The government has plans to change Malta from being a mere location for the filming of movies to having a movie industry, Investments and IT Minister Austin Gatt said.

The minister was speaking on Wednesday when he announced the entering into force of the law that regulates the setting up of the Malta Film Commission, as well as regulations aimed at offering incentives to invest in and boost the sector.

Despite the fact that several films have been shot in Malta, the movie industry did not exist and needed to be built "from scratch", he insisted.

With this aim in mind, Dr Gatt announced that rebates on the expenditure of production companies in Malta were being introduced and one of the first beneficiaries was Steven Spielberg's production, currently filming in Malta.

It would be taking back about 15 per cent of its expenditure on the island, which has been estimated to amount to Lm500,000, based on the fact that the production would be spending Lm2.5 million in its six weeks of filming in Malta.

It is normally calculated that every $1 spent generates $3 in the economy, meaning that the Spielberg movie would be pumping Lm7.5 million into Malta, Dr Gatt said.

A legal notice on the incentives would soon be published but the policy was already in practice and even the BBC1 docu-drama Blackbeard, which finished shooting last week, had benefited from them.

Every movie shooting in Malta could now apply to take back not more than 20 per cent of the amount spent on what left added value for the Maltese, such as on hotels, restaurants and car hire, Dr Gatt explained.

Since the incentives started to be promoted in February, about seven productions had come to Malta, which was considered a good response. Moreover, they were high profile and would have a ripple effect. In Mr Spielberg's movie, Malta was acting as eight different countries - a major bonus when considering the expenses spared.

Dr Gatt said the ministry has also allocated Lm1.5 million to this sector until December 2006 - a sign of the government's belief in its potential. He considered it to be a substantial sum, which was being directed towards a new industry that was sure to bear fruit.

For years, the Malta Film Commission, set up in 1999, has recognised the need to introduce fiscal and financial incentives to help it and others involved in the field in their struggle to ward off stiff competition from other countries, which were quick to create interesting packages to attract productions.

Incentives in the form of substantial tax breaks for those who wanted to invest in facilities and equipment related to the film industry were also being introduced, Dr Gatt said. Anyone who decided to invest in film-related projects, including film studios and sound stages, among others, would have advantages under the Business Promotion Act.

The way things stood, a director such as Mr Spielberg had to bring everything with him, Dr Gatt pointed out.

The problem was that it was a "chicken-and-egg" situation: what came first - investment in the industry or having a constant flow of productions coming to Malta? Without the facilities, productions would not come over but without productions, no one wanted to invest. Dr Gatt said the idea was to work on moving both sides together.

Incentives had already been available under the Business Promotion Act to encourage the private sector to invest in the industry but these were never taken up over the years, possibly because of the lack of a flow of film productions.

Asked what would be different now, the minister said the quality of the incentives was more attractive and, coupled with the stepping up of the government's drive and commitment to give birth to and boost the industry, the private sector would be encouraged to invest.

The idea was for the country to be a centre in the Mediterranean for the production of films but also an industry, which would bring with it economic added value.

The plan was to invest in facilities, increase the technical capabilities of the locals and create relatively regular employment, Dr Gatt said, outlining four methods that have been devised to address the challenge: the creation of a film industry is high on Malta Enterprise's agenda and is one of the strategies it is targeting. It would be backing up the commission, which already operates from its premises.

Meanwhile, film legislation was recently enacted and the Film Act should come into force this week, plus a Film Commission board has been set up, chaired by Chris Grech, former Malta Tourism Authority chairman.

Oliver Mallia remains the Film Commissioner, while members of the board include former Data Commissioner John Mamo, Jonathan Shaw and Monica Attard, who was nominated by the Tourism Ministry. Together, they were faced with the major challenge to see how to develop this new industry and help it evolve.

A total of 25 consecutive weeks of continuous filming are scheduled from the first week of June to the last week of November, with two movies being shot simultaneously at one stage, Dr Gatt said.

But, despite the advantages Malta offered, it had to be aware of the competition from North African and Eastern European countries, which also had facilities and were cheaper. Greece, he said, had launched new incentives after Troy was filmed in Malta.

Dr Gatt said that the water tanks at the Mediterranean Film Studios, which date back to the 1960s, were no longer unique. There had been no investment, which meant they were lagging behind, while the rest of the world had caught up.

He commented about the prevalent local problem of "biting the hand that feeds you". He related ridiculous stories of people who were requesting "invented" sums of money from the Spielberg production. For example, restaurants owners, whose premises were hundreds of metres away from the filming, claimed their business was suffering; or even that a customer had fallen ill due to the confusion caused by filming.

Although this happened everywhere, Dr Gatt said such stories travelled fast and would put off other movies from shooting in Malta.

Dr Gatt said the industry depended more on low- to medium-budget productions and the plan was to have a constant flow of these. Attracting the big-budget blockbusters every one to two years, such as the Spielberg movie, would be the cherry on the cake.

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