JOINT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE díospóireacht -
Wednesday, 22 Jun 2005

Business of Joint Committee.

Chairman

Apologies have been received from Deputies Ó Caoláin and Ned O'Keeffe. The first item on the agenda is the minutes of the meeting of 9 June 2005. Are they agreed? Agreed. Are there any matters arising? No.

Members have been circulated with the schedule of correspondence. The first item is details of the sub-committee on EU scrutiny of 2 June. The proposed action is to note that none of the proposals warrant scrutiny. Is that agreed? Agreed

The next item is a letter from the Office of the Director of Corporate Enforcement regarding NIB. We asked for that letter so I suggest we note it. No further action is necessary.

The next item is a letter from the Department of Finance regarding the ongoing review of certain tax reliefs. As I indicated at the previous meeting, we will discuss this matter in September. At that stage, we had received a significant number of submissions from the Department of Finance but yesterday the Department decided it would make public all 86 submissions. The website can be checked for the submissions but hard copies can be circulated to members.

Deputy Burton

I would like hard copies.

Chairman

There will probably be two lever-arch folders of submissions.

Deputy Burton

That would be better. Are these the permanent submissions?

Chairman

Yes. We will work through them in advance of the meeting at which we will discuss tax reliefs and exemptions in September. Is that agreed?

Deputy Burton

I am unclear what the Minister proposes to do. Is he making the consultants' report, as opposed to the submissions, available to us? The report would be the interesting part. There is no point our weighing up the submissions as the Minister is the decision-maker and the consultants are the advisory bodies.

Chairman

The idea was that the committee would have an input into the process and make a submission in September. The Minister asked for a submission from the Oireachtas.

Deputy Burton

I have repeatedly asked for information about who benefits from particular tax breaks, the costs associated with them and the implications for specific development in particular areas. People have views for and against different elements of the tax breaks but we should get the consultants' information about who is benefitting, the costs involved and the degree to which benefits can be identified. We have been asking for that information for four years and it has not been forthcoming. I understood that was a major part of the consultants' remit.

Deputy Finneran

It would be appropriate for us to make recommendations on or discuss the tax breaks that are available under all headings. Apart from any consultant's report, many of us have definite views of the benefits of some of these schemes. From a political perspective, there are people who have an interest in certain schemes. Some people in developed areas might think that there is no need for certain schemes where areas have enjoyed the benefit of east coast funding for many years, while some of us had to put up with a lack of infrastructural development incentives until these schemes came along. We have not reached the stage where there is a level playing field, particularly in the BMW region. Some schemes have acted as a catalyst for development.

I have served on this committee for many years and I would welcome the opportunity to contribute to any report, irrespective of the revenue implications. There are revenue implications in all schemes but there are also social, economic and practical reasons for a balance of development that has been neglected in some quarters until now.

Deputy Bruton

I agree with Deputy Finneran that some of these tax schemes have made an important contribution regionally. However, I also see merit in the committee having access to information — other than anecdotal or political information — about the impact of the schemes.

The Minister has taken care in the terms of reference he set for the consultants to do it in a dispassionate way and to look for details on the contribution of the schemes to regional regeneration, economic and social infrastructure in disadvantaged areas and to local employment. He goes through a substantial analysis. If the committee is to make a meaningful contribution, other than saying one person is for it and another against it, members must have access to this information. If we give substantive time to this without access to the consultancy evaluations, it will be pointless because it will all be seat of the pants speculation.

Revenue has not been able to give the information we have sought in the past because it has never properly collated it. It is difficult to form an opinion without that information. I ask the Chairman to indicate to the Minister that we would like to make a contribution on the basis of this information. If he says that he can release the information at his discretion but that he has not made up his mind, we should defer until we find out if the information will be released. I do not want to become engaged in political argy-bargy where people are taking stands on information that sheds no light on the subject. I support the idea of seeking the consultancy report and making it a core element of the discussion.

Deputy Burton

Deputy Finneran might think he disagrees with me but we are talking about the same thing from a different angle.

On nursing homes tax relief, we have no idea how many nursing homes have availed of this, where — with the exception of local knowledge — they are situated or the total amount of tax foregone by the State, except that it is a significant incentive to invest in care schemes for older people on a ten-year basis but not necessarily for any longer. In the context of what has emerged in Leas Cross, a number of eminent people, including the doctor who established the Blackrock Clinic, have stated that there is distortion in the Irish medical structure because investment is tax as opposed to care driven. I do not know whether what he is saying is correct. All I know is that we need the information in order to make an evaluation.

We also need to know if there is any connection between tax incentives in, for example, the nursing home and private medical hospitals sectors and broader medical policy. The Hanly report suggested that hospital units of under 200 beds are not viable. However, people are aware of the establishment of private hospitals driven by tax incentives. I am not aware of any of them having more than 100 beds. We need mapping information and numbers. We also need to be able to examine this in a dispassionate way. Otherwise, we are simply giving our opinions in a way that will be not useful.

Deputy Finneran

The question of nursing homes must be examined on the basis of the provision of nursing homes and tax breaks for them. Deputy Burton is leaning towards an inspectorate role, which is not the remit of the committee. Such a role is for someone else to fulfil.

On the issue of tax breaks, the revenue side of the matter can be dealt with dispassionately. However, the reports of the City and County Managers' Association, the chambers of commerce, the Small Firms' Association, IBEC, the trade unions or the Commission of the West have not been considered. Over the years, these and other fine bodies have dealt with the flow of people from the midlands and the west. As John Healy asked many years ago, "Who is going to call stop?" Some of these schemes have contributed to that stop and are not complete in the opportunities they present to the regions.

The committee cannot allow itself to deal with tax breaks solely on a revenue basis. There must be an opportunity to examine the socio-economic advantages in schemes such as the rural renewal scheme. These have contributed enormously and made the only impact in staving off population decline in the west. While I appreciate that members are examining what is important in the Minister's report, the committee has a job to do irrespective of whether documents are available.

Chairman

What then is the view of the committee? At our next meeting we might come forward with an outline for this work in September. It is possible that the consultants may not have a report until later in the year. The Minister will be examining the matter in the autumn before the budget in December. It is somewhat of a chicken or egg situation if the committee is to have an input into the consultants' report to the Minister.

Deputy Finneran

That is the kernel of the matter. Our input must be part of the overall report to the Minister. I want the Minister to have our views, irrespective of the revenue side. We would not be doing our job as public representatives——

Chairman

I am just saying——

Deputy Burton

No. I spoke about this at previous committee meetings and during the debate on the Finance Bill. We are aware that tax incentives have been valuable in certain areas. We are also aware that they have led to a situation where some individuals with incomes over €1 million pay no tax. Deputy Finneran may recall the Taoiseach telling the House that the quality of much of the tax-driven investment in Dublin city centre was extraordinarily poor. The Hotels Federation perceives problems in the area. All we need is information.

Deputy Finneran is in favour of tax incentives. If that is what he wants to write to the Minister, that is fine. I am saying the committee needs to write to the Minister requesting that it be given information. I have raised my concerns about tax-driven nursing home care, which has a ten-year lifespan and is not care-driven. I simply want the information on this scheme. There may be many nursing homes in Roscommon, while there may not be sufficient homes in Dublin. I do not know if this is the case because we have no body of information. All I know is that the Hanly report, the Government's policy on hospitals, states that hospitals with fewer than 200 beds are not viable, whereas the bulk of new tax-driven hospitals cater for fewer than 100 beds.

Chairman

We can seek whatever information is available.

Deputy Bruton

The Chairman should approach the Minister for an answer and ask him if he will make as much information as possible available from these consultancy reports. His indication is that he is not going to release anything. While there may be a case, as Deputy Finneran said, to discuss it and express our points of view, as a political exercise, the discussion would be much better if we had access to as much information as possible. The Chairman is in a better position to secure this.

Chairman

We will proceed on that basis. We will discuss this further at the next meeting. It is September I have in mind for this exercise.

The next item of correspondence is an e-mail invitation to a conference in Washington on reinventing retirement balance. I suggest that it be noted. Is that agreed? Agreed.

The next item is a letter received from the Department of Finance regarding tax implications from the use of taxpayers' money to fund a school. Senator O'Toole raised this matter. I will send a copy of it to the Joint Committee on Education and Science.

Deputy O'Flynn is the head of the working group of committee chairmen. He has indicated to me that it was agreed some time ago that a pool of 16 researchers would be made available to service the committees on a full-time basis. He suggested that if this committee is interested in obtaining the service of one full-time researcher, I should write to him immediately and outline the work programme of the committee before Tuesday, 28 June. Is that agreed? Agreed.