A FIVE per cent levy on concrete products came into effect on Friday and will significantly increase building costs, according to local Independent TD Richard O’Donoghue.
The levy is being introduced to fund the Mica Redress Scheme.
“The Government’s proposed five per cent levy on concrete products, intended as a half-baked measure to fund the Mica Redress Scheme, will significantly drive-up building costs for all homes, infrastructure, and agricultural projects,” stated O’Donoghue, himself a building contractor for some 30 years.
“According to a new report by the ICF (Irish Construction Federation), the levy will add a staggering €1,285 to the cost of building a three-bed house and around €12 million in delivering on the ambitious target of 1,250 homes each year in Limerick until 2030.
“The ICF’s report highlights that up to 80 per cent of the revenues generated from the levy will come from ready-mix concrete rather than concrete blocks, which were at the heart of the mica issue.
“Over the last two years, the cost of ready-mixed concrete rose by 40 per cent according to the CSO (Central Statistics Office), and concrete block prices rose 30 per cent over the same period. Forging ahead with this new levy under these circumstances is highly reckless.
“It comes at a time when construction costs have already risen dramatically as a result of the energy and international crisis.”
Farmers and agricultural projects, the Limerick politician believes, will face even greater increases in essential structures’ costs, such as silage pits and wind turbines. The ICF report highlights that the levy will add a staggering €5,000-plus to the costs of building a single wind turbine.
“The lack of clear guidance and information regarding the levy’s enforcement raises serious concerns for cement producers, especially those in Border counties. Potential competition from Northern Ireland compounds the worry, potentially leading to job losses and economic disruptions.
“Alternative funding sources for the Mica Redress Scheme should be explored, including going after those responsible, which should include banks and insurance companies.”