Renewed calls for permanent Location Offset increase

Michael Fassbender and Carmen Ejogo in ‘Alien: Covenant’, shot in Sydney.

Australia boasts impressive crews, cast and locations, but at 16.5 per cent the Location Offset “doesn’t stand up” to the other physical production rebates offered around the world, according to the Fox exec responsible for bringing Alien: Covenant Down Under.

In order to lure big budget foreign productions to Aussie soil, the Federal Government has in the past five years awarded a number of blockbusters, such as Aquaman, Alien: Covenant, Thor: Ragnarok and Pirates of the Caribbean: Dead Men Tell No Tales, one-off cash grants which effectively raise the Location Offset from 16.5 per cent to 30 per cent.

However, 20th Century Fox’s executive vice president of feature production Fred Baron – the Moulin Rouge! producer who has also brought Alien: Covenant, Aquamarine and The Wolverine to Australia – told IF that he wishes 30 per cent was standard, instead of studios and producers having to lobby for uplift.

“When it works it’s great, but we can’t budget films without knowing in advance if it’s going to work or not. We’ve used [the grants] as a way to make Australia competitive with other locations, specifically Eastern Europe, London, Canada, Louisiana, Georgia, Massachusetts, New York and California.”

As Fox owns a studio in Australia, it is always keen to bring productions down here, says Baron. Australia also offers a good exchange rate, has strong on and off screen talent and is an attractive destination for US stars. Baron notes that Alien: Covenant director Ridley Scott and producer Mark Huffam were greatly impressed with Sydney’s crews, art departments and cast, as well as how liveable the city was.

However, Baron emphasises that to bring a production to Australia it has to make sense not only creatively but financially. Alien: Covenant utilised the Location Offset, the one-off cash grant and a NSW state incentive.

“[Rebates are] just part of the equation of making film or TV, and how to get the maximum amount of money on screen. It’s a business; it’s film business.”

He lists The Martian as one film Fox would have liked to have brought to Australia but didn’t as it wasn’t able to secure the additional grant to lift the rebate.

Baron discussed the advantages and practicalities of shooting in Australia at Ausfilm’s recent Partner with Australia event in Los Angeles. The annual program is designed to connect Aussie talent with US businesses, and share with the US market, as well as Australian producers and creatives now based Stateside, how they can access Australian incentives.

A call for an increased Location Offset is nothing new; Ausfilm has long advocated that it needs to be more competitive and certain to compete with other incentives around the world.

“I think there’s an acceptance here in Hollywood that Australia is very good what they do and they like Australia. But of course, we’ve got to make sure that they get certainty about incentives,” Ausfilm CEO Debra Richards told IF on the phone from LA.

“We’ve benefited greatly from the one-off grants that the government has given over the last five years and we’ve seen the benefits of that in terms of direct foreign investment and jobs, etc. If [the level is] certain then it makes our lives easier, it makes the studios’ lives easier, it makes our creatives and our businesses lives easier as well because they know what they’re dealing with.”

Richards says there is currently a lot of work being brought to Australia through the 30 per cent Post, Digital and Visual Effects (PDV) Offset – “so we know it all works.”

“We’ve just got to get the level right and permanent.”

Over the past four years, an estimated $1.039 billion has been invested into Australia from international feature and TV production. In the 2015-16 financial year over 3,940 people were employed from footloose productions.

Among the foreign productions that have recently shot here are: Kong: Skull Island, Thor: Ragnarok, Alien: Covenant, Pacific Rim: Uprising, Peter Rabbit, The Shallows, Bleeding Steel, television series The Leftovers, Hunters, Australia-China co-productions The Longest Shot (formerly Dogfight) and Guardians of the Tomb (formerly Nest); and Aquaman, currently shooting in Queensland.

An assessment of the Australian Screen Production Incentive, which encompasses Producer Offset, Location Offset and PDV Offset has been laid out in the terms of reference of the government’s Australian and children’s content review. The government has said the offsets were designed to “suit pre-2007 industry models”.

The House of Representatives inquiry into the growth and sustainability of film and television, announced earlier in the year, will also feed into this review.

As well as a Location Offset increase, Ausfilm’s submission to that inquiry has called for offshore producers to be entitled to access both the Location Offset and the PDV offset to encourage projects to be filmed and have their post done in Australia.

International productions that completed or are completing visual effects and post-production in Australia include LEGO® Ninjago, The LEGO® Batman Movie, Spiderman: Homecoming, Logan, Jumanji: Welcome to the Jungle, xXx: The Return of Xander Cage, Doctor Strange, X-Men: Apocalypse, Deadpool, Game of Thrones (season 6, 7 and 8), Ghostbusters, Alien:Covenant and Guardians of the Galaxy Vol 2.