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Economic Development department to continue the heavy discounts given to big screen productions in New Zealand

In defense of the country’s film subsidies, the Economic Development Minister, Gerry Brownlee dismissed a report by the New Zealand Treasury that revealed big Hollywood screen productions were shortchanging the country financially. In the report, big budget films such as James Cameron’s “Avatar” cost the Kiwi economy US$25 million in 2009, warning at the same time over the renewal of the current arrangement that offers a 15% discount to big productions.


In his rebuff, the Minister called the report “a sloppy piece of work by people who relied largely on their own prejudices,” adding that they had no creativity and failed to see the wider gains. Subsequently, the Minister reported that he had commissioned a thorough report to support his propositions, saying the robust Kiwi film industry was evidence enough of the good work being done by the government coin.


Mr. Brownlee said he was in support of the Large Budget Screen Production Grant and will not alter it, pointing out that more funds had been spent on development in New Zealand’s Tourism sector. An industry analyst said the New Zealand government was aware of the economic and industry value the country has as an international film production center, given the robust nature of the industry led by recent releases with blockbusters such as “The Lovely Bones,” and “The Adventures of Tintin” amongst others.


Upcoming blockbusters to be screened in the country include “The Hobbit” and “Wind in the Willows,” produced by Ray Giggs. The high tech film, Wind in the Willows, will be produced at Sir Peter Jackson’s Weta Workshop in Wellington. Estimated at about a budget of $30 million, the film may get about $4.5 million in Film Commission Grants.


However, critics are faulting the Minister for being blind to the loss of millions of dollars as the government tries to woo Hollywood film makers into the country. In a recently released Cabinet paper, the subsidies for films such as Avatar and King Kong were faulted as economically unjustifiable, citing that they had incurred the country a net loss of $36 million. In 2007, the Labour government raised subsidy levels from 12.5%, disregarding advice from the Treasury. This saw Avatar makers, the highest grossing film globally, get about $45 million in subsidies while King Kong got nearly $49 million. The report noted that those who benefited the most from the rebates were conglomerates in the US, mostly large multi-national media companies.


June 18, 2010.


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