Leadership

Crumbs from Star Wars or reel deal?

By Trina Vargo

Sunday Business Post

December 13, 2015

When it comes to film production in Ireland there is strong opposition to big foreign productions and it seems to be having its desired result. So why is the government allowing this? More productions, including big Hollywood films, would mean more jobs, a greater spend in the country and more tourism but the barriers to entry are prohibitive when it comes to the film industry in Ireland.

What it would take to make Ireland attractive to major Hollywood productions is well known. Every year there is hope that the problems will be addressed, but budgets come and go and they’re not.

Policies over the last several years amount to taking completely inadequate steps to give the appearance of moving to make Ireland competitive. What is done is necessary but not sufficient, which explains why Hollywood hasn’t rushed in.

The Irish Film Board (IFB) suggested that increasing the tax incentive to 32 per cent would be a game-changer. It’s not and that’s because 32 per cent is the rate technically, but effectively it’s more like 26 per cent. If a foreign producer wants to make a film in Ireland, he or she is required to have an Irish co-producer to access the tax credit. The only reason that provision exists is so an Irish co-producer can take a percentage of the incentive. The net or real tax incentive means Ireland isn’t so attractive. Furthermore, the tax incentive can only be paid to an Irish production company that has been trading for at least 21 months. This creates a barrier for a foreign producer to set up a company to make a specific film.

If those obstacles weren’t enough, many foreign producers are also excluded because of a rule that says a production company cannot be connected to a broadcaster. This was reportedly established to keep RTE from double dipping on state funding. If you assume that blocking Hollywood was an unintended consequence, it should be easy to fix. But it hasn’t been. The only thing the most recent budget includes regarding film is an increase in the cap on the expenditure eligible for tax relief from €50 million to €70 million. But big productions often have budgets of more than $200 million. That €20 million difference is nothing more than a slight improvement, it would have to be much higher if Ireland truly wanted to host major productions.

Minister for Finance Michael Noonan seems to be operating under the mistaken impression that this decision is hugely significant. On that basis, he said that he hopes “that the industry will now make the necessary investments in studio spaces in order to attract high quality films and create new jobs”.

The lack of studio space is another reason the country is unable to attract major productions. Going back more than two years ago, I urged agencies in Ireland to reach out to Pinewood to encourage them to build a studio in Ireland. I noted that would require joined up thinking across several bodies, but when ConnectIreland and the IDA raised this with the IFB, they were told this was the IFB’s turf and the effort was quashed.

Ireland may keep getting things like small productions and small pieces of big productions but why is Ireland satisfied with the crumbs? Why settle for three days of a Star Wars-sized film instead of being able to pitch for the entire production? Right now, the British film sector is over-capacity and had Ireland taken steps when first suggested, it could be getting that business. Instead, it’s going to Hungary. The industry in Ireland is being held back for fear of competition. If there are more productions there will be more jobs for actors, electricians, construction workers, lawyers, accountants, cooks and crews. Big productions can also generate millions in tourism. The producers fear their costs will rise. If they do at all, it will only lead to more people going into the film industry.

Rather than see Hollywood as a threat, the government should realise that an expanded industry can lift all boats. The government should see that the industry as a whole can grow, for everyone’s benefit. It’s time to lift the barriers.

Trina Vargo is the founder and president of the US-Ireland Alliance.