The Australian government ismulling a 40% tax rebate for producers, as a means to boost local production, aproposal which has secured the backing of the Film Finance CorporationAustralia (FFC).

The government is currentlyreviewing its direct and indirect support of the film industry and the FFC madeits submission public this week thereby confirming that it is in line with manyother agencies and organisations.

The proposed rebate is astraight-forward and transparent mechanism that gives producers copyright inthe films they make and remunerates them from returns, not just from fees. Theindustry hopes this will help improve its hand-to-mouth existence and perhapsremove Australia's cottage industry tag.

The rebate is positioned asa third financing option alongside the direct financing available from the FFCand the indirect financing available from Division 10BA, which gives investorsa 100% tax deduction on what they contribute to film production.

Anything from $38m (A$50m)to $102m (A$135m) is spent on Australian films each year and the FFC'scontribution usually exceeds that from private investors; 10BA is seen as notattractive enough and too accessible to financial intermediaries.

The rebate has been modelledon the one used to entice foreign films into Australia, which is also under the spotlight. It is seen asappropriate as a mechanism but no longer effective in attracting big-budgetfilms because of the competition from other countries. Most say it should beincreased to 15% of Australian spend.

A consolidation of theAustralian government's many funding agencies has also been mooted in thereview and little objection has been raised. This would have been unheard of asrecently as five years ago.