Here is a perfectly simple question. It was the Minister himself who put it in my mind. If it was right to lend money from the Local Loans Fund to local authorities at 2½ per cent. in 1946, 1947 and 1948 when the acting-Minister for Finance to-day was the Minister for Finance, why does he think it appropriate to charge the same local authorities, for the same purposes, 5½ per cent. for the same money? Is not that a fair question?
Committee on Finance. - Local Loans Fund (Amendment) (No. 2) Bill, 1953—Committee and Final Stages.
Question proposed: "That Section 1 stand part of the Bill."
If the Deputy drags me into it, I will answer it.
I will be grateful if the Minister answers that simple question: if he thought it right and equitable to charge 2½ per cent. for these three years and deprecates the 3¼ per cent. which we charged, will the Minister explain why does he think it right to charge the same local authorities for the same purposes 5½ per cent.?
This section sets out the amount of money.
Yes, Sir, but the Minister's Order sets the rate at which it is to be lent.
There was a discussion on the Money Resolution. We are not going to have duplication.
On this section I am entitled to ask the Minister, in the light of information which he gave us on the Money Resolution——
The section deals with the amount of money. It is increasing the limit on issues from the Local Loans Fund.
And the rate.
The rate is not here.
It is, Sir.
I allowed a good deal of discussion on the rate on the Money Resolution. I do not think I can allow it to be duplicated on the section.
The rate is implicit in the amount. The rate is not fixed by the Bill. It is fixed under the Principal Act.
The amount is fixed. What is fixed by the Bill is the amount.
Exactly. The Minister has now told us, for the first time, that when he was Minister for Finance——
The rate does not arise relevantly. It does not fall for discussion on the section. I allowed a good deal of latitude on the Money Resolution because I thought it night be, if not relevant, at least interesting.
Does not Section I fix the aggregate amount of the money?
Yes.
The terms on which the money is to be issued are fixed, not by the Bill——
It says "the aggregate amount of the moneys."
To be issued.
That surely means one thing—the aggregate amount of the moneys.
To be issued.
Yes, to be issued. That is the only thing that can arise—the aggregate amount of the moneys to be issued.
Issued? Surely the terms, the conditions, on which it is going to be issued?
I allowed the discussion on the Money Resolution. I cannot allow it to be duplicated on this.
All I am asking is a perfectly simple question. If it was right to make a charge of 2½ per cent. in 1946, 1947 and 1948, why does he think it right to charge 5½ per cent. now?
Simply because the rate of interest on money is a matter of policy rather than necessity. If any Government decided it was the right policy that money should be made available at ½ per cent., it could be done.
Yes?
But a Government must have care that the over-all of the national economy is not adversely affected either by too high a rate of interest or too low a rate of interest. It is right for a Government to see that money is made available for proper purposes at the right rate of interest having regard to the surrounding circumstances. If the Deputy wants a complete answer to his question he can get it in the speeches I have referred to.
Question put and agreed to.
Section 2 and Title agreed to.
Bill reported without amendment.
Agreed to take the remaining stages now.
Bill received for final consideration and passed.
This is a Money Bill for the purposes of Article 22 of the Constitution.