Australia's film industry has been growing steadily in recent decades, with its sets and production and effects facilities used for films ranging from the recent Star Wars and Harry Potter series to Aquaman and Peter Rabbit.

But the Covid-19 pandemic has taken a heavy toll on the sector, which usually employs tens of thousands of people. While animation and post-production work was able to continue during the recent lockdowns, filming largely came to a halt.

To deliver a much-needed boost to the sector, Australian Prime Minister Scott Morrison has pledged A$400 million (S$393 million) in cash grants to lure Hollywood and other international film-makers to produce their next movies in Australia.

The government hopes that Australia's relatively low infection rates will prove an extra incentive and enable it to host large-scale physical productions. As of yesterday, Australia had recorded 17,282 Covid-19 cases and 201 deaths.

The scheme is expected to boost Australia's international production, but critics say it will do little to help the local film sector, which is in desperate need of support.

Screen Producers Australia said the new incentives were welcome and would help to generate jobs. But it said the scheme would assist only about 20 per cent of the local workforce and called for additional incentives to be offered for domestic productions, which would boost employment and create "great Australian cultural content".

"(We) need to ensure… that there are also appropriate support measures in place that will allow us to continue to make Australian stories, told by Australian voices, supported by sustainable Australian production businesses," the organisation said in a statement.

The government believes the new scheme will bring in A$3 billion over the next seven years and create 8,000 new jobs a year.

But Australian Writers' Guild president Shane Brennan described the scheme as a "$400 million giveaway to Hollywood".

"It shows a total lack of faith in the Australian industry and Australian storytelling," he told The Sydney Morning Herald.

Television producer Nick Murray said boosting the number of international films made in Australia would increase costs of local productions, which will need to compete to hire local crews.

"The new scheme stuffs cash into the pockets of the studios on the false premise that helping the foreign productions is of benefit to the local sector. It isn't," he wrote on the Mediaweek website.

"Unlike every other industry, the government is subsidising foreign producers while local productions receive far less, indeed in most cases, no government support," he added.

In recent decades, Australia's film industry has been expanding, with the number of Australian films made each year - including co-productions - increasing to about 38 a year, up from 14 in the 1970s.

But the Covid-19 pandemic forced more than 30 film projects to halt or suspend production. The local industry has resumed productions, but has introduced strict health safety guidelines, such as filming outdoors and staggering start and finish times where possible.

Some foreign actors have arrived in recent weeks for productions but have had to spend the mandatory 14 days in quarantine before starting filming.

Actress Jane Seymour, who recently arrived in Australia to film a movie and completed quarantine in a hotel in Sydney, said she was fortunate because "nobody is able to make anything right now and California has got worse since I came here".