Producers of narrative features and feature documentaries fear that reducing the Producer Offset for films to 30 per cent will have a crippling impact on theatrical releases.

They say the government’s proposal to double the minimum qualifying Australian production expenditure (QAPE) threshold for feature length content to $1 million will exclude many lower-budgeted films and feature docs.

Screen Producers Australia CEO Matt Deaner predicted the media reforms announced today will slash production by at least 50 per cent and remove thousands of jobs from the sector as well as opportunities for audiences across the world to engage with Australian stories.

Reducing the Offset could well mean the end of the line for many Australian feature films, he said.

“The effective abolition of children’s content quotas, the watering down of drama and documentary requirements and the halving of requirements for subscription TV doesn’t meet the government’s articulated desire for forward-thinking policy-making,” he said.

“Instead, it presents as the adoption of the deregulation wish-list of legacy broadcasters and their owners and the international streaming companies.

“There is the clear potential for the proposals to shrink the Australian production industry to an unsustainable size and to lose the critical mass in economic activity needed to ensure viable screen businesses and employment opportunities.”

The measures will allow broadcasters to meet an entire year’s content obligation across drama, children’s and documentary content through a single program such as Home and Away, he said.

The Media, Entertainment & Arts Alliance warned the reforms will result in job losses and worsen the crisis in the screen industry.

The proposals “reflect a lack of comprehension about the sector and a lack of compassion for the tens of thousands of workers who will now operate under rules that dilute how much content is produced for Australian audiences each year,” the MEAA said.

Australian Children’s Television Foundation CEO Jenny Buckland said scrapping the fixed local content quotas for the commercial broadcasters will be devastating for children’s producers.

“I’ve been expecting it to happen for at least the last 10 to 15 years, but it doesn’t make it any easier,” she tells IF.

In turn, Communications and Arts Minister Paul Fletcher contends that standardising the Offsets at 30 per cent from July 1 2021 is designed to stimulate the Australian screen production sector and enable producers to take advantage of the growth of streaming services.

That will require legislative changes which won’t be retrospective, so producers who have provisional certificates and are raising the finance during this financial year will still get 40 per cent.

He stressed the additional $30 million for Screen Australia over two years will enable the agency to increase its support of features, children’s content and documentaries.

Fletcher said the government is still considering whether to impose local content spending obligations on SVOD services, describing that as a “live option.”

Asked why he ruled out granting a 10 per cent cultural uplift for features that are released in cinemas, as proposed by Robert Connolly and other producers, he tells IF: “We are providing significantly increased support for productions that are made, for example, for a combination of an Australian network and streaming service.

“We are growing the overall market. There will be a whole class of production that can now get a 30 per cent rebate for projects that targets the demand from streaming services.

“We also know that most Australian feature films don’t sell very well or get very good audiences. We want to see Australian creators getting their content seen by as many people as possible and selling as well as possible.”

Yarra Films’ Dr Trevor Graham fears that reducing the Offset for feature docs and increasing the QAPE will kill theatrical releases, and he lamented the removal of overheads as eligible expenditure for all three Offsets.

“It pushes documentary more into TV factual, giving more control to broadcasters particularly with the total absence of a quota, or the like, on SVODs,” he said.

Graham also said that removing the ‘Gallipoli Clause’ from the Producer Offset, which allows production costs incurred in other countries to be claimed as QAPE, will rule out internationally-shot documentary and make it difficult for films shot in part overseas.

Jenny Buckland.

JOTZ Productions’ Tom Zubrycki argues that increasing the QAPE threshold will impact severely on the the kinds of documentaries that are being made, observing: “It will also hurt the smaller companies like ours and privilege the larger production companies.”

MEAA CEO Paul Murphy said maintaining the 55 per cent Australian content rule for commercial broadcasters is likely to mean the demise of children’s content on commercial TV, leaving a cash-strapped ABC to pick up the slack.

“Even the additional funding for Screen Australia simply restores the organisation to pre-Abbott (2014) funding levels,” he said.

“How the government has missed the boat on regulating streaming services and requiring set levels of Australian content each year defies belief. This government seems intent on deregulation rather than creating a playing field that is level for all.”

Buckland said: “Australian kids and their families have embraced the expanded ABC children’s service but it has become harder and harder to demonstrate that the audience is there for children’s shows on the commercial channels.

“The broadcasters haven’t valued the content or the audience so the audience has left them. But kids are watching the ABC, they’re also watching all the video on demand platforms, Network 10 is going to have kids content all day on 10 Shake and NITV continues to embrace the children’s audience.

“It will be really important to examine the contributions of the video on demand platforms.”

‘Romance on the Menu.’

Free TV Australia lauded the announcement as a huge positive for the Australian film and TV production sector. “These reforms will deliver greater flexibility to respond to what our audiences demand,” Free TV CEO Bridget Fair said.

“The government has combined a more flexible quota system with strong incentives for production of quality Australian programs in a way that should stimulate a broad range of Australian stories.

“The old quota system was collapsing under its own weight. There has long been a need for the onerous and outdated framework, in place since the 1980s, to be updated. We commend Minister Fletcher for recognising the need to ensure the sustainability of the sector.”

ViacomCBS Australia/New Zealand chief content officer/executive VP Beverley McGarvey hailed the reforms as a significant step forward for broadcasters, content providers, producers and audiences in ensuring a sustainable and enduring local production industry.

She said the measures reward 10’s ongoing investment in Neighbours and incentivise its involvement in larger-scale productions such as The Secrets She Keeps and Five Bedrooms and encourage growing investment in children’s programming and documentaries such as Todd Sampson’s Body Hack and Lindy Chamberlain: The True Story.

A Netflix spokesman welcomed the opportunity to formalise its commitment to Australia’s content production industry and supplying information to the ACMA.

The streamer cited such recent releases as Rosie Lourde’s romantic comedy Romance on the Menu, Hannah Gadsby’s Douglas, Legend of Monkey series 2, Izzy Bee’s Koala World and Urzila Carlson: Overqualified Loser.

It also pointed to current Netflix Originals Clickbait and feature doc Microworlds: Reef as well as the recent appointment of Que Minh Luu as director of local originals.