Gov pledges $20m Location incentive, Offset still at 16.5%

13 March, 2013 by Brendan Swift

The Federal government has pledged a one-off $20 million Location incentive to lure Hollywood productions to film in Australia.

The result will disappoint the struggling film industry where expectations were rising that the government would increase the Location rebate from 16.5 per cent to 30 per cent as part of its $235 million Creative Australia national cultural policy.


“This is as a precursor to an increase in the Location Offset should the Australian dollar remain high,” Arts minister Simon Crean said. “This new incentive fund is in addition to our investment in securing The Wolverine, and the current negotiations with Disney to secure 20,000 Leagues Under the Sea: Captain Nemo.”

It is not yet clear if the $20 million will be used as part of more "one-off" offers to Hollywood productions (the The Wolverine received $12.8 million last year and Captain Nemo has a current offer of at least $12 million) or as part of a more transparent mechanism that can be assessed by all productions.

The Media Entertainment and Arts Alliance welcomed the new policy but also called for the Location Offset to be increased.

"Today Minister Crean said the funding boost was precursor to the location offset being permanently increased if the Australia dollar remains high – and we are going to hold him to that. The livelihood of our world-class film crew depends on it,” said Mal Tulloch, director of the Entertainment, Crew and Sport section of the Alliance.

The new Creative Australia government policy also includes plans to create an online production fund to support premium Australian content for online delivery and an immediate four-year investment of $10 million for production aimed at digital platforms (including television).

The Screen Producers Association of Australia (SPAA) was supportive of the policy, particularly the $10 million digital funding as audiences migrate towards online content, however, it also pointed out the lack of new tax offset policy.

“While it is pleasing to see a number of new subsidies to encourage innovation, we believe it is equally important to consider tax incentives and regulation," SPAA executive director Matthew Deane said."It is these policy levers that underpin broader types of production and have the biggest impact on growth. Unfortunately, they have not been addressed in either Minister Crean or Minister Conroy’s announcements this week. We will continue to pursue these options in the coming months."

Missing from the government policy was another recommendation from the Convergence Review: doubling the Producer Offset to 40 per cent for so-called “premium” local TV content.

As part of the planned online production fund, Screen Australia will begin exploring partnerships with telecommunication providers, broadcasters and online providers (telcos and ISPs have proved particularly reticent to fund Australian content in the past).

The government policy also included somewhat vague plans to work with the industry "on long-term measures to support production and distribution of Australian screen content, including the converged content production fund proposed by the Convergence Review".

The converged content production fund was intended to support Australian content and contemporary music and required funding from government, potentially spectrum licence fees from broadcasters and "content service enterprises" (such as Google and Telstra).

Late last year, the government also announced $20 million to create an Australian Interactive Games Fund, overseen by Screen Australia. Crean said he would announce the first recipients in June.

Earlier this week, the local screen production industry condemned the Minister for Communication Stephen Conroy's proposed plans to make permanent a 50 per cent reduction in commercial broadcaster licence fees in return for their pledge to broadcast an additional 1490 hours of Australian content by 2015.

The government has not refuted claims by the Australian Directors Guild, the Australian Writers' Guild, the Media Entertainment and Arts Alliance, and the Screen Producers Association of Australia, that those new requirements are already being exceeded by the broadcasters.

The full Creative Australia policy can be read here:

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