Supporting The Australian Screen Industry

It really is a pleasure to come here this afternoon to talk to you about the Australian screen industry.  And specifically to talk with you about what I believe the proper role for government should be in fostering that industry. 

THE HON. MARK DREYFUS QC MP

SHADOW MINISTER FOR THE ARTS

MEMBER FOR ISAACS

 

SUPPORTING THE AUSTRALIAN SCREEN INDUSTRY

 

SCREEN PRODUCERS AUSTRALIA: SCREEN FOREVER CONFERENCE

 

MELBOURNE

 

WEDNESDAY, 18 NOVEMBER 2015

***CHECK AGAINST DELIVERY***

Thank you.  It’s a pleasure to be here this afternoon in my capacity as Shadow Minister for the Arts.  While I have a passion for the law, as Shadow Attorney-General much of my time over recent years has been focussed on the grave, sometimes urgent, and inevitably complex questions of national security.  In particular, I have been spending a great deal of time wrestling with debates about how to maintain our nation’s security while at the same time maintaining a just, open and harmonious society, founded in respect for fundamental human rights. The horrific events in France over this last weekend have once again brought these matters into very sharp focus.

So it really is a pleasure to come here this afternoon to talk to you about the Australian screen industry.  And specifically to talk with you about what I believe the proper role for government should be in fostering that industry.  Of course, I am not for a moment suggesting that there aren’t policy questions to wrestle with here too.  It’s just that there is a great deal to celebrate about your industry, and that for many of the challenges exist there are solutions to be found.

As a barrister I represented some film industry players, and through that work I learned something of the commercial side of the industry.  I must say that when it comes to fighting over dollars and cents the screen industry is as ferocious as any other industry, maybe more so.  Though I expect that won’t be news to any of the producers here.

But much of what I know about our screen industry I’ve learned through my meetings with many of you over the last two years, including conversations with producers, directors, actors, crew and industry representatives.  I think I now have an understanding of the work that you do and of some of the more pressing challenges the Australian screen industry faces.  Of course I do have more to learn, and my door is always open if you have matter that you need to raise with me.

In the fifteen minutes I have before taking questions I will talk to you about the role I see for government in supporting a prosperous Australian screen industry.  I hope I won’t be disappointing anyone here when I say that we are still a little too far from the next federal election for me to be announcing Labor election policies here.  But a happy consequence of that is that I am still in the process of formulating policy in this area, and I am open to hearing from you as to what changes you would want to see from a future Labor Government.

I want to briefly address three matters today.  First, I want to set the scene by talking in broad terms about why Labor supports a vibrant and successful Australian screen industry.  Second, I will discuss the importance of government funding for the ABC, SBS and Screen Australia.  Finally, I will briefly address the perennial question of offsets, and my current thinking about where these settings should be. 

From long before I became shadow Minister for the Arts I have always believed that the arts enrich and enliven our society.  I come from a family of musicians, and perhaps I rebelled by rejecting that heritage to follow the scandalous career path of a lawyer.  I often think that in my family going to law school was a bit like running off to join the circus.

Gough Whitlam talked about the arts as central to the lives of Australians, and I agree with a statement by the great man that was quoted by Cate Blanchett at his memorial service last year. Gough said:

In any civilised community the arts and associated amenities must occupy a central place. Their enjoyment should not be seen as something remote from everyday life. Of all the objectives of my Government none had a higher priority than the encouragement of the arts, the preservation and enrichment of our cultural and intellectual heritage. Indeed I would argue that all the other objectives of a Labor Government social reform, justice and equity in the provision of welfare services and educational opportunities-have as their goal the creation of a society in which the arts and the appreciation of spiritual and intellectual values can flourish. Our other objectives are all means to an end; the enjoyment of the arts is an end in itself.

 

That statement was a guiding principle of the Whitlam Labor Government, and I am confident it will continue to be a guiding principle of future Labor Governments.

 

The arts define who we are, as a modern, innovative, confident and outward looking society, because it is through the arts that we express ourselves, explain ourselves, how to some extent at least, understand ourselves.

 

I also feel that the arts, and those arts that tell stories in particular, have an important part to play in helping us to understand the rapidly changing world around us, by helping us to understand and empathise with those who we may never meet in person. 

 

And of course, the arts are also a critically important part of our economy, because the arts are the engine that drives our creative industries.  So while the arts will always have a cultural value that cannot be quantified in purely economic terms, there can be no doubt that the arts and our creative industries will play an increasingly important role in our economy in the years and decades ahead.

 

Which brings me to the Australian screen industry, an industry that is important to our nation in so many ways.  To begin with, Australians love seeing Australian stories on screen.  Our film industry has been a vital part of the cultural landscape for generations now, whether it’s moving historical works such as Breaker Morant and Gallipoli, uniquely Australian action epics like the Max Max series, hauntingly beautiful explorations of our spiritual landscape such as Picnic at Hanging Rock and Storm Boy, iconic comedies such as Crocodile Dundee and The Castle, or, more recently, reflections about Indigenous Australia such as Samson and Delilah and Ten Canoes.  And recently I saw an excellent Australian film from the uncommon genre of ‘revenge comedy drama’ – The Dressmaker.

 

On the small screen too, Australian stories have helped us to understand ourselves and our place in the world.  I hesitate to even try list examples, but relatively recent shows that have caught the public imagination include Rake (a must for all barristers – none of it’s true of course), The Secret Life of Us, Offspring,  Underbelly,  Redfern Now, Anzac Girls, and most recently, The Beautiful Lie.

 

But the screen industry does far more than tell Australian stories that move us, make us laugh, and help define us as a nation.  Your industry is also a powerhouse of economic activity, whether it’s local film productions, TV drama series, or the enormous US productions that come here for the quality of crews and a host of other reasons that makes Australia such a desirable place to shoot.

 

Earlier this year I had the opportunity to visit the set of Pirates of the Caribbean 5 on the Gold Coast.  It was a remarkable thing to see.  In addition to the scores of actors employed on the shoot, on set there were literally hundreds of technicians employed for many months in the most creative of endeavours, from camera crew to lighting teams to set designers and builders.  And through their work on one huge production they are developing the industry’s skill base and global reputation.   And most heartening of all for me was to see that the vast majority of the actors and crew on that foreign production are Australian.

 

The screen industry is also important to our economy because it is an industry that promotes and rewards innovation.  While I understand that usually the most precious resource on a film set is time, new technologies and innovations often require their creators to take a prototype through its paces on set.  A newly designed motion control rig was called for on the set of one major production I’ve been told about, leading a camera assistant to earnestly explain to a junior, “This thing is amazing.  It’s a robot that’s been specially designed to produce enormous quantities of crew overtime.” Clearly innovation can become an individual producer’s nightmare, but its value to the industry and to our economy in the longer term cannot be doubted.

 

I’ll now turn to the issue of government funding.

 

I have no doubt that you’re all aware of the adage that good scripts lead to a climax that is surprising yet inevitable.  Unfortunately government policy in the arts over the last two years has failed this basic test, with policies that could generously be described as surprising yet ridiculous.  I do not want to make a partisan political speech today, although I will make a few criticisms about some recent policy decisions.  I offer these as constructive criticisms for the new Arts minister, who I understand will addressing you shortly. 

 

Television drama is in many respects the engine room of screen production in Australia.  The quality of much of what is produced here is superb, and the importance of Australia having its own stories told is a matter that few Australians would disagree with.

 

Many producers have spoken to me about what they already refer to as the ‘golden years’ of television production, a period that blossomed only a few years ago now in the boom created by Labor’s injection of funding into the ABC.  But following years of growth in expenditure on adult television drama production, production has been falling rapidly over the last two years.  No one is any doubt that a key reason for this has been the massive cuts to the ABC and SBS imposed by the current government, which amount to over half a billion dollars in cuts over just two budgets. These cuts have led to the slashing of hundreds of jobs at the ABC, as well as the shutting down of productions and the dismantling of some production facilities.

 

Tony Abbott made an explicit promise to the Australian people immediately before the last election that there would be ‘no cuts to the ABC or SBS’ under a Coalition Government.  As Communications Minister Malcolm Turnbull was the one wielding the axe against the ABC and SBS over the last two years. But he now leads the Government.  I hope that he will show that he was only Abbott’s unwilling hatchet-man over the last two years, and will now use his prerogative as Prime Minister to make good on that promise to the Australian people and reverse his cuts to the ABC and SBS in the next federal Budget.

 

Screen Australia has also suffered very significant cuts over the last two budgets. The 2014 Budget, which was the fiscal equivalent of the Red Wedding in Game of Thrones, included cuts to Screen Australia of $38 million over four years.  In this year’s budget those cuts continued, with a further cut of $3.6 million over the next four years.  This means that our nation’s peak film funding organisation will have had its budget slashed by more than 16 per cent in just two years of Coalition Government, with its federal government allocation dropping from around $100 million in 2013-14 to a projected $84 million in 2017-18.

And these cuts have been imposed despite the fact that since its formation in 2008 with the merger of its three predecessor bodies, Screen Australia has reduced its operating costs by 44 per cent.

Assurances by the former Arts Minister, Senator Brandis, that these cuts would not impact ‘front line services’ were of course hollow.  I know that unlike his predecessor Mitch Fifield has actually been consulting with the sector he is responsible for.  I only hope that he will act on what he is hearing, and take an entirely different approach to that of Senator Brandis.  

 

So what role should government play?  There is absolutely no doubt that our screen industries need government support to flourish. 

 

As I’ve made clear, the ABC and SBS need to be properly funded in order to produce the cutting edge dramas that Australians have come to expect and love to watch, and to challenge the commercial networks to match that quality of production. 

 

Screen Australia needs to be properly funded to fulfil its vital functions in supporting Australian film productions and nurturing our new talents. 

 

And the Government needs to regulate in a manner that nurtures our industry. Although the current Government has trumpeted its ideological opposition to what it refers to pejoratively as ‘red tape’, or ‘green tape’ in the case of laws to protect our environment, it is crystal clear to anyone who understands the Australian screen industry that well designed regulation is essential to the industry’s survival and prosperity.

 

For example, we need well-calibrated regulations for Australian content on Australian TV, adapted as needed to changing industry circumstances.  There is no doubt that buying foreign content is incomparably cheaper than producing high quality Australian content.  So to simply let market forces rip, without strict regulations mandating the inclusion of Australian content, would decimate the Australian television production industry.  This can be a complex regulation to get right.  For example, there are currently concerns about the use by commercial broadcasters of increasing quantities of New Zealand content to acquit their Australian content requirements, and it may be that adjustments to current policy settings are required, particularly with respect to the definition of ‘first release’ programs.

 

Copyright infringement through internet piracy is another area in which government regulation is essential to protecting the Australian screen industry.  While we have worked with the government to pass legislation to facilitate the blocking of overseas websites that distribute pirated content, I believe there is more to be done in this sphere.  Additional measures include the need for a government-driven education campaign in support of copyright holders, and for work with the industry to ensure that audiences here are provided with access to legitimate content in a timely and economical manner.

 

But the two regulatory settings that I want to discuss briefly in the time remaining are the tax regimes for foreign productions under the Location Offset, and for the production of Australian content under the Producer Offset.

 

Earlier this month the Government announced that Disney-owned Marvel Studios would be producing the third instalment of its Thor franchise here in Australia, staring our own Chris Hemsworth.  In addition to Thor - Ragnarok, Ridley Scott’s unnamed Aliens prequel or Prometheus sequel provisionally titled Alien: Paradise Lost, or possibly Alien: Covenant, is also to be shot here.

 

It is instructive that even with our dollar falling by some 30 percent in the last 18 months, the current Location Offset of 16.5 percent was not enough to attract those productions without more from the Australian Government.  Specifically, the Government has committed some $47.25 million in addition to the Location Offset, which is likely to bring the total offset for these productions to around 30 percent.  Although close to $90 million is a considerable outlay to attract two movies to our shores, I wholeheartedly support this expenditure. 

 

Large foreign productions bring considerable economic benefit to Australia, well beyond the money spent directly on the production.  In addition to direct and indirect job creation on these projects, there will be secondary benefits such as practical training for those involved, opportunities for local actors to build international profiles, development of film industry infrastructure and related production facilities, on-set innovations that can be commercialised for future productions, and potentially tourism benefits as well.

 

The concern that has often been expressed to me is that Australia’s 16.5 percent Location Offset is no longer competitive.  The ad hoc additional funding provided for the Thor and Alien movies demonstrates this. Other countries are also aware of the economic benefits of attracting large productions to their shores, and have increased their location offsets accordingly.  New Zealand and the UK offer offsets of 25 percent, Georgia offers 30 percent, and Canada offers offsets that are even higher, and is further assisted by its proximity to the US. 

 

While we may be able to negotiate one-off deals with producers to match or exceed the offsets offered elsewhere, as was recently done with Disney and Mr Scott, and as Labor did for productions in the past, it is a concern to me that in many cases Australia will simply be passed over for the certainty offered by jurisdictions with a competitive offset that can be relied upon without the need for negotiations with government.  It is important that Australia have a seat at the table when shooting locations are first being discussed, and so I am looking closely at what could be done to make Australia more competitive in this respect.

 

It’s my view that with the right settings to ensure we are globally competitive in a financial sense, government can ensure that our local industry is best able to then leverage its many advantages as a production destination.  These advantages include our excellent crews and actors, our reliable infrastructure, extensive choice of exterior locations, English language, excellent post-production facilities, desirability as a destination for foreign cast and crew.  Usually we like to make the point that Australia is also ‘politically stable’, but with five changes of prime minister in as many years, we probably shouldn’t crow too loudly on that front.

 

According to figures released by SPA early this month, the total spend on Australian series, serials, miniseries and telemovies was down to $237 million last year, amounting to a drop of 21 percent.  And the quantity of TV drama being produced also dropped to the lowest level in ten years, down from 472 hours to 401 hours.

 

This is where a second major policy lever that the government can pull becomes particularly important – and that is the Producer Offset.  I know that this is the offset of greatest relevance to most of you, and a number of you have approached me about the need for changes to the current criteria for access to its higher level. 

 

In particular, I have heard many convincing arguments that the requirement for theatrical release to access the forty percent Producer Offset is antiquated, and does not reflect the realities of the current market and distribution channels for high quality Australian content.  Many of you have said to me that while care would need to be taken in changing the criteria for access to the 40 percent offset, if Australian television producers had access to this offset it could help to stimulate production in very significant way, with all the cultural, and direct and indirect economic benefits such increased production would bring.

 

Once again, I am looking closely at whether this setting should be changed, and if so, in what ways.

 

The Australian screen industry relies on and nurtures creativity in the classical arts, such as writing, acting, and photography, as well as in what are now often called the broader ‘creative industries’.  I don’t believe one can draw too sharp a distinction between the classical arts and creative industries, but it is particularly in the creative industries associated with screen production that we are seeing growing numbers of skilled technicians, from the engineers who build innovative new lighting and camera rigs, to the sound designers, to the hosts of programmers and digital artists who contribute to the huge post-production process involved in many modern film and television productions.

 

As Debra Richards from Ausfilm pointed out to me when we visited the set of Pirates of the Caribbean 5, while automation has led to a reduction in human labour in so many industries over the last generation, one only has to visit the set or watch the credit role of a modern Hollywood film to see that the number of people employed on movies seems to be constantly increasing, notwithstanding the constant introduction of new technologies.

 

Labor understands the importance of our screen industries, in cultural terms, as well as in economic terms as a driver for jobs, innovation and economic activity. We will do all that we can to support you. 

 

Thank you.

 

18 NOVEMBER 2015