Jenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source

I would like to begin my remarks by acknowledging the passing of Mr David Dalaithngu. Mr Dalaithngu was a remarkable storyteller, painter, dancer and actor. His powerful presence connected with audiences across the world. Most Australians of my generation have Storm Boy etched on their memory—a powerful childhood exposure to a different way of seeing the world. At a time when it was uncommon to see First Nations actors on screen and racial stereotypes dominated Australian society, Mr Dalaithngu brought culture and country to mainstream audiences in a way unseen before. He transformed Australian cinema. I offer my deepest condolences to the families in Ramingining, Maningrida, Darwin, Murray Bridge and across Australia.

This bill is labelled a Treasury bill. Weirdly, it combines non-controversial changes to corporate insolvency law with what is perhaps the biggest overhaul of screen policy settings in decades, so I will confine my comments to just schedule 1 of this bill, which deals with screen policy.

It's important to place this bill, the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021, in the context of some recent history in terms of how this government has treated the screen industry and existing tax support structures. Australia's screen industry has given us some incredible Australian stories: Gallipoli, Wake in Fright, A Country Practice, The Secret Life of Us, Paper Planes, The Dry. As a country we are capable of making incredible film and television. In January this year the government used a non-disallowable instrument to completely change the local content quota system. It effectively removed the requirement for certain types of content, such as Australian children's television, to be made at all. Eleven months on, children's television productions tell us their commissions have completely collapsed. That is an entirely predictable outcome but it doesn't mean it is any less worrying.

The Australian market is a small one in global terms. Premium film and television is expensive to make. There are some movies which have been huge commercial successes—Gallipoli, Crocodile Dundee, Muriel's Weddingbut there are others which have told incredible Australian stories and which might not have got off the ground without government support. Samson and Delilah, Hearts and Bones and Alex and Me come to mind. Our industry requires a level of government support in order to flourish and to continue to produce great Australian content. It's the kind of equation you see in many areas of government policy. There is a public good at stake—that is, the production of Australian film and television shows. If the market won't provide that outcome on its own, government steps in to help. One part of that framework is Australian content for television. But, as I've said, the government's approach to this is killing this sector. For many years commercial television networks were required to produce a certain amount of Australian children's content, documentary and drama each year.

The other part is taxation offsets for film and TV production and post-production services which make it easier for Australian made shows and films to get off the ground. What has been so odd about the government's approach is that for many years this has been common ground in terms of policy. Both sides of politics have agreed that nobody wants our kids growing up without hearing Australian accents on the TV screen. We want to see local heroes at the local cinema. But this government have walked away from that consensus, and what's disgraceful is that they use the cover of COVID to do so. Last year, when the minister used the cover of COVID to suspend the subquotas for the different television genres for a year, they swore black and blue—just a year, they said—that it was a temporary measure. But those who feared there was more going on were sadly proved right. As I said, 11 months on from a decision to remove those subquotas, children's television production companies tell us their commissions have collapsed. The government's next step in their campaign was to try to halve Foxtel's local content quota from 10 per cent to five per cent. A lot of people might not realise how much fantastic content has come out of Foxtel—Love My Way, Upright, Picnic at Hanging Rock, Wentworth, just to name a few. This time government senators were awake—well done to those government senators—and they said no. They along with other senators recommended in a bipartisan report that the section that halved Foxtel's Australian content requirement be dropped from the bill. They backed Labor's position, and the government backed down. It shouldn't have come to that—it shouldn't have been necessary—but it did.

This bill is part 3 of the government's attack on the local screen industry. It's not as bad as it might have been. Their original plan was even worse. The original plan included a reduction in a producer's offset from 40 per cent to 30 per cent for an Australian feature film. That would have devastated the Australian film industry. It would have meant films like The Dressmaker would not have been made. It took a coalition of film producers and stars to come together. They travelled to Canberra several times to make the government listen. It also took a groundswell of support from everyday Australians who'd enjoyed a summer of Australian film—Higher Ground, Penguin Bloom, The Dry,just imagine last summer without them. That part has been dropped from this bill. Unfortunately, many other parts of this bill are just as damaging to the industry, and I'll go through a few of these in turn. The threshold for qualifying expenditure to access producer offset for film has been doubled, from $500,000 to $1 million. That means the only productions that will be able to access the producer offset will be large, premium productions. It's pretty obvious what the problem is: many smaller productions that need the offset to get off the ground will not go ahead. This particularly impacts documentary productions, which typically have an expenditure of just over $500,000. There are some fantastic examples of recent Australian documentaries—In My Blood It Runs provides just one example. These are true Australian stories, and the government wants to cut them off at the knees.

The threshold for qualifying expenditure to access post digital and visual effects offsets, PDV for short, has also doubled, from $500,000 to $1 million. A lot of Australians might not realise how immensely successful the PDV industry is. It's a growing industry and it's incredibly important and a heavy hitter on the world stage. This is one of our great exports. Lots of people might not have heard of Animal Logic, but lots of Australians will have watched their work—Captain Marvel, Peter Rabbit and The LEGO Movie are just some examples. They are considered one of the best outfits in the world. I've had the very good fortune of touring their studios, meeting their CEO, seeing their vision. This is an incredible example of outstanding Australian innovation, leveraging some of our best capabilities. We are a country that has terrific levels of education, high levels of digital literacy and immensely qualified people doing really creative things.

The Australian Post & VFX Alliance estimates that 400 jobs in this incredible sector are at stake if this change goes ahead. The Gallipoli clause, which allows expenditure incurred overseas to be claimed against the offset, will also be removed. This clause was inspired by the classic Australian movie Gallipoli, and it means that Australian films that need to shoot in overseas locations are not disadvantaged. The reality is that sometimes Australian stories require part of their production to be filmed overseas, particularly given the diversity of our population. Imagine the film Lion if parts of it could not have been filmed in India. Imagine Gallipoli without their having gone overseas to film it. It just doesn't make sense. This is a completely blunt instrument. If the government is trying to encourage Australian employment in the screen industry, this is not the way to go about it.

Other more minor measures in this schedule include the removal of certain types of expenditure that can be claimed against the offset, such as overheads, copyright, and other measures designed to limit the coverage of the current offsets.

I don't dispute that there are good parts in this bill, or just one good part, and that is raising the producer offset from 20 per cent to 30 per cent for television productions. I want the industry to know that Labor appreciates how important this change is to them. It has been a long fight to get there. As these changes are due to retrospectively apply from 1 July, many television productions have already budgeted for this change. They are desperately awaiting the passage of this legislation. Despite everything in this bill having been announced in September last year, and the bill itself having been introduced back in June, the government have left it until now, the second last day in the last sitting week of the year, to list the bill. It's inexplicable. It's left Australian producers desperate and put the financing of local productions at risk. The government has wasted time, playing silly political games, for absolutely no reason, and the industry has paid the price.

Labor will move an amendment to this bill that will seek to remove the damaging parts of this bill while keeping the increase to the producer offset for television intact. We recognise the urgency and the importance of the bill's passage. We won't stand in the way. But we utterly reject the government's attempt to bundle measures that are unambiguously good for the industry in with measures that are damaging to other parts of the industry. This approach, careless at best, malicious at worst, tells you everything about this government's respect for Australian stories.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I rise this morning to contribute to the debate on the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021, a piece of legislation that makes changes to Australia's screen sector and our film industry, changes that have been long debated. It's a piece of legislation that, despite having been flagged more than 12 months ago, is still far from perfect. In fact it desperately needs fixing.

The debate over how we support Australian stories in this country has been long fought. How much time do we give Australian stories on our own television screens? How much do we fund and support those producing and making Australian stories to ensure we have a true representation of what we tell ourselves, what we tell the rest of the world and how we reflect on our own history?

Storytelling is such an important part of who we are as a community and as a society. The history of storytelling has been around for tens of thousands of years. Today we're debating a piece of legislation that is so important to making sure that here in Australia we can continue to tell our stories, to help us understand who we are, to help us reflect on the things we value, to help us understand how others see us. It's part of soft diplomacy. It's part of education. It's part of fostering social cohesion and wellbeing. Storytelling helps us be more empathetic both as individuals and as a community. It helps us deal with division and difficult issues.

Storytelling is important for making sure we understand our history and the debates over our history. If it wasn't for storytelling and the Australian screen sector, many Australians would have no idea of the history well before white settlement; no idea of the struggles, the richness of culture and the history of our First Nations people. If it wasn't for our Australian screen sector, many of the stories that have been covered over the years would never have been told to an audience that needed to hear them.

As a mum, I've always been incredibly passionate about making sure that we have Australian children's programming so that our kids can access a window into how they see the world and see themselves reflected in what they see on screen to help them make sense of who they are and where we all fit. But, time after time after time, those who passionately tell these stories, make these stories and produce these stories have been under attack by government policy. They haven't been prioritised and nurtured the way they should.

We've seen changes in the last year that attack the number of Australian stories on our television screens by changes to the quotas and subquotas—regulations that say a certain amount of content on our TV screens and on our streaming services should be Australian, Australian made. This is so we're not just being bombarded with stories from overseas and our children are not just being bombarded with shows straight out of the United States, which bear little resemblance to what growing up in Australia is like for Aussie kids.

I came to politics with a desperation for social change. I think most of us in this place are here because we want to make the world better, our community better. We want to do the best we can to help improve our communities, and one of the best ways of achieving social change—that is, of course, changing hearts and minds and bringing people along with you—is by telling stories. Our Australian screen sector is needed if we are to progress and be better as an Australian society, particularly for those of us wanting to see social change in some of the areas that have been the most difficult to discuss.

If it wasn't for storytelling, we wouldn't have the truth about our First Nations history. If it wasn't for storytelling on our television screens and through our films, we wouldn't have progressed marriage equality in this country in the way that we have. If it wasn't for the power of storytelling, we wouldn't know about the horrors and histories in relation to the stolen generation. If it wasn't for the power of storytelling, we wouldn't know about the fights that women—not just in Australia but around the world—have taken up to achieve equality.

This bill makes it more difficult for the people who tell these powerful stories to keep doing it. There is a good part of this piece of legislation—that, of course, is the increase to the producer offset for television, something that has been long and hard fought for, and has finally been put on the table. But this legislation is riddled with whack after whack to a sector that needs nurturing and support because it is in and of itself a public good. It's essential to being a respectful and empathetic society that we're able to tell our own stories.

A number of the elements of this piece of legislation dismantle the important work of documentary-makers in this country. The history of documentaries in Australia is essential, and it is a powerful part of recording our history—tackling those difficult issues and dealing with things that have perhaps been too divisive to discuss. Documentary-making is an important part of public interest journalism in this country. But the changes in this piece of legislation will make it harder for documentary-makers to do their job. It'll make it harder for documentaries to be made about issues that perhaps aren't already being ventilated, because, unless you're going to spend $1 million making your documentary, you're not going to be able to access this support. That means that, under these laws, so many documentaries in Australia just wouldn't have been made.

There are the changes to the Gallipoli clause, which is about allowing footage filmed overseas that is part of an Australian film to be counted as part of the producer offset. That doesn't make any sense. We are part of the world. Australia isn't its own isolated unit, separate from everyone else. Our stories connect us to the rest of the world and so should our films, in the way we reflect Australia's position in the world. Cutting the Gallipoli clause will only make Australia more isolated. Art, creative work and storytelling in this way is such an important part of soft diplomacy, and it is so often underestimated in the conversations and debates that we hear from politicians and those represented in, particularly at this point, some of the highly contested discussions about Australia's role in our region right now—our relationship with China, the Pacific and the United States. Being able to use soft diplomacy and the power of storytelling is essential if we are to de-escalate conflict and find pathways towards agreement with our neighbours. It's far too often dismissed.

I'm not sure if I've ever heard Mr Peter Dutton, while he stands on his soapbox speaking about the conflict with China, ever talk about embracing the power of our creative workers or the power of storytelling and the role soft diplomacy can play. He seems all too busy looking to thump his fist and pull the trigger. This is the problem with the government's approach to this issue and to the arts industry across the board. They have been attacked time and time again. The COVID-19 pandemic has hit the arts sector harder than any other industry, whether it's live performance or on screen, and, rather than stepping in to support our artists, we have another piece of legislation bowled up today to the Senate which will dismantle the good work they do.

This is why the Australian Greens will be supporting the opposition's amendments before the chamber. These are amendments that we too had flagged. They're important changes to fix this piece of legislation and to send a message to those who dedicate their life to telling our stories as Australians, the diversity of our stories as Australians, and to let them know, 'We have your back'. The parliament and those of us who are here making policy day in, day out, we have your back. We know what you do is important. It's not some luxury lifestyle, some vocation that doesn't contribute as some on the other side would have you believe.

Being an artist is a real job. Being a filmmaker is an important job. Producing Australian stories that we can tell ourselves to help us understand and be more empathetic about our differences—that is essential. And we will fight to improve this piece of legislation, because we have your back. I don't know what's going to happen with these amendments. I hope the crossbench see the value in supporting not just the tens of thousands of jobs that are on the line—by the way, if this government gets its way and these changes happen, that will cost jobs. This is the government that says it stands for the economy. Well, this industry is an essential part of Australia's creative economy and they need to stop being used as Scott Morrison's plaything.

Artists and creative workers in this country are sick of being kicked time and time and time again. The contribution that artists make to our society, our community, our public debate is so essential. We value it. We will fight for it. And we will try to fix this legislation so that you don't have to keep begging and scrimping every single day. I applaud the proposed changes and commend them to other members in this place.

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

I rise to make some brief remarks about the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021. These are important matters. The way that we regulate the arts and the media sectors will be some of the most important economic and social judgements that parliament will make over the next decade or so.

We are looking down the barrel of having a vastly greater percentage of foreign control of media organisations simply by virtue of the massive digital disruption we are living through. Basically, everyone knows that there are five very large companies based in the United States that started out as forms of digital supply organisations and are effectively morphing into everything: production companies, banks et cetera.

We need to be nimble in the way that we run our affairs in this country. Now, these particular measures deal with the tax incentives and offsets available to production companies. I note that the Screen Producers Australia organisation has called for this to be dealt with by this parliament in this year, to provide the certainty that is required for these producers. That is entirely valid and welcome, and I'm sure the Senate and the parliament will be able to achieve that goal for the industry. I know there are lots of people who are following this debate very closely, because there are jobs that hang off these things. Tax offsets and incentives are important. We know that from these arrangements and we know that from the research and development tax incentive. The reality is that you wouldn't have organisations like Canva in Australia employing thousands of people unless you had tax offsets, because those companies would set up shop in Silicon Valley with the official family of the digital world, which is already over there.

My point is that these are at first glance details but they are connected to an important and much broader agenda for the country: what are the settings we're going to have to ensure that Australians can get access to Australian content and that Australians can work in the digital, tech and media businesses, which are morphing into, effectively, one sector? That is going to be a very big question, and we can't get stuck with static policy settings. We can't have policy settings which were put in place 20 or 30 years ago, when the media landscape was radically different.

I welcome this measure. I note that the minister and the government have listened to the Senate committee process here. Once again, we see that the Senate committees probably do some of the best work of the parliament in providing that additional scrutiny and providing the capacity for people to have their say. It is very important that we protect and preserve the institution of the Senate committees, which are celebrating 51 years this year, because they serve a really important role in giving people access to policymakers. In this case, I think the revisions here are very sensible, and I look forward to this legislation being debated and passed.

Stirling Griff (SA, Centre Alliance) Share this | Link to this | Hansard source

Although the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 implements a large number of measures, most of them are minor technical changes which are uncontentious. The exceptions to this are the changes to the screen production incentive, which could have significant impacts on our film and television industry. I have serious reservations about this measure and have had them since it was first introduced in June. Judging by the representations made to my office and to the Senate bill inquiry, those reservations are very much widely shared.

My fundamental concern is that this strikes me as a very narrow change. The government says that the incentive changes are intended to drive the local industry towards higher-quality productions, and it seems reasonable to believe that that will in fact be the effect. But what I want to know is how this measure fits into a broader strategy for the local screen industry.

The Commonwealth puts many millions of dollars into subsidising this industry every year. We have done so for decades, and it's likely that we'll continue to do so for decades to come. But it is astonishing that we do this without having a clear strategy for the industry. The minister for the arts should have a vision for the sector—a vision of where the industry could be in five years or 10 years time. We obviously have the talent and the resources for our screen industry to do incredible things, and there is so much potential to build on those strengths and take our industry to the next level. So there should be a strategy, jointly developed by the minister, the department and the industry, which sets out how to take the industry from its current position to the next level.

We should have a clear idea of how government money and regulation will be used to support this strategy. If we had a vision and a strategy and I could see how this measure contributed to it, I would have no problem whatsoever supporting this bill. I will always support empowering our local industries. But we don't have a vision and we don't have a strategy. This measure isn't part of a long-term plan. It's just a fiddle—a play with the policy levers to see what happens. Unfortunately, it's a fiddle that is likely to have some serious detrimental effects on parts of the industry. A lot of industry stakeholders have made it clear that this bill will be quite damaging to their businesses and will probably lead to some job losses.

Ordinarily, these issues would be picked up by broad consultation and engagement with industry. That would have given government the opportunity to reconsider some of the measures, but that clearly did not happen. There may have been consultation, but it was not broad. It failed to include all parts of the industry. And it was not deep; many stakeholders were not consulted about all of the measures that are under consideration and many of them were stunned by what was ultimately included in this bill. This is simply not good enough. It's a failure of government, and the failure was so obvious that the government was forced to acknowledge it in the bill inquiry report. But they continue to press on with what was obviously a flawed and somewhat harmful bill.

This leaves the Senate in an invidious position. If we support the bill, we will enable the government's damaging changes to some parts of the industry, but, if we oppose it, certain film subsidies will not be paid as expected, and that will be particularly damaging for productions that are currently underway, many of which have already secured external financing on the basis of these subsidies. That could lead to production businesses becoming insolvent and some projects immediately shutting down. It will also damage the reputation of the Australian industry and may deter future projects from coming to our shores.

Both outcomes are damaging to local industry, who, frankly, have done nothing wrong here. They deserve a lot better from this government. But we still have to make a decision, and I've decided to listen to the industry, who tell me that the passage of this bill is now the lesser of two evils. It will still be harmful, it will still be damaging, but it is less harmful than the alternative. So I will be supporting this bill.

Perin Davey (NSW, National Party) Share this | Link to this | Hansard source

I too rise to support the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021. Like Senator Griff, I have had many conversations with the industry, who have stressed to me, as Senator Griff quite rightly says, that it is the lesser of two evils. But, importantly, for the changes to the Australian screen production incentive, it is imperative that the parliament pass this as soon as possible. As Senator McAllister pointed out in her contribution earlier and Senator Griff also noted, many productions have received finance on the basis that this change will go through and will be retrospective to 1 July this year. So it is imperative that we pass this bill.

I participated in the Environment and Communications Legislation Committee process that reviewed this bill and I want to note that the committee, while it found that support for the bill was mixed, noted that the support for schedule 1 of the bill, which facilitates the increase to the Australian screen production incentive, was overwhelming and the committee recommended that the bill be passed. Furthermore, industry organisations such as Free TV Australia and Screen Producers Australia have advised of the need for timely passage of this bill to give the industry the certainty and the confidence they need to make important investment decisions so that we can have the Australian content that every contributor today has highlighted is important.

Senator Hanson-Young quite rightly spoke of the need for us to be able to hear, see, listen to and watch Australian stories. I also want to note how many of those Australian stories are produced in regional Australia and the economic input of the screen production industry in regional areas—places like Broken Hill, where we've seen some fantastic screen productions; and the little town of Silverton, which is proudly home to the fabulous Mad Max Museum. These regional areas benefit from our screen production sector, and the screen production sector benefits from the screen production incentive.

Several witnesses to the inquiry, however, did raise concerns about the increase in the qualifying Australian production expenditure threshold, and I want to address those concerns today. These concerns were particularly dominant in the documentary sector. However, the department did point out that Screen Australia is being provided an extra $33 million in additional funding to target and support high-quality and culturally important Australian content, with a focus on the documentary sector.

A number of stakeholders also raised concerns about the increased threshold on the post, digital and visual effects sector, or the PDV sector, highlighting that often PDV work is split between several smaller companies. They raised the concern that meeting that $1 million threshold is a bridge too far. However, in their response submission—admittedly, late submission—to the committee, the department did clarify that what is commonly known as the QAPE threshold of $1 million applies to the whole production, not the individual contract. So a production company would be able to enter into PDV contracts with multiple companies at less than the $1 million as long as the total equated to the million dollars.

The committee also noted that the threshold remains unchanged at $500,000 for shorter form productions of up to 60 minutes for non-feature length content. Based on that information, the committee recommended the bill be passed but it also recommended that the department consult with industry further to develop measures to strengthen the Australian screen production incentive requirements to maximise the value of work awarded to Australian PDV providers. I sincerely hope that the department has taken that recommendation on board and commenced that work to see what we can do to continue to encourage the use of Australian PDV providers who are located all over Australia.

The beauty about post-production work is that it can be done almost anywhere, and we have some fantastic PDV companies based in regional New South Wales—a big shout-out to them. I hope that the successful passage of this bill today sees much more investment in Australian content, Australian screen production and Australian post-production, digital and visual effects. Thank you.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

Firstly, I would like to thank those senators who have contributed to this debate today. Schedule 1 to the bill makes a range of reforms to the Australian screen production incentive, including increasing the producer offset for films that are not feature films released in cinemas to 30 per cent of the total qualifying Australian production expenditure and various threshold and integrity amendments across the three screen tax offsets.

I can also confirm that the government has agreed to the recommendations of the Senate Environment and Communications Legislation Committee to increase the copyright threshold for documentaries, and I thank senators involved in the preparation of that report. Overall, the changes to the Australian screen production incentive will ensure the screen tax offsets effectively target areas that require support and encourage production and commercial distribution of quality Australian screen content in a digital environment.

Schedule 2 to the bill relates to small business insolvency. The main 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 that it operates in accordance with the policy intent, making minor policy changes to improve administrative outcomes or remedy unintended consequences and correct technical or drafting defects. I commend this bill to the Senate. I table a supplementary explanatory memorandum relating to the government amendments to be moved in this bill.

Question agreed to.

Bill read a second time.