By Morgan Hind

Screen Australia has rejected claims that it is approving film production budgets which undervalue the work of post-production houses and endangering the future of the local industry.

It comes several months after eight sound post-production companies, led by major local player Soundfirm, wrote to Screen Australia expressing concerns about the depressed state of the industry.

However, the national screen agency told Senate Estimate hearings this week that the sector's current woes are being caused by price undercutting and the high value of the Australian dollar.

“We have heard a lot of criticism that the budgets are being slashed and burnt, but we have not seen any evidence in the budgets that we get,” Screen Australia executive director Fiona Cameron told the Senate.

“So all we can assume is that competition is such in the PDV [post, digital and visual effects] sector, and there is so little work in the PDV sector, that people are undercutting each other.”

Screen Australia said it cannot regulate pricing for post-production services and it still used a guideline, called The Satchel, as a point of reference. It was created by the now-defunct Australian Film Commission and contains recommended guidelines, forms and budgets for a film.

The issue was first reported by INSIDEFILM (#126) in its November 2009 edition. At that time, Soundfirm chief executive Roger Savage said the proportion of budgets allocated to sound-post had more than halved over the past two years, forcing many post houses to downsize, retrench staff and sacrifice necessary technological updates.

However, Cameron said it was not Screen Australia's role to regulate a floor price and “from our perspective the commercial rates are reasonable”.

“The best thing for them is more international productions and a bigger and stronger Australian production industry as well,” she said.

“We never regulated a floor price. It was not our role to regulate a floor price and we do not propose to regulate a floor price.”

The Federal Government announced plans to boost the PDV and Location rebates in the 2010 Budget in an effort to attract more offshore productions to Australia.

Meanwhile, the value of the Australian dollar – which almost hit parity with the US dollar in the past year – has now fallen back to the mid-80s providing another incentive for offshore productions to shoot locally.

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