Silver smokescreen
Politicians are telling no tales when it comes to divulging the incentives being offered to lure film productions to Queensland, writes Kelmeny Fraser
WHEN thenQueensland Premier Campbell Newman arrived at Walt Disney Studios Los Angeles headquarters one spring day in 2014, the state’s film industry was enjoying a bright spot.
Queensland had just secured filming of two blockbusters: earthquake drama San Andreas and Angelina Jolie-directed prisoner-of-war film Unbroken.
The films, lured to Queensland via a secret incentive deal, ended a twoyear production lull. And Newman, elected in a landslide to the LNP two years earlier, was keen to notch up another.
His arrival at the Disney studio lot created some excitement, with a near-brush with Jolie making local headlines, along with talk of his ambition to turn Queensland into the next Hollywood.
Delegates held a lunch meeting at the Rotunda restaurant perched on top of the Team Disney building, famous for its Seven Dwarfs statues serving as ornamental pillars. The meeting opened doors, with Disney later writing to Newman to say his “influence in starting this dialogue” had prompted it to considering filming a significant portion of a new movie in Queensland. That film was Pirates of the Caribbean: Dead
Men Tell No Tales, starring Johnny Depp.
Months later,
Newman announced Disney had chosen Queensland for the filming, saying it would inject $100 million into Queensland and create thousands of local jobs. But the announcement left out a crucial detail: the decision came at a hidden cost to taxpayers. Behind the scenes, government officials had been scrambling to come up with package sizeable enough to entice Disney amid significant budget pressures. Industry sources estimate they ended up offering a funding package of $10-15 million. But the size of that incentive, along with the string of incentive payments to follow, remain a closely guarded secret by the State Government and its film finance company Screen
Queensland. That is despite the Federal Government then revealing it had offered the studio $21.6 million in location offset tax incentives to help secure Pirates. Insight can reveal the Pirates deal was sealed as a highly critical review into the value of the incentives payments was finalised by consultants commissioned by Queensland Treasury officials.
The September 2014 review, obtained under Right to Information laws, warned the case for pumping taxpayer funds into luring Hollywood productions was “weak” and the claimed benefits “spurious”.
It found governments’ willingness to negotiate special top-ups and compete to secure relatively few large productions implied most value flowed to the film producer, not the host location.
“The fact that producers will capture most/all of (the) value that a location assigns to securing a production is the most compelling economic argument against jurisdictions offering financial incentives to attract international film productions,” the review, by ACIL Allen Consulting states.
It called for more data on where the money went and where those hired lived.
SQ, however, has stood by the incentives, telling Insight it had facilitated an unprecedented pipeline of productions creating thousands of “direct industry jobs and thousands more indirect through the supply chain boosting the economy by millions of dollars.”.
Films including Chris Hemsworth’s (left)
starring Isabela Moner; and which featured Nicole Kidman (above left), have all been recipients of state and federal grants and tax incentives to film in Queensland but the exact levels of funding remain unknown.
In the years since the review, the Government, via Screen Queensland, has continued to dole out multimillion-dollar incentive payments to lure a string of new blockbuster productions.
Attempts to discover the size of the individual incentive payments has met fierce resistance. The Government even went into battle with the state’s freedom of information umpire after it ruled in 2016 that the incentive figures should be released as a matter of public interest. It followed its refusal to release the Pirates incentive figure to Gold Coast producer Chris Boyd.
But the ruling was overturned last year when SQ appealed the decision in the Queensland Civil and Administrative Tribunal, which ruled it was a confidential Cabinet document. SQ had argued in the Tribunal that disclosure would “seriously prejudice the ability of the state
to attract major international productions and events and advantage other states.”
Adding to the opacity of the incentive deals, SQ itself sits out of reach of RTI laws.
After the legal stoush, the paper trail went dead.
Boyd tried and failed to find any Government papers under RTI on the SQ incentive to lure Thor: Ragnarok, starring Chris Hemsworth, in 2016. That is despite Premier Annastacia Palaszczuk crediting a $30 million four-year funding injection to SQ in 2016 for securing the production.
It created 1000 local jobs and injected $142 million into the economy, she then said.
US film researcher FilmLA believes Thor: Ragnarok attracted $71 million in state and federal grants. That included a $30.3 million federal tax incentive, $25 million federal grant, $3.87 million state payroll tax rebate and SQ production incentive of $11.62
million. SQ has refused to confirm the $11.62 million grant. But if correct, that would equate to a cost of $36,620 for each job created from state and federal incentives, excluding tax breaks.
Mystery also surrounds the amount of incentives paid to lure productions such as Aquaman, Dora the Explorer, and most recently, Baz Luhrmann’s Elvis biopic.
Palaszczuk last year announced the Luhrmann production was expected to hire 900 Queenslanders in behind-the-scenes roles and inject more than $105 million into the local economy.
Yet SQ, which has received $85.7 million in government funding for its Production Attraction Strategy over six years, refused to provide a breakdown on jobs or funding for past productions.
Its financial reports also do not break the payments down by individual productions.