Federal Budget: PDV offset doubled to 30%, Location rebate to 16.5%
Australia’s struggling post-production sector has received a boost from the Federal Government, which plans to double the level of the post, digital and visual effects (PDV) offset to 30 per cent.
However, the Location rebate will only be raised by 1.5 percentage points to 16.5 per cent, according to the 2011 Federal Budget.
Government-industry group, Ausfilm, has been lobbying for several months to double the level of both schemes, which have become largely ineffective as the value of the Australian dollar has soared. Ausfilm welcomed the announcement but said it was disappointed the Location rebate was not also doubled.
“The high Australian dollar is dramatically impacting the competitiveness of Australian post-production companies for large scale work on offshore productions,” Ausfilm chief executive Debra Richards said in a statement. “This incentive increase will allow for the continued growth and development of Australia’s post-production industry.”
The decision is likely to benefit local companies such as RSP, Fuel VFX and Animal Logic, which derive significant income from Hollywood productions, as well as other local post-production companies such as Iloura and EFilm.
The Screen Producers Association of Australia (SPAA) said the government's decision not to increase the offshore location incentive to 30 per cent was the only major disappointment in the budget.
"We hope the government will revisit this issue offline from the budget process," SPAA executive director Geoff Brown said in a statement.
Ausfilm also expressed disappointed at the decision.
"Large budget international productions that are filmed in Australia, provide vast economic and employment benefits to the country," Richards said. "At 15 per cent, the Location Offset is no longer competitive due to the high Australian dollar and competition from higher incentives offered by other national governments and US state governments."
The Australian dollar has hit record highs in recent months and is currently trading at about $US1.08. Offshore productions generally do not consider filming in Australia when the dollar is more than US80c.
Ausfilm chairman and Deluxe Australia boss Alaric McAusland thanked the government and Minister for the Arts, Simon Crean, for their support.