As part of its federal budget the Australian government has announced changes to its tax offset rules for overseas productions, removing the 70% minimum spend requirement.Changes have also been made to the minimum theshold for offsets in post -production and digital effects - lowered from $5 million to half a million.
All sounds good, though the headline used to announced these changes - "Changes to Film tax offsets to boost Australian film industry" - is questionable (my italics) and sadly typical of the way the offshore film industry is so often confused with the Australian film sector.
Of course every time a big Hollywood (and sometimes Bollywood) film or TV production comes to Australia it gives work to local crews and often actors and that helps them to sustain careers and businesses in Australia instead of disappearing overseas or simply moving to a more lucrative profession.
But the effects are more complex than that. In the wake of the huge, locally-shot blockbusters (Stars Wars, Matrix-es etc) of the '90s and '00s, many local filmmakers found costs shooting up as councils - especially in Sydney - jacked up their rates for filming in the locality. These rates have since been subject to reform in NSW but not before they had done serious damage.
There's also the inflationary pressure on wages. Even though many technicians and actors will idealistically accept much lower payments when working on an Australian production, I'm not sure this can always be taken as read.
In the meantime the minimum $1 million production cost requirement for the 40% tax offset (flowing to Australian producers on local productions) remains in place. That means one of our greatest assets - the resourceful and sometimes very talented filmmakers working on ultra-low budget productions - are being denied a vital form of help.
Have overseas productions made it easier or harder for local filmmakers - or a mixture of both? I'd be interested to receive feedback from readers working in the local film industry - whether as directors and producers, actors or crew.
FULL MEDIA RELEASE HERE.
EDITED VERSION BELOW:
'The Rudd Government will make important changes to eligibility requirements for film tax offsets that will provide a boost for the Australian film industry.
The changes will make Australia a more attractive destination for significant film making and enable more Australian businesses, particularly small businesses, to benefit from the film tax offsets.
The Government will remove the current requirement under the Location Offset for productions valued between $15.0 million and $50.0 million to spend a minimum of 70 per cent of their production budgets in Australia.
The Post, Digital and Visual Effects Production (PDV) threshold will also be reduced, from $5.0 million to $500 000. Both changes will apply from 1 July 2010.
Minister for Environment Protection, Heritage and the Arts, Peter Garrett, said: "In recent years the requirement for large offshore productions to spend 70 per cent of their budget locally has been a factor in some productions not coming to Australia, particularly smaller budget films wanting to shoot here as one of multiple international locations."The amendments to the eligibility requirements in the tax law will remove some of the barriers to significant offshore productions considering Australia as a production destination and will help local PDV providers to bid for additional work overseas.
"Reducing the PDV threshold to $500 000 will make Australia's world-class, but smaller, PDV providers more competitive when bidding for work outsourced by Hollywood studios, increasing both local employment opportunities and skills within our industry," Mr Garrett said.
Assistant Treasurer, Senator Nick Sherry said: "These changes ensure the Government's incentives are delivered as effectively as possible, by taking into account the commercial practices of the industry."
The Government will further consider the outcomes from the 2010 Review of the Australian Independent Screen Production Sector being conducted by the Department of the Environment, Water, Heritage and the Arts, after it reports later this year.'
2 comments:
My story from 2002 when there were some big OS productions in town goes thus. I took on the job of supervising about 60 CG shots for a vietnamese feature, As fate would have it two other massive CG-intensive blockbusters were in production in town at the same time. Star Wars and the Matrix - both at the same time! It was happy days for CG people but my problem was I couldnt compete with Lucas or the Wachowski's and basically could not get a single person to stay on board. My 3 month schedule turned to 8. On the upside i got to pocket the whole budget myself. But then i might have earned more in half the time working on Matrix. The moral? It's a mixed bag.
Hmm. I suppose that would have made more sense if my own production had been local rather than Vietnamese - I'd actually overlooked the point. So I guess without overseas productions everyone in the story might have been unemployed. The question of whether those productions displaced local ones remains open, as does the question to what extent they keep the strong skills base that exists here alive. Like a lot of things, it's probably healthy to have in moderation.
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