Tuesday, 4 October 2022
Defective Concrete Products Levy: Motion [Private Members]
"That Dáil Éireann: believes that:— the Defective Concrete Products Levy being proposed by the Government is badly designed and unacceptable; andnotes the assertion by the Society of Chartered Surveyors Ireland that this will add €4,000 to the price of a house; and
— it means that the people in homes with defects, and first-time buyers, will foot the bill through increased house prices, as has been recognised by the Economic and Social Research Institute;
calls on the Government to:— hold those most responsible for defects to account; and
— introduce a defects levy focused on the banks, profits of big developers and those who were responsible for the defects."
As the House knows, tonight tens of thousands of people - homeowners, private rental tenants and social rental tenants - will sleep in defective homes. We now have defective blocks in 13 counties across the State. According to an independent report commissioned by the Government, we also have as many as 100,000 apartments, duplexes and houses with significant fire safety, balcony and water ingress defects.
The problem is that the party of the current Minister for Finance has always been exceptionally slow to respond. It took several years of campaigning by homeowners affected by pyrite in Leinster before we eventually got a pyrite scheme. It took several years and one death in Priory Hall before Fine Gael moved to redress those issues. It took much longer and greater campaigning by homeowners in Donegal, Mayo, Clare and elsewhere, as well the Construction Defects Alliance, before we finally got some movement on those areas as well.
The problem, of course, is that there are still very significant issues with defective blocks. The relevant legislation is not fit for purpose and needs to change. We have not yet had sight of a scheme for people with apartments, duplexes and homes affected by wider Celtic tiger era defects. In fact, the recent announcement by the Minister for Housing, Heritage and Local Government, Deputy Darragh O'Brien, indicates that there may be no scheme for those homeowners until the middle or latter end of next year, with no possibility of redress funding until 2024 at the earliest.
While many people were looking to budget 2023 for greater progress, there was deep disappointment. One of the small facts that was missed in much of the budget debate is that the Government’s own contribution to funding for defects has only been increased by €5 million and there is, as I said, no scheme for others.
On top of that, the Government has taken an eminently sensible idea and is making an absolute mess of it.
Sinn Féin has always said, and will continue to say tonight, that industry has to make a contribution towards the cost of remediation. On the basis of the estimates of the Department of Housing, Local Government and Heritage and those of the independent report on building defects, we could be looking at a figure of €4 billion to €5 billion for remediation alone. Therefore, industry, particularly those most responsible, has to pay. The problem, however, is that the Government is applying a very high levy to a very narrow section of the construction industry and to products. That will result in very significant increases, particularly for those who already have to pay extra to remediate their own homes in Donegal, Mayo and elsewhere and those who are building their own homes, who are responsible for 20% of all new home completions. Regarding small and medium-sized building contractors, who both Ministers know are already struggling to remain viable, an extra 10% on the price of core materials will push them over the edge and some out of business.
The problem is that it does not have to be like this. There are better ways to approach this levy. Based on our knowledge of other jurisdictions, we have long argued that a levy should be applied much more broadly, not to one sector or group of products but right across industry, from quarries and block manufacturers to construction companies. Second, it should focus on profits. It should focus, in particular, on those companies and corporations with very significant and growing profits that have the ability to pay and absorb the increased cost without passing it on to the consumer.
The Government completely leaves out construction companies and ignores banks, both of which contributed to the crisis and are profiting from it. There has been no discussion of non-life-insurance industries. We firmly believe it is possible to construct an industry contribution, a scheme, through legislation and negotiation with industry that would allow for a significant amount of additional revenue on top of the €200 million we believe the Government should be putting towards the remediation of defects annually, not the €65 million committed to by the Government for next year. In particular, the focus should be on those who should and can pay and who, if the Government acted appropriately, would pay.
There is a better way to do this. I am aware that the Minister for Finance is both reasonable and intelligent, so he should please not introduce a levy that will force homeowners in Donegal, Mayo and Clare to pay an extra 10% on top of the gap he has already left them with, amounting to tens of thousands of euro. He should not have struggling buyers, including first-time buyers, footing the bill, and he should not jeopardise small and medium-sized building contractors. He should listen to our advice, take on board our proposals and work with us and the industry to have a fair system to ensure the latter pays 100% of the redress cost for all homeowners and tenants living in defective buildings across the State.
On numerous occasions, I have engaged with the Minister for Finance and the Minister for Housing, Local Government and Heritage on the role of the banks in contributing towards redress for the affected families in this scandal. I recall one exchange with the Minister for Finance when the Dáil was sitting in the Convention Centre Dublin when he looked puzzled that banks, the mortgage lenders whose assets would be reduced to zero with houses impacted by defective blocks, would have their assets restored to full market value with the help of the State and that the banks were not being asked to play any role in any of it. Worse than that, they were not making a financial contribution. They have not assisted families with restructuring their loans or even writing down debt. I can speak with authority only about my own county, Donegal. The role of the banks there has been absolutely shameful. Right up to this moment, families who have needed help from their banks to navigate this crisis to rebuild their lives have not been helped, yet the Government is not proposing a levy on the banking sector to assist in this crisis. He is not even asking the banks to help the families affected, based on a recent response I got from the Minister for Housing, Local Government and Heritage. That is just shocking.
Consider the pyrite scandals that have affected families in north Leinster and Dublin, and also the defective block crisis, which concerns pyrrhotite, mica and pyrite in counties in the west and a growing number of other counties. It is estimated that 13 or 14 counties are now affected. We must also consider the tens of thousands of people in houses, apartments and duplexes who were failed by the Celtic tiger owing to greed, recklessness and the consequent defects. Not one person has been brought to account, and not one cent has been taken from the people who delivered the misery all across the country. Nobody has been brought to book. The Minister said last October that he would appoint a senior counsel to look at a public inquiry to learn the lessons from these scandals. A recent response I got to a parliamentary question states the Minister has not only not appointed a senior counsel but that he has not even provided the terms of reference. I talked to campaigners in Donegal in recent days and noted they had not been consulted on terms of reference. Can Members imagine any other country tolerating such a devastating impact on so many families, costing the taxpayer billions of euro and with nobody brought to book or held to account? Not even a senior counsel has been appointed and no terms of reference have been provided. For God's sake, does the Government not understand the hurt and devastation that people have gone through all across this country, in almost every county, because of the greed and recklessness and the relationship between builders, manufacturers and those who were in government throughout all the years in question?
It gets even worse. At a meeting of the housing committee in July, we listened to evidence from the experts on the legislation the Government was introducing. We learned from them that, right now, there are quarries that are continuing to manufacture defective concrete blocks. For Christ's sake, it is happening even as we speak. The Minister talks about the billions that remediation would cost the taxpayer and everything that has to be done but he is still allowing quarries to manufacture defective concrete blocks. There is no accountability or contribution, and this still goes on today.
In this debate and in response to the bad decision the Government has made on the concrete levy, I have been asked to plead with the Government to demonstrate by its actions that it will have zero tolerance for the recklessness in question, which has destroyed people's lives, will hold those responsible to account, end the misery delivered to people and afford to the latter 100% redress no matter where they live in this State. This is the opportunity tonight. It is not just about this foolish concrete levy; it is also about showing people that what happened will never happen again and that the taxpayer will not be exposed. Moreover, it is about showing that families will not have their lives destroyed. That is my plea tonight. The Minister should finally deal with the banks.
"Not our fault": that is what tens, nay hundreds, of thousands of apartment dwellers across the country, many of whom are in my constituency, are saying as more and more shoddy workmanship, blatant disregard for fire-safety standards and criminal construction of dangerous homes in the Celtic tiger era come to light. The homeowners, occupiers and landlords are all discovering they have to pay tens of thousands of euro to make good the failures of the Fianna Fáil and Fine Gael Governments' light-touch building regulations. These people face the unenviable choice between being locked out of their homes for fire-safety reasons and being forced to find alternative homes while repairs are being carried out and living in fear for years, with no block insurance, all due to poor building construction and poor building regulations. This is while apartment dwellers such as those in The Crescent, Park West, are being told to magic up €15,000 within six weeks, out of a total of €67,000, which is required to fix a fire-safety issue. There are 232 dwellings in the complex and they are occupied by people in their 20s, 30s and 40s and their children. There are tens, if not hundreds, of thousands of others who expect to hear about the same issues. Many of them expected to hear good news in the budget speech, but there was no sight of a sense of urgency or the 100% redress scheme to address the State's scandalous failure of regulation. As one woman said when faced with a crippling €15,000 demand:
These are life changing debts to put a person into. Myself and my husband work full-time to pay our mortgage, childcare and support our 3 children. We have NOTHING LEFT at the end of each month, we cannot afford these charges which are levied on us through no fault of ours.
In the Bridgefoot Court social housing complex, Dublin 8, residents got a letter in June asking them not to use the balconies until further notice, or until remediation works have been carried out, as the decking may not support people. Think of that, of the chaos that would cause up and down the country. It is on the Minister's watch that this is happening and it is on his watch that no scheme has been put in place to help people to ensure redress for something that is not their fault.
The defective concrete products levy proposed by the Government is badly designed and will have the effect of increasing costs to homeowners. Indeed, the Society of Chartered Surveyors Ireland, SCSI, has stated it will increase the cost of a home by more than €4,000. If it is implemented, the cost of 800 houses, including social and affordable houses and cost rental, at a development at Church Fields in Mulhuddart will increase by €3.2 million.
Sinn Féin agrees that a levy is needed and that it would be the right and appropriate thing to do if it was done the right way. There are very profitable developers out there who are making tens of millions of euro in profit, while the banks are making record profits. They should pay up. Sinn Féin is also calling for the quarries and suppliers to be held to account financially.
In Dublin West, there are hundreds of homes that were affected by pyrite. Now there are hundreds of apartments there that have major fire safety and structural issues. One apartment block of which I am aware will have permanent fire wardens until each apartment owner pays up tens of thousands of euro. Many of them do not have that money. We in Sinn Féin believe strongly that the Government should widen the remit of the existing Pyrite Resolution Board to allow it to start processing applications for building defects from early 2023. The pressure, hurt, anger, stress and distress that the homeowners affected by pyrite or mica are experiencing are shared by those in defective apartments. This was caused by greedy developers and suppliers, along with light-touch regulation by Fianna Fáil and Fine Gael. That contributed to the massive problem we have today. It is time to do the right thing for all those affected by pyrite, mica and defective apartments and that is to make the right people pay and for those on the Government benches to take responsibility for their past failures.
Deputy Mac Lochlainn stated that these blocks are still being made. That is extraordinary. We know it is still going on. We know that defective buildings are probably still being built. Deputies have given examples of that in their constituencies. The Government announced an anaemic scheme of compensation but it never once tried to go after those who caused the problem. Once again, it is the people who are asked to pick up the tab. Just like the insurance levy, the people are being saddled with the bill for a levy that it seems is due to go on indefinitely. That is the way most people I know are looking at this. The levy will possibly add €4,000 to the price of a house - that is not our calculation; it comes from the Society of Chartered Surveyors Ireland - and for what? We are talking about €80 million a year to fund €2.6 billion in compensation. This levy would have to be in place for more than 30 years to cover that.
In my constituency there are hundreds of desperate homeowners living in homes that have been affected negatively by fire and safety defects. There are apartment owners who cannot use their balconies because the struts were never treated and are now rotten. I have talked to these families. The windows in their homes are falling out. What happens then? The builder goes into liquidation. What does he do then? His family open a new company across the road and build houses from there and he walks away from the problem. It is not fair.
We have to break with the belief that the people should always be the ones to pick up the tab for corporate and commercial bad practice. We must hold those who are responsible for defects to account, be they developers or providers. Light-touch self-regulation is what the Government seems to love but it has constantly led us to disaster. This levy should be put on the banks, the profits of big developers and those who are responsible for the defects. It is not the fault of the owners or the people who are living in them; it is fault of the people who built them. That is not being followed up and it is happening to this day.
That the Government hopes to raise €80 million a year from this levy to part-fund a scheme by placing the burden on people who had no hand, act or part in creating these defects is deplorable, particularly as all of us know that those who were responsible were there because of a lack of regulation or light-touch regulation under previous Governments. In the midst of a housing crisis when the Government continually pays lip service to its plan to make housing affordable, it expects the public to believe the way to do that is to increase the price of the main ingredients - blocks and concrete. It was not Sinn Féin that said this levy would raise the cost of houses; it was the Society of Chartered Surveyors Ireland. It stated that the levy will increase the cost of a home by €4,000. Those seeking to buy a home or extend their agricultural buildings cannot be left to foot the bill because this Government is so focused on blaming the bricks and blocks instead of those who have responsibility. That responsibility lies with the developers, the banks and the insurers. That is where the focus of this levy needs to be.
When Government backbenchers have been outside the walls of Leinster House, they have been beside themselves to criticise this levy. They, too, see that it is fundamentally flawed. I bet the price of one of those blocks, however, that they will come in here tomorrow and vote in favour of the Government. It is another exercise in misinformation - of saying one thing but doing something else. If the parties on the opposite side of the House put one tenth of the effort into pursuing those who are actually responsible for causing this issue rather that those who they see as being financially responsible for it, we would all be in a much better place.
It is very difficult for those of us in this House who have never been affected by mica, pyrite or defective apartments to truly understand the impact that has on people and families. However, I have spoken to apartment owners at Lakepoint in Mullingar. I have heard their concerns. I have seen them physically break down in tears at the thought of having to foot a bill for something they had no part in creating; something that was completely outside their control to address. What is being asked of these people is truly shameful. They are not the professionals in this situation. The professionals have run off into the wind - they closed the doors and reopened under another name a few days later.
It is the responsibility of the Government to step up here. It is its responsibility to put the financial burden and the levy on those who caused this issue in the first place rather than on those who are living with the consequences of that light-touch regulation.
I move amendment No. 2:
To delete all words after "Dáil Éireann" and substitute the following: "notes that:— the Government continues to place the highest priority on improving Ireland's housing system and delivering more homes for all types of people with different housing needs through the Housing for All: Our Shared Future plan;
— the households affected by the use of defective concrete products in the construction of their homes deserve the necessary support to address the issues they face;
— a Government decision in November 2021, enhanced the comprehensive Defective Concrete Blocks Grant Scheme to support affected households, and also agreed to put in place a levy to contribute to the costs associated with the scheme; and
— details of the design and how the construction industry and developers will contribute to the levy will be outlined in the forthcoming Finance Bill 2022."
I thank the Deputies for raising this important issue that follows on from my budget day announcement. Let me begin by acknowledging the common ground that exists here this evening. There is the fact that the families and homeowners who have been afflicted by the trauma of seeing their homes crumbling in front of their eyes due to malpractice and reasons and factors that are entirely beyond their control deserve a response and help from us and for the State to play a leading role in the rebuilding of their homes, where appropriate, and in the fixing of the defects in other cases. That is what the Government is doing in bringing forward broad and comprehensive legislation, which was opposed by most of the Opposition, to try to address this issue. It is beginning with funding and then putting the resources in place to get this work done in the parts of the country affected by all the harm that mica has done.
As some Opposition speakers acknowledged, however, there are many other issues in our past or yet to come that will merit and need a full Government response to help homeowners and tenants with the defects in their properties. In the time ahead, the Government will have decisions to make in respect of other issues, such as apartment defects and how we support those who are living in homes that have been affected by other issues.
Where the common ground falters, however, is on the thornier difficulty of how, if the State is going to take on commitments of many billions of euro, that will be paid for. How will we find the money to respond to the future commitments we have without deprioritising the many other things on which this House, society and the economy want the Government to make progress?
I acknowledge that with any measure I bring forward, there are risks. There are also risks in the proposals that have been brought forward by Sinn Féin but the greater risk as a Parliament is to convince ourselves that we can make commitments regarding spending many billions of euro and assume for a moment that there are not trade-offs in that regard because at a point in time there may be a need to raise money to meet the future commitments we have for the citizens in our State who need a response from this State and this Government. That is at the heart of this levy.
I was very struck at hearing the first round of Opposition speakers from Sinn Féin and how little time they spent talking about the levy. They raised very many other matters and issues of great importance in making progress on mica and in fulfilling the commitments we have to homeowners who want and need a response from the Government. Many other Deputies touched on other issues which the Government will have to contend with and indeed offered views on the current mica redress scheme.
We were a fair bit into the speech of Deputy Ó Broin before he addressed the levy. The other Opposition Deputies who spoke on this important motion this evening touched on and addressed many other issues in the contributions with less time focusing on the levy. The reason for that is that the approach of the Opposition can be summed up here this evening by making the case and demanding that the State spend more on a cause and on issues that myself, the Minister of State, Deputy Fleming, and the Government acknowledges we need to do more on and are doing more on, but the Opposition, and mainly Sinn Féin, is calling on the State to do more and for the Government to spend more, but is against a proposal to do that.
I know that the retort from Sinn Féin will be that we are generally in favour of this, which I will come to in a moment, but are against the specifics. The problem with that approach is that it is ever thus with Sinn Féin. It is in favour of something generally but is always against the specifics of doing it. I had hoped that it would be different given the fact that Deputy Doherty welcomed this levy on budget day. I had also hoped that it would be different given the frequent Sinn Féin motions, including its most recent motion which called on the Government to: “ensure the [construction industry] contributes to the overall cost of [fixing this]”. Deputy Mac Lochlainn called on the: “industry [to contribute] to the overall cost of remediating defective properties.” There were many other points in time when that call was made.
If one looks at the measure the Government has brought forward which has a target of raising €80 million, we, of course, accept the risks that are there in that regard. The independent assessment we have done on the impact of this on construction is very different to the figures that have been quoted this evening. There is a potential cost of between €800 and €1,600 for a typical three-bedroomed detached house or €750 to €1,100 for a six-floor apartment block with a basement. I acknowledge that there are still costs and risks but they are very different to the ones that we have heard in the public debate so far. I emphasise again the point that the greater risk in all of this, with all of the commitments that the Government may yet need to make, is to suggest to the House or for the Opposition to indicate that we can make commitments for many billions of euro on issues that we want and need to make progress on, but to indicate that there are ways of paying for this that are not without risk or consequences.
I listened for clues from Sinn Féin this evening on how one would do this. On the one hand the party wants a bigger levy, one of €200 million. This is 2.5 times the size of what was proposed this evening.
There will be ample opportunity on the part of Sinn Féin to clarify as the evening goes on. The party wants a bigger levy on the one hand but it is against this levy, which is smaller than some of the figures I heard the Opposition party members mention. I acknowledge it has a risk and that there are consequences here which will need teasing out and debate. How can Sinn Féin, however, want a bigger levy for which more is paid and not suggest that there are risks for that also?
How can this party want a broader levy, which I will come to, and not also indicate that there are risks? Sinn Féin has said that it wants a bigger levy. If it does not the party will clarify that point as the evening was on. If there is a risk, however, with a levy of €80 million, how is there a smaller risk with a bigger levy?
The next charge Sinn Féin makes is that we need a broader levy and more people to pay this levy. Here we hear a reminder of those to whom Sinn Féin always goes to seek payment. They are the developers. I acknowledge that the construction sector has a role to play in responding to this. How could Sinn Féin pretend that we can levy the developers and that there will not be risk and consequence in that these are the same developers we need to build all of the homes that the House just spent the past number of hours debating the need for? There are risks and challenges with that as well.
Sinn Féin then says that we should levy the banks. We already have a bank levy.
We have had two banks leave our State. In every debate on the banking sector here, I am always asked what more we can do more banks in to the country.
While I can understand the attraction of levying, does the party not think there is a risk that could also be passed on? Does it not think that our ability to get more banks and more investment into our country to build more homes is not always or could also be affected by the demand and the case that is made for more levies there?
Finally, Sinn Féin called upon the insurers and said that they should be levied. As the party knows, there are levies in place which they already pay. These are the same insurance companies that we want to provide cheaper and more insurance to our State. I am not saying for a moment nor would I ever indicate to the House that these options are not worth consideration and debate but I am saying that those proposals for a bigger and broader levy also pose many other risks. They also affect things that this House wants to make progress on and wants to see change. While I acknowledge, as I have done in debates since budget day, that any measure I bring forward, including ones that are welcomed by Sinn Féin, always have trade-offs and risks.
The greatest danger we face is twofold. First is not to commit the money to those who were affected by mica to make a difference to their homes and lives. The second is to pretend for a moment that we can commit billions of euros and that that will not create trade-offs and decisions that need to be made elsewhere. I look forward to hearing the views on this issue, particularly on the Finance Bill, and the views of the House on the measures that are being brought forward. I go back to where I began. We have a duty to the homeowners, the need to make progress, but we also have a duty to the taxpayers to explain how it will be paid for. Sinn Féin here this evening want us to do and spend more but are always against the way of paying for it.
The price of an average three-bedroom semi-detached house in Cork has risen to €350,000. That is the latest figure from a survey by Real Estate Alliance. People cannot afford an extra 10% in money payments, because in money terms, that is €3,000 to €4,000 added to the price of their new home. These are people who are trying to get on to the property ladder to buy for the first time.
The reality is that this Government is putting this concrete block levy on them. We have repeatedly told this Government that its policies increased the price of houses. House prices are now at an all-time high in the history of the State and that has happened under the watch of this Government. Once again, instead of tackling developers and people who have profited from these homes, the Government wants to put this tax back on ordinary people. This is just like in the good old days of the bank bailout when ordinary people were left behind.
The Government tells us that this needs to funded. We agree but we disagree on the way it should be funded. That is what we are saying today. There are other ways of doing this instead of putting this levy on the people who cannot afford it.
We put it on the people who have profited. That is the fundamental difference between Sinn Féin and this Government. Big banks, developers and speculators have all profited and the Minister just stood there and talked about the duty to the taxpayer.
I find it astounding that the Minister announced last week in the budget a new vacancy tax which comes in at 0.3%. Today, I listened to one of his Government colleagues tell us about what is being done in Vancouver and how all of the vacant properties are being used in Vancouver due to the levy there. The levy in Vancouver is 3%, ten times more than what Government Deputies are coming in here to say we should be doing. If we had our way, it would be a lot more than that. There are 100,000 properties lying idle in this country. When it comes to it, they look after the land hoarders, the speculators and the developers, and, once again, the ordinary people suffer. Those are the facts.
I listened to the Minister intently. “Sinn Féin, Sinn Féin, Sinn Féin” - that is the answer he has to anything. People watching this from Mayo, and I will talk about Mayo in particular, will be absolutely disgusted. The Minister talks about trade-offs. What they see are the trade-offs between the Galway tent, the relationship with developers and the cronyism that was rife in this country. That is the trade-off they see. It really makes me angry to have to hear what the Minister has to say around this. I have worked on this issue for more over a decade. I have seen how it has destroyed people's lives. To pass it off as somehow the fault of a party that has not been in government in all that time is ridiculous. Mayo homeowners impacted by pyrite, those looking to build a house and farmers who are planning to use concrete even for a wall or shed look on in amazement as the Minister tries to wriggle out of the mess that his party and Fianna Fáil are responsible for. He should at least be honest about it.
For those ten years, I have been asking for accountability and for those responsible for plunging families into the nightmare of pyrite to be held accountable. Those responsible are the people who supplied the products, those who sold the homes to innocent buyers, the banks which lent recklessly and profited from forcing homeowners to continue paying mortgages for a pile of rubbish, a pile of rubbish that this Government left them with, the insurers who gladly took the premiums and then took to the hills, and a Government which was so enthralled by the developers that it forgot and failed to regulate the industry, because that is what has happened here. I urge Deputies, especially the Deputies from Mayo, who know these people and what they have gone through, to vote with us tonight and vote against the Government.
This is totally wrong. I cannot believe the twists and turns they are taking to somehow suggest it is Sinn Féin's fault that we have landed in this mess. This levy is going to make it worse. Last week, when we were in a situation with rising inflation and a widening construction inflation gap, what did the Government do? It came along and widened it some more. It is disgraceful.
I thank Deputy Eoin Ó Broin and the Sinn Féin team for bringing forward this motion. The motion was brought about because of the introduction of a 10% levy on all concrete products by the Government in budget 2023. Under the Government’s design, this 10% levy is directly passed on to young couples and individuals who have saved and borrowed to build their new home or are in the process of buying a new home or a new apartment. That is according to the Society of Chartered Surveyors Ireland and the leading think tank, the ESRI. More disturbingly, the people whose homes have been decimated by pyrite and mica will see their remediation prices also increase.
Some of these folks have stood outside the gates of Leinster House for over a year. I have spoken to some of them. They are tormented and broken-hearted, and some have lost family members through suicide. This is the scale of this man-made problem. Surely these are the people the Government should be looking after the most, not penalising them through a badly designed levy. We in Sinn Féin believe a more concentrated and targeted approach should be implemented. Those who profit from their own greedy and irresponsible behaviour in providing inferior materials and concrete blocks that devastated homes and caused untold despair to families should be made to pay. That is why we want to make sure the levy is placed on a broad section of the industry, focusing on the super-profits of the cuckoo funds, large developers and the banks. The Government's hands are not clean on this either, with disregard for regulations and, in some cases, the removing of regulations during the so-called Celtic tiger era, allowing quarries, block manufacturers, developers and large builders and contractors to build with and supply deficient materials without any checks or inspections.
We know this remediation scheme is a once-off huge cost and it needs a revenue streamline. It also needs front-lining by the Government, which did not happen in the budget, when there was a mere €5 million extra. However, that streamline must be based on fairness and specifically targeted towards the real culprits.
There is serious concern over this concrete block levy, with genuine fears of serious increases in house prices. Those building a home will be faced with increased costs. What the Government is doing is placing the cost of defective materials on the shoulders of people who are struggling to buy a home or who had no hand, act or part in this scandal. It was under the Government’s own watch that there was light-touch or no regulation.
The scheme is badly designed and will mean first-time buyers see their house prices soar. The Society of Chartered Surveyors Ireland has warned that this scheme could see €4,000 added to the price of a house, and that on top of huge increases in building materials in the last two years. This is hitting ordinary people's pockets at a time when they are already struggling with sky-high housing costs due to this Government's failure to tackle the growing housing crisis across the State. It will cost jobs as some small contractors would have contracts signed at least a year in advance and they will not be able to absorb those extra costs. The cost of concrete had already increased by approximately 30% since February 2021.
Our motion calls on the Government to hold those actually responsible for housing defects to account. It calls for a defects levy that instead focuses on big developers, banks and those responsible for the defects. At the minute, the banks own most of these assets that are worth very little or nothing. We are going to hand them assets that are worth hundreds of thousands of euro each, with no cost to them. Talk about backing a horse that loses and you get your money back. That is what is happening with the banks.
On RTÉ’s “Drivetime” last week, it was said that the levy should be abolished pending further discussions. It was said:
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.
That is not Deputy Eoin Ó Broin talking; it is Deputy Willie O'Dea. For once, I would have to agree with him.
I welcome the opportunity to speak on this motion on behalf of the Labour Party. For the record, our amendment states:
"further calls on the Government to:
- replace the Defective Concrete Products Levy with a levy on profits derived from construction; and
- commit to the introduction in the Finance Bill 2022 of retrospective tax relief for those already carrying out remediation works on their homes."
Like many, and we have heard it ventilated here this evening, the Labour Party is concerned about the proposal for an €80 million levy on concrete products on the basis that this will inevitably push up the price of new homes. We have already heard straight from the horse’s mouth, as it were, that contractors across the country intend to pass on the value of the levy on blocks and other concrete products to their customers. No ifs, no buts, no maybes - that is what they plan to do and it is frankly inevitable. This is especially problematic at a time when hard-pressed, would-be first-time buyers are scrimping and saving for every cent they can get their hands on to get a deposit together.
House prices in my own constituency grew 7% in the third quarter of 2022. That is considered to be a slowdown, so the language the industry uses is very interesting. It is compared with record growth in recent years, growth that in fact was not even seen during the so-called Celtic tiger years.
Wages certainly have not increased to the tune of 7% for most people. When we speak about slowdowns, all it means is that the rate of increase is slowing down. Greater value or affordability is not provided for customers. I know many proud and hard-working people in their 20s, 30s and 40s who greeted the news of the levy last week and how it would impact on their ability to purchase their own homes with grave concern. They were deflated. It was another obstacle placed in their way.
When we discuss how the remediation schemes, which we all want to see supported, ought to be levied, we have to agree that the most significant contribution of all must come from the construction sector. There is no doubt about that. We can see the consequences of the era of self-regulation - non-regulation, more appropriately - that was presided over for many years. We can see the impact on families who have experienced the trauma of having mica in their properties or on householders across the country who are living with the consequences of apartment defects. Their experiences are shocking and well documented and have been aired in the Chamber time and again on behalf of the people we represent. I agree with the Tánaiste, who has stated that the costs must be socialised in some way. That is inevitable, but the costs should not be socialised while the profits continue to be privatised by rogue players in the construction sector. That is why our preference is for a levy on profits, thereby minimising the risk to would-be homeowners of even more inflated prices.
The apartment defect scandal has left more than 100,000 dwellings with serious fire defects. With one or two exceptions, builders have walked away consequence-free from tackling the defective buildings that they have left behind them. Unfortunately, owners of defective apartments cannot walk away. They are living with fear, anxiety and insecurity every day. The unnecessary risk to the health and safety of residents of apartments with fire safety defects, which was identified clearly by the report of the working group on defective homes, is becoming real. The impact is clear for all to see. We know the consequences of defects for insurance cover, which is a nightmare scenario, but there is more to this than the financial cost. The human cost of having a home crumble and crack before your eyes is devastating. Stress and anxiety levels among apartment owners have increased significantly due to the ongoing risk to their health and safety and the ongoing financial and insurance uncertainty.
To date, the issue of defects has been consequence-free for the construction sector, but not for the owners. In this context, the construction industry's recent concerns and calls for mobilisation against the levy would be amusing were the situation not so serious. This is the same advocacy and lobby group that said nothing on the issue of defects until mid-July when the prospect of a levy loomed large. It did not even bother to show up at the Oireachtas housing committee's hearing on defects in late 2020. The Construction Industry Federation, CIF, owned HomeBond but has paid out nothing to owners of defective homes. Suddenly, it now seems to care for consumers and the impact on the value of homes when a levy is being imposed on the industry. No one should be fooled - the CIF has not cared one jot about the hundreds of thousands of people living in unsafe apartments, given its record to date. Instead, the idea has been perpetuated that there are bad apples around the place. This is the bad apples theory, according to which the sector as a whole should not be scapegoated for the actions of a few. However, the bad apples theory does not wash when we consider the systemic nature of the apartment defects problem. Between 1991 and 2013, approximately 100,000 apartments were affected, mainly by fire safety issues, due to shoddy workmanship and irresponsible work, regulation and enforcement, or the lack of regulation and enforcement in some cases. The theory does not acknowledge the fact that well-known companies which are members of representative bodies are still trading despite being responsible for defects and doing nothing to help desperate owners. They have not been forced to do anything to help owners either. All of this is the result of poor self-regulation, shoddy workmanship and a culture of impunity that has existed within the sector for far too long. This culture needs to change urgently, as must the law. There need to be consequences for those who are responsible for apartment defects and for making and selling defective and deleterious materials. There needs to be a great deal more stick and a little less carrot.
The Minister of State should note what has happened in the UK as regards construction defects. There, those firms that are responsible for defects are under threat of being refused permission to build and sell homes. We understand that the majority of building firms have agreed to remediate defects in their own buildings and to contribute an additional £5 billion immediately to a building safety fund and a further £3 billion over the next ten years through a building safety levy. UK builders refusing to co-operate are being hit with refusals of permission to build and sell homes. This is important, as it stops them in their tracks. They cannot develop and trade if they do not play ball. Inspiration could be drawn from the UK scheme in how we approach this issue, particularly in the Department of Finance's consideration of the measures in the finance Bill that will give effect to any levy that may be introduced.
In our recent alternative budget, we called for a 2% levy on profits, which would raise €50 million per year and would go some way towards financing redress. That levy would be on profits, not product, which is an important distinction. This would minimise the risk of any fallout from the levy being passed on to potential first-time buyers.
Our amendment seeks to ensure that those affected by the apartment defects scandal and the mica scandal are compensated and supported in respect of remediation work that they have already undertaken. We have long supported the Construction Defects Alliance's call for a retrospective tax credit for owners. This would allow essential repair works to continue or to commence immediately. While it is disappointing that no provision was made for this tax credit in last week's budget announcement, the Minister for Housing, Local Government and Heritage indicated that funding would be available in 2023 for amelioration measures. We look forward to seeing precisely what he means. For example, will consideration be given to short-term measures that provide for security and fire wardens where there are apartment defects, as called for by the Construction Defects Alliance?
If we have learned anything from this crisis, it is that kicking the can down the road will only lead to worse problems being stored for the future. We must learn from the experience of all of these scandals and ensure those who are responsible are held accountable. It cannot always be up to the State to step in and resolve issues that have been created by private industry. Private industry is responsible and accountable and it must make a contribution, but one that is properly designed.
"The introduction of the 10% levy on all concrete products is the actions [sic] of a 'rogue' Government." These are not my words, but the words of the chairperson of the International and Small Business Alliance, ISBA, Mr. Seamus Maye, who says that there is no excuse for quarries and concrete producers not being held to account for the mica building block crisis. The Government is gung-ho about introducing this levy. It is reasonable to ask where the same enthusiasm is for ensuring strong, robust and effective regulation of the building industry. Why is there not the same enthusiasm for going after those responsible for defects? Why is the Government not ensuring the accountability of developers and companies that have caused incredible stress and trauma to families who are living in homes that are falling apart and have other defects? If half the effort that is being put into constructing the new levy were put into strong, effective and robust regulation, we might get out of this vicious circle of more and more levies being introduced because regulation is not done properly in this country. It is reasonable to ask how many more levies will be introduced and will hit people who are not responsible for a regulation. As has been referenced, we have a number of levies in place already.
These include the Insurance Compensation Fund levy. This was in place between 1984 and 1992, and then brought back in 2012 following the collapse of Quinn Insurance. It is a 2% levy paid on all non-life insurance policies to fund the administration of Quinn Insurance. We have also had the Motor Insurers Insolvency Compensation Fund, with a 2% levy on gross motor insurance premiums. This is paid for by everybody getting motor insurance. We also have the bank levy, of course, which is being renewed and extended to the end of this year, albeit with reduced annual yields. Additionally, we have had the electricity levy, namely, the large energy user rebalancing subvention, which has cost households an average of €480 since its introduction. How many more levies are parties in this House going to suggest or impose on people facing huge costs?
The Social Democrats do not support the Government's levy of 10% on concrete blocks. We do not support the introduction of levies that do not hold those responsible to account but that place additional costs on people trying to buy homes. We support those seeking to buy homes who are faced with exceptional affordability challenges that will be compounded by these levies. We also support homeowners affected, through no fault of their own, by construction defects, including those caused by pyrite, mica, fire safety deficiencies, water ingress and other such defects. We do not support any attempts to divide these groups of people who are all struggling to provide safe and secure homes for their families. We do support maximum accountability for those responsible for defects and defective materials.
Given the huge costs, financial and human, of building defects, it is unforgivable and inexplicable that we do not have sufficiently robust and independent regulation of the construction industry. Why is the Government not pursuing those responsible? In recent years, we have heard from the Government that it will go after those responsible, but not a single case has been taken by the State to seek to recoup funds from those responsible for this disaster. Why is it that the quarries producing the defective materials going into homes are still allowed to operate? I asked the Tánaiste about this last week and I felt his response was a kind of a case of shrugging his shoulders and wondering where the evidence was. Expert evidence concerning this matter was presented to the Joint Committee on Housing, Local Government and Heritage a few months ago. Why is the Government not rigorously pursuing these quarries and getting them shut down to ensure no more defects are caused by the use of defective materials? Why is the Government not being proactive on this issue? Why are agencies of the State failing to act when the evidence of defects is right under their noses? I will give an example shortly Equally, after all the billions of euro spent remedying these defects, why do we not have a robust, statutory national building control authority? All we have is the promise of one.
I will give one example where this type of issue has been under the nose of State agencies and they have failed to act. This is just one example of which I am aware, but I am sure there are plenty of others. Fingal County Council knew of serious fire safety defects on an estate in north County Dublin. This emerged when the council was acquiring Part V units. The council fixed its own units, did not pursue the developer concerned for those building defects and did not tell the other residents on the estate that there could be a serious problem with their homes related to fire safety defects. This was a county council, and it must be remembered that local authorities act as the planning authority, the building control authority and the fire safety authority. In my view, the county council in this case ignored all its duties under the legislation regarding those three roles. Fingal County Council became aware of these defects in 2007. Subsequently, further evidence of these defects emerged when a fire broke out on the estate. Thankfully, that happened during the day, which meant people were not asleep. Smoke from the fire spread quickly into other homes in that block. If that fire had happened at night, then it would have killed people.
This is what is happening in respect of the local authorities with responsibilities in this area, but I do not see the Government taking any action or seeking any accountability when State agencies have failed to carry out their duties as building control or fire safety authorities. The Government is quick to bring in levies to place the costs on everybody else, but where is the action to ensure that the authorities meant to be doing their jobs in this regard actually do so? We do not see the Government changing company law legislation to address the old trick where the directors of companies, including development and building companies, fold up the enterprises when there is a problem and then those directors head for the hills or set up a new company and continue trading and building. Why is nothing being changed in company law to allow those directors to be held to account for building defects and fire safety breaches and to ensure there is accountability concerning these issues? There has been nothing from the Government in this regard.
What we need is a national building control regulator. We need a robust system of independent inspections on building sites. We also need independent regulation of the construction industry, and not regulation of the industry by its own lobby group, as the Government brought in this year via legislation in this House. Additionally, we need compulsory defects insurance for builders and developers to weed out rogue builders and developers. My proposed amendment to the Government's legislation, which would have brought this measure in, was voted down and not accepted. Why did the Government do that? Why is it not holding developers and builders to account? Why is it always a case of shrugging the shoulders and trying to find ways of heaping these costs on individuals trying to buy homes? Why is it not possible to find the time to hold developers and builders to account?
The costs of construction are rising sharply. Yesterday, we learned that child homelessness increased by 40% over the past year in counties Cork and Kerry. In the middle of a housing disaster, with thousands of families homeless and a whole generation trapped in a cycle of ever-increasing rents, it is increasingly expensive to build a home. Somehow, the Government's response is to make it even more expensive. This defective concrete products levy will add up to €4,000 to the price of a house. I reiterate that it will add €4,000. Even if a family benefited from every measure in last week's budget, that total would represent only a fraction of the costs this measure will impose on them. It is precisely those people who need support to get homes that the Government is making pay the price for failures they had nothing to do with, at exactly the same time as those are trying to get their homes.
The scandal around mica, pyrite and fire safety defects is due to a disgraceful lack of regulation during the early 2000s and irresponsible practices by some in the construction industry. The Government's levy will especially hit families in rural areas who are more likely to be building their own homes. At a time when it is harder than ever to stay in a rural area and have families settle in rural communities, the Government has burdened precisely these same young people with the cost of paying for Fianna Fáil's mistakes. Moreover, the Government knows this is wrong. Numerous Government backbenchers pointed out this inequity in their speeches on the budget last week.
The Minister for Finance spoke earlier about how no alternatives have been offered. The ESRI has called for the levy to be scrapped and said that, instead, windfall corporation taxes should pay for the redress scheme. It is not the case, therefore, that no one is offering an alternative; it is that the Government has opted to specifically penalise young families and those trying to build new homes in the middle of a housing crisis. Members of the Government sat there shaking their heads earlier at the people making these points, but anything that could reduce the supply of new housing at a time like this, in this kind of housing crisis, is simply ridiculous. Along with the Minister of State's party's litany of failed and costly housing policies, this Government is actively placing barriers in the way of young families having homes.
Across the country, hundreds of thousands of people are living in homes affected by defects, whether these have been caused by mica, pyrite, fire safety deficiencies or other blatant defects. Hundreds of thousands of people have been impacted. Given the campaigning and the pressure from below, it is clear that the Government has been forced to concede redress schemes, such as the one for people affected by mica defects. It is still an inadequate redress scheme. The top line refers to 100%, but, in reality, in the small print, it is something like 80% redress. The families affected by mica defects are not giving up on this and they are going to continue to fight. The question of another major redress scheme, worth between €1.5 billion and, more likely, the higher end of €2.5 billion for apartment and duplex defects, is going to come on the agenda.
The obvious question now is: who is going to pay for these?
The Government's answer is that ordinary people will pay and it will not make those who are responsible pay. On the one hand, new homeowners will pay this levy, and on the other, because the levy by itself is completely inadequate, the public in general will pay in terms of public funding, extra taxation, etc.
There is a continuous feature from the origin of this problem to the solution of how we deal with it and how we pay for it, which is the absolute consistent position of Fianna Fáil and Fine Gael to represent developers and builders. That is who they represent. That is whose interests they have represented in this all the way along. We have hundreds of thousands of people in this crisis because we have the builders' parties in power.
I will go back all the way to 29 November 1989. My attention was drawn to it. It is referenced in Deputy Ó Broin's book, Defects. It is a very revealing debate on the Building Control Bill 1984. What it reveals is that all of this was warned about. All those decades ago, it was all warned about. The then Fianna Fáil-led Government knew about it, shrugged its shoulders and said that there would be no problem with the builders. In the debate, the former Deputy, Mr. Eamon Gilmore, then spokesperson for the Workers' Party, stated:
It is quite clear that the intention in this section of the Bill is to introduce a system of self certification which will be the primary instrument used to give effect to building control. It is a little misleading to suggest that the provision for self certification is some kind of an adjunct to the general provisions of the Bill and which can be exercised from time to time. It has been made crystal clear - this is my reading of the debate which took place before the adjournment of the Dáil - that the central method by which it is intended building control will be exercised under this Bill is through the system of self certification. In other words, a competent professional or whoever has designed a house, is responsible for the building of it and so on, would also be the person who would be able to say "this building is fine". That principle is not acceptable in commercial life. If it was accepted in commercial life, why do building societies, when they are approving a loan for someone ..., decide they will not automatically accept the word of the professional representing the people ...
The principle being enshrined in this section is very dangerous. It will expose people who are buying homes to buying products which are sub-standard against which they will have no comeback. Under a later section of this Bill once a local authority take in a certificate of compliance and file it away one cannot take any action against them. These people will have no worth-while come-back if a certificate of compliance does not properly ensure that a building meets the required standards.
All of what has come to transpire was warned and predicted. The then Minister for the Environment, Mr. Pádraig Flynn of Fianna Fáil, stated, "I cannot for the life of me understand the Deputy's preoccupation with rogue builders, certifiers and architects." Mr. Gilmore responded, "I come across a lot of them." Mr. Flynn stated, "If Deputy Gilmore buys a building without having put in place some checks ... then he is the one who is being negligent in protecting his own investment." The then Government, a Fianna Fáil Government, was warned at the time about all of this, about everything that would transpire as a consequence and they said that it was people's fault even though it is not people's fault. How could they possibly have known? If one bought a house with mica, one could not possibly have known. If one bought a house with fire defects, one could not possibly have known. If one bought a house with pyrite, one could not possibly have known. What is consistent from 1989 to now is representing the interests of the builders and the developers, and that is what is happening here.
The 10% defective concrete products levy should be scrapped because it is clear that the cost will simply be passed on to ordinary people and make already unaffordable housing even more expensive. It has been referenced how the SCSI has forecast that the levy could add €3,000 to €4,000 to the costs of an average three-bedroom semi-detached house.
It is a scheme that has been carefully designed to place no financial burden on developers and builders but, effectively, merely makes them collectors of a levy on ordinary people in need of a home. It is yet another demonstration we have had over all these decades of the toxic relationship between developers and builders on the one hand and Fianna Fáil and Fine Gael, as their political parties, on the other.
We need to pay for this. That is agreed. The Minister was on television last night asking to be shown a way that this levy will not be passed on and I agree that this levy will be passed on. The way a levy that cannot be passed on should be designed is to go after the profits of the developers and construction industry, the profits of the banking sector, etc. They should be hit at the point of profit. Many of them are highly profitable and we need a levy on their large profits. In Britain, post Grenfell, such a levy has been introduced. It is entirely possible to do it here if the political will exists and if the builders and developers are not protected.
I do not accept that we cannot go after those who are directly responsible for, or guilty of the consequences of, the defects that we are seeing now. With regard to the apartment and duplex defects, some of the companies still exist. In many other cases, the same people still exist. They are still building apartments and duplexes but they have simply reinvented themselves. The same people who made significant profits are still active in the industry. Some of them are still getting new public contracts. We should go after them.
I will finish by making the point about the report on the defective apartments and duplexes. It is now more than two months since the Government received the report from the working group that examined defects in housing. That report is clear about the significant extent of defects, primarily fire defects, in apartments and duplexes. If people are living in an apartment or a duplex built between 1991 and 2013, the chances are they are affected. The chances are they will be faced, though they do not know it yet, with a bill on average of €25,000. More likely, in many cases, it will be significantly higher than that. The working group estimates that of apartments and duplexes constructed between 1991 and 2013, the number that may be affected by one or more defect, that is, fire safety, structural safety or water ingress defects, is likely to range between 50% and 80%, which equates to between 62,500 and 100,000 apartments or duplexes. That is one-in-20 homes in the State. Effectively, it is 5%. It is an immense issue that most people who are affected by it do not know that they are affected yet. The then Minister, Mr. Flynn, said at the time that it would be the purchaser's fault but this is absolutely not people's fault. They did everything they were supposed to do when their homes were built and when they bought them and they are faced with substantial bills to make their homes safe.
On budget day last week, the Minister for Housing, Local Government and Heritage brought a memorandum to Cabinet on the issue of defective apartments, but all he did was to announce the establishment of a new group to look into the report from the previous group and to report back before the end of the year. We do not need months more of deliberation, etc. We have the report of the working group. It is clear on the extent of the problem. It also includes, as one of the possible solutions, the only solution that will work, in my opinion, which is 100% redress.
We know what the issue is. We know what the solution is. We cannot expect apartment and duplex owners to simply wait more months as this is kicked down the road before some scheme is put in place that then takes months or years to be implemented. The Government should move on it now. It should have included redress in last week's budget and it should move on it immediately.
This levy will be on concrete blocks and other concrete products and it will be paid for by the taxpayer, be it through public works contracts that will increase in price, by farmers who are trying to upgrade their slurry facilities to meet environmental demands or, most importantly, by anybody trying to buy or build a house.
The SCSI have put €4,000 of a price tag on the additional cost for a house. That has been ridiculed by Government, yet the same Government has used the SCSI to help it formulate the costs for the implementation of the mica redress scheme. They are independent and they will give it as it is. I think the figure is correct.
Furthermore, with regard to additional concrete products, to put a levy of 10% on precast concrete products is to put a levy of 10% on materials other than concrete that go in to make up these components, and that will drive up costs even further. A levy at this time will further fuel inflation when the construction industry is battling monthly to try to cope with the cost increases coming with every kind of material. It is ill-judged and ill-timed and should be deferred until we get things right. It will raise €80 million per annum, but that does not deal with the redress schemes that have to be put in place or their cost. It is just tokenism. I cannot understand why it is even being talked about.
In addition, the apartment blocks that have to be remediated are not concrete, so why should this levy on concrete and concrete blocks be used for all these remediation schemes, as the Taoiseach said last week when I questioned him in the House on this?
We have had three major incidents in which defects have arisen in buildings as a result of the lack of implementation of regulations. Until we get building control right in this country, we should not touch any levies.
The new 10% levy introduced on concrete blocks, pouring concrete and other concrete products is expected to raise €80 million annually. Based on that figure, however, it would take 40 years to raise what is needed to pay for mica redress.
This levy will penalise young people trying to build or buy their first homes as well as local authorities trying to build social housing. Given robust demand for housing, combined with the long-standing supply constraints, the burden of this new levy is likely to fall on the residents of newly built homes rather than on industry. Ordinary people are being made to pay for these errors and the crooked developers are getting away with it scot-free. The SCSI has calculated that the levy will add approximately €3,000 to €4,000 to the cost of an average three-bedroom semi-detached house. We need to fully assess the cost implications of this new levy because, let us not forget, this levy will affect not just housing but also major infrastructure projects due to significant extra costs.
Additionally, the president of the Irish Cattle and Sheep Farmers' Association said the 10% levy will have "huge implications for farmers" building a slatted tank, slurry or silage storage facilities or grain storage facilities.
Overall, now is not the right time to do this, in the midst of a housing crisis. While construction has picked up strongly over the past year, with the commencements of nearly 30,000 homes during the second quarter of this year, mounting headwinds in the form of higher input costs and shortages of labour will mean that the momentum in the housebuilding market will slow. The Taoiseach has said that the construction sector has to realise that, because of what happened, the levies are being put in place to deal with rogue behaviour, but ordinary people will pay the price.
I in no way mean to portray the families affected by mica as not needing to receive redress, but let us stop playing a political game of football. Why do we continuously look to plaster over problems rather than getting to their root causes? Yes, more thorough inspections have been implemented, but more needs to be done in respect of building control regulations. Would it not be more beneficial to invest this €80 million towards a new building control scheme that would be independent and ensure building regulations were met on all new builds?
As I mentioned, we need to assess fully the implications of this new levy and how it will affect the most vulnerable in our society.
In the middle of the most damaging housing crisis in the history of the State, Fianna Fáil, Fine Gael and the Greens propose to introduce a levy to make it worse, which is an incredible situation. We have a record-breaking Government that has pushed house prices to their highest level in the history of the State, and in the budget the Government introduced a levy to ratchet them up even further. The people are aghast at the complete detachment and incompetence of the Government when it comes to housing. If a leaving certificate student of economics who knew nothing about the housing crisis surveyed its wreckage for even an hour, he or she would know that pushing up prices at this stage is absolutely the wrong thing to do. That is the issue, and this is important. The people really believe at this stage that Fianna Fáil, Fine Gael and the Greens simply do not get it. They are so removed from the experience of real people in the housing crisis that they do not understand it. It is unbelievable that a government could think that this is the right thing to do in the middle of a housing crisis.
The mica crisis is a direct result of Fianna Fáil light-touch regulation. Fianna Fáil's friends from the Galway tent were allowed to produce dirt and sell it as a building material and were allowed to get away with it. It was not an isolated incident in any way. Fianna Fáil operated light-touch regulation across society. The banking crash was another example of that and of how much such regulation costs people. When the time comes to pay for this crisis, however, the mica catastrophe, Fianna Fáil does not turn to its old friends and to the cause of the crisis but, rather, seeks simply to make the victims of the housing crisis, the people who are suffering the most, pay for it.
The Minister should mark my words: the concrete levy is a tax on human misery and it will go. There is no doubt about it. The Government may stall and push against that but, in the end, it will not be able to fight the logic of getting rid of this levy and it will back down. I am confident of that.
Everyone accepts that those impacted by mica have suffered enormously. We see the images of houses disintegrating and it is heart-wrenching. The hopes and dreams of their owners have crumbled into dust. These are not just houses; they are homes to 8,000 families who have innocently found themselves trapped in a nightmare. Their homes were the biggest and most significant investments of their lives. Many of them undoubtedly struggled to build them. Sacrifices were made as they turned their dreams into a lifelong reality. These people must be compensated for the cruel hand they have been dealt, and that is beyond question.
The budget decision has unintended consequences. The cost of addressing the mica mess has been shifted onto the young couple saving to build their first home or the family who needs to extend their house. This decision will exacerbate the existing housing crisis. This is at a time of unparalleled demand for all forms of housing throughout the country and when homelessness and housing demand have spiralled to record levels.
The use of defective building blocks in people's homes was, and is, a catastrophe. It was not created by the average person. They are not responsible for this appalling travesty and should not be expected to carry the cost.
What efforts were made to pursue legally the quarries and developers involved? Some operators within this supply chain are glaringly culpable. They behaved in a reckless fashion and exploited light-touch regulation. The Government needs to explain to the public why it is that no entity is being held responsible or accountable. The Government should publish its legal advice on this issue. The construction industry should also share some responsibility and contribute from net profits. Surely some mechanism can be found to target and pursue the offending operators to recover moneys for the State. I am not in favour of a blanket 10% levy. The Government must restructure and design an acceptable scheme when it introduces the finance Bill. The Sinn Féin motion highlights a serious problem without giving us a solution. It is important now that the Government takes time to review this measure and returns to the House during the taking of the finance Bill with a just and fair solution.
A 10% levy on concrete products is a tax on concrete products. However, the Government takes not only the 10% levy it is looking to put on concrete products, including blocks, but also 23% VAT, which is another tax, on products that are delivered to a site for supply only. The Government then takes a further 13% tax if it is supply and fit. Then what does the Government do in a time of crisis?
It takes 50% in fuel taxes. Manufacturers of the blocks deliver the blocks and the concrete to your house and the Government takes 50% on that and we wonder why we have inflation in this country.
Then the Government announces grants. It is going to give grants to the farmers for slurry tanks but sorry, it may be giving them grants but it is taking back 10% of it in tax. Does the Government think the people of the country are fools? Its absolute lack of understanding of what it is doing is astounding. The Government is creating inflation and creating hardship for every first-time buyer, every person who is buying a house and wants to renovate it and anyone who is in a position to build a house. The Government is putting another 10% tax on them. On top of that, people have to pay local authorities €5,000, €6,000 or €7,000 if they want to build a house on their own land, which is considered to be another tax. Does the Government know any other word besides "tax"? They are cowards. They would not take on the industries that created this problem, that is, the two or three quarries that created this problem. They are cowards because they will not take them on. They want every single person in this country to pay for it. It is like bailing out the banks all over again, but the public has to pay for it. Shame on the Government that it has not stood up to the quarries that caused the problem. There was not one quarry in Limerick that had pyrite but we imported it from other counties. The Government wants everyone in this country to pay again because of its cowardly mistakes.
I also support this motion. What about the perpetrators of the crisis, the quarries and concrete plants? This industrial sector is dominated and controlled by CRH plc, Ireland's largest company, which is number one in the US and the UK and is the world's third largest manufacturer of construction materials. CRH plc settled a price-fixing, market-sharing case taken in the state of Virginia for $101 million in October 2020. An Garda Síochána will not investigate CRH plc and neither will the Competition and Consumer Protection Commission or the Director of Corporate Enforcement. The Government will not investigate CRH plc; in fact, it protects the company and that is the shame of this. CRH has the resources to pay for all of the mica and pyrite if it was asked to do so by the Government but no, it is beholden to the company. CRH needs to be investigated to establish the extent of its control over the market. We know from reports in the Sunday Independentthat CRH plc controls a stable of secondarily-owned, so-called independent operators. It forced them out of business and took them over. It highjacked, banjaxed and squeezed the lifeblood out of many good companies in this country. The Fianna Fáil Party, founded by de Valera and Lemass, is in its pocket, as is Fine Gael. That is the fact of the matter.
Why pick on young Irish people and hard-pressed farmers by imposing such a penal levy? It is a tax. It walks like a tax and it is a tax. Why impose a tax on them when the culprits are getting away scot-free? Where is HomeBond in all of this? Why is the Government so beholden to these big companies, the corporates? It has reached a new low in trying to penalise the ordinary people who want to put a roof over their heads. It is disgusting, despicable and disgraceful. The cowardice shown by the Minister for Finance, Deputy Donohoe, who cobbled this together, and the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, who let CRH off scot-free, is shameful.
I fully support this Sinn Féin motion. The 10% levy on blocks and other concrete products introduced in the budget will have to be passed on to customers. This has led to fury in west Cork among good, honest builders who know the customer cannot afford it and among the young people who want to start their lives by building their new homes. The new levy which is designed to contribute to the cost of a national redress scheme for people whose homes were built using defective products is scheduled to come into effect on 3 April next. However, it makes absolutely no sense and gives the quarries, including many that we know about, that are responsible for this mess a free pass.
In the middle of a housing affordability crisis, initial assessments are that this new Government measure could add approximately €3,000 to €4,000 to the cost of an average semi-detached house in a housing estate, according to Mr. Conor O'Connell, director of housing, planning and development with the Construction Industry Federation, CIF. This levy also comes at a time when the cost of concrete has already increased by approximately 30% since February 2021. Industry representatives have explicitly stated there is no doubt but that the cost of this 10% levy will be passed on to the customer. Therefore, this is not really a levy on the construction industry; it is levy on the first-time buyer, the purchaser of a home, the farmer building a slurry tank or a slatted shed, and the person who was going to build an extension to their house. The Society of Chartered Surveyors Ireland, SCSI, stated the levy will add up to €4,000 to the cost of a new semi-detached house and will challenge the viability and affordability of new homes.
Around 5,000 homes in Donegal are impacted by the mica crisis, with thousands more constructed with faulty blocks in counties Mayo, Sligo, Clare and Limerick and God knows, there are some in west Cork too. Some braced their necks around here in Dáil Éireann for many years, with what they carried on. Ministers have been warned that the redress schemes could end up costing the taxpayer more than €3.5 billion. However, despite these costs and the pain and misery that has been caused to so many people, not a single person or quarry operator has been prosecuted. Why? Why is that the case? The Government should answer that question. We cannot be paying, coughing up for their sins. The idea that this levy would even pay for the scheme is a complete red herring. It would take more than half a century or possibly 80 years to make a dent in those costs. The levy is nothing more than a free pass for those who are responsible for this crisis, including the Government, senior local authority officials and Ministers in the Department of Housing, Local Government and Heritage, all of whom allowed this mess to go unchecked.
I thank Sinn Féin for the opportunity to speak on this important motion, which I support. Our group was the only one that did not congratulate the Minister on this levy in the Dáil when it was announced on budget day. This concrete and concrete block levy will add at least €5,000 to the costs for every young man or woman who is trying to build a house. It will also add millions to the cost of the Government's public works and social housing building.
The price of concrete products and concrete blocks has already gone up by 30% in the last nine months. The €80 million will be a lot more if the young fellas can continue building one-off houses, for which it is hard to get planning permission in places around Killarney. All types of housing materials have gone up in price. I was amazed that the Minister for Finance and his advisers thought that they were smart by asking where we will get the money to pay for the levy. Is there any fear that we have already paid for it and that we have paid over and above for it? People are being hit by taxes of every creed and description - carbon tax, VAT, income tax, property tax and any other tax the Government can think of. People have to pay up. There are humps on people with lorries and tractors trying to pay the extra VAT and excise duty on the fuel as they try to keep their vehicles going. They have already paid.
There was no regulation in the Twenty-six Counties. We hear that the same quarries that supplied these defective materials also sent materials into the North of Ireland but they were checked there. There was no problem in Derry, when they took their products across the Border.
The Government is giving grants to farmers for buildings and slurry storage on the one hand and then it is increasing the cost of concrete and concrete blocks on the other. That is not fair. What the Government is doing is wrong. It is hurting the ordinary young boys and girls that are trying to put a roof over their heads, which they are entitled to do. Instead of helping them, the Government is hurting them.
This issue goes back quite a while. The necessity to pursue the quarries, or at least investigate pursuing the quarries, has been obvious to every fair-minded person in the House and country for a long time. Nobody could but be moved by the plight of the mica homeowners and something clearly had to be done for them. One thing I took from my very limited meetings with them and their appearance before committees was their sense of injustice that they have suffered so much and there was apparently no attempt being made by the State to pursue the quarries.
Some had, of course, made attempts individually, but it is very difficult to pursue some of these companies for a variety of reasons. The quarrying sector is not renowned for being a home for shrinking violets. There was great difficulty in pursuing some of them. Some of these companies are huge and have access to the most expensive legal representation that can be provided and used that to fight these cases.
They expected that the State might step into their shoes and take a case. In a way, the legislation kind of provides for that because any single case is obligated to the Minister. In theory, the Minister is pursuing the case. At the time the legislation was brought through the House last summer, I proposed amendments that would at least require the Minister to come back before the House and state how many cases were continued, how many new cases were initiated and what the procedure was for looking at whether there was a case against a quarry. However, the Government did not bother even looking at those amendments. The way that legislation was rammed through the House without even looking at how we, as a society, might recover at least some of the money it is going to cost to put these unfortunate people back in the position they should have been had somebody not supplied them with defective concrete blocks, and done so for profit, was an incredibly arrogant act by the Government.
I do not envy the fact that the Minister of State, Deputy Fleming, is here tonight, because this is within the remit of the Minister for Housing, Local Government and Heritage who has been all over this. He is being spoken about quite a lot as a leader at the moment, and a potential leader of Fianna Fáil. During Leader's Question in the Dáil last October, he said he was working extensively with Paul Gallagher SC, the Attorney General, to ensure those who are liable can be held to account and that he believes those who are responsible should contribute towards remediation and can contribute towards it. He went on to say, "I have engaged intensively with the Attorney General on this matter and he is working on mechanisms to ensure wrongdoing and liability on the part of quarries and other parties are fully penalised." In November, he announced in a press release the contours of the scheme and said that a senior counsel would be appointed to look into the role of the industry and regulations in generating this controversy.
Fast forward seven months to June, when the general heads of the Bill came before the committee and the Minister's acting assistant secretary was a witness. Civil servants are not to blame for the actions of their Ministers. Whatever about collective Cabinet and Government responsibility, the acting assistant secretary had to say that not only had no one been appointed, there were no terms of reference drawn up. She said it was an urgent matter and the Department would get right onto it, but that we needed to pass the Bill first.
It is now October. Through all of this the clock is ticking, because for any civil action to recover, there is a limited period of time within which one can do so, which is after the date of knowledge. From the time people realise their houses are affected by pyrite, there is a limited period of time within which a case can be taken. Twelve months after the Minister told the House about his extensive discussions with the Attorney General, nothing has been done. There have been no terms of reference or senior counsel, but what we have is a concrete levy which, in those circumstances, is unconscionable. That we will seek to recover this money from ordinary people is wrong.
This is a further punishment for the victims of the mica scandal. That is what is really shocking about this debate. It is a further piling on of wrongdoing on top of them. The victims of the mica scandal are still waiting for the redress scheme to be announced, yet the costs they face will be increased by the levy the Government is proposing in the budget. That is completely wrong, but it is typical of what the Government is about and the lazy way the Government does its work.
What can be said about this levy is that it is, at best, extremely lazy. The Government will introduce a levy, knowing it will be passed on to the costs of the people who have to pay for building work. They will pay the levy, and the Government can dress it up as a levy on the building industry when in fact it is actually a levy on the people who pay to get work done in the building industry.
What would be wrong with levying the profits of the building sector? Rather than putting it on the work the building industry carries out, it could be put on the profits announced every year. We could tell such companies that their profits will now be X minus Y, and that will be the levy. At least then there would be some semblance of the Government actually wanting to go after the companies rather than going after the individuals and citizens of the country. The reality is that all citizens are paying for redress because all citizens will pay for the redress scheme.
The Government is forcing people who are trying to build houses to pay on the double, because they will be paying through their general taxation and the Government is now forcing them to pay a levy. That is typical of the light touch regulation that has been founded and espoused by Fianna Fáil and Fine Gael over many years. That was highlighted by other Deputies in this debate. The Labour Party identified what the Minister of State's former colleagues were doing. The fact is the Labour Party and Green Party continued on their merry way afterwards. When they came out of power, they moved on and said it was nothing to do with them.
The reality is this is what the Government has forced on people and what it is going to do at all stages along the way. That is shocking. In this country, we seem to follow slavishly everything that is happening in England. We introduce something a couple of years after it has been introduced in England. Earlier, we heard about a levy that is being implemented in the UK but there is no mention of that being implemented here because it will go after the Government friends, the builders, and that is the problem.
I am here to speak on behalf of the good people of County Clare in respect of the proposed levy of 10% on concrete blocks and products to be introduced next April. This levy has drawn huge attention, and rightly so. In the midst of a homeless crisis that has embarrassingly and shamefully reached record numbers, what sense is there in having those who are trying to build or buy their own homes, or who have to rebuild their own homes, pay a further levy? It does not make sense.
Last week, in my constituency of Clare, 16 planning applications were granted and a further 21 were received. These are, of course, young couples who are first-time home builders and retired people who have worked hard and paid into the State their whole lives. There are farmers, the backbone of commerce and community in rural Ireland. None of these people ripped off decent and hard-working people by selling them defective concrete products, causing their homes to crumble around them, yet they are the very people the Government levy has been designed to punish.
The Society of Chartered Surveyors Ireland, as we know, has estimated that the imposition of this levy will tack on anywhere between €3,000 and €4,000 to the building of a three-bedroom home, which is the most common type in Ireland. We know why there is a need for a redress scheme, namely, because there was no regulation and a lack of action for many years. Everyone knows this, but why burden the ordinary person any more? Deliver, if anything, a progressive levy that will fund the necessary work in the redress scheme and, just as important, deter such despicable acts as selling defective products from ever happening again. That is what would make sense. Where are the repercussions for the quarries that started this fiasco? As of yet, they are nowhere to be seen.
In fact, Aidan O'Connell from Engineers Ireland told the Joint Committee on Housing, Local Government and Heritage - just three months ago - that there are still problematic quarries producing defective blocks. The answer here is not to target hard-working people building a home or those affected by pyrite and having to rebuild their homes. The answer is to get a move on with legislation to investigate the situation and hold the actual culprits to account properly and thoroughly and make them pay.
I have listened carefully to the comments of the Deputies in the House tonight. The scandal of defective concrete products is one which this Government is committed to addressing. We have already spoken about the redress scheme that this Government has put in place which will assist an estimated 7,500 householders who, through no fault of their own, have had their lives severely impacted by the supply of defective concrete products; products which they quite rightly expected to be manufactured to a suitable standard.
The cost of the redress scheme is in the order of billions of euro and it is untenable and unwise to suggest that all of the costs of this should fall entirely to the hard-pressed taxpayer. It is only just and right that the industry which, after all, caused the problem contributes towards making it right. The Government has come up with real solutions to support those affected by defective block products, while ensuring that the cost of this is shared with the industry that caused the issues and problems in the first place.
We have developed a levy which is targeted at the concrete industry and will raise a meaningful contribution towards the costs associated with redress for affected homeowners. The Government has no intention of allowing those responsible for the unconscionable situation that the use of mica and pyrite in the manufacture of construction materials has given rise to not to be held to account. Every possible avenue of recourse open to the Government will be pursued.
The Minister for Housing, Local Government and Heritage is currently advancing plans to appoint a senior counsel to review the defective concrete blocks issue and make recommendations on the options open to the Government to pursue potentially-liable wrongdoers, while the Government is united in its commitment to ensuring that an occurrence such as the defective concrete blocks debacle never happens again.
The Minister is also committed to establishing an independent building standards regulator to strengthen the oversight role of the State with the aim of further reducing the risk of building failures and enhancing public confidence in the construction-related activities. The purpose of the independent building standards regulator will be to oversee building controls nationwide and to act as a custodian of the building controls management system.
The scheme is currently estimated to cost in the region of €2.7 billion. This is on the basis that it will support approximately 7,500 affected householders. A redress scheme of this scale and nature is only possible if industry makes a contribution. It would be unsustainable and unjust for the Irish taxpayer to shoulder the entire cost alone. That is why the Government made a decision on the scheme last November. It has also agreed that some of the costs associated with this scheme should be borne by industry. This was widely reported at the time and it should not come as any surprise that the Minister for Finance will bring forward a levy to ensure the industry contributes to the cost of redressing the issues that originated with it.
As was announced in his budget 2023 speech, my colleague, the Minister for Finance, proposes to introduce a levy on pouring concrete, concrete blocks and certain other concrete products which are used in the construction of buildings. The levy has been set at a rate of 10% on the price of concrete products which will apply at the point of first supply of product in the State. It is intended to come into force on 3 April 2023 and will be applied to all liable concrete products manufactured or used in the State.
The proposed levy is only one among many actions this Government has taken and is taking to tackle the root cause of the defective concrete products issue. In addition to the redress scheme, my colleague, the Minister for Housing, Heritage and Local Government is developing proposals for the establishment of the independent building standards regulator and this will allow the State to strengthen its oversight role with the aim of further reducing the risks in this area and in construction-related activity.
I can also assure the Dáil that the Government is committed to addressing all of the shortcomings that led to the use of the defective concrete products in the construction of people's homes. The redress scheme was an obvious first priority to ensure homeowners were supported. However, the Deputies and others will agree that more must be done.
I will relate what has been said by one Deputy on the issue of the defective concrete blocks legislation, which provides for the State to take over a legal right or claim with regard to defective concrete blocks in a relevant dwelling against any party. This will be a condition for those people who want to participate in the scheme to agree with.
It will allow the State to pursue claims against wrongdoers and remove this burden from individual homeowners. The Minister, Deputy Ryan, is determined to pursue claims against wrongdoers, where such an option is considered possible, following the senior counsel review and the evidence gathered from homeowners as part of the application process under the enhanced scheme to adequately support any such claim. The statute of limitations is being examined as part of that review to see whether such pursuit of claims can be made by the State in respect of all these properties where homeowners agree to sign up to the particular scheme. We do not yet know whether that will be successful, but we are doing everything in our power to pursue it subject to the statute of limitations and to recover money from the wrongdoers and their insurance companies where possible. The Government is determined to follow that route.
There is a reference in the motion to the Society of Chartered Surveyors commenting in detail on how much it will cost, but it would be prudent for people to see the details of the finance Bill, which is to be published on 28 October, in order to have a full, comprehensive understanding of the specific details of the scheme.
I think every single Member who spoke here tonight said that the industry, the wrongdoers and the suppliers must pay. There is unanimous agreement that the taxpayers should not carry the full cost. There is unanimous agreement in this House that the wrongdoers must be forced to contribute. That is what we are doing. We are going after the wrongdoers through the court, where possible, and we will make every effort to be successful in that regard. We are putting a specific levy on the concrete projects mentioned which are in the schedule as announced on budget day and there is unanimous agreement that, through the industry, funds should be collected.
The only point of difference is the specific method of implementing that charge on the industry. There is a unanimous view that there should be a charge on the industry, which is the wrongdoer. It must be pursued and the Government is determined to do so. The taxpayer cannot bear the entire cost on his or her own and, therefore, it is only right that a levy or a charge be introduced on the industry in order that it makes a meaningful contribution to the overall scheme.
If this was about the industry paying the price, of course, we would not be here this evening. It is, quite frankly, naive of the Minister of State to think that this will not be passed on to people building their first homes and to those forced to rebuild their homes. I listened to the response by the Minister, Deputy Donohoe, earlier on, much of which he spent justifying why the banks and developers could not possibly be asked to pay. He said that these are the people Sinn Féin always wants to go after, never mind the fact that they are the ones responsible.
Of course there is no such concern for ordinary people which reminds me, as others have referenced, of when Fianna Fáil wrecked the economy and the people were left to bail out the banks, and will continue to do so for generations.
The people did not cause that either but again, why would the Government ever hold those who are actually responsible to account?
I live in a rural area near a small village. There are two family homes being built on my road. They are the first family homes to be built by young couples since I was a child. Building a home in rural area is already massively expensive. Before you lay a block you spend hundreds on percolation, thousands on water and ESB connections and thousands on planning permission. You pay thousands in development fees and get nothing in return. It costs an awful lot of money because of inflation and every single type of building material increasing in price. We have a housing crisis that is getting worse and the Government's proposal is to increase the cost of building a home; you could not make it up. This proposal will punish people building their first home and punish those forced to rebuild their homes because everything they put into it is now crumbling around them. It will punish people for the Government's failure to regulate the construction sector. Rather than dealing with that lack of regulation the Government is instead looking at putting the cost on the taxpayer. This is despite the fact the defective block issue has not gone away. It is still happening. We still have quarries producing defective blocks. Developers have walked away or, as some Deputies have mentioned, are still building homes. This is embarrassing, people will see it for what it is and it must be removed.
The twisted logic behind the decisions of this Government can often be mind-boggling but the defence of the concrete block levy we have just heard would send the head spinning. In the midst of a housing crisis that has merged with an inflationary crisis the Government is proposing a measure that will make houses more expensive. It has essentially proposed a defective funding mechanism to pay for an under-funded defects remediation scheme that, by the Minister of State's own admission, is going to cost ordinary workers, families and small businesses.
This measure will mean houses will cost more. Every expert in the field has reaffirmed that as a matter of absolute fact. In fact, the Government is not disputing that but just claims the increase will be less than what those experts claim. This measure will mean fewer houses will be built and that is especially the case in rural areas where many one-off building plans have already been shelved due to soaring costs. For many more this will be the straw that breaks the camel's back.
This measure will result in job losses and company closures. The bitter irony is that it is likely to be the concrete companies that have maintained high standards and did not and do not manufacture defective blocks that will be put into jeopardy as they compete with others who do not apply the same standards.
As always, this Government has ignored the blight on this country that is the Border. Naturally, many of those building, especially in counties like my own, will travel North to purchase material that is not subject to this levy. The Government has provided no insight as to how they will deal with imports from outside the island altogether, both in relation to standards and this levy.
As a final point, I fear this measure will make farms unsafe and perhaps even unviable. Farmers are already under severe pressure due to increased costs and reduced Common Agricultural Policy supports and will simply forego plans to build slurry holding tanks, sheds or animal housing.
I have listened over the past number of days to Fianna Fáil and Fine Gael backbenchers whispering that they accept that this levy is a harebrained notion. They now have their chance to stop whispering and start speaking up for the constituents by supporting the Sinn Féin motion and rejecting the Government amendment.
I listened carefully to the Minister for Finance. He said the Government has a duty to homeowners living with defective homes. That will come as a great surprise to those homeowners because they have been living with defective homes for over 11 years. They have been campaigning for action from Government. How many homeowners in Donegal have received their full grant amount in those 11 years? It is 14. In Mayo it is zero. In Clare it is zero. How many apartment owners with fire safety or structural defects, or duplex owners, or homeowners, have received any remediation compensation from the State? The answer is zero. That is not a sign of a duty to homeowners. The Minister for Finance also said there was a duty to taxpayers. Maybe I am wrong but if we had tackled this back when the problem first arose, back when the construction industry had an excess of labour, materials were cheaper and we desperately needed to stimulate the economy in 2011, 2012 and 2013, it would not have cost us a fraction of what it is going to cost us now. By delaying action, the last Government and the present one have increased both the emotional impact on the families and the financial impact on the State.
The Minster for Finance is right that Sinn Féin is committing more. In fact, the €200 million figure I quoted is what we would have in Exchequer funding year on year to tackle that. The reason for that is we must compensate for the fact that after ten years of Fianna Fáil and Fine Gael Governments in one form or another, these homes have yet to be remediated. On the cost variations, the Minister is right there are different variations. He is quoting departmental figures and we are quoting the Society of Chartered Surveyors Ireland, which has a real-time tracking index. If the Department has an independent analysis with independent data then the Minister should publish it and I would be more than happy to compare it to the information we get from the SCSI to see which is more accurate. With the greatest respect to the Minister of State, the Finance Bill is not going to give us that detail and it would require the Department that has undertaken that study to publish it.
What was most interesting to me about the Minister for Finance's comments is that he did not respond to the three central criticisms of his scheme. He is right that industry must pay. The Minister is also right to say we disagree with him on the details, because he has the details wrong. The first thing is the Government levy is too high, as designed, at 10%. It is too narrowly-focused on one section of industry, which means it will have a disproportionate impact on its costs. Lastly, it is a levy on products. Those three fundamental design flaws in what the Government is proposing are why the entire Opposition is saying the Government has got this wrong. The other thing the Minister for Finance or the Minister of State failed to acknowledge is what they might have to say to the homeowner in Mayo or Donegal who will already have to pay €30,000, €40,000, €50,000 or €60,000 of their own money to fill the gap between an inadequate remediation scheme and the full cost. Now the Government is saying those homeowners must pay an extra 10% for the blocks for the home. That is a fact and the Government has yet to address it. The Government has not mentioned the impact on buyers either. Whether it is €1,000, €2,000, €3,000 or €4,000, that is money buyers cannot pay.
The Minister of State knows what is happening with small- and medium-sized building contractors in his constituency. I talk to contractors throughout the counties of Ireland. They cannot currently develop small- and medium-sized building projects because they cannot match viability requirements. An extra 10% on their core building product will push them even further over the edge and the Minister of State knows that as well as I do, even if he will not admit it here. Our proposal is more sensible. I never said it was risk-free or easy but by broadening the scope of who it applies the levy to, our proposal would be sharing the burden across a greater stretch of industry. By ensuring to focus on profits, and especially those of large corporations, our proposal would ensure those that are most able to pay absorb that cost. I will name two such companies. One of the interesting things in Cairn Homes' annual report published earlier this year is that it says construction sector inflation for the company increased by 6% last year but that because it was so profitable, with a 44% increase in profits to €57 million last year, it did not have to pass that on to the purchasers. Similarly, Cement Roadstone Holdings, CRH, has a level of profitability that is enormous and it too can shoulder the burden. Why name those two companies? CRH is directly linked to defects in Mayo and Cairn Homes is indirectly linked to defects in Belmayne, where families are still struggling with huge bills.
I do not believe this Government is going to pursue those directly responsible for defects, be they quarries, block manufacturers, developers, or others, through the courts. If it does I will welcome it but I will not hold my breath. The Government has got the design of this wrong. Its own backbenchers are telling it so. All we are asking is that it accept this. The Government should work with Opposition in the finance committee to put in place a mechanism to supplement the very significant State expenditure we must see in the coming years to remediate all these properties with a levy that makes sense, does not punish owners of defective homes, buyers and first-time buyers and does not push small- and medium-sized building contractors further over the edge. The Minister of State knows it is the right thing to do.
Even if his line Minister does not, the Minister of State knows and his colleagues do. Please, listen to what we have to say. Abandon this badly designed levy and work with us to put something in place that will ensure industry pays its fair share in the right way without further hurting homeowners.