Dan Neville (Limerick West, Fine Gael)

I welcome the opportunity to speak in this debate on the Finance Bill. I wish to raise a specific point about what I regard as discrimination against psychiatric institutions in respect of tax relief. This is a reflection of the marginalisation of people with mental illness. The Finance Act 2001 extended tax concessions for investment in private hospitals but psychiatric hospitals were excluded from this concession. It may be the case that at the time, people just did not think of psychiatric hospitals. This would serve to highlight yet again the discriminatory approach taken over decades, if not centuries, to the treatment of people with psychiatric illness. The Finance Act 2001 extended the industrial buildings writing-down allowance to capital expenditure incurred on a building or structure in use for a trade or consisting of the operation or management of a "qualifying hospital". The allowance consists of writing-down allowances at the rate of 15% of the qualifying expenditure for each of the first six years and 10% of the expenditure for the seventh year in respect of the construction of private hospitals.

When the owner of the hospital building is an individual and the hospital is leased to an operator, the legislation imposes limits on the manner in which the allowance can be offset against an individual's tax income. Section 49A of the Taxes Consolidation Act 1997, limits the amount that may be set off against an individual's other income, subject to a maximum of €31,750 in any one year of assessment. Any excess may only be offset against the individual's Irish rental income. There is no corresponding restriction, however, where the investor is a company chargeable to corporation tax. As a consequence of these restrictions, the reliefs are likely to be of interest mainly to those with substantial Irish rental income per shelter.

The qualifying conditions impose limits on the availability of the facility to psychiatric hospitals. Under the Finance Act 2001, the qualifying hospital must meet a range of conditions. It must be a private hospital and have the capacity to normally provide medical and surgical services to persons every day of the year. Apart from lobotomies, few surgical interventions are undertaken in the psychiatric area, which limits the extent to which individuals are able to invest in psychiatric hospitals.

In addition, the qualifying hospital must have a capacity to provide outpatient services and accommodation on an overnight basis of not less than 100 inpatient beds. This requirement does not create a problem. The hospital must also house an operating theatre or theatres and related on-site diagnostic and therapeutic facilities. Psychiatric institutions do not have such facilities. The hospital must contain facilities to provide not less than five of the following services: accident and emergency; cardiology and vascular; eye, ear, nose and throat; gastroenterology; geriatrics; haematology; maternity; medical; neurology; oncology; orthopaedic; respiratory; rheumatology; and paediatric. As psychiatric hospitals will not be able to provide five of these services, they are precluded from meeting the qualifying criteria.

The Bill also provides that the hospital must undertake to the health board in whose functional area it is situated to make available annually, for the treatment of persons who have been awaiting inpatient or outpatient hospital services as public patients, not less than 20% of its capacity, subject to service requirements to be specified by the health board in advance. In addition, the fees charged for the treatment afforded to any public patient shall not be more than 90% of the fees which would be charged in respect of similar treatment afforded to a person who has private medical insurance. I do not dispute that hospitals should have this concession — there is good reason for it — but it discriminates against the 25% of the population who will suffer from psychiatric illness at some point in their lives.

I am setting out principles rather than making a case for any individual or group. An individual has, however, made a proposal in this regard so my concerns amount to more than speculation.

Recent media coverage and discussion in the House have highlighted the shortfalls in a range of facilities and services for treating child and adolescent psychiatric conditions, such as attention deficit hyperactivity disorder and eating disorders, which the House discussed recently, suicide, personality disorders and mood disorders. Amnesty International has referred to our mental health services and championed the urgent need for facilities for children and adolescents with psychiatric health problems. This group requires separate inpatient and outpatient facilities and services. We send our children and adolescents to specialist facilities and services in other countries.

To source the funding required to establish a hospital service, a company needs to avail of tax incentives for investment in the establishment of private hospitals. Under the 2001 Finance Bill, however, psychiatric hospitals do not qualify for such incentives. I ask the Minister to examine this matter.

I regularly raise the lack of investment in psychiatric services with the Minister of State at the Department of Health and Children, Deputy Tim O'Malley. He informed me that €15 million will be spent this year on the development of psychiatric services. Of this, €5 million is required in Limerick alone for a special safe unit, with the balance to be allocated to meet the cost of changes in the Central Mental Hospital. As a result, general psychiatric services will receive no investment. At the same time, however, private individuals do not have the same incentives to invest in psychiatric institutions as those available for general hospitals.

The Government is morally obliged to provide services for psychiatric patients. Due to a lack of investment over generations, substantial capital is required to bring psychiatric services up to an acceptable level. The benefits of providing some services through private providers are significant and should be considered. The Government would be spared capital costs, day-to-day running costs and long-term financial liability and a wide range of specialist services would be provided. I ask that those who wish to invest in the provision of psychiatric hospitals be offered the same incentives as those who avail of incentives to invest in the general hospital sector.

See this speech in context