For many, the Australian film industry is heading into an unprecedented decision: to support and develop local content, or to increase Australia’s capacity to accommodate for large foreign-financed productions (Soh, 2017). But this is not a new debate. This tension was the primary topic of discussion at the 2003 Australian Film Industry Awards in the wake of the U.S.-Australia free trade agreement (Lobato, 2008). Furthermore, Hambly (2020) argues that this debate is really a continuation of a tension that has existed since Australian feature film’s ‘renaissance’ of the early 1970’s: whether the Australian film industry should focus on productions of cultural significance, or on economic development.

This article interrogates the broad policy direction of national Australian film bodies and federal agencies. This will come from a discussion of the role and general standing of local and international productions. Ultimately, this article concludes that the stern binary that exists in understandings of this topic is reductive. There is little to suggest that local and international productions are necessarily mutually exclusive. As such, tax-breaks for foreign productions are not unfair insofar as they do not have to take funding from local content. Discussions that assume these productions contexts are mutually exclusive divert attention from the primary issue: the current policy ambivalence towards the sustained creation of feature-length Australian stories for the screen.

Before engaging with the primary content of this article, it is first important to note how the production contexts will be contrasted and discussed from this point. Firstly, there will not be a prolonged interrogation of cultural significance. As Hambly (2020) notes, the evaluative marker of ‘cultural significance’ has widely been applied to domestic Australian films without much consideration. While this is a significant issue – and certainly worth exploration in itself – the scope of this article is such that this will not be explored. It will be generally assumed that films made by Australian creatives, that represent a diverse range of Australian stories, and are for Australian audiences are inherently culturally significant.

Secondly, this article, in line Screen Australia’s delineation in their 2015 Drama Report, will separate Australian feature film production into ‘core’ and ‘non-core’ (Hambly, 2020, p. 2). ‘Core’ refers to films that are immediately characterizable as Australian (Hambly, 2020, p. 2). ‘Core’ films are Australian stories coming from Australians, generally domestically financed, and have aesthetic or cultural value to offer. On the other hand, ‘non-core’ refers to productions that take place in Australia, but that are not characterizable as Australian – not featuring Australian stories (Hambly, 2020, p.2). ‘Non-core’ films are largely internationally financed, most often from the U.S., and have economic or financial value to Australia. There are limitations to this delineation. As will be noted when co-productions are discussed, not all films fit neatly into ‘core’ or ‘non-core’. However, separating productions into ‘core’ and ‘non-core’ enables this article to interrogate the underlying elements of this debate: whether Australian feature production should focus on Australian stories of cultural and aesthetic value, or fully pivot to become a film-factory for more profitable international features with great economic value.

The core Australian feature film industry: Its makeup, and its value

As prominent Australian film industry scholar Thomas O’Regan famously stated: “locating Australian cinema is a messy affair” (1996, p. 1). However, this was certainly not always the case. During the Australian film renaissance at the start of the 1970s – which came from the introduction of national film funding body the Australian Film Commission (AFC) – the intent and direction of Australia’s national cinema was simple: to speak for the country, and unify Australian identity domestically and internationally (Avram, 2005). This was an important step for Australian cinema. The first recognised feature film was produced and exhibited in Australia – The Story of the Kelly Gang (Danks et al., 2018; Tait, 1906). However, the Australian film industry suffered through a period of relative insignificance from the late 1940s to the late 1960s thanks to middling government support (O’Regan, 1988). Promoting national cohesion, as well as creating national heritage with early AFC era art-cinema such as Picnic at Hanging Rock (Weir, 1975), forwarded governmental support and brought necessary funding to the industry (Bowles, 2007).

However, as Avram (2005) and Goldsmith (2010) argue, with the rise of globalisation –as a process and a concept – national identity cinema was problematised. Firstly, the concept of a national cinema that speaks for all Australians is problematic. Australia is a recently colonised country, where – according to the 2016 census – 49% of residents were born overseas or had at least one parent who was born overseas (Australian Bureau of Statistics, 2017). Australia has an extremely diverse population, thus trying to promote a cohesive national experience feeble, or perhaps even culturally damaging. Secondly, as Goldsmith (2010) notes, the physical boundaries between national industries dissolved. Globalisation has meant that overseas collaboration and off-shore filmmaking are much simpler and efficient than ever, and often the most cost effective avenue (Goldsmith, 2010). Because of these two factors, locating Australian national cinema spatially or temporally is a fraught endeavour. Instead, as Avram (2005, p. 26) protests, Australian cinema – what this article is terming ‘core’ cinema – can be understood as a diverse range of aesthetics and practices, collated by audiences recognising a film as Australian – however diverse, disparate, and contradictory aesthetics and practices may be.

The above encompasses the general academic understanding how Australian national cinema can be located, and thus where its value lies. However, it is certainly not the only perspective. As Gaunson (2012) argues, selling ‘Australia’ as a brand has always been a concern of Australian core cinema thanks to the high degree of government intervention needed. As observed above, this occurred domestically, Australian cinema acting as a form of internal cultural education (Gaunson, 2012). However, more recently core movies have been valued by the Australian government as a means to sell Australia as a site for non-core production. In a 2016 brochure designed to attract foreign feature production to Australia, the Australian Trade and Investment Commission (ATIC) highlight that the Australian core film industry produces talent (2016). Furthermore, they depict the talent of the Australian feature film industry as feeding into the international film industry – painting core Australian films as a proving ground for before working on larger, international productions (Australian Government: Australian Trade and Investment Commission, 2016, p. 7). In this sense, the quality of Australian national cinema is an essential part of the ATIC’s development of ‘Australia’s Nation Brand’; the national film industry operating as part of the ‘Nation Brand(‘s)’ ‘Brand Toolkit’ (Australian Government: Australian Trade and Investment Commission, 2021). While for audiences, creatives and academics Australian national cinema is defined by a diverse range or ‘Australian’ aesthetic practices, for government departments like the ATIC, the perceived aesthetic quality – and talent production as a bi-product – of core filmmaking is a means to build and sell Australia as a site for non-core feature production and post-production.

The notion that core Australian films produce aesthetic and cultural benefits comes from – as discussed in the introduction – that there is a significance to the creation of Australian features by Australians for Australians. However, it is also derived from the reality that the Australian core feature film industry brings about very little economic benefits. As protested by Hambly (2020, p. 11): “the Australian film industry is consistently framed as a commercial enterprise but the facts say otherwise”. Between 2005 and 2008, none of the 94 films in which Screen Australia invested returned all costs and turned a profit (Hambly, 2020). This is largely due to the reality that films are extremely risky enterprises. There are extreme uncertainties of demand (Kim, 2020). And this is compounded by the fact that films are expensive, yet audience interest cannot be truly measured until there is a finished product (de Vany, 2004). Furthermore, as was discovered by the Swedish Film Institute (2018), there is a direct correlation between budget size and audience size – essentially, the more expensive a film is, the larger its audience and the more likely it will profit. This is a significant problem for Australian core films, as they – almost without exception – exist in the exceedingly unprofitable low-to-mid budget range (Hambly, 2020). This is not to say that there is not value to the Australian film industry – there is great cultural and aesthetic value. However, it would be short-sighted to suggest there is near-to-any commercial or economic reasons to champion the core film network.

Currently, the Australian federal government supports core filmmaking in the number of ways. First, Screen Australia – Australia national screen industry body – has a budget to directly fund Australian features. The increasing limitations of this will be discussed later, but Screen Australia partially finances 15 to 20 feature productions a year (Hambly, 2020). This funding, as it stands, is inefficient. Every year, 60 to 70 production-ready projects apply for funding – meaning that only about one-third are successful (Hambly, 2020, p. 8). Of the two-thirds that are not successful, the majority do not receive enough funding elsewhere to enter production (Hambly, 2020). This is made more concerning when one considers that it can often take 5 to 8 years for a film to become production-ready (Hambly, 2020), meaning that the industry is full of wasted efforts, lost work, and developmental inefficiency.

The other primary form of production support offered to core domestic productions is the Producers Offset. The Producer Offset has contributed $1.5 billion to 1,182 screen projects over its first ten years (Screen Australia, 2017). Currently at 40 per cent – but will soon be lowering to 30 per cent (Hambly, 2020) – the Producer Offset is a rebate designed to increase domestic producer equity (Australian Government: Department of Infrastructure… 2021; Screen Australia, 2017). It is, as the name suggests, open to Australia producers and production companies, with the intent to build the equity they have in their films, and thus their ongoing capital and organisational or career sustainability (Screen Australia, 2017). In a survey of creatives that benefitted from the Producer Offset in its first 10 years, Screen Australia (2017) note that 91 per cent of persons surveyed indicated that the producer offset was essential to their ongoing business, and 92 per cent considered their film equity to have increased. That being said, the offset is not perfect. One-third of those surveyed noted that they had to trade their equity to financiers in order to gain the other funding required to complete the film (Hambly, 2020; Screen Australia, 2017).

‘Global Hollywood’: ‘Local Hollywoods’ and non-core production

With the process of globalisation has come what Goldsmith et al. (2010, p. 13) term ‘Global Hollywood’. ‘Global Hollywood’ refers to the way in which ‘Hollywood’ has evolved beyond a singular spatial production centre, and now refers to a set of global relations and flows (Goldsmith et al., 2010). These flows are tied to the development of what Miller and Leger (2001) term the ‘new international division of cultural labour’ (NICL). The NICL refers to the development of transcontinental mobility and instant communication technology that has reduced the need to have a single domestic site of production, and how this development has affected creative labour practices (Miller & Leger, 2001). With regards to Hollywood filmmaking, the NICL has allowed to think of the world as their ‘backlot’, looking to film wherever it is cheapest, most aesthetically useful, most comfortable, and most efficient instead of having to remain tied to the studios that spatially make up Hollywood (Lobato, 2008). This ties into the development of other related practices – such as Netflix’s internationalism (see Cunningham & Scarlata, 2020) – that have extended the reach of U.S. financed feature film production to span the globe.

It should be quickly noted that, for the Australian industry, not all exported filmmaking does comes from the U.S., and not all of it is non-core. Since 1986, Australia has reached co-production agreements with other countries (Screen Australia, 2020b). So far, treaties have been signed with 12 countries – none of which is the U.S. – and this has led to 199 films and $2.0 billion of investment (Screen Australia, 2020b). These agreements enable a single project to receive funding and rebates from more than one national film board – if requirements for all countries involved are met (Hoyler & Watson, 2019; Oaten, 2010; Screen Australia, 2020c; Soh, 2017; Walsh, 2012). The benefits of these agreements are such that a non-Hollywood film can accrue a larger budget than otherwise possible, and more than one national audience can be accessed (Bosanquet, 2018; Yue, 2008). An issue for this subject is that these films can be core, non-core, or something in between. While they are deserved of their own focus, it is important to note that foreign investment and offshoring does not always mean something is non-core or non-Australian. 

One of effect of this is a race between viable countries and sites to increase their ‘film friendliness’. ‘Film friendliness’ refers to the attributes of a location that lend it to be considered by international financiers as part of Global Hollywood (Goldsmith et al., 2010). As Goldsmith et al. (2010) note, raising film friendliness generally takes the form of the creation of satellite Hollywood production centres: studios or sets of studios that can be relied upon outside of the U.S.. Goldsmith et al. (2010, p. 4) term these sites ‘local Hollywoods’, as the operate as domestic sites of production with the potential to house larger international productions. In Australia, the most prominent satellite production centres are Fox Studios in Sydney, and Village Roadshow Studios in the Gold Coast – however all major Australian cities have at least one studio geared towards attracting international productions (Australian Government: Australian Trade and Investment Commission, 2016). Along with the infrastructural element to local Hollywoods, other considerations such as language, weather, and – as mentioned above – local production and post-production talent are considered when international – mostly U.S. – productions decide to film off-shore (Australian Government: Australian Trade and Investment Commission, 2016; Hoyler & Watson, 2019).

The commercial or the cultural – why not both?

However, the primary consideration for where to film, and why a country would want to hold satellite productions, is commercial. Focussing on Australia, the government offers incentives specific to large-to-mega budget international features. The most significant of these is the Location Offset – a 16.5 per cent tax rebate (Australia Government: Department of Infrastructure…, n.d.). The offset was originally a short-term commitment, with a total cap on the amount rebated overall. However, in the light of Covid-19 further globalising the industry, this year the Morrison government announced that $400 million would be added to the incentive over the next three years, and that the program would be extended to 2026-2027 (Australia Government: Department of Infrastructure…, 2021). This is a considerable financial commitment but is a continuation of the actions of past Liberal governments. In 2015, Julie Bishop – Foreign Affairs Minister at the time – directly spoke with Hollywood executives to lure the production of blockbuster films Alien: Covenant (Scott, 2017) and Thor: Ragnorok (Waititi, 2017). There is a strong commitment from the current government to draw large-to-mega budget productions to film in Australia.

The government’s incentive to do this is largely economic. These films bring astounding amounts of money with them. The aforementioned Alien and Thor films were estimated to have created around 3000 jobs and bring in around $300 million in investment to Australia (Wroe & Knott, 2015). Furthermore, the location incentive was estimated in the 2018/19 financial year to have brought in $297 million in foreign expenditure that would have not existed otherwise (Ausfilm, 2019). ‘Otherwise’ is the chief word in the last sentence: these incentives, while they seem like large financial commitments, bring in foreign investment that far more than makes up for the financial commitment of the rebates.

While it is hard to argue against the merit of trying to benefit the Australian economy through job creation the federal policy direction worrying. First, it should be remarked that relying on non-core development has previously been risky. The amount invested by foreign agents per year fluctuates dramatically. 2016/17 saw $521 million of foreign investment, however, the next year only $10 million – only with one less foreign film produced in 2017/18 (Screen Australia, 2020a). While there are variables that can be controlled here – such as stabilising demand with incentives – there are a lot that cannot. In the early 2000’s, Australia produced many foreign productions (Screen Australia, 2020a). However, numbers and investment dramatically decreased throughout the 2000’s thanks to a surge in the value of Australian Dollar making Australian production more costly (Lobato, 2008).

But this is perhaps not the primary concern. What is truly devastating is that financial support for core films is being taken away to contribute to non-core production. While the acquisition of the aforementioned Alien and Thor films was a positive for the wider economy, the finance to make it happen was drawn directly from Screen Australia’s budget – a budget that had already been cut by $51.5 million in the 18 months leading up to 2015 (Hambly, 2020; The IF Team, 2015; Wroe & Knott, 2015). This thought carries through to other contemporary examples, such as Screen NSW devoting their entire film financing budget to acquire the upcoming entry in the Mad Max franchise (Ausfilm, 2021).

Yet, mega-budget non-core films and low-to-mid budget core Australian films are not mutually exclusive. Due to the differences in their budgets and subject matter, they will almost always be using different locations, crew, creatives, and cast. Moreover, their benefits and deficiencies are, if anything, complementary. Large non-core films bring in incredible finance at the cost of direct aesthetic and cultural value. Core films, on the other hand, have tremendous cultural significance, but are almost uniformly unprofitable.  A balanced Australian film industry could exist where Australian creative work is allowed to flourish in a more efficient funding scheme, subsidized by mega-budget foreign projects.

This, however, is not how this situation is viewed on a federal level. Aligning with the modern shift from cultural to creative industries, what is being valued over all else is how renumeration can be gained from creative outputs, and how to maximise economic benefits (Garnham, 2005). The attraction of foreign feature production is currently not geared towards growing and benefiting the domestic industry. Instead, as has been made obvious by the cuts to culturally significant core films, it is made with short-term renumeration in mind. And this short-term renumeration of non-core foreign features is, in turn, diverting attention away from the divestment from the less economically efficient core industry.

 In this sense, it would perhaps be reductive and misunderstood to conclude that the recent increase in incentives for foreign non-core feature filmmaking are a direct cause for dwindling support to the local industry. Instead, the suffering of the core sector should be viewed as part of an ideological turn towards a negative revaluation of significance of aesthetic and cultural value. The profitability of foreign film production could perhaps more aptly be understood as an excuse to execute cuts to core film production: allowing federal powers to initiate a shift away from culturally significant film production, and a swing towards becoming an efficient film factory.

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