Australia’s film and TV industry has long grappled with issues of underdevelopment and sustainability in the indie production sector, a lack of private sector financing, and limitations on growth in levels of adult drama, documentary and children’s drama.
But now, the Aussie production funding landscape is poised for dramatic shifts following a raft of government announcements that are currently being drafted into legislation.
In its May 2007 Budget statement, the government unveiled the Screen Support Package, calling for the amalgamation of three funding bodies – The Australian Film Commission (AFC), Film Australia (FA) and the Film Finance Corporation (FFC) – into a single body called the Australian Screen Authority and the introduction of a Producer Rebate (20% for docs).
While Aussie producers generally agree that the move should lead to an increase in Australian productions, many have concerns. Doc producers in particular noted three main areas of contention following the initial release of the Producer Rebate plan, two of which have since been addressed. First, the original thresholds for application were too high, effectively preventing smaller producers from being able to access the rebate. Second, the allowable thresholds of overseas expenditure to qualify as Australian meant that doc-makers would not be able to access the rebate on overseas shoot components, which are common to Aussie doc production. Third, the level of allowable above the lines for documentary production was exclusionary.
In early August, in deference to lobbying from the Screen Producers Association of Australia (SPAA) and other stakeholders, the government announced that it was lowering the threshold for doc producers to access the producer offset from AU$500,000 (US$420,000) to $250,000 (US$210,000) for programs of at least a commercial half hour, and that it would modify the provision for allowable overseas expenditure.
Above the line remains a point of contention, with producers like Gulliver Media Australia EP Larry Zetlin, concerned that producers may attempt to reduce above the line fees and hide these costs as below the line items. And the Producer Rebate itself is still drawing industry criticism. According to Daryl Karp, CEO of Film Australia, the rebate is too low and less than the funding body recommended. Stuart Menzies, head of documentaries for ABC TV, concurs: ‘It must be remembered that the gap between domestic license fees and production budgets is usually far greater than the 20% rebate.’
A more serious issue for SPAA and its members is the notion of networks being able to access the Producer Rebate, essentially by discounting license fees by the rebated amount. ‘This is a potential threat to the livelihood of the independent television production sector across all genres and could mean a reduction in diversity, competition, already low license fees and an increase in unhealthy terms of trade,’ says Julie Marlow, senior policy consultant at SPAA.
For its part, the ABC is working against this possibility. ‘The government has announced that it will monitor the operation of the scheme to identify such issues,’ says Menzies. ‘The ABC has advised the government that it will not discount its license fees to attempt to gain the benefit of the rebate, which we recognize as for producers.’
With the funding body merger set for July 1, 2008 and the Producer Rebate (retroactive to July 1, 2007) yet to be officially enacted as of press time, there are still more questions than answers for the industry at the moment. But most remain hopeful. Says the SPAA’s Marlow: ‘Things are moving quickly; it’s an election year and the government will push for legislation on the rebate and other funding decisions to go through before the end of September.’