Government 'not backing down' on concrete levy despite backbench backlash

Government 'not backing down' on concrete levy despite backbench backlash

A growing number of Coalition TDs are demanding that the levy on concrete products be postponed, scrapped, or revisited. File picture

The Government will not be backing down on the controversial new concrete levy despite criticism from backbench TDs and others who claim it will push up building costs by thousands of euro.

Fianna Fáil and Fine Gael TDs have expressed concern over the measure contained in Tuesday’s budget that will see a 10% levy on concrete blocks, pouring concrete, and other concrete products from April 3, 2023.

Representatives from the construction sector have warned that the move could slow down the Government’s housing for all plan by adding to building costs. The Society of Chartered Surveyors Ireland estimates the levy will add between €3,000 and €4,000 to the overall delivery cost of an average three-bed semi-detached home.

However, a senior Coalition source said last night there are “no plans to postpone it,” and despite the time needed to put the levy in place, it would not be delayed.

Tanáiste Leo Varadkar told a meeting of the Fine Gael parliamentary party the levy must be legislated for and “it is important that we get it right”, which some TDs took as a signal that there could be some changes.

Mr Varadkar said the Government needs to “find the funds” for defective apartments, along with the mica redress scheme.

Revenue from the levy — which is expected to raise €80m — will be used to partially offset the cost of the €2.7bn scheme. The measure is likely to be in place for several years, given estimates that the scheme could ultimately cost the State as much as €4bn by the time all remedial works are completed.

A growing number of Coalition TDs are demanding that the levy be postponed, scrapped, or revisited.

Fine Gael TD Alan Farrell told the parliamentary party meeting that the proposal is a “crude means of clawing back funding towards what will be a hugely expensive remediation scheme”.

There has been a wave of mica and pyrite protests in recent years seeking redress for the damage done by defective concrete products. Picture: John O'Grady
There has been a wave of mica and pyrite protests in recent years seeking redress for the damage done by defective concrete products. Picture: John O'Grady

He said: “Let us not forget that the taxpayer is yet again footing the bill for another failure of regulation during the so-called boom.”

His colleague Alan Dillon described the levy as “shortsighted” in the midst of a housing crisis and said “consumers will suffer at the end of this”.

Although the levy was not raised at the Fianna Fáil parliamentary party meeting last night, several of the party’s TDs have also expressed their frustration with the measure.

Tipperary TD Jackie Cahill said although he fully accepts a levy is needed, he wants it to be postponed for two years. He said the Taoiseach acknowledged that TDs had made a “valid point”, and the measure will be discussed further.

Fianna Fáil Cork North-Central TD Pádraig O’Sullivan said he wants the levy to be reviewed, and argued “at a time when people are crying out for houses, adding an extra cost in any way is not the way to go”.

Other TDs in favour of having the measure either abolished or revisited include Fianna Fáil’s Willie O’Dea and James O’Connor, and Fine Gael’s John Paul Phelan.

Speaking in the Dáil yesterday, Taoiseach Micheál Martin stood firm on the levy’s introduction, but said that “the money raised by the levy would in no way go anywhere near the costs incurred by the taxpayer”.

Independent TD for Galway East Seán Canney described it as an “ill-judged decision”, pointing out that is not “penalising people who committed wrong”.

In response, Mr Martin said: “The rogue behaviour is the core issue — people’s rogue behaviour in providing such defective materials."

Housing Minister Darragh O’Brien described the levy as a sustainable funding stream for the mica and pyrite redress schemes. However, speaking on RTÉ, he acknowledged that he did not know how the cost of the levy would be borne or paid for and if house purchasers would bear the cost ultimately.

The “workings” of the levy would be given by the Minister for Finance in the Finance Bill, he added.

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