The inspiration for Charlie's Country came to Rolf de Heer when he visited lead actor David Gulpilil in jail in Darwin. They had worked together on the film Tracker previously, and de Heer felt he owed Gulpilil a visit after learning Gulpilil had been charged with assault against his wife during an alcohol-fueled bender. Gulpilil told de Heer he didn't know what to do after his release, but he wanted to make another film with de Heer.
De Heer didn't know if Gulpilil could still act. He was physically weak, very thin, and over sixty years old. De Heer knew he had to make a film that would make sense for the condition Gulpilil was in. On the drive from the jail to his hotel room, he already knew what to do. De Heer would use biographical material from Gulpilil's own life so that he could access the character more easily and readily when developing "Charlie."
The next day de Heer returned and said he would try to get the film funded. Gulpilil didn't like the sound of de Heer "trying" and made him commit to creating the film. De Heer agreed he would. He knew it would be important for Gulpilil to rebuild his self-esteem and have something to look forward to; the film was formed from this need. However, when asked if he was Gulpilil's savior, de Heer insists, "He saved himself."