by Lindsay Shelton
New Zealand’s screen industry has three halves, and two of them are in crisis, according to this week’s reports. The third half is Peter Jackson – his Wellington-based segment of the industry (as everyone knows) is in extraordinarily vigorous health.
The two crisis-prone halves are looked after by two state-supported Wellington organisations. The Film Commission’s responsibility is to encourage and finance the production of feature films (with modest budgets) being made in New Zealand by New Zealanders. Film New Zealand is responsible for enticing offshore productions (with substantial budgets) to come here.
The Film Commission’s annual reports  show diminishing investment – it spent $11.6m on the production of New Zealand features last year, compared with $12.2m the previous year and $14.7million the year before. It also pays out money for developing projects, and for marketing the films, locally and internationally.
Film New Zealand promotes the New Zealand film industry at international markets, and it has a partnership with Park Road Post Production for promotion in Los Angeles. Its annual reports used to include a list of international projects that had been working in New Zealand. But it hasn’t published an annual report since 2009 (when it listed six international features and seven international television productions).
It was the creation of the Film Commission by the government in 1978 which triggered the resurgence of film-making in New Zealand. Film New Zealand was created 16 years later, as an initiative of the industry.
One half of the current crisis story was first reported by TVOne News on Wednesday . It was picked up and headlined in the Guardian on Friday . Nothing was confirmed. But the Guardian told its international readers:
New Zealand’s film industry looks set to lose out on a billion-dollar bonanza from James Cameron’s Avatar sequels because other countries are offering greater tax incentives to Hollywood studios.
Its source was TVNZ, which reported:
ONE News contacted director James Cameron to confirm his plans but has yet to get a response. Likewise, Weta Digital, which won an Oscar for its visual effects work on the first film, would not comment. Economic Development Minister Steven Joyce said: “There’s … discussions going on, and there’s no doubt about that. The Film Commission and Film New Zealand are working with the producers and the director and are keeping me informed as to how things are progressing.”
How serious is the situation? The news contradicts a formal announcement from 20th Century Fox, reported by the Los Angeles Times in August , stating that Weta Digital would be creating visual effects for the three new Avatar films.
But the industry’s problems are broader than whether or not Avatar will be based in Wellington. On Friday, Radio New Zealand quoted “many in the screen industry” as saying 
… the sector is in crisis and battling to stay alive, especially in Auckland where there are no major international productions scheduled. NZ film and television producers and directors say the Government is too reliant on big budget film production and needs to pump more funding into small and mid-size productions.
Spartacus was the last major international production in Auckland, and since it finished filming in October last year many in the industry have been struggling to find work. The downturn has also affected post-production work in Auckland, where companies say work is going elsewhere because the New Zealand incentive scheme for large productions is not competitive. They say the 15% tax rebate does not match other countries’ tax breaks, such as Ireland which offers 32%.
Digipost managing director Garry Little says increasing the production incentive would attract more work to New Zealand and also help to keep skilled people in the country. He says the industry is almost at the point of no return. The owner of agency Auckland Actors, Graham Dunster, says there are no more big projects in the pipeline and the industry’s infrastructure is evaporating.
Steven Joyce concedes it is hard to compete with other countries offering better incentives but he told Radio New Zealand’s Morning Report that the key to making the film industry sustainable is more development and control of local stories.
He didn’t show much knowledge of his subject. It sounded insulting when he said that key players such as filmmaker Sir Peter Jackson need to choose to keep making films here instead of going offshore. Evidently he hasn’t been paying attention to what’s going on in Miramar. And if he wants to deal with the crisis, then the answer is simple – he can increase funding to the Film Commission. As local film-makers have repeatedly been saying, NZFC investment of $11m or $12m a year – three or four features get $2m or $3m each, with much less for the others – doesn’t compete with the $US500m budgets of a project such as The Hobbit.
The subject was a talking point during the film festival this year, after the premiere of the magnificently-restored version of Geoff Murphy’s Utu, which was made 30 years ago with a budget of $3m and is set in the 1860s. Geoff and his cinematographer Graham Cowley (who was producer on the restored version) told a panel at the film festival that it would cost $30m  to make a similar film these days. And such a budget could not be found, unless changes to the story and to the casting – “name” stars from overseas – were made to suit international audiences. Which means that such historically-important local stories have no hope of being made any more. (Vincent Ward’s River Queen was the last one, and that was eight years ago. And it needed overseas stars. And problems thereby ensued.)
If the government could be persuaded that local production needs boosting, there’s a way of doing it without costing the taxpayer anything. Freelance director Jonathan Brough, who has moved to Melbourne, told Radio New Zealand that changes to legislation are needed to force broadcasters such as Sky Television to finance local programmes. Sky is a profitable monopoly, but it has no requirement to invest in local productions, whereas Australia’s pay networks have specific regulations compelling them to do this. In one easy move, the government could improve the quality of television programming, and create more work for the local production sector.
The Standard: Lucy Lawless says Steven Joyce killed the local film industry 
TransportBlog: Trains to blame for Auckland crisis? 
Russell Brown: Movie disaster