Private health investment costs €95m

The Minister for Finance, Michael Noonan, has said that the €232m invested in capital investment in private healthcare since 2004 may have cost the exchequer an estimated €95m in tax relief.

In a written Dáil response to Sinn Féin health spokesman Caoimhghín Ó Caoláin, Mr Noonan said it is not possible to say with certainty what the various reliefs have cost.

Mr Noonan said: “However, the maximum cost to the Exchequer of this relief, based on a total investment of over €232m, is estimated at €95.6m.

“This estimate assumes tax forgone at the higher rate of income tax applying in the relevant years.

“ It should be noted that the cost to the Exchequer does not arise in the year of the expenditure but rather is spread out over the seven-year writing-down period, provided there is sufficient income in those years to absorb the allowances.”

Figures provided by Mr Noonan on capital investment in the private health sector of €232m between 2004 and 2012 show that it peaked in 2010, when €40.8m was invested.

The figures show that the spend has declined since totalling €35m in 2011 and €29.1m in 2012.

The Independent Hospitals Association of Ireland represents 20 private hospitals and clinics across the country.

IHAI chief executive Catherine Whelan said yesterday the IHAI’s “20 hospitals play an essential role in the delivery of acute and mental health services, accounting for almost one third of the acute hospitals in Ireland and treating one in every five patients nationally”.

She said its members employ 8,100 healthcare workers; make around 1m bed nights available to the Irish healthcare system each year; and provide one in every six available beds.

In addition, she said, IHAI hospitals provide two out of every five available mental healthcare beds and treat around 400,000 patients every year.

Giving the background to the allowances available, Mr Noonan said: “A scheme of capital allowances was available for qualifying capital expenditure incurred on the construction or refurbishment of private hospitals from 2002 onwards.”