Some of Malta’s leading film-makers want to know how much of the money spent by big films shot in Malta goes to local people and companies. 

They believe that the current cash rebate system used for the industry is designed to benefit foreign companies and individuals, with Maltese workers only landing low-end service jobs in the industry.  

While the film-makers say they are in favour of offering cash rebates to productions, they want the scheme to be re-engineered to push local film-makers and crew into higher-end jobs, growing the local industry.

The film-makers broke their silence after Times of Malta revealed on Sunday that the goverment will give almost €47 million in taxpayers’ money to the company producing the Gladiator sequel and that it will have given more than €143 million to different films and series in five years – with the big chunk of the money going to foreign production houses.

“The most pressing concern is related to what percentage of the cash rebates for the last three to four years actually covers the costs of hiring and utilising local talent and crew,” the Malta Entertainment Industry and Arts Association (MEIA) told Times of Malta. “MEIA believes that limits should be placed on the eligibility of foreign expenditure across every production.”

The MEIA said that it favoured the rebate system but wants it redrafted following consultation - something it said is generally non-existent. 

The Malta Producers’ Association (MPA) also said it supports the cash rebate scheme but wants the scheme's guidelines revised. 

It said its new committee is prepared to meet Tourism Minister Clayton Bartolo and Film Commissioner Johann Grech “to discuss the current financial incentives programme and ascertain how these can be revised and renewed”. 

‘An attack on Malta’

In an unusual video message released on Facebook on Friday, Film Commissioner Johann Grech fired back at critics of government spending on big films. 

He told local film crews that anyone criticising the rebates was attacking their jobs, their businesses and their livelihoods – and was attacking the country itself.

The scheme gives production houses a 40 per cent cash rebate if they film in Malta.

It was launched in 2005, giving 20 per cent cashback on local expenditure back then, but was then broadened dramatically in 2019 and again before the election last year, making almost the production’s entire expenditure in Malta eligible for the rebate – including a chunk of Hollywood actors’ salaries.

The government has so far been extremely secretive on film spending and has defended the cash rebate, saying Malta gets back much more money for the 40 per cent it forks out.

However, it remains unclear what value for money Malta gets: claims that the country pockets the remaining 60 per cent of expenditure are misleading, as film productions only spend a small portion of their expenditure in Malta. 

The rebate scheme, on the other hand, now applies to all expenditure incurred by a production, including money spent overseas. 

'Maltese crew get the lower-end jobs'

Local film-makers say Grech's broadside against people "attacking" the rebate system is misguided. 

It is not the rebate that is the problem, they say, but rather the way it is designed to throw uncapped amounts of money at wealthy foreign companies.

Many people might think giving 40 per cent cashback to big films leaves a comfortable 60 per cent in the local economy, they said, but that would only be the case if the film’s entire budget was spent directly in Malta – which it clearly is not.

A lot of money goes to pay salaries of Hollywood actors and crew and to hire high-end equipment and services from all over the world.

It is unclear how much of a film’s budget is actually spent in Malta, on Maltese people and companies, they said, especially since the jobs that are being created for the Maltese people are generally lower-paying ones.

‘Policy must put local industry at the forefront'

Film-maker Martin Bonnici said the problem is there is no data on which to assess the rebate scheme. No such data has ever been made public in the past 20 years, he noted. 

Bonnici would like authorities to make more effort to encourage an endemic film industry, rather than just focus on servicing foreign projects. 

“Maltese projects - not simply filmed in Malta but by Maltese writers and directors - will not only help Maltese society develop but also promote Malta more than any servicing project can and eventually bring more capital to Malta through the profits that films can make,” he said.

‘€47 million on one film is not very clever’

Film-maker Oliver Mallia said he believes the rebate scheme has been "pivotal" for the local film industry to attract big-budget shows like Game of Thrones as well as smaller local productions like Luzzu.

But he says it is “not very clever and responsible” to spend €47 million on any film and he fears it is not sustainable for a small country like Malta.

Previously, the scheme capped rebates on the salaries of actors, directors and producers at €500,000. That capping was raised dramatically to €12 million, without consultation. 

“It was necessary to increase it to remain competitive, but it was not necessary to raise it that much, especially considering that most of these costs would not be spent in Malta,” Mallia argued.

Similarly, he questioned the wisdom of not having any cap on worldwide spending that is eligible for a 40% cash rebate. 

Maltese productions are also eligible for the cash rebate scheme, but since 2005 only a handful have had a budget large enough (all of them under €1.5m) to benefit from it. 

“This is why it is frustrating to see Gladiator 2 taking away €46.7m of taxpayer money while local film producers have had to share a total of €1.5m in public funding over the past 2 years to develop, produce, and market their own films," Mallia said. 

“Local productions and co-productions barely have an impact on the public purse, yet these are shows that hire 95% of their crew from Malta, expose crew to more responsible roles, and spend most of their budget here."

Mallia said he was sceptical of the government's claim that allowing productions to recoup 40% of costs related to all their cast and crew from anywhere in the world was economically beneficial to the country. 

Tourism Minister Clayton Bartolo has promised to release a study in the coming weeks to illustrate the film sector's impact on the economy. 

Mallia said he hoped the report would be a detailed one "that clearly demonstrates how our country will now have more local film-makers, more film suppliers, and most importantly, more of our own films produced as a result of paying nearly €50 million to one American sequel.”

‘It must be sustainable precisely because it’s good’

Film maker Malcolm Scerri-Ferrante also believes the cash rebate scheme is crucial for the industry’s survival. But that is exactly why the government must make sure it is sustainable, he argued. 

Scerri-Ferrante said the €47 million Gladiator rebate would have made much more financial sense if the production spent over €100 million in Malta. 

“What is important is that the majority of the expenses are made in Malta so the multiplier effect in the economy can do its work,” he said. “Unfortunately, the changes made last year to the incentive do not guarantee this.”

‘Big companies seek small salary packages’

Actor and crew member Matthew Maggi, who is based in Canada, believes Malta's overly generous rebate scheme is only part of its race to the bottom.

Big productions look out for countries like Malta not only to get a good rebate deal, but also because filming here allows them to circumvent film workers unions’ policies and directives.

“Malta is a non-union territory and Hollywood prefers to work in countries like ours, where it is allowed to operate with the lowest salary packages it can get,” he said.

“There’s a reason why Gladiator is set in Rome but did not go to film in Rome and instead preferred to build Rome in another country. Because in Malta we allow them to take full advantage of a system that exploits the workers.”

Gladiator filming had to stop last month because of a strike called by a Hollywood actors’ union, and Maggi believes an even harsher crew strike will hit the industry next year.

He said rebates in Europe are around 25 or 30 per cent, and even there, people are questioning whether that is too much. And even though Maltese people are truly getting jobs in big productions, those jobs are generally “dead-end”.

“I’m not saying we should not bring Gladiator over, but if we had at least given it €40 million, for instance, and gave the remaining €7 million to Maltese producers, we would have still gotten Gladiator and enriched our local industry at the same time,” he said. “It should be a healthy mixture of both.”