IBEC AVF Review

The IBEC Audiovisual Federation annual review for 2009 was published yesterday.

Not a good year in 2009, but things are looking up in 2010. The following from the executive summary.

This report analyzes the economic impact of a total of 257 audiovisual productions, the majority of which were completed in Ireland in 2009, comprising a total production value of €243.3 million. The report shows a drop in the production of feature films and independent TV, including major TV drama, but animation production shows a significant increase. Figures for 2009 show an overall decrease of almost 1.5% on the previous year, but our estimates for 2010 are showing a significant increase of 50%.
Irish Expenditure
The total expenditure on Irish goods and services arising from the audiovisual productions for 2009 was €157.2million which shows a decrease of €10.6 million (6%) for the sector. This decrease reflects the drop in the Irish spend within the Feature Film and the Independent TV production sector (see Appendix I). Although 2009 shows a slight drop in expenditure we estimate an increase of over 40% for 2010, which is a record for Irish expenditure.
Employment
The total number of Irish employees, in terms of placements, increased from 12,660 in 2008 to 14,198 in 2009, but the number of full-time equivalent jobs decreased from 1,631 in 2008 to 1,368 in 2009. This shows that more people were working in the sector but for a shorter time.

I believe this the reality of employment in the film and independent production sector, rather than the constant glib references to '6,000 jobs' or '10,000 jobs'.

I do wonder how the income tax and PRSI returns to the exchequer are calculated, and whether 1,368 'full-time equivalent' employees would make a significantly greater tax and PRSI return than the actual 14,198 part-time 'placements'?

Also, 1,368 'full-time equivalent' employees would have no periods of unemployment where they might be entitled to benefits or allowances, unlike the 14,198 'placements'. And, where the 'placements' are employed on a Schedule D basis, they could be entitled to a tax rebate at year end, in addition to the many expenses they are entitled to claim which would reduce their taxable income.

Benefits of Section 481 to the Exchequer
The gross gain to the exchequer is estimated to have been €55.5 million in 2009. This includes direct benefits in terms of PAYE, PRSI, schedule D and corporation tax, and indirect benefits in other forms of tax, including VAT and excises. The indirect benefits are taken into account by the multiplier effect of investment in audiovisual production.
The cost to the Exchequer of Section 481 is the tax foregone on the €106.6 million, which was invested under the scheme and is estimated to have been €43.7 million. This results in a net benefit to the state of €11.8 million in 2009.

What bears further investigation here is that in 2007, which was a particularly low year in terms of feature film production output (€19.3m as against €58.6m in 2009), the net benefit to the Exchequer is calculated at €18 million. This would seem to suggest that Exchequer benefit and levels of output in film production do not necessarily coincide, and that television production delivers a better return. Why might that be?