Create NSW launches PDV incentive

NSW/Qld-based Cutting Edge worked on ‘Halloween’. (Courtesy: Universal Pictures/Blumhouse)

Create NSW will now offer a 10 per cent tax incentive for post, digital and visual effects (PDV) that can be combined with the 30 per cent federal PDV offset, bringing the state’s offering in line with South Australia and Queensland.

The introduction of the incentive, which will require a minimum spend of $500,000 on PDV in NSW, has secured the state post-production on the upcoming Untitled Baz Luhrmann Elvis Project, with the government anticipating a $35 million boost to the economy as a result.

The South Australia Film Corporation (SAFC) launched an uncapped, non-discretionary 10 per cent PDV rebate in December 2017. Just two months after the rebate was unveiled, Technicolor announced it was to open a $26 million VFX studio, Mill Film, in Adelaide, and the Adelaide-based Rising Sun Pictures has looked to expand its staff numbers. 

In October last year, Screen Queensland introduced a similar uncapped 10 per cent PDV attraction grant. The minimum spend for the Queensland grant is $500k, and SA’s $250k.

With a majority of the country’s post-production companies located in NSW, there were concerns within the sector that the state would start to lose work or its talent pool unless a similar PDV incentive was introduced in NSW.

Minister for Jobs and Investment Stuart Ayres said the introduction of the rebate is a signal to the industry that NSW is open for business.

“This decision helps achieve the NSW Government’s vision of creating great jobs in great places. It is a fantastic boost for the NSW film, television and streaming industries which increases global competitiveness, helps retain the best talent and creates jobs.

“NSW as a technology focused and services driven economy is a natural fit for investment in and support of the film and PDV industries. We look forward to seeing more jobs, investment and projects being located in NSW,” Ayres said.

The news has been welcomed by the major VFX and post houses in NSW. This is particularly in light of the fact that Federal Government announced in April that it had decided to extend the federal PDV offset to cover series made for online platforms such as Netflix, Stan and Amazon Prime, with the new rebate putting them in a better position to secure such work.

Marcus Bolton, head of features and television at Cutting Edge, a full service company which has offices in both NSW and Queensland, said: “This incentive will allow us to supercharge the national offer for Cutting Edge. We have already seen the uplift and benefit from other states’ incentives for us, and this NSW change would allow us to drive the focus for our Sydney team with increased infrastructure and most importantly creatives.

“This news coupled with the recent federal acceptance of PDV eligibility for the streaming services such as Netflix and Amazon is a winning combination for Cutting Edge to help kickstart the sector back in par with other domestic state offers.”

Fin Design managing director Chris Spry said: “This incentive allows NSW to be globally competitive again and will stem the closure of NSW businesses and outflow of talented professionals interstate and overseas.

“It will enable Fin to double in size in a matter of months and allow us to create 60 new full-time jobs for visual effects professionals. This growth will let us take on larger projects and increase our capacity, benefitting the entire state’s local, national and international screen production activity and creating even more jobs for the overall screen sector.

“It will also bring an important skillset back to the state, which will benefit multiple industries which use the same skills as visual effects professionals, including defence, education, medical and manufacturing sectors.”

Animal Logic CEO Zareh Nalbandian welcomed the government’s announcement as an acknowledgement of the value of the creative industries, with COO Sharon Taylor adding: “This clear commitment by the NSW Government to making PDV attraction incentives more competitive with other states such as South Australia will be a huge boost to Animal Logic’s ability to continue to secure large scale international productions like Peter Rabbit to NSW.”

Plastic Wax general ,anager Felix Crawshaw said: “Online streaming services like Netflix, Amazon and Hulu qualifying for the federal PDV incentive is a game-changer for Plastic Wax and their clients, and this new state-based incentive takes this even further.

“State-based incentives are a crucial deciding factor that influences producer’s decisions on where to place their shows. With the animation industry showing strong growth and set to reach US$270bn by 2020, this incentive will not only ensure that NSW remains competitively ‘on par’ with other territories, but also position NSW perfectly in becoming the animation capital of Australia.”

Spectrum Films managing director Josh Pomeranz said: “This 10 per cent PDV rebate will not only mean a significant boost to post production houses being able to support local content across feature and TV production, it will bolster Spectrum’s ability to strengthen our connections with the North American and Asian markets.

“The incentive will maximise the ability of post houses to capitalise on the increase in global content production due to the surge in demand for SVOD. Everyone will benefit from this with increased employment in the post sector, stimulating creative talent and the VFX sector with whom post houses are frequently collaborating. It is an exciting concept with enormous ramifications for the future of the film and television industry in NSW.”

Slate VFX directors Prue Fletcher, Bryn Farrelly and David Booth said, “SLATEVFX are pleased that the NSW Government is now offering this PDV incentive on top of the federal rebate, which brings it up to 40 per cent for filmmakers.

“This incentive will help grow the digital production industry and stimulate the local sector by enabling companies to expand and retain talented crews. It will also be a major attraction to international productions, complimenting the services provided in NSW.”

Minister for the Arts Don Harwin said this competitive post-production incentive gives filmmakers and studios more reasons to locate in NSW.

“Coupled with our extended Made in NSW funding, which so far has supported over 20,000 jobs and brought in a spend of over $700m across the State, this is a great opportunity for filmmakers and studios,” he said.

“Time and time again, audiences are blown away by what they see on screen – be it cinema, TV or gaming. A huge majority of this wouldn’t be possible without the highly skilled artists, engineers, specialists and data scientists who work tirelessly behind the scenes to deliver these incredible experiences.

“Already nearly 60 per cent of the country’s screen practitioners and more than half of the country’s production and post-production businesses call NSW home. We’re committed to keeping up our competitive edge to secure major investment that will continue to drive the creation of these highly-technical jobs across our local creative industries.”

Warner Bros. Pictures senior vice president of production Danielle Dajani said: “The announcement of a PDV credit by the NSW government will provide much-needed consistency and confidence to productions which must make decisions on where to place post work under very tight timeframes. This will allow us to utilize the world-class facilities in NSW for our upcoming Baz Luhrmann project in 2020.”

The new incentive will apply from October 1, and Create NSW will conduct industry consultation in August to inform the full guidelines for the incentive in the meantime.