Film and television made under Australia’s official co-production arrangements can automatically bypass the SAC test and apply for the Producer Offset. All other productions must pass a ‘significant Australian content’ test in order to claim the Producer Offset.

Australia has a variety of co-production partners

The word ‘co-production’ usually means official co-production in Australia. Official co-productions are made under the formal arrangements (treaties or memoranda of understanding) that exist between the Australian Government and the governments of other countries.

These arrangements foster cultural and creative exchange, allow the risk and >cost of filmmaking to be shared, and drive up quality and output.

Australia has arrangements with Canada, China, Germany, Italy, Ireland, Israel, Korea, Singapore, South Africa and the United Kingdom (treaties), and also with France and New Zealand (memoranda of understanding).

Negotiations are underway with the governments of Denmark, India and Malaysia. Cast and crew from the member states of the European Union can be involved in co-productions between Australia and its official European partners. Each co-production arrangement is negotiated separately and they are not uniform although there are commonalities between the arrangements.

Australia has arrangements with Canada, China, Germany, Italy, Ireland, Israel, Korea, Singapore, South Africa and the United Kingdom, and also with France and New Zealand.

40

Co-producers can commence co-productions with up to 40% of their finance plan.

The enthusiasm for co-productions is growing

Official co-productions are regarded as domestic productions in each partner country and can therefore take advantage of more than one set of support systems. In Australia that means a film or television program is eligible to apply for investment from Screen Australia, for example.

More importantly, because Australia’s Producer Offset equates to a guaranteed slice of the budget, Australian co-producers can access the Producer Offset without the project having to pass the ‘significant Australian content’ test. This means that Australian co-producers can commence co-productions with up to 40% of their finance plan already banked.

Australia is keen to increase its participation in the global film and television industry via co-productions and Screen Australia regularly hosts networking events outside Australia to facilitate and create opportunities for producers to explore co-production partnerships.

Examples of recent features that were made as Official Co-productions include The Nest, The Space Between, and Early Winter. Recent documentaries that were Official Co-productions include Death or Liberty, and Thrive, whilst recent television series include Cleverman and Banished. A significant amount of children’s programming is co-produced, with recent examples including The Deep, Winston Steinburger and Sir Dudley Ding Dong, The Day My Butt Went Psycho – S2, and Heidi.

Creative contribution, financing and expenditure must all be in proportion

There must always be a producer on board from each country, referred to in this booklet as ‘co-producers’.

Subject to some specific exceptions, all personnel involved in making official co-productions must be from the co-producing countries and the film must be made in the co-producing countries. That said, most arrangements allow for use of non-party nationals where:

the film is undertaking a location shoot in a third country (approval for which is at the discretion of the competent authorities), or

exceptional circumstances require the use of an actor from a third country.

All of Australia’s co-production arrangements require each co-producer to make a creative contribution to the project that is roughly in proportion to the finance raised by that co-producer. In addition, the percentage of the budget raised by each co-producer must be roughly in proportion to the amount of the budget spent on each country’s elements.

Each partner country has a ‘competent authority’ that assesses the requirements of the relevant co-production arrangement in accordance with its own guidelines. It is the responsibility of each co-producer to liaise with the competent authority in his or her country to ensure that the film meets its requirements.

Who negotiates the treaties and who administers the Co-pro Program?

The Australian Government negotiates treaties with the governments of other countries. Screen Australia administers the international Co-production Program.

The required approvals provide certainty

To qualify as an official co-production under any of the co-production arrangements, a co-producer must apply to Screen Australia for provisional approval before production commences.

At this stage, the Australian co-producer will need to satisfy Screen Australia that:

there is a producer from each country;

a co-producers’ agreement is in place between the co-producers that outlines the responsibilities and rights of each co-producer and fulfils all the requirements of the relevant co-production arrangement;

the financial contribution of each co-producer can be substantiated by at least a letter of interest from each financier;

the Australian co-producer’s financial contribution is reasonably in proportion to the Australian creative contribution (‘Australian points’ are used to assess the Australian creative contribution – see below);

the Australian co-producer’s financial contribution is reasonably in proportion to the spend on Australian elements; and

the project meets the terms of the relevant co-production arrangement.

Provisional co-production approval is jointly given by the relevant competent authorities.

Once a film or television program is completed, an application for final approval must be made to Screen Australia in order to secure official co-production status. At this point, in addition to providing all of the executed financing agreements, the Australian co-producer must provide a DVD copy of the finished film, the final budget, a full cast and crew list, and other documents as required.

Similarly to provisional approval, Screen Australia will not be in a position to give final approval until the relevant overseas competent authority has confirmed its approval.

Creative contribution is determined by a points test

The points test is a way of Screen Australia assessing the Australian creative contribution to a project. The proportion of Australian points must be reasonably equivalent to the proportion of the finance provided by the Australian co-producer.

The proportion of Australian points must also reach at least the minimum contribution level prescribed by the relevant co-production arrangement. (There is a different arrangement in place with each of Australia’s co-production partners, but the minimum is usually either 20% or 30%.)

If the Australian co-producer contributes half the finance, then half the points should be Australian, for example. Subject to the minimum contribution allowed in the relevant co-production arrangement, a 5% margin is allowed. So, if the Australian co-producer’s financial contribution is 60%, the Australian points must be at least 55%, for example.

For the points test, key creative roles are allocated a points value. If the person filling that role is an Australian national or permanent resident, a point (two points for the writer and director) is scored for that role.

Bear in mind that:

producers do not attract points because there must be, by definition, one from each of the co-producing countries;

an individual cannot be treated as two nationalities in one application;

the splitting of points may be approved on a case-by-case basis, for example, where each co-producing country has one writer each engaged on a television series;

re-voicing or narrating in the language of each co-production country will result in the points being split. For an animated project, voice cast is allocated three points, so if one voice track is undertaken in Australia and one track in the partner country, then the project scores 1.5 Australian points, for example; and

for features and television drama, if the film is a majority Australian co-production, that is, if the Australian financial contribution is greater than 50%, at least one of the four lead roles must be filled by an Australian national or permanent resident. In other words, there must be at least one point for key cast.

Different points tests apply to different types of production

The same points test applies to (live action) feature films and television drama but there is a different test for documentary and for animation (including feature documentaries and animations).

Each test aims to provide a degree of flexibility by allowing some of the roles considered in the points test to be selected from a shortlist.

Each test has a set number of roles that are always counted in the points test (top-line key creative roles) in Section A. Then, the Australian co-producer may select roles in Section B of the test (from a shortlist).

Each test also includes a potential point for ‘other creative role’ in Section B. If an Australian co-producer wishes to claim this point, he or she must convince Screen Australia that the role in question is particularly important for the film. For example, if the film is a martial arts feature, it may be possible to allocate a point to the fight choreographer or, if it is a musical, to the musical director or choreographer.

The aim of the test is not to maximise the number of Australian points, but to balance the proportion of Australian creative with the proportion of finance contributed by the Australian co-producer. The percentage of points ‘scored’ as Australian must be no more than 5% under the Australian financial contribution.

The feature films and television drama test – 15 points

Section A (always counted)

Writer   2
Director 2
DoP 1
Editor/Picture Editor   1
Cast (four principal roles). Note that if the project is a majority Australian co-production, at least one role must be filled by an Australian actor

Section B (select five of the below)

Composer 1
Costume Designer 1
Production Designer   1
Script Editor 1
Sound Designer 1
Underlying work   1
VFX Supervisor 1
Other senior key role specific to the film such as a Choreographer or Special Make-up Designer 1

The documentary test (including feature animation) – 10 points

Section A (always counted)

Writer   2
Director 2
DoP 1
Editor/Picture Editor   1

Section B (select four of the below)

Composer 1
Researcher 1
Narrator   1
Sound Designer, Recordist, Sound Editor or Mixer   1
Underlying work/subject matter   1
Other senior key role specific to the film such as underwater Director of Photography, Art Director or Visual Effects Supervisor   1

The animation test (both 3D and 2D, including feature animation) – 13 points

Section A (always counted)

Writer   2
Director/Animation Director 2
Cast 3
Key Animator 1
Storyboard Artist 1

Section B (select four of the below)

Editor/Picture Editor 1 Key Background Artist   1
Composer 1
Sound Designer 1
Underlying work   1
Key Model Designer 1
Voice/Actors Director 1
Other senior key role specific to the film such as 3D Modeller, Digital Compositor or Previs Animator 1

Further information on co-productions, including the guidelines, is available at www.screenaustralia.gov.au/coproduction

Statistics as at 31 December 2016

Co-production partners

Country Nature of agreement Date signed Entry into force date No. co-productions1 Total budgets (A$m)
France2 MOU 15 May 1986 15 May 1986 33 $275
United Kingdom3 Treaty 12 Jun 1990 27 Aug 1990 43 $500
Canada4 Treaty 23 Jul 1990 26 Sep 1990 60 $565
Italy5 Treaty 28 Jun 1993 12 Dec 1996 2 $6
New Zealand2 MOU 23 Dec 1994 23 Dec 1994 13 $72
Israel Treaty 25 Jun 1997 13 Jan 1998 1 nfp
Ireland Treaty 4 Feb 1998 7 Sep 1998 5 $30
Germany6 Treaty 17 Jan 2001 12 Sep 2001 11 $107
China6 Treaty 7 Jun 2006 19 Dec 2008 5 $87
Singapore7 Treaty 7 Sep 2007 16 Oct 2008 5 $52
South Africa Treaty 18 Jun 2010 22 Aug 2011
Korea Treaty 8 Apr 2014 12 Dec 2014

Partners by type of production

Country No. co-productions1 Features TV Drama
Animation Documentaries
France2 33 11 2 12 8
United Kingdom3 43 23 13 1 6
Canada4 60 10 18 23 9
Italy5 2 2 0 0 0
New Zealand2 13 4 6 1 2
Israel 1 1 0 0 0
Ireland 5 0 3 0 2
Germany6 11 9 1 0 1
China6 5 5 0 0 0
Singapore7 5 1 1 2 1

Total budgeted cost by type of production

Type No. co-productions1 Total budgeted cost (A$m)
Documentaries 29 $45
Feature films 61 $732
TV Drama 43 $487
Animation 38 $349
Total 171 $1,613

Budget ranges

Features

Budget range (A$m)8 Official No. co-productions to date 1990/91–2016/17 Official Share of co-productions to date 1990/91–2016/17 (%) No. of all features9 (Australian and co-productions) 1990/91–2015/16 Share of all features9 (Australian and co-productions) 1990/91–2015/16 (%)
Less than 1 0 0% 152 20%
1 to 3 4 7% 215 28%
3 to 6 10 18% 167 22%
6 to 10 12 22% 139 18%
10 to 20 19 35% 59 8%
20 + 10 18% 40 5%
Total 55 100% 772 100%

Mini-series

Budget range (A$m) 8 No. of official co-productions to date 1995/96–2016/17 Share of official co-productions to date 1995/96–2016/17 (%) No. of all mini-series 9 (Australian and co-productions) 1995/96–2015/16 Share of all mini-series 9 (Australian and co-productions) 1995/96–2015/16 (%)
Less than 1 0 0% 0 0%
1 to 3 0 0% 4 2%
3 to 6 0 0% 36 14%
6 to 10 3 17% 101 39%
10 to 20 14 78% 111 43%
20 + 1 6% 5 2%
Total 18 100% 257 100%

nfp: not available for publication

  1. Three-way co-productions are counted against each country involved. Therefore the total by country exceeds the total number of titles produced.
  2. Includes three-way co-production (Australia/France/New Zealand).
  3. Includes three-way co-production (Australia/Canada/United Kingdom, Australia/Germany/ UK).
  4. Includes three three-way co-productions (Australia/Canada/United Kingdom, Australia/ Canada/Italy, Australia/Canada/Singapore, Australia/Germany/Canada).
  5. Includes three-way co-production (Australia/Canada/Italy).
  6. Includes three-way co-production (Australia/China/Germany, Australia/Germany/UK, Australia/Germany/Canada).
  7. Includes three-way co-production (Australia/Canada/Singapore).
  8. Adjusted using the ‘non-farm GDP-implicit price deflator’; base year 2014/15.
  9. Productions under Australian creative control, including domestic productions, official co-productions and other productions involving shared creative control, i.e. with a mix of Australians in key creative positions.