(Dublin Central): I can quite understand the reason for this section. I agree it is an enabling section, increasing the amount of borrowing from £4 million to £11 million. Up to now the obligation to provide this money was placed on the Minister for Finance. Probably the Minister for Finance has sufficient problems within his own Department. There is every likelihood that the Minister for Finance, with the consent of the Minister for Posts and Telegraphs, will tell the authority to float their own loans abroad. Knowing that revenue is scare within the Department of Finance I can see that happening. The undertaking of the establishment of the second channel and the building of other transmitters required throughout the country must be honoured. We know how undesirable is foreign borrowing and that it should be avoided if at all possible. We have observed the steady depreciation of sterling especially against stronger currencies over the past three or four years. We have seen the State itself embark upon a huge spree of foreign borrowing, some for capital purposes and, indeed, some for current purposes. I always disagree with foreign borrowing for current purposes.
The £11 million about which we are speaking is sufficient only to keep the Authority going up to 1979. It is more than likely that they will be demanding the largest part of that amount within the next 18 months. Naturally, the most expensive part of their undertaking will be the building of new transmitters and the establishment of a second channel. There is also heavy depreciation within the station itself. But, if the authority are placed in a situation which forces them to borrow on foreign markets, they will find themselves in a very different position from what they have experienced heretofore. For example, up to now the £4 million was not repayable; it has not been repaid since the establishment of the Authority. If and when loans are floated abroad by the Authority themselves, in their own right—and this is what the Minister is doing here; I know they will have to come back to the Minister for Posts and Telegraphs and the Minister for Finance—these may be given very willingly if there is insufficient moneys available within the Department of Finance. Whether or not they realise it at present it will place a very severe strain on the Authority.
Probably some such loans will be granted for a very short period. We know that some loans floated by the Minister himself over the past two years have been very regulated and restrictive as to their repayment. We know that the interest charged on such loans is fairly substantial. Not alone will the Authority have to fund such loans but they will have to repay them. If, in four or five years' time there has been a loan of anything in the region of £5 million to £6 million, I cannot see how the Authority will repay it. Looking at their performance since the establishment of television, the Authority have found it difficult to break even. I believe one or two years they made a profit but it was very limited. This will certainly place an obligation on the Authority as far as foreign borrowing is concerned to honour their commitments. Their running costs will have a big effect on what the Authority will charge in licence fees. We know, in relation to the present state of costings, that the recent increase in licence fees will barely cover the running operations of the Authority in 1976.
Semi-State bodies such as the ESB and local authorities have borrowed money from abroad but they usually are paying propositions. They can generally increase their charges to the public. I do not think RTE have the same latitude in regard to this type of situation. There is a certain limit on how high we can put licence fees and there is also a certain limit in regard to advertising. Advertising is not increasing. We do not know what the financial state of the Authority will be in five or six years' time when they will probably be forced to engage in some sort of foreign borrowing. Such a loan will have to be repaid within a certain period. I believe at that stage the Authority will find themselves in financial difficulties.
Foreign borrowing did not come into question for the Authority up to now, but now it has. I would prefer to see the Authority raising money within the State. In the case of such borrowings the Exchequer get a substantial part back in interest. In relation to any money borrowed outside the State the State loses in regard to the interest paid by the depositor and also in regard to repayments. Have the Authority researched what their position will be in five or six years from now if they undertake foreign borrowing?
