Look to Danes, not hobbits
As long lines of Hobbit fans, some in costume, queued outside the Embassy Theatre last week for a sneak preview of material from the blockbuster, most Wellingtonians could be forgiven for thinking that the New Zealand film industry is in great shape.
But it's not. Auckland, where 70 per cent of New Zealand film and television is made, has empty sound stages and unused production facilities, and many highly skilled film workers there are considering moving overseas.
In its heyday, there were numerous overseas movies being shot in Auckland, as well as big-budget television series such as Hercules, Xena and Spartacus.
But the flood of major film and television productions being made in New Zealand has reduced to a trickle, despite the fact that the Government gives a 15 per cent tax rebate to the film industry as part of the Large Budget Screen Production Grant.
So what has caused foreign investment to dry up?
Our high dollar is partly to blame, but most in the film industry are saying that the 15 per cent Government subsidy isn't high enough. Singapore gives a whopping 40 per cent subsidy, and countries like Canada, Australia and South Africa give a slightly higher subsidy than we do.
So surely the answer is to raise the subsidy even higher and attract international film production back to New Zealand? I'm not so sure. If you applied the same logic about wages there would be a national outcry. Some factory workers in Bangladesh might earn around $2 a day so why not pay unemployed workers here less than that and attract those factory owners over here?
The Government recently commissioned a report that did not favour raising the subsidy and questioned whether it was of any economic benefit to the nation at all. Similar studies overseas have shown considerable benefits to the country paying the subsidy, so perhaps it's not a good idea to rely too much on one study.
So has the film industry got a good case to raise state subsidies, or is it the spoilt brat of the New Zealand economy?
Economic Development Minister Steven Joyce has been talking a large amount of common sense recently.
The film industry is one of the few to receive a government subsidy, and he believes trying to match other countries by raising the subsidy could lead to a "race to the bottom", as he calls it.
He makes the excellent point that where New Zealanders own some intellectual property in a film, such as with the Hobbit, there is far more economic benefit. But the big question is just how you do that?
Overseas productions that fly in and fly out again, hiring "Mexicans with cellphones", as our excellent crews have been cruelly labelled by some Americans, to make their movie, definitely have their place. But as we can see at present, they are fickle and have little long-term value.
Foreign investment often roams the world in search of tax loopholes, subsidies, compliant governments and cheap labour. It if doesn't get what it wants, it leaves.
In Auckland, local government and private businesses invested heavily on the strength of overseas productions, like Rob Tapert's Spartacus, choosing to film there. Now that Tapert and others have flitted off in search of bigger subsidies to make their soft-core-porn schlock, the locals are left with expensive facilities and no one to use them.
A healthy industry is an integrated one. In Wellington, crews that work on an overseas TV advertisement one day might work on The Hobbit the next and a low-budget Kiwi feature the next. The country's film industry needs all sorts of production to survive. But if we seek long-term models, perhaps looking only to foreign investment is not the best way.
Denmark, not that much bigger than New Zealand, makes quite a few movies for its size. The state television company, far more generously supported by its government than here, has had a string of high-earning international hits with series like Forbrydelsen and Borgen. Perhaps taking their lead and concentrating on government investment in local film and television, rather than bigger subsidies for international companies, could be a way forward.
The Dominion Post