Subsidies help keep NZ king of cheaper films

Peter Jackson's King Kong benefited from the Government's expenditure grants for large-budget foreign productions

Government subsidies have helped to lift feature film production dollars five-fold in New Zealand and Australia over the past seven years to $US717 million ($1.2 billion), according to a new report funded by US film organisations.

The report by Hollywood's Centre for Entertainment Industry Data and Research also confirms that labour costs in New Zealand are lower than in Australia, Canada and Britain.

After taking exchange rates and production incentives into account, the report found a technician cost a feature film producer US$21 an hour in Britain, US$15.38 in Canada, US$15.03 in Australia and US$14.02 in New Zealand. In the US the pay would be US$25.

"Many a producer will tell you that if not for production incentives, whether foreign or domestic, their movie would not have been made," the report says.

"The incentives offered by other countries along with favourable currency exchange rates can be very lucrative, saving 10 per cent to 15 per cent of the total budget."

Centre co-founder Stephen Katz said the US economy had lost 47,000 jobs a year and $US23 billion in economic benefits from feature film production going overseas since 2000.

From 1998 to 2005 production in Canada grew 179 per cent to $US1.2 billion, in Britain and Ireland 66 per cent to $US809 million, in New Zealand and Australia 531 per cent to $US717 million and in Eastern Europe 927 per cent to $US308 million.

Worldwide feature film production expanded 30 per cent over the same period to $US7.2 billion, but US production declined 14 per cent.

"It appears that if the US hopes to retain a competitive edge in the global market for production, it will be necessary for the government to consider the enactment of an enhanced US federally based incentive programme and for state governments, particularly California, to do likewise," Katz said.

The report noted that New Zealand this year extended its 12.5 per cent expenditure grants for large-budget foreign productions until 2009.

Last year the scheme paid $US33.3 million for five projects, including an interim payout of $US16.6 million to Peter Jackson's King Kong.

- NZPA