Dáil Éireann Debate, Thursday - 21 June 2018
1. Deputy Niamh Smyth asked the Minister for Culture, Heritage and the Gaeltacht the engagement she has had with the Department of Finance on the extension of section 481 film relief; and if she will make a statement on the matter. [27284/18]
Amharc ar fhreagraDeputy Ó Cuív is to introduce this question.
Unless it is renewed, section 481 expires in 2020. Uncertainty in the film industry will lead to loss of business. It can take five years of planning before a production comes on stream as they need to plan considerably ahead. What discussions have taken place between the Department of Culture, Heritage and the Gaeltacht and the Department of Finance to ensure the renewal of this very important support for our film industry?
As a tax relief, section 481 is a matter in the first instance for my colleague, the Minister for Finance. It is a film tax credit, which provides a critical support for the Irish production sector, generating thousands of jobs and providing a strong value proposition for the public purse. As the Deputy noted, the existing tax credit extends to 31 December 2020.
The Department of Finance is now undertaking a full review of section 481 in line with tax expenditure guidelines in advance of any formal decision to extend the extension of tax credit. My Department is working closely with the Department of Finance on an ongoing basis on the issue, including the provision of information for input into the review.
Pillar 4 of the Creative Ireland programme focuses on Ireland's potential to be a global leader in film production, TV drama, documentary, children's storytelling and animation. Central to this pillar is the production of an audiovisual action plan, which I will publish very shortly, on 27 June, and which will aim to put in place a strategic and coherent approach to making Ireland a leader in this sector. The audiovisual action plan is being informed by a number of key inputs including a report by economic consultants Olsberg with Nordicity entitled, An Economic Analysis of the Irish Audiovisual Sector, which includes policy recommendations; the outcomes of a media production workshop at the Royal Hospital Kilmainham, hosted by my Department last year under my predecessor, which was attended by more than 150 representatives of the film, broadcast and animation sectors; and a report on a strategy for the development of skills for the audiovisual industry in Ireland, which was commissioned jointly by the Broadcasting Authority of Ireland and the Irish Film Board, prepared by consultants Crowe Horwath. The plan will also be underpinned by the Government's capital investment plan.
With certain justification, the now President of Ireland but then Minister for Arts, Culture and the Gaeltacht, Michael D. Higgins, was credited with being the powerhouse behind the introduction of what is now section 481. It was a different section at that time. Whereas technically I appreciate that it is the responsibility of the Minister for Finance and that is why the question is framed as it is, the driving force behind this has to be the Department of Culture, Heritage and the Gaeltacht and it has to be driven home to the financial conservatives that this is of huge importance. Can the Minister tell me when publication will take place of the economic analysis of our screen-based creative industries? That would be a very important tool in the armoury the Minister will need to persuade the Minister to renew this in the next budget and to renew it for ten years. Can the Minister further confirm that she is seeking that it be renewed for ten years to create certainty in the industry?
The Olsberg report will be published on 27 June, together with my audiovisual plan, which I mentioned in my response. Changes to the tax code are always budget announcements. However, the necessary work to enable announcement in this year’s budget is under way. It is a tax expenditure and is therefore subject to the requirements of the Department of Finance tax expenditure guidelines. As a requirement under the guidelines, reliefs such as section 481 are required to be reviewed periodically. This review is under way and the Olsberg report will feed into this review. We are also very aware of the importance of the tax credit system in supporting the industry in Ireland and the need to be competitive with other jurisdictions, which have support for the industry.
The origins of section 481 lay in the business expansion scheme in 1984, which allowed individuals to claim tax relief on investments in film production and other designated enterprise sectors.
Does the Minister agree this should have been renewed last year or the year before because of the five-year minimum lead-in for the big productions? There are many series made by Netflix and Amazon Prime and so on. We are in a very new world of a screen, where all the different technologies are merging and it is not just film in the old-fashioned sense. The lead-in is quite extraordinary. Can the Minister absolutely confirm to the House that a decision will be announced in the budget because the industry needs that certainty to get out in the market and to be able to say we will have this relief? Can the Minister also confirm that it will be for ten years because anything less would be useless?
I do not intend to predict the outcome of the review but the Deputy may have noted that I changed the name of the Irish Film Board to Fís Éireann, which encompasses much of the revolution in the media and is forward thinking. The Department is aware of the need to ensure early certainty on the continuation of the tax credit support. While the present extension is only half way through its lifespan, many of the investments being considered in the sector are unlikely to come on line until after the State makes a decision. Major studios work years ahead to plan their productions with films for 2019 being prepared in detail and outline plans for 2020 being made. This incentive also applies to feature film, TV drama, animation and creative documentary. Galway has a very strong reputation in the film industry, for example, Telegael and the impact of TG4 has been very strongly felt in Connemara.
