Monthly Archives: January 2010

Un-Know1ng Benefits

What Precedent?

During the week, Pleiades sent in this link about Alex Proyas’ company getting the Producer off-set for producing ‘Know1ng’. :

IF you were giving somebody a gift of $20 million, the recipient may want to know about it. But in a farcical situation last week, the Australian director and producers of the film Knowing, Alex Proyas and Topher Dow, were unaware that their film had finally qualified for the federal government’s 40 per cent producer offset, a subsidy that could pay for up to $20m of the $55m film.

The Australian contacted their Sydney production office on Friday to ask why federal agency Screen Australia had included Knowing in its annual analysis of Australian films at the box office. The film had previously been denied the offset, presumably because it wasn’t considered Australian enough.

Last year, Proyas had not been quiet about the rejection, saying both publicly and privately he was flummoxed by Screen Australia’s decision, given his thriller – starring Nicolas Cage, Rose Byrne and Ben Mendelsohn – was shot in Melbourne and post-produced here by Australians. Proyas and Dow’s office could “neither confirm or deny” whether the film received the offset on Friday. The truth is, they didn’t know until The Australian called to inform them that Screen Australia had pronounced Knowing the third highest-grossing Australian film of 2009, with takings of $7.6m. It came behind Mao’s Last Dancer ($15m) and Baz Luhrmann’s Australia ($10m in 2009, after its 2008 release).

Knowing had previously not been considered an Australian film. It did not receive Screen Australia investment and was not submitted for any local film awards.

Matters were further confused by Screen Australia in its explanation. It said statistical definitions were “applied independently of the producer offset unit”, and that Knowing qualified as an “unofficial co-production”, meaning that it “satisfies the co-production requirements despite not being made under a treaty or memorandum of understanding with one of the 10 countries [with] which we currently have official agreements.”

Screen Australia analysis of box-office data from the Motion Picture Distributors Association of Australia shows we spent $54.8m on tickets to Australian films last year. The figure represents 5 per cent of the total box office of $1.09 billion.

It was the best domestic share since 2001, a year that produced Moulin Rouge!, Lantana, The Man Who Sued God and Crocodile Dundee in Los Angeles.

After Mao’s Last Dancer, Australia and Knowing, the next highest-grossing local releases of 2009 were the comedy Charlie & Boots ($3.9m) and Warwick Thornton’s acclaimed debut Samson & Delilah ($3.2m).

Without Australia and Knowing, however, the Australian box office would have slumped to $36.6m, or 3.3 per cent of total cinema revenue, down appreciably from the 10-year average of 4.4 per cent. (Happily, new release Bran Nue Dae has already topped $3.6m in receipts in its first two weeks of release.) Proyas was unavailable for comment but said in a statement on Monday: “As producer, co-writer and director of the film, I am extremely pleased at this decision, as the film was made by Australians and shot and post-produced in Australia. The production brought a great deal of work to the local industry and I hope that with this film now qualifying, more projects of its type can be made locally. I feel the Australian film industry will benefit enormously from this decision.”

The case raises or highlights many questions about the new federal incentive for film and television production, ahead of an expected discussion paper and departmental review this year.

First, the privacy provisions surrounding the offset – it is administered under tax law – are of no use to anyone other than perhaps Screen Australia. Government subsidies for other industries are transparent; the financial secrecy regarding the administration of the offset only obscures the means of film financing and hurts the industry’s desire to be treated seriously. Changes to tax legislation heading to parliament will be of minor consequence.

Second, while Proyas did not know his film had received the offset money, no doubt his US studio, Summit Entertainment, did. In many instances, the offset subsidy provided by Australian taxpayers is being swallowed by international studios and financiers. As Luhrmann told The Australian when asked about the rebate available to his film Australia, “Don’t ask me, that’s all handled by Fox!” (Twentieth Century Fox is owned by News Corporation, the parent company of News Limited, publisher of The Australian.)

Malcontents have suggested several other theories. Was Knowing granted the offset in order to boost Australian box-office figures at a testy time in screen politics, ahead of the departmental review and as industry distress with Screen Australia’s management grows?

Or was approval of Knowing kept quiet so as to distance it from a decision to deny the 40 per cent offset to George Miller’s Justice League: Mortal? That film, like Knowing, would have been shot in Australia with a largely Australian cast and crew but had a script written by foreigners.

This leads again to the issue of transparency. Knowing was arguably successful in obtaining the offset because it was developed by Proyas, an Australian director, and – unlike Justice League: Mortal – ownership of intellectual property in the film would be retained in Australia. If the decision becomes a precedent, it will affect international studios and whether they choose to invest in production here. Yet no one knows which criteria Knowing satisfied and what the precedent may be.

At a policy level, transparency is key. Producers are willing to divulge what financing process they use, if not the amount of money raised. If Screen Australia is unwilling to provide clarity on sources and dollar volumes, the public or industry scrutiny of the new incentive scheme is aimless.

Consequently, when Screen Australia announced late last year that the offset had helped screen productions to the tune of $123m since July 2007, there was no way of knowing how much that figure was boosted by the eight-figure sum heading the way of Luhrmann’s Australia. One insider suggested the offset is working “as the government expected”. Unfortunately, as Proyas discovered, that is as precise as film policy gets.

So let’s see now… It’s ‘Australian’ after the fact if it helps boost the bottom line for Screen Australia then? That’s just swell. Not only is it policy by Post-hoc, it’s Ad-hoc.

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