McCreevy under fire over tax break for clinic

FINANCE Minister Charlie McCreevy controversially introduced a tax break yesterday which will significantly benefit one of his constituents.

The minister's introduction of a loophole granting lucrative tax relief for the building of private hospitals at the request of the developers of a clinic in Co Kildare provoked an angry response from the opposition.

Labour Party leader Pat Rabbitte said the last-minute introduction of the tax break, worth hundreds of thousands of euro to the developers, raised serious questions for the Government and Mr McCreevy.

However, the minister insists the entire affair was above board and the tax relief will be used by many investors to benefit the entire national health service.

The creation of the tax break comes when the minister is priding himself on closing tax loopholes.

It was created after a meeting on February 24 between Department of Finance officials and the promoters of a private clinic from Kildare.

Comparing the incident to a controversial tax break previously provided by the Taoiseach , Mr Rabbitte said it made a mockery of the principle of equality before the law.

When he was minister for finance in 1994, Mr Ahern inserted a section into Finance Act of significant financial benefit for businessman Ken Rohan, a major donor to Fianna Fáil:

"It is 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."

The tax break extends significant capital relief to the cost of building private health clinics with a minimum of 40 day beds and providing day care, allowing them to claim back 15% of the capital cost of the project over seven years.

Mr McCreevy says the incentives for developing private clinics will actually help to take the pressure off the public health system.

Private hospitals have to make 20% of their bed capacity available to public patients and provide 10% discounts to health boards.

The amendment merely extended an existing relief which already included private hospitals and extends the definition of a qualifying clinic, the minister's spokesman said last night.

Although the origin of the tax break was a proposal by a constituent, the spokesman said the minister had made the position perfectly clear from the start and it was all above board:

"It is important to make the point that the provision has a general application. It is not case specific."