Dinny McGinley (Donegal South West, Fine Gael)
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Question 84: To ask the Minister for Finance if he is satisfied regarding the tax treatment of families with children to support. [19413/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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This Government acknowledge the continuing cost pressures on parents, particularly those with young children.

The Government have substantially increased Child Benefit since coming into office in 1997. From last month Child Benefit payments have increased to €150 per month for the first and second children and €185 for the third and subsequent children. These Child Benefit payments, which are exempt from income tax, represent a 294% increase in the rate for first and second children over the rate prevailing in 1997 and a 274% increase in the rate for third and subsequent children. By comparison, during this period the increase in the consumer price index is estimated to be 34%. Overall expenditure on Child Benefit has increased by 279% from €506 million in 1997 to almost €2 billion in 2006.

In addition, in Budget 2006 I announced a new Early Childcare Supplement of €1,000 in a full year for each child up to his or her sixth birthday. This new payment, which is also exempt from income tax, along with increases in Child Benefit, brings the amount a family will receive, for each of the first two children under six years, to €2,800 per year, equivalent to over €50 per week in direct financial support. This will be even higher where a family has more than two children under six.

On the supply side, the provision of formal childcare places is being stimulated through a programme of investment under the new five year National Childcare Investment Programme which I announced in Budget 2006. This programme will support the creation of an additional 50,000 childcare places from 2006 to 2010, building on the success of the €500 million Equal Opportunities Childcare Programme which has already been provided under the National Development Plan 2000 to 2006. So far this funding has generated over 26,000 new places with a further 15,000 places due to come on stream before it ends in 2007. This means that between now and 2010 some 65,000 additional places will be funded.

In total, over €2.5 billion extra will be invested in the area of child support over the next five years.

Measures have also been taken by the Government to favour the supply of childcare by tax incentives to set up facilities and provide relief from benefit-in-kind taxation for free or subsidised childcare where this is provided by employers. Taken together, these represent substantial measures to assist with the cost of childcare.

In addition, the tax system treats parents with dependent children more favourably than persons with no dependent children, in recognition of the additional financial burden associated with parenthood. This is done mainly through the one parent family tax credit, the widowed parent tax credit, the incapacitated child tax credit and the home carer tax credit. Also, persons who qualify for the one parent family tax credit, including widowed parents, qualify for the associated standard rate band cut off point which is €36,000 in 2006. This is €4,000 greater than that which applies for a single person.

Tommy Broughan (Dublin North East, Labour)
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Question 85: To ask the Minister for Finance the number of representations and from whom he received them in respect of postponing the proposal by the Revenue Commissioners to subject contracts for difference to stamp duty; the estimated tax to be raised by the Revenue Commissioner in respect of the taxation of this type of share transaction; the volume of stock exchange contracts conducted as contracts for difference; and if he will make a statement on the matter. [19292/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Following the announcement by Revenue clarifying the stamp duty treatment on purchases of shares underpinning the contracts for differences (CFD), my Department received strong representations that there would be severe consequences for the liquidity of the Irish Stock Market and, therefore, on the ability of Irish companies to raise capital here.

In particular, representations were made by the Irish Stock Exchange and by the London Investment Banking Association. The representations made by the London Association reflect the fact that the majority of the CFD business concerned originates with London-based firms. A survey of Irish Stock Exchange member firms conducted by the Exchange indicated that the aggregate value in 2005 of trades in Irish shares associated with CFD contracts represented 30% of the overall value of trades on the Irish Stock Exchange for that year.

I considered the representations made carefully as they seemed to have substance, taking account of the international nature of stock markets. In the circumstances, and having regard to the fact that the relevant stamp duty legislation predates the development of the CFD market, I decided to have the matter reviewed in advance of the next Budget and I issued a statement to that effect.

I was advised by the Revenue Commissioners that, in the light of the planned review, with a view to Budget 2007 announcements, and of the surrounding circumstances, they had decided to allow the existing practices of CFD issuers to continue pending the review. Although a significant percentage of trades in Irish shares was associated with CFD contracts, Irish share-based CFD business was a small fraction of the overall CFD business conducted by the London firms concerned. The Commissioners further advised that, in those circumstances and given the likelihood of that business transferring to non-Irish shares, it was unlikely that there would be any real loss of stamp duty arising from allowing the existing practices to continue pending the review.

Dan Neville (Limerick West, Fine Gael)
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Question 86: To ask the Minister for Finance if he has sought a review of the evaluation of tax relief for private hospital investment in view of the decision to permit these hospitals to use public lands adjoining public hospitals; and the way in which this alters the benefit to cost ratios of such projects. [19425/06]

Richard Bruton (Dublin North Central, Fine Gael)
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Question 249: To ask the Minister for Finance if he has sought a review of the evaluation of tax relief for private hospital investment in view of the decision to permit these hospitals to use public lands adjoining public hospitals; and the way in which this alters the benefit to cost ratios of such projects. [19700/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 86 and 249 together.

The plan for private hospitals in the grounds of public hospitals is designed to be a cost effective way of expanding the supply of beds for public patients. However, there have been no decisions yet in regard to approving any particular proposal. It will be a matter for the HSE to assess any proposals.

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 their review, including consultations with the Department of Health and Children and the Health Service Executive. Their report was published on 6 February 2006 and is available on the Department of Finance's website. The review recommended that this scheme should continue as there was a need for ongoing investment in private hospitals. The consultants observed that the construction of private hospitals could free beds in public hospitals used by private patients. It should also be noted that the consultants observed that the Government's plan for private hospitals in the grounds of public hospitals is designed to be a cost effective way of expanding supply and if properly managed will increase supply and competition.

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.

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 policies-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 Tanaiste's policy direction to the Health Service Executive to build private hospitals on public sites thereby freeing up beds for public patients.