Screen Australia CEO Graeme Mason was “slightly bemused” by some of the industry’s reaction to the Federal Government’s plan to harmonise the Producer Offset for both film and TV at 30 per cent from July next year.
While the extra 10 per cent for the TV offset has been largely welcomed, Screen Producers Australia (SPA) has said any reduction to the film offset – currently at 40 per cent – could “mean the end of the line for so many great Australian feature films”.
Indeed, various producers have described the offset decision as the “death knell” of Australian cinema, and predict a crippling impact on theatrical releases.
Mason understands feature filmmakers concerns, but has said it has felt “a little bit over the top to think it’s the end of the world”.
As he sees sees it, even with the changes, an Australian producer could potentially finance more than 50 per cent of a mid-sized feature via government money, if they combine the 30 per cent offset with direct Screen Australia and state agency funding, including state-based post, digital and visual effects (PDV) rebates.
“I don’t know anywhere else that has that [in the world],” said Mason last week in a webinar with SPA CEO Matthew Deaner. “I recognise it’s a step down… but it’s really pretty extraordinary.”
The proposed offset measure will see the requirement for features to receive a bricks-and-mortar cinema release removed. This means films released via streamers will get a 30 per cent rebate, rather than 20 per cent as previous.
Minister for Communications, Cyber Safety and the Arts Paul Fletcher has suggested the overall change will enable producers to take advantage of the growth of SVODs.
Mason believes producers have to be mindful of the “new world” for feature film, noting theatrical was already having problems pre-COVID and has since been “decimated”.
“I understand you suddenly maybe today woke up and for the film you were planning for the end of ’21, you have a 10 per cent hole you hadn’t anticipated. Totally understand that. I certainly don’t buy in, however, to the idea that the sky has fallen or the world is over. There is still a lot of government support.
“We will be looking at how we fill holes… Now, will it be on everything? No. But again, I would suggest in the theatrical space, we have to be thinking about: is making something specifically for cinemas the right approach anyway?
“The reason a lot of producers have had problems with their finance plans of late is because that whole model has been creaking, changing anyway. Home ent has been in trouble for a long time. International sales have changed dramatically in five years.
“We still love film. We’re going to be making sure that films get made. But it is a fundamentally different game than it was five years ago.”
Screen Australia was one of the beneficiaries of the government’s sweeping announcements last week, due to get an additional $30 million over two years to support the production of Australian drama, documentary and children’s film and TV content.
It will also receive an additional $3 million over three years to establish a competitive grants program targeted at script development. Mason said the intention of this funding is to make sure Australian projects have a better chance at international investment and sales.
“I want us to have a better show of selling our stuff offshore because that money comes back to producers and productions. I want to go back to a day when – like hopefully will happen now with the streamers – they start coming down earlier, knocking on people’s doors and saying ‘What have you got?’ and investing in it early.
“A challenge for us at the moment is that a lot of our stuff is good – but not great – for an international buyer.”
Given the additional funds from the government, Mason suggested to Deaner that the agency will consider looking at investment caps and how it structures funding streams, including how it best supports emerging talent to come through. He underscored that the agency has to ensure good content is made; content that is connected to audiences.
“One of the challenges for film of late has been that… the amount of people watching it has gone down so dramatically.
“Take Australian content out of it, you get the great French or British film that comes to the festivals. It used to be in Sydney or Melbourne, and then it would go to all the other festivals. Then it would do the cinema arthouse circuit around the country. Now it probably plays in Sydney and Melbourne festival and that’s it. You have Palme d’Or winners at Cannes not getting released at all.
“The world has shifted. You can’t ignore that. I can’t sit in Senate Estimates and say ‘We gave $X million to a project that 22,000 people watched.’ And people say ‘Oh, but it’s about career development’. To what?”
One of the other key proposed changes to the Producer Offset is the doubling of the minimum qualifying Australian production expenditure (QAPE) threshold for feature length content – from $500,000 to $1 million. There has been some industry concern about what this would mean for projects of lower budgets.
Mason said there needs to be thought put into how such work be best supported going forward. With regards to documentary, he flagged Screen Australia will look at the Producer Equity Program (PEP) program, which provides a direct payment of funds to producers of low-budget docos. As it was, the program was already oversubscribed, but plans to adjust Screen Australia’s documentary funding program were delayed earlier this year.
More broadly on financing, Mason said the agency has seen some distribution and minimum guarantees reduce significantly due to COVID-19. However, he said the pendulum is starting to shift back as confidence in the market returns – with caveats.
“What we’re seeing, is when they want something, they’re really putting up money. When they’re not sure, they don’t put up anything or put up almost nothing. It’s feast or famine.”