SPEECH BY THE HON. GEORGE HYZLER, PARLIAMENTARY SECRETARY IN THE MINISTRY FOR ECONOMIC SERVICES, ON THE OCCASION OF THE INAUGURATION OF A TWO DAY CONFERENCE, 'WHEN AUDIO-VISUAL MEETS FINANCE' - 14TH DECEMBER, 2000

Mr Chairman,

Distinguished Speakers,

Ladies and Gentlemen;

It is my pleasure to inaugurate this conference organised by Audiovisual Eureka and the Malta Film Commission. Over the next two days our local audiovisualprofessionals will have the opportunity to understand better how to tackle the financial difficulties they face in their endeavours.

Cinema and audiovisual images are no ordinary product. They convey values and life-styles, patterns of behaviour and ethical issues, cultural models and an artistic heritage. They impress the mind and provoke imagination. An audiovisual product is unique. In its form it reflects the imagination of the author. Its development has significant financial implications.

It is well known that the financial requirements of this sector are extensive and enormous. It is also recognised that the market alone cannot regularly cover such costs. During the last years, all over the world, but especially in Europe, concern on how to finance film and television productions escalated. Undoubtedly, one way to address the problem, would be that of adopting a national legislative and regulatory framework capable of financing the audiovisual sector. Unfortunately, many countries, particularly small states like ours, could not implement such a measure due to national budgetary constraints.

Alternatively, a more efficient system for the financing of the film and television industry can be from the tapping of both public and private resources.

Malta does not have a cinematographic industry. What we do have is a film-servicing industry, which has been in operation since the early 1950s. This industry is still led by our main film facilities - the water tanks – at the Mediterranean Film Studios, which still attract a good number of productions annually. However, film production companies choose Malta as a location, and the launch of the Malta Film Commission, earlier this year was intended to promote further the island as film base and to offer its services for free to foreign and local productions. On average, about eight to ten foreign film or television productions are shot in Malta every year, with last year being one of the most remarkable years with two Hollywood big budget projects, Gladiator and U 571, shooting simultaneously.

Apart from our locations, the Film Commission also promotes our audio-visual facilities and resources, and is entrusted to prepare studies and carry out research and assessment reports on the local scene. In fact, an ad hoc Advisory Council within the Film Commission was set-up earlier this year to study this sector, particularly in respect of the permanent structures, as well the new legislation required to enforce government's commitment to the film industry in Malta. The Council's Chairman will brief you on the results of this report later this afternoon.

Government also plans to implement in the coming year, a new set of fiscal and financial incentives for the film industry. Under the present Industrial Development Act we have a list of incentives directed at the provision of services required by the film industry, but since the law is very much directed towards manufacturing activities it does not cater for the special requirements of films. An amended version of the IDA - the Business Promotion Act which was presented earlier this month, and which will be discussed in Parliament next month will enable us to issue incentives by regulation in favour of this sector. At present we are discussing proposals presented to us by KPMG, who earlier last year were commissioned by government to carry out a detailed overview on audio-visual tax incentives. A presentation regarding these proposals will also be delivered during this conference.

To date Malta has not produced a feature film or invested in a foreign production. An attempt to start financing local film and television productions was made by the previous administration in 1998. The idea behind the film finance company Maltese Falcon Productions was that of amalgamating public resources and private finances through the help of two commercial banks, which at that time, were still government owned, in order to produce films for cinema and television. To date, nothing has been achieved and this initiative did not take off for various reasons.

One of such reasons was that the company was structured, such that, each project assessment, made by the company itself was too focused on direct returns to the company rather than the potentially much wider range of benefits to the industry and economy in general.

This reality leads us to think of other alternatives on how to generate money in order to launch our industry. Undoubtedly, although moderately, government will contribute firstly either through the creation of a fund or other public-private initiatives that should avoid the conflicts of interest registered with Maltese Falcon Productions. Other initiatives such as collective investment schemes in film production should not be discarded.

Ladies and Gentlemen,

Malta's accession to the European Union should also help us in this sense. As an applicant country, we are already eligible to participate and obtain funds from the

MEDIA Programme, although to date we have not committed ourselves to do so. The same applies for EURIMAGES. I hope that in the coming year we will exploit opportunities to tap such resources in order to sustain this industry.

Government is also interested in signing a number of bi-lateral co-production agreements so that Malta would become more attractive as a location to foreign production companies. To date we only have one such agreement with Canada.

With regards to audiovisual policy, earlier this year Parliament adopted an amendment to the Broadcasting Act of 1991, in order to bring it closer to the aquis communitaire. The amendments introduced a system whereby administrative sanctions replace penal sanctions used previously in respect of offences by broadcasters.

However, Malta's legislation on audio-visual policy is still not fully aligned with the acquis. A number of issues including those related to jurisdiction, the promotion of European and independent works, as well as the of protection of minors and advertising rules need to be regulated through the implementation of regulations which are still to be adopted.

In conclusion, I am sure that the Maltese audiovisual sector could be exploited further to the benefit of our economy. I am confident that our natural and human resources have the potential to succeed further, not only to service foreign projects, but also to create our own productions and distribute them abroad.

I would like to thank Audiovisual Eureka for having included Malta in their initiatives programme for this year and hope that the contributions that will follow will serve as basis to help us understand better how to improve this sector.

Thank you