The New Australian Producer Offset – One of the Best in the World

In its 2007-2008 budget, the Australian Government introduced a package of measures designed to increase Australia’s international competitiveness in TV and film production. The package provides one of the most generous financial incentives in the world, and Australian film-makers now rank among the world’s most desirable production partners.

The producer offset allows for a 40% offset on qualifying Australian production expenditure or ‘QAFE’. There are minimal budgetary and content restrictions. The only substantive restriction is that projects must have significant Australian content ‘SAC’. In determining whether a project has SAC, Screen Australia (the Australian film authority) takes into account such factors as the place where the project was made and details of the QAFE incurred with regards to the project, etc.

The biggest obstacle with the offset has been finding financiers willing to lend against the offset at reasonable rates. This situation is largely due to the global financial crisis, and as markets improve, so should the number of financiers willing to lend against the offset.

The introduction of the current offset signals a move away from the traditional cultural model to a more commercial one.

The Australian film-makers who will find the current offset beneficial are those who have been involved with co-productions, as well as those producers with international financing experience.

An example of a movie being shot in Australia in the near future, with a big Hollywood name attached, is Sanctum, which goes into production in November.  James Cameron is one of the executive producers. The movie is about a father and son cave-diving exploration that goes awry.

For more information on the Australian producer offset, please contact the author.

Gene Goodsell is a practising lawyer, with a business and law degree with honours. He is currently studying for his Masters of Laws in entertainment. Gene is a director at aspire management and focuses on the procurement of international film financing and film packaging. He is a member of the Beverly Hills Bar Association.