Opposition plans Offset overhaul
[Wed 18/11/2009 02:45:36]
By Adam Coleman
Shadow Arts Minister Steven Ciobo plans to table a Private Member’s Bill in parliament on Monday night, to help the industry and the government derive greater benefit from the Producer Offset.
“Under the current lodgement arrangements, neither producers nor the government are getting the full benefit which was anticipated from the Offset,” Mr Ciobo said.
“This has meant significant cashflow issues for producers (exacerbated by the global financial crisis), many of whom have not been able to make projects stack up and been forced to scrap them.”
Speaking at a press conference outside the Screen Producers Association of Australia (SPAA) conference in Sydney today, Shadow Minister Ciobo accused Minister for the Arts, Peter Garrett, of refusing to act on the issue.
“Minister Garrett has sat on his hands for more than two years in government while the industry made it very clear how the Offset could be improved.
“I am moving a private members bill in parliament on Monday night, that will ask the Australian Tax Office to acquit early any lodgment by those companies that are seeking to use the Producer’s Offset,” he said.
The Producer Offset returns up to 40 per cent of qualifying expenditure to a production, but only after lodging a tax return.
While the Federal Government has recently allowed screen projects completed through a 'special purpose vehicle' (SPV) to close at any time, triggering an early assessment by the Australian Taxation Office, SPAA executive director Geoff Brown said it is still "clear that the cost of that is not giving the flexibility needed for the majority of producers.”
“The cost of the money to go to next year, the cost of the money to put an SPV in place, the cost of the money to liquidate the SPV, someone is paying those bills and it is not going into the screen,” he said.
Managing director of production house Omnilab, Chris Mapp, raised concerns about the number of productions underway simultaneously because of timing issues with the Offset.
“We are struggling with where we can actually do post-production and visual effects because if we all do them at the same time as our clients, you end up having to buy more equipment from Asia, America or Europe to be able to work for those two months,” he said.
Charlie & Boots producer, David Redman, who was also present at the press conference, said there is a practical issue with SPVs, “which is that ultimately the value of the Offset is what you can borrow against it to pay your production costs.”
“There is a degree of uncertainty around the closing of an SPV, where it can be held up indefinitely by the various procedures, [so] lenders are going to be reticent to lend against that degree of uncertainty. I think there is a need to have the ability to account as soon as the film is completed,” he said.
“On Charlie and Boots we struggled to get some of the essential marketing materials out in time for our release because of the amount of work all going through the post production facilities at the same time.”
[Wed 18/11/2009 02:45:36]