Warner Bros is set to be the first company to trigger the 15% post-production, digital and visual effects (PDV) offset introduced by the Australian government in May last year.

The studio has signed with local effects house Rising Sun Pictures for some of the visual effects on Harry Potter And The Half-Blood Prince.

The offset aims to encourage foreign films to undertake post-production in Australia irrespective of where they are filmed, but at least $4.48m (A$5m) must be spent locally for a film to qualify. The 15% claimed will be made through Warner's Australian arm.

'We have previously worked on Harry Potter films but have now made the leap from doing modest packages to being one of the major vendors,' Rising Sun director Tony Clark said today.

Other companies working on the film include Industrial Light & Magic in the US and The Moving Picture Company in the UK.

'We have a technically challenging body of work of substantial complexity to complete by October,' added Clark. His aim is to provide quality work that will give the company leverage to continue on to Harry Potter And The Deathly Hallows.

Winning the work justifies the arguments put to the Australian government about the need for the PDV offset, he said. Rising Sun was in negotiations on three other jobs that would also qualify.

'We have seen an enormous upswing in the amount of work coming to us for quotes and in the type of work coming to us. It is more substantial,' said Clark.

'Half-Blood Prince will give us real consistency of work over an extended period and enable us to build up our talent pool and technical platform and increase our effectiveness and competitiveness in the world. Consistency of work is pivotal because most of our costs are staff costs.'

Staff numbers peaked at 150 on Charlotte's Web - the company developed the realistic yet loveable spider - up from the 40 in place before that film. The company is currently working on The Ruins for Dreamworks SKG, Australia and shortly Wolverine for Fox, and Where The Wild Things Are, Speed Racer, Get Smart and Harry Potter And The Half Blood Prince for Warner Bros.

'The rising Australian dollar is hurting us and I am surprised we are seeing as much activity as we are but the existence of the offset is doing a lot to insulate us,' said Clark. 'Also, the US dollar is dropping against all the major currencies, not just Australia 's but those of our competitors too.'

The Australian companies Animal Logic, Fuel and Iloura also regularly work on blockbusters for the US, often jointly.

Foreign producers can also claim 15% of what they spend in Australia on location filming, providing the level of expenditure reaches $13.43m (A$15m).

Upcoming films that will spend well over that amount include Alex Proyas's Knowing for Summit Entertainment and starring Nicolas Cage, and Gavin Hood's X-Men Origins: Wolverine for 20th Century Fox and starring Hugh Jackman. Some of Wolverine is also being filmed in New Zealand.

Proyas and Jackman are Australians, which raises questions about whether either film will try for the new 40% rebate for Australian films. The other film in this category is George Miller's Justice League Of America (a new name is pending), which is understood to have been delayed.

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