21 Oct 2010

Extra tax breaks for Hobbit ruled out for now

10:45 pm on 21 October 2010

Economic Development Minister Gerry Brownlee says extra tax incentives to guarantee that the Hobbit films are shot in New Zealand are not on the table.

On Thursday, actors' unions in New Zealand and America lifted their boycott on performers working on The Hobbit, but director and producer Sir Peter Jackson says that does nothing to help the films.

Sir Peter's company, Wingnut Films Productions, and the New Zealand Actors' Equity union have been at loggerheads over a collective pay agreement, leading to warnings the film might be made in another country.

Australian-based Media, Entertainment and Arts Alliance (MEAA) had urged the New Zealand actors to boycott The Hobbit.

Sir Peter says the studio financing the films, Warners Bros, is coming to New Zealand next week to arrange for the production to be moved overseas. Prime Minister John Key says he wants to meet with Warner Bros. representatives then.

Mr Brownlee said on Thursday the Government is going to do everything it can to keep the filming in New Zealand but ruled out more tax breaks for now, saying money is not the issue.

"We know from Warners that the issue is the industrial relations. This is a $2.8 billion industry in New Zealand, and to have had an Australian union come in here and kick the crap out of it is just completely unacceptable."

Generous tax break already, says English

Finance Minster Bill English says it is possible there is an agenda at work by the makers of the Hobbit films to extract more money from the New Zealand Government.

Mr English said he expects the issue of further tax breaks will come up during the meeting with Warner Bros.

"No doubt if they've got something to say, they'll say it. The rough estimates of taxpayer support for this film are around $50 to $60 million - maybe more if they spend more, so it's pretty generous."

He would not be drawn on whether the Government should be offering more subsidies to overseas production companies that film in New Zealand.

Prime Minister John Key said the issue is not about dollars and cents, but of the potential for industrial strife.

"I think we have a strong position, but the industrial action from the unions and the threat of industrial actions, along with a number of actions the CTU (Council of Trade Unions) took last year, have substantially undermined the confidence that Warner Bros. has in New Zealand.

"The Government will have to sit down and talk to them about what we can do to restore that confidence."