Kangaroos and Koalas

The current state of the Australian Film industry is incredibly dismal. It is a commercially nonviable industry that survives on Government funding as it is seen to be of cultural importance. The current policy of protecting the Australian Film and Television industries because of their cultural value to Australian audiences is flawed and reform is needed to create a viable industry in the wake of the Global Financial Crisis. One method of achieving success in the industry is to simply alter the current legislation. By removing the ‘Kangaroos and Koalas’ clause from the Significant Australian Content (SAC) test, Australian media content producers may stand a change in creating commercially successful material that can also succeed in an international market.

The introduction of the accelerated write-off provisions of Division 10BA of the Income Tax Assessment Act (Australian Screen Production Incentive) saw an increase in the number of films and television programs being produced due to government funding. Screen Australia controls funding through the incentive. There are three sub-categories of the Australian Screen Content Production Incentive, they are:

  • The Location Offset, a 15% tax offset for shooting a production in Australia.
  • The PDV Offset, productions can claim back 15% of their expenditure on post/digital/visual if a minimum of $5 million is spent on Australian PDV.
  • The Producer Offset, a 40% tax rebate if the production meets the SAC test.

The Producer offset is incredibly attractive to overseas productions and can drastically cut the cost of a feature film. Essentially, its aim is to get international films made in Australia creating a massive boost to the Australian economy. However its greatest flaw is the requirement that the ambiguous SAC test be met.

In its current version and under section 376-70 of the Act, the determining body, Screen Australia, must consider:

  • The subject matter of the film
  • The place where the film was made
  • the nationalities and places of residence of the persons who took part in the making of the film (including producers, directors, authors, scriptwriters, composers, actors, editors, directors of photography, production designers and other film technicians)
  • The details of production expenditure incurred in respect of the film, and
  • Any other matters that Screen Australia considers to be relevant.

Source: http://www.cofc.com.au/articles/sac_guidance.pdf

Screen Australia’s guidelines for meeting the criteria of the SAC test further discusses how it interprets each element of the test and in particular, what they consider when assessing the subject matter of the film, colloquially known as the ‘Kangaroos and Koalas’ requirement.

Screen Australia interprets ‘subject matter of the film’ as requiring it to determine if the ‘look and feel of the film’ is significantly Australian; ie is the film ‘about’ Australia or Australians or does it reflect a cultural background that is particular to Australia?

Source: http://www.cofc.com.au/articles/sac_guidance.pdf

My issue with this act is the ambiguity of the parameters for consideration. Particularly the last point of the act, which effectively leaves the act open to Screen Australia’s determination. Additionally the judgments on who qualifies are conducted in secrecy so the public, and the industry cannot know why one thing that looked to qualify did not, and why something that does not look remotely Australia did.

For example, the 2009 film Knowing qualified for the Producer Offset. Within the film, there are no discernible Australian elements, yet it was filmed by an Australian director and shot in Melbourne and therefore it qualified. When a National Geographic series called Taboo attempted to qualify for the offset, it was denied because of lack of onscreen ‘Australianness’, despite 57% of the production taking place in Australia and 86% of the budget being spent here.

So in order to satisfy Screen Australian, producers are introducing clichéd representations of Australian culture in their media products. Whilst this may qualify them for the producer offset, it is polarising Australian audiences who are weary of culturally stereotyped media texts and avoid them, thus if a text cannot be successful in its country of origin, it is unlikely to be a success overseas. The concept of protecting the Australian film industry for its cultural importance for the larger Australian audience has little validity.

Knowing had a $50 million budget and managed to garner a worldwide box office total of $183,593,586. This was an incredible success for the Australian film industry even if its acquisition of the Producer Offset seemed flawed. The Australian Government needs to re-evaluate their stance on protecting this failing industry on cultural merits. Australia needs to accept the ‘global’ industry concept that survival of an Australian industry, facing rising costs, increasing domestic competition and growing international opportunities is reliant on its ability to produce films that are capable of being sold in overseas markets. I suggest that by removing the clause for Australian subjects in the SAC test, Australia can encourage larger investment by foreign film stakeholders and potentially create a commercially viable industry and access lucrative export markets. The time for cultural maintenance has passed and a period of commercial viability needs to begin.


Box Office Mojo 2009, Knowing (2009) – Box Office Mojo, accessed: 7/5/2011, http://boxofficemojo.com/movies/?page=main&id=knowing.htm

Department of the Prime Minister and Cabinet 2011, Australian Screen Production Incentive, accessed: 6/5/2011, http://www.arts.gov.au/film/production-incentive

Knowing, 2009, film, Summit Entertainment, Escape Artists, Mystery Clock Cinema, Goldcrest Pictures, Kaplan/Perrone Entertainment, Wintergreen Productions

Screen Australia 2009, Significant Australian Content (SAC) Guidance on eligibility for the Producer Offset, Screen Australia, Canberra

Screen Australia, Screen Australia: Producer Offset, accessed: 6/5/2011, http://www.screenaustralia.gov.au/producer_offset/

Taboo, 2009, Television program, National Geographic Channel


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