I move that the Bill be now read a Second Time. Deputies will, no doubt, recall that on the Second Stage of the Industrial Credit (Amendment) Bill, 1958, I indicated the Government's determination to ensure that the resources of the Industrial Credit Company, Limited, would be ample to meet all reasonable requirements arising out of the financing of industry. On that occasion, I assured industrialists that they could proceed with their plans in the knowledge that no industrial project with worthwhile prospects, particularly export prospects, need be frustrated by lack of capital. The policy of allowing no soundly-based industrial project to fail, or to be prevented from starting, solely through lack of capital, is confirmed further in the Programme for Economic Expansion.
As shown in Appendix II to the White Paper, the Programme envisages the provision by the Industrial Credit Company of credit for industry amounting to £20 million in the years 1959-60 to 1963-64. It is visualised that the company's capital expenditure will be at the rate of £3½ million in each of the years 1959-60 and 1960-61, £4 million per annum in 1961-62 and 1962-63, and as much as £5 million in 1963-64. Thus, the company faces a much enlarged scale of activities over the next five years as compared with its previous level of operations. In 1958-59 its capital expenditure amounted to £2.8 million and this included a funding of existing overdrafts to the extent of £1.4 million.
The enhanced facilities now proposed, apart from assisting in the setting up of new industries, are intended to encourage the replacement of old machinery by up-to-date plant, the installation of additional machinery and, generally, the expansion and modernisation of industry. The company's need for additional capital and borrowing is increased, too, by its decision to provide hire purchase facilities for industrial plant and equipment on attractive terms. It is now prepared to finance up to 75 per cent. of the cost of suitable new plant and machinery in this way.
The implementation of the policy set out in paragraph 98 of the Programme for Economic Expansion now justifies, in the light of the Company's existing financial resources, the introduction of amending legislation to provide it with sufficient funds for the purposes of industrial expansion.
The capital available to the Industrial Credit Company consists of an authorised share capital of £5 million and loan capital that may be raised under guarantee of the Minister for Finance within a statutory limit of £5 million. The company could also raise further loan capital by means of debentures but in practice debentures would, in present circumstances, require to be backed by a State guarantee. Up to the present, £3 million worth of share capital has been issued and paid up and is held almost entirely by the Minister for Finance. In addition, a loan of £1.8 million has been made by the banks under State guarantee. This makes a total of £4.8 million which has already been invested in Irish industry.
A further issue of share capital to the value of £250,000 is in the process of being arranged. These shares will also be taken up by the Minister for Finance and the money issued in payment for them will be used to meet maturing commitments in respect of various projects. The resources remaining available to the company will thus consist of £1.75 million of unissued share capital and the possibility of raising £3.2 million under State guarantee — a total of just under £5 million. Against this, it already has commitments extending over the next five years amounting to more than £7 million. Access to additional capital is, therefore, necessary to enable the Company to play its due part in economic expansion in the coming years.
The main purpose of the Bill is to allow of the enlargement of the company's resources by £15 million. This, with the balance of about £5 million which the company is already free to raise, would make up the total of £20 million forecast for the company in the Programme for Economic Expansion. It is proposed that the enlargement be effected by increasing the authorised share capital from £5 million to £10 million — an increase of £5 million— and by increasing the Company's effective borrowing powers from £5 million to £15 million — an increase of £10 million. The increase in the company's borrowing powers involves enabling the Minister for Finance to guarantee, when necessary, such borrowings up to £15 million instead of up to £5 million as at present.
Further, as loan capital may not always be readily available from banks and other institutions as and when required, it is proposed in the Bill to enable the Minister for Finance to make loans to the Company on such terms and conditions as to interest and repayment as he may stipulate. It is intended, however, that such advances together with any sums borrowed by the company from other sources should not at any time exceed the proposed overall limit of the Company's borrowing powers, namely £15 million.
The new legislation also affords an opportunity to effect some minor improvements in the existing law relating to the administration of the Industrial Credit Company. These are effected in Section 6 (1) and (2) of the Bill.
The Bill is intended to place in the company's hands the means of accelerating future industrial progress. The availability of necessary capital is, of course, only a beginning. The capital must be wisely invested: this requires co-operation, initiative and enterprise from industrial promoters and workers alike. It can then be expected to fructify and yield a continuing return of goods for sale at home and abroad, of jobs for the workers and profits for the promoters.
The latest reports from the Industrial Credit Company indicate that the policy of providing adequate funds for industry is already bearing fruit. This, indeed, may be gathered from the extent of the provision considered necessary for 1959-60 — £3½ million. The company's activities have expanded appreciably and there has been an upsurge in demand for industrial credit. It is clear that the better services being provided are welcomed and appreciated by industrialists, and I feel that we can safely look forward to further expansion. I should, perhaps, say that the facilities provided are available not only for public manufacturing and processing companies but also for private companies, partnerships and individuals engaged, or proposing to engage, in manufacturing activity. Enterprises large and small are, therefore, being catered for.
The Board and staff of the Industrial Credit Company have a heavy task before them. They are in one of the key positions in the drive forward on the industrial front. The expansion of activities which has taken place, and the greater expansion to which we look forward, will necessarily give rise to many difficulties and problems. I am sure Deputies will wish the company every success in its efforts on which so much depends.
The legislation now proposed, if enacted, will take us a step further in the development of our country. I hope the step will prove to be a significant one. The Bill will, I trust, commend itself to the House.
