Mr. Ronan McCabe:

We know animation is a longer process than live action, so I will go a little over the speaking time of three minutes. On behalf of my colleagues Catherine Keane and Moe Honan, who is joining us online, I am grateful for the invitation to appear before the committee to discuss supports for the development of regional film and television production.

Animation Ireland is the representative body for the animation industry on the island of Ireland, with 43 member studios employing more than 2,500 people full-time. Our sector is well spread geographically, with animation studios and their workforces operating across all parts of the island. Animation Ireland members are globally recognised world leaders in animation, producing award-winning animated films, television series and digital content for both children and adults and viewed in over 180 countries and territories worldwide. Our members are building companies of scale, creating high-value, all-island and regionally spread investment and employment, innovating and embracing new technologies and nurturing Ireland’s culture on-screen.

Screen content plays a vital role in how Ireland is perceived abroad and is an essential element of our cultural exports and the projection of Ireland’s soft power internationally. Without indigenous content, Irish audiences would not see their stories reflected back to them on-screen and our diverse storytelling voices would go unheard. Without targeted tax incentives, our domestic market would simply not have the resources to bring our stories to the world. Around the world, these supports are commonplace and most countries have investment reliefs or production tax credits which are the main mechanism for these supports.

Ireland was a leader in this type of support and the section 481 credit, at 32%, with the potential of a 90% advance payment under certain conditions, was the envy of many and a major factor in the growth of the industry over the past 20 years. However, in recent years, we have seen the competitive landscape for these production supports move significantly and we now find Ireland behind some other locations, not least our nearest neighbour. This has come sharply into focus with the announcement in March of the new level of 40% tax credit in the UK for independent productions under £15 million, or approximately €17.5 million to €18 million. We are now at a significant competitive disadvantage to the UK. The impact of this in the medium and long term could see us losing both inward productions and, potentially, encouraging, if not forcing, local producers to consider the transfer of production out of the State.

The animation industry is ready to deliver success under the smart specialisation strategy for the digital creative industries and by delivering more jobs in more local clusters spread right across the island. Currently, Galway, Kilkenny, Belfast and Derry are the only hubs outside of Dublin to have a substantial animation presence. However, Animation Ireland believes we can exponentially improve on regional development if given the necessary resources. Remote working and working from more regional locations suit the animation industry.

Based on the evidence provided by our industry colleagues at Ardán, we believe the reintroduction of a regional support could benefit the country as a whole. If the Government were to reintroduce a regional support we suggest that it be extended to the entire country outside the greater Dublin economic area. The generally accepted best decentralisation model is for animation companies to work with a number of clusters and innovation centres around the country availing of and supporting the Government-backed broadband and regions of enterprise initiatives.

The animation industry is at the forefront of the smart specialisation strategy. As an example, Studio Meala, a small successful creative-driven company, moved out of Dublin to Boyle, County Roscommon, where it is creating a new animation hub and cluster of expertise for the region. This initiative was based on a regional uplift remaining in place. We believe that this success story could be replicated across the country with an extended and targeted regional support, which would position Ireland as a digital leader while also delivering on the objectives in the national Digital Creative Industries Roadmap 2024-26.

Animation Ireland is the lead agency for the National Talent Academy for Animation. The academy has been established to support skills development across all regions of Ireland. A regional support would complement the work of the academy and assist in the delivery of its objectives, which support remote and blended learning for a diverse group of artists and technicians.

The animation industry in Ireland comprises two major components. These are service work with regard to producing animation for international partners by way of foreign direct investment, and through creating our own intellectual property. Story development and exploitation is a key driver of productivity and long-term growth. Most Irish studios attempt to find the balance between service work, which affords companies the ability to build their studios and gain expertise by working with the major animation financiers and broadcasters, and reinvesting that expertise and capital into developing our own stories in the form of IP creation. Animation companies throughout the country also partner with other studios throughout Europe and the world to engage in co-productions. These are underpinned by the co-production treaties Ireland has entered into. This approach also enables the retention of IP, as well as enhancing skills and talent across the industry.

The ability of Irish producers to bring Irish financing to a project in the form of our section 481 tax credit, as well as broadcaster and screen agency investment, are absolutely critical to the ability of Irish studios to retain their IP. The funds generated from IP are then reinvested in the development of future projects, securing jobs, building companies of scale and creating a virtuous circle of investment for companies. Section 481 and the reintroduction of a regional support are critical elements that helps balance our inherently small domestic market and affords Irish companies the ability to operate at a level that secures long-term sustainable investment and growth in the industry. I thank the committee for its time and for allowing Animation Ireland the opportunity to discuss the supports today.