Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Both of these recommendations pertain to the defective concrete products levy, DCPL, but they have separate purposes. I will speak on each of those purposes in turn.

The effect of Senator Gavan's first recommendation would be to eliminate the levy, which was introduced through section 99 of the Finance Act 2022 and only came into effect on 1 September this year. It is important to underline the purpose of the levy. It is intended that the revenue from it will contribute towards offsetting the cost to the State arising from the enhanced defective concrete blocks grant scheme. That scheme, designed to provide redress for those home owners whose homes have been affected by defective concrete blocks, has an estimated cost in the region of €2.7 billion.

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 accept that the introduction of the levy comes at a time when the cost of construction is high and we are experiencing significant, albeit easing, construction materials inflation. However, that does not take away from the fact that the cost of constructing a new home is expensive. I firmly believe that where we commit a significant amount of money, as we have done with the grant scheme, it is important that we can point to a revenue stream that, over time, will make a contribution towards those costs.

I now turn to the second of Senator Gavan's two recommendations on the DCPL. As Senators will be aware, a wide range of factors influence the viability of developments. They include the dynamics of our planning system, infrastructure requirements and land costs, and hard and soft costs. While housing policy and remediation for home owners affected by defective blocks are matters for my colleague, the Minister for housing, measures have been rolled out by the Government and that Department to specifically address market conditions applicable to the provision of housing. The Government's Housing for All plan has identified a number of actions across all areas of the housing market to address these challenges, with a record €5.1 billion in capital investment funding being made available for housing in 2024. As part of the work undertaken on the impact the defective concrete products levy would have on construction sector costs, the Department of housing has commissioned two bottom-up scientific analyses, the first in September 2022 and the more recent one in November 2023. They were both carried out by an independent construction economics cost consultant. The 2022 report was published on my Department's website following budget 2023. The 2023 report will be published on the website in due course.

Recommendation No. 30 calls for a report on the impact of the levy on the cost, viability and affordability of construction and housing projects within six months of the passing of this Bill. This is not necessary. As I have already mentioned, a further cost impact report has been prepared by an independent construction economics cost consultant and will be published. Senators can be assured that the impact of the levy will continue to be closely monitored by my officials, who will review its impact and operation on an ongoing basis, as is the case with all charges that are placed on taxpayers.