David Stanton (Cork East, Fine Gael)
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Question 68: To ask the Minister for Finance if he has or will consider extending the €10,000 income tax exemption for self-employed childminders to other workers in the child care sector in view of the relatively low salaries for persons working in this sector; and if he will make a statement on the matter. [12546/06]

Catherine Murphy (Kildare North, Independent)
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Question 80: To ask the Minister for Finance his plans to revise upwards the €10,000 tax exemption for childminders caring for up to three children in their own homes in view of the very low level of income these workers would have to operate on to qualify for this allowance; and if he will make a statement on the matter. [12552/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 68 and 80 together.

The new childminding tax scheme allows an individual to mind up to three children in the minder's own home, without paying tax, on the earnings received, provided the amount is not more than €10,000 per annum. If childminding income exceeds €10,000, the total amount will be taxable, as normal, under self-assessment.

The scheme is designed to provide an income disregard to home-based childminders who are self assessed for tax purposes. It is not available to childminders who mind other people's children in the children's own home or in a formal child care facility where their employment status differs in that they are treated as employees for tax purposes and issues of employee-employer tax and PRSI arise. The new relief is not designed to include such employees and I have no plans to extend the scheme to cover these or other workers in the child care sector at this time.

Other workers in the child care sector who are employees are entitled to the PAYE tax credit whereas childminders availing of the new scheme, operating under self assessment, do not have this credit. Thus, taking the personal credit into account, the entry point to the tax system for a single employee is €15,600 whereas the normal entry point to the tax system for a person on self assessment is €8,150.

It is envisaged that this new scheme, as part of the five year national child care strategy which I announced in budget 2006, will help increase supply and accessibility of child care and help parents with affordable child care. As I understand it, many childminders who may wish to avail of this new scheme care for a small number of children in their own home on a part-time and flexible basis and would not, for example, require payment arrangements to cover the full 52 weeks of the year or holiday periods. Accordingly, I consider the upper limit of €10,000 to be adequate and I have no plans at this time to revise it upwards, as suggested by the Deputy. As is the case with all tax schemes, I will, however, keep this scheme under review in the context of future budgets and Finance Bills.

Jan O'Sullivan (Limerick East, Labour)
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Question 70: To ask the Minister for Finance the position in regard to his contacts with the EU Commission regarding its preliminary opinion that the stallion tax exemption scheme would seem to constitute an aid that was not compatible with the Common Market; if he has received a final opinion from the Commission on this matter; when he expects his discussions with the Commission to conclude; and if he will make a statement on the matter. [12388/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I refer the Deputy to my reply to a similar parliamentary question from Deputy Costello on 9 November last, which set out the background to this issue in relation to the contacts that have been ongoing with the European Commission.

As regards the future of the tax exemption for stallion fees, I announced in my Budget Statement of 7 December 2005 that this exemption will be discontinued from 31 July 2008, the same end-date as for various property-based tax incentive schemes. The relevant provision is contained in section 22 of the 2006 Finance Bill as passed by the Dáil. A new regime appropriate to the industry will be discussed with the European Commission later this year.

Olivia Mitchell (Dublin South, Fine Gael)
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Question 71: To ask the Minister for Finance if he has conducted an evaluation in conjunction with the Department of Health and Children of the tax relief for private hospital investment; and if it meets the public policy objectives in the health sphere. [12500/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The scheme of capital allowances for the construction of private hospitals was reviewed by Indecon Economic Consultants as part of the overall review of property tax incentives in 2005. Indecon consulted widely in the course of its review, including consultations with the Department of Health and Children and the Health Service Executive. Its report was published on 6 February 2006 and is available on the Department's website. The summary of the main findings from Indecon's analysis is as follows.

There has been an overall increase in planning applications and approvals for private hospitals since 2000 but most have not proceeded to date; most of the extra investment in the sector would either not have been undertaken, or would have taken longer to come on-line in the absence of the tax incentive scheme; while it is too early to provide detailed estimates of the impact of the scheme on the supply and on the costs of hospital beds, Indecon believes the scheme has the potential to address supply shortages in the sector and to reduce costs.

The net cost of this measure to date was estimated by Indecon at €23 million. This will be spread over a number of years. Private health care is a long established feature of the system of health care provision in Ireland and acts as a strong complement to the publicly funded system. Private health care provision spans from general practitioner services through private beds in public hospitals and private hospitals to private nursing homes. The Government is committed to exploring fully the scope for the private sector to provide additional capacity in the health system. The key objective is to provide the required extra capacity, whether this is in the public or private sector.

A number of Government policy initiatives support the co-existence of public and private health care such as: the designation of private and semi-private beds in public hospitals; income tax relief on private health insurance premiums; income tax relief on medical-dental expenses; the National Treatment Purchase Fund sources capacity in private hospitals for public patients; and the Tánaiste's policy direction to the Health Service Executive to build private hospitals on public sites thereby freeing up beds for public patients.