Down Under, but not out

From opening gala to closing night, Australian filmmakers are strutting their stuff on the Croisette

Although Australian films aren't to be found in the main competition at this year's Festival de Cannes, there are still a raft of Aussies set to make a splash along the Croisette.

From Russell Crowe and Cate Blanchett headlining the world premiere of Ridley Scott's "Robin Hood" on opening night and a short film In Competition to closing night's French-Australian co-production "The Tree," the diversity and global impact of the nation's film will be on full display.

And while some pundits have noted the lack of Australian films In Competition this year, back home the focus has been on attracting Australian audiences back to local films, 17 of which will be on sale in the Marche du Film.

The structure of the local industry has undergone significant changes during the past three years, with the creation of mega-agency Screen Australia, the introduction of a new tax rebate, known as the producer offset, and other incentives designed to attract investors back into Australian film while underpinning a more viable production sector.

Recent figures seem to indicate that the industry is going some way to building greater audience engagement.

Last year, Australian releases accounted for 5% of the local boxoffice, or AUS$54.8 million ($50 million) -- well up from the five-year average of 4% -- led by Bruce Beresford's "Mao's Last Dancer," which took $15 million. In total, Australian production was worth $668 million.

The handful of local features released so far this year have attracted strong audiences. World War I film "Beneath Hill 60," released in early May, became the third local feature this year to gross more than $2 million. Indigenous musical "Bran Nue Dae" has taken more than $7.5 million, and local vampire film "Daybreakers" took almost $2.5 million.

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Also set for release during the coming months are the romantic comedy "I Love You Too," comedy caper "Wog Boy 2 Kings of Mykonos," Sundance prize winner "Animal Kingdom" and Claire McCarthy's "The Waiting City," about a young couple who travel to India to adopt a baby.

Equally diverse is the current production slate. Fred Schepisi is in production on his new psychological thriller, "Eye of the Storm," based on the Patrick White novel. Stephan Eliot returns to the Outback with the wedding picture "A Few Best Men," and scribe Stuart Beattie's debut feature, "Tomorrow When the War Began," and the country's first 3D stereoscopic production, "Sanctum," also are in postproduction.

It's estimated that more than 30 local films will be released this year.

It's the use of the producer offset, after some teething problems, that's being heralded as generating a renaissance in Australian film, and it has taken the pressure off the national agency's role to directly fund features.

"Wog Boy 2 Kings of Mykonos"
Screen Australia CEO Ruth Harley believes that the offset has "given a real confidence to the industry."

Adds Michael Favelle, CEO of local sales agent Odin's Eye Entertainment: "It's no longer a case of producers lining up at Screen Australia and putting their hands out for government money. It's empowered producers and motivated them to make market-driven films."

That, in turn, has helped Odin's Eye step up to its next challenge: developing and producing new 3D-animated feature "The Dreaming."

"To have that production–sales pipeline gives us more control of our destiny," Favelle says. "The offset has certainly helped that."

James Vernon, CEO of financing group Media Funds Management, which provides funding for local features at various stages, says that, overall, "the offset is working and well, and there's a range of films getting made that are especially outside the Screen Australia development route."

For Vernon and the banks he deals with, the offset's biggest advantage is that it's "safe."

"It's one of the safest pieces of film financing that a bank can take on anywhere in the world, as it's enshrined in legislation," he says.

According to Vernon, the worst of the global financial crisis has passed, and the offset means that the market is picking up and there's an increasing determination by buyers to acquire good product.

"Good films are starting to make decent presales that we can fund against," he says.

MFM has about 10 projects it will be involved in, and six that will happen this year. They include Schepisi's "Storm," which is completely privately financed, the animated feature "Oki's" and Outback adventure and horse racing story "The Cup."

However, Bill Leimbach, producer of "Hill 60", says that "the offset has not created a big flow of investors to the industry, but it has encouraged companies that will lend you the money because they know they'll get it back if you've got a completion bond on your film. It's the future of financing films in this country. If you can get a good story partially financed, they'll lend you the rest at 10%–14% interest. It's the easiest money you can find, and they don't care if it makes a profit or not, as long as it gets made. It will keep the industry alive for a while."

It's certainly fueled a range of funding options for producers. From the loosening of private investors' purse-strings to co-productions and top-up funding from the film festival sector, sources are becoming as diverse as the slates they're funding.

Harley, however, has a less-than-rosy global outlook.

"I don't think we've seen the end of the contraction in the world markets," she says. "It's still difficult conditions."

Making it more difficult here, she adds, is that offshore production has all but dried up. The strength of the Australian dollar against the U.S. dollar and the competition to provide attractive incentives, means Australia has struggled to get big studio pictures made here in recent times.

Digital filmmakers are picking up some of that slack. Director-producer George Miller and Animal Logic's Zareh Nalbandian have two big-budget, studio-backed films in production: "Happy Feet 2" and "Legends of the Guardian."

And with Miller ready to start production on "Mad Max 4: Fury Road" their output shows no signs of dropping off, Harley says.

To further boost offshore production, Screen Australia and locations marketing agency Ausfilm are pushing access to the offset as enticement for foreign filmmakers to partner on co-productions.

Ausfilm is holding forums to explain the offset and other incentives this month in London, and Screen Australia has a specific focus on co-productions.

"Co-productions are the way of the future," Favelle says. "It's increasingly more difficult to finance a film in a single country; there's not enough private money out there."
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