Government Ministers and officials who should know better have once again been seduced by the glamour of Hollywood, with the Australian Government offering around $22 million to Disney to secure production of Pirates of the Caribbean 5 in Australia (see Brisbane Times coverage). The Queensland Government also offered payroll tax exemptions so the film would partly be shot in Queensland. This is an example of the selective industry assistance most of us have come to accept is bad in other sectors (e.g. the car industry). It encourages the inefficient use of resources that could be better employed elsewhere. We don’t really face a choice of having people employed on an international film production or having them unemployed – and if that really is the choice we should make sure they get some re-training for a more reliable job.
Further, even if there were some benefit to the local economy of securing this production, the incentives provided, which are going to a highly-profitable, largely foreign-owned company, mean we’re most likely coming out behind on a cost-benefit analysis. Disney’s net profit was $2.25 billion in June quarter 2014 (see the Quarterly Earnings Reports). I have no idea why Australian taxpayers should be contributing to its future profits.
I’ve previously written about the folly of chasing after international film productions:
Moochers making movies: Government assistance to the film industry
Queensland Economy Watch 
I agree that the money could be better spent. These jobs are temporary and given the profits those movies make and the obscene amounts paid to the stars, it beggars belief that taxpayers have to subsidise these leeches.
Totally agree, Jen. Thanks for the comment!
When it comes to the subsidy contributing to the profits of Disney, another beneficiary will also be Village Roadshow via the film studio and theme park on the Gold Coast. I haven’t looked at the details but did see some critical comment previously of a tourism subsidy arrangement to promote the Gold Coast as a theme park destination. The partners and beneficiaries here are Village Roadshow and Ardent Leisure (ex a Macquarie trust). Both profitable ASX listed companies which seem to have been doing quite well in recent years and not in need of any hand-out to promote themselves.
Good point, thanks, Mark. I think they have some special water tank at the Gold Coast studio for filming ocean scenes. We definitely shouldn’t be giving Village Roadshow and Ardent Leisure handouts.