The Rudd Government will make important changes to eligibility requirements for film tax offsets that will provide a boost for the Australian film industry.
The changes will make Australia a more attractive destination for significant film making and enable more Australian businesses, particularly small businesses, to benefit from the film tax offsets.
Senator Sherry said that the changes were a part of the Rudd Government's commitment to building a strong and thriving local film industry.
The Government will remove the current requirement for productions valued between $15 million and $50 million to spend a minimum of 70 per cent of their production budgets in Australia.
The Post, Digital and Visual Effects Production (PDV) threshold will also be reduced, from $5 million to $500,000. Both changes will apply from 1 July 2010.
"These changes will provide fresh boost for the Australian film industry," Mr Garrett said.
"In recent years the requirement for large offshore productions to spend 70 per cent of their budget locally has been a factor in some productions not coming to Australia, particularly smaller budget films wanting to shoot here as one of multiple international locations.
"The amendments to the eligibility requirements in the tax lawwill remove some of the barriers to significant offshore productions considering Australia as a production destination and will help local PDV providers to bid for additional work overseas.
"Reducing the PDV threshold to $500,000 will make Australia's world-class, but smaller, PDV providers more competitive when bidding for work outsourced by Hollywood studios, increasing both local employment opportunities and skills within our industry," Mr Garrett said.
"These changes ensure the Government's incentives are delivered as effectively as possible, by taking into account the commercial practices of the industry" the Assistant Treasurer said.
"These changes will increase the likelihood of productions choosing to film in Australia, providing increased employment opportunities for Australian casts and crew."
Changes to the offsets are part of an initial Government response to issues affecting the film industry. The Government will further consider the outcomes from the 2010 Review of the Australian Independent Screen Production Sector being conducted by the Department of the Environment, Water, Heritage and the Arts, after it reports later this year.