Kylie Minogue was one of the biggest TV stars in the country in the late-1980s. But it took the support of the government’s newly-formed screen agency, the Film Finance Corporation (FFC), to provide millions of dollars in funding for her big screen debut.
The Delinquents, like many Australian films, bombed. The FFC’s near $4 million investment – almost half the $8 million budget – returned just $524,000 to the agency in just over 12 months, according to a confidential analysis.
It was a disaster that spurred the executives and board at the FFC – which later merged into Screen Australia – to believe they knew better than the private sector after a four-and-a-half hour meeting on May 4, 1991.
“The meeting noted that marketplace judgement of quality had not proved sufficient e.g. The Delinquents,” the FFC’s board notes recorded. “A possible way to address this problem is to pay more attention to a negative script assessment.”
It was the beginning of the end of the nation’s most audacious experiment in direct arts funding: letting the free market decide.
The federal government screen agency was never intended to cast creative judgment on films. It was supposed to follow the investment decisions of the marketplace, which would lead to more audience-focused films.
There was a simple reason behind that belief, as then-Treasurer Paul Keating (who backed the FFC’s formation) would say: “In the race of life, always back self-interest – at least you know it’s trying.”
A potted history of screen agency success
The shift more towards creative assessment proved no more successful despite the rise of indie films in the 1990s. Even the three biggest hits of the era: Strictly Ballroom, Muriel’s Wedding, and The Adventures of Priscilla, Queen of the Desert were initially rejected by the FFC.
A longer run of less stellar box office success followed and in 2008 the screen agency was merged with the Australian Film Commission (AFC) and Film Australia to become Screen Australia.
Fast-forward to today and Screen Australia’s creative assessment holds as much sway as the investment decisions of the private sector. They are two of five equally-weighted areas that Screen Australia assesses, including the potential to reach an audience, the experience and achievements of the creative team, and the way the film will amplify inclusivity, diversity and/or gender equity in front of (and behind) the camera. However, the agency ultimately retains discretion to decide which films are funded.
Ian Robertson, who was deputy chair of the inaugural Screen Australia board, said the success of the industry ultimately rests with producers and the screen agency is there to make a business assessment of projects rather than a creative assessment.
“I don’t think agencies should be giving producers script notes. I’m not saying it doesn’t happen. I’m not saying that perhaps there shouldn’t be script notes, but I don’t think it’s the job of the agency to do that. That’s surely part of the development process about getting other inputs and advice and experienced writers to look at less experienced scripts.”
It is a sensitive area for filmmakers who, despite the introduction of the 40 per cent Producer Offset on film expenditure in 2008, remain largely reliant on Screen Australia’s direct funding. Few will discuss details of the assessment process.
Two-time Academy Award-nominee Bruce Beresford says both film studios and government film bodies regularly get it wrong.
“I think the assessment aspects of the various government film bodies are bizarre, but this is probably the case everywhere, not just in Australia,” the Australian writer-director says.
Many of his most critically-acclaimed hits were initially rejected by studios and other private investors, including Tender Mercies, Driving Miss Daisy, and even Breaker Morant, which kickstarted his international career.
“My Breaker Morant script was sent to various LA production groups when we were looking for finance,” he says. “The script reports that came back were all dismissive – all regarded the project as worthless. The same script, unaltered, was nominated for an Academy award.”
A theatrical release remains the pinnacle for many filmmakers although the cinema landscape has radically changed in recent years with the collapse of release windows and the rise of streaming. Yet Australian audiences have rarely flocked to see local films.
The Australian share of the local box office averaged 4.68 per cent over the last decade, falling to just 2 per cent in 2023, according to Screen Australia data. Robertson says it has always been the case that most low-budget Australian feature films haven’t found an audience.
“There are reasons for that – one is, it’s certainly economically the worst way to distribute anything because you’ve got to pay for the theatre; you’ve got to have huge publicity budgets,” he says.
“You’ve really got to be making a film that will attract a larger audience, so we get it right when we do international scale work – the Baz Luhrmanns and George Millers and so on keep proving that – but the rest, there remains an audience problem and I’m not convinced that that’s soluble.”
Retired film distributor Alan Finney, who marketed many classic Australian films including Priscilla and Muriel’s Wedding, says the question of “who decides” which films receive government funding has always been a complicated question.
“One of the problems when you’ve got a small population and a small industry is the people who you appoint to make the decisions are either of two kinds,” he says.
“They’re either people who have never been in the industry and know nothing about it, and are therefore criticised for not being in touch with the key factors of decision-making, or they’re people that have been in the industry, and then the criticism is made that either they’ve got vested interests or they’re obviously failing in their job in the industry, which is why they’ve been appointed to the board of this state or federal funding body.”
Direct film funding: an idea once opposed by Treasury
The launch of a government film agency to pick which feature films were funded was deeply controversial in the 1980s.
The FFC was itself the answer to one of the biggest miscalculations in the history of subsidies – the 10BA tax break. It prompted wealthy mum and dad investors in the 1980s to pour hundreds of millions of dollars into questionable films that rarely found an audience.
The AFC, led by Kim Williams at the time, proposed a new model: a government “film bank” that would foster a more commercial industry. But Treasury was concerned that a government bureaucracy would end up controlling the film industry.
“The Treasury has however made it abundantly clear that its primary concern in addressing any film assistance regime is to ensure that there is no public sector industry focus or control of activities,” Williams wrote in an AFC board report of March 23, 1988. “Treasury believes the industry is in danger of becoming a ‘public service industry’.”
The answer was to remove the fledgling screen agency as a creative decision maker. That was left to those closest to the audience, such as film distributors, who had to invest real ‘at risk’ money before the FFC would come in with its own funding.
Yet three years after its launch, the FFC had supported just one bone fide hit: Peter Weir’s rom-com Green Card. Even when it backed a winner, the FFC would regularly subordinate its recoupment position, allowing private investors to recover their investment from potential film returns ahead of the screen agency.
By the May 4, 1991 board meeting, the FFC directors and executives decided it was also the way to flex the agency’s creative muscle.
“FFC present policy of looking only at the commercial aspect of a project need not be changed where other investors are taking the risk, but where FFC dollars are subordinated, the FFC needs to pay more attention to the creative components,” the meeting notes said.
“RESOLVED that where management is of the view that a script is poor – and where a negative script assessment has been provided – this should be put clearly to the board and the script assessments in market reports commissioned by the investment manager should carry more weight than in the past. The board then has the option to disregard the script assessment.”
Years later, the FFC’s final chief executive, Brian Rosen, split the creative assessment and marketplace attachment criteria into a two-door funding policy. One funding path was automatically triggered by marketplace funding and the other was triggered by the FFC’s own judgment. He says it wasn’t clear which was more successful.
“Nobody knows in this business,” Rosen says. “Nobody knows – it’s as simple as that.”
He points to a discussion he once had with an FFC board member who asked if a film project applying for funding was “commercial”.
“I said, ‘If I knew that I wouldn’t be running an agency, I’d be running a studio’. I said, ‘We’re not here to do that, we’re just here to make Australian films for Australians to watch or not watch, and to create a bit of an industry’. That’s what it is and it’ll never change.”
For more stories about the local film industry, see ‘Money, art and madness: How the war between bureaucrats & auteurs killed the Australian film industry‘ which is available now on Amazon.