Mr. Speaker, I move—

It is said that politics and the economy are very similar. One person in ten thousand understands the economy and every day one meets that person. Today I should like to discuss four basic points in connection with this motion, namely the role of the State, the reduction in the size of the Government sector, the great challenge of involving the Black people in the capitalistic system and the training drive which in my humble opinion is needed to promote the free enterprise system in South Africa.

Since I intend to start with the role of the State, I first wish to thank the hon. the Minister of Industries, Commerce and Tourism and his department most sincerely for the opportunity to learn something which we as a group were recently afforded in Pretoria, and for the very useful documents we received from them. I think I can say on behalf of all the hon. members in this House that the work done by that department is not only aimed at promoting the free enterprise system in South Africa, but that in reality we have, over the past few years, reaped the benefits of the work done by its department and that we want to wish the department and its staff everything of the best for the future. I think the Opposition would agree that it would not be inappropriate for us to pay tribute to the Government for what has been done when we discuss the free enterprise system. It is true that there is still a great deal to be done. However, I think that if we look in all fairness and honesty at the economy and at the factors that play a role in it, at the Government’s attitude to these factors and the steps they have taken, we can say that South Africa now has a Cabinet that will do everything in its power to ensure that the free enterprise system succeeds in South Africa for the good of all its inhabitants. We need only think of the tax measures introduced by the hon. the Minister of Finance, to enable the State to channel an increasing amount of money to the private sector during the past few years, to see that as far as capital is concerned the attitude of the State is that the private sector must succeed. If we consider the measures taken in the field of labour, we see that with all the relaxation of restraints allowed in regard to the utilization of labour, we have now in fact reached the stage in South Africa where there are very few, if any, restrictions left on the free utilization of labour in South Africa.

I think it is against the background of these factors that South Africa, in a world struggling in the grip of an economic recession, can boast with its economic growth rate during the past few years of which many countries would be proud. It is true that a very difficult economic period now lies ahead for South Africa. However, if we in South Africa look at the African situation, we have to admit that under the policy of this Government, we have a great deal to be proud of. The Opposition frequently accuses us of hindering economic growth with our policy of separate development. When they say this they need only look at the African States around us and the economic conditions there, which exist in spite of the fact that they do not have a policy like the one in South Africa.

Another point I should like to make—and if this sounds racistic it is not meant to be— is that I think it is necessary that we in this House tell the Black people in South Africa and Africa that the stabilizing role played by the Whites in the economic development of this country and of Southern Africa, is of so much importance to them in general that in the face of the onslaught of what the enemy is telling them, they should think twice before they renounce the role of the Whites. This Government has taken the lead in a great many spheres which led to economic growth and development in South Africa. When we think of the Sasols, the Iscors, the tremendous work done by Escom in respect of infrastructure, and Foscor, we can say that this Government has played its part in the field of agriculture, in the industrial sector, the commercial sector, the services sector and every other economic sector. The large-scale research projects that were launched and the assistance that was given to various sectors of the economy wherever and whenever necessary, made a tremendous contribution to the prosperity we have experienced. The large measure of assistance given to the Small Businesses Development Corporation, which I do not wish to discuss—my colleagues will do so—is another point in favour of the Government. In addition this Government has showed itself to be a Government that would like to hold talks with businessmen. I think the Carlton Conference and the Good Hope Conference showed that there is goodwill on the part of the Government to work together with the private sector. When all is said and done, a country’s economic development is first and last a team effort by the Government and the private sector, and there can be no proper growth-rate if good team work between the Government sector and the private sector is lacking.

When we thank the Government we in this House should also thank the businessmen of South Africa. It was Benjamin Franklin who said: “The first big mistake every businessman makes, is to become a businessman.” Every member of this House who has been involved in the business world will agree that the business world is a world full of tensions, challenges and problems. Frequently I ask myself whether it is really worth the effort to be a businessman. I read a very interesting article in the German Tribune of 13 December 1981 in connection with businessmen in Germany. A disturbing statement was made in this article, and I think it is true of most Western economic systems—

Then this article went on to discuss a television broadcast outlining the career of a businessman from the day he decided to enter the business world, showing how he had to struggle to get round all the rules and regulations, how he had to struggle to pay the high salaries his employees demanded, how he had to struggle to remain competitive because of the social assistance he had to give to his employees, etc. The conclusion arrived at by this article—and I think it is important that we take these things into consideration in South Africa as well—is that it has become so complicated and difficult for people to be businessmen that many of them prefer to join the public sector or to work for large State corporations where the work is easier and they are not subject to the same stress.

I want to say a few words about the reduction in size of the Government sector in South Africa. When one ventures into this field one is in a dangerous and sensitive area. However I want to corroborate what Dr. Colin Cameron, the chairman of the Public Servants’ Association, said, according to the Citizen of 15 September 1981. He said—

He was referring to the central Public Service—

South Africa is a country with a mixed economy. On the one hand the free market system has to function to its maximum extent, and on the other hand the Government has to lend a hand itself here and there. Millions of people in South Africa are lagging behind in development, the vast geographic expanses of South Africa and the strategic threat to South Africa has also led to greater State involvement in our economy than is perhaps desirable. Of course the Afrikaner also had to come a long way in the economic sphere to eventually arrive at a Carlton Conference and a Good Hope Conference. After all, there was a time in our history when many Afrikaners believed, as many Black people do today, that political power means economic power. Fortunately most Afrikaners have now buried these Hoggenheimer ideas. South Africa’s communistic enemies are concentrating their attack in the economic sphere in particular and they turn to the masses with a question which they reduce to a simple form: What does the capitalistic system mean to you and what are your chances of owning something and of getting ahead? Our enemies find it easy to answer this question. They say: Overthrow the entire system. Capitalism must make way for socialism. For this reason the great question in South Africa is: Are we going to succeed in selling the free market system to the Black masses or are they going to rebel against it, as has happened in the rest of Africa? There is still a great deal we must do to ensure that the free market system wins. We shall have to look more closely at the role of the Government sector in the economy, and dramatically reduce that role. The sometimes exaggerated impression and image that the Government wants to control and regulate everything must be completely eliminated. In South Africa we shall have to take a penetrating look at laws, ordinances and decrees. Are these laws, ordinances and decrees, rules and laws that have a damping effect on initiative, or do they stimulate economic development?

During 1981 the following number of people were employed by the Government sector: Central Government, 335 922; provincial administrations, 250 567; local authorities, 226 600; various statutory bodies, 25 843; S.A. Transport Services, 271 488; the Post Office, 77 829; universities, 33 645 and the Black national States, 82 097. In addition, several thousand people are employed by public corporations, for example Iscor, Escom and Foscor. A tremendously high percentage of South Africa’s economically active population is therefore employed by the government sector. South Africa is a country that has to utilize all its economic resources to the maximum. Entrepreneurial talent, capital, manpower and raw materials, have to be utilized to the maximum. Annually 350 000 Blacks enter the labour market in South Africa, and we cannot afford to under-utilize a single economic resource. It is not possible for the government sector of any country in the world to utilize economic resources completely. Stimulating organizations and individuals in the government sector to achieve maximum production, is only one of many problems.

The second problem in the government sector revolves around the idea that money is plentiful. This can lead to waste and the unproductive utilization of capital goods, for example machinery and equipment. There is also the tendency in the government sector for an ever-increasing number of posts to be created. The vicious circle of establishment expansion and salary and pension increases can eventually be destructive. In a developing country such as South Africa we cannot afford this. Now is the right time to reduce the size of the government sector. The government sector is burdened by a great shortage of trained people and a great deal of the work done by the government sector in the past can no longer be dealt with efficiently. This means that here and there in our community we shall have to take a look at certain little empires, and it is in this spirit that I am making these remarks.

A large part of our government sector is living in a dream world as regards the role of the private sector. Recently I received a newsletter from the municipality of Pretoria in which the city council boasted that they were going to enlarge their printing section by installing further equipment to the value of more than R100 000. The fact of the matter is that this is work which ought not to be done by a municipality. It is pre-eminently work that ought to be done by a private printer. It is tendencies of this kind that deprive the small businessman of opportunities and which result in the taxpayers’ money being used incorrectly by the government sector. I want to advocate in earnest that we in the overall government sector, including State corporations and municipalities, should give fresh consideration to which work could be transferred to the private sector, which work the private sector should preferably carry out because the private sector is a large employer and also because competition can be stimulated in that way. If the municipalities, the central Government or Provincial Administrations themselves undertake more and more work that could be done by the private sector, we are not doing justice to the concept of “competition”. However, it is true that the Standing Advisory Committee on State Competition tries to ensure that State departments do not undertake new work that belongs in the domain of the private sector.

Today, however, I want to ask the hon. the Minister of Industries, Commerce and Tourism to launch a further investigation on the part of the Government into the work at present being undertaken in the overall government sector, with the specific terms of reference to ascertain what aspects of that work being done by the State departments, Provincial Administrations, municipalities and State corporations may be transferred to the private sector. I am utterly convinced that we can stimulate the private sector in South Africa tremendously by transferring a large part of the work at present being undertaken by the government sector to the private sector.

The next point I should like to discuss is the question of the selling of the free market system to the Blacks in South Africa. This is one of the biggest future problems we are going to have to contend with in South Africa. I have no doubt that if we as Whites, the Government and the private sector, cannot succeed in future in selling the free market system in South Africa to the Blacks and in making them full-fledged partners in the free market system, the free market system will disappear completely. It is of no avail that we Whites try to keep everything for ourselves, and perhaps lose everything in the end. It is in this spirit that I want to make this appeal. In the Sowetan of 6 January I read an article by the President of the Azanian People’s Organization, Mr. Kehla Mthembu. He began with these disturbing words—

He concludes his short article with these words—

And—

I believe that a large-scale onslaught is being made on the emotions of the Black people in South Africa with this kind of appeal. I say that the aim of this side of the House should be to make the Black people in the Black States and in White South Africa partners and participants in the system of free enterprise.

In my humble opinion we have, with the 99-year leasehold system, taken the first step towards eventual full ownership, because property is a basic element in one’s overall economic development. Ownership of property is the perception of every person to become a partner in a free market system.

Now you are talking!

Ownership of property is the basis from which one can be independent in the economic sphere because you can borrow money, because you have a basic stability …

Well done!

And I believe if we do not have a strong, stable urban middle class among our Black people in South Africa, we are doomed for all time in the economic sphere. Then our enemies will exploit the Black people and will use the emotions of the Black people against the White people who have to play an important part in this country. I believe this is unavoidable and I have frequently said in this House …

We have been trying for more than 30 years to bring this about.

… if we think we can get by unscathed by allowing the Black residential areas in our cities to remain poor appendages of rich White cities, we are living in a dream world. I have frequently said that if we think that the Black national States—the Opposition can help us here—must remain poor appendages of a rich South Africa, we are living in a dream world.

We are therefore facing a tremendous challenge, for just as the Afrikaner used to tell himself that political power meant economic power, so too do the Black people, as the late President Nkrumah put it: “Seek ye first the political kingdom and all these things will be given unto thee”. I believe that in future we can bring about tremendous stability in this country through the establishment of a strong Black middle-class. There have already been ideas about the opening of certain central business areas for trade by various population groups. I am a great supporter of there being more and more freedom for people to do business and run business enterprises.

However, it is not as simple as the Opposition may think, because we must be honest, we must acknowledge that a large number of Black businessmen will not be able to stand up to competition from White businessmen. For this reason we must follow a long and arduous process, but the message, the tangible message that must be conveyed to the Black people in South Africa is that the Government wants to make them partners in a free market system. One of the greatest onslaughts on us is in fact the onslaught on the free market system.

Finally I want to advocate that the hon. the Minister and the Government launch a very comprehensive education campaign on the economy. The fact of the matter is that money is power. If one ignores that simple truth in a country like South Africa, one loses so many opportunities of getting things done that have to be done. For example, if we can stabilize the Black communities in our cities, there will immediately be a reduction in their growth rate and in this way our ability to ensure that justice is done in the sphere of education, as a matter of fact in all spheres, is so much greater. If one has money one can establish a much stronger infrastructure in one’s country. Money is power. Let us launch a comprehensive education campaign to make every South African, White and Black, a generator instead of merely a consumer. If we carry on as we have been doing, and more and more people consume more instead of generating more, then, economically speaking I see hard times ahead for this country. The Minister of Transport Affairs frequently said we complained while we had a loaf of white bread under the arm. I share that opinion of the hon. the Minister. Until we have educated our people to realize what is involved in the economy and what productivity is, they will not be able to understand it. Ask any factory worker what productivity means and he will reply that he works from eight o’clock in the morning until seven o’clock at night, and that he works as hard as he can. But for the life of him he cannot see himself in the overall production picture. His production level is determined by the managers and the management cadre.

We can talk about productivity, the spending of money, the free market system, initiative and everything else, but I still feel that thousands of young people leave school every year without having the vaguest idea of how the free market system functions. I am therefore earnestly advocating that, over and above the scholastic training, we make an extra effort in our White and our Black schools to turn our young people into capitalists in the full sense of the word. Our young people must understand this system, so that everyone in this country can help to generate more than we consume.

Mr. Speaker, I was hoping that we would today have a debate over economic alternatives that are available to South Africa, a debate over which would be the most satisfactory alternatives. When the hon. member for Innesdal started, I was a little concerned as to whether we were going to have such a debate, but towards the end of his speech, I became more hopeful, not only because we were going to have that debate, but also for him as an individual. He made three very important points that I propose to enlarge upon.

The first point is the need to own property as being a basic requisite to having a stake in the system. I am more than happy to hear that coming from the Government benches, and I hope the hon. member for Innesdal will throw his weight in with people like the hon. member Mr. Van der Walt, who has, as a minority in his committee, himself said that freehold rights must be given to Blacks in the urban areas. I think there is now at least one other recruit that we welcome to that cause.

The second point that the hon. member has made relates to the question of reducing the work of the bureaucracy. Here we have a very important factor, one which we cannot really ignore. Of the 1 388 000 economically active Whites, 498 602 are involved in the public sector. If these figures are wrong, I must tell hon. members that these are the figures that were quoted in a debate here by the previous Minister of State Administration, whom they may or may not wish to repudiate at the moment. That high percentage of people who are involved in the public sector, as opposed to the percentage that are in the private sector, must cause concern to everyone who is interested in productivity in South Africa.

The third point as made by the hon. member relates to the selling of the system that he believes in, in South Africa. There we may find that we have a slight difference of opinion because I believe that it is going to be very difficult, if not impossible, to sell capitalism in Africa. I shall give my reasons for saying this. To begin with I quote what Mr. Dennis Athridge says. He is, I believe, not regarded as a socialist by any means. His words were—

If one should try to sell a system to the Black man, and one has to start with that disadvantage, it is obvious that one must operate from a point of complete disadvantage in one’s attempt to sell that system. He is not alone in saying that. If I may, I also want to quote an opinion from Zimbabwe because Africa as such has a view on capitalism. I should like to quote the words of Dr. Mugabe. He addressed the Zimbabwe Economic Society, and this is what he said—

The reality is there. This is what Dr. Mugabe’s approach is. That is also what the approach is of Blacks in Africa. One must accept that it is a reality that the term “capitalism” is not a marketable term in Africa at this stage. That is the reality.

Dr. Mugabe says that because he is a Marxist.

Well, whether Dr. Mugabe is a Marxist, as the hon. the Minister of Health and Welfare says, or not, is not the relevant issue. The relevant issue is that we have to persuade our people of a cause, and that when one starts off with that sort of disadvantage one has, I believe, a very real disadvantage.

You should learn something about African culture.

You must learn some African culture. When we talk about communism in Africa, when we learn to understand that, only then will we understand what it is all about. I should like to tell the hon. member for Rissik that he should begin to learn what Africans are actually thinking, instead of holding what he thinks Africans are thinking. That is part of the reason why he is sitting where he is sitting now. That is because he does not know what Black people in South Africa are thinking. He wants to think for Black people in South Africa. That is his problem. I do not pretend to think for the Black man. I make no pretence at that. What I do know, however, is that I have taken the trouble to study what they do indeed think.

The hon. member for Innesdal quoted the words of a representative of the Azanian Peoples’ Organization. One cannot pretend that they are not saying that. This is indeed the tragedy of South Africa. People are pretending that there are movements afoot in South Africa which, because they do not like to admit that they exist, they prefer to pretend that they do not exist. That is not the way to handle a problem. Trying to do that is a way towards failure.

Mr. Speaker, I wish to become involved in a debate on economic alternatives, and in order to do that I move, as an amendment to the motion of the hon. member for Innesdal—

Let us really define what the issues are about which we are talking. This motion deals only with the free market system. Let us deal with what the free market system is indeed. The free market system is not capitalism. The free market system is not free enterprise. The free market system is something quite different. I should like to quote the definition which appears in a recognized textbook, as follows—

We can define the details required for a free market, but it is not in itself free enterprise, because in a free market socialist organizations can also operate, as can State organizations. It is well known that a free market does not mean that only free-enterprise entities can operate in it. I see the hon. the Minister of Industries, Commerce and Tourism shaking his head at that, but I can quote economic text books and other examples that show that in a free market State-owned enterprises and socialist-orientated enterprises can operate. So it is no use disputing that economic fact.

The second point is that free enterprise, if I may again give a definition from a text book—

So one must clearly distinguish between free enterprise on the one hand and the free market on the other. If hon. members want a definition of capitalism for the purposes of the debate, I could give another one, and I quote:

That is really what is required. If we take those definitions, and start analysing what people in South Africa actually want, we find that in the Government ranks there is a most remarkable dichotomy. Let me, for example, quote the view of the hon. member for Randburg, Mr. Wynand Malan. I was somewhat startled to read what he had to say, but let me quote him—

These words are often heard these days, but let me quote him further—

That was said by a Nationalist spokesman, a prominent member of the economic group.

That is Marxism.

He goes on to say—

What economic philosophy is that? It is certainly a most remarkable state of affairs. Let me, however, go one step further. Let me refer to someone who was, I think, a prominent person, a person who was formerly the chairman of the South African Broadcasting Corporation, Mr. Piet Meyer.

Dr. Piet Meyer.

Sorry, yes, Dr. Piet Meyer. He says the following—

I hope the hon. member for Rissik is going to take part in this debate. I quote further—

I wonder whether the hon. member for Innesdal agrees with this, because he has been advocating it, and he is an Afrikaner? Dr. Meyer goes on to say—

When did he say that?

When did he say that? Only a matter of a year ago.

No, I just wanted to know.

Where do we actually stand now, in fact where does the NP stand? I know where the hon. member for Rissik stands, stood or may stand, but where does the hon. the Minister stand on this issue? I am asking because here we see free enterprise rejected out of hand as a liberal philosophy, a philosophy that is alien to Afrikanerdom.

Where do you stand, Harry?

He stands alone.

Let me quote a further piece from a publication I am sure all hon. members in this House get, though I doubt whether they all read it. I am referring the publication called Aambeeld from RAU. In the issue I have here there is a very interesting article dealing with the whole question of free enterprise, “Die Vrye-ondernemingswese”. Let me quote the following passage—

Where do we actually stand?

It is healthy Marxism.

If hon. members do not like those quotations, I have some others. I am not short of quotations. Let me read the following—

I quote further—

I wonder who wrote that. Let me go further. The writer, referring to the Group Areas Act, says—

Then he deals with some other things in connection with the Group Areas Act and says—

I wonder who wrote that.

Do not keep us in suspense too long. [Interjections.]

Let me go on—

Is that Dr. Wassenaar?

It is a wicked capitalist.

Surely the hon. the Minister of Finance cannot agree with this sort of thing?

You are keeping us in terrible suspense. Tell us who wrote that.

What does the hon. the Minister think of the fellow who wrote this?

Does he agree with it?

Let me go on. I can tell you, Sir, it is marvellous.

[Inaudible.]

Do you agree with it?

Sir, the suspense is killing somebody, and it is not me. I quote further—

Does the hon. the Minister agree with that? Do the hon. members on the Government side agree with it? [Interjections.]

Tell us more about economic democracy.

It goes on—

So I can go on quoting, and I wonder who wrote it. [Interjections.] The fact is that it was written by a gentleman who is now a member of the Cabinet of the NP of South Africa. He sits in this House and defends Government policy from time to time. Perhaps he may remember the words he wrote and tell us in the course of this debate whether he still believes in them or not.

It must have been some wicked Prog, some wicked capitalist.

It must be a strange man who wrote that.

The Minister of Finance?

I want to put it very clearly that, as I see it, what South Africa needs is an economic system which combines the maximum degree of equality of opportunity with the highest degree of efficiency. What has to be realized is that a completely free and uncontrolled market in reality leads to combines, monopolies, abuse and exploitation. The economic market, like any other human activity, should be governed by reasonable rules. Without enforceable rules there is a return to the law of the jungle. Do those who speak glibly of a free market want to have consumer protection abolished? If they do, why in this House did they support the Trade Practices Act, the Credit Agreements Act and the Limitation and Disclosure of Finance Charges Act? Do they want the repeal of the laws relating to monopolies? Do they want there to be no protection against fraudulent advertisements? Do they want all of this? The reality is that a market without rules favours the big battalions. The resources of big business in respect of advertising and the use of skilful selling techniques and the non-availability of options to the consumer are the realities of the market. So, too the man, that starts a new business, faces insurmountable obstacles in this kind of market where there are no rules. The argument that the big corporations and the corner grocer are governed by the same economic forces, have the same competitive advantages and that each has the same influence and opportunities, is of no substance, and needs only to be stated to be shown to be such. While the market needs to exist, it needs to be subject to rules. Freedom does not mean freedom to exploit, but means freedom to operate within reasonable rules which give fair and equal opportunity to all, as has been put by a well-known economist—

That is the reality.

What kind of free market do we actually want in South Africa? Do we want a market in which all men are free or only some men are free? Do we want a market in which all can compete or only some can compete? Do we want a market in which all can own property or only some can own property? Do we want a market where people can move where they like or only some can have freedom of movement? What are the objectives of the market that we are talking about? Riches for some, or a fair chance for all? Advantages for the haves or opportunities for the have-nots to uplift themselves? As far as we are concerned, we want a market that gives equality of opportunity, that gives protection to the weak, which prevents exploitation of the consumer and that allows competition to be fair and equitable. This does not mean that government plays no part or that it has in return to play a dominant role. Adam Smith referred to three roles that government had to play. The first was to protect the society against violence; the second to protect the individual member of society against other members of society and to have an exact administration of justice and, thirdly, the duty of erecting and maintaining public works and certain institutions which the individual cannot do and which in fact the State can do at a profit and benefit to all. These are the obligations of government and Milton Friedman added a fourth one, namely the duty to protect the members of the community who cannot be regarded as being able to look after themselves. To argue against any role of the State is theoretical nonsense and practical unreality. Defence, law and order, rules for conduct and behaviour, socio-economic provision for community services and care for those in need are essential State roles and must not be negated. The challenges that we face for the ’80s are whether we can in fact, firstly satisfy the aspirations of people in this country; secondly, whether we can remove discrimination and, thirdly, whether we can provide adequate services for all. The community as a whole has to ask itself if it is able to provide for these services and if it is willing to provide for these services. To remove a notice on a station is cheap, to let somebody sit next to you in the cinema is cheap, but to equalize education costs, costs money—real money. To provide housing also costs real money. The issue is whether South Africa is prepared to pay the price for its future and for its own security. I believe that South Africa has to pay that price, and the question is if a free market without State action can solve all these economic problems. I believe there is a place for the free market, but there is also a place for State assistance and State help.

When the hon. member for Yeoville began to speak, I thought for a moment that he was presenting his own programme of “Dis my geheim”. It reminds me of when the hon. member for Waterberg was addressing students in Pretoria and made certain allegations. When a student posed an open question, he said: “Come here to the back; then I shall tell you about it”. I hope that the facts given by the hon. member for Yeoville are more correct. I agree with the hon. member for Yeoville that selling the concept of capitalism in the African context to the Black man in South Africa, is a tremendous problem. If the hon. member wishes to discuss the Black man’s reservations with regard to capitalism, he should be very careful whom he listens to and whom he quotes. Surely one cannot quote Mugabe, who is a self declared Marxist, because then we should be arguing with one another from a completely wrong premise. The hon. member came forward with his “economic alternative”, as he puts it. This is merely “social democracy”, as he has tried to explain it before. He spoke, inter alia, of an economic democracy in which free people are afforded equal opportunities and in which there is an incentive work in a market system which functions within the bounds of a social conscience. Basically, one cannot find any fault with the wording of this. However, we must look at the background against which the PFP operates in South Africa. Their premise is completely different to that held on this side of the House. After all, they propose a unitary State. Then one can come forward with such theories.

No, healthy power-sharing.

They simply avoid certain realities, which I shall deal with during the course of my speech. Therefore I wish to state today that it is essential that we gain perspective about the concept “free market system” here in South Africa, especially after we have listened to the hon. member for Yeoville. Therefore I wish to compliment the hon. member for Innesdal on his motion and the positive speech with which he opened this debate.

The ideology surrounding the free market system is an economic theory, and this theory emphasises two principles, viz. private initiative and private ownership. It is a fact that capitalism, as a premise, does create the opportunity for the individual to show initiative by, inter alia, initiating his own enterprise—be it large or small—on condition that he finances it himself or arranges financing for it. Furthermore, that the individual is entitled to private ownership, to a choice of profession and to the right to compete within the supply and demand concept in South Africa. The alternative is very clear to all of us, viz. that of socialism and State intervention in almost every sphere. The fine example of this situation in reverse, is what has in face happened in Zimbabwe. There we had a fine capitalists system which has now been placed in reverse gear by a man who could not accept this principle.

Having said this, I suggest that we look at the background against which we in South Africa should apply this basic ideology, this economic theory. We know that we have to do this with a First World concept which has to take account of a Third World community. It is a fact that a large number of people in South Africa, as well as in Southern Africa, see this ideology as an alien concept. There I agree with the hon. member for Yeoville. It is a tremendous task to sell this concept to people to whom it is an alien concept. Furthermore, we know that our premise involves three basic facts which must be borne in mind, viz. that the economy of South Africa—and no one can dispute this— is a free economy. At the same time, South Africa cannot deny that its economy is partly modern, but for the rest still largely underdeveloped. Finally—and this will surely not be disputed—our economy is indissolubly linked to the Western World. The question now arises: How do we in South Africa overcome this backward position we are saddled with? I say that it is through sustained efforts to extend the free market system, as called for by this motion, which we are justified in saying that this side of the House is seeking to bring about through the policy of the hon. the Minister. What we in South Africa should try to do, is to give free choice a greater share and control a lesser share. I repeat this, as we must be clear on this: We must give free choice a greater share and control a lesser share. However, we must also bear in mind that freedom of competition on the one hand, and control on the other hand, is a matter of balance. One should not disturb the balance in such a situation to such an extent as to place the future of South Africa on a chaotic path.

What do the business leaders in South Africa say? They want self-determination for the private sector, but without the Government abandoning its function of regulation. The business leaders also say that the private sector should exercise this right to self-determination in a disciplined and responsible manner. The business sector further accepts the challenge which South Africa is faced with, viz. to reconcile self-interest, the interests of the businessman, and the interests of the country. The business leaders also wish to associate themselves with the national goals of South Africa. In such a spirit one can surely adopt a positive approach to the country’s problem.

What does the hon. the Prime Minister say? Let us place this on record, as there is so much that we are accused of. I recall that the hon. member for Port Elizabeth Central has in the past alleged that all South Africa’s economic problems are attributable to the apartheid policy of the Government. The hon. the Prime Minister, in discussing the formulation of an economic strategy in South Africa, said at the Carlton Conference—

This is what the hon. the Prime Minister of South Africa is saying. Hon. members on the other side of the House should accept the bona fides of the Government in this regard. After all, here we have a positive atmosphere.

Our biggest problem—I believe it is a priority on the road ahead—is to involve the masses of South Africa in the free market system, being as it is one of the fundamental principles of capitalism. There are very few, if any, of the developed South Africans who are not already, to a greater or lesser extent, capitalists in the true sense of the word. However, we must also make capitalists of the under-developed people in South Africa. If we can succeed in this then I believe we shall be more than halfway to success. I am referring here to the Black man in particular, but also to the individual, the small businessman and the entrepreneur who lacks sufficient capital. In the time that remains to me I should like to concentrate on this aspect.

The hon. member for Innesdal said that where possible, the services of the Government sector should not clash with those rendered by the private sector, especially the small business sector. I wish to endorse this idea. In a developing country such as South Africa, there is an unparallelled demand for services and goods. This is, after all, one of the basic causes of inflation in South Africa. The fact is that in my humble opinion, the small business sector is and remains the cradle of a country’s free enterprise system. The role which the small business concern plays or should play in South Africa, is of the utmost importance for the maintenance of the free market economy, for the initiative to develop new products, techniques and services, for the contribution to product variety, especially speciality goods, and for the development of the social life of a nation. Furthermore, the small business concern is the partner of the large business concern in South Africa and it is the instrument whereby entrepreneurs may enter the business world. In addition, it is a supplier of job opportunities to a significant proportion of the work force in South Africa. Last but not least, I believe that if one can involve the masses in this concept, the small business sector will become the bastion of a total onslaught against South Africa.

Resulting from the Carlton Conference, the first consultations, there was a proposal by Dr. Anton Rupert that we in South Africa should establish a Small Business Development Corporation. This Small Business Development Corporation has been established. There was a question in this regard on the Question Paper, and the hon. the Minister told us that the Small Business Development Corporation is a private company, that the State has a shareholding in it, and that the corporation is responsible to its shareholders. Here again we have a fine example of the Government not wishing to interfere, but instead creating an instrument and then leaving it to the private sector to support it. I believe that this is a fine effort on the part of the Government. This Government is therefore making a real effort with regard to the small businessman in South Africa as well.

The question we wish to ask is: What does the “small business concern” entail? Once again, there are three facets. Firstly, there is private ownership, secondly, independent management, and thirdly, private business. Therefore it is important that a healthy, efficient and balanced small business sector should develop in South Africa so that this sector may become one of the cornerstones of the free market system.

I think that it is necessary in a debate such as this for us to discuss once again the goals of the Small Business Development Corporation. Firstly, one of the goals of this Small Business Development Corporation is the promotion and the extension of the small business sector amongst all race groups in South Africa; secondly, the financing of and assistance to individual small business undertakings in South Africa; thirdly, the developing of an infrastructure for small business concerns where such a need exists; and finally, auxiliary services such as management and business guidance to small businessmen who make use of the Small Business Development Corporation’s programmes. The Small Business Development Corporation has therefore got off the ground, but not without problems, and here the public sector, the private sector, this House and the academics of South Africa should put their heads together to make a success of this whole concept. The public sector created the mechanism and the private sector contributed substantially to the dowry of R40 million for the Small Business Development Corporation. I also wish to say here today that there are academics, universities which are showing a special interest in this concept. Here one must pay tribute and express gratitude to, for instance, the Small Business Advisory Bureau at the University of Potchefstroom. These people try to make a positive contribution with regard to the promotion of the small businessman as far as advice and training for these people are concerned. Academics are playing a role in this regard, and accordingly I also wish to request that we look to the private sector, as I believe that they ought to be playing a far bigger role.

However, a few problems remain. There is one thing we must accept about the Small Business Development Corporation. They are expected to tackle low-rated projects and this entails serious financial complications. These relate to the granting of loans, financing, the after-care of these people, consultation and training, and finally, guarantees to the commercial banks. While the Small Business Advisory Bureau at the University of Potchefstroom is assisting, there are other people in South Africa who I think should be doing their share. The other problem of the Small Business Development Corporation, is that it has to initiate certain action programmes in areas on which the profits on projects are low-grade. For instance, these people are expected to assist in areas known as decentralization or deconcentration areas, such as Richards Bay and Atlantis. The Small Business Development Corporation has a further problem with regard to the erection of business centres in the underdeveloped areas, for instance in the group areas for Coloureds and Indians, in the Black urban areas and in the underdeveloped industrial areas in South Africa. I should like to illustrate a problem or bottleneck with regard to the Small Business Development Corporation by means of an example. These people tackled a project in Orlando West. They erected buildings there at a cost of approximately R1 million. The maximum rental they may charge, because we are dealing with the small man in the business world, is an amount of something like R1,40 per sq. metre. This R1,40 per sq. metre has to cover capital and interest, as well as all additional services, such as municipal services and so on. The direct cost amounts to 75 cents per sq. metre, which means that a balance of 65 cents remains. The return is something like 3,3%. That is by no means all, since these people do not obtain the land for nothing; they have to buy land from the Administration Boards. In that case, they have to purchase a piece of ground of 26 500 sq. metres. This would therefore cost them a further R400 000. The return is thereby reduced to something like 2%.

However, the Small Business Development Corporation does not merely adopt a mendicant attitude. If one talks to these people about their problems, one finds that they are positive. All they ask is that a sympathetic attitude be adopted by the public as well as the private sector. I understand that the Small Business Development Corporation has already dealt with approximately 1 000 applications, of which they have been able to approve 162 up to the end of February. The total amount they have lent, is in the region of just under R10 million.

What worries me, however, is the share of the commercial banks in the granting of loans. I understand that the commercial banks have only loaned approximately R2 million to the small business sector, using the formula of an 80% guarantee from the Small Business Development Corporation. The commercial banks have to obtain security for the remaining 20% from the individual. I believe that the commercial banks of South Africa should increase their risk, as their risk is absolutely minimal at the moment. They have to consider security for a mere 20% of the loans. And interest? They do not ask prime rates for these people; they ask prime plus. I think that the commercial banks, which make enormous profits in the business world of South Africa, should realize that it is time that they plough back their large profits to a certain extent, so that they too can make a contribution towards putting things right and being constructive as regards this specific problem of selling capitalism in South Africa. They should take greater risks and they should at least apply lower interest rates.

I wish to conclude by saying that the welfare of South Africa lies in the extension of capitalism, of which the free market system is a key. And this is the task of each one of us. Therefore it is a pleasure to support the motion which appears on the Order Paper in the name of the hon. member for Innesdal.

Mr. Speaker, there is very little in what the hon. member has said with which one can disagree when it comes to the promotion of small business enterprises. I find the attitude of the hon. member and that of his colleague the hon. member for Innesdal, who moved the motion, very admirable indeed. I do believe that we are seeing changing attitudes emerging from Government members, and I believe this is to be welcomed. I particularly welcome the call of the hon. member for Innesdal for an enquiry into the work being done by the various public sectors, and his appeal to the hon. the Minister that he should try to hand over as much as possible of this work to the private sector. I also welcome his statement that Blacks should be encouraged into the private or free market system because private ownership by Blacks is absolutely necessary in order to establish a strong, stable middle-class establishment in South Africa. These ideas and thoughts are very much welcomed by the hon. members in these benches.

I think what we see emerging in the NP is what Prof. Lombard, a professor in economics at the University of Pretoria, describes as a movement towards economic liberalism in South Africa. I think it is clear that the NP is changing its direction and its attitudes held in years past. Prof. Lombard’s papers have been published in book form. In one of these papers, entitled “Multi-nationalism in a liberal society—A case for South Africa”, he refers to the failure of the Verwoerdian design. It is very interesting reading this, because Prof. Lombard goes into the myth of Verwoerdian apartheid dogma and says—

What is happening in the NP today is that there is this movement towards reality in South Africa, and we in these benches welcome that whenever it emerges.

I do believe, however, that there is a bit of confusion in regard to terms. Here I agree with the hon. member for Yeoville when he gave a definition of what a free enterprise, a free market, is. I do believe that there is some need for clarification of this. For instance, the hon. member for Turffontein said that the free market system is based on two principles, i.e. firstly, private initiative and, secondly, private ownership. I do not agree with it entirely. The free market system is what the hon. member for Yeoville says it is: a market completely free of restraints, controls and regulations; a laissez-faire type of market.

He said the market should be completely free.

I doubt whether it can be completely free, as I intend to show. I should like to say, however, that we in the NRP have for many years expressed the view that we are a party that believes in the freedom of the individual to use his initiative, to better himself and to build up assets that he can pass on to his children, etc. We believe in a free market as much as possible.

The hon. members on the other side would assume that consequently we should be able to support the motion before the House. I think it is advisable that we should once again read the motion, because I believe very little has been said that is directly in terms of it. The motion reads—

I am afraid that we cannot support this motion for reasons which I will give later. In so far as we would like to see the free market system being promoted in South Africa, we do not believe that the Government has been dynamic and positive enough in promoting this system in recent years. In recent years there has been a movement in that direction, and I believe that was probably started by Dr. Wassenaar’s book that has been widely read and in which Dr. Wassenaar condemns certain interference in the economy by the State. We in these benches, however, do not believe that the Government has been aggressive and dynamic enough in its efforts to promote certain aspects of the process.

I should like to ask the hon. member for Innesdal whether he really believes that one can have an economy or market that is totally free. The hon. member for Yeoville has already referred to the fact that there is certain legislation on our Statute Book which I doubt whether the public in general would condone this Parliament to repeal. There is, for example, the Trade Practices Act and the Limitations and Disclosures of Finance Charges Act. Then there is also the Hire Purchase Act and the Sale of Land on Installments Act, as well as the Drugs Control Act. We must have dozens and dozens of Acts which have been placed on the Statute Book by this Parliament in order to protect the public. I believe we have to concede at the outset that it is inevitable that, human nature being what it is, there are certain controls that are necessary in order to protect the public. A number of hon. members have already referred to this.

Unfortunately once a government begins to control the economy one thing leads to another and ultimately the free market suffers to a greater or lesser extent. As Prof. W. H. Hutt of the University of Cape Town used to lecture his students, and I quote his words—

Mr. Speaker, this is the dilemma in which the legislature gets itself when it tries to serve the interests of both the free market concept and the social conscience, to which the hon. member for Yeoville referred. A very good example of this, I believe, is the Rents Control Act. That is an Act which was promulgated in order to protect the public under certain circumstances. As years have passed, however, this specific Act has completely distorted a whole section of our economy relating to accommodation for rental. The question at issue today, however, is whether the Government has been active enough in order to promote the free market system wherever possible.

As I have said, there have been some steps taken by the Government, though very small steps when one really considers the major areas in which the Government could indeed act. If we truly believe in a free enterprise system, why are Blacks, for example, denied freehold title to land in places like Soweto, Langa and Guguletu? This is a very basic, ordinary area of activity in which the Government could act. It acts very, very reluctantly, however.

That brings me to a further question. Why are the central business districts of our major towns and cities not open yet to entrepreneurs of all population groups? Here is an area in which the Government could act without affecting the types of control to which I referred earlier, those which are needed in order to satisfy our social conscience. I am of the opinion that no greater blow could be struck for the concept of a free market system, for the concept of the individual and individual enterprise, as well as for good race relations in South Africa, than by the repeal of all legislation relating to private ownership of homes in Black townships and the right of entrepreneurs of all population groups to conduct businesses in central business districts.

Do you want that to apply also to the suburbs?

Mr. Speaker, the hon. member for Rissik wants to know whether this should also apply to the suburbs. I believe the hon. member for Rissik must accept that it is inevitable that these changes I have referred to in regard to private ownership of land in Black townships and in regard to the right of entrepreneurs of all population groups to conduct their businesses in the central business districts will come about. It is inevitable.

Also in suburbs?

As far as suburbs are concerned, the position of the NRP is quite clear. We believe in local option as far as suburbs are concerned. Our opinion is that if a suburb wants to open its business district to people of all races, the suburb should be entitled to exercise that option. Yet, the Government, despite the fact that these developments are inevitable, vacillates, equivocates and allows the free market system to suffer.

I wil certainly concede that there have been certain amendments to our labour legislation, for example, which have opened the door to Blacks for a freer marketing of their own talents and labour. We welcome this. These are positive steps, but I must ask the hon. member for Innesdal how long it took the Government finally to see the inevitability and correctness of this and eventually to take the plunge. [Interjections.] We believe that because of the principles involved in such things as the labour legislation amendments and the other points I raised, and also because the cause is just, there should be no shyness, on the part of the Government, in shouting out this progress from the rooftops. Instead, however, this Government seems to be far too concerned about the reactions of the Arrie Pauluses of South Africa and is far too reluctant to come out boldly into the open and proclaim its unequivocal commitment to this cause. Talking about the free market, one must remember that there is the question of Government involvement and participation in business. I do believe that there is a case to be made out for State involvement in those areas where, because of the risk factor and other considerations such as greater infrastructural development for the country, the private sector is reluctant to invest, and under these circumstances there is a case to be made out for the State becoming involved. We have seen how this has happened in the case of the Transport Services, Sasol, Iscor in the past, Escom, Foscor and so on. Why is it, however, that Iscor, after nearly 50 years or more since its establishment, today has—as I am led to believe—a controlling interest in 200 or 300 other companies? Why has Iscor become such a giant in its field? Surely the time has come for, let us say, Iscor or the State to start channelling some of its shares to the public, as Sasol has done to a limited degree. I believe there is a great deal that can be done in that direction.

I agree with you.

That hon. member says he agrees with me. Well, I am pleased to hear it. Other areas in which I believe the Government should be seen to be actively promoting the free market is in those areas that are at present under the control of Administration Boards. I believe that the State can only be condemned for its insistence upon the fact that in certain areas certain businesses have to be under the control of the State of the Administration Boards. Imagine the bitterness in the heart of a Black entrepreneur who has not only had his brewery taken away from him, but also the right to distribute the products from his brewery. May I just say that I am aware of the fact that the hon. the Minister of Co-operation and Development has said that he would transfer a larger number of these businesses to Blacks as soon as possible, but I believe that the Government has been very slow indeed in moving in this direction. If we want to talk about promoting the free market, I believe that the Government must really get going in this direction and transfer as many as possible of the breweries, hotels, cinemas, bottle stores, etc., at present under its ownership and control, to Black entrepreneurs. There are plenty of competent men who have the money and who are prepared to take over many of these businesses. I therefore believe that the Government must get on with things and do the job. The Government is far too slow in moving in that direction.

You know what happens to the provinces then.

Then there is the area of price control. Over the years this Government has applied price control in so many areas in which I believe competition has suffered. This opens the door to inefficiency brought about by over-capitalization because, after all, within the price structure there is the so-called fair return on capital. Today a great many of these price-controlled industries are, in fact, over-capitalizing by putting millions of rand into capital development—much of it perhaps not entirely necessary—because they know that when it comes to negotiating a new controlled price, they will be given a fair return on capital.

Give us an example.

Give an example? Well, what about the brick industry, the cement industry and many others? We can discuss that when the hon. the Minister’s Vote comes up for discussion.

In conclusion let me say that there are many areas in which this Government could be doing far more than it is doing at the present time, and whilst we accept the spirit in which this motion was moved by the hon. member for Innesdal, and backed up by the hon. member for Turffontein, we believe that this Government has been too slow, in fact has not been dynamic and aggressive enough in pushing these ideas. For that reason we cannot support the motion.

Mr. Speaker, to begin with I should like to thank the hon. the member for Innesdal for proposing this motion. I listened with interest to him as well as to the hon. members for Amanzimtoti and Yeoville. It is very clear to me that there may be a difference in emphasis with regard to certain aspects of this matter, but that ultimately, everyone in this House and in the country is striving to balance a First World economy and a Third World economy to the benefit of the country as a whole and all its people. I have no doubt concerning the undertaking of the Government with regard to the expansion of the free market system. The reality is—I do not think that there can be any doubt about this—that we in South Africa will, for very good reasons, have to have a healthy mixed economic system in which there will have to be an essential interaction between the private and public initiative. This means—we must bear this in mind—that the ordinary market mechanism will have to be constantly monitored and, where necessary, will have to be steered in the right direction to ensure that the necessary order is maintained.

Many theories have been expressed in this House today concerning what the free market system and the free market mechanism in fact are. I too wish to make an effort to do so. I would say that the general objective is to strive for a higher and stable growth rate in the economy which is determined by various factors, for instance consumption, investment, saving, and increased productivity. The subject I wish to speak about, is most definitely an important factor as well, viz. self-sufficiency and the necessity for regular supply. There can be no doubt that the role of the State, is to create the macro-economic framework in which the opportunity to promote growth should be created by means of stimulation.

Ultimately, it all amounts to a healthy balance. I specifically wish to put forward a few ideas concerning agriculture and the agricultural industry, because after all South Africa, being a developing country, still has a very important agricultural sector in its total economy. I should like to speak today on the importance to our economic set-up of the system of orderly marketing; our control board system. It is often criticized as though it were in opposition to the free market system, but as far as I am concerned it is in reality an extremely important extension of our free market system. In my opinion, there can be no criticism of control in agriculture as such. There may be criticism concerning inefficient control, but in my opinion, there can be no criticism of the principle of control. It is true that from time to time, and more often nowadays than in the past, very strong attacks are being made on the controlled marketing system in terms of the Marketing Act. Often these attacks are the result of ignorance, but I fear that they are often organized attacks from sectors which feel that they would make better profits than at present, under a system other than the control board system. At a later stage I should like to attempt to prove this.

Firstly, it must be borne in mind that the principle of the free market mechanism can only perform its function if there is complete freedom of information in the market situation, i.e. if both the supplier and the consumer, or the producer or manufacturer on the one hand and the buyer on the other hand, have full knowledge of the supply and demand position. It is just here, i.e. in the obtaining of full information, that the specific problem lies in the case of agriculture. It is not only in our country that this is a problem—it is a worldwide problem. It is a simple fact that in all countries, even the most developed and industrialized countries, the number of farmers today is still far greater than, for instance, the number of industrialists or dealers or brokers who supply the demand for the product. It is often said that the marketing of agricultural products should take place strictly according to the principles of supply and demand under the absolute—I wish to stress this—under the absolute free market mechanism, and that the competing elements of the capitalist economic system would present the ideal solution to the problems which both the primary producer and the consumer are faced with. History has proved that throughout the world control measures, in one form or another, have to be implemented. Sometimes they are implemented with regard to specific countries or regions, or with regard to specific products. As far as the position in our country is concerned, traditionally there are three factors to be taken into account. Firstly, there is the principle of price stability which enables the producer to meet the demand at all times. Secondly there is the principle of profitability within each branch of the agricultural industry and, thirdly, there is the principle that free enterprise should be retained as far as possible. These three factors which I have mentioned are basic to the system of control boards and are just as applicable to the free market system. The reason for this—hon. members will concede this—is that there are many factors which play an extremely important role with regard to agricultural products. Here one calls to mind changing climatic conditions, the fact that production is necessarily seasonal, the lack of elasticity of supply and cultivation practices and the uncertainties this involves.

The need for control in agriculture has been given worldwide recognition, particularly since the depression years. As a result, there are control schemes in most countries. However, the nature of the control differs. Hon. members know that in America, for instance, which sets its sights on an absolute free market system, there is a system according to which producers are, in fact, forced to take a proportion of their lands out of production so as to prevent an oversupply from occurring.

†I want to say that the system of the control boards is not faultless. There is no doubt in my mind that many errors are being made, but at the same time I believe that if there had been a better system it would have been introduced long ago. In the evaluation of the controlled marketing system, it should be borne in mind that South Africa is far from ideally suited to agricultural production. In fact, our soils, compared to those of other countries, are poor in quality. The main objective of the Marketing Act—I want to compare that with the free market system—is firstly to secure a measure of stability in the prices of farm products and secondly to reduce the price differential between producer and consumer and to give the consumer a product of good quality at a fair price. What better proof than this do you need for a free market system. The most important factors that are taken into account in determining producers’ prices are briefly as follows: The relationship between supply and demand, the cost of production, the general level of agricultural prices, the relationship between domestic prices and world prices and the general economic policy of the Government.

Unfortunately, there are certain fallacies in connection with the control system which I think should be put right. Firstly, it is often said that the taxpayers provide the funds for the control boards. This is completely wrong, because the control boards are financed by levies paid by the producers. Secondly, it is sometimes said the control boards are not established in a democratic way, which is also completely untrue. They are never established unless they are specifically required by the producers. Thirdly, it is often said that subsidies, for instance, on bread which amounted to almost R200 million this year, are paid to producers. This is also not true, because these subsidies are paid to consumers in order to make the product cheaper. The fourth fallacy is the thought that there will always be an ample supply of agricultural products. The time is long passed when a producer of any article will produce at below production cost for any length of time. The last fallacy is that it is said that too many people work for the control boards. That was also inferred by the hon. member for Yeoville in a broader sense. Throughout the whole country only 2 500 people work for 22 control boards. They handle R3 000 million worth of marketing, and the administration costs of that is only 0,7%, compared with 5%, which is the average of any industrial organization. I venture to say that if it were not for the stability brought about for producers by control boards many more farmers would have left the land and prices would have soared even further.

*Here I briefly wish to refer to one of the industries which is controlled by a control board and in which I am intimately involved, viz. the wheat industry. To come back to the free market system, I cannot think of a better testimonial for orderly marketing as an extension of the free market system, than the establishment of control over the wheat industry in the late thirties. Up until that stage, when an absolute—and again I underline the word “absolute”—free market system applied, the production of thousands of wheat farmers was dependent upon the demand of a small group of grain brokers who simply played cat and mouse with the farmers. There was no control over processing, and there was no control over production and marketing. In contrast to this, control has achieved precisely what the free market system strives for, viz. a fair and competitive price, higher productivity and a balance between supply and demand. It is not only the producer who has benefited by control; it most definitely has advantages for the consumer as well. The price of a loaf of brown bread in South Africa is 30c, and I have brought with me today a very nice loaf of bread, a loaf of healthy brown bread. The subsidy on it amounts to approximately 12c. So, in reality, this product costs 42c.

Keep it; it is almost time for lunch.

We only pay 42c for this product, i.e. about one quarter of the price of a similar product in the highly industrialized countries. I am not even speaking of African countries. However, the important point is that the wheat value of this bread, unsubsidized, amounts to 40% of the 42c. The wheat farmer only gets 40% of 42c for the wheat is in this loaf of bread. In America the farmer gets a mere 8% of the price there. What better proofs is there than control in South Africa is, in reality, an extension of the free market system, in the sense that the end product is sold to the client at the most reasonable and competitive price?

To produce wheat in South Africa today, to store it, to grind it, to bake it and market it in the form of a loaf which, as far as quality is concerned, does not take second place to bread in any other country, and at a price which is one quarter of a comparable product in Europe, for instance, is, as far as I am concerned, the best testimonial and proof that the system of control is indeed a very important component of the free market system. There are 20 other control boards too, but I am not going to discuss them now. Some of them follow a one channel system, others a pool system, surplus disposal, sales promotion and so forth. The only criticism that could be levelled at control, would be in respect of its implementation, inefficient implementation, but certainly not in respect of control per se.

I wish to conclude by saying that the free market system may be found in different forms, that orderly marketing in the form of the control board system is an important component of this system, that it is in the general interest of everyone and that, as far as I am concerned, criticism is therefore completely unjustified.

Mr. Speaker, the hon. member for Paarl delivered a speech in which he predominantly tried to justify the control board system as being part of the free market system. To start off with, this is a total contradiction in terms. While I can see that the hon. member has made out a reasonable case for control boards—in theory reasonable cases can be made out—in practice the reality is that tremendous problems have been created. This is why the control board system has come under so much attack. I want to draw the hon. member’s attention to the fact that for the last year for which figures are available, meat and dairy products amounting to some R17 million had to be imported. This was a tremendous drain on our financial resources and was occasioned to a very large extent through the machinations of the control boards, particularly relating to the dairy industry. At one stage we had a butter mountain and a cheese mountain which we could not sell because there was an over-production. Then certain actions were taken and we have now reached the situation in the dairy industry where we are importing butter. We are now even importing milk powder to subsidize our own meagre resources in this regard.

If one wants to look at control boards I only have to ask the hon. the Minister of Finance—who is present in the House today— what the situation is regarding for instance the over-production of maize and the financial problems which it has caused. The hon. the Minister himself referred to these problems in, I think, the debate on the Part Appropriation Bill. This has resulted from a price being set by the control board for the production of maize which resulted in maize being totally over-produced in South Africa, creating tremendous problems as a result.

Is the price of maize too high?

The hon. member for Amanzimtoti made a plea for central business districts to be open to all race groups. The hon. member said, in reply to a question regarding suburban areas, that that would depend on the policy of local option. As far as central business districts are concerned the hon. member wants the free market system to operate, but as far as the suburban areas are concerned the policy of the hon. member’s party is that the free market system should not operate unless it has local option. I want to draw the attention of the House to the fact that that local option means that two-thirds of the people in the area have to vote in favour of it—not just a simple majority—and even then it can still be vetoed by the local authority. I cannot be made to accept that that is in any way local option. It simply is not.

I think the outstanding feature of this debate has been the speech of the hon. member for Innesdal, because to quite a large extent that speech could also have been made from these benches.

Watch it!

He has made many of the points which I intended making and which I am going to make later on, and I think the hon. member put those points forward extremely well. I think we can call today’s debate a “verligte” debate. Hon. members from the other side of the House have made speeches with which we on this side of the House can agree. I am very delighted to see that the hon. member for Innesdal talked about the correlation between economic freedom and political freedom and said that the two could not be divorced. One of the problems in our country today is that the only expression of freedom of the Black man really lies in the economic field in terms of trade unions.

Especially in Zimbabwe.

This is of course creating a great problem, because the Black population is utilizing their only means of debate for political reasons, which creates great problems for the businessmen themselves.

When we consider the motion before this House I believe we also have to look at what the alternatives are. Without doubt the two major economic systems in the world are the free market system with lesser or greater degrees of socialism mixed in, and the communistic system which is, of course, based totally on economics. Assuming that we have a free choice, we in South Africa have basically to chose between these two systems—the free market system or the communistic system. We have supposedly in this country a free market system and if this system is perceived by the population to bring them the rewards they require, they will continue to support that system. If it fails them and their needs they will reject it and, as soon as the opportunity presents itself, they will adopt the communistic system. I believe that this is a very real danger that exists in this country today and the hon. member for Innesdal pointed this out. I believe that it is imperative that if we are to have a healthy and on-going free market economy in South Africa, in order for that economy to survive it must be shown to bring rewards to a majority of the people. One of the frightening aspects of the current situation is that the vast majority of the population is not adequately rewarded. The hon. member for Innesdal has obviously seen this very clearly.

This Government constantly tells hon. members on these benches that we are obsessed with race. However, we have to bring this subject into almost every debate because of the attitude of this Government which leaves us no choice. Almost every aspect of South African life is affected by one or other of the Government’s racial laws and, until we rid ourselves of these monstrously evil laws, we will have no option but to bring that subject into debate. The free market is no exception to this rule and I believe that we have to bring this subject in to the debate here this afternoon.

Before going any further, let me inform this House about what Karl Marx said about communism and how it would be achieved. Among other principles that would bring about a redistribution of wealth, which he was after, was, firstly, a heavy, progressive or graduated income tax system. This we have. Secondly, he believed that the centralization of communication and transport in the State’s hands was necessary. Need we look further than the S.A. Transport Services, the SABC and SATV and the Post Office? Thirdly, he said that the extension of the means of production further into the hands of the State was necessary, and here we need only look at Escom, Iscor, Sasol and the Uranium Corporation, which are only a few examples. Therefore, my first point is that to further the free market system in South Africa we must reduce the State’s participation in private enterprise.

The second major point I wish to make relates to the enormous bureaucracy we have built and are continuing to build in South Africa. Here again, the hon. member for Innesdal mentioned this point. I referred earlier in this session to the pushers of pens and the shufflers of paper and the many pettifogging rules and regulations which unnecessarily bind and restrict private enterprise. The hon. member for Innesdal in fact quoted from a German article about German businessmen actually not going into private enterprise because there are these problems in Germany as well. He also quoted Dr. Cameron in this regard. However, as I have already spoken on this subject during the course of this session, I shall not elaborate on this regard.

The third major point—and I believe that this is the most important one—is that the Government must move away from economic discrimination in order properly to carry out the free market system in South Africa. This economic discrimination is driving the Black people straight into the hands of the communists and the Marxists. There are many forms that this discrimination takes and it affects the Blacks from the cradle to the grave. When I refer to Blacks, let it also be understood that I am talking about the Coloureds and the Indians as well.

Let us, firstly, start with education. In 1980 and 1981 expenditure per White child was estimated at R1 071 per annum. In respect of the Black child it was estimated at R113,50. So right from that early stage, in terms of education considerably more money is spent on the White child and he is prepared more adequately to participate in the free market system by obtaining the basic education necessary to meet his needs.

Secondly, one has then the aspect of freedom of movement. Having left school, he looks for a job in his area, and if he is lucky, he finds it. If there is nothing available to that Black man, he cannot move to where the job exists. This is totally in conflict with the free market system. There are many examples of this. There are the squatter camps which hit the headlines in the course of the last session with the evils which develop from that situation. There is the separation of fathers from mothers and children. There is the forced removal to areas where jobs are not available. This is still going on today, and let me quote a case which was reported in the Eastern Province Herald only on Wednesday. The headline reads—

It is the strange story of a man with nowhere to go. It relates to a Mr. Nkulu from Port Elizabeth. This man was born in Port Elizabeth and he lived for 25 continuous years there, but the law does not allow him to live and work there now. His parents have rights to live in Port Elizabeth and his little brother stays with them in the house, but Mr. Nkulu must go.

Do you not feel ashamed of yourselves?

The problem is that this gentleman accepted a job in a farming area where he worked for a number of years. After 25 years that job has come to an end and he is not allowed to go back to find a job in the city where he was born.

This is in total conflict with the free enterprise system and it must be sorted out by the Government to ensure that the rewards of the system are given to all people. I believe that any Christian who supports this kind of evil needs to examine his conscience.

Thirdly, there is salary inequality. Having overcome the obstacle in his way, the lucky employee finds that simply because of the colour of his skin, the State does not pay him on the same basis as his White counterpart who does the same job. As I have said before, a White policeman and a Black policeman are just as dead when they get on the wrong side of an assassin’s bullet. This is continuing. Only this week, Wednesday, 10 March, the hon. the Minister of Law and Order answered a question of the hon. member for Green Point. Apparently the average salaries of White policemen were increased in 1981 by 24,39%, but the salaries of Black constables only by 13,95%. A 10% bigger increase was given to the White policeman than to the Black policeman who already is being paid considerably less.

Do you not feel ashamed of yourselves?

I come to the fourth question and this relates to industrial and commercial inequality. The very few Blacks who overcome all these problems and become businessmen of substance find that they too still have to pay the penalty. They cannot buy or operate business premises, businesses or industrial enterprises in the prime areas or central business districts in many industrial areas. They are barred from these areas. The same goes for the suburban shops. We know today that the whole development of shopping is into the suburbs, but the Blacks are denied the right to move into the suburbs where a lot of the money today is being spent. Even advocates, attorneys and doctors may not practise in many areas. They cannot set up their consulting rooms or surgeries in those areas.

Fifthly there is residential inequality. These businessmen and their families may not own a house in some 87% of what was the land area of South Africa before the independence of certain homelands. Hon. members on that side as well as on this side have referred to this fact, and it is absolutely basic that a man must be allowed to own his own home. While we welcome the 99-year lease proposals, (a) they do not seem to have worked particularly well and (b) it is not the same thing. It does not actually replace the ownership of his own home by the individual whatever the colour of his skin. We hope that the Government will move in this direction. These people, the Blacks with capital who have succeeded, are lumped together with all the others in the Black townships. If we want to establish a Black middle class, let them have the rewards of being middle class in terms of wealth. Let them have their areas where they can move into their own houses, where they are not cheek by jowl with the people lower down in the economic spectrum.

The final point I want to make in this debate relates to the cradle to grave concept. Having experienced all this throughout his life, what happens to the Black man when he reaches the declining years and wants a pension, something to live on during the rest of his lifetime? The White pensioner gets R122 as a pension, while the Black man gets only R44 per month. Let us look at the means test. The means test for Whites is R122 per month while that for Blacks is R348 per annum. If a Black earns more than R348 per annum, he is not even entitled to that meagre pension of R44. Moreover, the Black man is very often lucky to get that money. Let me refer to another article in the Eastern Province Herald of 15 January 1982, where we read the following—

Further in the article a spokesman for the department is quoted—

So if one is Black, throughout one’s life the free enterprise system appears to be a system that one cannot beat and that holds very little in the way of rewards. It has been inadequate in all periods of one’s life, from the cradle to the grave. I believe therefore that we should urge this Government to ensure that the undoubted benefits of the free enterprise system are brought to all the people of South Africa. I think this is the aim of the hon. member for Innesdal and certainly mine, as well as those of hon. members on these benches. I support the amendment moved by the hon. member for Yeoville.

Mr. Speaker, in the first place I should like to thank the hon. member for Innesdal for the opportunity his motion has given us to debate this important matter this afternoon. Thus far the debate has generally been conducted on a very high level, although I must single out the hon. member for Port Elizabeth Central because the tirade at the end of his speech was definitely not on a par with the contributions of other hon. members. In general, however, it was a constructive debate, and I want to thank the hon. members who took part in it most sincerely. Various aspects were discussed in an objective way, which was a credit to this House.

It was only to be expected that hon. members of the Opposition, in this case the hon. member for Port Elizabeth Central in particular, would harp on the same old theme. Their entire approach is that as far as the free market system or market economy in South Africa is concerned, our entire policy is an illusion. They allege that the restrictions and limitations that the Government’s so-called apartheid policy places on the free market economy turns it into an illusion.

The hon. member reminds me of a fellow who once said to Spurgeon that he was looking for the perfect church and therefore did not want to join any of the other churches in the world. When Spurgeon argued with him and pointed out to him that there was no such thing as a perfect church, he simply refused to change his attitude. Spurgeon then said to him: “Go ahead; keep on looking for the ideal church which I do not believe exists, but if you find such a church I want to give you some sound advice: Do not join that church because you will only spoil it.”

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Speaker, just before business was suspended I was discussing the superficial political tirade of the hon. member for Port Elizabeth Central against the Government.

That went to the root of the problem.

The hon. member referred to the Government’s policy—if I wrote down his words correctly—as follows.

†He had it against the Government’s monstrously evil laws, the evil policies of this Government. He called it an evil system, and even tried to substantiate his argument by referring to a number of individual cases of hardship. [Interjections.]

*The hon. member for Port Elizabeth Central argued on precisely the same basis on which hon. members of the PFP have so frequently argued, viz. that the ideological prejudices, the ideological obsession of this Government, stands in the way of development and progress.

It is a fact.

The hon. member says it is a fact. However, the hon. member’s speech was proof of the ideological obsession of hon. members opposite. It is the irony of debates in this House that hon. members of the official Opposition cannot discuss any subject except from the viewpoint of their ideological obsession with a unitary state and with an integrated unitary community in South Africa. This is the ideological obsession we have to contend with in this House.

Who said anything about a unitary State? [Interjections.]

No one on this side of the House denies the fact that the economic system in South Africa does have specific shortcomings and deficiencies. Of course the system we have in South Africa has many deficiencies and shortcomings, which in many respects are the result of the complicated nature of our population structure, and also of the realities of the history in which these developments are rooted, as it were. However, it is the expressed policy of this Government, and also its intention, to continue to eliminate those restrictions which are identified in this regard and which can be eliminated, and also to create further opportunities for participation in the free market system by everyone. These are matters which are being dealt with by the Government. These are aspects to which constant attention is being given.

When we want to conduct a constructive debate in this House on matters which are elevated above superficial party politics, we must be honest with one another. For example, is the hon. member for Port Elizabeth Central an advocate of a system, an economic system, a market system, that is without any restrictions?

No.

The hon. member concedes that he does not advocate that, Mr. Speaker. He is quite right too.

What do you advocate?

Since the member for Yeoville is becoming vociferous again, I also want to say a few words to him, pursuant to the remarks I made about the hon. member for Port Elizabeth Central. The hon. member for Yeoville made his contribution to this debate this morning. He dealt with the free market system in a theoretical way. Also in the spirit of the report of the commission of which he was chairman—the economic commission of the PFP—he gave us a definition of a free market system—a perfect definition. At the same time, however, it indicated one of the problems of hon. members of the PFP. They are dealing with ideals, with theories, with textbook theories. However, when one philosophizes in that way, one loses touch with reality. It is very easy to make a meritorious speech on general matters. But when it comes to applying those theories in practice, that philosophy is neither here nor there.

The hon. member for Yeoville also said that capitalism was an unmarketable concept in Africa. However, it is not only unmarketable in Africa. It is also unmarketable in certain sectors of that hon. member’s own party. That is the dilemma in which that hon. member finds himself. On the one hand there are hon. members in his party to whom capitalism is unmarketable. I believe the hon. member for Yeoville himself has problems with certain aspects of the capitalistic system. In the same party, however, there are hon. members to whom the concept of socialism is unmarketable.

This is why the political statements of the PFP and of the hon. member for Yeoville are theoretically so wideranging that they are neither here nor there. The hon. member for Yeoville, as chairman of this commission, published a report in which the commission accepted that a free market system should exist in South Africa. I quote from paragraph 3.3 of the report—

That is correct. Do you not agree?

Can we not be honest with each other?

Are you opposed to it?

Whether it is this Government that is in power or any other government, certain restrictions will be imposed on the economy in terms of the convictions or the political premises or policies of the respective governments. We must admit this to one another honestly. We advocate a mixed system. In fact, we have a mixed system in this country. That hon. Opposition also advocates a mixed system. Of course we can disagree with one another about the nature and the composition of the mixture, and the nature of the mixture will be determined by our respective political premises. If we are agreed that we advocate a mixed economy, allow me to say a last word to the hon. member for Port Elizabeth Central. That hon. member was completely out of step with the other contributions in this House …

He is always out of step.

… he accused the Government of every possible evil. The hon. member for Pinetown provided an accompaniment by repeatedly saying: “Are you not ashamed of yourselves?” That was his contribution. [Interjections.] However, if this Government is so bad, let us ask the hon. member for Parktown and the hon. member for Port Elizabeth Central to listen for a moment to what I am now going to say. Are they not ashamed of having abused this Government and the economic dispensation under the regime of this Government so vehemently?

They are not ashamed of anything.

It is good to see that the hon. member for Kimberley South is awake.

Although the RSA constitutes only 3,7% of the surface area of Africa and its population constitutes only 6% of the population of Africa, the RSA nevertheless makes the following contributions in the sphere of agriculture: 36% of the total maize crop of Africa, 18% of the total wheat crop, 54% of the total wool production, 83% of Africa’s sunflower seed production—that hon. member must listen very carefully—17% of the potato crop, 19% of the red meat and 33% of the sugar cane production. Perhaps we also have the most windmills trying to pump water from dry boreholes, but I would rather not comment on that. [Interjections.] In the field of mining the RSA already contributes approximately 95% of the coal production in Africa, 38% of the uranium production, 14% of the copper production, 27% of the diamonds, 81%—please note, 81%—of the chrome ore, 70% of the manganese ore, etc. I can go through the entire list.

However, let us consider the manufacturing sector. In the industrial sphere the RSA is responsible for 40% of the manufacturing production in Africa, for 22% of Africa’s exports and approximately 66% of Africa’s steel consumption. In the sphere of transportation we find virtually the same situation. The RSA is responsible for 50% of all motorcars, trucks and tractors. The RSA also has 4,2 times more kilometre rail capacity than the rest of Africa. So I can continue. How is this possible under a Government following an economic policy that is as evil, unacceptable or objectionable as the hon. member for Port Elizabeth Central wants to make out?

It is good South Africans doing that work.

A mixed economic system, which we all advocate, means that the market mechanism can be protected, influenced, corrected, supplemented or even entirely replaced in a variety of ways by Government action. The free market system is based on individual freedom, inter alia, consumer and entrepreneurial freedom, private ownership and independent undertakings.

What about personal freedom?

If the free market system functions properly, market forces ought to be able to ensure proper price formation in the national economy.

There are a large number of factors that contribute to the market being disrupted, factors that distort the ideal market conditions.

Can one have a free market if the people are not free?

Because time is limited we shall unfortunately not have the opportunity to deal with this subject properly this afternoon, but there are a great many factors of this kind and the hon. member for Yeoville knows what factors can have an adverse effect on the normal functioning of the market.

But can one have a free market if the people are not free? [Interjections.]

I should like to discuss a number of aspects concerning the State’s involvement in the economy. In the first place I should like to refer to price control. The place of price control within the system of business freedom is frequently debated. Price control and economic power formation, about which I shall have something to say a little later on, can prevent prices from performing their function properly in the interests of the greatest possible satisfaction of needs and prosperity and can make a material contribution to a distortion of economic life. Frequently this results from incorrect concepts being used or incorrect concepts forming the point of departure when the market economy is being discussed. There is an incorrect view that price control can keep profit margins at an acceptable level, that it can, as it were, guarantee levels of return, and that it can also keep prices at low, acceptable levels over long periods. However, the economic reality is not static and does not know about general conditions of equilibrium. There is momentum in the economy. There is movement and change in the economy and the economic policy of the State should as a rule, endeavour to promote this economic dynamism and not to obstruct it. It should be the task of the State to correct the faults of free competition and free price formation and not to regulate them otherwise the free market system could break down to the detriment of everyone and the free market economy will eventually become nothing more than a planned economy. The consumer in South Africa must realize that a free competitive market economy is also to his advantage in the long term, and that prices can be kept at their lowest levels in this way. A cornerstone of any free market system is and remains a sound competition policy.

In this regard I want to refer briefly with great appreciation to the valuable work that is being done by the Competition Board. This board was established at the beginning of 1980 in terms of the Maintenance and Promotion of Competition Act, Act 96 of 1979, and the board immediately began to institute various important investigations. Naturally these investigations took time, but many of them have already been completed and in several cases it was necessary to take steps to put an end to restrictive practices. Since its establishment in 1980 the Competition Board has already investigated 98 cases. Of these 81 were completed during 1981. The board’s second annual report will be tabled in this House soon, and I want to make an appeal to hon. members to study that report and in that way take cognizance of the very important work which is being done by the Competition Board. This year the board has already completed a few important investigations and reported on them to me. Further statements in this regard may be expected in the near future.

The board is also at present engaged in a number of other important investigations. For example, the board has already made a great deal of progress in the investigation into the provision and distribution of alcoholic beverages, an investigation which has aroused widespread interest and which may also bring about important and far-reaching proposals regarding structural problems at present being experienced in the liquor industry.

And the beer price.

The South African market remains a relatively small and limited market, in spite of its significant growth and development over the years. This factor, together with many other structural characteristics, has in many cases led to a lack of a significant degree of competition in the national economy. This in turn has led to market forces not being able to perform their functions properly. In addition there is also a great amount of ignorance in the national economy and among a large sector of our population of the functioning of the market system, and they are not always able to look after the functioning of the market system in their own interest. The hon. member for Innesdal also referred to this aspect and emphasized the importance of an education programme. In this regard I could just mention that the Consumer Council is doing important work, but owing to its size and its means there is a limit to what it can achieve. However, the Competition Board can do a great deal more in co-operation with local communities. I was privileged to be present when the local business community, in fact, more than just the business community, took the initiative and called in the assistance and advice of the board to launch a consumer campaign in their own area. The board can make a valuable contribution in this regard and can help us to increase outreach of the education campaign.

The hon. member also referred to the possibility of promoting a more widespread campaign to introduce the market mechanism, the system of private initiative, even at school level. These ideas also warrant further investigation. In such a situation, where consumer ignorance exists on the one hand and, as a result of the high level of inflation we have to contend with, continuous price increases occur on the other, the task of the Competition Board is of course very important and also very difficult. People are unfortunately under the erroneous impression that price increases can be avoided if price control is applied on various products. The short-term advantages of price control are certainly not to the advantage of the consumer or the economy in the long term. For this reason it is the policy of the Government to allow the market forces to operate where possible, under competitive conditions, to the greatest advantage of efficiency and productivity and of growth and development and to determine price levels themselves. If an enterprise in the free market system places a new product on the market, either by innovation or by new marketing techniques markets a product and earns higher profits on it than other enterprises, and access to that branch of the industry remains open, it is merely sound common sense and logic that other entrepreneurs will follow that example and that the supply of that article will increase in due course and that the competition created in this way, will be beneficial to the consumer in the long term. Of course this is on condition that there are no restrictive practices that prevent competition or that prevent entry to that branch of the industry. There may not be any restrictions at all on the right of entrepreneurs to engage in that branch of the industry. The Competition Board is therefore an important instrument to promote competition and to ferret out restrictive practices. If it appears that the board is not able to succeed in this aim in terms of the present powers given to it by the Act, I shall not hesitate to extend the authority of the board so as to enable it to pursue those aims more effectively. In this connection and with a view to the promotion of the system of industrial freedom and free price formation, a working group on price control was appointed in September 1980 to investigate cases in which existing price control could be lifted. The working group is under the chairmanship of the Price Controller and consists of representatives of organized trade and industry, State departments, organized agriculture, consumers and others. At the end of last year, arising out of the recommendations of the working group, the price control on a large number of commodities was lifted. This was done in the belief that the lifting of control on those commodities would be to the greater advantage of the consumer, thanks to the functioning of the market and the competition in those branches of the industry.

Another group of commodities was referred to the Competition Board by the committee to investigate the market conditions in respect of those products so as to ascertain in what cases price control could be lifted. The board reported to me recently on this matter and I hope to make further announcements in this connection in the near future.

Another important aspect is that the board also investigates take-overs and mergers to ascertain whether such take-overs and mergers were really in the public interest. Economic activities in South Africa are strongly concentrated, a matter to which I have already referred and regarding which I voiced the concern of the Government. Sometimes it cannot be helped because, as I have already indicated, the local market is in many cases small and limited and there is only room for one or two undertakings in a particular branch of the industry. I want to emphasize that monopolistic or oligopolistic industries are not necessarily detrimental and undesirable per se. However, it is true that take-overs and mergers constitute potential dangers and disadvantages and cannot be allowed to continue in an unauthorized way without the necessary supervision. The Competition Act also makes provision for supervision of this form of concentration. The legislation and its implementation was entrusted to the Competition Board and does not assume that take-overs and mergers per se are contrary to the public interest. Some may even be in the public interest. In cases where real competition and economic implications are at stake, however, it is desirable that the Competition Board should be consulted beforehand. In this way embarrassment for the respective parties can be prevented in that, if it is deemed to be necessary in the national interests a public investigation need not be instituted, one which could even lead to further steps being taken. For this reason the Act makes provision for consultation with the board. The board may provide prospective parties to such a take-over or merger with advice and could even give a binding decision that such take-over or merger would not be contrary to the public interest. I am delighted to be able to say that these advisory services of the board are being used to an increasing extent by undertakings.

Although I must repeat that the Government does not generally condemn the possession of economic power, mergers or takeovers, it is obvious that many industrialists and businessmen frequently follow the line of least resistance in deciding to expand or diversify by simply acquiring an interest or a controlling share in an undertaking. It goes without saying that this behaviour is not always to the greatest advantage of the socioeconomic development of the country in the long term. One also understands the motivation which is presented to one when undertakings indicate that they want to expand their production line or were motivated into taking a certain step as a result of rationalization benefits or as a result of the fact that they want to strengthen their position vis-à-vis their competitors. Today, however, I want to make a serious and urgent appeal to our major industrialists, businessmen and entrepreneurs in particular, and I hope the Press will also help to convey this appeal further. I should like to make a serious and urgent appeal to our major undertakings rather to start new and original undertakings than to employ available investment funds for the take-over of existing undertakings. It would be more beneficial to our economy if large undertakings were to utilize their expertise, their capital, their entrepreneurial and managerial ability more creatively to establish new undertakings than to take the easy way out of take-overs and mergers. Such behaviour will of necessity contribute to greater competition and a greater utilization of raw materials, capital and managerial and manpower potential and also to greater productivity, employment, the opening up of new markets and eventually to a general broadening of our economic base.

Frequently a complaint in respect of excessive State competition with the private sector is also heard. The hon. member for Innesdal also referred to this. He also referred to the Standing Committee on State Competition, under the auspices of the Department of Industries, Commerce and Tourism. I should like to draw attention to the fact that any person or body who feels unhappy about competition from the State in a specific field may bring this to the attention of this committee. With reference to the motion of the hon. member for Innesdal I think the committee could also be directed to identify fields in which the public sector could more readily transfer its activities to the private sector. The aims still remain to reduce State interference and State involvement in the economy and to give the market forces an opportunity to play a greater role. However, these aims must naturally be pursued in an orderly and responsible way.

Mr. Speaker, I withdraw the motion.

With leave, amendment and motion withdrawn.

Mr. Speaker, I move the motion standing in my name on the Order Paper as follows—

1. (a) deleting subsections (2) and (3) of section 40 of the Republic of South Africa Constitution Act, 1961 (No. 32 of 1961); and
2. (b) amending section 43 of the said Act in respect of—
   1. (i) the provisions regarding the calculation of provincial quotas; and
   2. (ii) the departure from the established quota by the Delimitation Commission.