Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the Senator for raising this issue.He spoke to me before we arrived in the Chamber to discuss the matter, and I appreciate his efforts to highlight the issue.

The Minister for Finance announced the introduction of a levy on pouring concrete, concrete blocks and certain other concrete products used in the construction of buildings in his budget 2023 speech. This follows a Government decision of November 2021 which approved an enhanced redress scheme for householders impacted by the use of defective concrete products in the construction of their homes. The Government decision also agreed to the development of a levy whereby the construction industry would make a contribution to go some way to offset the significant cost of the defective concrete block-mica redress scheme, which is currently estimated at €2.7 billion, or of the order of €15,000 for every household in the country.

The levy will apply at a rate of 10% on concrete blocks, pouring concrete and certain other concrete products. It will apply from 3 April 2023 and will be levied at the point of first supply. It is important to note that the levy will not apply to all concrete products. The levy will be placed on concrete blocks and ready-to-pour concrete; in addition, it will apply to a small number of other concrete products used in the construction of buildings. Further detail of the levy and the specific products it will apply to will be set out in the Finance Bill 2022, when that is published on 20 October.

The Minister for Finance was conscious, when developing the levy, of balancing the need to ensure some of the costs of the redress scheme are met from a source other than the Exchequer with limiting the impact on inflation and the construction sector. The levy would have to be set at a much higher rate to cover all the costs associated with the redress scheme.

The Department of Housing, Local Government and Heritage commissioned a bottom-up scientific analysis carried out by an independent construction economics cost consultant on the potential impacts of the levy. Taking account of variables involved, it is estimated that the impact of the levy on construction costs will be between €800 and €1,600 for a typical three-bed semi-detached house or €700 to €1,100 for a sixth-floor apartment block with basement. For a typical dwelling, this is an increase of approximately 0.4% to 0.9% in cost. Other figures have been quoted by many people but I have been contacted by a person heavily involved in the construction industry who is, as we speak, building houses for the private sector, local authorities and the approved housing body sector. He said it is of the order of €1,500, which tallies with these figures, though much higher figures are being quoted.

I acknowledge the comments by the Senator on contact with the Department of Finance before this matter is finalised and enacted through the Oireachtas. I look forward to the Senator contacting my office to facilitate such a communication process.

While the levy is focused on ensuring industry makes a contribution towards the cost of redress, it is not the only action the Government is taking in this regard. The Department of Housing, Local Government and Heritage is 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 construction-related activity.