Australia’s film and TV industry has a long history of grappling with underdevelopment in the indie production sector, a lack of private sector financing, and limitations on output growth in genres such as children’s drama. But the region’s funding landscape is about to change significantly following a raft of government announcements that are currently being drafted into legislation.

In its May ’07 budget statement, the Aussie government unveiled its Screen Support Package, which calls for an amalgamation of the country’s three funding bodies – The Australian Film Commission, Film Australia and the Film Finance Corporation – into a single entity called the Australian Screen Authority, as well as the introduction of a Producer Rebate (amounting to 20% of budgets for children’s drama projects).

While Australian producers generally agree that the move should lead to an increase in local production, many have concerns. Children’s drama specialists like Jonathan Shiff, executive producer and GM of Jonathan M Shiff Productions, feel that the amount of the rebate is illusory. ‘Several key budget items will be excluded under the definitions of a qualifying expenditure,’ says Shiff. ‘The real figure we can expect will be more like 17%.’ And that’s not exactly heartening news, when one considers that the gap between domestic license fees and production budgets is usually far greater than the full 20%.

‘Whether children’s dramas will benefit from the rebate as much as feature films and adult dramas remains to be seen,’ says Jenny Buckland, CEO of the Australian Children’s Television Foundation. ‘And producers also question whether animated series with episodes that are shorter than commercial half hours will qualify for the rebate. We are hopeful, however, that this issue will be clarified before the legislation is finalized.’

But the real concern, according to the Screen Producers Association of Australia, is the notion of television networks being able to access the Producer Rebate, essentially by discounting their license fees by the rebate amount. ‘This is a potential threat to the livelihood of the independent television production sector across all genres, and it could mean a reduction in diversity, competition and already low license fees, and an increase in unhealthy terms of trade,’ says Julie Marlow, senior policy consultant for the org.

Shiff agrees that it’s a serious issue, and one that cuts across the underlying intent of the legislative reform, which is to make independent production more viable. ‘One needs to note that broadcasters still need to raise the remainder of the budget, and in high-end kids drama production, that is largely sourced outside of our domestic market,’ he says. ‘In my view, there will always be pressure from some networks to satisfy kids programming regulatory requirements by the cheapest, easiest method. They will exploit such a system of rebate return, but in doing so, they clutter their schedules with unappealing, poor-quality content.’

In contrast, Buckland feels that this is a non-issue for the children’s drama genre, although she recognizes its relevance to adult drama. ‘Networks don’t contribute the same percentage of the production cost to children’s dramas, and it wouldn’t make economic sense for them to bring this type of production in-house,’ she says.

For its part, the ABC is committed to ensuring that this does not happen and has advised the Australian government that it will not discount its license fees in an attempt to gain the benefit of the rebate, which it recognizes as producers’ territory.

With the funding body merger set for July 1, 2008 and the Producer Rebate (retroactive to July 1, 2007) still not officially enacted at press time, there are still more questions than answers for the industry at the moment. But most remain optimistic. Says Marlow: ‘Things are moving quickly; it’s an election year, and the government will push for legislation on the Producer Rebate and other funding decisions to go through.’