Avatar's arrow has found its mark

16:00, Dec 16 2013

The taxpayer handout to the Avatar film sequels hit about as close to the political bullseye as you can get.

The timing - just after Parliament rose, within 12 days of Christmas, and on the day the latest Hobbit movie led box-office takings - minimised critical scrutiny while maximising the feel-good factor.

When the best the Opposition can do is carp about it possibly being too late while welcoming the Government adopting its policy, then you know the arrow has found its mark.

The framing of the announcement hit the spot too. Treasury, which is adamantly opposed to the film rebate regime, suggested "if ministers consider decisions are needed quickly to retain the Avatar production in New Zealand, Cabinet could consider a one-off increase in support of that production only".

But that would have just filled the quiver of those who would attack "crony-capitalism, picking-winners, National helping its rich mates" as they had over the Hobbit, SkyCity casino and Bluff smelter deals.

There is little doubt lifting the rebate to 25 per cent for the Avatar films, matching the Hobbit sweetheart pact, was behind yesterday's announcement.


Name another in the immediate pipeline.

But by folding it into an industry-wide deal, and including assistance for $15 million to $50m budget local productions (the so-called "missing middle" of the sector) the Government drew the poison from that.

The cost will not be huge either, unless it triggers an avalanche of work into the country. The annual subsidy has been running at about $62m prior to the increase.

Yet Treasury is nervous and uncomfortable with good reason. Is it ever possible to attain the "golden mean" of a Goldilocks subsidy; warm enough to keep screen production here, but not too generous?

Can any taxpayer help ever be "for the time being", as officials put it?

A stopgap on the road to a sustainable unsubsidised industry?

When movie moguls use the twin power of popular films and the threat of job losses to bend the will of politicians will that forever be - ahem - unobtainium?

As the economic mandarins see it, the past benefits of screen subsidies have been minuscule - less than 1 per cent return a year between 2004 and 2007 at a net fiscal cost of $168m.

Ramping up the subsidies is just fuelling the worldwide race to the bottom.

Matching overseas handouts is not a sound basis for an economic development policy. Steven Joyce take note.

They also argue there was no urgency for large scale changes, and proposals should be considered against higher-priority, higher-value initiatives as part of the 2014 Budget.

True, perhaps, but only on a utopian world far, far away from planet Key.

The Dominion Post