The plan to turn Sydney and Melbourne into the ‘West End of the Asia Pacific’

Australian stage shows are being made overseas because of tax breaks, prompting producers to lobby federal and state governments to provide financial relief to save the live entertainment industry.

Theatre producers say a tax offset scheme modelled on Britain’s Theatre Tax Relief program and existing tax incentives for the movie and digital games sectors would encourage more live entertainment in Australia.

Theatre producers say a tax offset scheme would encourage more live theatre such as Muriel’s Wedding the Musical.Credit: Lisa Tomasetti

The peak body for the live performance industry proposed tax relief in a pre-budget submission to the federal government last year and wants the scheme to be on the agenda at this month’s meeting of state and federal cultural ministers in Cairns.

Live Performance Australia chief executive Evelyn Richardson said producers would be able to claim a tax deduction on a profitable show for its production expenses such as development of new work, touring, staging and copyright payments.

“We are giving it priority focus now given the Albanese government’s commitment to its national cultural policy, which will need more investment sources to deliver on its ambition,” she said.

Richardson said Britain and the United States used tax breaks to encourage investment in live theatre.

Tax breaks were a factor behind the decision to stage a new production of Moulin Rouge the Musical in the United States.Credit: Michelle Grace Hunder

“The UK incentives are attracting work that could be done here,” she said. “We also know that our local investors are now moving investment dollars to projects in the UK and not investing locally.”

Sydney Theatre Company executive director Anne Dunn said tax incentives would help transform the Sydney and Melbourne theatre industry into “the West End of the Asia Pacific”.

The STC generates about 60 per cent of its revenue from box office sales, compared to just 7 per cent from government funding.

STC shows such as RBG – Of Many, One and The Picture of Dorian Gray have toured overseas to critical acclaim, but Dunn said the company’s capacity to invest in Australian artists and stories is decreasing as costs escalate and government funding shrinks.

Dunn said it was uncertain whether the STC could afford to take its current show, Dracula, on tour next year “or even create works of that scale in the future, given the costs and complexity involved”.

Dunn said theatre costs had risen by up to 30 per cent and “without some shift in the economic landscape there is a real danger that fewer and fewer new Australian works will get made”.

Western Australia’s Black Swan State Theatre Company also wants tax relief for live theatre. The company’s chief executive, Ian Booth, said it would create jobs and investment in a sector in “desperate need of additional investment, especially post-COVID”.

“It will create certainty in terms of knowing that a proportion of the pre-production costs of a show are covered, and will incentivise us to develop new works,” he said.

Richardson said a tax offset scheme would be more effective than grants, removing GST for tickets or tax incentives for individual investors.

“At a time of rising production costs, cost-of-living pressures on audiences and static public funding, it is vitally important that we look at ways of developing new and sustainable sources of funding to create and present live theatre,” she said.

Producers such as Torben Brookman, founding director of GWB Entertainment, which staged Death of a Salesman in Sydney last month, believe tax breaks are more palatable to governments than boosting funding for the arts.

Brookman said a tax offset would lead to more shows being developed in Australia by providing an incentive to spend money.

“It also means that the incentive is only there if work is being produced and risks being taken,” Brookman said.

Global Creatures chief executive Carmen Pavlovic said a tax offset would make it easier to attract investment for a production “because you can show investors with certainty how this support translates to reducing risk and improving the likelihood of a return”.

Pavlovic said tax breaks were a factor behind the decision to stage a new production of Moulin Rouge in the United States. Global Creatures is also utilising Britain’s tax offset scheme to raise money to take Muriel’s Wedding to London’s West End.

Newtheatricals chief executive Rodney Rigby said his productions relied on overseas funding because of a lack of investment in Australia. The Australian production of Come From Away attracted a “pathetic” 0.3 per cent of locally sourced capital, he said.

Rigby said theatre producers would shun Australia without more support.

“Unless there are incentives for investors to develop a culture of investment here in Australia and to attract overseas funding, the future is going to be very dim,” he said.

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