‘We’ve considered this pretty carefully’: Paul Fletcher speaks to green paper proposals, offset changes

Minister for Communications, Urban Infrastructure, Cities and the Arts Paul Fletcher has doubled down on criticism of the ABC for its response to potential local content obligations, but has sympathised with other industry views on the green paper – namely the call for streaming platforms to spend 20 per cent of their local revenue on Australian content.

Speaking to IF, the Minister also addressed industry concerns regarding the harmonisation of the Producer Offset, saying the changes have been “carefully” considered to allow producers to go where there are market opportunities.

Earlier this week, Minister Fletcher publicly replied to ABC managing director David Anderson, who has repeatedly voiced his opposition to the local content obligations for the national broadcaster, most recently at last week’s Senate Estimates.

In an op-ed published by The Australian, Minister Fletcher said Anderson’s claim that the proposal is a breach of the broadcaster’s independence was “quite surprising”, going on to describe his view as “a bit precious”.

Anderson has maintained that content quotas are an “issue of budget” and “not a question of intent” for the broadcaster, an assertion the Minister said was a “red herring”.

“No media organisation has the certainty of funding the ABC has,” he told IF.

“This is about what the community expectations of the ABC should be, as codified by the Australian Parliament on behalf of the Australian people.”

The green paper, which is currently under consultation until May 23, does not specify the form the obligation will take, instead noting that it could include a quota or broadcast requirement, as seen with the commercial television broadcasting licensees.

While the exact shape of the requirement is still to be decided, Minister Fletcher said it made sense to use the framework that applies to the commercial networks as a starting point.

“We’ve obviously got a consultation process underway in the green paper seeking the perspectives of stakeholders, including the Australian production community,” he said.

“If the guiding principle is firstly competitive neutrality and we are serious about Australian content, then lets have a framework that goes across the entire broadcaster sector.

“It follows from that that you would start with the requirements for commercial broadcasters but those are details to be worked out.”

Bryan Brown speaking at Parliament House.

The proposals in the green paper have come under scrutiny more than once in the last month.

Two weeks ago, a delegation of actors, crew, writers, and producers appeared at Parliament House as part of the Make it Australian campaign to lobby for streaming platforms to spend 20 per cent of their local revenue on new Australian drama, documentary, and children’s content.

At the time, Australian Directors’ Guild (ADG) executive director Alaric McAusland noted that “with streaming platforms such as Netflix, Stan, and Disney+ notching up 16 million Australian subscriptions, the time is right to ensure Australians can see their stories on those platforms too.”

While the green paper identifies the need for Australian content investment obligation for SVOD and AVOD at some level, it outlines an exemption for “an individual SVOD or BVOD owned by the holder of a broadcast licence or a subscription television licence”.

This means that Stan, which is owned by Nine, would not fall under the requirement, nor would Foxtel’s Binge.

Minister Fletcher said the aim of the reform was to provide a regulatory approach that was neutral between businesses that are competing with one another.

“The policy logic is that Stan is already part of a group that has significant Australian content obligations,” he said.

“When you think about policy issues, if Netflix or Disney+ or any of the others that have been launched or are going to be launching are earning revenue in Australia and they don’t have any Australian content obligations, then they have a competitive advantage over their competitors.”

In terms of how much the SVODS should invest in Australian content, he welcomed suggestions from the industry on the issue.

“The green paper doesn’t propose a specific percentage amount; it seeks views.

“I’m anticipating there’ll be a formal submission from probably more than one organisation speaking for producers or actors or others in the sector with views about what percentage of Australian content should be.

“I’m pleased that the green paper has laid out the substantive arguments as to why there should be an Australian spend on the SVOD businesses.”

The Make it Australian campaign has also been vocal about the proposed changes to the Producer Offset, announced as part of last year’s budget.

The reform outlines a harmonisation of the film and TV Producer Offsets at 30 per cent, as well as an increase of the QAPE threshold from $500,000 to $1 million for features and the scrapping of the Gallipoli clause.

The government has unveiled $30 million in funding for Screen Australia across two years to coincide with the proposed start date of the Producer Offset reform in July.

Australian Writers’ Guild (AWG) president Shane Brennan has said the commitment was “little more than a stopgap” in relation to the permanent loss of funding, noting that the reduction of the offset could prevent films, such as The Dry, Penguin Bloom, and High Ground from being made.

But Minister Fletcher disputed that claim, saying the “modest” change to Offset was about supporting Australian producers “to go to where the market is”.

“If you do the math, even with offset coming down, the extra firepower from Screen Australia means they will still be well placed to support Australian movies and more than make up for anything that might be lost on the offset front.

“We have considered this pretty carefully; what we want to do is back Australian screen producers to go after where the big market opportunities are and we are doing that in a number of ways.”

Among the ways in which the government has provided support to productions across the past 12 months as they have been forced to navigate COVID-19 is via the $50 million Temporary Interruption Fund (TIF).

Administered by Screen Australia, the contingency fund is designed to assist producers to get projects financed, despite the exclusion of coronavirus from insurance cover.

While it has supported more than 40 productions so far, it remains unclear as to whether the fund will be made available in the latter half of the year.

Fletcher remained coy on the future of the initiative, only going as far as saying he was “in discussions” with the production sector on the issue.

  1. Australia production companies should have been relishing in a privileged position – having a covid-safe country to film in – instead they have had the rug pulled out from underneath them. This rubs salt into the wound of our project based/freelance industry who were largely ineligible for jobkeeper.

    Screen Australia/Graeme Mason’s argument that “those companies were probably going to fail anyway” is complete BS.

    It’s purely circumstantial as to whether a production company or freelancer had project based revenues whose cycle aligned with the jobkeeper dates and thresholds.

    The minister’s rationale also ignores that in a Covid depressed market, private equity investment is simply not available to make up the shortfall in the drop of the feature film producer offset.

    Moreover, foreign distributors (hard hit by covid) are reluctant to make commitments/formal offers – or if they do – they are significantly diminished in value.

    With the rising value of the Australian dollar – our film budgets are deemed “too expensive” – because we pay fair wages. Budget reduction isn’t possible without compromising safety, minimum wages or production values or marketable cast. No other industry is expected to work for free – why are we?

    And now our marketable cast and experienced crew have all been snatched up by the influx of studio productions, making them unaffordable or unavailable to local production companies.

    Other countries, post covid to encourage domestic production, are are bolstering production incentives to the same or higher levels than the Australia’s proposed incentives, to support their local production companies.

    Australia has lost any competitive edge.

    These cuts mean that Australian producers will find it more difficult to fund co-production projects or be considered viable partners. Why bother paying extra to come to Australia, when they can get the same incentives in their local territory?

    Relying on Screen Australia to become the market decider for “what gets made” is disastrous for producers seeking to make projects that tells stories outside the “Australianna” contemporary drama genres.
    Our projects already get sidelined.

    The local broadcasters and streamers seem to not want to take any risks – simply making more low cost “Australian melodrama”.

    Add to that – the absence of a quota is a disincentive for streamers and broadcasters to commission any Australian projects … (not that they answer anyone’s emails – including those by top Australian feature film producers)

    To finance the changes, the government has simply shuffled the feature film producer offset budget across to broadcast. Then donated millions of dollars to foreign company’s films.
    Nothing for the locals.

    As I said previously, this should have been “the good year” for Aussie production companies – instead we’ve been tripped up just as we were closing in on the financing finish line.

    Shame on the minister and the funding agency staff who support it.

    There’s nothing in this new proposal that helps “small businesses” – which is what Australian film production companies are.

    The saddest thing is that the government simply doesn’t care.

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