Paschal Donohoe defends concrete block levy: ‘I believe this is a measure that is proportionate, that can work’

Government hoping to raise €80m a year from levy to help fund mica redress scheme, but Opposition warns it will add to cost of buying a new home

Minister for Finance Paschal Donohoe has strongly defended the controversial 10 per cent levy on concrete blocks.

The Government hopes to raise €80 million per year from the levy to part-fund a €2.57 billion redress scheme for homes affected by mica. However, Opposition parties and backbench TDs have raised concerns it will add to the expense of buying a new home.

Estimates for the impact of the levy on the additional cost of a typical three-bed semi-detached home last week ranged from between €800 and €1,600 to as high as €4,000, in estimates available to the Department of Finance.

Sinn Féin brought forward a motion in the Dáil on Tuesday night calling on the Government to halt its plans and instead “introduce a defects levy focused on the banks, profits of big developers and those who were responsible for the defects”. The Government, however, said it would press ahead with its own proposed levy and criticised Sinn Féin’s plan.

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Speaking after a Fine Gael “budget roadshow” meeting in Tullamore, Co Offaly on Wednesday, Mr Donohoe said that while he will “engage with the sector”, he said the levy must form part of the overall cost of mica redress.

“We’re making commitments of huge amounts of taxpayers’ money, with other decisions still to come. We have to be open about the need to pay for some of this cost in some way. And that is what this levy is about,” Mr Donohoe said.

“Any other measure that I brought forward would also have drawn criticism, would also have had pros and cons, and I believe this is a measure that is proportionate, that can work.”

He said the State has committed itself to spending €2.7 billion on mica redress, but the levy is needed in addition “if we want to keep on spending money on everything else that we’re doing at the moment”.

“I’m very committed to this kind of measure, we need the money but, as with everything in the Finance Bill, I’m going to get lots of feedback, we’re here to consult with businesses and to hear carefully what they have to say.”

The Minister was speaking after meeting local businesses and politicians in Tullamore.

He indicated he believed the Temporary Business Energy Support Scheme (TBESS), where firms will receive up to 40 per cent of the increase in their electricity bills, is “sufficient”, but it will be reviewed.

He encouraged businesses to enrol with the scheme now and “after a month has elapsed we’ll have a far better idea regarding how many businesses will be on the scheme, what it’s costing us, and what the average level of support is to different businesses”.

“And then we’ll make an evaluation of the scheme at that point.”

He said the scheme, costed at €1.2 billion for its first six months, is a “really significant intervention” to back businesses and protect jobs.

Mr Donohoe also said that through Minister for the Environment, Climate and Communications Eamon Ryan’s engagement with the energy providers, he hopes to soon have clarity for “pay as you go” customers who are fearing disconnection.

Meanwhile, Mr Donohoe said his “own future” is a matter for the three Government party leaders in advance of the reshuffle in December when Taoiseach Micheál Martin and Tánaiste Leo Varadkar swap roles.

He once again ruled himself out for the vacancy as managing director of the European Stability Mechanism (ESM).

“I see my future within Irish politics and I hope I can have the opportunity to continue to serve, but it’s not a decision for me to make. I’ll continue with my work in the Eurogroup, which will take me up to the end of the year, and then the party leaders will take the decision on the matter.”