Australia Increases Incentives for Post

The government held the location and producer offsets at 15 percent, despite the strength of the Australian dollar.

SYDNEY -- Australia’s post digital and visual effects companies have been given a boost in the federal government’s annual budget, with a doubling of the Post Digital and Visual Effects (PDV) incentive from 15% to 30% announced Tuesday night.

The move was one of a handful of measures provided by the government, in response to its review on the tax rebates and other industry incentives undertaken last year. It includes some reforms of the Producer Offset scheme, lowering the threshold for qualifying Australian productions and providing additional direct funding for low budget documentaries.

“With a 30% PDV Offset, Australia’s post-production companies will be able to attract multi-million dollar contracts on big-budget international projects, which in turn helps to build Australia’s filmmaking infrastructure and expertise,” Debra Richards, CEO of locations marketing agency Ausfilm said. “The high Australian dollar is dramatically impacting the competitiveness of Australian post-production companies for large-scale work on offshore productions. This incentive increase will allow for the continued growth and development of Australia’s post production industry,” she added.

South Australian Film Corp. chair Cheryl Bart said the increase of the PDV rebate is “a major advance” that will have an “enormous impact on the competitiveness of this world beating sector.”

She said local companies like Adelaide-based visual effects house, Rising Sun Pictures, which has recently worked on the Green Lantern and Harry Potter And The Deathly Hallows films “be able to compete with other jurisdictions on a more even playing field."  

At the same time national film agency Screen Australia received $13 million over four years, with direct funding for low budget documentaries and lowering the threshold for eligibility for feature films and telemovies from $1 million to $500,000, allowing low-budget features to qualify for the 40% producer offset.

A broader range of expenses will also be allowed in the test for qualifying Australian production expenditures when assessing the offset and the 65-episode cap on TV series applying for the 20% TV producer offset will be changed to 65 hours of TV.

Screen Australia chair Glen Boreham said the screen sector should “take some comfort from these measures that are designed to invest more money on screen rather than administration or compliance” in what was clearly “a tough budget." 

While the industry welcomed the doubling of the PDV incentives, many were disappointed that the government maintained the location incentives at their existing 15%.

Ausfilm’s Richards said “at 15%, the Location Offset is no longer competitive due to the high Australian dollar and competition from higher incentives offered by other national governments and U.S. state governments. Large budget international productions that are filmed in Australia, provide vast economic and employment benefits to the country."

With many of Australia’s major studios currently lying idle and feature film crews heading overseas for work, Ausfilm will continue to advocate for an increase to the Location Offset from 15 to 30%.