The Australian Government’s 2011/12 Budget included a number of proposed reforms to the Producer Offset. Legislation to enact the proposed reforms was introduced into Parliament on 22 September 2011 and came into effect following the Royal Assent of the Tax Laws Amendment (2011 Measures No. 7) Act 2011.

We are continuing to revise our information guides, spreadsheets and forms, but in the meantime, here’s an overview of the changes, including how they might affect your projects.

Expenditure thresholds

QAPE thresholds have been reduced from $1 million to $500,000 for feature films (40% Offset), and also for non-feature single-episode programs including direct-to-DVD films, telemovies, and films made for online distribution (20% Offset). Such films must be at least a commercial hour in length.

An overall QAPE threshold of $500,000 has been introduced for documentary projects – whether for series, seasons of series or single-episode programs. Instead of receiving the Offset, eligible documentaries with budgets of $500,000 or less will be able to apply for a Producer Equity payment equal to 20% of the budget.

Guidelines for the Producer Equity Program, which is administered by Screen Australia’s Documentary Unit, are available here.

The table below summarises the Producer Offset threshold changes.

Format	Minimum total QAPE	Minimum QAPE per hour (ie QAPE / Duration in hours)
Feature film	$500,000 (was $1 million)	N/A (unchanged)
Single-episode drama	$500,000 (was $1 million)	N/A (was $800,000)
Series/Season of a series drama	$1 million (unchanged)	$500,000 (unchanged)
Documentary (single-episode or series)	$500,000 (no previous threshold)	$250,000 (unchanged)
Short-form animation	$250,000 (unchanged)	$1 million (unchanged)

 

QAPE reform

The scope of expenditure that is considered QAPE has been broadened. Information on the amendments is available here, and revised spreadsheets are now available for Provisional Certificate applications.

For projects with QAPE of under $15 million, the foreign exchange rate as reported in the final cost report will be used when calculating QAPE.

GST is now excluded from QAPE.

Other proposed changes

The 65-episode cap has been amended to 65 commercial hours rather than 65 episodes.

The 20% above-the-line cap has been removed for all non-feature documentaries.

Short-form animated documentary is now an eligible format.

WHEN WILL THE CHANGES TAKE EFFECT?   

The Act specifies that:

• In the case of projects with Screen Australia production funding (investment or grant), the new arrangements apply where notification of funding approval is given (ie, a Letter of Approval is issued) on or after 1 July 2011.

• In all other cases (ie, projects without Screen Australia production funding) the new arrangements apply where pre-production commences on or after 1 July 2011.

Screen Australia is assessing Provisional Certificate applications on this basis.

does your project fall under the
'old rules' or the 'new rules?

[Page created 27 May 2011; updated 12 December 2011]