John O'Donoghue (Kerry South, Fianna Fail)

I am grateful to the House for facilitating us in taking this Bill at short notice. It has a simple but important objective, namely, to increase the statutory limit on the cumulative capital outlay, commitments and liabilities that the Irish Film Board may incur. As is the case with some statutory bodies that receive public funding, a limit was set by statute on such outlay when the Irish Film Board Act 1980 was enacted. This limit must be updated by the Houses of the Oireachtas every three to five years.

The Irish Film Board (Amendment) Act 2000 increased the limit from IR£30 million to IR£80 million, or approximately €101.5 million. In the absence of amending legislation, spending by the Irish Film Board, inclusive of the recently announced additional allocation, will reach this statutory limit by the end of the year. It is proposed, therefore, to increase this limit to €200 million, to allow the board to continue to operate within an appropriate statutory limit, subject to the normal annual Estimates process.

It is a positive mark of the activity of the board in recent times that it is now necessary to increase this limit again. Following the publication of the 1998 strategic review of the audiovisual industry, known as the Kilkenny report, key Government decisions were taken to assign a central place in industrial policy to the audiovisual production industry. This included a restructuring of the board itself that resulted in its staffing numbers growing from four in 2000 to its present staffing complement of 16. In the same period, the board's Exchequer current and capital funding has risen from a total of €10.16 million in 2000 to €19.4 million by the end of 2006, almost a doubling in its funding.

These past six years have seen the environment in which the board operates undergo massive and constant evolution and development, both domestically and internationally. The board has reflected and adapted to these changes. One cannot stand still in any endeavour, if it is to succeed, and the film sector is no exception. One must adapt to changing circumstances, in the type of projects being developed, the audiences to be reached, and the markets to be targeted.

The Irish Film Board, with Government support, has adopted a strategic approach to meeting these challenges. Through its varied schemes and programmes, it aims to assist projects at the earliest stage of development, right through the pre-production phase and finally to production and post-production. It has established clear polices, from bringing forward and nurturing talent, using its short film schemes, up to its most recent initiative for company development, which is aimed at moving forward with several more established companies in streamlining their funding structures. Through its funding of Screen Training Ireland, in conjunction with FÁS, the board addresses the needs of the industry at entry level. Thus, training supports can be put in place to match the requirements of the market place and render its participants relevant to the sector they wish to enter.

The short film Oscar for "Six Shooter" and the Palme d'Or for "The Wind That Shakes The Barley" at the Cannes film festival are proof these policies are working. The latter film, which is set in the time of the Civil War, went on to become the highest grossing independent Irish film at the Irish box office to date. It has taken more than €20 million worldwide, proving there is an international market for Irish stories. We can be confident there is real progress and cause for optimism for the Irish film industry.

Film is not just about talent, however. It has become an international commodity, driven by economic incentives in an ever changing environment. This, combined with the current dollar exchange rate imbalances, the domestic United States incentives and the low cost regimes in some Eastern EU states has resulted in less United States big budget projects being attracted here than was previously the case. Moreover, one cannot deny the effect of the recently approved United Kingdom scheme on the Irish position. We continue to monitor this situation.

The Government is aware of the needs of the sector and the need to react to such changes. We were pleased to improve the scope of the section 481 scheme in the Finance Act 2006 and so maintain Ireland's position as an attractive location. In an increasingly competitive international environment, the board is able to continue effectively to discharge its vital role of promoting our indigenous film industry and marketing Ireland as a location for international productions.

This activity has yielded direct results. 2006 was an exciting and productive year for the film industry, with production activity returning to high levels. As proof of this, some 38 projects were certified under the section 481 tax incentive scheme in 2006, with a total Irish spend of €115.6 million. This is an increase from 28 projects in 2005, with an Irish spend of €64 million. Included in the 2006 figures is a small number of large budget projects, chief among them being the television series, "The Tudors" and "Rough Diamond", as well as the television movie "Northanger Abbey".

Looking to 2007, the board has succeeded in attracting new projects, including the feature film "Dorothy Mills" and television film "My Boy Jack", as well as further series of "The Tudors" and "Murphy's Law". In other words, for 2006 alone, the film sector generated the equivalent expenditure of the Irish Film Board since its inception. This is a remarkable rate of return by any measure.

While Ireland can hold its own, due to our talent pool and incentives package, we cannot get complacent and must continue to search for and avail of any comparative advantage we can find. We must also be active in the marketplace. The Irish Film Board has risen to this challenge with the recent establishment of an office in Los Angeles, which it is expected will do much to raise awareness of the Irish industry in the United States. The board has also put in place a Dublin film partnership scheme, a one-stop shop for potential producers seeking to produce projects in the city. This grouping, encompassing businesses and public sector interests of the city, facilitates in overcoming the practical obstacles inherent in bringing a production to fruition.

Although 2005 and 2006 have been challenging years for production, indigenous films, supported by the Irish Film Board, have continued to perform to critical acclaim both at home and at festivals around the world. Titles such as "Adam and Paul", "The Mighty Celt", "Breakfast on Pluto", "Isolation", "Pavee Lackeen" and "The Wind that Shakes the Barley" have been well received by audiences and critics. Further affirmation in this respect are the nominations at world-renowned festivals in which Irish talent is well represented.

I appreciate Senators' co-operation in expediting the enactment of this short but vital Bill. I commend the Bill to the House.