Paul Gogarty (Dublin Mid West, Green Party)
Link to this: Individually | In context

Question 3: To ask the Minister for Arts, Sport and Tourism the position regarding the artists' exemption scheme; if a cost and benefit analysis has been applied to the scheme; his views regarding the ongoing retention of the scheme; and if he will make a statement on the matter. [28423/05]

John O'Donoghue (Kerry South, Fianna Fail)
Link to this: Individually | In context

I have consistently argued that the tax exemption for artists has very positive effects on the arts in Ireland. The scheme was innovative and imaginative from the outset, and the benefits are many. This scheme increases the level of artistic activity, encourages artists to stay with the arts rather than moving to more lucrative occupations, makes Ireland a more attractive place for artists to live and enhances our image throughout the arts world internationally.

For most artists, the questions of milking the system or making vast dividends from the scheme simply do not arise. Earnings in the arts, unfortunately, are low, and the issue facing most artists is that of economic survival. It is clear that most of those benefiting under the scheme are very low earners. Revenue's own figures for 2001 show that more than 50% of beneficiaries had earnings of less than €10,000 per annum and 90% had less than €50,000 per annum. The very low-income figures available from Revenue for this scheme must be viewed in the context of very uneven earnings profiles. An artist who earns €50,000 in a given year may earn little or nothing in years either side of it. Annual earnings can be very much lower when averaged out.

It has validly been pointed out that 2% of beneficiaries account for 58% of the exempted income, indicating that there is a small number of people who make very large amounts of money on which they do not pay tax. However, while equity suggests that capping the scheme would correct this, much of these earnings are foreign income which simply will not come here at all if the exemption goes. The really high earners are predominantly musicians, and research carried out in 2002 indicated that 97% of the income of the top twenty music recording artists is from foreign sources.

Essentially, the anticipated benefits of adjusting the scheme are likely to be outweighed by the negatives. I have made these views known to my colleague, Deputy Cowen, the Minister for Finance, and officials of our two Departments have had detailed consultations on the issues, which are continuing. It will ultimately be a matter for the Government to decide on the continuation of this and other tax concessions in the context of its consideration of the outcome of the general review of tax concessions initiated by the Minister for Finance.

Paul Gogarty (Dublin Mid West, Green Party)
Link to this: Individually | In context

Has the Minister for Finance confirmed that the artists' exemption scheme was not among the 30 such schemes being reviewed? Has the Minister for Arts, Sports and Tourism made his views known to the Minister for Finance in terms of the secondary benefits to the country? For example, personalities such as Bono, Neil Jordan, Jim Sheridan and even Cecelia Ahern may earn large amounts of money in a particular calendar year but perhaps not earn money in the previous year or the year after. They still earn large amounts of money, and the media tend to portray this as money for artists rolling in on the back of State subvention.

Does the Minister agree it would be beneficial to carry out a cost benefit analysis based for example on the spin-off employment created by the members of U2 remaining in Ireland, with Japanese tourists for example coming to meet their heroes, to meet the writers who inspire them? Such an analysis, possibly commissioned by the Arts Council, would back up the Minister's valid argument that the exemption scheme has benefitted the artistic community in this country. If it could be proven that the scheme provides great economic benefit as well as the social capital, the analysis would put an end to any talk of toying with a cap on the scheme.

John O'Donoghue (Kerry South, Fianna Fail)
Link to this: Individually | In context

I wholeheartedly agree with Deputy Gogarty in his assessment of the situation. My understanding is that the Minister for Finance initiated a review of tax reliefs which would include the artists' exemption scheme.

It should be recalled that the exemption is for works that are creative and artistic and that they must have cultural and-or artistic merit. These hurdles must be cleared before the work concerned qualifies for the exemption in the first instance.

The vast majority of people in the arts community earn very low salaries and in many cases their income is quite sporadic. As I said earlier, on either side of a good year they can have very bad years. The argument is made that the exemption should be capped at a certain level because 2 per cent of those involved seem to get 58 per cent of the benefit. However, this must be understood in the context that much of the income derived by those at the top of the scale comes from foreign sources. The argument can be very cogently put that these are funds which would not arrive in Ireland if the exemption was not there. One can also argue, as Deputy Gogarty has done, that the people concerned assist in giving the country a very high profile and it is difficult to quantify the benefit for the overall economy in that context.

The exemption sends out a very positive image of the arts in Ireland, of artists working in Ireland. Its introduction was imaginative and innovative. It portrays the country internationally as one which nurtures the arts. Since its introduction it has provided a positive image for Ireland. Tinkering with the scheme will achieve very little in the final analysis. I do not believe in implementing ideas solely on the basis of a principle. There must be a pragmatic, tangible return if one is to become a legislator for principle, and in this instance I do not see the return.

Paul Gogarty (Dublin Mid West, Green Party)
Link to this: Individually | In context

I thank the Minister for his reply. Certain exemption schemes involve holiday homes, or stallion services, and nobody can say that the work of a stallion is of any intrinsic artistic merit. Could the Minister give a commitment before the House that he will ask the Arts Council to commission a cost benefit analysis so that the intrinsic social and economic benefit to this country of this scheme, even for high earners, can be finally proven, and that when the silly season comes around again we will not see the same stories scaring the life out of the poorer section of the artistic community?

John O'Donoghue (Kerry South, Fianna Fail)
Link to this: Individually | In context

I have received voluminous correspondence about the scheme from people involved in the arts, and Deputy Gogarty is correct in saying they are very worried about the future of the scheme and in general terms support the retention of the scheme in its entirety, irrespective of their income. Regarding the artistic merit of a stallion, it all depends whether one bets on a winner or a loser.