Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

It is important to put on the record what is happening in this Bill in relation to section 481 this year. As I announced on budget day, I am increasing the cap on qualifying expenditure on audio-visual productions from its current level of €70 million to a new cap of €125 million. This change has long been sought by the sector. The increase will support the continued development of the creative film sector and will ensure that Ireland remains an attractive location to produce high-quality films and television series into the future.

Turning to the recommendation put forward by the Senators, the Finance Act 2018 introduced a short-term, tapered regional uplift for productions being made in areas designated under the state aid regional guidelines. The uplift is an approved state aid. The premise upon which it was originally notified to the European Commission is that it would be temporary in nature and would be withdrawn on a tapered basis. For the uplift to be changed or retained for a further period, a further notification process with the European Commission would be required. In addition, it should be noted that a further extension of the uplift in its current form would not be possible. While it is not an EU regional aid, it uses the regional aid map to identify geographic areas in which the relief is available and, as it was introduced in 2018, the map referenced is the regional aid map for Ireland applicable from 1 July 2014 to 31 December 2020.As the Senators will be aware, a new regional aid map covering a smaller geographic area within Ireland was introduced in April 2021.

While approval was granted by the European Commission for the uplift to continue to reference the previous map for the remaining term of the current relief, it is not expected that a similar approval would be granted for a longer extension. I am aware of how well the uplift was received upon its introduction. However, as discussed by Senators on Second Stage in this House and as with all targeted reliefs, there was dissatisfaction in those areas not qualifying for the relief. For these reasons, a decision has been taken to focus on enhancing the main film tax credit of 32%, which is available for qualifying productions in all areas of the country. As stated, the cap on eligible expenditure of the main credit is increasing significantly this year. I believe this will have a positive impact on the industry as a whole, including productions in the regions.

I also note there are other non-tax supports available to regional productions, such as Screen Ireland's regional support fund. The fund is designed to support the development of skills around the country, outside of the established hubs in Dublin and Wicklow. It is targeted at crew across all grades, including new entrants, and will require commitments in the areas of diversity and inclusion, sustainable production and on-set initiatives. I, therefore, do not propose to accept the recommendation.