Australian Government backs game developers with extra tax break
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In order to grow Australia’s digital economy, the Australian Government has given local game developers an extra tax break through the Digital Games Tax Offset.
During Mid-Year Economic and Fiscal Outlook on Thursday, the extra tax break has been expanded to cover the ongoing development work, also known as “live ops”, after a game’s public release.
This means that changes, updates, or improvements made to an existing game will now be covered by the Digital Games Tax Offset.
It is expected that the additional $19.6 million for two years will kick in on 2023-24.
With the global digital games industry worth approximately AU$250 billion, Minister for Communications, Urban Infrastructure, Cities and the Arts Paul Fletcher stated that it was critical to promote the growth of Australia’s digital games development industry and increase its market share.
“This additional investment recognises that a lot of valuable and highly skilled work in the industry is devoted to the ongoing development of games, after their initial release,” Minister Fletcher said.
“Expanding activity eligible for a 30 per cent refundable tax offset will enable our local interactive entertainment sector to expand and foster skilled employment in an area in which significant numbers of young Australians are seeking to work.”
The 30 per cent refundable tax offset was announced in the May budget for eligible businesses that spend a minimum of $500,000 from 1 July 2022.
Minister Fletcher said that expanding the offset will make the country a more attractive and competitive destination for international digital games development, supporting investment and highly-skilled, transferable jobs.
Minister for Superannuation, Financial Services and the Digital Economy and Minister for Women’s Economy Security Jane Hume said that building capability in emerging technologies and accelerating the growth of digital tech businesses such as digital games can help uplift the rest of the economy.
“The Australian Government is investing in these transferable digital capabilities to grow our domestic pool of digital talent, support a growing Australian industry and make Australia an attractive destination for international investment,” she said.
It is estimated that the country’s economy will benefit through digitalisation as much as over AU$315 billion in the next ten years. Aside from this, it will also potentially create up to a quarter of a million new jobs by 2025.
The added investment builds on the $18.8 million commitment towards the Digital Games Tax Offset, which is part of the Australian Government’s Digital Economy Strategy that aims to establish Australia as a leading digital economy and society by 2030.
The Offset will be made available to Australian resident companies or foreign resident companies with a permanent establishment in Australia.
The tax break is yet to be legislated, and its draft will be released in the first quarter of 2022 for comment.
With AAP
Eliza is a content producer and editor at Public Spectrum. She is an experienced writer on topics related to the government and to the public, as well as stories that uplift and improve the community.
