Film, Arts and Culture

Dr John Garden
Social Policy Section

The 2007–08 Budget contains significant initiatives in the area of film, extra funding for performing arts companies and international cultural diplomacy, and a continuation of the course it has set with respect to general arts funding. The thrust, as has been the case for many years, is on arts as an industry and for export, and although likely to be welcomed by most high profile film and arts producers, will disappoint those who have been arguing for more to be done to facilitate broader arts education and participation.

The screen industry package

The most financially and structurally significant initiative is the provision of $282.9 million over four years to introduce a package of measures aimed at strengthening the Australian screen media industry.

Ever since David Gonski’s 1997 report Review of Commonwealth Assistance to the Film Industry found significant functional duplication between the Commonwealth funded film agencies, some form of structural simplification of the sector has seemed a possible policy option. In 2003 an amalgamation of the Australian Film Commission and the National Film and Sound Archive/Screen Sound Australia was announced but met with such opposition that it had to be abandoned. This budget announces the amalgamation of the Australian Film Commission (AFC), Film Finance Corporation Australia and Film Australia Limited into a new single agency, the Australian Screen Authority (ASA).

Although the exact functions and budgets of the components of the new ASA are not yet available, the amalgamation is likely to be well received for three reasons. Firstly, the research and statistics functions of the AFC are going to find a home in the Australian Film, Television and Radio School, also in Sydney, and the latter will receive funds to support the transfer. Secondly, the newly established ASA is going to be given a budget far in excess of the sum of the budgets of the three agencies it will replace. Thirdly, the package introduces a new producer tax rebate, administered by the ASA, for which both Australian and overseas producers may be eligible.

An Australian producer will be eligible for a 40 per cent refundable rebate on feature films and 20 per cent refundable rebate on other media productions as long as the production meets Australian creative control criteria and minimum expenditure thresholds. An overseas producer will be eligible for a 15 per cent rebate on eligible expenditure (as opposed to 12.5 per cent under the Refundable Film Tax Offset Scheme—RFTO—which will be discontinued), where that expenditure exceeds $5 million. The definition of such expenditure will be broadened from that in the RFTO to include expenditure on post, digital and visual effects production in Australia even if the film is not made in Australia. This new mechanism will replace not only the RFTO but also the current investor tax incentives available through:

  • Divisions 10B and 10BA of the Income Tax Assessment Act 1936 (for which no new applications will be accepted after 30 June 2007) and
  • the Film Licensed Investment Company (FLIC) which will not be renewed beyond its current expiry date of 30 June 2007.

Responsibility for raising money and creating successful films will henceforth rest mostly with the producer and not the investment consortium as in the FLIC’s model, and, unlike under the 10BA scheme, it is the producer (or production house), rather than an individual film, that private investors will be backing.

Funding for performing arts

The Budget offers funding as a follow-up to earlier responses to two different reports. It provides $24.1 million over four years to major performing arts companies in line with the funding formula established in 2000 in the wake of the report of the Nugent Inquiry into the Major Performing Arts, Securing the Future (1999). This will represent an average 35 per cent increase annually for the 20 companies involved. It provides $19.5 million additional funding for small to medium performing companies as a follow up on a now elapsed earlier four year commitment which followed the 2002 Report of the Contemporary Visual Arts and Craft Inquiry.

Cultural diplomacy

The Budget in the Foreign Affairs and Trade portfolio includes $20.4 million over four years ‘to enhance Australia’s cultural diplomacy and improve market access for our cultural exports.’ This allocation, for a program called ‘Australians on the World Stage’, pre-empts to some degree the report of the Senate Inquiry into Cultural Diplomacy due in July 2007. It will boost the amount of funds that the Australia International Cultural Council has to disperse ‘to help create a better understanding of Australia in our region and further abroad’ from $1 million to $5 million each year.

Arts education and regional arts

There are two areas of arts policy awaiting a full Australian Government response.

The 2005 National Review of School Music Education, (see also concerns of the Music Council of Australia and their submission to the Review), found that Australian students miss out on effective music education because of the lack of equity and access, lack of quality provision, inadequate teacher training and the poor status of music in many schools. The Government convened a National Music Workshop in Melbourne in August 2006 to develop an action plan for implementing the Review's recommendations. Although it is now funding a music education award scheme, the Government has not yet produced a comprehensive response to the needs identified by the Review. It would appear that some of the momentum in the area of arts education has been lost with the ministerial changes in the education portfolio.

Similarly, Regional Arts Australia, after an extensive public consultation process and producing a national directions document in 2006, has requested $60 million over four years to meet a range of identified needs. The Budget, however, offered no extra funding (see the media release Disappointment in the arts budget for the one-third of Australians living in the bush).