Minister confirms concrete levy will go ahead to reduce €6bn bill for housing defects
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The taxpayer is facing a bill of €6bn to help homeowners whose houses have been destroyed by defective blocks and to bring 100,000 apartments up to fire safety standards.
Finance Minister Paschal Donohoe has confirmed the Finance Bill will include a new levy on concrete, in an effort to reduce some of the burden on taxpayers, despite Fianna Fáil TDs previously claiming it was “dead in the water”.
Confirming he will be bringing his proposals to Cabinet today, Mr Donohoe made it clear he will be presenting the full Finance Bill to ministers for approval. The Finance Bill gives effect to the €11bn in financial announcements made on Budget Day on September 27.
Housing Minister Darragh O’Brien said he agreed with the principle that the construction sector should contribute to the cost of rebuilding homes that were damaged by mica defective concrete blocks.
“So between both of those pieces of work, we're probably looking at about €6bn in costs to the Exchequer. I wanted the idea that those who created the problem would pay,” he said.
Mr Donohoe said he is “absolutely standing behind” the principle of a levy to help cover the €2.7bn cost of dealing with the mica crisis.
“I'm standing behind the principle that if we're going to spend additional money on things that are needed, then we do have to find ways of paying for that,” he said.
Mr Donohoe stressed the importance of securing additional revenues to help with the cost of fixing homes, but he acknowledged a level of anger and concern from his own backbenches on the issue and that he is working on a less penal levy than had originally been proposed.
Backbenchers had raised concerns that the levy would merely be passed on by the construction sector and thereby drive house prices higher.
“That money does have to come from somewhere and there will be many other issues that are going to develop in the near future that may require additional spending. What I am doing is listening and considering the different issues that have been raised.
"And I'm going to try and respond back to some legitimate matters that I do recognise have been raised since the Budget Day."
However, Mr Donohoe accepted the levy brings risks. “I acknowledge there are trade-offs. I acknowledge there are risks with any approach that I bring forward to the government,” he said.
"It is absolutely vital, not only in the mica decision but in other decisions, that we are just open and honest about the trade-offs if the Government is spending a lot more money in the future that it has to find a way of paying for some of it."