Govt unveils support for indie game developers but industry waits on tax cuts

Joseph Brookes
Senior Reporter

Small Australian videogame developers will have access to $150,000 government grants under a revival of a federal government assistance program. The inclusion of smaller companies comes as larger ones have been left waiting on a new 30 per cent tax offset, with industry warning the uncertainty is holding the sector back.

On Wednesday Screen Australia announced it will provide $6 million over the next two years for a new Games: Expansion Pack program to support small video game studios.

Original games on any platform with a budget below $500,00 are now eligible for grants up to $150,000 from Screen Australia to assist with development and some marketing costs.

IGEA CEO Ron Curry (left) with Communications Minister Paul Fletcher at the launch of Screen Australia’s Game: Expansion Pack. Image: Faro Photography

Interactive Games and Entertainment Association (IGEA) chief executive Ron Curry welcomed the Expansion Pack program, which the industry group had been lobbying for.  He said it will create an “accelerator” effect for small studios, allowing them to bring on staff and increase output much more quickly.

“It’s great that it’s kicking off today — it’s not a promise. It’s in effect today which is really exciting,” Mr Curry told InnovationAus.

The Screen Australia program comes from the agency’s existing budget rather than new federal funding. It is seen as complementary to an incoming Digital Games Tax Offset (DGTO) announced by the Coalition government nearly a year ago to support companies with larger budgets.

The DGTO will offer a 30 per cent tax rebate to eligible games businesses that spend a minimum of $500,000 on qualifying Australian games expenditure.

The initiative was widely welcomed when announced last year as a way of supporting Australian companies and attracting global gaming giants to establish a local presence.

But there are now concerns about whether the July implementation deadline will be met. Initial consultation has concluded but draft legislation confirming what expenditure is eligible has not been released.

There are only a handful of sitting days left before the election which will mostly be dedicated to budget measures.

Mr Curry said the industry has been told an exposure draft will be released this month, with another month for feedback. He said the consultations so far have been encouraging but it was disappointing the legislation still hasn’t been seen.

“We would have liked it to be a lot quicker. We would have loved the legislation to have been passed [by now],” he said.

“There’s uncertainty come 1 July for those businesses we know are sitting there chomping at the bit to move to Australia. But of course, you can’t make a big business decision like that without certainty. And without the legislation, we don’t have the certainty so that’s a disappointment.”

The underlying legislation will be key to the DGTO scheme, setting the terms around access and eligibility.

If too much is excluded or access is considered too difficult, foreign companies will simply look elsewhere, Mr Curry said.

“If it’s too hard, companies would just go where it’s easy to do business. Or just not do as much business if it’s too hard. And the government get that, we’ve had that conversation with them,” he said.

It is increasingly likely the legislation will not pass until after a May election. But Mr Curry said he is confident even a change of government would not derail the program, pointing to Labor’s support for the local industry over many years.

“We’ve seen it in [Senate] estimates, we’ve seen in Parliament — we’ve seen their contribution in various hearings. They’ve always been behind the supporting video game industry,” Mr Curry said.

Applications for Screen Australia’s Games: Expansion Pack program are open until April 28.

The primary intention of the grants is to fund the creation of new titles. However, applications for live ops development of existing games are also eligible.

Do you know more? Contact James Riley via Email.

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