Major tax break to benefit McCreevy constituent

The Minister for Finance Mr McCreevy has given major tax breaks to a planned private hospital after being lobbied by one of the…

The Minister for Finance Mr McCreevy has given major tax breaks to a planned private hospital after being lobbied by one of the promoters who is based in his constituency.

Labour and the Green Party last night condemned the manner in which the tax break had become law through a last-minute amendment to the Finance Bill.

The Labour leader Mr Pat Rabbitte claimed the Department of Finance was being converted "into a constituency office for the Minister and his constituents who feel their business would benefit from a tax break". However, Mr McCreevy said the change was completely consistent with the Government policy of encouraging private health development.

"These incentives play a valuable role in taking pressure off the public health system," he said.

READ MORE

The Department of Finance would not say last night who the promoters of this hospital were or where the project would be located.

Questioned by Mr Rabbitte in the Dáil, Mr McCreevy said he had met one of the promoters in November, and had arranged for him to meet officials of his Department on the issue. That meeting had taken place on February 24th.

Asked who he had met, Mr McCreevy said: "He is a doctor in my constituency. He is an ordinary GP situated in the Naas area who probably voted for deputy Stagg [of the Labour Party]."

The move gives generous capital tax allowances to those who build private hospitals with 40 or more beds for day-case and outpatient medical and surgical services.

It follows the introduction of such allowances in recent years for private hospitals with 70 or more in-patient beds, nursing homes, sports injury clinics and housing for the aged and infirm.

The measure will allow the developers write off 15 per cent of the capital cost of the project against tax in each of the next six years, with the final 10 per cent being written off in year seven.

A spokesman for the Minister could not say how much the project was worth. However, Labour's finance spokeswoman maintained it would cost some €30 million, "meaning taxes foregone will be some €10 million". Mr McCreevy defended the decision as being beneficial to the health services.

To qualify for the allowances, the private hospital must make available at least 20 per cent of its bed capacity to public patients and give the State a 10 per cent discount in fees charged for such patients.

However, Mr Rabbitte said it was "particularly ironic that these generous tax reliefs are being provided for investors in private health facilities at a time when the public health service is struggling to survive and when many elderly residents of nursing homes are being denied the subvention to which they are entitled".