Is a rigorous cultural test a good way to determine which projects are eligible for national tax breaks' Two Screen writers give their opinions based on the experiences of the UK and Australia, where governments are both attempting to create sustainable, long-term film industries by making state financing available to local producers via tax credits and rebates.

Screen's Sydney-based writer Sandy George, who does not believe a cultural test is necessarily good, gives her opinion below. (To read the opinion of London-based Screen writer Geoffrey Macnab, who supports a cultural points system, click here)

Sandy George in Sydney

Australia was considering the introduction of a similar model for producers looking to access a 40% tax rebate until earlier this month when it was rejected on the grounds of being too prescriptive.

The Australian film industry is at the beginning of its biggest shake-up for two decades. Tax-based financing drove the industry in the 1980s, while direct subsidy did so over the last two decades. Now the government has opted for producer rebates. Contingent on the legislation being passed sometime this year, every Australian film spending more than $883,000 (a$1m) in Australia will be able to claim back 40% of that expenditure (it is based on a scheme that has been giving back 15% of Australian expenditure to foreign producers since 2001).

In addition, three organisations - production investor Film Finance Corporation Australia (FFC), development agency the Australian Film Commission and documentary production house Film Australia - will be amalgamated into a new super agency, the Australian Screen Authority (ASA).

With the rebate, the government's main goal is to make bigger Australian films with greater potential to reach audiences - at present only one or two Australian films each year are made with budgets of more than $8.8m (a$10m).

Objections to cultural test
For its part, the ASA will focus on first-time, indigenous, culturally specific projects and other smaller films that are unlikely to attract private investment.

The new rebate has been welcomed by the industry. What has not is the suggestion a project would need to qualify as Australian via a rigorous points-based cultural test.

Last month the FFC drafted a model based on the version used by the UK Film Council. Industry consultations did not proceed far before the idea of introducing such a test was scrapped. It is likely the industry will now retain the test used for many years to determine a film's eligibility to apply for FFC funding and for investors to claim tax deductions.

In fact, the rules governing which projects qualify as Australian are set to relax further. While the content and nationality of cast and crew - as well as where principal photography and post-production takes place - will still be important, where the copyright is held and where the financing has come from will no longer be taken into consideration.

This is likely to benefit bigger production companies such as Working Title and Village Roadshow over independent producers but it is likely to ensure bigger films with a broader appeal are made. This in turn may attract ever-elusive private investment into the industry.

If the new system means big films do emerge as hoped, various hubs of activity will also grow around very experienced and entrepreneurial producers, which will have the effect of stoking up small projects with connections to them.

Film-makers should look outward
In order to make the best films possible and attract international finance, film-makers need to work with as much flexibility as possible to package together the best scripts, cast and crew. It also requires some flexibility when deciding what is and is not an Australian film. The mooted points-based cultural test was not flexible by nature and would have required certain thresholds to have been met.

For example, it does not matter whether the crew is mainly Australian providing they are making a story of importance to Australia - many seminal Australian films of the past, for example, were made by British directors. Similarly, it should not matter if an all-Australian team wants to make a film set elsewhere.

Film-makers have working relationships with people from throughout the world, and want to tell international stories. They should be encouraged to look outward not inward and this will be attractive to audiences.

The existing test allows for this fluidity. And there are enough checks and balances in place such as immigration rules - and watchful unions and associations - to ensure foreign projects do not masquerade as Australian.

Most importantly, the rebate is only paid on Australian expenditure. The biggest danger is that the system will overheat, forcing the government to cap the rebate or make the percentage much lower than 40%.

Many national film industries struggle. What makes it a surprise in Australia's case is that it has such promising raw materials: diverse locations, excellent weather, wealth and stability, actors of international renown, talented creatives and crews, and digital-effects houses of global repute.

Such attractions have long lured footloose Hollywood productions, most recently Superman Returns, Ghost Rider and Charlotte's Web. Now, the hope is that Australian producers will start making bigger projects of their own.