Changes to labour laws were introduced to Parliament on Thursday, following an agreement between the Government and Warner Bros to enable The Hobbit to be filmed in New Zealand.
Prime Minister John Key announced on Wednesday the Government had reached a deal in which it offered the studio giant bigger subsidies to make The Hobbit films in New Zealand, costing it another $NZ33.5 million, and agreed to the labour law changes.
The House went into urgency on Thursday afternoon to debate the Employment Relations (Film Production Work) Amendment Bill.
The legislation, to clarify the status of an independent contractor in a film production versus an employee, will be be pushed through over the next two days.
During hours of robust debate, the Government argued that the law needed to be clarified and its agreement with Warner Bros is good for the film industry and the economy.
Government MPs launched a prolonged attack on New Zealand and Australian unions, with several National and ACT MPs accusing them of almost driving the production of The Hobbit overseas by their recent threats to boycott the films.
Labour MPs responded by saying the Government is looking for a scapegoat to cover up its own incompetent handling of the situation.
Opponents of the Government accused it of selling out New Zealand's sovereignty, under pressure from foreign commercial interests.
Labour's Trevor Mallard told the House on Thursday night that workers are not the only losers in the Government's deal.
"What does it look like for New Zealand as a democracy in a country with sovereignty when a group of people come from offshore (and) shake us down for $33 million?"
But Economic Development Minister Gerry Brownlee was looking elsewhere to lay the blame for the potential loss of The Hobbit films to New Zealand.
"Make no mistake, Mr Mallard, the only foreigners who've come into this country to shake us down have been the Australian union."
Meanwhile, it became apparent through the debate that only four out of the five Maori Party MPs are voting for the legislation.
Hone Harawira said he had to return home to Kaitaia but left his vote with the party whip. He says the fact it has not been cast in support of the legislation appears to be the result of a mix-up, as he supports his party's position.
The House will continue to debate the legislation under urgency on Friday morning.
Long-term measures, says PM
Mr Key told Morning Report the films are a huge project and Warner Bros wanted to eliminate as much risk as it could, and changing the laws will spell out employment terms for the entire film industry.
"This is also about the long-term film production industry in New Zealand. We are also trying to ensure this is a long-term destination to make movies."
Council of Trade Unions president Helen Kelly says the change is opportunistic and convenient for a Government that does not value workers' rights.
She says it could leave production company workers vulnerable to having their employee status unfairly downgraded to contractor.
Ms Kelly says New Zealand's reputation is in tatters for allowing a corporation to interfere.
John Barnett from production company South Pacific Pictures, which made Outrageous Fortune and produces Shortland Street, says that won't happen.
Under the agreement with Warner Bros, the Government will pay $US10 million towards marketing costs of the films as part of a "strategic partnership" to publicise New Zealand.
Mr Key, who is also the Tourism Minister, said a promotional video created by Sir Peter Jackson will be placed at the end of DVDs and digital downloads of The Hobbit films, describing the move as a huge opportunity for tourism.
"To put that in perspective," he said," the last DVD of the Lord of the Rings sold 50 million."
Tourism New Zealand says the international exposure gained through the filming of The Hobbit will provide another much-needed boost to the country's multi-billion dollar tourism industry.
Unions welcome deal
New Zealand Actors' Equity president Jennifer Ward-Lealand says performers are grateful to the Government for negotiating the deal with the American producers.
"I think in many ways, the issue has helped build public awareness of the importance of the film industry to New Zealand, and the industry will be stronger as a result".
The Media, Entertainment and Arts Alliance, the Australian actors' union that instigated the now-lifted boycott of The Hobbit production, says progress is now being made in agreeing to terms and conditions for performers on all future screen productions in New Zealand.