Deal will also streamline various film agencies

The Australian government is overhauling film tax incentives to kickstart local projects and lure runaway production.

Pols are not waiting until the next budget in May to announce details of the shake-out, which also will streamline the various film agencies, because film fundraising has ground to a halt ahead of the planned review.

The government will provide details in coming months to allay widespread uncertainty.Two fundraisings were abandoned due to lack of interest days before the end of last financial year, June 30, by the FLIC Co. and Future Films Australia.

“It’s very hard to attract investors at the moment knowing the government is about to overhaul incentives in a bid to make investing much more attractive,” said Richard Harris, executive director of the Australian Screen Directors’ Assn.

Private investment in all Australian films last year amounted to just A$8 million ($6 million), or 7% of the total production cost, less than half the five-year average.

The level of runaway production work in Oz has also dipped, with figures showing total spend last financial year was $38 million, down from $191 million in 2005 and well below Oz’s $156 million five-year average.

The government appears likely to adapt the refundable film tax offset scheme, which functions as a rebate, to suit funding of local films and TV, as recommended by the Film Finance Corp.’s submission to the review.

The FFC paper, one of 88 received by Department of Communications, Information Technology and the Arts, argues film producers should be able to claim a 40% rebate on their production costs but not in conjunction with FFC investment or any other incentive.

However, members of the Screen Council argue the rebate should be usable with other incentives.

The proposed system would create a commercial route for filmmaking, while direct government investment would be guided toward cultural films with less obvious commercial aspects such as big stars or directors.

Arts minister Rod Kemp said the key to reinvigorating private investment in film products is “certainty, ensuring incentives are finely tuned and that Australian movies are going to attract an audience.”

Due to the strong performance of the comedy “Kenny,” which was privately funded by the toilet company SplashDown, the share of Australian films at the box office will improve slightly in 2006.

To better manage government resources and overcome duplication of services a merger appears likely of documentary producer Film Australia, international marketing agency Ausfilm, funding agency the FFC and the development and marketing activities of the Australian Film Commission.

The National Film and Sound Archive, uncomfortably slotted into the AFC since 2003, may return to self-governance.

The arts minister said to disperse the pressure on any “superagency,” it would be vital that producers were able to fund films outside the government system.

“You’d have to open a second door if the agencies are merged, so you can go the government route or the private route,” Kemp said.

The chair and the acting chief executive of the AFC, Maureen Barron and Chris Fitchett, last week agreed to an extension of their contracts until June, the strongest indication yet of the government’s transition timeline.

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