03 November 2005
Dr. Henry: I thank the Minister for attending the House and I welcome his address, which was extremely clear. It would be churlish of me not to say that I have enjoyed the tax regime of the past few years. I was one of those who warmly welcomed Mr. McCreevy's individualisation plan, having for decades been assessed - as someone in the Revenue once said - as though I were a wholly-owned subsidiary of my husband. That was not a remarkably cheerful thing for a professional woman to be told. I welcome the fact that now I have never paid less tax proportionate to my income in my life. I do not know whether or not it is just that this should be so, but I have found it to be an extremely agreeable experience.
I wish to refer to a few matters that are sometimes overlooked. Some people get into difficulty when trying to follow the Government's instructions as to how they should lead their lives. Even though they may be well off, they find themselves in a serious situation regarding money and taxes. I am glad the Minister said he would try to ensure that some of the wealthiest individuals in the country, who are currently avoiding tax, will end up having to pay it. It has been said to me that the latter group is treated preferentially while others are treated badly.
I will cite a case in point for the Minister. It concerns an elderly couple, with a good income, where the husband worked all his life and paid a considerable amount of tax, while the wife always stayed at home. When both were in their mid-70s, the man suffered a stroke. We are advised to try to keep family members at home as much as we can. The Department of Health and Children certainly wants people moved out of acute beds into rehabilitation beds and then back home. This is what my friends tried to do. They sold their house for well over €1 million and bought a small ground floor apartment. The man is incapacitated, but his wife was keen to have him at home where she could look after him. When the money they had left over from the house sale was invested, even with his good pension, they had a totally inadequate income to pay for health services at home. Let us say that they had an income of €40,000, which is considerable, while their outgoings for health services alone were €50,000. It cost over €1,000 per week to pay an agency for help. I thought this was bad enough but this was not the poor woman's complaint. She is prepared to sell her shares and the income is declining and her husband may live for a very long time. Her complaint, however, is that she must pay 21% VAT on the agency fees, which I find almost unbelievable.
Their children are prepared to give their parents money. However, the children can only give €3,000 each from their taxed income towards the health care of their incapacitated father. After €3,000 that money is also taxed, which the woman involved is also upset about. Very wealthy individuals may be paying no tax, and while the couple I mentioned are not poor, their children are anxious to do the best they can for their father. Nonetheless, their children appear to be heavily penalised for what they are trying to do. Will the Minister examine why individuals must pay tax on attendance fees charged by nursing agencies or others who are not even nurses? In this situation, it appears that the money will run out at some stage whereupon the man will become a charge on the State. The woman is well able to maintain herself and her house but, as she told me, only 13% VAT is charged on hairdressing.
I wish to raise another point which is important from the point of view of international competitiveness and which should really come under the heading of stealth taxes. It is the question of encouraging people to take out private health insurance. The Minister for Health and Children, and her party colleagues, frequently point out with some satisfaction that 52% of the population is now paying for private health insurance.
That is not to be rejoiced in as it is a sign of a lack of confidence in public health care. Public health care, if one can get it in this country, is extremely good. It has been put to me that some firms are paying employees' private health insurance. When I mentioned this to owners of Irish firms, some of whose firms are small and employ 20 to 40 people, they said it is an absolute disaster and that it would amount to a terrible cost to them if they had to do so.
In the United States it is the norm when looking for a job to try to obtain from one's prospective employer a package in which private health insurance will be included. If this practice continues in Ireland we will run into very serious problems in terms of international competitiveness. I was in the United States some weeks ago and noted the cost of private health care is rocketing. The VHI is a not-for-profit organisation. BUPA has community rating at present but it is very important to remember it is not community-rated in the United Kingdom. If we start this race for the top in private health insurance, it will result in serious added costs for industry. I hope the Minister will try to calm the enthusiasm for making private health care part of the package that makes a job all that much more desirable. Private health insurance should be acquired by individuals if they want it. Public health care in the Republic should be considered adequate for everybody. Of course it has problems but it is good and will be supported.
Another area I hope the Minister will examine is the building of private hospitals. He must have noticed the concern expressed by some in the private hospital sector over the number of private beds we propose to build. At present, the private beds are being well-supported by taxpayers through the National Treatment Purchase Fund. The funding in this regard comprises a very important part of its income. I have been told by some of my colleagues that it is sometimes hard to accommodate paying customers of some of the health care organisations because the beds are taken up by National Treatment Purchase Fund patients. We should be very careful when considering the economics of this matter or we will end up paying on the double. We will be giving tax relief to the hospitals for which we are providing public land and at the same time we will be paying the very same people who built the hospitals for taking care of people who should be taken care of in the public system. While the current proposals in this regard might sound fine and dandy, it should be noted that certain people with much experience in this area are genuinely concerned. The Minister should reconsider the matter.
