Trade and Industry Minister Rob Davies on Tuesday announced that he will lower the domestic film expenditure threshold required for producers to benefit from government incentives.

Mr Davies is keen on promoting the expansion of the local film industry. The threshold has been slashed from R10m to R500,000, allowing small productions to benefit from the rebate scheme from October this year when it takes effect.

Between 20% and 25% of qualifying film expenditure in the country benefits from the rebate. Of the R8bn spent domestically on film production, government had paid out R2bn under the rebate scheme.

Mr Davies used his recent trip to the US for President Barack Obama’s Africa Leaders Summit to visit senior executives of major film producers in Hollywood to discuss South Africa as a location for US film production.

He met decision makers from 20th Century Fox, Sony, Marvel, NBC, Universal and Disney.

Increase in projects

While they were positive about South African facilities and technical expertise, the executives highlighted the high demand for limited production facilities such as studios in Cape Town, which indicated the need for expansion.

Mr Davies stressed the importance of the film incentive for South Africa to remain competitive in attracting foreign film productions.

The scheme had seen film projects increase from 49 in 2004 to 398 in 2012, of which 256 were local productions, 77 co-productions and 65 foreign productions.

A study in 2013 showed that in 2012 the industry employed 25,000 direct and indirect employees compared to 4,000 in 1995. It contributed R3.5bn to gross domestic product and R670m in tax.

"This is a niche industry where we are making significant headway and where the work of our department has contributed to this development," Mr Davies said.

Bollywood and Nollywood

The Indian film industry — so-called Bollywood — was also showing interest in South Africa as a location. Smaller producers were working with counterparts in Nigeria’s "Nollywood".

He would propose that his department and the Department of Arts and Culture send a mission to Hollywood to showcase the abilities of the South African industry.

The minister was upbeat about the response by members of the US administration and Congress to the extension of the Africa Growth and Opportunity Act when it expires in September next year, and about South Africa's continued inclusion after his engagements with them while in Washington for the summit.

The US administration had suggested that the parameters of the act be broadened to allow greater access for products from the continent.

While the outcome was "pretty good news", the minister noted that "nothing is final until the last gavel hits the table, but I think the signals are positive at this stage".

Concerns were raised about phytosanitary measures South Africa had adopted against US beef, pork and poultry.