June 2000, Sydney. In preproduction at Fox Studios Australia is the next installment of George Lucas' Star Wars saga, Episode II; in production on the coast south of the city is David Caesar's indie feature Mullet; and in postproduction all over town is Baz Luhrmann's international vision, Moulin Rouge. Hollywood offshore jostling with low-budget and large-scale Australian movies: it's a good snapshot of the city's role as an international film capital. "What we are going through," says Luhrmann, "is evolution and change."
It's a change that has taken a century to unspool. In that time, celluloid Sydney has taken its place alongside Hollywood, Bollywood and Hong Kong as a movie town, constantly reinventing itself in the process. The gritty working- class aura of The Sentimental Bloke (1919) was followed by the slick studio years of Cinesound, where Oscar winner Ken G. Hall directed 17 features during the 1930s. And 70 years before titian-tressed Nicole Kidman, there was Sydney starlet Louise Lovely, who made 50 pictures in silent-era Hollywood.
Like the ABBA-singing bride in Australian director P.J. Hogan's 1994 hit film Muriel's Wedding, the city dreams big. Just look at Tropfest, Sydney's annual short-film festival, which sprang from a casual gathering of young filmmakers in an inner-city cafe seven years ago. "Tropfest started as a handful of people watching a video, and we had a quarter of a million hits on our webcast this year from around the world," says founder John Polson, who went on to act alongside Tom Cruise in the recent M:I-2 and is now working as a director in Los Angeles. "That's indicative of a shift in focus for a lot of people around the world on Sydney."
With the Sydney-filmed M:I-2, that shift in focus has never looked quite as glamorous. Locals might snigger at the city's celluloid makeover—actress Thandie Newton cruises past the Opera House in a harbor uncluttered by ferries, the movie's deadly virus is housed in an office tower normally home to the New South Wales state premier, and the Spanish hacienda is actually located in urban Elizabeth Bay. "As a colleague in Los Angeles said, 'Didn't like the movie, but God, isn't Sydney a star,'" says the state Film and Television Office's Kingston Anderson.
Behind the star turn have been decades of industry toil. Since 1973, the city's Australian Film Television & Radio School has been a conveyor belt for cinematic talent, from The Piano's Jane Campion to Babe director Chris Noonan and Shine editor Pip Karmel, whose movies all won Oscars. The crop now coming through, says AFTRS director Rod Bishop, "thinks about making films for the world, rather than just making them for Australia." For those graduates' cameras, the National Institute of Dramatic Art in Sydney has honed stars like Judy Davis, Mel Gibson and Cate Blanchett. Until recently, they didn't have a studio to call home. Then, a couple of kilometers down the road from NIDA's sheds, the Royal Agricultural Society Showgrounds were handed over to Rupert Murdoch's Fox Filmed Entertainment by way of a state government lease in 1996. Since then, Fox's soundstages have hosted a cattle call of largely U.S.-funded productions, from Dark City to Babe: Pig in the City, The Matrix, M:I-2 and Red Planet. In the process, Sydney "has gone from a place where I couldn't make a film to a place that has arguably the best technical facility in the world," says nida-trained Luhrmann.
Luring offshore productions to shoot in Sydney is a local specialty. First, The Matrix's Australian producer, Andrew Mason, and compatriot director Alex Proyas persuaded U.S. studio New Line that Sydney had the technical capability to film their ambitious 1998 sci-fi thriller, Dark City. They were able to turn that project around for a modest $9.3 million, which helped convince the brothers Wachowski to base The Matrix at Fox at the same time as Babe: Pig in the City was shooting. "While that was going on, the decision was made to bring Mission: Impossible here," says Mason, "so you can see a rolling flow."
Australia's weak dollar, which saved the Wachowskis an estimated $30 million, and Fox's generous payroll tax rebate have added to Sydney's allure. "Right now, if you want to make an independent English-language film, this is the cheapest country you can make it in," says Rick McCallum, the American producer of the next two Star Wars episodes, which are being shot in Sydney. While Canada attracts the most "runaway" Hollywood trade, followed by Britain, "what's important is that Australia is now one of those players," says Fox Studios Australia chief executive Kim Williams, "and is a significant player on the world production map."