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A REAL FILM INDUSTRY NEEDS PRIVATE FINANCE

Industry practitioner and past film bureaucrat, GREG SMITH, responds to Andrew L. Urban's ARTICLE about the Australian film industry - or rather it's absence - in this provocative letter.

Dear Andrew,
You are so right to point up the policy confusion inherent in the operating structure of the industry in Australia. My first point is: is 'the industry' that you refer to the actual groundspring for future filmmaking in this country - or is it merely the neo-Byzantine enclave of self comforting bureaucrats (I have been one) and the filmmakers who know how to operate the system to maximise their share of the available subsidy dollar? A provocative question but one which should be asked.

This is not the model for building an 'industry'. I don't ask the question to be critical or accusing. If there is any truth in it, it has wide implications for finding the solution you seek.

A couple of observations to indicate what I mean.

"The need to encourage and stimulate"

While CEO of both Film Victoria and NSWFTO, I would preside over the funding of hundreds of projects each year - in script development and production funding. The reasons were not just the 'cultural' ones to which you refer. They also included the need to encourage and stimulate.

Valid reasons. And to try to deliver a throughput of activity that would sustain the 'industry'. Not so much the articulate and savvy writers, directors and producers and their political representatives, but the real 'industry' - those capital intensive infrastructure companies that filmmaking needs. Without sufficient throughput, they would (and did) go to the wall leaving filmmaking with out studios, labs, equipment and post production facilities.

That is why I was very keen to attract off-shore production to Australia (and a lot of successful, collective marketing, including AUSFILM was born out of that), to smooth out the boom/bust cycle in Australian production and to underpin the infrastructure. That attraction has been successful and is very valuable for the long term growth of an industry here. Fox Studios Australia is a case in point. By the way, there is no way that a local consortium could have, in my view, provided the depth of pocket or depth of international network to provide such a working facility of enormous potential benefit to local filmmaking.

If, when I was at Film Vic and the NSWFTO, you had asked how many projects each year I thought should be supported on strong commercial and creative integrity grounds (the two are in my view inclusive, not mutually exclusive as is often postulated), I would have answered 3 or 4. This is the nub of your problem.

"To support experiment, youth and innovation"

There is an absolute cultural need and justification for government to support experiment, youth and innovation - and to be in a position to fund (not finance) projects that are deemed culturally important but which demonstrably have no power to repay the capital costs of production and distribution. The trouble emerges when it tries to do everything and be all things to everyone. That is what it has been trying to do for the last decade or more. Necessarily embracing the mantras of economic rationalism in the belief that that would sway more money from the politicians, the filmmaking community has done itself a disservice and presented its bureaucrats with an impossible conundrum and an impossible argument.

The truth is that if there is to be a real film industry it needs to engage private finance - not just subsidy. The other truth, and a sad irony, is that for the last decade or more, private finance has effectively been excluded from participating in financing Australian film. The mainstream of talent has cobbled together its necessary (if often inadequate) production budget by a combination of 'soft' government funding with distribution guarantees - often set at a rate that is cognisant of the level of subsidy available. The projects offered to the private finance market have generally (Strictly Ballroom and Crocodile Dundee are notable exceptions) been the marginal ones or those that were in truth merely vehicles for taxation minimisation - not needing much creative, commercial or any other credibility.

And so, the private finance market has a rather dim view of Australian filmmaking as an investment opportunity. Worse, it has not spent time to do its 'due diligence' to learn about the characteristics of good filmmaking and exploitation. Effectively, until the FLIC Scheme, they were not really invited to do so.

Involvement of the private finance market will address many of your concerns, Andrew. Once it knows what it is dealing with, it will bring its usual business disciplines to bear. If satisfied, it will bring significant additional capital to filmmaking. Which will deliver viability for essential infrastructure (do we really need to debate the need for Australian filmmaking to meet international production standards of production and distribution?) It will defeat the argument that the government should just keep giving more and more subsidy: if we want an industry, surely we cant believe it can secure long term growth and success on the back of subsidy. It will conversely allow the government to do what it should; to concentrate on underpinning those cultural objectives.

"Art in commerce"

Back to my first point: there is an emerging generation of filmmaking talent that does not belong to the enclave. They don't know the rules - I hope they never do. They represent what you identified - art in commerce. They are talented; they expect to take risk; they recognise the responsibility that attaches to asking others to take risk. For them, exploitation is not a dirty word. In other circles it might be called propaganda. It is about the fundamental requirement of getting the story you want to tell to people who want to see it.
Greg Smith

April, 2000

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Greg Smith

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Greg Smith is Executive Director Creative Affairs of Content Capital Ltd, one of the FLIC companies established last year, endeavouring to raise up to $20 million in tax deductible film and tv production finance (among other things). He has previously been director of Film Victoria and the NSW Film and TV Office, both Government film agencies.

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