Dáil Éireann debate -
Wednesday, 19 Mar 1986

Vol. 364 No. 10

Private Members' Business. - Health Contributions Regulations, 1986: Motion

Minister for Health (Mr. B. Desmond)

I move:

That Dáil Éireann approves the following regulations in draft—

Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1986

a copy of which regulations in draft was laid before the House on 27 February 1986.

It is provided in sub-section (3) of section 9 of the Health Contributions Act, 1979, that the Minister for Health may, by regulations, vary the income ceiling up to which health contributions are payable. Subsection 5 of section 9 of that Act provides that a draft of any such proposed regulations shall be laid before each House of the Oireachtas and that the regulations shall not be made until a resolution approving of the draft has been passed by each House. It is not proposed to vary the rate figure which has remained at 1 per cent since 6 April 1979.

The income ceiling is at present £13,000. It is proposed to raise this to £14,000 with effect from the beginning of the next contribution year, namely, 6 April 1986. In determining this, I have taken into account — as required by the Act — the latest information available regarding changes in the average earnings of workers in the transportable goods industries since the last income ceiling was adopted. The latest recorded information on average weekly earnings in those industries relates to June 1985. Average weekly earnings in June 1985, were £173.94. This represents an increase of 7.9 per cent on the June 1984 figure. When this is applied to the current ceiling of £13,000, a new ceiling of £14,027 or, say, £14,000 per annum, emerges. The effect of the revised ceiling is to increase the maximum contribution payable from £130 to £140, an increase of £10 per annum. The increase will be collected from most contributors towards the end of the 1986-87 contribution year, that is, in the first quarter of 1987. While the total estimated annual additional yield is £2.1 million approximately, only about £195,000 extra will be realised in the current financial year ending on 31 December, 1986. The balance of £1.905 million will come in the first quarter of 1987.

Regarding the eligibility ceiling, I shall be reviewing shortly the income limit for free hospital consultants' services. I am not in a position as yet to say what this limit will be.

A total of £75.8 million was collected from health contributions in respect of the year ended 31 December 1985. The vast majority of this was, of course, contributed by the PRSI workers and collected through the PAYE system.

There is obviously more difficulty in collecting contributions from farmers and other self-employed where the contribution due is based on income assessments. It will be agreed that — from the viewpoint of equity alone — every effort should be made to ensure that the self-employed pay their fair share.

Since 6 April 1984, the Revenue Commissioners have taken over responsibility for the collection of health contributions from farmers, in addition to their previous responsibility for collecting contributions from the PRSI workers and the self-employed.

The only involvement on the health boards now in the collection arrangements relates to the collection of arrears due for periods up to 6 April 1984. The total amount of health contributions owed to health boards at 31 July 1984 was £11.80 million. This amount was reduced to £9 million at 31 December 1985.

I am extremely anxious that these arrears should be collected and used to relieve some what the extremely tight budgetary situation in which the health boards now find themselves. It is manifestly unfair that a situation should exist whereby persons who have reneged on their obligations in this regard should be able to obtain health services without penalty. I advised health boards to make full use of every enforcement procedure available to them in the collection of outstanding amounts. In fact, in recent months health boards have notified a number of defaulters of their intention to take legal action for the recovery of arrears. Solicitors letters have issued and some boards have selected cases for proceedings if demands are not met.

Members are aware that in 1984 I introduced a regulation whereby any person who, on admission to a public hospital bed, fails to produce evidence of current payment of health contributions is liable for an additional charge of £100. So far 154 persons have had to meet this charge and I propose to amend this regulation shortly to increase this penalty to £150. I stress that persons in arrears are not refused admission to hospital but the collection of the admission charge and arrears is pursued later.

As an added incentive to health boards to collect amounts outstanding, I introduced regulations in 1985, with the consent of the Minister for Finance, which allowed health boards retain in full, arrears of health contributions collected by them in 1985. In the normal way these contributions would have been credited to the Exchequer. A total of £1.4 million health contributions arrears was collected by the health boards in 1985. I wish to announce that I am extending this arrangement to cover all outstanding health contributions arrears collected by health boards in 1986, 1987 and future years. This decision will be of continuing benefit to the health boards' budgets.

However, the purpose of the motion today is simply to raise the ceiling level or health contributions from the current figure of £13,000 to a new figure of £14,000. I now ask the House to approve the regulations before it in draft form.

Dr. O'Hanlon

These regulations come before us each year. In the current year the Minister is asking us to raise the ceiling level of income for contributions by £1,000.

He has not stated what the income will be for eligibility for service. Is there any reason why, when he circulates these regulations, he does not announce what the figure for eligibility for service will be?

There are a few points I would like to raise. First, when will the Minister announce the income level for eligibility for service? The second deals with the collection of the health contributions, particularly in relation to the farming community. There has never been a satisfactory method of assessing farmers' incomes. No sooner was one method beginning to show results but the Government of the day changed that method. I acknowledge that the poor law valuation was not fair, and a court case abolished the PLV as a means of assessing farmers' incomes. Then farmers, like other self-employed persons, were obliged to submit accounts. The health boards assessed farmers on the basis of an estimated figure, without having an accurate figure to work on.

A number of farmers produced books and appealed the figure assessed. An agreement was reached with the health board as to what their health contribution should be. Those farmers who did not keep books — many of them because they could not afford it — received an estimated income. Some of them did not pay in the relevant year and now are getting letters from the health boards telling them they will be prosecuted within 14 days if they do not make the payments.

A number of small farmers have general medical service cards and these farmers have received demands from the local health board for the health contributions which they are not required to pay. A proper record has never been kept of farmers who are not liable to pay health contributions because they have general medical cards. That is a point we have raised in the House on a number of occasions. Yet nothing has been done about it.

There is also the problem of farmers who made returns to the Revenue Commissioners—I am talking now about the years preceding 1985-86 when the health boards were collecting the health contributions on behalf of the central Exchequer — who received a demand from the Revenue Commissioners and another from the health board. They did not know where they stood in regard to their eligibility. It is for these reasons that arrears have accumulated amongst the farming community. In fairness to them a certain proportion of the blame must lie with the administrators who allowed these anomalies to obtain in the manner of collecting contributions.

Now we have a land tax. While health contributions up to the year 1985 were the responsibility of the health boards, the health boards are now making an effort to collect arrears which they are entitled to put to their own accounts. As the Minister said there were arrears of £11 million of which they have collected approximately £2 million to date. For instance, perhaps the Minister would say what method was used by the Revenue Commissioners last year to assess farmers' incomes? How much money was collected? What method is being employed in view of the fact that the majority of farmers no longer have to submit accounts to the Revenue Commissioners, their tax being collected by way of a land tax? What is the position in relation to that land tax?

The other point I should like to raise is the whole question of the assessment of income of farmers. Currently farm incomes are assessed in a number of ways, there being no uniformity about the manner of assessment. For example, the Department of Social Welfare assess farmers' incomes for pensions. The Department of Health community welfare officers assess them for medical cards and eligibility for other health services. Then the Department of the Environment, through the local authorities, assess them for eligibility for education grants. Finally the Department of Finance have their way of assessing them. This lack of uniformity has been raised in the House before. I know the Minister does not have prime responsibility for collecting tax. Up to recently he was Minister for Social Welfare also and between the two Departments they absorbed 45 per cent of the annual budget. Because of the cost of the health services on the Exchequer the Minister would have a major input into ensuring some uniformity in the method of assessment of farm incomes where necessary in regard to any State benefit.

Each year we continue to raise the level of income for contributions while at the same time reducing the level of service, thereby creating another anomaly. The level of service has been curtailed. The amount of money allocated in real terms to the health services has been reduced on the Minister's own admission in answer to questions in the House. On 5 March, in answering questions, the Minister said that the measures taken to reduce expenditure on health services for 1985 related largely to institutional services. He listed the measures included: the non-filling of a substantial number of vacancies, reduced employment of locums, reduction on expenditure on pay extras such as overtime and on-call allowances, tightening of budget levels in relation to drugs, medicines, consumables, travel, energy and so on; the temporary closure of wards and the designation of a number of wards as five day-wards. That had to lead to a very real reduction in the level of service on the hospital side.

On the community side there has been an even more dramatic reduction in certain community care areas, including, in our own constituency, a Cheann Comhairle, where there is now practically no dental service or optical service for adults. It is worth making the point that, at a time when the level of service is being reduced, we have regulations before us here requesting that we increase the amount each worker will pay towards health contributions.

These regulations come before us each year. While we are not opposing them the Minister might tell us why we are not told at this stage the level of income for eligibility for services. Will he say when he will be in a position to announce that?

Mr. Allen

I welcome the Minister's announcement this evening, especially that he is extending the arrangement whereby health boards will be allowed to retain any unpaid contributions in 1986. This will be of some help to health boards. I am a member of a health board with a deficit at present of £5 million. We are being told of the major cutbacks that will have to be effected in coming months to overcome our problem. Therefore, the Minister's announcement this evening will mean some small easement.

Health boards have become inefficient, over-administered, badly-managed devourers of public moneys. Health costs us £1¼ billion at present, of which £682 million goes into the hospital service. Having been a member of a health board since July last, I have endeavoured to learn as much as I can about the system. One thing that has appalled me is the lack of cost control within hospitals, with £682 million of public money being spent in hospitals annually and with very little control on the way that money is expended.

For example, there are no real controls over departments in our major hospitals. If I ask a programme manager on a health board what departments of a particular hospital are efficient or inefficient, I cannot be told. There are no controls on cost unit efficiency per patient. Neither can we pinpoint efficient or inefficient consultants or whether diagnostic tests are carried out in an efficient manner. Until such time as we tighten up hospital spending we will continue to have appalling debts. This is something the Department of Health should examine immediately because, between the spending on hospitals and administration costs, we find ourselves in a very difficult position. The people who rightly clamour for taxation cuts cannot be catered for until we get our spending in order.

I admire the Minister in his attempts to get this whole sector in order. I disagree with him on certain issues. But on this one he is opening a hornet's nest. He is committing political suicide in taking on some of the most powerful groups within the State. We have seen the teeth of these people in recent times when they have attempted to embarrass the Minister and to challenge him at every opportunity because their cosy, lucrative positions and performance have been called into question, and it is about time.

Therefore, I ask the Minister this evening to continue with the work on which he has started out in bringing this whole £682 million monster under control. I wish him well. As I said, he has been criticised by certain people who perhaps are making fortunes out of the health service, who are paid a salary by the Department of Health and who at the same time in tandem with that are pursuing a private practice. We talk about morality. This is an area where the morality of this whole practice must be called into question. I go to hospitals quite often to see what is happening there and to try to learn as much as I can about the situation, and I am appalled at what I find in outpatient clinics. Maybe a dozen or two dozen people are called for appointment at the one time and are herded into waiting rooms because they are public health patients. Maybe a junior doctor is waiting to see the patients when they are expecting to see a consultant. Contrast that with the private practice being pursued by the consultants in another area. It is immoral and the Minister is quite rightly trying to bring these costs under control and is suffering politically for it. Some consultants who are making huge fortunes in this area are demanding more and more up-to-date facilities. We see it every day in the Munster region and in all the regions. They are looking for more and more facilities and at the same time taking as much as they can out of the system. That must be stopped.

One thing that puzzles me at times relates to the health contributions. I am not here to defend the farmer, but when he puts a case to me which I think is reasonable I feel that I should follow it up. I ask the Minister to explain how he levies the charge on a farmer. I cannot understand why a farmer cannot take some of his justifiable expenses off his income and why he cannot be assessed on his net income rather than as at present, as I have been told, on his gross income. There is something wrong about that and I would like the Minister to explain in more detail how the assessments are arrived at. I know a number of people who are willing to pay their way in other areas but this demand upsets them, and they are people who are not easily upset. I would like the Minister to explain how the assessments are arrived at.

I ask him also to tell us how much is owed by the consultants in hospitals. I was at a health board meeting in the past few days where the question of outstanding payments from consultants to the Department of Health came up and £3 million was mentioned as the figure the consultants owed to the Department of Health for the use of public facilities in hospitals and were refusing to pay. The case they put forward was that they are paying 10 per cent and sometimes 15 per cent of their salary already for the use of the hospital equipment. I would like the Minister to set the record straight here so that we can at least know what we are dealing with.

I ask the Minister if any assessment has been done on the level of private practice in our publicly funded hospitals. In other words, what are the consultants taking out of our public hospitals by way of private practice? I ask the Minister to give his opinion. I have an opinion that where a consultant operates a private practice and is an employee of the Department of Health, there is a conflict of interest within the hospital. I would like to hear the Minister's views on this.

Otherwise I welcome this regulation and I await with interest the Minister's response. This is a huge problem area which is labour intensive, finance intensive and full of inefficiencies and irregularities. I would like to put on record my support for many of the things the Minister is trying to do and being much maligned for doing them by the vested interests within the health system.

In conclusion I want to ask the Minister on a parochial level about a cancer treatment unit in the regional hospital, Cork.

There have been justifiable demands for updating the facilities there. I ask the Minister to update us on his present attitude towards the provision of equipment for the cancer treatment unit in the regional hospital which has caused serious public concern in the Cork region because of statements made by both medical and lay people in recent times. I ask the Minister to respond to this. I know it is a question of money in an area where money is short, but people's fears have been aroused. I have had many letters from cancer sufferers who are very upset by some of the statements that have been made publicly and in fairness to these people the record should be set straight.

Mr. E. O'Keeffe

I listened with interest to Deputy Allen and I was amazed at his uncaring approach and his attack on both the consultants and the Southern Health Board. Consider a body who have a deficit of £5 million because the Government have not given them the funds necessary to make them viable and then think of the state of our hospitals in the SHB area with the closure of wards in many of our modern hospitals such as the orthopaedic hospital in Cork and in the regional hospitals. I did not intend to go down this road, but I have been brought into doing so. I intended to make a short contribution on the self-employed in respect of the farming community and the payment of levies but now I am brought into this area. Like Deputy Allen I visit the regional hospital regularly and I visit also the Mater general hospital, the orthopaedic and some of the other health board hospitals and I have nothing but praise for the medical people, the nursing profession and the administrative staff in those hospitals and in the health board.

Mr. Allen

I said nothing about administration. The Deputy is putting words into my mouth.

Mr. E. O'Keeffe

He talked about efficiency and that type of thing. Efficiency is one thing but when you talk about efficiency in health you are talking about a very sensitive area. People are entitled to a service. We budget fairly heavily for that but there is more inefficiency in the hospital service now than there was heretofore because of the cutbacks. Now we see wards where extra beds must be provided because of the closure of other wards. This is a fact of life and it is creating greater inefficiency within the hospital service than we had heretofore when we had full hospitals with all wards in use. Perhaps we should look at this again, but it is wrong to give the health boards the kind of condemnation they have received here this evening.

I would like to talk about hip replacements. Recently a family called to me seeking assistance in getting a hip replacement for their father. They were told that their father would have to join the long queue. That poor family had to come up with £450 for that operation. I have nothing but praise for the family concerned but their father should be entitled to the operation without delay. It is wrong that such a person should have to wait three or four months. A constituent who approached me about a knee operation told me that he had been waiting from the middle of last year for it. I accept it is expensive to have a knee replacement but people should not have to wait so long.

At the same time that we have people waiting a long time for such operations private consultants are being condemned. Some people forget that such consultants help the health boards, the Department and the State by providing a service. They should be commended rather than criticised. Many consultants have spent a long time at college and travelling around the world gaining knowledge about different operations. When they return to Ireland at the age of about 35 or 38 they do not have much money. They are the people who carry out major operations in our hospitals and we should praise rather than criticise them. If an anomaly exists it should be corrected without criticising people in public. The public are getting an erroneous view of consultants.

I am concerned about the collection of levies. That system is a shambles because of the dispute that has gone on for many years, particularly in regard to the way the self employed are assessed. Huge bills are being posted out and many people have received solicitors' letters and threats. The farming community, particularly small farmers, are suffering most. Many of them will never have a taxable income but they are being asked to fork out huge sums of money at a time when they are finding it difficult to rear a family. Those people do not know how to deal with such problems and must approach their local representative. However, some of them do not know how to appeal against such demands and I am concerned about them.

The main complaint farmers have about the health contribution and the youth employment levy is that they are not allowed to deduct capital allowances when arriving at an income base for the purpose of calculating health contributions. That anomaly must be corrected. I received numerous representations from farming organisations about this matter. They are being discriminated against compared with other sectors. Many farmers have invested heavily in buildings, fencing and land reclamation and they are penalised for carrying out that work.

I am not objecting to farmers being asked to pay a health contribution but it is unfair that they are asked to pay the levies on a basis different from other sectors in the economy. I accept that other self employed people pay levies on the same basis as farmers but the capital they are required to invest in their business is lower in many cases. For example, a businessman may require a cash register and that would cost a small amount of money. The Minister should remove this anomaly once and for all and farmers should be asked to pay the levies on the same basis as other sectors in the economy. The current system of assessment is inequitable and does not make economic sense.

I should like to refer to the need for a cancer treatment unit in Cork. It appears that there has been a breakdown in communications between the Minister and the health board. It is important that our hospitals have the most up-to-date equipment. We are all aware that after three or four years cars have to be replaced and the same should apply to plant in hospitals. The treatment plant transferred from St. Agatha's in St Finbarr's Hospital to the regional hospital is out of date. The section of the community who suffer most because the plant is not up to date are those who can ill afford to pay. A person with money can get the treatment on demand in London. The people of Munster should not be deprived of that treatment in the Cork Regional Hospital. On behalf of the people of Cork, Kerry, Waterford and Tipperary I appeal to the Minister to assist the health board and the medical profession in regard to this plant rather than confronting them.

Health is a very sensitive area and the health of our people must be our first priority. I accept that costings must be taken into consideration but we should not emphasise them too much. I shall continue to make an issue of this at every opportunity although I must admit that to date I have made little progress. Those who do not see any hope of the equipment being provided become disillusioned while those fortunate enough to have the money do not have to go on the waiting list or avail of outdated equipment but can take the first flight to London, have the treatment over three days and their life span greatly extended. The provision of that equipment should be a priority. The Minister should also deal with the anomaly in regard to assessment of farmers because we are the only country in the EC that operates this system.

Mr. Farrelly

I welcome the proposals outlined by the Minister. However, serious problems exist in a number of areas. Those who have contributed to the debate have highlighted the problem of self assessment for farmers. I am aware that bills for two years, amounting to £327, were sent to an individual in my constituency. The income of that person from his small farm was £2,000 per year with the result that he was liable for £40 each year, £20 for his health contribution and £20 for the youth employment levy. The individual concerned was assessed for £327. That is an example of a large discrepancy. I do not accept that the original assessments sent out by the Revenue Commissioners are proper assessments. I say this because of the overall way that Revenue work. A few months ago I had the opportunity of asking the chairman of a representation from the commissioners, during a meeting of the Committee on Public Expenditure, what the assessments amounted to and what percentage of the assessments sent out represented the gross income of firms. The commissioners accepted that they send out assessments that are much higher than the actual amounts on which there is liability for tax. When we take that into account and bear in mind also that the 1 per cent levy is based on those assessments, we must realise that we are operating an unfair system and that something needs to be done radically to rectify matters as quickly as possible.

We all realise that there are cutbacks in some areas but in some areas also services are inefficient. With respect to the health boards and to the professional and nursing staffs of the hospitals it is fair to say that there is a certain discrimination in so far as some people who earn huge amounts of money are availing of the services.

The entire health services represent a cost of £400 per annum in respect of every man, woman and child in the community. Services in some areas may not be adequate. It may be that sometimes a person needs to go outside the State for the treatment he requires but the point is that the health services we are providing are costing £400 per head of the population. Surely we cannot increase that cost expecially when there is a diminishing number of taxpayers. We all realise that if the services generally were administered more adequately from the top down we would probably have a more efficient service, thereby saving a lot of money. I am a member of a health board that is one of the most efficient, if not the most efficient, in the country in so far as capital expenditure is concerned. That health board have been conscious always of the need to obtain the best value possible for the taxpayers' money.

Though they do not care for people generally in the lower income groups I was amazed to hear at a meeting of the Committee on Public Expenditure yesterday that people operating private hospitals and nursing homes can provide a service at very much less than similar services are provided publicly. I was amazed, too, to hear that the people involved in this area of private hospitals and nursing homes are not consulted by the Department. We were given examples of some reports that had been produced in recent times.

If we are to have a health service that will cost less we must harness all the expertise available both in the private and public areas of health care. The views of all involved in health care should be taken into consideration at all times in regard to any report that the Department may be commissioning in an attempt to ascertain where improvements might be made in the service and savings effected. Each of us here, as well as anyone who is a member of a health board, has a duty to save the taxpayer money in so far as possible. A bed in a private hospital costs about £110 per week while in a public hospital the cost is about £150 per week. In the various areas in which I am involved I will be doing everything possible to ensure that adequate services are provided and that where services are already more than adequate, cutbacks will be effected.

A previous speaker referred to the unsatisfactory situation of calling a large number of people to a casualty unit at the same time. This could mean that a patient arriving at 2 o'clock would not be seen until 4 or 5 o'clock. We had a discussion recently in the North-Eastern Health Board in this regard in the context of Navan Hospital. It was interesting to learn that at weekends the numbers of people presenting themselves at casualty are much higher than the numbers attending such units during the week. It was interesting also to learn that when there was a small service charge for treatment at a casualty unit, the attendance was between 35 to 40 per cent less than is the case now. Equally, if there was a fee in respect of visits to a GP, people might not avail of that service as often as happens in some cases now. In any event, we should consider imposing a charge in respect of prescriptions. In many instances much of the medicine prescribed is not used. The imposition of a prescription fee would help to eliminate such wastage. Measures such as that must be considered if we are to reduce the per capita cost of the health services. There is waste right across the board in the services we are providing.

Over the years we have provided excellent services which as a country we were not able to afford in many cases. We have come to the cross-roads and we should only provide services for which the taxpayer can pay. We must be realistic about this. Those who are paying 58p in the £ are sick and tired of doing so because they are the very people who must also pay voluntary health contributions for all the health services needed by themselves and their families. I must compliment the Minister in taking very tough decisions, even though the Opposition may not agree fully with some of them. They might find themselves in the position of having to take such decisions. If psychiatric care can be given to people in their own homes that is the proper way to care for these people and I compliment the Minister on his proposal in this regard.

Since our discussions last year on this subject we have had a very comprehensive and up-to-date report and legislation as regards nursing homes and we are all grateful for these measures. It had been brought to the notice not only of the Department of Health but of the different health boards — and also there were reports on the radio — that some patients in nursing homes were not being treated as they should. One cannot condone that. A stop was put to people taking money from unfortunate individuals whose families were hard pressed to keep them in the homes while at the same time a subvention was being paid from the Department of Health in the region of £42 per week. Despite those payments, the patients were not getting proper care in those homes, but we have now taken a step in the right direction.

I come back to the area of self-assessment of farmers. A decision must be made with regard to the introduction of the land tax for those with an acreage of under 80 adjusted acres. How will these people be assessed for health contributions? People should be let know what they will be paying and in what manner. When asked about self-assessment, the chairman of the Revenue Commissioners told the Committee on Public Expenditure that the assessments were relatively high to get people to react. This was the case when the accounts for the previous year were not forwarded to the Revenue Commissioners. As I said earlier, a person with three years' arrears of £327 was assessed for £80 because his land was set and his income was receipted. When bills at a higher level are sent to farmers they become alarmed, but a large percentage decided they did not have to pay that amount and as a result arrears accumulated over two or three years. It came to the point where there were arrears of £11.8 million due to the health boards at 31 July 1984. It is nice to note some small improvement in that situation.

The assessment system is inadequate and must be changed radically. I am amazed that nobody, either from the Revenue Commissioners or the Department of Health, tackled this problem on the basis of accepting a reasonable valuation. If that had been done, a large amount of those arrears of £11.8 million would now have been paid, instead of the health boards going short. I am glad that the amount collected may now be kept by the health boards for use in the health care area. In all negotiations taking place with regard to the updating of the health services the views of the experts, both private and public, should be taken into consideration. By arriving at a synopsis of all the opinions, a large saving of taxpayers' money will be possible. At present the cost is £100 per head. The Committee on Public Expenditure will help all they can in highlighting areas that need to be looked at.

Mr. Wyse

This matter of the health contribution has been under discussion for a number of years but it is just another aspect of the crazy ad hoc taxation system with which successive Governments have lumbered the people. Whether we call them youth contributions, youth employment levies or income levies, they are nothing more than a part of an ill-thought out taxation system. The 1 per cent income levy has, happily, now been abolished but all these levies have had their own peculiar inequities. The 1 per cent health contribution is taken from gross income and takes no account of tax allowances. It ceases to apply to incomes which reach £13,000 per annum. It is proposed that this figure be £14,000 for the year ahead. This raises further inequities. The measure bears down more heavily on those whose salaries reach only the health contribution ceiling. It is more lenient on those over that figure.

I appreciate that people over the health contribution ceiling do not enjoy the same hospital benefits. The health contribution also highlights inequities between different sectors of the community because there is a serious problem in some parts of the country in regard to the farming community due to the nature of the tax system. This is not the fault of farmers. They have been seeking to have depreciation taken into account in assessing their liabilities. The Progressive Democrats maintain that inequity and blatant injustice between different taxpayers is at the root of the very serious national unease which exists regarding taxation. My party are currently preparing a comprehensive policy on taxation. We will be seeking to get away from income levies and to propose an equitable taxation system which will treat all sections of the community fairly and provide a basis of taxation which will do away with the need for any more ill thought out, impromptu tax measures to fill occasional gaps in revenue.

I support my colleagues in Cork in relation to cancer treatment. I do not think a week passes without my having consultations with the Minister in regard to this acute problem in Cork and the Munster area. The Minister is aware that many patients are referred to St. Vincent's Hospital but I understand that that hospital will no longer take patients from the Munster area. I am sure the Minister appreciates the problem and anxiety caused to people suffering from cancer. We met the Minister on a number of occasions in relation to this matter and something must now be done about cancer treatment in Munster. The Minister is also aware of the hundreds of people who go around the country collecting funds to help to provide equipment in Cork Regional Hospital. A sum in the region of £200,000 has been collected and it is not asking too much of the Department of Health to make a contribution and to give recognition to these voluntary workers who are prepared to continue their work to ensure that the necessary facilities are provided in this hospital.

I do not wish to say too much on this subject because it will cause alarm to those unfortunate people who are being referred to the regional hospital for treatment. The Minister should recognise the tremendous dedication of people who are trying to provide a service which the State should be providing. We have been trying for two years to raise sufficient money for this treatment. The doctor in charge of the cancer unit is dedicated to his patients but it is appalling that the hospital in Cork which covers the Munster area does not have proper equipment for treating cancer. I make a very special appeal to the Minister to provide the necessary equipment at the Regional Hospital Cork.

Minister for Health (Mr. B. Desmond)

I should like to deal with five or six points as briefly as possible. Deputy O'Hanlon raised the question of problems regarding collections from the farming community and there is no doubt that there have been many problems in that regard. Some years ago farming organisations advised their members not to pay any contributions but thankfully that policy was changed and they have now recommended, particularly in relation to arrears, that farmers should clear their arrears. A large number have attempted to do so. Deputy O'Hanlon asked about the extent of revenue collection and the amounts involved. I do not have information regarding the amounts collected since the change over of the system but I will try to obtain the data and forward it to him.

The collection of health contributions and the levies under the land tax is under consideration at present but no final decision has been taken in that regard. However, such a decision may be expected shortly in relation to the procedure to be adopted under the land tax for health contributions and the levies. I note that many Members referred to the farming community but, in many respects, it is irrelevant because, for all practical purposes, the collection from the farming community is too small to be relevant. In 1983 insured persons were contributing £62.5 million in health contributions but the farming community paid £700,000. It would take that amount to run a fair sized hospital for a few days.

In 1984, as a result of a major effort, health contributions for insured persons went to £65.8 million and the farming community paid about £2.3 million which is still a very small figure in terms of health services provided. The following year we had the change over and in 1985 health contributions from the insured population went up to £73.2 million and down to £1.6 million from the farming community. The relativity is almost an irrelevancy in terms of contributions. That was last year. I hope there may be some improvement in 1986. I do not know. It depends in large measure on the extent to which the land tax measures are introduced and effectively deployed. For all practical purposes the average of £1.5 million per annum from the whole of the farming sector has to be contrasted with the total expenditure on the health services of £1,276 million. It is not even half of one per cent.

The PAYE sector are the people paying the contributions. In 1983 when I became Minister the amount contributed was £62 million and this year I estimate to get in £75 million, a substantial increase from a declining labour force with higher earnings. Everybody pays, including myself, up to £13,000 last year. I congratulate the Deputy opposite who is, I think, the only voluntary contributor in the House. I also pay another 6.5 per cent on my income. By the time I have finished paying my contributions and six per cent Oireachtas pension as well, there is a fair slice taken. The ordinary insured worker is the person paying health contributions.

We have a lot of political guff about things like capital allowances. Not only do farmers not pay for the most part but they want capital allowances added in terms of an exemption. It is a joke. Deputy O'Keeffe raised the question of capital allowances. On the new factual assessment basis farmers' income is determined on the same basis as that of every other self-employed person. Profits from farming are subject to health contributions. Farmers pay health contributions after deducting rent, rates, wages paid, repairs to machinery and equipment — one can always find a few dockets for that one — and if the farmer is stuck he can purchase seeds and fertiliser and charge all that against profits. To that can be added business interest and stock relief. After all that there might be a profit figure and a farmer might pay his health contributions on that.

Mr. E. O'Keeffe

The Minister should buy a bit of land.

Mr. B. Desmond

In addition, if a farmer is feeling fairly desperate about his spouse and his unfortunate children he might decide to take out substantial superannuation and charge that also against the profits. We do not allow the capital side. There are serious suggestions in terms of health contributions that if somebody puts up a couple of hundred yards of fencing it could be charged against profit and he would pay virtually no health contribution at all. He could put in roadways to the holding yards, or become involved in drainage and land reclamation. In the end the nett effect of all that would be that I would be giving health contributions. I would have to give them a net payment of a refund of a notional health contribution. This proposal for capital allowances in terms of health contributions is something which cannot be considered because there is no good reason why an exception should be made for the farming community who, for the most part, do not pay health contributions.

Lest we get carried away with the health contributions by insured persons, the figure to the end of this year will probably be about £78 million, representing only about 5 per cent of total health expenditure. Health expenditure is paid for out of ordinary income tax, VAT, excise duty and the bit of corporation profits tax we get. By and large people do not pay for health as such. God be with the days when we had many and vigorous arguments about health charges at local authority level. All that is gone now and it is all moved to the central Exchequer and placed on the shoulders of one or two Ministers who will be pilloried for the rest of their lives because there is nowhere else to come to get the money. Nobody pays for anything and nobody wants to pay for anything. That is the experience one has in Government or in Opposition.

The question of private nursing homes was raised by Deputy Farrelly. There was a lot of raiméis on the early RTE news about the Minister for Health not consulting with private nursing homes and private hospitals about their role in the health services. The Committee on Public Expenditure, with profound respect to them, swallowed a lot of guff in that regard. The only relationship between my Department and such facilities is that we sanction the rate of increase in subscribers' premiums to the VHI and we give approval for new schemes. That is our function. We also give approval to the health boards to pay certain subsidies to certain nursing homes where they provide beds for the health board for geriatric care. Apart from that we have no role whatever. These facilities are privately funded, privately owned, the staff are privately employed. Their accounts are not sent to the Department of Health and if we were to ask for them we would be told to go and get ideologically knotted and mind our own business because they regard themselves as very private within the system. Their admissions and their discharge policies and their consultant staffing policies are privately determined.

Dr. O'Hanlon

Is that hospitals or nursing homes?

Mr. B. Desmond

Nursing homes and the private hospitals. In the case of the largest private hospital in the country, the Bons Secours Hospital in Cork, I do not have anything to do with that hospital, nor do the Southern Health Board for the most part.

Dr. O'Hanlon

Does the Minister allocate any money to them?

Mr. B. Desmond

No, not a shilling.

Dr. O'Hanlon

Then he should not be complaining.

Mr. B. Desmond

I am not complaining. They are complaining that I am not consulting with them about what they do. They neither consult nor want to be consulted. One must always translate what people say and what they mean and consultation frequently means they want to be consulted about their prospects of getting a few bob — money for some reason or another.

Mr. Flynn

They know well the Minister will not give them any.

Mr. B. Desmond

Everybody in this country wants to run a nursing home provided the health board will pay for the beds on a subsidised basis. It is quite easy to run a very good nursing home if the health board will subsidise all the beds. That is the degree of consultation some people require. I want to bury that one, just as tonight we had a lot of political guff in relation to the north side of Dublin. I would point out that there are 365 private beds on the north side of the city. This unfortunate segment north of the Liffey whose population is so desperately deprived of private hospitals that they have to build another one, have 365 private beds.

Mr. Flynn

There would not be three if the Minister had his say.

Mr. B. Desmond

There are so many hospitals in Cork that you would have a nervous breakdown if you tried to make up your mind which of them to go into. There are a couple of thousand private beds in Cork. The debate strayed somewhat in regard to the point made by Deputy Allen and, to some extent, Deputies Wyse and O'Keeffe. It related to cancer treatment services in the Cork area. I have taken careful note of what has been said and I assure the Deputies that I will be taking steps to deal with the situation as a matter of urgency. I want to expand the services throughout the country on a rational basis. I have some work to do in regard to the Cork Regional Hospital and I will be making a number of decisions in that respect. I will consult with the health board, and I do not want it to become another political football. Health is bad enough but when politicians start messing around with cancer, God help the people of Ireland. Politicians would make a real dog's dinner of that.

Deputy O'Hanlon spoke of the Category 2 limit of £13,500. This is being reviewed and it will be increased with effect from 1 June 1986. Taken into account will be the income from 5 April this year. Through information from the Revenue Commissioners and with the approval of the Minister for Finance I will get a fix on the precise figure. It is not possible for me to state now what the new limit will be, but it will be in line with usual developments in this area. I am as anxious as the Deputies to ensure that persons in Category 2 will be looked after. I, too, have a hospital services card as a fully paid up voluntary contributor.

Mr. Flynn

The Minister is making a virtue of his socialism.

Mr. B. Desmond

I believe in a comprehensive health service. People in that category should have full consultant cover.

Mr. Flynn

If it takes the Minister as long to open the Castlebar hospital——

Mr. B. Desmond

I was in Castlebar the other night and I was delighted to see a crane demolishing the old nurses' home and the bakery. It was a lovely sight. The work is in full swing.

(Interruptions.)

Mr. Flynn

It was the old county jail.

Mr. B. Desmond

I will be down to lay the foundation stone in a few months.

Mr. Flynn

Has the Minister been invited?

Mr. E. O'Keeffe

Will the Minister invite Deputy Flynn?

Mr. B. Desmond

And I will invite him to the lunch. We must examine the collection system from the farming community and the self-employed. For practical purposes, it is the ordinary PAYE contributor who pays for the health services, public and private employees. One gets the impression that if a person is in the public service he does not pay for anything.

Mr. Flynn

Why is the Minister down on the farmers all the time?

Question put and agreed to.