Pat Carey (Dublin North West, Fianna Fail)

Senator Doherty has proposed that the new scheme of capital allowances regarding the construction and refurbishment of buildings to be used as specialist palliative care units does not come into effect.

This scheme was introduced in the Finance Act 2008 but has yet to receive European Union Commission approval from a State aid perspective and be commenced by the Minister. It was introduced in response to identified gaps in the supply of and demand for palliative care facilities around 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 these 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 Senator will be aware, this Finance Bill contains amendments that will make the scheme more effective when it comes into operation. Because the Minister was persuaded by the arguments made during the Dáil debate on the introduction of this scheme in the Finance Bill 2008 that the minimum bed capacity requirement of 20 beds could be a significant hurdle for some palliative care units, he is lowering this requirement to eight beds. He is also allowing capital expenditure under the scheme to qualify for capital allowances from the date of the passing of the Finance Act 2008 because he did not think it 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. The Minister believes this scheme has the potential to make a real contribution to increasing the provision of much needed palliative care facilities and, therefore, he is unable to accept the recommendation. However, as with other similar schemes that have been reviewed in recent years, he will keep this scheme under review to ensure it meets the requirements he has in mind for it.