Despite having spawned a catalogue of Hollywood stars from Mel Gibson, Russell Crowe and Nicole Kidman to Guy Pearce and Heath Ledger, the domestic movie business appeared in almost terminal decline.

But thanks to a reinvigoration of the way films are financed down under, 2005 has seen a crop of more edgy, highly praised movies emerge in the lead-up to the national film awards.

Filmmaker Rowan Woods, who recently directed Hollywood Ingenue Cate Blanchett in the gritty box-office favourite “Little Fish”, says Australian movies in 2005 were no longer “jigsaw puzzles put together in a speculative way”.

The latest crop, which includes the winner of the critics’ award at the Toronto Film Festival “Look Both Ways” and Nick Cave’s “The Proposition”, contrasted with “a lot of films that were green lit in the last five or six years which were films pieced together by the financiers”, Woods says.

He credits part of the revival to a change in strategy from the industry’s financing body, the Film Finance Corporation.

While the corporation would previously hunt for a new smash-hit to eclipse the success of the country’s most successful film ever, the 1986 blockbuster “Crocodile Dundee”, they are now more open in their approach, he says.

“They were attempting to hit-pick, particularly with the comedies. They were trying to rule the multiplex without the stars and without the scripts,” Woods tells AFP.

Even before the government-funded corporation introduced its new qualitative evaluation policy last year, which for the first time gives it creative input into the movies it invests in, change was afoot, says filmmaker Sarah Watt.

Watt, who directed “Look Both Ways”, says this year’s movies are more confident because they are being developed with a specific target audience in mind.

“It’s not like they are trying to make millions and millions of dollars,” she says.

Polarised market 

Australian moviemakers are moving away from comedies -- and the change is driven as much by market dynamics as much as it is by creative impulse, says Troy Lum, who heads distributor Hopscotch Films.

“The film business at the moment is going through market place change where it seems like the films that are working are either very big tentpole films or very specific niche movies,” he says.

“If we do anything in between ... it’s just nowhere.”

Because the big budget films are overwhelmingly provided by Hollywood studios, Australian filmmakers are giving more consideration to the gaps in the market, he says.

What Lum calls “sophisticated adult dramas”, such as “Little Fish” in which Blanchett plays a former drug addict struggling to rebuild her life, fit this criterion nicely.

“They are the kinds of films that Hollywood is not really making in great numbers,” he tells AFP.

Kim Dalton, head of the development agency Australia Film Commission, agrees that changes in the way the Film Finance Corporation funds movies has brought results. As has additional government funding.

But Dalton is reluctant to describe recent successes as a revival in Australian film, noting that the country’s filmmakers, writers, actors and technicians have long been in demand internationally.

“There’s no doubt that “Crocodile Dundee’ is quite iconic. It’s a very well known film in America and in other countries around the world, in Asia, in China,” he tells AFP.

“But I think that certainly in places like France there’s a lot of people who are quite familiar with certainly all the great Australian directors of the 1970s -- the Peter Weirs, the Bruce Beresfords, the Phil Noyces -- and all the work that came out of the 70s and 80s.

“I don’t think it’s true to say there’s a resurgence, or a new era or a new dawn, I think that we have a long and proud and quite consistent history of producing interesting films and interesting filmmakers.”

Dalton acknowledges that Australia movies have languished somewhat in the past few years.

In 2004, domestic films accounted for a record low of only 1.3 percent of the 907 million dollars (685 million US) Australians spent on going to the movies.

“The number of films that Australia has been producing has fallen significantly and last year we really hit a bit of a low spot, there was only about 10 or 12 Australian films being produced. So there is an issue of sheer volume,” Dalton says.

“It is hard to maintain a profile internationally if you are producing 10 or 12 films a year.”

Bumper crop 

The industry only has to look to the highest-grossing Australian movie of 2004 -- “Somersault’, which took 2.1 million dollars -- to see that this year will be a boon for box-office earnings for domestic movies.

At present, four home-grown productions -- “Little Fish”, the romantic “Oyster Farmer”, “Look Both Ways” and the city drama “Three Dollars” -- are among the best performing limited release films in Australia.

Considering they were only released on between 15 and 63 screens on their opening weekends, each of these films have had impressive box-office returns, taking some nine million dollars between them.

’The Proposition’, which only opened in early October, has already taken 1.22 million dollars.

All are up for various honours at the nation’s version of the Oscars, the Australian Film Institute awards to be announced on November 26.

“Of the 100 or more films that are released, of the top six, the top four are the Australian films,” says Woods. “That’s pretty bloody astonishing. That’s a good hit rate in a business that is usually high risk.”

The question now is whether the current purple patch of quality filmmaking will continue, particularly following the collapse of another major Australian production, “Eucalyptus”, which was to pair Crowe with Kidman.

Dalton says while the movie, which fell by the wayside following a dispute over the script, was unlikely to affect the overall health of the industry, it did have an impact.

“That sort of thing happens in the states and it might get a paragraph in (screen magazine) Variety, but something of that size in the context of Australia is just massive,” he says.

Australians love the cinema, but movies offer few dividends to investors beyond tax incentives and this creates a barrier to private investment, Dalton says.

“Whilst we are seeing quite significant increases in funding coming from the government, unless we can encourage higher levels of private investment, then the opportunities to grow the industry are limited,” he says.

While he is optimistic about the future of the industry in Australia, Lum says it’s worthwhile savouring the 2005 crop.

“Our industry is really small. We make about 15 or 20 feature films a year. While we are operating on that basis, we are not going to have good years every year,” he says.