So why are taxpayers spending more than $20 million to get Walt Disney Studios to shoot a blockbuster movie in Australia? Isn’t this just throwing cash – not much more than a bribe – at a hugely profitable Hollywood studio?
Federal Labor backbencher Ed Husic is not alone in questioning why the government is handing so much money to attract 20,000 Leagues under the Sea – the latest movie based on Jules Verne’s novel about Captain Nemo’s adventures – instead of funding hospitals.
After all, the movie will have no more cultural connection to Australia than some of the big Hollywood films that shot in Sydney when the dollar was half the value – the Matrix trilogy, two Star Wars episodes and Mission: Impossible 2.
Like so much involving Hollywood, shooting 20,000 Leagues is a numbers game.
Federal and state subsidies could total more than $50 million, when you add the $21.6 million grant to a tax rebate of 16.5 per cent (the ”location offset” for big-budget foreign movies), plus whatever NSW, Victoria and Queensland offer to get the work.
In round terms, even if the star gets a salary of $20 million, the director, producers and other foreign cast get $15 million and post-production goes overseas, 20,000 Leagues could spend $130 million to $150 million in Australia.
These government incentives will bring Hollywood money into the country for a movie likely to shoot for six to eight months.
It will pay wages to 200 to 400 crew and cast on a typical filming day, plus fees for studio, facilities and equipment hire, construction, catering, transport and accommodation.
Everyone who works on the movie will pay tax and spend their earnings as they go about their lives.
When he launched The Wolverine, Hugh Jackman estimated that a $100 million movie immediately returned $20 million to the government in tax revenue.
Without 20,000 Leagues, some of these crew members will take jobs outside the film industry and others will head overseas to work but many will be under-employed or unemployed.
Economics professor John Quiggin, from the University of Queensland, argues the $21.6 million would be better spent on commercial Australian films than a movie largely set underwater with a US star.
That grant would support just one or two medium-budget Australian films. But everyone getting paid more on a Hollywood movie helps local filmmaking.
On 20,000 Leagues, the grant leverages up production worth at least $130 million, provides work for crew and actors, stops facilities and equipment companies making cuts for lack of business and develops skills that support Australian filmmaking.
True, it’s not producing the next Red Dog or The Sapphires and does nothing for hospital patients. But it does create jobs and bring economic benefits.