Eugene Murphy (Fianna Fail)
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I welcome the Minister of State at the Department of Finance, Deputy Fleming.

Malcolm Byrne (Fianna Fail)
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Cuirim fáilte roimh an Aire Stáit. As he will be aware, we are seeing a global explosion in content production, in film, television, animation and the new digital sector, and Ireland has been very much to the fore in ensuring we get a slice of that international pie. We have an excellent film, television and animation sector in Ireland, and one reason that has been the case relates to the section 481 tax relief, which helps in financing these productions.

It was welcome in the budget that section 481 was extended to 2028 but there was no clarity in the budget concerning the regional uplift, which allows for projects to be produced outside the Dublin-Wicklow region. This additional relief is available to allow film and television crews to travel, but the broader idea behind it was to ensure we could build up in the regions a sustainable film and television production sector and have people within the regions who would be able to support the development of the sector. The Minister of State will be aware that all those who are involved within the industry, such as Screen Producers Ireland, Screen Guilds of Ireland, Animation Ireland and Ardán, which represents the studios, as well as IBEC, the audiovisual sector and SIPTU, as the main trade union, were all supportive of this because we could see the development starting to happen. Indeed, he will be aware of film and television production that was starting to happen in his county, Laois.

This relief is crucial, not least as we are looking at seeing a significant number of new film and television studio spaces developing throughout the country, including in Westmeath and my county, Wexford. To ensure we have something that is sustainable until 2028 and in order that we can guarantee to the regions that there will be support, we should have, as was originally introduced in 2019, a 5% regional uplift until 2028.This would mean that it would be more attractive to look at filming and creating new content outside the Dublin-Wicklow hub. It would make it attractive for domestic production and also particularly in terms of us being able to attract international productions to Ireland.

We also know the tourism and cultural dividends that come from investment in film and television production when people from outside this country see the scenery on offer here as a result of what they see on their screens, it makes it more attractive. There have been numerous reports to verify this. I hope, while it is welcome that section 481 has been extended, that the Government will commit further to regional film and television production and to animation production by ensuring the extension of the regional uplift. When it was originally introduced, Covid-19 was not anticipated, which interrupted the process. Now, we need a period to allow that to bed in and allow for regional film and television production and animation to grow in a way that will support jobs in all of our regions.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Section 481 of the Taxes Consolidation Act 1997, also known as the film tax relief, is intended to act as a stimulus to the creation of an indigenous film industry in the State creating quality employment opportunities and supporting expressions of culture. I thank the Senator for his opening remarks. He has shown a depth and knowledge of the industry that very few Members have and he has gone through the various groups involved in the sector that participate and are involved in it. They earn a good livelihood and income from it, with the benefit of the tax consolation relief I mentioned. The scheme provides relief in the form of a corporation tax credit related to the cost of production of certain films. The credit is granted at a rate of 32% and is available on qualifying expenditure of up to €70 million for any project or film.

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 purpose of the regional uplift is to support the development of new, local pools of talent in areas outside the current main production hubs of Dublin, Cork and Wicklow to support the geographic spread of the audiovisual sector. The uplift originally provided for an increase of the credit for four years, with 5% available in years 1 and 2, 2019 and 2020. That 5% uplift is on top of the 32% available everywhere in the country. That was followed by 3% available in year 3, 2021, and 2% available in year 4, 2022.

However, in recognition of the detrimental impact the Covid-19 crisis had on the audiovisual sector, the Finance Act 2020 amended the original uplift scheme to provide for an additional 5% in 2021. Instead of being available for two years, it was available for three. I asked about the matter that surely during Covid-19, this may not have cost the Exchequer that much, but the film sector did reasonably well during the Covid-19 period as lots of their productions were in different areas throughout the country and the sector was more resilient during Covid-19 than many others. That may not have been anticipated at the time. In effect, this was to replace the incentive year lost. As I said, an extra year was given. The tapered withdrawal of the uplift then restarted this year, with a reduction to 3% in 2022. It will reduce 2% in 2023. No uplift will remain thereafter.

The uplift is an approved state aid. The premise upon which it was notified to the European Commission was that it would be temporary in nature and would be withdrawn on a tapered basis. If the uplift was deemed to be permanent, it might not have been approved in the first instance. If the uplift were to be changed or retained for a further period, we would then have to go back to the European Commission and start negotiations again.

I am aware of how the uplift was received upon its introduction. However, there are currently no plans to increase the regional uplift rate or to introduce alternative proposals for regional-specific changes in the context of section 481.The main film tax credit will remain available to qualifying productions in all areas of the country following the winding down of the uplift in those regions. That costs about €70 million per annum. The Senator is aware that the Government is committed to the continued growth of the audiovisual sector. The Finance Bill 2022 provides for the extension of section 481 from the current end date of 31 December 2024 to 31 December 2028.

Malcolm Byrne (Fianna Fail)
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I thank the Minister of State. I appreciate that he is only reading the figures given to him by the Department of Finance. It is clear that the Department is not committed to the development of a regional film and television industry on the basis of this response. That is quite disappointing. It is also clear that the Department does not understand the importance of section 481 and the regional uplift. The fact that everyone in the sector saw new productions coming into the regions that would not have happened if it were not for the uplift. It was well-intentioned and was interrupted by Covid. The scheme was only getting going and then it disappeared. The Minister of State made the point that it was temporary, as agreed with the European Commission. Did any further negotiation with the European Commission take place? I do not believe so. Given the fact there was an interruption, if we were to consider temporarily extending the scheme to allow it to continue until 2028 in line with the current section 481 arrangements, that would allow us to develop a strong regional film and television sector. We must give it a chance.

I ask the Minister of State to ask the Minister for Finance to reconsider this matter. The scheme is important for the development of the sector in the regions. The Department does not fully understand how important the uplift is.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I acknowledge what Senator Malcolm Byrne said. The fact the Department is, in the context of the Finance Bill, extending the main relief available under the scheme for all counties for another four years is an indication that it fully supports the general scheme. It is a nationwide scheme.

On assisting particular regions, the Senator will be aware the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media recently announced funding of €2 million for the establishment of five new national talent academies in Wicklow, Limerick, Galway and Dublin for film, television, drama, animation and production crew. Various local authorities are active in this area through their arts offices in facilitating local projects. IDA Ireland is working in this area to increase facilities in different regions. In the context of the Finance Bill, which is currently going through the Oireachtas, there are no plans to extend the uplift.

Eugene Murphy (Fianna Fail)
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I thank the Ministers of State, Deputies Fleming, Butler and Calleary, the Senators who tabled Commencement matters and the staff, including the ushers.