Q and As: Modernising Australian screen content settings
What are the measures in this package?
- Funding of $30 million over two years to Screen Australia to support the production of Australian drama, documentary and children’s film and television content.
- Funding of $3 million over three years for Screen Australia to establish a Script Writing and Script Development Fund.
- Funding of $20 million over two years to the Australian Children’s Television Foundation to support the development and production of high quality Australian children’s screen content.
- Amending of the Australian Screen Production Incentive measures in the Income Tax Assessment Act 1997 to harmonise the Producer Offset rebate rate at 30 per cent for eligible film and television content, and to make complementary threshold and integrity amendments across the three film tax offsets.
- Reducing and simplifying the Australian content ‘sub-quota’ obligations on commercial free-to-air television broadcasters so that the new quota can be met with either drama or children’s content or documentary content. With the minor exception of a cap on the number of hours of documentary content that can be counted towards meeting the requirement, the particular mix of content chosen will be a matter for each broadcaster.
- Broadcasters will continue to face a 55 per cent overall Australian content requirement.
- Removing the ‘P-preschool’ and ‘C-children’s quota obligations on commercial free-to-air broadcasters, while maintaining appropriate safeguards which must be met if broadcasters choose to show P and C content.
- Legislate to reduce the existing Australian new drama expenditure obligation on selected subscription television channels from 10 per cent to 5 per cent from 1 July 2021.
- Largest video streaming services operating in Australia will be asked to commence reporting to the Australian Communications and Media Authority on Australian content acquisition from 1 January 2021.
What funding is the Government providing?
- The Government will provide an additional $53 million in funding to support the production of quality Australia content. This represents a significant boost to the screen industry, building on the previous investments of $50 million to establish the Temporary Interruption Fund and $400 million boost to the Location Incentive.
What funding will the Australian Children’s Television Foundation receive?
- The Government is providing funding of $20 million over two years, to the Australian Children’s Television Foundation (ACTF), in 2021-22 and 2022-23.
- ACTF will be able to invest these funds in the development and production of high-quality Australian children’s content and secure its distribution to audiences across a range of platforms.
- ACTF offers Australian producers a one-stop-shop for investment, development, local distribution and international sales specifically for children’s television.
- ACTF has proven success in brokering deals with international streaming services. This funding makes it more likely that Australian children will have access to quality Australian content reflective of their culture and values on alternative platforms.
What funding will Screen Australia receive?
- Screen Australia will receive a total boost of $33 million.
- $30 million will be provided to Screen Australia over two years from 2021-22 to support Australian film and television drama, children’s and documentary productions. This boost in funding to Screen Australia will enable it to target quality and culturally important Australian film and television content and support producers to find a pathway to audiences thereby resulting in a positive commercial return.
- Screen Australia will also receive $3 million over three years from 2020-21 to support the Screen Writing and Script Development Fund. This program will support Australian creators by giving them the time, money and tools to develop their scripts to a production ready state.
How do producers access this additional funding?
- Funding will be delivered through Screen Australia’s competitive funding programs. Information on how to apply for funding is available on Screen Australia’s website.
How do screenwriters access this Fund?
- Screen Australia will administer this funding. Guidelines and information about applying will be released over coming months on Screen Australia’s website.
Australian Screen Production Incentive
What is the main change being made to the Australian Screen Production Incentive?
- The key change will be the harmonisation of the Producer Offset as 30 per cent for film and television production, regardless of release platform.
Why is the television incentive rate being increased from 20 to 30 per cent?
- This will increase support for the production of Australian television content, stabilising the production sector during a period of regulatory change and creating productions of scale to compete on a global stage.
- This increased rate will open up opportunities for the screen sector to engage further with international streaming services, which will enhance the availability of Australian content to Australian audiences no matter on what platform they choose to watch it.
Why is the feature film incentive rate being decreased from 40 to 30 per cent?
- Harmonising the Producer Offset will see the rate for feature films also set at 30 per cent. This will result in the removal of the theatrical distribution requirement for feature films.
- Producers of films will have the flexibility to identify and pursue more appropriate commercial release strategies.
- This may still include a cinema release but other platforms, such as an on-demand platform, subscription television broadcaster, free-to-air broadcaster, or a catch-up service, could also be considered.
Why is the 65 hour commercial hour cap for drama series being removed?
- Currently under the Producer Offset a series is only able to claim the rebate for qualifying Australian production expenditure incurred up to 65 commercial hours.
- Under this change, much loved Australian drama productions can continue to be produced and distributed to audiences, as they will be able to access the support provided through the Producer Offset on an ongoing basis.
- Supporting drama that remains in production for longer increases the likelihood that investors and equity partners will get a return.
- This change will also assist producers to invest in longer-running series knowing that the Producer Offset support will be available for as long as the series is in production.
- Further, this change will also apply to children’s content, so producers can continue to entertain the next generation of Australians.
Why is the minimum expenditure threshold for feature length content being increased from $500,000 to $1 million?
- It is important that taxpayers’ support provided through the Producer Offset incentivises the creation of quality content and can compete for domestic and global audiences.
- Increasing the minimum qualifying Australian production expenditure threshold for feature length content from $500,000 to $1 million will encourage the creation of high-quality productions that are larger in scale.
Why are you removing the Gallipoli clause?
- It is important that the Government’s main support mechanism for the production of Australian content, the Producer Offset, incentivises production taking place in Australia.
- Therefore, the clause that allows production costs incurred in other countries to be claimed as qualifying Australian production expenditure, commonly known as the ‘Gallipoli Clause’, will be removed.
- Incentivising producers to undertake more production in Australia will assist to maintain jobs in the industry and develop and retain the skills necessary to create quality productions.
Why is the PDV Offset minimum expenditure threshold being increased from $500,000 to $1 million?
- The Government will amend legislation to increase the Post, Digital and Visual Effects (PDV) Offset threshold from $500,000 to $1 million of qualifying Australian production expenditure.
- This change will better target Government support to attract post, digital and visual effects activity that is technically ambitious and assists in the growth of our PDV sector.
- Attracting larger packages of work and investment to Australia is essential to assist our industry to recover from the impacts of the COVID-19 pandemic.
- This change is in line with the PDV Offset objective of encouraging offshore productions to contract Australia’s world-class PDV houses to undertake significant post production and visual effects work.
Why are overheads being removed as eligible expenditure under all three offsets?
- Currently, under all three tax offsets, productions are permitted to claim a certain percentage of their production spend as overheads not directly related to the making of the film to cover company expenses.
- In order to target Government (and thereby taxpayers) support, the provisions that enable overheads to be claimed will be removed.
When will the changes come into effect?
- The Australian Screen Production Incentive is underpinned by the Income Tax Assessment Act 1997 and changes will be implemented through legislative amendments.
- It is intended that these amendments will come into effect for productions that commence principal photography or post, digital and visual effects activity on, or after 1 July 2021.
Content obligations for commercial broadcasters
What are the simplified and reduced obligations on commercial broadcasters?
- The modified content quota will replace the existing annual and triennial sub-quotas for drama, documentary and children’s content.
- It will be a streamlined and simplified programming obligation on commercial free-to-air television broadcasters.
- Content will count towards the new simplified requirement if it is either drama or children’s content or documentary content. With the minor exception of a cap on the number of hours of documentary content that can be counted towards meeting the requirement, the particular mix chosen will be a matter for each broadcaster based on its business strategy and judgement of audience appeal.
- Further information about the proposed changes are available on the Fact Sheet: Modernising Australian content regulation.
When will these obligations be implemented?
- The modified content quota will apply to commercial broadcasters from 1 January 2021.
- The changes will be made through a Ministerial direction to the Australian Communications and Media Authority (ACMA) to revoke and remake the Australian Content Standard and Children’s Television Standards.
Will the Australian advertising quota and the transmission quotas be affected?
- No. The overall Australian programming transmission quotas for primary channels and multi-channels will remain in force.
- Information about the Australian programming transmission quotas can be found at: www.acma.gov.au/australian-content-commercial-tv.
Will the changes affect local programming obligations?
- No. Local news obligations that apply to regional commercial broadcasters will remain in force.
- Information about the local content rules for regional broadcasters can be found at www.acma.gov.au/local-tv-content-regional-areas.
Will protection measures for children’s content still apply?
- Yes. While the Government will be asking ACMA to remake the current Broadcasting Services (Australian Content) Standard 2016 and Children's Television Standards 2016, the child protection measures in the current children’s standard will remain in force.
- These include prohibitions on the advertising of alcoholic drinks, prohibitions on endorsements of products by popular characters, and prohibitions on content that is discretionary, distressing or depicting unsafe situations.
- This means that, when commercial free-to-air broadcasters broadcast children’s content, young audiences will continue to be protected.
How will the changes affect subscription television broadcasters?
- The Government will legislate to reduce the obligations on subscription broadcasters by reducing the requirement for new drama programming from 10 per cent to 5 per cent.
- Information about the content regulations for subscription broadcasters can be found at www.acma.gov.au/spending-subscription-tv-drama
Streaming video services
How will the changes affect streaming video services?
- There will be no immediate impacts on streaming video services, although the Government will be asking the larger providers to report to the Australian Communications and Media Authority on their investment in Australian content, commencing from 1 January 2021.