Jacqui Gal

On Location: Ausfilm

Looking Down: Australia — Its films, its faces

Photo by Courtney Miller

Countries (especially those as far away as “OZ”) hoping to lure foreign film productions to their shores must compete with ferocity to showcase their territory as a bounty of pleasant conditions, skilled crews and financial incentives. And for good reason. When a big-budget movie comes to town, it brings with it a raft of A-list actors, directors and production teams, which can then translate into revenue, jobs for locals and excellent exposure for the country, often boosting tourism and the location’s international reputation.

AUSFILM

Australia’s federal content attraction organization, Ausfilm, is headed up by Sydney-based CEO Mark Woods, who describes the organization as a “gateway” for foreign, or “footloose,” producers to access both federal and state-based incentives and services. “Any producer can come to us and give us their script. We read it, tell them what the federal incentives would be, offer a soundstage base, and perhaps a second unit,” explains Woods. “We work closely to place them in the right state; if they need snowfields, that is going to limit their options. If they need a desert, that’s going to be a different state. We navigate the shortest route for producers to get what they need.”

While each Australian state offers different motivations and lays down different stipulations for bringing productions to their territory, if an overseas production plays its cards right, a combination of state and federal incentives can account for some 15 percent of its budget.

THE INCENTIVES

The Australian federal tax offset scheme offers a 12.5 percent refund on production expenditure. The key stipulation is that a production must spend at least $AU15 million (approximately $US 12 million) in Australia. For film budgets between AU$15 and 50 million, 70 percent of the expenditure must be in Australia. For productions spending greater than AU$50 million, there is no percentage test. Each state also offers its own scheme that can be combined with the federal scheme. “There is no cap like in the U.S. states, and it’s not recoupable, so it can be combined with any other form of finance,” explains Woods. “Unlike the UK scheme, there is no cultural test; the content doesn’t have to be Australian in character. And unlike the Irish scheme, it is not an investor-based scheme. Our incentive program is unusual because it applies to TV as well as film, and can be applied to reality shows.”

So, dollar for dollar, how does this stand up against overseas competition?
“[The incentives are] not necessarily high compared to our competitors. Some of the U.S. states offer higher incentives. But they don’t have the same package. When you come here, it’s safe, secure and English-speaking. You have skilled crew available. If you went to shoot in Romania or some of those states in the U.S. that don’t have an infrastructure, you have to import everything with you.

“It’s also the lifestyle, and you can’t underestimate that. When you are dealing with A-list cast and crew, they like going to lifestyle destinations. Matthew McConaughey is having a great time in Cairns shooting Fool’s Gold , and Bryan Singer and cast had a great time in Sydney. We waste little time in noting, in the last 10 years, Sydney has consistently topped Conde Nast Traveler’s Readers’ Choice Awards.”

Nevertheless, Ausfilm is lobbying for a shake-up of its current scheme, hoping to further sweeten the deal for inbound productions. “We’ve been advocating to the federal government that while [the current incentive scheme] has been good and effective in the five or six years since it was introduced, we need to update because things move quickly,” says Woods.

According to the Australian Film Commission, during the fiscal year spanning 2004-2005, Australia saw AU$248 million (approximately US$200 million) of foreign film and production (which doesn’t take into account the revenue raised from foreign reality TV programs). “The operational simplicity of the scheme is why the foreign companies like to film here, and it tends to be competitive for the mega movies, films like Superman Returns, The Matrix, Charlotte’s Web.”

Under the existing scheme, however, indie films and those with a budget of less than AU$15 million are not as well catered to, so the absence or cancellation of one big-budget project (like Eucalyptus — the stalled project that was moments away from shooting with Oscar-winners Russell Crowe, Nicole Kidman and Geoffrey Rush) can have disastrous consequences on the local industry.

Consequently, during 2005-2006, the total figure spent was down from the previous year to AU$49 million. This sharp drop illustrates the calamitous situation that can emerge when one or two “big fat studio movies,” as Woods lovingly calls them, happen to fold in a given year. When mega-budget films cancel, they leave local crews —who had been committed to the projects —unemployed. “It only takes two or three things to go wrong, and you have a whole lot of people not working,” laments Woods. “We really think the scheme has to be enhanced to attract a broader range of productions. The present structure makes for lumpy work patterns. It’s not good for production companies here, because none of those people can invest with any confidence in their future.

“We are saying to government, ‘Times have changed.’ [The current scheme] is great, but we think it should offer a baseline of 15 percent and introduce some more flexibility. We are saying, ‘Drop the 70 percent stipulation that applies for budgets of between AU$15 and 50 million.’ It was first introduced to attract big-budget films, but it has scared away productions in the AU$15 and 50 million bracket.”

In building their proposal, Ausfilm approached each of the state and territory governments, the Media Entertainment Arts Alliance union, the directors’, producers’ and writers’ guilds, 40 private-sector service providers and the major visual effects companies for their support.

THE PDV POV

“What we’ve seen in the last few years is a growth in the post, digital and visual effects ( PDV ) sector,” says Woods. “We’ve seen the emergence of a raft of films — Kung Fu Hustle, Batman Begins, House of Flying Daggers — who are doing their visual effects in Australia but have done no shooting here. We need to incentivize that sector to grow. By dropping the 70 percent rule, you’ll allow the visual effects sector to flourish.

“If Ausfilm has its way, you would need to spend AU$5 million for visual effects and, if you are shooting, you have to spend AU$15 million. But the 70 percent rule should be dropped.”

While well represented by Los Angeles-based film commissioner Tracey Montgomery, Ausfilm also recently appointed an LA-based vice president, Jodea Bloomfield, charged with seeking business for Australia in the areas of television, independent features and post/digital/visual effects ( PDV ) sectors.

IN THE BEGINNING

Australia’s popularity as an inbound production destination began gathering momentum in the late 1980s, when American producers realized the advantages of favourable tax laws, a currency that was very low against the greenback, and a fledgling film industry.

Following from this awareness, Warner Bros. opened studios and a theme park on Queensland’s Gold Coast. Australian states quickly established film offices to capitalize on this business opportunity and deal with issues of permits and fees. By the end of the century, the federal government, having become hip to the potential of an industry that would bring in big Hollywood bucks, recruited relevant companies in the private sector and the state governments to form Ausfilm (formerly ESSA ). Rupert Murdoch’s Fox also opened an impressive studio in Sydney.

Now, along with the incentive reforms, Ausfilm is also suggesting the establishment of a frequent spenders’ scheme, says CEO Mark Woods. “Warner Bros’ Superman is a good example. We would say, ‘If you spend more than AU$50 million, for the next two years you can put through any spend you like, and it will count towards the incentive’…They could put through an AU$3 million director DVD and AU$2 million of visual effects on Harry Potter 20 and visual effects worth AU$9 million. It’s a reward measure. We are saying, “Bring other work down and we’ll add it to the scheme.’

“Once you get a blue-chip client, you don’t want them giving work to another territory or crewing up or skilling up another territory; and it also serves to even out the work patterns. The frequent spender scheme is an important part of the new model. It keeps the clients close.”

THE RETURN

But perhaps the clients aren’t as focused on incentives and bonuses as Ausfilm might believe. Explaining his decision to shoot in Sydney, Superman Returns producer Gil Adler shares “I was more concerned about what the picture would look like.”

“The light [in Australia] was very clean and clear and bright. We were impressed with the light. The incentive didn’t hurt; it was a great consideration, but not the final one. The final consideration was, “Where can we make the best picture?’”

During an Ausfilm promotional DVD , Rick MacCallum, producer of Star Wars Episodes II and III , echoed those sentiments. “A lot of people think we did it because it was the money, the exchange rate and things like that, but actually, [it was] primarily the crew talent and the fact that it is the easiest place, we think, to shoot in English language right now,” he says.

Adler likens Sydney to a “little New York” when it comes to great restaurants, striking scenery and friendly locals, but he also points to more technical factors that made the experience of shooting Downunder worthwhile. “There’s an infrastructure that’s film-savvy. They understand the business and what needs to be done and how to do it. They have a work ethic that is exceptional. We brought a bunch of people with us, for comfort, but there are very skilled people there.

While filming Stealth in Australia, executive producer E. Bennett Walsh (who also produced Ghost Rider in the southern state of Victoria), found the country’s proximity to neighbouring Thailand and New Zealand came in handy, for second unit shoots. “Everything was close. If we were any other place, our travel time would have been a lot more,” Walsh says.

For Adler, the distance between Australia and Hollywood is perhaps the only negative aspect he can point to, in remembering the Superman Returns experience. “I asked them to bring Australia a bit closer to America, and they just refused to do it.”