Hobbit deal details under wraps

22:34, Oct 28 2010

The Government is keeping key details of its eleventh-hour deal to save The Hobbit under wraps as it rams through changes to the labour laws agreed with Hollywood studio bosses.

Labour yesterday demanded to know how the grants scheme would be expanded and complained that it had been shown the controversial legislation only one hour before it was tabled in Parliament.

Along with the Greens, Labour opposed the bill and is likely to delay it being passed into law until today. But National, which has the support of ACT, the Maori Party and UnitedFuture, easily has the numbers to pass it.

However, the Government is yet to reveal crucial elements of the second leg of its deal with Warners that will see it qualify for an extra $20 million in taxpayer subsidies on top of about $65m already available for the two Hobbit movies.

Economic Development Minister Gerry Brownlee would say only that it extended the present 15 per cent tax rebate to spending that was currently excluded.

"We have said we will now let them include that, but we have capped the amount that will be paid out on that part at US$7.5m (NZ$10m) per film."

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His department provided a list of expenditure that currently qualified for the rebate, but Mr Brownlee would not say what could be added under the new criteria.

The extra funding would apply to all big-budget films, costing more than US$150m, but details were commercially sensitive as the final touches were worked on.

The cost of promotional material about New Zealand in DVD and digital downloads of the movies would be paid from a separate $13.5m given to Warners to offset its marketing costs, taking the total bill to taxpayers for the movies to almost $100m.

Labour's Trevor Mallard, who is a former economic development minister, said the new criteria could not be commercially sensitive.

"If the grants scheme is to be widened, then it's got to apply to everyone who applied and therefore it must be public."

There could be commercial sensitivity about how much Warners would receive, but not the criteria.

Labour was expected to carry the debate into today, normally a non-sitting day.

A second bill on a legal matter being kept under wraps, but which was unrelated to The Hobbit, was expected to pass quickly with cross-party support.

In Parliament, all parties welcomed news The Hobbit would be filmed here. But Labour and the Greens said workers who signed up as contractors would lose existing rights.

Under the current law, they can challenge their status in court if they believe their work arrangements make them an employee, opening the way to claims for wrongful dismissal.

Mr Mallard said it was "convenient" for the Government to blame unions for the saga surrounding The Hobbit, but they had worked hard to settle the dispute.

"My experience with Warner Bros is that, when a relationship breaks down, they play hard-ball. And what happened was that the Government blinked in a way that was unnecessary."

Greens co-leader Russel Norman said the Government had moved to pass the law despite Council of Trade Unions assurances that there would be no industrial action.

"The actions taken by John Key have threatened New Zealand's economic and parliamentary sovereignty."

Mr Brownlee said the legislation would keep "hundreds if not thousands" in work.

The Dominion Post