Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

It's great to be able to speak on the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 and a number of amendments, which are all of incredible importance to the ongoing nature of the Australian economy in supporting industries throughout this pandemic and as part of the ongoing strength of different sectors in the future. We all know we're going through incredibly challenging times right now, but while we sit in this chamber and are fortunate enough to live in, shall we say, predictable circumstances, even if we have our masks on and the like, the economic impacts of different aspects of COVID-19 are very uneven, depending on the sectors that you work in. Of course, some people have thrived. If you work in a large corporate entity or a large corporate retailer, in some cases business has never been better. In some cases that is true because one of the direct consequences of lockdown is to take people out of small businesses and concentrate them in big corporates. I think we need to be very mindful that many of the measures that are taken in the interest of public health are exacerbating inequality and favouring the few at the expense of the many, particularly small businesses.

But there are other sectors as well—for instance, the many people who work in hospitality in Victoria. And a sector that is often overlooked as part of the broader discussion around hospitality is live events. In the wonderful Goldstein electorate, wedding reception venues have had to cancel bookings due to the different waves of lockdown we've had. Of course, people booking future events has been heavily contingent on their sense of confidence that they're not going to have future lockdowns. People made bookings towards the end of last year and at the start of this year thinking that the long lockdown in Victoria last year was going to be the last. But the ongoing rolling lockdowns that have persisted throughout Victoria this year mean it has become increasingly difficult for anybody to put any money down on the table. No doubt, this will persist because there is a legacy effect and a lag that comes directly from these lockdown events. I know people who have had their wedding cancelled twice. They're not rushing to put down a deposit a third time, because they could be in the same situation—flights are booked, honeymoons are booked, friends' time schedules are booked out and, of course, they organise things like catering, flowers and the like. And a lot of community events have faced similar challenges. In fact, even our own political parties have booked to organise fundraisers or community-spirited events and they've had to be cancelled. I've had that experience myself.

Another sector of the economy that has taken a big hit is live music venues. And people who put on performances in the artistic sector have had their bookings hit too. And, of course, there are sectors in the economy that have traditionally relied upon the movement of people, particularly areas like screen production for television and for the cinema. Part of this bill is to recognise some of the challenges that the different parts of the sector have faced in the contemporary world, not just in the context of COVID-19 but as part of the broader obligations around tax offsets to incentivise production in Australia.

The objective of this bill is to make those measures more favourable for the sector but also more competitive. We don't want Australia to be a desirable destination for production off the back of pseudo-protectionism; we want Australian stories to be told because they reflect the very best of who we are. Sometimes these are stories of hardship, challenge and tragedy. We want that to be done because we believe that we see the best of humanity in Australia and these are stories that are powerful and can move people. The more compelling they are, the more they are produced understanding how to enliven, embolden, entertain and encourage an audience, or even to draw on emotions, the more likely they are to be successful and for the success of our country to be presented on screen to the rest of the world as well as being reflected back to us. We don't want productions made for subsidies alone, for the purposes of production alone; we want productions to be made and stories to be told because they reflect the best of what this nation has to offer and to reflect this back to ourselves as well as to the rest of the world. We want to make sure the policy settings are in place to ensure that those stories are told to advance our national interest.

Another important part of this bill, which might seem minor and technical, particularly in the Treasury portfolio, is schedule 3 of the bill, which deals with clarification of the law to ensure it operates in accordance with the policy intent and makes minor policy changes to correct technical or drafting defects around Parliamentary Counsel and the like. These don't excite or energise anybody but they are as important as having legal instruments in place designed to advance the application of tax law.

The other one is in the area of corporate insolvency reforms, where there are some amendments in terms of making sure that small businesses can operate successfully within an insolvency framework. That insolvency framework is actually something that's very important and that has been very important as a result of COVID-19, where we know a lot of companies have faced challenges around insolvency because of changing business circumstances, obviously as a direct result of government decision-making and the flow-through effect. The Morrison government provided some relief from insolvency provisions throughout last year to make sure that those companies are in the best position to survive and to trade through, particularly in circumstances outside of their control and which have significant impact on themselves but little to do with their own decision-making, including even if they were accepting responsibility.

Before question time, I gave a very abrupt 90-second speech, and I did so to table some important documents. But it actually touches on these issues around liquidation and insolvency, so I think it's important that I have the opportunity to address the substance of those documents in this speech because it gives life to the provisions which this bill, in part, seeks to address—which is to make the point that the strength of our nation comes from strong citizens, communities and, of course, commerce. A poor nation is a weaker nation to defend itself and its interests, in comparison to a strong one. When foreign interests seek to undermine our citizens, communities and commerce, they seek to corrode those strong foundations of our nation.

If an Australian company were maliciously liquidated at the direction of a Chinese state linked entity, this House would be rightly outraged, and should be. This is why I brought to the attention of the House the liquidation of Sargon at the request of Taiping Trustees, as the financing arm of the Chinese state linked enterprise China Taiping. The documents that came into my possession and have been presented to the House appear to indicate that there was a deliberate campaign by China Taiping to trigger the receivership of Sargon. The documents allude that, through the use of a PR firm, stories were deliberately seeded to raise doubts about the sustainability of Sargon, to advance the interests of China Taiping. The allegations include that interest payments on finance were deliberately redirected to present a failure to service debt. Consequently, contractual terms would be triggered, allowing for the appointment of an administrator to then appoint a liquidator of Sargon.

By triggering such terms, ASIC does not scrutinise the claims of the creditors, China Taiping, and whether interest has been paid or not. The allegation, in doing so, has allowed China Taiping to take control of Sargon and its assets, physical and intellectual. Like with many members that table documents, the documents that were presented only inform part of a complex picture. But there is a public benefit, should the allegations be investigated and made out, because the documents include financial statements of Sargon, China Taiping and their trustee implying payments were made and seemingly misdirected to trigger contractual terms. These are serious allegations, of course, and the documents are tabled to ensure scrutiny in the interests of Australian companies that might secure finance from Chinese state inked entities and, should the claims be made out, a warning. The documents were also tabled in the hope that ASIC may review the matter and consider whether the appropriate course of action was taken in that situation. Therefore, I will be writing to ASIC to seek their views and what action they intend to take in the context of the China Taiping-Sargon matter.

Making sure that insolvency provisions work effectively for businesses and uphold interests, including the investment and effort that is made, while not allowing them to be manipulated or utilised by domestic or foreign entities, is of critical importance. So these amendments that are before the House today in this treasury laws amendment bill provide for part of an ongoing discussion to make sure that screen producers and those who invest in the production of the telling of Australian stories get the support that they need and that it's adapted based on changing circumstances, and that insolvency provisions in Australia today work effectively to support small and medium businesses to be able to trade through difficult times and, if they need restructuring, to be able to go on trading so that they can be successful. Nobody wants to see businesses fall over with liabilities. They would rather a situation where they find a pathway to success to continue to go on and employ Australians, but also to be able to make sure that they honour all of their creditors and obligations, and avoid liquidation where possible.

Of course, sadly, we know that in some cases that is not the outcome that is achieved. But surely the objective of the law should be first to give people pathways to adjust and find their way through that challenge, rather than simply seek first to liquidate and become insolvent. I would've thought we would all agree with that, because we want a successful and thriving small business sector, and I'm hoping you're going to nod, Mr Deputy Speaker Freelander, to show that, like me, you want to see a successful and thriving small business sector. I'm seeing a nod there. That's good. In fact, I might even get one from the member for Fenner as well if we keep going at this rate—and even from the shadow Treasurer. You never know your luck in the big House!

There are minor technical amendments that deal with issues of tax design to make sure that the law works effectively to advance the interests of Australia. But, of course, nothing will improve the operation of the tax system more than the simplification of the system and the flattening of the rate across the board so that there is no intention of or incentive for people to change their economic behaviour to seek lower tax rates. It's not just that we should do it because it's economically efficient. Sure, that's always a consequence, but we should do it because it's just and because the people who benefit from the complexity of the tax system are the rich, the powerful and those with entrenched interests.

We need to make sure that the tax system reflects not just the challenges of the 21st century, though it must, and we need to do this not just to provide a pathway for the next generation of Australians to thrive and survive—a pathway that encourages them to work, save and invest in their own future for the security of themselves and their families—but to make sure that we don't create a system that entrenches privilege and vested interests and a system where people are able to earn more from the income from and the growth of their assets than from their labour. That is one of the most fundamental principles of a truly liberal society.

When people can earn more and be taxed less because of the holding of assets over income, it rewards capital interests against labour, and that means that you entrench those interests and you break apart what I think of as one of the fundamental principles that has made this nation successful and strong, which is to turn to the next generation and say: 'You get your equal chance too. We will back you to be able to realise your opportunity.' But, in the words of the Prime Minister, rightly, to have a go you've got to get a go. But when you actually entrench interests through law, particularly through a rigged tax system that favours the few at the expense of the many, what you do is turn around to the next generation of Australians and say: 'We will, at your expense, protect those who came before you and are often—particularly because of the way the tax system works—heavily dependent on income tax. We will funnel your cash. While you haven't even had your chance, we will protect those who have had their chance, and have done very well out of it.'

That's one of the reasons it's so important that we provide a pathway for young Australians to secure their own home and that we promote home ownership. Home ownership isn't just about a financial resource, though it is one. It's also about providing a pathway for economic security and independence for the next generation of Australians to support themselves and their families. That's why it is the most important financial decision that Australians make.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

[by video link] The two industries that the Morrison government has really left behind when it comes to support during this COVID pandemic have been the Australian university sector and our arts and cultural institutions. The latter, of course, is a very important part of Australian society. It is the one that tells the stories of our culture, our history and who we are as Australian people.

In the electorate that I represent, there are many who are very proud to work in Australia's artistic and cultural industries and who are very disappointed by the lack of support that they've received from the Morrison government during this pandemic. Many of them have had their productions cut. Many of them have lost their incomes and their jobs, and are struggling to support their families. And many of them work in the Australian screen industry. This bill goes to changing some of the taxation arrangements for the screen industry in Australia but falls well short of the support that the industry deserves if we're going to have a thriving Australian screen industry, both movies and television, that promotes Australia's artistic achievements, culture, history and heritage.

This is an industry that's undergoing rapid transformation, and that transformation is making it much more competitive and difficult for Australian stories and Australian voices to be heard. We all know about the increase in streaming services that people throughout the world and Australians are tuning into for their entertainment. The majority of that content is coming out of the United States or other big nations like Great Britain, and that means the opportunities for Australian voices and Australian stories to be heard are diminishing. There's been a complete lack of support from the Morrison government to cater for that transformation and to ensure that the necessary support and assistance is there for the Australian screen industry to continue to tell Australian stories and ensure that Australian voices are heard. I've got four kids at home. I don't want them to grow up developing American accents because all they've been given access to through modern-day television and streaming services is American content. But that's the way it's becoming in the living rooms of Australia.

The opportunities for Australian content through streaming services are diminishing. Many of those companies that produce the content we've traditionally seen on Australian TVs are finding it difficult to compete on a mass scale with the larger producers coming out of the United States, and are receiving no support from the Morrison government to continue to tell their stories. While this amendment to our taxation laws does deal with some of those issues, it simply doesn't go far enough and give the industry the support that it deserves. Typical of this government and their approach to screen policy, they've had to be dragged kicking and screaming towards doing something that is positive for the Australian film and television industry. But they've attached many things to this bill that are a negative for the rest of the industry.

We all know that the industry has been campaigning for some time to stop the Morrison government reducing the producer offset. They've been somewhat successful in that campaign. I want to congratulate the industry for not only coming to Canberra earlier in the year but also their concerted campaign to make sure that Australian producers get the support that they deserve to ensure that we have a viable film industry here in Australia. They've been successful in ensuring that that reduction in the producer offset for the Australian film sector, from 40 to 30 per cent, was abandoned. If the Morrison government had bothered to consult the sector in the first place, they would have realised that that proposal was a bad idea. While that's now been dropped, the government continues with other damaging measures.

The increase in the qualifying expenditure threshold for the producer offset is bad news for many smaller and lower-budget films. This means that many of those smaller producers, directors and, indeed, actors who have produced great Australian content and breakthrough films in the past may not be able to under this new regime. The change in the qualification for the offset not only affects production but also affects post-production, because the qualification for that offset to kick in has also been doubled, from $500,000 to $1 million. That means that people who work in post-production will possibly have their careers and their jobs affected by this because they won't qualify for the tax offset in the future, because they don't meet that threshold.

As I mentioned earlier, it's not the bigger production houses that need support from the government; it's the smaller ones. But this particular change to our laws and the change that the government is enshrining in this bill make it more difficult for those smaller producers to get a start, to get a leg-up and to get their big break in the industry. These are the kinds of productions that we want to encourage, to help tell more Australian stories.

Another important part of this bill is the removal of the Gallipoli clause. This clause got its name from the great Australian movie, Gallipoli, because it's the best example of an Australian story which couldn't avoid filming parts of its production overseas. This clause existed so that Australian movies that needed to do some filming overseas could still claim the expenditure against the offset and not be disadvantaged. The removal of this simply makes it harder for Australian stories to be told. The Morrison government hasn't provided any clear rationale for why this change is necessary or for the damage that it will do to the sector. It's a clear cost-saving exercise. It's an austerity measure during a pandemic, when the arts and film industry is on its knees, and it doesn't make sense. It comes at a time when the domestic screen sector is struggling to get traction during the pandemic.

As I mentioned earlier, this isn't a government that's committed to supporting our television and film industry and our arts sector more broadly. I have a couple of independent cinema outlets in the electorate that I represent. The member for Watson and I, late last year, had a meeting with those independent cinemas. They told us about the struggle that they had had over the last 12 months of the pandemic and about the struggle just to get content for them to show to encourage people to come back to the movies. Reforms like this will make it much more difficult for that Australian content to be produced and are a regressive step during a pandemic, when we should be doing all we can to encourage our artistic industries.

The other element of this bill relates to corporate insolvency. Schedule 2 of the bill makes a number of transitional and consequential amendments relating to the government's 2020 reforms for corporate insolvency. Labor is not opposing these reforms. The reforms introduce a new streamlined approach to debt reduction for small businesses and introduce a simplified liquidation pathway for small businesses. We had significant concerns about the rushed nature of these reforms when they passed in 2020. In particular, we were concerned about the reforms that allow easier phoenixing of companies or that allow failing companies to avoid paying employee entitlements. That's why Labor moved an amendment to impose a statutory review on the bill, but that wasn't adopted by parliament.

The legislative changes in this bill make a number of small consequential amendments to ensure that the reforms that passed in December last year operate as intended. Those reforms include ensuring employees can access the Fair Entitlements Guarantee where a firm is wound up following a restructuring process, ensuring prudentially regulated firms can't use the restructuring process, making changes to ensure the process applies appropriately to Aboriginal and Torres Strait Islander corporations, and placing protections relating to restructuring practitioners in the primary legislation rather than in the regulations. These are all sensible reforms that will ensure that the bill operates as intended.

But as I mentioned earlier, the government hasn't gone far enough when it comes to ensuring that it is cracking down on phoenixing. It's a terrible indictment on a number of industries in Australia that we still have people who put businesses into liquidation, who owe creditors and who then go and set up under another name with another company and continue to operate, and leave many, including employees, in the lurch. This government has had to be dragged kicking and screaming to make changes to our corporations laws to ensure that they are fairer so that we are reducing the impact of phoenixing and people avoiding their obligations to creditors, most notably employees. These reforms don't go far enough, and there is more that the government could do. They could start by adopting some of the reforms that Labor took to the last election.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

It's a pleasure to rise to speak on the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 and particularly to speak in support of the changes to the Australian Screen Production Incentive but also reflect on some of the fine-tuning, as the member for Kingsford Smith has outlined, in relation to corporate insolvencies, particularly for small businesses. I might speak to that first. The laws we introduced in 2020 were designed to ensure that, in the event of insolvency of a small business, we maximised the funds available to creditors. I think all of us in this place, including, I'm sure, the member for Kingsford Smith, who's still on the screen, would agree that we've all seen plenty of times the receivers and the administrators come in to small businesses and charge exorbitant fees that have resulted in the creditors of those businesses getting very little, if anything, out of the proceeds of winding up that business. I fully supported the laws, when we introduced them last year, to ensure that we seek to take some of those costs out of the system and streamline the process so that the creditors who are genuinely owed money by these businesses get as much as possible out of the proceeds of winding up that business and the proceeds don't all finish up in the pockets of the administrators. I think the member for Kingsford Smith was on the committee with me when the Parliamentary Joint Committee on Corporations and Financial Services did the inquiry into impaired loans back in 2014-15 or around then. We saw the activities of some of the banks during the GFC which made it extraordinarily difficult for small businesses to refinance their loans or restructure their loans, when the banks changed their tune in terms of sectors of the economy they wanted to lend to. That actually led to a lot of problems for those businesses and a lot of unnecessary insolvencies.

This debt restructure process goes some way towards assisting to mitigate the impacts of that because it gives the businesses some protection and the time to restructure their debt, restructure their finances and, where they are genuinely a going concern as a result of their ability to restructure, continue in business. That's important because they are leasing a building, nine times out of 10, so the landlords won't miss out. They are employing people, so those people won't lose their jobs and have to find other jobs. If those businesses have to be wound up there may be a bill the government has to pick up through the Fair Entitlements Guarantee for their due entitlements, whether it's for superannuation, long service leave, leave or any of those sorts of things. The notion that we're seeking to streamline the process for small businesses to ensure that we can assist them to restructure both their business and their debt facilities if and when necessary to be able to continue on, if they're a going concern, makes this a critically important piece of legislation. The fact that this bill is tidying up some of those things is a good measure. We all would like to think that we get every piece of legislation perfectly correct when it goes through this place the first time, but sadly that's not always the case, so I fully support these changes.

In relation to the Australian Screen Production Incentive reforms, when I look around our country at some of the wonderful productions that have been made here—not only local productions but also the support and the economic benefits and impact from some of the big-ticket, big-budget movies and features that have been made in Australia over the years—I see the value and the importance of supporting our film and screen industry. I will put on the record that I have an older son who has a very active interest in the film industry and has been involved in a few small projects. We are encouraging small production companies to produce Australian content, whether it's for cinemas, whether it's for the TV screen or whether it's for the streaming services like Netflix, Stan and many others. Those services provide opportunities for Australian producers to tell stories about Australia that show the world what a wonderful country we are but also reflect our culture back to us. For us to be proud of who and what we are as a country is critically important. I think these changes go to the heart of seeking to achieve that.

When I look around the areas where these films or features are produced, I see the economic impact on our local areas: flow-on jobs and money spent at local hardware stores, cafes, restaurants and hotels, which also benefit from encouraging the production of Australian film and television content here. I think that's critically important and it's a part of the equation that maybe we sometimes overlook. We talk about the actors, we talk about the lighting companies, we talk about the sound technicians and we talk about the crew that puts the film together in the post-production houses, which this also touches on. But we forget about all the other stuff outside that that also supports our film industry, or that our film industry supports by going to venues across this country far and wide.

If a film crew goes to a small country town to film a feature or a little documentary, they are going to stay in the local hotel, eat at the local pub or restaurant or go and get coffee at the local cafe. All of those things are critically important and a very good reason why we should encourage the production of more and more Australian content. So I fully support these changes. Silver Wings Films, whose producer, Pamela Collis, and director of photography, Michael Collis, live in my electorate, specialises in Australian and international film production. Hopefully these changes give them even greater incentive to produce here in Australia. Likewise for young film makers like Lark Lee of Lark Lee Films who I met, I think, late last year. She knows my son as well. She's a writer, director and editor and acts in some of the small films that she does. This is an encouragement to people like Lark to get more and more involved in the film industry.

All of these things, when you put them together, create a tremendous incentive for our small-to-medium production companies to grow, develop and produce more Australian content that will benefit not only our actors, writers, producers, cameramen and lighting and technician companies but also the communities where they film these documentaries or features. I commend this bill to the House.

Matt Keogh (Burt, Australian Labor Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source

[by video link] This piece of legislation with its very clear name hides the fact that it deals with many different pieces of Treasury law, but there is one area that I want to come to directly in my contribution this afternoon. It's that the federal government doesn't believe in the arts or believe that jobs in the screen industry are real jobs. Typical of this government's approach to policy in this space in general, they've been dragged kicking and screaming towards doing something positive for the television industry and in the process have dudded the rest of the industry. Labor are proud that we have forced the government to amend this bill to remove the reduction in the production offset for the Australian feature film sector, which would have seriously compromised the Australian domestic feature film industry.

There are two positive changes contained in this bill: the producer offset for television productions, which will be increased to 30 per cent; and the removal of the 65-hour cap on the producer offset for television, which will mean the offset can be claimed for an entire television series instead of being limited to just the first few episodes. It is worth noting, though, that these positive measures weren't even the Morrison government's intention and only came about from sustained pressure from Labor and the government's own coalition partners, the Nationals.

The same can't be said for myriad other damaging measures that are featured in this bill. The increase in qualifying expenditure threshold for the producer offset, contained in this bill, is bad news for smaller and lower-budget films. These are small Australian businesses, employing Australians, telling Australian stories, that are going to be negatively affected. Before COVID, many international post-production projects never came to Australia. But, given our world's increasing use of remote workforces, Aussie owned companies have been able to compete and win millions in post-production and visual effects work that can be done remotely, helped significantly by the current post, digital and visual—PDV—effects 30 per cent tax rebate, a rebate that this legislation seeks to change.

This legislation proposes to raise the PDV offset threshold from $500,000 to $1 million. With most post-production and visual effects budgets below $1 million, increasing the threshold offset to that amount risks forfeiting all this work, sending it offshore to cheaper providers. The vast majority of these projects, picked up and undertaken by small and medium-sized businesses here in Australia, are in the hundreds of thousands, not millions. So increasing the tax rebate threshold will leave Australian owned firms unable to compete with their overseas counterparts.

This might not be a sector that we hear much about, but it is a sector that Australia excels at. We have some 400 people in the sector, contributing to massive Hollywood feature films. It's a very impressive export for our small businesses. Here in Western Australia we have an impressive list of post-production companies, including Boogie Monster, in Perth, who are known for their unique ads. Another local business, Double Barrel, started out their company in the spare bedroom of a friend's place in Canning Vale in my electorate of Burt, and they are going from strength to strength, having contributed to Amazon, Warner Bros, Paramount and Disney feature films. Sandbox, in Perth, have delivered myriad post-production services to a huge number of Australian TV shows. KOJO, also based in Perth and working across the country, have contributed to such films as Top End Wedding, The Lucky One, Wolf Creek, No Reservations and Storm Boy.

While these small Perth companies are frenemies, vying for the same work, they're banding together to support their sector, because it's not just one-off contracts that will be hit by this threshold change. If a company like Warner Bros, for example, wanted to get some post-production work done in Australia, that work wouldn't be going to one small company in Australia; it would be divided into smaller contracts, in audiovisual, in editing, in graphics. All of that can amount to contracts totalling over the $500,000 to make Warner Bros eligible for the offset. These companies were all working in the same $500,000 threshold for business planning, expansion, recruitment, training and the like. This change will change the goalposts for them, and businesses looking to use them, overnight. The likelihood of combined expenditure totalling over $1 million here in Australia is negligible.

Aussies have a great reputation for quality work and for putting more than 110 per cent in. Our industry is climbing. So what have we got to lose? Well, Australia will miss out on millions of dollars worth of post-production and visual effects projects every year with growing export revenues, and companies will be cut off overnight. We will lose over 400 full-time and part-time jobs in Australia. We will lose the opportunity to use this investment to cross-subsidise Australian productions and to better tell more Australian stories. We won't be able to grow and expand this important industry that showcases and grows Australian talent. This is a growing industry in Australia that will be destroyed overnight should this legislation changing the threshold go through in full. And it won't just be those involved in postproduction; it will impact across the sector—in front of screen, behind screen, organising, all of the different work that comes into this sector.

Another important and notable part of the bill, though, is the removal of the Gallipoli clause. It's a clause that got its name from the renowned film Gallipoli. Parts of that film, understandably, had to be filmed overseas. This clause exists so that Aussie movies that have to film parts overseas can do so and claim some of that expenditure against the offset. This is of course most important in telling stories of our military history. The government has not provided any clear rationale for these damaging changes that will decimate our film and production industry virtually overnight. Its apparently only rationale is cost-saving, at a time when the screen sector—like most industries in Australia—is still recovering, if not indeed suffering, from the impacts of the COVID-19 pandemic. If the government had truly thought about it, surely they wouldn't be introducing legislation that will destroy Aussie jobs in the blink of an eye, let alone be taking away the ability for us to grow our cultural wealth and share our Australian stories locally and to the world.

I often talk about the synergies in the defence industry and small-business portfolios, my two areas of shadow ministerial responsibility. In this instance, the parallels made me chuckle nervously. You see, in consulting with screen industry players, they told me that most other countries have generous offsets and incentives to bring film production work to their nations. Australia's current one is okay but it could be better. But it's not shocking. The eradication of the post, digital and visual effects tax rebate, however, will put Aussie companies completely on the back foot, competing with overseas companies who are backed by their respective governments. Much as with the Australian defence industry, the Australian government is failing to support our local film and TV industry, leaving them to go it alone while their overseas competitors are supported by their governments. The Aussie film, post-production and visual effects industry punches way above its weight, and we shouldn't be undermining it. We have a great international reputation, and our businesses are growing, but they will be wiped out overnight if this legislation comes into effect. We will be leaving them to fight with one arm tied behind their back against others who are getting support in their home nations.

But, as I said, the government don't care about the arts. They don't believe that there are real jobs in the arts. So we will make sure that the government do consult on this issue, they do hear from the sector and they do evaluate the real-world consequences, be they intended or not. Labor will refer this bill to a Senate committee inquiry to make sure that the industry's voice is heard in respect of these changes. We will also seek to make changes to this legislation to ensure parts of this bill that will have a negative effect on the Aussie screen industry are removed, once again demonstrating that it's not the Liberals but Labor that is on the side of small business.

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

[by video link] I will be speaking to schedule 1 of the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021, as it is this schedule that directly impacts the screen industry, specifically the changes that the government are seeking to make to the producer offset, which will, in our view and in the industry's view more broadly, have very negative impacts on the screen industry. That's why we will be moving amendments to avoid these negative impacts. Specifically the government want to increase the qualifying expenditure threshold for the producer offset for smaller and lower budget films. They want to double the threshold from $500,000 to $1 million, so that effectively only larger productions would be able to access the producer offset, meaning it will be next to impossible to get smaller projects off the ground. Those rejected stories are pretty much as good as gone if this passes through. We're talking largely about the documentary sector. Think of fantastic recent examples like In My Blood It Runs. Australian screen should be more than just Crocodile Dundee and Muriel's Wedding. As great as they are, they're big-budget projects. We need to tell our smaller stories too. They are equally important.

The government are also wanting to increase the threshold for the post-production sector, again doubling it, from half a million dollars to $1 million. This is a direct whack on the post-production sector in Australia. I'm talking about many of the animation and digital effects companies and how many jobs they actually create. We are one of the bigger hitters on post-production and digital effects globally, and yet many Australian companies will no longer be able to access this offset because it's being doubled by the government. The shadow minister, Tony Burke, noted that the Australian Post & VFX Alliance estimates that 400 jobs are at stake if these changes go ahead.

Thirdly, as mentioned by previous speakers, the changes in schedule 1 go to removing what is known as the Gallipoli clause. The clause is called this because it has allowed producers to access the offset if they had to shoot some of their film on location overseas. If we think of a film like Lion, it's an Australian film, but if they couldn't film parts of it in India it would have been a lot less of a film than it actually was. Even a local TV project like Jack Irish, which I'm watching currently, wouldn't be able to shoot in India or the Philippines. Again, we're seeking to change this bill so that the clause can survive. This is because this is part of Australian storytelling—the telling of our multicultural stories.

There are some positives in this bill which we don't seek to change. Originally, the government actually wanted to reduce the producer offset for feature films from 40 to 30 per cent, jacking up the cost of making Australian films by 10 per cent. A film like The Dry would not have been able to be made. Thankfully, the government have backed off. I'm not sure whether they backed off because of the coming together of many actors and producers—they descended on Canberra and all the Liberal and coalition members of parliament were able to take some selfies with them. That may have dissuaded them from making this change. It may also have been our campaign in opposition against this change. Whatever the reason for backing off, it certainly is welcome that they haven't made this hit on the feature film industry.

Yet they still want to make those three changes I have outlined. As a hit on the arts sector during a pandemic it just beggars belief. Is it just a cost-cutting exercise? As a country, we are capable of making some great film and television—and not just the big-screen endeavours like Crocodile Dundee. It's our smaller stories as well. Why is that? It's important to hear our accents and to see and hear our stories on the big and small screens. There's a public good at stake, as mentioned by the shadow minister, and that public good is the production of Australian film and television.

But why is it a public good? I think the answer lies in the fact that telling those Australian stories on the big or small screens, even if they're not a commercial success, resonates with Australians in a way that a big Hollywood production cannot. That's because those stories are our stories. Often, they're not commercially viable, because our market is certainly much smaller than the US or even the UK markets. Therefore, Australian storytelling and content is at a competitive disadvantage. I recall, from when I worked at SBS prior to entering parliament, that the cost of producing an hour of Australian drama was north than half a million dollars if you wanted quality—it's probably more now—whereas our programmers could actually buy content off the shelf, made overseas, for as little as $5,000 for an hour. That's because the larger markets mean greater volume of content which we can't compete with. So, if we don't have these producer offsets and we don't have these types of arrangements that support Australian content, we will lose something precious: the myriad ways of telling Australian stories on the small and big screens.

In my first speech to parliament, back in 2016, I spoke about the importance of arts in our society. A thriving arts sector is the heart and soul of any society. At a time of crisis, like the one we're currently facing, the arts have never been more important in promoting a sense of solidarity and togetherness. I know this because I've experienced it—I think we all have. We've experienced that feeling when a creative work inspires you, moves you, makes you think about something in a different way or, even better, makes you stop thinking altogether and just reminds you to be in the moment. The arts give us something that's almost indescribable—something fundamental to being human. It's the interaction with the creative that makes our souls sing.

Many people will make an economic argument, something along the lines of 'More people go to the NGV than go to the MCG annually.' That's the National Gallery of Victoria and the Melbourne Cricket Ground, for those outside Victoria. It's certainly true that the arts sector generates over $100 billion, but it's so much more than that commercial element of success. The arts have an inherent and intangible value to society that cannot be measured by economic metrics alone. We are all beneficiaries of a thriving arts sector, we are all beneficiaries of the inherent value of the arts and we are all beneficiaries of that which is intangible. The momentary joy in beauty and wonder, the sense of connectedness of our stories told well, a feeling of belonging in seeing our experiences and our lives reflected on our screens are especially so important in these times of lockdown, where our world has shrunk. We are escaping into or seeking some solace in the worlds created on our screens. Those stories that are told about who we are can keep us sane. They become central to our lives as we turn to those stories for both entertainment and enlightenment.

We take for granted the TV shows and movies on Netflix, the music that we can plug into our ears—arts and culture at a click. We consume it every day with little thought, but it is so important to all of us. That's why, frankly, it beggars belief that this coalition government abandoned the arts and entertainment industries in their time of need. I know it shouldn't come as a surprise; they have never been a friend of the arts. They've slashed and starved the sector. They have shown such disinterest in support that in 2019 the government actually abolished the Department of Communications and the Arts and merged it into the Department of Infrastructure, Transport, Regional Development and Communications.

In this crisis, the government have done next to nothing. At the beginning of this pandemic in March 2020, as shows and performances were cancelled en masse across the country, our shadow minister for the arts called for a major dedicated support package for the arts. Labor have continued to call for this since March 2020 and the government has just ignored our calls. We then called for a wage subsidy, which, eventually, the government agreed was a good idea. But when they go to it, they designed it in a way that excluded many arts and entertainment workers. This is a sector that is dominated by casuals, freelancers and short-term contracts with different companies and employers, many of them ineligible for JobKeeper.

Former finance minister Mathias Cormann rubbed salt into the wounds when he said they were missing out on JobKeeper because, 'They can't demonstrate they've had relevant falls in their revenue.' Really? I say to the government: take a look at the empty theatres and concert halls across the nation, the art galleries that have closed down. Take a walk up Sydney Road in my electorate of Wills at night and hear the eerie silence where once there was a buzz of live music to be heard. Just listen to these sectors; their voices plead for help. They're on their knees. But what this coalition government did instead was deliver a half-baked scheme for the arts, a $200 million package to support a $111 billion arts and entertainment industry. Of this, more than 30 per cent is in the form of concessional loans which will eventually have to be paid back. It fell way far short of that glossy announcement, when the arts minister, Paul Fletcher, confirmed weeks ago that the government had only delivered half of that package that was promised—more government incompetence, no surprises there. Guy Sebastian, who the government trotted out, said himself that the government's efforts have been dismal. According to Guy, no-one seems to have followed through on their words. The artists, the musicians, the actors, dancers, singers, filmmakers of Australia deserve better than what this government is dishing up. They deserve more than a photo op.

These decisions impact local communities across the country, especially in my electorate of Wills, where the suburb of Brunswick, for example, has one of the highest concentrations of artists in Australia. I've been contacted by so many during this pandemic. One example from Brunswick is Jared, who owns a touring theatre company which continually falls through the cracks of the government's support. He's had to cancel tour after tour because of lockdowns in different states. All 11 of his casuals have been stood down without pay. His full-time staff are all working reduced hours.

In contrast to this, Labor will always support artists and the arts in Australia. We took policies to the last election that would do so. When the pandemic hit Australia in March last year, many of my colleagues and I campaigned for a targeted package for the events, entertainment and the arts sectors. It's not too late to lend a hand. The government, as a matter of emergency, should set up a national COVID-19 insurance scheme for the arts, entertainment and events industry, similar to the temporary interruption fund for the film industry. Labor's been calling for this now for six months, but the government has stubbornly refused to act.

Commercial insurance is no longer available for events against COVID-19. That means all the investments made into those events now being cancelled will be lost. Some businesses will now be assessing whether or not they can survive the other side of the current restrictions. We want people to invest in the arts, in the entertainment sector, in events in Australia, but how can they if they're unable to insure against lockdowns in COVID restrictions? We know the devastating impact this pandemic is having on the huge arts sector in Australia. Whether it be musicians, actors, dancers or performers, all have had their gigs cancelled. Visual artists cannot hold exhibitions. Lighting technicians and theatre ushers are being stood down. There is no part of the arts sector that is unaffected.

Because of that passion I have for the arts and the background I have in it, and because it's so important for us as a nation, as a society, I'll always stand up for the arts and for artists in this parliament. The arts do matter. Australian stories matter. Our Australian content makes a difference to our lives. It's somewhat intangible, difficult to measure, but it has such inherent value. So their work has to go through and go forward. They are not only vital to our economy but also to our society and to our culture. We cannot forget about them. We shouldn't take them for granted. We must support the arts. I call on the government to backtrack from these changes in schedule 1.

Zali Steggall (Warringah, Independent) Share this | Link to 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.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021. I love the movies. Hollywood blockbusters, edgy indies, documentaries, Korean films—I love them all. But I especially love the Australian screen industry. The fact is, we have long boasted being home to some of the world's greatest screen industry figures both in front of and, just as importantly, behind the camera. In Tasmania, we've played host in recent years to Van Diemen's Land, The Hunter, The Nightingale, The KetteringIncident and Lion. For TV we've just seen season 5—the last season, unfortunately—of Rosehaven wrap up. If I may have a brief indulgence: there's a small section of me in Rosehaven. If you look at season 1 as the car's driving through New Norfolk, there's an old election poster as they drive past. There's my head. Not quite a starring role, but I'm there!

We've got so much to offer in Australia: a wealth of acting talent and, of course, eye-popping scenery. It wouldn't be a stretch to say that we are blessed with some of the most enviable natural landscapes and backdrops right here in Australia. Film is etched into our national DNA. It's part of our national identity. 'How's the serenity?' 'You're terrible, Muriel.' We even produced the world's first ever feature film, way back in 1906: The Story of the Kelly Gang, a story that's been told and retold in many ways. The original launched on 26 December 1906 at Melbourne's Athenaeum Theatre—the first ever Boxing Day release, as it were. Australians are pioneers of film, and it's clear that we punch well above our weight on the world stage, with Australians featuring heavily on and off the screen in Hollywood.

But, as great as it is to see Hugh Jackman flash his metal fingers, Nicole Kidman play Woolf, Chris Hemsworth fling Mjolnir or Cate Blanchett rule England, it is even more vital that we continue to see Australians portraying Australians and telling Australian stories. We can only do that with an Australian screen industry rooted in Australian culture; embedded in this nation's soil and spirit. We are a country designed for the screen—our light, our landscapes, our people and our histories—and we should be making full use of these resources. Imagine an Australian film industry without Chips Rafferty, Robert Tudawali or Bill Hunter. It's unimaginable.

This bill is so disappointing. It is steeped in mediocrity. There are just two proposed measures in this bill that are of benefit: an increase in the producer offset for TV productions from 20 to 30 per cent and the removal of the 65-hour cap on the producer offset for TV. But the government has attached a bunch of other things that are harmful. And it could have been worse, of course: without a concerted campaign by the screen sector, by this side of the House and, it must be said, by the junior partner in the coalition government, this bill would also have included an outright reduction in the producer offset for the Australian feature film sector.

Unfortunately, the other measures remain in place. The increase in the qualifying expenditure threshold for the producer offset is bad news for many smaller and lower budget films. Documentaries, which typically have a budget of just over $500,000, will suffer the most. How do we tell our Australian stories without documentaries? Think about recent hits like Mountain, Mystify, 2040 and That Sugar Film. These are productions we want to encourage, not discourage, because truth-telling has never been more important—documentaries about our Indigenous origins and their intersection with European influences; about our natural environment and how it is impacted by climate change; our military traditions; the emergence and decline of industries and their replacement with new technologies; and our incredible people. These are documentaries that are unlikely to ever turn a profit but serve the nation nevertheless and become repositories of footage and curators' stories. And there need to be Australian stories. American documentaries and British documentaries are fantastic, but they are American stories and British stories. We need to protect the Australian story. Documentaries hone the skills of filmmakers. We want to nurture these talents and see them bloom.

If we value the role of the screen industry only in the dollars and cents that are transacted at the box office, we do ourselves a great disservice. How cheap our love of culture is if it is to be measured only in how much popcorn is devoured. There are similar problems with the increase in the qualifying expenditure threshold for the PDV offset, which applies to post-production and visual effects—a long-winded way of saying special effects. This is a sector Australia excels at, even though you don't hear about it as much. It's a growing industry. But a change like this could cut it off at the knees. The special effects industry is massive, and our excellence in this country continues to be noted on a global scale by huge production companies like Marvel.

Again, a short-sighted government seeks to hike the eligibility threshold and leave growing companies without a leg to stand on. Perversely, you've got to be big and successful to get government assistance. It's a bit like happily handing out government millions to billionaires while shaking down pensioners for the return of Centrelink overpayments. If there is one aspect of this bill that highlights the ignorance of the government when it comes to our cultural heritage on screen it is the removal of the Gallipoli clause. This clause got its name from the 1981 movie Gallipoli because it is the best example of an Australian story which could not avoid filming part of its production overseas. This clause existed so that Australian movies that needed to film scenes overseas could still claim that expenditure against the offset and not be disadvantaged. It's a simple concept: Australian films should not have to suffer financially just because essential scenes are shot overseas. How would one film Gallipoli without the Dardanelles? How would one film Lion without going to India? It's both unreasonable and impossible.

In typical fashion, the government has not provided any clear rationale for these damaging changes. It seems clear that the reason is nothing more than penny-pinching—from an industry that is already reeling from the pandemic. A sensible government would know this is not the time to make life harder for business—any business. We have heard from the shadow minister that, if these changes go ahead, one production company alone faces losing 40 of its staff—40 jobs gone, just like that, because of entirely unnecessary and counterproductive changes.

But we do know that this government has little regard for Australia's arts sector. To those opposite, the arts is all berets and caftans, and wine and cheese and cocktails spent discussing Kafka. But the arts is so much more diverse than a meeting of the Kooyong branch of the Liberal Party. The arts is a $3 billion sector that employs 30,000 Australians—far too many of them poorly and insecurely. The fact is that this is not a minister who cares about the screen sector or the jobs or the people in it. This is not a government that cares about telling Australian stories crafted by Australian people.

But it never used to be this way. The Liberal Party used to value traditions and culture as the bedrock of this nation. The party of Sir Robert Menzies and Malcolm Fraser would never have inflicted these wounds on our arts sector. They valued the arts, and the richness and the vigour that the arts provide to our country. But now the Liberals are the wreckers and the radical agents of change. They have no interest in protecting our national culture and our national institutions. Instead, they want to destroy and remake them in the warped visage of the modern Liberal Party—a hollow creature that values nothing but the accumulation of money and power.

Australia's screen industry contributes billions and employs thousands, and it's as valid an industry as construction, tourism or retail. The jobs are just as real. The people are just as real. The need to pay bills and rent and mortgages and feed a family is just as real. This is a sector that has been smashed by COVID but has received none of the support that it needs. But we have seen that, with this Prime Minister, support is conditional on who you are and who you work for, and the Liberals are all too happy to turn off the lights and pull the curtain on Australian arts.

Terri Butler (Griffith, Australian Labor Party, Shadow Minister for the Environment and Water) Share this | Link to this | Hansard source

The Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 is a really important piece of legislation, of course, and I rise to speak on it out of general concern for this topic but also because I have constituents in my electorate who work in the field. These are people who work very, very hard, who are working in an industry that's really important for Australia and who, frankly, have raised some concerns with me about what the government is doing. Of course, there are some good aspects to this proposed legislation. Typical of this government, though, it has had to be dragged kicking and screaming to doing something good for TV, and here it is finally doing something. But also typical of this mob is that they've attached a whole bunch of things to this that are really quite negative for the rest of the industry.

Let's just remember for a moment that, without a concerted campaign by the opposition and the screen sector across Australia, this bill would also have included an outright reduction in the producer offset for the Australian feature film sector, from 40 per cent to 30 per cent. This of course is incredibly worrying for people who are working in the creative industries, because it's just emblematic of this government's approach to the creative industries and to the arts. They've never seen a creative industries business that they've understood, I think. They seem to not understand the contribution of the creative industries to our Australian economy, to our Australian society and to our Australian culture.

If you just think back to the first budget that this government handed down, in 2014, then Prime Minister Abbott's first budget—not a well-received budget; in fact, probably the least well received budget in many, many years within memory—that budget took the axe to a range of arts funding and creative industries funding, including, I might say, the Interactive Games Fund, which was a Labor initiative to basically make sure that we have a games industry in this country—really important. But the Liberals and Nationals just didn't understand the significance of that, and so they cut it.

Here, we're talking about screen production. The government did back down on their plans to reduce the producer offset for the Australian feature film sector because they were under such immense pressure. It's true, though, that the government has to be placed under pressure; otherwise, it will try to sneak through cuts to and attacks on the creative industries.

Nonetheless, it is worth noting that the increase in qualifying expenditure for the producer offset is bad news for many smaller and lower budget films. Often it's only because of the producer offset that such films can get off the ground here in Australia. Documentaries, which typically have a budget of just over $500,000, are particularly poorly affected. How else do we tell our Australian stories without documentaries? It's a great question, and a lot of people here would remember that we've talked about Australian documentaries in the past, and we need to encourage those productions.

I mentioned that I have a lot of people throughout my electorate who work in this sector, who have businesses in my electorate that are involved in the creative industries. I wanted to particularly mention the increase in the qualifying expenditure threshold for the PDV offset. This applies to post-production and visual effects. This is a sector that Australia actually excels at, even though you don't necessarily hear about it much. Firms like Animal Logic have worked on some of the biggest movies and TV shows out there. It's a really growing industry. And people have spoken about this. I'm not the first and I won't be the last Labor person to speak about these issues.

But I did just want to mention that I received some correspondence from the Australian Post & VFX Alliance—the industry body for the firms that are involved in this particular field, which is post-production and visual effects. It's a copy of a letter that they sent to the minister, and it's under the hand of Marcus Bolton. Marcus wrote to the minister and said, 'The Australian feature film and television industry has enjoyed blockbuster success over the past decade.' He said that government support, and latterly COVID, have accelerated that success, enabling Australia to attract millions in filming and post-production work that would typically stay offshore. His letter goes on to say that the government's PDV offset—the post, digital and visual effects offset—has supported Australian post-production companies to win more international projects and to create more local jobs. He goes on to say, 'However, this hard work is now in jeopardy as the government proposes to raise the offset threshold from $500,000 to $1 million,' and that that's included in the bill that's before us.

He goes on to say that, with most post-production and visual effects budgets below $1 million, increasing the offset threshold risks forfeiting all this work offshore and handing what remains in Australia back to the few large internationally owned firms, leaving Australian owned companies unable to compete. What a terrible thing for this country to lose creative industries firms and to lose work to international competitors in this crucial sector. He says that the Australian post-production and visual effects industry will miss out on the millions worth of post-production and visual effects projects every year, with growing export revenues cut off overnight. He says that the consequence will be that 400 full- and part-time jobs will be loss in Australia—that's the significance of this change—and that the opportunity to cross-subsidise Australian productions and tell Australian stories, which comes with getting this work, will be lost.

I think you can tell from what the industry body are saying that they have grave concerns about this. I just wanted to mention that another person from the same industry, someone who I know very well, has put it to me in slightly blunter terms. He said to me: 'We have done it tough enough through COVID, so why, when we're on our knees, make it worse with these proposed changes, which will kill the Australian domestic post-production sector? It simply makes no sense.' That's what this gentleman said to me, and he's got a business that is based in my electorate that does this sort of work.

When you see bills like this, they've got these dry titles, and it sounds very technical, but really what they're about is creative industries, Australian culture, Australian content and Australian jobs. Here in this House, at all times, but particularly now—when our country is facing a crisis of a scale that is really unprecedented in everyone's lifetimes who are here; when we are under a lot of anxiety; when we have come to appreciate the value of entertainment and of content, of documentaries, of information to keep us company through those lockdown periods that we've had, particularly for people in quarantine, who can't go out, who are alone, and for whom entertainment and film and screen are links and connections to the outside world that they have precious few of—we have seen the importance of content, of screens, of films, of TV. Why on earth would we want to make it harder for small and medium Australian companies to participate in that sector?

How important is it to us, as a nation, that we see ourselves reflected back to us? How important is it that we see Australian stories on our screens? And how important is it to us that we see Australian jobs and Australian creatives and Australian businesses making a contribution to this sector? It is so important. I really want to urge the government to consider very carefully changes that they're making to these sorts of arrangements that could have these knock-on effects for Australians. I know that I'm not the only person with constituents in this sector, but, of course, representing, as I do, an inner-city inner-Brisbane electorate, I know I've got an incredibly high proportion of people for whom this would be incredibly important. So I wanted to speak to the bill to make those points, and to encourage the government because, look, you've just got to get better at dealing with the arts. That's high arts, that's low arts. You've got to think about how relevant the arts are to the Australian people. You have just got to take them into account, take them into your thinking.

We all saw during COVID how the government deliberately designed JobKeeper to exclude certain sectors, and the arts really suffered during COVID. The arts are still suffering in this country. It's not just screen, of course; it's everything. It's theatre, it's music, it's ballet, it's opera, it's the orchestras who don't necessarily have audiences, it's the live bands, it's the jazz clubs, it's the art galleries, it's visual arts, it's dance. I should give a special shout-out to playwrights and dramaturges—I certainly have one or two friends who would be very sad if they didn't get a shout-out—because they've been suffering. Creative people whose lives and whose passions have been dedicated to entertaining, informing and creating Australian stories to reflect our society back to itself, they've been suffering through COVID. As I said, this government designed JobKeeper for certain sectors. They delayed and delayed and delayed on the arts support. Even on a much smaller scale, in my electorate last year I had to fight this government when they were trying to cut funding for Backbone Youth Arts, a lovely organisation that engages young people in the arts and also contributes to job outcomes for people. At the moment we're in another battle for this poor organisation, because the LNP council administration in Brisbane is trying to get them out of their current lodgings in east Brisbane.

Why is the LNP so hopeless when it comes to the arts? Why can't Liberals and Nationals understand in their bones, like we do on the Labor side of the House, the significance of the creative arts—even just the question of a creative outlet or even participation. When we talk about sport we sometimes talk about the elite sports on the one hand and the club sports, community sports on the other. It's the same with the arts. Of course we all love the elite arts—we love the big stadium concerts, we love amazing headline visual arts exhibitions—but there's also the participation dimension of the arts. There's the participation dimension of being in a local band—maybe you're in a garage band; I certainly am—or maybe you play in an orchestra or maybe you are involved in amateur jazz or tap.

Honourable Member:

An honourable member interjecting—

Terri Butler (Griffith, Australian Labor Party, Shadow Minister for the Environment and Water) Share this | Link to this | Hansard source

I'm not going to take that interjection. Whatever it is, these things aren't just about creating art to perform or to show in front of an audience; they're also for the inherent joy of creating, of making something. Maybe the audience is only yourself. Maybe it's just a way to help you feel better through the existential crisis that we are all going through at the moment—COVID, climate change; there's a lot of anxiety out there, there's a lot of fear. So I say to the government that the arts are not a peripheral consideration. They're not a side issue. They're not some sort of thing that only a small proportion of Australians care about. The arts are fundamental to our wellbeing as a nation, and you guys need to get better.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

In lockdown, which many of us are in at the moment and some of us have been through for a long time, it's the arts that have got many people through. It's been the things we've watched and the things we've listened to that have got us through. We all take it for granted that we can sit there and open up ABC iview or binge on whatever streaming service we like. We all take it for granted that we can enjoy ourselves and pass the time with the arts during these very difficult times. But the arts need our support. If they're going to be there for us, we need to be there for them.

What we've seen instead from this government, especially during the course of the pandemic, is bringing the arts sector to its knees. We saw that with the exclusion of so many casual workers from the original round of JobKeeper, a wage subsidy which the Greens were the first party to call for. We saw the government completely decimate a whole group of people simply because they happened to be employed as casual workers. In my area of Melbourne, a big part of our economy is heavily reliant on people getting together to enjoy themselves. We've got a visitor economy but we've also got an event economy. Many of the people who work for the comedy festival, the arts festival or the international film festival are employed on a casual basis. They do it from year to year. This is the thing I think the government doesn't quite get. Arts isn't just about people who make something that appears on TV, or a piece of music or an artwork—it's all of the people who work around them to make it happen.

When those events had to be cancelled—many are still being cancelled in Melbourne at the moment—a lot of people were out of work. A sector that is helping us get through the crisis by providing the entertainment and distraction that so many of us need got next to no support from the government. In fact, so many of those people who made their whole living based on working in connection with the festivals, which up till now had been a regular part of every year that you could plan your year around, all of a sudden found themselves with nothing. In many instances, the government wouldn't even give them JobKeeper. It wouldn't even give them JobKeeper. Many businesses in the arts sector found it incredibly difficult to support their staff and even continue to get by. We had to push and push and push the cause of the arts with this government to get minimal support for sectors of the arts and creative industry.

What became apparent in the course of the pandemic—because it reveals the cracks already underlying society—is that the government is actually quite hostile to an understanding of a certain sector of the arts, just like it is with education. That is why it excluded so many people in the education and creative sectors from JobKeeper and from any kind of support. It's why, even now with this bill, the government is coming back again with another attack. What it wanted to do is say, 'We're going to provide some support to film and television, and we're going to increase the support that's available to television.' That's something we would welcome, because we have been fighting for it for a very long time. But, of course, the government can't give with one hand without taking away with the other. So it announced that it was going to increase the TV offset by harmonising it with the film offset, by reducing the film offset from 40 per cent to 30 per cent. Whenever the government says, 'We're going to do something that is helping a sector,' you have to look pretty closely. You didn't even have to look at the fine print for this one to see that—in the middle of a pandemic, at a time when the industry was already doing it tough in ways that I've just explained, including in areas like TV and film—the government came and said, 'We want to cut support for you even further.' We fought them off on film and we won. But there are other measures in this bill which again betray the government's hostility towards the arts and the creative sector.

The increase of the minimum expenditure threshold for a production to be eligible from $500,000 to $1 million will have a huge impact on the sector in Australia, including in Melbourne and Victoria, where we are fortunate to be housing so many people associated with the sector, not only actors but also production staff and all the way through the chain. At a time when the industry, which employs so many people, is trying to get back on its feet, why would you want to cut support? Why would you want to cut support to independent films and documentaries that are making sure that we can tell stories about ourselves to ourselves, that we can tell Australian stories to people in this country? This is the level at which it happens, and yet it's not as if the government is short of a quid when it comes to handing out money to support certain sectors. There were tens of billions of dollars available for big corporations and billionaires who didn't need it. Gerry Harvey was quite happy to be sucking at the public teat and getting JobKeeper from this government, and then he went on to make record profits off the back of public support.

You may know this, Mr Deputy Speaker Goodenough, but many people wouldn't: if you go and put petrol in your car to fill up, you pay 40-odd cents a litre in tax. But when Gina Rinehart and her big mining companies go and put diesel in their trucks, they pay the tax and then, at the end of every year, the public writes them a great big refund cheque. So the public are paying for their petrol tax twice: they're paying when they go and fill up themselves and they're paying so that Gina Rinehart can have tax-free diesel, cheap diesel. Clive Palmer and all of the other billionaires on their mining sites get cheap petrol, which is subsidised by the Australian public. The government is prepared to give $8 billion a year in the fuel tax credit.

Government Members:

Government members interjecting—

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

This is very sensitive for the government. They're interjecting, defending Gina Rinehart and defending Clive Palmer because they know they are willing to write cheques for billions of dollars a year to support the fossil fuel industry. We're very happy to have that diesel fuel rebate going to farmers because they are doing it tough. But why do big mining corporations need to be subsidised by the public to buy cheap fuel? At the same time as the government comes in here with a bill that says we are going to cut funding from the creative and film sector, they say, 'We can find billions of dollars in the kitty to take from the public to help Gina Rinehart and Clive Palmer buy cheap diesel for their mining trucks.' At this time of climate crisis, when we're looking for ways to make our economy lower emissions, the government says, 'We will spend billions of dollars a year to subsidise the big coal and gas corporations, but we're going to cut money from the creative sector.' That is what this government is about. It is all about priorities, and the priorities of this government are to be nothing more than a bunch of corporate shields for the big coal and gas corporations, many of which make donations to this government.

What is even worse is that at the time that the government comes along and says, 'We've got to cut money going to the creative sector,' they will give billions to the coal and gas corporations, and these coal and gas corporations don't even pay tax. The biggest gas corporations between them brought in $55 billion a year in income in the last recorded year. Do you know how much tax they paid? Zero—zero dollars tax. The government then has the gall to say, 'Not only will we make you pay no tax, but can we give you a handout as well?' But then the government says: 'I'm sorry, there's not enough money for film and television to give them the kind of support they need. There's not enough money for the arts sector to give them the support they need. There's not enough money for education to give them the support they need.' That is because this government does nothing more than the bidding of the coal and gas corporations while everyone else can go hang.

I would have thought, during a pandemic, that the thing to do would be to create employment, and you don't create employment by pulling the rug out from under the creative sector. A job working in the arts should be treated just as importantly by this government as a job in the mines, but it's not—the government does not treat it as importantly. The government says, 'If you're working in the creative sector or you're working in the education sector, you're fair game—we're coming after you.' This government says that they're all about business but they're only for a certain kind of business, and if you happen to work in the arts and creative sector then the government is coming after you.

We see this time and time again. They love to get the photo op with the big Hollywood stars but one-off support to big productions is not the same as systemic support for the screen industry. That's what we need: we need systemic support for the screen industry. Australian audiences deserve to see stories on their screens that reflect the diversity of our community. We need a strong local screen industry to tell our stories. The next step to provide that kind of systemic support and to protect the local industry must be to legislate local content quotas for streaming services like Netflix, Amazon and Stan. We need to do that; that has to be the next step.

The Greens have been fighting for the arts and entertainment workers throughout the pandemic. We are also fighting for an arts insurance scheme to underwrite live events that may need to be cancelled due to COVID. But, to conclude, again this government says they're coming along and providing support, but they can't provide support at the same time on one hand without cutting it and taking it with the other. So we will seek to amend this legislation in the Senate so that we can start to provide the kind of support, ongoing and secure, that our creative sectors need.

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021.

The government needs to support the screen sector. We heard from previous speakers how vital it is to the telling of our Australian stories, and I can only agree 100 per cent with the comments that have been made. In my electorate, like in many other electorates around our country, there are absolute professionals who are so excellent at their jobs in this sector and who have been telling those stories to a grateful nation and to international audiences for a long, long time. As the member for Lyons mentioned in his contribution, there was that first feature film about Ned Kelly and how many times that has been retold over time and given new perspectives. It's vital that we make sure that these excellent Australian professional people are able to be competitive in the world.

The government, those opposite, need to implement Australian content obligations immediately on global streamers, to ensure that our stories—Australian stories—are told. That's so our culture and our values, those values which define us, are displayed on screens where not only Australians but people from all around the world get a sense of our stories, our values and our various and amazing cultures.

Those opposite, the Prime Minister in particular, have wanted to use our Olympians—he has tried to attach himself to them at a time when he has failed when it comes to the vaccine rollout. What he needs to understand is that, as good as our Olympians are, Australian screen professionals are every bit as good. They are world class. They are the best. They represent us around the world. So many of them go overseas to continue to ply their trade, being the professionals that they are. They bring us credibility, whether they're working in Australia or overseas. They bring credibility to Australia because they are excellent at what they do. With support from the federal government, they will be able to do a lot more of it right here in Australia. They are quite brilliant at what they do. I've worked with some of them, but they shake their heads at the lack of understanding from those opposite about how important the telling of these stories is to a nation.

Now, during COVID, as previous speakers have mentioned, we have sometimes taken for granted, I think, being able to binge on some of this content. Due to the great work of the Northern Territory government, I've not spent that much time locked down, but I know that those who have been and continue to be locked down are having more screen time than perhaps they have in a long time. What we will continue to find is that there'll be fewer Australian stories told on those screens if the government doesn't change tack. If the government doesn't act right now then, just like this bungled vaccine rollout, our industry and our content will be left behind, particularly as European and Canadian content obligations swallow up the global revenue and content slots from these massive businesses, these streaming organisations.

In other words, Australian professional workers and Australian film and TV production businesses that are not being supported by the coalition as well as they should be will lose out to international competitors. It would be nice to see more support for them from those opposite by way of this need to put these obligations on the streamers. It would mean that, like our Olympians, they would be able to compete on the international stage. Australian businesses and Australian workers in the creative arts would be able to compete.

Our stories from my electorate—from Darwin and Palmerston—and from the Northern Territory are particularly epic. They are really critical to the definition of who we are and what we want our children to identify with. Our Top End industry has some of the greatest storytellers Australia has to offer, but, unfortunately, their voices will be silenced without a demand for content on these streamers. We welcome the government increasing the offset credit for TV to 30 per cent and retaining the film offset at 40 per cent, because, without these, movies like High Ground would not have been able to be made in the Top End. I use this film as an example, and I know some people who worked on this particular film. For those who haven't seen it, I can really recommend it. It is a stunning film. Not only does it show the stunning landscapes of Arnhem Land; it tells a very important story about First Nations people coming into contact with non-Indigenous Australians. It is a great story about the effect of war on those that go to it and the conflict that happened in our nation, so it really is a vehicle for reconciliation.

Those opposite are not too fond of truth-telling, it must be told. That's why they've seen fit, for some unknown reason—perhaps an aversion to the truth—to not support documentary films. That is short-sighted and unfortunate as well. Those opposite really need to think more about this sector, about the telling of Australian stories and about making our professional people in the screen industry, and in the creative industries more broadly, more competitive against foreign companies in this same sector.

The need for obligations around local content, particularly for these streamers, will make all the difference in the world, to make sure we've got a sustainable industry for job growth and economic growth in this sector—a sector that has been decimated by COVID. We've heard from previous speakers about the lack of support for this sector and for creatives in general from the government. If we can make sure that there are these competitive obligations for streamers then our industry will grow. That will mean more Australians in jobs and more successful Australian companies, and we'll have an industry that reflects who we are as Australians. We need that systemic support for the screen industry. I think one of the previous speakers likened these big Hollywood numbers to a bit of a sugar hit; they employ a lot of people for a short amount of time. They are welcome, of course, but it is this systemic support of the screen industry that will drive growth and, as I said, will make us more competitive internationally.

Cutting support to documentaries is just dumb. It's stupid. Truth-telling will never get us the reform we need in our country. It won't give us the facts. It won't give us the data that, in our busy lives, other than through documentary film-making and good current affairs and investigative journalism, we can find out. The Australian people deserve to have those documentary stories told.

Maybe it is, as another speaker previously mentioned, that those opposite haven't had much to do with the creative industries in their careers. Maybe that's true. I learned, when I started making some films, that a documentary film is a lot of work, employs a lot of people and is really, really important. One of the films was called A Debt of Honour. It is a good example of a film that would not possibly have been made and licensed, but the Nine Network had documentary content obligations. The reason we were able to make this film is that the Nine Network had documentary film obligations. They're important. This film was able to get funded, and Australians, on Anzac Day 2005, when it first screened on Channel Nine, were able to watch an hour-long documentary that told the story of Australia's deep relationship with Timor-Leste from World War II through to the current day. That story had not been told in a documentary format. There was filming in Timor-Leste and in Australia, with veterans from World War II and veterans from INTERFET, telling that story through 1975 and through the intervention to the current day, reflecting the stories of our soldiers in their own words about their deep feelings about not only their country but service to our nation. That film was able to be made because there were these content obligations. Post-production is also something I learnt on that film. You write a script, you go away, you shoot a film, and then the work begins in post-production. That is, unfortunately, where this legislation lets down members of such an impressive and important sector, those who are in post-production jobs in particular.

So what are we on this side on about? We are committed to supporting Australian stories being told—and told by Australian creatives, not people overseas. People from overseas will always be welcome to come and help tell us our stories, but we want Australian companies to succeed and we want Australian workers to come up through the trade and see a career in telling Australian stories. We have a long-term commitment to a well-supported and well-funded Australian film industry. I again encourage those opposite to do more to assist with local content.

Jobs and a talented and creative workforce will enable small to medium sized businesses to produce diverse and quality Australian content that local and international audiences will love to watch. At the end of the day, we are an excellent country and we are great storytellers—from First Nations Australians through to the young people who are making films in my electorate right now telling local stories. They are important stories and we have the ability to tell more of these stories and be internationally competitive if we get behind this vital industry, this vital sector for our nation.

Nola Marino (Forrest, Liberal Party, Assistant Minister for Regional Development and Territories) Share this | Link to this | Hansard source

I thank those members who have contributed to this debate. Schedule 1 to the bill increases the producer offset for films that are not feature films released in cinemas, to 30 per cent of total qualifying Australian production expenditure, and makes various threshold and integrity amendments across the three screen tax offsets. These changes will ensure the screen tax offsets effectively target areas that require support and encourage production and commercial distribution of quality.

Schedule 2 to the bill relates to small-business insolvency. The small-business insolvency reforms, which came into effect on 1 January 2021, introduced new insolvency processes suitable for small businesses, reducing complexity, time and costs. These processes enable more Australian small businesses to quickly restructure. Where restructure is not possible, businesses can wind up faster, enabling greater returns for creditors and employees. This measure makes consequential amendments which will support the operation of the new insolvency processes.

Schedule 3 to the bill makes minor and technical amendments to Treasury portfolio legislation. This includes amendments that clarify the law to ensure it operates in accordance with the policy intent; make minor policy changes to improve administrative outcomes or remedy unintended consequences; and correct technical or drafting defects.

I commend this bill to the House.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Watson has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be disagreed to.

Question agreed to.

Original question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.