Aussie video game industry calls for 30% tax offset, with backing from small business ombudsman Kate Carnell

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Source: Unsplash/Alex Haney.

The video game industry is calling on the federal government for a 30% tax offset, and Australian small business and family enterprise ombudsman Kate Carnell is backing the sector.

In its submission to a government inquiry into Australia’s creative and cultural industries, the video game industry is seeking a tax offset to help producers access a greater share of the lucrative $250 billion international industry.

Carnell says video games are a high-growth industry made up of small businesses and startups with huge potential.

“The video game production industry was worth about $250 billion globally in 2019, but the Australian sector earned a mere $114 million of that.”

“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,” Carnell says.

The federal government’s committee on communications and the arts is now investigating Australia’s creative and cultural sectors, scrutinising their economic benefits, employment opportunities and how to grow them.

According to the Interactive Games and Entertainment Association’s (IGEA), the video game industry is the world’s largest creative and cultural sector, however, the Australian video game sector makes up a very small portion of the entire industry and, unlike other countries, receives zero financial support from the government.

The government invests $750 million into Australia’s creative and cultural industries each year and that is expected to rise to $1 billion in 2020-21 when COVID-related arts support is included, the IGEA said in a statement.

But Australian game developers receive none of the $750 million investment.

In the IGEA’s submission to the inquiry, the association is asking the government to:

  • Provide game developers with access to a 30% tax offset for video game development, similar to the current offset for the Australian VFX and animation sectors; and
  • Restore the $20 million Australian Interactive Games Fund, which was introduced in 2013 and then cancelled in 2014.

“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,” the association said.

“A tax offset for game development, similar to the incentives given to the screen production industry, would be an excellent start.”


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