The Audiovisual Federation of Ireland's employer's lobbyIBEC has released its annual report for 2005, reviewing production andemployment statistics across the film and TV sectors in 2004 and givingestimates for 2005.

Produced just as the new measures were being adopted in Britainthe foreword to the report by producer James Flynn of Octagon Films paints apessimistic future for UK/Ireland co-productions and advocates a strengtheningof Ireland'stax incentive if international producers are to be financially motivated tolocate in Irelandafter April 2006.

'Given that the UK spend requirement has been doubled from20% to 40% under the new legislation effective from April 2006, the previouspattern of shooting a film in Ireland and editing in the UK to access bothincentives - a key factor in attracting major Hollywood films to Ireland in thepast five years - will now slow down. The U.S studios will now be more likelyto decide on either Irelandand/or the UKfrom April 2006 onwards.'

However Flynn does point out that, in the short term, theexpiry date of the UK'sSale and Leaseback will lead to a busy first quarter in Irelandin 2006 as projects seek to take advantage of the final few weeks of thecombined UK andIrelandincentives. Three projects, Becoming Jane,Dragnet, and Puffball are poised to shoot in Irelandduring this period.

In the longer term the Audiovisual Federation has called onthe government to adopt three key measures in the 2006 Finance Act. Firstly, toremove the Section 481 cap of $17.7m (15m Euros). This would enable Irelandto attract bigger budget films that have a disproportionately positive impacton the Irish economy. Secondly, to abolish the 55%/66% rule, as limiting theSection 481 funds to be raised to just 55% of the production budget on biggerbudget films acts as a disincentive to film producers to make the entire filmin Ireland. This abolition would enable Irish producers to compete head on withthe UK byoffering a similar net benefit. The last benefit would be the restoration of 100% relief (from 80%) for individual investors,in line with all other EU tax reliefs.

While a cost benefit analysis shows that the sector as awhole continued to make a significant contribution to the Irish economy, thelevel and value of feature film production has fallen off dramatically in 2004and 2005. A total of $60.2m (50.9m Euros) million was invested from abroadacross the entire sector in 2004 and returns to the exchequer, derived fromincomes and expenditure, again exceeded tax forgone through Section 481yielding a $14.4m (12.2m Euros) net gainto the Irish Economy.

The Audiovisual Federation of IBEC consists of membercompanies involved in Ireland'saudiovisual industry. These include broadcasters, producers, animation studios,facilities and other organisations and agencies supporting the sector.