David Stanton (Cork East, Fine Gael)
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Question 295: To ask the Minister for Finance the incentives in place to support the provision of child care by employers and business; and if he will make a statement on the matter. [19182/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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There are two tax incentives within the tax code to support the provision of child care by employers and business, an exemption from a benefit-in-kind charge where employers provide free or subsidised child care for their employees and capital allowances available for expenditure on child care facilities.

The benefit-in-kind exemption where employers provide free or subsidised child care for their employees applies whether the employer provides the facilities "in-house" or in a premises made available by the employer in another location. The exemption also applies if an employer provides child care facilities jointly with others, for example, with other employers. The exemption also covers situations where an employer makes a contribution to the capital costs of an independent supplier of child care facilities.

Capital allowances are available for expenditure incurred on or after 2 December 1998 on child care facilities which meet the required standards for such facilities as provided in the Child care Act, 1991. The allowances apply to expenditure incurred on the construction, extension and refurbishment of a building or part of a building used as a child care facility as well as to expenditure on the conversion of an existing building or part of a building for use as a child care facility. For expenditure incurred on or from 1 December 1999, 100% capital allowances are available in year one. There will be a clawback of the allowances, in the form of a balancing charge, if the building ceases to be used as a child care facility within ten years.

I would point out that this Government remains firmly committed to supporting working parents with their child care needs through increased capacity, choice and service quality. These aims are the hallmark of the Government's child care strategy. To this end considerable progress has already been achieved, in terms of increasing the supply of centre based child care places, through the Equal Opportunities Childcare Programme 2000-2006.

The current equal opportunities childcare programme, a seven year programme, has both an equal opportunities and social inclusion focus and facilitates the further development and expansion of childcare facilities to address the needs of parents, in reconciling their family life with their participation in employment, education and training. It aims to increase the supply of centre based child care places by 55% by the end of the programme.

The programme provides funding for small scale self-employed providers and larger commercial providers as well as community and not-for-profit consortia of private and community groups towards the building, renovation, upgrading or equipping of child care facilities.

Since it was launched in 2000, the funding for the programme for the 2000-2006 period has increased from €317 million to €499.3 million or by 57%, the most recent increase being €50 million in budget 2005. The multi-annual capital envelopes announced on budget day also included the injection of a further €40 million in additional capital funding into child care between the end of the programme and 2009.

It is expected that the total funding committed under the programme to date will lead to the creation of 33,946 new child care places, and will support another 29,556 existing places. Of the new child care places being created, 24,636 places had been put in place by December 2004, an increase of 43% in the supply of child care places in four years. These new places offer parents greater access to child care throughout the country as they balance their work and family needs.