Dáil Éireann debate -
Wednesday, 3 Nov 1965

Vol. 218 No. 6

National Loan, 1965. - Statement by Minister for Finance.

Minister for Finance (Mr. J. Lynch)

I wish to inform the House that a new National Loan will open for subscription on Monday next, 8th November. The loan will be for £25 million, but £3.9 million of the stock is being allotted to certain life assurance offices and an application for £5 million of the stock is being made on behalf of funds under my control. The balance of £16.1 million will be underwritten jointly by the banks and the Government.

The rate of interest will be 6¾ per cent per annum and the price £100 per cent. The stock will be redeemed at par not later than 1991 and may be redeemed at any time from October, 1986.

The usual provision is made in the prospectus whereby only 10 per cent of the purchase price need be paid on application, the remainder being paid in three further instalments spread over the period to the first week of January. Those subscribers who wish to pay the full amount on application next week, or to complete their subscription on 1st December, will be entitled to discount equivalent to an interest rate of 6¾ per cent per annum on the advance payments.

The tax privileges attached to recent National Loans are again included. Interest will be paid without deduction of income tax at source, but, of course, holders ordinarily resident in the State will be liable for whatever tax on the interest is appropriate to their respective incomes.

Stock of the issue will be accepted at its nominal value as the equivalent of cash in satisfaction of death duties on properties of which it formed a part. The stock and the interest on it will be exempt from all Irish taxation, present and future, if owned by a person neither domiciled nor ordinarily resident in the State.

The issue is being made under the authority of the Appropriation Act, 1965, and other statutes. Both principal and interest will be a charge on the Central Fund. The attractive interest rate it carries, its status as a trustee security, the concession whereby it will be accepted in payment of death duties and substantial sinking fund allocations should ensure that the stock will always have a high market value. The Government stockbroker will be ready continually to buy and sell reasonable amounts of the stock, and this will help to maintain an active market in it.

The loan is required for the financing of State capital outlay on agriculture and industry, on housing, sanitary services and schools, on afforestation and fuel resources, on transport and on other development schemes in pursuance of the Programme for Economic Expansion.

The prospectus of the issue will be published in tomorrow morning's newspapers. Copies of the prospectus, with the application form for subscriptions attached, will also be available as from tomorrow from any bank, stockbroker or post office. The lists will close not later than Friday, 12th November.

I ask every Deputy in the House to give the issue his full support.

Mr. T.F. O'Higgins

Whatever criticisms we may offer as to the manner in which this country is at present being governed, we have no doubts as to the inherent soundness of our economy. For this reason, an invitation to invest in the economy of the country is an invitation which we can support and do support with enthusiasm and confidence. We believe that on grounds of patriotism and of profit, this loan should commend itself for widespread public support. An attractive rate of interest is a real inducement but the dominant attraction is the opportunity of investing in a sound economy and of contributing to the prosperity of the country. This country can only be developed economically and socially if there is adequate investment in agriculture, industry, drainage, afforestation, housing, hospitals, schools and generally in the provision of employment at home for our people.

The present economic difficulties should not obscure, and, I believe, will not obscure, the basic soundness of our economy. If we are to provide our people with the standards to which they aspire and which they should have, increased capital investment is essential. We, therefore, in the Fine Gael Party commend with enthusiasm this loan to the people generally. We would stress that the loan is an attraction not only to the big investor but also to the small investor throughout the country and we hope that it will have, both from the bigger investor and from the small investor, general and widespread support.

Mr. Corish

Raising a loan for national development is not and never has been a matter of Party controversy. For that reason, I, on behalf of my colleagues in the Labour Party, should like to express our full approval of the raising of the sum of £25 million by way of loan. We also strongly recommend the public to avail of it in view of its most generous terms. We approve of the method and we approve of the amount because such an amount is needed, as the Minister has said, to finance certain important schemes of capital outlay. Not only are the terms attractive but those who subscribe to this loan are doing so in the knowledge that the £25 million so raised will be put to good use in the further development of agriculture and industry and in the provision of houses, schools and sanitary services, and the development of afforestation and activity of that kind. Above all, it will help to maintain, and possibly improve, employment in these various projects. When considering raising money from the public, we should realise that it is mainly by our own efforts here, for greater production and consequent better incomes and greater savings, that we can provide for the future development of our country. I trust that this attitude and the attitude of the three Parties here today will be reflected in the response by the public to this loan of £25 million.