I wish to inform the House that a new National Loan will open for subscription on Monday next, 28th October. The loan will be for £25 million but £5.1 million of the stock is being allotted to certain life assurance offices so that the amount available for public subscription will be £19.9 million which will be underwritten jointly by the banks and the Government.An application for £5 million of the stock is being made on behalf of funds under my control.
The rate of interest will be 5¾ per cent per annum and the price £100 per cent. The stock will be redeemed at par not later than 1989 and may be redeemed at any time from November, 1984.
The usual provision is made in the prospectus whereby only ten 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 middle of December. Those subscribers who wish to pay the full amount on application next week, or to complete their subscription on 20th November, will be entitled to discount equivalent to an interest rate of 5¾ 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 will, if ordinarily resident in the State, 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, 1963, 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 the 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 to assist in 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.
As you are aware, we are mainly dependent on domestic savings to finance the capital investment necessary for national development. The Second Programme envisages an increase in capital formation in the period to 1970. The resources necessary for this increased investment must come in the main from increased current saving. The national loan provides an excellent opportunity for putting the savings of the community to good use. Subscribers to the loan, while providing the State with the resources necessary to develop the national economy, will at the same time be making a safe investment on which they will earn an attractive annual return.
The prospectus of the issue will be published in tomorrow morning's newspapers. Copies of the prospectus, with an 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, 1st November.
I am sure that every Deputy will give the issue his full support.