The Art Neuro Weblog

How The Australian Film Industry Got 'Stuffed' - Part 1
At the core of the concern for that state of the Australian Film Industry lies the notion of the value of actually having a cultural industry. Back in the 1950s and 1960s, when American Studios through their distribution channels ruled the entire world's cinemas through her marketing power, the most likely product you would have seen at the cinema was American product, and nothing else. While being an English speaking country spawned off from the United Kingdom, the United States of America has always had a distinct culture unlike that of the other English speaking Nations.

Naturally, those in Australia felt that to have cinema monopolised by American culture was a problem, and so the concept of a National Cinema emerged from the murky business of the Studio monopolies. At the same time, the Studio monopoly on distribution was broken by anti-trust laws in the 1950s, which prompted the loosening of control over world-wide distribution the Hollywood studios once possessed.

So in the time of Prime Minister John Gorton, Australia embarked on a project to resuscitate its National Cinema (which dates back to 1906). This led to the formation of the Australian Film Television School, and launched the feature film careers of the likes of Peter Weir, Philip Noyce, and Gillian Armstrong. At the same time, the government devised a tax break known as 10BA, which gave a whopping 150% tax break to monies invested in certifiably 'Australian' films.
At the same time, the Australian Film Commission was given a boost to its coffers to invest in worthy projects.

These policy shifts carried out by both Labor and the Coalition Governments brought about what we now call, the New Wave of Australian Cinema. Some of the most famous films were made under this regime; Gallipoli, The Year of Living Dangerously, Mad Max 1 &2, Newsfront, Heatwave, My Brilliant Career, all of them representative of the best of Australian Cinema were produced with the help of the 10BA and the Australian Film Commission.

Then, in the 1980s, it was discovered that many films made with the help of 10BA were actually being used as Tax Shelters, helping people write off money in losses, rather than being invested in films with the view of creating quality works. At the same time, strapped for tax income, the Federal Government reduced the 10BA tax incentive from 150% to 133%, then 125% and finally 100%. By the time the 1990s rolled around, the Federal Government had a new plan. It would create the Film Finance Corporation which would directly invest in projects, functioning as a defacto Australian studio. The AFC would remain, and concentrate on 'culturally important' films (i.e. films made by Indigenous People that nobody would want to pay to see, but need to be made for the good of our culture anyway).

Except the FFC did not quite function like a studio. Instead, it hired on arts bureaucrats that ate up most of its budget on salaries and junkets while investing in a raft of fairly unsuccessful films. Now, the rule of thumb when it came to film investing used to be, you'd make 10, and only one would be a hit, but that 1 would pay for the slate of 10. Instead, the FFC put together year after year where it failed to make its budget back at the market place, and now everybody is asking, why can't we get money from these people?

The truth is, if you invest only in worthy projects, chances are you won't see any of your money back; and that's what has happened to the FFC. Then how does Hollywood do it? After all, the annual budget of the FFC rivals that of MGM. Why can't the FFC turn a profit commensurate with its budget? The short answer is that they don't make films for the market; they make films for cultural reasons, which brings us back to the issue: What is having a cultural industry worth to a country?

The way I see it, an industry is only going to be an industry when it actually can turn a profit as whole; not one or two success stories a year, but as a whole. Otherwise, it's a sheltered work shop. In fact, the model whereby producers put together reams of paperwork to satisfy bureaucratic criteria in order to get money, can only lead to the creation of films that have very little market appeal. In other words, it's a glorified kind of the dole. And while it is stuck in that model (which it has been for many, many, many, years), then there really is no 'industry' to speak of. The folks who gather at SPAA to talk about the state of the *industry* are kidding themselves.

And yet the federal government would insist this sad so-called *industry* stand on its two legs and go out there and be a market place player. Well, that's not going to work when the opponent is the Goliath known as Hollywood; and in this instance, Goliath has better equipment, more talent and more expereince than our david-Industry. Frankly, I just don't see that as being feasible; and if they do, they're kidding themselves as much as the folks gathered at SPAA.

If the government values a cultural industry, then it's just going to have to prop it up no matter what because that's the nature of the cultural industry: it's just not rationally economic. If the government chooses to say the industry must function as a free market player, then it is best off dismantling the FFC and re-instate tax incentives. The reason the Australian film industry is 'stuffed', is because the FederalGgovernments of the last 12 years, both Labor and Coalition have kept insisting on being both a cultural industry, but also a free market player.
Well, sorry Politicians, but that simply wasn't going to work.

- Art Neuro