I am glad to have this opportunity to look at the future of the Irish film industry, which faces something of a crossroads. The Minister for Finance indicated in the last budget that the tax incentives that the film industry has enjoyed will be looked at, which is timely. In any good tax incentive scheme, review is always an important and vital part of it. The reason I am particularly interested in the review which will be conducted is that it gives us the opportunity to applaud and appreciate the pioneering work of section 481 which has allowed the Irish film industry to develop at an unprecedented rate. When I say "pioneering", I do not use that word lightly. Ireland is well known as having this pioneering legislation. Legislation has also been introduced to provide tax incentives to artists. As somebody who worked in the arts industry in England, I know they always turn to Ireland as an example of how things should be progressed.
The decision to introduce this incentive was a courageous and an important economic one because, as a result, the Irish film industry has developed into a thriving one. Ten years ago, six feature films were made in this country while last year, 21 feature films were made. If incentives such as this are to continue, God knows how many films will be made. It will probably reach three figures.
A report published recently indicates that this industry, given the care and attention it has already received until now with incentives such as section 481, will grow at an extraordinary rate. It has been indicated that the industry is growing at an annual rate of 18%.
I wish to make a case for the retention of section 481, or something similar to it, for the film industry. It has been suggested that the economic cost of this incentive is roughly €25 million in taxes forgone. However, not quite that amount of money has been forgone. Much of the money forgone has come back to the State because a lot of it was used to pay wages, PRSI, VAT and so on. It has been calculated that the actual cost has only been €10 million. The economic return on the other hand is somewhere in the region of 3:1. Some 4,300 people are employed directly and it is estimated that another 3,000 are employed indirectly in tourism related to the film industry. That is quite extraordinary. I visit Connemara regularly and I meet people who constantly refer to where "The Quiet Man" was filmed. The places where films have been shot remain part of a community.
The Minister has indicated that he is in favour of incentives, particularly property related ones which were needed in the 1980s in order to incentivise development. The standard incentives available to other businesses are not really available to the film industry, in particular the attractive corporation tax rates and IDA grants. In effect, section 481 is the equivalent of those incentives and that is why I will press the case for a retention of that scheme, or an acknowledgement of what it has brought to this country and how it has developed an important industry.
If we are to look forward and if the number of feature films made annually is to reach three figures, we need certainty, and I appreciate the Minister would be interested in something such as this. Certainty comes from proposing long-term objectives. Perhaps we might think of putting a ten or five-year scheme in place which would be subject to review. We have developed an attractive labour force and have trained individuals. We should applaud the incentives which others have copied. I hope the extent and importance of this industry will be acknowledged.
