The impact of the concrete blocks levy on the price of construction will be higher than government modelling suggests, Sinn Féin has said.
Speaking at the Oireachtas finance committee on Wednesday, the party’s finance spokesman Pearse Doherty said that an analysis of the costs of the policy indicated they would be higher than sketched out as inflation from September onwards was not included.
The policy document, which was published on Wednesday morning, was drawn up by the Department of Housing before the budget, and it showed that all-in development costs could be between €1,400 and €2,200 per dwelling for a typical three bed semi-detached home. These figures related to the amounts before the levy was cut by half and its introduction delayed.
That includes both “hard” or construction related costs and “soft” costs such as tax and levies. However, the cost range was based on tender returns from September 2022 and excluded the potential for future increases caused by hyperinflation, the Russia-Ukraine conflict and rising energy costs.
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Officials from two departments. Housing and Finance, as well as the Revenue Commissioners were in front of the finance committee. Mr Doherty said that due to current trends in inflation and energy prices, “the impact on house prices of this levy will be higher. The real politics of this is it’s going to cost more”.
The committee earlier on heard from the Society of Chartered Surveyors Ireland that the reduced concrete levy will still add in the region of €1,200 to the costs of a typical three-bed semi-detached house.
The SCSI reiterated previous warnings that the levy, even at a reduced level, “directly increases costs” and will “undoubtedly challenge the viability and affordability of construction projects, including new homes”.
Revenue Officials said at the committee that those engaged in self-build would have to pay the levy on any of the relevant concrete blocks that they brought in from another jurisdiction, including Northern Ireland.
Tom Parlon, the director general of the Construction Industry Federation, said the levy should be delayed for two years and a full regulatory and economic impact assessment should take place. He criticised the blanket nature of the levy, calling for “targeted and surgical” measures on those responsible for defective works and products, saying a civil engineering contractor working on a bus corridor would be asked to pay for the legacy of defective buildings.
Asked by People Before Profit TD what would be a fair split to pay the bill for defective builds between industry, consumers and the taxpayer, Mr Parlon did not directly address the question but argued that firms in the building industry were significant taxpayers.
Lisa Hone, the chair of the Mica Action Group, criticised the levy as well. She said that among homeowners the “overall feeling” is that it is a “smokescreen, a PR exercise on behalf of Government… to persuade the Irish people that they’re doing something, they’re holding the companies to account”.
She said, however, that she believed many of the relevant companies were still active - saying she could supply Minister for Housing Darragh O’Brien with a list “in the morning” if needed.
She said the levy sent a message to the industry that it could wreck and endanger lives and cost the taxpayer billions but suffer no consequences.
“Until the Government grasps the nettle and overhauls the broken system of self-governance… taxpayers will continue to be asked to sign a blank cheque,” she said.
