Government claims broadening concrete levy would result in higher bank and interest charges

A widening of a levy on concrete products to include banks and other businesses would lead to higher bank charges and interest rates, the Government has claimed.

While Tánaiste Leo Varadkar again defended the Coalition’s plan to introduce a levy on some concrete products to partially fund the costs of repairing homes built with defective blocks, Minister for Finance Paschal Donohoe said proposals put forward by Sinn Féin for a broader charge also came with risks.

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.

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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“I see Sinn Féin proposing a levy on the banks, the construction industry and the insurance industry. And that would be passed on at least in part in terms of higher bank charges and interest rates,” Mr Varadkar said.

Mr Donohoe said that with any budget measures there are always “trade-offs and risks”. He said that there were already levies on insurance companies and banks, and questioned whether Sinn Féin believed placing one on developers would not have knock-on consequences.

Sinn Féin’s housing spokesman Eoin Ó Broin said that “the Government has taken an eminently sensible idea, and is making a mess of it”.

“It does not have to be like this. There are better ways to approach this levy. It should be applied much more broadly, not just to one sector and one group of products, but right across industry, quarries, block manufactures and construction companies.

“Secondly, it should focus on profits, those companies and corporations with very significant profits who have an ability to pay and absorb the increased cost without passing it on to consumers.”

Taoiseach Micheál Martin earlier accused Sinn Féin of “double think” over the controversial levy, and claimed the party simultaneously held opposing views on the measure, both supporting and rejecting. He also said Department of Finance calculations on the impact of the levy on house prices was “much, much lower” than the €4,000 indicated by the Society of Chartered Surveyors.

Mr Martin quoted George Orwell’s 1984 to claim the main Opposition party took “double think” as an instruction rather than a warning.

But Sinn Féin leader Mary Lou McDonald retorted that Orwell’s Animal Farm applied to Fianna Fáil because it was taking the approach of “some being more equal than others”.

Minister for Agriculture Charlie McConalogue defended the planned concrete levy, saying the issue of mica and pyrite-damaged homes and defective apartments was “a key priority for the Government” and central to that was how resolving these problems is paid for.