I welcome this opportunity to raise the need to retain the tax incentive for film-making contained in section 481. This support to the film industry is vital to the future of many hundreds of jobs and the livelihoods of many small businesses currently dependent on major film projects.
In County Wicklow, there is a long tradition of film-making. Direct jobs across the range of technical and creative activities have been developed, as well as the spin-off to local businesses which film-making brings. A film commission has been established in County Wicklow in recognition of the value the local authority puts on its economic importance to the county. The role played by Ardmore Studios as the country's largest film studio is evident. Over 24 major productions selected the county as a location. Not only did these companies spend money in the county, they also highlighted its tourist attractions. Tourist numbers to Avoca doubled after the making of the "Ballykissangel" television series.
Tax incentives play an essential part of attracting such business. All other EU countries provide these incentives. In the UK, there are four such schemes. Not only does section 481 attract business very successfully to Ireland. As well as supporting indigenous film-making, it also constitutes good value for money. An example is the film "King Arthur" currently being made – much of it in the Minister for Finance's home county, Kildare – which is employing 900 people for nine months. Since the investment liable for tax relief is capped, the maximum relief is €3.5 million. The amount of money being spent in the Irish economy adds up to €50 million alone. Between €8 million and €10 million is returned directly to the Exchequer by way of VAT, PRSI, PAYE etc. This is true value for money.
At a time when the Government, on a daily basis, is being found deficient in ensuring the good management of the public finances, it is impossible to understand why the Minister is targeting this tax incentive for abolition when it has proved itself time and again. The same Minister for Finance introduced a wasteful and unnecessary tax incentive scheme at the behest of a constituent who is building a private day care hospital.
Much play has been made by the Government – regrettably even by the Minister of State, Deputy Roche, who represents County Wicklow and should know better – that abuse of this scheme is the cause of its abolition. That is an erroneous argument. Clearly, the vetting procedures and the film community itself are capable of dealing with any abuse.
According to Screen Producers Ireland, the organisation representing the industry, the Irish film and TV drama industry employs 4,300 people. If a tax incentive for the industry is not available, it is estimated that 80% of production work may stop immediately, with the loss of 80% of the jobs overnight. However, if tax incentives were to continue, the organisation believes that, within ten years, the industry could employ up to 11,000 people directly and spend €500 million euro in Ireland. This industry is growing fast on a worldwide basis. The issue now is as to whether Ireland, particularly County Wicklow, will be able to keep up or will be left behind because of wrong-headed Government intransigence.
The film producer, Jim Sheridan, noted that Los Angeles holds the Irish film industry in high esteem. This has helped to bring an average of $136 million inward investment annually to Ireland. Ireland has become one of the top six preferred locations in the world for film production. A considerable talent and skills bank has grown up over the years. We have developed the essentials for a successful industry: a talent base, professional support, infrastructure and a good reputation. Students are coming out of our film schools well trained and ready to take up jobs in an industry that is growing and expanding in its potential. I ask the Government to think again before it is too late.
Film could be a key enabler for the development of an indigenous digital media industry. Other countries can see the potential, yet our Government is intent on blindly pursuing a policy that will damage rather than develop film-making. Far from withdrawing section 481, there is a strong argument for increasing the cap in order to attract more and larger productions. I urge the Minister to see the value of this incentive in fin ancial, employment, commercial and tourism terms before it is too late.