Much of the recent discussion about our film industry has focused on rebates and net production costs, and rightly so, because any country competing for international productions has to understand what it really costs a producer to shoot in one territory rather than another. Malta's own experience shows that well-designed incentives can deliver results, a game-changing policy introduced a Nationalist administration in 2005, offering a cash rebate of up to 20% on qualifying expenditure. Successive governments built on it until the maximum reached 40%. The National Audit Office has confirmed that the 40% rebate succeeded in attracting productions, with clear benefits in expenditure, Gross Value Added, employment and tax revenue, while also reminding policymakers to weigh opportunity cost and the potential for the industry to diversify.
The rebate worked, and it certainly has an important place in the future landscape of the film servicing industry. What concerns me is whether a model built for the industry of the past two decades will be enough for the industry of the next two decades.
Under the traditional model, productions bring people, equipment and money to a location, hire local crews and suppliers, and generate the qualifying expenditure on which incentives are calculated. With the rise of Artificial Intelligence, we are already seeing this model experiencing some fundamental changes on the international stage, as the revolutionary tech is now reaching into almost every stage of filmmaking, from development and planning through to performance, sound, editing and distribution. Taken together, these tools mean that work which once needed large teams can be done by fewer people, that some tasks shrink from weeks to days, and that parts of the physical shoot can be supplemented or replaced digitally. I have no doubt in my mind that filmmaking will survive all of this, although its economics are likely to shift considerably.
This is why I believe our film strategy needs to broaden from attracting productions to building an ecosystem, taking into consideration what remains once a production leaves as much as how much it spent while here. Physical infrastructure, such as proper sound stages which we are still missing from the formula, however, is only one element. A modern production ecosystem also depends on skilled creative and technical talent, virtual production and digital capture, research and development, continuous training and reskilling, intellectual property, production-technology companies and adequate data and computing infrastructure, all working together.
The shift will be gradual, moving from traditional production through technology-assisted and hybrid models towards increasingly digital work, and each stage will give producers different reasons for choosing a country.
As digital workflows mature, physical location may matter less for some productions, which means Malta's geographical appeal will have to be complemented by other strengths in the future. We have plenty to build on, including an established industry, experienced crews, good connectivity, an English-speaking workforce and a compact ecosystem. With the boundaries between film, gaming, animation, immersive experiences and artificial intelligence becoming increasingly blurred, those strengths could support an industry far broader than film production alone.
Over time, I would like our incentives to ask what capability a production leaves behind alongside how much it spends. Does it train people and develop local expertise? Does it create intellectual property, digital assets or new production technologies? Does it encourage international companies to set up longer-term operations here? Naturally all this needs to dovetail alongside the successful cash rebate, but we do need to start to widen the conversation and recognise that expenditure may no longer be the sole measure of value.
Marilena Gauci is Opposition Spokesperson for the Film Industry