Film tax rebate changes will hack into micro-budget features

Raising the minimum budgets for feature films to obtain a tax rebate will be devastating to a valuable production space. But how big is it?

The federal government is raising the minimum budget for a feature film to receive the tax rebate from $500,000 to $1 million.

In the drama sector we have heard little protest, but this is in stark contrast to the documentary makers who are mounting a serious campaign to protect that $500,000 threshold. 

Read: Documentary makers in desperate fight to protect funding.

The number of so-called ‘micro-budgets’ in the feature drama sector are low. According to the Screen Australia Drama Report, there were seven features in that $500,000 to $1 million space over the 2018-19 year. They cost less than $7 million in total, and used under $2.8 million of Offset money, when the total feature budget was $288 million. 

So, the films in question are a very small niche in the grand scheme of entertaining Australians in culturally valuable ways. 

Currently, producers can put a film together at $500,000 in which the cash budget is actually only $200,000. Even better with some agency money or prosperous relatives. There are calling card shorts which can cost that much. To get the rebate, these films must have a meaningful exhibition pathway involving cinemas. 

The micro-budget sector attracts a fair share of hopeful enthusiasts, many of whom are never documented by agencies. We can imagine that the secretive people inside Screen Australia’s Producer Offset and Co-production Unit or POCU regard them as a time-wasting chore. 

The micro budget sector has supported some memorable films. Ruin from Amiel Courtin-Wilson and and Michael Cody, Strange Colours by Alena Lodkina and Isaac Wall, Toomelah from Ivan Sen, Son of a Lion and Jirga from Benjamin Gilmour, and Sequin in a Blue Room from Samuel Grisven…

It is a fuzzy edge, but good policy allows wiggle room at the margins. John Maynard, a canny producer who has spent a lifetime with Bridget Ikin making art-inspired work, is working against the change. Heath Davis, who made a messy but fun film in the Blue Mountains with the locals called Book Week says, ‘It stinks. Right royally’. 

The micro budget sector has supported some memorable films. Ruin from Amiel Courtin-Wilson and and Michael Cody, Strange Colours by Alena Lodkina and Isaac Wall, Toomelah from Ivan Sen, Son of a Lion and Jirga from Benjamin Gilmour, and Sequin in a Blue Room from Samuel Grisven and the Australian Film Television and Radio School, are just some examples in the last decade. 

The screen sector funding is caught in a basic policy contradiction. On the one hand it yearns for systems and on the other it continually undermines them. 

Systems

Many Australian producers are good at keeping costs down and containing high risks, and they have read a lot of budgets. There is a general consensus that the absolute minimum budget for a successful cinema film is around $1.6m. On the tiniest project that seems to be the amount needed to hire reliable, talented crew and some name cast. They tend to say that anything under $2.5m is a nightmare; they whisper, ‘Never again..’ into the phone. 

Their message? Feature film is an art form which requires millions of dollars to collect the raw materials to practice. That is simply non-negotiable. The only way forward is an alliance between skilled people, a great storyteller(s) and savvy producers. Artists who can’t assemble that have not reached the minimum standards to practice repeatedly. 

Joyful change

On the other hand, producers are encouraged to experiment, to find new and cheaper forms of production on all possible levels. Blur the lines about part-time shooting, use new and non-actors, support emerging craftspeople, find new ways of reaching audiences, go immersive and interactive… there are wonderful pockets of the screen sector which think conventional production is medieval.

And they say: We are the future, we are the leading edge of change in which chaos solidifies into systems. We are the highest of high art and the grottiest of popular culture. Whatever systems are erected, the change agents will never disappear. Whatever minimum thresholds are set up, they will gnaw away at them and challenge the planners. Set a higher minimum and we will grab that too. 

The campaign to create a tax rebate system for games is just one example.

Read: First look at the Parliamentary Friends of Video Games

Salutary reflections

The budgets in the micro sector are particularly closely guarded, because producers don’t want the low budget tag in their publicity. Great for the money is not an enticing image. What is more, cash budgets don’t factor in the huge amount of unpaid extra work, and those profit participation deals are private. 

So it is hard to know which films are actually in the category, and most projects under that high art/low budget banner may have much higher budgets.

There is a group of producers, writers and directors who see low budget as their fundamental identity; seeing the system through the lens of career and international ambition is pretty shabby. 

Read: Marshmallow Laser Feast explains XR and tells a wonderful visual story

The crisis around raising the minimum QAPE threshold involves both the feature drama and feature documentary sectors, but they are very different. In documentary, projects costing more than $500,000 but less than $1 million are viable parts of company slates, which can be completed to the highest standards for the budget. They are frequently distributed and often do well in festivals, while several companies have grown from low budget to high budget documentaries.

As far as the documentary makers are concerned, the best solution is to abandon the whole change and accept a small package of messiness on the drama side to protect the feature documentary.

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In 2018, the Melbourne International Film Festival presented a bumper year for micro-budget Australian films. Our description at the time is relevant today.

Read more: MIFF 2018 – low budget key to hope for Australian films.

‘Undertow is a subjective film about the deep interior of a woman in pain. The Merger and Book Week are very different kinds of comedy. Under the Cover of Cloud is just something else – hard line documentary drama using performed selves. Strange Colours is at the arthouse end of this. Jirga is inspired by ethnography.’ 

There are other films that don’t fit this discussion – 1%, Acute Misfortune, West of Sunshine and Celeste deserve to be seen in terms of their cinematic inspirations as well.

These films all have some things in common. 

1. They are immersed in communities –The Merger in Bodgy Creek which is somewhere near Wagga, Book Week around a high school in the Blue Mountains, Under the Cover of Cloud in Hobart’s Sandy Bay, and Strange Colours in Lightning Ridge. Jirga is a journey through the deserts of Afghanistan.

2. They are all low budget projects which make strong use of milieu. They take the disciplines of poverty and use them to create inspiration. Characters are cheap, communities provide resources and joy, personal climaxes don’t have explosions. I am putting this crudely, but it helps to understand how the intimacy of these films is such a powerful resource. 

3. They are all made with faith in performance. They have very good casts, often from the friendship circles around theatre. Our acting community has an enormous amount to offer screenwriters and directors who make truthfully observed characters who are alive breath by breath. It sure beats bulking up for a superhero movie where an actor pretends to see a humanoid bacteria instead of a green screen. 

4. They are all made with genuine affection which is at least close to love. Under the Cover of Cloud is about a man who reconnects with his family who are played by his real family. Both The Merger and Book Week are made by ex-schoolteachers who battled with reality every single day. Jirga ultimately comes from the experience of an ambulance worker who went to Afghanistan. Strange Colours emerged from the trust and closeness created in a previous documentary, and I suspect that Russian Australian filmmaker Alena Lodkina may see the face of her own cultural past in the fractured masculinity of her characters. 

In other words, all these films are made from experience outside the inner city bubble, inspired by ordinary lives in the ‘burbs and rural Australia. There are not many caricatures and stock characters, and no meanness of spirit. 

These tendencies are not rules. They are a group of films that have integrated story, character, plot and meaning pretty well, which is the Holy Grail of project development.

David Tiley was the Editor of Screenhub from 2005 until he became Content Lead for Film in 2021 with a special interest in policy. He is a writer in screen media with a long career in educational programs, documentary, and government funding, with a side order in script editing. He values curiosity, humour and objectivity in support of Australian visions and the art of storytelling.