SYDNEY — Private coin for Oz films is scarcer than ever, the government’s primary funding agency says it’s underfunded, and the Tax Office is shooting down schemes to finance international films shooting Down Under.
In short, the outlook amid a slowing local economy is tough for indie producers.
“In this very difficult economic climate, any speculative investment is inherently problematic,” says lawyer Lyndon Sayer-Jones, explaining why few investors are encouraged to put money into Oz films.
The Australian Film Finance Corp.’s annual grant from the government “isn’t enough to support the diverse slate of production that we are supposed to be funding,” FFC chief exec Catriona Hughes tells Variety. “We are running out of fuel.”
Still, as Hughes realizes, the agency isn’t likely to get any increase in the fiscal year starting June 30 as the government strives for a budget surplus while it faces an election before the end of the year.
Two firms, Macquarie Film Corp. and Content Capital, were licensed by the government to raise private coin for film and TV projects before July 2000 on the condition the money is spent by June 30 the following year. Macquarie found it difficult to board films while it insisted in vain on recouping before other investors such as the FFC, and only committed to its first project, the Bryan Brown starrer “Dirty Deeds,” in March. Content raised a small amount of money and has not invested in any film.
Division 10B of the Tax Act has been used to bankroll Hollywood films lensed in Oz, such as “Moulin Rouge” and “The Thin Red Line.” But the Tax Office has blocked the producers of the second and third installments of “The Matrix” from using that mechanism, which gives investors a big tax break by enabling them to put up a percentage of the coin and borrow the rest. “Matrix” promoters are appealing the decision, sources say.
Australian Film Finance Corp.: Invests only in Australian productions. FFC receives $25 million per year from the government (fixed for three years) plus revenue recouped from earlier investments (in the 1999-2000 fiscal year it recouped just $6.3 million.) FFC channels 50%-60% of its coin to feature films, 30%-40% to TV dramas and 12%-15% to docus.
Australian Film Commission and state film agencies: provide limited funding, which focus primarily on development.
Division 10BA of the Tax Act: gives investors 100% write-off over 12 months in Australian films made wholly or substantially in Oz with significant Australian content or as official co-prods.
Division 10B: allows a 100% deduction over two years in some international films lensed Down Under.
FFC (Catriona Hughes)
Macquarie Film Corp. (Charles Wheeler)
“Dirty Deeds” (New Town Films), director David Caesar; $5 million; FFC, Nine Films & Television, Alliance Atlantis/Momentum Pictures
“Garage Days” (Mystery Clock Cinema), director Alex Proyas; FFC, Fox Searchlight
“The Man Who Sued God” (View Films), director Mark Joffe; FFC, Buena Vista, Icon Entertainment, Showtime/PMP
“The Nugget” (Bill Bennett Prods.), director Bill Bennett; FFC, Showtime/Premium Movie Partnership, Village Roadshow, Overseas Filmgroup