With the Dutch government recommending 30% cuts in the culture sector, local film industry experts brace for film spending cutbacks and potential job losses and bankruptcies.

In Cannes this month, there was one subject that dominated conversation in the Dutch pavilion - the shock recommendation for 30% cuts in the culture sector and their potentially catastrophic impact on the local film industry.

Even as they tried to do business on the Croisette and attended the usual round of Cannes cocktail parties, Dutch producers were contemplating a potentially very grim scenario back at home. Many warned that if State Secretary for Culture Halbe Zijlstra decides to heed the advice of the Council for Culture to cut back on film spending, job losses and bankruptcies will be inevitable.

“We’ve built up an industry with producers and production volume. It (the sector) will go back 30 years,” suggested Sandra Den Hamer, CEO of EYE, the new institute for film in the Netherlands. “People will become unemployed…it will have economic consequences for the whole infrastructure.”

The coalition Government has set itself the target of trimming €200 million from public spending on culture by 2013. To its critics, this isn’t so much about saving money as ideological score settling. Geert Wilders’ right-wing Freedom Party has openly derided the arts as “left-wing hobbies.” Opponents of the proposed cuts point out that Dutch public spending on the arts is only 0.6% of the overall national budget…and the amount spent on film is a fraction of that.

“The average cuts (in sectors other than culture) are between 8 and 12%. Why has culture been hit? That was a major point of the Freedom Party. They wanted to cut down on the public spending on culture and on the public broadcasters and the others (the political parties in the coalition) went with it,” suggests Doreen Boonekamp, CEO of the Netherlands Film Fund.

When the Council For Culture delivered its report at the end of April about how the necessary savings might be achieved, the film community reacted with undisguised fury.

Five leading filmmakers - Jean van de Velde, Alex van Warmerdam, Paul Verhoeven, Martin Koolhoven, Urszula Antoniak – signed a strongly worded letter pointing out that Dutch cinema has been undergoing a renaissance in the last 15 years. Dutch movies currently enjoy a 16% market share but that is now under threat.

“A cutback on film subsidies does not only mean fewer Dutch films, but in the long term it is an irrevocable cutback on quality, a loss of audience, and a reversion to the darkness of the 1980s and 1990s, when the market share for Dutch films fluctuated between 0.8% and 3%,” the five directors stated. They also noted that the proposed cuts were going against the wishes of 4.4 million moviegoers who had “voted” for Dutch cinema by going to see a Dutch movie last year.

Meanwhile, the Dutch Producers’ Association issued a press release with the headline “DUTCH FILM INDUSTRY RUNNING RISK OF COLLAPSE” that was even more outspoken. The proposed cuts, the producers predicted, would “lead to the reduction of feature film production by half, accompanied by a significant decrease in employment, irreparable loss of knowledge and craftsmanship, and a growing number of bankruptcies in the audiovisual industry.”

“The proposed reduction in funding for culture is outrageous,” agrees Boonekamp. “The film support in the Netherlands has never been very high. Right now, it is around €48.7 million for a country of 16 million people. That budget includes EYE (the archive & film institute), five festivals, Animation Institute, Binger Filmlab and the Film Fund.”

The Film Fund currently receives €35.5 million, which is mainly spent on development, production and distribution. However, the Council for Culture is advocating the Fund be cut by €10.2 million.

What some observers see as likely to happen now is for the Government to agree to a soft money scheme for Dutch film at the same time as it cuts public subsidy. It has long been a vexation to the local industry that it’s not in a position to offer foreign producers the incentives they can receive elsewhere in Benelux, whether through the Belgian tax shelter or Luxembourg’s CIAV system. That means it is a struggle to encourage inward investment and that the Dutch are not especially attractive as coproduction partners.

A tax break for the film industry will be very welcome but it was already on the agenda before the current cuts were proposed. Local producers are quick to point out that a soft money scheme won’t make up for the damage the cuts will do to Dutch film culture overall.

Minister Zijlstra has until mid-June to make up his mind whether or not to accept the Council for Culture’s recommendations. If he does so, not only is the production sector likely to contract. Organisations like training outfit the Binger FilmLab and the Nederlands Film Festival (which hosts the Holland Film Meeting for foreign and Dutch film industry professionals) will face an uncertain future. Zijlstra, though sympathetic to the Dutch film industry, is understood to believe that the sector can raise much more money than it currently does through sponsorship and private sources. This is not a view shared by the industry.

“Can Dutch suddenly survive without any subsidies?” the five filmmakers asked in their open letter. The answer they gave was a resounding “no.” Just as in other European countries competing against Hollywood, they pointed out, the local industry depends on local audiences. The underlying problem is the tiny scale of the domestic market.

So what now?

“For this year, we still have the money,” Boonekamp observes. “In 2012 we will get a first cut of 2.2%. In 2013, the full cuts will start. I am an optimistic person. We’re going to prove the great potential and value of the Dutch film industry and we will do our utmost to get new schemes for film financing in place to keep on track and stay in business.”