Oz film industry gets $232 mil funding boost
EmptySYDNEY -- In what's considered the largest shake-up and funding boost for the Australian film industry in many years, the annual 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.
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%;
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 screen 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.
"The package of AUS$282.9 million ($232 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.
The new budget measures are estimated to increase the government's commitment to the sector by more than 25% a year.
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 throws the onus back to 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.
"The sector can do more with this package, make far bigger films and more ambitious films that can compete on the world stage," he added, predicting that production could rise to 40 films a year within the next three to four years.
Screen Producers Association of Australia executive director Geoff Brown 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. 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," Brown noted.
Brown also said that while the new 20% rebate for TV series of as many as 65 episodes was a "great boost," he hoped broadcasters wouldn't use it as an incentive to lower the license fees they pay for TV drama.
Mark Woods, 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.
"It future-proofs our position. It's a huge win that will have reverberations through the industry here and internationally," Woods said.
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.