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Australia has incentive to do business

New budget sets local rebates

The Aussie talent pool was seriously decimated by the odyssey towards Hollywood by thesps, helmers, scribes and cinematographers.

But the local industry is hoping that a recent overhaul of the federal budget has created the means to reverse the brain drain. After July 1, domestic producers like Baz Luhrman’s company will be able to get up to a 40% production rebate, which could be an attractive proposition for big-budget studio projects featuring Australian talent.

The success abroad of the “Aussiewood” posse — Nicole Kidman, Peter Weir, Naomi Watts, Hugh Jackman, Cate Blanchett, Robert Luketic, scribe Stuart Beattie, cinematographer Dion Beebe et al, hasn’t been generating work or income at home. (George Miller’s Sydney-hatched “Happy Feet” is a notable exception).

As these individuals have ridden the crest of international success in recent years the local film biz has been languishing, stymied by a dearth of financing for production and development.

Even foreign productions, until recently a staple of the Oz biz, have been reticent to venture Down Under, dissuaded by outdated incentives and the dwindling power of the greenback.

Crews are idle or leaving the biz, producers are sinking under debt or pursuing other enterprises, while the exit of thesps and directors Stateside continues apace.

Some A-listers such as Russell Crowe and Eric Bana have offset their Hollywood paychecks with charity jobs at home (“Bra Boys” and “Romulus, My Father,” respectively) but admirable as they are, these individual efforts do not an industry make.

Last May the government agreed to review film funding, after intense lobbying from the industry. The outcome of that review unveiled in the federal budget last week (May 8) will result in the biggest industry overhaul in 19 years.

Effective July, foreign filming incentives will be boosted to 15% and extended to cover digital effects work undertaken Down Under and domestic producers will be able to tap a 40% rebate for films, 20% for TV productions. From mid-2008 government agencies the Film Finance Corp. (coin), the Australian Film Commission (development) and Film Australia (doc production) will be rolled into a single body, the Australian Screen Authority.

It’s no coincidence an election is pegged for the end of the year and Prime Minister John Howard’s conservative government is under genuine threat of being overthrown for the first time in its 11-year reign. The ’07 budget contained something for absolutely everyone.

Significantly for the Aussiewood posse, the new domestic incentive will give tangible encouragement for Oz directors to make movies at home.

In an acknowledgement of the increasingly international marketplace, the government relaxed its requirements of films classified as Australian. Films can now be funded from elsewhere and copyright need not necessarily be domestically owned. It has not capped the 40% rebate.

So, as long as there are lots of Aussie elements to a project, the government will pick up 40% of the tab, a move designed to persuade foreign backers to stump up the rest.

Baz Luhrmann’s “Australia,” an epic outback romance now lensing in Sydney with Kidman and Jackman and funded by Fox, will be the first film to access the rebate but it can do so only for money spent after July 1, when the rebate comes into effect.

“This is not about taxpayers giving grants to the arts, this is just good business,” Luhrmann told Variety.

“We’ve got the global stars and where it’s nice to have ‘Superman Returns’ shooting at Fox (Studios Australia), it’s even better to have (classic Oz story) ‘A Town Like Alice,’ ” says Luhrmann.

The government estimates its reform package is worth A$283 million ($235 million) over four years.

“The good thing about the new model is it’s simple and certain,” says Richard Harris, executive director of the Australian Screen Directors’ Assn.

Arts minister George Brandis warns it would not be in the spirit of the new legislation for foreign studios or funds to attempt to falsely qualify projects as Australian if they were not.

“If a scheme was devised that sought to elevate a foreign film into the Australian-made category then the minister has the discretion to” block it, he says.

Despite being funded by Fox, “Australia” is eligible for the domestic rebate because it is produced by Luhrmann’s company Bazmark.

The film industry argues government subsidy, even at this level, will stimulate jobs, bolster the industry’s future and enhance Australia’s reputation abroad.

Village Roadshow managing director Graham Burke describes the reforms, overseen by his friend, treasurer Peter Costello, as “a tremendous leg up for the Australian industry.”

Village Roadshow, in partnership with Warners, is one of the most significant producers of big-budget, foreign movies in Australia. It also owns the Warner Roadshow Gold Coast studio, which hosts many of the bigger shoots.

“Roadshow intends to take advantage of the government’s offer with very aggressive and positive outcomes, stand by for some big plans,” Burke says.

The foreign rebate increase to 15%, for films and skeins spending between $12 million and $41 million spending at least 70% of their budget Down Under, fell well short of the 20% sought by U.S. studios. Apparently the government didn’t think subsidizing the U.S. studios would win any votes at home.

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