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

As well as opposing section 99, the Senator and her colleagues in this House are, in recommendation No. 27, calling for a report to be prepared on the impact of the levy within six months of the passing of the Act. The Minister has previously stated it is intended that the revenue from this new levy will contribute towards offsetting the significant costs arising from the comprehensive redress scheme for those homeowners who have been affected by the issue of defective concrete blocks, as agreed by the Government in November 2021.

The Minister has stated it is essential that the entire cost of the redress scheme, which after all arises from the use of defective concrete blocks and other concrete products, is not borne in full by the Exchequer and through it every Irish taxpayer. The cost of the scheme, or at least the portion of it represented by the revenue that is expected to arise from this levy, must be borne by the construction sector.

I am aware of the potential impacts of the introduction of such a levy on the construction industry. These are recognised. However, there is a wide range of factors that influence the viability of development projects. These include the dynamics of the planning system, infrastructure requirements and land costs, as well as hard and soft costs. While housing policy and remediation for homeowners affected by defective blocks are matters for my colleague, the Minister for Housing, Local Government and Heritage, I remind the House that measures are being rolled out by the Government and by that Department in particular. As part of the work undertaken on the impact that the levy would have on the construction sector, the Department of Housing, Local Government and Heritage commissioned a bottom-up scientific analysis. This was carried out by an independent construction economics cost consultant to help identify the likely impact of the levy on construction costs. This report was carried out in September 2022 and took account of the prevailing relevant costs in the construction sector as they applied at the time they were prepared. The costs set out in the report are for the third quarter of 2022 and account for inflation up to that point in time. Revised figures have not been prepared since, given that it has only been a very short time since the report was prepared and published.

The report was undertaken on the impact of the levy as was announced in budget 2023 and so is a cost assessment based on a 10% levy on concrete products for typical dwellings. As the rate of the levy as published in the Finance Bill 2022 has subsequently been reduced to 5%, the Minister's consideration of feedback received from industry participants and others was taken into consideration. The costings in the analysis can be reduced by approximately 50% to determine the impact of the new design of the defective concrete products levy on costs.

As has already stated, the levy will be essential in providing funding to help, at least partially, offset the cost of the redress scheme for those home owners who have been affected by the issue of defective concrete blocks, and, therefore, the removal of section 99, which provides the legislative basis for the defective concrete products levy, is not an option to which the Minister would give even the smallest consideration. The Minister and the Government are quite clear that the vast bulk of the cost will be paid by the Irish taxpayer through the Exchequer but there must be some contribution by the construction industry as it was directly involved in the supply of the concrete blocks to the particular houses in question. Therefore, the Minister cannot accept recommendation No. 27. Speaking on behalf of the Minister, I reiterate that we are not in a position to accept the deletion of the section.