Dáil Éireann díospóireacht -
Wednesday, 1 Apr 1987

Vol. 371 No. 6

Financial Resolutions, 1987. - Health Contributions (Rate) Regulations, 1987: Motion.

Minister for Health (Dr. O'Hanlon)

I move:

That Dáil Éireann approves the following regulations in draft—

Health Contributions (Rate) Regulations, 1987

a copy of which regulations in draft was laid before Dáil Éireann on 25th March, 1987.

Subsections (2) and (3) of section 9 of the Health Contributions Act, 1979, provides that the Minister for Health may vary the rate of contribution and the income ceiling which determines the amount payable by an individual in a particular contribution year. Subsection (5) of section 9 of the Act requires that a draft of the proposed regulations shall be laid before each House of the Oireachtas and that the regulations shall not be made until a resolution approving of the draft regulations has been passed by each House. The draft regulations now before the House, which propose to vary the rate as well as the income ceiling, shall apply in relation to the contribution year commencing on 6 April 1987.

The income ceiling is at present £14,000 and it is proposed to raise this to £15,000. It is proposed to vary the rate figure from 1 per cent to 1.25 per cent.

While the income ceiling has been varied each year in line with increases in average earnings in transportable goods industries, the rate figure has remained at 1 per cent since the introduction of the income related scheme in April 1979. Unfortunately, the escalating cost of providing health services leaves me with no alternative but to seek additional revenue by means of the proposals now before the House.

In determining the proposed increase in the income ceiling, I have taken into account — as required by the Act — the latest information available regarding changes in the average earnings of workers in the transportable goods industries since the last income ceiling was adopted. The latest recorded information on average weekly earnings in those industries relates to June 1986. Average weekly earnings in June 1986, were £184.42. This represents an increase of 6.02 per cent on the June 1985 figure of £173.94. When this is applied to the current ceiling of £14,000, a new ceiling of £14,843 or, say, £15,000 emerges. The effect of the increased ceiling is to increase the amount of health contributions payable by persons with incomes in excess of £14,000 per annum. Persons with incomes of £14,000 or less will not be affected by this increase.

The effect of the variation in the rate figure, taken in conjunction with the increased income ceiling, is to increase the maximum contribution payable from £140 to £187.50, an increase of £47.50 per annum. While all contributions will be affected by the proposed rate increase, only those with incomes of £15,000 or more will pay the maximum increase of £47.50. The additional charge on a person with an income of say £10,000 per annum will be £25 per annum or 48 pence per week.

It is estimated that increasing the rate to 1.25 per cent in conjunction with a rise in the income ceiling to £15,000 will result in an increase in the amount of health contributions to be collected of approximately £23 million in the contribution year 1987-1988. Of the estimated additional income, about £13 million should arise in the financial year 1987. The remainder of the additional yield will come in the first quarter of 1988.

The Revenue Commissioners are responsible for the collection of current health contributions from all sectors. Health boards remain responsible for the collection of arrears due from farmers for periods up to 6 April 1984.

The total amount owed by farmers to health boards at 31 December 1986 stood at £6.4 million. It is clear that by comparison with the old system under which liability was based on notional income related to rateable valuations, there are more difficulties in collecting contributions from farmers where liability is based on factual assessments of income. While the amount still outstanding is cause for concern there has been an encouraging response in recent years to the efforts of the health boards to collect these arrears. A total of £1.4 million in health contributions arrears was collected by health boards in 1985. A further £1.1 million was collected by them in 1986. Deputies will be aware that health boards can retain these arrears, including any such arrears collected in future years, as additional revenue to be applied to local health service needs. This arrangement will be of continued benefit to health boards' budgets and farmers who are in dispute with their health boards on issues relating to amounts due should get in touch with the health board on the matter.

I am anxious that, in cases where it is clear that a liability for health contributions exists, all outstanding amounts should be collected as soon as possible. It is clearly unfair that persons who do not honour their obligations in this regard should obtain health services at the expense of others.

I shall be reviewing shortly the income limit for free consultants' services. I am not in a position yet to say what this limit will be.

Before concluding I would like to make one suggestion to the House. We will shortly have ample opportunity to discuss fully the charges for in-patient and outpatient health services which were announced in the budget. Consequently, I suggest that discussions on the motion now before the House should be confined solely to health contribution issues.

I now ask the House to approve the regulations before it in draft.

Miss Flaherty

I am somewhat taken aback by the Minister's request not to discuss the wider matters as it has not been the tradition on the debate on this each year. I looked at the Minister's contribution last year and it was a very wide-ranging debate. However, I will do my best to confine my remarks to the regulations although I may stray from them at times.

The reason it is very hard for us to respond to this item in isolation is that we proposed it and, therefore, we consider it a responsible element of the health package proposals for this year. However, the total health package proposals presented to the House yesterday are ones of which we are strongly critical in many aspects. In responding to the increases last year, the Minister, Deputy O'Hanlon, then Opposition spokesman said that it was worth pointing out that at a time when the level of services was being reduced we were asking people to contribute more. We are now reducing services to an unprecedented level and the Government are proposing cuts over and above those the Coalition Government had proposed, as well as rejecting some very worthwhile cuts which we had proposed. At the same time they are attacking people with increased levels of charges.

It is impossible to separate this debate into neat little packages and one must stray from the regulations. While we are not opposing the elements proposed here we are strongly critical of many of the other changes, in particular of what will be discussed at more length by my colleague, Deputy Allen, the savage proposal for charges for hospital beds. I do not understand how this was adopted. It was rejected by the outgoing Government, it is unnecessary and I cannot believe it will see the light of day and be implemented.

The charges proposed here are, as the Minister indicated, in line with common practice. There is an increase in the income ceiling from £14,000 to £15,000, roughly in line with inflation. Less common is the increase in the contribution rate of 0.25 per cent which the Minister indicated rightly is related to the escalating level of health costs which in the context of any budget take up is such a huge proportion that they must be looked at very closely.

We proposed these changes in our budget but we proposed them in the context that there would be no other taxation increase on individuals. However, the budget in which this proposal is set imposes further taxation measures on people by way of the changes in mortgage interest and of the prospect of their having to either pay charges if they find themselves in hospital or incur the expense of being insured as a preventive measure. That context is entirely different from the one in which we saw this as a single revenue measure taxation, as Deputy McDowell referred to it yesterday. It is a contribution to the revenue of the State and must be seen in the context of all other demands for revenue. While this charge in itself is acceptable, with so many changes in approach we find the total health package proposal entirely unacceptable, particularly when you cast your mind back two to three weeks and think of the posters that adorned so many hoardings — I am surprised that some of them still are not there — and which proclaimed that health cuts hurt the old, the sick and the handicapped.

The Minister has outdone the outgoing Government in the cuts he has proposed. He has rejected certain of our proposals, such as the ending of the prescription charges and accepting the one here before us now but he has replaced them with savage cuts in the Estimates for recruitment and staffing with a lopping off of £10 million there. We will tease out the implications of that later but they will be felt in every hospital and health institution. We examined that and thought that £3 million was as far as one could go. I will be interested to hear the Minister telling us a little more about how he intends to achieve this far greater saving of £10 million to £11 million. We prefer the public ward charges to the prescription charges. We believe that the prescription charges measure would impact on people to a far lesser degree because the largest saving in that area would have been on drugs expenditure, not through contributions from individuals. The figure there would have been from £2 million to £3 million.

It is difficult to confine oneself in talking about this to the narrow area we are concerned about. I wonder where it is all going. Is this the beginning of a total change in how we will pay for our health services? Are we talking about a transformation to the ending of the free hospital service as we know it? Is this £10 this year to be a greater contribution each year? Are we looking to an American style health system where either you are on a very inadequate public health system paid for by medical card or in an insurance bracket? Perhaps there is merit in that but if that is what we are talking about let us look at it up front. How we are going to make up the package of ways in which we will pay for health services is a major issue. We find it difficult to accept this because it is such an extraordinary transformation. We are debating this with a Fianna Fáil Government who all over this country had those posters which suggested that there was a softer way, an easier way, a more pleasant way and that somehow we were the heartless monetarists. Now they must turn on their own heads all of that criticism, answer all their own arguments and explain to us when we go into further debate later tonight how they can stand over such a changed position or, if they can stand over that — it is somewhat close to the arguments here — how they can explain the irresponsibility of their previous decision.

I am trying to be careful here in saying that we reject not the process of pruning back on the health service because that would not be realistic, but the measures which the Government have chosen, and we wish to question why they rejected certain of the savings we proposed. Essentially they have taken the soft option, PAYE again. The Minister mentioned the figures he got in the last two years in relation to farmers. Will he tell us what figure that leaves outstanding of the charges due to the health boards? Has he any indication of how successful the Revenue Commissioners have been in recent years in bringing in extra amounts from the farmers and the self-employed? Again we must look at the health contributions of the farmers and the self-employed in the context of what this budget has indicated to the PAYE taxpayers, from whom expectations and demands are so much tighter than ever they have been or will be under this Government so far as the farmers are concerned. With the abolition of the farm tax there will be difficulty in getting out contributions such as these. The last figure that Deputy Desmond as Minister indicated as their contribution to the health services of the nation was of the order of 0.25 per cent.

I had intended to mention wider areas about the development of the health service in the context of the wider budget but we will leave that until later in the night. Has the Minister considered the whole mechanism by which we have this cut-off level for contributions? Perhaps there is an element of inequity here in that those who have most contribute least although they also benefit somewhat less, but not greatly less, and there is a disincentive to work to the point where a person is about to reach the cut-off point. Other factors come into play here. I will be pressing our own party to look at that closely. This area should be examined and the whole contribution system reviewed in that context. Has the Minister considered that at all?

Most of my other points are wide and not specifically related to this motion so I will leave them for later in the evening. However, I would like to indicate that we are going to accept and support the making of these regulations because they are part of our own proposal, but we do so setting down a clear marker that there are many elements in the proposed package which we find unacceptable and very savage and clumsy. We will be pressing the Minister closely on these in the later debate tonight.

An Ceann Comhairle

Before calling Deputy Molloy, let me advise Deputies that there is a very strict time limit to this debate. The Chair is anxious to facilitate as many Deputies as possible but this can be done only if Members confine themselves to the subject matter of this debate which is health contributions and them only.

Mr. Molloy

I will confine myself to the health contributions which are before the House. I accept that we will be moving on immediately to discuss the other matter, in-patient charges and out-patient charges. As far as we are concerned, increasing the health levy and the income limit as proposed here will not increase in any way the resources directly available to the health services. It does not extend or improve the health services for any member of the public. As has already been stated in the House and by the Minister in previous debates of this kind, it introduces the situation where, while the Minister is proposing increased charges, the actual level of services is being reduced and those who are being brought further into the net will be involved in the proposed additional charges we will debate later. The health levy is an instrument of taxation. We cannot get away from that fact. The regulations proposed by the Minister will increase the tax burden on each individual taxpayer. The tax burden is already too heavy. The Progressive Democrats will highlight any proposal to increase the level of personal taxation and this is one of them.

The health levy is a regressive tax. It hits the PAYE sector who have no way of escaping from it. Many of the self-employed sector do not pay it. As can be seen from the Minister's statement, another section of the community are very heavily in arrears and have unpaid health contributions of up to £6 million. The health contributions are applied to total income even when that income may be below taxable levels. There is no equity in that. It applies very unfairly to a certain section of the community. It is a hidden tax and is not the solution to the type of problems affecting our economy today. The real solution must be to deal rigidly with the overall Government spending programme.

There is a need for fundamental reform in the whole area of Government spending and taxation. If we succeed in reducing spending we will succeed in reducing taxation and only then will we succeed in starting to create jobs. Low taxation is the key to job creation. These orders add an additional £13 million, according to the Minister's latest figures, of direct taxation on the tax paying public. This amount is part of the total increase in taxation of £473 million which this year's budget adds to the already over-burdened taxpayer. We are adding an additional burden of £13 million to the contribution of many of the people who are already making a private contribution for health services through the VHI system. Anything that proposes additional taxation is adding to our economic problems and will lengthen our dole queues. We see these two orders as a continuation of a policy of high taxation which has led us into our present sorry state and for that reason we will oppose both the orders.

Mr. Desmond

At long last we have reached a stage in this budget debate where it appears that all the Opposition parties will join together, perhaps for quite different reasons, in opposing the increase of a quarter of 1 per cent. We are opposing the measure but not because we are afraid to pay taxation. We differ sharply in that regard from our colleagues. We believe people should pay for services. We believe that a fair system of taxation can provide resources to pay for the services. When I was Minister I proposed that health contributions should be increased. I recall many an acrimonious budget debate when I argued that they should be increased from 1 to 2 per cent to provide an extra £80 million or £90 million for the health services and saying that in public I would stand over such an increase. The Minister for Finance of the day did not want to do that because he wanted to perpetuate the belief that you can have a low level of taxation and a high level of social services, a piece of mythology which is rampant in this House but which will be exposed as the months unfold in terms of the budget analysis.

For that reason I am opposed to this measure which will yield £13 million this year and which admittedly appears in the appropriation-in-aids of the Department of Health but which simultaneously has been clawed back quite deliberately out of the net Exchequer support of the Estimate, so much so that the Minister for Finance said yesterday that the outturn on the Health Estimate for 1986 was £1,115 million. He said he was reducing the net provision for 1987 to £1,111 million. Effectively the net Exchequer provision is being reduced by £4 million. It is far more serious than that because as happened in previous years, despite all the caterwauling of Fianna Fáil, health boards and vested interests in the health services, we managed to have a percentage increase of roughly 3 per cent each year. Three per cent of the 1986 outturn of £1,115 million would necessitate an extra £33 million net Exchequer support to enable the maintenance of existing services. Three per cent is the minimum increase and does not take into account any new developments or any new units being financed in the Department of Health. It just covers the increase in pay and pensions which is 17 per cent of the Health Vote. Instead we have a net reduction of £4 million on the net Exchequer support. On top of that today we have an effective taxation imposition of another £13 million by way of health contributions. The contributions are up, net Exchequer support is down and the overall impact is that the health services are on what one might call a zero-zero budget for 1986 and 1987. That means a substantial reduction in the delivery of the health services. For that reason we cannot support this health contribution proposal.

I want to raise another matter with the Minister and with the Department of Finance. The Department of Finance notoriously underestimate the yield from health contributions. The Revenue Commissioners are very conservative people. As I discovered in the four years I was in office our appropriations-in-aid allocation of health contributions was invariably under-forecasted. That is reflected to some extent today. The Minister said that the yield from health contribution increases in 1987 will be £13 million. The Minister for Finance said yesterday that the yield will be £11 million. That is the increase in the rate of contribution from 1 per cent to 1¼ per cent which increases the ceiling figure to £15,000 from 6 April. That amounts to £2 million which is gold dust in the Department of Health these days.

As we know the Minister will be savaged in the years ahead over the £10 public ward charge. That is estimated by the Department of Finance and the Department of Health on a joint agreement basis to yield in the region of £6 million.

We must consider all the confusion that will be created by new administrative systems, staff being recruited, every hospital admittance being the subject of a comprehensive statement as to status and so on. All of that will have to be paid for. The £10 charge could be reduced to £7 without any loss in Exchequer support for the Health Vote. I suppose one must be grateful for small mercies and I know that the Minister for Health will indeed be profoundly grateful for any small mercy he may get in the months ahead as he endeavours to bring in the regulation around mid-year. I put this matter to him.

When I had the responsibility and, indeed, the honour of endeavouring to bring in health contributions we made a number of changes. First, from 6 April 1984, as the Minister confirmed, the responsibility was quite rightly transferred to the Revenue Commissioners who were held responsible and still are for collecting health contributions. I am becoming very suspicious about their capacity to collect them at all. I have some reasonable evidence that the income from health contributions in 1985 and in 1986 may, if anything, proportionately have dropped. The health board should never have had the responsibility of collecting the health contributions in the first place. In the final analysis it is a matter for the Revenue Commissioners, just as in the case of farm tax, to ensure collection.

As of 14 January last there were total arrears in all levies, including health contributions, youth employment and so on, from the farming sector and the self-employed sector of about £110 million. Five days before we left office, the Minister for Finance sent a letter to the Tánaiste stating the Government were extremely concerned about the matter and that the Revenue Commissioners did accept there were about £110 million arrears of levies due by farmers and the self-employed. They estimated they would get about £14 million and the then Minister made the very understandable point that he was extremely concerned about the prospect of only £14 million being collected because he regarded this as totally inadequate and unacceptable.

In the case of the farm tax, farmers decided not to accept any liability in relation to that tax. I gather they have paid out of a £5 million liability only something in the region of £600,000 or £700,000. You would not even consider that sum in terms of rounding up an Estimate. There will inevitably be the temptation, in respect of the increase in the health contributions from 1 per cent to 1¼ per cent and the income ceilings going up to £15,000, that the farmers will say if Fianna Fáil are as good as them in the future as they now are with regard to farm tax they can forget about paying the health contribution also. Admittedly, there is a penalty there which I brought in, that anybody turning up in hospital without a paid up contributions certificate will automatically be obliged to pay £100 admission fee into the hospital. Naturally not all farmers end up in hospital and they operate on the basis that if they do not become ill then their liability is nil.

In this budget a section of the community have been let off very lightly. It is reminiscent of 1978 when rates came off, largely at the behest of the then Minister for Agriculture, Deputy Jim Gibbons. Then the farm levies came off and the resource tax also. Rates were subsequently found to be unconstitutional and the notional system was changed. Now the farm tax system is changed and on some bright day in the months ahead there will be unveiled in the Finance Bill a new notional assessment system for farmers which will be emasculated within months, as the IFA lobby get to work on the Fianna Fáil backbenchers and pour into the offices of the members of the Cabinet.

An Ceann Comhairle

I regret to observe that the Deputy is enlarging very much now on the debate.

Mr. Desmond

We have only up to 7 p.m. to discuss this important matter. Suffice it to say that somebody earning £15,000 a year will be obliged to pay an extra £1 a week. It will be included in their PAYE amount each week or month. For a person earning £10,000 that is slightly above average, there will be an extra £25 a year of what is effectively a health levy. I have no objection to health contributions being increased, if all the money accrues to a normal Health Estimate. However, in this case there is an actual reduction in the Estimate.

In my 18 years in the Dáil, I always advocated a payment of this nature so that it could be clearly allocated in the Health Vote. However, on this occasion it is highly regrettable that I must oppose it because for the very first time in the history of the State we have a Health Estimate which shows an actual 3 per cent reduction. That of itself on a year-to-year basis means major reduction in the provision of services. I am glad to see that the Fine Gael Party and the PDs, perhaps for quite different reasons from ours, will oppose this measure also. They seem to be opposed to taxation but have no alternatives to propose. The Labour Party will vote against this measure this evening.

Mr. Sherlock

The Workers' Party are opposed to these measures which seek to increase from 1 per cent to 1.25 per cent the level of health contributions and to raise the income ceiling on which this is levied from £14,000 to £15,000. They are particularly opposed to the increase in the levy from 1 to 1.25 per cent as this will affect every taxpayer in the country. It is outrageous to ask people to pay a higher health levy at a time when health services are being cut back, when people are being asked to pay for out-patient services and for each night they may have to spend in hospital. These charges represent nothing more nor less than a tax on illness. People are to be penalised financially for being unfortunate enough to become ill.

Over the years workers have paid the health levy willingly. For example, a worker on an average income of £10,000 per annum would pay £100 per annum by way of health levy, although the vast majority of them would never visit the out-patient department of a hospital or spend a night in hospital. Many workers have paid hundreds of thousands of pound in health contributions over the years without ever having visited an outpatients department or spent a night in a hospital bed. They paid their contributions willingly in the knowledge that, if they were unfortunate enough to become ill and needed to go to hospital, they would be covered for such an eventuality by the contributions they had paid over the years. They find now that this Government have arbitrarily breached that contract and are intent on introducing charges for out-patient treatment and hospital beds.

The decision to raise the health levy represents simply an increase in taxation. It must be seen against the crushing burden of taxation the PAYE sector has carried over the years. Bearing in mind that even those people on relatively low incomes are crippled by taxation, the average tax being paid by a PAYE worker in 1985 being £2,490 per annum, or almost £50 per week, the Government ensure that that same sector pay a health contribution which is deducted from their wage packets. Successive Governments have not been so effective in ensuring that other sectors paid their health contributions. There is in the region of £38 million outstanding in uncollected health contributions from the farming and self-employed sectors. That constitutes more than three times the yield of the proposed increase in the levy.

I might ask: what action are the Government taking to ensure that that money is collected at present? I am aware that farmers who want to pay the levy are approaching their health boards — I understand this has been going on for a long time — because they have received no demands from the Revenue Commissioners. When replying perhaps the Minister would clarify that point and inform us why no vigorous demands are being issued for these health contributions. Because those demands are not being issued again the burden is being placed on the PAYE sector.

In deciding to increase the health levy the Government have taken the easy option, the attitude being to take what they can from workers. The decision to increase the levy must be viewed against the background of other budgetary provisions which will result in the total income tax take going up from £2,388 million to £2,721 million, an increase of £33 million or approximately 14 per cent.

We all remember hearing the Tánaiste, Deputy Lenihan, on "Morning Ireland" a few weeks ago saying they would tax everyone including their friends. There is not much evidence of that in this budget. For example, there are no new property, capital or corporation taxes, nothing to ensure a more equitable tax system. On the whole question of health services I should like to quote a statement made by the present Taoiseach in an interview with the Irish Press on 25 September 1984 when he said:

The health services have been reduced to dangerously inadequate levels and I think that if it has not happened already people will die because of the unavailability of particular services in certain areas.

We are also opposing the proposal to increase to £15,000 the income ceiling for contributions. The Workers' Party believe that ideally there should be no ceiling for contributions, that the health contribution should be levied on all incomes, with everybody then qualifying for free hospital services. Over the years there has emerged a gap between the ceiling for the health levy and that for qualification for free hospital services. The health increases of this budget represent the most shameful proposals ever advanced by a Fianna Fáil Government. They appear to want to turn the clock back even more so that the quality of health services will be determined by a person's ability to pay. Human life and health are far too important for that.

Mr. M. Higgins

Like my colleague, Deputy Desmond, I should like to emphasise the reason the Labour Party are opposing these resolutions which would render possible the introduction of health charges of a particular kind and an increase in the levy.

It is very interesting to reflect on the whole question of health policy, on the atmosphere prevailing in discussing this budget and the run-up to it. Most of those who advocated an emphasis on the fiscal aspects of our economic prospects at present have advanced an argument based on efficiency. They have argued that there must be an elimination of waste. Turning to social welfare they argue that there must be an erosion of the disincentive to work, as they see it. Turning to the unemployed, they have changed the unemployment problem into one of labour mobility. Turning to everyone of the economic and social areas the justifications keep reverting to some kind of norm of efficiency.

As I listened to speakers on these two resolutions, in particular that in relation to health, I began to ask myself: when did we last have a White Paper on the health services in terms of even conservative criteria? Are the health services delivering efficiently what taxpayers are paying for, what private contributors are paying for? The truth is that we did not have a White Paper on health policy for a very long time for a very good reason: some of the best organised vested interests in this country would be totally opposed to such a White Paper and structural review.

I have had the advantage, if one could call it that, of having been a member of the Western Health Board for many years. On it I have subjected myself every month to listening to heart-rending speeches from public representatives and professional representatives on the board speaking about what would happen if any services were cut, or if the allocation to the health board was cut, to such an extent that on one occasion, to their horror, I voted with them which could have had the result of the health board being disestablished. They were appalled by such an outcome, but I proceeded with my education in the public hyprocrisy of health, as it might be called, in those years.

A White Paper on health, as a background to the resolutions we are now discussing, should reasonably ask what has been the consequence of changing the general medical status in 1972 and what are the consequences of running two health services in a small country like ours, a private system and a public system, not in efficient isolation of one from the other, but a private system purchased by an increment of additional expenditure made possible out of public taxation. None of the people who benefit from the discriminatory provision of private health care has privately funded the education of a doctor, a laboratory technician, or bought a single instrument for use in the provision of health care.

An Ceann Comhairle

The Deputy is getting away from the subject matter of this discussion on health contributions.

Mr. M. Higgins

I will come directly to those. We have always had a system that is in one sense public and in another sense can be different but private. What we have not had is a general health care service which, in every State where the welfare state has been established, has been the basic approach towards health.

On the question of health charges and on the question of health the NESC in their document Strategy for Development, 1986-1990, document No. 83, published in November 1986 made a comment on the levy, and to cut a long story short they pointed out something that is obvious. For a start the levy excludes people below a certain level and excludes people above a certain ceiling, so it cannot be regarded as an appropriate revenue gathering mechanism for the provision of health care. It was found defective by the NESC. Two other bodies also rattled the concept of health levies as an appropriate mechanism of funding. They were condemned in the report of the Commission on Taxation, and the Commission on Social Welfare said the operation of health levies as a means of funding health care is defective and unacceptable. What we find in Ireland in this curious atmosphere of people wanting to pay little tax and be able to purchase health care privately from doctors educated by public funding in hospitals and clinics built out of public funding, is that people want to pay little tax and purchase a privileged form of health.

What will be the effect of raising the levy? There will be people above the ceiling who will not contribute and there will be people who cannot afford to pay. What we are witnessing is another example of regressive access to and consumption of State services being substituted for adequate taxation and general provision. People in this country simply have not had the guts to take on the vested interests involved and say: "You are either committed to making money out of the sickness industry or you are interested in providing health." I am not condemning all doctors and consultants. I know many are dedicated and the Minister knows many more who are dedicated, but the fact is that what we have here are charges for the sickness industry. How does one justify the exclusion of everyone who earns income and pays on a PAYE basis. They might have imagined that, for the joy of paying openly a significant proportion of their income, they might have been entitled to a general health service, but they are told that they are not.

Irish doctors will never be asked in this land of all equal republicans to deliver health to everybody because they all pay taxation. They will be asked: "Would you like to work in the public service and you can have a bit of private practice as well? You can hop over from here to there, have a little contract here, a retainer there and a salary here and so forth." The more I sat on the health board and listened to this the more I concluded that it qualified as some of the crassest hyprocrisy that I have ever heard, although I knew we had people deeply committed to an egalitarian provision of health care. Now in an outpatients clinic in a hospital provided out of public taxation where salaries will be provided out of public taxation, people can pay an additional charge.

One could summarise some of what Deputy Desmond said by saying that for the benefit of healthcare in hospital some people will pay twice. They will be caught inescapably at the level of income, and then they are supposed to provide out of their post-tax income another sum of money to consume services which would be provided in any civilised country. Of course we will have people who in the new ethos which now prevails can demonstrate their poverty. They can flash the medical card and they might be allowed to get the services.

An Ceann Comhairle

I hesitate to interrupt the Deputy again, but since this debate must conclude at 7 o'clock I am concerned that the Minister might be afforded an opportunity to reply to the debate since many questions arose.

Mr. Spring

Does he want it?

Mr. M. Higgins

I thank the Chair for this advice. In relation to the charges, or further taxation, the point has been well made. Every report published on the levy says that it is an inequitable form of taxtion. There is enough evidence there. For all these reasons we in the Labour Party will be opposing both of these measures.

Minister for Health (Dr. O'Hanlon)

As there are only two minutes left, I will confine myself to the issues before us. Deputy Flaherty asked how much of the health contribution from the farmers remained uncollected. The figure at the end of 1986 was £6.4 million. Deputy Flaherty also asked if we would look at the method of collecting that contribution, and we certainly will.

Other Deputies raised the question of not being able to collect the total amount due from the self employed, including farmers. One of the difficulties is that the method of collection from the farmers has changed so often over the years. First it was under the Poor Law Valuation, then it was under income, then under land tax, and now the land tax is being abolished and farmers will pay their tax in the same way as everybody else, on their profits.

It is important to remind Deputies opposite that they were in Government over the past four years and that they were responsible for the change in the taxation system applying to farmers and, therefore, they must take responsibility for the fact that there has been a certain amount of difficulty in collecting revenue due from farmers. We are looking at the whole question of the health contributions to ensure that everybody who can pay health contributions does so. The question of the health contributions is an important one in so far as many Deputies admitted that the health services are going through a difficult time. Finances are scarce. It is illogical to oppose health contributions and then oppose hospital charges because if we are to provide an adequate level of service — and we are intent on doing that — then the money must be found somewhere.

I recommend that the House approve the regulations before it.

An Ceann Comhairle

It now being 7 p.m. in accordance with the Order of the House I am putting the question: "That the motions approving the Health Contributions (Rate) Regulations, 1987, in draft, and the Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1987, in draft are hereby agreed". Is the question agreed to?

Mr. Spring

No.

Question put.

The Dáil divided: Tá, 78; Níl, 30.

Tá

• Abbott, Henry.
• Ahern, Bertie.
• Ahern, Dermot.
• Ahern, Michael.
• Andrews, David.
• Barrett, Michael.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Matthew.
• Brennan, Séamus.
• Briscoe, Ben.
• Browne, John.
• Burke, Ray.
• Byrne, Hugh.
• Calleary, Seán.
• Collins, Gerard.
• Foley, Denis.
• Gallagher, Denis.
• Gallagher, Pat the Cope.
• Geoghegan-Quinn, Máire.
• Haughey, Charles J.
• Hilliard, Colm Michael.
• Hyland, Liam.
• Jacob, Joe.
• Kirk, Séamus.
• Kitt, Michael P.
• Kitt, Tom.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Lynch, Michael.
• Lyons, Denis.
• McCarthy, Seán.
• McCreevy, Charlie.
• Mooney, Mary.
• Morley, P.J.
• Moynihan, Donal.
• Nolan, M. J.
• Conaghan, Hugh.
• Connolly, Ger.
• Coughlan, Mary T.
• Cowen, Brian.
• Daly, Brendan.
• Davern, Noel.
• Dempsey, Noel.
• Dennehy, John.
• de Valera, Síle.
• Doherty, Seán.
• Ellis, John.
• Fahey, Frank.
• Fahey, Jackie.
• Fitzgerald, Liam.
• Fitzpatrick, Dermott.
• Flood, Chris.
• Noonan, Michael J.
• (Limerick West).
• O'Dea, William Gerard.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Batt.
• O'Keeffe, Ned.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Rourke, Mary.
• Power, Paddy.
• Reynolds, Albert.
• Roche, Dick.
• Smith, Michael.
• Stafford, John.
• Swift, Brian.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Walsh, Joe.
• Walsh, Seán.
• Wilson, John P.
• Woods, Michael.
• Wright, G. V.

Níl

• Bell, Michael.
• Clohessy, Peadar.
• Colley, Anne.
• Cullen, Martin.
• De Rossa, Proinsias.
• Desmond, Barry.
• Gibbons, Martin Patrick.
• Gregory, Tony.
• Harney, Mary.
• Higgins, Michael D.
• Howlin, Brendan.
• Kavanagh, Liam.
• Keating, Michael.
• Kemmy, Jim.
• Kennedy, Geraldine.
• McCartan, Pat.
• McCoy, John S.
• McDowell, Michael Alexander.
• Mac Giolla, Tomás.
• Molloy, Robert.
• O'Malley, Desmond J.
• O'Malley, Pat.
• O'Sullivan, Toddy.
• Pattison, Séamus.
• Quill, Máirín.
• Sherlock, Joe.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.
• Wyse, Pearse.

Tellers: Tá, Deputies V. Brady and Browne; Níl, Deputies Taylor and Harney.

Question declared carried.