From one of our freelance animators…
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Josh Bowman Says:
June 20, 2008 at 7:05 am edit
I think it’s great that you guys are doing “The PRA Dec.”
It seems to me that the people responsible for the deduction want to finance movies that are “Australian” and I find that extremely short sighted and pompous. As if in some way they think that if it’s not Australian then it’s not worth it because it doesn’t do anything to promote “Australia”.
This is all based on my view of these events, if someone has more information on the situation or if there’s anything in what I’ve said that’s incorrect let me know.
The fact is that in the next 6 – 8 months there’s a very real possibility of me having to look overseas to find animation work just so I can survive. There are so few places in Australia being used for animation in movies and if there aren’t any incentives for overseas movies to be produced here then we’re all just going to have to leave.
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Josh is one of the very real people affected by how this legislation works. There is some confusion over how these incentives work, which has not been helped by some of the selective reporting we’ve seen about Justice League Mortal.
Essentially, a number of rebates were announced as part of the Australian Screen Production Incentive. There were:
- Producer offset – 40% rebate on “Australian” Films (minimum budget on 1M)
- Producer offset – 20% rebate on “Australian” TV series
- PDV offset – 15% rebate on post, digital and visual effects (Minimum spend of 5M)
- Location offset – 15% location rebate for overseas productions shooting in Australia (Between 15-50M spend, > 70% of total expenditure to be in Australia)
Generally speaking, the new producer offset leaves Australian producers better off, so long as they’re producing features with budgets over $1M. For ultra-low budget filmmakers, they’re neither better or worse off. For visual effects and production crews servicing foreign production, there’s definitely an improvement as we didn’t have these sort of incentives at all before. 15% is not as generous as the 40%, but when the government is footing the bill, there should definitely be some “Australian-ness” to it – whether it is cultural or where the profits go.
The 40% offset is designed so that Producers can borrow against it and assume a high equity position in their projects and make more out of their films, so they can keep making more films. I think it is the second issue is more important here. The previous system often left producers worse off after after finishing their films.
By giving them a high equity position in their films they can achieve more sustainability in their businesses and increase the output of production in Australia. Would Warner brothers have given George Miller a high equity position (around 30% as the regulations won’t quite give you a full 40%) in a film based on one of their most lucrative franchises? The Producer Offset isn’t intended to just give the major studios a discount. The producer has to gain more out of it in exchange.
So the real question with Justice League Mortal wasn’t about whether it was Australian or not, but whether it would qualify for the 15% location/pdv offsets, or the 40% offset.
In the end, Justice League didn’t qualify for the Producer’s offset because it wasn’t deemed “Australian” enough. If it did, it might have broken the bank! I’m not sure if it would have qualified for the 15% location offset either as the budget was over 70M. Regardless, according to The Australian, Miller insisted that “Justice League Mortal would not [have] be[en] viable in Australia if it attract[ed] only the 15per cent rebate”.
It is truly unfortunate that Australia lost out on a mega project that would have changed the whole lanscape here. It could have done for us what Lord of the Rings did for New Zealand. And if (big if) Warner Brothers would have allowed Miller to keep the rebate and take a high equity position in Justice League Mortal, who knows what great things he could have done with the money as possibly the most powerful Australian producer ever.
BUT, in spite of all this, we shouldn’t forget that we still have a location and PDV offset that is an big improvement on what we had before. These industries should still be able to attract more work from overseas than they did before and make us more competitive globally.
Now if only we could do something about that high Aussie dollar right now!
