Zali Steggall (Warringah, Independent) Share this | Hansard source

[by video link] This Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 contains several Treasury law amendments. It has several schedules, but today I will focus on reforms to the Australian screen production incentives.

On 30 September 2020 the government announced a media reforms package, which is a massive overhaul of the supports offered from the screen content sector. These reforms will have lasting ramifications for Australian film, documentaries and television shows and on how we portray our culture and Australian identity to generations to come. The reforms will focus on producer offset legislation. First introduced in 2007, the tax laws amendment act was designed to encourage investment in Australian film, television and documentary programs and increase the productivity output and growth of the screen industry.

According to the explanatory memorandum of the act, the legislation was introduced at a time when the industry was striving to meet the challenges of a rapidly changing global market. The producer offset portion of those reforms was, at the time, a major new support mechanism to assist producers in being competitive and responsive to audiences as well as to create sustainable production businesses. The producer offset is a refundable tax offset for producers of Australian films. Currently, it provides for 40 per cent of expenditure offset incurred making feature films and 20 per cent of expenditure for TV series, documentaries, animation series or online content. And guess what? The legislation worked.

In the 14 years since the act was introduced, the Australian screen content sector has grown into a remarkable industry, which has made an impact across Australia and in international markets. The industry employs 30,500 people and contributes over $5.34 billion to the economy. The industry also helps attract tourism. Over $725 million of tourism expenditure can be linked back to Australian content in the entertainment industry.

I'm lucky to have in my electorate of Warringah many content producers. From Cheeky Little Media, Kapow Pictures, Spark pictures to Flying Bark Productions, these producers are making word-class content here. But since the industry has matured it's now grappling with the major technological shifts. Audiences are now primarily using online services—specifically, streaming video on demand, like Netflix, Prime, Stan and Disney Plus. Seventy-one per cent of Australians have at least one subscription to a streaming service. The annual revenue of streaming subscriptions is a sizeable $1.8 billion. There are benefits to this shift, including that producers are no longer reliant on established media gatekeepers, such as theatrical distributors or broadcasters, to reach people and make a return on investment. However, in the aggregate, because there are no content obligations on streaming services, Australians and people overseas are losing access to Australian content, which has tangible and intangible benefits for our society and our culture.

Australian content matters. The stories make us who we are. They make us come to terms with who we've been, who we were, who we want to be. They tell the important stories. Who could forget household names like Bluey and Home and Away? They've gone international. Through our content we broadcast to the world what makes Australia Australian, and we need to do all that we can to continue to foster and broadcast Australian stories and support this industry, which is so important to our culture, society and economy.

Stories like Bluey and Home and Away only exist because of our unique system of local content rules and government support. However, with the massive upheaval that is occurring at the moment, the government is modernising the regulatory framework to make Australian content and broadcasters competitive in the digital age, and that is coming with disruption for our content producers. I accept that we need to modernise our regulatory regime, but we also need to be sensitive to parts of the industry who may be left behind.

As part of the government's reform of this sector announced last year, the government is harmonising the producer offset, which will be 30 per cent for all formats. It's increasing the threshold for feature-length content supported through the producer offset from $500,000 to $1 million. It's removing the 65 commercial hour episode cap for drama series. It's removing the ability to claim production costs incurred in other countries towards the producer offset, also known as the Gallipoli clause.

I welcome some of these measures. I welcome the increase to the producer offset rate to 30 per cent and harmonising it across formats. This will provide additional funding for TV production in particular. However, I've received so much feedback and so many representations from constituents and companies in this sector about the impact of these changes. Constituents who are award-winning journalists and documentary makers with significant contributions to Australia and to our culture—some of the films you may have seen are My Year of Living Mindfully and The Crossingworry the changes will impact their ability to make impactful documentaries, going forward, and risk the loss of regional Indigenous voices and the unique stories of our Australian explorers and scientists and entrepreneurs.

The primary concern is that raising the threshold of the producer offset to productions of over $1 million leaves productions in the mid-range, between $500,000 to $750,000, in significant uncertainty, and my constituents believe that up to 58 per cent of the documentary productions in the country will cease under this new threshold. Secondly, they argue that the changes to the Gallipoli clause may act as a deterrence to film and documentary producers to hiring Australian staff for these productions. Instead, overseas crews will be hired, as it's financially cheaper and better for those productions. Thirdly, a separate constituent, a writer in the writing industry, feels the removal of the overheads as allowable expenditure will materially reduce the benefits of the 40 per cent rebate, so this could further erode support for a sector which has already been hit so hard by the pandemic.

To offset the impacts of the reforms the government is making, $30 million over two years to support the production of Australian drama, documentary and children's film and television content has been announced. Screen Australia has also received $3 million to establish a competitive grant program. But let's be real here. These supports are not enough to compensate for the proposed changes. The government shouldn't walk away when more needs to be done—make changes to the threshold and the Gallipoli clause or at least make exemptions for documentary makers. Documentaries are so vital in raising awareness of issues and really bringing that depth of knowledge to the Australian people across so many fields.

In addition, we need to look at how we regulate streaming services. I've been inundated with emails calling for content rules to be extended to streaming services. We urgently need to update content regulations to ensure that Australians continue to have access to new, diverse Australian programming on the platforms they actually use. I understand that the government has placed an initial requirement on the streamers to report on how much Australian content they broadcast and that the government is considering a five per cent content requirement. However, it's well short of what the industry needs and are calling for. In Canada and the European Union, they're proposing a 30 per cent local content requirement. Australian content producers are calling for a 20 per cent requirement. This sustainable level for a total quota on all streaming services would make it internationally competitive.

The Australian screen industry desperately needs the Morrison government to start listening to its calls for what it's needing. It is undergoing structural change. I accept that we need to modernise the regulatory regime. Things have to change, but that doesn't mean that we should be leaving significant and important parts of the industry behind, particularly documentary producers. We need to think carefully about the changes to the producer offset and the Gallipoli clause. These changes will leave lasting impacts on an industry that has already been devastated by COVID. To keep pace with the changing way Australians view content, we must look at extending content quotas to streaming services. Without this support, Australian content will go into structural decline and we will be the worse for it. I call on the government as a matter of urgency to regulate streamers so we can protect what makes Australia unique: our culture, our history and our storytelling.

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