Spending by foreign film productions in Australia has dropped to almost nothing in the past two years as the strong Australian dollar continues to deter Hollywood from our shores, increasing pressure on the federal government to boost incentives to the sector through its location offset scheme.
The damage done to the local industry by the robust dollar has been highlighted by research from Screen Australia that shows an average of just $2 million a year was spent by foreign productions in the first two financial years of this decade, compared to an average of $137 million per financial year in the previous decade.
Those figures do not include spending on the Hugh Jackman picture The Wolverine, which falls in the current financial year, or Baz Luhrmann’s big-budget production of The Great Gatsby, which is considered an Australian movie.
Rebate … Hugh Jackman in action as Wolverine on the streets of Parramatta. Photo: Mick Tsikas
Foreign spending since the turn of the decade has accounted for just 2 per cent of total film production expenditure in Australia. That is a marked decline from the $65 million per year – equivalent to 38 per cent of the total – spent by what the industry terms “runaway” productions between 1994-95 and 1999-2000.
It is an even sharper drop from the $137 million per annum – 44 per cent of total production spend – per year for the decade from 2000-01 to 2009-10.
Foreign productions are avidly courted by the local industry because of the volume and continuity of employment and skill development opportunities they afford local cast and crew.
Nicolas Cage in Melbourne for Ghost Rider.
Foreign production expenditure peaked in 2004-05 when the Australian dollar ranged from a low of US71¢ to a high of US78¢. Seventy-four per cent of the $351 million spent on film production that financial year – a total of $258 million – was attributable to foreign productions, including Hollywood movies Charlotte’s Web, Ghost Rider and Superman Returns.
While the Australian dollar sat at or under US75¢, Australia was considered an extremely desirable place for Hollywood to shoot on account of the high skill levels, proximity of the major studios in Melbourne and Sydney to their respective CBDs, and the fact we speak English.
But since the dollar began its steady climb, Hollywood has focused its attention elsewhere. The last big-budget Hollywood production to film here was The Voyage of the Dawn Treader, the third film in the Chronicles of Narnia series, in 2009.
Filming for Baz Lurhmann’s adaptation of The Great Gatsby at Centennial Park. Photo: Jon Reid
The figures are likely to add to pressure on the federal government to increase the location offset offered to foreign productions from its current 16.5 per cent to the 30 per cent figure for which the industry has been clamouring.
Arts Minister Simon Crean is known to support such a move, though Treasury has been less convinced.
By way of compromise, Mr Crean’s office has adopted a case-by-case approach, granting a $12.8 million deal to The Wolverine in 2012 that equated to a 30 per cent offset. Mr Crean’s office has declined to respond to speculation that a permanent increase in the location offset will be included in the National Cultural Policy he is set to announce on March 13.
kquinn@fairfaxmedia.com.au