This Bill, as the long title indicates, proposes to amend and extend the Land Purchase Acts. It is complicated by numerous references to existing provisions in those Acts but this is inevitable as the object of the Bill, I think I may fairly and truly state, is to make modifications which experience has shown to be desirable rather than to introduce any new basic principles.
The main purpose of the Bill is to permit the creation of land bonds bearing a higher rate of interest than 4 per cent. The Land Bond Act, 1934, under which the Minister for Finance periodically creates series of bonds for the financing of land purchase, prescribes a maximum rate of interest of 4 per cent. That Act also requires the Minister for Finance, when fixing the rate of interest for a series of bonds, to have regard to Stock Exchange quotations with a view to fixing a rate which would secure that the market price of the bonds would remain at or near par for a reasonable period after creation of the series. As this requirement and the 4 per cent. maximum are no longer compatible it is proposed to remove the interest limitation.
Each Land Bond Order made by the Minister for Finance specifies a period —usually a calendar year—and the bonds created by the Order are available for payment of prices agreed upon or fixed during that period. The latest Land Bond Order created 4 per cent. bonds for prices agreed upon or fixed during the year 1952. Pending the enactment of the present Bill the Minister for Finance has not made any Land Bond Order for the price fixation period which commenced on the 1st January, 1953. The result is that since the beginning of this year there have been no bonds available to enable prices to be agreed upon or fixed for land which the Land Commission propose to acquire and resume.
When the land bond interest limitation is removed on the enactment of section 4 (1) of the Bill the Minister for Finance will be in a position to create a series of bonds bearing such rate of interest as will maintain their market price at or near par for a reasonable period. It will then be possible to resume price negotiations and fixations.
It is also proposed, in Section 5 of the Bill, to substitute the new bonds in pending cases where prices have already been agreed upon or fixed but the relevant 4 per cent., 3½ per cent. or 3 per cent. bonds are not issued before the new bonds become available. In addition to these pending cases, it is proposed to extend the scope of the Bill to land which has been taken over by the Land Commission since the Bill was introduced. It would not, however, be practicable to substitute the new bonds in those particular cases as 4 per cent., 3½ per cent. or 3 per cent. bonds have already been issued. Accordingly, Section 6 is designed to bring about approximately the same financial result as if new bonds were substituted. It is proposed in the case where bonds have already been issued, to achieve this by the issue of additional bonds in the form of a "bonus"; the determination of the appropriate bonus percentage is left to the Minister for Finance as it is a matter related to the rate of interest borne by bonds for which he is also responsible. The Minister for Finance fixes the rate of interest. The bonus bonds will bear the same rate of interest as the bonds originally issued in each case. The principal cases in which the additional bonds are to be issued are those in which the Land Commission have taken possession of the lands since the 11th December, 1952. That is the date on which leave was granted by the Dáil for the introduction of the Bill and it has been selected as the most appropriate date after full consideration of the circumstances.
So far I have been mainly concerned with the rate of interest payable on land bonds. There is also a rate of sinking fund for each series of bonds. The sum of the rates of interest and sinking fund represents the rate of annuity. Since 1923, the rate of annuity has been 4¾ per cent. The interest element has varied, according to the particular issue of land bonds, from 4½ per cent. to 3 per cent. and the balance of ¼ per cent to 1¾ per cent. has represented sinking fund in repayment of principal. To cover interest and sinking fund for future bonds, it is necessary to provide for the possibility of a higher rate of annuity; this entails adaptation of existing statutory references to the rate of 4¾ per cent. and the matter is dealt with in the Schedule to the Bill, which effects the required adaptation and other consequential amendments. The annuity rate will continue to be fixed by the Land Bond Order creating each series of bonds and will apply to lands purchased by means of bonds of the series; the halving of new annuities under the Land Act, 1933, will also continue.
The provisions of this Bill do not in any way affect annuities already set up.
To summarise, where the land bonds have already been issued in what I may describe as pending cases, cases that have been dealt with since the introduction of this legislation, the purpose is to issue bonus or additional bonds bearing the same rate of interest as those already issued for the transaction. We do not know where the bonds originally issued may be—they possibly have changed hands and are no longer in the hands of the vendor to the Land Commission—and, in order to avoid complications and to have the same order of bonds dealing with the particular transaction, we have arranged in the Bill that, where the bonds have already been issued and where we are now proposing to increase the amount to bring it up as nearly as possible to a suitable market rate of the bonds, we are adding these bonus bonds. The determination of the percentage additions will be a matter for the Minister for Finance.
If no bonds have been issued, the new series created at a new rate of interest by the Minister for Finance will be available and the whole transaction will be covered in a single item by the issue of bonds bearing the new rate of interest, whatever that may be, under the new series and that will be done by the Minister for Finance making an Order under the 1934 Act. That is the chief purpose of the Bill—to see that those who sell land to the Land Commission are not penalised by having to take bonds which are very much lower in market value than they might properly be expected to be. We are trying to adjust that position.
We are also increasing the total amount of land bonds that may be created under the 1934 Land Bond Act which limits the amount to £10,000,000. Although there is a balance of more than £3,000,000 still available which would enable land purchase to be financed for some years to come, the present opportunity is taken to raise the limit by a further £5,000,000. The necessary amendment is effected by Section 7 of the Bill.
There is also an important provision relating to a concession in regard to certain prices. The Land Act, 1950, which laid down market value as the basis of the price of untenanted land, provided for redetermination of prices fixed before the passing of that Act in cases where the Land Commission had not taken possession of the land before 1st December, 1949. The period allowed for lodgment of applications for redetermination does not appear to have been sufficient and to avoid hardship, Section 11 of the Bill proposes to give eligible persons a further opportunity of making applications.
The remaining provisions of the Bill are matters of detail which can be gone into, if necessary, on Committee Stage. They are designed to secure uniformity of procedure and consist largely of amendments to remedy drafting imperfections in previous Land Acts.
As I have already explained, the price fixation machinery of the Land Commission has been at a standstill since 1st January last bringing about an inevitable hold-up in the intake of new land for land settlement schemes and the House will therefore appreciate my anxiety to have this Bill enacted as early as possible.