The annual Audiovisual Federation of the Irish Business & Employers Confederation annual report estimates a big drop in film production in Ireland this year.

Irishfeature filmsproduction was worth $44m (Euros 29.8m) in 2006,well up on the lull of $26m (Euros 17.5m) in 2005.

But the reviewestimates that the Irish spend will reduce further to $16m (Euros 11m) in 2007.

Much of the blame is put on an improvement in the fortunes of UK shoots following the introduction of the UK tax credit this year.

The ending of the saleand leasebackschemes in the UKhad encouraged particularly high levels of production early in 2006.

But thenew tax credit in the UKhaslead to a bounceback which has had a knock-on effect for Ireland.

Feature film activity has increased in the second half of 2007 with four indigenously developed feature film projects currently in production.

Films produced or partly shot In Ireland in 2006 include Once, Becoming Jane, PS I love you and How About You. How About You was released in Ireland on Friday and the Hilary Swank starring PS I Love You gets an international launch on December 21.

While film has been falling, Irish television has been performing relativelywell.

Much of the increase in TV production is due to large scale, incoming international independent TV drama shooting on location.

Kevin Moriarty, MD of Ardmore Studios and Chairman of the Audiovisual Federation Database Committee that produced the report said, 'The film and television industry in Ireland continues to be a significant employer with great potential. However, if Ireland is to continue to participate in the huge growth internationally of the industry, it is essential that steps are taken now to restore competitiveness, particularly in the film sector.'

On the issue of international competitiveness Andrew Lowe, producing partner in Element Films and Chairman of the Audiovisual Federation Film Financing Committee noted that, 'The Audiovisual Federation has formulated a number of Budget proposals, designed to restore our international competitiveness for inward feature film investment, particularly from the US. By adopting these amendments the Government will be demonstrating its continued support for the creative industries in Ireland and its intention not to be outdone by competing countries in terms of incentivising inward investment to this country.'

These proposals include:

- Increase the relief available to individual investors from 80% of their investment to 100%.

- Raise the cap on an individual's investment from Euros 31,750 to Euros 150,000.

- Amend the definition of eligible spend to include all film making activity in the State.

- Commit to an extension of Section 481 to 31 December 2012 [from December 2008].