NEW tax scheme could bring big Hollywood productions back to Australia.
CAROLINE Pitcher apologises for cutting the interview short.
The jet-lagged chief executive of Australia's premier film lobby group, Ausfilm, has just returned from a whirlwind tour of Hollywood's major film studios and is running late for a meeting interstate.
In the past week Ms Pitcher has courted Hollywood executives at Disney, Universal, Twentieth Century Fox, Warner Brothers, Columbia and Paramount.
It's a tough job pitching Australia's film industry and set locations to the movie moguls of Tinseltown.
Last year Ms Pitcher helped to woo Hollywood productions including Superman Returns, the latest X-Men instalment, Wolverine and Steven Spielberg's $200 million World War II mini-series The Pacific to Australia.
But the surge in film production could be short lived if the Australian dollar remains so strong against the greenback.
At stake is Australia's $111 million slice of the $29 billion celluloid pie.
"The market is not looking that good for the US at all," Ms Pitcher said.
Australia's best defence against the dollar and the strengthening inflation rate is the Federal Government new tax incentive for foreign films.
The Australian Screen Production Incentive aims to overcome Australia's unattractive exchange rate with generous tax breaks of up to 40 per cent.
"Without the new incentive scheme, if our dollar was to keep going up we would have a problem," Ms Pitcher said.
"But because we've got the new incentive scheme, there is really a renewed positive energy in Australia."
The ASPI, revealed in last year's May budget, offers handsome rebates to offshore studios which employ Australian producers or feature local content.
The financial incentive is a significant departure from the Refundable Film Tax Offset of the 1990s.
While modest compared to the big tax breaks offered in Germany and eastern Europe, the RFTO managed to establish Australia as the destination of choice for low-budget Hollywood movies in the late 1980s and early-1990s.
Made-for-television movies like Child Star: The Shirley Temple Story injected up to $5 million into the local economy and created a steady stream of income for Australia's cottage film industry.
But when the Aussie dollar climbed above 70 in 2003, the reliable low-budget Hollywood movie fled to the burgeoning economies and weak-exchange rates of eastern Europe.
"Australia used to be very successful in attracting what we called small-budget Movie of the Week films," Ms Pitcher said.
"They came down here and created a real flow through of work for our crews.
"Now we don't even market to that stream of production any more because it's simply just not affordable."
The ASPI consists of three separate schemes that target big-budget Hollywood movies:
THE Location Offset, which gives foreign and domestic films with budgets of more than $22 million a 15 per cent rebate if they spend 70 per cent, or a minimum of $15 million, of their budget in Australia.
THE Post Digital and Visual Effects (PDV) Offset, which provides a 15 per cent rebate to foreign films who spend a minimum of $5 million on post-production work in Australia.
THE Producer Offset, the most lucrative of the three, which gives films a 40 per cent rebate on the condition they employ a domestic film producer.
In one sense, the ASPI encourages Australian producers and directors to the think big.
Indeed, Baz Luhrmann and Twentieth Century Fox are reported to have secured a 40 per cent rebate on the $140 million epic Australia.
But the generous Producer Offset has ruffled a few feathers among Australian-based producers.
Opponents believe big-budget Hollywood producers will be the chief beneficiaries of the new rebate, with local independent producers forced to contend with the might and wealth of US studios such as Universal and Disney.
Brian Rosen, chief executive of Australia's Film Finance Corporation, prefers to see the ASPI as a concerted challenge to other foreign film locales and an opportunity for local producers to think big.
The next step in the renaissance of Australia's film industry is the merger of the country's three film organisations.
On July 1, the Australian Film Commission, the Film Finance Corporation and Film Australia will unite to form Screen Australia.
This, Mr Rosen says, will ensure Australia's actors, producers, directors and film crews are all pulling in the same direction.
