The comments come as the Interactive Games and Entertainment Association (IGEA) recommended the tax offset to encourage productivity and help local producers secure a greater share of international contracts in its submission to the federal government’s inquiry into Australia’s creative and cultural industries.
Ms Carnell said Australia’s video game industry comprises many high-growth potential small businesses and start-ups, and that there is a strong economic argument as to why they should be supported.
“The video game production industry was worth about $250 billion globally in 2019, but the Australian sector earned a mere $114 million of that,” Ms Carnell said.
“Internationally, we are seeing video game production industries in countries that offer tax incentives such as Canada, the UK and New Zealand securing substantially larger slices of the pie.”
Ms Carnell pointed to Canada’s tax incentive as an example, saying it offers a digital media tax credit on labour and certain marketing expenditures.
She said the video game development industry in Canada employs more than 27,000 full-time workers and generates $3.8 billion in revenue.
By comparison, Ms Carnell said Australia compares poorly with fewer than 1,300 full-time workers in the video game production sector and earning less revenue than New Zealand.
“While the federal government invests $750 million annually in arts and culture, the video game sector continues to fall through the cracks,” she said.
“IGEA estimates Australia could create a $1 billion industry in game development, providing export revenue and employing an additional 10,000 full-time workers with the right support.
“A tax offset for game development, similar to the incentives given to the screen production industry, would be an excellent start.”