Recent government changes to film and television support and regulation are not good news for the Australian feature film industry, and are more bad than good for the television production industry.

Right now there is an unexpected burst of production across the country, much of it from Hollywood, driven here by the pandemic. There are also a lot of Australian films and television in production, financed under the previous regulations.  “Queensland is full,” someone said to me.  

A further $50 million has been allocated for the industry in this year’s budget.  Sounds rosy … but look a bit further down the track.  Along with the extra funding, the government has made unwelcome changes to the rules which will have long-term implications for Australian features, television drama and documentaries.

Some Background

Changes in viewing habits have been speeded up by the pandemic.  The advent of streaming services – Netflix, Stan, Amazon, Disney – has altered the way we access our visual entertainment.  These hugely successful content deliverers have affected the revenue of the free-to-air television networks as viewers move to the smorgasbord of material available on the streamers.  

The lockdowns caused by the pandemic have sent cinema into a freewheeling spiral.  Cinema will almost certainly recover when the world is again Covid-free, but the changes in viewing habits acquired in lockdown may mean it is never quite the same.

The free to air TV networks and Australian creators of programming – for opposing reasons – have been agitating for changes in government regulation of Australian content.  The networks, which have always fought against Australian content rules, are now crying “unfair” as their revenue is dwindling and the streamers are stealing their audiences but are not subject to the same Australian content requirements.  The networks want their Australian content regulations removed.Australian television producers, while wanting the networks to retain their quotas, are asking the government to impose even-handed Australian content rules on the streamers.

No surprise – the streamers are resisting.  Just like the free to air networks, they will not buy much Australian material unless they are forced to do so. Television companies are businesses.  They are privileged by being given access to the airwaves, but their job is to attend to the bottom line, not to the aesthetic and cultural needs of a society.  Therefore governments have to impose regulations to ensure these cultural needs are served in balance with profits.   

Quota Requirements

Now, the government has responded to the free to air networks by altering the Australian quota requirements.  Instead of having to screen so much drama, so much childrens’ programming, so much documentary, the networks now just have to fill 55% of their air time with Australian programming.  A programme on renovating houses will count the same as high end TV drama – and guess which is cheaper.  Commercial networks will no longer be required to screen childrens’ drama and there has been no extra funding to the ABC to make up the gap. The Childrens’ Television Foundation has been given $20 million over three years to spend on Childrens’ television, but where will it be screened? There is a risk of a generation of Australian kids who will learn more or less nothing about their own culture from their screens.  

Foxtel previously had to spent 10% of its annual revenue on Australian content.  This has been cut to 5%.  

Turning to feature films, the government has reduced the instrument of delivery of assistance, the Refundable Tax Offset, from 40% to 30%.  That is, a percentage of the total budget of the film.  The Offset, or rebate, is paid on completion and borrowed against as part of the financing structure of Australian films, and can only be calculated on certain items in the budget.  When ineligible items are removed, the amount currently is reduced from 40% to around 30 – 35%.   Going forward, the producer’s overhead allocation in the budget has been made ineligible for calculation in the Offset.   The reduced Offset of 30% will net down to around 20%. What all this means is that more money will have to be found from the commercial and or private sector.  The change will also penalise producers at the back end.   Producers own the Offset’s share of copyright and thus revenue – income which is usually used to develop future projects – and now this will be reduced.

Our Films Threatened

Australian feature films just got quite a lot harder to finance and producers’ efforts to develop future projects more difficult.

The Offset for television production has been increased from 20% to 30%, thus making TV and features equal, but TV was hoping to be increased to 40%, so no one is cock a hoop about that.  Documentaries previously had to have a budget minimum of $500,000 to access the Offset.  That has been increased to $1 million – which will count most one-off documentaries out altogether.

The government has removed the requirement for feature films to secure an Australian distributor ahead of production in order to be eligible for the Offset.  While this does make some sense, as too many  film projects were chasing too few distributors and distributors are having a very tough time at the moment, it still leaves the streamers without any compensating requirements to assist the industry.   

Unmentioned in all of this is the role of Screen Australia, the government body charged with development and financing assistance for the Australian film industry.  It has been given an extra $30M over two years, which will partly replace funds cut since the Abbott government.  This is presumably to compensate producers for the reduction in other subsidies.  But this puts more creative decisions about which films are to be made in the hands of the government agency, rather than with the filmmakers and the marketplace.

Due to the pandemic, it is looking as if Australia will be a location of choice (along with New Zealand, which is also experiencing a full schedule of offshore productions) for Hollywood for quite a while to come.  While no one is complaining about that, high end stories about our own society which can compete with the offshore product will find it harder to get made under the new regulations.  

It’s hard to understand the government’s mean spirited changes to the current arrangements which can at best only save them nickels, not even dimes – especially when they appear unfazed by throwing away thirty million dollars on a dairy farm at Badgery’s Creek.

Sue Milliken

Sydney.

Sue Milliken lived in Wingham till she was fourteen.  Her family had been there since the 1860’s, and owned and ran the Wingham Hotel.    

Sue has been producing films since the 1970’s.  Her credits include The Odd Angry Shot, Sirens, Dating the Enemy, Paradise Road, Black Robe and most recently, Ladies in Black, for which she also wrote the screenplay with Bruce Beresford.

She has served on film industry boards and written books about the industry, including a memoir, Selective Memory, and There’s A Fax From Bruce.  She has an Order of Australia (AO) for her service to the film industry .