MPs call for rules forcing Netflix and Amazon to support Australian screen content

Local content rules for Netflix and other streaming services, cuts to children’s TV quotas and an overhaul of the screen industry’s tax offset schemes have been recommended by a parliamentary committee looking into the sustainability of Australia’s film and television industry.

The report, commissioned by communications minister Mitch Fifield in January, suggested services like Netflix and Amazon Prime Video be required to invest a proportion of their local revenues into Australian productions, while quotas on children’s TV be replaced by a new fund.

Luke Howarth MP, chair of the House of Representatives Standing Committee on Communications and the Arts

Other recommendations of the House of Representatives Standing Committee on Communications and the Arts, which boasts five government members and three opposition MPs, included simplifying the various tax offset schemes to a standard rate of 30% for movie and TV productions.

The offset schemes were introduced a decade ago to provide tax rebates covering part of the costs of making Australian dramas and documentaries to boost Australia’s domestic screen industry.

Under the present arrangements, TV productions receive an offset of 20% and the location offset for international productions is 16.5%. As a result of the standardisation, the location and TV production offsets would increase to 30% while the movie producer offset would fall from 40% to 30%.

One of the arguments made by the committee is increasing the location offset would make Australia more competitive for international productions.

Currently, the Federal and state governments provide ‘top-ups’ on a case-by-case basis to attract large feature projects. This year, a Federal government top-up of $22 million and an undisclosed amount of Queensland state government funding was provided to Warner Bros Pictures to film the movie Aquaman on the Gold Coast.

To complement the changes to the offset scheme, the committee also recommended an Australian production quota be applied to subscription video on demand services based on their local revenues.

“Subscription on demand companies are very new and are therefore not required by the legislation to invest in Australian productions,” the committee’s report said. “These companies are operating very profitably here and the committee is recommending that part of their revenues in Australia should be invested in new Australian content.”

Quotas for children’s television were another matter for the committee, with the Liberal members recommending a reduction of children’s TV obligations for commercial TV networks and replacing the hours-based quota with a new fund.

While the committee recommended taking away commercial broadcaster’s obligations, it also proposed the ABC be subject to an hours based quota for first release children’s screen content.

“This reflects the ABC’s strong commitment to children’s television and community feedback indicating that the ABC has become the primary provider of Australian programming for children,” said the committee.

The committee also recommended the restoration of the Interactive Games Fund, which was axed as a budget saving exercise in 2014, noting “there seems to be ample potential for the growth of Australia’s digital gaming industry due to the popularity of video games both at home and abroad.”

In its final recommendation, the committee proposed amending the Foreign Actor Certification Scheme to remove the obligation for union consultation before granting visas to overseas performers.

“There is absolutely no evidence that the current process has hindered or deterred investment in the film or television industries,” said MEAA chief executive Paul Murphy in a media statement.

“We are disappointed that our members gave evidence in good faith but ended up with a dose of conservative ideology.

“The committee was charged with examining sustainability of the film and TV sector but instead managed to propose new ways of destabilising local content, principally by hitting children’s content and local job protections.”

Matthew Deaner, CEO of Screen Producers Australia, was largely supportive of the proposals although he did express some reservations towards the committee’s recommendations, saying in a media release: “One concern I have with the recommendations is the proposed reduction in tax offset for feature films from 40 to 30%.

“There are many existing challenges for our talented film makers in today’s competitive global landscape and to put things simply, this proposal will mean great Australian feature films will struggle to get made.

“SPA has made this clear in our submission to the Government in the Australian and Children’s Content Review and we will continue to advocate for features films not be marginalised in any policy reforms and ensure great Australian productions like LionThe SapphiresThe Dressmaker and Sweet Country be able to be made and shown to audiences both home and abroad.”

The Labor members of the panel objected to a number of the recommendations, including reducing the producer offset, imposing children’s TV quotas on the ABC and union consultation on foreign actors.

In a statement to Mumbrella, opposition communications spokesperson Michelle Rowland said: “This inquiry was commenced before the minister for communications and the arts, Mitch Fifield, was compelled into action by Labor and others, to finally put the government to work on updating the framework for the screen production sector.

“Some of the recommendations in the report have not been modelled or costed, and need further consideration.

“Any reduction in the producer offset for Australian feature films or the children’s television quotas could have adverse impact on this important form of Australian storytelling, jeopardising the cultural outcomes and adversely affecting jobs in the sector.

“Labor is listening carefully and consulting widely with the sector as it looks to a set of proposals that will set the sector up for the future.”

When asked by Mumbrella about the government’s reaction to the report, a spokesperson for minister Fifield responded: “The government will consider this report as part of its review into Australian and children’s content.”


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