HONG KONG – Australian producers have reacted angrily to a proposal by the government auditor that film and TV support body Screen Australia should lose half its funding.

In a recently published review of government spending the Commission of Audit also said that Screen Australia should be merged with general arts body the Australia Council.

“This would be disastrous for the Australian film and television industry and devastating to Australian audiences,” said Screen Producers Australia executive director Matthew Deaner in a statement.

“We cannot underestimate the importance of Screen Australia to the health of the screen industry.  Last year 84 of the top 100 rating television programs were Australian and our feature films such as ‘The Great Gatsby’ and ‘The Railway Man’ were big box office hits,” Deaner said. “Without Screen Australia’s programs of support, many of the companies who make these fantastic Australian films and television programs could disappear.”

Australian media has quoted producer Robert Connolly as saying such a move would be “catastrophic”, and cited producer director Sophie Hyde as calling it “devastating.”

Screen Australia was controversially born six years ago from the merger of the Film Finance Corporation, the Australian Film Commission and Film Australia. It was headed by Ruth Harley during most of that period. Former Universal and PolyGram executive Graham Mason took over as chief executive in November last year.

Currently Screen Australia has both cultural and industrial remits. The commission suggest s that should be simplified:

“The Commission has identified other industry assistance programmes which have a mix of public and private benefits. These programmes should continue but with reduced levels of Commonwealth funding. They include Screen Australia (where funding should be halved and focused on areas of Australian content, including those with an historical perspective that might not otherwise be funded) ….”

“These proposals are clinical and driven by a single economic motive but the effect would undermine public and industry expectations as well as damage business confidence. They are clearly in conflict with current policy discussions and we expect the Government to take a more level headed approach in the upcoming budget,” Deaner said.

“Screen Australia has not released an official response and at this stage it is not appropriate for us to comment on the report,” said a spokesman in response to Variety‘s enquiries.

According to the latest available annual report for 2012-13 “Screen Australia received revenue from the Australian Government totalling $98.1 million, which included an initial $5 million payment of the total $20 million three-year Interactive Multi-Platform (Games) initiative announced by the Government in February 2013.” It ran a deficit of $2 million in the period.

The same annual report says that the organization has consistently improved its efficiency and reduced its running costs by 40% since foundation in 2008.