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Tax Laws Amendment (Improving the Producer Offset) Bill 2009

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2008-2009

 

 

 

 

 

 

 

 

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

TAX LAWS AMENDMENT (IMPROVING THE PRODUCER OFFSET) BILL 2009

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by Mr Steven Ciobo MP, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts)



TAX LAWS AMENDMENT (IMPROVING THE PRODUCER OFFSET) BILL 2009

 

 

OUTLINE

 

In September 2007, the then Minister for the Arts and Sport, Senator the Hon George Brandis SC established an Australian Screen Production Incentive, providing more than $280 million over four years in generous incentives for Australian film and television productions and for offshore productions to locate to Australia.

 

The new incentives included a Producer Offset which provides a 40 per cent rebate to producers of Australian films and a 20 per cent rebate for the production of other media.

 

The Producer Offset provides the necessary impetus to grow the Australian production industry by making it easier for Australian producers to attract private investment, increase equity in their productions, and develop stable production companies.

 

Senator Brandis said at the time: “The new Producer Offset will be available to all producers of Australian productions, including feature films, telemovies, series, including animated series, documentaries and short form animations. The introduction of the Producer Offset reflects the [Coalition] Government’s view that a sustainable and independent screen production sector is crucial in building a stronger Australian film and television production industry.”

 

The Producer Offset was welcomed by the Australian screen industry.

 

In a comprehensive paper submitted in July 2008, the Screen Producers Association of Australia (SPAA) raised concerns with the current Government regarding, inter alia, the timing of the acquittal of the Producer Offset funds back to the Producer after the issue of Final Certification. Producer Offset funds are remitted only once a tax return is lodged for the financial year in which any project is completed.

 

Some of the practical problems and unintended consequences of this provision are the delays that can occur between completion of a production and the receipt of the Offset funds, leading to cash flow loan terms being longer than necessary.

 

As the Government has failed to act to remedy these concerns, the Shadow Minister for the Arts, Steven Ciobo MP, is introducing this Bill to improve the Producer Offset and ensure the intentions of the Producer Offset policy are met. 

 

 

FINANCIAL IMPACT

This Bill seeks only to change the timing by which Producer Offset payments, that the taxpayer would ordinarily be entitled to, are made within a given financial year and does not seek to increase Government expenditure.

 

 

NOTES ON CLAUSES

 

376-56  Special assessments

Clause (1)

This clause requires the Commissioner to consider the effectiveness of the Producer Offset in making a special assessment decision under section 168 of the Income Tax Assessment Act 1936. Timely acquittals are critical to the effectiveness of the Producer Offset. The special assessment provisions under section 168 allow a taxpayer to seek a special assessment at any time during any year, without requiring them to liquidate or cease their ongoing business activities.

 

Clause (2)

This clause clarifies the intention of the Producer Offset policy to provide a financial incentive for the making of Australian film and other specified media. The effectiveness of the Producer Offset is diminished by any delay to the acquittal of Producer Offset funds to the taxpayer.

 

Clause (3)

This clause requires the Commissioner to consult with the production industry regarding special assessments. It is anticipated this will allow the industry to highlight the importance of interim assessments to the effectiveness of the Producer Offset.