Hugh Jackman... in full <i>Wolverine</i> mode.

Hugh Jackman... in full Wolverine mode.

Hugh Jackman is returning to Australia to make The Wolverine, his sixth outing as the Marvel character, thanks to a $12.8 million federal government subsidy.

And while billed as a “one-off”, the local film industry has its fingers crossed that the near-doubling of the standard assistance for a big-budget foreign production is a sign of things to come in next month’s budget.

The Wolverine is set in Japan but will be shot at Fox Studios in Sydney between July and December. Hugh Jackman will star and produce. “It’s so great to bring these big movies down there, to keep people working,” Jackman told the Today program from London, where he is filming Les Miserables for Oscar-winning director Tom Hooper (The King’s Speech). “I just have to say thanks to Prime Minister Gillard, she was instrumental with this.”

Ms Gillard and Arts Minister Simon Crean jointly announced on Friday “a one-off payment” that provides Marvel Entertainment, the Hollywood producers of The Wolverine, a 30 per cent rebate through the tax system on production expenditure in Australia. “Without this … the producers of The Wolverine would not have chosen Australia as the location,” their statement said.

They claimed the subsidy would generate “over $80 million of investment in Australia and create more than 2000 jobs”.

But local industry figures are hopeful the “one-off” caveat could soon be lifted.

“It’s a positive step for us, it shows the government’s willingness to look at the proposed increase to the location offset,” said Debra Richards, chief of Ausfilm, which is charged with attracting big-spending foreign productions to Australia.

Ausfilm and others have been lobbying the government for an increase in the foreign location offset for the past three years as the strong Australian dollar and competing incentive schemes offered by more than 40 states within the US and countries such as the UK, Canada and even Malaysia combine to make Australia too expensive for big-budget foreign productions.

The offset was introduced in 2001, at 12.5 per cent. At the time, the Australian dollar was worth about 50 cents. In 2007 it was increased to 15 per cent as a number of other territories copied, and often bettered, Australia’s incentives. Last year it was increased to 16.5 per cent.

The industry is seeking an increase to 30 per cent, and is believed to have support from both sides of politics because big-budget foreign productions are seen as important in training and retaining technical personnel.

Crucial to the case it has taken to government is the argument that the cost to government will be relatively low as Australia is unlikely to be inundated with big productions. “It won’t be opening the floodgates,” said Ms Richards. “There’s a natural capacity here in terms of personnel and facilities.”

Sources suggest that capacity might be one large production per annum in each of Queensland (Warner studios), NSW (Fox) and Victoria (Melbourne Docklands Studios).

Docklands boss Rod Allan greeted the news with both cautious optimism and regret.

“I think it’s terrific the federal government is willing to look at a one-off production offset and I hope that’s an indication of its willingness to look at the offset generally,” he said.

“I’d have preferred Wolverine to have come here, but now the Sydney studios are tied up for the rest of the year we’re in a great position to compete for other projects.”

Asked if the decision foreshadowed an announcement on the offset scheme in the budget, Simon Crean’s office replied “the issues facing the screen industry are important to the government and will remain on our agenda over the coming years”.

The budget will be handed down on May 8.

twitter Karl Quinn is on Twitter: @karlkwin