Local Loans Fund (Amendment) Bill, 1937—Second Stage.

I move that the Bill be now read a Second Time. The purpose of this Bill is, in effect, to give authority to raise a further £6,000,000 for the purpose of the Local Loans Fund. The House will remember that by sub-section (3) of Section 4 of the 1935 Act, which established the Local Loans Fund on a statutory basis, authority was given in respect of issues made from the fund after the appointed day to raise up to £5,000,000. It is now desired to secure authority to raise an additional £6,000,000, the position of the fund being that already £3,943,307 have been advanced from the fund, and that there are commitments which will absorb a balance in the fund of £1,056,693 within the next four or five months.

There are also two subsidiary matters dealt with in the Bill. One is making good a deficiency of over £91,000 which existed on the establishment of the fund. The deficiency arose in this way, that the non-statutory local loans account was financed from the Exchequer by means of grants-in-aid voted annually on a sanction or commitment basis, as distinct from an issues basis. This necessitated the provision of so much money each year as, with repayments by borrowers, would cover the full amount of all loans sanctioned in the year, without regard to the amount likely to be required for actual cash issues.

The position was that the local loans account carried a large and growing surplus cash balance which, as it could not be invested, and had to be carried on deposit account, earned only deposit interest, while the account itself was indebted to the Exchequer for interest on the advances made to it at the full borrowing rate. The deficiency which existed has now to be made good. It does not put the Exchequer in any worse position; it merely puts the account upon a proper basis.

In addition, there is also a minor amendment connected with Section 16 of the Act of 1935. Under Section 4 of the present Bill it is proposed that where a debt is due to the fund by a local authority, by a subsidiary local authority, that if necessary, if a default arises, that default can be made good from moneys payable to the parent body, if the parent body acts as the guarantor for the subsidiary local authority.

When and where does the Minister propose to seek the £6,000,000?

Under the terms of Section 5 of the Act of 1935, the money can be raised either by repayable advances to the fund out of the Central Fund or out of any other Government funds or moneys, or by a public issue of securities on behalf of the fund. So far, in fact, the Local Loans Fund has been financed by advances from the Central Fund and, so far as the immediate future is concerned, it is unlikely that there will be any change in that regard.

That is, the Minister does not propose to borrow?

We do propose to borrow. We do propose that the Local Loans Fund will borrow.

From the Exchequer?

From the Exchequer. We have authority under the Principal Act to raise the money in other ways, such as public issues.

I have just heard the Minister for Finance talking in millions of money, possibly at the rate of one Deputy per £1,000,000, judging by the attendance in the House, I should like to know does the Minister contemplate, or does he think it will be necessary at a later date, to make a public issue? He mentioned the possibility of a public issue. Is it a possibility that will become a probability?

In that regard I could not commit myself to an expression of opinion. All I know is that we were able to get on last year without any long-term borrowing, and the Exchequer position this year is just as good.

Does the Minister anticipate any exceptional demands upon the Local Loans Fund?

None, except such as are at present being made in respect of housing and public health works.

Question put and agreed to.
Committee Stage fixed for Tuesday, 25th May.
The Dáil adjourned at 7.20 p.m. until 3 p.m. on Tuesday, 25th May.