The near-demise of the Irish Film Board last year has placed a question mark over the future direction of the Irish industry.

It was the nightmare before Christmas, really. During the seasonal party time it emerged that the Irish Film Board had come within a hair's breadth of abolition in a pre-budget row between the Minister for Finance and the Minister for Arts. According to the Arts Department the proposal that the Film Board be scrapped was "reversed following discussion between the Minister for Arts and the Minister for Finance."

So, the Film Board was saved, but at the cost of an aggregate cut in its budget of 12.5%. The Minister for Finance's budget also shortened the life expectancy of several tax incentives, including the Section 481 incentive for film, which are now to end on December 31 2004. Meanwhile, behind the scenes, there are discussions underway about a tightening by the Arts Department of both the qualifying and reporting criteria for Section 481.

Asked if he concurred with the Minister for Finance's view that "there is no justification" to continue the Section 481 incentive beyond 2004 the Minister for Arts, John O'Donoghue replied, "The decision to curtail Section 481 relief was taken by the Government in the light of current budgetary circumstances. We must now look to the future, maximising the role of the Irish Film Board in the development of the Irish film sector."

Bad news, and the knowledge that things might have been a lot worse, has provided a much-needed wake-up call for Irish producers. They realise now that they have perhaps eight months to develop new policy ideas, a political lobby and the unity of purpose necessary to convince the government to protect and restore Ireland's competitive position in the industry internationally.

As one company, John Boorman's Merlin Films has commented, "We are deeply disappointed with the decision to withdraw Section 481 relief as from December 31st, 2004. At a time when Britain is giving substantial tax relief, as do many other jurisdictions throughout the world, it would place us at a major competitive disadvantage. Many studies prepared for various bodies also seem to suggest that the relief is in fact self-financing, in respect of numbers employed and tax generated."

Referring to the proposal to abolish the Film Board Merlin said, "It would be disastrous if anything were to happen to the Irish Film Board that would mean this source of funding was no longer available to Irish producers. The Board has also accumulated extensive expertise in the financing of films, including international co-productions, which is a vital resource to the industry."

These macro concerns aside it's still a bit too early to make predictions about the production year ahead. It is likely that a few Spring and early Summer production starts will only be confirmed in February. The buzz around in early January suggests that Jerry Bruckheimer Films may return to Ireland for their David Franzoni (Gladiator) scripted King Arthur project, with Antoine Fuqua (Training Day) in the director's chair. If the rumour is accurate this will go into pre-production in April for a June shoot.

Possible production delays notwithstanding, the other sizeable project understood to be scouting Ireland, for at least part of its shoot, is Mira Nair's take on Thackeray's Vanity Fair, with Reese Witherspoon in the lead role of Becky Sharp. The adaptation is written by Julian Fellowes (Gosford Park) and is to be photographed by Nair's regular DoP, Irish-American Declan Quinn.

The slew of new Irish and Irish-directed features due on our screens this year will begin with the near contemporaneous World Premiere at Sundance of Aisling Walsh's Song For a Raggy Boy (starring Declan Quinn's brother Aidan) and the release at home of Neil Jordan's The Good Thief. A complete retrospective of Jordan's work will then show in Dublin before the inaugural Dublin International Film Festival in March launches perhaps as many as seven new Irish films which, release dates permitting, might include Pierce Brosnan's Evelyn and Jim Sheridan's In America.

If Irish talent is seen to prove itself in these and the many lower profile films due out this year, it will make the job of convincing the government of the merits of its financial support a whole lot easier.