Privatisation lies behind Minister for Health scandal

There is only one real scandal involved in the issues surrounding Health Minister James Reilly’s problems arising from his investment in a private nursing home in County Tipperary. It is not because his name is in Stubbs Gazette as a debtor nor is it being in a financial conflict with those who invested with him in this project in 2010. The scandal is that the care of our elderly people in this State should be seen as a commercial opportunity for profit making through speculative investments by private commercial companies and individuals. An that this should be supported by massive tax breaks for wealthy investors.

The Fianna Fail / Progressive Democrat Government introduced the tax break in 1997. The legal device employed was to put nursing homes in the same category as industrial buildings through an amendment to the Taxes Consolidation Act 1997. Section 268(e) of that Act outlines that an industrial building or structure which qualifies for significant tax breaks by business investors ‘means a building or structure in use for the purpose of the intensive production of cattle, sheep, pigs, poultry or eggs in the course of a trade.’

A new paragraph (e) adds the ‘operation or management of a nursing home’ to the list. How cynically appropriate, since the result of this meant that there would be an intensification of the treatment of the aged as commercial products to be the subject for business tax breaks. Cattle, poultry or elderly human beings, what does it matter to investors looking for an ‘opportunity’!

Minister Reilly has been accused of a conflict of interest since his policy is to reduce the number of nursing home beds in the public sector and therefore, the claim is, that this increases the value of a private nursing home investment, such as his own, which may benefit from a greater demand for places.

The real conflict however is that a Minister should be involved in developing a private for profit nursing home policy in general at a time when the government of which he is a member is savagely cutting funding in the Health sector as part of the general austerity policy dictated by the Troika and following on from the decision to bail out bankers and speculators in the financial markets on the backs of the Irish people. There is growing pressure for privatisation of care for the elderly arising from the austerity agenda. A Minister who is involved in medicine and people care as a private business will hardly put up much resistance to this.

Three Irish billionaires are heavily involved in the private nursing home sector, although for now their business is located mostly in the United Kingdom. Financiers JP McManus, and Dermot Desmond, with stud farm owner John Magnier are the main players in Barchester Healthcare which has around 180 nursing homes.

In its annual results announced in mid 2011, Barchester recorded after tax profits of €35 million for the 2010 financial year. The directors statement included the following, ‘The business is supported by strong future demand based on the demographics of the UK population. The long term growth in the older population and rising affluence continue to offer opportunities for investment in the sector . . . despite the current economic situation.’

Reference to ‘rising affluence’ should raise eyebrows here since broad swathes of working class people in Britain are suffering acutely from the austerity agenda of the Tory/Liberal government. We do know that recent surveys of the very wealthy suggest strongly that those in the top economic echelons of society have increased their wealth considerably even while the majority struggle. Obviously nursing home care as a business seeking maximisation of profit will seek out those who can afford to pay for their keep against a background of cuts in public spending in Health care.

The Unison trade union which organises health workers in Britain and in the North very recently published a report on major problems following from whole sale privatisation in the nursing home service. They point out how major private nursing home chains were floated on stock markets and for a period in the years 2000 realised massive speculative gains. With the collapse of property prices these chains have collapsed massively in value and there is now a real threat of collapse in some cases.

It is shameful that care for our elderly should now be widely exploited as a profit making concern. This and the need for a comprehensive, publicly funded, elderly care system should be the subject of the broadest debate in society and in the media and political arenas rather than the superficial commentary that so far ensued as to whether it is appropriate that a government Minister should find his name among a record of people who owe money as a result of business squabbles that finish up in court.