The Australian Government Has Finally Responded To The Federal Inquiry Into Video Games

In April 2016, the Senate held a parliamentary inquiry into the state of the Australian video game industry. After weeks of deliberations and consulations with industry and bureaucracy, the cross-party committee made 8 recommendations that included arguing for the reinstatement of the Australian Interactive Games Fund.

Earlier today, after missing its initial deadline to respond to the committee’s recommendations, the government has responded.

The response, which can be read in full here, noted the majority of the inquiry’s recommendations without making any commitment to support them in the future.

Only one recommendation – that the government “facilitate dialogue between video game industry associations and groups that use, or could potentially use, serious games” – was supported “in principle” by the government, although the response notes that such dialogue was “an initiative for industry to pursue”.

“The Government has outlined a range of measures that are being developed or enhanced to support a more innovative and entrepreneurial Australia through the National Science and Innovation Agenda (NISA),” the government’s response reads.

Here is a summation of the government’s response to the recommendations:

That the government introduce a funding scheme based on the former Australian Interactive Games Fund:

The Government notes this recommendation. The games and interactive entertainment sector is constantly innovating as its audience wants highly technically advanced products … The Government will continue to explore mechanisms that will assist games businesses and demonstrate to the private sector the potential of this sector to drive innovation. Measures that are available under NISA that relate to tax incentives, incubators and crowd funding are outlined in response to recommendations 2, 3 and 5.

That the government introduce a refundable tax offset to assist the development of video games:

The Government does not support this recommendation … government may be best placed to support industry through broader initiatives designed to improve the general regulatory and cultural environment for innovation and therefore promote jobs and growth in the sector, rather than through an industry specific tax offset. Additionally, the Incubator Support element of the Entrepreneurs’ Programme was introduced to provide funding to incubators … supported incubators may be suitable for supporting start-ups in the video games sector. The R&D Tax Incentive is a broad-based, market driven program accessible to all industry sectors … the [incentive] offers a 43.5 precent refundable tax offset for eligible entities with a turnover of less than $20 million and 38.5 per cent non-=refundable tax offset for other eligible entities for the first $100 million of eligible expenditure … Video game development studios undertaking eligible R&D activity are supported under this initiative.

That the government encourage and financially support the creation of shared working spaces modelled on The Arcade in other locations, and that the government consider establishing an innovation hub in a regional centre for video game development and other tech start-ups:

The Government notes this recommendation … one of the elements of the Entrepreneuers’ Programme is the Incubator Support initiative, as noted above. … The Government also considers development of location-specific hubs is an initiative that can be driven by state governments very effectively … state governments are best placed to propel such initiatives due to the nature of the partnerships required to develop shared working spaces, or hubs, such as industry, businesses, community and educational institutions.

That the government encourage the further uptake of ‘serious games’ in health care, education and other sectors, and the production of these games locally, as well as facilitating dialogue between industries that either use or could potentially use ‘serious games’:

The Government supports this recommendation in principle, but considers that such developments are an initiative for industry to pursue. … The Government encourages [the Interactive Games and Entertainment Association], [the Game Developers Association of Australia] and other peak organisations to pursue connections with relevant sectors of government and business that represent potential markets for serious games.

That the government consider the tax implication for crowdfunding for start-ups, including whether temporary tax relief should be made available:

The Government does not support this recommendation, however notes existing measures in place … the Government has amended the tax system to incentivise investors to direct their funds towards high-potential start-ups. The measures include concessional tax treatments for investors who support eligible start-ups … another alternative is crowd-sourced equity funding, an online fundraising platform.

That the government develop a discussion paper and consult on the use of the Export Market Development Grants (EMDG) scheme for businesses working online:

The government notes this recommendation … for the 2014-15 grant year … there were 161 recipients of grants totalling $8 million who identified as being in the ‘software development’ industry, which includes game developers. The EMDG scheme also allows businesses to access the scheme collectively through approved bodies promoting on behalf of their industry (at a national, state of local level) and to joint ventures approved under the EMDG Act.

That the government factor whether the video game industry is improving the diversity of its workforce and is providing fair employment conditions:

The Government notes this recommendation. All Australian employers must comply with the relevant workplace legislation and regulations.

The government commit to rolling out 21st century broadband infrastructure:

The Government notes this recommendation. The Government’s commitment to Australians was to speed up the rollout of the National Broadband Network and deliver broadband upgrades as soon as possible, and that is being delivered … the network is scheduled to be completed by 2020. When the network is complete, all Australian homes and businesses will have access to a minimum wholesale download speed of 25 megabits per second, with nine out of ten users in the fixed line footprint able to access download speeds of 50Mbps or more.

The government’s 14 page response can be read in full on the Parliament Info website. The response from industry can be seen below.