Vol. 574 No. 4
84 Aengus Ó Snodaigh asked the Minister for Arts, Sport and Tourism his views on the recommendations of the Oireachtas Joint Committee on Finance and the Public Service on the retention of the section 481 tax relief for the film industry. [27633/03]
I share the view of the joint committee that for strong economic and cultural reasons the Government should continue to promote and foster film as a high value, high knowledge, highly-skilled industry. I have also made no secret of my view that the section 481 scheme is important for the maintenance of a viable film industry. I am in dialogue with the Minister for Finance on all of the issues arising in this context. These discussions will take account of all relevant inputs, including the detailed recommendations of the joint committee and the PricewaterhouseCoopers report jointly commissioned by my Department and the Irish Film Board, which is being considered in the Department of Finance.
The joint committee highlighted the problem of abuse and while we must be careful not to tar the legitimate majority with the same brush as the abusing minority, I share its concern. We can no longer afford to have such an important industry threatened by people who refuse to abide by the rules and we will root them out. I do not wish to comment further on the details of the committee's recommendations until my discussions with the Minister for Finance have concluded.
I welcome the Minister's support for the recommendations. They were the result of all-party agreement in the committee. I went slightly further in the committee by asking that section 481 be extended further than the three years recommended by the committee to ensure continuity and certainty. Is the Minister of the view that we should extend this provision over a longer term so it will not arise again in three years, should the committee's recommendations be accepted?
The other suggestion I made in the committee was that instead of examining the cap on investment, consideration should be given to an immediate doubling of the cap in the overall review of section 481 suggested by the committee. An immediate increase in the cap would encourage the making of more films in Ireland. Does the Minister believe it is logical to encourage 3,000 students to undertake film industry courses when there is no certainty that there will be jobs for them when they complete their studies? Many of them will have to emigrate to find work if section 481 is ended.
Section 481 was one of the most innovative proposals for the film industry to emanate from Europe for many decades. It has served the Irish film industry well. It ensured that the industry prospered and grew to its current level where it employs approximately 4,500 people. The industry has gone from strength to strength. Indigenous Irish film making has been underpinned by the efforts of the Irish Film Board in recent years and I was glad to provide a substantial increase of 9% in the board's funding for next year in the Estimates for my Department.
Section 481 has benefited the Irish film industry. The question is where we go from here. The Minister for Finance deemed it necessary to announce, in last year's budget, the termination of the scheme as of end December 2004. It is important to examine the reasons for that decision and to acknowledge that there were reasons for it. There is little doubt that there has been abuse of the scheme and if I were to ignore that, it would signal the certain end of section 481. I and the Irish Film Board commissioned a report from PricewaterhouseCoopers on the effect of section 481 on the film industry and specifically on whether it was of benefit to the general economy. I forwarded this document to the Minister for Finance and he is giving it his consideration at present. It is my intention to meet the Minister again soon to discuss the matter.
The Deputy asked about an extension of time for section 481. Film makers plan their films far in advance and it is important that they have a long lead-in period. The longer they have to plan their project, the better. In that context, the longer the period of extension for section 481, the greater prospects there are for attracting high budget feature films. There is a strong argument for increasing the cap of €10,480,000 on the amount that may be invested under section 481. I agree with Deputy Ó Snodaigh in that respect. If the cap were increased, there would be a greater probability of attracting higher budget films to Ireland. That, in turn, would have a positive ripple effect on the economy generally and an unquantifiable benefit in so far as advertising the country on a broader stage is concerned.
I am particularly glad that young people have chosen in recent years to get involved in the exciting film industry. I would be saddened if they were discouraged from doing so as a result of the termination of the section 481 relief. The Minister for Finance has made his case about section 481 in a fair way. He has been careful to listen to the industry and to what I have had to say about it. This dialogue, in the context of consideration of the PricewaterhouseCoopers report, will continue. I do not believe it is the intention of the Minister for Finance to destroy the film industry or to see it retrench. However, he has a duty to the taxpayer to ensure that if reliefs are given, they are not abused by unscrupulous people to the detriment of the majority who have dedicated their lives to a thriving Irish film industry.
The Minister's last comment is covered by the recommendations, which state that the extension should include the elimination of all forms of abuse. I wish the Minister well in his continued dialogue with the Minister for Finance. I look forward to publication of the PricewaterhouseCoopers report as soon as possible so we will then be aware of its contents and the information on which the Minister will base his final decision. There is a significant link between the arts and tourism sectors and the film industry. It is a pity the section 481 relief is within the remit of the Department of Finance because I believe this Minister would be more favourable towards its retention over a longer period. Has a study been carried out on the loss of revenue for small areas which have been deserted by tourists and which are now dependent on films being made there? I have in mind areas in Wicklow and around Dingle, which have benefited occasionally from film making when the tourism industry is collapsing.
There has been no such study. However, far from retrenching, the film industry and the number of film projects in Ireland have been growing, and I sincerely hope this growth will be allowed to continue.
