Hobbit bill passes first reading

Prime Minister John Key announcing The Hobbit deal yesterday. Photo / Mark Mitchell

Parliament was tonight working its way through a labour law change the Government says is essential to ensure The Hobbit movies are made in New Zealand.

But the legislation was running into stiff opposition from the Labour Party.

The three-page Employment Relations (Film Production Work) Amendment Bill changes the Employment Relations Act so there is no doubt that when a film industry worker is engaged on an independent contract they won't be able to go to court and claim employee rights.

Labour Minister Kate Wilkinson said it would make a clear distinction that would end concerns by Warner Bros and ensure the $670 million production was filmed in New Zealand.

"If a worker signs on as a contractor, they are a contractor. If they sign on as an employee, they are an employee," she told Parliament.

"Film workers perfectly understand this. It doesn't remove any rights or affect any existing contracts."

Labour MP Trevor Mallard said the Government totally mismanaged the negotiations with Warner Bros, which ended last night with agreement on a $20 million tax break for the producer and an undertaking that labour legislation would be changed.

"What does it make our democracy look like when a group of people come from overseas, shake us down for millions of dollars and demand our labour laws be changed?" he said.

Economic Development Minister Gerry Brownlee, who played a key role in the negotiations, said the only people doing any shaking down were Australian union leaders.

Mr Brownlee said there wouldn't have been a crisis if the Australian film union hadn't organised an international ban on the movies, and the Council of Trade Unions went along with it.

The ban was lifted and assurances were given that there would be no industrial strife during filming, but Mr Brownlee said it had been left to the Government to save the movies for New Zealand.

"We've pulled a dreadful situation out of the fire," he said.

"It is our workers who have won. Their jobs were put at risk by an Australian union."

Mr Brownlee said Warner Bros didn't make any demands when its executives explained their concerns.

Labour's David Parker said the law change wasn't necessary and the negotiations had really been about money.

"This is all about sticking it to the unions and trying to drag the Labour Party into it," he said.

Government MPs said Labour didn't support having the films made in New Zealand, which was strongly denied by Labour MPs.

The Government's support parties - ACT, United Future and the Maori Party - backed the bill and it passed its first reading on a vote of 68 to 51.

With Parliament sitting under urgency, it was due to be passed into law late tonight after going through its second reading, committee and third reading stages.

- NZPA