Dáil Éireann díospóireacht -
Thursday, 14 Mar 1996

Vol. 463 No. 2

Written Answers. - INDECON Film Industry Report.

Peadar Clohessy

Ceist:

34 Mr. Clohessy asked the Minister for Arts, Culture and the Gaeltacht if he has considered the report by the independent consultancy, INDECON, in relation to the film industry; and the changes, if any, he proposes to make in response to the findings of this report. [3224/96]

Minister for Arts, Culture and the Gaeltacht (Mr. M. Higgins)

The report by INDECON International Consultants on the section 35 tax incentive for the Irish film industry was commissioned by me in the context of the Finance Act, 1993, which provided that the incentive would expire in 1996. At a time when all tax incentives have been the subject of the most rigorous scrutiny by Government in the context of the 1996 budget, the House should be under no illusion that the extension of section 35 was in any way an automatic option for the Government.

Following a detailed consideration of the INDECON report by my Department and by the Department of Finance, an amended section 35 regime has now been put in place up to 1999. This new regime sends out a powerful signal to our film and television production industry that the range of incentives which I have introduced to develop the industry remain in place in the period up to 1999. Industry practitioners are now well placed to address weaknesses identified, and to make strategic decisions to maximise the benefits of the regime now in place to secure their long-term future.

The essential features of the new section 35 regime are that they remain faithful to the core analysis in the INDECON report. This analysis called for the maximisation of the return to the Exchequer in terms of expenditure on Irish employment and Irish goods and services; the reduction of the overall cost of the measure to the Exchequer; and the increase in the investment pool to make use of the new section 35 regime. I am satisfied that the question of maximising indigenous production and of developing key talent in this country is addressed by the retention of the provision whereby up to 60 per cent of the cost of production of films, with budgets not exceeding £4 million, can be met by section 35 funds.

As for the other recommendations of the INDECON report, officials of my Department have already held meetings with representatives of the trade unions involved in the industry; with the key producer groups and industry representatives; and with the representatives of the financial intermediaries involved in the raising of section 35 funds. The analysis in the INDECON report concerning labour market entry restrictions and inflexibilities, the relative organisational weaknesses of the industry itself, and the question of leakage from the system arising from fees and commissions were brought to these groups' attention and a full and frank exchange of views ensured. While it is not part of my function to intervene with market forces in the film and television production industry, I do look to the various industry interests to consider the INDECON analysis very carefully and, in a spirit of partnership with Government, to establish the essential conditions for the sustained development of the industry by responding to the INDECON analysis in an appropriate fashion.