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Taoiseach on who pays for the concrete levy: 'It's industry or the taxpayer. Make up your mind'

10% levy on concrete blocks aims to help fund mica redress scheme.

Sinn Féin have called for the concrete to be levied on more industry groups, such as insurance companies and banks.
Sinn Féin have called for the concrete to be levied on more industry groups, such as insurance companies and banks.
Image: Oireachtas.ie

Updated Oct 4th 2022, 5:22 PM

APPEALS TO THE Government to widen the concrete levy appear to have been dismissed by Taoiseach Micheál Martin as he told the Dáil this afternoon “it’s the industry or the taxpayer, make up your mind”. 

Pressure has been mounting on Government over the new concrete levy, which has faced a backlash from backbench TDs, with a motion to scrap the tax in its current form being put to the Dáil by Sinn Féín today.

The Government are set to table a counter-motion this evening in favour of the levy proposed in the Budget.

The new 10% levy on concrete blocks, pouring concrete and other products will be introduced next April to fund mica redress scheme.

The levy is expected to raise €80 million annually.

However, experts have predicted that the levy will most likely be passed on to house buyers, with the Society of Chartered Surveyors Ireland forecasting that it could add €3,000 to €4,000 to the costs of an average three-bed semi-detached house.

1984 and Animal Farm

There was a tetchy back-and-forth on the matter between Micheál Martin and Mary Lou McDonald.

Martin quoting 1984 and accusing Sinn Féin of being the party of “doublespeak and the three card trick” listing out instances in which Sinn Féin representatives spoke in support of a concrete levy in the past. 

McDonald hit back at the Taoiseach, stating he would be “more familiar with Animal Farm than 1984”. 

She called on the Government to scrap the concrete block levy now and replace it with a measure “that will in fact put the burden on those responsible for defects and not on the shoulders of those struggling to buy or to build a home”.

Martin said Sinn Feín’s private member’s bill last year, called for those responsible for the manufacture of defective blocks to be held to account and that the industry, including builders and suppliers, also make a contribution towards the remediation. 

Now, he said Sinn Féin also want “big developers”, “the big banks” and estate agents to also be covered with the levy.

“You support the levy on concrete products until you don’t, the industry is responsible for the problem and should pay, until it shouldn’t. You are making this up as it goes along,” said Martin. 

“God help us if we ever get near the national finances in respect to the first time buyer,” Martin said to McDonald.

The Sinn Féin leader said: “By the way all of you on the benches opposite are responsible for the light touch regulation or the no regulation at all that gave rise to this nightmare. So that’s where culpability for that lies. Of course you have to ensure this industry and those responsible, including the banks pay, that’s for sure.”

She urged the Taoiseach to listen to the Chartered Surveyors who have said the levy will increase house prices.

The Taoiseach said the Chartered Surveyors group came up with a calculation “without even seeing the detailed design of the levy”, stating that the Department of Finance’s calculations are “much much lower”.

A number of TDs both in Fianna Fáil and Fine Gael raised concerns about the levy with party leaders at their parliamentary party meetings last week, with many calling for the measure to either be delayed or scrapped from the budget Finance bill.

Backbench Fine Gael TDs Brendan Griffin, Alan Farrell, Joe Carey, Alan Dillon, and former minister Michael Creed raised concerns about the new measure, as did a number of Fianna Fáil TDs, such as Barry Cowen.

Fianna Fáil TD Willie O’Dea told RTÉ’s Drivetime programme last week that the levy should be abolished, pending further discussions within Government.

“It seems to me to run contrary to the Government’s policy to make housing affordable as possible. You don’t make something affordable by increasing the price of a basic ingredient,” he said. 

Pressure will mount upon Government parties today when Sinn Féin puts forward Dáil motion calling for the concrete block levy plan – which targets concrete producers only -to be abandoned. 

Government sources have called the motion a “political stunt” by Sinn Féín, claiming the main opposition party is cashing in on tensions within Government parties on the matter.

They pointed out that a number of Sinn Féin representatives such as Pádraig Mac Lochlainn, Pearse Doherty and Ó Broin have called for the industry to contribute to the overall cost of remediating defective properties.

‘Badly designed’

Sinn Féin’s housing spokesperson Eoin Ó Broin said his party are in favour of a levy on the industry, but not one that will be passed on to consumers.

Speaking to The Journal, he said a defects levy should be targeted more widely.

He said the problem with the Government’s levy is it’s on a very narrow section of industry, which is concrete, stating this will have a very significant impact in prices.

All of the sectors involved have to play their part, from the Government, to block manufacturers, builders, developers, insurance companies and the banks, he said.

The levy should be “spread as widely as possible” so as to minimise any impact on individual homebuyers. 

The Government needs to also pursue those companies who are directly responsible for defects, he added. 

Ó Broin said Sinn Féin’s position is that there should also be a focus on the profits of larger companies that have a capacity to absorb a levy.

Non-life insurance companies should also contribute and the banking levy – which was brought in after the financial crash – which has been extended for another year, should help pay towards the defects bill, he said.

In the first instance, a voluntary contribution should be sought, but if it’s not voluntary then Government should legislate for a levy to take a small portion of profits, said O’Broin.

“I’ve been calling for a levy for a very, very long time,” said O’Broin, adding that the approach the Government is taking is all wrong.

Other opposition parties are also of the view that the profits should be targeted rather than a levy being imposed, with Labour and People Before Profit citing how the likes of a windfall tax could be commenced on different sectors of the industry.

At Cabinet this morning, the Government decided that it would be submitting a counter-motion, saying that the levy will be used to support the families impacted by defective blocks.

Enormous costs

Finance Minister Paschal Donohoe robustly defended the measure last week, stating that when commitments are made by Government around redress schemes, there also has to be a plan as to how to pay for it. 

In June, Cabinet signed off on the mica grant scheme, which is designed to help homeowners whose houses were damaged by the presence of mica in their concrete blocks.

The estimated cost of the scheme stood at €2.7 billion in June.

However, given the number of concerns raised, Taoiseach Micheál Martin said over the weekend that first-time buyers could be exempt from the charge when the mechanics of the levy are finalised. 

He told RTÉ Radio One: “In the normal course of a finance bill, people bring forward ideas and suggestions on how the mechanics of the application of this levy will be worked out. And it’s not our objective, in the first instance, to put an imposition on first-time buyers.”

Confusion

It is understood there is some confusion within Fine Gael at the Taoiseach’s comments, with some in the party stating that there was no suggestion put forward yet as to how one would prevent first-time buyers alone from being impacted by the levy. 

Some sources say they have concerns about how there can be a differential made between first-time buyers. One added that there is unease at the suggestion that the industry would face no levy of some kind.

It was suggested if the levy is delayed it won’t be by much.

“The levy should happen on industry, that’s not in question,” said one source, who said that the details will be worked out in the Finance bill.

During questioning from Social Democrats TD Cian O’Callaghan in the Dáil last week, Tánaiste Leo Varadkar said:

It’s going to cost hundreds of millions if not billions of euros to repair the homes affected by mica, we need to do that for those seven or eight thousand families affected.
“There is no quarry or two quarries that are going to come up with that kind of money, so we need to find some kind of way to recoup some of the cost. It’s not fair that the taxpayer should cover all of the cost.”
While opposition parties such as the Social Democrats and Sinn Féín are opposed to such a levy in its current form, there will be interest in whether Labour votes down the motion, as that party’s leader Ivana Bacik called for a levy to be imposed ahead of the budget.

Ó Broin said the levy will hit ordinary people’s pockets at a time when they are already struggling with sky high housing costs.

“Our motion calls for the government to hold those actually responsible for housing defects to account. It calls for a defects levy that instead focuses on the banks, the profits of big developers and those responsible for defects,” he said.

He urged all TDs to back the motion and to “stand with ordinary home owners and buyers”.

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