Lucrative incentives from the government have drawn major Hollywood projects, such as the $1 billion plus grosser Aquaman, to our shores, providing an immense economic boost and creating jobs in the process. But while the government and public agencies are content to claim these projects as victories for Australia’s burgeoning film industry, homegrown talent and films keep lagging behind.
It may seem bizarre to see Hollywood blockbusters like Aquaman promoted across our TV screens as ‘Aussie films’, but this is the reality in a country where Aquaman joins a long list of American and international productions invited to our shores by the government.
It’s a simple and commonplace strategy. The ‘screen offset program’ is used to attract large, foreign film projects. While these projects are foreign in origin, they generate massive returns in local jobs and domestic spending which in turn is meant to develop our own industry. Filmmakers are then entitled to a tax rebate from the Australian government provided they spend a specified, minimum amount here.
Aquaman alone was projected to provide over 1100 employment opportunities and a $150 million financial injection into Australia’s economy. However, it also cost the Australian government a one-off grant of $22 million to actually secure the film for an Australian production.
Previously, Thor: Ragnarok and Alien: Covenant similarly may have cost the government a whopping $34 million to secure. However, they have indisputably been great economy boosters. In the previous fiscal year, Aquaman and Thor: Ragnarok delivered a record-breaking $1 billion in finance for the Australian film industry. This confirms that film offsets are a rewarding and lucrative means of supporting the economy. And the financial and employment returns of these offsets also arguably justify the public funding that goes into them.
While this may be cause for celebration, it also underscores a stark and shameful contrast.
Australia’s own movies continue to generally be financial underperformers that fall to even justify the capital they require. While Hollywood work remains Australia’s primary means to secure a return for the Australian film industry – where exactly do our own film products rank in their contribution to our industry?
Federal agency Screen Australia funds domestic Australian movies through taxpayer funded government grants- as opposed to the offset system that draws in foreign films. Since Screen Australia’s inception in 2008, their grants towards Australian films have increased annually.
However, the last time these Aussie films commanded a share of over 10 per cent in our own domestic box office was in 1988 with Crocodile Dundee 2. Unlike the offsets that bring Hollywood products to Australia, these grants for homemade films deliver a substantial net loss for taxpayers.
This misspending of public funds is something that the industry has always been oblivious to. This is unsurprising, as Screen Australia’s KPIs for a ‘viable screen businesses’ aren’t based on how well a film performs or returns financially. Instead, they are based on how much these film production budgets increase every year. In other words – these KPIs target an annual increase in taxpayer-funded grants towards Australian films, rather than their return.
Besides the Australian Government’s screen offset program, Screen Australia looks after the Producer Offset, which is a 40 per cent tax rebate towards significantly Australian content. Meanwhile, the Department of Communications and the Arts is responsible for the Post, Digital, Visual Effects tax rebate of 30 per cent and the location offsets which similarly deliver a 16.5 per cent rebate. The latter two rebates have not only been the means to attract significant film spends from overseas, but have also ensured a substantial flow of inbound work and finance for the domestic film industry
These offsets have continually drawn successful foreign works such as, The Great Gatsby, Kong: Skull Island and Spider-man: Homecoming. But none allow Australian cinema to sincerely claim credit for producing a $1 billion plus grossing film in the way that Hollywood – or even Bollywood – can.
Meanwhile, a broken grants system for homegrown Australian movies that lacks sufficient incentives to create commercially viable films, continues to deliver only blindly cashed checks to cover bills footed by hardworking taxpayers.
This should serve as a wake-up call. Our dependency on foreign projects that can never be a sincere source of national pride, to prop-up our film industry will continue unless we consider ways to promote a commercially viable and profit-sustaining homegrown films that don’t rely on the taxpayer to cover losses in order to keep a leaky boat afloat in troubled waters.
Jay Bedi is an actor, screenwriter and founder of creative film agency, Nylero, content marketing strategist at Indago Digital and a research associate at the Australian Taxpayers’ Alliance. Jay’s focus is on commercialising Australia’s film industry through his own productions.
Ilustration: Warner Bros./First National Pictures.
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