Aussie film biz lauds reforms, budget boost
EmptyIn what's considered the largest shake-up and funding boost for the Australian film industry in many years, the federal budget unveiled Tuesday includes a package of measures that will overhaul the tax incentives and direct-funding mechanisms for local and foreign productions and provide an AUS$283 million ($232 million) boost to the stagnating sector.
The new budget measures are estimated to increase the government's commitment by more than 25% a year.
"The package of AUS$282.9 million represents a complete overhaul of film funding and will introduce a genuine incentive for producers to attract strong investor interest and help put the industry on a more sustainable footing," the government said.
Announced by Communications Minister Helen Coonan and Arts Minister George Brandis, the reforms will:
Abolish the current 10B and 10BA tax incentives and replace them with a new refundable tax offset worth 40% of a feature film budget and 20% of a TV drama series;
Increase the location rebate for large-budget foreign productions shooting in Australia from 12.5% to 15%; and
Introduce a new 15% rebate for PDV (postproduction, digital and visual effects) work on international projects budgeted at more than $5 million.
In addition, a new agency, called the Australian Screen Authority, will merge the current Australian Film Commission, Film Finance Corp. and Film Australia Ltd. as of July 1, 2008.
Coonan said the reforms provide a "once-in-a-generation package that will introduce a genuine incentive for film and television productions with a wide audience appeal."
"Australia will also be able to attract strong ongoing interest from offshore filmmakers through significantly enhanced incentives," she said.
Brandis added that the new producer rebate will "provide an ideal opportunity for producers to retain substantial equity in their productions and build stable and sustainable production companies and should therefore increase private-sector investment in the industry."
The producer rebate will become the primary source of funding for projects with commercial potential, replacing the direct funding the FFC provides.
An upbeat industry welcomed the new measures, saying they'd been hard won after 18 months of sustained lobbying and several major reviews.
Australian Film Commission chair Maureen Barron applauded the government for "responding strongly to the need to increase the volume of production."
"The new rebate is a significant new support measure to stimulate higher levels of investment in the industry," she said.
FFC CEO Brian Rosen said the new package puts the onus back on producers to rethink the way they do business.
"I believe it shows enormous confidence in the ability of Australian filmmakers to expand their funding opportunities and make a greater range of films for audiences here and internationally," he said.
Geoff Brown, executive director of the Screen Producers Association of Australia, branded the new industry structure "challenging."
However, Brown lamented the abolition of 10BA, saying it would remove the high net-worth individuals who had used the tax plan to invest in projects.
"Theoretically, the new approach should put producers in the box seat when it comes to raising private investment for film and television productions," he said. "They can lever investment off the back of the substantial equity that the rebate delivers to them. However, SPAA is concerned that without 10BA co-investments, the rebate may only deliver marginal gains to the producer. All the upside from the rebate will be traded off to attract investors who will not be able to get the traditional tax break on 10BA."
CEO of locations marketing agency Ausfilm, said he is "thrilled" with the increase in the tax offset for offshore productions shooting in Australia and "beyond thrilled" with the new 15% PDV rebate that, according to Brandis, is a world first.
Elsewhere, the new Australian Screen Authority will take on the functions of the FFC, the AFC and Film Australia that won't be covered by the producer rebate.
"Synergies at each of the three federal agencies made their merger appropriate," the AFC's Barron said. "Overall, the Australian film, television and digital content industries will benefit from the establishment of a central and focused agency working towards promoting and encouraging Australian screen culture."
The ASA's remit will include oversight of low-budget film production, screen culture initiatives, industry development, marketing and promotion of Australian films here and overseas as well as the "production of projects of national cultural significance that would be unlikely to attract the necessary private finance from the rebate alone."
Those projects could include documentaries, children's programs, new producers' work and indigenous content.