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Media Centre

07 07 2017 - Backgrounder

Australian Content: Support and Interventions

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Official China/Australia Co-production Guardians of the Tomb/Arclight Films

Correct as at 1 July 2017.

There are a number of support measures, regulations and incentives currently in place to support the production and distribution of Australian content including:

THE PRODUCER OFFSET

What is the Producer Offset?

  • The Producer Offset is a refundable tax offset (rebate) for producers of Australian feature film, television and online projects. It is administered by Screen Australia on behalf of the Federal Government.
  • Feature films produced for exhibition to the public in cinemas are eligible for a 40% offset.
  • TV and online projects are eligible for a 20% offset.
  • To be eligible the project must have significant Australian content or be an official co-production, and must exceed the relevant ‘QAPE’ threshold.

What is QAPE?

  • The offset is calculated at either 20% or 40% of the determined ‘QAPE’ (Qualifying Australian production expenditure). This is essentially the total amount of a project’s production budget that is spent on goods and services provided in Australia.
  • There are minimum QAPE threshold requirements for all formats:
  • All feature films and single episode programs (e.g. TV, online) need to meet or exceed a QAPE threshold of $500,000.
  • A season of a series (e.g. TV, online) needs to meet or exceed a total QAPE threshold of $1,000,000 and a per hour QAPE threshold of $500,000.
  • Non-feature documentary projects (either single episodes or seasons) need to meet or exceed a total QAPE threshold of $500,000 and a per hour QAPE threshold of $250,000.

Are films made for TV or online eligible for the 40% offset?

  • A feature film can only receive a 40% offset if the film is produced for exhibition in cinemas. Films produced for home entertainment, TV or SVOD are not eligible for the 40% offset but may be eligible for the 20% offset.

Are all TV formats eligible for the 20% offset?

  • Certain formats are not eligible for the Producer Offset including advertising, discussion, quiz, panel, variety, news, current affairs, reality programs, games shows, footage of a public event and training films.
  • For an ongoing eligible TV series, the project can only claim the Producer Offset for up to 65 commercial hours.
  • TV projects made for free-to-air, subscription TV (cable/satellite) or streaming services/online are all eligible.

Are official co-productions automatically eligible for the Producer Offset?

  • Official co-productions are made under formal arrangements between Australia and the governments of various countries. If a project is an official co-production it is considered an Australian program and therefore may be eligible for the Producer Offset.
  • Co-production agreements vary for each partner country e.g. some include film and TV projects, while others cover film only.

How do you know if a project has received the Producer Offset?

  • As the Producer Offset is a tax rebate, companies are not required to disclose if they have received the offset, although some producers choose to declare it (recent examples include Hacksaw Ridge, The Water Diviner and The Great Gatsby)

Hacksaw Ridge/Mark Rogers

THE LOCATION AND PDV (POST, DIGITAL AND VISUAL EFFECTS) OFFSETS

What incentives are there for foreign films to shoot in Australia?

  • The Location Offset is designed to encourage large-budget film and television projects to shoot in Australia.
  • Film and television projects filmed in Australia with an Australian spend of over $15 million are eligible for a 16.5% offset.
  • There is also the PDV Offset which is designed to help the Australian visual effects, post-production and animation sector.
  • Post, digital and visual effects production for a film in Australia (regardless of where the project is shot) is eligible for a 30% offset.
  • Both offsets are administered by the Department of Communications and the Arts, as opposed to Screen Australia.

Document update: In May 2018 the Federal Government announced a $140 million Location Incentive Program will be delivered over four years from 2019-20 to attract large budget international productions to Australia. The Program will effectively provide an increase to the Location Offset rate from 16.5 per cent to 30 per cent for eligible large budget international productions that film in Australia from 1 July 2018. In October 2018 the Federal Government announced the first beneficiaries of the funding.

Can a production company claim the Location, PDV Offset and the Producer Offset?

  • The Producer Offset, the Location Offset and the PDV Offset are all mutually exclusive. A company is only able to claim one of the three offsets for a project. 

Are all TV formats eligible for the Location or PDV Offset?

  • Certain formats are not eligible for the Location and PDV Offsets including advertising, discussion, quiz, panel, variety and games shows as well as footage of a public event, training films and computer games.
  • Documentary feature films are not eligible for the Location and PDV Offsets, but TV documentaries are.

How do you know if a project has received the Location or PDV Offset?

  • As both the Location and PDV Offsets are tax rebates, companies are not required to disclose if they have received the offset.

For more information on Location and PDV Offsets, including total QAPE expenditure and estimated rebates each year, contact the Department of Communications and the Arts by email [email protected]

Original Australian production commissioned by ABC TV and Netflix The Letdown

AUSTRALIAN CONTENT QUOTAS

What Australian content quotas are currently in place?

  • For commercial free-to-air TV networks, 55% of content on the primary channel (between 6am and midnight) must be Australian content and at least 1,460 hours of Australian content must play across the network’s non primary channels (e.g. 7Mate, 9Go).
  • Sub-quotas also apply to commercial free-to-air networks:
  • Achieve a minimum of 250 ‘points’ each year for Australian first-run drama. Each point is a standard hour of Australian drama broadcast in prime time, with extra points for feature films, mini-series and series produced at a rate of one hour or less per week.
  • Broadcast at least 20 hours of first-run Australian documentary programs each year.
  • Broadcast at least 390 hours of children’s and preschool children’s programming each year, including 25 hours of first-run Australian children’s drama.
  • Higher quotas are set for adult and children’s drama over three-year periods
  • For subscription television, 10% of the total program expenditure on drama channels (e.g. Fox 8, Showcase, UKTV) must be on Australian drama programs. In 2015-16, the expenditure requirement was $32.79 million.

For more detailed information visit the ACMA website or contact [email protected]

Do Australian content quotas currently apply to SVOD services and online content providers?

  • Quotas don’t currently apply, however Foxtel Now, Stan and Netflix all carry Australian content. This includes original Australian productions which have received Screen Australia funding such as The Other Guy, Wolf Creek, and comedy special Chaperones, which were all commissioned by Stan; as well as The Letdown, The Legend of Monkey and Glitch S2 commissioned by ABC TV and Netflix; and Let’s Talk About Series 2 commissioned by Foxtel Now (Presto).
  • Netflix has also picked up rights to Screen Australia-supported original Australian features Cargo, Casting JonBenet and Berlin Syndrome and have commissioned Australian drama series Tidelands, which was supported by Screen Australia at the development stage.

THE AUSTRALIAN AND CHILDREN’S SCREEN CONTENT REVIEW 2017

The Australian Government is undertaking a comprehensive review of Australian and children’s screen content, with the Terms of Reference released on 23 May 2017.

The review will examine the above support measures, regulations and incentives and will be conducted jointly by the Department of Communications and the Arts, the Australian Communications and Media Authority and Screen Australia. All Australians can make a submission to the review, with details of the consultation process to be released shortly.


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