I welcome the opportunity to speak on the Bill. I welcome the Bill as it allows the Minister to increase the annual capital grant to the Irish Film Board. We all recognise that the board together with the tax incentives – section 481 – remain the linchpins of the film industry in Ireland.
There are a number of issues surrounding the development of the Irish Film Board which are crucial and which must be dealt with immediately by the Minister. In her contribution she outlined some of the initiatives she proposes, and I will pose further questions in my contribution. The Minister committed herself to implementing the 1999 Kilkenny report in full. It said the capital budget of the Irish Film Board should be doubled in two to three years. The Bill allows the Minister to do that, but the question arises as to whether she will do so. In the Estimates the Minister will have the opportunity to show exactly what she proposes to provide for the board for 2001, and in her reply to Second Stage I would like her to outline her proposals for funding the board over the next two years, as she did not specifically refer to this in her contribution.
Last year the Minister said she would like to see the income of the board doubled over four to five years. That timescale is much too long given the needs of the industry. I suggest the income of the board should be doubled over the next one to two years. There is some confusion. Therefore, there is a need for the Minister and her officials to clarify the position in regard to the funding of the Film Board, the administrative costs, the development costs and the capital costs.
The Kilkenny report made a number of recommendations on the role and responsibility of the Irish Film Board vis-à-vis other State agencies such as Enterprise Ireland and RTE and suggested its role should be greatly enhanced. The Minister referred to this in her contribution on Second Stage, but she must clarify it further. There is no point in stating it here on Second Stage, what people need to know is what action she is prepared to take. While I welcome the increased funding provided under the Bill, the Minister must be more specific about the role she plans for the Irish Film Board to place it on a stronger strategic footing in the development of the industry. When will the process commence? What is her strategy and what programme is in place to do that?
I understand there are only six people on the staff of the Irish Film Board. If we hope to build a dynamic film industry – the Minister said she is prepared to give new responsibilities to the Irish Film Board and that it will have a developmental role and so on – surely that involves staffing, a matter to which the Minister has not referred. Perhaps her officials will ask her to clarify that issue when replying.
During the debate on last year's Finance Bill I referred at length to the film industry. The Minister for Finance responded by accepting my amendment on an aspect of section 481. Section 481 cannot be divorced from the future of the Film Board because every film in which the board invests derives finance from that section. The industry is in good condition. This is due to the sterling exchange rate which has artificially boosted the levels of production in Ireland. This could be in the short term. In February when I made these points on the Finance Bill the film industry was facing increasing competition, particularly from Great Britain which is pouring vast amounts of lottery funds into the film industry. It is backing up schemes and providing tax incentives for the export of television programmes, animation production and so on. In Los Angeles the state is providing incentives to hold some of its big films in Los Angeles and at home in Hollywood. We are fortunate to have that exchange rate advantage at this time but we must always be wary and vigilant of the buoyancy which has taken place. There had been a lull for some time, the market appears to be buoyant once more but it may not last forever. That is why is it important that all the recommendations of the Kilkenny report are implemented and that some of the actions pointed out by the Minister are put in place immediately.
This is the right time for the Minister to give her views on the tax incentives. She committed the Government to implement the Kilkenny report in full. Three recommendations in this report of major significance have still not been implemented nor has the Minister given any indication in her Second Stage speech or over the past 12 months of when she intends to implement them. The level of tax relief at the marginal rate permitted for personal investors must be set at 100% for projects with budgets below £4 million. A budget of £4 million is the average for most Irish originated feature films. It could remain at 80% for films with budgets of more than £4 million. The restoration of 100% relief is important. The 80% relief should be reviewed upwards in light of changes in conditions such as the lowering of the marginal rates of personal taxation. The first recommendation is the most important at this time, along with a possible review of the 80% relief in view of the changes in personal taxation. Also, investors must be permitted to opt to invest £50,000 in the first year. This would mean they would not be entitled to make a further investment in the second year but would allow people to frontload a sum of £25,000. A combination of all three recommendations would ensure the industry would meet the targets for growth set out in the report. I look forward with interest to the proposals in the budget and Finance Bill relating to the Film Board. The Minister has an opportunity to enhance what she said in her Second Stage speech with action in the budget, in the Estimates and in the Finance Bill.
I wish to look briefly at the phenomenal success of the Film Board over the past ten years. The level of production was undreamt of ten years ago. It has succeeded in fostering talent and creativity and has produced six to eight films per year. Those working in the Film Board deserve recognition for their commitment. Too often the Film Board has been placed in the role of minor partner, propping up productions driven by the BBC, Channel 4 or agents of the US studios. The Minister mentioned that we should recognise our cultural expression but the big question is editorial control. If one is the minor partner how can one have editorial control? That is an issue about which we must be wary.
The board's function should be not only to foster talent and creativity but also to foster an entrepreneurial spirit and flair. It is no longer good enough to produce films. We must have a strong marketing arm and look at distribution. There are other aspects of film production which the board must consider. Bringing the Screen Commission under the remit of the board and having them work closer together will help. It does not make sense for the Film Board to have half a page in an international film magazine and the Screen Commission to have another half a page. That has happened. Both can now work together to promote Ireland as an attractive destination for film production. It is also important that the commission and the Film Board work closely with the Northern Ireland Screen Commission. The Minister of State might refer to this issue in his reply.