Australian Government announces important changes to Australian Screen Production Incentives
PDF DOWNLOADIn the Federal Budget delivered on Tuesday evening, 10 May 2011 the Australian Government has announced several significant changes to Australia’s screen production incentives. The changes follow the Government’s 2010 review of the Australian independent screen production sector which reported in February this year.
Doubling of the PDV Offset
The PDV Offset will be doubled from 15% to 30% of Qualifying Australian Production Expenditure (QAPE) spent on post, digital and visual effects production in Australia with effect from 1 July 2011. The minimum QAPE threshold for PDV-related expenditure remains at the previously announced figure of AUD$500,000.
Producer Offset Changes
The minimum QAPE threshold for feature films and for single episode television programs such as telemovies and direct-to-DVD films has been reduced from AUD$1million to AUD$500,000 with effect from 1 July 2011. In addition, the requirement for single episode programs to meet a QAPE threshold of $800,000 per hour has been removed.
The current cap on the number of episodes of a television series which are eligible for the Producer Offset has been changed from 65 episodes to 65 commercial hours. The change will benefit series with episodes of less than one television hour’s duration. The change takes effect from 1 July 2011.
A new minimum QAPE threshold for documentaries (whether for a series, seasons of a series, or single episodes) of $500,000 has been introduced. The existing QAPE threshold of $250,000 per hour remains. Low budget documentaries under the $500,000 QAPE threshold will instead receive direct funding in the form of a non-recoupable grant equivalent to 20% of the budget of the documentary from Screen Australia (which receives $11 million in additional funding over 4 years to support low budget documentaries).
Non-feature documentaries will be exempt from the current 20% above the line cap for QAPE calculation purposes, and short-form animated documentaries will be eligible for the Producer Offset (consistent with the existing eligibility of short-form animated drama).
QAPE Amendments
The definition of QAPE for both the Location Offset and the Producer Offset has been amended so that a number of expenses that are currently excluded from QAPE will now be included. These include the amount spent on completion bond or completion guarantee insurance, standard production insurance, costs associated with financing, additional marketing costs, censorship and classification costs, and carbon offset costs.
The rules for calculating expenditure in foreign currencies for projects claiming QAPE of AUD$15 million or less have been simplified – the actual exchange rate that applied when the expenditure was incurred will be used.
However, the amount spent on GST will now be excluded from QAPE. The amendments take effect from 1 July 2011.
Documentary Funding by Screen Australia
As mentioned above, Screen Australia has been provided with additional funding of $11 million over 4 years so that investments by it in low-budget documentaries (under $500,000) will now be in the form of a non-recoupable grant equivalent to 20% of the budget of the documentary (which will be called a “Producer Equity” payment).
Contact details
Melbourne
Dan
Pearce, Partner
T: +61 (0)3 9321 9840
E:
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Sydney
Ian
Robertson Partner
T: +61
(0)2 8083 0401
E:
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