No relief in sight for studios and post businesses

28 June, 2013 by Don Groves

The weaker Australian dollar won’t help attract offshore productions to Australia unless the location rebate is lifted from 16.5% to 30%, according to Ausfilm, studios and post production executives.

Deluxe Australia M.D. Alaric McAusland welcomes the government’s $21.6 million grant to Disney’s 20,000 Leagues Under the Sea remake and the one-off $20 million incentive for offshore production.

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But he describes these measures as a “band aid” on the longer-term need to raise the offset to make Australia a globally-competitive location. McAusland characterises the post industry’s plight as the worst he’s experienced in more than 25 years.

“The easing of the dollar from parity provides the hope of some relief. However, the modelling done for us by PWC shows that the increase in the offset to 30% would only begin to fully compensate for the state of the $A when it gets to 86 cents and below against the $US," Ausfilm CEO Debra Richards told IF.

“Increasing the location offset will result in substantial and meaningful benefits for the industry and the economy including direct and indirect employment; skills development and training; innovations in technology; infrastructure maintenance and renewal; along with direct benefits to a range of businesses across Australia ," said Richards.

Village Roadshow Studios president Lynne Benzie said, “Without a higher offset we will not be able to attract international productions on the scale we used to."

The economic benefits of big offshore projects have been quantified for Steven Spielberg’s WW2 HBO miniseries The Pacific. The production employed an Australian crew of 1,517 (for an aggregate of 163,340 days) and a cast of 210 (3,057 days), according to Dean Hood, who was the financial controller. Those stats don’t include the local VFX houses that were hired.

The project filmed for 40 weeks, with a six month pre-production period, utilising the services of 2,622 Australian companies. Around 100 foreign personnel worked on the production. More than $10 million was spent on accommodation, $4.5 million on catering, more than $4 million on construction materials and almost $5 million on warehouses and stage rent.

“All the above mentioned crew, cast and extras including foreign paid taxes in Australia,” Hood said. “In order for our government to give incentives first they take. The government still runs in the black on these projects.”

Benzie supplied figures to illustrate how her Gold Coast studios have been a magnet for runaway production and provided a massive stimulus to the local economy.

Since Village Roadshow bought the facility in 1988, she said productions worth $2.4 billion have been filmed there, of which $1.26 billion was spent in Queensland. In the period 2000-2011, the studios housed film and TV productions with total budgets of $1.6 billion, with a local spend of $856 million.

In the 2009-2010 fiscal year, when The Chronicles of Narnia:The Voyage of the Dawn Treader, Sanctum, Bait and Sea Patrol series 4 were filmed at the studio, the figures were $120 million and $69 million respectively.

McAusland said the Australian Bureau of Statistics’ Australian screen production survey, which was unveiled at last week’s Screen Australia conference in Canberra, showed the post sector’s revenues in the past five years had fallen by 25% to $330 million.

He noted the post industry’s costs had dropped by 16% in that time, illustrating the hit to the industry’s margins. “This is still an expensive business to invest in,” he said. “Offshore production is a critical part of the eco system.”

 

 

 

 

 

 

 

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