Australian film business in uptick

Oz offerings faring well at home and abroad

SYDNEY — The Australian film industry began 2007 with a bang.

“Happy Feet,” wholly made Down Under and co-funded by Australia’s Village Roadshow (with Warner Bros.), was tap-dancing toward a worldwide B.O. of $380 million. Pic crowned its B.O. achievement by snatching the animated feature Oscar.

Domestically, an offbeat comedy about a portable-toilet operator, “Kenny,” minted seven times its original microbudget by the end of 2006, and berths for Oz pics at Sundance (“Clubland,” “Noise”) and Berlin (“Razzle Dazzle,” “The Home Song Stories,” “West”) gave the biz a boost.

“The Home Song Stories,” a semiautobiographical immigrant drama from multihyphenate Tony Ayes, generated critical acclaim at Berlin, and Warner Independent splurged $4 million for the rights to “Clubland” (to be released Stateside as “Introducing the Dwights”), in which Brenda Blethyn plays a club entertainer.

The first theatrical releases for 2007, “Razzle Dazzle” and Russell Crowe-narrated surfing doc “Bra Boys,” generated solid domestic results that positioned them well for strong ancillary.

Aussie films’ share of the theatrical B.O. has doubled in each of the last three years (albeit off a very low base), and the scene is set for further growth.

“(Considering) the range of films coming through, this year could be similar if not stronger than last,” observes Brian Rosen, chief executive of government coin agency Film Finance Corp. He cites “Romulus, My Father” (Richard Roxburgh’s directorial debut, toplined by Eric Bana and Franka Potente) releasing at the end of May and “Clubland” at the end of June as promising pics.

According to Rosen, the reputation of Australian films in the foreign market, after an abysmal stretch earlier this decade, has been restored, and sales are following suit.

Then April arrived, and Australia was completely over-looked by Cannes selectors — not a single pic was chosen for any of the sections, a sharp contrast with last year, when five Oz pics played the fest.

According to Chris Fitchett, chief executive of the Australian Film Commission, the Cannes snub was largely due to timing. Since pics screened at Sundance and Berlin were ineligible and others were not ready, Fitchett expects a strong showing at Toronto instead.

Government neglect

Domestic politics have also put a strain on the biz.

An Oz election is pegged for late 2007, and Prime Minister John Howard’s 11-year conservative leadership is under real threat for the first time. He has consistently lagged behind opposition leader Kevin Rudd in 2007 opinion polls. That spells hard luck for an industry awaiting the outcome of a broad-ranging federal review of all film incentives and the bureaucracies that manage them.

The review, announced a year ago, attracted lots of interest — 82 submissions — but film policy reform has been sidelined as politics takes precedence over governance.

Political jousting is focused on the worst drought in a century, environmental concerns, education and housing. Neither party sees many votes in film industry reform.

Outcome of the film review in the May 8 federal budget delivered an enhanced 15% foriegn production rebate, a new 40% rebate for film producers and announcement of the creation of a super agency to administer key industry functions.

Limited alternatives

Local filmmakers have found it difficult to raise capital in a climate where fund-raising mechanisms are perceived as outdated and details of expected new mechanisms are guesswork.

Last financial year, private equity investment in films amounted to just $6.7 million, 7% of the total. Co-producers and Hollywood studios considering shooting Down Under are cooling their feet due to the many unknowns.

Mark Woods, topper of international lobby agency Ausfilm, says he can’t blame anyone for awaiting the outcome of a review intended to improve shooting and fund-raising conditions.

“On the Hollywood level, every meeting I take, the question is, ‘Should I hold off until the new fiscal year (July 2007)?'” Woods says.

The review will change the terms governing the rebate for large-scale productions and the amount should increase, but by how much?

Pressure for a rebate of at least 15% for international shoots (up from 12.5%) and a new 40% rebate for local filmmakers has been intense. Baz Luhrmann met with the prime minister, eager to get the best possible terms for his Fox production “Australia,” now in pre-production. George Miller and Village Roadshow topper Graham Burke have taken their “Happy Feet” Oscar along to meetings with federal treasurer Peter Costello and arts minister George Brandis. Studio execs have joined the army of Aussies making beelines to Canberra to put their cases to government.

The AFC’s Fitchett is resolutely optimistic about the industry’s future, pointing to new drama production at pubcaster the ABC, due to a $25 million government grant over three years.

Fitchett also points to numerous bigger-budget Aussie films with potential to break out abroad, among them “Daybreakers,” from splatter directors the Spierig brothers; “Dirt Music” from Phillip Noyce; “Rogue,” the Weinstein Co.-financed follow-up from “Wolf Creek” helmer Greg McLean; and Harry Houdini biopic “Death Defying Acts” from Gillian Armstrong.

“There are more and more lower-budget features being made and some higher-budget ones, but it’s really tough because there are just not enough features being made,” Fitchett says. “Hopefully the new tax offset will solve that problem.”

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