I thank committee for the opportunity to contribute to its work on tax expenditures. My name is Elaine Geraghty. I am CEO of Screen Producers Ireland, SPI, and I am accompanied by two member producers, Ms Siobhán Ward of Crossing the Line Films who produced such content as "The Game", "The Farthest" and "A Wild Irish Winter"; and Mr. Stephen Rooke of Tile Films, who produced "Aerial Ireland", "Sacred Sites" and "A Terrible Beauty".
Before commenting on section 481 and its importance to the Irish screen industry, I want to provide an overview of Screen Producers Ireland and our members work. SPI is the national representative organisation of over 100 independent film, television and animation production companies. The Irish independent production sector comprises a diverse range of companies of different sizes, spread across the country, producing content for television, cinema release and online distribution. These companies, most of which are in the SME bracket, produce high-quality content in English and Irish, which is culturally relevant and loved by Irish and global audiences. Irish independent productions have been lauded worldwide, including this year when SPI member, Element Pictures produced "The Favourite", a multi-nominated Oscar winning film. Other film and TV drama productions made by our members include, Fastnet Films, "Black 47", Samson Films, "Float above the Butterfly", Ripple World Pictures, "Never Grow Old", Abu Media, "Finky" and Metropolitan Films, "Vikings". Television productions made by our members include Indie Pics, "Ear to the Ground’, Coco Content, "First Dates Ireland", Crossing the Line Films, "The Game", Sea Fever, "Ireland’s Deep Atlantic" and Tile Films, "Sacred Sites".
In terms of what we do and the role of a producer, the Irish film and TV sector is a vibrant industry with a sophisticated infrastructure of production companies, studios, service companies and expertise, all of which provide valuable employment in the Irish economy. Irish producers within that infrastructure are entrepreneurs who contribute significantly to the enterprise economy and bridge the divide between commerce and culture. Producers are responsible for the creative, financial and statutory management of the individual projects in which they are involved. They are engaged in all elements of production from the earliest stages of commissioning of concept, rights acquisition, development, sourcing of finance, pre-production, production, post-production to delivery, marketing, distribution and compliance.
Financing production is challenging, and funding opportunities can be limited. Available funding for producing content includes a mixture of the TV licence fee, Broadcasting Authority of Ireland Sound & Vision funding, Creative Europe MEDIA funding, the Irish Language Broadcast Fund, section 481 tax relief and private financing. The importance of section 481 in this funding mix cannot be overestimated.
Ireland has a long history of supporting the Irish TV and film industry through fiscal incentives, the most important of which was originally introduced in 1987, namely section 481. While having experienced a number of iterations over the years, section 481 remains a crucial component to the sustainability and growth of the Irish independent production sector. It is absolutely necessary if Ireland's film and TV industry is to continue to develop and thrive because those countries with which Ireland competes have similar or comparable incentives, a point also made by the Irish Tax Institute when it appeared before this committee a couple of weeks ago. The Government commissioned Olsberg-SPI with the Nordicity company to conduct an economic analysis of the Irish audiovisual industry. The analysis defined the importance of section 481 as "underpin[ning] the Irish film and TV industry". The analysis stated, "It provides vital finance to enable Irish producers to make local projects with local content in Ireland, ensures Irish producers remain attractive international co-production partners, and makes Ireland a globally competitive location for co-productions and high-budget inward investment productions." The analysis recommended the extension of section 481 to 2024, as one of many recommendations to support the growth and sustainability of the Irish screen industry. The last available full-year total committed figures, for 2017, show a spend of €292 million in the Irish economy as a direct result of section 481-certified projects. This was spent on goods, services and labour across TV drama, documentary, film and animation. There were 85 certified projects in that year comprising 11 from animation, 17 from TV drama, 17 from film and 32 from documentary. Over the past four years there have been some significant big-budget TV drama projects. I am sure members are familiar with them. They include "Ripper Street", "Nightflyers", which was made in Troy Studios, "Vikings" and "Into the Badlands". However, it is also interesting to note that the majority of productions in Ireland are in the budget range of €1 million and under. Over the years 2016, 2017 and 2018, for example, the percentage of productions whose section 481-eligible expenditure budgets were €1 million or less are 79%, 85% and 83%, respectively. This reflects the fact that the majority of Irish production companies are in the SME bracket.
In the run-up to budget 2019, we engaged with the Department of Finance and Revenue on the possibility of extending section 481 beyond 2020. This engagement has led to better understanding between all stakeholders on the operation of the incentive and to ongoing engagement, which has been very helpful. In October of last year, the Minster for Finance, Deputy Donohoe, announced the extension of section 481 until December 2024, advising that the extension of the incentive was "to support the continued growth of the film industry in Ireland". The Minister also announced a new time-limited regional uplift of up to an additional 5%, which will taper out over four years. The uplift will support the development of new local pools of talent in areas outside the current main production hubs, which tend to be Dublin and Wicklow. This will help to increase the geographic spread of the screen sector in Ireland and support the overall cultural objective of having an established and sustainable screen industry. Significantly, the tax incentive moved to a self-assessment model, which came into effect in March of this year. We believe that this move will make the application process more efficient in the long term. In the meantime we look forward to the publication of a new set of guidelines by Revenue related to eligible expenditure. The announcement of the extension was welcome and very important as the lead-in time for film, TV and animation projects from initiation and development to financing and production can span several years. Certainty around the long-term availability of section 481 is crucial to providing confidence and security to the indigenous industry and to ensuring we can continue to attract direct inward investment from international studios and producers. Speaking about section 481 last May, the Minister for Culture, Heritage and the Gaeltacht, Deputy Madigan, said: "Section 481 is a key and central component to the Irish screen sector."
We support this statement by the Minister, which shows the Government's commitment to supporting a strong, vibrant Irish indigenous film industry.
Delivering quality employment is an obligation of section 481. The Irish producer company itself employs a core full-time staff who work in the areas of production, development, administration, sales and marketing. These core staff are involved at all stages of delivering a production, in a process that often takes, as I said, three to four years. Crew are then hired when a project moves to the production stage and for the duration of that project. Crew comprise a mix of PAYE and self-employed individuals. The independent production industry provides significant employment opportunities for crew. The Department of Culture, Heritage and the Gaeltacht commissioned the Olsberg report into economic activity in the audiovisual sector for 2016. The report stated that there are more than 7,070 full-time equivalents, FTEs, employed in the live action, film, TV and animation sectors. These sectors of the industry contribute €692 million in gross value added, GVA, and generate €184 million in export earnings.
Our crew are some of the best in the industry and act as a strong attractor for projects. This is in part because skills development has always been core to the production industry in Ireland but also because Ireland has been able to attract a diverse range of projects, enabled by section 481. The introduction of new skills development requirements as part of the section 481 application criteria means we can continue to build on this while it allows us to capture data and information on skills development. We can track career pathways in the industry as well as identifying and addressing skills gaps.
Section 481 has a positive impact on the creation of indigenously produced content. It attracts incoming production and has a positive impact on the creation of quality employment. It contributes to Ireland's reputation as a global hub for high-tech digital and creative content and has a direct impact on attracting tourism to our country. The result is that Ireland has become a very attractive location for incoming film and TV production but is able to support indigenous production at the same time. Expenditure in the Irish economy as a result of section 481 clearly illustrates the need for Ireland to maintain and continue to improve its fiscal incentive, as required.
I would be very happy to take any questions members may have, as would my colleagues, Ms Ward and Mr. Rooke.