TÁNAISTE Leo Varadkar has hinted to his party that there may be changes to the specific levy following a backlash from coalition TDs.
r Varadkar told the Fine Gael parliamentary party on Wednesday that the new 10 per cent levy would require legislation and would therefore be subject to further scrutiny.
The Fine Gael leader noted that the government had to come up with the funds for defective housing alongside the mica scheme, but said the levy needed to be legislated and that “it’s important we get it right”.
He was responding to concerns raised at the meeting by backbench TDs Joe Carey, Brendan Griffin, Alan Farrell, Alan Dillon and Michael Creed.
It comes as several coalition TDs had called for the new concrete block levy to be reconsidered or postponed to fund a mica reparations program.
Treasury Secretary Paschal Donohoe on Tuesday announced a 10 percent levy on concrete blocks, poured concrete and other concrete products in the home.
The levy is due to take effect from April 3 next year to raise €80 million to fund a reparation program for people whose homes were built with defective blocks.
The levy is expected to remain in place for several years, given estimates that the scheme could cost the state up to €4 billion to complete the clean-up work.
Organizations representing builders have estimated that the new levy could increase the cost of a new home by between €1,500 and €3,000.
Limerick TD Willie O’Dea said the issue should be revisited in the context of the current housing crisis.
“I could see where the minister is coming from, there is a temptation to reclaim some of the huge amounts spent on mica.
“But on the other hand, making housing affordable goes against government policy. It is passed on to consumers.
“I think it should be revisited; I think it should be revisited in the context of housing policies to make housing more affordable.”
Tipperary TD Jackie Cahill said he had used both Taoiseach Micheál Martin and Public Expenditure Secretary Michael McGrath to delay the introduction of the measure until the price of concrete falls.
“I contacted Secretary McGrath and spoke to the Taoiseach last night. I agree with the concept, but could we postpone it until costs are back to something close to normal?
“They’ve gone up 50 percent in the last year. I’m not against the concept, but it’s not the right time for it.”
Cork East TD James O’Connor said he supports deferring the levy amid acute housing shortages. “I support the postponement,” he said.
Cork North Central TD Padraig O’Sullivan said: “At a time when we need both private and social and affordable homes, I don’t think it’s fair that we would put an additional levy on blocks and I think they do should be reconsidered.”
It comes as the levy was described in the Dáil today as a “punitive” 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 and hit the state’s own projects under the National Development Plan.
Meanwhile, Fianna Fáil TD, Longford-Westmeath’s Joe Flaherty suggested the proposal could be reconsidered in the new year.
“It’s a long time between now and April. We were told there would be a levy on the sector. I think there’s room for another look at it early in the new year that might prevent or minimize its adoption,” he said.
Two Fine Gael TDs also expressed concerns about the proposal on Wednesday. Mayo TD Alan Dillon said he was “very surprised” to see the measure included in the budget announcement.
“Rising inflation in building materials is already a problem, and that’s not going to help. A 10% levy is on the high end and should be reduced or postponed until inflation starts to trend down,” he said.
Dublin Fingal TD Alan Farrell said he was concerned about the proposed levy and its impact on housing. “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 repeal the levy despite predicting it will add €2,000 to the cost of a newly built home.
It was pointed out that the 10 surcharge imposed in the wake of the pyrite and mica scandals penalized people not responsible for defective blocks.
However, the Taoiseach pointed to the huge cost of interventions to alleviate housing problems, which could range from €4 billion to €6 billion.
The industry and sector facing the cost of such relief cannot all be on the same page, he said.
He said that after a series of controversies, levies were also introduced in the insurance sector.
“The rogue behavior is the core issue – the rogue behavior of people in providing such flawed materials,” said Mr. Martin.
“The money raised by the levy would in no way cover the taxpayer’s costs,” he added.
“But there must also be a clear message that such behavior has consequences.”
The levy is expected to bring in €80 million annually.
It is scheduled to arrive on April 3, 2023 with a rate of 10 percent for concrete, concrete materials, sills, lintels, hollow core and also concrete blocks.
“This is at a time when we have rampant inflation in the construction industry wreaking havoc for young people trying to build their own homes,” Mr Canney said.
“It’s causing chaos for local authorities trying to build social housing. It will add to the overall cost of building all of our infrastructure in this country.”
The levy punishes the innocent, he said.
“It actually creates additional costs for innocent people trying to build or buy their own homes and trying not to put a burden on the state.
“They bring additional inflation to the hardware store.
“You will add additional costs to our public works contracts by increasing the cost of the very important component that is used on every construction site and in every civil engineering contract in this country, as well as in home construction,” Mr Canney said.
“It stuns me to think that this would be introduced right now, at a time when we are trying to curb inflation.
“Any concrete supplier in this country will add the cost to their sales, they will not pay it themselves. Young people will have to pay more at a time when house construction has already increased by 40,000 to 50,000 euros in the last 12 months.
“They are now proposing to add at least another €2,000 extra cost as a levy for young people – people trying to do something. I think it’s wrong.”
The Taoiseach said: “I would like to highlight the tremendous support the government is giving to young people in terms of affordable housing – an investment of over €1.3 billion and an overall package to provide thousands of affordable housing and people over the next year to help buy and rent cheaply.”
He listed a number of initiatives and then said that a whole range of measures would be taken to solve the problem of the bad blocks, the cost of which was then estimated at around 2.8 billion euros. Pyrite has already cost 1 billion euros since 2013, he added.
“Yesterday the housing minister submitted a memo to the government on housing shortages. And it outlined the extent of the problems, with up to 100,000 homes potentially affected. He will come up with proposals on the program before the end of the year to help people refurbish these units.”
There are now three relief programs, the Taoiseach said.
“They’re looking at anything between €4 billion plus, possibly up to €6 billion for state intervention.
“It was signaled at the time that, in terms of future revenue streams, an element of sustainability would need to be built in to cover these huge costs.
“Hence the idea of an effective levy on concrete products.”
https://www.independent.ie/news/tanaiste-leo-varadkar-hints-to-his-party-there-may-be-changes-to-the-concrete-levy-after-backlash-from-coalition-tds-42023899.html Tánaiste Leo Varadkar hints to his party that there could be changes to the specific levy after backlash from coalition TDs