Over the last year, the Australian Government rolled out a suite of significant reforms to its film and television incentives, promising to reshape the production landscape for both domestic and international players. These changes were designed to boost Australia’s global competitiveness and provide greater flexibility for creative teams.

With the “dust settled”, we break down the key updates, compare Australia’s offering to international regimes, and highlight practical considerations for producers considering the country of vibrant coral reefs, ancient rainforests and sacred monoliths as a filming destination.

NEED TO KNOW

Producer Offset

In a significant development for the Australian screen industry, the longstanding 20% cap on “above the line” costs – which includes costs for producers, directors, and lead cast – for the Producer Offset was removed for projects which commenced on or after 1 July 2024.

Previously, the Producer Offset was subject to this 20% cap on certain expenditure, limiting the proportion of qualifying Australian production expenditure (QAPE) that could be allocated to key creative roles. In contrast, the Location Offset did not impose such a cap, providing greater flexibility for productions to allocate expenditure as needed.

With the recent changes, both the Producer Offset and the Location Offset now offer a 30% rebate (for a television series), and the removal of the “above the line” costs cap for the Producer Offset brings it into alignment with the Location Offset in terms of both the rebate rate and the treatment of above the line costs.

This increase in the cap, from 20% to effectively no cap, gives producers greater freedom to attract marquee talent. It also simplifies budgeting and financing arrangements for producers; eliminating the driver to structure budgets around QAPE requirements to preserve access to the Producer Offset.

Other key updates impacting on eligibility of the Producer Offset include:

• Removal of minimum length requirements: Most formats no longer need to meet minimum duration rules, making it easier for streaming and non-traditional projects to qualify for the offset. Only feature films (60 minutes) and large format features (45 minutes) still have minimum length requirements.
• New QAPE threshold for drama series: Drama series can now qualify for the Producer Offset if they have a total QAPE of at least $35 million per season, without also needing to comply with the per-hour ($500,000 QAPE) and other thresholds (minimum $1 million QAPE spend), which remain in place for smaller-budget series.

Other federal and state incentives

The Post, Digital and Visual Effects (PDV) Offset remains at 30% and is available to productions carrying out post-production, digital, and visual effects work in Australia, regardless of where filming takes place. Productions can also combine the PDV Offset with state and territory incentives, further enhancing Australia’s appeal as a potential destination for high-quality post-production and visual effects services.

Each of the states and territories offer their own tailored grants and incentives to support screen production. A snapshot of the available grants and incentives available is set out below.

• Made in NSW TV Drama Fund: Targets high-end television drama series which are footloose and/or fully funded by international sources.
• Victorian Screen Rebate: Provides rebates for production of games, post-production, visual effects and animation.
• Screen Queensland Capital Grants Program: Offers matched funding up to $750,000 to support businesses to grow their operations to serve local, interstate and international films and series.
• South Australian Film Corporation Revolving Loan Facility: Up to 90% of QAPE funded as a loan.
• Western Australian Regional Screen Fund: Funding up to $2 million for qualifying regional expenditure in Western Australia.
• Tasmanian Island Screen Incentive: Once-off capped grant at the rate of 10% of expenditure on Tasmanian goods and services.
• Northern Territory Production Attraction Inventive Program: Targeting “footloose” productions to film in the NT.
• ACT CBR Screen Investment Fund: A new program which will replace the existing Screen Investment Fund.

Each of these grants and incentives can often be combined with federal programmes such as the Location Offset, Producer Offset, and PDV Offset.

Australia in the global context (USA, UK & Canada)

Australia’s screen production incentives have positioned it as an attractive destination for production and post-production activities, compared to other leading jurisdictions including the USA, UK, and Canada.

In the USA, production incentives vary widely by state, with rebates and tax credits typically ranging from 20% to 30%. However, these incentives often come with complex eligibility criteria, annual funding caps, and restrictions on the types of expenditure that qualify. Many US states also impose minimum spend thresholds and have limitations on the proportion of above the line costs that can be claimed, in contrast to Australia’s regime.

The UK offers a film tax relief of up to 25% of qualifying UK expenditure, with certain requirements regarding cultural tests and minimum spend. Canada’s federal production services tax credit is set at 16%, with additional provincial incentives that can bring the total rebate to around 25% to 30%. However, both the UK and Canada maintain more stringent requirements regarding local content, minimum spend, and qualifying expenditure.

Australia also offers operational advantages which go beyond financial incentives. These include world-class production facilities, highly skilled crews, a diverse range of locations and high quality post-production, digital, and visual effects services.

INSIGHTS

• The most recent round of reforms to Australia’s screen incentives have removed longstanding barriers, such as the 20% cap on “above the line” costs and most minimum project length requirements.
• The ability to combine the Producer Offset and Location Offset with other state and territory incentives can result in a stacking of incentives to achieve effective rebates of 40% of more.
• The reforms not only provide potential monetary benefits, but also reduce administrative complexity, making Australia a more accessible and attractive destination for both local and international productions.

ACTION POINTS

International producers interested in basing their projects in Australia should consider consulting with local production partners and advisors, as well as local screen agencies to map out the optimal incentive strategy, ensuring you maximise the available rebates and grants while leveraging Australia’s post-production expertise.

For local producers, with screen incentives relatively stable post reform, now is an ideal time to re-assess your slate to identify potential “stacking opportunities” for federal and state incentives, to maximise the net value of the available grants and rebates.