Australia Ponders Increase in Tax Credits for Overseas Productions
The strong Australian dollar has brought overseas production interest to a halt.
SYDNEY -- Australia’s 15% locations and post, digital and visual effects tax incentives are outdated and, with no immediate prospects for offshore features shooting in Australia, the incentive should be increased to 30%, locations marketing agency Ausfilm said Thursday.
Ausfilm was responding to the release of the findings of a federal government review into it assistance to the film and TV production sector, which acknowledged “the impact of the exchange rates on the location and pdv offsets and competition form incentives available in other countries” but offered no immediate solution to the problem.”
Ausfilm CEO Deb Richards quoted the report which showed that in the last decade foreign production had injected at least $2.2 billion of expenditure on film production activity.
“For minimal investment, the positive impact of offshore production to the nation’s economy and local film industry is enormous. Since 2007, the government’s investment of $67 million in location and Post, Digital and Visual Effects tax rebates has resulted in a total of $452 million offshore investment injection into the economy. That is a total net gain of $385 million to the nation’s economy,” she said.
That's now at risk of drying up totally.
An increase of the location and PDV Offset to 30% will allow Australia to once again be competitive on the world stage and for offshore investment to continue to flow into Australia’s film industry,” Alaric McAusland, Ausfilm chairman added.
Ausfilm has previously said that if a 30% tax incentive is not achievable, an incentive that is pegged to the value of the Australian dollar could work.
Elsewhere the review found that since the introduction of the Screen Production Incentives, including the producers offset, which provides a 40% tax credit for features, in 2008 government support for the production sector has trebled from AUS$136.7 million ($138.4 million) to AUS$412 million.
Arts minister Simon Crean said that while the boost in indirect funding was “a great achievement” there are opportunities “to improve the efficiency and effectiveness of the offsets.
Pointing to the increase in value of domestic features and local box office share, driven by films like Australia, Happy Feet 2 and Tomorrow When The War Began as evidence of the scheme’s success, he added it was still too early to know whether the offset is encouraging greater private investment in the sector.
Co-productions have increased but the timing of payments through the tax system and the transparency of investment decisions is still problematic.
“The government has committed to working with the sector to respond to the review. In particular I’m keen to hear more from the sector about its strategies for improving audience engagement and attracting additional private financing,” Crean said.