On the subject of premium bonds, there is only one request which I want to make to the Minister in respect of the draw to which he has referred and that is that he will ensure that my number comes out of the drum. I dare say he will have a fair number of requests of that sort.
With regard to the draw, I presume there will be adequate facilities not merely for reporters as such but for Press photographers. A movietone news item, or something like that, would be desirable. So long as there is sufficient publicity of that sort, I do not think anybody would mind that the general public would not be able to be present though I suppose a good many people would turn up for the thrill or in the hope that their number might come out of the drum. Has the Minister yet made arrangements as to whose will be the golden voice on this occasion announcing the success of the various units? If it is somebody connected with the Department of Finance, it will be a new rôle for him to be giving something like this rather than in his normal and proper rôle of restriction. Perhaps the Minister will keep that pleasure to himself? However, time will tell.
So far as the issue of Exchequer Bills is concerned we are glad on all sides of the House that the issue was a success. There has been some considerable discussion from time to time about the provision of an Irish money market. From the editorial in the Irish Press the other day it would appear they thought this was an Irish money market. It is not, of course, but it is undoubtedly a system of short term Government financing which is very desirable indeed and which, as I indicated the other day, is one which could not be successfully introduced until, first, our balance of payments had been put on a proper basis and secondly, until British Treasury Bill rates had dropped.
The Minister was lucky in that the previous Government created the first situation for him. So far as the second is concerned, nothing that we do in this country can in any way alter the international interest rate nor the British Treasury Bill rate. The augurs were favourable for the Minister and he took advantage of them and on all sides of the House we are extremely glad that the issue has been so successful.
I noted in the statement that was made, the Minister indicated that the average price of issue was somewhat below the maximum. That also is satisfactory. I think the information that was published in that respect is the same information published in respect of British Treasury Bills. I can easily see that to ask for any additional information might very well impact on the confidential nature of the individual transactions and, therefore, so far as I am personally concerned I do not propose to ask for any information other than that divulged by the Press statement through the Department of Finance.
While many countries issue bills of the sort which have just been issued, very few countries indeed have the money market and the complex system of discount houses which exists in London. It is not necessary to have that complex system of discount houses for the successful issue from time to time of direct Government Bills. I think Canada, Australia, New Zealand and South Africa—to mention some countries of the British Commonwealth—all operate the type of Governmental Exchequer issue such as that we have released but I do not think any of them operate the type of money market and discount house which exist in London. In fact, to the best of my recollection, Australia did once start an effort to have such a money market and it was a complete failure, while the issue of Treasury Bills in Australia remained most successful.
When I was speaking on this the other day, I did not want to say too much before the issue closed but there is no doubt in my mind that it was the re-discount facility which made the issue a success. I think without that facility the Minister would not have got many of the applications he did receive. I hope that in whatever new issue of bills he may contemplate in future he will pay particular attention to the re-discount facilities that are offered because, in my opinion, they are even more important than the fractional rate of interest over or below the average which it may be possible to achieve. At the average tender price of £98 17s. 9d. I think the interest is somewhere about £4 11s. 3d. per cent. which is an extremely high rate for a bill which has the guarantee of 48 hours' discount that these bills have.
It is a rate which I think we would be able to reduce in the future, but at the same time let me be quite clear in saying that I think the Minister was right in making his initial rate the maximum figure he quoted and which would be the guide to tenderers. He was right in making that rate fairly high on this occasion so that he would be sure in that way that the initial issue would be successful.
I hope that further issues will be made along the same lines and, even if the Minister does not make any issue before the 30th September, I hope that when these bills come for redemption he will make a new issue at that time. By then also people will have become more acclimatised to the situation and it might be possible to get more small tenders for the bills than perhaps was the case on this occasion.
I would like to know from the Minister whether he proposes to retain the services of the Capital Investment Advisory Committee? I hope he will retain their services. It is an organisation appointed for the purpose of giving advice, and only for that purpose. The decision must remain with the Minister if it is within his ambit, or with the Government if within their ambit, but at the same time I think it is desirable that a body such as the Capital Investment Advisory Committee should investigate our problems and tender disinterested advice on them. It remains then for the people concerned to judge the value of that advice and to take decisions on it.
Obviously the committee will give that advice only from the purely economic standpoint and other things have to be taken into account in arriving at decisions. It does not necessarily mean that rejection of economic advice is any indication that the economic advice as such is considered unsatisfactory. It may be entirely satisfactory as economic advice but at the same time it might set off certain trends in other fields that would render the economics of it open to serious criticism.
For that reason therefore, the opinion of any such committee can only be purely advisory and must not be regarded in the nature of a decision. We heard some remarks from time to time during the Budget debate on this matter which I do not propose to go into now but I remember Deputy Loughman saying the Government had taken the committee's advice. The Government, of course, did nothing of the sort. The advice of the Capital Investment Committee was in relation to capital purposes not in relation to current purposes as was the Minister's decision. However, that is all water that has flowed under the bridge.
I should like to reinforce what I said on the Central Statistics Office in relation to the Department of Finance. The Minister is aware that I made a certain effort to try to strengthen the economic section of the Department of Finance but I was not able to get exactly what I had in mind. I hope that, if that opportunity arises in the future, the Minister will be able to strengthen the Department in that way.
I have very strong views that it is through the Minister for Finance the Government should be advised on economic matters. It is impossible for the Minister adequately to advise the Government on economic matters, unless he has an adequate economics staff in the Department. The officials that were there to advise me on these matters gave me advice that could not have been bettered. I was extremely lucky in their co-operation, but, at the same time, they were so limited in number that there was a certain disadvantage. The number available requires expansion and if something is not done, should the opportunity arise wherein to carry out that very necessary expansion—it is only a trifling expansion—I am afraid some officials will be very seriously overworked, with bad effects not merely on their own health but on the eventual quality of their work.
I should like the Minister also to tell us whether the system of the Government stock for dealing with national loans and other Government securities which was instituted in 1954 has been successful in recent months. It was initiated in 1954 in relation to Irish Government securities, and was subsequently expanded to other issues, and I should like to know whether that expansion for Dublin Corporation issues, for example, has proved satisfactory.
I have two other matters to raise, and one I shall raise in a general way only. I was very surprised indeed to see that it was the Minister for Industry and Commerce, and not the Minister for Finance, who made a statement yesterday on the future of the levies. The levies were imposed for balance of payments purposes and it was the Minister for Finance and the Department of Finance who were primarily concerned in these levies. I was quite amazed therefore when I saw that it was the Minister for Industry and Commerce and not the Minister for Finance who made the statement last night prognosticating what their future was likely to be. I hope that, by that, the Minister for Finance is not relinquishing the primary responsibility that remains to him, and should remain to him, of dealing with levies, should our payments and our balance, visible and invisible, vary from time to time. It would be most unsatisfactory if that were so.
The other matter is one which does not require legislation, in my view, and I think it would be very bad, if it did require legislation. The reason I say it should not require legislation is that I feel we have got to arrive at a situation in which the Central Bank and the commercial banks will co-operate more closely with the Government of the day than they have done up to the present. In saying that, I do not want to suggest at all that there has not been a liaison. There is, and it has been a satisfactory liaison in many respects; but I think that liaison must become even closer in the light of our present economic conditions; and one of the things that must be done is that the Minister for Finance must impress upon the commercial banks that they will have so to alter their system that they can have selective interest rates to a degree not existing at present.
If the Minister goes back on the records of his Department, he will see that I made certain suggestions along those lines some little time ago. Other circumstances arose in relation to our balance of payments which necessitated that my concern would be taken away from that and directed towards other much more pressing matters. I think we will have to have here a system of more selective overdraft interest rates so that we will be able in any potentially inflationary situation to damp down the type of spending that we do not desire and at the same time, stimulate the type of productive investment that we must have in far greater degree if we are to improve. The present situation, by virtue of which an overdraft for luxury consumption pays exactly the same interest rate as one for productive development, does not provide a satisfactory solution. I know, of course, that the trade loan guarantee system does provide for a lower rate of interest, but that is a very limited aspect of the problem and the problem requires to be dealt with on a much wider basis.
In no circumstances should it be dealt with by legislation, in my view. It would be highly undesirable that there should have to be legislation for that purpose. It is a matter that should be dealt with administratively between the spokesman of the Government, the Minister for Finance, on the one hand, and the commercial banks, on the other, with, perhaps, the Central Bank in between acting as the cement, as somebody so graphically described it the other day in relation to a somewhat similar problem.
Now that we have got ourselves on to an even balance of payments keel, I hope that in the time ahead that will be one of the reforms which will be possible of achievement. It was one which it was not possible for me to tackle while our balance of payments was in disequilibrium in the years 1955 and 1956. The Minister will find that Australia, subsequent to my making certain suggestions here, adopted this system and now has in operation this system of selective overdraft rates. The report of the New Zealand Banking Commission, which was published round about last Christmas, recommended the same thing. They are countries, like ours, which are underdeveloped. They are countries, like ours, which may have inflationary tendencies from time to time and may desire to curb these tendencies, without, at the same time, affecting the productive enterprise so necessary to build them up just as it is so necessary to build us up here.