Seán Ryan (Dublin North, Labour)
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Question 91: To ask the Minister for Finance in relation to tax incentives on private hospital developments, the number of applications which have been made under the scheme; the number of applications which have been approved; the number of hospital beds to be supplied by the approved applications; the expected cost of the tax foregone on these developments; and if he will make a statement on the matter. [33105/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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There is no system of prior application and approval under the scheme of tax relief for the construction or refurbishment of buildings used as private hospitals. When the relevant facilities have been completed, and provided they meet the necessary criteria, investors can then claim tax relief on the expenditure incurred under the scheme in their annual income tax returns as part of the self-assessment system. All returns are subject to check and possible audit to ensure that, among other things, the tax relief is correctly claimed.

The Revenue Commissioners do not therefore have information on the number of hospital beds supplied or to be supplied as part of projects seeking tax relief under the scheme. However, in order for expenditure on a private hospital to qualify for the tax relief, the private hospital would have to provide a minimum of 70 in-patient beds on an overnight basis or 40 beds for day treatment services.

I am informed by the Revenue Commissioners that information on the scheme of tax relief for private hospitals was for the first time specified and separately included in personal income tax returns for the tax year 2004, the latest year available, and which were due for filing in October, 2005. No specific information on the cost of the scheme is available for the tax year 2002 (when the scheme of relief for private hospitals was introduced) or for 2003. Based on the information that has been received and collated to date for the tax year 2004, a total of €4.5 million was included in 37 claims for capital allowances for the construction of private hospitals. This figure would correspond to a maximum Exchequer cost of the order of €1.9 million for these returns in terms of income tax forgone.

I should point out that the Revenue Commissioners are concerned at preliminary indications that in some instances the new, separately categorised data on exempt income and property incentives may not have been correctly entered on the 2004 Income Tax returns. Revenue is engaging with the tax practitioner bodies to draw attention to these deficiencies and to rectify them. Revenue has also increased awareness among its own staff involved in processing tax returns of the need to ensure, through closer examination of the returns, that they are correctly completed.

Data for the tax years 2005 and 2006 is not yet available as the income tax returns for those years are not due for filing until October 2006 and October 2007, respectively.

I should also point out that 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. The report was published on 6 February 2006 and is available on my Department's website. A summary of the main findings from Indecon's analysis of the scheme of capital allowances for private hospitals 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 the measure to date was estimated by Indecon at €23m from 2002 to 2005. This cost will be spread over a number of years.

Jerry Cowley (Mayo, Independent)
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Question 92: To ask the Minister for Finance his views on whether a development tax scheme is needed for the Ballina and north Mayo areas of County Mayo as this area of Mayo is persistently being ignored by the Government; the financial investment plan his Department has in place for this region of Mayo; his further views on whether investment is needed; and if he will make a statement on the matter. [33226/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy will appreciate that in line with normal practice in the run up to the annual Budget and Finance Bill I do not wish to comment on the intention or otherwise to make changes in taxation. However, as I have pointed out in previous replies, I cannot in any way agree that North Mayo, or indeed any part of Mayo, is being persistently ignored by the Government. I would like to refer the Deputy to replies he received to previous Questions on this matter including Questions Nos. 354 and 355 dated 2 November 2005, Question No. 147 on 7 February 2006, Question No. 110 of 28 February 2006, together with my reply to questions on 9 and 21 March 2006 and I would like to take this opportunity to reiterate some of the points I have made in these previous replies.

While the Deputy is no doubt aware the allocation to any region of the country, including North Mayo, of public investment at project and sectoral level is a matter for the relevant Minister in the first instance, I have previously informed the Deputy that the role of my Department is to assist in achieving the Government's priorities, including those priorities designed to address the issue of job creation in areas such as North Mayo. I also indicated that progress is being made in prioritising expenditure under the National Development Plan (NDP) in the BMW Region and the indications are that the under-spend on a number of key infrastructure measures under both the Economic and Social Infrastructure OP and the BMW Regional OP is being addressed.

As I pointed out to the Deputy in my reply of 28 February, 2006, the latest data reported to my Department at that time indicated that some €750m has been spent in County Mayo under the NDP since 2000. Expenditure on housing, transport and environmental infrastructure alone had amounted to some €490m. In addition, ambitious plans have been set for further investment in transport infrastructure under Transport 21 which sets out targeted improvements to be made in a number of national secondary routes including the important N59 costal road which runs from Sligo through North Mayo on through Westport and into Galway City. Recently completed projects in North Mayo include phase 1 of the N26 from Ballina to Bohola with a further 18km currently being planned by the NRA. Work on the important N5 Charlestown bypass has begun and is due for completion in 2008. Further development of the N5 will see 14km of roadway being constructed which will bypass the town of Ballaghadereen. In addition, a further 17km of the N5 from Wesport to Castlebar will be upgraded following completion of planning for the project. When completed, these projects will further complement the 16km of the N17 between Knock and Claremorris which was completed in 2002 and the plans by the NRA for upgrading a further 25km of this route from Charlestown to Collooney.

Finally as I have previously pointed out that with respect to tax incentive schemes which come under my responsibility, I would draw the Deputy's attention to the fact that Ballina was among the 42 towns and cities that had integrated areas designated for tax relief under the 1999 Urban Renewal Scheme, while Belmullet, Charlestown and Foxford had sub-areas and sites designated for tax relief under the Town Renewal Scheme. Under both of these schemes tax relief has been and continues to be provided for the refurbishment and construction of certain residential, commercial and industrial buildings.

Following a major review of various property and area based tax incentive schemes I announced in Budget 2006 that the various reliefs either had achieved the objectives set out for them or were no longer considered to be cost effective in terms of the objectives set out for them and were therefore being terminated subject to certain transitional provisions. These included the urban renewal and town renewal schemes. This winding down of property based tax reliefs is consistent with the greater capacity of particular economic sectors nowadays to fund such investment from their own resources, and the sizeable capital investment which the Government itself is making through major new investments.