Richard Bruton (Dublin North Central, Fine Gael)

When the debate adjourned, we were wrapping up on this group of amendments, which deals with a number of issues, including the possibility of tax relief being extended into areas of special educational need and the welcome decision by the Minister to grant medical tax relief from the very first euro of expenditure incurred by an individual or a family. I welcome the suggestion by Deputy Boyle that we should consider the totality of relief in respect of medical expenditures and medical provision.

I know the Minister is a strong defender of the tax-based schemes for developing private hospitals, private nursing homes and ancillary services. I acknowledge that in terms of getting rapid response in these areas and getting buildings built rapidly, these schemes have filled a very important gap that existed in the public service and the Minister is probably correct to state it would have taken a long time to fill that gap by other means. However, it is timely to have a proper review of these elements in the context of a health policy.

The Minister commissioned a report by Indecon last year. It has more recently been cited as a justification for the tax relief provided in the Bill, although I have not yet seen it. In previous reports Indecon assumed the medical advantages and only reviewed the level of take-up. Once it became apparent that there was a reasonable level of take-up, it deemed the scheme a success and that it should continue.

Indecon also recommended a three-year review. The Minister has built into his proposal a termination date of three years but we need a health-based assessment of the various tax schemes for developing facilities, on which the Minister did not comment on Committee Stage. Some private developers have had problems meeting standards, although I know this issue is being addressed by reforms in standards provision. However, in another change this year the Minister for Health and Children has decided that the State will effectively fund all nursing home care provision after three years. It will not provide all the funds but will be the funder of last resort. The Minister's provision means that after three years the State will pick up the residue not met by 80% of a person's income. The cost of most nursing home care is currently between €4,000 and €5,000 per month, way ahead of the pension income of many individuals who might need it. Once the 15% property threshold set by the Minister has been reached which under the scheme will typically happen within three years, the State will effectively fund the entire residue above 80% of a person's income. If the State removes the risk by underwriting the income flow in the long term, it dramatically changes the basis on which we allow tax relief at a rate of 42% for the construction of nursing homes and other facilities by private developers.

I support the call for a health-based review of the place of tax-based schemes in an evolving health policy. Such a review has been missing to date but the Minister is uniquely well placed to initiate one, having served as Minister for Health and Children, as well as Minister for Finance, and has insights not only into the contribution which tax breaks make but also their limitations. I hope he agrees that this is a good time to set up a health-based review which will go well beyond that undertaken by Indecon which involved desk-based research with virtually no contribution from the Department of Health and Children. The review should offer an opportunity to participate to advocates of public sector provision, as well as those of a tax-based model involving the private sector.

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