Film crews say pay is falling as fewer movies are made here, but the industry is split over how to deal with it, writes Hugh Linehan.

The success of The Wind That Shakes the Barley at this year's Cannes Film Festival, and its subsequent record-breaking run at the Irish box office, has been heralded as a major success for the domestic film industry. But how healthy is that industry in reality, from the perspective of those working in it? Camera technicians, sound recordists, make-up, hair, costume, art departments and many others are essential to a successful film production sector.

However, they tend to be fairly invisible most of the time. Currently, they're far from happy and are attempting to make their voices heard. A fundamental shift is taking place in film production here, they believe. Larger budget films, many of them US-financed, have disappeared. Medium-budget films have been displaced by small or micro-budget productions, often shot digitally instead of on film. The only growth area is TV drama, which tends, by definition, to be cheap - or, at least, cheaper than movies. Incomes are falling and people are leaving.

Three years ago, a concerted campaign by all sections of the industry saved the Section 481 tax incentive scheme for film investment from abolition. At that time, it was argued that maintaining Section 481 could lead to increased inward investment and a tripling in the size of the industry.

Since then, the incentive has been further enhanced to make it more attractive to bigger-budget productions. But those films have not come.

It's broadly accepted that, to function to its full potential, the Irish industry needs a span of different kinds of production, from TV to indigenous movies to larger-scale imports. Camera grip John Murphy has worked on many of the most successful films made here, including The Commitments, The General and Braveheart. "Without the Americans in town we don't have a film industry," he says bluntly.

Someone who's in a better position than most to judge what the future might hold is American producer Ned Dowd, who was instrumental in bringing such big-budget productions as The Count of Monte Cristo, Veronica Guerin, Reign of Fire and King Arthur to Ireland. By the time King Arthur finished filming, he says, the exchange rate had become a huge factor. "It went from 88 cents to $1.38 to the euro," he says. "Having run production for two studios, I can tell you that, for them, the bottom line is the bottom line."

With no sign of any major change in the exchange rate, Dowd believes the market will remain tough for Ireland, especially since the major Hollywood studios have reduced their output by 20-30 per cent in recent years, and more and more countries are offering tax incentives for film. In the meantime, he says, Irish film crews may have to adjust. "I don't think crews in Ireland are greedy," says Dowd. "But with TV, everything's much closer to the bone, and I understand if people are hurting."

ALL SIDES ARE agreed that the unfavourable exchange rate between the dollar and the euro has been a significant factor. Many point to increased competition, both from countries with developed production infrastructures, such as the UK, Canada and Australia, which have refined and enhanced their own tax break schemes, and from lower-cost locations such as the Czech Republic and Romania. But there are fundamental differences between crews and producers about what should be done and who is to blame. Producers argue that they are hemmed in by archaic and inflexible working practices, which must be addressed to improve competitiveness. Technicians say they're prepared to be flexible, but that the real fault lies with the producers.

The Film Technicians' Association of Ireland (FTAI) is a lobbying group which claims to represent approximately 300 people working in the industry.

Most of their anger is directed at the film producers who ultimately employ them, according to one of its representatives, sound recordist Kieran Horgan, whose credits include My Left Foot, In the Name of the Father, Michael Collins and Veronica Guerin. "They're not producers. They're middlemen," says Horgan dismissively.

FTAI argues that a disproportionate amount of the tax shelter goes on fees to those who package the deal, rather than into actual production. It also believes that broadcasters such as RTÉ use the independent commissioning process to force crew costs down, using the producers as proxies to avoid getting their own hands dirty. Horgan says he was offered €1,750 per week to work on the BBC co-production Rough Diamond. "I was earning that 20 years ago on The Irish RM," he says.

David McLoughlin, of the producers' organisation Screen Producers Ireland (SPI), does not agree that his members are forcing down costs. "It's not in producers' interests to shoot on shoestring budgets," he says. "But there is increasing pressure on budgets. It's getting harder to raise finance. The money available to producers from European TV, which was often very important, has shrunk considerably. That's true right across Europe."

Nick McCarthy is a first assistant director, who agrees with Horgan that a disproportionate amount of resources is being diverted to producers.

"Production offices are becoming enormous," he says. "There's more producers than ever before, and each one has a secretary and back-up. They seem to be trying just to feed into the tax incentives. They're moving money around but they're not looking at what they're manufacturing." Not surprisingly, McLoughlin sees things differently.

"It's increasingly difficult for producers to bring together different sources of finance. In many cases those financiers will look for a production credit. But I would absolutely reject the idea that producers are creaming off the top. You'll often find producers deferring their own fees so that a film will get made."

That may be true in the case of some low-budget features, where there's a certain desperation to get the film into production, but it's hardly an issue with TV drama, which is produced with a definite end user in place, and where, to put it bluntly, nobody should have to suffer for their art. "There's no doubt that with TV drama the risks are much less," says McLoughlin. "But the requirements are much stricter, because you're dealing with a broadcaster. The producer's fee is set by RTÉ, who would also go through the crew costs."

"If you take inflation and national wage increases into account, we're about 50 per cent down on where we might have expected to be at this point," says McCarthy, who believes experienced people are leaving the industry as a result. "A lot of people are moving away. You don't always see it happening, because everyone's freelance."

"The reason technicians are leaving the industry is because it has declined, because we're losing competitiveness," says McLoughlin. "But crew costs are not necessarily the issue. There's the low dollar. There's the fact that we can't hope to compete with labour costs in eastern Europe. But we can enhance Section 481 to improve competitiveness."

The technicians, though, argue that Section 481 is part of the problem, not the solution. They believe it should be scrapped and replaced by a tax credit scheme similar to those in operation in Canada and Australia. "The inherent problems with our own 481 scheme are still there," they argue in a draft discussion document. "Even the UK will not allow tax breaks for TV but here we still do, even though €170 million is raised by licence fees in Ireland in 2006, as well as a further €200 million in advertising. Why should television be further sponsored by tax breaks? No other country does this. We are no longer attracting the 'A' feature films as in the past, but instead now have an influx of TV and low-grade movies . . . The targeting of jobs should be at the forefront, not the money that can be got from people saving on their tax bills."

The document stresses the importance of investing in infrastructure - the studios, technology and post-production facilities which still, after 15 years of tax incentives, compare very poorly with what's available in the UK. Without these, all sides agree, the production sector here will always remain underdeveloped.

David McLoughlin rejects the charge that the current system is not tax-efficient. "The 481 process is very strict in terms of the exact expenditure within the country," he says. "Due diligence is emphasised by the Revenue Commissioners. Yes, TV has increased, but it's partly because of the decrease in major films. If it wasn't for those recent TV productions, we'd be even worse off."

But he agrees that infrastructure is one area where we fall down badly.

"Ardmore Studios can't compete with the major studios in the UK," he says. "The stages are too small. How that can be solved is a problem."

It's hard to dispute, though, that the film industry in recent years has been faltering, despite many years of substantial state investment. "I would agree with that," says McLoughlin. "Our view is that things are improving, but could be better. Levels of production aren't as high as they should be, but we're trying to make progress. I think what [ the technicians] are trying to achieve - getting the bigger-budget productions back in - I would agree with. But I don't accept the reasons they're giving as to why this is happening. There's an obligation on us all to get a new agreement which is transparent, fair and equitable. We're looking for more flexibility, and for some of the more ridiculous penalties to be removed."

SPI argues that the current agreement with unions on terms and conditions, which dates back to 1994, badly needs overhauling. Producers and unions have been negotiating a new agreement for the past 18 months. "We're dotting the Is and crossing the Ts on that at the moment," says Des Hughes, branch organiser of Siptu's film and entertainment branch. According to Hughes, the rates of pay negotiated in the 1994 agreement have been subject to all national pay increases awarded over the years, and all the terms and conditions of that agreement still apply.

HOWEVER, THE agreement only sets minimum rates; most technicians have been accustomed to negotiating better terms. On paper, those rates can look quite handsome, although technicians point out that, taking into account the extremely long and unsocial hours which they work over the course of a shoot, and allowing for the fact that the seasonal nature of the industry inevitably entails long periods of unemployment between jobs, then they are far from excessive. They also argue that falling salaries mean less return to the State on tax revenue forgone through Section 481. "Rates of pay are falling, so the tax rate is going to be equally low," says Horgan, who estimates the average technician will struggle to reach an annual income of €30,000.

"The only thing we can stand over is the minimum rates," says Hughes. "We have had times when productions tried to come in under those rates, and we prevented that from happening. But if somebody has been negotiating a better rate, and that has dropped, then that's not a union issue."

It's clear that there is considerable disquiet within the industry about the direction it seems to be taking. One example of current trends cited by some technicians was an incident during the shooting of the new series of The Clinic, when crew members claimed they were asked to accept a pay cut.

"They wanted to ask the crew if they would work for five per cent less on the next series," confirms Hughes. "We made it clear that wasn't acceptable."

Alan Moloney of Parallel Films, which produces The Clinic, strongly disputes this version of events. "What was discussed was in the context of exploring possibilities, in order that we could agree as many episodes as possible for the next series," he says. "To see what could be agreed with the crew to ensure a longer continuity of work. It was ultimately resolved, but there were many suggestions along the way. Negotiations of this kind are confidential, and if people have an issue they should say it to us."

Moloney argues that the guarantee of several months of continuous work which comes with episodic TV drama should be taken into account by technicians when they are negotiating their fee. "There's got to be a little bit of give and take," he says. "That's the reality. They can blame the producers, but the producers are the ones who are at the coalface trying to make this work. This doesn't sound constructive to me; it sounds like a whinge. The people working on The Clinic seemed very happy, and we're hoping to move on with a new series. If they're not happy, they should go somewhere else."

Moloney is currently producing a TV series in the UK, where he says rates of pay are about the same as here. "The only difference is there's more flexibility." He doesn't agree that the current climate is bleak, citing The Clinic, Rough Diamond, The Tudors, and the low-budget feature, Garage, as examples of production activity this year. "It feels like a busy environment to me," he says. "It is more skewed towards television now. But the reality with the feature film market is that the amount of money that people will expose themselves with has come down."

Whatever the merits or demerits of RTÉ dramas such as The Clinic or Pure Mule, or bigger international series like The Tudors, the former make a minimal impact overseas, while the latter have no Irish connection visible to their audiences. Given the stress which the Department of Arts, Sport and Tourism puts on the importance of Irish film as a marketing tool to attract tourists, this hardly seems ideal.

But, according to Moloney, the rise of the multiplex and the proliferation of TV channels have fundamentally changed the market. "The average low-budget film in the UK now costs £2 million," he says, citing Intermission, the Dublin comic thriller he produced three years ago as an example. "We made it then for €4 million, but we couldn't do that now."

FTAI members are bitterly critical of the standard of stories and scripts on which they have been working for the past few years. They are unimpressed by the failure of producers to make films which are attractive to the international market, and they feel undervalued by state organisations such as the Film Board, which they claim has never publicly recognised the contribution they make by working for reduced or deferred fees on low-budget indigenous films.

"There's never been a stoppage or a strike in this industry," says McCarthy. "We're not the types to protest. We just want better conditions and a better industry. There's a vibrant industry which is disappearing at an astonishing rate. There are faults on both sides, but I think the crews have a legitimate complaint. I've never known a time when the gulf between production and crew has been so big. When any workforce gets really angry and really bitter, there's something fundamentally wrong."