Nithe i dtosach suíonna - Commencement Matters

Cancer Services Provision

I thank the Minister of State for coming to the House to deal with this matter. This question is on a very important issue, the oncology radiation services in Cork. As a result of the overrun in the cost of building the new national children's hospital, there is concern that other projects which were in the process of being provided with capital funding will be affected. One of these projects is this one in Cork. I tabled this Commencement matter to seek a clear indication that the project will not be affected. The delivery of this unit is essential for Cork and the southern region. It is in that context that I raise this matter. It is important that clarification be given at this stage.

I will be taking this matter on behalf of the Minister, Deputy Harris, this morning. I thank Senator Colm Burke for raising the issue of radiotherapy services in Cork and for giving me the opportunity to update the House on this matter. Cork University Hospital is a designated cancer centre. Radiation oncology treatment is currently available at the hospital. The Minister, Deputy Harris, would like to assure Senator Burke that the building of the new radiation oncology facility to meet the level of demand that will arise in the coming years is progressing as planned. The construction of the new facility is a key component of the national plan for radiation oncology and its delivery will not be delayed arising from the costs involved at the new children’s hospital.

Radiation oncology treatment is available in four other public hospitals, namely, St. James’s Hospital, Beaumont Hospital, St. Luke’s Hospital, and University Hospital Galway. Through a North-South joint initiative, radiation oncology services are available to patients from the Republic of Ireland, mostly from Donegal, in the North West Cancer Centre in Altnagelvin Area Hospital, Derry. In addition, contracted services are available to public patients in Waterford and Limerick. Due to the projected increases in cancer incidence arising from an increasing and an aging population, demand for radiation oncology services is expected to grow. New facilities are also planned for Galway and design work has commenced on a facility to house further radiation oncology capacity at Beaumont Hospital. Recommendation 22 of the National Cancer Strategy 2017-2026 highlights the importance of expanding capacity in Cork, Galway and Dublin in line with the national plan for radiation oncology.

Building work on the new facility in Cork is nearing completion and will be fully complete in this quarter. Many of the extra staff who will work in the new expanded service are already in place. It is expected that the facility will be fully equipped, commissioned and operational early in 2020.

The HSE’s national cancer control programme, with oversight from the Department of Health, monitors the radiation oncology key performance indicators as agreed in the national cancer strategy. According to the most recent report of November 2018, 87% of referrals to radiation oncology units were offered an appointment within 15 working days. Projects, such as that under construction in Cork, will allow us to continue to provide quality and timely care to patients in the coming years.

I very much appreciate the Minister of State's reply. The only issue I want to raise is related to equipment. Given that the building is nearing completion, can the Minister of State indicate whether the equipment for the facility has been purchased? Has provision been made for equipment in the 2019 budget or does funding spill over into 2020? That is my concern at this stage. It is important that clarification is provided on this matter.

I am unable to answer the Senator's questions on the purchase of and budgeting for equipment for the project. However, I will convey his concerns to the Minister for Health, Deputy Harris, and ask that his office provide a direct answer to his questions.

It is important that a reply is furnished to me in due course. I thank the Minister of State for her assistance in this matter.

VAT Exemptions

I welcome the Minister of State, Deputy D'Arcy, to the House yet again. The issue I raise is the change to the zero rate of VAT for vitamins and minerals. I acknowledge that the Minister for Finance clearly articulated the view that these are matters for the Revenue Commissioners in the first instance, rather than his Department or the Department of Health. I appeal to the Minister of State to have this matter reviewed on a number of grounds, one of which relates to health. It does not make sense to charge a VAT rate of 13.5% on fast food, such as burgers, chips and other greasy foods, particularly in the context of the national health strategy, when the Revenue is prepared to impose a VAT rate of 23% on health supplements from next month onwards. I noted the Taoiseach's statement in the Lower House - I checked the record today - that he was not in a position to confirm the higher rate would apply to iron supplements or folic acid but he would revert to the House on the matter.

I spoke to a number of general practitioners when researching this issue. My GP prescribes vitamin B12, folic acid and fish oils to patients. There are issues in this regard. I am not suggesting this for the benefit of those who are popping vitamins every day of the week. That is not right. However, GPs tell me they are prescribing these vitamins and mineral supplements - let us not call them drugs - on which Revenue will charge VAT. One must ask what the Government can do about it. I presume there it may be possible to address the matter in a finance Bill or other legislation. Maybe we should distinguish between cases where vitamins are prescribed and those where they are not prescribed. I would generally like these vitamins to be zero rated for VAT, as has been the case since 1972. I ask the Minister of State to consider with his colleagues whether we can set up a consultation process to engage on this matter with stakeholders.

As someone who lives near Gorey, the Minister of State will know how important our provincial towns area. Supplement and health shops, in particular in rural communities, rely on this legitimate and legal business. We need to support them against the major multiples in the cities. This decision raises many issues for rural communities and rural traders. More important, there is substantial employment associated with the supplements industry and we need to be careful how we impact on that.

To address the Senator's direct request to me, the Department is reviewing this matter. That commitment was given by the Minister for Finance on Committee Stage of the Finance Bill in October last.

On a point of clarification, basic vitamins, minerals and fish oils are zero rated. The standard rate of VAT applies to food supplements. However, there is a Revenue concession which allows the zero rate to be applied to certain types of food supplements, such as vitamins, minerals and fish oils. The practice of zero rating vitamins, minerals and fish oil food supplements has been applied since the introduction of VAT in November 1972 when the marketplace for food supplements was small. The concession meant that vitamins, minerals and fish supplements were treated the same as food for VAT purposes. However, since the 1970s there has been significant growth in the number and complexity of food supplement products on the market, most of which are not covered by the zero rate concession, such as supplements containing botanicals and bioactive substances. While these new products apply at the standard rate of VAT, the growing variety of products in the market led to diverging views between Revenue and industry over which food supplement should be at the zero rate versus the 23% rate. Revenue issued eBriefs in 2011 and 2013 in an effort to clarify that only basic vitamins, minerals and fish oil would qualify for the zero rate. However, disagreement on the applicable VAT rate and queries on specific products continued.

The operation of the current concession has become problematic because of efforts by some businesses in the industry to exploit the concession to extend zero rating beyond the scope permitted by Revenue. Some businesses have challenged Revenue guidance and decisions on the VAT rating of products giving rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses.

The issue was raised during debates on the Finance Bill 2018. Deputies and Senators looked for clarity for industry on the VAT treatment of food supplements and sought the retention of the zero rate for certain categories of food supplements. On Committee Stage, the Minister agreed that he would ask his officials to address the matter in the context of the tax strategy group and also stated he would not interfere in any decision made by Revenue on the matter in the interim. Revenue published new guidance on 27 December 2018 concerning the rate of VAT that applies to food supplements, announcing its intention to apply the 23% VAT rate to most food supplements with effect from 1 March of this year.

It should be noted, however, that human oral medicines, including certain folic acid and other vitamin and mineral products licensed by the Health Products Regulatory Authority, will continue to apply at the zero rate of VAT. It is possible to retain these products at the zero rate because they qualify as oral medicines, which are charged to VAT at the zero rate in Ireland under an historical derogation to EU VAT law. Infant foods will also continue to be zero rated.

I understand the concerns of industry in this matter. For this reason, independent of Revenue's decisions on interpretation, the Minister agreed to put in place a process that will conclude in the 2019 tax strategy group paper to examine the policy choices around the VAT treatment of food supplements.

As I stated in the Lower House yesterday, the Revenue is independent of these Houses and the Minister has said he will not intervene with Revenue. That is long-standing practice.

I thank the Minister of State for his detailed reply and welcome the decision to have the tax strategy group produce a paper on the matter.

The recurring theme is that we need to look at alternatives. I recognise the independence of Revenue but when we are charging 13.5% on fast foods and, at the same time, removing the zero rate from food supplements and vitamins, something is amiss and needs to be addressed.

I thank the Minister of State for coming to the House.

There are thousands of products to be analysed to determine whether zero rating, a 23% rate or potentially a different rate should apply. This will depend on the advice of the tax strategy group. From speaking with the Minister for Finance, Deputy Donohoe, I know that a fair hearing will be given to this. I know there are peculiar anomalies with food. As the Senator mentioned, products sold by unhealthy fast food outlets are at the lower VAT rate of 13.5%, while potentially healthy products that may be prescribed and may be really beneficial to people's health could be at the 23% rate. That will be a matter for the tax strategy group. As I said in the Lower House yesterday, I will certainly give this a fair hearing, as will the Minister.

Schools Building Projects Status

The next matter is from Senator Lombard and concerns a very important matter in his constituency.

I think it is your constituency as well, a Chathaoirligh.

My constituency is the Thirty-two Counties now. I will not allow it to be diminished.

I welcome the Minister of State and realise the Minister for Education and Skills unfortunately cannot be here due to issues in Donegal. He made contact about it last night, in fairness. I am calling for an update regarding the purchase of a site for a Gaelscoil in Kinsale. The Gaelscoil has been a unique and thriving part of our community for 11 years, during which, unfortunately, it has been housed in prefabs. One of these buildings had to be abandoned last year because of the condition it was in. It has been an ongoing debacle trying to secure a site for a permanent school.

Kinsale is a unique location. In the past ten years, its population has grown by 23%, which is significant when we consider our population growth nationally. The need for a permanent structure and site for the Gaelscoil has been talked about for over a decade. We have moved an awful long way along this path. We have identified a five acre site, which the local authority, as the purchasing power, and the Department have agreed is suitable. Contracts were submitted to the Chief State Solicitor's office last October. We are trying to get these contracts out to start the process, which is part of the Government's schools building programme. For that to happen, this roadblock needs to be lifted. We need to ensure the Chief State Solicitor's office signs off on the site so we can move on.

We have a unique population of students going to the school. We have 106 boys and 112 girls in the school at the moment. In this day and age, it is probably not appropriate that they should go through their childhood education in a prefab setting. We need to find a solution. The solution is to purchase the beautiful five acre site that has been identified. We need the Chief State Solicitor's office to remove these blockages so we can deliver the school for the people in the surrounding community of Kinsale.

I hope the Minister of State can give me some detail regarding what the Chief State Solicitor's office is planning to do and whether the matter can be moved forward. If not, perhaps the Minister of State would speak to me afterwards about trying to move this project forward.

I thank the Senator for raising this matter. A new school building for Gaelscoil Chionn tSáile is included on the Department's six year capital programme. The project is to provide is a permanent school building for the Gaelscoil which is currently in temporary accommodation. In that context, the Department of Education and Skills has been working closely with Cork County Council under the memorandum of understanding for the acquisition of school sites with a view to securing a suitable site for this school. Under the memorandum of understanding for the acquisition of school sites, local authorities assist the Department with the process of identifying and acquiring sites for the development of school accommodation. The first step in this process is the identification of suitable sites by the local authority. The identified sites are then technically assessed on a joint basis by officials from the local authority and the Department’s professional and technical staff.

The Senator will appreciate the importance of a thorough appraisal of site options at this point in order to ensure the achievement of value for money and to minimise the potential of any issues arising during the planning and development stages. A number of site options for Gaelscoil Chionn tSáile were identified and thoroughly technically appraised for suitability by personnel from the Department of Education and Skills and Cork County Council. Arising from this exercise, the Department has been engaged in negotiations with the owners of one of the suitable sites identified at technical appraisal stage. The site in question is that on which the Gaelscoil is currently located in temporary accommodation. Negotiations have concluded and agreement in principle has been reached with the landowners in respect of the proposed acquisition of this site by the Department. Therefore, the site acquisition process has advanced to the conveyancing stage as draft contracts are being prepared and legal due diligence is being undertaken in respect of the proposed transaction. The acquisition of the site will enable the Department to progress the architectural planning process for the project. I assure the Senator that the school authorities are being kept apprised of progress with respect to the advancement of the site acquisition and building project for the school.

The Minister of State has updated us on the information that is in the public domain. Moving forward, it is about trying to get the contracts that have been with the Chief State Solicitor's office since last October signed. We have lost three or four months and we need to get movement on this issue. I ask the Minister of State to make representations to the Chief State Solicitor's office to try to move these contracts forward. Having them signed would be a major step forward for the community of Kinsale that uses the school. If we get this project going, we will go through the building programme at speed. While this may seem like a small thing, it is a major roadblock and it would do an awful lot for us if it were lifted.

I will speak directly with the Minister on the matter and try to get officials from his Department to provide an update on where matters are with the Chief State Solicitor's office. The objective of the exercise is to move on to the next stage.

Beef Industry

The agri sector is a vital part of the national economy, yet there are a number of serious issues for farmers, which means that many of those involved in the sector are at risk. There simply is not enough of a return on the investment made for some farmers. As the margins are too tight, many have to consider their future. This is a very serious issue in rural Ireland. There is the issue of oversupply and a drop in prices which, in turn, is leading to a crisis of confidence throughout the industry. During the week ending 20 January, the number of cattle processed by Department of Agriculture, Food and the Marine beef export plants totalled 36,656. During the same week in 2017 the figure was 33,256. Unfortunately, the slump in cattle prices before Christmas has continued into 2019, with many factories quoting unchanged prices. Farmers are struggling to have stock killed, with many having to wait weeks. Ultimately, the prices achieved are unsustainable. This cannot continue. We need a clear plan. What measures and additional supports are being developed and considered by the Minister of State to address the issue?

There are growing concerns about the viability of the agrifood sector. What help is being offered to those who need it most? The growing cloud of Brexit is also hanging over us. There is a distinct feeling of despair surrounding beef exports to the UK market, particularly in the event that there is a hard Brexit. Earlier this month it was deeply worrying and concerning to hear the president of the Irish Farmers Association, Mr. Joe Healy, warning that if the United Kingdom crashed out of the European Union, "We are facing ... [a] potential wipe-out of beef production in this country." According to Bord Bia, total Irish exports of beef in 2017 amounted to 556,000 tons, of which 51% with a value of €1.3 billion went to the United Kingdom. We need to know what plan the Government has to support all of the farmers who have invested so heavily in their stock, their livelihoods and those of their families who need to know where they stand. They also need more detail of the aid packages the Government has stated it will demand from Brussels in the event that there is a hard Brexit. We also need clarity on the state of play for beef producer organisations. How does the Minister of State envision it panning out in the future?

The beef plan group has added its voice on the issue and been holding a series of public meetings across the country to seek support for the beef plan policy. It seems to be striking a chord with many farmers in rural Ireland. It has pinpointed what it sees as a lack of support from the market for a quality beef product as a major problem, as well as processors paying below the cost of production for such a product. It believes there is an oversupply of cattle in the market. To tackle the issue it has suggested removing mandatory stocking levels. It is aiming for the introduction of a programme centred on sustainable quality assurance instead of quantity driven policies. Such a measure should help to increase the price of beef. The group is also calling for incentives to be introduced which would see beef producers who exit the market switch instead to fodder production programmes and-or environmental schemes which, in turn, would create a greater balance in the sector.

Farmers are under severe pressure and their stress levels are extremely high. They need the Government to provide clarity for beef producers. How does it plans to tackle this issue in the next few months?

As an active beef farmer I am very conscious that 2018, in particular, was a difficult year for the beef sector due to unprecedented weather events which resulted in increased input costs owing to fodder shortages. I am deeply committed to fully supporting and developing the beef sector. One of the unique strengths of the agrifood sector has been the shared vision for its sustainable development in Food Wise 2025. It is crucial that we all continue to work together. The Minister for Agriculture, Food and the Marine, Deputy Creed, has utilised the beef round table to highlight the need for stakeholders to recognise their inter-dependency and support the sector through an examination of mechanisms to add value along the supply chain and increase the strength of all links, including beef producer organisations. My Department is engaging extensively with stakeholders in beef producer organisations which have strong potential to strengthen the position of the primary producer in the supply chain. I firmly believe producer organisations have the potential to play a very important role in this area. My Department is continuing in its efforts to drive the potential of the scheme through engagement with an array of stakeholders across fora. It has rolled out a range of schemes as part of the €4 billion Rural Development Programme for the period 2014 to 2020.

The beef data and genomics programme, BDGP, is the main support specifically targeted at the suckler cow sector which will provide beef farmers with €300 million in funding during the current rural development programme period. The scheme is an agri-environmental measure to improve the environmental sustainability of the national suckler cow herd by increasing genetic merit within it. In addition to the BDGP, other supports available to suckler cow and sheep farmers under pillar 2 of the Common Agricultural Policy, CAP, include the green low-carbon agri-environment scheme, GLAS; the areas of natural constraint, ANCs, and knowledge transfer groups. Suckler cow farmers also benefit from the basic payment scheme, BPS, and greening payments under pillar 1.

The national farm survey data suggest suckler cow farmers receive support equivalent to approximately €500 per suckler cow on average. It is also envisaged that suckler cow farmers will be the primary beneficiaries of the €23 million increase in ANC payments, in addition to the €20 million available under the beef environmental efficiency pilot scheme being announced by the Minister, which is why he has had to send his apologies to the House. The scheme is targeted at suckler cow farmers and specifically aimed at further improving the carbon efficiency of beef production. The Department is examining all appropriate measures to support the different sectors, including the suckler cow sector, in preparation for the next iteration of the CAP. We are committed to ensuring suckler cow farmers will continue to receive strong support under the next CAP. Such payments should support and encourage suckler cow farmers to make the best decisions possible to improve the profitability and the economic and environmental efficiency of their farming systems.

The development of markets for Irish beef was a particular priority for many of the trade missions in 2017 and 2018. The opening last year of the Chinese market to Irish beef marked the culmination of significant work over a period of years. The Department continues to prioritise efforts to gain market access to new third country markets and, equally as important, deepen existing markets for Irish beef products. I am deeply committed to ensuring suckler cow farmers will continue to receive strong support under the next CAP. My view is that such payments should support and encourage suckler cow farmers to make the best decisions possible to improve the profitability and environmental efficiency of their farming systems.

I raise this matter because of the urgency attached to it. As he is involved in the farming business, the Minister of States fully appreciates the difficulties farmers face. There is a sense of urgency attached to this issue. With other farm bodies, the new beef group has put forward some proposals which are credible and should be explored if the sector is to have a future. I would appreciate it if the Minister of State gave them serious consideration as rural Ireland depends greatly on farmers doing well. If farmers do well, the local economy tends to do well also. Conversely, when that does not happen, we have a serious problem. The cloud of Brexit is hanging over us. It is a worrying and stressful time for farmers, particularly for those in Border areas. I would like to see the Government taking this issue very seriously and bringing forward proposals to help to alleviate the situation in which farmers find themselves.

I thank the Senator and I agree with him. In my opening remarks I made the point that it was important to realise that there is serious interdependency. The beef sector, processors and markets are all very fine but if one does not have a primary producing base whose members feel like they have a viable future, then the whole system will fall asunder.

In terms of all of the suggestions, we need to consider various systems, be they fixed price contracts or fixed agreement contracts with the processors for some or all of the producers in the establishment of producer organisations. In terms of opening the supply chain prices up to scrutiny and explaining why each player along the chain must have so much of a margin, transparency is very important. In other countries, transparency is beginning to be rolled out and have a positive effect.

I urge everyone to participate in the beef forum and round-table group because everything gets solved, if it is going to be solved, in discussion and agreement. I mean an agreement that is honoured and not reneged on, which is very important.

Sitting suspended at 11.11 a.m. and resumed at 11.30 a.m.