Mr McMULLAN (4:51 PM) —I want to support the Film Licensed Investment Company Bill 2005 and the Film Licensed Investment Company (Consequential Provisions) Bill 2005. Like the member for Barton, I welcome any initiative to provide further funding to the film industry, particularly at this time when it is in crisis. The previous speaker, the member for Cook, said it was suffering a bit of a dip. I think it is actually in a very serious crisis. The percentage of the Australian box office being spent on Australian films is at a record low, and the production slate is very low—although we are seeing some re-emergence of some quality films from Australia, and one welcomes that, and we want to see more of it. I want to say something about the film licensed investment companies, the origin of the proposal—that is, the 1998 proposition—and this proposal to continue it in a slightly reduced form, and something about more fundamental issues relating to the crisis in film and television production.

The Film Licence Investment Company proposition, when originally introduced by legislation in 1998, was based on a report by David Gonski, who is a significant figure in the Australian arts and finance sectors. The original proposition did not pick up all of the Gonski propositions. It was proposed then that there be more than one Film Licence Investment Company, but there was not sufficient market demand for more than one to be successful—although more than one licence was issued. I notice that the proposition now put forward by the government is less ambitious. It has quietly dropped the 1998 proposition for more than one company and, with that exception, I assume they are continuing with their previous initiative. But in 1998 the provisions did allow for more than one and more than one licence was issued, although only one company fund effectively became operational. That company fund did make significant contributions to production finance available in Australia; they were relatively small but, nevertheless, welcome. This being a commercial investment proposition, it was originally envisaged that it would have a greater eye on the commercial reliability and prospects of the productions. But I do not think the evidence backs that up. I do not think there is anything to suggest that the films produced under the Film Licence Investment Company Scheme are more commercially oriented than those funded by the Film Finance Corporation—in fact, they are perhaps less so.

Nevertheless, many doors need to be made available for film financing. It is an area in which investment decisions with a commercial element are also subject to elements of subjectivity and judgment. To be able to go to the Film Finance Corporation and to state film bodies with Film Licence Investment Company propositions for operations under 10BA opens more doors and allows more judgments and a more diverse set of judgments to be made and, therefore, provides a broader range of film opportunities. On the face of it, it looks like a pretty inefficient structure because there are so many different sources of finance—Commonwealth, state, 10BA film licence investment companies, the Film Finance Corporation and the Film Commission. But, as I say, I think the idea of having many different doors is appropriate. This is not an area where you can simply streamline it into one. It would be more efficient administratively and there would be fewer overheads, but there would be a narrower range of judgments being exercised. I do not regard film licensing investment companies as a major contribution to the financing of Australian films; I think their contribution is quite minor, but it is positive and I welcome and support it.

Underpinning the problem that the FLICs are trying to deal with is the crisis in film and television production in Australia and, at an even more basic level, the failure to invest in the fundamentals that create the basis on which a successful film and television industry can be built. Prior to the 1998 election, I attended a function at which Geoffrey Rush spoke; he had just won an Oscar for Shine. He said, I think very effectively and accurately: ‘I could never have become the successful actor I am, were it not for the original government funding of the Queensland Theatre Company that enabled me to develop my craft and skills as an actor’—and to develop them to a level where he could transfer them and become the successful film actor that he is. He was making the profound point that, if we do not invest in the underlying fundamentals of the experimental and major theatre companies, we will not produce quality actors. At the moment we are living off the fat of investment in previous years that developed leading Australian figures in global films. World leading Australian actors, directors et cetera are essentially the product of great investment over many years in institutions like NIDA. If we do not continue that investment, we will find that there is a bit of a gap at the top in five, 10 or 15 years time.

The first problem is a failure to invest in the fundamentals. The second problem is a failure to invest at the television production level, where many of the skills are developed and many of the people are kept employed, which enables them to be available, when required, to the film industry—and not just actors, but electricians, carpenters, drivers, caterers and all those who go to making a successful production. I want to refer here particularly to the crisis in drama production at the ABC.

On 19 May, an article by Amanda Mead in the Australian reported, ‘The ABC will stop producing Australian drama altogether if the federal government does not increase its triennial funding this year.’ That warning was issued by the managing director, Russell Balding. He went on to say:

This issue was taken up by John Wood when he received his Logie. He said, ‘Kick some money into the ABC.’ If we are not receiving basic quality and cutting-edge production from the ABC, we are not developing the training and skills that will create the potential for a successful film industry in five or 10 years time.

There is something else that we are not doing—and I do not think the FLICs assist in this. This is not a criticism of FLICs; it is not what they are designed to do. This can only be done successfully by bodies like the Film Commission. We are not investing enough in scripts. The success of films essentially revolves around scripts. We do not give enough patient support to enable scripts to be refined and improved and for third, fourth and fifth drafts to be written. Great Australian scriptwriters who have been hired to go to the US are paid more for revising a third draft of a script into a fourth draft than they get for the whole exercise in Australia. We need to be more prepared to invest in scripts if we are to have quality films.

Finally, we are very strong on doing things on the supply side of the film industry—and we have to do that—but we have to make sure that we are doing something on the demand side as well. I do not mean ‘demand side’ in terms of Australians getting the opportunity to go and see films; there is plenty of opportunity for that. I mean ensuring that there is ample opportunity for Australians who invest their taxes in Australian films to get a chance to see them. The nature of the distribution system is such that, if you live outside the major capital cities or you do not live in a town that has a multiplex, you will probably not see an Australian film; they will not come to the smaller centres. We need to do something on the demand side, and I will have something to say about that issue on another occasion.

The film industry is one of the ways in which Australians tell our stories to ourselves and to others. I welcome any support that makes it more possible for Australians with creativity, imagination and ideas to turn those into successful films. Film licensed investment companies are one small contribution to that and, small as it is, I welcome it as a small step in the right direction. I support the bill.