Malta has dramatically increased the amount of money handed out to foreign film companies in a bid to attract more blockbusters to the island but industry insiders say it may be a gamble doomed to backfire.
The new payment system, introduced quietly in the lead-up to the last election, will see large-scale film and TV productions go from receiving up to a €200,000 cash injection to cover the cost of on-screen talent to a new maximum of €5 million.
The payment caps for behind-the-lens employees have also been rejigged.
These are over and above tax rebates which productions can apply for.
Film Commissioner Johann Grech and government sources have defended the move saying it will generate millions of euros in economic activity.
Meanwhile, local industry players have questioned whether the government is simply throwing money at large production companies to bring big-name films to the island for little more than “personal vanity”.
The matter was raised by the executive producer of a new Napoleon bio-pic which was partially shot in Malta earlier this year.
In a recent interview with industry publication Deadline, Aidan Elliot, who works with director Ridley Scott, described Malta’s new system as “the most generous cash rebate in the world”.
“It just absolutely cemented our decision to go there because not only did we have this great location and backdrop but we also had this incredibly, incredibly generous cash rebate,” he is quoted as saying.
“We took around 500 people to Malta and we were able to get the rebate on all of those people and that equipment,” he added.
How Malta's cash rebate system for films works
What is a cash rebate system?
Malta’s system dates back to 2005 when the island was first trying to emerge as a filming location for large-scale productions.
At the time, Malta offered to pay back up to 20 per cent of the cost of on-screen talent to a maximum of €200,000. This increased to 25 per cent when Labour was first returned to power in 2013 and then pushed up again to 40 per cent in 2019.
Then, on the eve of the 2022 election, the government increased the capping from €200,000 to €5 million for what are known as above-the-line costs, that is, actors, producers and directors.
The parameters for below-the-line – meaning crew – have also been made more generous too, opening it up to cover non-EU nationals.
Is the cash rebate system worth it?
Industry sources say this means that the film commission will likely overshoot its €9 million financial allocation for these rebates by about 300 per cent.
They raise doubts over whether these large productions leave that much in the economy in the first place and if the money could be better spent.
“The question immediately crops up: is it worth it? Of course, we will only know in a few years’ time but this is a lot of money to be throwing around, especially when so little is given to support the local industry,” a local film operator said on condition of anonymity.
Replying to questions sent last week, Grech said improvements to the cash rebate programme had been introduced “in order to remain competitive within the global film and TV market, securing more projects and creating more local jobs.”
The film commissioner added that the new cash rebate programme in Malta has a strict skills test aimed at encouraging productions to engage local crew.