Hollywood on the Harbour

Australian talent was much in evidence at last week's Oscar nominations. Will Fox's grand plans develop or exploit it?

With a Golden Globe firmly in one hand, Cate Blanchett now has an Oscar within the grasp of the other. Last week, Blanchett received a Best Actress nomination for her performance in Shekhar Kapur's Elizabeth. Should she win - and the Globes are the nearest thing to a reliable form guide to the Oscars - she will become the first Australian woman to take an Academy Award for a leading role.

The day after the Globes, Blanchett appeared on the front of every newspaper in the country. And she's not Australia's only representative on Planet Hollywood. Rachel Griffiths has been nominated as Best Supporting Actress for Hilary and Jackie. Geoffrey Rush, who was named Best Actor for Shine in 1997, is up for Best Supporting Actor for his comic role in Shakespeare in Love. And Best Director may well be Peter Weir, for The Truman Show. On hearing of her fellow-Australians' nominations, Blanchett remarked, "Per capita, we must have the highest proportion of nominees than any other country. It's pretty incredible."

America has always had the power to make small foreign film industries glow inordinately in the face of its patronage. But the American-Australian relationship is less one-sided than it used to be. As Australia goes to Hollywood, so Hollywood is coming to Australia.

Specifically, it's coming to Sydney, which Rupert Murdoch envisages as "Hollywood on the Harbour". Murdoch has more than a passing interest here: his News Corp, which controls the 20th Century Fox in the US, opened an Au$200m film studio in Sydney last year. Fox Studios Australia is the largest film production centre outside Los Angeles, and is already attracting blockbusters. Babe: Pig in the City was made here in 1998; and George Lucas has booked the sound-stages for both the remaining parts of his Star Wars trilogy. The Jim Henson Company is currently shooting a 35-part sci-fi series, Farscape. Both Mel Gibson and Baz Luhrmann, director of Strictly Ballroom and William Shakespeare's Romeo + Juliet, have long-term deals.

FOX is not the first studio to be built in Australia, but it is the first that can rival LA for size, scope and technology. The complex has six state-of-the-art sound-stages and ample post-production space: Spectrum, Sound Firm and Animal Logic, the three leading Australian specialists, have already relocated. The site has a large backlot: the house and street Babe stayed in when the pig went to the city still stand there. And a large entertainment complex is being built, with two cinemas, several concert venues, a skating rink, a circus, markets, shops and restaurants. Baz Luhrmann and Barrie Kosky, the avant-garde theatre director, are devising the studio tour.

From the moment it was first discussed, however, Fox Studios has been controversial. Originally, opposition centred on its proposed location: the old Sydney Showground, since 1881 the home of the Royal Agricultural Society. Its 28 hectares of open space was a treasured part of the city's heritage.

And more contentious still was the announcement, in 1994, by the then Prime Minister of Australia, Paul Keating, that the Showground site would be awarded to Fox without a formal tender process. Keating was quoted as privately saying that this was a way of "gouging something out of Rupert" and that he had got Murdoch "to give something back to Australia". But with an election looming, the agreement was interpreted as a political deal between the premier and the country's largest media proprietor. Critics - heard loudly in the non-Murdoch press - attacked the cosiness of the deal, its secrecy (the exact extent of the government's investment was not revealed) and the idea that public money should be used to finance what was essentially a private property deal.

The NSW Labor government retorted that its investment (initially Au$25m, perhaps, by now, Au$80m) would more than pay off, reckoning that the studios would inject around Au$100m a year into the state's economy. "To have one of the world's largest film producers wanting to use Sydney as their South-East Asian base - you would have to be crazy not to let them walk in with open arms," said the state treasurer, Michael Egan. If Sydney did not embrace Fox, the argument ran, Fox would run off to Melbourne, where the Victorian PM, Jeff Kennett, was dangling similar carrots. So the NSW government "let them walk in". The deal was eventually cleared by the Independent Commission Against Corruption, though the process - or lack of one - was criticised.

Australian film-making has traditionally been an independent, low- budget business. Young directors make films on a shoestring, or on their parents' credit cards. Film crews are small and adaptable, with multi- skilled technicians typically doing a variety of jobs. Movies are shot on location, or in improvised studios. Their subjects are - to use a word that's fast becoming a label - quirky: misunderstood pianists, transvestites in the outback, families threatened with eviction, ballroom dancers in suburbia. Now and again they do big box office.

In 1997-98, 80 films were made in Australia. Fourteen of these cost less than Au$1m each; another 25, by reasonably established directors and producers, cost an average of Au$2.3m; two more cost Au$90m and Au$95m. The latter were Babe: Pig in the City and The Matrix, which were made at Fox Studios and backed by American money. They belong to a different stratosphere to the other 78 Australian films on the list.

If the Australian film industry is so far from Hollywood, why did Fox want to set up here? I put this question to Kim Williams, chief executive of Fox Studios Australia. "The costs of producing in Australia are significantly lower than in North America or Europe," he says. "Australia does have a lot of very talented film-makers: good writers, directors and actors, and terrific film crews. I was talking to Terry Malick about The Thin Red Line [shot in Queensland] and he said he's never enjoyed working with a film crew so much."

What worries local film-makers is that a studio of Fox's size will attract big-budget, American productions, which will "shoot and ship", treating Sydney as little more than an LA backlot, while the native industry continues to suffer further cuts in subsidies (the Australian Film Commission has all of Au$16m to distribute a year). The suspicion is that Fox has come here only because it's cheap.

Williams admits this is a factor: "The Australian dollar tends to work in a range between 60 US cents and 70 to 75 cents. But it has the same buying power as an American dollar. Dollar for dollar, our crews tend to be less expensive, and certainly on things like set production, our costs are significantly lower. " But he rejects the idea that Fox Studios Australia is just an outpost of Fox Studios America. "It's definitely Australian. It's been designed and built by Australians. It's very proud of its corporate parent, but it's loved and managed by Australians."

WHEN IT WAS announced that George Lucas would be filming the next two Star Wars movies, bringing US$240m and perhaps 1,000 jobs, the Australian film critic and broadcaster Peter Castaldi compared Sydney's response to that of natives welcoming missionaries. "We're worshipping the people and technology without even questioning what the outcome for our culture is going to be," he said. "It's great but it's really scary. We're in danger of being blinded by the light."

John Polson, actor, director and founder of Tropfest, Sydney's popular short film festival, also has doubts. "Personally, I'm not one of the people who gets turned on by the idea of Lucas shooting here. I do not give a f--- because I know that I'll go to that movie and there won't be the slightest mention of Australia, and only a small core of people will even know what country it was shot in. It's great for the economy, it's great for the crew members getting thousands of dollars a week. It means nothing to the film industry or the film culture."