The Location Incentive brought Hollywood to Australia and the question is who benefits

The Location Incentive started at $140 million in 2018. In the 2021-22 federal budget, the government tripled it to $540 million over seven years. The stated purpose is to attract large-scale international productions to Australia. The unstated purpose is jobs, specifically the kind of jobs that show up in electorate-level employment figures in Western Sydney and the Gold Coast.

The productions that have taken the money include Marvel’s Shang-Chi and the Legend of the Ten Rings (filmed in Sydney), Thor: Love and Thunder (Sydney), Ticket to Paradise (Queensland), and multiple Netflix and Amazon originals. Screen Australia’s annual report lists $1.7 billion in foreign production expenditure for the 2020-21 financial year, a record driven almost entirely by US studio shoots that relocated to Australia during the pandemic.

Those figures are real. The spend is real. The crew employment is real. What is less clear is what Australia gets from the arrangement beyond the immediate economic activity.

The jobs-versus-culture argument

The Location Incentive is a 16.5 per cent rebate on qualifying Australian production expenditure. A film that spends $100 million in Australia can claim $16.5 million back from the federal government. The rebate is uncapped per production, subject to the overall programme budget, and available to any foreign production that meets the minimum spend threshold of $15 million.

The argument for the programme is infrastructure. International productions hire Australian crews, rent Australian studio space, and use Australian post-production facilities. When they leave, the crews remain, the facilities remain, and the institutional knowledge remains. The theory is that a rising tide of foreign production lifts all boats, including the smaller Australian boats that could not afford to build those facilities alone.

The argument against is displacement. When Marvel books every available stage at Fox Studios for eighteen months, the Australian productions that would have used those stages go to the back of the queue. When a US tentpole pays above-award rates to secure the best crew, the local feature with a $4 million budget loses its first-choice cinematographer. The infrastructure argument assumes the benefits trickle down. The displacement argument observes that they trickle up.

What the crew data shows

Screen Producers Australia’s workforce survey paints a mixed picture. Crew day rates have risen by an average of 12 per cent since 2019, which is good for individual workers and difficult for local producers operating on fixed budgets. The number of crew working on international productions has increased by 40 per cent. The number of crew available for Australian productions in any given quarter has decreased by a corresponding margin.

The wage effect is not evenly distributed. Heads of department, particularly in visual effects, camera, and construction, have seen rate increases of 20 to 30 per cent on international jobs. Junior crew have seen smaller gains. The gap between senior and entry-level rates has widened, which creates a pipeline problem: if early-career crew cannot get on set because every available production is a closed-shop US studio shoot with its own imported department heads, the next generation of Australian cinematographers and production designers does not develop.

What the government is not measuring

The Location Incentive programme tracks expenditure, employment, and rebate dollars claimed. It does not track IP ownership. Every film made under the programme is owned by the foreign production company that brought it. Australia provides the labour, the locations, and a portion of the financing. The finished product belongs to someone else.

This is how runaway production works everywhere. The UK, New Zealand, and Canada all operate similar programmes. None of them pretend the arrangement is symmetrical. The difference in Australia is that the government describes the Location Incentive and the Producer Offset (the 40 per cent rebate for Australian content) as complementary programmes, when in practice they compete for the same finite resources: studio space, crew, and post-production capacity.

The question nobody is asking in the budget papers

The $540 million committed to the Location Incentive over seven years is roughly four times the annual budget of Screen Australia’s domestic production funding. That comparison is not entirely fair, because the Location Incentive is a rebate (the money comes back as tax revenue and crew wages) while Screen Australia funding is a direct allocation. But it reveals a priority. The federal government is willing to spend significantly more attracting other people’s stories to Australian soil than it spends supporting Australian stories made by Australian producers.

Whether that is the correct allocation depends on what you think the screen industry is for. If it is an employment programme, the Location Incentive is working. If it is a cultural programme, the answer is less straightforward. The crews building sets for Marvel are employed. The Australian screenwriter who cannot get a meeting because every development executive is servicing a US studio relationship is not.