Brian Lenihan Jnr (Dublin West, Fianna Fail)

We are discussing a scheme for hospices. It was introduced last year at the request of the relevant voluntary groups. Developing hospice care was widely welcomed at the time. Deputy Morgan's amendment proposes that the new scheme of capital allowances for the construction and refurbishment of buildings to be used as specialist palliative care units does not come into effect. I appreciate Deputy Morgan tabled an earlier amendment which was ruled out of order, and that he spoke to that. However, the scheme Deputy Morgan seeks to repeal was introduced in Finance Act 2008 but has yet to receive EU Commission approval from a State-aid perspective and be commenced by me. It was introduced in response to identified gaps in the supply of and demand for palliative care facilities throughout the country. The scheme has similar terms, conditions and exclusions to those that apply in the case of qualifying private hospitals and qualifying mental health centres. It aims to encourage private sector investment to fill some of those gaps, but only where proposed developments of facilities are in line with the longer term public health policy objectives in this area. For expenditure to qualify for capital allowances, the development of a facility must have pre-approval from the Health Service Executive, with the consent of the Minister for Health and Children, as being in line with national development plans and needs assessments for palliative care facilities.

As the Deputy will be aware, the Finance Bill contains some amendments that will make the scheme more effective when it comes into operation. Since I was persuaded by the arguments made during the debate on the introduction of this scheme in the Bill that the minimum bed capacity requirement of 20 beds could be a significant hurdle for some palliative care units, I am lowering this requirement to eight beds. I am also allowing capital expenditure under the scheme to qualify for capital allowances from the date of the enactment of the Finance Act 2008, because I do not believe it is reasonable that legitimate capital expenditure on qualifying projects should be excluded from benefiting under the scheme in the period pending EU Commission approval.

Tax incentives for similar schemes have proved to be an effective way of attracting the necessary private investment into areas of the economy where investment is needed. This scheme has the potential to make a real contribution to increasing the provision of much needed palliative care facilities and I am, therefore, unable to accept the amendment. As with similar schemes that have been reviewed in recent years, I will keep this scheme under review to ensure that it meets the requirements I have in mind for it.

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