Ivor Callely (Fianna Fail)

I am not sure whether I should raise this point on this section or when we reach the end of Chapter 4. I take the opportunity to bring to the attention of the Minister and his departmental officials an issue which I have been raising with the Department for some time, that is, capital allowances which are dealt with in Chapter 4 - section 36. It includes corporation tax which are dealt with in Chapter 45 - section 43. There was a cut-off date for nursing homes of December 2009 in respect of planning applications where building works were to commence in June 2010. I bring to the attention of the Minister and his departmental officials the fact that the demographics are clear on the need for the provision of nursing home beds. The Minister's colleague in the Department of Health and Children will be able to give him the actual figures identified as being required.

Because of the economic, financial and banking situation that prevailed in 2009, people with nursing home proposals were unable to secure the required liquidity and as a result, some projects did not proceed. Thus, some of their proposals did not succeed. I am simply putting a marker down at this stage of the debate in asking the Minister of State to revisit the representations I have made on this issue and hopefully come back to me on Report Stage. Perhaps, in the intervening period he might have the opportunity to discuss the matter with his colleagues in the Department of Health and Children. All I am simply asking is that in light of the economic and financial situation that prevailed in 2009, the cut off period for capital allowances for nursing homes, which was December 2009, should be extended to December 2010, for build to commence from June 2010 to June 2011.

I have no doubt a number of arguments could be presented with the blinkered vision of the Department of Finance focusing purely on the financial aspects. However, Government policy as regards the Department of Health and Children is to try to encourage the provision of nursing home beds. Clearly, in relation to north Dublin, while I am not too sure about the rest of the country, there is a lack of long-stay facilities. To use the term familiar to hospitals, we have "bed blockers" in every one of our acute hospitals. We have not had any level of investment in nursing homes throughout 2009.

I do not have to explain this to the Minister of State, but I shall take the opportunity to stitch it into the record. A person who wants to develop a 100-bed nursing home would require approximately €10 million. The banking position last year was not favourable for anybody applying for that level of funding. I understand that whereas in the past there may have been 100% funding for the development aspect of such a project, since the liquidity crisis the same level of funding has not been available. I am talking about just the development, not the site and fit-out costs. We are talking, perhaps, about a 40:60 ratio. If that is the situation all the more reason that capital allowances are needed.

I would welcome clarification from the Department in this regard, but my understanding is that it is really not a case of capital allowances being of great benefit to the owner operator of the nursing home because it is likely the concern will be a limited company with a 20% tax regime. However, for somebody who has to raise 40% of the €10 million I have mentioned, it will encourage him or her to be able to draw down money via an accountant and the bank if the capital allowance facility is in place. It is really an incentive to get the required equity needed for those types of projects.

Having said all that on the financial side-----