The cinema of Australia has a long history and has produced many internationally-recognised films, actors and filmmakers.
Australian film has a long history. Indeed, the earliest known feature length narrative film in the world was the Australian production The Story of the Kelly Gang (1906).
Arguably one of the world's first film studios, The Limelight Department was operated by The Salvation Army in Melbourne, Australia, between 1897 and 1910. The Limelight Department produced evangelical material for use by the Salvation Army, as well as private and government contracts. In its 19 years of operation, the Limelight Department produced about 300 films of various lengths, making it the largest film producer of its time. The major innovation of the Limelight Department would come in 1899 when Herbert Booth and Joseph Perry began work on Soldiers of the Cross, arguably the first feature length film ever produced. Soldiers of the Cross fortified the Limelight Department as a major player in the early film industry. However, Soldier of the Cross would be dwarfed when the Limelight Department was commissioned to film the Federation of Australia.
There are various explanations for the subsequent demise of the industry; some historians have pointed to falling audience numbers, a lack of interest in Australian product and narratives, and the decision to participate in World War I. However, a major reason lay in the official banning of bushranger films in 1912. Looking for alternative products, Australian cinema chains realised that Australian films were much more expensive than imported films from the United States, which could be purchased cheaply as production expenses had already been recouped. To redress this decline, the federal government imposed a tax on imported film in 1914, but this was removed by 1918. By 1923, U.S. films dominated the Australian exhibition sector, with 94% of all films coming from that country.
Another explanation is concerned with anti-competitive behavior between film distributors and cinemas. Between 1906 and 1912 Australia's burgeoning film industry produced more feature-length films than Britain or the USA, but in 1912 Australasian Films and Union Theaters established a monopoly over production, distribution and exhibition and shut out smaller producers. That opened the way for US distributors in the 1920s to sign exclusive deals with Australian cinemas to exhibit only their products, thereby crippling the local film industry .
A generation of directors and actors emerged who told distinctively Australian stories. Films such as Picnic at Hanging Rock (Peter Weir, 1975) and Sunday Too Far Away (Ken Hannam, 1975) made an impact on the international arena. The 1970s and 80s are regarded by many as a 'golden age' of Australian cinema, with many successful films, from the dark science fiction of Mad Max (George Miller, 1979) to the romantic comedy of Crocodile Dundee (Peter Faiman, 1986), a film that defined Australia in the eyes of many foreigners despite having little to do with the lifestyle of most Australians.
After Rupert Murdoch, the head of Fox Studios and an Australian, saw that the new Fox studios were moved to Sydney, some US producers have chosen to film at Fox's state of the art facilities as production costs in Sydney are well below US costs. Studios established in Australia, like Fox Studios Australia and Warner Roadshow Studios, host large international productions like The Matrix and Star Wars II and III.
A recurring debate in the Australian film industry revolves around the necessity or otherwise of government support for the industry. In brief, the argument for government support maintains that a viable film industry is only possible if it is supported in some way by the government and proponents of this view hold that the industry cannot compete against the hegemony of Hollywood. The argument against government support is that the industry is viable without support and will become stronger if increasingly globalised market forces are allowed full and untrammeled play. Others argue that a film industry in itself has little value. The history of the industry in Australia is to some extent a result of the ascendancy of one position over the other.