Seán Ó Fearghaíl (Kildare South, Fianna Fail)

While watching the programme I was reminded of a comment made on radio by a Fine Gael Party spokesman that a monkey could run the economy. The hard work, commitment, initiative and genius of the Irish people, operating in partnership with a government that has provided leadership, foresight and prudent management, has brought us to our current position. We should be loth to do anything that would unscramble that winning formula.

In the time available to me I will refer to two particular areas of concern. As a representative of the thoroughbred county in my constituency of Kildare South, I have a special interest in the bloodstock industry, as has my colleague, the Minister of State, Deputy Seán Power. The sector is the backbone of the rural economy in County Kildare and many other counties. Section 24 addresses tax arrangements for stallion stud fees, with new provisions taking effect from 1 August 2008.

I am conscious that not every Member of the House understands the importance of the stallion industry for the rural economy and in that regard it is useful to refer to the Indecon report. I will summarise the report's main findings on the bloodstock sector. Indecon estimated that total stallion fee income in 2002 was €85 million. After adjusting for costs, including wages and salaries, keep and related expenses, depreciation and financing costs, Indecon prudently estimated the total net value added produced by annual stallion income in 2002 at between €7 million and €16.4 million.

The report also suggested that 2,154 full-time equivalent jobs were supported by the stallion sector. The Minister for Finance indicated yesterday that this figure has since increased to approximately 2,500. The employment created by the operation of stud farms also generates substantial employment incomes, estimated by Indecon to total €44 million in 2003. Conservative estimates put total Exchequer contributions from the stallion sector, through PAYE and PRSI taxation paid on employment incomes and VAT and excise duties, at €22.4 million in 2003. Assuming a multiplier of 1.43 and based on a best estimate of total current spend by the sector, it was estimated that total contribution to the economy of expenditures undertaken in the stallion sector was of the order of €120 million.

Since the Indecon report was published in July 2004, the bloodstock sector has continued to grow to the point at which Ireland is now the third largest producer of thoroughbreds in the world. That, in itself, is quite a phenomenal achievement for such a small country. The industry is conscious of the significant support it has received from this and the previous Government. It is, I believe, understanding of the changes that are now proposed to the tax regime, on foot of objections from the EU Commission and some Opposition Members of the Oireachtas to stud fee relief. The Minister's proposal for a four-year write-off on the purchase cost of a stallion is welcome and will, I assume, be approved by the EU.

Moving on from a tax relief that is to be abolished, the Minister might consider a new relief in line with his own belief that some reliefs continue to be justifiable where they are targeted and likely to be productive for the citizen and taxpayer. It is appropriate that the Minister of State, Deputy Seán Power, is in the House to hear this suggestion. The Government is strongly committed to the implementation of the primary health care strategy, a key element of which is the introduction of an interdisciplinary team-based approach to primary health care provision. It is recognised that modern, well equipped and accessible premises are essential to the effective functioning of a primary care team and that such premises should provide a single point of access for the user, as well as encouraging closer co-operation between providers.

The primary care strategy group estimates that, at 2001 prices, a typical such facility would cost of the order of €2.5 million. Given that the group recommended that up to 600 special care units would be required up to 2011, a total capital investment of €1.2 billion would be needed. I am proposing the following suggestions in this regard. First, the Minister should consider the introduction of tax benefits like those for nursing homes, to be offered to groups of GPs, with a combined list size that is sufficient to fulfil the required numbers for a primary care team. These GPs would then proceed to develop primary care centres with both GP surgeries and areas for wider primary care team participation. This would encourage GPs to invest funding in primary care centres. It would provide the necessary capital investment for the primary care strategy, and would act as a real incentive for GPs to come together and join into primary care teams.

Second, I am proposing the introduction of a lease-back scheme, whereby the HSE would either lease back the area of development earmarked for the primary care team alone — leaving GPs to own their section of the development — or the entire development, so that once they had gained ownership of the building they would lease the GP section back to GPs at a reasonable rent.

The first of these options would attract GPs who want to retain ownership of their surgeries, while the second option would allow the HSE to have control in deprived urban areas, thus ensuring that new GPs would not face significant capital investment costs. Such a scheme should be severely limited. Tax incentives should only apply to the medical part of any development and only GPs involved in the primary care strategy should be entitled to avail of any relief. Such GPs would have to be in a team that is sufficiently large to justify the development in the first instance. Any new developments would require the agreement of both the HSE and the GPs.

The advantages of such an approach would obviate the long bureaucratic process whereby the HSE tries to obtain sanction for capital funding for each individual project across the country. In addition, because of the appetite among GPs for such developments, it is realistic to envisage such centres being developed much faster and more cost-effectively than via the public sector. It would also encourage GPs to expedite these developments by providing such tax incentives for a limited period of three to five years. The ultimate goal is to develop as many purpose-built, state-of-the-art, primary care centres as possible, both quickly and efficiently.

I strongly believe that these suggestions warrant consideration as a means to advancing the provisions of the primary health care strategy. I commend the Bill to the House.

See this speech in context