency to Ellisras in the Northern Transvaal. The first thing that happens is that a person drops that letter into a letter-box after which a truck comes along, collects the letters from the various letter-boxes and delivers them to the Maitland depot. There the letters are transferred to another truck which takes the letters to the central Post Office in Cape Town. The letters are then fed, face up, into automatic handling equipment for the cancelling of the postage stamps. From there a letter is fed into an automatic sorting machine where it is encoded according to its destination. All the mail for Ellisras is then collected on one side, tied and labelled manually and put into the Pretoria mail-bag. The mail-bag is then delivered by special truck to D.F. Malan Airport from where the mail is flown to Jan Smuts Airport where it is once again collected and taken to the Pretoria Post Office. There it is opened and the mail destined for Ellisras is put into a pile with all the other mail for Ellisras. Then it is placed in another truck which takes it to the station where it is loaded on to the north-bound train which will deliver it to Vaalwater Station. There it is off-loaded for collection by the road motor service operating between Vaalwater and Ellisras, a distance of 116 km. The entire distance involved is approximately 1 900 km. At the Ellisras Post Office the mail is sorted for local delivery and the letter is put in the addressee’s private bag for onward conveyance by means of available public transport or in some instances by private transport, for which the Post Office also pays. When one considers that that service is available for 5 cents, I think it is a remarkable achievement and I want to congratulate the department in that regard.

Good communications are the absolute foundation of a modem society. When one looks at the history of great civilizations it is interesting to note that all of them have rested upon good communications services. The earliest recorded information on a postal service dates back to the great civilization of ancient Egypt 2 000 years ago. In the Chou dynasty of 1 000 years ago one saw the development of post houses which have led to the modern postal services of today. Then through the civilization of Cyrus in the 6th century B.C. to the Roman period where one saw a further development because then the postal service reached great heights with the so-called cursus publicus which, as hon. members will remember, was a highly developed system on which the whole administration of Rome rested. It is interesting to note that at that time letters covered approximately 170 miles per day. Just as here the volume of mail is increasing enormously because of increasing literacy, so we see that when the Gutenberg Press came into existence in 1450, literacy and education increased to such an extent that one found a great increase in the mail to be handled. By 1680 we had William Dockwra setting up his “penny post” when letters were first stamped prepaid.

It was really in 1837 when that great British tax reformer, Mr. Rowland Hill, wrote his paper “Post Office Reform—Its Importance and Practicability”, that we saw the next great advance, the first great advance since the Roman period. He suggested for the first time the use of the adhesive stamp, a uniform rate regardless of distance, and pre-payment by stamps. It is interesting that the rate then was one penny per half-ounce which, in present money terms, means that our rates now are cheaper than the postage rates were in 1837. The key of the radical simplification suggested by Hill was high volume. Our present postal system rests on that principle.

Our postal service in this country really began in 1501 when Pedro Alvarez Cabral’s fleet put in at Mossel Bay and Joao De Nova put a letter in a shoe reporting the disasters that had taken place in India and of the death of Bartholomew Diaz. It is interesting to note that the birth of our Post Office was on 28 December 1791 when the following proclamation appeared—I quote from Rosenthal’s book Runner and Mail Coach in which a translation of this proclamation occurs—

Then a post office was started in a room at the Castle. It was called the “Post Comptoir” and it was open from 9 a.m. to 10 a.m. every morning except on Sundays. The first postmaster to be appointed was Mr. Adrian Bergh and the first “brieven bestelder”, or postman, was Aegidius Binet Ziervogel.

Then followed the further development of postal services in South Africa. In this respect I should like to refer to the amusing story of a certain post orderly who used to travel between Cape Town and Stellenbosch in those early days. He was once found sleeping by the roadside while his horse was grazing nearby. When he was awoken and asked what he was up to, his reply was: “I am the express”. If we look at our satellite services today, it does seem as though we have made some advance in this! We have now even reached the stage at which we are talking about launching our own satellite. We are also using Intelstat IV, a satellite in outer space which can handle 12 000 conversations daily. This particular satellite is in orbit, I think, 36 000 km away from our planet. This is indeed a far cry from the small and very humble postal services which existed in the very beginning. These beginnings were, relatively speaking, not so very long ago. The hon. the Minister, in his Second Reading speech yesterday, referred to a solar generated energy system by means of which the farm lines in the Kalahari can be served. According to the hon. the Minister this system is already being used on an experimental basis.

In this regard I should just like to refer to the Camel Post that was opened in the Kalahari in 1900 to convey post between Swartmodder and Rietfontein. That was in 1900, relatively speaking not so many years ago. Today we are talking in terms of solar energy being used in the Kalahari. This shows the remarkable progress that has been made in this sphere in a relatively brief space of time.

Potelin stands at the head of this whole process of technological development. Therefore I should like to pay tribute today to the men and women who staff Potelin, those who run it and control it. I should like to congratulate them on what they have done in order to keep South Africa in the forefront of this industry of high technology which, in turn, is in the forefront of human achievement at the present time. I should like to suggest to the hon. the Minister that he consider once more the decentralization, perhaps, of Potelin. I am certain Potelin could be transferred to the Cape. I should also like to congratulate the hon. the Minister and the Department on their decision to decentralize the audit function to Port Elizabeth. Potelin is the kind of unit which is not involved in the day-to-day running of the Post Office as such. Therefore it could perhaps be effectively decentralized. If the hon. the Minister should be looking for an appropriate site, I know of a site at Milnerton which could be used for this purpose, although there are alternative sites else-where in the Western Cape which may be just as suitable.

*Furthermore, it is my heartfelt wish to pay tribute to the postmen of the Post Office, too, with a few words of gratitude and appreciation. Nowadays we are all used to a highly developed technology. Nevertheless most of us still think of the Post Office in terms of the man who delivers post at the door, dressed in his white cap and uniform. He turns up in all possible weather conditions. In sunshine and in rain he is always at his post, always friendly and courteous. One encounters among postmen people with some of the finest characteristics I have ever come across. One always has a warm and human relationship with postmen, who do their work so efficiently.

They kick your dog.

Mr. Speaker, the hon. member for Parktown made an interesting remark. It seems to me that after all, things never change. In 1873, when postmen in the Cape started wearing uniforms for the first time, the comment of The Cape Argus was—

That could just as well be said today. That, however, is what The Argus said when those people started wearing uniforms for the first time in 1873.

Then, too, I want to convey my warmest congratulations to the Post Office and its staff on their fine achievements to date.

†Finally I should like to point out that nothing can better demonstrate the level of development of our civilization in this part of the world than a few statistics in respect of the Post Office and the services it provides. The number of post offices per 1 000 of the population is something which is often used to gauge the progress of a society and its level of development. The world average, which is of course brought down tremendously by countries in Western Europe, Japan etc., is one post office to every 7 000 of the population. The worst example is to be found in Ruanda where there are 300 000 people per post office. In South Africa there are some 10 000 people per post office. This gives one some idea of the measure of the development of this industry in our country and how it reflects the development in our society.

Did they send you a telegram about it?

No.

*With those few words I should like to support the hon. the Minister and thank the department for the excellent work they are doing for all of us in South Africa.

Mr. Speaker, I should like to mention a few matters raised by the hon. member for Overvaal as well as the hon. member for Maitland. I do not think the hon. member for Overvaal is aware of the fact that the principle at stake in telephone tapping is whether telephone tapping of political parties should be tolerated. It does not matter if it happens by chance to be the HNP, the NP, the PFP or even the NRP, but no telephone should be tapped which is being used for political purposes and in order to make political capital out of it. In the United States of America the Washington Post reporters showed that telephone tapping of another political party had been one of the major factors in the Watergate affair and this led to the resignation of probably the most powerful political figure in the world, the President of the United States of America.

With reference to the remarks made by the hon. member for Maitland it was very interesting to have a lecture on how the postal system developed in South Africa. It was strange that I, too, came across a book that was published about 100 years ago. It was a book that showed that the contractor who took the post from Cape Town to George received £2 387 a year for taking the post there three times a week. It used to take four days to get there. His was rather a good speech and I enjoyed listening to it.

While I listened to the hon. the Minister of Posts and Telecommunications lauding the success of his Department and telling of the many facets of the new developments that were going to be made available to the consumers of South Africa, my mind went back to the times of Sir Rowland Hill, the father of the modem post office, who was also mentioned by the hon. member for Maitland. It was over 1½ centuries ago that he introduced the system of Penny postage and the first adhesive stamp in Great Britain. The hon. the Minister labours under the same difficulties that confronted Hill so long ago. Hill said—

Yesterday the hon. the Minister indicated that the posts and telecommunications services are absolutely without limit. Important changes are taking place but, like Hill, he is uncertain as to the time of their accomplishment.

I should like to dwell for a short time on the shortfall in postal services. From the manner in which the accounts are presented it is indeed impossible for me to know how the expenditure and revenue in respect of postal services are arrived at. There is still a shortfall of R84 million. The Post Office has been granted a virtual State monopoly of communications, whether by writing, by voice or by sight. Therefore it should not be compartmentalized but should serve the whole purpose of communication. I believe the hon. the Minister will be doing the country an injustice if he abides by his statement that the tariffs of those services will be adjusted to a maximum subsidization of 10%. He has the monopoly and he must try to increase the usage of the more profitable services such as telecommunications. I shall deal with this matter further under Marketing, Advertising and Promotion.

Postal services are labour intensive. This is a very labour intensive business. Despite the automatic mail sorting machines at a few large centres, the mail eventually has to be sorted into boxes or street addresses and no automatic machine can read the final destination of a letter.

I should like to read from a publication which deals with Communications in Holland and is published by the PTT, which is the postal and telecommunications services of Holland, to show the hon. the Minister that they have exactly the same problem. I quote—

It almost sounds like the hon. the Minister’s speech which was made yesterday, viz—

To my mind one of the major problems is the task of standardization of envelopes. I believe that the time has come for the Bureau of Standards to be called in to devise a limited number of standardized envelope sizes. This must be done in conjunction with the envelope manufacturers and stationery representatives. After the actual standard envelope sizes have been agreed upon any letter not conforming can be surcharged because it involves extra labour and handling. I believe we should also take the lead, although we are not members of the Universal Postal Union, to try to get standardization of envelope sizes all over the world within the next 10 to 20 years. Otherwise the task of sorting will become intolerable as the amount of mail increases.

The next point I should like to deal with is that of agency services. The hon. the Minister drew attention to pension vouchers, radio and television licences, customs duties, revenue stamps, Treasury and bonus bonds etc. With a surplus of only R1,75 million in this regard I believe the Post Office is underpaid. These have become major time consumers at the Post Office and I think the hon. the Minister should call all his colleagues together to discuss ways of obtaining more money from them.

I should also like to deal with a very important branch of the Post Office which is not fulfilling the role that it should, namely the Money transfer and Savings services provided by the Post Office. I wish to quote from the annual report of the Postmaster-General for 1979-’80—

Of these, savings accounts were R230 million, Savings Bank certificates just over, R800 million and Union Loan Certificates and National Savings Certificates R190 million. The interesting remark comes now—

It will be noted that 65% of all savings in the Post Office are in Savings Bank certificates. This provides the Post Office with an excellent source from which to fund its capital requirements at a very low rate of interest. However, it should be noted that the increase of the rate to 8¾% under the present circumstances is not sufficient as inflation is running at 15% per annum. The person who invests the maximum of R10 000 for a tax-deductible benefit could be losing on the deal. He should actually be getting R11 500 at the end of the first year if he wishes to maintain his capital at R10 000 with the same purchasing power. In actual fact he only receives R10 875 which results in a loss of R625 in his purchasing power. Because of the tax benefit it may not be necessary to pitch at 15%. However, I believe 8,75% is too low and that it should be 10%. Secondly, the amount of R10 000 per person per family is also far too low. This was introduced many years ago, and inflation demands that this amount should be raised to, say, R25 000 for tax deductions and R50 000 maximum per person in toto. I can assure the hon. the Minister that his chances of doubling his savings within a short time from R800 million to R1½ billion would be very good. Even at 10% under today’s conditions, this would be cheap money.

I should like to deal now with the question of the expansion of the transfer of savings services of the Post Office. I believe the time has come to introduce a GIRO-service in South Africa because the Post Office has this fantastic telecommunications monopoly and all the necessary equipment. It is well fitted for this work, namely to provide low cost current account facilities and money transfer systems at every post office. However, I do not want to go into all the details of the GIRO-service but I should like to suggest to the hon. the Minister that the whole question of the investigation of the money transfer and savings services and their expansion in South Africa should be referred to the Select Committee on Posts and Telecommunications so that they may take evidence from both the public and private sectors, as well as obtain evidence from overseas, and avoid any discrimination between the various sectors in our country.

In conclusion, I should like to deal with marketing, advertising and promotion. I am pleased that the Post Office as a monopolistic organization has for the first time devoted R750 000 for advertising and promotion after providing a paltry R30 000 for the past two financial years. I believe it is completely wrong to call this publicity, as appears on page 4 of the estimates. The Post Office does not do enough business because it does not tell its consumers what it has to offer. It has never put an advertisement in the best media over which it has ultimate control, in the issuing of licences, both television and radio and not forgetting also the Press, magazines and billboards. Because it has a monopoly over telecommunications and postal services, it does not have to hide its head under a bushel. It is now spending tø% of its revenue on advertising and promotion in a consumer market. The average business in consumer goods spends about 5% to 10% of its turnover in the promotion of its products. The Post Office must make profits in order to subsidize its communications services, such as postal services. It must understand that it pays to advertise. If the revenue from telecommunications could be doubled, I am sure that there would be so much additional surplus that the hon. the Minister would never have to increase postage tariffs. The Post Office could embark on a new era of expansion. It will be the best monopoly of the State in the service of the people of South Africa. In effect, it is, like most businesses, receiving 80% of its profits from 20% of its services.

Finally, having taken the plunge into advertising and promotion, let me in conclusion warn the Postmaster-General of Lord Leverhume’s famous injunction—

May I finally quote that great parliamentarian, Edmund Burke, who said—

Let me exhort the Postmaster-General and his excellent staff throughout the country to be projectors, to look forward with confidence to the future and to see no difficulties. Then they will at every possible opportunity be able to confound their critics who only see difficulties.

Mr. Chairman, the hon. member for Bezuidenhout, like all the other members on that side, is suffering from an eavesdropping complex. They are dead scared someone will say something or hear something. I do not know why they are so afraid, because we do not participate in such practices. As far as they are concerned, everything hinges on eavesdropping. The hon. member must be careful. One of these days he will be unseated, because the J.G. Strijdom tower is not far from there and true to its name, many National Party signals are broadcast from the J.G. Strijdom tower and then Bezuidenhout will become Nationalist again.

That will be the day! You won’t live that long.

One of these days Bezuidenhout will be Nationalist again. The hon. member will see the PFP blown away there.

There were cost increases over a wide front, as the hon. the Minister pointed out. There is the inflation spiral and there is a shortage of staff. The total expenditure is only R4,9 million more, but the other side of the matter—and this is encouraging to us—is that thanks to the top echolons the two key elements in the Post Office—the Postmaster-General and his assistants as well as the hon. the Minister—remained intact.

Sizable expansion programmes are being initiated and communication services have grown to great proportions. As against the total expenditure which rose by R4,9 million, the total revenue rose by R35 million or 3,2% and I therefore do not know what all the fuss is about. After provision has been made for loan redemption, for an increase in the standard stores capital and for expenditure on the housing scheme, we have a surplus of R110 million.

I therefore do not know why there is such pessimism. The full-time staff only decreased by 0,1%. Surely this is a very low percentage. The number of telephones increased by 10,2% and the other day—as the hon. the Minister pointed out—the 3 millionth telephone was installed, in Port Elizabeth.

As a result of a resurgence in the economy and higher standards of living, especially among the Coloureds and the Blacks, the demand for telephones has increased tremendously. I should like to emphasize that the hon. the Minister should go over the waiting lists again. It frequently happens that people place their names on a waiting list only to find later on that they no longer need the specific service. The same thing happens with waiting lists for the lease of premises. I should like the telephone waiting list to be analized. It should also be ascertained to what extent party line telephones can be used.

However, an automatic telephone system with 175 000 lines and 20 electronic exchanges with 72 000 lines are to be put into operation. Why should this not alleviate the telephone shortage?

Before I discuss this matter further I wish to point out that we visited the local post office the other day. It was very interesting that the hon. members of the PFP only accompanied us to the Cape Town Post Office and then disappeared. I do not know if they then went to sit at Crossroads. When they should have been looking at what is happening in the telephone section near Retreat, not only at the factory to make telephones available, but eventually to stimulate the industry with 2 500 employees of whom most are Coloureds, the members of the PFP were conspicuous by their absence. They should not ask us where the telephones are and point to the long waiting lists now. They should have come to see all the modem components which are now being used.

The telephone services section has made phenomenal progress. I know there is a loss of millions of rands on the part of the posts and telegraphs services and I also know that these services cannot be subsidized forever. The question is whether it is in the interests of the Post Office, the State and the private sector that it should always be subsidized by 30%. I agree with the Postmaster-General when he says that gradually something must be added to this and that there must eventually be increases in the tariffs so that the subsidy will eventually be only 10%.

It is in this regard that I consider the Post Office to be so wonderful: It took cognizance of the Franzsen Commission which laid down the formula that 50% of capital requirements should be sought from loan funds and the remainder from other sources such as surpluses as well as provision for depreciation and higher replacement costs of capital assets.

Of course 50% is low if one takes into consideration that financing in other countries varies from 77% to 100%. We also know that the Post Office Savings Bank will be electronically controlled by the middle of 1982. This is a further step forward in order to obtain funds so that it will eventually be possible to develop to its fullest potential. We sincerely hope that as a result of the new telecommunications service which is being introduced, a wonderful thing will happen. The hon. the Minister has done all these things without announcing any tariff increases. Thorough regard is now being had to the profitable sections as well as those which are heavily burdened.

While we are on the subject of telephones, I wish to ask the hon. the Minister whether he has found a name for those automatic push-button telephones which will come into operation in 1982.

It is the Disa.

What is the other name again?

The Lorea.

Oh yes. I was not certain whether it already had a name or not. I thank the hon. the Minister for that information. Rising costs in various fields are a matter I should like to discuss with the hon. the Minister today. Has the time not arrived to take a look at what is going in the publishing industry? From time to time publishers raise their printing costs, and then the Post Office is blamed for the increase. Can the hon. the Minister not perhaps show the publishers what is really being done by the Post Office?

I made a study of the matter. In South Africa alone almost 50 million newspapers and magazines are sent through the post every year, and the postage varies from 10,3 cents for a mass of up to 50 grams to 22,5 cents for a mass up to a maximum of 500 grams. There is also a newspaper rebate, which means that it costs only 4 cents to despatch an item weighing up to 100 grams, 4,8 cents up to 250 grams and 6 cents up to 500 grams. Let us now make a calculation for a magazine with an average mass of only 100 grams. It will therefore cost R2 million to post 50 million newspapers a year. This R2 million only covers postage, and one must still add the handling and transport costs. Then the postage costs rise to R5,95 million. This means that those 50 million newspapers or magazines entail a loss of R3,95 million to the Post Office. I think publishers should also take cognizance of this, because 1,86 billion mail items are despatched every year and it is not known how many of these items are unregistered publications. If one considers all these aspects, one sees that standardized items, such as ordinary postal articles, cost only 5 cents. This however only covers postage, but handling costs amount to an additional 8,2 cents.

Let us take another case. An item sent by surface mail with a mass of 2 000 grams, costs 35 cents. But this is only the postage. The handling costs amount to an additional 63 cents. A good look must therefore be taken to see how these matters can be weighed up against one another.

There is also a further rebate of 20% to 30% on the said tariffs, a rebate which also benefits the publishers. The income from the postal service for the year 1981-’82 is estimated at R139,3 million and the operating costs at R223,4 million. Consequently there is an operating loss of approximately R84,1 million. There are also services which the Post Office is rendering which can never be economical in the long term.

Let us consider the revenue figure of R139,3 million. Only R113,5 million is actually obtained from postage. It is not possible to ascertain exactly what portion of the operating expenditure of R223,4 million is for the handling and conveyance of postal articles. Based on a minimum cost of 8,2 cents for a standardized item, the handling and conveyance costs amount to at least R152,5 million. These are all matters to which we shall have to give attention, if we eventually want to make a success of this entire matter.

If Marco Polo, the well-known Venetian traveller of the 14th century, could see how much the postal service has already expanded, he would be astounded. In his time in China he came across 10 000 post stations with 200 000 horses. There was another Eastern ruler named Abu Diafar Manssur. This famous Eastern potentate made the following confession—

This is what this hon. Minister is, he, together with his top management team, is one of our pillars who keeps things functioning. The regular and rapid delivery of postal articles has created problems through the years.

In early times letters were conveyed at seven miles an hour by Chinese runners. The runners first had to pass a strenuous test. Empty bags were tied to their arms, legs, backs, shoulders, sides and heels. They began training without any weight in the bags, but later flour was placed in the bags. Then they had to practice until they could maintain a speed of seven miles an hour, after which post was placed in the bags. Only then were they fit to carry post. In our country matters have developed to such an extent that today we have the postman, a person who plays a very important role in our lives.

One of the previous speakers mentioned camels. It is interesting that at one stage insufficient food could be found for the camels and sometimes camels had to be imported from Egypt to replace those that had died. This was the beginning of a parcel service because one camel carried the driver and the other carried the post. In that way the postal service developed to the heights it has reached today.

I should like to tell the various postmasters and the hon. the Minister that we are glad that so much is being done for us. The other day during our tour I spoke to the postmaster here in Cape Town and he told me the staff in the Western Cape had raised R41 000 for aid funds. They collected R26 000 for the disaster fund. I remember how, when I was the secretary of Die Transvaler’s Christmas fund, Mr. Henry Bester, who was in Johannesburg, made strenuous efforts every year to ensure that Die Transvaler’s Christmas fund, Die Vader-land’s Strandfonds and The Star’s Seaside Fund all received money. This is the wonderful example which these people set.

I should also like to mention the first fibre cable connection in the southern hemisphere which will become a reality on 19 October. That cable will be laid over a distance of seven kilometres between Witpoortjie and Roodepoort. The system will be able to withstand thunderstorms, lightning and even the sparks which the NRP and the PFP cause on the line.

What?

Yes, there are still members of the NRP in my constituency.

Are there?

Yes, there are still a few. This cable is of such a nature that no disturbances or bugging devices will affect it. It will be one of the most wonderful technological inventions, and we wish to thank the hon. the Minister for his vision, for the wonderful facilities he makes available to us and for his wonderful department, which will go from strength to strength to the year 2000 and beyond.

Mr. Speaker, it is not a major problem to speak after a veteran like the hon. member for Rosettenville. He himself has only one problem and that is that he still has NRP supporters in his constituency whereas we in Losberg have already got rid of them.

How are the HNP faring in Losberg?

There are already far fewer HNP supporters, too. [Interjections.] I wish to join with previous hon. members in saying that when we were privileged to listen to the speech of the hon. the Minister of Posts and Telecommunications yesterday, we were impressed by the competence of the Minister in charge of this specific portfolio. Of course this excellent budget and the exceptional results of the department cannot be ascribed solely to the exceptional competence of the hon. the Minister; much of the credit and congratulations must go to the efficient and devoted officials for their service and help. Congratulations, therefore, to the hon. the Minister and the Post Office staff for the efficient way in which they handle postal affairs in South Africa. I also feel it as a heartfelt need to single out the Post Office staff who represent the Post Office in Parliament and assist the members. We always get quick service from them and they are always friendly. I therefore also wish to say a word of thanks to them. I also wish to thank the hon. the Minister for not announcing any tariff increases for this financial year.

A matter close to everyone’s heart is the staff shortage. This staff shortage, and of course the technical staff leaving the department too, are cause for concern. I am also aware, of course, that in certain trades the private sector in its turn is losing staff who can be accommodated at a better salary and with better conditions of service in other Government departments. The great mistake many of our public service staff make—this also applies to the relevant people in the Department of Posts and Telecommunications—is that they only look at the immediate tangible amount of money which they will receive at the end of a working month and do not give much attention to other benefits such as a medical fund, a pension scheme, a housing scheme, etc. Moreover, most of them do not save enough over the years to be self-sufficient when they retire. Then they suffer financially in their old age, whereas they could have retired with a reasonable pension. In this particular regard one would like to make an appeal to the public service staff and specifically the Post Office staff to think twice before they leave the Public Service and enter the private sector.

In an attempt to overcome the immediate staff shortage or to make a partial contribution in this connection, it is perhaps as well to reconsider postal deliveries to the homes of the general public. I agree with the hon. members for Maitland and Rosettenville, who said that one is very grateful to have the convenience and advantage of postal deliveries to one’s home. However, this is a luxury which most of us could in point of fact do without. I think we can do away with the traditional postman. We can use these people much more productively elsewhere in the Department of Posts and Telecommunications. By this I do not mean that we must do away with postmen completely. There will still be a few to deliver telegrams which, owing to the delicate information they contain, cannot be read out to the addressee over the telephone. This also applies to express mail which must be delivered urgently and other urgent items requiring delivery. In this way we can accommodate many of the delivery officials elsewhere in the department.

Naturally there must be an alternative way for the public to get their post. What I have in mind in this connection is that postboxes can be erected at various places in a town. A member of almost every family certainly goes to the central business centre of his residential area once a day. If his postbox is there, he can collect his post without difficulty. In this way one delivery official can do the work of about five. All he need do is place the post in the various postboxes. For this purpose we can even make use of the services of pensioners or women who are normally housewives. They can do this work on a part-time basis.

What should be borne in mind is that many pensioners also wish to play their part in the community and in the labour field, but are no longer able to do a full day’s work. The same applies to housewives who have to look after their families, but who can none the less set aside a few hours every day to do other work. This idea could possibly be investigated by the department in due course. Although it will definitely not solve the problem of staff losses and the shortage of staff, it could none the less still make a small contribution in the quest for a solution to this particular problem.

Another aspect I wish to raise here is the payment of a basic deposit by telephone subscribers. It is true that an amount of only R2 133 607,50, to be precise, has been written off by the department as non-recoverable telephone revenue. This represents a mere 0,26% of the total telephone revenue. We may think that the amount seen as a percentage of the whole does not justify such a proposal. However, what one should not lose sight of is the manhours spent collecting this money, the expenditure on correspondence and even telephone calls, and apart from that, the responsibility placed on the shoulders of the Department of Justice, which, by taking legal steps, must collect the amounts due. In this department, too, time is spent which could otherwise have been used in a much more useful, positive and productive way.

When I speak of a basic deposit to be paid by telephone subscribers, this is also of course something which can be done in more than one way. In the first place, for example, a basic amount can be paid for every telephone line used by a subscriber. This amount need be paid only once, and can be paid back to the subscriber when he terminates the service. For example, one could pay R20 as a basic deposit for every telephone fine. This is, of course, over and above the connection fee and monthly rental payable. In the second place, it could also be done on the basis of a sliding scale. In other words, the subscriber makes an estimate of his monthly telephone account, and then pays an amount equivalent to the monthly account as a basic deposit.

Let us consider a few advantages which can arise from such a practice. In the first place, in the case of a private telephone subscriber one has the advantage that when a subscriber does not pay his account, his service is still discontinued and his deposit is used to pay the outstanding account. Only after he has paid his account and has also put his deposit in order will the telephone service be made available to him again. In the case of an estate, the department need not wait months or sometimes even years for payment. The amount owed by the estate of the deceased, is deducted and the balance paid to the estate. In cases where there is a shortfall, the department puts in a claim, but at least much of the account will already have been paid.

The same applies in the case of companies. They also pay the basic deposit and—as is the case with a private individual who becomes insolvent—the deposit of a company that has been placed under liquidation can offset the loss suffered by the post office. Probably the first thing hon. members will think of is pensioners, the handicapped and sickly people who urgently need telephones but do not have the money to pay the aforementioned deposit. One could easily exempt these people from paying such a deposit. These are probably the people who always meet their obligations to the department because they would be totally lost without this service. From time to time exemption from the payment of this specific deposit can also be granted in other deserving cases.

It is surely the aim of the State not to take legal action against its citizens, and in this way one can take another step towards succeeding in this goal.

When I requested earlier that to a large extent we get rid of postmen, and place them elsewhere in the department, I could not help thinking about the educational side of our population. I should like to give hon. members a comparative picture of this aspect. The percentages I shall quote are those which pertained in November 1979. At that stage only 30% of the population of Angola was literate. In Zimbabwe the figure was 68%, in Bophuthatswana 45%, in Zambia 47,7% and in Ethiopia—interestingly enough—only 9%, while the figure for Zaïre was 15%, for Uganda, 31% and for Mozambique only 7%. And what about South Africa?

In November 1979 South Africa had a literacy rate of 89%. We therefore have a tremendously high literacy figure and we can and must use our brain-power in this particular regard. In conclusion allow me, therefore, to refer to my constituency, in which is situated a certain post office which I should like to bring to the attention of the hon. the Minister. In the Brillie Park area, in the Losberg constituency, we have a fairly densely populated area which has again expanded to the area of Vanderhoff Park, which borders on it. The Department of Posts and Telecommunications has land of its own there, and the request is that serious consideration be given to erecting a post office in that area. That area has an old-age home and four schools, three of which are boarding schools, and the area is also surrounded by smallholdings. The population density in that area is therefore particularly high, and there is a definite need for a post office with the basic postal facilities to be placed at the disposal of the community. I therefore request the hon. the Minister and the department to give serious consideration to this matter.

Mr. Speaker, I am glad the hon. member for Losberg referred to the staff shortage. At least he admitted that there was a problem in this respect. I want to go further and call it a crisis and not a problem. It is a crisis which the hon. member for Sunnyside clearly does not want to recognize because he interjected that he was not aware of any crisis. It is certain, however, that the postal services themselves consider this problem to be a crisis. That is why they appointed a subcommittee in May to investigate the problem of a staff shortage, the staff crisis. This followed representations by the S.A. Telecommunication Association. They made it very clear to the Postmaster-General in May this year that as far as they were concerned, there was indeed a crisis situation in the Post Office. In this regard I want to refer to a brief article which appeared in Die Burger on 29 May this year. The article reads—

They also referred to the inefficiency which would result in the Post Office should that crisis continue.

†It is this crisis which I believe we must recognize as such because if one is not prepared to recognize a problem, one will not be able to tackle and solve it. It is our duty here to try to recognize problems and then to tackle them rather than whitewash them and thank the hon. the Minister and the department as was done in every speech that we have heard today. We appreciate what they are doing, but we are here trying to solve problems, not to “dank die Minister” all the time. The crisis in the labour field was referred to by the hon. the Minister in his speech yesterday and is not a problem which is peculiar to the Post Office only. It is a phenomenon that we find in the private sector as well as in commerce and industry. However, in the Department of Posts and Telecommunications it appears to have reached a stage where it is starting to affect expansion programmes and to hamper the development and the implementation of programmes that the department has planned. The department and its activities play such a vital role—and this has been mentioned before today—in the economy as a whole that the country cannot afford a situation where, because of a staff shortage, the development is held back. If one has a look at the figures which the department has produced, one can see how serious the position really is. I am not dealing now with the staff in the management and administrative section, because in that section as a whole it appears that the department has been able to maintain the levels of employment which existed in March 1980. In fact, there has even been significant improvements on the March 1980 figure. But I am referring specifically to the technical section in the department where the situation has reached frightening proportions. At the end of June this year the department had only 7 350 telecommunications electricians—that is both Blacks and Whites together. In March 1980, 15 months before, there were 8 058. This represents a drop of 708 telecommunications electricians over a period of 15 months. That is equivalent to 8,8%. Amongst Black electricians there has been a drop of 77 during the same period—from 828 to 751—which represents a drop of 9,3% over the 15 months prior to June 1981. It is the first time since 1978 that the department has had to cope with such a small number of electricians. The situation is even more serious among the White electricians. There was a net loss of 631 over the same period of 15 months. There was a drop from 7 230 in March 1980 to 6 599 in June 1981, a drop of 8,7%, the worst in five years. In 1976 a more or less equivalent number of White electricians were employed and between then and 1981 there always have been more than are employed at present. This shortage, specifically of electricians, has a direct bearing on the growing backlog of new telephone service installations. We know from the report tabled yesterday by the Minister, that the backlog has increased from 104 200 in March 1980 to 141 200 in March 1981. Unless the department can stop the drain of electricians and other related areas in the technical staff, that is likely to increase. The crisis in the shortage of technical staff has become particularly noticeable amongst the White section and not so much amongst the Blacks. If one looks at the figures furnished in the estimates, one can see that also the number of engineers employed has dropped over the last 15 years. One sees that in respect of technicians and draughtmen there was a drop of 3%. Telecommunications mechanics also experienced a drop. What is most worrying, is the pupil technicians, the new-comers, has dropped significantly. That suggests—it obviously is the case—that the recruitment drive which the Post Office embarked upon was not as successful as was hoped. If that trend establishes itself, namely that the Post Office is not able to recruit even enough people to keep up with the previous year’s limit, then it starts to face real problems. Fortunately amongst the Black pupil technicians there has been a significant improvement in that over the 15 months up to June 1981 there was an increase of 733 pupil technicians, which is a very significant and positive result in the department.

These are some of the problems which exist. If one looks at Black employment in the technical section, one notes that there have been significant improvements and one has to congratulate the department on taking the lead as far as the public sector is concerned in training, in recruiting and investing in that field.

One tries to bring about an overall improvement and one tries to make suggestions as to resolving the crisis. Salaries are the main problem. The salaries of the Post Office personnel were increased by an average of 12%, but from statements made by the staff unions it appears that this is not regarded as sufficient to close the gap between the public and the private sectors. Obviously this is one of the main problems which the department faces.

The subcommittee which was appointed in May was, as I mentioned earlier, appointed, I presume, partly as a result of representations made to the management. Part of the suggestions made by the staff unions were that on that committee or on any committee looking into wages there should be representation from the various staff unions. I want to ask the hon. the Minister whether this was done, because that, in my view, is essential if the grievances and the views of the staff unions and their members are to be accommodated.

Improving the salaries, even if the department did manage to do that, will in itself not resolve the problem and that is why the difficulty in which the management finds itself is appreciated. In my view it has become absolutely essential to increase the investment in and the concentration on the training of Black technical staff because that is the only sector of our employees’ market which has not been tapped to the full yet. We can see from the figures in the report that as far as White employment is concerned there is a drop and it is clear that in future there will be further drops because of population figures. The Black sector is a market which has to be tapped. Although the department has made a start, I believe that far more has to be invested in that field than at the moment.

The number of Black pupil technicians, as I said earlier on, is an indication that there is a market and that there are people who can be trained for the job. We can see that overall the department has for the past five years employed about 7 500 more Black staff members and this is an indication where future development should take place.

I wish to refer briefly to the housing scheme of which mention was made in the speech of the hon. the Minister yesterday. This is a scheme which ought to be welcomed. Provision of 14,5% is being made for the 1981-’82 financial year, but I should like to make an appeal to the hon. the Minister that the full benefits of that scheme should be extended to other centres where staff crises and staff shortages are experienced, because at the moment the scheme seems to be restricted to the Pretoria-Wit-watersrand-Vereeniging area. I am referring in this particular instance to Durban for example which was specifically mentioned by the hon. the Minister in his speech as an area where there are staff problems. I should like to ask him whether he would consider extending the full benefits of this scheme to the Durban area as soon as possible because the problems which are being experienced there in the housing field and in connection with a staff shortage are the same as and similar to the ones on the Reef.

I should also like to refer very briefly to one last aspect, to a problem which is not only peculiar to post offices in my constituency, but which must be a problem in other post offices as well, and that is the accessibility of post offices to elderly and disabled people. This being the Year of the Disabled, I think it is opportune for a moment to think of their plight. Some post offices in my constituency are perfectly planned and it is very easy for the disabled to gain access to them to make use of the telephones for instance. However, there are others, for instance the post office in Flora Road in my constituency, which have ramps or steps and which therefore make it impossible for the disabled to even reach the post offices. I am therefore making an appeal to the hon. the Minister that in planning post offices, particularly in the case of small branches where the local residents will inevitably go to the post office themselves, provision should be made for facilities that the disabled need, and these are usually accessible telephones situated not too far from the street, on not too steep an incline and with no steps leading to them. There are post offices in my constituency that are well planned, but problems are still being experienced by many elderly and disabled people.

On the whole, as the hon. member for Hillbrow has indicated, the finances of the Post Office are on a sound footing, and the problems that do exist ought to be tackled realistically rather than trying to white-wash everything.

Mr. Speaker, I want to agree with the last part of the speech of the hon. member for Durban South in particular. I think it was a fair request which he addressed to the hon. the Minister. However, the commencement of his speech was not quite fair, for he saw too many crises. While I was watching him and thinking about his crises, I came to the conclusion that he belongs to a crisis party as well. In fact, they appear to be suffering from crisis-itis.

Mr. Speaker, this Post Office budget is probably the greatest disappointment to the official Opposition after the censure debate, for in this budget there is nothing for them to scavenge. If there had been increased tariffs, there would certainly have been heard an outcry. The official Opposition with its “daily wail” would then have bayed louder than “The Hound of the Basker-villes”. During February this year the Opposition’s official chief spokesman on Post Office affairs said that it had been an election budget. In my opinion he ought to have admitted here today that he was wrong. Why does he not do so? After all, we are not in the throes of an election contest now. Not a single tariff increase has been announced in this budget, and consequently I believe that the chief spokesman of the official Opposition ought to admit that he was wrong.

I was at pains to listen attentively to the Second Reading speech of the hon. the Minister. I studied the annual report as well and judging from the data I gleaned from it, I am convinced that the Department of Posts and Telecommunications is on the move. One could perhaps find something of a personal nature to complain about, but we are definitely dealing here with a department which is on the move, to such an extent in fact that communication has caused a whole revolution in South Africa during the past decade or two. I should like to illustrate this with a few examples. In 1960 there were only 900 000 telephones, of which 70% were connected to automatic exchanges. Today we have more than 3 million telephones, of which more than 90% are connected to automatic exchanges. I think this is an achievement, something of which this department can be very proud.

During 1960 radio telephone systems were the only means of person-to-person communication with the outside world, and the sound quality of the transmission was often poor. Today telephone calls are being conveyed via a marine cable which is more than 10 000 km in length, as well as by satellite connections.

Ask McHenry.

In 1975 the Post Office’s own satellite station was put into operation at Hartbeeshoek. Shortly afterwards a second, third and even a fourth antenna was erected in order to connect South Africa with the satellite system via the Atlantic and Indian Oceans. As a result of that we are able to communicate with all parts of the world. I think these are exceptional achievements. Today these very clear sound waves are allowing us to make direct dialling contact with more than 34 countries.

This is a further achievement of this department.

During the same period the number of telex subscribers has increased from a mere 1 700 in 1960 to 21 000 today. These services are being processed through 12 automatic exchanges, and are connected to subscribers in 98 countries. In addition the manual exchange in Johannesburg grants access to a further 94 countries.

Telephones and other complex items of equipment have not remained static. In the electronic era in which we are living things are changing very rapidly. Whereas a large area was previously required to house an exchange, a similar exchange can virtually be fitted into a filing cabinet today. This is progress which should be recognized. The same applies to telephones. The hon. the Minister announced that we are acquiring a new telephone called a “Lorea”, with all its intricate built-in mechanisms. It even has a built-in memory. These telephones have been available for the past three or four months, but even before we have these telephones, there is another new telephone available, viz. the “Disa”. The “Disa” is even more intricate than the “Lorea”. It has a built-in loudspeaker and microphone.

During this era of engineering expertise one comes across something new every day. I should like to make an appeal to hon. members, particularly to the hon. members on the Opposition side, to display a little more understanding for the Post Office and its people, especially in respect of its training programme. The Post Office has a very difficult task, for it must train people to keep up with the rapid development which is taking place, but also to know how the existing equipment works. I want to mention a few examples. In future there will be telephones without receivers. Furthermore there will be telephones in motor cars. A few have already been installed. Furthermore there are electronic-mechanical systems with computer controlled relays. With this system one need merely press buttons and one is immediately connected to the other end. One need not wait for dial selection. In years to come women will merely have to pick up a telephone in order to be connected with a television service to ascertain the latest prices of sugar, milk, etc. It will be possible to give them all this information on a television screen. It will also be possible to make inquiries about the weather forecast, etc.

In his speech the hon. the Minister also mentioned conference rooms. It will be a unique event when people in Pretoria, Johannesburg, Kimberley, or wherever they may be, will be able to hold a conference by way of closed-circuit television, will be able to look each other in the face and be able to thrash out problems with one another. This is an exceptional achievement.

Furthermore the department has kept pace with the tremendous increase in the number of postal articles. Since 1960 the number of postal articles handled has doubled from 900 million to 1 800 million. Moreover I want to associate myself with a previous speaker who also paid a visit to the sorting section of the post office here in Cape Town. It is absolutely remarkable to see how post is being sorted with the new automatic machine. In Cape Town approximately 500 000 letters are being sorted every day. But even these machines are not perfect, and once again an earnest appeal can be made to the public to co-operate, for by using the standardsized envelope and affixing the stamp in the correct place and by not making a small package of their letter, they can help the post office save thousands of rands every year, for the post office still requires a large staff to deal manually with the letters which the machine cannot process. In that way, as well as by using postal codes, the public can contribute a great deal to better and quicker service.

As mentioned earlier, the public receives exceptional service for the five cents it pays per letter. If one posts a letter and it is despatched to Pietersburg or wherever and delivered to someone’s house for only five cents, I believe the public, too, can make a contribution towards being helpful in this regard. I believe that 3 million postal articles are being sorted in Johannesburg every day.

If one were to look at legislation of a century ago which dealt with the conveyance of mail matter, one would observe that the old Postal Act stipulated that—

Furthermore it stipulated how secure the repository would have to be and that they were to be covered with a waterproof tarpaulin. Section 30 of the Act stipulated that—

If one were to apply this information to the Johannesburg post office there would have to be 75 mail coaches and approximately 300 horses every day to convey the mail matter of the Johannesburg post office. It may be interesting for Transvaal members to know that when an epidemic of horse-distemper broke out, zebras had to be purchased at ten pounds each for the Zederberg mail coach. The mail coach used between Pietersburg and Leydsburg.

I just want to point out another interesting aspect of mail sorting. The Post Office is well aware that terrorism throughout the world assumes all kinds of forms, including the use of letter bombs. However, I do not think the public need be concerned; they may rest assured that the Post Office is keeping more than just a watchful eye on this matter as well. The Post Office is prepared for this and is geared to ensuring the safety of its own people as well as that of its clients, i.e. the public. I do not think one can say more about this matter.

After a critical analysis of comparative statistics I have no doubt that one is dealing here with a disciplined and motivated staff which is rendering high-quality service beyond the production line. Not only are they rendering excellent service during working hours, they are also rendering selfless service to the community. Allow me to mention a few examples. It has already been pointed out that in a certain district thousands of rands were collected for charitable purposes and on behalf of organizations which take care of the lesser privileged. In the Free State—this is the part of the world I come from—more than R12 000 was raised during the past year. I think it was the hon. member for Umhlanga who referred to the fact that Post Office staff had raised R125 000 for the Laingsburg disaster fund. This is a wonderful achievement. The Post Office itself suffered a grievous loss in Laingsburg.

In the cultural sphere the Post Office has an organization which is known as the ATKB. This is an organization which renders a comprehensive service to its people. It is not only rendering a service to the Post Office staff, but to the public of South Africa as well. This organization, inter alia, played an important part in the establishment of the fine Afrikaans-language monument outside Paarl. It is an adornment to our country. The ATKB has also been responsible for the establishment of holiday resorts for the staff in the interior as well as on the coast.

In the field of sport the Post Office staff have a wonderful record. It was not easy to establish how active they are at club and provincial level. I know that in the Free State approximately 500 members participate in sport and serve on management committees. On the national level, on Springbok level, the Post Office staff have a wonderful record. More than 40 Post Office employees have won their Springbok colours for athletics, tug-of-war, softball, soccer, judo, angling, cycling, skating, cricket, etc. Some of our best cricket players who won Springbok colours were members of the Post Office staff. And the same applies to rugby. I am speaking under correction, but I think that Mr. Cockrell, who is in New Zealand now, works or worked for the Post Office. I think so. He is at present in the land of the All Blacks. The Post Office produced a captain in the sphere of gymkhana. In addition there is surfing, pistol-shooting and target-shooting, etc. A young woman who works for the Post Office—and I think she is in the same team as the hon. the Minister—won her Springbok colours for targetshooting. While we are referring to shooting I just want to point out that the hon. the Minister is the captain of his department’s target-shooting team. I do not know how many hon. members are aware of that.

Hear, hear!

They also have an inter-departmental target-shooting competition every year, which the hon. the Minister happened to win. He won the service rifle section, and was second in the Bisley competition. This is the competition in which all the Government departments, with the exception of the Department of Defence—I think—participates. Consequently we can congratulate the hon. the Minister on these achievements as well. I am aware that he can shoot. In fact I have had the privilege of going shooting with him. He is a good shot.

Why didn’t you bring us some biltong?

We have no biltong. [Interjections.]

The Post Office is making its contribution as far as our national defence is concerned too. A considerable number of members of the field unit of the Post Office have been decorated for their good and excellent service in the operational area as well. [Time expired.]

Mr. Speaker, it was a pleasure at the end of this peaceful debate to listen to the hon. member for the Free State—if I may call him that—who told us today how important the Free State is in the structure of the Post Office. In addition he elaborated on the entire wide spectrum of the Post Office’s activities. In due course I shall react to the speeches of the individual hon. members who participated in the debate.

At this stage I should like to refer briefly to the amendment moved by the hon. member for Hillbrow, in which this House is asked to decline to pass the Second Reading of this Bill unless the Government undertakes, in the first place, to recruit staff and to concentrate on the recruitment of staff, giving priority to technical and professionally trained staff and, in the second place, to expedite the installation of telephones in order to eliminate the substantial backlog of outstanding applications. On this occasion I wish to say briefly, that to my mind, neither of the two legs of the amendment are sound, because we are doing exactly what this amendment implies we are not doing.

But are you going to accept my amendment?

Mr. Speaker, we have a Bill here which must be passed, not an amendment which is meaningless and makes absolutely no sense because what the amendment is demanding of us is exactly what we are already doing. [Interjections.]

The department is already recruiting staff. I am sorry that the hon. member for Umhlanga passed a remark here this afternoon—after he had listened to my speech yesterday and alleged that he had heard me on television last night—that I was supposed to have said that we were having problems recruiting immigrants. This is incorrect; on the contrary, a recruiting team from the Post Office left yesterday for the United Kingdom, where, after an advertising campaign, 500 positive answers have already been received. Mr. Speaker, do you see what kind of trouble one can find oneself in? People put words in your mouth which you never spoke.

Which people are putting words in your mouth?

The hon. member for Umhlanga himself. The hon. member said that we had had problems recruiting immigrants. I did not say so yesterday. I said that we were in fact recruiting immigrants. On television last night I also said that we are recruiting immigrants. Now I don’t know …

If you are not having problems, why then do you have to … [Interjections.]

We shall take that argument further at a later date, when I have more time.

Quick thinking. [Interjections.]

Mr. Speaker, we give preference to technical and career-trained staff. These are exactly the people we are going to recruit overseas. They are trained staff. They are not just people from the street. They are trained people.

In the second place the hon. member for Hillbrow said in his amendment that we must expedite the installation of telephones in order to eliminate the substantial backlog of outstanding applications. Today nothing was said by the Opposition about the fact that during the past financial year a total of 270 000 new telephone services were supplied, which is 64 000 more than during the previous financial year. The growth is in excess of 10%, but nothing was said about this. This was not taken into consideration. When I have more time at my disposal I shall tell hon. members how we compare in this regard with developed countries in Western Europe and not with developing countries, such as our own country. I shall tell hon. members what the position is with waiting lists in those countries, expressed as a percentage of the total telephone services. This will prove to hon. members that the second leg of the hon. member for Hill-brow’s amendment is also wide of the mark.

However, to be able to reply to the debate in more detail later, I move—

Agreed to.

Mr. Speaker, when the House adjourned yesterday I had been making the point that this Bill was replacing the original Co-operatives Act, an Act that had been introduced by the old United Party and had stood the test of time for 42 years. What has happened now shows very clearly the difference between the Government in those days and the present Government. Here we find an hon. Minister who cannot even reply to a debate that he says has brought forth no criticism. He cannot reply to it until tomorrow so that he can consult with and get somebody to help him. In the days when we still had Government it could introduce laws like the Act which is now being replaced. It could also do this so that it stood the test of time. I am not only referring to this Bill but also to the other fundamental Bills which go with it and which were praised and accepted last night by Government members as being cornerstones of agriculture.

This Bill which is now replacing the 1939 Act ends generations of controversy between the co-operative movement, agriculture and private enterprise. Ever since I can remember there has been criticism by the private sector, by commerce and industry of the advantages which the agricultural sector enjoyed through the Co-operatives Act. This argument has gone on year after year. In 1963 we had the Steenkamp Commission which eventually reported in 1967, and only in 1979, two years ago, was a package deal finally negotiated. It was a package deal negotiated between the S.A. Agricultural Union, the Afrikaanse Handelsinstituut, the Association of Chambers of Commerce, the Federated Chamber of Industries, the Steel and Engineering Industries Federation and the Motor Industries Federation. The measure now before us is the result of that package deal.

Therefore let me say at once that this party will not support the amendment moved by the official Opposition that the Bill be referred to a Select Committee. We shall not support it because the Bill puts into law something which has been agreed upon by all the interests concerned by negotiation and particularly because it puts an end to the long dispute, the argument and the opposition that has existed over the years between the different interest groups and organizations involved. We see no reason to now refer it back to a Select Committee over what is a difference of interpretation of how the package deal has in fact been incorporated into the measure itself. When the package deal was made it was accepted that this was non-negotiable, that this was an agreement that all the parties would stand by.

One point that has been raised is that there should be consultative machinery that would enable the parties to the agreement to meet in some formal or official body able to watch progress, consult and advise on the operation of the measure when it becomes law. I do not believe, however, that that is something that could or should be done in the Bill itself because one then creates an official watchdog committee. In effect any committee to advise on the implementation of a measure of this nature would have to be a committee appointed by agreement and operating more or less on an informal basis but not as a provision of the measure itself which would give it power to interfere in the running of co-operatives. There must, however, be provision for advice and consultation.

I want to ask the hon. the Minister to give an assurance that he envisages implementing that aspect of the agreement by the creation of such a body or forum, call it what he likes, where the parties will be able to get together and advise on the progress, implementation and application of the measure itself. If that assurance is forthcoming then I believe that on the whole the agreement is covered by the Bill. It involves concessions from both sides. Agriculture and the co-operative movement have for instance conceded the licensing principle whereby all co-operatives must take out a licence. Licence fees must be paid and in that respect they will be treated the same as any other business that requires the same basic authority to operate. Co-operatives have conceded—this has been the position since 1977—the principle of taxation and have been paying tax since 1977. They have also conceded the abandonment of preferential interest rates on the non-productive activities of co-operatives by the introduction of two rates. The one is the preferential rate on money received from the Land Bank for production purposes and a market-related rate of interest for moneys which are advanced for purposes other than production—manufacturing, trading, etc. They have conceded the ending of the compulsory one-channel marketing system other than in the existing four fields of tobacco, ostrich feathers etc. They have conceded that no further one-channel marketing will be permitted. These are major concessions that have been made by the agricultural sector. Equally, commerce and industry have made concessions as well. Perhaps the most important is the recognition and acceptance of the role of the co-operative society in the agricultural economy and its necessity and value to South Africa—the recognition of the importance of agriculture and the need for special provision to be made which is met by the co-operative system. That acceptance is something which has never existed in the past. Co-operatives were always looked on in the past by commerce as being something unfair, evil and something that worked against the principles of private enterprise and the interests of commerce itself. They have also conceded the bonus system referred to in clause 18(1)(b). They would not agree to this before because it was something limited to the co-operative movement and was not applicable to commerce itself. They have conceded the right of cooperatives to handle all components of production. One of the main ones that is being introduced here is electricity which is a new service that can now be supplied and handled by co-operatives in the interests of their members and can be financed by co-operatives as a component of production when it is used for productive purposes. Commerce has conceded the 5% nonmember business which is allowed other than by means of special permission from the Minister. Therefore concessions have been made on both sides, concessions that have led to agreement and that have led to this package deal.

Certain controversial issues remain, however. I do not want to debate this in detail during the Second Reading debate but I do want to raise them now. The first is the provision in regard to liens—the right of a co-operative to a claim to the crops of a farmer in respect of moneys or products that have been advanced by the co-operative for the production of a crop. Here there seems to be a difference of opinion between what was actually agreed upon in the package deal and what is provided for in this measure. I think we shall have to debate this matter in committee. For instance, as the Bill now reads, a co-operative will have a lien on any agricultural produce of the member, produced or held for a period of 18 months after the liability was incurred. This means that if a farmer receives seed and fertilizer in order to produce a maize crop but he also has cattle, sheep or timber on his farm then, in terms of the Bill the lien is on all the agricultural products that he produces or that he has in his possession including, for instance, the timber, the cattle and the sheep. If he owes money to the co-operative any produce that he produces is part of the security that the co-operative takes in respect of the fanner’s liability to it. I can see where the 18 months comes from. If a crop is produced and cannot be marketed immediately due to storage, transport or other problems, this provision will be needed. However, as the Bill now provides I believe it goes further than that. It now ties up any product that the farmer produces.

Later in the same clause provision is, however, made that the co-operative can require the producer to identify the specific products on which the lien will apply. Here we have a conflict. At the beginning of the clause it refers to “all agricultural produce” but later on it can be limited by the co-operative to certain specific items. But that is only at the discretion of the co-operative and not at the discretion of the producer. I believe that we shall have to look at this to see whether this should not be agreed before the crop is produced, before the debt is incurred,—i.e. exactly what the lien is going to apply to and what hold the co-operative will have on the farmer’s produce. I think we shall have to look at that fairly carefully.

There is also some controversy over the question of ministerial interference in competition between co-operatives. I myself am not particularly impressed with the arguments that have been advanced on this matter. The agricultural sector, however, feels that there should be interference by the Minister if co-operatives compete against each other. Our feeling is that there should be the opportunity for competition which is always healthy in any business.

Another provision that I believe requires attention is the question of the retained bonus, the money due to a producer but which is withheld by the co-operative as a form of loan levy. This money which in fact belongs to the producer provides a loan account of capital for the co-operative. The farmer can only get this money back when he gives up farming, when he moves out of an area or when he dies, unless the co-operative agrees or decides to pay it back. We believe that there should be a time limit after which withheld funds that are the property of the producer and are being held as a form of loan levy, should be repayable in the same manner as a loan levy in respect of income tax is repayable. After seven years that loan levy is repayable. Similarly, in regard to money withheld by co-operatives there should be a time limit. The period can be renewed voluntarily but we believe that the producer should have the right to get back money that belongs to him after a fixed period of time of, say, 5 years, and that he should not have to wait until he dies or gives up farming. There is a principle involved here of the right of a person to what is owed to him.

The question may be raised as to whether that money can be withheld. The answer is yes, with the permission of members at an annual general meeting. However, everybody knows what happens at an annual general meeting. In fact, the next point I want to raise is the question of a quorum at meetings. A minimal percentage of members of a co-operative attend their meetings, unless there is some crisis. The result if that it is almost automatic that resolutions are adopted which renew the hold of the co-operative on withheld bonuses. We believe that in the Committee Stage we should look at this and establish a time limit for it. This is borne out by representations from the agricultural sector, from the S.A. Agricultural Union, for the provision in regard to a quorum at regional meetings to be amended. If a single meeting is held it can be postponed for an hour, and if there is still not a quorum, they can meet again and I think five members can then constitute a quorum. However, in the case of co-operatives that cover a vast area, regional meetings are held and the provision is that the aggregate of attendance at all the meetings must conform to the quorum requirements as though it were one meeting. Suppose there are seven regional meetings. The first six meetings are held, and only when the seventh meeting is held, can one determine whether the aggregate of attendances at all seven meetings conforms to the quorum requirements as though it were one meeting. That means that one then has to start ab initio. One then has to hold all seven meetings over again. One goes right back to square one and have to start all over again, whereas when there is only one meeting at issue there is a simplified procedure for dealing with the lack of a quorum, namely meeting again after one week and a minimum of five people then being recognized as a quorum. To avoid the reholding of all these regional meetings, we believe that some provision should or could be introduced that would meet that objection.

The only other controversial issue I want to raise now is that of the compulsory retirement at age 70 of directors of cooperatives. I can see the purpose of this, because there are cases of “father figures” developing. Year after year he then becomes more and more of a permanent fixture as chairman of the co-operative. As I say, I can understand that, because when I first became a director of a co-operative, I was 26 years old, but I think all the other directors were over 70 years of age, or getting pretty close to it. There is a feeling that one tends to get entrenched directorships and a stultification of initiative. [Interjections.] There may, of course, be people over 70 who have sat in judgment for lengthy periods and are therefore still clear-thinking, or who have perhaps been engaged in some other occupation and also kept their minds clear, so I am not suggesting that all people over 70 years of age have no contribution to make.

One can see that Piet is not a day over 65.

Although this limitation is opposed by agriculture, I do believe that it is something that is generally wanted by members, because nobody wants to vote against Oom Piet or Oom Lang Hans who has been in that position for 40 years and is a patriarch of the local community. [Interjections.] Yes, just look how long I have been in Parliament. People do not vote against me. They bring me back time after time!

Some may say: “Let us get rid of this bloke because we have had him long enough, in fact too long.” They do not, however, because there is a basic loyalty in people, particularly in a co-operative where there is a great deal of fellow-feeling and a desire not to hurt people. This is not a political or a party issue, and I personally would support the provision stipulating 70 years as the retiring age. A co-operative can always still make use, in an advisory capacity, of the knowledge, background and experience of someone who has served the respective co-operative long and well and still has a contribution to make. It does, however, prevent a “closed shop” situation, with little opportunity for new blood to come in and make a fresh contribution.

We feel that this measure should proceed, that we should debate it and discuss the points I have raised, and those which other hon. members have raised and will be raising, so that we can get this measure onto the Statute Book. I do not think we should delay it any longer, so that once and for all the old battle between commerce and agriculture can come to an end. I have heard the views of commerce. A number of hon. members, in fact, heard them only last week, including a number of Government members. There are valid points that they also raised and there are valid points raised by agriculture. I do not believe, however, that any of those points are of such a nature as to justify delaying the acceptance of this measure after all these years. After all, the Steenkamp Commission started in 1963, and that means that 18 years have passed since the last commission was appointed. I believe the time has now come for us to proceed with this.

We shall therefore support the Second Reading of this Bill and participate in the Committee Stage to speak on the issues we have raised.

Mr. Speaker, it is pleasant to be able to speak after the hon. member for Durban Point. If the hon. member maintains his present standard of debating, I think we will be able to talk about the Rock of Durban Point. However, one must think back a little and remind oneself of how the hon. member began. A few days ago the hon. member looked back, almost with a feeling of nostalgia, to the days of the old United Party and said that this legislation dated from those days. However, time has run out for the legislation to which the hon. member referred. Now one wonders whether the party of the hon. member, who made a positive contribution today, should not have faded away quietly together with the legislation. [Interjections.] I agree with the hon. member for Durban Point that at this stage, after the long negotiations, to ask for a Select Committee is quite unnecessary. With regard to this matter we stand united against the official Opposition. I also agree with the hon. member for Durban Point about one of the last ideas that he raised here, viz. that the 70 year provision should perhaps be deleted from the Bill.

I said it should be retained.

Yes, the hon. member said it should be retained so that 70 year old people could continue to serve on boards of directors.

I said it should be retained so that they are obliged to retire at 70 years of age.

I am sorry, apparently I misunderstood the hon. member.

I said that the restriction of 70 years should be retained in the Act.

Now I can no longer agree with the hon. member for Durban Point, because I, in fact, want to ask the hon. the Minister to allow people of 70 years of age to be considered suitable to remain in their posts.

Mr. Speaker, I am pleased to see that the hon. member for Wynberg is in the House now. At the commencement of the debate on this Bill, I noticed that the hon. member was not here. It is a pity, because I should have preferred to speak to the hon. member for Johannesburg North. Hon. members may not be aware of it, but the hon. member for Johannesburg North and myself have a past that reaches back as far as Koffiefontein, and I think that the hon. member for Johannesburg North would probably be able to speak about this Bill with more insight, because he knows the rural vicinity of Koffiefontein, not only above ground, but underground too. [Interjections.] The affection which the hon. member for Johannesburg North feels for Koffiefontein, reaches so far back and is so enduring that he still goes to visit the Silbersteins in the vicinity of Koffiefontein for periods of seven days.

However, I want to come to the hon. member for Wynberg. That hon. member delivered a speech which made one wonder whether he supports the Bill or not. The hon. member who spoke just after the hon. member for Wynberg, has already made this point. I myself was not sure at first. However, I later realized that the hon. member nevertheless wanted to criticize the Bill from behind paper screens—and I want to call them nothing but paper screens. I want to give a few examples in this regard. The hon. member quoted from the report of the Steenkamp Commission and used this as his first rampart to criticize the legislation. I want to quote once again what the hon. member quoted so that hon. members can follow the thread of the entire argument. He quoted the following (para. 837)—

Then the hon. member said the following, inter alia, (Hansard, 28 August)—

This is what the hon. member tried to say from behind this paper screen.

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

Mr. Speaker, I think the hon. member’s question will be answered in due course. The hon. member also referred to other paragraphs in the report—and this is probably in this regard that the hon. member wanted to put a question to me. He referred, inter alia, to paragraphs 838, 839 and 842. I wonder whether the hon. member thought that we would not read it. We did. The hon. member wanted to put it across to us—I have quoted him—that according to this report, a standpoint was adopted against retaining the lien system. This is precisely how I quoted the hon. member.

No, it is a standpoint against the expansion thereof.

I am coming to that. The hon. member must just not become hasty. Allow me to quote paragraph 838—

What is the true evidence? I read further—

And I want to emphasize this—

That is why I am saying that the hon. member is using this report as a screen. I think that in order to take proper note of what is stated in the report in this regard, I should quote something else from it. I want the hon. member to listen to this carefully. It seems to me that the hon. member wanted to use the report in order to sow suspicion about this Bill. What does the commission say? After a whole argument about the lien system with reference to the Co-operative Council, the commission writes (para. 841)—

This is the argument raised by the Co-operative Council—

It goes on—

This is the reason why this commission recommended that the lien should be retained. I would not like to quote further from this report, but the hon. member also says in his speech that if one were to read the entire report, one would gain the impression that this is in fact the case. I do not want to give hon. members the wrong impression viz. that I had in fact read the report in its entirety. However, all sections of the report that have any bearing upon this at all, definitely do not give rise to that idea. I can testify that this is in fact the case. It was simply the hon. member’s first paper screen. The hon. member held up a number of other paper screens, behind which he wanted to hide in order to criticize this legislation. His second paper screen is the package deal. The hon. member says the following about the package deal—

How true that is. One must understand it indeed. Let us now look at how the hon. member understands it. The hon. member goes on to say—

The hon. member refers to two parties. He refers to two hon. Ministers on the one hand, and to organized commerce and industry on the other. If ever I have encountered a lack of feeling with regard to the cause of the farmer and organized agriculture, it is in this statement by the hon. member, in which he says that if one wants to understand the package deal, one must understand that it is an agreement merely between the State and organized commerce and industry. In this respect one of the most important parties in this deal—if not the most important party—is being totally excluded. This is the farmer himself and organized agriculture.

If we think that this is the last of the paper screens of the hon. member, I believe we are making a mistake. The paper screens that the hon. member set up, however, are becoming few and far between. Hon. members will recall that I commenced by referring to a fairly thick report. In the second place I referred to the package deal, which comprised a mere two sheets of paper. Now we finally come to the telex. After a tissue, I think this is about the flimsiest paper screen behind which one can operate. The hon. member then uses this telex report, and by quoting it he is using an argument which boils down to the fact that an agreement was apparently reached, or had apparently been reached, between organized trade and industry and the hon. the Minister. What is at issue now, is the question of when this meeting was arranged. The package deal was announced by the hon. the Ministers as early as in 1979 by way of a Press statement. Now I want to ask the hon. member a question. If unanimity was not achieved regarding the content of this package deal, which was announced as early as in 1979, why then was no objection raised? Why did no one object to the content of this package deal?

Objections were continually raised. The objections resulted in its ultimately not being included in the legislation.

The objection that was in fact raised, was raised at a meeting initiated by the Registrar of Co-operative Societies, and members of organized trade and industry attended that meeting. As far as I know, prior to that time they had not received any complaints about the package deal as it was worded by the hon. the Ministers of Agriculture and of Finance.

Now the question is this.

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

I shall deal with the matter fully. I cannot answer the hon. member’s questions now. I first want to complete my speech before I do so. At that meeting it was not conceded that the provision that the lien should form an integral part of the original agreement, could be deleted. It must be retained. What was in fact achieved, was firstly that municipalities will not be able to become part of an agricultural co-operative and secondly, that agricultural co-operatives will not be able to handle farm property transactions. Did the hon. member say this? No, he did not say it in order to put the entire telex in the correct perspective. He remained silent about it and now I want to know why. I am guessing—and I think my guess is correct—because when the hon. member said that in order to understand the legislation properly, one must understand the package deal properly, he simply speaks about the State on the one hand and organized commerce and industry on the other and forgets about the fanners. This is also the reason why the telex was used as a paper screen.

That is enough about the hon. member for Wynberg. Perhaps just the following: The hon. member for Wynberg’s speech contained one good section and this was the introduction. I think he should have contented himself with that, because the hon. member really did not serve any useful purpose with the rest of his contribution as far as the farmers of this country are concerned.

I want to deal briefly with some standpoints regarding principle contained in the legislation. As the hon. member for Durban Point also pointed out, the Bill envisages replacing the Co-operative Societies Act, 1939, because that Act has served its time since—I want to add this—agriculture has shown tremendous growth under the auspices of the Government. Furthermore, it is also true that agriculture is experiencing different problems than was the case in the past with regard to financing and that is why the legislation had to be amended. This is also the reason why the commission was appointed. This is old news and we are all aware of it.

When the commission was appointed, they were asked to investigate the role played by agricultural co-operatives. They also had to establish how agricultural co-operatives can be utilized in order to best serve the interests of the country. Therefore I want to ask the hon. members of the official Opposition whether they judged the legislation with the interest of the country foremost in their minds. Is this the standpoint from which they judge the legislation, yes or no?

A second directive to the commission was to establish whether, when restrictions and privileges of agricultural co-operatives existed, such restrictions or privileges could still really be justified. They also had to establish where they could be eliminated in order to bring about a more equal dispensation for commerce and industry.

There were certain bottle-necks and we must concede this. Briefly, the bottle-necks were twofold in nature. However, this is not the subject on which I want to deliver my speech and consequently I am just referring to it in passing. In the first instance, it is true that organized commerce and industry felt that the co-operatives were in an unjustifiably privileged position with regard to taxation. The second bottle-neck about which conflicting standpoints were adopted, is the privileged rates of interest at which the co-operatives could obtain Land Bank loans.

In the spirit of the package deal, the Government set to work to rectify these matters, although it would require sacrifices on the part of the co-operatives. In the 1979 budget speech—therefore this too is old news—it was announced that co-operatives would also be subject to taxation in the future.

Mr. Speaker, I think it is necessary to strike a rather more positive note, but the Opposition has forced me to react in the way that I have been doing thus far.

I should like to submit a single positive idea to the House. I think we must accept, particularly after what the hon. member for Durban Point has already told us here in the House, that there can be no question of unjustifiable privileges for the co-operative movement in this country in contrast to the non-co-operative enterprises in the country. There can be no question of unjustifiable privileges if we think of the fact that the co-operative movement in our country has also become subject to taxation with regard to surpluses, has to pay market related rates of interest on loans from the Land Bank for many purposes which were not applicable previously and are still being restricted to members’ business, excluding the 5% allowance.

It could be argued that despite these concessions made by the co-operative movement, there is nevertheless another advantage with regard to the treatment that the co-operative movement is receiving from the State in our country. I am referring here to the availability of the Land Bank as a source of finance. Then, for the sake of convenience, we can forget about the availability of the NDC as a source of finance for the industries in our country. It is a source of finance which makes funds available to this sector of the economy at favourable rates of interest. Let us leave it at that.

There is also the question of the Small Business Corporation.

We must accept that the availability of every source of finance depends on the profit margin that is anticipated in the industry concerned. Then it is simply a plain fact that in a growing economy like that of South Africa’s, the profit margin in agriculture is lower than the profit margins outside the agricultural sector. Furthermore, we must accept the fact that in the agricultural sector, the liquidity position is less favourable than it is outside and that the risk-yield ratio in agriculture is less favourable than outside agriculture. All of this simply means that sources of finance have become more available for sectors outside agriculture at the cost of—I repeat at the cost of—agriculture. It is only logical to deduce from this that agriculture is becoming increasingly dependent upon finance from the Land Bank.

In what other way besides utilizing cooperatives can funds from the Land Bank be meaningfully channelled to the farmer? If this is being done to an increasing extent, we must accept, and grant our support to the fact that, the co-operatives which in a certain sense are using State funds, will be guaranteed that the funds will flow back to the Land Bank. That is why we have this apparently, at least slightly contentious provision with regard to the lien.

It is logical that we should extend the lien as described in the legislation merely because in future the co-operatives will in all probability have to work with larger and larger sums originating from the Land Bank. I can assure the House that hon. members on this side of the House will never adopt an unfeeling attitude towards the small business enterprise on the platteland in this process. It is extremely important, but we need no watchdog organization in order to accomplish this. We have Ministers who will act in a responsible fashion in this regard, i.e. the hon. the Minister of Agriculture and Fisheries and the hon. the Minister of Finance. If the hon. members can imagine a watchdog organization that is better than these two hon. gentlemen, I should like to hear about it.

I am pleased to support the Bill.

Mr. Speaker, I do not think we need to get carried away with verbosity or inter-party strife on this particular measure, because I think all of us in this House agree that it is necessary to have a Co-operatives Bill and that it should be enacted as law in due course. The only thing that we do not agree on is the precise timing of the whole measure, and we do not agree for various reasons. The attack made for instance by the hon. member for Fauresmith on the hon. member for Wynberg, first of all by asking the hon. member why he was not in the House at the beginning of the debate today, was unwarranted. I think the hon. member must look to his own side of the House for an answer and not to this side of the House. The hon. member then said that this Bill before us was clearly carrying out the intentions of the package agreement. We on this side of the House do not agree, and I will develop this theme during the course of my argument. We do not agree that the packet agreement is carried out in this measure before the House at the moment.

The hon. member for Barberton who spoke on this Bill when it was discussed sometime last week, also attacked the hon. member for Wynberg. Basically, he suggested that we on this side of the House were attempting to put commerce and industry in front of organized agriculture. This could not be further from the truth. We are not attempting in any shape or form to put industry and commerce in a preferential sort of situation, not at all.

Who are you trying to bluff?

We are not trying to bluff anybody. I do not think the hon. the Deputy Minister should interject at this stage. He should let us develop the arguments that we want to develop. I imagine he has every opportunity to speak in this debate, and perhaps he will. If he does, he can then react to this argument.

The whole principle behind co-operatives—and we agree with this principle —is obviously to provide agriculture with the means to market, produce and purchase their requisites on a basis which is to their advantage. We do not just agree with this; we think it should actually be carried out. The question we have to ask ourselves is whether they should be given certain advantages in law which puts them in a more favourable position than private enterprise. Once again, we answer “Yes, in certain circumstances”. However, in other circumstances, the answer is “No, we do not think they should be put in a favoured position”. I think the package agreement actually goes along with that viewpoint because the package agreement was that certain things should be financed at normal Land Bank rates and other things at market-related rates. In other words, certain activities of the co-operative are activities which really have nothing to do with the farmer or his ability to produce basic foodstuffs or any sort of foodstuffs. We must, as a background to this Bill, realize that in this country today there are co-operative movements which have for instance the franchise for vehicles such as BMWs. Fair enough, let them have such franchises, but in their handling of such franchises we do not agree that they should have any preferential treatment. They must be ad idem with anybody else who is in the same line of business.

We fail to see the reason for the enormous rush to get this Bill through the House. We must look at the history of what happened. The Steenkamp Commission was originally appointed in October 1963, 18 years ago, and reported on 16 March 1967, almost 141/2 years ago. There was a package agreement in 1979, and that is over two years old. In the meantime the situation remained unaltered. Co-operatives have continued to trade and farmers have continued to enjoy advantages through the co-operative movement, and if this measure is defeated in this House today, farmers will still continue to enjoy those advantages. Therefore, in suggesting a delay we are not attempting to take things away from the farmer that he currently has.

With all the restrictions.

I am sure the hon. the Deputy Minister will have plenty of time to speak if he wishes to. The point that we are making is that we cannot understand what the hurry is in this matter. We must remember that it was only at the beginning of this session that the Bill now in front of us was published for the first time. Had it been published, say, six months ago and organized commerce and industry had had an opportunity to make a thorough study of the Bill and to have discussions with the hon. the Minister and his department, and had they reached some sort of consensus, then we would have had a different approach. However, they obtained this Bill only a few weeks ago and were only then able to study it. The hon. the Minister will recall that he met a delegation from organized commerce, and hon. members on the other side of the House know that their agricultural group had discussions with members of organized industry and commerce. Members on this side of the House who are members of our agricultural group were also interviewed by industry and commerce, and I must tell the House that in those interviews they expressed great concern about the Bill itself. That concern still exists today to a large degree, and I shall tell you why, Sir.

The advantages that co-operatives enjoy are fairly wide-ranging. To start off with, they have a big tax advantage. This can actually be as much as 11% because they can pay bonuses, something which companies in industry and commerce are not able to do, and this does save the person who invests in the co-operatives a considerable sum of money in comparison with the person who invests in a company. In the case of a company 42% tax has to be paid and then the individual still has to pay tax on the dividends. One can end up in a situation where on the original Rand earned by the company the tax can be as much as 61%, that is 42% by the company and 19% by the shareholder. In terms of the Co-operatives Act, the maximum rate is only 50% on any money that is returned by way of bonus. There is a difference there of 11%. However, that is not the problem that we have with this Bill.

The second big advantage that the co-operative movement has is that it can get loans at rates which are considerably lower than normal market rates of interest from commercial banks. Once again, we do not have a problem with this, provided those funds are not used for things that are not related to productivity of the farmer and perhaps the marketing of his products.

That is the position.

The hon. member says that that is the position, but where in this Bill that is now before us is that given substance to? Nowhere at all. Nowhere in this Bill is there anything that tries to prescribe to co-operatives for what purposes they can borrow funds from the Land Bank.

The Land Bank has a policy as far as that is concerned.

Certainly, I realize that the Land Bank has a policy. I also realize, however, that it is perfectly possible to have …

Have you read it?

… a clause which would prevent the co-operative from borrowing funds from the Land Bank other than for specific items at a certain rate and other items at another rate. It is certainly possible to do that in this Bill, but it has not been done. [Interjections.] If the hon. the Minister tells us clearly now that he has discussed this with the hon. the Minister who has charge of the Land Bank and that the Land Bank Act would be amended so that the Land Bank cannot lend funds to co-operatives except at market-related rates for certain uses, as defined in the package deal, perhaps we would be happier. The point I am making, however, is that this is not given substance to in the legislation before us now.

[Inaudible.]

Thirdly there is the advantage that the co-operatives have relating to hens over their crops and various other articles. I shall be dealing with this aspect further when I am dealing with the Bill clause by clause. We think that basically a delay of a few months in the enactment of this Bill would not actually cost the farmer anything at all. If we were to give a Select Committee the right to take evidence and to hear what the problems of commerce and industry are—and the hon. the Minister must agree with me that commerce and industry do have problems—we believe that we would be able to get a Bill through which would then satisfy organized agriculture and organized commerce, and we think that this would be a distinct advantage. This is what we are attempting to bring about.

Something else in the package deal, which is not contained in the Bill, relates to the watchdog committee to which the hon. member for Wynberg has, in fact, referred.

Who is watching whom?

It was part of the package deal, as I understand the situation, that there would be a committee set up and that it would be able to hear appeals, from commerce and industry, against certain practices, that it would thoroughly investigate each and every aspect of co-operative movements and that the people on the committee would not just be from agriculture, but from other Government departments as well. This, as we understand it, was agreed to in the package deal, yet it is not given substance to in the Bill before the House now. I therefore think we have the right to ask the hon. the Minister why this has not happened. What has happened to this watchdog committee? Our difficulty is that in terms of the rules of this House we cannot move an amendment in the Committee Stage to create such a committee because that would, in fact, cost the State extra money. That could only be done by the hon. the Minister himself. So we cannot even move an amendment in this House in an attempt to create such a committee. I therefore think that if it were only for that reason that we asked for a delay, that in itself would be a very valid reason indeed. Organized commerce and industry believe that the watchdog committee—one can call it any other name one liked, such as the co-operative and finance committee—could and would protect their interests.

The standing advisory committee.

They felt that would be a body they would be able to appeal to, being a body that was not directly concerned with the farmers only. They saw this as a great advantage, and now they are extremely concerned, because there is no mention of such a committee in this Bill whatsoever.

If we go on to the Bill itself—and I am now going to deal with the individual clauses —we find various definitions on page six. I refer to them to demonstrate some of the problems which we on this side of the House have with this particular Bill before us and to motivate our desire to have a Select Committee. There is, for instance, a definition on page six which reads—

I should like to ask the hon. the Minister what the situation would be if there were four co-operatives each with a 25% shareholding in a company. Would it then be deemed to be a subsidiary of that co-operative? Will this legislation then apply to that company? This is the sort of question that I believe commerce will be asking in a Select Committee should it be established. In clause 10, on page 12, the Minister is granted the right to delegate any powers conferred on him by this legislation, and further the Director-general also may delegate powers. The effect of the Bill can therefore be diluted by the various powers being delegated down the line to a lower level of authority. On page 16 we have clause 18. This is also a very interesting clause when one looks at it in terms of monopoly and competition, etc. In terms of this clause, the hon. the Minister can declare any co-operative practice to be a co-operative practice which may be pursued exclusively by a co-operative. At the stroke of a pen he can create what is basically a monopoly for a particular co-operative practice. What is more, in terms of clause 18(1)(b) he can—

I can see the advantage of this clause in many ways for organized agriculture, but we believe that this clause puts too much power into the hands of the Minister. We feel that matters of this nature should rather be put in front of a body such as the watchdog committee that I have mentioned. On page 32 we come to another important aspect of the Bill, one which I believe needs a lot more investigation, and this relates to the fact that a co-operative can—

In terms of this particular clause, therefore, a co-operative can really go into any field of business. It can borrow money from the Land Bank and can use that money to run the company it has bought. The only thing that it needs to do before it can do this is that it has to get financing subject to the provisions of clause 52, which basically says that there has to be a special resolution by the co-operative before they can lend that money. It is therefore purely a formal matter which can be handled perfectly easily. We think that this can give rise to all sorts of practices which are not necessarily desirable. It is, for instance, a very simple matter for a co-operative that has a subsidiary company to charge that company a very high management fee, a very high directors’ fee or a very high accounting fee and in that way siphon profits from a company through to the co-operative and pay those profits out in terms of a bonus which again gives certain advantages. I do not say that these are practices that are going to occur. The point I am making is that in terms of the legislation in front of us these are practices that can occur. It is theoretically possible for profits to be siphoned out of companies into cooperatives in this manner.

Clause 53 on page 36 of the Bill provides—

I have referred to this previously, but here, once again, basically the co-operatives have virtually unlimited rights to borrow money. There is nothing that can stop them. All they need do is to have it approved under the authority of a special resolution.

So what is wrong with that?

What I mentioned previously. A co-operative can borrow money from the Land Bank which, let us face it, is an undertaking which is specifically aimed at helping the farmers. The co-operative can then utilize that money, as many co-operatives have done, to operate for instance an agency for motor vehicles. I specifically refer to this because I know that many co-operatives have in fact done this. Market-related interest rates are one thing, but there is more than that to be considered, because in times such as the present, funds are difficult to obtain through normal commercial banks. There has been a tightness of money over the last six weeks so that companies have been unable to borrow the money they want.

The same applies to the Land Bank.

But the Land Bank does have sources of money that are not available to the commercial banks and there is a different treatment of the situation in this regard.

Then we get the outside trading clauses, but the clause I really want to come to is the clause relating to liens or “pandreg”. That is clause 173 on page 112 of the Bill. In contravention of the package agreement with the farmers, this has been extended to other areas without the agreement of commerce and industry. I know that the additional points that have been put into the Bill are the result of the recommendations of the Jacobs Commission. What has happened here, however, is that the right on liens for co-operatives has been extended to, for instance, spare parts and also vehicle repairs.

I think this can also give rise to some very interesting results. I should for instance like the hon. the Minister, who was previously Deputy Minister of Finance, to react to the suggested situation I am now going to put forward. Let us take the situation where a farmer purchases a new, or used, article of machinery which he uses for production purposes on his farm, be it a tractor, a harvester, a baler or whatever.

Or a windmill.

He purchases that under a hire-purchase agreement which can extend over a number of years. Let us assume that while that hire-purchase agreement is still operative the machine breaks down and requires parts and repair services, which cost a fair sum of money which the farmer then gets from the co-operative. In the event of the hire-purchase agreement not being paid and the financial institution which covers the machine under hire-purchase agreement wishing to repossess that article, what has it got to do? This is the question I want to pose, because there is now a lien to the co-operative on that article. Here I think there must very clearly be a conflict of interests somewhere in that it would obviously be silly to suggest that before the financial institution could repossess that particular harvester, for example, it would have to strip all the parts off it and return those parts to the co-operative. I do not think second-hand parts would be particularly valuable to a co-operative. If the right in lien here was restricted only to recovering the price of those spares or the price of repairs by having a hen over the crop, that would be a different situation. But as the legislation reads at present it clearly states that—

I suggest that it is extremely stupid to have a clause of this nature which is clearly going to conflict with any hire-purchase agreement held over the machine by another company.

All in all, we in these benches really do believe that the Bill could be improved considerably by a Select Committee. We do not understand what the rush is and why it has got to be passed now. I repeat that I do not believe that the farmers would in any way be prejudiced by any delay in the passing of this legislation. As a matter of fact, I believe that it could be in the farmer’s interest for this Bill to go to a Select Committee for the very simple reason that if private industry or commerce feel that the right of the co-operative is to great vis-à-vis the crops, the machinery or anything else of the farmer, then they will be considerably more wary of giving credit to the farmer when they are aware that co-operatives already have a lien on the farmer’s crops. This can actually be a disadvantage to the farmer himself. When he attempts to get credit from private bodies and institutions he might find that he has more difficulty in getting that credit because of the very provisions contained in this Bill.

We believe, and let me stress the point again, that a Bill relative to co-operatives should be passed. We think that this Bill has the bones of it, but we think it can be considerably improved. Therefore I support the amendment that the Bill should go to a Select Committee.

Mr. Speaker, it is the second time within a week that I have to react to the hon. member for Port Elizabeth Central and I am afraid that it is the second time in a week that I have to disagree with him. The hon. member for Wynberg, being a farmer, being a member of a co-operative and being one of my voters in Paarl, started off on a very positive note, but I am afraid that towards the end of his speech he came under the influence of the hon. member for Port Elizabeth Central, because he changed his tune completely.

I am also a member of a co-operative.

That is very interesting. The hon. member for Port Elizabeth Central might be a member of a co-operative, but as far as I am concerned, he is completely anti-co-operative. The amendment that the hon. member for Wynberg moved is completely unacceptable to us.

*I found it very interesting to observe which members have so far participated in this debate. Until just before the hon. member for Port Elizabeth Central spoke, those who participated were either farmers or directors of co-operatives. I have great appreciation for the contribution which the hon. member for Durban Point made. I think it was a very positive contribution. In contrast to all the farmers and directors of co-operatives it is my privilege, as a former official of a co-operative, to say on behalf of the officials of co-operatives that this legislation is an excellent piece of work.

I cannot but say that the speech made by the hon. member for Port Elizabeth Central, although it contained good arguments, was unfortunately interspersed with allegations which, to my mind, were anti-farmer and anti-co-operative.

[Inaudible.]

And that, Mr. Speaker, is a man who makes his living from the farmer.

That is not the truth. It is absolutely incorrect. [Interjections.]

I want to put it to the hon. member for Port Elizabeth Central that I have for many years been a member of the co-operatives council of the S.A. Agricultural Union, the co-ordinating body of the South African co-operatives, on which quite a number of English-speaking members from Natal and from the Eastern Cape also serve. They all serve with great distinction on that body and make excellent contributions there. That council discussed and scrutinized this Bill for many years. They are unanimous in their support of the Bill.

The argument which the hon. member for Port Elizabeth Central is now putting forward, i.e. that there is no reason for the hasty passage of this Bill, is totally unfounded, because requests for this legislation to be rewritten have been coming in for years, and we have at last reached the stage now at which we can grant the co-operatives and the farmers of South Africa what they are entitled to, a new, consolidated piece of legislation.

Now, in the first place, I should just like to sketch the entire background of the co-operative movement in broad outline to hon. members. In my heart I have no doubt that the co-operative movement in South Africa has been one of the main contributory factors to the economic development of the semi-urban and rural areas, and that in future it will and must indeed play a very important part as a deterrent to the depopulation of the rural areas. With this new Co-operatives Bill, which is now before this House, a new era is being ushered in for co-operatives in South Africa, and it is the completion of the package agreement to which considerable reference has already been made here, an agreement which was entered into a few years ago when cooperatives became liable to taxation, between the Government, the S.A. Agricultural Union, the Handelsinstituut, the Chamber of Commerce, the Federated Chamber of Industries and other organizations.

The principal argument, as I understand the hon. members of the official Opposition—and specifically the hon. member for Wynberg and the hon. member for Port Elizabeth Central—was in reality concerned with the implementation of the package agreement as defined in the Bill before this House. I do not think there can be any doubts about the contents of the package agreement entered into at the time by the various parties. As has already been said in this debate, there was very great candidness about what was contained in that package agreement. In fact, it was mentioned in this House years ago.

I believe it is essential, for the sake of the record, to look at those specific conditions in the package agreement. I should like to deal with them one by one. Hon. members of the official Opposition have already referred to several of them.

Mr. Speaker, can the hon. member tell me what the agreement entails as far as the hen agreement and the details thereof are concerned?

I shall come to that.

Could you please deal with that specific aspect first?

Mr. Speaker, I shall get round to that. It is the ninth point, the last of the nine points which are mentioned here. [Interjections.] The nine points of the package agreement are as follows. The first is that the co-operatives shall be taxed on all undistributed surpluses at normal company tax rates. For many years this was the most important argument of the private sector against the co-operative movement. Their objection was to the fact that the co-operatives did not pay tax. Since 1 April 1977, though, co-operatives have been liable to pay tax. Consequently that aspect of the package agreement is already being implemented.

This brings me to the second point, which is that Land Bank financing for the primary and secondary processing of agricultural produce and other processing activities will be granted at market-related interest rates. This forms part of the package agreement. Coupled with that is the point that all other financing will take place at the ordinary Land Bank interest rates.

The hon. member for Port Elizabeth Central is now looking for the place where this point in the package agreement is written into the Bill. I must point out to him that it has never been included in co-operative legislation at what interest rates the Land Bank may finance a co-operative. It serves no purpose, nor is it the task of co-operatives legislation to prescribe such things.

Why not?

I want to point out to him right now that not all the points contained in the package agreement were included in the co-operatives legislation, for that is not the place where all those points should be included.

Why not?

If it is accepted as policy by the Land Bank and prescribed in the Land Bank legislation at what interest rates this may be done, surely it is not necessary at all to prescribe this in the Bill as well.

The third point is that the co-operatives will be allowed to undertake all activities pertaining to the production and handling of the farmer’s product freely. This is written into the package agreement and there was consensus on this among all the parties. At the same time this is the reply to the problem which the hon. member for Port Elizabeth Central had a moment ago.

The fourth leg of the package agreement is that non-members’ business of co-operatives is only allowed on a limited scale and in special cases with Ministerial approval. This is written into the Bill because it is provided that non-members’ business may be done to an extent of 5%, and to a higher percentage with the consent of the Minister of Agriculture. What is interesting about this is that this insertion in the legislation was made at the request of commerce and not at the request of the South African Agricultural Union or the co-operatives. In this connection the request of organized commerce was acceded to.

The fifth condition is that only cooperatives will be allowed to determine a bonus on a transaction basis. This is also a point to which the hon. member for Durban Point referred. It forms part of the package agreement and was accepted and written into the Bill. It was also an existing arrangement, and therefore the status quo is merely being preserved.

The sixth point is that no further compulsory co-operative one-channel marketing will be allowed under the legislation, but that existing schemes will continue with this practice. This has been written into the Bill. Later in my speech I want to spend a little time sketching history of the co-operative movement, but I can point out at this early stage already that one-channel marketing is something which dates back to the distant past.

Then it is out! [Interjections.]

The seventh point deals with decentralization aid in the sense that decentralization aid and benefits will in future be available to co-operatives as well. Hon. members will also seek in vain for this point in the Bill, because this type of condition and concurrence is not written into co-operatives legislation either. However, it is being applied in practice.

The eighth point deals with the fact that co-operatives will in future be subject to commercial and industrial licensing. This has been accepted, and will be implemented in terms of the Bill.

I come now to the point raised by the hon. member for Wynberg concerning the automatic lien that co-operatives have. I want to concede at once that there was an expansion after the acceptance of the package agreement. It refers to specific items such as spare parts and repairs and so on. However, it was not entirely without foundation; these were specific recommendations of the Jacobs Committee and they were generally known in public for a long time. They are simply an extension of the existing lien in order to make it practicable.

So much, then, for the background to the package agreement.

To see the entire situation in the correct perspective, I think it would be a good thing if we were to consider for a moment where co-operatives come from. The word “co-operative” is derived from the Latin word “operare”, which means “work” and the word “co” which means “together”. A simple definition of the word would then be “co-operation which occurs for some common purpose”.

The first co-operative in the world was established in 1844 in Rochdale, a small town north of Manchester in central England. The building in which that co-operative was established is still there today. It is a national monument in Rochdale. For the most part the principles which applied to this co-operative, established 140 years ago, are still valid today.

Those principles are the following: Firstly, open and voluntary membership regardless of politics and religion; secondly, one vote per member; thirdly, limited interest on capital; and, fourthly, distribution of surpluses according to turnover.

Hon. members who are members of cooperatives will realize that these principles are still applicable to co-operative today in virtually the same form. In fact, in 1967, the Steenkamp Commission, to which reference was made here this evening, found that the following four principles applied in regard to South African co-operatives: Firstly, sole association with members—this is also contained in the new legislation; secondly, the distribution of profits according to turnover-—profit according to turnover in contrast to the usual company practice where profit is distributed according to shareholding—thirdly, limited return on share capital—this is being preserved in the new legislation, and I shall come back to this point—and, fourthly, voluntary membership, to which can consequently be added, democratic control. I find it very interesting to note that the principles and features of co-operatives have run like a golden thread through the movement over a period of 140 years.

I began by saying that in South Africa co-operatives have made a tremendous contribution to the economic development of this country. They go back a very long way, because the establishment of co-operatives was being propagated by the colonies in South Africa even before Union. I am proud that the foundation was laid in the Cape Colony with the appointment in 1905 of the first superintendent of Agricultural co-operative societies and the passing of an Act in the old Cape Parliament here in the same building, in terms of which an amount of R300 000 was made available at the time to help expand the co-operative movement.

It is true that initially progress was very slow, except for a few specialized cooperatives. Progress was slow particularly because there was no overall statutory protection. It was only with the passing of the first Co-operative Societies Act of 1922 and the appointment of a Registrar of Co-operative Societies in that year that the idea really began to take root. Suddenly the number of co-operative societies grew from 85 in 1922 to 210 a year later and increased to 422 in 1929.

The 1922 Act, of which this 1981 Bill is the grandchild, consolidated all previous legislation and afforded national recognition to co-operative societies. All co-operatives were now for the first time placed under central control, and for the first time the principle of compulsory co-operation, to which reference was made a moment ago, was introduced, a principle which is also being preserved in the new legislation. This Bill which we are now dealing with, is a substitution for the 1939 Act, the second Act, which was also amended five times after its introduction.

Now it is interesting to note that as a result of consolidations and amalgamations, there are 320 agricultural co-operatives in South Africa today. One can classify the objects of co-operatives into three categories, firstly, the pooling, processing and marketing of members’ products; secondly, the supplying of all kinds of farming requisites; and, thirdly, the provision of services in connection with farming operations.

Today South Africa has approximately 78 000 farmers and every farmer belongs to an average of four co-operatives. Do hon. members realize that the total assets of South Africa’s co-operatives exceed R3 000 million, and that their turnover exceeds R5 000 million, a third of the budget of this country? This is a vast contribution to the economy, which the co-operatives are making. Today these co-operatives, with a few exceptions, have an almost 100% share in the receiving and storing of agricultural products. Reference was made to the monopoly which co-operatives allegedly enjoy. However, the so-called private sector will not be interested at all in the work the co-operatives are doing, because the return which the co-operatives receive for the vital services which they render is by no means attractive enough for the private sector.

The co-operatives have also played a significant part in the processing of those products, and South Africa is fortunate that, as a result of the strong and well-organized co-operative movement, coupled with a control board system under the Marketing Act, it is one of a handful of countries in the world which is able to be self-sufficient and to feed its own population and is at the same time able to be an exporter of various basic foodstuffs. Even though inflation has also played a part in increased prices, I have no doubt that food prices in South Africa are still among the cheapest in the world, something which is to a large extent due to the part which co-operatives are playing in South Africa.

Over the years criticism has been levelled from various quarters at the so-called privileged or protected position which cooperatives enjoy in South Africa, and most of the arguments which the hon. member for Port Elizabeth Central raised against this Bill were specifically concerned with this aspect, i.e. the so-called privileged position which co-operatives enjoy. I want to concede at once that the Bill does in fact entrench certain advantages, i.e. the lien and bonus payments which are tax-deductible, but at the same time there is a series of disadvantages which attach to co-operatives which are not being eliminated by the Bill.

Such as?

I shall come to that in a moment, because there are quite a few examples.

By means of vertical integration the producer has, through his co-operatives, obtained an interest in the eventual processing and marketing of his products, and this I do not begrudge the South African farmer, because it has frequently led to the possibility of eventually offering the end product to the consumer at a considerably cheaper price than would otherwise have been the case.

As far as I am concerned, there have over the years been wonderful examples of excellent co-operation between co-operatives and the private sector, which helped to serve the interests of this country. A few weeks ago the hon. the Minister of Agriculture and Fisheries opened a large malt project in Caledon, which has a very interesting history. South Africa produces enough barley, the basic ingredient of beer, to make enough beer for our country’s consumption, but there were inadequate malt facilities and consequently three-quarters of the South African barley production was being sold abroad at low prices; perhaps, too, because the quality was not always what it should have been. On the other hand, the beer industry had to import a large quantity of the malt it required at high world prices because South Africa’s malt facilities were unable to meet its needs. Consequently we have here a wonderful example of how the co-operative sector and the private sector co-operated to establish a new project which, in the first year of its existence, will save the country R25 million in foreign exchange and will continue to do so to an increasing extent in future.

I trust that the earlier distrust of cooperatives which existed will disappear and that the way will be paved for whole-hearted co-operation, in the interests of both the South African farmer as well as the national economy.

The hon. member for Wynberg asked me what disadvantages still applied to cooperatives. It is so obvious. To my way of thinking, one of the most interesting restrictions is one of the principles accepted in 1844 in Rochdale, and that is the limited return on capital. In the new legislation a maximum of 15% is laid down. In the present situation it is 8%. This is a consider able improvement on the present maximum rate. I concede that. The old principle of limited return on capital remains, however, and investment in co-operative shares will still not be an attractive investment because the appreciation possibilities of an investment in a co-operative are limited. In fact, there is no such thing. If a person stops farming, or if he dies, the nominal value of his shareholding is simply paid back to him. Whether the interest rate is 8%, or whether it is 15%, the position remains the same. One need only compare the return which a member of a co-operative receives on his investments with the return which an hon. member receives on his shareholding in a gold mining company or any other industrial company. [Interjections.] Here I am even referring to a company of the hon. member for Port Elizabeth Central. I am certain it will be more than 15%, otherwise no one would invest in his company.

I wish it was my company.

That is one very good example. A further example is the restriction on doing business with members, to which I have already referred. Surely this is a major disadvantage which continues to be applied to co-operatives.

In terms of the Act it can very easily be circumvented by buying out companies.

Order! Does the hon. member wish to ask a question?

Mr. Speaker, I just wanted to set the hon. member straight.

A third disadvantage is that the opening of branches or depots by a co-operative is limited, because this may only be done with the consent of the Minister.

There was an argument about a new provision which has been written into the Bill. This is concerned with the age limit on directors. I think this is being inserted by clause 108. In companies in the private sector there is no limit on the age of directors. The Marketing Act also lays down that a person may not become a member of a control board if he is older than 68 years of age. This matter has been discussed for many years by the co-operatives council of the South African Agricultural Union on council level and congress level. As far as I am concerned, there is a very big difference between the functions of a director of a co-operative and a director of a company. A director of a company has very little responsibility to the members of the company.

Oh, no, not at all.

It is true.

Read the Companies Act.

In practice he is for the most part not elected directly by the members. [Interjections.] He is simply co-opted. Members never even see the director. I know, because I am a director of companies myself. [Interjections.] However, a director of a co-operative is elected on an entirely different basis. [Interjections.] There is great difference of opinion in the movement itself. In truth, there are two schools of thought. For quite a number of years I was personally present while the Co-operatives Council first decided that the age limit of 70 years ought to be retained, and then decided that it ought to be omitted. Last year, at the congress of the South African Co-operatives, a specific debate was held on the entire matter and it was felt that under the circumstances it would perhaps be a good thing if there were no age limit in the legislation. I must honestly say that to me personally, it is six of one and half dozen of the other. Perhaps it would be a good thing, under the present circumstances and because there is a difference of opinion on this matter, to omit this provision from the legislation. However, I should very much like the message to be brought home that if the provision laying down that a director should resign at the age of 70, is not written into the legislation, the co-operatives themselves will have to make provision for directors to retire at some stage or other. I do not think the co-operatives can afford, as often happens, to have persons serving as directors simply because they have been sitting there for 50 years, while the S.A. Agricultural Union and the Co-operatives Council are doing a great deal to train directors. They are giving young farmers who have had a good training, further training in order to become directors. [Time expired.]

Mr. Speaker, may I say in the first instance that I listened with great interest to the hon. member for Paarl, and I do agree entirely with the last statement he made regarding the retirement of directors at the age of 70 years. I can inform him that this party intends voting against that particular clause because we want it to be deleted. I think there is no reason whatsoever to have that clause or to have any discrimination on the basis of age; discrimination should be only on the basis of ability. I hope the hon. member will support me. With regard to the other points raised by the hon. member for Paarl, I shall deal with them in the course of my speech.

After reading the Co-operatives Bill and the explanatory notes thereon, I was very pleased that all hon. members on both sides of the House were agreed that the economic policy of South Africa should be based on the principle of a free market system and that the primary function of Parliament was to enact such legislation as would ensure that only free and fair competition in business would be tolerated. It was indeed pleasing that this basic principle of equal competitive opportunity was so ably endorsed by the hon. the Prime Minister at the famous Carlton conference last year. I am certain that when the hon. the Prime Minister holds “Carlton II” in Cape Town during the course of this year, he will re-endorse that particular policy.

We in this House and the voters who elect us have no constraints on the choice of occupation that we wish to pursue as a livelihood. When we were young, we could choose whether we would be public servants, industrialists, farmers or teachers. Therefore those of us who choose to be farmers, do so out of our own free will. In the development of our society, should individuals be made to pursue their occupation of choice singly or alone or should they be allowed to form aggregates to ensure the benefits of the division of labour? Time and circumstances over many years have provided the formation of three types of companies, viz. private, public and co-operative companies. This House has already imposed legal disciplines on their operation with guardians in the form of the Registrar of Companies and the Registrar of Co-operatives.

It now becomes necessary to study what the objectives are of agricultural cooperatives because that is what we are talking about, not about the trading cooperatives. Firstly, in terms of clause 2 of the Bill, the Minister is empowered to declare any article derived from farming to be an agricultural product. Part A of Schedule I to the Bill defines such agricultural products at present. Secondly, in clause 21 of the Bill the objectives of the agricultural co-operatives are stated, and these are, very briefly, to acquire, or to acquire control over to process, to market or to dispose of any nominated agricultural product or to manufacture agricultural products into any other form and to market or dispose of these derivatives; secondly to deal in farming requisites; thirdly, to provide facilities necessary for agricultural production; fourthly, to provide services for agricultural production; fifthly, to carry out farming operations themselves if they choose to do so; sixthly, to undertake insurance business in respect of farming risks; and seventhly, to act as an agent under the Marketing Act. In addition, single agricultural co-operatives can amalgamate to form central and federal co-operatives which, in addition to the above objectives, can undertake short-term insurance and compulsory third-party insurance and administer pension and medical schemes.

Up to this point there is no one in the House who has the right to question the legitimacy of farmers associating to carry out these objectives. One could not question this meritorious Bill, so well compiled by the Registrar of Co-operatives, if it existed in vacuo, viz. if there were no other Acts of Parliament at all in the country.

When one reads the first five pages of the explanatory memorandum, one is confronted with the fact that there are conflicts of interest between co-operatives on the one hand and private enterprise on the other. We as members of the House, whichever side we belong to, have to ensure that there shall be free and fair competition and equal competitive opportunities between all sections of the business community, whether they be co-operatives or private or public bodies. Therefore the vital question has to be asked: Is it in the interests of South Africa that private enterprise should be allowed by law to participate in the marketing and processing of primary agricultural products? I would repeat that question: Is it in the interests of South Africa that private enterprise should be allowed by law to participate in the marketing and processing of primary agricultural products? If the answer is “No, it is not in South Africa’s interests”, then the Bill is superfluous and co-operatives should be made the arm for the nationalization of the agricultural industry and the Bill should be changed immediately to give effect to this. Actually, in terms of clause 18 of the Bill, the Minister is given the power virtually at any time to do this. This would however be in direct conflict with the Carlton Conference where the hon. the Prime Minister stated that private enterprise was to be a cornerstone of the South African economy. If the answer is “Yes, private enterprise should be allowed to participate”, then surely, in arriving at a conclusion on the merits of the Bill, it must be accepted that the only equitable basis private enterprise can have is to have equal competitive opportunities, no more and no less, with co-operatives. The House must allow private enterprise to participate and have equal competitive opportunities.

The explanatory memorandum deals with the findings of the Steenkamp Commission on this conflict as well as with the so-called package deal between the Government on the one hand and certain institutions such as the Afrikaanse Handelsinstituut, Assocom, FCI, Seifsa, MIF and the S.A. Agricultural Union on the other, because of opposing views. This is where the problem really arises. A closer examination of the Bill shows that the areas of conflict are not in the Bill, but lie outside it in other legislation which has been passed by the House. These conflicts have not been resolved in toto, as we can see from the telex which was sent by the various organizations to all the Ministers who are concerned with the conflict in one way or another. It is imperative that we, as law makers, should deal with these conflicts ourselves and see if we can solve them.

I now propose to deal with the points of conflict as set out in the explanatory memorandum. If hon. members will turn to page 5 of the memorandum, we can deal with the problems as set down in paragraph 4. Paragraph 4.2(a) deals with Land Bank financing of agricultural co-operatives at market-related interest rates in respect of short-term and long-term financing. Most co-operatives utilize the Land Bank facilities to the full and borrow from the commercial banks for additional financing. What assurance do we then have about what is meant by market related rates? To a simple-minded person like myself, to allow for free and legal competition the answer is for the hon. the Minister of Finance to amend the Land Bank Act, No. 13 of 1944, in order to allow by law, private enterprise, which deals in agricultural products and their manufactured derivatives, to avail themselves of the facilities of the Land Bank on equal terms with the co-operatives at market related interest rates as laid down by the Land Bank itself. The Land Bank Act, as it is presently worded, stipulates that the bank can deal with co-operatives and companies, but when one looks at section 21 and section 35 of that Act, it is clear that they have to be amended in order to allow for what I propose, as at present the Land Bank can only deal with farmers and co-operatives.

An additional safeguard would, however, have to be introduced. That is that the Minister must register those private companies that deal in agricultural products and define exactly those companies that can deal in agricultural products. Only such registered private enterprise companies which actually deal in and handle agricultural products would then be able to deal with the Land Bank. Then one would have no competition because both would have equal competitive opportunity. The business of the bank must be expanded so that it can advance money to further agricultural production and distribution because that is its purpose. It should also be enabled to guarantee the performance of contracts whether by an agricultural co-operative or by a private agricultural company.

As far as paragraph 4.2(b) of the Explanatory memorandum is concerned, there can be no objection to the activities of a co-operative if there is equal competitive opportunity, but I shall deal with this in detail during the Committee Stage.

Paragraph 4.2(c) reads as follows—

That we can also discuss during the Committee Stage. I should like to stress that business turnover should not be limited only to that of co-operatives but should also include the turnover of all subsidiaries and partnerships as well.

In paragraph 4.2(d) mention is made of the payment of bonuses from profits. Payment of bonuses in terms of patronage proportion is an undeniable objective of co-operatives. Unfortunately, it is what happens outside the ambit of the Act in that these bonuses are utilized to achieve an unfair competitive advantage.

In section 60 of the Marketing Act, No. 59 of 1968, a control board is empowered to fix the price of regulated products—that is, acquiring or selling or disposing of any quantity of the product to which the scheme relates, at a price other than or below or above the price fixed by the board. What happens in practice is that when cooperatives pay a bonus in terms of patronage proportion, this is in effect interpreted as an increase in the price, but in terms of another Act, the Co-operatives Act. Every control board says to private enterprise, when they ask why they cannot pay a bonus, that their hands are tied by another Act. On the other hand, in terms of the Marketing Act, private enterprise is prohibited from paying an additional amount out of its profits if it so wishes, an amount equivalent to what a competitive co-operative has paid in bonus, so that a farmer who prefers to sell his agricultural products to private enterprise can receive the same total reward.

One cannot have one law for the Medes and another law for the Persians. This was stated by the hon. member for Johannesburg North when he was still on the bench. He made that statement in a certain case involving control boards. [Interjections.] What I should like to have is an undertaking from the hon. the Minister that he will amend the Marketing Act in order to allow free and fair competition among all who are affected by the Marketing Act. Then one would have certain equal competitive opportunity. It is outside the Bill, not inside the Co-operatives Bill that problems arise.

The hon. member for Paarl dealt with the question of tax. I should like to make a comparison of the payment of tax to the Fiscus by public companies in private enterprise and co-operatives. Each hon. member in this House is responsible—and this is a great responsibility that we each have—for seeing that the Fiscus—that is the tax collector—receives sufficient tax to fulfil the needs of the State on an equitable basis of distribution of taxation. One of the major terms of reference of the Steenkamp Commission was to inquire into and report on the existing system of income tax relating to cooperatives. On page 2 of the memorandum it was found that co-operatives should pay tax. In terms of section 38(2)(d) of the Income Tax Act a co-operative is recognized as a public company—this is since three years ago—and is subject to taxation. However, it must be clearly understood that the basis of taxable income, as laid down in the Income Tax Act for public companies and for cooperatives, differs greatly. In spite of the fact that they are both purported to pay tax, the difference lies in the fact that there are different sets of deductions that either cooperatives or companies can make. This is where the problem lies and particularly so in the deductions that can be made from the total net profits in the case of public companies and what we call surpluses in the case of co-operatives.

The Afrikaanse Handelsinstituut, Assocom and the Federated Chamber of Industries state as follows in their telex—

Basically bonuses are now taxable in the hands of the farmers. I hope that they pay taxes as a result of that. The deductions that a co-operative is entitled to make, after it has paid bonuses, are so favourable that any co-operative that pays taxes needs a new competent manager. They must sack their manager immediately because he does not know how to manage the company properly to avoid paying tax, which is quite legitimate, as opposed to evading tax, which is unlawful. Private companies have deductions, but none so favourable as those that apply to co-operatives.

Let us go through these because it is very important that we should know them. Taxation on agricultural co-operatives is similar to that on any other company, but cooperatives may in addition—and I am quoting from the law—claim certain special deductions. Firstly, bonuses distributed to members during the period of 12 months ending six months after the end of its year of assessment but limited to its taxable income before allowing certain deductions. Secondly, an investment allowance of 20% of the cost of certain storage buildings and improvements to such buildings, provided that the erection of the building or the improvements were commenced on or before 30 June 1983 and that the buildings were brought into use or the improvements were completed on or before 30 June 1984. I am certain that when the Income Tax Act is dealt with from year to year the hon. the Minister will extend these dates like he does with other companies. Thirdly, an annual allowance of 2% of the cost of certain storage buildings and improvements to such buildings. Fourthly, an investment allowance of 30% of the cost of new and unused machinery that is brought into use on or before 30 June 1986 and which is used for the storing and packing of the products of its members or for subjecting such products to a primary process. Fifthly, an initial allowance of 25% of the cost of new and unused machinery qualifying for the above investment allowance. And this is the best. I wish that I in my private business could have this deduction allowance because then I would never pay any tax. Sixthly, subject to certain conditions and limitations, amounts repaid on certain loans obtained in order to finance the cost of erecting and acquiring storage buildings, the cost of improvements to storage buildings and the cost of immovable machinery and plant used for storing and packing products of its members or for subjecting such products to a primary process.

Mr. Speaker, on a point of order: The hon. member is dealing with other aspects now, while we are dealing with the principles of a Bill concerning cooperatives. On such an occasion, is the hon. member entitled to discuss the details of another Act, for example the Income Tax Act, which has no bearing on this whatsoever, and to advance arguments in that regard? Should this not be discussed when other legislation is under discussion or when the Vote of another Minister is under consideration?

As I understand the hon. member for Bezuidenhout, he is dealing with the question of the income tax payable by co-operative societies. I am of the opinion that he is entitled to do this. [Interjections.] Order! The hon. member for Bezuidenhout may proceed.

Mr. Speaker, thank you very much. I started off by saying that most of the problems which we have with the Bill before the House do not he within the Bill, but outside the Bill. That is why I am appealing to both you as Minister of Agriculture and to the Minister of Finance, who does not happen to be here this evening, please to take note of these because this is the way to solve the problem.

Mr. Speaker, on a point of order: Is an hon. member entitled to say “to you as Minister …?”

The hon. member for Bezuidenhout must address the Chair.

That is so, but everyone makes a mistake sooner or later.

Sir, the deduction under section 22(7)(f) of the Income Tax Act is permissible only in respect of the first year of assessment on or after 1 April. This is a fantastic deduction and it really places the co-operatives in a very favourable position. Finally there is a provision for losses due to damage and I must say it is quite in order.

The effect of these deductions can be illustrated as follows: Let us assume that a private company and a co-operative both make say R100 profit. The private company pays R42 in tax which leaves it with about R60. It declares 50% and retains 50% as reserves. It therefore has R30 available to be distributed as dividends. This has already been explained by the hon. member for Port Elizabeth Central. When a co-operative makes a R100 surplus, a large portion of that amount is given as bonus and therefore what is left over for taxation is, as I have said, very small. All I am entitled to ask is that the hon. the Minister of Finance reconsiders these deductions in order to make for more equitable competition.

When it comes to compulsory co-operative single-channel marketing—here I refer to paragraph 4.2(e) of the explanatory memorandum—I think that we must all thank the hon. the Minister that all commodities, except the four mentioned in the paragraph, have been brought into the ambit of the Marketing Act. I think the hon. the Minister must probably think again about even trying to put those four under the Marketing Act as well.

It is absolutely correct that decentralization assistance and benefits—here I refer to subparagraph (f)—should be available to everybody whether it be a co-operative or private enterprise. I think the explanatory memorandum is perfectly correct where it says that both private enterprise and cooperatives should all be subject to the same legislation. That is all I am pleading for.

The hon. member for Port Elizabeth Central has dealt in detail with the special statutory pledge, and I want to thank him for that.

It was a pleasure.

I should like to deal with the definition of co-operative practices. I find it difficult to grasp what the hon. the Minister means because co-operative practice is not defined anywhere in the Bill. I earnestly request the hon. the Minister to add the definition of co-operative practice to the definitions. If he does so, we will be able to study it and then get on with it.

Co-operatives, as the hon. member for Paarl has told us, are no longer small, badly managed and ill-equipped organizations. Cooperatives today are well equipped and outstandingly well managed organizations. The hon. member for Paarl is a typical example of the high degree of management that they have. Many of them have highly qualified and university trained managerial staff whose financial acumen and knowledge is comparable to anything in private enterprise. What is more, they are highly integrated and in the words of the hon. the Minister for Co-operation and Development they are highly orchestrated. They are run within the South African Agricultural Union which is an outstanding body looking after the interests of the farmers in this country. As a matter of fact, as we heard from the hon. member for Paarl, one of the three vice-chairmen of the S.A. Agricultural Union is specially elected to look after cooperatives.

Finally, I would like to deal with the formation of the standing advisory committee. I would like to bring to the notice of this House the meeting that was held in Johannesburg last Friday where an agreement was reached between private enterprise and the Registrar of Co-operatives. I quote from the minutes of the meeting—

I cannot agree with this last paragraph. I would like to refer the hon. the Minister to the Statistics Act, No. 66 of 1976. Section 2 of the Act makes provision for the establishment of a Statistics Advisory Council. I would like him to establish a Standing Advisory Committee. I do not want to go into the details of this but if he reads the aforementioned section he will see that the purpose of the Advisory Council is to advise the Minister in regard to any matter connected with the Act. That is wide enough. The hon. the Minister can lay down all the qualifications. I would like the hon. the Minister to consider this section and, if possible, incorporate it in this Bill. Unless this is incorporated in the Bill the committee will have no power and it will only become a talking shop. Once it is incorporated there will be peace from both the agricultural sector and the commercial sector of South Africa. It is our duty to see that this is done and I appeal to the hon. the Minister to include something of this nature into this Bill so that we can get rid of all the trouble we have had for so many years between co-operatives and private enterprise.

When one deals with a Bill as important as this one, it is interesting to follow the conduct of the discussions. Even more important is the spirit in which the discussions take place and the attitude of the speakers conducting the discussions. I should like to ask the official Opposition whether all of them agree wholeheartedly with the attitude reflected by the hon. member who has just resumed his seat. Is that the attitude of the official Opposition towards the co-operative legislation as a whole? I shall reply to this question in a moment. I believe that the Government and the population of South Africa owe it to the farming community to establish machinery which will create a sound agricultural industry in South Africa. An unsound agricultural industry in a country bears the seeds of its downfall at various levels of the community. The Co-operatives Act as such is one of the instruments which has been developed over the years to achieve this very aim, that of a sound agricultural industry. This is the essence of the whole matter.

I should like to convey my sincere congratulations to the hon. member for Paarl, and to the hon. member for Fauresmith who spoke earlier, on the positive contributions they have made. I find it very difficult to improve on, or even add anything new to, what the hon. member for Paarl had to say. However, I want to point out that from small beginnings and, in many respects, a precarious existence, in the course of time our co-operative associations have developed into what they are today. Every step was a hard-fought struggle to win the rights they have at present. In essence it was a struggle waged by the co-operative societies, but nevertheless hon. members opposite, and specifically the hon. member for Port Elizabeth Central, are constantly referring to the private sector. However, any company is free to change its structure and become a co-operative if it thinks that so many advantages are involved. Why do they not wish to do so? Because in the case of a co-operative, the profit returns to the farmer, in contrast to private companies, where the profit finds its way into the hands of a few capitalists. This is the basic difference in principle, particularly with regard to what the hon. member for Port Elizabeth Central had to say. [Interjections.] However, there is another very important aspect. I am not disparaging private commerce, but private commerce must not try to suppress the co-operatives and only seek to rely on rights and obligations of co-operatives, without also giving them the benefits that stem from them. [Interjections.] After all, it is true that there were advantages as well as disadvantages for the co-operatives in the package agreement.

There were certain restrictions too.

The hon. member states that restrictions were also imposed on the co-operatives. Therefore there were advantages as well as disadvantages. What advantages and disadvantages do the cooperatives already have at this stage? [Interjections.] Hon. members opposite come here and piously maintain that there is no haste at this stage to adopt this Bill and that we should first sort it out and then see what happens. In principle I agree that if matters are not cleared up within a certain period, it is essential that we should establish exactly what the situation is as regards the basic principles at issue. However, this Bill has been under discussion for a long time; in fact, the former Minister of Agriculture introduced a draft Bill which was strongly criticized, after which he referred it back. Now a new Bill has been introduced by this hon. Minister of Agriculture and once again the hon. members opposite want to postpone its acceptance. However, let us consider precisely what happened. In the budget debate of 1977, the hon. the Minister of Finance explained what this whole situation involved and announced certain things, inter alia, matters relating to market-related interest rates and the nature and scope of co-operative activities, and said—

I stress this with reference to an interjection made by the hon. member for Port Elizabeth Central—

The hon. member for Paarl also discussed this. This is already been implemented. The issues of short-term financing and long-term financing are also spelled out, and a few other matters are also dealt with, for example, the payment of bonuses out of profits, obligatory co-operative single-channel marketing—the final point dealt with by that hon. member—and decentralization benefits as well. The co-operatives have never enjoyed decentralization benefits.

But they are entitled to … [Interjections.]

The crux of the matter is that they are in fact entitled to them. The people themselves say that they are entitled to them.

[Inaudible.]

However, the issues of taxation and the payment of related interest rates are already applicable, but at this stage those hon. members are trying to postpone this legislation so that those other things cannot be made applicable to the co-operatives. This means that the cooperatives have to wait even longer. Surely those are the facts of the matter. After all, that will be the effect of this. The final point I mentioned concerned decentralization benefits, and then there are also the questions of industrial legislation, licensing, the right of pledge and other recommendations.

What does the hon. the Minister have to say about the right of pledge.

I am coming to the right of pledge.

No, you merely mention it and then you proceed to other matters.

That hon. member should not be so hasty. [Interjections.] Very well, since hon. members insist, I shall deal with that issue immediately. What is the purpose of the right of pledge? The right of pledge arose after certain credit facilities had been created for farmers. The credit facilities had to be granted to fanners due to drought conditions and due to the pressure on the farmers with regard to operating capital. Due to the risk involved, the private sector—I give them full credit for that—were unable to provide the farmers with all that credit. After all, those are the true facts of the matter. The right of pledge then came into being, due to the fact that the Government had to assist the farmers without delay so that those farmers could remain in production. Therefore Land Bank financing is channelled to the farmer in the form of a loan by the co-operatives. The co-operative was responsible for the money obtained from the Land Bank. However, the only security which the co-operative had was the fertilizer, fuel and other means of production which the producer obtained in order to produce a crop the following year. The question I ask myself straight away is this: Who in the private sector would make that money available at such a reasonable interest rate when the risk was so great? [Interjections.] Who in the private sector would be prepared to do this in the knowledge that there could be a drought the following year and that it might therefore not be possible to pay the money? However, this was the basic premise of the Government in granting the farmers production assistance.

Another important aspect is that cheap capital was made available, and this did more than merely help the farmer. If the cost at which a product is produced is taken into account in calculating the cost of controlled products in order to determine the price structure, this must have an effect on the price paid to the farmer for that product, and the eventual price paid by the consumer. It is interesting that if those hon. members say that they are critical of the right of pledge …

The expansion of the right of pledge.

Just give me a change to state my argument.

You are not being quite honest in your argument. The issue is the expansion of the right of pledge.

I am coming to that; let us first just state the principle. The consumer will now have to pay a higher price. That is, after all, the effect of this. However, the hon. member refers now to “the expansion of the right of pledge”. As far as the expansion of the right of pledge is concerned, I find it interesting that the hon. members of the opposition have not yet touched on the crucial aspect of the expansion of the right of pledge.

I have.

The hon. member moved amendments, but in none of their arguments have any of the hon. members of the Opposition, apart from the hon. member for Durban Point, touched on the essence of the matter. Not one of the other hon. members mentioned it. They spoke about spare parts, fuel and repair services. This was what they objected to. However, the issue of the right of pledge as stated in clause 173(1)(c) concerns a right of pledge which extends over a period of 18 months and applies to all products.

You are referring to matters which we have no difficulty with; we agree with that.

That is just the point. The hon. members are objecting in regard to the period of 18 months. Now, however, they are saying that they have no problem with that, although one of their members did argue the point. I do not want to argue with those hon. members.

Who said that?

We are not trying to argue with those hon. members; we are merely trying to adopt a fair and just approach with regard to agriculture and in the interests of the country as a whole. I now come to the point against which I personally objected, and I am pleased that the hon. the Minister has placed an amendment on the Order Paper today in order to accommodate it. This links up, to a certain extent, with an additional argument advanced by the hon. members with regard to facilities which the producer obtains from other sources. As the provision reads at present, it means that if a farmer were to obtain a production loan for the production of maize, there would be a right of pledge in respect of all the livestock in his possession, even if he had livestock in the Karoo or in Natal. It would affect the credit worthiness of that producer and could extend the security held by the co-operative to such an extent that it may be more than is strictly necessary for the specific loan allocated. This is what is being provided in clause 173(1)(c). The hon. the Minister has placed an amendment on the Order Paper which provides that if a producer submits a written request to the co-operative, he may be permitted to utilize some of his products as security for any other source of finance which he may resort to. I think that this is an exceptionally good amendment and will also accommodate to some extent one of the arguments advanced. However, I could not resist getting in a blow. The hon. member for Wynberg said a moment ago that his party had no difficulties with the provision, but now they have found out that there were indeed certain problems. That hon. member should do a little homework before making such remarks.

That, then disposes of the right of pledge as a whole. However, there is another matter which I feel ought to be singled out. The right of pledge is severely criticized by commerce. When one looks at the security the co-operative has, the Government and the co-operatives deserve a word of thanks from the community as a whole and from the farming community in particular for the fact that notwithstanding the high operating capital requirements and the tremendously high risks with regard to the expected harvest, they are creating this system which enables the farming community to obtain capital and carry on with production. I think that the farming community must thank the cooperatives for what they have done and for the way in which they are dealing with this matter during a period when the farmers are really having a hard time of it.

In my opinion we have already dealt with the question of the right of pledge. I stated very clearly, with regard to the package agreement, that it was imperative that this House pass this Bill as soon as possible, because there are a number of debits against the co-operatives with regard to taxation, market-related interest rates, non-member business and further obligatory single-channel systems which are imposed on them. However there are benefits, too, stemming from this legislation, and because they are in my opinion fair, from the point of view of the farmer and the co-operative and from the point of view of free enterprise, the legislation ought to go through without delay.

There is another point which I should also like to deal with. It has been said that there must be a “watchdog committee” to keep an eye on the co-operative and its activities.

That is scandalous. Who is watching whom?

I ask myself whether, in the normal joint activities of departments and of private enterprise …

Has there been such a committee over the last few years?

If the hon. member were to listen for a moment he might learn something. Surely it is only human, fair and courteous that any person and any body would have the right to approach the Minister or the department at any time and to say that they had certain problems which they wanted investigated or which justified further investigation on merit.

But was there not an agreement concerning this committee?

The hon. member must be quiet for a moment and listen.

I ask: Was there not an agreement concerning this committee? [Interjections.]

Sir, when I was small, my father said to me: “Children should be seen and not heard.”

You did not listen.

That must have been many years ago.

I may be grey, but I am not bald yet. In all decency and fairness, any body or person has the right to approach any department at any time to discuss a problem with the department or even to call for a further investigation. In a community such as ours, people are free to do this at all times.

The hon. the Minister and his predecessors have shown this to be the case in the past, too. The fact that the people in question had the opportunity to discuss such aspects with the department last week shows that this does occur in practice as well. However, I want to say that I reject the suggestions that we as Parliament or as a responsible organization, or as a party, should permit one interest sector to form a committee to supervise the activities of another. This cannot be done. I challenge any other organization in this country to come and tell me that they will establish such a committee to supervise their affairs from day to day. [Interjections.] That is unheard-of, and it will not be done. We on this side of the House will not permit it. [Interjections.] For the sake of fairness and for the sake of the proper regulation of our society, we shall be prepared at all times to listen to problems from whatever sector and to give the people in question the necessary say in order to ensure that improvements are effected in accordance with the needs of our times. [Interjections.]

It is all in the interests of the farmer.

Yes, that is correct. The hon. member for Paarl has just said it. It is for that very reason that there is a Registrar of Co-operatives. That, too, is why a channel of this kind will be made available.

The Registrar has agreed to the establishment of such a committee. [Interjections.]

Mr. Speaker, in all fairness I call on the hon. member for Wynberg … [Interjections.]

Order! The hon. member for Wynberg has already had the opportunity to address the House.

Mr. Speaker, I am merely trying to help the hon. member. [Interjections.]

If I had made as meaningless a speech as the hon. member for Wynberg has done, I, too, would definitely want a few minutes to try to compensate for it. [Interjections.]

There are still a few other aspects, for example the matter of the bonuses and the taxation. Hon. members of the Opposition previously made a big fuss of how unfair it supposedly was that the co-operative can pay out its bonuses before it pays tax. Surely there are important reasons why this is done. Let us take a look at this. The hon. member for Bezuidenhout sketched a tax structure which supposedly creates problems. Let us take a company as an example. In the first place, the Income Tax Act provides for the way in which taxes are levied. Therefore—as the hon. member correctly remarked—we cannot make provision for that in the legislation under discussion. Therefore the hon. members are now concerned that, specifically due to the implementation of the Income Tax Act, co-operatives may enjoy unfair advantages. That is their point of departure, as far as I understand it.

There are difficulties.

Whatever the case may be, that cannot prevent this House from deciding to accept this Bill. The hon. member for Wynberg failed to motivate fully and effectively his amendment that this Bill be referred to a Select Committee after the Second Reading.

If we were to accept the amendment of the hon. member for Wynberg, and the Bill were to be referred to a Select Committee, what then? If, then, in the light of the Income Tax Act, further problems were to be apparent in this Bill, we should discuss and argue the matter in the Select Committee.

But that is exactly what I said.

However, I can give the hon. member the assurance in advance that we will oppose him there. I shall also tell him why. After all, a company also enjoys certain advantages. The company does pay tax, that is true. The hon. member for Paarl explained this and said that companies were already benefitting by the tremendous increase in value of their shares. What does a farmer get from the shares in his co-operative? In what way does the value of those shares increase? The bonuses paid out can also be converted into bonus shares. The legislation does make provision for that. However, the farmer has to pay tax on those bonuses that accrue to him. The tax he has to pay is calculated on the cash value of the shares at the period when the money accrues to him. This is in terms of the Income Tax Act. The farmer does not receive the money in cash. Without actually obtaining the money, he re-invests it in the co-operative. He therefore has to pay the tax on it from a different source. Then, in addition, he still has not benefitted from the increase in the value of those shares as one would expect.

Nor can the farmer withdraw those shares at will, as is usually possible in the case of private or public companies, where the shares can be withdrawn at any time. We argue therefore …

[Inaudible.]

Mr. Speaker, the hon. member for Port Elizabeth Central is confused. He is now speaking about agricultural legislation. I must say, the washers of his pump are worn. That is why he is only flumping wind, and not a drop of water. Interjections.] The hon. member should be constructive about this matter and see it from the point of view of the producer. The bonuses paid to farmers are taxable. The same principle applies to companies. Only when a company has declared a dividend does it pay tax. If it pays a dividend to another company, does that company also pay tax? No. The company only pays once. The only difference here is that instead of the tax on the dividend being levied from the co-operative, it is levied from the farmer. Surely the principle is the same. Therefore there are very logical arguments that could be advanced in this regard.

There is one final matter relating to taxation that I want to touch on. The taxability of the co-operatives has already been dealt with here. Since the co-operatives have already become taxable, they have accepted this, but the principle of bonuses is a principle that has existed over the years. It is of the essence of co-operatives. We shall not make any concession in this regard.

I agreed with you on that score.

That was very sensible, and I am grateful.

There is another matter that I wish to discuss briefly, viz. clause 108, relating to the age of directors. There is difference of opinion as to the question whether provision ought to be made in the legislation for someone having to retire at a certain age. Some people feel very strongly that people should be compelled to retire at a certain age specifically because the farming community will not vote a person out of office, due to the attitude that may prevail. This is an argument that is raised. However, my personal feeling in this regard has always been that people should not be compelled by legislation to do something in the absence of exceptional circumstances. That right should be left open. [Time expired.]

Mr. Speaker, I have listened with great interest to the hon. member for Ventersdorp and I must say that his speech mostly consisted of putting words into our mouths and then turning around and claiming that we had said something that we did not in fact say. First of all, I should like to make one thing very, very clear and explain it clearly to all hon. members in this House. We have looked at this Bill from the point of view of what is good for the farmer. I have family who belong to the farming community throughout the Free State. Unfortunately most of them happen to be members of the NP and I have a hard enough time getting on with them as it is. Therefore, if I should stand up here tonight and talk against the farmers, that would mean that I have seen the last sheep in my deep-freeze.

The one assumption that has been made throughout the discussion so far is that what is good for the co-operatives is good also for the farmers. I believe that this is not necessarily the case. We should be able to look at the farmers and the co-operatives as two completely separate identities. The assumption is made that co-operatives can do a better job when it comes to supplying farming requisites than private enterprise. This is not always the case, and I have seen study group results which show in fact that private enterprise can compete and supply services just as cheaply as the co-operatives. In addition, I should like to say right now that we have no quarrel with co-operatives; we are not against co-operatives, because farmers have every right to organize their own affairs as they see fit, as far as production, marketing, storage, processing and all such things are concerned.

However, we believe very strongly that farmers must have freedom of choice, and we are therefore against anything anywhere that limits a farmer’s freedom of choice. Any legislation which in fact gives the cooperatives competitive advantage is limiting the farmers’ freedom of choice. When you and I go downtown, Sir, to buy a suit of clothes, we like freedom of choice; we like to be able to buy from whom we please and we like to be able to compare prices. That is why I think that it is important that we stick to this principle that farmers have freedom of choice.

At this stage, I should like to turn to the so-called package deal because it is in this regard that we as the official Opposition have the strongest objections. We do not believe that all the provisions of the package deal have been adhered to. The hon. the Minister has in fact included many of the provisions of that package deal in this legislation, but he has also seen fit to omit certain of the other provisions. The first of these is that in the legislation as such there is no provision whatsoever for market related fates of interest. I realize that this may be difficult to do but nevertheless there is no provision for these so-called market related rates of interest.

I should also like to discuss the automatic lien which co-operatives have. In this regard we of the official Opposition recognize the need for a lien. This is certainly important under certain circumstances owing to the nature of agricultural production. We have no problem whatsoever with the actual concept of a lien. The only reservation we have is that we do not believe that it should be automatic. We believe that, when necessary, a co-operative should be able to take out a lien on a crop or whatever the case may be. The most serious objection that we have in this regard is that in this legislation the hon. the Minister has in fact extended the provision of the lien over and above what was included in the package agreement. He has extended it to include repairs to and spares for agricultural machinery. We believe that, having extended it in this way, he should once again have referred it to organized commerce and industry as well as the co-operatives and organized agriculture and renegotiated this point.

The next matter I should like to deal with is the so-called watchdog committee. In this regard I should like to refer hon. members to the minutes of a meeting held in Johannesburg on 21 August 1981 between representatives of organized commerce, agriculture and the co-operatives. From these minutes it appears that there were certain points of agreement. The first point of agreement was in fact that a watchdog committee be formed under the chairmanship of the Registrar of Co-operatives that would consist of parties representing all interested bodies, namely the South African Agricultural Union, the co-operatives, chambers of commerce, of industries and so forth, as well as the Department of Finance and of Industries, Commerce and Tourism. It was agreed that they would form this committee. Then, on the assumption that such a committee would be formed, they were in fact prepared to let the Bill go through as it was and they would then renegotiate or discuss the question of market related rates of interest as well as the question of the automatic lien at a later stage. However, as things are at the moment, we have no watchdog committee, we have no provision for market related rates of interest and neither do we have any provision regarding the automatic lien and its extension over and above what was covered by the original agreement.

One other matter which I consider to be very important is the question of outsider trading. As regards outsider trading there are gaps or loopholes in the Bill which one could in fact drive a bus through. Any co-operative can do as much outsider trading as it wishes. I have nothing against their doing outsider trading as long as they compete on an equal basis. However, they can do outsider trading through subsidiary companies. That is fine. Subsidiary companies pay tax, as everybody else does. They should pay tax. However, as has been pointed out by hon. members on this side of the House, it is possible for subsidiary companies to plough their profits back by various methods to the co-operatives and thereby reduce their tax liabilities.

The hon. member for Fauresmith took great pains to explain to us that the cooperatives were in no way really looking for special privileges or competitive advantages as such. I agree with him because that is completely in keeping with this Government’s policy of free enterprise to which we on this side of the House subscribe. However, hon. members on that side of the House ostensibly subscribe to it yet only pay lip-service to it. Co-operatives do in fact have advantages which give them a competitive edge over private industry. The way in which co-operatives only pay tax after bonus dividends etc., have been declared is the main advantage. Then the co-operatives can also use Land Bank money. This money can be used to run businesses not related to farming in any way whatsoever. We have had the examples of BMW agencies. I know of examples where co-operatives are in fact acting as estate agents for urban property in Natal. That has nothing to do with farming, but they are in fact doing it. They are using Land Bank money to do that. I do not care at what rate of interest they obtain it. Everything, of course, depends on what the definition of farming requisites in fact is. Then of course, hens, as far as freedom of choice is concerned, clearly do limit the farmer’s freedom of choice. They discourage other suppliers of credit and the farmer in fact has very little choice or option but to go to the co-operatives.

Finally, there is another serious problem which can result from co-operatives having a competitive advantage, particularly in the small rural towns. It means that the small trader is in a disadvantageous position when trading with the farmers or the communities in that area. It can—I am not saying that it will—result in the problem of “ontvolking” of the country areas being perpetuated if these people are forced to leave and move away from smaller towns.

In conclusion I should like to say that I believe a moral obligation rests on this Government to stick to the actual provisions of the so-called package agreement. It is quite patent that they have not done so and that is why I support the amendment moved by the hon. member for Wynberg.

Mr. Speaker, I wonder what the official Opposition thinks would happen now if we who represent constituencies in which the majority of voters are farmers, were to go and tell those people what those hon. members’ …

You must simply tell them the truth or not.

… attitude is in regard to this Bill we are discussing this evening. I can tell them now what my Prog farmers in Ermelo would say about their party’s standpoint in respect of agriculture and the farming community as it was very clearly indicated by the discussion this evening. I predict that the official Opposition is going to encounter serious problems with its voters in the rural areas.

I wish to react to certain statements and arguments advanced this evening by the hon. member for Port Elizabeth Central. He stated, inter alia—

He went on to contend that co-operatives engaged in such activities enjoyed an inproper advantage over the so-called private sector because they supposedly relied on unlimited Land Bank credit. This is by no means the case. We have already heard from various speakers on this side of the House—and this was conceded by the hon. member for Bezuidenhout—that the Land Bank levies a specific market-related interest rate for that specific part of a co-operative’s activities.

It is indeed true that a co-operative may borrow money from the Land Bank at a lower interest rate for other activities, but as far as that is concerned the following simple test may be applied: A co-operative is only entitled to the lower interest rate when it is engaged in activity which the farmer also conducts on his own farm in the normal course of events. One example of this is that of a farmer who usually has a workshop on his farm where he is able to repair implements, tractors and some of his vehicles. This is an activity which is directly connected with his farming activities. If his co-operative wants to establish a workshop on its own premises on a larger scale and with more sophisticated equipment, in order to render that service to its members, then that is an activity similar to that which the farmer performs on his farm, and therefore the co-operative must be entitled to obtain money from the Land Bank at a more reasonable interest rate than the market-related interest rate. I do not know what the hon. member’s problem is in this connection. If he uses the above-mentioned example as a criterion, it is so simple that any child could understand it.

In the second place, the hon. member wanted to know why the hon. the Minister was suddenly in such a hurry to try and have the Bill steamrollered through this House, because according to him it was only published recently, and commerce and industry have not yet had sufficient time to study it properly. He advances this as a reason to support the amendment to the effect that the Bill be referred to a Select Committee. For what reason should that be done? For one reason only, and that is to delay the matter; in fact those were the words he used: “There must be a further delay.” Why? So that the businessmen and industrialists can have more time to produce well-founded comment on the Bill.

Looking at the history and the background of this question, we find that due to the package agreement between the farming community and the agricultural sector on the one hand and commerce and industry on the other, everything that was agreed on has already been complied with, at least as far as commerce and industry are concerned. The co-operatives are already paying tax and already have to pay market-related interest to the Land Bank for certain activities. One could also mention certain other points. The things that are to the detriment of the co-operatives and to the benefit of the private sector have therefore already been put into effect.

However, the farming population, the producers, those who have to supply this country and its people with food, have to sit and wait, because thus far only the restrictions have been applied to them. None of the benefits negotiated for them in that package agreement which the private sector agreed that they should have, have yet been put into effect. I therefore say that this House would be irresponsible if it were to refer this legislation to a Select Committee at this point in order to cause still further delay. I do not think we would be doing our duty to agriculture and the farmers of this country if we were to accede to that request at this juncture.

The private sector has had its way as far as the package agreement is concerned, but the farmers are still waiting for this House to dispose of this legislation as rapidly as possible so that they may also receive the benefits negotiated for them which have been agreed on.

A third matter mentioned by the hon. member for Port Elizabeth Central, which apparently causes him a great deal of concern, is that of the so-called tax advantage for co-operatives. The hon. member for Bezuidenhout is apparently equally concerned about this. Reference is also made to the payment of bonuses. Other hon. members on this side of the House have already pointed out that those bonuses are taxable in any event, and that the member who receives them has to pay tax on them.

We admit that.

That may be so, but the hon. member does not like the idea.

I did not say that.

Of course the hon. member said that. The hon. member for Bezuidenhout can shake his head, but one of the main points he advanced in his speech was that it was not competitive. He objected to that. If a member of the co-operative lends the free surplus paid to him back to the co-operative—the hon. member for Bezuidenhout does not like that either—then surely that is an investment in his own co-operative that was established for the member’s benefit.

One must regard the payment of bonuses in this light too, because what is a member of a co-operative really receiving when he is paid a bonus? What it amounts to in practice is a rebate on his purchases from his own co-operative, of the products and articles he requires to produce various things on his farm. This is what it amounts to in practice. After all, no one can object to that, neither the private sector nor commerce and industry. If in effect the essence of a bonus payment is that it is a rebate on purchases, then no-one can reasonably object to that.

Another matter raised by the hon. member for Pietermaritzburg South is the question of the extending of the right of pledge. Let us put the question of the right of pledge in perspective. Let us consider its position in the co-operative movement over the years. Every year in the budget we in this House vote money for the Land Bank, and one specific reason for this is so that the co-operative movement can be supported by way of those funds. How does the Land Bank operate? The Land Bank Act provides that if the Land Bank lends money to a co-operative to enable it to make that money available to its members, the Land Bank requires a pledge on all the assets of the co-operative as security.

That is correct.

This House incorporated that provision in the Land Bank Act. Why? Because we are working with public money, with the tax-payers money, this House has to satisfy itself that when the Land Bank lends money, whether to individual farmers or to co-operatives, there is adequate security for that money. In the Land Bank Act it is provided that a co-operative must pledge its total assets in favour of the Land Bank. Therefore it is only logical if the co-operative, when it in turn lends those funds it has obtained from the Land Bank to its members, should also require security in the same way and in accordance with the security which the law requires it to provide to the Land Bank. Now those hon. members are complaining about this and saying that the right of pledge should not be extended in this way. It seems to me that they no longer see themselves as the responsible guardians of public funds, because they now want the taxpayers’ money to be lent out without security. This is an untenable situation; surely we cannot accept it. However that is only one side of the matter. Let us look at it from the point of view of the producers. I want the hon. member for Wynberg to show me the farmer and the financial institution …

He does not know farmers.

Yes, the hon. member has no farmers in his constituency. That hon. member must show me the financial institution that will advance money to a farmer on the scale at which agriculture has to invest today to produce food, on the basis of a mere pledge. There is no such financial institution. No bank in the country …

They would want a mortgage on one’s land.

That is correct. The hon. member for Ventersdorp states that such institution would want a mortgage on one’s land, and that is what the financial world wants. If that is so—and the hon. member for Wynberg cannot deny it—then surely it is in the interests of the producer, too, that there should be a right of pledge. This is not something that troubles him and lays a heavy burden on his shoulders; it is an arrangement which gives him access to the credit facilities of the co-operative. Surely, then, it is in the interests of the producer that there should be such a thing as a right of pledge. Therefore I have yet to meet the farmer who raises any objection to the fact that his co-operative does not want to deliver anything to him if he does not pledge all his products to it. No farmer has ever mentioned that objection to me, because the farmer knows that without that right of pledge incorporated in the legislation, he would not be able to produce, because no-one would be able to provide him with that quantity of money on that security and those terms. Therefore the right of pledge is in the interests of the farmer, and I repeat that the party that objects to that does not serve the interests of agriculture in this country.

Not only did the hon. member for Port Elizabeth Central reveal his total ignorance of agriculture in his speech this evening, he also neglected to consider the provisions of clause 173 dealing with the right of pledge. What did he do? He quoted the example of the farmer who purchases a tractor on hire purchase in town. Before he has finished paying it off, the tractor breaks down. He now approaches his co-operative—and it is very interesting that the hon. member states that the farmer approaches his co-operative, and not the man who has sold him the tractor …

That would cost too much.

It is probably Malcomess’ tractor.

Now he obtains spare parts for the tractor from his co-operative and uses those parts to repair the tractor. The hon. member then took the hypothetical case further and asked what would happen if the farmer were to neglect to continue with his hire purchase payments and the hire purchase owner of the tractor wanted to take steps. He wanted to know whether the co-operative would first have to take out all the spare parts before the hire purchase owner could take the tractor back. In the first place I want to point out to the hon. member that the right of pledge does not relate to the tractor or the spare parts, but in fact to the agricultural products of the farmer. [Interjections.] The hon. member had better go and reread what is stated in clause 173, specifically subsection (1)(c).

Look at subsection (1)(a).

Very well, let us read subsection (1)(a). It provides that the ownership of the spare parts shall vest in the co-operative.

That is right. So what happens if one owns a thing and someone else …

But that has nothing to do with the right of pledge. Subsection (1)(a) provides that the co-operative remains the owner of the spare parts. Therefore, if the hire purchase owner of the tractor then …

Mr. Speaker, may I ask the hon. member whether he would support an amendment in the committee stage which makes it quite clear that the lien on the article could only be applied against the products of the farmer and not against the spare parts as such?

Mr. Speaker, the legislation already provides for that. We do not need an amendment in that regard. The hon. member should just read clause 173(1)(c). This clause states that when money is advanced—

The right of pledge is created there, and not in paragraphs (a) or (b). Paragraph (a) provides that the co-operative remains the owner of the spare parts and paragraph (b) provides that if the seller of the tractor wants to seize and sell the tractor, he may not do so without the permission of the co-operative. Therefore this has nothing to do with the right of pledge.

One cannot have a lien on one’s own property.

The point is that the right of pledge does not apply to the spare parts, but to the products of the farmer on the farm. That is the point that the hon. member overlooked.

I should like to come back to what the hon. member for Bezuidenhout had to say. He made a big fuss about the point that there should be “equal competition” between the co-operative on the one hand and any other company on the other. I want to ask him whether he would support an amendment from this side of the House that the limitation of 5% on transactions by non-members of co-operatives be abolished. Surely then we would have “equal competition”.

Finally I want to deal with a remark made by the hon. member for Pietermaritzburg South. He made a remark here which I cannot allow to pass unchallenged. He said that in its present form the Bill would help to depopulate the platteland.