As predicted by Simon Nasht at last week’s 2012 AIDC conference in Adelaide, the Federal Court has rejected Screen Australia’s appeal against the documentary series Lush House being granted the producer offset.

As Geoff Brown says, SPAA urged Screen Australia not to appeal against the ruling that Lush House was eligible for the offset, but they went ahead anyway. This will now add to the uncertainty about the definition of what is a documentary, for the purposes of the Producer Offset.

Here is Brendan Swift of IF Magazine’s take on the issue (Wed 07/03/2012)

The Federal Court of Australia has confirmed that TV documentary series Lush House should qualify for the Producer Offset rebate after Screen Australia challenged last year’s similar decision by the Administrative Appeals Tribunal.

The national screen agency originally rejected Essential Media and Entertainment’s Producer Offset application because it viewed the ten-episode cleaning series as a ‘reality’ program. However, Essential argued that the series, which follows household expert Shannon Lush as she gives cleaning advice to homemakers, was similar to another of its programs, Is Your House Killing You?, which did receive the tax break.

The AAT confirmed Essential’s position although Screen Australia then challenged that judgement in the Federal Court.

Essential said the Federal Court did not find any fault with the process followed by the lower court in determining that Lush House is eligible for the 20 per cent tax rebate available for broadcast documentaries.

Essential Media and Entertainment chief executive Chris Hilton said the company is pleased with the Federal Court decision.

“It represents a win for the Australian production industry as a whole and should provide more certainty to producers who are seeking to invest the Producer’s Offset as part of their project finance,” he said in a statement.

“The factual production industry can now move forward with the hope that Screen Australia will consult closely with it on clearer definitions for eligibility for the Producer Offset program. Essential will continue to work with Screen Australia on this issue and continues to partner directly with Screen Australia on an exciting slate of films and television programs over a range of genres.”

Screen Producers Association of Australia executive director Geoff Brown said it is concerned that Screen Australia has wasted taxpayer funds pursuing the case, which has also caused uncertainty across the industry.

“The uncertainty for producers and financiers that Screen Australia’s actions have caused, has seriously disrupted production,” he said in a statement. “We had requested both management and the board of Screen Australia not to take this to the Federal Court and to reach industry agreement as to what qualified for the Producer Offset. Unfortunately our request fell on deaf ears.”

Screen Australia said only four screen projects which have sought Producer Offset status as a documentary have been rejected from 252 applications since July 2008. The 248 final certificates approved by Screen Australia represented a total tax rebate of $44.2 million.

“Regardless of the definition of documentary adopted, there will always be some programs which are at the margins, and which challenge classification as documentary,” Screen Australia said in a statement. “It is, and has always been, Screen Australia’s intention to make decisions about these programs in good faith, reasonably and in accordance with law.”

The screen agency will not appeal the Federal Court decision.

Nonetheless, the decision will also place further focus on the inherent conflict of interest Screen Australia has in not separating its direct investment team and Producer Offset assessment committee – a situation that SPAA has been particularly critical of. (Screen Australia’s head of development, Martha Coleman, and head of production investment, Ross Matthews, sit across both committees.)

The Offset was designed as a market-based funding mechanism that has little cross-over with the cultural aims of Screen Australia-funded documentaries, according to SPAA.