Tax incentives and world-class post-production and visual effects studios are fuelling the growth of the screen industry in South Australia.
A Deloitte Access Economics report published this month found the state’s screen industry contributed a record $A119.5 million to the South Australian economy in the 2017/18, up from $76.8 million in the previous 2013/14 report.
Screen Australia’s most recent Drama Report also found South Australia’s share of the national industry had grown to a record 10 per cent in 2017/18 despite the state only having 7 per cent of Australia’s population.
The introduction of the state-based Visual Effects, Digital and Post Production (PDV) rebate in February 2018 and a string of major projects has the industry on track to set a new record in 2018/19.
This month’s announcement that blockbuster action film Mortal Kombat will be made in South Australia’s capital city of Adelaide is a further boost and is expected to inject $70 million into the South Australian economy in what is being touted as the biggest studio production in the local industry’s history.
The PDV rebate is calculated at 10 per cent of gross spend in South Australia and can be combined with federal rebates of up to 30 per cent to create one of the largest and most reliable rebates worldwide.
South Australian Film Corporation (SAFC) supported 18 projects in the 2017/18 financial year, including feature films I Am Mother and Storm Boy, which were shot in South Australia.
PDV work included foreign features Tomb Raider and X Men: Dark Phoenix.
Adelaide is home to four major post-production and visual effects studios: Rising Sun, Kojo, Resin and Technicolor subsidiary Mill Film, which is expected to soon move into a new 3000sq m VFX studio in the centre of the city.
In the past 12 months Adelaide-based KOJO has worked on several projects including as co-producer on Top End Wedding, post production and visual effects on Hotel Mumbai, colour grade on Storm Boy and post production and visual effects on Netflix movie I am Mother.
CEO Dale Roberts said 2018 was KOJO’s busiest year on record across PDV and production work.
He said the rebates and the relatively low Australian dollar were helping the South Australian industry compete with other countries with strong rebate systems such as Canada.
“There are 18 projects we’ve bid on in the past few months — not all of these convert — but in terms of the number of bids and estimates we have in play it’s probably double what we normally have so the PDV has been a significant driver of growth for us,” Roberts said.
“The US in particular sees us as a very strong creative and technical country to do business with but the reality is that these rebates are in play globally and if we want to be a part of that best group of countries then we’ve got to play that game.
Roberts said the Adelaide-developed software tool cineSync and the timezone difference between South Australia and California meant Hollywood studios and producers could review work overnight and provide a brief for the following day to create a 24-hour workflow.
“In LA now when you go from one Hollywood studio to another, every single one of them knows where Adelaide is and they know exactly who’s here and what the rebates are so from an awareness point of view it’s been fantastic.
“There’s a real opportunity here — you see what Peter Jackson did to Wellington in New Zealand — and I think Adelaide is proving that technology means you can work anywhere in the world.
“The government’s made the investment, we’ve all marketed well and we’ve brought an international brand in Mill Film to Adelaide so hopefully the next two or three years will show that Adelaide is considered a great production hub and a world class visual effects hub as well and if we can do that then it will look after itself.”
The Australian Government offers a 16.5 per cent offset on production expenditure for film and television projects filmed in Australia with an Australian spend of over $15 million. This can be topped up to 30 per cent for eligible projects under the Location Incentive. Productions are also eligible for state-based rebates on top of federal incentives.
South Australia was the first state Deloitte Deloitte to introduce the additional 10 per cent PDV rebate but Screen Queensland has since adopted a similar scheme.
The recent Deloitte report, commissioned by the SAFC, also found that direct spending from screen production in South Australia had almost doubled since the last report, from $38.8 million in 2013/14 to $65.5 million in 2017/2018.
SAFC chief executive Courtney Gibson said the report demonstrated the outstanding value being provided by the screen industry in South Australia.
She said the PDV rebate had played a significant role in the growth, which was fairly evenly split between production and post-production.
“What that PDV rebate does is it attracts work from interstate but more importantly it attracts a significant amount of work from overseas and we have a very evolved and sophisticated suite of world class PDV, post production and visual effects companies,” Gibson said.
“Our reputations as key creatives is stronger than ever and that helps bring more international funding into the country.
“Business is booming and we’re on track to have an even bigger year this year.”
Gibson said the top up of the Federal Location Offset to 30 per cent had already been and would continue to be hugely advantageous to South Australia.
She said the solid local growth would allow a consistent pipeline to develop over time.
“We’ve got really strong policy settings and federal rebates designed to attract production here so I think what we are seeing in the Deloitte report is that our policy settings are working exactly how they were designed to,” Gibson said.
“We are attracting more production here and we are developing an industry of Australian and South Australian producers who are more than capable of attracting international finance into their projects.”