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Why Australia's Film, TV Business Has Hollywood Buzzing Again

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Warner Bros. Entertainment
"Happy Feet Two"

The boom has sparked a boost in the quality and diversity of production and an increasing number of international projects and co-productions.

There's a frisson of excitement around Sydney's Fox Studios Australia, the likes of which hasn't been seen since X-Men Origins: Wolverine wrapped years ago. Leonardo DiCaprio and Tobey Maguire sun themselves during breaks from filming Baz Luhrmann's buzzy remake of The Great Gatsby, while extras -- men in black-tie evening wear, women in exquisite gowns and dresses -- stroll the 1920s-appointed lot.

At the same time, The X Factor Australia and Celebrity Apprentice are filming in smaller studios nearby, and Alex Proyas' dark epic feature Paradise Lost is in preproduction, with stars Bradley Cooper and Casey Affleck promising archangels and demons in January. Across town, director George Miller is putting the finishing touches on Happy Feet Two,  and a couple of kilometers from the Fox lot is See-Saw Films, where Emile Sherman's best picture Oscar for The King's Speech lives -- the first such prize won by an Australian.

STORY: From 'Great Gatsby' to 'Happy Feet Two': 7 Hot Movies, Series Coming Out of Australia

Australia's burgeoning production slate is billed as one of the world's biggest and most diverse, from indie films to studio pictures and from hard-edged festival fare like Julia Leigh's Sleeping Beauty to Kriv Stenders' 2011 breakout hit Red Dog, the eighth-highest-grossing Australian film of all time at the local box office.

What's driving the boom?

For the most part, it's three key incentives. Australia's locations incentive was increased to a 16.5 percent rebate in 2011, and its postproduction, digital and visual effects (PDV) incentive recently doubled to 30 percent. But only growing in popularity since its creation in 2007 is the producer offset, which provides a 40 percent tax rebate for features and 20 percent for TV projects with significant Australian content, which can include  a mix of creative teams, cast and an Australia-based shoot.

Many here say the incentives have boosted the quality and diversity of production and, vitally, attracted an increasing number of international projects and co-productions. More importantly, they are bringing home Australian talent to make those projects.

"It's had a major role in attracting internationally recognized Australian talent back home and has shifted the level of production to more sophisticated, robust feature films," says Tania Chambers, the outgoing CEO of agency Screen NSW. "High-end studio fare has been quite dramatic and fundamental to the strength of the Australian screen industry, so the impact of the U.S. dollar has been minimized while the indie midrange sector has woken up."

Adds Brian Rosen, president of the Screen Producers Association of Australia: "The idea of the producer offset is to build relationships with people who are well-financed, which really means Hollywood or some of the major players in London and Europe like Gaumont and Pathe. It was always going to take time for that to happen, but we are getting there."

Some using the offsets are working to meet the notion of what an "Australian film" means in 2011. Case in point: Who would have thought an adaptation of  F. Scott Fitzgerald's great American novel Gatsby, with its Long Island setting and flapper-culture backdrop, would shoot here? 

With the offsets, state government incentives and Luhrmann's insistence that Gatsby be made in his hometown, Fox Studios Australia is bringing to life 1920s America and the fictional towns of East Egg and West Egg while still qualifying as an "Australian production":  Luhrmann's creative team at his Bazmark Inq shingle, including the writers, department heads and producers, is made up mostly of Australians, and key roles are played by Aussie actors Joel Edgerton and Elizabeth Debicki.

Australia's secretive tax laws prevent projects that receive offsets from being identified, but pundits say Gatsby's reported $120 million budget will actually be $80 million thanks to incentives. That's more than enough to overcome the Australian dollar's high value against the U.S. dollar, which has proved difficult for local production the past few years.