What does it mean? Well, when it passes both houses, the offset will deliver a 30-percent tax incentive to game developers with projects on or above $500,000 AUD for eligible expenditures. Moreover, when the bill passes, development projects meeting the requirements for the 30-percent tax break that were started on or after July 1, 2022, will also be eligible.
This is effectively the beginning of a major turning point for game development in
Australia and sets the industry on a path to growth the likes of which we've never seen.
The introduction of
Treasury Laws Amendment (2022 Measures No. 4) Bill 2022 which, when passed will become the "DGTO", has been an incentive-in-waiting for a number of years. We
spoke with Ron Curry of the
IGEA about what this incentive is capable of earlier this year, who at the time said that his hopes with the DGTO would be that Australia would "become recognised as a powerhouse for creativity" upon its implementation, with the industry growing subsequently because of it.
Here's some official wording around the submission into parliament:
The sector has been eagerly awaiting the details of the DGTO, which have been released today following the introduction of this bill by the Albanese Government in the House of Representatives. Pending the bill's passage through both Houses of Parliament, local video game businesses and creators can now confidently scale up their studios and projects to deliver more quality Australian content to a global audience. At the same time, Australia will shine brightly in the global video games industry as the next big destination for business and investment.
The DGTO is the first federal policy of its kind and one of the best game development incentives anywhere in the world. It will deliver a 30% tax incentive to Australian video game developers with projects above $500,000, with eligible expenditure incurred from 1 July 2022 able to be claimed. It signals a commitment to the local games development industry and recognises game creation as an important part of our screen and cultural sector. Australian studios have already witnessed an impact on their businesses since Screen Australia launched its first funding program for video games in eight years earlier this year through the Games: Expansion Pack program. The DGTO will complement this fund and help to make Australia among the best places in the world to make video games.
Ron Curry, CEO of IGEA, commented, “We sincerely thank the Treasurer, the Hon Dr Jim Chalmers MP and the Assistant Treasurer, the Hon Stephen Jones MP for introducing the legislation as well as the Arts Minister, the Hon Tony Burke MP, for advocating for support for Australian game developers in both of his innings as Arts Minister and the time in between as the Shadow Arts Minister. We would also like to thank the Minister for Trade, Senator the Hon Don Farrell, for his recognition of our sector's enormous trade and investment potential and finally the Communications Minister, the Hon Michelle Rowland MP, for being our industry’s champion over many years.
“By backing and introducing the legislation into Parliament, the Albanese Government has provided certainty and growth opportunities for our highly creative and technically skilled industry. The Australian game development sector has embraced this opportunity. The job creation, revenue growth and international investment in game development will further cement and enhance Australia’s reputation for delivering quality content internationally. In particular, it will create a new generation of creative 21st century Aussie tech workers.
“Noting that the DGTO represents bipartisan policy, we look forward to a swift passage of the bill through Parliament. In addition to our gratitude to the Albanese Government, we also thank the Opposition, and particularly the current shadow and former Arts Minister Paul Fletcher MP, for proposing the DGTO last year and continuing to support it.
“The Office for the Arts and the Treasury have run a very effective consultation with industry and we expect the dialogue and education to continue as the DGTO rolls out. The DGTO, coupled with the many state government digital games funds and rebates, means that Australia has some of the most aggressive video game industry incentives available globally. We expect to see many multinational companies expand their operations to Australia and contribute to a thriving and sustainable game development ecosystem.”
Obviously this still has to pass both houses, but in terms of light at the end of the tunnel, this is a massive step for game development, nationally, and has many, many developers -- established and upcoming -- excited at the prospect of the DGTO being passed.
“For Tantalus and for Keywords Australia, the DGTO with turbocharge our growth and expansion, said Tom Crago, CEO, Tantalus. "That means more jobs and more videogames developed in Australia, for the global market. Australia has an opportunity to be one of the world's great hubs for game development. We’re ready to play.”
Naresh Hirani, Head of Studio, Riot Sydney added: ""In our 25+ years as a game development studio, Australia has continued to grow its recognition globally as a hotbed for talent in the gaming industry. During that time, the Australian Government's support has been instrumental in navigating the challenges our industry has faced, and now this tax offset scheme is a clear signal that Australia's importance to game dev is here to stay. As one of the largest AAA studios in Australia, we’ve seen first hand the challenges in retaining world class development talent and we’re thrilled for what the Digital Games Tax Offset will mean for growing, attracting, and retaining that talent here in Australia."
Now we wait with baited breath on the outcome of the bill's passing and then, heopfully, look to a pretty bright and fruitful future for game development in this country.
A number of AusGamers and QGL members have bounced around dev, feel free to chime in on the above in the Comments and let us know what you feel this means for the industry as a whole.
