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Limiting film subsidies? Govt getting conflicting advice

Wellington.Scoop
The New Zealand Herald is this weekend raising issues about the government’s subsidies to New Zealand’s international film productions which, says the newspaper, are based mainly in Wellington.

The Herald’s Matt Nippert reports:

The New Zealand taxpayer has forked out nearly $600 million to Hollywood producers since 2010 to support the Wellington-dominated film industry, and despite commissioning numerous studies the Government is unclear whether this represents money well spent…

According to his Herald report, the Government is looking at ways to limit taxpayer exposure to the film subsidy scheme. At present the scheme is uncapped. Economic development Minister David Parker has released a report that concludes the Wellington-dominated industry is reliant on the subsidies for continued survival. The review from economic consultancy Sapere Group found the scheme, dominated by spending on international film productions, generated wider economic benefits that “significantly outweigh the cost of the grant”. But, says the Herald, peer review by two independent consultancies said evidence for this claim was weak.

Nippert writes that the scheme, which he calls an evolution of ad hoc tax credits scripted in the late 90s to facilitate Sir Peter Jackson’s groundbreaking Lord of the Rings adaptation, has steadily increased over the past two decades and now sees mostly overseas producers paid subsidies of up to a quarter of production costs.

He says that the enabling of Lord of the Rings opened a Pandora’s box office in New Zealand and made Sir Peter Jackson the man he is today: “according to Forbes he is now worth $630m.”

He summarises the Jackson empire as

To understand Wellywood is to understand the ecosystem of companies that revolves around planet Jackson. There are outlying satellites and planetoids, mostly a belt of television producers based in Auckland, but the real centre of gravity is found on the Miramar Peninsula where the big business is drawn to Weta. The Weta Group includes a suite of companies that collectively offer everything a big-budget film-maker might need.

He adds:

Analysis of the film rebates payout shows Jackson-connected firms work on 80 per cent of qualifying productions by value. If Wellywood gets the lion’s share of the big-dollar Hollywood productions, Jackson is the undisputed king of this pride. He owns three-quarters of the Digital business, is a one-third partner in Workshop, shares the Stone Street Studios business with Taylor, and is the sole owner of production firm Wingnut Films.

And he quotes Sir Peter as saying:

“You seem to be asking whether New Zealand needs incentives. In my mind it’s very simple: Does New Zealand want to have a film industry?”

Read Matt Nippert’s two articles in full here and here. The Herald promises further articles in an investigative series titled Inside Wellywood, looking at the nexus between the Wellington-dominated film industry and the Beehive.

And for a more positive view, read Gordon Campbell.

3 comments:

  1. greenwelly, 1. July 2018, 8:49

    The New Zealand taxpayer has forked out nearly $600 million to Hollywood producers since 2010, so that’s less than $100 million per year. The initial 15% subsidy was essentially the governmentn returning the GST, so the net cost to the government is much less than the headline… it’s grown a bit to 25% for qualifying production now, but given that the current government has Shane Jones running round the country promising to give out $1000 million in one year, and his boss is introducing tax breaks for good looking horses, I seriously cannot see the trough being taken away from the film industry, (especially while other countries run similar schemes)

     
  2. Jonny Utzone, 1. July 2018, 12:32

    Yes, there is no such thing as ‘free trade’ in the Film Industry. The ‘industry’ from WellyWood to Bollywood and back via Hollywood would throw a hissy-fit if you cut their subsidy and tax breaks! OOOOOh you can’t do do that – we are essential to the functioning of the whole economy…..

     
  3. Kiwigov, 3. July 2018, 9:31

    Interesting to note the parallels between the heavily-subsidised car industry of the 1970s (Porirua), and the now heavily-subsidised film industry (Miramar). Similar rationales for subsidy being put forward by industry spruikers, right up to the point where economic reality hits. How about rephrasing Sir Peter’s comment to “Does New Zealand want to have a car industry?”
    Of course, Miramar attracts footloose creative and IT types; whereas Porirua was lower down the class ladder

     

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