2021-22 Pre-Budget Submission to the Australian Treasury
IGEA has made a Pre-Budget Submission to the Australian Treasury ahead of the 2021-22 Federal Budget.
In our submission, we have continued our campaign advocating for the Australian Government to introduce a 30% refundable tax offset for video game development and to restore the $20 million Australian Interactive Games Fund.
In our submission, we highlight that:
- Video game development is by far the largest creative or artistic industry in the world – estimated to have been worth $250 billion in 2020 globally. Despite this, the Australian video game development sector is many times smaller than the equivalent industries in Canada and the UK, and even lags behind New Zealand’s sector.
- Australian video game developers are the only segment of the overarching Australian creative industry that receives zero funding or support from the Australian Government. In fact, Australia is one of the only advanced economies in the world with no federal funding for video game development.
- As a result of this lack of support, we anticipate that billions of dollars of investment, exports and economic activity have been lost from the Australian economy over the past decade. However, if this is fixed, we anticipate that billions will be gained, with global games companies currently scoping Australian cities as a destination for new studios. By applying a 22% CAGR to our industry, a rate that other territories around the world have been able to achieve with a tax offset, Australia could have a video game development industry that generates $1 billion a year by 2030 (almost all in exports) and employ 10,000 fulltime workers.
- While video game development is certainly part of the arts sector, the game development process itself resembles an advanced digital manufacturing industry with an almost limitless export market. Video games are highly-valuable technology products, and unlike most other Australian-made products, games are exported digitally and can also generate revenue long-term (many Australian games are still generating significant revenue even years after their release). Game development also creates highly innovative and versatile technology-based workers that have inherently future-proofed skill sets.
- While a tax offset and a restored games fund would involve budget expenditure, it would comprise only a small proportion of the total amount of investment into screen production that the Australian Government already provides (funding that our sector is locked out of even though we are also part of the screen industry). Supporting video game development would be tax-neutral at minimum, and would almost certainly contribute far more to the Australian economy than it would cost to the Budget. In fact, analysis of the video game-specific tax offsets available in the UK and France show that each $1 of Government funding led to around $2 back in new taxes.
- Supporting video game development is not unusual – in fact, not supporting it is. In recent months alone, two Commonwealth agencies, Austrade and the Australian Small Business and Family Enterprise Ombudsman (which is part of the Treasury portfolio), have publicly called on the Australian Government to introduce a tax offset for video game development.