Significantly more Australian co-productions are set to be made as the producer offset's flexibility and generosity make the country a true international player.
"I see a massive wind of change coming," says producer Chris Brown, whose list of credits includes The Proposition. "Co-productions are the key to building a big-budget sector... and provide a unique opportunity to make films both mainstream and independent that can compete on the world stage. It's not the saviour of the industry but it does mean we can finally build one."
Official co-productions automatically qualify as Australian films, so can claim the offset and apply for taxpayer funding in all partner countries. The offset also gives producers a pari passu equity position in their productions.
Jane Campion's Bright Star is a 70:30 official UK-Australian co-production, reflecting the spend and investment in each country. UK producer Caroline Hewitt will claim UK tax credits on the UK expenditure and Australian producer Jan Chapman will be claiming the Australian expenditure under Australia's producer offset. The Australian expenditure includes the wages of Australian cast and crew while they are working in the UK, such as lead actress Abbie Cornish. (The offset cannot be applied to financing and some other costs, and to that proportion of above-the-line expenditure that exceeds 20% of the budget.) Bright Star has also received backing from the UK Film Council and the Film Finance Corporation (now under Screen Australia), as well as Pathe and BBC Films. The majority of the post-production is taking place in Australia.
(In theory, even double-dipping is possible. If, for example, an Australian production designer works on a co-production in the UK, the producer can access both the UK tax credit and the Australian producer offset on that person's wage if the subject matter reasonably requires use of that location.)
Eighteen applications for official international co-production status were received in the year following the offset's introduction, six more than in the year before. A spokeswoman from the department that administers treaties reports growing producer interest and says government "is definitely encouraging co-productions because they work for us on so many levels".
This month the Screen Producers Association of Australia (Spaa) will lead a delegation of producers to India looking for partners, the first of many international forays. Co-production has never been Australia's forte, especially when it comes to countries other than the UK. The challenge of geographical isolation is a factor - working around the clock in different time zones, paying high legal and travel costs and having to painstakingly balance the financial and creative elements put off many producers. The offset adds to the complexity and only applies to Australian expenditure and to above-the-line costs where they do not exceed 20% of the budget, but producers who have executed co-productions are eager where the material suits.
Only 11 co-productions have been made in the last four years including Bright Star and writer-director Christopher Smith's psychological thriller Triangle, which is in post. It is partly a question of attitude.
"In this country co-productions are seen as a way of co-financing and that is not what they are about," says producer Mario Andreacchio, who last month signed a three-picture co-production arrangement with Hong Kong's Salon Films and Hengdian Film Productions in China. "I have made so many because, each time, I find partners who share the same ambition and vision for the film. Their contribution is as much creative as financial. Developing a film before finding a partner is too late."
Ausfilm chief executive Caroline Pitcher recently led a delegation touting the producer offset to London and Singapore. She emphasised the team approach: Screen Australia's head of the producer offset and co-production, Alex Sangston, was on board, as were representatives of four state agencies. She says the international industry is opening its eyes to the offset: "We are finding very deep interest in Australian talent - writers, directors, producers, heads of department - compared with road trips of the past."
Concerns about projects rebranding themselves 'Australian' to claim the offset have faded; Sangston says only two or three applications per month are going to the Screen Australia board for review: "There are two reasons the (eligibility) committee would refer a project to the board: if the offset value of a feature is estimated at over $10.3m (a$15m), which probably means the budget is $27.2m (a$40m)... or where the claim being made under the significant Australian content test is slightly controversial."