SYDNEY — The Australian government’s new tax rebate for producers of big-budget films is precisely the kind of clear and simple incentive that Hollywood wanted, according to Oz execs.
Some U.S. producers had postponed decisions on where to shoot pending the outcome of a government review of the tax regime for financing international productions.
The government fast-tracked it after fears that the Australian Tax Office’s decision to deny tax breaks for Aussie investors in “Moulin Rouge” would deter U.S. and other foreign producers from lensing Down Under.
“There’s a sense of relief among those who were committed to shooting in Australia, or who were seeking to do so, that something is in place which is effective immediately and can be easily accessed,” said David Pratt, the L.A.-based commissioner for AusFilm, the industry’s film marketing agency.
While not aware of any producers who canceled plans to film in Australia after the “Moulin Rouge” ruling, Pratt said, “There was a lot of concern and people were nervous. We had a lot of initial approaches from people. We hope this (announcement) will tip them over the edge to make the commitment to shoot in Australia.”
The initiative unveiled Tuesday (Daily Variety, Sept. 4) will give producers a tax rebate of 12.5% of qualifying Australian expenditure on films.
The government consulted closely with the Motion Picture Assn. and reps of studios including Warner Bros. to find out what incentives would help Australia compete with Canada, the U.K. and Ireland.
L.A. -based Greg Coote of production banner Coote/Hayes welcomed the rebate but argues it does not go far enough because it does not apply to TV series. Miniseries, however, will qualify if they reach the budget threshold.
Coote’s company is making the third series of “The Lost World” and “Beastmaster” in Queensland this year — some 44 hours of TV — without any Oz tax assistance. He said he could ramp up output to as much as 150 hours if TV series were eligible for the rebate.
10B ruling soon
While it’s still not clear whether producers will be able to use the 10B tax deduction for investing in international films, the ATO has promised to issue a clarification for the film industry soon.
Moreover, said Sydney-based entertainment lawyer Ian Robertson, the rebate is a far more attractive option because it’s “clear, quick and predictable, and you don’t need to have complex negotiations with lots of intermediaries.”