The latest official CSO figures for tourism to Ireland show an increase in visitor numbers of over 3% for the first six months of the year and the best market intelligence available suggests that this level of growth may be sustained for the year as a whole. On these figures alone, Ireland's performance in 2003 is positive and represents a strong endorsement of its marketing strategies.

Performance on a market by market basis is also encouraging, with Ireland increasing its share in many of its major tourism markets despite the intense competition this year. Ireland has managed to increase numbers from Britain, where outbound tourism has been flat, by over 2% in the first six months of the year and looks set to sustain this level of growth throughout the year. Similarly, in Mainland Europe, Ireland appears to be outperforming its main rivals in Germany, France, Italy and Spain. The North American market also appears to be turning the corner with strong growth achieved this year for the first time since 2000.

The overall projections for the year from the tourism agencies are also positive with forecasts predicting a 3% increase in visitor numbers to 6.1 million visitors, with Britain up 2%, Mainland European up 6% and North America up 7%. If this level of growth is achieved, it would represent a good performance in a very difficult year.

Obviously, the hosting of the Special Olympics World Summer Games provided a welcome boost to the tourism sector this year. The host-town initiative also meant that towns throughout the country shared in the benefits of this wonderful event. Hard figures are not available to determine precisely what proportion of overall visitors to Ireland relate to the Games, but it seems clear that in terms of generating goodwill to Ireland and showcasing one of the biggest tourism assets which we have – the friendliness of the Irish people – the games were clearly invaluable.

The news this year is not all positive. It is evident that, in meeting the challenges of an increasingly price-conscious market, the industry's bottom-line has come under severe pressure this year. The average length of stay of overseas visitors continues to decline and the continued growth in the capacity of the hotel sector is impacting on the overall share-out of bednights generated by visitors to Ireland. Tourism Ireland and Fáilte Ireland are focusing increased marketing resources on longer-stay market segments although the tremendous growth in the short break market has been a major factor, both in Ireland and worldwide.

I have already referred to the Report of the Tourism Policy Review Group and their recommendations in relation to maintaining competitiveness. From a marketing perspective, it is vital for the sustained development of this sector that the industry continues to deliver the quality of holiday experience which the tourist to Ireland expects. Delivering value for money must continue to be foremost in the minds of all those involved in the industry.

As far as the marketing of Ireland is concerned, I am in no doubt as to the professionalism and commitment of our tourism agencies in developing and implementing their joint marketing programme this year. Having secured an unprecedented level of Exchequer funding for the Tourism Marketing Fund this year, I am satisfied that both Tourism Ireland and Fáilte Ireland have managed to deploy the resources available to Ireland's best advantage in a very difficult year. Indeed, the highly responsive and adaptable nature of their marketing strategies this year allowed them to cope with the impact of war in Iraq and SARS and ensure Ireland was ideally positioned to take full advantage of the upturn in consumer confidence which has manifested itself in many of our key markets later in the year.

I am delighted to say that the Exchequer provision for marketing in 2004 - under the Tourism Marketing Fund - has been increased by a further 3.5%. In early December, I will be launching Tourism Ireland and Failte Ireland's joint marketing programme for 2004 and I am confident that next year's campaign can build on the successes achieved in 2003.

Deputies will be aware that the Council will receive funding of €52.5 million in 2004, a 19% increase in 2004 on 2003 funding levels. This level of funding clearly demonstrates the extent of my own and the Government's commitment to the arts. This allocation took account of all pertinent factors, including, of course, the views expressed by the Arts Council in advance of the publication of the Book of Estimates.

The reduction in funding for the Arts Council in 2003 was a direct function of the far more difficult conditions that applied in the economy generally and particularly in the public finances. I am well aware of the difficulties that have arisen for those in the arts sector because of the unavoidable decisions that had to be taken by the Arts Council as a consequence of the reduction in funding this year. However, I would point out that although the Arts Council's funding was reduced this year by around 7.5% on the 2002 figure, that 2002 figure was the culmination of steady year-on-year increases since 1997. Indeed, Arts Council funding increased by over 80% between 1997 and 2002

The Arts Plan is a Council strategy, not a Government strategy, and although Government endorsed the principles on which the Plan was based, this endorsement did not extend to commitment to the annual financial targets set out in the Plan. The amount that Government can provide for the Arts Council is dependent on the Estimates process, which is of course based on an annual cycle. This system cannot accommodate multi-annual commitments, as the availability of funds are known with any certainty for only one year in advance.

Where a child must attend a primary school which is not the nearest primary school to where the child resides, a transport grant may be paid under the terms of the School Transport Scheme if my Department is satisfied that there are valid reasons for the child's attendance at that school and the child resides at least two miles from the school concerned.The School Tansport Section of my Department would be pleased to investigate a particular case should the Deputy wish to provide the relevant details.

To ask the Minister for Arts, Sport and Tourism if there have been further discussions with the Minister for Finance regarding the retention of the section 481 tax incentive after removing the necessary loopholes that enable abuses of the scheme, in view of the report of a company (details supplied) into its impact on the industry.

The termination of Section 481 relief with effect from end-2004 was announced by the Minister for Finance in his 2003 budget statement as part of a programme of tax base broadening measures. In view of the likely implications of the termination of this scheme for the film sector, I commissioned Price Waterhouse Coopers to carry out an independent analysis of the economic consequences for the audiovisual industry and its associated services sector of this decision. I have received the consultant's Report and I am very happy with the approach taken, which appears to be robust and prudent.

I am currently in dialogue with the Minister for Finance on the issues highlighted in the PwC report with a view to the creation of an environment which will support the continuing development of the film industry in Ireland. As these discussions must of their nature remain confidential, I do not propose either to publish or to make any public statement for the present on the PWC analysis and conclusions.