Details of the concrete block levy to help pay for the cost of fixing homes damaged by mica are likely to discussed by Ministers at the Cabinet meeting on Tuesday, with sources indicating that the levy would be included in the Finance Bill but its implementation would likely be delayed.
There has been strong opposition from Government backbenchers to the proposed levy, announced in the budget last month by Minister for Finance Paschal Donohoe. The backbenchers argue it would push up house prices at a time of high inflation.
Minister for Housing Darragh O’Brien wrote to Mr Donohoe last week to convey the objections of Fianna Fáil TDs to the plan, telling him that while they supported the principle of demanding a contribution from the building industry to the cost or repairing defects, they wanted its design and timing to be reconsidered.
“The group requested me to communicate their clear support for comprehensive remediation schemes for impacted homeowners and the need for a sectoral contribution,” Mr O’Brien said in his letter to Mr Donohoe.
“However, they also sought to clearly state their views that the proposed implementation timing was inappropriate and that the format of a levy and its application needs to be reconsidered.”
It is expected that the Finance Bill — which gives effect to many of the tax changes included in the budget — will contain provisions to allow the concrete block levy to the introduced. But Government sources say it is likely to be delayed, at least into next year.
Mr Donohoe on Monday said he still wanted to ensure that the construction industry makes a contribution to the cost of dealing with homes damaged by defective concrete products.
Speaking to reporters in Dublin, he said he was standing full square behind the principle that if money was to be spent on a project, even one as needed and deserved as making progress on mica-afflicted homes, that ultimately, over time, ways had to be found to pay for it.
He also said the levy structure could ensure that the part of the economy involved in the delivery of the raw materials that played a role in the difficulties made a contribution to the cost of fixing the problem.
He acknowledged that there were “trade offs and risks”, but said the “greatest risk of all” was that “we begin to indicate to the country that we can spend billions of euro of their money and that, ultimately, it doesn’t have to be paid for”.
It was, he said, absolutely vital, not only in the mica decision, but in all the decisions that are yet to come, that the Government was open and honest about how, if it spends a lot of money in the future, ways have to be found for paying for it.
Asked to about political events in Britain, where the chancellor of the exchequer has been replaced following furore over the new government’s mini-budget, Mr Donohoe said that instability anywhere in the world is bad news for a small open economy like Ireland, particularly when it involved a significant trading partner.
“We have all been reminded of the importance of retaining investor confidence in spending and taxation decisions,” he said, adding that stability and confidence in the UK’s national finances mattered to Ireland.
