FAQS

 

Are there any resources available to me to assist me in creating the budget?

The Production Budgeting and Film Management Manual (the "Satchel") is a highly valuable budgeting resource. Although it is aimed mostly at feature films, it is also useful as a guide for budgeting short films, animations and documentaries. It is laid out to reflect each category. To purchase this publication, see Budgeting Manual.

The AFTRS regularly offers Production Management and documentary budgeting short courses around the country please check their website for further details.

You should also check with associated industry websites, which may contain useful information - such as production accountancy services laboratories, post-production facilities etc.

What is the A-Z budget?

The A-Z budgets are updated regularly to correspond with changes in technology and industry standards to accurately reflect production practices in Australia:
There are six budgets:

• Feature Film
• Non-feature drama
• Short Film
• Documentary
• Animation
• Interactive Digital Media

These budgets are specifically designed for each of these genres in order to create a useful checklist for both experienced and inexperienced practitioners.

Do I need to know how to use a Microsoft Excel spreadsheet in order to use the budget?

In order to use the budgets, you will need a degree of proficiency in the use of Microsoft Excel spreadsheets. An introductory course in Microsoft Excel should be enough to give you a grounding in the basics. The spreadsheets are suitable for both Macintosh and PC users.

Do I need to fill in all lines of the budget?

The budget is a guide only. You don't need to fill in every category - use only what you require for your production. However, there are certain requirements that funding bodies need you to budget for (for example, Screen Australia requires crew and cast to be paid award wages for an audit to be completed and for insurances to be budgeted). Read the guidelines on the website for the program you wish to apply for. Contact the funding agency you are applying to and find out exactly what they require you to cover in the budget.

Many of the budget categories have detailed worksheets; see the coloured tags at the bottom of your screen. Use these detailed worksheets to help work out the amounts you will need.

Can I add required lines or delete those I don't need?

You can add lines, delete lines or delete whole sections from the budget. But only do this if you are proficient enough with Microsoft Excel to know how to change the formulas. If you delete lines or sections, it may affect existing formulas in other cells, and they will need to be amended accordingly. If you add lines, make sure the extra line(s) add into the existing formulas and ensure the summary page has the additional lines and adjusted formulas.

An easy way to avoid making formula errors is to change the name of an existing line item, either to make it better describe what you're budgeting for or to re-use the line for another cost altogether. This way you're not adding or deleting lines and won't risk affecting existing formulas.

How do I start?

The Production Budgeting and Film Management Manual (the "Satchel") details the steps required to get started on a budget. See Budgeting Manual.

Any budget evolves from the script or a treatment (for documentary) and should reflect the contents including cast/characters, locations, travel, props, animals, vehicles etc.

First, do a shooting schedule and an overall production schedule. The shooting schedule allows you to work out the number of days shoot you require and, for drama, what days the actors are needed for plus essential props, vehicles, animals etc. The overall schedule allows you to work out the number of weeks pre-production, edit, sound etc.

Then you need to decide the size of your crew - who do you need to do what? Who can you afford and what jobs can be safely doubled up?

For drama, decide the length of your script. Either have a continuity/script supervisor do a timing, or make a realistic estimate yourself, including credits and titles.

What is the Producer Offset?

The Producer Offset ("Offset") is one part of three tax incentives forming part of the Australian Screen Production Incentive (ASPI). Full details, documents and application forms are available on the Producer Offset page.

The Offset is a tax-based incentive and is principally relative to goods and services provided in Australia. It is available to feature films at 40% of qualifying expenditure and for all other formats at 20% of qualifying expenditure, as set out in the legislation and guidelines.

The two key elements of the Producer Offset are the ability of the applicant to show that the project has Significant Australian Content (SAC) and passes the threshold and, if applicable, eligibility tests.

What is QAPE and how do I calculate it?

Qualifying Australian Production Expenditure (QAPE) is one of the components of the Producer Offset required to pass the eligibility test and apply for the Producer Offset.

QAPE = Total film expenditure minus exclusions, minus non-QAPE, minus Above-the-Line (ATL) excess, minus prior spend (1 July 2007).

QAPE is defined as "the company's production expenditure on the film that is incurred for, or is reasonably attributable to:

• goods and services provided in Australia;
• the use of land located in Australia; or
• the use of goods that are located in Australia at the time they are used in the making of the film.
• Where the subject matter of a film reasonably requires a foreign location, expenditure in a foreign country on goods and services supplied by Australian residents only during principal photography may be eligible;
• Where the Above the Line (ATL) expenditure is in excess of 20% of the Total Expenditure of the film, expenditure in excess of the 20% will be deducted from eligible QAPE calculations. This cap does not mean that a budget cannot have an Above the Line total in excess of 20% of the Total Expenditure. "Above the Line" equates to the concept of a film's budget as understood by the Australian screen production industry."

What is Production Expenditure?

A film's production expenditure (PE) is defined as the expenditure incurred in, or that is reasonably attributable to, making the film (i.e. your full production budget). This includes pre-production activities, shooting of the film, post-production activities and any other activities undertaken to bring the film up to the state where it is ready to be distributed, broadcast or exhibited to the general public. This budget could include costs of financing and marketing of the film. For more detailed information and full guidelines visit Producer Offset.

How do I find out what everything costs?

Get quotes from services and facilities to ask them what things cost, and get a specific quote/s. In the first instance you might just want a ballpark figure to see what you can afford, then you might go back later for a proper quote when you've got more idea about what you want. Some of the areas you might want to get quotes for include camera equipment hire, film laboratory services (for shooting and finishing on film), video facility services (for post-production via video), specific locations, airfares and accommodation, insurance, art department major props or on-screen vehicles, animals, etc.

What are fringes and how do I calculate these?

Fringes are the expenses associated with employment. Fringes include holiday pay, superannuation, workers compensation and payroll tax.

The Information page of the budget gives information on how Fringes are calculated - open the "Info" tab, scroll down and read the page.

For a medium budget film assume that at least 80 per cent of your crew and cast are employees. For a low-budget film assume 100% are employees. By law the nature of the relationship that you have with them is that of an employer rather than a contractor. Even if a crew member has an ABN you will need to pay fringes. If a crew member is contracted through a Pty Ltd company, fringes are usually not payable but they will often want to negotiate a higher fee that compensates them for holiday pay and superannuation. So at the budgeting stage you could even assume fringes on all crew and cast.

What is payroll tax and should I include it in my budget?

Generally a short film or a documentary won't have a payroll tax liability. Payroll tax is calculated on the amount of wages you pay per month. There is a threshold amount of total wages that is payroll tax-free. Usually this amount is too large for a short film or doco's wages to reach. But in the instance of a film with a big wages component, or if the production company has an existing wage liability, then it may apply. The rates and thresholds vary amongst the states (as it is a state tax). See Budgeting Manual for further details or contact the state office of revenues in your state to find out the rates.

How does GST work?

No matter how small the budget every filmmaker is advised to register the entity through which they produce their film for GST. In all likelihood they would be legally required to register. Once registered you may claim back all the GST that has been included in payments made. This being the case, always budget the production expenses net of (ie without) GST. Invariably the funding that you achieve for your film is considered a taxable supply and you are required to invoice the funding body, network, distributor etc for your cashflow plus GST. This is not a reason to put a line in the budget for GST. GST will be dealt with contractually and by invoice. DO NOT INCLUDE GST AS A COST WITHIN YOUR BUDGET.

What insurances do I need and what does each category mean?

You are obliged by law to provide certain insurances such as workers compensation for your employees and in some cases contractors, and Public Liability Insurance throughout the period of your production. Your Insurance Agent can provide you with further information about these requirements.

Many other insurances such as Negative Risk, Multi-Risk for equipment, props and sets, travel insurance, Film Producer's Indemnity and Errors and Omissions may be required by your investors, broadcasters or funding bodies. You will need to talk to an insurance agent about your film and they will assist you in preparing a quote based on your production budget. A listing of Australia Film Insurance Agents can be found in all the industry directories.

How do I work out a contingency?

The contingency is a sum of money set aside for unpredictable expenses that inevitably occur on every production. The contingency is calculated as a percentage of the below the line costs. Different funding agencies and broadcasters have different requirements but the norm is 10 per cent.

What is the ratio?

The ratio is the amount of footage shot compared to the final length of the film. For drama you need extra footage to cover shooting takes of the same shot, covering the same material from different angles and for wastage between the shots. For documentary you need extra footage for all the hours of shooting you do to get the good material, whether it's for an interview or for following a subject over a period of time.

Knowing your ratio is a means by which you can work out the amount of film or video stock you need to make your film. For example, if your film is 30 minutes and you determine you will need a shooting ratio of 10:1 (ie you will shoot ten times as much footage as you need in the final product), you will need to purchase five hours (300 minutes) of film/video stock. Determining your ratio will depend on the kind of film you are making. The more uncontrollable a situation (interviews, multi-camera, slow motion, stunts, observational documentary etc), the higher the ratio of footage you will require.

Do I need to fill in the whole budget if I am only applying for post-production funding?

No. In these new budget formats, you can split off just the post-production part of the budget - from R - and fill in the appropriate lines in the remainder of the budget.

What are deferrals?

Deferred costs are those where individuals or facilities have agreed to delay their invoicing (or part thereof) until further finance has been raised on a project. Some films have been made entirely on deferrals however this does place a heavy burden on the producer to ensure that incoming funds are appropriately distributed at a later date.

Screen Australia does not recognise deferred fees in a film financing plan. Producers applying for post-production funding will need to consider their existing agreements with cast and crew where deferred fees have been negotiated, as Screen Australia investment cannot be used retrospectively to pay deferred fees.

What is a completion guarantor and do I need to budget for one?

A completion guarantor is a form of insurance provided to investors, guaranteeing that the film will be completed. The completion guarantor guarantees to the financiers of a film, or a distributor who has advanced money prior to delivery, that the film will be completed and delivered by a given date to its principal investors in accordance with the relevant distribution agreements.

An agreement will be drawn up between the completion guarantor and the production company under which the completion guarantor will be allowed to take over the production in certain specified circumstances.

Screen Australia requires a completion guarantor on its feature production and TV series investments and many broadcasters and other investors also insist on it. Producers are advised to budget for a completion guarantee.

You will need to contact a completion guarantor to obtain a quote. They will need to see a copy of your budget in order to determine this. A listing of Australian completion guarantors can be found in all the industry directories.

How do I check if the budget is correct?

The budget has a good checking system built in to make sure everything is adding up correctly. In the two far right-hand columns there are totals, which add up the same figures but in different ways. The total figures in column L (subtotal) and column M (total) should be the same. If these figures are different, you know there must be a formula error that you need to identify.

Once you've completed the budget, it's always a good idea to print it out and manually add it up, just to double-check. It is very easy to make a simple mistake that has big ramifications, that aren't always obvious when you're looking at a computer screen.

The summary page of the budget also has totals by section and in total. If the total of the detailed budget doesn't match the total of the summary budget, check section by section to see where the disparity occurs.

How do I fill in the summary page?

The summary page automatically fills from the main budget. You don't need to enter any figures here - they automatically populate on the summary page as you complete the budget.

However, if you do delete or add budget categories, you will need to also delete or add those categories on the summary page or an error will show.

Use the summary page to cross-check the accuracy of your detailed budget.

What do I do if I'm having trouble printing the budget?

Print areas have been selected, and generally the printer default is set up one page wide by several pages tall. This should work for most printers, but if you have an unusual setup you might need to play around with the printer setup and size.

What if I get an error message when launching the Excel spreadsheet?

The spreadsheets have been developed for Microsoft Office 2000 and later. If you are using MS Office 98/Excel 98 you will run into an error message when launching the A-Z budgets. The error message will refer to a Unicode error and will open the spreadsheet in Read-Only mode (ie you won't be able to save changes to the downloaded version of the budget spreadsheet).

The workaround for this error is to select "Save as..." from Excel's file menu, and save the budget document with a different name. This will save a copy of the A-Z budget, which you will then be able to use.