Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael) | Oireachtas source

I thank the Deputy for bringing forward the motion. I watched much of the committee proceedings on this matter. I was interested in it. The Deputy and I share a constituency adjacent to where much of this work happens and many of the people who live in our constituency are involved in production or work in the industry. It is a matter of great importance to the Deputy and me. For that reason, I took an interest in the committee hearings on the matter, insofar as I could without being a member of the committee. I was interested in the range of producers' and workers' representatives who attended before the committee and gave different perspectives. I know the Deputy has a very strong perspective on the matter, which he just articulated. What happened at the committee was broader than the Deputy has depicted. It was a broader reflection of experience. Although the Deputy and I might have different perspectives on the matter, as we do on other things, it is important to say that in the interests of balance and reflecting the full report.

Both I and the Minister, Deputy McGrath, have read the report in full. It deals with a range of issues. It deals not just with the direct tax issue but also with questions relating to employment. My background is as an employment law solicitor and I am familiar with the fixed-term workers provisions in EU law and their application in Irish law. I am also aware of the complexity relating to multiple contracts with different entities and how that complexity can come into operation in individual cases. Such cases are to be resolved individually and they are not for me to address here, except to note the complexity of it and the difference between having a single entity and successive contracts and perhaps contracts with multiple entities at the same time as having successive contracts. That is a broad observation, however.

More broadly on the issue of the value to the State from this tax credit, I refute the Deputy's claim that the State gets nothing. When the State is deriving employment, it is getting something. When it is driving employment into different regions, especially outside Dublin, it is getting something. When it is finding ways to develop a resilient economy based in multiple sectors of employment rather than in single points of failure or an over-reliance on one sector, it is getting something in terms of building up its resilience.

The Government recognises the remarkable achievements of the screen industry to date and everybody who works in it, as well as the genuine economic and cultural impact it has generated domestically and internationally. Through the years, the industry has demonstrated adaptability, determination, resilience and innovation. The Irish skills in this sector have achieved outstanding international success in the past decade. In 2023, there was an unprecedented number of Academy Award nominations for Irish skills and people working in this field, including an historic Academy Award nomination for best international feature for the Irish-language film "An Cailín Ciúin". The global impact of films such as "The Banshees of Inisherin", whether one liked it or not, was supported by the section 481 tax incentive and has demonstrated the outstanding worldwide reach and influence of Irish stories on screen.

Major successful international films and television dramas have also been produced in Ireland. I experience great pride when I see Irish names on international films and recognise the contribution Ireland is making to the sector. Some of those productions demonstrate the cultural dividend in the Irish film sector, showcasing Irish skill and creativity while promoting Irish screen tourism on a global scale. In particular, the Irish animation sector has continued to go from strength to strength. In the past 15 years, Irish post-production and visual effects have become a leading hub for large-scale productions, underpinned by a highly skilled local talent pool of skills to call upon. Irish visual effects work is globally recognised and competes at the highest level internationally. That highly skilled workforce is important. It is important to protect and acknowledge it and generate an industry in which it will be capable of working for decades to come in a resilient way. We want an industry where people can train, develop skills and choose to continue to work in Ireland or take opportunities internationally as they may arise.

I hope Ireland’s unique position as an English-speaking European Union centre of excellence for screen production will continue to attract high-quality inward production activity, supported by the section 481 tax incentive. Much of the success the industry has achieved is the culmination of long-term investment in the skills of Irish people, but it is also the result of continued funding for Screen Ireland, as the Deputy stated, and the section 481 tax incentive for film and television production.

A cost-benefit analysis of the scheme was undertaken in advance of budget 2023, resulting in an estimated net economic cost for the year reviewed of €78.54 million. Although the cost-benefit analysis indicates a cost to the Exchequer, it must be recognised that the primary purpose of the relief is to contribute to the development, enhancement and promotion of Irish and European culture. Projecting the work of Irish productions to audiences around the world conveys the message that Ireland is a country with a rich history and a thriving cultural community. Recognition of these productions at a global level enhances Ireland’s international reputation as a location to live, visit and work.

This cultural dividend is of genuine benefit to Ireland, even though we can never really quantify it in an economic analysis of the scheme. The Deputies may be aware that last year’s Finance Bill provided for the extension of section 481 from its current end date of 31 December 2024 to 31 December 2028. That extension is, of course, subject to European Commission approval. Extension of the relief in advance of the sunset date demonstrates the Government’s commitment to the Irish audiovisual industry,and is intended to provide certainty regarding the future availability of the relief. That certainty will foster further confidence in Ireland as a centre of excellence for screen production because these projects are not planned year on year but on a much longer basis.

There are a number of recommendations in the committee's report to enhance the competitiveness of the credit, specifically with regard to the extension of the regional uplift and increasing the cap on eligible expenditure, which were very important and interesting. Regarding the regional uplift and the cap on eligible expenditure, these are budget items and the committee’s recommendations will be given due consideration in advance of Budget 2024. The regional uplift piece is particularly important and was introduced in Finance Act 2018, as a short-term, tapered uplift for productions being made in areas designated under the state aid regional guidelines. It is now in its final year of operation. The uplift was originally designed to provide an increased level of credit for four years, with 5% available in years one and two, 2019 and 2020; 3% available in year three, 2021; and 2% available in year four, 2022. The Finance Act 2020 then amended the regional uplift to provide for an additional 5% year in 2021 in recognition of the negative impact of the pandemic and the tapered withdrawal of the uplift then restarted in 2022 with a reduction to 3%, and now 2% in 2023.

With regard to the proposal to extend and amend the uplift, I understand that discussions before the committee highlighted some practical impediments to such proposals. The uplift received state aid approval on the basis that it was a short-term, tapered support, designed to stimulate the development of new pools of talent in the regions. It is not an EU regional aid but it uses the EU regional aid map for Ireland as a means to identify geographic areas in which the relief is available. The Deputy may be aware that a new, and geographically more limited, regional aid map for Ireland has been approved by the European Commission and it is expected that any further extension or amendment of the existing credit would, if granted state aid approval, be governed by this more limited geographic scope.

With regard to the cap on eligible expenditure, as Deputies are aware that cap was increased from €50 million to €70 million in 2016. It was considered at the time that the increase to €70 million struck an appropriate balance between providing a sufficient increase to attract big budget productions, while also being mindful of the possible cost to the public finances if a number of such films were to come to Ireland. As I have stated, as to whether it is now time to further increase this cap, and I thought the committee’s recommendation on this was very important this, will be a matter for consideration in advance of budget 2024. I believe that any amendment would also require state aid approval to come into effect. This again comes down to a cost-benefit analysis of what we think we might be able to attract to Ireland, the tax foregone and the balance struck therein which is a conversation the committee went into in some detail.

On the question of other elements of the committee’s recommendations such as employment rights, copyright, designated activity company, DAC lifespan and so on, many of the issues involved cut across the policy areas of number of Departments, in particular the Departments of Enterprise Trade and Employment, and Tourism, Culture, Arts, Gaeltacht, Sports and Media. There is particular focus on the areas of employment rights in the audiovisual sector and copyright protections for the intellectual property of creatives such as actors, writers and composers. Regarding employment rights, the Deputy will be aware that changes were made to the film tax credit to reinforce the requirement to adhere to employment rights legislation. As part of the cultural certification process, an applicant company is required to submit an undertaking of compliance with all relevant employment legislation. This commits applicants to compliance with all relevant employment legislation in regard to the film being certified. These conditions are to be met not just by the producer company but also, as the Deputy said, by the DAC that is required to be set up for each production to avail of section 481.

With regard to the recommendation to extend the life of DACs to three years post completion of a project, it should be noted that from a practical point of view, certain obligations remain even where a company is no longer active, including, for example, the filing of annual accounts. There is a question about the additional costs and how they might impact disproportionately on smaller productions and smaller DACs that were set up. They are more vulnerable in many ways than some of the larger entities. It is also worth noting that company law contains provisions whereby companies can be restored, including by the courts, in circumstances where there is a legal claim against the company. For these reasons, it is not clear that the proposal would deliver the desired benefit but it is a matter that will be kept under review.

With regard to quality of employment, Ireland has a very comprehensive body of employment, equality and industrial relations legislation, which offers the same protections to all employees legally employed under a contract of employment. All employers, regardless of sector, are responsible for ensuring that their employees receive all protections afforded them under employment legislation. The Protection of Employees (Fixed-Term Work) Act 2003 provides for the improvement of the quality of fixed-term work by ensuring the application of the principle of non-discrimination, that is, that fixed-term workers may not be treated less favourably than comparable permanent workers. The Act also provides for the establishment of a framework to prevent abuse arising from the use of successive fixed-term employment contracts. We witnessed the particular question that arose in universities, for example, where someone who was working at the same entity year-on-year-on year. If an employee who commenced employment on a fixed-term contract basis on or after 14 July 2003 has had two or more fixed-term contracts, as everybody will be aware, the combined duration of the contracts shall not exceed four years. After this, if the employer wishes the employee to continue, it must be with a contract of indefinite duration, unless the employer has objective grounds for renewing the contract of employment on a fixed-term basis.

If a fixed-term employee feels that he or she is being treated less favourably as regards any conditions of employment than a comparable permanent employee or if he or she considers that he or she is entitled to a contract of indefinite duration and the employer refuses to concede this, it is open to the employee to refer the matter to the director general of the WRC.

In tandem with these legislative protections, there is also the opportunity for collective agreements as an efficient and effective way to improve and standardise working practices in many sectors. A modernised crew agreement was agreed and introduced in January 2021, which promotes good practice, regularises evolving work practices and provides for an industry pension scheme operating under the construction workers pension scheme. The agreement includes a monitoring structure to oversee the operation of the agreement and a commitment to developing the first work-life balance policy for the film and television industry. It acts as a framework for the industry, covering all crew grades except film construction, which I understand were subject to separate negotiations. Following the conclusion of those separate negotiations, last year Screen Producers Ireland and the Irish Congress of Trade Unions, ICTU, film construction group of unions secured a construction crew agreement. This agreement encompasses up to 300 construction crew in the independent film and television construction sector. The agreement provides for increased hourly pay rates and a range of other matters. Other important measures include sick leave, coverage for pension, other benefits for industry construction workers and the establishment of a new joint monitoring structure to ensure implementation. The introduction of these two industry agreements demonstrate that the Irish audiovisual industry is collaborative, and positive place to work, although I know Deputy Boyd Barrett takes issue with that in respect of the people he is representing.

As regards intellectual property rights, copyright is relevant for many workers in the film sector, including authors, producers, and broadcasters in addition to actors. I have been informed that Screen Ireland has engaged an independent facilitator to meet with key stakeholders, as the Deputy has alluded to, to understand the various perspectives of those concerned. Stakeholder meetings were held recently and the next phase will progress to group discussions. It worth noting that the relevant copyright legislation applies in any event.

Finally, the final recommendation of the report concerns a stakeholder forum. I might come back to that in my closing remarks but I think there is an overall question. The report was extremely balanced and reflected the multiple perspectives of the people who came before the committee during the hearings. There are multiple employee or worker and producer perspectives reflected. There is something of a balance between really genuinely creating a resilient industry that will stick in Ireland and will offer ongoing training and employment to anybody who wants to come into that sector to give them the opportunity to work within a really vibrant Irish industry and to give them a platform to travel internationally to the multiple other locations that are creating excellent film and television around the world. The best way to do that is to create a sector where there are multiple job opportunities; where employees have the opportunity to choose the type of structure they can work within; where they have the opportunity to engage with collective bargaining and where they are protected in that way. The report alludes to much of that but I hope the debate will as well.

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