The Game Developers Association of Australia (GDAA) have had their request for tax rebates for the film industry to be extended to investment in games developing rejected by Federal Government Communications IT and Arts Minister Senator Coonan.

In a previous entry, >>Howard Government to ‘bring Hollywood home’ through tax breaks<< I mentioned the new package the federal government was providing the film industry to ‘bring Hollywood home’ which included a 40 percent refundable tax rebates for film production.

The entry was also critical of the package and its ambitious goal:

…on first glance the tax incentives appear somewhat short-sighted or parochial on the policymakers front by exacerbating an artificial division between supporting “Australian stories” and allowing international films to use local locations and talent.

Quoted on Builder AU news, the Minister said in a written response to the GDAA:

“The Screen Media Support Package announced in the Budget has the potential to benefit screen content producers of all kinds. While games will not be eligible for the tax offsets announced as part of the Package, the introduction of a Location Offset is expected to have positive indirect flow-on effects for screen businesses, as digital and visual companies develop larger and more skilled workforces.”

Builder AU quotes GDAA CEO Greg Bondar saying the introduction of a rebate would have led to an additional AU$25 million in new investment into Australian-developed titles.

Raising the game developers’ interest in receiving government support to encourage investment, the aforementioned DISCONTENTS entry asked the question “why film and not games?”

On the game / film divide, one could argue that the film industry still has the justification of “culture” on its side, having enjoyed a long history of support from a cultural policy approach. Film and television policy has long supported the production of “Australian” programs to ‘protect our culture and national identity.’ Like nobody would watch Australian programs if there was not a 50 percent local content quota on free-to-air broadcasts? Games in contrast are rarely distinguishable as ‘Australian’ (and probably export better than films for that very reason!)

But if the goal of the film industry package is to increase economic growth, then games developers have a very cogent argument for the package being extended to them.

Undoubtedly, the Minister, and Treasury, would be anxious about extending tax incentives beyond the industry that the policy was originally designed for. Fears that such a move would open the flood gates to lobbying from any number of industry bodies claiming that they are no different to the industry sector receiving benefits. With this in mind, it is not all together likely that the tax incentives will be extended to the games sector if Labor wins office this election, despite their being “very sympathetic”.

It is an indictment on industry [industrial] policy that an industry should need to show it is in danger of dying – that capital will dry up and jobs will be lost, before a government offers any kind of support. One has to wonder whether if the Minister’s response would be any different if the GDAA showed that they were being undercut by programmers and developers in China and were set to lose x number of jobs without government intervention. That is not meant to be a statement advocating the propping up ailing industries, nor one that supports the indiscriminate provision of tax dollars to high-growth industries.

One does wonder though, whether the recent ‘lull’ in industry policy in Australia is not so much a sleeper as it is the conservative continuation of prevailing protection for inefficient industries.