Pearse Doherty (Donegal, Sinn Fein)
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I will speak briefly to the amendment tabled by Deputy O'Callaghan. It seeks a "report on the consequences for employment, prices, and Exchequer revenue arising from the reduction in the VAT rate". As I said before, all of these issues should be kept under review. Especially with a major proposal such as this, it is important to see the impacts and the consequences. I support the Deputy in respect of amendment No. 68.

The amendment in my name and that of Deputy Farrell states:

The Minister shall, within 3 months of the passing of this Act, prepare and lay before Dáil Éireann a report on the impact of the exclusion of the entertainment sector from [the] lower [rate of] VAT.

While considering the previous section, we had a debate about the 9% VAT rate. We heard form Deputy Nash that he was involved with the introduction of the 9% VAT rate when he was in government in 2011. We had a 9% VAT rate during the Covid-19 pandemic, between 2020 and 2022. What we see now is very different from what was originally there, and rightly so. In 2011, hotels, guesthouses and bed and breakfast accommodation were also included. It would not be appropriate to include them today. However, other areas were also included, namely cinemas, theatres, museums, galleries, exhibitions, amusement parks, fairgrounds and admission fees to some sporting facilities. A number of areas that were included then are not included now.

One of the areas in particular that I want to reference is a part of the entertainment sector. I raised in the Dáil last year the issue of the hosting of concerts. For transparency, I am the founder, chairperson and director of a music festival that has taken place in Donegal since 2018. I ask members to bear that in mind. It is a not-for-profit organisation, so I have no benefit, but if the VAT rate were reduced to 9%, the festival would benefit. I make that transparent.

I have raised the wider issue, and there is a serious issue here in relation to the music industry. When people look at what is happening with concerts, they are not seeing the full picture. They are seeing people such as Zac Brown, Bruce Springsteen and others coming to Dublin to play in the Phoenix Park or Croke Park. We have big concerts coming up next year. The prices for some of these tickets are massive. There is huge appetite for them, which is all well and good. In the main, international artists are coming here. It is great to see some of our local, homegrown talent being able to perform very large concerts now in Ireland. I am thinking of Fontaines DC, Kneecap and others that have evolved from small acts that used to play in Teach Hiudaí Beag many years ago to now playing all over the world.

The issue here is that the acts in the music industry who aspire to play at Croke Park or the RDS someday must cut their teeth at local venues. They will cut their teeth in some cases at a very early stage in very small venues, but they need to be able to progress to larger festivals, with capacities of 2,000, 3,000 and up to 5,000. Across the State, that industry is shutting down. That sector is closing. While you might see considerable ticket sales and attendance at very large concerts in particular, with people coming from all over the country, which is great, our artists are not, in the main, going to be backing up those acts. They are not going to have that opportunity. If we do not have regional music festivals, we will ensure that the industry of bands across the State will not get an opportunity to make a go of it in the industry to keep the show on the road in terms of revenue and also will be unable to create a wider audience.

It is not just the bands that are affected. There is a whole industry around them, including stage managers, production and sound teams, engineers, audiovisual professionals and local suppliers who provide Portaloos, barriers and fencing. All of those are involved in the provision of facilities.

The reason I refer to the music industry in the context of the debate about the 9% VAT rate is that in the past, the sector was included. There would have been an expectation and anticipation that the sector would be included in this scheme but it has been excluded. When you consider the costs associated with the 9% VAT rate, and there was a debate on the matter during consideration of the previous section, to actually include this section of the entertainment sector would have a small impact.

Perhaps there are better ways of doing it. I do not think there is a need to reduce the VAT rate on ticket sales to see Bruce Springsteen or somebody else playing in Croke Park. It is not going to make a blind bit of difference to MCD or whomever is hosting that event. The ticket prices are so big that the extra couple of per cent is not going to be material to the individual but more so to the promoter. In terms of smaller music festivals, it is a question of whether they are going to survive or not. Many festivals are not breaking even. There has been a change to music festivals, particularly since Covid. Unless it is an established and well-ingrained festival, there has been a behavioural change on the part of a lot of people. The idea of going to a festival and camping for two nights is no longer as appealing as it was. Covid had an impact in that regard because all festivals, including our own, were closed for a number of years. What we are seeing across the State, and this is not unique to us because the same is happening in Britain, is that regional festival after regional festival is closing. We have many excellent festivals in Donegal. They are regional and local festivals. Some are festivals of traditional music. Some are literary festivals, and all the rest. I am talking here about music festivals of a high enough degree.

These are places where we would be looking at anything from 2,000 up to 5,000 capacity. They are closing down all over the State, so we either act or we ignore it and just let it continue to happen. It has already happened in a lot of areas, but there are still a lot of festivals that are surviving and struggling. However, what we are going to see if there is no intervention in this entire sector is that, not all but a large number of the independent regional festivals will close down. I made a contribution in the Dáil last year in relation to nine festivals that had closed down in the last two years. There have been another two since. I am aware of others that are struggling and that have incurred losses. Some have incurred losses for a while in trying to see if they can keep going. Therefore, 9% VAT would be for a lot of these, not a lifeline - it is not going to be a lifeline for any festival; that is not what it is going to be - but the potential and hope that it would be perhaps €6,000 or €7,000 more they would have next year than they had this year, so if they broke even or lost a couple of grand next year and kept on going, they might be able to do that. I take the opportunity to raise that now.

I have declared my own interest, but it is not a personal interest as such because it is not for profit, and nobody is paid in terms of our festival. That is not the big issue. However, if we look at what has happened across the State, and these are well-established festivals, not things that sprung up overnight, Body and Soul is gone, Wild Roots is gone, Forever Young festival is gone, Far West Fest in Mayo is gone, The Playing Fields festival is gone, Life Festival is gone, Bandon Music Festival is gone, Indiependence festival, which was hugely established in Cork, is gone, Donegal Town festival is gone, and Sea Sessions, one of the biggest festivals in County Donegal, is gone. The last two are ones that have gone just in the last year. Beyond that, Beyond the Pale nearly went into liquidation and was rescued, and we had that whole issue in terms of tickets. This is all because of the viability of this sector. The Rory Gallagher Festival, which many will know, has been established again in Ballyshannon for many years, and they do excellent work - Members will have heard Barry on RTÉ - but it was in threat of closing down. They ran a GoFundMe, and they are able to continue to survive. The independent festival sector is going to get wiped out unless there is a level of support. I know from talking to different people who are promoting festivals at that level that they were quite shocked that the 9% VAT rate was not going to apply to them.

There is no scheme. There is no support at all from Government from this year, bar its regional festival fund, which is about two grand or something like that from the local authority through Fáilte Ireland. There is a serious issue here. As I said, 9% VAT in the entertainment sector is very broad and all the rest, but there has to be a way to actually look at how we support these types of festivals. There are loads of other festivals - not loads, but there are some other festivals still continuing. If we want to support the sector and the bands that need a livelihood, the musicians, artists, audiovisual technicians, sound technicians and all that, then the Government is going to have to find a way to actually support this entire sector. VAT is one way of doing that. It was a way they expected. I thought that 9% VAT would happen, but I would actually prefer a more targeted approach.

Festivals need planning permission, but there is a very key issue in relation to the capacity of festivals. If we go through the State, we will find that a lot of festivals have a capacity of 5,000. The reason the capacity is 5,000 is that if it goes over 5,000, they need to go for planning permission under the Planning and Development Act. Therefore, we have two different types of festivals. We have a festival that has a capacity of 5,000 or less or something that is a lot bigger like concerts and all the rest. There should be a way to support those that are below that threshold and try to save this industry.