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Tánaiste Leo Varadkar hints to his party there may be changes to the concrete levy after backlash from coalition TDs

  • The 10pc levy on concrete blocks, pouring concrete and other products introduced to fund mica redress scheme

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Tánaiste Leo Varadkar

Tánaiste Leo Varadkar

Taoiseach Michael Martin

Taoiseach Michael Martin

Tipperary TD Jackie Cahill said it was not the right time for a levy

Tipperary TD Jackie Cahill said it was not the right time for a levy

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Tánaiste Leo Varadkar

TÁNAISTE Leo Varadkar has hinted to his party that there may be changes to the concrete levy after a backlash from coalition TDs.

Mr Varadkar told the Fine Gael parliamentary party on Wednesday that legislation will be required for the new 10pc levy and therefore further consideration will be afforded to it.

The Fine Gael leader noted that the Government need to find the funds for defective apartments along with the mica scheme, but said the levy has to be legislated for and that "it's important we get it right".

He was responding to concerns raised by backbench TDs Joe Carey, Brendan Griffin, Alan Farrell, Alan Dillon, and Michael Creed at the meeting.

It comes as several coalition TDs had called for the new levy on concrete blocks to fund a mica redress scheme to be revisited or postponed.

Finance Minister Paschal Donohoe announced a 10pc levy on concrete blocks, pouring concrete and other concrete products in the Budget on Tuesday.

The levy is due to take effect from April 3 next year in order to raise €80m to go towards funding a redress scheme for people whose homes were built with defective blocks.

The levy is likely to be in place for several years given estimates that the scheme could cost the State as much as €4bn by the time remedial works are completed.

Organisations representing builders have estimated that the new levy could add between €1,500 and €3,000 to the cost of a new home.

Limerick TD Willie O'Dea said the issue should be looked at again in the context of the current housing crisis.

"I could see where the minister is coming from, there is a temptation to claw back some of the enormous amounts being spent on mica.

"But on the other hand, it conflicts with government policy making housing affordable. It will be passed onto consumers.

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"I think it should be revisited; I think it should be looked at again in the context of housing policy which is to make housing more affordable."

Tipperary TD Jackie Cahill said he has lobbied both Taoiseach Micheál Martin and Public Expenditure Minister Michael McGrath to postpone introducing the measure until the price of concrete comes down.

“I contacted Minister McGrath, and I spoke to the Taoiseach last night, I agree with the concept, but could we postpone it until costs come back to something like normality.

“They've gone up 50pc in the last year. I am not against the concept, but it's not the opportune time to do it.”

Cork East TD James O’Connor said he supported the levy being deferred given the acute shortage of housing. “I support it being postponed,” he said.

Cork North Central TD Padraig O’Sullivan said: “In a time when we need both private, social and affordable houses I don’t think it’s appropriate we would have an additional levy on blocks and I think it should be revisited.”

It comes as the levy was described in the Dáil today as a “penal” imposition on young people trying to build or buy their first home.

Independent TD Sean Canney said the move would also lead to construction inflation, hitting the State’s own projects under the National Development Plan.

Meanwhile,  Fianna Fáil TD, Longford-Westmeath's Joe Flaherty suggested that the proposal could be reconsidered in the new year.

“It's a long time between now and April. We were given an indication that there would be a levy on the sector. I think there is space for a further look at this early in the new year that could avert or minimise its introduction,” he said.

Two Fine Gael TDs also raised concerns about the proposal earlier on Wednesday. Mayo TD Alan Dillon said he was “very surprised” to see the measure included in the budget announcement.

“Rising inflation on building materials is already an issue and this won’t help matters. A ten per cent levy is on the upper scale and should be reduced or deferred until inflation is trending downwards,” he said.

Dublin Fingal TD Alan Farrell said he was concerned about the proposed levy and its effect on housing output. “It has the potential to increase costs at a time when national and international pressures are driving up the cost of building materials,” he said.

But Taoiseach Micheál Martin refused to rescind the levy, despite predictions it will add €2,000 to the cost of a new-build home.

It was pointed out that the 10pc surcharge, imposed in the wake of the pyrite and mica scandals, was punishing people who were not responsible for defective blocks.

The Taoiseach however pointed to the huge costs of interventions to alleviate house construction problems, which could land between €4bn and €6bn.

The industry and the sector needed to realise the cost of such reliefs could not all be on one side, he said.

He said levies came in on the insurance sector as well after a series of controversies.

“The rogue behaviour is the core issue – people’s rogue behaviour in providing such defective materials,” Mr Martin said.

“The money raised by the levy would in no way go anywhere near the costs incurred by the taxpayer,” he added.

“But equally a clear message has to go out that such behaviour has consequences.”

It is expected the levy will raise €80m annually.

It is due to come in on April 3, 2023, set at 10pc rate on concrete, concrete materials, sills, lintels, hollow-core and also concrete blocks.

“That’s at a time when we have a thriving inflation within the construction industry which is creating havoc for young people who are trying to build their own houses,” Mr Canney said.

“It is creating havoc for local authorities who are trying to build social housing. It will be add to the overall cost of building all our infrastructure in this country.”

The levy is penalising the innocent, he said.

“It's actually putting an additional cost on innocent people who are trying to build their own homes or trying to buy their own homes, and who are trying not to be a burden on the State.

“You're putting additional inflation into the construction market.

"You are going to add additional costs to our public works contracts by increasing the cost of the very vital component that is used on every building site and in every civil engineering contract in this country as well as in housing construction,” Mr Canney said.

“It baffles me to think that this would be introduced right now, at a time when we're trying to curb inflation.

“Every concrete supplier in this country will be adding the cost to their sales, they will not be taking it on themselves. Young people will be asked to pay more at a time when the cost of building a house has risen by €40-€50,000 already in the last 12 months.

“You are now proposing to add at least another €2,000 additional cost as a levy on young people -- people trying to do something. I think it’s wrong.”
The Taoiseach said: “I would point out the enormous supports the Government is giving to young people in respect of affordable housing - over €1.3bn of an investment and an overall package to deliver thousands of affordable houses next year, and to help people to buy and to rent at an affordable rate.”

He listed a series of initiatives, then said that a whole range of actions were being taken to deal with the defective blocks issue, the cost of which at the time was estimated at about €2.8bn. Pyrite had already cost €1bn since 2013, he added.

“Yesterday the Minister for Housing brought forward a memo to Government on apartment defects. And it outlined the scale of the issues with up to 100,000 apartments potentially impacted. He will bring forward proposals on the scheme before the end of the year to help people remediate these units.”
There were now three relief schemes, the Taoiseach said.

“You're looking at anything between €4bn plus, potentially to €6bn of an intervention by the State.

“It was signalled at the time, that there would have to be some element of sustainability built into this in terms of future revenue streams to meet this enormous cost.

“Hence the idea of an effective Concrete Products Levy.”


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