IGEA welcomes the recommendations of Austrade, the South Australian Film Corporation and Film Victoria calling for a tax offset for video game development

IGEA has welcomed the recommendations by three government agencies, the Australian Trade and Investment Commission (Austrade), the South Australian Film Corporation (SAFC), and Film Victoria, who have all called for a new tax offset for video game development in their submissions to the Australian Government’s ‘Australian stories on our screens’ review.

IGEA and members of our industry including Gameloft Australia also made submissions to the same review, calling for the same recommendation of a tax offset for game development.

Austrade

Austrade has recommended that video games should no longer be excluded from the 30% PDV Offset, arguing that fixing this would “encourage Foreign Direct Investment (FDI) from global technology companies and grow Australia’s current digital games sector into a competitive and vibrant sector”.

Austrade also recommended that the Australian Government recognise video games as another platform to tell Australian stories for global audiences, noting that stories told through interactive video games are unique and “resonate in Australia, cross-culturally and across borders”.

Austrade highlighted some critical reasons why reform is needed. Austrade warned that potential investors were telling them that the exclusion of games from tax offsets was their major barrier to expanding into Australia, noting other countries were much more investment-friendly towards our sector. Noting the scale of the global video games industry, which dwarfs film and music, Austrade argued that expanding the PDV offset to games can help underpin Australia’s digital transformation.

Austrade also warned that there was an urgent need for a tax offset for game development even if just to help the film and TV sectors stay relevant and competitive. It noted that these sectors were rapidly being expected to adopt games technology for real-time production and VFX. COVID-19 restrictions had made this reliance on games technology even more critical, giving the example of how the use of a game engine for filming The Mandalorian helped them avoid the need for location shoots.
There is, therefore, a vital need for video games skills and expertise by the film and TV sectors. This can only come from a vibrant and robust game development sector that is essential for training and attracting the next generation of highly skilled and transferrable digital screen practitioners.

South Australian Film Corporation

In its submission, the SAFC has advocated for a single, harmonised, platform-neutral 30% tax offset that should also extend to video games. The SAFC highlighted the unfairness of video games being excluded from screen support policies such as a tax offset, especially “given the economic potential of the game development sector, and the fact that digital games are also stories on screens”.

The SAFC argued that supporting digital games met all the policy objectives of the Australian Government’s screen support policies, including: diversity in stories about Australians on screens, diversity in where screen content is made, supporting industry and skills (recognising the capacity of foreign productions to up-skill), and encouraging the development and retention of IP in Australia.

Film Victoria

Film Victoria, on behalf of the Victoria Government, likewise recommended the creation of a single 30% tax offset for content on all platforms, including digital games, in its submission. Film Victoria highlighted the fact that the visual effects skills supported by the existing PDV Offset are the same skills used in the production of digital games.

Film Victoria’s submission also noted that providing an offset for games has been recommended by previous Victorian Government submissions and the 2016 Senate Inquiry on the future of Australia’s video game development industry. These submissions and the Inquiry shared the view that government support should be provided as equitably as possible across related screen industries.

IGEA and industry

Our industry also made a number of submissions to the review, including IGEA and Gameloft who shared the same recommendations as the three government agencies.

In our submission, we prepared a new advocacy paper, titled Game Engine, that articulated Australia’s opportunity to build a game development industry that can generate $1 billion a year in mostly export revenue and employ 10,000 highly-skilled full-time workers by 2030. To achieve this, we have called on the Australian Government to implement a new 30% tax offset for video game development, similar to the current PDV offset, and to restore the $20 million Australian Interactive Games Fund.

Gameloft Australia, the largest game development studio in Queensland, also made a submission calling for a 30% tax offset. Studio Manager Dylan Miklashek highlighted the opportunity to create a thriving games industry similar to what countries like Canada and the UK, and many US states, have already built with government support. He also noted how a tax incentive would help larger studios like Gameloft Australia that play a crucial role in training and supporting the local games labour force to not only stay in Australia but to expand, hire new workers, and invest in more ambitious projects.

You can download the submissions that have been made public from the Parliament House website:
·       Austrade’s submission.
·       South Australia Film Corporation’s submission.
·       Film Victoria’s submission.
·       IGEA’s submission.
·       Gameloft’s submission.