Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

In addition to extending the section 481 film tax credit for a further four years, the Bill provides for a short-term, tapered, regional uplift for productions in areas designated under the state aid regional guidelines. It should be noted that this is subject to state aid approval. The regional uplift will be phased out on a tiered basis, with 5% available in years one and two, 3% in year three, then 2% before reducing to zero.

The purpose of the regional uplift is to support the development of new local pools of talent in areas outside the current main production hubs and the geographic spread of the audiovisual sector. The regions availing of the uplift will be limited to areas sanctioned to receive regional aid under the EU regional aid guidelines, which was Deputy Michael McGrath's point. Those guidelines allow each member state to provide enhanced rates of state aid in its least economically developed areas. This enables the State's enterprise development agency to grant state aid at enhanced rates to businesses in order to support new investment and employment in Ireland's most disadvantaged regions.

Based on these guidelines, areas that do not qualify for regional aid will be outside the scope of the regional uplift. That includes Dublin, Cork and the mid-east generally, that being, most of Kildare, Meath and Wicklow. The uplift is subject to state aid approval and my officials are in the process of notifying the aid to the European Commission. Should it transpire during our engagement with the Commission that the geographic regions able to avail of the uplift can be amended, it may be something that we can consider.

It should also be noted that productions in regions unable to avail of the uplift are still able to benefit from the existing film tax credit of up to 32% of eligible expenditure. Therefore, while I cannot accept the amendment, I assure the Deputy that options in respect of the geographical applicability of the uplift will be discussed by my officials during the notification process.

Deputy Boyd Barrett made a point about the scheme. On Committee Stage, I went through the rationale for this change. I am trying to encourage a more even spread of the industry across the country.

I am cautious about making changes to reliefs of this nature which is why I have introduced this relief on a tapered and reducing basis. The objective is to develop some alternative clusters of production and development talent beyond those already established. However, I only buy the argument that this should be available for a limited period of time. We should not be bringing in a relief at the expense of the Exchequer which continues indefinitely. If after the period of time outlined in the Bill the relief does not deliver a cluster of employment and capital in some additional areas or build up beyond what is there at the moment, then the scheme cannot deliver the objective laid out for it. This is why it has been introduced on a tapered basis. Making it available for four years is adequate and provides enough time for new hubs to be further developed. After that point, frankly, the hubs are either developed or not and the relief has either done its job or has not been properly crafted. Putting it in place for a four-year period should deal with some of the concerns raised.

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