Opinion: while the tax incentive has brought a lot of film business to Ireland, it does raise questions around how and why the state funds culture

Ireland's tax incentive for audiovisual production, Section 481, is heralded by politicians as a great success. It has attracted big-budget productions to Irish shores, including Star Wars: The Last Jedi in 2017, TV series Penny Dreadful, which was filmed in Ireland from 2013 to 2016, and the BBC/PBS adaptation of Little Women.

The tax relief offers a generous 32% tax credit on eligible expenditure in Ireland and, according to the Department of Finance's report on tax expenditures from October 2018, has cost the Irish exchequer an estimated €242.5 million in foregone tax from 2015 to 2017. This is seen in some circles as irrelevant as the existence of the tax expenditure creates employment, brings in funds to the state by way of income tax on payments, VAT, tourism and provides other more nebulous less quantifiable benefits termed a "cultural dividend" by the Department of Finance. In other words, the tax foregone is no loss since the existence of the relief gives rise to production which otherwise would not have taken place.

From RTÉ Radio 1's Morning Ireland, a 2014 report by Laura Whelan on the filming of Penny Dreadful in Dublin and Wicklow

But does the existence of the tax expenditure serve the needs of the audiovisual industries in Ireland? To explore this, we need to think about what we want from policies that support the production of films and TV programmes in Ireland. Film, TV and other cultural products such as digital games, theatre and literature help to form our ideas about the world around us and to represent us. As they inform, educate and entertain us, should policies that support the audiovisual industries actively encourage productions that reflect who we are as a nation?

Section 481 supports indigenous productions, co-productions and internationally originating productions variously known as runaway productions or footloose productions. Currently, Ireland is actively courting big-budget productions, with the Taoiseach Leo Varadkar visiting Los Angeles in September 2019 and the proposed re-opening of the Screen Ireland office in that city in 2020.

While it is to be celebrated that international productions can take place in Ireland and offer training, jobs and opportunities, it is also important to sound a note of caution. How can we ensure that indigenous productions are also supported? It appears to be an assumption of policy-makers that the benefits of such big-budget productions will automatically spill over to benefit the Irish industry and Irish society, through the provision of training schemes in particular. The recent amendment to S481 legislation, requiring the provision of an Industry Training Plan with the support of Screen Skills Ireland, is one step along the road to ensuring that the film industry in Ireland is supported and encouraged.

From RTÉ Radio 1's The Business, Liam Geraghty reports on Hollywood's love affair with Irish scenery from The Quiet Man to Star Wars 

Section 481 relief is granted on the basis of a cultural test, albeit one that is sufficiently broadly defined to include industrial benefits. However, if Section 481 is used to support a footloose film industry which avails of the expenditure without contributing to the development of the wider film industry, there is a danger that Ireland's audiovisual production policy is failing to provide a sufficiently supportive environment for the promotion of the domestic industry. Instead, it works as yet another FDI style manufacturing industry, where Ireland provides the space for production, but reaps little in the way of rewards.

Recent coverage of a similar relief operating in the UK for video games highlights the potential imbalance in the operation of cultural tax expenditures. Since introduced in 2014, close to half the relief claimed has gone to four large foreign-based companies including Warner Media and Sony. The report quotes a researcher from TaxWatch UK who considers that the relief has become a cash cow. 

In contrast, Section 481 has a max cap on expenditure of €70 million per project, which is relatively small in the context of international audiovisual productions, and is therefore less concentrated on big-budget productions. The recent report by Olsberg SPI suggested the cap be extended to €100 million per project, but this hasn't been introduced as yet. Therefore while the expenditure is marketed towards attracting international productions to Ireland, the existence of the cap makes it less attractive to such productions.

From RTÉ Archives, a 1995 RTÉ News report by Colm Connolly on Government plans to allocate IR£2.58 million to a scheme to train individuals to work in film and television production

The existence of Section 481 relief raises questions around why the state funds culture. Broadly, culture is supported from public funds for a number of reasons, including to support a national culture, for educational, informative and representational reasons. However, the structure of the policy interventions by Irish policy-makers towards the audiovisual industries appear to be primarily driven by more industrial rationales, which, while laudable on the one hand, are not necessarily beneficial in the long run for Ireland’s film culture.

It is not axiomatic that support of a film industry will support all manifestations of what a film culture could be. This allows us to think about what a democratic cultural industry might be. We can think about whose voice is heard, who gets to make culture and who is supported by public funds. It opens up thinking around what form of culture the state funds, what form it could fund and on what terms.


The views expressed here are those of the author and do not represent or reflect the views of RTÉ