Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

That is absolutely fine. Once I have got this amendment out of the way, I will be flying through the rest. I will probably not even speak to most of my other amendments. On this one, however, I want to get all the relevant points across.

These are serious charges. They are coming precisely from the people who are the creatives. The whole point is to support the creative industry, which, in this case, is the film industry. Writers, performers and actors are making serious charges. It is incumbent on the Minister to investigate them seriously and not just talk to the people he gives the funding to, who are obviously very happy to keep it. Of course they are. The Minister mentioned Screen Guilds of Ireland yesterday. That body is wholly funded by the State. All its funding comes from Screen Ireland. It has been suggested to me that Screen Guilds of Ireland represents the self-employed contractors who hire and fire people on film productions. That does not really tell us about the people we need to be looking after. Of course, Screen Guilds of Ireland is going to say things are okay.

In order to elaborate on the points on the DAC, intellectual property rights and what happens to the latter, let me refer again to the email I read yesterday. This relates to my metaphor of the flower, which has died but still exists. Importantly, it is when a film is put on a hard drive that it starts to generate revenue. It does not generate revenue when it is being made. It is when it is put on a hard drive, sold, distributed, downloaded and so on that the money starts to come in, but that money never shows up in the DAC. The revenues accruing from the flower, with the production now on the hard drive, do not go back to the people with the creative input or DAC. That should be of concern to the taxpayers as well as the performers because they finance it. Where is the money going? Let me explain why it should be of concern to the taxpayer. In England, where Irish performers sometimes perform and where they get the right deal, the residuals that come in over the years for downloading, distribution and performance go back to the performers, writers or others and they pay tax on it, meaning the state gets something back. In Ireland, however, that does not happen. The artists and performers never get anything back. They have to sign it away. Screen Producers Ireland says it front-loads the remuneration. In other words, it gives the creatives a payment up front, but this payment is nowhere near comparable with what would be obtained if they had access to the revenues that accrue, often for years, from the performance and downloading of the work they have contributed to. Insofar as there is a back-end deal - this is the lingo - it is linked to the profits of the producer, not the sales, distribution and revenues flowing from the intellectual property. That is a big difference. Elsewhere, the revenues from sales and distribution, or the revenues flowing from the intellectual property, are what remunerate the creatives, artists and performers. Here, the remuneration is linked to the profits, but, as I explained, it is unheard of for the producer companies we fund to make a profit.

Here, it is linked to the profits. As I explained, a profit being made by the producer companies that we fund is unheard of; it does not happen. I hope the Minister sees the difference. There is a consequence as well for the taxpayer. Anyway, I will read what he wrote:

It should be noted that when the finished film (the hard drive and the bundle of underlying copyright) is transferred/sold from the DAC to another company its price, and the terms of the assignment of the rights, will be well below the market price to ensure that the DAC accounts register a loss.

With this kind of structure the tax credit can never be reclaimed as the potential for profit has been removed. Any profit that accrues as a result of distribution and sales will be experienced by a different company. If that company is outside Ireland’s tax jurisdiction then the section 481 taxpayer investment never re-enters the Irish tax net and the investment is effectively lost. There is an additional opportunity for Production Companies within the DAC structure.

"Internal pricing" is a common practice between companies with common owners. It is possible, for example, for the Production Company to invoice the DAC for certain services. For example, the Production Company might take on certain management and financial services on behalf of the DAC and invoice the DAC for those services. At this point it is possible to inflate those costs to the benefit of the owners of the Production Company. Or in the case of animation, the Production Company can invoice the DAC for the services of its ... animators at a significantly increased rate that does not reflect the actual cost of the animators. These are common internal pricing practices. Our point is that these practices are possible within the current design of Section 481, and therefore more transparency and regulation is required.

The final point of course is that the DAC structure means that Production Companies employ only a smaller number of full time office staff on anything like a full time basis. The majority of performers and crew are contracted by the [DAC] which, by their nature, have a limited [time] span. It is difficult to take action [i.e. to the Labour Court or the WRC] against such transient entities. Section 481, as it is currently designed is open to ALL of these risks. We know from the recent cost benefit analysis that it has a net cash cost in excess of €70 million.

That is the cost-benefit analysis referred to yesterday. He continued, "It is possible that this could be reduced if not reversed, if these risks inherent in the design, were removed." All of that is quite telling. I will move on to perhaps the last point and elaborate on that in terms of the ability of workers, because that relates to the other part of my amendment.

I was asked to put this question to the Minister. Can he produce a single PAYE worker who has a contract of indefinite duration acknowledged by the production companies to which he gives money to employ people in the film industry? Can he find one? He referred to 3,000 full-time equivalent people last night. That is a new figure, by the way. It should be noted that these figures fluctuate. This is very important because this is what the relief is for – to create employment. Mr. Hickey, who was in here at the budgetary scrutiny committee the other day, claimed back in 2018 there were 17,000 full-time equivalents. When that figure was challenged and the Minister’s Department looked at it, we discovered that the correct figure was 2,000 rather than 17,000. Now we have a figure of 3,000. Those are amazing fluctuations, are they not? There is a big difference. My challenge to the Minister is not whether he can find 2,100, 17,000, or 3,000, but can he find one? Can he produce one PAYE employee on any of the film productions funded either with section 481 or, as I believe it was called, section 35 before that? If one adds up all the public money that has been invested through section 481 or its predecessor since the 1980s, it is probably in the region of €4 billion over all those years. That is going back to the 1980s. Can we find one person who actually has a job as a result of the money we have given to create jobs? My challenge to the Minister is to suggest that he cannot.

This makes a mockery of the declaration that the recipients have to sign where it says that they have to; for example, that they have to comply with the Protection of Employees (Fixed-Term Work) Act and, of course, the EU directives surrounding that, which require that people on fixed-term contracts do not enjoy conditions lesser than those on normal contracts of employment. That is what the directive states. It is precisely to protect people in what you call “project-to-project”. That is purpose of the fixed-term workers directive and the fixed-term workers legislation. It is to protect people who work on project-to-project employment to ensure they acquire these rights by law. If they work for the same producer, as it is in this case, or the same employer successively over a number of years, even if there are gaps or if they work for some other people in between, they acquire these rights. However, those rights are not acknowledged.

While I challenge the Minister to find one PAYE worker who has an acknowledged contract of indefinite duration, I could bring in 30 or 40 people, many living in the Minister’s constituency, who could demonstrate their record as having worked for 20, 30 or 40 years in the film industry, who should have contracts of indefinite duration but have not got them, and who have been put out of the industry because they have asked for such contracts. I refer not to people who say they represent this, that or the other, but the actual people who worked in the film industry. That is a very serious problem because it means the objective of this relief is not being met. The requirements for such state aid under EU law are not being met.

Somebody else I was talking to this morning noted the big question in this regard: who is the employer in the film industry? The Minister mentioned the Screen Producers Ireland, SPI, agreement, which has not been registered, as I understand it, with the Labour Court. Normally these agreements are registered with the Labour Court. Why has it not? I suggest it has not been registered because it cannot be - because an agreement in the Labour Court has to be between an employer and an employee. SPI is not an employer. Therefore, that agreement has not and cannot be registered. The only people SPI could register an agreement for are the people who work for SPI. However, they cannot sign an agreement for employers who do not exist. When I say they do not exist, it is not me saying it - it is the so-called employers – the producers companies - that are saying it. Is that understood? An agreement between employers and employees can only exist if there is an employer. The people the Government gives the money to explicitly said in this committee room that they are not and cannot be the employer. Therefore, how can it make an agreement with employees? Now we have a big problem. There is no employer or employee. That is a big problem when the Government is spending €100 million a year to create quality employment and training.

Finally, I had another phone call this morning with another person who has been working.

This person is not blacklisted, unlike some of those who came in here in 2018 who have not worked since. He has been working and he is saying this stuff is still rampant in film productions.

By the way some people in section 481 work are not even doing the trainee stuff or pretending to do it. There is willy-nilly firing of anybody who says, for example, that the scaffolding is a bit unsafe and something needs to be done about it. In that scenario the person who mentions that is fired. If someone argues with the producer or says people are working unsafe or too long hours they are fired and they will not be employed again. There is nothing to protect people against this stuff. Whether the Minister accepts that those allegations are true or not, I am asking him to do this because I put it to him - and I ask the Minister to respond to these things - that there is no protection against that stuff. It does not exist and it cannot exist because of the DAC structure. I will leave it at that.