Lights, cameras, economic boost?

Last updated 13:00 18/12/2013

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OPINION: When the whole world is your stage, you can afford to look around for the most attractive place to play.

Hollywood movie moguls are in this powerful position, able to bargain about incentives with countries keen for the profile and potential economic boost that filming a blockbuster can deliver.

As in other spheres, New Zealand's size means it cannot compete solely on cost with countries prepared to throw greater inducements at film-makers. It can, however, compete on its production expertise and its resume, thanks to Peter Jackson's Lord of the Rings films and the first Avatar movie.

It leads to questions about how much taxpayer money should be used to keep the country competitive enough to bring projects here, and what the wider payoffs are.

Part of the Government's answer was provided this week, when Prime Minister John Key announced a new package for big-budget international productions that lifts their cost rebates from 15 per cent to 20 per cent, or up to 25 per cent for the biggest projects.

The first, and so far only, beneficiaries of this are the three sequels to James Cameron's Avatar that will now be made here. In return for incentives worth an estimated $125 million, the producers will spend at least $500m in New Zealand.

On the surface, it looks like a reasonable deal, but the package was passed against Treasury advice that argued there were limited benefits from past Crown contributions to the screen industry, and questioned the worth of more generous subsidies.

Another part of the package is extra Crown support, including direct funding, for mid-sized New Zealand film and television productions.

Economic Development Minister Steven Joyce says the package is needed to help reverse a sharp downturn in international production in recent months, partly due to other countries offering more generous incentives. He is right when he says New Zealand does not want to get involved in a "race to the bottom" to get overseas films made here. But the Government points to wider benefits than the black-and-white bottom line argument from Treasury, saying the screen industry has grown significantly in the past 15 years and contributes to the economy and our international profile.

There is little doubt that the Lord of the Rings and The Hobbit films have lifted New Zealand's international profile, and by implication tourism and business opportunities, though the numbers are difficult to quantify.

It's a similar argument used to justify taxpayer spending on events such as the America's Cup, or other sports events that raise our profile but have a return that's hard to measure. Wellington Mayor Celia Wade-Brown says the first Avatar film generated $100 million in spending for the capital, and had broader spinoffs for the city's innovative industries.

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The funding package walks a delicate line to attract international films and boost the local industry. It's kept Avatar here, but the key test is whether it will pay off in the longer term.

- © Fairfax NZ News


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