House of Reps inquiry recommends a 30 per cent Producer Offset for all productions

08 December, 2017 by Jackie Keast

That the Producer Offset be adjusted to 30 per cent for all qualifying productions, regardless of platform, is among the key recommendations to come out of the parliamentary inquiry into the growth and sustainability of the screen industry.

In its report, handed down yesterday evening, the House of Representatives Standing Committee on Communications and the Arts recommended that the government ‘harmonise’ the offset, which it said would remove the distinction between theatrical and non-theatrical features.

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At present, the Producer Offset sees all theatrical feature releases receive a tax rebate of 40 per cent, and television and VOD productions 20 per cent.

In his foreword to the committee’s report, chair Luke Howarth said that this distinction between film and television was no longer valid.

“Television and film now have comparable production costs and television is a far larger employer. Notably also, most Australian filmmakers cannot access a cinematic distribution and many films bypass cinema for alternative content platforms,” he said, with the Liberal MP noting that the committee had heard almost universal support for the offset to be leveled across platforms.

In a dissenting report, Labor members of the standing committee – Tim Watts, Susan Templeman and Emma McBride– said they did not support the broader committee’s recommendation on the Producer Offset, arguing that any reduction in the present offset for feature films could have an adverse effect on the sector.

However, all committee members agreed that the 65 hour cap be removed with regards to television series.

As was expected, the committee recommended that the Location Offset be lifted from 16.5 per cent to 30 per cent, and that it be decoupled from the Post, Digital and Visual Effects (PDV) Offset so both can be claimed for the same production. It also suggested that qualifying production expenditure for the Location Offset could be reduced from $15 million to $5 million for pilot features.

The report has also recommended that children’s content quotas be reviewed in light of current viewing trends. However, it said mechanisms need to remain in place to continue to ensure access to a variety of content, particularly live-action drama. Going further, it has suggested that hours-based quotas for children’s content should be either be completely or partially replaced by a contestable fund, and that the ABC have minimum hours-based quota for first release children’s content.

“This reflects the ABC’s strong commitment to children’s television and community feedback indicating that the ABC has become the primary provider of Australian programming for children,” it said.

Labor members of the committee did not support the change to the ABC charter, arguing that it should only be considered after detailed discussions with the broadcaster about the cost implications and broader impact.

The broader committee has also suggested that SBS’s charter be amended to require that additional multicultural programming is sourced from the domestic market. It has suggested the public broadcaster should be required to show a minimum of 50 per cent Australian content across all of its channels.

Labor has also rejected this, arguing that “additional programing requirements and charter amendments for SBS would have significant cost implications for the organisation and cannot be pursued in isolation of the question of government funding for the organisation.”

Other key recommendations from the report:

  • SVOD services should be required to invest part of their revenue earned in Australia in new local content;
  • 10 per cent of Screen Australia funding should be earmarked for productions filmed outside of the Sydney and Melbourne metro areas, and that the agency provide a regional breakdown of the productions it has funded in its annual report;
  • Government should remove the “unnecessary red-tape obligation” to consult the Media, Entertainment and Arts Alliance (MEAA) before permitting a foreign actor to work in Australia;
  • That the Interactive Games Fund, scrapped in 2014, be reinstated;
  • The government should negotiate further co-production agreements with Asian countries;
  • That ‘first-release’ be redefined to mean first broadcast anywhere in the world, effectively closing the ‘New Zealand loophole’;
  • The Minister for Small Business should consult on mental health and other health and safety issues with companies in the sector.

Screen Producers Australia has largely welcomed the report’s recommendations, positing it sets out an updated policy framework that will allow production businesses to compete internationally. However, the organisation was concerned by the reduction of the Producer Offset for features.

“There are many existing challenges for our talented film makers in today’s competitive global landscape and to put things simply, this proposal will mean great Australian feature films will struggle to get made,” said SPA CEO Matthew Deaner.

“SPA has made this clear in our submission to the government in the Australian and Children’s Content Review and we will continue to advocate for features films not be marginalised in any policy reforms and ensure great Australian productions like LionThe SapphiresThe Dressmaker and Sweet Country be able to be made and shown to audiences both home and abroad.”

Deaner also said he was delighted to see the committee recommend SVOD services be required to contribute back to the local industry. While he suggested that children’s content remains a contentious issue – “we know the commercial broadcasters want their obligations to Australian children abolished” – the recommendations put forward by the committee were sensible.

“SPA will continue to advocate to #savekidstv.”

Ausfilm welcomed the recommended changes to the Location and PDV offsets, which are in line with what the organisation has long lobbied for.

“Should this recommendation be accepted by the government, it means we will be able to secure up to another $200 million per annum in additional production value. That will be a huge boost to the Australian film industry and help secure many more jobs, not just in our sector but also in a wide range of sectors that provide products and services to the Australian industry,” said Ausfilm CEO Debra Richards.

The Australian and Children’s Screen Content review, a concurrent analysis of the screen industry’s support mechanisms, conducted by the Department of Communication and the Arts, Screen Australia and ACMA, is also expected to hand down its recommendations in the coming weeks.

Read the full report here. 

 

 

 

 

 

 

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