Feds to spend $140 million to top-up the Location Offset

Jason Mamoa as ‘Aquaman.’

The Federal Government will allocate $140 million over the next four years as a top-up for the 16.5 per cent Location Offset.

While that is welcome news for Australian studios, technicians and post and VFX houses, the extra $35 million per year may attract only two major productions of the scale of Aquaman each year.

In 2016 the Turnbull government announced a $22 million tax rebate to secure the Warner Bros./DC superhero film directed by James Wan, which was shot at the Village Roadshow Studios and on location in South East Queensland.

Jason Momoa played the title role alongside Amber Heard, Nicole Kidman, William Dafoe and Patrick Wilson.

Nor does it address the structural issue that, at 16.5 per cent, the incentive is not competitive with most other markets that are chasing offshore production.

Ausfilm, the MEAA and Queensland Premier Annastacia Palazczuk have long been lobbying for a permanent increase to 30 per cent.

The government said the new fund, which starts in 2019-2020, will bring in more than $260 million in new foreign investment. More optimistically, Ausfilm CEO Debra Richards said she expects it will attract an additional $200 million in production value annually.

Large-scale international productions contributed more than $600 million in direct investment to the Australian economy in fiscal 2017.

Richards noted that Aquaman, Thor: Ragnarok and Alien: Covenant locationed in Australia thanks to Federal Government top-ups, productions which would otherwise have gone elsewhere.

“This will be a tremendous boost to the Australian businesses in the industry and help to secure those same jobs for our crews, technicians and creatives,” she said.

“This will also provide work not just in our screen sector but also across a wide range of sectors in Australia. It will deliver new sources of revenue and innovation. It also contributes to developing skills and training opportunities of Australia’s crews and technicians in businesses like sound and post-production or visual effects.”

Politically it may be tough for the government to lift the Location Offset while the TV Producer Offset remains at 20 per cent.

The screen industry is not expecting any change to the Producer Offset in next week’s budget while the government takes more time to consider the incentives regime.

Screen Producers Australia CEO Matt Deaner tells IF, “I welcome today’s announcement. SPA has long argued that greater certainty and support should be afforded international production in Australia. These international productions offer great opportunities for enhancing the industry’s reputation and capability. At least 10 per cent of our workforce is employed on these productions and rely on a robust, solid and successful local industry that has been built up over decades.

“I now look forward to working with the government to further its reforms to grow local industry capacity, capability and trade opportunities so we can employ more Australians, make more and better Australian stories for Australian and international audiences.”

The government said this is the first measure of a number of reforms which it’s considering to further support local production.

Tourism Minister Steve Ciobo said he is confident the additional incentive will attract more big-budget international filmmakers to Australia, and Queensland in particular.

“The major studios have told us they want to make movies here,” Ciobo told the Courier-Mail. “This funding makes Australia more competitive and will help secure more major productions that will create and support local jobs.”