Ms Liz Murray:

I am an advocate for the Irish Film Workers Association and I work in employment law. Section 481 of the Taxes Consolidation Act 1997, as amended and currently structured, does not work. It does not work for our cultural aspirations, the crews or the taxpayer. Committee members will have received submissions from a wide range of vested interest individuals and organisations, none of whom is a recipient of section 481. Many of the submissions will say that section 481 is crucial to the ongoing development of the film industry. While section 481 has been crucial to the development of the Irish film industry since 1984, there has been no significant development. If one cares to drill down, one will see that there is no indigenous industry because we lack the essential characteristics of an industry. We do not have large employment numbers - 2,158 was the Department of Finance's estimated figure in 2019 - and the producers do not appear to have a business model, buildings, infrastructure, machines, vehicles, etc. Since the producers do not own content, they have no ownership of the product either.

Content is crucial to the taxpayer as well. Creative Capital, a Department-commissioned report to plan for the industry from 2011 through 2015, recognised the issues relating to owning content in the films being made. One of its key recommendations highlighted the difficulties for the indigenous industry when the producer companies concentrated on simply servicing "Hollywood" productions. The report's committee recognised ownership of content as crucial to development. This is what it said was needed: "Rights ownership to vest in production companies and content creators to drive export growth."

I will outline a few facts about section 481 that are not generally understood or may be ignored because they do not fit the narrative of the vested interests. The objective of section 481 and its predecessors was to stimulate the development of an indigenous Irish film industry, meeting two key criteria - a culture test and an industry development test. My colleague, Mr. Arkins, has referred the committee to the relevant film regulations. Section 481 is payable to an Irish producer company that has a track record in film production, is based in the State and gives a solemn undertaking to the Minister that it will adhere to all employment, social and Community laws. Section 481 is not payable to foreign directive investment, FDI, companies and is not intended as a mechanism to attract FDI, according to the legislation. If filming here, FDI companies must take on an Irish producer company and crew.

Section 481 is part of a significant suite of State aid available to Irish producer companies to meet the criteria of the regulations. Be that money loans or grants from Screen Ireland or investment by RTÉ, TG4, the Broadcasting Authority of Ireland, BAI, or any other State-funded agency, the criteria are the same. The sole objective of section 481 is to develop an indigenous industry turning out Irish product. It is not payable so that the producers can invest it in "Hollywood" for no return on the investment to anyone other than themselves. Section 481 is not payable so that the producer can service American multinational and streaming platforms so that, when they complete their film or TV projects, fold up their tents and strike for home shores, the Irish producer lays off the crews and sits back until another service opportunity arrives. This is not the way to develop an indigenous industry, yet that is the reality in Ireland.

State aid to film productions is mandated by EU law. The obligations are the same - produce films that express European culture and train and maintain a permanent pool of experienced employees. It is unclear how the EU will view Ireland's film industry if we are only servicing Hollywood productions and not developing an indigenous industry or maintaining a permanent pool of experienced crew.

Using the Government's own commissioned report as a benchmark, there are approximately 500 production companies in Ireland. Based on Department of Finance figures, there are 2,158 employees, 900 of whom are PAYE workers, the remainder being freelance grades. This translates to an average of 2.5 employees in each of those companies or, in other words, the principals of the companies. This is wholly consistent with what our association has known for many years through union membership figures. It is a far cry from the 17,000 being touted by vested interest groups. Crucially, the 2,158 have as-and-when jobs, not full-time ones.

To recap, there are no jobs other than casual as-an-when jobs, no buildings, no infrastructure, no camera equipment, post-production or other paraphernalia associated with a production process, and we do not own any content of note. In other words, there is no industry. Is that a fair return for the taxpayer on an investment of close to €4 billion since the reliefs were introduced? Not by a long shot.

We hope the committee can see there is something fundamentally wrong with this picture and urge reforms, and that the key stakeholders, that is, the taxpayer, the employers and the employees, can be brought to the table to debate what are serious and fundamental structural problems. With amending film regulations imminent to reflect the extension of section 481, the time for debate is now. Kicking cans down long roads does not work and will not work anymore. The taxpayer simply cannot afford this playacting.