Tuesday, 10 August 2021
Treasury Laws Amendment (2021 Measures No. 5) Bill 2021; Second Reading
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes that the Government:
(1) must stop its ongoing campaign to remove supports for the Australian screen industry; and
(2) has not provided adequate support to Australian small businesses during the COVID-19 pandemic, leading to insolvency and distress for business owners, suppliers, and employees".
The bill in front of us might be labelled as a Treasury bill but no-one should be fooled by this. This bill doesn't just make some innocuous changes to tax, to spending or anything like that here and there; the measures contained in this bill represent probably the biggest overhaul to the policy framework for Australia's screen industry in some years. I want to take a few steps back to explain this and give some recent history and context to tax support for our screen industry.
When people think of Australia's screen industry, too often we go to the big commercial successes;. We go to Gallipoli and Wake in Fright. On the small screen, we'll go to A Country Practice, The Secret Life of Us or PaperPlanes. More recently, we had three films all topping the box office last summer—The Dry, Penguin Bloom and High Ground. As a country, we're capable of making incredible film and television. But the Australian market is a small one in global terms, and premium film and television is very expensive to make here. Because we are an English-speaking country with a small population, we start with a competitive disadvantage.
If you simply work on the basis that Australian screen is only there for the big commercial successes, you can run that argument, but effectively that argument takes you to a point where there's very little Australian content left. The importance of screen policy shouldn't be judged by just the big commercial successes. It needs to be judged by whether or not we are telling stories that speak to Australians. So, as well as looking at the big commercial successes, like Gallipoli, like Crocodile Dundee, like Muriel's Wedding, we also need to look at those which might not have got off the ground at all were it not for support—Samson and Delilah, Hearts and Bones, Alex & Eve; those are films that some people here will have seen, but many won't have. Samson and Delilah: for many people living in remote First Nations communities, that story being told was incredibly important to them. Hearts and Bones: for people particularly in the African Australian community in Melbourne, to see the validity of their story being told in an Australian film on the big screen was important and real and dependent on getting these settings right. In my own part of Sydney, having Alex & Eve, where you recognise on the screen the places that you eat in Lakemba and where a story that is true to the people of the local area is being told, that is important in its own right.
So let's not only tell the stories or think that getting this policy right is about the stories that become the 'Crocodile Dundees' of the world. They're great, but to get these settings right the key question is: 'Do Australians get to see and hear Australian stories on the small screen and the big screen?' So our industry requires a level of government support in order to flourish and continue producing Australian content. It's the kind of equation you see in many areas of government policy—there is a public good at stake. That public good is the production of Australian film and TV shows. Therefore, if the market won't provide that outcome on its own, your government policy settings step in to help. When you're dealing with something that is a commodity, you'll have lots of times where, quite rationally, you'll say, 'Well, the market will sort out where our competitive advantage is.' But, because we are a small population and predominantly an English-speaking one, in global terms the cost per minute, for the size of the audience, of being able to produce high-quality screen content is just a different equation in Australia to what it is in the UK or the United States.
One part of this framework is Australian content quotas for television. For many years commercial TV networks were required to produce a certain amount of Australian children's content, documentary and drama content per year. The other part is tax offsets for film and TV production and post-production services—all of which, when you get it right, make it easier for Australian-made shows and films to get off the ground. For many years there's been common ground on these issues—common ground in terms of policy on both sides of politics. No-one should want our kids growing up without hearing Australian stories, and the many accents which make up this nation, on the TV screen. We want to see our own heroes at the local cinnamon—at the local cinema. 'Cinnamon' is actually the rescue greyhound at my home! I've been carrying her up the stairs twice a day. So there is a story behind that, if there were ever a slip that was Freudian—'cinnamon', that's the one. But the government has walked away from that consensus, which had been around for so long.
Of all the times to walk away from that consensus, to do it in the middle of a pandemic I find extraordinary, just extraordinary. At a time when the TV networks, quite rightly, are saying they're doing it tough because the advertising dollars are down, instead of the government saying, 'Well, we'll help you on a pathway through there'—and you would have thought maybe it would have been a time to run a decent advertising campaign on COVID; that might have been one of the ways they could have helped the commercial networks—no, there was none of that. They say, 'We'll help reduce your costs by reducing Australian content obligations.' Now, to do that at any time was against the national interest. To do that at this time was just a horrific act from someone who might be called 'minister for the arts', but it's no surprise there's no department bearing that title.
Last year, the minister used the cover of COVID to suspend these subquotas for the different television genres for a year. He swore black-and-blue that this would just be a temporary measure, but those who feared there was more going on than that were, sadly, proved right. In January this year, the government used a non-disallowable instrument—an instrument that the parliament didn't have the power to prevent—to completely change the local content quota system, effectively removing a requirement for certain types of content, such as Australian children's television, to be made at all. Six months on, children's TV production companies tell us that their commissions have completely collapsed. It's an entirely predictable outcome. The minister was told that this would be the outcome. The fact that it was predictable didn't stop him from doing it, and so it has gone from predictable to a decision now where those responsible for it are culpable.
The government's next step in their campaign was to try to halve Foxtel's local content quota from 10 per cent to five per cent. Foxtel have been a good citizen in producing high-quality Australian content. They're also a commercial operator, and if you reduce their obligation, understandably, they will reduce that because, as I said before, Australian content per minute of the same level of quality is more expensive. It will be: small population. That's going to happen. But on this occasion, government senators stepped in and said no. I'm glad the minister was humiliated; I wish part of that humiliation saw a change in behaviour. The government senators said no, brought down a report backing Labor's position and the government backed down. It should not have come to that.
This bill now is stage 3 of an attack on the local screen industry. First quotas, then Foxtel and now tax. Their original plan, I will readily concede, was worse than the bill that's in front of us now. The original plan was going to take the screen offset for producers—the producer offset for a feature film—from 40 per cent back to 30 per cent, effectively adding a bit more than 10 per cent to the cost of every Australian film. It would have meant that films like The Dressmaker and The Dry wouldn't have been made. If you doubt that, ask the people who were involved in those productions. It took a coalition of film producers and stars coming together. They travelled to Canberra and a whole lot of people got selfies and photos—apparently that seems to be one the ways of getting a change in this government. It also took a groundswell of support from everyday Australians, who enjoyed that summer of Australian film with Higher Ground, Penguin Bloom and The Dry. Imagine last summer without them; imagine what last summer would have been like without those Australian films.
So they dropped the cut in the producer offset for screen from 40 to 30 per cent—that's a good thing. But, unfortunately, there are many other parts of the bill that are still damaging to the industry. There is an improvement, and I don't want to skate over that. There is an improvement in the producer offset for television. This is an important thing to do; not by cutting other areas but an important thing to do in its own right. Why? Because any of us who have been watching TV for more than 15 years—and I've been watching it for a lot more than that!—have seen the change in the quality of production and, clearly, the amount of money that goes into each minute of television drama these days. It is much closer to the costs of feature film than it was with the programs that I remember growing up with just as we made the transition from black-and-white to colour. But I want to go through the other cuts that are in the bill.
The threshold for qualifying expenditure to access the producer offsets for film has been doubled, from half a million to a million dollars. This is for producer offsets for film. This means that the only productions that can access the producer offset are the larger premium productions that are worth more than a million dollars. Which are the productions that we know will be hit? What are the standard productions on screen that cost more than $500,000 but less than $1 million? The answer is simple: documentaries. The documentary sector gets hit really hard by this change in the threshold. There have been fantastic examples of smaller Australian documentaries recently. In My Blood It Runs is one example. They're true Australian stories told in the first person, told even more directly than drama is. This bill, this change in the offset, does mean a direct hit for Australian documentaries.
The threshold also for qualifying expenditure to access post-production—how many times have we heard about the great post-production sector for Australia? Digital, digital effects—we've got some of the best animation companies in the world. That's also doubled from $500,000 to a million dollars. So a whole lot of Australians might not realise just how successful our post-production industry is, but it creates so many jobs. When we welcome those productions that come here from overseas, it's not only the actors and the people working on set; there's a whole lot of post-production work that comes here. But now a lot of those companies won't be able to access the tax offset, because a lot of that work is piecemeal; a lot of that work is for jobs of less than a million dollars.
In the growing, important industry of post-production, Australia is a heavy-hitter on the world stage. A lot of people might not have heard of Animal Logic, but you've certainly watched their productions: Captain Marvel, Peter Rabbitand The Lego Movie are a few examples. They're considered one of the best outfits in the world. They're just one of many companies located here. The Australian Post & VFX Alliance estimates 400 jobs are at stake if this change goes ahead. These are all commercial businesses operating in a commercial environment where changing the rules under their feet will see jobs lost. I say to the government: don't do this.
The other change is to what's known as the 'Gallipoli' clause. We've all seen lots of Australian movies that are truly Australian stories, but part of the story, logically, goes to other countries for part of the filming. Gallipoli is one of the more obvious examples; that's why it's called the Gallipoli clause. Anyone who saw Lion saw the same thing, where you've got a whole lot of sections of an Australian movie that is truly an Australian story, but, quite logically, to tell it, some of it is done overseas. This clause covers Australian films which need to do some shooting on location overseas so they won't be disadvantaged. This clause will be removed. Imagine the film Lion if parts of it couldn't have been filmed in India. Imagine Gallipoli without having been able to go overseas for that. It just doesn't make sense. Unless they want to argue Gallipoli is not an Australian story—have a go at arguing that. If they want to argue that immigration stories where you do something on the country of people's heritage are not Australian stories, have a go at arguing that. If you don't believe it, don't do it. Let the Gallipoli clause survive. Other, more minor measures in the schedule include removal of certain types of expenditure that can be claimed against the offset, like overheads, copyright and other measures designed to limit the coverage of other offsets.
I want to conclude, because I think it's better if I do this all in one hit as we approach 90-second statements rather than have a 2½-minute speech later. The whole arts sector has been smashed by this pandemic, and there is an overlay between people who work in screen and people who work in other sectors. There is part of this bill that is really good; there are other things that need to be amended. And no-one yet from the other side has raised the argument as to the Gallipoli clause, as to why there aren't Australian stories that you need to film overseas, as to why the post-production sector is something that is expendable, as to why in Australia we're not in a situation where smaller documentary stories need to be told. If no-one's willing to make that case, then can I simply say: don't do it. Make the change for TV, improve the offset there, but don't wreck the businesses that tell our stories and don't wreck the experience of an Australian audience that wants to know that not every story is told with an American accent, that wants to know that our stories deserve to be on the small screen and on the large screen.