Kiwi tax break encourages Avatar to settle Downunder

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Avatar, the most expensive movie ever made, was propped up by a $45 million subsidy from Kiwi taxpayers.

James Cameron's film has already grossed more than $2 billion in global box office receipts but none of its profits will be returned as a dividend to New Zealand.

The New Zealand Government does get "special thanks", however - at the end of six minutes of rolling credits. The $307m movie qualified for the grant because much of the digital production work was done in Wellington.

Weta Digital, the computer special effects arm of Peter Jackson's studio empire, received the lion's share of the American-financed film's budget.

It employed almost 900 people for four years to work specifically on the project. Some of those were Kiwis; others were flown in from Europe or the United States.

Asked in December why New Zealand was chosen as the film's production location, Avatar producer Jon Landau said: "To be honest, we went for the tax credit."

Economic Development Minister Gerry Brownlee said the grant was a worthwhile investment and would have flow-on effects for the entire economy: "A good chunk of that $307m was spent on salaries here."

Industry sources estimated top staff at Weta Digital could have earned up to $11,000 a week for their work on Avatar.

Green Party co-leader Russel Norman said he loved the movie but the $45 million hand-out was "excessive". The subsidy should be a capped, he said.