There was some good news buried in the headline numbers of the federal government’s Mid-Year Economic and Fiscal Outlook (MYEFO) for Australia’s video gaming industry.
The upbeat MYEFO forecasts have the combined deficits over the coming four years to FY25 falling by $2.3 on the May budget forecast to $342.4 billion. The FY22 deficit has dropped by $7.4 billion to $99.2 billion compared to the budget prediction, but things will get worse a decade down the track.
Notably, the government has $16 billion in unidentified spending squirreled away head of next year’s election.
But the good news for the digital games industry is that the Digital Games Tax Offset will offer an extra $19.6 million over two years as a tax break to the sector to include ongoing development work—known as ‘live ops’—on digital games following their public release.
The boost more than doubles the existing $18.8 million commitment towards offset over four years.
The 30% refundable tax offset for eligible companies spending a minimum of $500,000 on qualifying Australian development expenditure from July 1, 2022.
Communications minister Paul Fletcher MP, said expanding the offset will make Australia a more attractive and competitive destination for international digital games development, supporting investment and highly-skilled, transferable jobs.
“The global digital games industry is worth approximately $250 billion, which is why it’s critical that we promote the growth of Australia’s digital games development industry and increase its market share in a rapidly expanding global sector,” he said.
“Expanding activity eligible for a 30% 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.”
Thursday’s announcement was welcomed by the Interactive Games and Entertainment Association (IGEA), with CEO Ron Curry saying that video games development is a leading technology industry with transferable digital capabilities that can help supercharge the Australian economy.
Curry said ‘Live ops’ is a significant contributor to the video games industry’s high potential to generate substantial export revenues.
We are delighted to see the Federal Government double down on its commitment to the video games sector and expand its offering to game developers as part of its Digital Economy Strategy,” he said.
“The confidence and certainty this provides to Australian video games businesses are immediately vital to the local sector as they strive to meet the growing global demand for video games and video games technology.”
Daily startup news and insights, delivered to your inbox.