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Our View: Auditor-general has single-handedly discredited film production scheme

Auditor-general Odysseas Michaelides

The auditor-general Odysseas Michaelides appears to have decided that the government should abandon its policy to attract film production companies to Cyprus. It is another case of the auditor-general behaving as a member of the executive, imposing decisions indirectly rather than as a state official with the duty of auditing procedures and expenditure of public funds.

His report on the ‘Scheme for promoting the audio-visual industry of Cyprus’ is a case in point. Anyone going through the report could see the audit office’s relentless negativity, a mission to pick apart the scheme which it approaches with the assumption that it is a scam that must be exposed and that the film-producers’ only objective was to fool the Cypriot taxpayer.

An illustration of this negativity is the auditor-general’s remarks about the quality of Jiu Jitsu, the film produced in Cyprus and starring top Hollywood actor Nicolas Cage. He found that the film was not of a standard to make a contribution to culture and proof of this was that the production “secured very low rating scores in websites that deal with the subject”.

Is the auditor-general responsible for ensuring the quality of productions subsidised by the state? If so, why has he never commented on the quality of plays staged by the Cyprus Theatre Organisation, which is also subsidised by the taxpayer? Incidentally despite not meeting with Michaelides’ cinematic standards, Jiu Jitsu is currently among the five most watched movies on Netflix and even the bad review mentioned it was filmed in Cyprus.

The producers of Jiu Jitsu have been waiting for their rebate of €8m for over a year, but have received nothing so far, presumably because the government has been pressured into withholding payment by Michaelides who undertook to carry out a report before the money was paid. The incentive scheme, the objective of which is to help Cyprus become a part of the film location market, offers a rebate of up to 35 per cent of the money spent in Cyprus.

Delaying payment by over a year is the worst advertisement for a country wanting to attract film producers. The ‘eligible spend’ was audited by the accounting firm KPMG, and it is not the fault of the producers that the government’s contract with the independent firm that was to review the KPMG audit had expired. Apart from delaying payment, the government is also questioning, via Michaelides’ report, the terms of the contract it signed.

The auditor-general has singlehandedly discredited the scheme when there was a much more sensible way of dealing with the matter. The producers of Jiu Jitsu should have received their rebate to protect Cyprus from the unnecessary bad publicity and then the government could have reviewed the scheme and subsequently taken decisions about lowering the rebate, tightening the rules and changing the criteria.

Not for the auditor-general the common-sense approach – he would rather destroy the scheme than correct some of its weaknesses and omissions.


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