WHILE many are talking about the resurgence of the Australian film industry, revenue from overseas sales has slumped.

The Federal Government's main funding agency, Film Finance Corporation Australia, has reported that returns from films and television programs fell to just $9.2 million last financial year. After three consecutive falls, it was the lowest recoupment for 16 years.

The corporation's chief executive, Brian Rosen, yesterday laid the blame partly on a slate of disappointing comedies released more than a year ago, including The Extra, You and Your Stupid Mate, Take Away and Thunderstruck.

Overseas sales of Australian telemovies and miniseries were also down because of the dominance of reality television and American series.

Mr Rosen said recent releases such as Wolf Creek, Little Fish, Ten Canoes and Jindabyne showed the quality of films had increased, but this did not mean they were selling overseas.

The soaring number of "independent films", produced cheaply with international stars outside the Hollywood system, had made it harder for Australian releases to attract attention overseas.

"Although the stories that we're telling are good, some of them are quite dark and therefore have a limited appeal," Mr Rosen said.

"I think we're on the road to recovery, but we need to get some more films happening.

"We need to get more ambitious in the storytelling."

The corporation backed a record 17 films last financial year, including Kokoda and Boytown.

But this year's biggest success, Kenny, was fully financed by a company that supplies portable toilets. "What that shows is that a hit can come from anywhere," Mr Rosen said. "It has to have a good idea, a really good heart and really engage an audience."

Under the Government's review of film funding, the corporation has lobbied for a new tax offset that would attract more private investment to the industry.

It has also argued that the existing tax offset for higher-budget productions be increased from 12.5 per cent to 15 per cent to rival the incentives offered by other countries chasing offshore Hollywood productions.