Mr. Speaker, I should like to commence by moving an amendment to the motion of the hon. the Minister of Finance, as follows—

1. (a) to manage the economy more efficiently;
2. (b) to combat inflation more effectively; and
3. (c) to remove general sales tax from essential foods.”.

Mr. Speaker, when one listened to the hon. the Minister presenting the little budget this year, what a difference there was between the words he used and the words he used in the little budget debate in 1981. If we compare this year with last year, what do we find? In 1981 there were words of great enthusiasm and even an anxiety to give tax concessions. The hon. the Minister could not even wait for the main budget. He had to hand them out quickly in order to make sure that they were in the hands of the electorate before the election. Now, in 1982, again he could not wait for the main budget. This time, however, he could not wait to impose new taxation. Last year he handed it out. This year, however, he is grabbing it. He could not even wait until today. He could not even wait for the date scheduled for this particular debate. Tax increases had to be announced earlier so that they could be imposed at the earliest possible date.

We cannot forget, of course, that the last little budget was just before an election, while an election is now somewhat remote and it is hoped that voters’ memories will be rather short. “Vote now, pay later” is what I predicted in February, 1981, and now is the time to pay. The hour has arrived for people to pay.

There is also no doubt that South Africa’s economic position has altered dramatically within a relatively short time. Let me remind the House of what the hon. the Minister of Finance said just a year ago. I quote—

This is what the hon. the Minister said in February 1981. Now it is a different story, however.

We still have a magnificent growth rate. [Interjections.]

I admit that the Government is not to blame for everything. I am prepared to be fair to the hon. the Minister. In particular, no one is going to hold him responsible for factors such as the fall in the gold price or the state of the economy of our trading partners.

Hear, hear!

Mr. Speaker, before the hon. the Minister of Transport Affairs gets too carried away by his “hear, hear’s”, which I hope he will continue, let me list the factors for which he and his Government are responsible and for which they should be called to account. Those factors include, firstly, the mismanagement of our economy. If anything has been mismanaged, this economy has been mismanaged, and if the hon. the Minister of Finance were the managing director of a company he would have been fired today. [Interjections.]

Secondly, the failure to take adequate anti-inflationary measures is another factor. That failure is very clear. The hon. the Minister has, even on his own showing, failed to take adequate steps against inflation in a meaningful fashion. More specifically, he has allowed the money supply to get out of control, he has failed to recognize the necessity for cost management as an ingredient in combating inflation, and finally, he took deliberate action in order to depreciate the rand without a true appreciation of the consequences of such action, in particular in regard to price escalation in so far as imported consumer goods are concerned. I am waiting for the hon. the Minister of Transport again to shout “hear, hear”, because only the other day he told us how much more he had to pay now as a result of these actions. What about a little “hear, hear” from him now? But now we have absolute silence. [Interjections.]

There is also the failure on the part of the Government to appreciate the effect on costs to the consumer of increases in the general sales tax and the imposition of the import levey. There is also the failure to appreciate the hardship which is being imposed on home-owners by escalating mortgage rates. It is fascinating to note that when there was an increase in the mortgage rate last year while there was an election pending, the hon. the Minister of Finance rushed into appointing a commission of inquiry because he was so concerned about people paying higher mortgage rates. We have not heard a word about that commission of inquiry, and we have not had another one appointed now that there have been far more substantial increases. Now, with no election pending, there is silence and inactivity from that quarter.

These are all matters which concern us as well as all ordinary South Africans, who are suffering from the effects of Government mismanagement of the economy.

Let me turn for a moment to the tax proposals which have been put before us and which the hon. the Minister of Finance could not wait—not even until the budget—to impose.

He was running out of cash.

At this stage we do not know what the contents of the budget will be. We do not know what the hon. the Minister’s other taxation plans are. We do not know what the anticipated budget deficit before borrowing is going to be, and without knowing these and other facts necessary to make a judgment on the question whether taxation is increased only by these two measures already announced or whether more measures to raise taxation will be introduced later, without these facts and without knowing what the needs of the Exchequer are, how are we expected to deal with tax proposals in this piecemeal fashion?

The way of budgeting is by presenting a package indicating what is necessary, what has to be spent, what income is going to be, and how the deficit before borrowing is going to be dealt with. The hon. the Minister, however, now comes along and presents a budget in this piecemeal fashion. I say this is another example not only of bad budgeting, but also of unacceptable management. To judge this year’s tax package we need to know it in its completed form. We cannot in any case support the increase in general sales tax because we believe it will add to consumer burdens, particularly in the lower-income groups. Whatever may be the merits of this type of taxation in a society where the income gaps are not as wide as in ours, in this society general sales tax creates an unfair burden on the lower-income groups, and as it is taxation on essentials as opposed to luxury items, it makes it even worse. We certainly do not support the tax in so far as food is concerned. While we ask for subsidies to allow bread, maize products and other essentials not to be increased further, this is only partial relief, even if it were to happen, as other essentials will still be subject, not only to the tax as it is now, but also to the tax in its increased form. So too the surcharge on imported goods will increase cost to the consumer. The increases are said to affect only about 30% of all imports, yet most of them are imports of consumer goods, of ordinary goods that the consumer needs. So the burden on the ordinary man and woman, the burden on the pensioner and the burden on other disadvantaged persons increases and increases as the hon. the Minister progresses with his budget. However, from a cost benefit point of view the impact on inflation will in any case be greater than the revenue it produces.

The hon. the Minister is very fond of referring to a publication that is not very fond of me, but rather loves him. It is called the Financial Mail. The hon. the Minister is so fond of always reading from it the praise that it bestows upon him. But this time the story is a little different. This time even his friends are saying, in dealing with this particular matter—

This comes from his friends; not from his opponents.

You would like that.

The article states further—

That is a fascinating thing, because on the one hand the hon. the Minister of Industries, Commerce and Tourism appears to be against protecting local industries now. He has said so and he is on record as having said so on the same day that this was announced. I have the speech here that the hon. the Minister of Industries, Commerce and Tourism made; so he must not shake his head.

It is qualified. Read it again.

Qualified! The one thing that is certain about this Cabinet is that it is not qualified. It is unqualified. That I can guarantee. Here we have a classic situation. The hon. the Minister of Industries, Commerce and Tourism says that we must not do it while the hon. the Minister of Finance actually does it by imposing a surcharge. Then there is the poor, schizophrenic Deputy Minister, who is Deputy Minister to both of them. He does not know what to say. He does not know whether he is for it or against it. He is the Deputy Minister to both the Minister of Industries, Commerce and Tourism and the Minister of Finance. What a burden to impose upon the poor man! The article goes on to say—

These are the words of his friends, not the words of his opponents. But, of course, the hon. the Minister of Finance belongs to the school of thinking which regards management of the money supply as a major, if not the most major weapon in the fight against inflation. So one can read further in this article of September 1981 that the Governor of the Reserve Bank says the following—

Some of us may remember how the hon. the Minister got worked up when we spoke about the increase in interest rates during February last year. At that time the hon. the Minister said the following—

They obviously would affect rates …

Remember the words “would not and should not”. They have not only come up to them but they have gone beyond them, exceeded them, I may say. The December quarterly Reserve Bank report states—

I want to stress the words “succeeded in regaining effective control of the money supply”—

It is interesting, Sir, to note that when I raised the question of the Government’s having lost control of the money supply, of the rate of increase in the money supply, there was great protest, particularly from the hon. the Deputy Minister of Finance. However, it is fascinating to realize that we in South Africa have politicians who are able to regain control of a money supply when they have never lost control of it! That is the reality of what this Government now claims to have done. Only a politician could claim so great an achievement—to regain control which he has never lost! What is worse, we find an admission that the broad money supply rose in the fourth quarter of 1981 back to 21%. What is even worse, this example of good management, this example of anti-inflationary action, goes hand in hand with the admission that the Government has had to make temporary use of money created in the banking sector to finance the deficit before borrowing. In November and December of last year an amount of no less than R638 million was withdrawn from the Stabilization Fund. Hey presto! Who causes inflation in South Africa? Who is responsible for it? Who in fact uses the classic Government measures that create inflation as opposed to fighting it? Who is creating an increase in the money supply? It is none other than this Government and this hon. Minister. The proud boast of realistic market-related rates in the third quarter of 1981 became historically most attractive in comparison with today’s interest rates. When they had the opportunity of raising long-term money and they had the opportunity of raising it at reasonable rates, they did not do it, they left it, and now they have a problem.

That is absolute nonsense.

That is a fact and the hon. the Minister knows it.

You don’t know what you are talking about. Go and study the capital market.

The reality is now that the failure by the Government to raise money by means of long-term stock issues when rates were relatively low, in today’s market terms, and when money was readily available, has now created a situation where, when the rates are high, large long-term Government issues are postponed. Is that also nonsense? The hon. the Minister has postponed them and he has had a tender issue which, when one looks at the facts, appears not to have been successful. Now, when rates are high and when long-term issues have to be postponed, the Government resorts to inflationary methods of financing and I say that that certainly demonstrates a lack of financial good management on the part of this Government.

We are not alone in this criticism and in criticizing the Government’s financial management. For example, a major bank places the responsibility for the need for a strict 1982 budget and for a reduction in the chances of an upswing in 1983 four-square on the Government’s failure to implement effective and co-ordinated fiscal and monetary policies. This was said by a major bank and at least one hon. member on the Government side is a member of the board of directors of this bank. Another bank economist has this to say—

The need for a balance between domestic spending and national productive capacity is stressed by all economists, and a failure to achieve this, so it is said, will cause further depreciation of the rand, higher inflation and even higher interest rates, as well as a longer period of adjustment before the economy can be put back on an even keel. Even the hon. the Minister’s greatest admirer to which I have referred, the Financial Mail, has conceded that “Horwood is adrift”. [Interjections.] The figures that are issued disprove the words that come from the mouth of the hon. the Minister; in other words, the hon. the Minister says one thing, but the statistics prove another and they prove that the Government’s tight monetary policy is in fact aborted by its own action.

The problem appears to be the vacillation between procyclical and contra-cyclical action. Prior to the election money was pumped into the economy and this action was pursued even for some time after the election. To use the words of a well-known economist—

Is that also nonsense? Now there is silence from the hon. the Minister of Finance who is so fond of this “nonsense” interjection.

I shall deal with all of it.

The hon. the Minister will deal with it, yes, but not very effectively. [Interjections.] He will deal with it as he deals with the economy.

I shall deal with you, too!

The Governor of the Reserve Bank conceded in August 1981 nevertheless, despite “all this leaning against the contradictory wind”, it is technically correct to describe monetary and fiscal policy during the recent month as pro-cyclical in the sense that the authorities have permitted pro-cyclical forces such as the decline in the value of our gold output and other exports, the tightening of the financial market and the resultant rise in interest rates to exert a restraining effect on monetary demands. While making it clear, however, that deliberate anti-cyclical action would be “totally inappropriate and irresponsible” at this stage, were there not an increase in the money supply due to Government action, the deliberate permitting of the depreciation of the rand, the Government’s use of overseas credit facilities and certain policies on foreign credit facilities which were made attractive contra-cyclical? In other words, these actions were described in the words of the man himself as being totally inappropriate and irresponsible in that context. To use the Government’s own words, “cushioning action”, it was said, “was taken”.

More recently, however, the screw was turned more harshly than might have been necessary in so far as the public of South Africa are concerned had the good years been better handled and had corrective action not been influenced by political consideration in the form of an early general election. Nobody would describe the hon. the Minister of Finance as a Joseph because Joseph knew that in the fat years one had to provide for the lean, and this is no Joseph in the financial field in South Africa.

The question, however, now is: Will the hon. the Minister pursue tight monetary policies and stringent financial approaches…

You look like Mordecai.

… which will involve increased taxation and in the process create unemployment, or will he seek to apply only moderate policies involving no further tax increases and so seek to avoid undue unemployment? If we read the signs correctly, the mistakes which have been made in the last years and also the Government having the precedent of the mistakes of 1975 still fresh in its mind, the probabilities are that there is going to be an endeavour now, at last, to co-ordinate fiscal and monetary policy more effectively, that a conservative view will be taken of the speed of recovery of the economies of our trading partners and of the gold price and that more taxation may therefore be expected together with high interest rates for some time ahead; in other words, a period of belt-tightening appears to be the prognostication for this year and we therefore cannot look with very much hope for relief towards the hon. the Minister in this regard.

I should like to deal with two other matters briefly. Firstly there is the question which has received considerable publicity and here I refer to the alleged irregularities in regard to the collection of general sales tax.

A number of facts are not in dispute. Firstly, there are more than 1 030 vacancies out of a total of 4 487 on the staff establishment of the Commissioner for Inland Revenue. Secondly, in the sales tax inspectorate alone 72 vacancies exist out of an establishment of 183. This represents a shortage of almost 40%. Thirdly, with this limited staff no less than 34 969 irregularities were discovered. Fourthly, if there were more inspectors and processing staff one can readily assume that more irregularities would have been discovered. Fifthly, the hon. the Minister has announced an increase in the general sales tax which is expected to bring about R600 million in the full financial year to come. Sixthly, the allegation is made—I say it is an allegation—in the Press that in a period of three years more than R800 million has “gone astray”, as the newspaper put it. Seventhly, at least one of the allegations concerns contractors who have foreign connections and where there consequently have been foreign exchange implications. These then are the facts with which the hon. the Minister is faced.

What do we expect the hon. the Minister to do in the face of these facts and allegations? Firstly, we expect him to deal with the staff shortage. The load on the existing personnel is heavy. The allegation might well tend other people to break the law; so additional qualified staff is an urgent requirement and steps to retain existing overworked staff are absolutely essential. We therefore suggest, as a temporary measure at least, that national servicemen who are accountants and who in any case are fighting to attain their professional standing and recognition in the Defence Force, should be seconded in order to assist in this task.

That is already being done.

I am happy to hear that, because I have suggested that repeatedly before.

Harry, you do not look very happy. [Interjections.]

Our second suggestion is that an immediate and thorough investigation be instituted into the allegation. All we have heard so far is that there are investigations. I do not know the source of these allegations, but I am told that it is both reliable and from the highest echelons of the department. I would therefore assume the allegations were not lightly made or lightly published. In reality, what did we have from the hon. the Minister? We have had virtually no reaction from the hon. the Minister himself. When we raised this issue of the servicemen for days and weeks there was no response; there was no official reply from the hon. the Minister. The only official reply related to an estimate of anticipated collection and an admission “dat daar in sekere gevalle ’n tekort van inspekteurs is wat moet toesien dat ondernemings hulle verpligte AVB betaal”, and that with a 40% staff shortage in the inspectorate.

The real test, however, is: How do the GST figures compare with the available statistics on the turn-over of goods which are subject to GST? That is the real test that one wants an answer on. If almost 35 000 irregularities are discovered with a 40% shortage in inspectors, how many more irregularities are undiscovered at this moment? The public pay GST not because they like it, but because they have to. What the public insist on is that what they do pay, reaches the State coffers and that they are not required to pay more GST because some of the GST sticks to people’s fingers and does not get into Treasury hands. That is the demand that we in these benches made today.

Lastly, in the few minutes available to me, I should like to talk a little politics. The hon. the Prime Minister has often said that he has to govern in accordance with a mandate given to the NP in the last election. I should like to test the hon. the Prime Minister’s actions on his own premise. If the majority of his supporters as well as the overwhelming number of other South Africans are in favour of the abolition of certain discriminatory laws and practices—I have the surveys and if time permitted I would quote them all—why does the hon. the Prime Minister then allow a veto to be exercised by the reactionary element within his own ranks on what he really wants to do?

He is afraid of Andries.

Two topical issues illustrate this. There is, firstly, the controversy about the use, in the publication Nat 80s, of the words—

I therefore want to ask the hon. the Prime Minister whether he agrees with that statement.

Of course.

I am very happy to hear that. [Interjections.]

I said the same thing during the discussion of the motion of no confidence.

I am so happy to hear it. [Interjections.] I am overjoyed to hear it. [Interjections.] The tragedy is that the hon. the Minister of State Administration does not. [Interjections.] The tragedy is that it is reported that the hon. the Minister of State Administration objects to this. The question I therefore have to put to the hon. the Prime Minister is: How long is he going to allow this brake to be applied to the wheel of progress in South Africa by the hon. the Minister of State Administration? [Interjections.]

Let me give a second example. It is reported that the Commission for Co-operations and Development, consisting entirely of Nationalists, will not recommend that permanent property rights for Blacks be given in South Africa, and yet the chairman of that commission, the hon. member Mr. Van der Walt, is in favour of property rights for Blacks in South Africa. There are also other hon. members on the commission who, though in the minority, are in favour of it. I also think the hon. the Prime Minister is in favour of it. [Interjections.] Yet he is paralysed by this action and, under the circumstances, can do nothing.

Do you always agree with everything the hon. member for Houghton says?

No, but the hon. the Prime Minister agrees with the hon. member Mr. Van der Walt, does he not? [Interjections.]

It has never been discussed by the Cabinet. [Interjections.]

Oh no! [Interjections.] Must we ask South Africa to believe that the issue of property rights for Blacks has never been discussed by the Cabinet? [Interjections.]

Order!

May I inform the hon. member that a number of years ago the Government took a decision that instead of property rights, it was in favour of 99-year leasehold, and that is the official policy of the Government.

As long as Andries says it will be, it will be.

That is interesting, because the hon. member Mr. Van der Walt and a minority in that commission are in favour of proper property rights, in favour of freehold. [Interjections.] I say that the hon. the Prime Minister is also in favour of that, but the trouble is that there is a brake being applied to progress in South Africa, and I therefore appeal to the hon. the Prime Minister to disengage that brake, to be his own man and to do what is necessary for South Africa. [Interjections.]

Order! Earlier on the hon. member for Yeoville referred to an hon. Minister as a “schizophrenic Minister”. The hon. member must please withdraw the word “schizophrenic”.

Mr. Speaker, I described the hon. the Deputy Minister as being a schizophrenic Deputy Minister. However, I withdraw the word and want to add …[Interjections.]

Order!

I withdraw the word unconditionally, Mr. Speaker, but you know that in using the word “schizophrenic” I used it in the sense that he had two departments. I was therefore not reflecting …[Interjections.]

Order!

Nobody has suggested that I was reflecting on his mental condition. Anybody who believes that is out of his mind. [Interjections.]

Order!

Now you are a schizophrenic member of Parliament.

Order! The hon. the Minister must please withdraw that.

Mr. Speaker, if the hon. member withdraws his unconditionally …

Order! He withdrew it.

… I shall also withdraw it.

That hon. Minister cannot be a schizophrenic, because he has no brain at all. [Interjections.]

Order!

Mr. Speaker, in an effort to conceal his own embarrassment and that of his own party, the hon. member for Yeoville referred this afternoon to so-called tensions in the NP. It has always been the case that when the Opposition speaks of tensions in our party, it is they who tend to split. This Government will make progress in spite …

… of itself.

… of the PFP. Before I discuss the subject of my speech, viz. financial matters, I should have liked to address a few words to the hon. the Leader of the Opposition, but unfortunately he is not present.

He is still running.

He is running away from Stellenbosch.

If he had been here, I should have liked to sympathize with him about the outcome of the election for the council of the University of Stellenbosch.

Where were you?

Wait for Johannesburg.

We in South Africa can as little expect to avoid the general economic trends of the Free World as we can expect to escape the whims of European women’s fashions. The hon. the Minister of Finance and his team have succeeded with astonishing skill in steering and disciplining the South African economy and causing it to perform well. He and his team have done what few could do. To evaluate this properly, one ought really to scrutinize the course of the economy over the past few years, because when one does so it becomes evident how corrective steps have been taken from time to time to adapt to the special circumstances of the time. This would be a lengthy procedure and we do not have the time, but we should at least draw the attention of this House to the fact that the decisions taken have not simply been ad hoc ones, but that various new principles have also been implemented and a new economic philosophy established in co-operation with, and with the approval of the private sector.

Was the hon. member for Yeoville not in favour of our making the money market freer? He was in favour of it. I can recall him advocating in his speeches in this House that we should do away with all the regulations, that we should do away with exchange control and that we should permit the market mechanisms to operate. Today, however, the hon. member for Yeoville comes here and states that the Government should step in in a number of spheres.

Social democracy.

Try it. It is very good.

The important thing is that the Government did not act in a one-sided fashion in laying down monetary and financial policy. The private sector was consulted on every occasion. Indeed, the private sector is still being consulted. I do not know whether the hon. member for Yeoville and I always happen to read different reports, but I read reports from the private sector that shower very high praise on the actions of the Government.

Have you read the Volkskas report?

Yes, I have read it. Not only did I read it in the newspaper, I also read the original report. Of course the hon. member did not read that.

[Inaudible.]

I shall come to that in a moment. The hon. member should not rely on newspaper reports; he should rather wait until he can get hold of the real thing. He should try to get hold of the original article. What does the Cape Town Chamber of Commerce say, for example? I wish I could quote the whole article, because it is a paean of praise of the actions of the Government and of the Minister of Finance. They say, inter alia—

Does the hon. member for Yeoville agree with that? That is the view of the private sector. I should also like to quote the next paragraph of this article—

Does the hon. member for Yeoville agree with that?

To view in isolation any steps now being taken to balance the budget would be quite mistaken, and it would be presumptuous to draw too many inferences without reviewing the overall financial position.

Appreciation has been expressed in several quarters of the hon. the Minister’s sustained policy of conservative State expenditure and encouragement of consumer growth. His standpoint of not deviating from his chosen path of financial discipline is very highly appreciated. Indeed, in his budget last year the Minister repeated that he would not deviate from his principle of financial discipline. Although the economic business cycle has turned, or is turning. Only fools would not expect that. We are now entering a new phase, a phase which requires new steps to be taken. When we say that the business cycle is turning, however, we must also be realistic. No upward phase of the business cycle can continue indefinitely; that is simply impossible. After a period in which it shows an upward trend, there must be a downward trend. This is nothing unnatural, and every Government prepares itself for this, this Government included.

Looking at the present economic situation as a whole, there are definite indications that the economy is still strong; indeed, one can say that the economy is still overheated. Only consider our motor sales last month. It was the highest yet. Is that a sign of a weak economy, one that is tottering? The fact that imports are still at such a high level is a definite indication that our economy is still overheated. We are experiencing major problems in our efforts to limit imports. I think that it will take some months before there is a significant levelling off and I can advance reasons for this. This will be readily apparent if one considers a few of the graphs provided in this brochure entitled “Korttermyn-Ekonomiese Aanwysers”. For example, I refer to the graph relating to job opportunities, which shows a constant upward trend. The graph relating to the manufacturing industry also shows a sharp upward trend. The same trend is evident in all the other graphs. I refer to the graph relating to the manufacturing industry—to mention just one further example—from which it is evident that the upward trend was still evident up to the middle of 1981. I could continue in this vein. However, in the months that lie ahead we shall continue to struggle with excessive imports. Why? Because during the rapid growth phase of 1980 to 1981, superfluous production capacity was taken up due to a very high consumer demand which was positively stimulated by the public sector as well. After all, growth was the watchword—we are a developing country, and we want growth.

New production capacity had to be created in order to meet the demand. Indeed, it is still being created. Foreign investors invested large sums of money in South Africa. I do not have the time to go into this now. However, our newspapers were full of reports about large foreign investors making investments in South Africa. Therefore, for the hon. member for Yeoville to say: “It was regrettable that the Government had not learnt the Biblical lesson of providing in the fat years for the lean years” was grossly unfair.

†The Government repaid short-term loans. The necessary infrastructure was also paid for. The private sector was enabled to create production capacity. In other words, South Africa was put in a position in which it could prepare itself for the upswing in the world economy, something which must inevitably come sooner or later.

*If that is not wise precaution for the lean years to come, then I do not know. How could one do it better?

The hon. member for Yeoville referred to inflation a great deal. As I have said, the hon. the Minister of Finance emphasized last year for the umpteenth time that the Government had no greater or higher priority than the combating of inflation. We are, after all, aware that the solutions to this problem are not simple. However, we have as yet had no indication from the Opposition as to what steps we should take to combat inflation; none whatsoever. [Interjections.]

It is easy to suggest that less money should be created, that the State should curb its expenditure, etc. However, South Africa is, after all, a developing country, and a developing country eats up money. A developing country needs a great deal of money. Will hon. members of the official Opposition tell us where we must cut down? These are the answers we should like to have from them when they criticize us. Let them tell us then, where we must cut down.

Must we cut down on defence? Surely not. I do not believe the hon. member for Yeoville wants us to cut down on defence. I do not believe hon. members of the Opposition want us to cut down on housing. Nor do I believe they want us to cut down on training and education. Nor do I think they want us to cut down on the salaries of our officials. Indeed, the hon. member for Yeoville has just called for higher salaries.

You must cut down on apartheid. [Interjections.]

Mr. Speaker, I suppose one should not answer a fool according to his folly.

If you cut down on apartheid, you will have money for many other things. [Interjections.]

Must we cut down on the salaries of the police, nurses, teachers…?

Definitely not.

“Definitely not”, says the hon. member for Bryanston. Must we cut down on food subsidies? [Interjections.] I repeat: Must we cut down on food subsidies?

By cutting down on apartheid …

No, I ask the hon. member who is speaking so loudly: Must we cut down on food subsidies? There is no answer. If, then, it is impossible to cut down in this regard, where is the money to come from? If we are not to cut down in respect of these matters, where is the money to come from? What are the State’s sources of revenue? The State has limited sources of revenue at its disposal. True, it can tax its citizens, and there are various means of taxation, or it can negotiate loans, and it can negotiate various types of loan. It can negotiate loans that are of an inflationary nature. It can borrow from the banking sector, thereby boosting inflation. Alternatively, it can tax its citizens, but that would be unpopular, as, indeed, all taxes are. I have yet to hear of a popular tax. However, I know that the citizens of this country are responsible people, and if one explains to them why it is necessary that we now have to live more carefully, why we must curb our demands for higher wages and why we must reduce our standard of living, then I believe that they will be willing, as in the past, to contribute their share.

We have passed through a number of these phases. On previous occasions we have imposed far heavier taxes than are being imposed at present, and the people of South Africa have never criticized the Government for imposing taxes when it has been in the interests of the country to do so.

You do not have the courage to do it before an election. And there is an election next week. [Interjections.]

South Africa’s balance of payments is unfavourable. Why? Is this not a problem faced by our trading partners? I now ask the Opposition again? Must we curb our imports drastically? Must we impose import control? We should like to hear what that side of the House has to say. Must we curb our imports? No, now they are all looking down at their benches. I ask them whether it would be a good thing for us to grant overall protection to our local industries? What would become of our competitiveness and our foreign markets.

In the few moments left to me I just wish to refer briefly to interest rates. Have we not had appeals from the Opposition over the years to free the money market? Now they are looking away. Or are they no longer in favour of a free money market?

I should just like to come back for one moment to a very ugly allegation made against an exceptionally loyal and senior Government official in connection with general sales tax. The allegation is groundless and is totally lacking in substance. I think it is unfair to level an allegation in this House against a man who is unable to defend himself. There is machinery whereby to keep a check on the expenditure of Government departments, and in this regard I refer to the Select Committee on Public Accounts. If I am not mistaken, representatives of the Department of Internal Revenue are to appear before this Select Committee this year. On that occasion we shall give careful consideration to whether these allegations are true. What these allegations mean is in fact that we are telling the public at large that they are a lot of scoundrels, because they are cheating as far as their income tax is concerned. I do not believe that this is true, nor does it correspond with the evidence of the Receiver of Revenue. The collection of tax has always been and ought to be a matter of confidence. I believe that it is a blot on the name of our taxpayers to say that there is large-scale evasion.

Is there not?

I am not prepared to reply to that because I do not have the facts at my disposal, and I do not speak about facts which I do not have at my disposal.

Why does the hon. member for Bryanston not sweep before his own door?

It is true that one needs staff with special qualifications in the office of the Receiver of Revenue. It is not simply a matter of appointing a couple of clerks to that office and leaving it at that. This is one of the departments in which it is necessary for us to have professional differentiation, because just as one has a shortage of staff in the private sector in auditing firms and attorneys’ offices, we have shortages in the Public Service as well. The people who work at the Department of Inland Revenue today are a loyal group of people and I think that they are doing a very sound job there. There is good co-operation with the selling public and I do not think it is playing the game to say that our taxpayers are cheating.

In the time left to me I should like to deal with the difference between the South African economy and those of our foreign trading partners, because it is often said that South Africa must not be compared since we have a distinctive situation. However, what are the facts? The fact is that we in this country could take stringent measures against inflation, but what would the result be? Unemployment. Looking at the situation in Europe, I read “11 million jobless in Europe” and then people are quick to tell us that that may be true but that European countries like England and Germany, and even America, have now considerably reduced their rate of inflation. I have a few very interesting statistics here. To the extent that those countries have reduced the rate of inflation, unemployment has increased there. I have it before me; it is a pity Hansard cannot print graphs in one’s speech. Nevertheless this is the situation. We must be very careful in dealing with the South African economy. We cannot simply kick over the traces and say that we are now going to kill inflation once and for all. We can do this, it is true, but then we would kill the South African economy and create large-scale unemployment which would create other problems for us.

Therefore I think we can be very content to convey our thanks and appreciation to the hon. the Minister and his team, as the private sector have done by way of the Afrikaanse Handelsinstituut, Assocom and various publications, for the neat way in which they have administered the finances of our country.

Mr. Speaker, I listened with interest to what the hon. member for Malmesbury had to say. Hon. members will recall that he started off by singing the hon. the Minister’s praises by quoting from a report that emanated from the Cape Town Chamber of Commerce which referred to the hon. the Minister’s financial discipline. I wrote it down while he was speaking and I hope that I have written it down correctly. He said—

The hon. member went on to say that South Africa, being a developed country, cannot cut its expenditure. The hon. member has contradicted himself. At the same time I should like to remind the hon. member of what was broadcast over the radio—I think it was yesterday—which was to the effect that over this past weekend the Italian Government had taken a decision to cut its budget by about 30% because of the state of the Italian economy. In referring to the booklet that we receive in regard to statistics in South Africa, the hon. member stated that statistics show that we have an upward trend in the economy. I should just like to tell that hon. member to be very careful of figures and statistics. I say this because those figures are probably in monetary terms and when we have an inflation rate of between 14% and 16%, an increase in economic activity of that order means nothing at all. The fact that we have to face today is the state of the South African economy as the man in the street experiences it. What does he find? He finds that inflation is still running at 15%, that money is tight and that interest rates are high. Everybody is feeling the pinch today.

The bone I wish to pick with the hon. the Minister today is Government spending. The hon. the Minister has held the portfolio of Finance for nearly seven years, almost as long as I have been a member of this House. During this period the hon. the Minister has often spoken of his policy of discipline, especially when it comes to Government spending. He referred to this again when he introduced this Part Appropriation Bill. He said, inter alia—

I want to ask the hon. the Minister just how well he believes that his chosen path of financial discipline has succeeded not only in respect of the Government itself but also and especially the ordinary people of South Africa. More and more people today are asking themselves just how well off they are compared to a period some seven years ago when this hon. Minister was first appointed Minister of Finance. I should like to ask the hon. the Minister just exactly who has been disciplined? Has it been the Government? Has it been big business? Or has it been the man in the street? I submit—and I intend to demonstrate this during the time available to me—that the only group that has really been disciplined—using the hon. the Minister’s own form of measurement, viz. tight control of overall expenditure—has not been the Government or big business but rather the general public of South Africa. It is clear from the hon. the Minister’s speech that he, like his predecessor, gambled on gold to fund the Government’s expenditure.

Could you just develop that?

Certainly, Sir. The hon. the Minister had to raise taxes early because he himself said that he fell short of R1 100 million in gold taxation because of the fall in the price of gold.

You don’t know what you are talking about.

Therefore, Sir, this hon. Minister like his predecessor has failed in that respect. [Interjections.] The hon. the Minister said so. He said that the fall in the gold price had resulted in a loss in revenue to the Exchequer of R1 100 million and because of this he is now rushing through increases in GST and import duties in order to reduce the size of the deficit…

When did I gamble on gold?

… on the Government’s balance sheet. These measures might, as the hon. the Minister said in his Second Reading speech, result in the actual deficit before borrowing being limited to the budgeted estimate of R2 707 million. However, in the interim period the Government has had to thwart its own anti-inflation campaign of tight money supply. The hon. the Minister admitted that when he said: “ … by making temporary use of money creation by the State banking system to finance part of the deficit.” In simple terms this means that the hon. the Minister has failed to discipline the Government into living within its means and has now resorted to printing worthless paper money to pay its debts. That is what it means. In so doing, the Government has seriously reduced the real value of the average income-earner’s hard-earned pay packet. That is to say the hon. the Minister has devalued the rand in terms of its purchasing power, and this is the evil which we call inflation. This is what inflation is all about. When Governments around the world do not have the guts to be honest with the voters who elected them by telling them that excessive Government spending can only rightly be financed through increased taxation, they steal the money of their people by ordering the printing of worthless paper money. They then pump the money into the economy—as this hon. Minister did in the fourth quarter of last year—as they pay off their debts. The hon. the Minister admitted that in his speech.

That is undisciplined.

The hon. the Minister has as much as admitted that. His continual talk about the financial discipline of Government expenditure is, I believe, wearing extremely thin with the people of South Africa. What South Africa wants today from the hon. the Minister is less talk and more action. We in these benches are going to await with growing interest the hon. the Minister’s presentation of the main budget next month.

The hon. the Minister has not only failed to discipline Government spending effectively, it is clear from his speech and from the fact of life in South Africa that he has failed miserably also in controlling the balance of payments. It is all very well for hon. members on that side of the House to say that we are dependent on what happens in overseas countries. We have all known for at least 18 months that there was a cooling-off in the economies of our major trading partners. There was much talk for at least two years of recession and rising unemployment in the United Kingdom, Western Europe and North America. The hon. the Minister must therefore have known at least two years ago that 1981 would see a fall-off in our export trade. Yet, instead of maintaining a tight control over the money supply for the past 24 months, and especially in 1980, the hon. the Minister allowed it to go completely out of control. I believe the public of South Africa are entitled to ask the hon. the Minister why. I can come up with only two answers.

What went out of control?

The money supply in 1980 went completely out of control. The first possible answer is—as the hon. member for Yeoville has so clearly indicated—that the hon. the Minister has not been doing his job correctly. Secondly, I believe it was politically expedient for the Government to have a massive boom in 1980, while in early 1981—as the hon. member for Yeoville again pointed out—it called an election in April that year. This is the way the Government and the hon. the Minister manipulated the economy of South Africa to suit its own selfish ends. During this period big business spent money as if it were going out of fashion. I have seen absolutely no evidence of tight financial discipline as the hon. the Minister claims.

This brings me to the general public of South Africa, the man in the street. I believe this is the person who has been disciplined. He is the man who has had to carry the can during the past five years. While the Government and big business have spent wildly and have expanded their bureaucracies and their empires, the little man in the street has had to pay, and he is the man who is now caught short. He is the man who has had to deal with a spiralling cost of living. I wonder whether the hon. the Minister really appreciates what has happened over the last five years? I realize that the hon. the Minister has a very important portfolio—I have no doubt about that—and I also realize that he is a very busy man. But I suggest that he should take some time off for a while. I think he should study, in depth, just exactly what effect inflation is having on our people, not only from the financial point of view, or from the point of view of a lowering of the standard of living, but also from the point of view—and I believe that this is probably even more important—of the public’s respect for those basic values in which we believe, e.g. the work ethic, the ethic of living within one’s means, the ethic of saving for a rainy day, etc. I have a Press clipping here from which I should like to quote certain remarks to the hon. the Minister. It is a report in The Star of 21 January 1982. The report is headed “Fighting inflation: A look at five years of price increases”. There is a table showing the prices of certain commodities in January 1977, the prices of the same commodities in January of this year and the relevant percentage increases. I should like to quote some of these figures to the hon. the Minister because I know that he is a very busy man and does not have time for this sort of thing. The price of a loaf of bread increased by 73%, that of a 500 gram block of margarine by 158%.

Is that all?

The price of minced meat increased by 163%, potatoes by 265%, tomatoes by 345%, rice by 234% and a litre of petrol by 114%. [Interjections.] There are 17 food and clothing items whose prices averaged an increase of 152% in these five years. Let us look, however, at accommodation. Rental for a one-bedroom furnished flat in Hillbrow increased by 300% in five years, that of a three-bedroom house in Northcliff by 169%. If an hon. member wished to buy a house in Bryanston …

Who would want to buy a house in Bryanston?

A house which cost R39 500 in 1977 would now cost R149 000, an increase of 277%. [Interjections.] Let us also look at salary increases during the same period. In the article figures are given for three average salaries. The average monthly salary of a senior female librarian increased by 17%.

Lucky girl!

The company secretary of an average company has had a salary increase averaging 68% and the average monthly salary of a marketing manager increased by 54%. Can the hon. the Minister tell us just how much longer this sort of inflation can continue? It is bad enough for the average wage-earner, but what is it doing to the lower-paid workers? What is it doing to the pensioners in South Africa or those living on fixed incomes? What is it doing to the public servants who have not had adequate increases?

Tell us how to rectify the matter.

I am coming to that. There are thousands of people today who have retired and who are living on their life-savings but who now find that the purchasing power of their incomes is plumetting. They now find themselves staring poverty in the face. I believe those people have been robbed by inflation, for which this Government is responsible.

Hear, hear!

I believe that we—especially those hon. members on that side of the House—must stop kidding ourselves. We find all sorts of excuses, like the hon. member for Malmesbury did, about influences from overseas. They ask: What about Europe and what about America? I want to ask: What about places like Taiwan, Japan, Singapore and other countries that discipline government expenditure and are not experiencing the rate of inflation that this country is experiencing.

You have no doubt been looking at the figures.

We can propound all sorts of economic theories, but after all is said and done, the cause of our inadequate growth-rate in the GDP, and the concomitant shortage of job opportunities for the masses of our people, the cause of our inflation rate and its disastrous effect on our standard of living, must inevitably be laid at the feet of this Government’s policy of deficit spending. I will concede that deficit spending by Government might be justified under certain circumstances, e.g. when the expenditure is absolutely essential for a basic infrastructure of a wealth-creating industry.

[Inaudible.]

Let me stress, however, that deficits do have serious dangers …

[Inaudible.]

… in that their financing either results in the inflationary practice of pumping in paper money, as the hon. the Minister did last year, or in soaking up good capital as a result of Government borrowing in the form of Government stocks, tax-free bonds and bonus bonds which could otherwise be put to far better use by the private sector in more productive and still more capital-forming enterprises.

Must we double taxation?

I have only 30 minutes, while the hon. the Minister has hours at his disposal. I therefore ask him to reply later. We are presently experiencing all the symptoms of this classic economic illness: Shortage of capital, high interest rates, a fall off in real growth in the economy, ever-spiralling inflation, rising living costs, increasing calls for more spending on social welfare, more subsidies for food and more subsidies for transport. We are in the classic downward spiral towards brankruptcy. [Interjections.]

I believe that the time has come for the hon. the Minister to do something about the situation. I call upon him to present a budget on 24 March which will result in a review of all programmes of Government spending and a restructuring of them so as to rid our economy of the excessive deficit-spending of recent years.

What is that deficit-spending?

After all, the hon. the Minister has failed in his own programme, as set out in Hansard col. 1350 on Monday, 25 February 1980, where it is said—

1. (a) The promotion of real economic growth and production;
2. (b) the provision of adequate employment opportunities;
3. (c) the curbing of inflations; and
4. (d) the maintenance of equilibrium in the balance of payments.

He has done none of those things. The hon. member for Yeoville is absolutely correct: The Minister has totally and utterly failed. Such a restructuring of Government spending is absolutely essential if our economy is to grow at the desired rate, if we are to achieve an average annual growth rate of at least 5% in the GDP from now until the year 2000, something about which hon. members on that side of the House spoke at great length during the last session. I therefore move as a further amendment—

1. (1) takes urgent steps to—
   1. (a) contain the spiralling cost of living; and
   2. (b) alleviate the desperate plight of the lower paid and the fixed income groups and the pensioner; and
2. (2) abandons its erratic approach to the political management of South Africa at all levels of government.”.

I want to put it to the hon. the Minister— and I do not believe I am being overly simplistic—that the basic financial principles which govern the running of a nation are really no different from those governing the affairs of a private corporation or, for that matter, those governing the lives of the ordinary citizens of our nation. All have to live within means. None can remain solvent if he cannot balance his budget and if he persists in running up deficits. The hon. the Minister, as a professor of economics, must surely realize this.

Where are these deficits? Give us the facts. What are you talking about?

Sir, the hon. the Minister had to print paper money to meet his deficit in his budget. Some Ministers of Finance around the world have persisted, like this hon. the Minister, in ignoring this basic reality, but the chickens are now coming home to roost. Those Ministers are now finding themselves on the path of narrowing options. They must either drastically cut spending and remove the deficit, as Italy did this past weekend, or they must tighten their belts, as Margaret Thatcher is trying to do in Great Britain and as Reagan is trying to do in the USA; alternatively they face the consequences of ever-increasing inflation, lack of real economic growth as one finds it in the USA, Great Britain and Europe today, unemployment and bankruptcy. I know that the word “bankruptcy” may sound sensational, but what is already happening in the UK and in the USA? Labour unions are passing up wage increases because the alternative is increasing unemployment which is staring them starkly in the face.

Fortunately for South Africa this hon. Minister has quite a few options already open to him. South Africa has, I agree, not reached the stage some of its trading partners have reached, but I believe that positive action is required on the part of the hon. the Minister and the Government. For a start, may I suggest that the restructuring I have proposed should have as its first objective a reduction in the fiscus in real terms. This, I believe, can be achieved, firstly by cutting all programmes based on outdated and what I call old-fashioned apartheid policies. I give the Government credit for the fact that they have already started in that direction with their new labour policy. We applaud them for taking this step, but this should be expanded into the areas of for example influx control that needs a tremendous amount of streamlining. Secondly, all regulations concerning the right of admission of people to businesses and to public places should, I believe, be reviewed. The option to restrict admission should be given to the owner of the business or to the local authority. These two examples alone will cut out a lot of red tape and bureaucracy and would save the hon. the Minister hundreds of thousands if not millions of rands.

Thirdly, the costly exercise of trying to consolidate the homelands and to form sovereign independent States should, I believe, be abandoned. In today’s world this should be abandoned, and the Government should say so openly. Instead, we should go for self-governing member States within a South African confederation. This alone would save the country hundreds the millions of rands that are being spent in an effort to consolidate the homelands. No doubt there are many other areas where we could economize.

I also believe that the fiscus should be reduced by reducing the bureaucracy presently employed to administer many of the regulations which plague the private sector. I do not have time to go into it, but a small businessman recently told me that he had given up trying to run his business because of the expense and the red tape involved in getting his premises to comply with Government regulations. Often these businessmen have to deal with petty officials who are totally unqualified for the jobs that they are trying to perform. It is a problem that the Government has with their employees. I grant it, but this is something we have to cure.

Thirdly, Government spending could be reduced by paying better salaries to fewer, better qualified and more highly motivated employees. Public Service salaries, especially in the middle and lower levels, are at the present time totally inadequate, and this results in a disinterested service being meted out to the public in many quarters. This is totally counter-productive to an efficient and economic Public Service.

May I just say to the hon. the Minister—I do it in my business—that I only get what I paid for, and when hon. Cabinet Ministers in this House are prepared to forego their salary increases, it is an indication to me that they are not fit for the job, that they are not worth what they are in. [Interjections.] In private business a man goes for as much income as he can get, and he gets it if he is motivated and makes a success of his job. [Interjections.]

As a second objective of a restructuring programme, I suggest that Government programmes and all departments should place greater emphasis on growth in the productive sectors of the economy. I believe there should be greater incentives for the private sector, especially in regard to small businesses. State departments should be far more helpful and less restrictive in their relationships with the private sector.

As I have already said, my time is limited and I have therefore been extremely brief with the suggestions I have made. The overall objective should, however, be to reduce Government spending on the one hand and broaden the tax base on the other through the generation of greater real growth in our economy. Thus the need for deficit-spending will be reduced and a serious problem in our economy removed. In the meantime, as my amendment states, the Government must alleviate the desperate plight of the less-privileged. Pensions have to be increased, and we suggest that one way of doing this would be to bring the means test into line with present-day costs. To us in the NRP it seems absolutely ridiculous that a pensioner who, in an attempt to stave off starvation, finds a job, only to find that his pension is reduced when his income reaches a paltry figure of R42 a month. This is totally ridiculous. It discourages self-help and stifles productivity. It is totally counter-productive, and I believe that this must be changed.

In conclusion I want to briefly refer to the second leg of my amendment. I referred earlier to the political path of narrowing options. I want to say something to hon. members sitting on Government benches. One cannot but despair at the erratic manner in which this Government approaches the political management of South Africa at all levels of government. It is a case of bungling, of making one step forwards and two back, and I believe it is a danger to South Africa. My hon. colleagues in these benches will deal with this subject in far more detail later. I should like to state, however, that this NP Government will go down in history as the government of lost opportunities. Our political options in South Africa are narrowing thanks to this Government and its obsession with its own self importance and its own self interest. We are losing valuable opportunities of finding a lasting solution to our political problems. What was acceptable just a year ago is no longer of any consequence. What was acceptable three years ago when the Natal indaba sat around a table—Indians, Coloureds and Whites—only to be rejected by the Government owing to its own lack of direction, caused a golden opportunity for thousands of people to be lost for all time. As such, I believe, this Government has become a security risk to all minorities in South Africa. [Interjections.]

There is no way whatsoever in which we in these benches can support the hon. the Minister of Finance in his Part Appropriation. That is the reason why I moved my amendment.

Mr. Speaker, over the years I have come to know the hon. member for Amanzimtoti as a balanced speaker, and I liked to listen to him. However, the wild allegations he made here this afternoon, were probably some of the most far-fetched I have ever heard in this House. [Interjections.] The hon. member’s promise was that the Government had gambled with the gold price. He went on to allege that the Government had mismanaged the economy, and then he also jumped onto the old inflation bandwagon. Worst of all, the hon. member told us that the general public was having a hard time.

In the course of my speech I shall refer to these things. If the hon. member had looked at this morning’s Beeld, however, he may have seen a report in it in connection with the further rise in the sales of new motor vehicles. The hon. member for Malmesbury also referred to this. It is generally accepted that the sale of motor vehicles is one of the most reliable indicators of the state of the economy. I should therefore like to quote from this report—

The hon. member went on to speak of bankruptcy. Does the hon. member know what he is talking about? I doubt it. I should like to have the attention of the hon. member for Amanzimtoti now. I should like to refer to what I consider to be the most serious allegation in his speech. Did I understand the hon. member correctly to have said that he was in favour of influx control in our cities being lifted?

I said “streamlined”.

Streamlined? It is a pity, Mr. Speaker, that the hon. member did not indicate how things should be streamlined. That is the trouble. Saying that things should be streamlined, but neglecting to say how they should be streamlined, is exactly the same as saying nothing. [Interjections.]

In his turn the hon. member for Yeoville alleged that the Government had not learned the Biblical lesson in connection with the fat years and the lean years. He said the Government had failed to derive the greatest benefit from the high gold price. Then the hon. member alleged that the PFP was endeavouring to bring about the abolition of the general sales tax on food. At the same time, however, he asked for increased food subsidies. If the general sales tax on food has to be abolished and increased food subsidies have to be paid, I should like to know from the Official Opposition where the extra revenue for the Treasury is to come from. It is no use making a plea for the abolition of taxes and for an increase in subsidies, without specifying the alternative. This is how we have come to know the hon. member for Yeoville over the years. He makes a number of statements here, he asks a number of questions and then he leaves everything hanging in the air. I shall refer to this matter again at a later stage in my speech.

One can summarize the present position as follows: The increases are inevitable be cause of, the lower gold price, the recession abroad, increased imports and reduced exports. The two measures introduced by the hon. the Minister will narrow the gap between the current revenue and expenditure of the State considerably. The 10% surcharge will have a positive effect, in the sense that it will reduce imports and will also afford our local industries a greater measure of protection. The increase in the general sales tax ought not to be inflationary although the Opposition alleges that it will. Why will it not be inflationary? It will not be inflationary because the tax is levied at the point of final sale, and should not bring about any increase in the manufacturing costs of products. In the second place, it will not have any appreciable effect on the consumer price index either. We know that the consumer price index is the principal indicator of the inflation rate. In fact, the increased tax can only lead to people spending a little less on luxuries, which will mean a decline in the excessive amount of money chasing too few goods.

The acceleration in economic activities reached the crest of the upswing phase in the business cycle at the end of 1980 when the real growth rate rose to 8,1%. This means that the recent upswing phase lasted for more than three years, which makes it the longest upswing phase since 1946. Despite what the Opposition said and what they are still going to say, good progress was made, during the years 1978 to 1980 in particular. In this connection the hon. member for Amanzimtoti quoted quite a few statistics here. During the period I have just mentioned, the economic growth in real terms was 16%. The supply of real fixed capital increased by 13%. Employment in the non-agricultural sectors increased by 6,4%, while the real gross domestic product per capita of the population increased by 7%. If one looks at the previous decade for example, the real gross domestic product per capita of the population, at constant 1975 prices, increased from R980 to R1 070. This represents an increase of 9,2%, or an annual average of 0,9%. The available personal income increased by 284% and the total remuneration of employees by 303%. The average remuneration outside the agricultural sector increased by 223%. What is very important is that inflation rose during the same period by 177,8% so that the average real remuneration per worker rose by approximately 25,4%, or an annual average of 2,3%. I should therefore like to know where the hon. member for Amanzimtoti got his figures from. All in all, therefore, the performance of this Government during the past decade has really been a remarkable achievement.

The slower growth rate of the economy since the beginning of 1981 is merely a normal trend in the economy, because with the eventual utilization to full capacity of the available human and other resources, it became physically impossible to maintain the exceptionally high real growth rate of 8,1% of 1981. With few exceptions, production capacities are fully utilized. Greater pressure on skilled labour resources has been experienced, and to an increasing extent the local demand had to be met by imports, which in turn contributed to a less favourable balance of payments position. It was chiefly against this local economic background that a lower growth rate could generally be expected in 1981. It is also against this same background of continued full utilization of local production factors, combined with certain expectations at international economic level against which the course of the South African economy should be assessed this year. The South African economy is to a great extent exposed to the pressure of international trade. I think the hon. member for Yeoville also referred to the fact that in 1980 imported goods satisfied 30% of the local demand while export goods represented up to 35% of local production. International developments are therefore directly and indirectly of great significance to the South African economy. Owing to international recessionary conditions, exports have shown a downward trend since the second half of 1980. At the same time the low price of gold has had a very significant negative effect on the country’s account with its trading partners.

The low gold price combined with the rapidly increasing production costs of mines has led to considerable lower gold-mine profits. These factors, together with the gold-mine tax formula in terms of which the State receives a relatively smaller percentage of gold-mine profits when profits decline, led to a big drop in the amount gold-mines paid in taxes. Gold mines pay taxes on profit according to a predetermined formula which amounts to taxes increasing progressively as profits rise. It should of course be borne in mind that the opposite is also true. This great fluctuation in the gold-mine tax is of particular importance and is both a blessing and a problem to the economic policy-makers. The advantage of this is that when the gold price and therefore gold profits rise, a proportionally larger part of the profits goes to the Treasury. On the other hand tax receipts from gold-mines drop very sharply if the gold prices weaken, as is the case at present. This usually places the hon. the Minister in a very unenviable position since it increases the deficit on State amounts and steps have to be taken to rectify the position.

The effect of the price of gold on State finances is particularly interesting. Over the past decade the average price of gold in rand value rose by 1 757% whereas tax levied on gold-mines rose by 3 000%. For example the profit of the gold-mines rose by 114% during the 1979-’80 financial year. In the period 1979-’80 gold-mines paid 52,1%—in other words more than half—of their profits to the State in tax. The following is a further example of this. In 1977-’78 taxes and rentals paid by the gold-mines only constituted 6% of the total revenue. As the gold price rose, this ratio increased as follows: In 1978-’79 to 10%, in 1979-’80 to 13,6% and in 1980-’81 to 27,3%; in other words more than a quarter of the total revenue came from gold profits. As a result of the lower price the estimated figure is back to 16,3% or even less.

What are the present economic realities? These can be briefly summarized by referring to the following facts: Full utilization of production capacity has been achieved in virtually all spheres of the economy; local demand and the local ability to satisfy it have been exceeded to some extent, which has led to large-scale importations; and owing to the international recession exports have fared badly and there is no prospect of great improvement for some time to come. In the fifth place the gold price was weaker and the current account of the balance of payments showed a considerable deficit. The external value of the rand also weakened. In addition the inflation rate has remained high. Given all these factors, it would be economic suicide not to consolidate our position in the economic field now and make the necessary adjustments. It is for this reason that the hon. Minister has put forward his proposals at this early stage.

The deficit in the balance of payments shows to what extent the country as a whole had begun to live beyond its means or income by spending more money abroad than it earned. One cannot solve one’s economic problems by trying to live beyond one’s means. What applies in this regard to the individual, also applies to a country, namely one must put one’s affairs in order or serious financial problems are unavoidable.

What is of importance in this connection is that South Africa has no control over aspects such as the price of gold and the recessionary conditions in the world economy and therefore over the weakening values of export goods. This leaves us with no other choice but to make the necessary adjustments where we are able to do so—as the hon. the Minister is consequently suggesting with his proposals—however difficult this may be.

The country’s overstrained production resources and the deficit on the current account of the balance of payments are serious matters that must receive the attention they deserve, and therefore we must not flinch from doing what will best serve the interests of the economy in the long term. That is why the present conservative monetary policy must be maintained as long as it is necessary to achieve a sound balance between production and expenditure and to subject the economy to the demands made by a sound balance of payments. Whichever way we look at this matter, it cannot be denied that the period that lies ahead of us will call for some or other form of financial sacrifices. However, if one looks at this realistically, one realizes that there are no short-cuts for promoting sound economic development.

Having said this, there is no doubt that the South African economy is sound and strong, as also appears from the report of the United States Department of Commerce from which I quote the following passage—

This is the important part—

This will suffice for the present. I gladly support the proposals put forward by the hon. the Minister.

Mr. Speaker, if it were at all possible from a practical viewpoint and if one did not fear for one’s future, one would like to see how the Opposition would draw up a budget in the current economic climate, because if they were to include everything which they said here today and which is not economically viable, it could lead to an economic shambles in our country.

It is probably not permissible for a junior in the House to measure his strength politically with senior politicians of the Opposition … [Interjections.] … but if one sits on this side of the House with a proud history in the economic sphere too, one has no hesitation in rising here today to defend the budget and to support it. In the first place we ask ourselves: What are the characteristics of this budget and of all other budgets that have been introduced by National Governments? First of all they show balanced thought. Just like the policy of the National Government, the budget too is flexible and is therefore able to adapt to the demands of the time. In the second place it aims at combating inflation without bringing the country’s growth to a standstill. Finally, the budget takes into account the interests of all aspects of our domestic economy.

Under what economic climate did this budget have to be drawn up? The hon. member for Smithfield correctly pointed out the influence that the decreasing, unstable gold price had on our economy. I should like to refer to agriculture as an example. The agricultural sector was struck by unfavourable rates of exchange that influenced the net realization of products. Furthermore agriculture was struck by low prices for its export products. In addition the costs of exporting were high. I should like to refer to a product from my area, viz. karakul pelts. Karakul pelts are being sold in countries where serious recession conditions are prevailing at the moment. In general, we are faced with increased imports and decreased exports in our country. Consequently more is being spent than is being produced. All of this has contributed towards an imbalance arising and the authorities cannot rectify this by means of a single magic formula. The co-operation of all persons and bodies in South Africa is required in this regard.

Why then is there all the fuss about financial discipline? The population of South Africa has been accustomed to economic stability for 33 years. Although the economy fluctuates, it fluctuates at the crest of the economic wave of prosperity. We find it strange to have to tighten our belts. Couples that marry today, are people who were born in prosperous times under the National Government. They do not know anything else. On the other hand our older people have had the experience of the suffering under a United Party government 33 years ago. They too have already forgotten what it feels like to live under another Government. In general we are doing well, in spite of all discipline. There have not yet been any drastic changes to our taxation structure and we are still paying in relation to our income.

Sales tax is one of the fairest taxes that is being levied in our country today. If one buys luxury articles, one pays luxury prices. For the lower income groups sales tax definitely does not mean more than R20 per month on normal household expenditure. For 1981-’82 it has been budgeted that the revenue from sales tax will amount to over R2 000 million. This is nearly enough to cover the entire defence budget.

I think the hon. member for Malmesbury referred to the considerable degree of economic prosperity that still exists. One simply has to look at the large number of cars that were sold last year. Another indication is the interest that foreign investors are showing in the South African economy in spite of stories of intimidation and boycotts are being planned. Those foreigners who think rationally, are still prepared to invest in South Africa because they have confidence in our economy.

However, what is the Opposition’s reaction towards this balanced action on the part of the Government?

We are now being told today that the Government should have followed a policy of putting something aside for the lean years. The fat years that have been referred to, were years in which all of us— even hon. members of the Opposition— shared in the prosperity. If anyone had stood up during those fat years and told the Government that it should have begun to take measures, that interest rates should be increased, that many other things should be done in order to utilize the fat years to the full so that money could be put aside for the lean years, it would perhaps not have been necessary to hurl reproaches. However, what happened? Everyone enjoyed the prosperity during the fat years. No hon. member of the Opposition attempted to call the Government to order and to issue a warning that measures should be taken.

However, when one does not accept full responsibility for a Government, and does not have to govern constructively either, one becomes just like a Kelpie sheepdog. If he is not kept busy, he starts killing chickens. [Interjections.]

After all, there is a continual yapping and snapping at the trouser legs of the Government. Of course this is because it is not necessary for hon. members of the Opposition to put their theoretical, impractical philosophies into effect. Therefore, all they can do, is to act as popular instigators of people. That is why they can tell the salary earners today that they are being paid too little. Reference was made to this by hon. members opposite. They said that we should pay fewer workers more. However, apparently they do not think of those who would be without work in the process. They tell the farmers in their turn that unfavourable measures are being taken that make it difficult for them to produce to the optimum. However, when taxes have to be levied, the Government is once again reviled as the so-called tyrant that does not look after the ordinary citizen of the country.

However, fortunately it is true that the majority of our people in South Africa have a clear attitude towards the things, as was proved without doubt during the past election. The majority of our people do not allow themselves to be taken in tow by popular instigation. In any event, this is of a temporary nature only. If we want economic stability in South Africa on the long term, we shall have to make certain sacrifices on the short term. I refer to a few of these only here, for instance sacrifices with regard to fuel. Is there a single hon. member here who can state today that he is not prepared to contribute a few cents towards the fuel price in order to ensure that Sasol 2 and Sasol 3, that are still in the hands of the Government at the moment, develop to the maximum in order to make us less dependent on imported oil? Is there any hon. member here who can allege that he is opposed to millions of rands being spent on the development of nuclear power stations in order to bring about greater independence in South Africa in the sphere of nuclear power as well?

After all, the manufacture of diesel engines is not to our temporary financial advantage. The emphasis falls more on the future, however. The future is being taken into account so that we can become more independent in this sphere too. Do we not already have the benefits of an independent arms industry in South Africa? Surely recent military action in the operational area is definite evidence of this. All of this points to the sacrifices that we will have to make on the short term in order to bring about economic stability on the long term.

The residents of South Africa must be grateful for the systematic action of this Government, and they must also appreciate the clear vision of the hon. the Minister of Finance and his department in drawing up this budget.

Mr. Speaker, the hon. member for Gordonia spoke about the proud record of the Government and of the NP in the economic sphere over the past ten years. I find that quite interesting, because the hon. member for Smithfield—if I heard him correctly—gave certain figures in regard to long-term economic growth in South Africa. He said that over the past decade the real gross domestic product had grown by 9,2%. I think I heard him correctly.

The interesting thing, however, is what the population growth figure over that ten-year period was, because, if the population growth was more than 10%—which I think it was because the population grows at a rate in excess of 2% a year—then what we are being told is that, in real terms, the gross domestic produce per capita was actually declining. The hon. member for Smithfield also mentioned a figure for inflation for the past decade, saying inflation over the past decade had been 177%. If that is something to be proud of, I should like to know what the position is going to be when we are ashamed about it.

1982 has been designated as the Year of the Aged. I think it is therefore appropriate in this debate that we should consider the position of the aged. I think that a bit of foresight tells us that 1982 is not a good year to choose because economically we are going through a relatively difficult period. Therefore I do not foresee a period in which there will be hand-outs from the fiscus. In addition, to the best of my knowledge there is no prospect of an election in 1982. There are steps, however, that can be taken and which I believe will be of benefit to those in the aged category. I think the time has come to look at the whole question of the means test. Just as we have had a policy of tax reform, I think we now need a reform of the means test. From many discussions I have had with aged people I have come to the conclusion that the present means test is a source of great dissatisfaction.

The present means test was set in 1972. At that time a single person qualified for an old age pension if his income was R82 per month or less and if he had assets of R34 400 or less. Since then there have been some adjustments. In 1979 there was an adjustment whereby an increase in a private pension would not disqualify a person from receiving a social old age pension merely because of the increase. In 1980 the level for income was raised to R116 per month for earned income or income from a pension and, as far as assets were concerned, the amount was increased by R400 to R34 800. In February 1981 allowance was made for an additional R34 per month in earned income. If one looks at the increases in terms of the means test, one sees that for an income from a pension it was 41,64% over that period and for the allowable assets 1,16% over the same period.

I should like to refer back to the figures quoted by the hon. member for Smithfield. He said that over the last decade inflation had increased by 177%. If one had R34 000 invested in 1972, one was considered to be financially comfortable. However, with the effects of inflation the position today is markedly different. In other words, the means test has not kept pace with inflation. I believe that this is demotivating for someone who is trying to save for his old age. He does his best to build a nest egg, but what happens? Because of inflation the nest egg he is trying to provide for himself is not worth very much at all when he comes to retiring. So what does he say? He asks: “Why should I save for my retirement?” This is a dangerous situation. I think that one way of overcoming the problem would be to adjust the means test regularly for inflation.

However, inflation has another effect on the means test, an effect I should particularly like to look at now. I refer to the discrimination which is practised within the means test. To motivate my argument, I should like to take a few examples from the information brochure on social pensions and grants. I believe that this discrimination is a major source of dissatisfaction because it is so blatantly inequitable. Let me give the hon. the Deputy Minister a few examples using these tables. If a person has investments of R30 000 and he has no other assets, I think we can say that he could get a return of between 14% and 16%. One can get 14% on a five-year building society fixed deposit and one can get 15½% to 16% on participation mortgage bonds. Let us say that he invested that amount at 14%. He could then earn R350 per month from investments and still qualify for an old age pension of R98 per month. Yet, if a single person receives R117 per month from a pension fund, he does not qualify for social old age pension. I ask whether this is fair, Sir.

Is that not an incentive to saving? [Interjections.]

We are now being motivated by the Government, in that one has to save for one’s pension because the Government is not going to look after one and because one cannot live on one’s social old age pension.

If a man invests R20 000 at 15%, he would receive R250 per month and would still receive the full social old age pension. Yet, if he receives R117 per month from a pension fund, he does not qualify for social old age pension. Is that fair, Sir?

If a man invests R34 000 at 15%, he would receive R435 per month and could still qualify for a social old age pension of R48 per month. He would also be entitled to all ancillary benefits that social old age pensioners receive. Yet, if a man receives R117 per month from a pension fund, he fails to qualify for a social old age pension. Is that fair?

The discrimination against income from a pension scheme is not only unfair, it is also counter-productive. We should be encouraging people to belong to a pension scheme. Yet the means test discourages this. People say: “Why should I try to save for my retirement through a pension fund? I will rather try and build up my assets and then invest those assets”. We know, however, what happens when people try to save for their retirement by building up their investments. It tends to disappear in TV sets, motorcars and so forth.

I think the solution to this problem is a relatively simple one. When the means test was set in 1972, it was assumed that the return on one’s assets would be 4% per annum. In 1972, when interest rates were much lower, it is quite possible that that was a reasonable assumption. In fact I think it was. But if one looks at interest rates today, that is no longer a reasonable assumption. What we should now do is to adjust the means test to bring it into line with the reality of the present situation. I do not believe that one can eliminate this inequity overnight, but I do think that the Government should commit itself to removing the bias against pension income over, say, the next three years. For example, let us assume that for this year we keep the level for assets as it is, but we raise the means test as far as income from pensions is concerned from the present level of R116 per month for a single person to R145 per month. In other words, instead of working on a factor of 4%, we work on a factor of 5%. If we move to a factor of 6%, the level for a single person would rise to R174 per month. At first this might seem a dramatic rise. However, I should like to go back to my earlier example of a person who receives R435 per month from investments and could quite possibly still receive a social old age pension.

This would lead to an increase in the number of people claiming the social old age pension, but I doubt if anybody knows how many additional people would qualify. I do, however, know from replies to questions that I have asked the Minister of Health and Welfare, that in 1978, according to their figures, 975 Whites had their applications for social old age pension rejected because their income exceeded the limits laid down by the means test. In 1979 the figure was 216 and in 1980, 941.

I also think that if we are going to reform the means test, we should introduce the same means test for all race groups. At present, for example, a White is allowed free assets of R10 200, whereas a Black is allowed free assets of R2 450. At present the means test limit, as far as income is concerned, is R116 per month for Whites, R58 per month for Coloureds and Indians and R20-50 per month for Blacks. I doubt whether the introduction of the same means test for all race groups would lead to a dramatic increase in the number of people claiming social old-age pensions. I do, however, think that the concept of a non-discriminatory social old-age pension system is right. If we are going to reform the means test, we might as well make it racially non-discriminatory.

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

No, Mr. Speaker, I do not have the time to answer questions. [Interjections.] There is another matter I should like to raise with the hon. the Deputy Minister in connection with pensions. I am referring here specifically to military disability pensions. At the present moment, for a 100% disability a person receives a basic pension of R300 per month, plus R50 per month for each dependant. An additional 12% is paid over and above this basic pension. When considering these figures there are certain points that must be borne in mind. Firstly it must be remembered that those serving under arms tend to be young. Therefore if they are disabled they have to bear the effects of that disability for a considerable period of time. Just think, for example, of a young man of 18 to 20 years of age who has been disabled. His disability is going to affect him for another 30 or 40 years. Can one imagine the traumatic effect on a young man of knowing that for the rest of his life he will not be able to live the normal life that most of us take for granted? I think that when a person has been disabled in the defence of the State, the State should be as generous as it can. It should not matter whether the person was disabled whilst fighting in World War I, World War II or on the border. One cannot discriminate against people who fight for their country in different wars, and I am glad that that anomaly is no longer with us, having been corrected. I feel that the military disability pension should be increased to say R600 per month and that the same pension should be paid to all people who are militarily disabled, irrespective of the colour of their skin. Whereas Whites receive a basic pension of R300 per month, that for Coloureds and Indians is R200 per month and that for Blacks is R150 per month. This is unfair and should be rectified as soon as possible.

Finally I should like to raise the question of the tax rebate given on insurance contributions. [Interjections.] At the present moment one is allowed to deduct R75—that is the maximum—which is 10% of the premiums paid. I should like to raise this matter with the hon. the Minister of Finance. I think that perhaps we should treat insurance premiums in the same way as we treat contributions to a retirement annuity or pension fund. In otherwords allow a taxpayer to deduct an amount of up to say R750 or R1 000 from his income on actual expenditure incurred for life and disability policies. I believe that the fiscus should encourage people to take out insurance. It covers the contingency of premature death and is particularly valuable to young families as it allows the bread-winner to provide for his family, and if he makes such provision he ensures that his family will not become dependent on the State. I believe that this should be encouraged. The present deduction formula for retirement annuities tends to aid the wealthier segment of our society. Without doubt the tax advantages have encouraged the growth of the retirement annuity industry. The younger family man and the less affluent cannot afford to contribute to a retirement annuity fund. They, however, should also be given every encouragement to provide for themselves and their families. It was Sir Winston Churchill, I believe, who said that he would advise every young man if he could, to take out insurance. I think the fiscus should encourage every young man to do so.

Mr. Speaker, the hon. member for Edenvale dealt with people who are militarily disabled and go on pension. He dealt with the aged and he dealt with other people who receive pensions. I can assure him that this is a matter that is close to the hearts of all hon. members on all sides of this House. The hon. member will know that in addition to the increases that the hon. the Minister has given from time to time to pensioners, when he has been in a position to do so he has given additional bonuses to pensioners. I am certain that this matter will be fully investigated by the hon. the Minister. I have no doubt that this is a matter that enjoys high priority with the Government at all times. I hope I do not embarrass the hon. member by saying so, but I want to tell him that his speech has been the most constructive we have heard from the Opposition so far in this debate.

The hon. the Minister dealt with the budget measures in depth and fully motivated the problems that South Africa is facing within the international community. Instead of dealing with the matters under discussion constructively, the PFP and the NRP competed with one another to see who could be the most destructive and the most negative. They made sensation-seeking, destructive remarks, but put forward no solutions to the economic ills and problems facing South Africa today.

The hon. the Minister has introduced this Part Appropriation Bill under difficult circumstances, difficult because departments had urgently to curtail priority programmes due to lack of finance. There are the requirements, as we have heard, of the old and of the young in every sector of our daily lives, and these had to be curtailed because of the lack of finance. The revenues at the disposal of the hon. the Minister are not sufficient for him, even if he has the best will in the world, to satisfy the most urgent requirements. We have heard that there has been a drop in exports due to a major recession in the economy of our major trading partners and we have seen that there is massive unemployment in the countries of our trading partners. But despite all these adverse conditions South Africa has managed, because of its economic stability, because of its inherent economic strength and because of its sound economic management, to maintain equilibrium and economic stability in the country. There are no other countries of comparable size that have better in-depth planning and a sounder economy. For example, if one looks at the investments that have been made on a massive scale in Sasols 1, 2 and 3, in Iscor, Koeberg, Armscor, education, housing and job opportunities, one realizes that South Africa will be able to reap the benefits of these investments at all times in the future.

The hon. member for Amanzimtoti, according to The Argus of 12 February 1982, said the following about the hon. the Minister of Finance—

However, the hon. member does not say in which way the hon. the Minister has gambled. As a result of the hon. member’s statement, The Argus headlines the article “Horwood is accused of gambling on gold”. On the contrary, I want to say that the hon. the Minister, his department and the goldmining industry have managed the gold situation outstandingly. The hon. member for Amanzimtoti—I thought he would have been here—has not motivated his accusation in any way whatsoever. International sales of gold, whether in the form of gold coins or bullion, are obviously handled by South Africa after an in-depth investigation and in consultation with the countries that assist us in marketing our gold. In order to raise funds, in order to stabilize the price of gold and in order to stabilize the best possible price, the hon. the Minister has entered into gold swop arrangements with other countries from time to time. Surely the hon. member cannot accuse the hon. the Minister of bungling in regard to the marketing of gold. If the hon. the Minister did not bungle the marketing of gold, then the only complaint that the hon. member could have against the hon. the Minister is with regard to what happens to the revenue from gold.

That is right. That is where the problem lies.

The hon. member for Durban North says that that is where the problem lies. I want to say to him that he must bear in mind that approximately slightly more than half of the income from gold comes to the State in the form of tax. The other half goes to gold-mining companies. As the hon. member will appreciate, the goldmining companies have their own priorities to which they have to attend. The portion that accrues to the State is dealt with by the hon. the Minister and the department, and it is dealt with in a conservative and on a sound economic basis. All hon. members can testify to that. Whatever the gold revenue has been, hon. members know that when there are projects on which they would like to see a go ahead, the departments have often not succeeded in persuading the Treasury because, obviously, the Treasury has to have its priorities and it has to spend its money according to a list of priorities on a sound economic basis.

We have learned from the hon. the Minister that gold averaged $613 per ounce during 1980 and during 1982 the average thus far has been $383 an ounce. If, for example, during 1982 the average is $413 per ounce, then the loss in income to South Africa will be in the vicinity of R4 200 million and the loss to the Exchequer may be in the vicinity of R2 200 million. In view of the reduced income from the sale of gold and matters beyond the control of the Government, how can the hon. member for Amanzimtoti substantiate the allegations of bungling?

Because you banked on a higher gold price.

Mr. Speaker, the hon. member knows as well as I do that the hon. the Minister is extremely highly thought of by commerce and industry and by the public in general both locally and abroad. However, The Argus on 12 February 1982 had a headline by the political correspondent to the effect that: “The GST increase points to bleak times ahead.” In the same edition of The Argus, the financial editor said exactly the opposite of what the political editor had said in discussing the increase in GST and the import surcharges. He said this—

The financial editor of The Argus then motivated the increases in the budget and came to the conclusion that it was worthwhile writing a favourable article in this regard. The problem with the Progs is, of course, that when The Argus gives them good advice they reject it but when they get bad advice, they accept it. It is easy to say to the hon. the Minister, as has been said this afternoon, that inflation can easily be contained; that the inflation rate can be curbed if we make more drastic cuts in our money supply. However, everyone knows that if we had to make more drastic cuts in our money supply we would have large-scale unemployment in South Africa. In Europe and America there are tens of millions of people unemployed and we cannot afford such large-scale unemployment in South Africa. The hon. the Minister has to be very careful to maintain a balance.

According to The Argus of 12 February 1982, the hon. member for Yeoville is referred to as follows—

There can be no doubt that throughout the world the 100% collection of taxes, whether it be GST or any other form of tax, is a dream that cannot be realized. Taxation means trust in commerce and industry and the general public not to evade tax. This must not be confused with legitimate tax avoidance. I am certain that in every country throughout the world there is tax evasion running into hundreds if not thousands of millions of rands. In South Africa there is a shortage of staff, as we have heard, generally in the public sector and also in the Department of Inland Revenue.

Why?

That is a stupid question from a stupid member. Despite this shortage of staff, since 3 July 1978 the error in GST was found to be 34 969 while the amount recovered by the department was over R22 million. This is some indication of the efficiency with which GST is enforced. I want to emphasize the fact that the R22 million was not lost. The Progs and their Press give the impression that that amount of R22 million was lost but that is totally untrue. If we look at The Argus of 16 February 1982 we see there as a headline—

I wonder whether The Argus will correct that wrong impression that they have created in the minds of all South Africans. I say this because that headline gives the impression that the State actually suffered a loss of R22,4 million. However, that amount of R22,4 million was recovered so there can be no question of the loss of that particular amount. Therefore, I think The Argus owes it to the country to explain the position properly. The only way we can ensure that we have 100% collections in respect of GST is to place an inspector at every till in the country. However, that is an impossibility. Inspectors do inspections in loco but they also do a desk audit. In addition, once a month commerce and industry have to send in a GST cheque and accompanying the cheque there is a form called “VB 5” which also has to be duly completed. The person in charge of the business certifies that the detailed information on which the GST is based is correct. The VB 5 form specifically calls upon people to certify, and informs them of the penalties which are involved if the certificate is incorrect. If the information is not correct, then there is an offence in terms of section 44 of the Sales Tax Act, and that provides for a fine or a term of imprisonment or both. There is also the possibility of a 10% penalty being paid per month, and after 10 months, this penalty will amount to 100%. On account of various defaults the department can cancel the GST registration under section 13 (4) of the Act, and upon cancellation the owner of a business must pay GST both on his purchases and sales; in other words, there is a penalty that he must pay GST twice.

It is not possible for anybody today to estimate accurately the amount lost through inaccurate declarations by commerce and industry. Any estimate can only be a guestimate at the very best. Any member of the public is free to report to the department any failure to render accurate returns if he has such information.

I should like to think that the majority of people in commerce and industry in South Africa are honest and hardworking, and that they would render returns to the best of their ability. I am pleased to see, however, in the Herald of 16 February that the hon. the Minister said that this matter was being closely looked into. It is obviously in the interests of everybody that the maximum GST is collected, and as such I have no doubt that the hon. the Minister and his department will cut this matter open to the bone. The fact that the department has found nearly 35 000 cases since 1978 gives one some idea of how mammoth this task of theirs is.

I should like to issue an appeal and at the same time a warning, only though to defaulters in commerce and industry and it is obviously not intended for the bulk of the people who comply with the Act, that there is a heavy onus upon commerce and industry to complete the VB 5 form accurately and thus sending in the correct amount when submitting the form. If defaulters ignore the appeal, one will need an army of people to enforce compliance with the regulations. I want to appeal to the organizations who advise commerce and industry in South Africa to assist by advising everybody to co-operate. Unfortunately very many innocent people who are complying will then receive a communication, but they can obviously ignore such a communication. The defaulters, however, must realize that by not paying the full GST, they are stealing from their fellow South Africans. The problem of course is that many defaulters probably do not belong to organized commerce and industry. It is obvious that wilful defaulters can expect the department to come on to them like a ton of bricks. I use the words “wilful defaulters” as we have a very mixed trading community and it is possible that because of ignorance there is not strict compliance. I think, however, that amongst the media, commerce and industry and the department, everybody can be made aware of the situation and of his responsibilities in regard to GST.

The hon. member for Yeoville made a statement which worries me and which requires explaining. He gave a statement which appeared in the Herald on 16 February. In that statement he qualified certain statements in regard to GST. That statement is fair enough, but then the hon. member goes on and in regard to the missing millions he makes an unqualified statement which I should like to quote—

The hon. member for Yeoville is always very specific, and when he says that R22 million is only the tip of the iceberg, I and other members should like to know what the rest of the iceberg is. What has he not told us today? If there is anything which he has not told us, he must substantiate the remark that the amount of R22 million represents only the tip of the iceberg. If he cannot substantiate the remark, he can be accused of merely seeking sensation in the Press. It is impossible for him to estimate the amount lost because of traders’ failure to pay over the correct amount. That certain traders are not paying the full amount over is reflected by the R22 million recovered by the Department of Inland Revenue. If the hon. member has any evidence to substantiate his allegations then it is his duty to present same to the department. If he has no further evidence on this tip of the iceberg statement, he has prejudged the investigation by the department and he has made the statement without any concrete foundations.

I want to ask the hon. member for Yeoville whether he agrees that the onus is on the trader to complete the form correctly and send his cheque timeously. If the trader discharges this responsibility and onus to the full, does the hon. member agree with me that far fewer inspectors are needed than would otherwise be the case? The hon. member will agree that if the trader fails to comply he is committing an offence and stealing from his fellow South Africans. The hon. member for Yeoville has had vast experience of commerce and industry and I should like to hear whether the hon. member thinks that South African people in commerce and industry are less honest than traders in other countries. I would like to think that our traders are more honest. In the past the hon. member for Yeoville has been very complimentary of the officials of the Department of Finance, which includes the Department of Inland Revenue, and I think he will concede that they are doing their very best. If the department approaches the hon. the Minister with any constructive suggestions about increasing manpower or mechanizing or doing anything that will improve the situation, I have no doubt whatsoever that the hon. the Minister will accept such constructive suggestions.

We have in South Africa sophisticated businesses with expensive machines to ensure the proper collection of this tax. Secondly, we have efficient businesses who do not have sophisticated machines but are able to collect the tax equally efficiently. We also have a third group of traders who through lack of proper knowledge make errors and omissions with no intention to defraud Inland Revenue. We also have a fourth group that deliberately furnishes incorrect figures and underpays with the intent to defraud. Some businesses do not even register. I do not think the hon. the Minister’s department and its inspectors will have many problems with the first and second groups because they can be attended to by way of the audits which I mentioned previously. However, it is with the third and fourth groups that the major problem arises. I believe that in regard to these groups the matter is being further investigated.

The department budgeted in 1980-’81 for an income of R1 550 million from GST. However, the income was in fact R1 653 million. In other words, the Government received R103 million more from GST than it budgeted for. The budget for GST for 1981-’82 is R2 150 million and indications so far are that the department will reach its bud geted figure. No tax or tax system can ever be infallible, but I have no doubt that the department is doing its very best under very difficult circumstances. In fact, the department should be complimented on the task it is performing and not denigrated as has been done in this debate.

All of us care about those who suffer hardship through increases. That is why we welcome the fact that the hon. the Minister has asked for an investigation into food subsidies. Last year food subsidies amounted to R260 million and a further subsidy of R190 million was paid for the conveyance of workers. These are examples of a Government that cares. It is vital that all South Africans increase their productivity to ensure an increase in production at a lower cost. Every South African, by increasing his productivity, can help in combating inflation. If there are salary increases then a corresponding productivity increase is vital in a country that wants to continue growing. Commerce and industry have a great responsibility in assisting in training their employees so that there is increased production. That in itself will help contain price structures.

There are certain aspects of the surcharge—one hopes it will only be a temporary surcharge—that worry one.

One of the things that worries me is that there are factories that cannot meet the demands of their customers. Because of a failure to obtain supplies, the customers often become importers on a very large scale, in fact on a far larger scale than they would want to become. They have turned to imports because of the necessity of staying alive financially. They have had to do this because certain factories have either been unable to execute the orders or have even failed to give them a chance to buy from them because they claim that their order books are full. Naturally the evidence in this connection has been laid before the Board of Trade in many cases. This 10% surcharge also gives our local industry an opportunity to expand production and productivity to meet local demand. Should certain factories take advantage of the surcharge and not produce sufficient for the local market at a competitive price, I know that we can always come and knock at the hon. the Minister’s door. Naturally I am worried about the surcharge when it comes to the motor industry, on which the Port Elizabeth region is so dependent. We would appreciate it if the hon. the Minister and his department would monitor the motor industry and see how these sales are going, because as he knows the interest factor in the sale of motor cars has increased vastly, and with the introduction of the surcharge one should monitor the situation to rectify any problems in the motor industry if one feels that there is a need for such rectification. Our most important collective task—this should also be done through our communications media—is to put forward, in a positive fashion, the case for industrial expansion and decentralization. A climate of confidence and an all-out effort to attract both local and foreign investment is needed. The investment climate can never be the sole responsibility of the Government. This means that every leader of every community—and the media— has the responsibility of creating a positive investment climate for foreign and local investment. No political leader worth his salt, no matter what his colour, can fail to plead the cause of economic expansion and prosperity. Africa has shown that political leaders who are more interested in financing a military arsenal have allowed their countries to collapse economically. According to a report received some years ago there are 63 million people in Africa either unemployed or under-employed. The standards of health, the food position and the economic situation have deteriorated to the extent that most African countries have collapsed financially and cannot pay their debts or feed their people. South Africa has expanded in many ways and we have helped Africa to survive. South Africa is a beacon of light in the darkness of Southern Africa. We have a vital role to play in the public and private sectors, and South Africa will continue as a haven of investment for the rest of the world. The spoilers in South Africa can do their utmost, but I believe that the hon. the Prime Minister and his Cabinet and the Public Service have built up a relationship with commerce and industry that can only augur well for the people of this continent.

Mr. Speaker, I am particularly grateful that I do not have to reply to such an excellent speech as the one made by the hon. member Mr. Aronson. However, I am somewhat confused, because I listened very attentively to the speech by the hon. member for Edenvale and to the one by the hon. member for Yeoville. The hon. member for Edenvale had worked out a very fine speech and he came up with many figures and ideas by means of which he wanted to show us on this side of the House how we should treat our pensioners. However, I want to assure the hon. member that for 33 years this Government has had a proud record with regard to its care of pensioners and those who are in need of care, because they too are the people of the NP. What confused me, was the fact that the hon. member asked for parity in pensions and so on. However, we can also assure him that we are looking at this. However, I should very much like to know where that money should come from, because the hon. member for Yeoville is opposed to the increase in GST. Indeed, it appears to me that he is totally opposed to GST. Hon. members must excuse me if I am too stupid to reconcile those two points. In the hon. member for Yeoville’s amendment he said that GST—particularly not the increase—should not be applicable to basic foodstuffs.

However, our people have stopped eating basic foodstuffs, eg. our people have stopped eating mealie meal for breakfast. It is too cheap and apparently too healthy as well. Now we buy things that are packaged in packets that contain a handful of maize only. I do not know what the maize farmer receives for it, but it cannot be more than a few cents. It is then rolled, ground, flattened and cooked and packaged very attractively. It is transported and distributed and a profit is made on it. Then a great deal is asked for it in the shop. If one looks at the type of thing for which people are prepared to pay— they even pay the artist who draws the pictures on the pack in order to catch the attention of the children—instead of eating mealie meal, I too want to call out with the poet: “En, Meneer, dan sê u nog die vis is duur!”

The fish is expensive.

As we see in the hon. the Minister’s speech and in the budget, we are experiencing a time of runaway inflation, dropping gold prices and sky high interest rates. These things have a serious effect on agriculture, that sector of our economy that really has very little sympathy from the Opposition side. When fuel prices increase, when interest rates increase and when an additional 10% taxation is levied on imported goods that are extremely essential at this stage, it is true that agriculture is first in the queue for taking all these blows. In times of prosperity agriculture is right at the back, but in difficult times agriculture is out in front to take the blows.

Who and what is the South African agriculture that the official Opposition treats as such a forgotten sector? It is the sector that is one of the seven net earners of foreign currency. It is a sector, whether they want to admit it or not, that receives less Government aid and fewer subsidies that other sectors in the economy. It is also a sector that, believe it or not, enjoys less protection than others. When we undertake something in the interest of the country, for instance the diesel engine project at Atlantis, agriculture is also first in line to take the blows. Nevertheless, agriculture will undertake these projects in the interest of the country. The agriculturalist in South Africa produces under some of the most unfavourable weather conditions in the world and the food is produced on some of the poorest soils in the world. Then the agricultural sector, the forgotten sector, comes to the fore and provides the consumer in South Africa with some of the cheapest food in the world.

Now it is true that in the financial climate that we are experiencing at the moment, agriculture is hampered by many things. I should like to point out two of these only. The first is the shortage of capital that is being experienced. I am talking about capital for capital works such as irrigation schemes, distribution networks, etc. There is also little money available for farm loans, housing, etc. Secondly, we have discovered the term “market related interest rates”. This is a popular term to use and I must honestly admit that a great deal of morality is hidden in the term, and possibly some common sense as well. Nevertheless I want to ask the policy makers and those who work with the coffers of the country, to establish exactly what “market related interest rates” means when we talk about agriculture. If we in South Africa are serious about providing our population with relatively cheap food, we must look at this. It has been calculated that the farmers will pay R750 million in interest this year. If we compare this with fertilizer and fuel that we are talking about all day, we find that the amount in question that is paid for the 1980-’81 financial year in the case of fertilizer is R514 million and in the case of fuel, R375 million. One can therefore say that the situation with regard to interest rates is a depressing one. Nevertheless the farmers of the country will supply our people with enough food at a reasonable price. However, if the farmer has to carry all the costs, including market related interest rates, it may mean that the days of cheap food have gone for good in this country. However, the farmer has a sense of responsibility. In addition, they are very well represented here, and there are hon. members here who have a thorough knowledge of the industry.

However, we must admit that the agricultural industry is not perfect and that many improvements can be made, but we are asking for understanding of our problems. In this regard I want to quote one figure only. The American farmer, who farms on excellent soil, produces 2,29 tons of wheat per hectare on average. In South Africa 1,2 tons of wheat are produced per hectare, i.e. approximately half of the American figure. In the USA the farmer receives R321 per ton whilst the South African farmers receive only R290 per ton. In spite of that and in spite of poor soil, difficult weather conditions and low prices, our farmers will feed the population because the South African farmers know that the Government lends an ear to their problems and has a sympathetic understanding of them. Those of us who have had years of experience in organized agriculture, are aware of this, and that is why one does not hesitate to raise the case of agriculture today in a debate on the financial problems with which the country is struggling at present.

Having delivered this plea on behalf of agriculture, I want to come to the hon. member for Wynberg, the chief spokesman on agriculture on the Opposition side. He is a very kind fellow, a pleasant person and he lives on a beautiful farm in a good area. Nevertheless he has two basic problems, two problems in his make-up. I listened to him last year and again the other day when he spoke about the legislation in connection with agency sales. He is a person who telephones various people and then listens to all the nonsense that they tell him. The channels of organized agriculture and those of the co-operatives are open to him. The hon. member likes to talk about labour relations, specifically in the Western Cape. There are hon. members here who are acquainted with those matters. The channels are open for him and he too can gain the knowledge. However, this is not his biggest problem; he has an even bigger one. He speaks quite well on agriculture, but up to a point only. When he starts linking agriculture to political expediency, things go wrong. However, we on this side do not hesitate to plead on behalf of agriculture, because the Government has an open, sympathetic understanding. We on this side of the House will look after agriculture. Therefore the hon. member for Wynberg need not worry about it.

Mr. Speaker, I have listened with interest to the remarks made by the hon. member for Wellington. Let me tell him one thing: He need not criticize the hon. member for Yeoville in the manner in which he did. He referred to breakfast foods, but let me assure him that the hon. member for Yeoville could eat him up before breakfast if his religion did not forbid it. [Interjections.]

Mr. Speaker, on a point of order. It is implicit in the words of the hon. member that the hon. member for Wellington is a pig. Is that permissible?

Order! What did the hon. member for Bezuidenhout imply?

Mr. Speaker, the religion of the hon. member for Yeoville forbids him to eat human flesh. He cannot be cannibalistic. [Interjections.]

Order! The hon. member may proceed.

Mr. Speaker, throughout the history of the South African Public Service, as it is now called, the most serious and difficult problem has always been executive remuneration or adequate salaries. For the information of the hon. the Minister of State Administration, who is not present in the House now, I was a Public Servant for three years. [Interjections.] There have been very few periods when the level of pay and the principles upon which they are determined have not caused restraint, confusion and frustration. There are two facets to the problem. The first one is the level of pay, and the second one, the principles on which they are determined.

Firstly, the Public Service is maintained by and for the use of the public. It has unfortunately been the normal practice for this Government, in power for 34 years now, to observe restraint in expenditure in salaries. What has been the result? The result has been a tendency for the Public Service salaries to lag behind rather than to keep up with the national trend of a long run increase in salaries in the private sector. Secondly, the non-profit character of the Public Service operation makes it impossible to tie salary changes, even loosely, to internal economic influences, especially when there is inflation and irregular, stimulated economic growth.

It is not surprising for us on this side of the House to know that the salaries policy, as well as the level of pay, have always provided a fruitful source of conflict. What is surprising is that this Government has shown such ineptitude in allowing it to develop into a crisis of such magnitude that the decisions of this House cannot be carried out because so many South Africans are not prepared to work for the State.

Since Union, the Public Service Commission, in trying to seek a principle which might govern the levels of pay, has tried to relate to the rates and movements of pay in the outside market for labour. The principle of “fair relativity”—paying what is paid for the same work in outside industry and commerce—has failed because the State instead of being the leader, has become the poor follower of the private sector. There is only one solution to the problem. The Public Service must be made the service in which people will clammer to be employed. The principle that must be adopted is that the State must become “the model employer”.

What do we mean when we talk about remuneration or pay? For far too long State Administration has taken the attitude that they can keep employees happy by means of good fringe benefits or perks. This does not work. I led a research group some years ago, which investigated executive remuneration. The findings were most revealing because they showed the obvious. What remuneration does a person want? He wants the following, in order of preference. Firstly, he wants a good take-home pay. Secondly he wants a good medical aid fund. Thirdly he wants a good pension fund.

What does this mean? It reflects a simple truth. A good employee wants sufficient money in his pay packet to take home to his family to provide them and him with a good standard of living. If he or his family should become ill, he wants to be able to obtain medical services at a reasonable cost in order to become well again. Finally, in his old age he wants a good pension, when he is unable to work anymore, to enable him and his spouse to continue with the same standard of living which they had when he worked.

What are the disadvantages of being a top executive? There are two main disadvantages, namely the time spent away from home and, secondly, an insufficient responsibility given for decision-making. Therefore, it is not enough take-home pay which is the principle reason for the Public Servants discontent.

This House of Parliament is the major decision-making body in the country. We must stop believing that by passing legislation we have accomplished our task and that we can leave the rest safely in the hands of hon. Cabinet Ministers. Without the best and most qualified people in the country in our employ we face the inevitable breakdown in the maintenance of the stability of the State. What we need is a sound administration, a sound system of justice, sound police protection, a sound Defence Force, sound supplementary services, sound education services, and sound medical services, inter alia.

It requires people to ensure that these services are provided. They do not come of themselves. People require motivation, and one of the major sources of motivation is a sound remuneration. And what do we have in effect? I have here scores of newspaper cuttings which show the total dissatisfaction of the public servants in South Africa with the attitude of the Government. These newspaper cuttings reflect the fact that we have almost reached the point of no return in maintaining the Public Service that a modern State like South Africa needs. I also have in front of me the last five annual reports of the Commission for Administration. They, too, reflect the dire situation we are in and the Commission is well aware of the problem.

I should now like to reply to a number of points made by the hon. the Minister of State Administration in the speech he made in this House during the no-confidence debate. In order not to confuse the issue, I shall confine my remarks to those public servants who are represented by the Public Servants’ Association. The hon. the Minister accuses those who rightly criticize him for his complete ineptitude of telling “sinkende-skip-stories, vertel met swartgalligheid en eensydigheid”. However, there is one point that the hon. the Minister must not forget. He should have made provision one year ago for the needs of the Public Service when the hon. the Minister of Finance was cutting taxes and dispensing largesse to all and sundry except the public servants. We on this side of the House said that these election tactics were “vote now, pay later”. The public servants are paying through the nose for the complete neglect of the hon. Minister of State Administration who plays politics instead of looking after the interests of his department.

The hon. the Minister also announced a package deal, viz. that salaries would be increased by 1 April. He did not say that they would equal the demands of the Public Servants’ Association. Secondly, he said that salaries would be based on differentiation by profession. This would be the subject of another investigation. Thirdly, a programme would be instituted over a period of time to make salaries more competitive. As usual, all he did was make promises and more promises. As is his usual custom, he promised that something would be done, but that it could not be done now because investigations were still taking place. These investigations have been taking place for years. Every single person in the Public Service from the hon. the Minister and the Commission for Administration right down to the lowest grades knows what is required. All that we need now is a decision.

How can the hon. the Minister accuse the hon. the Leader of the Opposition of causing confrontation? The hon. the Leader of the Opposition merely stated what members of the Public Service themselves have been saying, viz. that because the demands of the public servants have not been met, a confrontation could occur. Once again, the hon. the Minister wishes to introduce a racial bias into the Public Servants’ Association. He is not satisfied that the Public Servants’ Association should represent people of all colour as long as they are public servants. He wishes to have a separate association for each and every colour group in the Public Service, viz. White, Coloured and Indian. In principle, this is completely incorrect. Only one association, the Public Servants’ Association, should be able to talk for all public servants irrespective of colour.

This attempt by the hon. the Minister to “divide and rule” is a further manifestation of his absurd credo, where everything must be reduced to ethnic groups. It permeates every level of his thinking, from this level of public servants to the constitutional development of this House.

The hon. member for Yeoville has read out from the newspapers, stating what his objection is, and has appealed to the hon. the Prime Minister. The hon. the Minister of State Administration must realize that if there can be only one Government in this country then there can only be one Government in the Public Servants’ Association. Furthermore, the hon. the Minister of State Administration states that the private sector has been stealing. I use the word “stealing” because he used the word “beroof”. There is no such thing as stealing an employee. If the conditions of service are not good in one organization and an employee goes to another organization because the conditions are better there, he is not being stolen. The Public Servants are not satisfied with the promises of a package deal. I quote from Die Burger of 10 February 1982—

The present Minister of State Administration must be replaced by someone who will set the matter right even if he has to come from outside Parliament. In terms of the present constitution, the State President-in-Executive Committee has the right to nominate four members of Parliament. The Prime Minister should, if necessary, exercise this right in order to save the Public Service from possible disaster by appointing, from the private sector, some capable person who will get the Public Service right in the shortest possible time. The hon. the Minister of Finance must be told by the hon. the Prime Minister that the first call on his funds is for what is required for an efficient and capable Public Service before any allocations are made for any other requirements. I say this because without a Public Service of top quality this country cannot function. What we want is a small, highly efficient but well paid Public Service. This is what every public servant wants as well. It is only then that this House will have the right to demand that if a public servant does not measure up to the-post to which he has been appointed, he can be discharged. He must compete in the Public Service on the same basis as he would in private enterprise. On the other hand, however, the State must become a model employer paying a remuneration which leads the private sector and not follows the private sector.

In conclusion, I want to say that there is also the right of the Public Servant’s Association to be placed on a better official bargaining basis. The Public Service Joint Advisory Council has failed to provide the necessary bargaining structure for public servants and something else must replace it. The Wiehahn Commission recommended a trade union. I believe that the composition of the Commission for Administration should be changed. It consists today of three excellent persons who have served in the Public Service and are appointed by the State President. In its present form it has outlived its usefulness. The Public Servant’s Association must be given direct representation on the commission itself and must be given the right to nominate annually two additional commissioners on a contract basis, for one year, to represent their interests on the commission. This is not a revolutionary concept. In Germany today, the boards of directors of large companies are by law compelled to have almost as many directors appointed by the workers as are elected by the shareholders. In addition, two additional commissioners should be appointed from outside the Public Service on the grounds of their particular qualifications and experience in private enterprise in personnel administration, and they should also be appointed on a year to year contract basis. In the United States, many highly qualified outsiders work for the state in Washington D.C. on a contract basis for a number of years.

I want to say finally, Sir, that the official Opposition will continue to fight for the rights to which public servants are entitled, namely, to enjoy a standard of living commensurate with their ability and their responsibility.

Mr. Speaker, I just want to tell the hon. member for Bezuidenhout with his ambiguous statements that he and his colleague can depend on this Government taking care of them, taking care of everything that their hearts desire, providing all sorts of meat but we are definitely not going to throw it before the swine. [Interjections.] The hon. member is interceding for the public servants. I want to point out to the hon. member that the Government has always looked after the public servants well. They can depend on the Government looking at their salary position once again and making sure that they are happy. The hon. member may go ahead and tell that to the public servants.

Promises only.

We have listened to arguments by the hon. members of the official Opposition this afternoon, but their arguments would not even make an impression on a flea. The debate thus far has emphasized that South Africa’s finances are in good hands; that in spite of problems that are being experienced, South Africa’s finances are basically sound due to the brilliant way in which they are handled by the hon. the Minister of Finance. [Interjections.]

I want to come back to the hon. member for Yeoville, the chief spokesman of the official Opposition in this debate. He accused the Government of failing to take precautions by not filling the barns during the fat years as Joseph did in order to provide for the lean years ahead. Surely the hon. member is concealing facts; why does he not give the facts? Does he not know that at a time when funds were adequate the hon. the Minister paid an amount of R1 240 million into the Stabilisation Account?

He has forgotten about it.

He has conveniently forgotten about it. Does the hon. member not know that the hon. the Minister used part of that to strengthen our strategic supplies? In the times in which we are living, it is probably more important to stock-pile strategic supplies than it was for Joseph to store wheat for the lean years. What is more: The millions that were saved for the lean years, cannot suddenly be demonitized now and paid into the money supply of the country because it would be too inflationary in a time when inflation is in full swing. To do this, would be tantamount to creating new money and pumping it into the economy. The hon. member for Yeoville acts as if he is very clever; is he not aware of these things, and if he is, why does he conceal them?

The hon. member must not accuse the hon. the Minister of extravagance. The hon. the Minister is well-known for his financial conservatism and for his strong financial discipline. Financial discipline has always been the foundation of the policy of the hon. the Minister and of the Government, and it is still being applied today. After all, we all know that the hon. the Minister watches over the financial affairs of our country like a strict father. It is in fact due to the policy that he follows, of putting money aside for the lean years, that South Africa’s economic position is so healthy and strong today.

I want to come to another point that the hon. member for Yeoville raised. It has a bearing on sales tax. Wild statements have been made in the course of the debate this afternoon, as well as in certain newspapers, about the evasion of GST. After all, we know that there are people who are evading GST. Surely it has been true over the centuries that people evade all kinds of taxes, but to come here and allege that the State is losing hundreds of millions in GST because the Receiver is not doing his duty, is a wild sensational story. The fact is that over the past year the State has received R100 million more in GST than was anticipated. The Government’s revenue from GST is still growing year by year. The indications are that in the new year approximately R500 million more is going to be received than was the case in the previous year and that a record amount of R2 150 million will flow from the GST source into the Exchequer during the new year. However, to come here and allege that evasion is taking place on such a large scale, is a serious indictment of the honesty and integrity of the public, and I hope that the public will take note of it. Paying one’s taxes is largely a question of honesty. The philosopher Plato said—

The legislator depends on tax-payers being honest. He places a high premium on the integrity of the public. The Opposition and its Press must not overlook the fact that by over-emphasizing this situation they are simply drawing the attention of more people to the fact that tax can in fact be evaded. It is true that the Receivers of Revenue are experiencing a staff shortage, although it is no greater than in the other sectors. With their over-emphasis of the situation they are telling the people in the gate: “There are no soldiers”. Staff for offices of the Receiver of Revenue is scarce because they are specialists. They are schooled in accountancy, and therefore much sought after. I want to break a lance today for the Receivers of Revenue and their staff who are accomplishing a tremendous task under difficult circumstances. These people are being confronted by wily tax-payers and tax evaders who try to find loopholes everywhere. The Receivers and their staff, however, succeed in stopping the loopholes. There are loyal, dedicated people in revenue offices throughout our country who are keeping the services going in an excellent way. I think the time has come, due to the specialized nature of their work, for serious consideration to be given to placing them on professionally orientated salary scales. I want to ask the hon. the Minister to give very serious attention to the possibility of introducing professionally orientated salary scales for the staff of the Receiver of Revenue. This could be an important step in relieving the staff position.

Together with the bad news about our balance of trade, however, there is one pleasing aspect. Every year South Africa exports goods to the value of R18 000 million. As far as international trade is concerned, South Africa has grown to be one of the biggest countries in the world. Other countries can no longer play around us so easily, because they need us. However, we are not the only ones who have a balance of payments problem. On the contrary, most countries in the world are faced with the very difficult problem of the balance of payments today, i.e. to pay for goods that are imported. South Africa is one of the few countries that can afford increasing imports and can pay for them. Despite the fact that we are importing more goods today in order to provide for the requirements of our growing economy, despite the fact that imported goods cost much more and despite the fact that we must pay hundreds of millions of rands more in order to obtain oil, South Africa still has a strong current account on the balance of payments. Consequently we are in a position to pay for imported goods, and this is something that not every country in the world can do. In spite of problems that we experience from time to time, we are so strong domestically and are growing so strongly that we compel the respect of experts throughout the length and breadth of the world.

There are problems that we shall have to deal with. There is the serious problem of inflation that is making it increasingly difficult for our people to keep their heads above water. We are aware of this, but we also know that it is an insoluble world problem. It is not our problem alone. There is the problem of ever-increasing oil prices that have overturned our entire economy overnight, but that have also overturned the economies of the entire Western world overnight. In spite of this we are still growing. In the years that lie ahead, if attention is given to all the factors that promote growth and the training of manpower, all the factors that are required to keep inflation under control and all the factors that will ensure stability and prosperity, we cannot but prosper here. We are aware of the necessity of the better utilization of our labour resources. A great deal has already been done in this regard, but in the years that lie ahead, we shall have to dedicate ourselves increasingly towards the training of all our people in this country. We shall have to apply ourselves to increased productivity in particular. The basic fact is that South Africa has a tremendous labour potential. The quality of the labour force of our country must not be underestimated. If these people are properly trained, our manpower will compare favourably with that of Europe and America. We must not see a threat in numbers. If they are utilized properly, these large numbers can become one of our country’s greatest assets.

However, we have another basic problem here, and this is the continual increase in wages and the narrowing of the wage gap, without a concomitant increase in production. The hon. the Minister of Industries, Commerce and Tourism says that the lack of productivity in our country is alarming. Productivity in our country has in fact fallen behind, and every means at the disposal of this country—education, training and technology—must be harnessed in order to make good this backlog. However, what we in South Africa are in urgent need of, is what I want to call a process of purification in order to eliminate a lack of productivity, inefficiency, excessive spending and excessive imports. If one gives less than one asks for, the economy of the country is going to suffer, and this is what is happening in this country of ours at the moment. The demands that are being made, are too high.

Political demands too?

We have seen what happens when the gold price drops. Therefore, we must not put all our hope on gold alone. Extraordinary economic and industrial achievements in particular are necessary to take the place of gold in the years that lie ahead. However, we all know that we cannot succeed in obtaining extraordinary economic and industrial achievements unless we succeed in producing a greater labour achievement in South Africa.

Mr. Speaker, the previous speaker replied very effectively to the unmotivated arguments of the Opposition, and I should like to congratulate him on his fine, positive contribution towards this financial debate. He dealt with the subject so effectively that I do not feel I need to elaborate on it further. Therefore I rather want to devote my time to the Ciskei and the border area.

†Before I get to that, however, I want to direct a few words to the hon. member for Bezuidenhout. He found it necessary at this late stage to assure us that the hon. member for Yeoville did not eat human flesh. Well, we shall just have to take his word for it that the hon. member is not a cannibal. However, I want to give the hon. member for Bezuidenhout some advice. If I were him, I would stay very far away from any hyaena because they are also known to have certain eating habits.

I shall take your advice.

I want to thank the Government for its pragmatic approach and its understanding with regard to the problem of stagnation and unemployment in the border area and Ciskei. For years the Government has been besmirched and blamed by the Progs and their Press for every evil that exists or arises in that area. A well-known lady said recently—I quote from the Daily Dispatch—

It was not the hon. member for Houghton who said that, but I am sure she is very sorry that she did not think of it first.

Many of the people in that area have become so conditioned already that they are continually asking: “What is the Government going to do for us?” There are few of them these days who still ask: “What can we do to help ourselves?” The Government’s proposed plan of decentralization and increased concessions will give this area, the D-area, top priority of all areas. The time has come for the people of the Border to say thank you, because they have received more than they asked for. The time has also come for self-examination and the realization that the Government alone cannot bring about their salvation, but that with their own initiative, spirit of entrepreneurship and labour, together with the opportunities that are now being offered to them by means of the Government’s concessions, they must develop the Border and Ciskei. I am talking about both Black and White now.

We have experienced the successes of the Carlton and the Good Hope Conferences. I do not want to ask for another conference of this kind. However, the fact remains that in the Border area, apart from the large industrialists, there are many potential entrepreneurs, for instance small businessmen, doctors, attorneys and other professional people, who have money to invest and who can be involved in the development of Ciskei and the Border. However, they do not realize what advantages investments hold for them. I therefore want to ask that as soon as possible after the announcement on 1 April, the Government should call a conference in East London which the businessman, the small investor, the professional man and the public can attend, where it can be spelled out to them what the advantages entail and where they can ask questions about electricity tariffs, rail and harbour concessions, taxation and labour concessions, etc., i.e. how they compare, why they are as they are and what is being envisaged with them. Then they can also ask where they should go for advice, information and expert advice. At that conference it can also be spelled out to them that it is not only the development of East London, Berlin and King William’s Town that is at issue, but that of the Ciskei as well, and indeed, the entire area. They must be made to realize that the borders of countries are not economic borders, that it may be economically more advantageous to establish a business in the Ciskei than on this side of the border. There are still too many people who think of border industries as only those industries that must be established on the Republic’s side, instead of looking at the area as a unit, and I am including the Ciskei here. I am not asking the hon. the Prime Minister or other hon. Ministers to attend this conference, but for an expert from each department in question, including Transport Affairs, Posts and Telecommunications, Co-operation and Development, Industries, Finance, Manpower, etc., to be present in order to provide information and answer questions. The Ciskeian Government must also be represented at this conference so that they can provide information as well.

East London or the Ciskei cannot each be developed separately. There must be a team effort for joint development to and fro across the borders, because each successful undertaking in Ciskei is also an asset for East London, and of course vice versa.

It must be brought home to the public that the Prog policy of centralization, as it is being advocated by one or two of the hon. members on the official Opposition side, will make economic slaves of the Black workers, whilst their brothers in the independent and undeveloped homelands will die of hunger like sardines. This policy will simply not work. On the other hand the public must take note of the fact that deconcentration, decentralization and balanced and distributed development throughout Southern Africa, in White as well as Black areas, will guarantee the equitable survival of all. One cannot, as the Progs are advocating, make the rich “fat cats” even fatter at the cost of the average man or of the poor White or Black people. I am calling for an information conference of this kind—if I can call it that—to be held in East London because the local media alone does not have the insight and cannot convey the necessary information to the public. I believe that this can be done only on a personal basis of question and reply, on a basis of personal involvement.

I also want to ask the Government to make appointments in the regional development board or committee with a great deal of circumspection, and to ensure that no people are appointed whose ideas are hidebound and would call for the development of their own street only for personal gain and for political prestige.

Apart from what I have just said, I want to ask the Government to make another gesture towards the Border area in the form of establishing one or two factories there, whether they be branches or subsidiaries of Armscor or Iscor.

Mr. Speaker, I have listened attentively to the hon. member for East London North, and I must say at once that I believe he is seriously mistaken about the attitude of this side of the House towards decentralization and the development of underdeveloped areas in South Africa. This party has never opposed these things, so it rather surprises me that the hon. member spoke about this matter with some bitterness and ignorance. If anyone is to blame for the poverty and underdevelopment in the Eastern Cape, then it is hon. members on the other side of the House. This is so because of the fact that proper provision was not made …

[Inaudible.]

The hon. member should not get so excited. Poverty resulted from the fact that thousands and thousands of people were removed from Transkei, for example, and resettled in Ciskei, without proper provision having been made for them. In the second place, as I shall indicate again later, when the hon. member says that we should not make a country’s borders its economic borders, that was exactly what Dr. Verwoerd did by rejecting the recommendations in the report of the Tomlinson Commission in 1956. I request the hon. member to go and read up that debate in Hansard again, the debate about the Tomlinson Report. If he does that, he will understand what I mean. However, I just want to point out that it is untrue to say that we are opposed to the provision of incentives and of assistance for the development of underdeveloped areas of South Africa. [Interjections.]

I also listened with great respect to the hon. member for Bloemfontein North. He does not seem to be in the House at the moment. However, I must point out that there were some serious contradictions in his speech. Surely the hon. member cannot quote Plato on the one hand by referring to his statement about fair and unfair taxes, while at the same time arguing that taxation is actually a matter of honour. Moreover, the hon. member went on to say that the publicity given to the possible evasion of general sales tax will help to persuade more people to evade that tax. Surely that simply does not make sense.

The hon. member went on to talk about the dedicated officials. I do not believe there was any intention on the part of the hon. member for Yeoville or of a single hon. member on this side of the House to cast any reflection on the officials of the Public Service. What the hon. member for Yeoville did say was that it appeared that almost 40% of the posts in the office of the Receiver of Revenue were vacant. Surely it goes without saying that if 40% of the posts are vacant, the quality of the work must suffer, otherwise it would mean that with a full establishment they would be hopelessly overstaffed.

I want to emphasize, for the benefit of the hon. member for Bloemfontein North, that surely it is obvious that the work in that office cannot be properly done if there is such a high percentage of vacancies. However, I endorse the appeal made by the hon. member for Bloemfontein North for the training of all our people with a view to greater productivity. This is a real problem. I must add that I was presently surprised by the reference made by the hon. member for Bloemfontein North to inflation. After the speech by the hon. member for Yeoville, I was sitting here, waiting patiently for any signs of understanding on the part of hon. members on the other side of the House of the way in which our people are really affected by inflation.

Arising from the Budget Speech made by the hon. the Minister of Finance last year, I pointed out that one of the fundamental problems we were faced with was the fact that inflation affected our low-paid people in particular. This is a fact.

Give us a solution.

Just put us in power and the solution will come by itself. [Interjections.] However, hon. members on this side of the House were blamed—and the hon. member for Yeoville also referred to this—when we said before the last election that one could say “Vote now, pay later”. What were we being asked to do? We, the electorate, were being asked to demonstrate our confidence in the Government at the polling booth. We were being asked to show that we trusted the Government to solve the problems of this country—not only the political problems, but also the economic problems of our country. [Interjections.] That was what we were being asked to do. We were being asked to give the Government a motion of confidence. However, what has been happening since then? Let us take a quick look at all the price increases which have been announced since then. Let us examine all the price increases since the last election. Dairy products have become more expensive; so have petrol, mortgage rates, cigarettes, canned food, cooking oil, bricks, cement, postage, medicine, meat prices, margarine, paraffin, bread, chicken, electricity, flour, steel, fertilizer, etc. It is simply breathtaking to see that in these few months since the election …

Who told you the Government controlled the chicken prices? [Interjections.]

It is amazing that all these price increases have occurred in only a few short months. [Interjections.] Very well, all I can say is that if we examine the price increases … [Interjections.] There are many thousands of Whites today who are actually unable to make ends meet; all as a result of the enormous price increases in recent months.

The Government does not lay down the mortgage rates. [Interjections.]

All the same. That may be so. Surely the mortgage rates are also a consequence of the Government’s interest rate policy, because the building societies cannot compete. All I want to say is that it is our non-Whites in particular, the masses with a very low income, who are affected by these things. The White voter has the right to vote; he has the right to register his protest by means of his vote. He also has the advantage of the fact that his representatives in this House, we who are sitting here, can act as his spokesmen and can tell the Government that we cannot go on like this. However, how can all those other millions of people who do not have the vote and who are not directly represented here make their opinion known when we are doing things which have a fundamental effect on their lives? This is a problem which is of very great importance to us.

Now I should like to discuss a more political aspect, and that is the concept of self-determination. There is no doubt about the fact that the concept of self-determination has dominated our politics over the past 40, 50 or more years, and is today an inherent problem in our politics. I do not doubt for a moment that the future course of politics in South Africa will be decided on the basis of that concept alone. Unfortunately I do not have enough time today to discuss the problem in full, but I hope to be able to return to it on a later occasion. However, it is essential that we clarify this concept. What do we mean by the concept of “self-determination”? It would appear to me that when we talk about self-determination, we have two basic elements in mind. The one is related to politics; i.e. when we talk about self-determination, when people talk about political self-determination, they mean by that the right of a nation to exercise exclusive control over its political destiny. The freedom of a nation is an extension of its nationalism and so forth. This is what is normally meant or can be meant by political self-determination. However, it is also taken to mean the preservation of a nation’s distinctive identity. That identity can be a cultural identity, a religious identity, a biological identity …

I agree.

It can also mean the preservation of a nation’s distinctive system of values. I think it is essential that we decide whether political self-determination is essential to the preservation of any of these identities. This is an important question, because our people’s thinking is confused. They say that the Whites—the Afrikaners, if you like—must retain their right to political self-determination, because if they do not, their identity will be endangered.

That is correct.

The hon. member for Virginia, the hon. member for Rissik, the hon. the Minister of State Administration and others have repeatedly used this argument. This is a question which still has to be decided; i.e. to what extent the right to self-determination—whatever that may mean at this stage—is essential to the preservation of a nation’s identity. If, for example, we consider religious and biological …

And take Zimbabwe as an example.

Yes, any time. When we ask whether political self-determination is necessary for the preservation of a nation’s identity, then our own experience shows us that this is not so. In South Africa we have an Indian population, for example —consisting of Hindus and Muslims—which has no right to political self-determination, but which has been able to preserve its own cultural identity, its own religious identity and its own biological identity.

Because this Government guarantees it.

The Government does not guarantee it. [Interjections.] No, those members must show me where a guarantee exists. I just want to say that it has not been proved that the possession of the right to political self-determination is a precondition for the preservation of a nation’s distinctive identity, as I have formulated it. However, this does not mean that the right to political self-determination is not in itself an aim and objective that can legitimately be pursued.

That’s better.

Very well. Then we can proceed. As regards the concept of the right to political self-determination, the NP’s policy has had two main legs up to now. The one was simply that the right to political self-determination was essential for a nation to remain in control of its own future and, moreover, that the right to political self-determination was an exclusive right. The second leg has been that this is the only way of preventing power sharing. Therefore the policy of the NP has been the preservation of the right to political self-determination and the rejection of any form of power sharing. I think that is very clear. Hon. members opposite know it, I know it and I could quote one source after another to confirm it. With regard to the Blacks, NP policy stipulated, on the basis of those two considerations, that if we do want to apply the right to self-determination in South Africa, for us and for the Blacks, then we must separate them geographically. That is the concept of separate freedoms. This was accordingly done. Therefore we have the concept that geographic separation is the only way of doing justice to the concept of the right to self-determination of the Black nations. I shall not go into the question of whether that policy is viable in terms of the large number of Blacks living permanently outside those areas, because it is not going to work. The point I want to make is that we have now accepted and recognized the fact that in respect of the Coloured people and the Indians, geographic separation is not possible. We are now faced with a very interesting situation—and I hope that I shall be able to make some quotations in this connection on a later occasion—where one speaker after another in the benches opposite, including the hon. the Prime Minister, the hon. the Minister of Internal Affairs, the hon. member for Bloemfontein North and, to some extent, the hon. the Minister of State Administration, have conceded that as far as Whites, Coloured people and Indians are concerned, there cannot be full self-determination in this situation. I want to put this question to hon. members opposite: If, on the one hand, we say that those people must be drawn into the same political dispensation as ourselves, if those people must realize their aspirations in the same political dispensation, how can we still maintain the supreme concept of the White people’s right to political self-determination? I should very much like to come back to this point on a later occasion.

Mr. Speaker, I listened with great interest to the speech the hon. member Prof. Olivier has just made. I found it very interesting that the hon. member spoke about price increases for the non-Whites and then ignored the real increase in the incomes of those same people. What I find surprising, however, is that this session has been under way for almost a month and the Opposition has strangely kept quiet about a document they themselves drew up. I have the document here in front of me. It is entitled “Report of the Economic Commission of the Progressive Federal Party”. I should like to quote the following passage from it—

So I cannot understand how they can, at the same time, complain about both high interest rates and high taxes. Should the State then keep on creating credit, thus stimulating inflation even further? This document is very interesting in the first place because here we have a clear approach to democratic socialism. In this document it is stated that the political policy of the PFP must determine their economic policy. They went on to say that they chose the best economic policy to suit their political policy. It is interesting that they said they accepted a free market mechanism, but—I find this so delightful— under the control of the social conscience. Isn’t that wonderful?

It is better than your communistic policy.

In the document they state that there is a market mechanism, but that there are a great number of restrictions. So one finds that they want to strive for total employment, minimum wages, subsidizing of the unemployed and a whole lot of other things which clash here and there. They say they do not want to use any “-isms” at all; neither capitalism nor socialism. This reminds me of a young clergyman who visited old Reverend Van Huyssteen. He said to him: “Reverend, the people in my congregation are against me. They say I am a ‘Sap.’ Reverend, you know I am not interested in politics.” Then old Reverend Van Huyssteen said: “But my dear boy, then you are a ‘Sap.’” [Interjections.] They do not want to speak of “-isms”; now I tell them they do not want to get away from socialism. That is of course why the Financial Mail, the favourite publication of the hon. member for Yeoville, says that in the document they first incline to one side in favour of capitalism and then to the other side in favour of socialism, because they want to satisfy both wings of the party. And then they talk about our having different wings in our party! The document clearly shows the differences that exist in their party.

You all play fullback.

Any you are not even on the team.

I should like to point out that the democratic socialism proposed by the PFP, will in fact destroy the goal of individual freedom which they also talk about. I should like to quote what the well-known economist, Prof. Friedman, said when he spoke of democratic socialism—

One must analyse the political policy of the PFP to understand their economic policy. I came to this House only recently, but I am aware of the fact that they have already spoken of a national convention, the removal of all statutory discrimination, common citizenship, an independent judiciary and so on, and then they speak of “one man, one vote”. They go on to say—

Then they reach a pinnacle. They say they stand for a democracy. I quote—

The report goes on to state—

With its economic policy the PFP will not be able to implement the degree of individual freedom it stands for. Every restriction dictated by their social conscience will lead to greater interference in individual freedoms.

I also want to point out another weak spot of the PFP. The PFP says its economic policy is part of its political system. Friedman says an economy must to a certain extent control the political system. However, the PFP wants to decide political and economic policy and the economy must not restrict political power. Friedman refers to circumstances in a developed country. He alleges that if one were to apply a socialistic democracy, one would lose individual freedom. What is the situation in South Africa, a country with a dualistic economy? In our country there are great differences between the various communities. According to the PFP the Government is responsible for this.

You know that this is the most socialistic Government one can find.

The PFP is striving towards a free market mechanism, but speaks of a free market mechanism with a social conscience. The PFP has forgotten that certain economic prerequisites apply to any democracy. The Opposition does not mention this. The PFP has lost sight of the fact that one cannot adhere to a political system which exists separately from the economic structure.

The father of the hon. the Minister of Transport Affairs was a Marxist.

Mr. Speaker, on a point of order: May the hon. member for Yeoville say I am a Marxist?

The hon. the Minister himself said he was a Marxist; I was simply agreeing with that.

Mr. Speaker, the hon. member for Yeoville said my father was Karl Marx. I told the hon. member he was a capitalist.

Mr. Speaker, I withdraw my words. The father of the hon. the Minister was not Karl Marx.

That’s enough, Harry. You have already had your turn to speak.

Mr. Speaker, is it permissible for the hon. the Minister to refer to the hon. member for Yeoville as a capitalist?

Order! The hon. member Dr. Marais must proceed with his speech.

Mr. Speaker, the Opposition is jumping around because they have a political policy which does not rest on an economic structure which is a reality in the country. We have an economic structure in this country in which a large percentage of the Blacks are still in the lower-income groups. The PFP must admit that many of our Black people still form part of the semiskilled and unskilled labour force. The Opposition must admit that we are still faced with an economic welfare problem. The Leader of the Opposition admitted this in the no-confidence debate when he quoted Prof. Simpson as follows—

The fact that a large agglomeration of people form part of the lower levels of the economy is not, as the Leader of the Opposition suggests, owing to the fact that the Government does not want to adopt a free market mechanism. Why does a similar situation not exist in the USA? Why does a large percentage of the Blacks in the USA as well still find itself on the lower levels of the economy? After all, the USA is not applying a policy similar to that of the NP. The most important aspect of the hon. the Leader of the Opposition’s speech was that he admitted that the Black man was not yet a part of the economic community. Naturally it is being said—as I already mentioned—that this is the Government’s problem, but I want to put a question to the Opposition. They admit that we have problems, but will the Black man be satisfied with their political system with its great differences? This brings me now to the hon. member Prof. Olivier. According to him, they do not believe in the whole idea of the political self-determination of the Whites. It does not apply as far as they are concerned. He set out all their ideas for us, but they have ignored the wage gap and various economic differences. Naturally their friends, the English-language newspapers and they say that it is the fault of the Government. However, there is such a thing as an envy-arousing or demonstrative effect, and in the vast majority of countries this exists between the rulers and those who are ruled.

If we are to adopt a democratic system such as that proposed by the Progs, this economic structure will destroy the political system shortly after it is implemented. It is easy to draft a new constitution at a national convention, but my question to the Opposition is: How durable will their contribution be, seen in the light of these structural economic problems and a Black majority vote? Of course they have many solutions for that! I just want to warn them that their solutions are going to take a great deal of time and I think they will be too slow for them in the light of the political ideas they have.

Let us consider the practical political aspects. I do not necessarily want to bring Zimbabwe, where there is also such a gap, into this discussion. One can also take Malaya as an example. That country had exactly the same kind of problems with the Chinese and the Malayans. My conclusion is therefore that their policy will destroy the democracy in this country.

That is what Harry wants.

This will be the result of their social democratic approach and the fact that they ignore the realities in this country. I cannot do otherwise than refer yet again to the hon. member for Yeoville’s favourite newspaper, the Financial Mail. On 27 November it stated—

[Interjections.] If they cannot even draw up a proper economic document, how can we expect them to launch an organized attack here during the discussion of this Part Appropriation Bill?

Mr. Speaker, I think that the hon. member Prof. Olivier got the lecture in economy he was asking for. I think that he will have enough answers to think about for a long time.

The hon. member for Edenvale has drawn the attention of the House to the fact that 1982 is the Year of the Aged. However, before I refer to the speech of the hon. member for Edenvale in more detail, I should like to agree with his ideas with regard to the fact that there is a tremendous amount of human material which is lost after retirement. He referred to the fact that there are some of our older citizens who are still prepared to work, but one encounters a sort of resistance to employing these people in the labour market. I believe that industry and the community as a whole could very fruitfully draw on the experience of these older citizens and employ them successfully.

I further refer to the speech of the hon. member for Edenvale. Year after year he makes a substantial contribution on the subject of pensions. This year, in his overenthusiasm to capitalize on the matter for the purposes of the municipal election, he did not go to much trouble to modernize and adapt his speech of last year in the Standing Committee on the Vote “Health, Welfare and Pensions”—(Hansard, 28 August 1981, col. 142 et seq.). He repeated that speech almost word for word. Although that speech contains many truths, I recommend that before he speaks on the subject again, he polishes up his speech a little.

The hon. member for Edenvale is aware that the one adjustment of civil pensions in the 1981-’82 financial year alone cost the State R25 million. The hon. member is not a supporter of a State-controlled pension scheme, in contrast to the hon. member for Hillbrow, who is indeed a supporter of such a pension scheme. I think that the official Opposition should clarify for themselves their policy with regard to pension matters. The hon. member is aware that any adjustment or concession by the Treasury, costs money. The hon. member gave no indication as to where the additional money was to come from. It is very easy, if one is not in control, to score cheap political points, make resounding recommendations and not to get any further than that.

The hon. member for Edenvale is surely aware that since 1948 this Government has made enormous adjustments in the interests of pensioners. However, the Government is obliged to ascertain from time to time how much money it has available in order to render services. However, care must also be taken that eventually everything does not come from the State. The Government carries the responsibility and cannot simply make adjustments and promises without accountability. We must guard against the over-socializing of our services. In that regard, I want to suggest respectfully that the Government has always scrupulously guarded against this.

The hon. members of the official Opposition do not, however, have the monopoly on championing the cause of the aged. This is a matter which is not usually politicized, as we all have compassion for the aged as well as those who are less privileged in other respects.

The hon. Minister indicated on 24 August 1981—I refer to Hansard, col. 1647—that the total amount spent on welfare and other pensions for the year 1976-77 amounted to R323 million, while for the financial year 1980-’81 it amounted to R731 million. There was thus an improvement of 126% over a period of five years. This is indeed an outstanding achievement which the hon. the Minister has indicated in this regard.

Previous speakers have also referred to the bonuses which the Government grants the aged from time to time and pays out when funds are available. However, one cannot deny that our aged are to an increasing extent struggling to keep their heads above water. Many of them have made adequate provision, judging by reasonable standards, for their old age, but their savings, income or investments have largely been swallowed up by inflation which has continued for a number of years and which will continue for the foreseeable future. Many speakers have pointed this out in the past, but once again it is respectfully suggested that this matter be placed high on the list of priorities. During the 1981 session, the then member for False Bay even suggested that a Select Committee be appointed to investigate the matter. However, it is imperative that the means test be revised, and in that respect I agree with the hon. member for Edenvale. According to the determination in 1972, the asset value according to which determinations are carried out was R34 400. It has since been increased to R34 800. Taking into account the inflation rate since 1972, I believe it can be shown that such an adjustment can be justified. The Government has made the concession that the value of any property or dwelling of a pensioner may be fixed at R10 200. In Die Vaderland of 14 July 1981, an article appeared in which the example was given of a property which was sold for R7 000 in 1969 and for R135 000 in 1981. This is cause for concern. In my constituency, I had the experience that people qualify for a pension, but as the inflation rate rises, they have to withdraw some of their investments in order to supplement their pension. Eventually, they are compelled to sell their fixed property in order to make further investments. In this specific case, the pensioner involved bought a smaller property with the money which he received for his property, but the net amount he received from the transaction was such that he no longer qualified for a pension.

If one listens to the words of wisdom of the hon. members on the Opposition side, one often wonders where they get them from and to what extent they are at all justified. This morning I read Job 16: verse 4. It reads as follows—

I do not think that the souls of the hon. members on this side of the house and those of the hon. members on that side are at all close in that respect. I do not think that we speak in a comparable idiom, and therefore I feel that we on this side of the House can shake our heads at the lack of sensitivity in respect of those voters in the country which those hon. members represent.

The remarks of the hon. member for Sandton and the hon. member for Houghton during the discussion of the Steyn and the Rabie Reports, do not redound to the credit of this House. As far as the political image of the official Opposition is concerned, I have no doubt that the conduct of the hon. members on that side has damaged this image still further, if this is in any way possible. There are certain members of the official Opposition who will have to consider their position seriously in the light of those remarks and that conduct. There is a proverb “Touch pitch and you will be defiled.” I would rather not apply this proverb to the official Opposition or to certain hon. members of that party, as you may declare me out of order, Sir. However, I think that one could say to certain members of that party: “Beware, a man is known by the company he keeps, both male and female.” Can the hon. member for Yeoville associate himself with the conduct of the hon. member for Houghton? I cannot believe for one moment that that hon. member, with his approach, can condone the conduct of the hon. member for Houghton in this House last week. I believe that certain hon. members of the official Opposition are nothing but political philanthropists. They moralize and over-simplify and fail totally to keep abreast of political realities. They do not realize who or what they are dealing with; or rather, this is what I and many of their voters would like to believe. I believe that their voters rate them as people with a reasonable amount of political sense and—if I may be so bold— political integrity. Their voters would therefore expect them to take a stand against the unbridled and improper conduct and language of the hon. member for Sandton and the hon. member for Houghton in this House last week. The two hon. members mentioned, and I say this with respect—are ill-disposed towards this House and its institutions and conventions. Moreover, certainly do not have the interests of their voters or South Africa itself at heart.

That the conduct of the hon. members of the Opposition—and especially the hon. member for Houghton and the hon. member for Sandton—is only a part of a specific ideological pattern, which obliges them to boycott or disregard the institutions of this House, or even, in certain circumstances, to threaten to withdraw completely from the proceedings of this House, is to me typical of the characteristic thinking and behaviour of the hon. official Opposition. In this regard, I can only refer to what the hon. the Leader of the Opposition himself had to say in this House on the first day of the no-confidence debate this year. Hon. members can go and read it for themselves. I refer to Hansard, col. 27 of 1 February 1982. If one also takes note of the language employed by the hon. the Leader of the Opposition in that same speech—(Hansard, col. 23, 1 February 1982) —in his discussion of the suppression of differences of opinion by means of coercive measures and of insensitive conduct, the question arises whether this is not perhaps a factor which contributes towards the instigation of civil disobedience.

Surely the hon. members of the official Opposition ought to realize that their national convention and everything pertaining to it, cannot possibly work. To idealize everything and everyone and to moralize about it, can be wonderful. I would, however, respectfully suggest that it is completely impractical. What is more, their own Press concedes this. In this respect, I refer to the leader in the Sunday Times of 21 February 1982, in which we read the following—

The writer concludes as follows—

If the hon. members of the Opposition will take note of what happens in practice after the implementation of a policy similar to their own, and also take note of what happens when a constitution of fine-sounding words is introduced, without being implemented in practice—if, indeed, it is capable of being implemented—then I want to point out, with all respect, that it cannot be acceptable or attainable to a single voter in this country.

Any future constitutional dispensation in South Africa which is placed in the hands of people who have no respect for democracy and its institutions and customs, is doomed to failure and offers no future or guarantee for minority groups in South Africa. We realize that it will be a difficult task to work out such a constitutional dispensation. We also realize that there are many people within and outside South Africa who would muster all their forces to wreck such a dispensation even before it has fully taken shape.

If we do not succeed, the future of not a single person in this country is guaranteed. However, I believe that there is enough faith and drive in the NP as well as enough believing, sensitive and sympathetic people in South Africa to work with success at the constitutional future of this country.

Mr. Speaker, it is a very great privilege to speak after the hon. member for Roodepoort. He made a very good speech on a sensitive subject. It is the second time in two days that I am following in the hon. member’s footsteps. The first was on Saturday on the cricket field when members of Parliament played and we were both clean bowled with consecutive balls.

That is right, it is happening again today.

As a backbencher I found it very interesting to listen to this debate today. I once again realised how pleasant it is to sit on the Opposition benches and criticize without offering any solutions to the problems, and even without having to accept any responsibility. [Interjections.]

I want to try and sum up very quickly, the problems which the hon. members of the Opposition raised, and which were raised again today by the hon. member for Yeoville. They were: The alleged mismanagement of the economy; the Government allegedly not taking any steps to combat inflation; the contention that South Africa’s internal economy should be less dependent on external influences; that we did not utilize our gold bonanza correctly when it was there; and that we are dependent on gold.

Hear, Hear!

The hon. members can say, “Hear, hear!” if they like. I should very much like to give them the answers. They also said that there were objections to the 10% surcharge and the 5% general sales tax, as well as the effect of inflation on pensions. That is what the hon. member for Yeoville said. I think I have summed it up correctly. That is the good news from the Opposition side, but the bad news from our side is that those hon. members did not give a single answer as to what we must do to alleviate the situation. I want to try to provide a few answers to these matters. Tomorrow afternoon I shall try to make a few suggestions as to what the South African economy could do in the years to come to make use of the golden era which has to dawn for the South African economy.

One of the arguments which the hon. member for Yeoville used in his reaction to the Part Appropriation, was that South Africa should be less dependent on external factors. There is no doubt that as countries develop, grow economically and become interdependent on one another, and as communications improve across the world, circumstances have brought about that South Africa, as far as the financial position within the country is concerned, can no longer stand on its own in isolation from the rest of the world. With the best will in the world, it cannot do so. There are many examples which show how specific circumstances in a country—even in a country which is situated a great distance from us and with which we have no contact whatever—can have an important influence on South Africa.

In the minute or so that I still have left, I want to mention a practical example. A few years ago in Russia—a country on the other side of the globe, and with which we have no economic or diplomatic ties whatsoever— had a bad grain harvest—and it seems as if this is going to happen again—and had no option but to import wheat. The result of this was a tremendous increase in the price of this commodity. However, they had to pay for it. The only means they had of paying for it, was to sell an asset, viz. gold. The immediate effect was an over-supply of this sensitive product, which caused its price to drop. A result of something which happened 16 000 kilometres away from us had an important effect on our economy. It is a country with which we do not have any contact whatsoever. To say under those circumstances that we should try to have less contact with the rest of the world in the economic field, so that there can be fewer external influences on us, is completely unrealistic.

In accordance with Standing Order No. 22, the House adjourned at 18h30.