More help needed for struggling film industry
Australia's film industry says it's struggling to cope with the high Australian dollar, which is making it less competitive on the global market. The South Australian Government has promised more tax incentives to lure more investors. But the industry says more help is needed for big-scale productions to return.
Source: PM | Duration: 3min 57sec
MARK COLVIN: Australia's film industry says it's struggling to cope with the high Australian dollar, which is making it less competitive on the global market. Today the South Australian Government promised more tax breaks to lure film makers to the state. But the industry says more incentives are needed for big productions to return.
Nicola Gage reports.
NICOLA GAGE: It's a $48 million facility. But in its first year, the Adelaide Studios only attracted $100,000 in commercial work. While that's similar for other start-up businesses, it's been compounded by problems out of their reach.
RICHARD HARRIS: It's become particularly competitive. The fact that the Australian dollar has dropped, the fact that the international financing landscape has become very difficult.
So it means that a lot of those sales agents who were previously putting up money for films are not putting up those sort of money, if money at all.
NICOLA GAGE: Richard Harris is the chief executive of the South Australian Film Corporation. He says the industry is in a precarious position, but new tax incentives announced by the South Australian Government today could partly turn that around.
Film and television producers can apply for payroll tax exemptions before their production is made.
RICHARD HARRIS: What this decision today gives is something which is incredibly important to filmmakers and producers, which is certainty. Having that certainty up front is a major issue.
There is also the sense, in fact, that the state, which has always been a film-friendly state - this is yet another sense that this state at a cabinet level is willing to continue to back the film industry, which is very important.
NICOLA GAGE: A decline in foreign investment has led to a more competitive local market, but Mr Harris says the changes will give it an advantage over rival production houses interstate.
RICHARD HARRIS: One of the issues we've had with the payroll exemptions is that television producers coming into the state would never have had that certainty about getting that payroll exemption because it's not covered.
Now, they will be told very early in the piece whether that payroll exemption will be granted to that television production or not, and that will make a massive difference to a television show, which could make the difference of between $40,000 or $50,000, up to numbers of hundreds of thousands in their budget, and that's very significant.
NICOLA GAGE: It's a similar situation Australia-wide. States and territories are setting up their own incentives to lure investments.
Debra Richards is the chief executive of AusFilm.
DEBRA RICHARDS: Dollar which is above parity means that the bottom line for international footloose production makes it more expensive to come to Australia. So we've been lobbying for some time to try and get in particular the location offset increased by another 13.5 per cent to 30 per cent. We know that there is, again, significant studio interest in coming back to film in Australia if the location offset was at 30 per cent.
NICOLA GAGE: Ms Richards says the smaller offset for films based here isn't working.
DEBRA RICHARDS: Australia used to be regularly looked at when our dollar was a lot lower, of course. And there are a number of competitive territories that have now introduced incentives, such as Malaysia has just introduced an incentive at 30 per cent.
So that sort of seems to be the international practice, and so we're competing with more and more territories to try and get that work, because it does bring in a significant amount of investment into Australia.
NICOLA GAGE: Professor Deb Verhoeven is the chairwoman of media and communication at Deakin University.
DEB VERHOEVEN: that inbuilt incentive to come to Australia because you automatically make savings of some sort just isn't there.
Consequently, the Federal Government and state governments have to work much harder to attract foreign investment and foreign spend in the film industry to Australia. And that's proven to be quite difficult.
You know, we're not nearby, we're not like Mexico. We're not physically close to Los Angeles. And although we do share a language and we have very high-quality post-production facilities here in Australia, which makes Australia very attractive, in the end it's all about the numbers.
NICOLA GAGE: The industry says it will continue to lobby governments for better incentives to ensure the industry survives.
MARK COLVIN: Nicola Gage.