16 Apr 2021

Amazon Lord of the Rings deal furrows brows over government priorities

6:24 pm on 16 April 2021

The government's priorities are being questioned after announcing it will be giving Amazon a more than $100 million boost to film the Lord of the Rings television series here.

 Amazon building in Santa Clara, California.

Photo: 123RF

Under a Memorandum of Understanding, Amazon will get an extra 5 percent from the Screen Production Grant in addition to the 20 percent grant the production already qualifies for.

Amazon plans to spend about $650m on season one of the television series, making it eligible for a rebate of over $160m.

Economic Development Minister Stuart Nash said the deal was "fantastic".

"The world's most innovative company has decided to come to this country and they could have gone to anywhere in the world, spend $650 million, grow our film industry, we're able to leverage off some of their really innovative technologies and ideas, where is the downside?"

However, New Zealand Filmmakers' Collective founder Richard Turner described it as a double-edged sword.

The plus side is that is it will open up a lot of opportunities for consistent work, he said.

"The other side of the coin is for all that money it feels like we should be looking closer to home and looking at ... talent development and looking at New Zealand filmmakers and where that money could go," he said.

Turner said domestic feature film funding or funding for any project in New Zealand was incredibly difficult and the options were extremely limited unless the filming team met certain criteria.

"The majority of us [filmmakers] feel as though the government and funding bodies are doing the bare minimum to allow filmmakers to create content, especially feature films."

National is supporting the deal, but wanted the government to publicly release all advice on the extra economic benefits of the arrangement.

The minister told Morning Report he had not read Treasury advice regarding the deal.

Treasury has since confirmed there was no Treasury advice given specifically on the understanding between the government and Amazon.

Rather, it had given advice on Screen Production Grants more broadly.

National's economic development spokesperson Todd McClay also wants the government to ensure it is not creating a "bidding war" where other studios and companies start demanding the same levels of increased government subsidies.

ACT Deputy Leader Brooke van Velden does not think a company that made more money last year than this country needs any financial help from the government.

"All of those subsidies that are going to go offshore to Amazon to a company run by the world's richest man is money that can't be used for New Zealanders and getting more money to line their pockets, especially when so many families are hurting after the Covid lockdown," she said.

Van Velden said the country's Covid-free status and environment alone should be enough to entice film companies to come here.

Police Minister Stuart Nash, also Fisheries Minister, Revenue Minister, Small Business Minister

Stuart Nash has described the deal as "fantastic". Photo: RNZ / Dom Thomas

Nash said this was the nature of the competitive film industry.

Amazon will also be looking at other business opportunities here.

Council of Trade Unions president Richard Wagstaff is worried about Amazon's international reputation of undermining unions.

"Just a week or two ago we had a very significant event in Alabama where Amazon did everything in their power to dissuade workers from joining a union and that's a real concern to us that they bring those kind of ideas out to New Zealand," he said.

He said without collective bargaining, rights to decent working conditions would be seriously eroded.

Retail NZ's Greg Harford wanted to make sure Amazon was on an even playing field with New Zealand companies.

"It is really important to make sure that if Amazon is coming into the market and exploring any other opportunities that it is paying its fair share of tax and of course GST is being collected on anything it is selling," he said.

Nash brushed off rumours that a distribution centre could be set up here, saying that this deal is not linked.

The government would not say exactly how much this deal will cost, citing commercial sensitivity, but Nash confirmed it is over $100 million.

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