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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TAX LAWS AMENDMENT (IMPROVING THE PRODUCER OFFSET) BILL 2009
EXPLANATORY MEMORANDUM
(Circulated by Mr Steven Ciobo MP, Shadow Minister for Small Business, Independent
Contractors, Tourism and the Arts)
TAX LAWS AMENDMENT (IMPROVING THE PRODUCER OFFSET) BILL 2009
OUTLINE
In September 2007, the then Minister for the Arts and Sport, Senator the Hon George
Brandis SC established an Australian Screen Production Incentive, providing more than
$280 million over four years in generous incentives for Australian film and television
productions and for offshore productions to locate to Australia.
The new incentives included a Producer Offset which provides a 40 per cent rebate to
producers of Australian films and a 20 per cent rebate for the production of other media.
The Producer Offset provides the necessary impetus to grow the Australian production
industry by making it easier for Australian producers to attract private investment, increase
equity in their productions, and develop stable production companies.
Senator Brandis said at the time: "The new Producer Offset will be available to all
producers of Australian productions, including feature films, telemovies, series, including
animated series, documentaries and short form animations. The introduction of the
Producer Offset reflects the [Coalition] Government's view that a sustainable and
independent screen production sector is crucial in building a stronger Australian film and
television production industry."
The Producer Offset was welcomed by the Australian screen industry.
In a comprehensive paper submitted in July 2008, the Screen Producers Association of
Australia (SPAA) raised concerns with the current Government regarding, inter alia, the
timing of the acquittal of the Producer Offset funds back to the Producer after the issue of
Final Certification. Producer Offset funds are remitted only once a tax return is lodged for
the financial year in which any project is completed.
Some of the practical problems and unintended consequences of this provision are the
delays that can occur between completion of a production and the receipt of the Offset
funds, leading to cash flow loan terms being longer than necessary.
As the Government has failed to act to remedy these concerns, the Shadow Minister for
the Arts, Steven Ciobo MP, is introducing this Bill to improve the Producer Offset and
ensure the intentions of the Producer Offset policy are met.
FINANCIAL IMPACT
This Bill seeks only to change the timing by which Producer Offset payments, that the
taxpayer would ordinarily be entitled to, are made within a given financial year and does
not seek to increase Government expenditure.
NOTES ON CLAUSES
376-56 Special assessments
Clause (1)
This clause requires the Commissioner to consider the effectiveness of the Producer
Offset in making a special assessment decision under section 168 of the Income Tax
Assessment Act 1936. Timely acquittals are critical to the effectiveness of the Producer
Offset. The special assessment provisions under section 168 allow a taxpayer to seek a
special assessment at any time during any year, without requiring them to liquidate or
cease their ongoing business activities.
Clause (2)
This clause clarifies the intention of the Producer Offset policy to provide a financial
incentive for the making of Australian film and other specified media. The effectiveness of
the Producer Offset is diminished by any delay to the acquittal of Producer Offset funds to
the taxpayer.
Clause (3)
This clause requires the Commissioner to consult with the production industry regarding
special assessments. It is anticipated this will allow the industry to highlight the importance
of interim assessments to the effectiveness of the Producer Offset.