Last week, the Senate Economics Committee met to examine the Federal Government’s new tax offsets for Australian film and television production. The result was to hand an unexpected fillip to Australia’s free-to-air TV networks, courtesy of Australian taxpayers.

The Committee held hearings on changes to Schedule 10 of the Income Tax Assessment Act 1997, which deals with rebates for domestic film production. The changes, announced with great fanfare by Helen Coonan and George Brandis in the budget this year (“Backing the Australian film industry”) will replace the old 10B and 10BA film rebates that stimulated some colourful tax minimisation schemes in the 80’s.

The new system offers a “refundable tax offset” of 40 per cent for Australian feature films and 20 per cent for documentaries, television series, telemovies and animations. When it was announced, Coonan argued it would “stimulate growth in the Australian [film] industry.”

But it now looks like the major impact of the updated rebate will be to line the pockets of the free-to-air TV networks. They’ll now get a 20% tax offset for local content production that they are legally required to do anyway, as part of their licensing requirements.

The Economics Committee took a submission from the Screen Producers Association of Australia which queried this:

“This is effectively awarding them a discount for meeting a licence condition,” they argued. But far more weight was given to the submission from the networks’ lobbying body, FreeTV, which argued that “production will be maximised if the market effectively allows and encourages production by all Australian producers.”

Well they would say that, wouldn’t they? Then again, it’s not as though market forces effectively apply to Australia’s cosseted free-to-air networks, which rake in a combined $3 billion in advertising annually and are protected from new competitors by Commonwealth legislation which mandates the number of TV licenses.

Under Helen Coonan and her predecessor Richard Alston, the TV networks have been placated at all costs while digital media in Australia has stalled. The trend continues into the last days of the Howard government, with last week’s decision by the Broadcasting Authority to allow the commercial broadcasters an extra minute of paid political ads in prime time during the election campaign.

Now, with the new laws to be passed this week, the networks can bank an extra 20% in tax offsets for production they have to do anyway. It’s corporate welfare on a grand scale, and you and I are paying for it.