We're Tuning into the Federal Budget... here's why.
The time of the year is coming when our accountant excitedly orders a pizza and glues himself to his TV to hear the wins and pitfalls to come for taxpayers, businesses and industries in the coming year. The Federal Budget.
For us, we get the highlights in layman terms from our accountant that will impact us both personally and as small business owners, but this year there’s something else we find ourselves actively interested in as it has a ripple effect right down the food chain of our industry.
The Location Offset.
No doubt you’ve read about the Australian Location Offset, how piss poor it is and how it is contributing to the demise of our industry and leading to a LOT of talented Aussie’s in the production industry (not limited to our actors but editors, cinematographers, animators, etc) packing their shit and shipping off to just about anywhere else to chase work.
But, just in case you haven’t heard much, or you have and none of it makes any sense, we’ll give you our two cents.
First of all, what the heck is an Offset?
Broadly speaking, it is a rebate directly reducing the amount of tax payable by either an individual or enterprise.
In Australia for films, there are three tax offsets - The Producer Offset (administered by Screen Australia), the Location Offset & the PDV Offset (both administered by the Department of Communication and the Arts).
The Producer Offset, is a government contribution of up to 40% of the cost for Feature Films, and 20% for TV & other projects. The PDV Offset is a 30% offset on the QAPE (qualifying Australian production expenditure) that relates to post, digital and visual effects production for a film.
But the offset specifically in question and creating some hot-headed film industry peeps (including us) is the Location Offset.
The Location Offset, a 16.5% offset on QAPE for film and television projects filmed in Australia with an Australian spend of over $15 million or $1 million per hour for television.
That sounds pretty good you say?
This offset rate is frighteningly uncompetitive compared to our international friends. For instance, New Zealand and England have a 25% offset, some US states are up to 40% and Ireland’s is 32%.
So, what happens when productions only get approval for 16.5% location offset? They literally hang up the phone and call New Zealand. Taking away jobs and opportunities from our film industry experts, from production, crew and technicians to actors, extras and stunties.
Naturally, this is causing a production drought in Australia. Sadly, even after applications for top-ups, our Federal Government is legitimately sending away masterful productions to shoot elsewhere in the world.
In turn, this is causing a high volume of our very own film technicians and experts to move overseas so they can earn a living.
Recently, top-ups have been granted to select few films like Thor and Aquaman, and fortunately we have been able to retain these productions on our soil. But, who exactly decides who receives these top up grants, how are they justifying those and not others?
Our treasurer, Scott Morrison, declined to grant the top up for Paramount’s Dora the Explorer and Opposition leader, Deb Frecklington, labelled the push for more money from the QLD government a “vanity project”.
Frecklington suggested they need to focus on securing more long term job opportunities for Queensland, not “a short term, sugar hit”. Interesting view given if Dora the Explorer were to shoot elsewhere, there were no other options for potential films to shoot in QLD and therefore no alternatives planned to replace those job opportunities (not to mention contribution to Tourism and other local industries).
What actually needs to happen, and what our fingers and toes are crossed for come the budget next week, is a permanent increase to the location offset to 30%. It’s simply not good enough to only be offering it on a case by case basis, meanwhile we can’t confirm how many productions don’t even explore Australia as option on first site of the 16.5% currently available.
Fortunately, QLD Premier Annastacia Palaszczuk, feels passionately about pushing for a permanent increase in our federal location offset to 30%. Despite how hard she’s working towards it, she ultimately had to turn to her state government for Dora the Explorer and sourced the money for the top-up from her state budget. Hoorah...Dora the Explorer remains in the sunshine state.
Of course, the average taxpayer had something to say about how much of their money was allocated here in order to keep a film on our shores. This information won’t be disclosed until filming has concluded, but honestly do we really care?
Without Dora the Explorer and no other film opportunities on the horizon for QLD at that time, well...you get the idea. The ripple effect is damaging to an entire industry.
Also, we have to ask ourselves, is there some subjectivity to treasurer Morrison’s grants? Is Chris Hemsworth dressed in Thor get up better for the QLD Tourism industry than a young bilingual girl and her talking backpack? At the moment it feels like these top up decisions aren’t justified, and quite honestly it’s beyond frustrating.
Putting aside the fact that we obviously want to see more productions come here because it clearly could and will impact our potential income as small business owners, according to a Screen Australia report, in 2014-2015 our screen industry contributed to $3 BILLION of GDP and created 25,000 jobs. Yep. That’s more than both the gas and oil industries folks.
And according to a statement released by Annastacia Palaszczuk, Thor: Ragnarok employed more than 1000 QLD cast and crew and injected $145.2 million into the local economy.
So it’s a valid industry that deserves government attention. Our artists and technicians would rather work here than anywhere else.
As of today, 4th May, word is the Federal Government has announced that they will be investing $140 million into Queensland over the next four years by the way of increasing the offset to 30%. Palaszczuk will lead a delegation to Hollywood to bring the next blockbusters home to Queensland and will visit Los Angeles in early June as part of a Tokyo and Boston trade mission.
It sounds like good news, but let’s not pop the poppers until the official budget is released on Tuesday, shall we? We’re also not loving the idea of four years only (we assume with review at this point), but we can’t get too greedy too quickly. This could be the change we’ve been waiting for (and banging on about for over 1,000 words) so for once we’re looking forward to tuning in to the Federal Budget on Tuesday (words we never thought we’d say). Bring on the pizza.