New Zealand First leader Winston Peters has taken something of a gamble in challenging the Government over its decision to subsidise the Hobbit films.
What matters politically is the huge feelgood effect the made-in-New Zealand movies have had on public sentiment. What matters, too, is the perception created by Prime Minister John Key that he saved The Hobbit when its future here was threatened by Actors Equity demands for a better deal.
Mr Key's generous enticements ensured the project was kept here. He gave Warner Brothers a $67 million subsidy and had our labour laws changed so film industry workers became classified as self-employed contractors, not employees.
The New York Times was bemused by the Government's eagerness to help the movie moguls. For better or worse, it said, "Mr Key's government's extreme measures linked its fortunes to some of Hollywood's biggest pictures". This made New Zealand "a grand experiment in the fusion of film and government".
Questioned by Mr Peters last week about the economic benefits for the country, Mr Key bandied impressive figures. Besides an estimated 3000 jobs created, The Hobbit production team alone booked 6750 domestic flights, slept 93,000 bed nights in hotels, paid for 1800 rental cars and 1650 work vehicles, and spent $9m on construction and $1.5m on food.
Why was no Treasury report asked for to verify the benefits from a $67m handout? None was required, Mr Key insisted.
He explained, too, why he was prepared to give Warner Bros those millions but would not stump up an extra $6m for KiwiRail wagons to be built in New Zealand rather than in China, to save Dunedin Hillside railway workshop jobs. Whereas the films would generate 3000 or so jobs plus the other ancillary benefits, with KiwiRail "the long-term model did not actually support those jobs at Hillside".
Nearing the end of its United States domestic run in mid-January, The Hobbit had grossed $278,869,783 in that country, plus $608m outside North America.
But if our Government's corporate welfare policies mean taxpayers should support only successful businesses, Mr Key might explain if all successful businesses can look forward to taxpayer support - or only the glamorous ones.
- The Marlborough Express