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The operation of 10BA
When first introduced in June 1981, 10BA allowed investors to claim a 150 per cent tax concession and to pay tax on only half of any income earned from the investment. Government concern about the cost of 10BA over the years meant that concessions were progressively reduced to 100 per cent. Division 10BA was closed to new applicants in July 2007 with the introduction of the new Producer Offset. The concessional status for investment in productions holding a valid 10BA certificate remained available until 30 June 2009.
The tables on the following pages show the levels of financing of 10BA projects and effects on government revenue from 1980/81, and the finance raised by different types of production over this time.
In the eight years from 1980/81 to 1987/88, during which the 10BA concession was at least 120 per cent with at least 20 per cent of income from the investment exempt from tax, production budgets secured through 10BA totalled $959.7 million, an average of $120 million per year. A total of 896 projects were financed through 10BA during that time, including 227 feature films (or 92 per cent of Australian features produced in the period).
Since the exemption was removed and the concession reduced to 100 per cent (1988/89 to 2006/07), production budgets totalling $834.2 million have been secured through 10BA, an average of $43.9 million per year. A total of 382 projects were financed through 10BA over that period, including 176 features (37 per cent of Australian features, including co-productions, produced in those years).
The main source of finance since 1988/89 has been the Film Finance Corporation Australia Ltd (FFC). According to its 2003/04 annual report, the FFC’s slate of investments since establishment in 1988/89 comprises 875 projects with a total budget value of $1,963 million. This is an average $122.7 million per year since inception.
In 2006/07, the amount raised under 10BA rose to $9.1 million from to an all-time low of $8.5 million in 2005/06. The amount 10BA has contributed to the budgets of Australian film and television productions since 1999/00 continued to decrease.