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Media Centre

13 11 2012 - Media release

Offset gives Australian producers a greater stake in success

At the Screen Producers Association of Australia (SPAA) Conference in Melbourne today, Screen Australia’s Chief Executive Ruth Harley released the results of a survey undertaken on the Producer Offset – a tax rebate of 20 per cent for television drama and documentaries and 40 per cent for Australian films, introduced in 2007.

The survey, Getting Down to Business: The Producer Offset five years on, reveals that not only has Australian narrative production increased overall – by 70 per cent for feature films and 36 per cent for television drama – it has also provided a seven-fold increase of producers retaining more than 25 per cent equity share  in their films. Pre-Offset only 12 per cent of films provided this level of equity, compared to 85 per cent of films made with the Producer Offset. The tax incentive has also provided relief from the challenges involved in raising production budgets.

Speaking at the SPAA Conference, Dr Harley said, “What our survey has found is that the Offset is giving producers a ‘seat at the table’ or some ‘skin in the game’, and a greater stake in the success of their projects. It’s improved the producer’s equity share in their projects which means a greater share of potential revenue that can be used to build their business and develop subsequent projects. It also gives producers some leverage – they can trade part of the equity to bring investors or talent on board.”

Five years ago there was a fundamental shift in the way that the Government supports screen production in this country. In 2007, the Government introduced the Australian Screen Production Incentive. The Producer Offset was one of the central levers of this incentive package, with the aim of both increasing production activity and helping producers build stable businesses.

Overall, average annual drama expenditure has increased by 49 per cent in the five years since the Producer Offset was introduced, compared to the previous five years, and by 53 per cent for documentaries. It has provided over $500 million in Government support to the industry across television drama, documentaries and features since its introduction in 2007.

“Although the global financial crisis and surge of the Australian dollar were not factored into the plans for the Offset, it has still provided great benefit to the screen production industry,” said Dr Harley. “The Offset could be considered the stimulus package that we didn’t know we needed.

“What we have also found is that in the case of TV drama, the Offset has helped to support high-budget, high production–value content that has performed well in Australia and overseas. The Offset is providing relief in raising budgets at a time when international finance is scarce, and, when it is available, has diminished value due to the high Australian dollar.”

In the last five years, a total of 19 Australian dramas have rated in the top 10 drama series on TV, compared to 14 in the previous five years – that’s a 36 per cent increase. And these programs are travelling too – not just in terms of international sales, but also format sales of programs including SBS’s Wilfred, ABC’s The Slap, Rake, The Strange Calls and the upcoming export of new ABC program, A Moody Christmas, to the US, cementing an unprecedented wave of international interest in emerging Australian talent.

Dr Harley continued, “While we can’t tell you whether any titles specifically received the Offset due to tax secrecy laws, we know from talking to the broadcasters that the Offset has been key in giving them access to higher-budget content without having to take on the extra cost and extra risk themselves. All the broadcasters we spoke to were able to nominate examples of successful titles that would have been made at a more modest scale, or not made at all, without the Offset.

“We now have a snapshot of how producers are working with the Offset five years on from its initial introduction. And the overwhelming response was that, despite some challenges in using the Offset, it has been a positive influence in helping to finance projects and build businesses. Importantly, it has given producers a greater stake in the success of their projects,” concluded Dr Harley.

Screen Australia’s survey of the Producer Offset was conducted through extensive interviews with 28 production companies, whose projects accounted for over 300 Offset projects. To gain a holistic understanding, representatives of the free-to-air and subscription broadcasting industry were interviewed as well as Offset cashflow providers.

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