Síle de Valera
Question:20 Miss de Valera asked the Minister for Arts, Culture and the Gaeltacht if he has satisfied himself with the operation of section 35 of the Finance Act, 1987, as amended. [17691/95]
Ceisteanna—Questions. Oral Answers. - Film Industry.
Section 35 of the Finance Act, 1987, as amended, expires on 31 March 1996 for corporate investors and on 5 April 1996 for individual investors. In the light of the Government's continuing commitment to support the Irish film industry, and to have an independent assessment of the operation of the scheme I have appointed consultants to review the operation of the section 35 scheme.
I am pleased to inform the Deputy that the report of the consultants is close to finalisation. The report will be considered by me and by the Government is the context of overall budgetary policy for 1996.
Will the Minister outline the types of checks carried out by his Department and the Revenue Commissioners to ensure the conditions of section 35 certificates are adhered to? How many certificates, if any, have been withdrawn and for what reasons? In view of the collapse of the film "Divine Rapture" will the Minister request proof that full funding is in place for a film before granting a section 35 certificate? Will he consider a condition that the producers of a film be required to present a bond which would guarantee all moneys due to Irish workers and suppliers?
I thank the Deputy for her constructive and detailed set of questions. I will communicate with her if my information is in any way inaccurate. Approximately 59 certificates have issued for films in the last 20 months, since I became the certifying authority. Gross budgets amount to about £185.6 million, with £100 million spent in the Irish economy. There are about 226 trainees on those schemes. In regard to withdrawal of a certificate, as I stated in reply to an inquiry from the public press, in the case of one project this summer I and my Department were concerned that the conditions of the certificate were not met — these conditions issued in the certificates of June and September. It would not be wise to comment on that matter at this stage, but all appropriate action was taken.
In regard to the film Divine Rapture, the section 35 investment was not released and failure in that case related to seed funding from Cinefin, the American-French investors. The Deputy raised a good point on security for local creditors in the case of a film such as that, but that must be counter-balanced with justification in financial terms of a section 35 investment in that there is an element of risk. In reviewing the scheme I will consider all such procedures. My concern is to maximise the benefit to the indigenous film community. I am particularly pleased that of the last dozen projects I have certified, seven will involve first time Irish producers who started off with seed funding from the Irish Film Board. These are the kinds of changes which will make the scheme more effective and more attractive to the indigenous sector. The consultants' report is near finalisation.
I accept what the Minister said about Divine Rapture and the fact that section 35 was not used in that case. Does the Minister not agree that before any such future projects get under way, he should request proof that full funding is already in place? The Minister referred to elements of risk. In this case the Irish workers and suppliers were put at risk and some are still out of pocket. That is why I suggested at the time that the Minister should require film producers to present a bond which would protect Irish suppliers and workers in the future.
I want to be as positive about this as possible. There are some difficulties in relation to bonding which some of the international financial suppliers of bonds for film productions have experienced. For example, I know of one source in Britain which would provide bonds, provided British technicians were hired. I am willing to consider where a bond might be used in the future revision of the scheme. I am sure the Deputy agrees that it would be inappropriate for me, as the certifying authority, to remove the obligations and duties from others who gather money for investment, publish prospectuses, seek investment and invest money in production companies. They have obligations which cannot be passed on to me. As regards the future of the scheme, I am willing to consider how it can be improved. If there is merit in applying a bond, particularly in relation to suppliers as the Deputy mentioned, I will consider it when amending the scheme further after the consultants' final report is presented to me.