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Australia has reached a major breakthrough in support for its struggling games development sector, with state officials approving a $1.9 billion R&D tax bill.

The bill, set to be enacted in July, will support numerous companies all grouped within the ‘digital creative industries’ umbrella.

Each of these companies can save money on research and development costs for a range of projects, providing certain conditions are met.

Ron Curry, CEO of the Interactive Games and Entertainment Association, says the move “has already attracted the interest of many global game publishers”.

Australia’s game development sector has been sinking at an alarming rate, recent data suggests.

A February 2011 study, published by the Interactive Skills Integration Scheme, claimed that Australia had lost about 1,000 development jobs since 2008.

If true, that would mean the Australia has lost over 50 percent of its development workforce in three years.

The Australian Government sees the digital creative industries as key to its growth strategy, and has pledged to throw $1.9 billion ($1.8 AUS billion) behind the R&D scheme.

Antony Reed, CEO of the Game Developers Association of Australia, backed the new policy.

“Since the first announcement of the R&D Tax reform and in our own discussions with the [culture] Department, it became very clear that the government has confidence in the abilities of Australian SMEs to deliver ground-breaking innovations for the global market,” said Reed.

“Innovation is at the heart of game development and the introduction of the new legislation not only assists in levelling the global competitive playing field, but also affords the local industry the opportunity to challenge traditional gameplay conventions,” he added.