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Disney to Receive $18 Million Subsidy to Shoot Marvel Movie at Fox Studios Australia

Australia’s federal government is to provide a $17.1 million (A$24 million) subsidy to Disney to shoot a currently untitled Marvel movie at Fox Studios Australia. Disney took ownership of the Sydney studios last month as part of its acquisition of 21st Century Fox.

Australia also offers location incentive schemes, known as offsets, that are directly linked to the amount of production spending in the country. The film will also be able to claim the 16.5% location offset. “The Australian government’s location incentive increases the existing location offset rate from 16.5% to 30% for eligible large budget international productions that are successful through the application process,” according to Federal Minister for Communications and the Arts, Mitch Fifield and the New South Wales state government’s Minister for the Arts, Don Harwin.

Harwin said that the film will additionally be able to tap into the $7.1 million (A$10 million) per year Made in NSW fund which is intended “to support the attraction to NSW of significant international screen projects.” The amount going from the NSW fund to the new film was not specified.

Neither Disney nor the Australian authorities would confirm the title of the film they are proposing to subsidize, describing it only as “a major new Marvel Studios movie,” and “a big-budget superhero film.” Australian Media have speculated that it is “Shang Chi,” recently pitched as Marvel’s first superhero movie with an Asian protagonist. Marvel last month announced that Destin David Cretton would be the film’s director and that Dave Callaham is currently writing the script.

Adding the direct federal subsidy and the location offset implies $38 million of national government finance for the film. The top-up from NSW would likely lift that above $40 million.

Both federal and state governments explain their spending by pointing to the positive impact on their economies, jobs and film industries. If the aggregate federal subsidies equate to 30% of local production spend, the film should be expected to spend $131 million in Australia. Fifield offered a somewhat lower figure.

“Securing this latest production will bring over A$150 million (US$107 million) of new international investment, create 4,700 new Australian jobs and use the services of around 1,200 local businesses,” he said. Harwin said the production is expected to spend more than A$100 million ($71.2 million) in NSW alone.

“The film needs a large workforce of highly specialized special effects technicians and will also require sophisticated stunts, all of which NSW’s incredibly skilled and experienced screen industry can deliver,” Harwin said, adding that it will also “enhance the profile of NSW as a place to do business.”

The weakness of the Australian dollar against the U.S. currency has helped defray some of the high costs of shooting in Australia, but many in the Australian industry do not believe that a cheap currency is enough. One production executive, who spoke on condition of anonymity, last month told Variety: “Hollywood studios’ production departments simply no longer consider any foreign location unless it offers a rebate, even if it is directly comparable in terms of cost.”

Earlier this week some in the Australian industry expressed disappointment that the federal government’s annual budget, announced Tuesday, did not institutionalize an increase in the offset mechanism from 16.5% to 30%. But they were relieved that the national government made reassurances that it would continue to provide direct subsidies.

Marvel’s “Thor: Ragnarok,” previously shot at the Village Roadshow Studios in Queensland. So too did, Warner’s “Aquaman” and “San Andreas” and Disney’s “Pirates of the Caribbean: Dead Men Tell No Tales.” Sony’s “Peter Rabbit” and Fox’s “Alien: Covenant” shot at the Fox facilities in Sydney.

“Marvel Studios thanks the Australian and NSW Governments and is thrilled to be returning to Australia to work with the talented and highly skilled Australian crew, stunt performers and actors together with the thousands of small businesses across Australia that supply world class equipment, goods, facilities and services to large budget productions” said David Grant, VP of Marvel Studios.

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