The Australian is reporting ‘Hollywood Australia’ a $1.5bn movie blockbuster extravaganza, covering the surge in international film productions such as Thor: Love and Thunder filming in Australia. This is partly related to Australia’s success in managing COVID and also to super-charged tax incentives and other government subsides offered by the federal and state governments. For example, check out the PM’s July 2020 announcement New $400 million incentive to boost jobs for screen industry.
I’ve long been sceptical about the special industry assistance provided to the film industry. In my view, this assistance mostly benefits multinationals such as Disney rather than Australian taxpayers, who may end up being worse off (e.g. check out my 2017 Centre for Independent Studies Policy paper: The case against film industry subsidies).
In my latest Economics Explored episode, EP74 Industry Assistance and Crony Capitalism, I catch up with my good friend Darren Brady Nelson, Chief Economist at LibertyWorks and a policy advisor at the Heartland Institute, to chat about the economics and political economy of industry assistance. We also touch on the concept of Crony Capitalism. Like me, Darren has long been a critic of industry assistance, aka corporate welfare, and in the episode he tells me about his time in NSW Treasury advising against state government financial assistance for Fox Studios in Sydney.
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I totally agree with you and what a waste of taxpayers’ money. I think this is the way to spend hard earned taxpayers’ money in unproductive ways.
These billions of dollars should have been allocated and spent in fourth industrial revolution industries. In this case, it’s economic impact will benefit the general economy (re: GDP) and may attract talents and induce universities to focus in creating talents locally.
We shouldn’t be luring business from overseas nor interstate with subsidies. A non-bias low tax and minimal red tape domestic environment is the way to go to lure business to Australia and help it thrive in the long term.