The Australian government this week put aside $21m (A$20m) to attract high-budget international film production, but exactly how it is going to be used will not be known until the industry has been consulted, which may be a few weeks.

What is known is that, in practical terms and however it is accessed, the new incentive will put money into the empty pockets of Australian crews and service companies, and will do the US studios a favour by offsetting the high costs of filming in Australia.

It is also known that it will be in addition to the 16.5% uncapped location tax rebate payable on the Australian production expenditure component of any film that spends $15.5m (A$15m) or more in the country, and the 30% rebate on post, digital and visual effects where expenditure is more than $520,000 (A$500,000).

Australian films get a 40% tax rebate on expenditure, including official co-productions and unofficial co-productions that meet the multidimensional Australian content test.

It is also known that if Australia does entice Walt Disney Studios to make David Fincher’s 20,000 Leagues Under The Sea on its shores with a combination of the rebate, the $12.4m (A$12m) currently on offer from the federal government and an additional unknown amount from one or more state governments, this will not be included in the new $21m (A$20m).

Until this new money is exhausted, it is highly unlikely that any increase to the 16.5% location rebate – something the industry has been lobbying hard for – will come to pass. As the Minister for Arts Simon Crean said, the new fund is “a precursor to an increase in the location offset should the Australian dollar remain high”.

Five years ago the Australian government was paying out nearly $72.5m (A$70m) per year to offshore production companies because of the rebates but this figure has plummeted precisely because of the strong Australian dollar.

Screen Australia added to the nervousness of crews and service companies at year end when it announced that it had no more money to put into Australian films until the new financial year begins on June 1, which will almost certainly dampen activity in late 2013/early 2014.

Crean announced new incentive as part of an address to the National Press Club in Canberra. His speech focussed on Australia’s new national cultural policy; not that runaway production is ever about Australian stories.

The precedent was the government’s decision to put $13.3m (A$12.8m) into Wolverine.

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