Simon Harris (Wicklow, Fine Gael) | Oireachtas source

This amendment is the one I am most eager to implement. I have heard from Senators on all sides of the House about this matter. Senator Keane has taken a particular interest in this area and has spoken to me about it. Senator van Turnhout also raised the issue on Committee Stage as, I think, did Senator Byrne. I acknowledge the calls from Senators on Committee Stage for a more favourable rates treatment of child care providers. Since the conclusion of Committee Stage I and the Department officials have considered the valuation and rateability of child care in detail. I have been determined to try to do something. It has not been easy to get this right but what we are doing today is a very constructive step forward for the child care sector. This is not the first time this issue has been considered but it was the subject of a comprehensive review, including consultation with relevant stakeholders.

In this Bill we are dealing mainly with technical amendments to facilitate the acceleration of the national revaluation programme and to make changes to correct deficiencies identified since the Valuation Act 2001 came into force. We have to respect sound valuation and rating principles, one of which is that occupiers of a property who operate with the intention of making a profit are rateable. I am therefore working within tight constraints. That is the purpose of valuation. If one operates to make a profit one is rateable. Therefore, the flexibility for exemption from rates is limited. The rate system cannot be seen as a means of support for a particular sector. As has been said in the past, where the State wants to, and can, support a sector it can do so in many policy ways. This is what the State does in giving substantial and quite correct direct supports to the child care sector. It may not be sufficient. One would argue it never is but any meaningful response is not to be found in a rates exemption. That would make only a minor contribution to the sector but would involve breaking fundamental valuation and rating principles.

I have put significant work into this with the officials and stakeholders and I propose to extend the exemptions for child care to those that operate on a not-for-profit basis. I hope this will be welcomed on all sides of the House. I am doing this to bring greater equity and clarity to the not-for-profit sub-set of the child care sector. The application of the rates system by local authorities regarding not-for-profit child care is inconsistent and the distinction between charitable providers who are exempt and not-for-profit providers can be a subtle one that wastes the resources of not-for-profits, which are already busy providing vital community services, by challenging their status before the valuation tribunal. This is an improvement to the system.

I recognise that it does not go as far as those who argue for an exemption for the whole child care sector would like, and I can understand that argument. For the reasons I have outlined, however, I cannot acquiesce to that. I think my proposals today are a welcome and positive step forward. My understanding is that there could be up to 1,000 not-for-profit child care providers in the country and if this amendment is passed I hope it will bring consistency to their treatment and make absolutely clear that they are exempt from rates.