The fifth Pirates of the Caribbean film is among the latest Hollywood productions drawn by Australia's generous tax incentives. Image: Walt Disney Pictures.

Australian Tax Incentives Lure Hollywood Filmmakers

Australia

The latest installment of Disney’s Pirates of the Caribbean series is set to be filmed in Australia, after the Queensland government finalized a tax incentive deal worth US$ 20.2 million. Since the introduction of the Australian government’s Screen Production Incentive scheme in 2007, dozens of Hollywood films have been lured down under,attracted by tax breaks and other incentives.

Since the mid-1990s, the Australian government has provided funding for local productions and international films such as 2001’s Moulin Rouge. The 2007 Screen Production Incentive Scheme, however, replaced previous programs with a package of tax incentives designed to encourage private investment in screen production within Australia. Each state has its own regulatory office, with the most popular for Hollywood filmmakers being Queensland (Fools Gold, The Lost World), New South Wales (The Matrix series, The Great Gatsby), and Victoria (I, Frankenstein, Ghost Rider). For qualifying productions, the scheme includes a producer offset of up to 40% of expenditures, a 16.5% location rebate for large projects, and a 30% rebate for PDV (post, digital and visual effects) activities undertaken in Australia.

The tax incentives have been extremely effective, attracting increasingly large scale productions over the last decade. Two Star Wars films, Attack of the Clones and Revenge of the Sith, were filmed at Sydney’s Fox studios, as was Mission: Impossible 2. Marvel Studio’s X-Men Origins: Wolverine (2009) and The Wolverine (2013) were also both filmed in New South Wales, with a combined budget of $270 million, $30 million of which was made back from Australian audiences at the box office. Film attendance in Australia peaked in 2010, when 92 million Australians attended the cinema, spending a total of $1.1 billion. In 2010 , two of the largest grossing films, Avatar and Alice in Wonderland, had Australian actors in the lead roles, and together earned over $139 million at the Australian box office.

Australia’s love affair with Hollywood films benefits both the United States and Australia. Not only do films shot down under tend to do better at the Australian box office, but tax incentives make filming in Australia considerably cheaper for American studios. Likewise, the Australian tourism industry gains from enourmous amounts of international publicity, while the local film industry recieves world-class technical knowedge.

Jonathan Gordon recently graduated from the University of Sydney and is a Research Intern at the East-West Center in Washington, D.C.