Taking the bait

Gone are the days when Australia could rival the UK, Germany and Canada as a place to shoot big-budget US films. The strong Australian dollar has all but stopped the flow of overseas films to a territory that saw $250m per year rolling in across the Pacific during the peak years of 2003-04. Some experienced crew are deserting the industry and many service companies are cutting prices for local shoots.

The Wolverine, due to wrap at Sydney’s Fox Studios in November, is the first studio shoot in Australia since The Chronicles Of Narnia: The Voyage Of The Dawn Treader in 2009 and it came only because the government promised $13.3m (a$12.8m) over and above the 16.5% incentive on expenditure available to big-budget foreign pictures. If this windfall was meant to remind the US of Australia’s diverse locations and skills, it has not worked: 16.5% is simply not competitive.

But while big-budget shoots have been drying up, an impressive array of local film-making talent has moved into the spotlight to some acclaim, including newcomers Wayne Blair (The Sapphires), David Michod (Animal Kingdom) and Justin Kurzel (Snowtown). Meanwhile other directors, such as Kriv Stenders (Red Dog), Cate Shortland (Lore) and the Spierig brothers (Daybreakers), are hitting their stride.

This calibre of talent - along with the rise of a new generation of stars such as Mia Wasikowska and James Frecheville, financial incentives, skilled crews and an internationally minded local production sector - is helping Australia to attract suitors from around the world.

With local investment falling, experienced producers in particular are looking at setting up co-productions. Currently in the works is Jonathan Teplitzky’s Australia-UK project The Railway Man, starring Nicole Kidman and Colin Firth, France-based director Anne Fontaine’s Mothers, an Australia-France co-production starring Naomi Watts and Robin Wright, and Michod’s The Rover, an unofficial Australia-US co-production starring Guy Pearce and Robert Pattinson.

“I like making lots of films, I like working with other countries and I like to be challenged because it tests your mettle, and co-productions give us the ability to make films that can compete with the US on the world stage,” says Chris Brown, who is producing The Railway Man with Andy Paterson and Bill Curbishley. Brown also produced Bait 3D [pictured], Australia’s first co-production with Singapore.

Private financing is extremely limited for the 35-40 Australian films released in cinemas annually, so government agencies are pushing for official co-productions - and are sending delegations abroad for speed dating. The development of co-productions is certainly growing. On average only three official co-productions are made per year but 10 were given a letter of preliminary compliance in the 12 months to June 30. “The number of co-productions is steady and the Producer Offset is certainly attractive to international producers,” says Ruth Harley, chief executive of Screen Australia, which administers co-productions and the generous Producer Offset incentive available to Australian titles and official co-productions. “This is creating a lot of interest and we expect co-productions to become a bigger part of the production slate in future.”

Official international co-productions must balance financial contribution with creative participation - but they get to bypass the ‘significant Australian content’ test applied to any film claiming the Producer Offset. This is a rebate worth up to 40% of Australian expenditure exceeding $520,000 (a$500,000), and there is the possibility of getting up to $2.6m (a$2.5m) directly from Screen Australia.

‘Co-productions give us the ability to make films that can compete with the US on the world stage’

Chris Brown, producer

Australia has co-produced 51 features since the late 1980s. Driven by cultural similarities and a shared history, 22 have been with the UK, 11 with France and seven with Canada. The newest agreements are with China, Singapore and South Africa. The other partners are Germany, Ireland, Israel, Italy and New Zealand. Negotiations continue with India, Denmark, Malaysia and South Korea. Germany is proving a popular partner - Shortland’s Lore was an official Germany-Australia co-production - and the agreement with China has led to three films so far.

“The number of co-productions has to grow because they immediately have more international appeal, but they will never replace international [shoots coming to Australia],” says producer Marian Macgowan, who made Death Defying Acts with the UK and has a film about Catherine the Great in development with Germany.

As there is no treaty with the US treaties were in part created to compete with the US - the industry hopes the Producer Offset can attract more US dollars to Australia. Local directors Baz Luhrmann (The Great Gatsby) and George Miller (Happy Feet) are adept at attracting US finance and Walden Media is a big investor in the Australian film Nim’s Island 2, now in post and starring Bindi Irwin. Chris Brown is a producer.

However, co-productions can bring a range of difficulties including management of time-zone differences, language problems, fundamentally different legal and financial systems, costs, complicated treaties and so on.

Statistics show official co-productions are generally more expensive than a wholly Australian film, but generally they also perform better.

Responding to the marketplace

Local producers have a long-held perception that co-productions should be budgeted at more than $10m to cover their expenses but this notion is losing traction. Cathy Overett, producer on the Finland-Germany-Australia sci-fi title Iron Sky, is working with the UK’s Spice Factory on Alberto Sciamma’s $3m vampire movie Bite: “I am responding to the marketplace and it is very hard to finance films between $3m and $15m,” she says.

Overett’s credits include At World’s End, a Germany-Denmark-Australia co-production set in Indonesia but shot in Australia. “The Europeans are always amazed by our production values,” says Overett. “We are expensive and the exchange rate is really hurting us but no-one has as good a rebate as us.”

Macgowan’s Confessions Of A Super Man, being developed with Singapore, is another example of an experienced producer shaking up Australia’s usual co-production model with a low-budget project. The $1.75m (a$1.7m) film is from first-time feature writer-director Angela How and tells the story of a teenage Asian-Australian sociopath. “Working with Asia makes sense because we are close and there’s masses of people there,” says Macgowan.

OFFICIAL Australian CO-PRODUCTIONS

Source: Screen Australia

Skills and incentives combine to great effect

Australia is attracting high-end VFX work on projects such as Prometheus and The Great Gatsby

So far in 2012, Australia’s top four visual-effects houses - Rising Sun, Animal Logic, Iloura and Fuel VFX - have won contracts on major international projects such as Prometheus, Marvel’s The Avengers, The Hunger Games, Ted and Lego: The Piece Of Resistance.

A strong talent pool and an attractive tax incentive are among the territory’s strengths according to Allen Maris, visual-effects producer on Prometheus.

“You really get a sense… that it’s not just about the bottom-line profit, it’s about providing work that everyone in the company can be proud of. Though the time zones can present a problem, for the most part it proved very beneficial to be able to brief the vendor before the end of LA’s day and see progress by the time we returned to the office.”

With such compliments often flowing Australia’s way, the recent near-collapse of Fuel sent shockwaves through the industry. Andrew Spring of insolvency firm Jirsch Sutherland, appointed by Fuel when it went into voluntary administration in August, said one of the challenges was dealing flexibly with the ebb and flow of work while holding on to skilled staff.

Another Sydney company, Animal Logic, has since bought Fuel’s assets and formed a new company, Animal Logic Fuel, which will see the five founders of Fuel continue in the same premises, taking on Animal Logic’s advertising and short-form work but also continuing their high-end film VFX work as a distinct division.

Undeniably, Australia’s strong dollar has made the country less competitive though there was some relief when the PDV (post, digital and visual effects) offset was increased to 30% in mid-2011 and the expenditure threshold dropped to $512,000 (a$500,000).

Melbourne-based Iloura is now supplying visual effects for M Night Shyamalan’s futuristic After Earth for Columbia Pictures. Animal Logic, which develops its own intellectual property as well as providing services, is working on Baz Luhrmann’s US-financed The Great Gatsby.