Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 21: To ask the Minister for Finance the changes he proposes to make with regard to tax reliefs for the development of private hospital facilities; and if he will make a statement on the matter. [18651/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Under the current scheme of capital allowances available with regard to private hospitals the hospital must have the capacity to afford medical or surgical services all year round, provide a minimum of 70 inpatient beds, outpatient services, operating theatres and on-site diagnostic and therapeutic services and have facilities to provide at least five specialist services, ranging from accident and emergency to oncology and cardiology etc. Section 24 of the Finance Act 2003 extended this relief to private hospitals providing acute services on a day care basis with accommodation for such services of not less than 40 beds.

While the hospital provides services to those patients with private health insurance, 20% of the bed capacity must be available for public patients, and the hospital must provide a discount of at least 10% to the State in respect of the fees to be charged in respect of the treatment of public patients. Rooms used exclusively for the assessment or treatment of patients qualify for the capital allowances and fulfilment of the conditions necessary for qualification for the allowances must be certified annually by the Health Service Executive.

The allowances are subject to a clawback if the building ceases to be a qualifying private hospital within ten years. Capital allowances of 15% per year are available for the first six years with the balance of 10% being written off in year seven.

It should also be noted that the European Commission assessed the scheme of capital allowances for private hospitals under state aid rules. To comply with these rules, the categories of excluded persons outlined in the legislation with regard to private hospitals covers property developers, companies, trusts or those involved in the operation or management of the hospital itself. This provision facilitated a decision by the Commission that the scheme did not represent State aid.

In the context of the review of tax reliefs currently being undertaken by external consultants, I have asked them to review the current scheme of capital allowances for private hospitals. In this regard I will not consider any proposals with regard to private hospitals until the review is complete.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Is the Minister aware that the Tánaiste and Minister for Health and Children, Deputy Harney, recently indicated her interest in extending so-called tax reliefs for private health facilities? Will the Minister share his view on that proposition with the House? Does he agree with Deputy Harney and her penchant towards pouring more money into the private health sector, while we see the public health sector stumble from crisis to crisis? I am interested in the Minister's position on this issue.

Nursing homes are among the private health facilities that have benefited from property based tax reliefs. Age Action recently reported that some €500 million was poured into the private nursing care facility sector since 1997 with the introduction of these reliefs. Will the Minister confirm that figure? Can he also confirm that the owners of the Leas Cross Nursing Home benefited from this lucrative tax relief? Is he aware that those owners have had a chequered relationship with Revenue? These two points are not unrelated.

Will the Minister take the logical position and agree that there is a strengthened case, because of that experience and those facts, for the provision of public moneys directly into State services as against the current trend of more and more supports for the private sector in terms of health care delivery, be it hospitals or the range of other facilities under which these reliefs can apply? If the Minister will not join me in that view — we have teased out some of this before in terms of PPPs etc. — will he agree that any such tax reliefs earmarked for the private health sector should be conditional on strict adherence to the required standards of care for all residents, clients and attendees at these facilities, whether in terms of day care, short period stay or long-term residential care?

Brian Cowen (Laois-Offaly, Fianna Fail)
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It is not true that investment is going into the private sector while the public health sector gets nothing. There is historically unprecedented capital investment going into the public health sector since 1997. Whatever people may suggest about the past, this Administration has arranged for the largest amount of public capital and current investment into the health sector in the history of the State.

The Deputy asked my view on tax reliefs. I will await the outcome of the review so that I will be informed on our current position and then I will decide with colleagues where we go from here, what our priorities should be and what role, if any, private sector investment should play in addition to the role it already plays.

I am anxious to see the maximum possible level of investment in the health service from all sources. I am sure if the Exchequer was limitless, it would put more into the service. We should all consider the availability of access to capital, public and private, for the public good of improving our health service. We should also take into account all aspects of such a proposal and consider all of this carefully. In terms of it being a concept, the idea of private finance initiatives is something in which the new Labour Government has been involved in the United Kingdom, whether in education, health or elsewhere.

We must ensure we do not close off opportunities for further improving the standards of care that can be available to all our patients, including public patients, by deciding that only public capital should be the means by which we can improve services. We should be open to considering what role, if any, private capital may play. We must look at the pros and cons and see what issues arise and how we can deal with them and consider whether we would like to see a tax to such a proposal. My attitude, therefore, is open. I am prepared to consider these matters on the basis of any proposal that comes before me and in the context of the current review.

The issue of private sector investment in nursing homes is separate. I do not have detailed information here and cannot tell the Deputy what tax reliefs related to that nursing home in Swords. To make a general point, I recall from Finance Bill discussions that the availability of tax relief for private nursing home care provided in the region of 11,000, 11,500 or possibly 13,000 more places in the nursing home sector in Ireland since the scheme came into being. These places were in addition to those extra services provided by the public capital programme for the elderly through nursing home care and community nursing units and those created by us having to improve the existing level of care that was available in public facilities. We may not have been happy with these public facilities but the lack was there because we did not have the available resources previously.

This is an area where we need to apply our minds. The point is that the question of resources, improved capital and improved current funding must be allied to a reorganisation of delivery of the services, whether care for the elderly, acute hospital care or community services. Our social partnership programmes leave no doubt that we must all commit ourselves to finding a better means by which we can improve the service delivery mechanism of these services, given the level of resources being applied. Quite apart from the private sector investment into which the Deputy is inquiring, public sector capital and current investment has been unprecedented in the history of the State in recent years.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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It is acknowledged that many more places are now available in private care facilities, but the level of public care provision has not kept pace. The Minister signalled in his Budget Statement of last December that he would initiate a review of the various tax incentives. Will he examine each of these closely under each category? Will there be a specific examination of those who have benefited from these reliefs? Will an assessment be made of the return on the public investment? Will the return be compared with the return that would have been achieved if the moneys had been invested in the provision of public facilities, which should be an important aspect of the review? If such a comparison is not made, the review will not be complete and we will not be fully informed.

We all accept that the review, which is welcome, is necessary. I have no difficulty in awaiting the opportunity to engage with the Minister and other people in this House about the detail of the review. I hope it will be finalised sooner rather than later. The Minister and his colleagues have continually lauded and applauded the unprecedented level of investment in the health services, which the Government has had the good fortune to direct since 1997. While I acknowledge the level of investment, I do not detract from the premise I outlined earlier, that our public health services continue to stumble from crisis to crisis. I ask the Minister, rather than depending on the level of investment as a crutch, to take cognisance of the facts of the daily experience of ordinary people and accept that this serious problem needs to be addressed.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I would like to speak about the private assessment of where we stand. The amount of money invested in the public capital investment programme is the amount of capital that the Government believes to be available in the context of its various budgetary requirements, such as the need to maintain growth in competitiveness, job creation and revenue. The Government decides on its priorities across all Departments. Nobody has argued that it is wrong that the Department of Health and Children has been one of the major recipients of capital funding.

When one examines the role of private sector investment in enhancing all sectors of the health service, one has to strike a balance between the potential benefit of such investment to a prospective investor and its possible wider benefit for the community. Such wider benefits can accrue if private capital is invested in areas of social and economic priority, as identified by the Government. Certain schemes are put in place by the Government, from the available Exchequer resources, to enhance and supplement the public capital programme. Demands are placed on Exchequer funds when services are provided across the full gamut of Government activity.

The Government has to make a judgment when striking the balance I have mentioned — it is not an exact science. People can have honest disagreements when making such decisions. When one has the responsibilities of a member of the Government, for example as Minister for Finance, one operates on the basis of one's judgment and one defends one's judgment. I do not expect unanimous approval when the House discusses the decisions I have made. That is too much to expect even when I am right, and I am never 100% right. One has to defend the judgments one makes.

Deputy Ó Caoláin spoke about the state of the health service. I have acknowledged that we need to address some structural issues if we are to deal with some of the difficulties in the service. We should not talk about a status quo plus model as if that would help to bring about visible and incremental improvements in some of the service pressures we have discussed, because that is not the case. Real improvements are taking place. The number of people who have been on a waiting list for over 12 months has decreased significantly. When the Government took office, 45% of adults had to wait more than 12 months for surgery. Some 80% of patients now wait less than 12 months for surgery — 37% of them have to wait for between three and six months and 43% have to wait for between six and 12 months. While I do not suggest that the problem of waiting lists has been solved, the major reduction in waiting times should be acknowledged.

The total number of discharges in 2004 represented an increase of 35% on the figure in 1997. In other words, the throughput has grown by one third. The number of day case patients doubled between 1997 and 2004. The number of consultant posts has increased by almost 50%. I could speak about the increase in numbers of front-line staff, such as speech and language therapists and physiotherapists, who provide real services which offer additional value to citizens.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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There is a real shortfall in the speech and language therapy service.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The word "crisis" is probably the most overused word in political debate. I do not suggest that I am unaware of some of the problems which remain. The Tánaiste and Minister for Health and Children has provided increased resources because she is anxious to deal with further issues that need to be addressed. There have been significant improvements in capacity and personnel. I refer to front-line people who are doing good work. Deputy Ó Caoláin and I hear about the problems that exist, but I am sure if he is honest he will admit he has met many people who are happy with the level of service they have received within the health service. Not everyone is genuinely satisfied with the service they have been given, but the number of people who are happy with their experience of the health service is far higher than we are allowed to give credence to in this House.