Seanad Éireann - Volume 115 - 03 April, 1987

Health Contributions (Rate) Regulations, 1987: Motion.

Mr. Lanigan: I move:

That Seanad Éireann approves the following regulations in draft—

Health Contributions (Rate) Regulations, 1987

a copy of which regulations in draft was laid before the House on 25 March, 1987.”

An Cathaoirleach: Before calling on the Minister of State at the Department of Health, on behalf of the Members of the House, I should like to congratulate him on his appointment and wish him well.

Minister of State at the Department of Health (Mr. Leyden): This is the first occasion on which, as Minister of State at the Department of Health, I have had the pleasure of addressing this distinguished House. I wish to take this opportunity of wishing all the Senators who are seeking re-election to the next Seanad every success. Equally I wish those who have decided not to seek election every happiness in their retirement. I wish you, a Chathaoirligh — especially, as a former constituency colleague of mine — every success and happiness in your retirement. Indeed I hope that the family name will be represented in the membership of the next Seanad as well.

It is an honour to address this House on this important motion relating to health contributions.

Subsections 2 and 3 of section 9 of the Health Contributions Act, 1979, provide that the Minister for Health may vary the rate of contribution and the income [2065] ceiling which determines the amount payable by an individual in a particular contribution year. Subsection 5 of section 9 of the Act requires that a draft of the proposed regulations shall be laid before each House of the Oireachtas. It also requires that the regulations shall not be made until a resolution approving of the draft regulations has been passed by each House. The draft regulations now before the House propose to vary the rate as well as the income ceiling. The regulations shall apply in relation to the contribution year commencing on 6 April 1987.

The income ceiling is at present £14,000. It is proposed to raise this to £15,000. It is proposed to vary the rate figure from 1 per cent to 1.25 per cent.

The income ceiling has been varied each year in line with increases in average earnings in transportable goods industries. The rate figure has remained at 1 per cent since the introduction of the income-related scheme in April 1979. Non-capital health expenditure in 1979 amounted to £505 million.

This expenditure increased to £1,194 million in 1986. The high cost of maintaining existing health services leaves me with no alternative but to propose the increases now before the House.

All persons over 16 years of age, with an income, are liable for health contributions. However, persons who generally are held not to be able to afford the contribution are exempt. Medical card holders are exempt. Persons in receipt of a social welfare widow's pension, a deserted wife's allowance or benefit or a social assistance allowance as an unmarried mother are also exempt.

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. The latest information we have relates to June 1986. Average weekly earnings in June 1986, were £184.42. This represents an increase of 6.02 per cent on the June 1985 figure of £173.94. When this is applied to the current ceiling of £14,000, a new ceiling of £14,843 or say £15,000 emerges. The [2066] effect of the increased ceiling is to increase the maximum amount of health contributions payable by persons with incomes in excess of £14,000 per annum. Persons with incomes of £14,000 or less will not be affected by this increase.

These rate and ceiling changes will increase the maximum contribution payable from £140 to £187.50, an increase of £47.50 per annum. While all contributors will be affected by the proposed rate increase, only those with incomes of £15,000 or more will pay the maximum increase of £47.50. The additional charge on a person with an income, of say, £10,000 per annum will be £25 or 48 pence per week.

These changes will bring in approximately £23 million in the contribution year 1987-1988. Of this, about £13 million should arise in the financial year 1987. The remainder of the additional yield will come in the first quarter of 1988.

The Revenue Commissioners are responsible for the collection of current health contributions from all sectors. Health boards remain responsible for the collection of arrears due from farmers for periods up to 6 April 1984.

The total amount owed by farmers to health boards at 31 December 1986 stood at £6.4 million. While the amount still outstanding is cause for concern there has been an encouraging response in recent years to the efforts of the health boards to collect these arrears. Senators will be aware that health boards can retain these arrears, including any such arrears collected in future years, as additional revenue to be applied to local health service needs. This arrangement will be of continued benefit to health boards' budgets.

I appeal to the self employed, including farmers to ensure that their health contributions are fully paid without delay. I need hardly remind members that these contributions represent extremely good value for money and are an essential element of the moneys required to maintain the existing high standard of our health services.

I shall be reviewing shortly the income limit for free consultants' services. I am [2067] not in a position as yet to say what this limit will be.

Before concluding I would like to make one suggestion to the House. We will shortly have ample opportunity to discuss fully the charges for in-patient and outpatient health services which were announced in the budget. Consequently I would suggest that discussions on the motion now before the House should be confined solely to health contribution issues.

I now ask the House to approve the regulations before it in draft.

Professor Dooge: What the Minister has proposed in Items Nos. 1 and 2 today is, as he indicated, of somewhat narrow scope. It is concerned with the question of the level of the health contribution and with the income limits. Since these proposals were part of the Fine Gael proposals for a budget, on which Fine Gael fought the last election, it would be opportunism of the rankest kind for the Fine Gael group in the Seanad to oppose what the Minister is putting before us today. Consequently we do not intend to oppose what he is suggesting here in Items No. 1 and 2.

There are a few comments which I should nonetheless make. It was with the utmost regret that the Fine Gael Ministers in Government and the succeeding Fine Gael Government came to the conclusion that in the dire economic situation in which we found ourselves such changes under the health code were necessary. This prompts me to pay tribute to the former Minister for Health, Deputy Barry Desmond, for his efforts over the past four years at a cost of personal unpopularity in order to try to ensure that value would be obtained for the large amount of money which was being spent on health services. In what Deputy Barry Desmond has done the present Minister has a headline which he can well follow. It will not be easy and it was not easy for Deputy Barry Desmond and it will not over the next decade or so be easy for any Minister for Health to grapple with this problem of the vast amounts of [2068] money which are being spent in this area. We can agree with what has been proposed today because what the Minister is proposing is the levying of all for health purposes. When the time comes to discuss the question of other charges which are not, strictly speaking, part of what is proposed today but which were mentioned by the Minister in his speech, we may well take a different attitude.

I do not know if it is true, but the story is often told that under an ancient Chinese custom one paid a fee to one's doctor when one was well and stopped paying the fee when one was sick. In western civilisation we pay fees to our doctors when we are sick and not when we are well. There is a great deal to be said for that Chinese attitude.

Mr. Fallon: It would not work.

Professor Dooge: In so far as what the Minister is proposing to us today is a levy of all persons who are working, he is following, as it were, the Chinese philosophy in this regard. I can say on behalf of the Fine Gael group that as long as he adheres to this Chinese approach to the problem, an approach adopted in the Fine Gael budget which was never carried into effect and which we propounded in the course of the election, he will receive our support but when he deviates from the Chinese custom, this may be a different story.

The question of special levies on those unfortunate enough to be sick and on those unfortunate enough to require hospitalisation is another matter and nothing that I or any member of my group says today must be taken as approval of that. There is a tendency to think that what was brought in in the Fianna Fáil budget was almost completely proposed by Fine Gael, but there are essential differences. The charging of in-patients is one essential difference. The question of housing grants raised earlier today is another difference.

We welcome heartily the thrust of the budget of which these particular regulations are an outflow. We welcome the determination with which the new [2069] Government have grasped the problems of the economy. We only regret that the support which we offered them in this endeavour was not forthcoming from them as a party when we were grappling with the same problems. There are significant differences between the budget Fianna Fáil brought forward and that which Fine Gael would have brought forward if returned to office but as the Minister has indicated this is not the time for them to be discussed. There will be another opportunity. I will not be here but others will be to put forcibly to the Minister our points of difference. Accordingly, in regard to the question of the increase from 1 per cent to 1.25 per cent in the levy and the increase in the income limit, as far as the Fine Gael group are concerned there will not be opposition in this House today.

Mr. Fallon: I take this opportunity to congratulate Deputy Leyden on his appointment as Minister of State in the area of health, a very important area which affects the lives of everyone. It is certainly an area which will need a lot of attention in the years ahead. I know that Deputy Leyden will give it his utmost in the years in which he holds the position as Minister of State in that Department.

I wish you well a Chathaoirligh, in your retirement. Senator Dooge referred to the word “opportunism”. I should like to pay a very warm tribute to Senator Dooge for his work in the Seanad during the past few years. Opportunism is not a word I would connect with him. He seldom, if ever, seized an opportunity to embarrass or upset anybody on the Order of Business. I found him extremely helpful and fair at all times and I wish him well when he leaves the House.

Senator Dooge said his party would not oppose these measures. This is consistent with what we did when we were on the other side. We did not like what was happening then and do not like what is happening today but who does? We are in a very tough economic situation. We know tough measures have to be taken in all areas of Government. When I was spokesman on health the common [2070] denominator during the past four years was that we nodded through and supported the Government in increasing the ceiling every year. If you examine the records you will find that is accurate.

We know the Minister is endeavouring to increase the income ceiling from £14,000 to £15,000 and to vary the rate figure from 1 per cent to 1.25 per cent. The ceiling has been raised over the years. The hope this year is that these charges will bring in £23 million in a full year or £13 million in the financial year, 1987. What would the effect be if there were no ceiling to this contribution? Perhaps the Minister might give a brief reply to that.

Obviously the collection of the money is important. It is one thing to make the order, but it is another thing to collect the money. Every effort should be made to get people who owe this levy to pay it. Up to April 1984, the responsibility for collecting the arrears was deemed to be part and parcel of the affairs and the administration of the health boards. Since April 1984 it has been collected through the Revenue Commission. I understand that at present the arrears are over £100 million. Are the Revenue Commissioners serious about this aspect of their new role? Are they giving the same attention to the collection of this levy as to other levies and taxes. Perhaps the Minister will reply to that query.

The purpose of the exercise is to produce finance to help to maintain the existing health services. Nobody in this room, including the Minister of State, is happy about this increase but the high cost of maintaining the existing health services is a reality of life and we are faced with the increases now before the House. We do not wish to hold up unduly the passage of these draft regulations. We did not do so when we were in Opposition. My role today is to support the Government in their efforts. When we were in Opposition we supported what the Government were doing in this area and knowing Senator Dooge as I do, I am sure his party will also support the measure.

[2071] Mr. Ferris: I join with other Senators in wishing you, a Chathaoirligh, the best of health and happiness in your retirement. You are not going forward in the coming election and effectively, this will be your last day as Cathaoirleach. I thank you for the courtesy you always extended to me and to the members of my party and the fairness with which you operated the business of the House as did Senator Dooge in his role as Leader of the House. It was a privilege to work with both of you. The next House will be a poorer place because neither will be a member of it. I also join with previous speakers in congratulating the new Minister of State at the Department of Health, Deputy Terry Leyden, who is a very good friend of mine. He will make an excellent Minister of State. He has a very difficult task ahead of him because the Department are one of the big spenders and as such touch the lives of many people in our community.

I am sure the Minister did not welcome his first task in bringing these unpalatable orders before the House. We are discussing items No. 1 and 2 together but I take it we will be dealing with the two draft orders separately. Consistent with what I said on the Order of Business we will have different attitudes to both drafts. I will deal with item No. 2 first because other members of the Labour Party want to elaborate on our attitude towards increasing the level at which the cut-off in contribution takes place.

As Senator Fallon said, we were used to an increase in the limits at which the levy was collectable every year. This was normally carried out in conjunction with the consultants who immediately at the cut-off point — the point that was agreed and discussed with them — started to charge people for operative procedures in a hospital. This was usually the point at which VHI took over. The Labour Party have no objection in principle to having no limit to what a person may contribute to the health services through the PAYE and PRSI systems. We feel that a good service should be paid for by people who can afford it. People with incomes of £15,000 and over could help [2072] to pay for this service through the VHI system and the 1 per cent levy. We would have no objection to raising the cut-off point on the basis that people who could really afford to pay for this service could pay for it without creating hardship. This is why we adopt a different attitude to the raising of that cut-off point.

I am surprised the Minister admitted that, as of today, he has not reached agreement with the consultants on where they will start to charge people. We do not know if the consultants are prepared to operate the system from a figure of £15,000 or whether they will insist on a lesser sum. As soon as the cut-off point is increased the consultants ability to charge people is decreased. When Brendan Corish, a previous leader of our party, was Minister for Health, he tried to bring in a health service for everybody. A difficulty arose because the consultants insisted on still having a category of people who they were entitled to charge fees over and above the normal hospital entitlement. We will discuss this in the legislation which will come before us later today.

I would like to deal with Item No. 1 and put down a marker from the Labour Party that we could not support an increase in the contributions from 1 per cent of one's income to 1.25 per cent. We oppose this on the basis that literally it is another form of taxation in disguise. It increases the amount of money the PAYE sector will be paying into the coffers of the State for what will now be a diminishing service. For the 1 per cent at least, they had a free hospital service — I will not go into that at the moment — but now they are paying more for a lesser service. It is an imposition on the PAYE sector especially when we take that imposition in conjunction with the Minister's admission that arrears of the 1 per cent charge to health boards from the self-employed up to the date the Revenue Commissioners took charge of the collection amounted to the staggering figure of £6.4 million.

Are we serious about maintaining a health service which we will require at some future date, and which we all aspire [2073] to provide for our people? Do we recognise the problems health boards have faced in the past? I was a member of a health board for eight or nine years and I lived from day to day trying to balance a fairly restricted budget from previous Ministers, including Minister Barry Desmond to whom tributes have rightfully been paid. At least Deputy Desmond was specific when he pointed out areas in which savings could take place but I have my doubts that there has been a concerted effort to itemise specifically where these cutbacks in the health service will take place to balance the budget announced by the Minister for Finance, Deputy MacSharry on budget day. In the budget speech the Minister said he anticipated that these charges would contribute £11 million extra to the Exchequer. In the speech of the Minister of State today, this figure increased to £13 million for the rest of this year and there will be an amount even larger in 1988. I seriously question the budget figures that have been given to us when a week later there seems to be a discrepancy of £2 million or £3 million which it is hoped will be covered by this order.

I am extremely worried that this will be an increasing burden on people, and that no serious effort has been made by this Government to try to collect outstanding money, in the region of £6.4 million, from people who owe it. People who could have paid the 1 per cent have refused to do so or their farm leaders have advised them not to pay it, which is a tragedy. Responsible farm leaders have created a situation where genuine farmers, wanting to pay their contributions for what they consider a good service, still owe £6.4 million to the Exchequer. Today we are increasing the take from the PAYE sector who have no means of avoiding payment because it is automatically taken by their employer. We have washed our hands of the anomaly this will create and have worsened the urban/rural divide where the PAYE sector feel the self-employed can get away without paying the 1 per cent levy. The new Government, in trying to balance the budget, recommended an [2074] increase in the existing rate from 1 per cent to 1.25 per cent.

Everybody here is being co-operative today. Senator Dooge has followed a consistent line. He said the Fine Gael Government agreed to these figures as they felt they were part of budget. It was on figures like this that the Labour Party were forced to leave Government. How could I be consistent if I did not oppose the concept of an additional £13 million from the PAYE sector towards a diminishing health service? I wish to be consistent and that is why I laid fairly in front of the Minister our reasons for opposing this measure. We feel it is an additional tax on people who cannot afford it, who have no option but to pay it, unlike the private sector, and who are paying more for a diminishing service.

I know there are efficient ways of running hospitals and health boards because I have been part of that process and have tried to contribute efficiently and constructively under four different Ministers for Health. I always had difficulty ensuring that the service continued. I know the Minister, Deputy O'Hanlon, will have major difficulties to face, but it is an easy way out for him to increase the contribution by 25 per cent in the knowledge that it will be collected directly from the PAYE sector, who cannot avoid it — and we all know they do not want to avoid it — while the private sector who have the ability to pay, decide not to pay their fair share towards a very fundamental service for all. It is in everyone's interest that the service be maintained and that a hospital service be available, so that when people get sick they have some place to go. I am against the principle of using the easy option to get money from the PAYE sector while the other sectors have not paid their fair share.

The health levy is based on gross pay. The farming community objected to paying it on the basis that there was certain anomalies in the system and they could not write off capital investment as expenditure. As chairman of a board at the time, I met farm leaders to explain that the system being used was the same [2075] as that for the PAYE sector, that is, that the levy was paid on a gross figure and that had nothing to do with income tax. I will be unable to convince them now to pay this extra levy because it is another form of taxation, an increase in taxation towards the health service for which they feel they have already paid. I am unable on this occasion to support item No. 1 but I have no objection, in principle, to item No. 2.

Mr. Hussey: I congratulate the Minister on his appointment to the Department of Health and hope that he will be very successful. I also wish to join with the other speakers in wishing a happy retirement to all those who are not going forward for re-election to the Seanad. Now that they have got rid of the burden of this high office, I hope they will have a very happy retirement. I also wish success to the many people who are contesting the elections.

I know it would not be the Minister's wish to have to come to the Seanad on his first occasion looking for money, but everybody realises the problems facing the economy and know that health services, like the other services, cost a lot of money. In order to maintain those services, and perhaps in some instances to provide new services, we have this motion before us for an increase in health service charges. It is expected that £23 million will be taken in a year. It will cost those with an income of £15,000 an extra £47.50 per annum and people with an income of £10,000 will pay an extra £25 per annum, or 48p per week. It is not a great increase when you look at it that way.

Nobody likes to have to pay more for these services. Yet, they affect the lives of all our people. It is very important that those health services should be maintained and improved upon. Over the years the outgoing Government were criticised for curtailing many of the services. Two that I can remember very distinctly are the opthalmic service and the adult dental service. I hope that in the course of time the new Government [2076] will be able to reintroduce such services because there is a great demand for them at present. There is quite an amount of wastage in certain sections and perhaps that could be looked at closely, particularly in the prescribing of drugs. I have always considered that there has been wastage there and that many drugs have been prescribed and supplied to people and have never been used. Those drugs are very expensive and something should be done to minimise the wastage in that area.

It is a difficult job to run the services but I hope the Government will tackle it with the same determination that they have shown since they were re-elected to office. In particular I hope they will tackle the problem on the £6.4 million in outstanding arrears. It is deplorable that that situation should be allowed to continue. I hope the Government and the health boards will succeed in collecting that £6.4 million or at least the greater proportion of it, as that is a quarter of what they hope to take in a full year under these new arrangements. Arrears, if they are legally due to the health boards or the Department of Health, should be paid.

If people get away with the idea that they can get off the hook and that they will not be forced to pay those charges which they are legally liable for they are not going to pay. It is up to the Government to show the same determination in collecting this £6.4 million as they showed towards the collection of the outstanding fees which were due from the ESB and others. At the same time, I would not like to see any hardship imposed on anyone. Medical card holders are not liable for these charges and will be entitled to all of the services free of charge. Those who can afford to pay for the services should pay. As I said, my main point is that every effort should be made to collect the arrears of £6.4 million.

Professor O'Donoghue: I will be brief as I appreciate that we still have a good deal of business to get through. First, I would like to join with other Members of [2077] the House in wishing you, a Chathaoirligh, and the Clerk very long and happy retirements.

Turning to the business before us, I would like to begin by congratulating the Minister on his appointment and to wish him a long and fruitful sojourn in his office. It is unfortunate that he has to come before us so soon in his new office with the proposals which are before us today. I have to say that like other Members I cannot bring myself to feel that this is the right way to go about it. No matter what you call them, these contributions are in effect a tax and they are quite clearly income tax. They are the worst kind of income tax because there are no reductions or concessions to take account of ability to pay. In fact, it is an income tax upside down. There is no concession for people on lower incomes and the contribution stops at a certain figure. This year it goes up to £15,000. It is, as I said, the worst possible form of tax.

When you also take into account that there is a similar type of arrangement operating for social welfare, PRSI and so on, along with the actual system which is called income tax, you can see that we have allowed a higgledy-piggledy revenue collection system to grow up over the years. Not surprisingly, then, we find that overall our system of taxation and expenditure is riddled with anomalies and inconsistencies and therefore with all kinds of injustices to particular individuals and groups.

In the very short time since the new Government were elected they have not yet had the opportunity to tackle the question of fundamental reforms in the system but I would urge the Minister in discussion with his colleagues to think again from first principles about how he wants to go about these matters. At the earliest possible date he should get rid of this kind of contribution. If you want to collect money on the basis of people's incomes, do so but do so under the income tax code. If you have to make special arrangements for the self-employed or farmers or any other group, do so but have only one tax collection [2078] system rather than have all these bits and pieces tacked on with various names.

The Minister has asked us not to discuss the question of the charges for in-patient and out-patient services but since I will not be a Member of the new House I will not have the opportunity of discussing them at a later date. Therefore, very briefly, I would simply point out that the effects of increasing the contribution rate from 1 per cent to 1.25 per cent and the rate of the income ceiling taken in conjunction with the imposition of a £10 per day charge for hospital services are bearing on a group who are most severely caught by the various pressures at present.

Typically, you would expect that it would be many of the workers in these income categories who would have no VHI contributions. The Government have indicated they will not operate this £10 charge until they have had an opportunity to introduce a special VHI arrangement but in effect what are you saying? You are saying that under another name you are going to look for another form of contribution from this category. Therefore, if you look at the way in which these changes in the health area are coming into effect you will see that they are hitting a group of people, income earners and so on, who are among the groups who are finding it most difficult to make ends meet at present. That is unfortunate and it is an anomaly which the Government should set out to try to remedy at the earliest opportunity. In other words, I do not think it adds up to a set of arrangements which are in any sense distributing the sacrifices in a fair or evenhanded manner.

While we must of necessity go along with what is before the House today I would like to take this opportunity to place on record my disagreement and dissent to this type of approach and to urge the Minister, when he has the opportunity, to deal with this question from first principles, especially in the health area. If there must be a drive towards economies I suggest that most of it should lie in the direction of trying to introduce direct charges for particular elements of [2079] the service such as the use of drugs and so on. I do not wish to elaborate on that question today and I will have to avail of opportunities outside the House to debate some of these matters.

Mr. O'Mahony: As Senator Ferris has said, the Labour Party will be opposing the increase in the rate of health contributions proposed by the Minister today. Before going any further, I, too, would like to congratulate the Minister of State on his appointment.

I think all of us would agree that there is an inbuilt upward pressure on health expenditure not only in Ireland but in all economies and that the level of health expenditure is obviously a matter of concern to the Government as it would be to any Government. I suggest that the way this problem can be handled best is by doing something which I am sure the Government would find ideologically not to their liking. The way to bring about reasonable control over health care expenditure is by unifying the system, by moving towards a health care system which does away with the distinctions which now exist between public and private treatment, which withdraws all subsidy and support for private hospital care and which offers a unified option to the entire population. Linked to that, if we are concerned with getting health care expenditure under control, we must move towards a salary based system of payment, particularly to doctors but to others, in the service. I have no doubt that the system of payment on the basis of fee per item of service is a recipe by which the medical profession can write their own incomes, and they do.

From any economic perspective which would contain with it a sense of social equity, the way to bring health care costs under control is to move towards a unified single health care system supported by public funds. If after that, any group of doctors, or individuals, wish to have an alternative health care system, of course, there is nothing we can do about that but we can ensure that not one penny of the public's money goes into that system. [2080] That is the alternative which the Labour Party offer to this question of spiralling health care expenditure. It is the most socially just way. I suggest also — and this is borne out by many economists who have written on the matter — it is the most economic way.

The alternative being proposed today rather than tackling the fundamental problem of lack of control over health care costs and expenditure, represents a further dumping of the cost of this on the PAYE sector in particular. What we are being asked to do is to increase the contributions which the PAYE sector will pay at a time when it seems not to be within the wit or ability of the Government to collect £6.4 million which is outstanding from farmers who, I suggest, are readily identifiable. If they are not, it escapes me why they are not. If they are readily identifiable, as I think, it escapes me why they are not brought to court and made to pay the £6.4 million which is outstanding. It is, in many ways, an insult of the worst kind to those in the PAYE sector to say, “we are not able or we do not wish to collect outstanding payments from the self-employed, including farmers, but because you are an easy touch and because we have a system in place we will instead collect the money from you”. That is outrageous.

This type of approach is not confined to the health services. What is being proposed today — Senator O'Donoghue is quite right in describing the health contributions as no more than a form of earmarked taxation — in so far as PAYE people are concerned in the area of health contributions cannot be divorced from other proposals. For example, we know that the failure to increase tax bands, and tax allowances, in the income tax code will lead to an increase of 12 per cent in income tax take by the Exchequer this year.

Now not only will the health contribution rise automatically with incomes as it has done every year since it was introduced but on top of that there will be a further percentage increase over and above the normal increase that will accrue through increased earnings. On [2081] top of that again there will be a third tax which we will discuss later, a tax on being sick. This is the height of madness, it is regressive, reprehensible and, as I said earlier, an insult to the PAYE workers. That is why it is impossible for any sensible person concerned with matters of justice to support this health contribution increase in the context of a massive increase in income taxation overall for the entire population this year and in the context of a third tax, a tax on being sick. I certainly would be voting against it.

Mr. Magner: The position in relation to contributions, as Senator Ferris said earlier, is in terms of a ceiling on income and is something I would agree with, but the reality is that the Government are in the position of poachers becoming gamekeepers with a vengeance. One of this morning's papers comparing Deputy MacSharry's budget with the one proposed by the Coalition said the Coalition wielded an axe but Deputy MacSharry wielded a chainsaw. Unfortunately, the axe was was wielded by Fine Gael and Labour in Government — and I make a distinction between Fine Gael and Labour in Government and Fine Gael in Government on their own — caught more people in its swing than Deputy MacSharry's chainsaw. The reality is that a demand will be made on the PAYE sector for increased hospital contributions on the basis that when a person pays them that person still will not get them. I can understand why Minister Leyden asks us not to discuss in-patient or out-patient charges in conjunction with this measure: it is obviously embarrassing and inconvenient but one cannot look at this in isolation. We are not saying to the workers, “give us another 25 per cent and we will improve the health service” but we are saying “there is a Catch-22 situation here and if after you pay us the increased charges you are unfortunate enough to get sick and must go to hospital, you must pay again”. I do not think there is a country in Europe laying claim to social justice would concoct such a system. Senator Dooge mentioned a Chinese philosopher but I suggest that if [2082] this legislation was introduced in Peking there would be wall posters the size of O'Connell Street condemning the Government.

This is not just regressive, as Senator O'Mahony said but it is absolutely and totally fraudulent to demand more money from people who this year, despite all the bleatings of politicians in relation to the PAYE sector, will have to pay more money for a health service which they will have to pay for again. Senator Fallon said something in his contribution which I took with a grain of salt. He gave the impression that in the last four and a half years we had from Fianna Fáil a measure of benign neglect, that they allowed us to do this, that and the other. But in reality it was quite different. Deputy Barry Desmond was Minister for Health and people, in retrospect of course with 20/20 vision, paid tribute to his courage and his foresight in doing some of the things he did but when he made quite simple suggestions they were turned around by the then Opposition to be something quite different. For example, there was a suggestion made by him when he was Minister for Health that administrators in hospitals rather than bringing people in for tests on Thursday and not being seen by a doctor until Monday should call them in on the day the hospital was ready to carry out those tests. Fianna Fáil said in the Dáil and the newspapers, that now the position was that according to the Minister for Health, Deputy Barry Desmond, people could only get sick at a convenient time, especially in regard to weekends. Everybody, including Fianna Fáil — they are not suddenly endowed now with a very fine intelligence — know then what the Minister was trying to do but rather than support him they took the completely opposite line. Now the traps and snares of Opposition have been put away and the double barrel shotgun has been taken out.

I will not embarrass the member of the Government present by reading the statements made on the last Appropriations Bill not just in relation to health or the construction industry but on the [2083] economy in general, but the reality is that no-one can justify these increased contributions. There is no element of social justice in this. Fine Gael have yet to make up their minds whether they are to be totally invisible in Opposition or agree hook, line and sinker with what the Government are doing. In the last few days Fine Gael spokesmen in the Dáil have attacked the Government about their budgetary proposals yet when it came to a vote on these matters Fine Gael took to the hills. They cannot have it both ways.

There are other ways in which to get money. Senator O'Mahony mentioned one aspect, the vested interest of the medical profession, particularly consultants. Who are they to decide who they can treat? They decide into what tier a person falls. The old inscription on the Statute of Liberty was “give me your poor and your sick”. The consultants say “give me your sick but very wealthy and we will treat them”. The State carries the can for the rest of the people.

There is no evidence that Fianna Fáil will take on this group. They have only been in office for a few weeks but there are already indications that they are looking for vested interests to bow to. The abolition of the land tax is a good example of that. In a leading article in today's Irish Independent it was stated that massive fraud was uncovered. Land had been vested in greyhounds and in children. The 150 inspectors have discovered for the first time who really owns the land. Who were receiving the farm grants? We all know that it is impossible to find an area in farming which is not grant-aided. In the Dáil the Minister stated that social welfare fraud was costing £4 million a year. As a Government they do not appear to have their priorities right. There is massive fraud in the area of farm grants and payments. We all know about their non-payment of health contributions. When the former Minister, Deputy Desmond, tried to make farmers pay no-one screamed louder than the people now in Government. They said it was unfair. The said a farmer's pockets [2084] would be checked while he was being taken into a hospital's accident and emergency unit.

Why was a figure of £15,000 picked? Is there a reason for that? Why was it not £18,000 or £19,000? Who decided on the figure? The Minister said they would talk to the consultants. Who will consult with whom? Who will say at what level people should pay health contributions? Will it be the Government elected by the people or a small band of privileged and powerful people? We cannot accept fudge from anyone on this issue. There can be no justification for any of the Opposition parties supporting this measure.

Minister of State at the Department of Health (Mr. Leyden): I wish you, Sir, every success in your retirement. You have made a great contribution to the House since you were elected here. As a fellow constituent, I wish you a very happy retirement.

I thank Senator Dooge for his consistency in not opposing the regulations. It is in keeping with his fine position in the Seanad. I wish him, too, a very happy retirement and hope he will be back again at a later stage.

Professor Dooge: No, I have had enough.

Mr. Leyden: The Senator said that the previous Fine Gael Government put forward these proposals and that in the circumstances they would not oppose them. Senator Fallon asked some interesting questions. The additional amount raised by abolishing the ceiling would be minimal. It would only affect people with an income of over £15,000 and only that part of their income which was over £15,000. It was so marginal that we decided not to increase the level.

As regards Senator Ferris' point there is a difference between health contributions and eligibility. Eligibility for free consultancy services will be adjusted from 1 June and regulations will be brought before this House prior to that date. At that stage the Seanad will have an opportunity to discuss this matter [2085] again. As regards outstanding arrears, the health boards collected £1.4 million arrears in 1985 and £1.1 million in 1986. They are continuing to pursue outstanding amounts. The arrears collected go towards funding the health boards and will be of assistance to them in funding services.

Senators Ferris and O'Mahony mentioned the overall cost of the health services. The level has not been increased since 1979. Now it is being increased by 25 per cent. The cost of services have increased from £500 million to over £1,100 million in 1986. It can be seen from that that there was little alternative to increasing charges. We had no choice because of the escalating cost of the health services.

We have a health service equal to that of any other in the world. It is second to none. All the levels of health expenditure are currently being monitored and we are taking an indepth look at the overall cost of the health services. We are extremely concerned about this. Senator Magner made some political points about the budget. The country is in a serious position. The previous Government were not [2086] able to deal with it. The national debt has increased to £24 billion. Someone has to take hard decisions. It has been left to a minority Fianna Fáil Government to do so. We are not shirking our responsibility. It is now left to a minority Fianna Fáil Government to take the hard decisions. We are not shirking that responsibility. That responsibility has been shirked over the past four and a half years when we were not prepared to face up to the realities of life. It is a very difficult task for a minority Fianna Fáil Government. We are putting forward these charges and other charges in an attempt to deal with the situation. We would prefer an Irish Government to take those hard decisions rather than have them imposed on this country from outside. That is why we have to increase the charges from 1 per cent to 1.25 per cent. We regret having to do that on this occasion. However, we have no alternative but to grasp the nettle at this stage, to take the hard decisions and face the consequences.

Question put.

The Seanad divided: Tá 15; Níl, 7.

Cassidy, Donie.

de Brún, Séamus.

Fallon, Sean.

Fitzsimons, Jack.

Hanafin, Des.

Hillery, Brain.

Hussey, Thomas.

Kiely, Rory.

Killilea, Mark.

Lanigan, Mick.

Mullooly, Brian.

O'Toole, Martin J.

Ross, Shane P. N.

Ryan, Eoin.

Ryan, William.

Níl

Ferris, Michael.

Harte, John.

McGonagle, Stephen.

McGuinness, Catherine I. B.

Magner, Pat.

O'Mahony, Flor.

Robinson, Mary T. W.

Tellers: Tá: Senators W. Ryan and de Brún; Níl: Senators Harte and Magner.

Question declared carried.