Tax carrot should bring films

Gerry Brownlee. Photo / Sarah Ivey

Film studios are more likely to make big-budget movies in New Zealand because they will benefit from broader tax rebate rules, the Government says.

The Government revealed this week that the new rules would mean up to $20 million in extra money for Warner Bros via tax rebates, on top of the estimated $50 million to $60 million under the old rules.

While the details of the Large Budget Screen Production Grant remain under wraps, Economic Development Minister Gerry Brownlee said it would effectively increase the incentives for large productions to come to New Zealand.

The grant is a 15 per cent tax rebate available on eligible domestic spending. At the moment a production could claim the rebate on screen development and pre-production spending, or post-production and visual effects spending, but not both.

If the Government allowed both aspects to be eligible, it would be a large carrot to dangle in front of movie studios.

Mr Brownlee was giving little away yesterday but said the broader rules would apply only to productions worth more than US$150 million ($200 million). It would bridge the gap "in a small way" between what New Zealand offered and what other countries could offer.

"It helps assist with the issue of competitiveness. But what it comes down to in the end, we rely heavily on the talent pool that we've got here, because they do produce a good product, and we feel fairly strongly that this is the right sort of move to make to continue to support that industry."

He said some details still needed to be sorted - "not for Warner Bros" - and the new rules would be released before Christmas. Commercial confidentiality still applied, even though the laws were passed by Parliament yesterday.

The law change that the Government said was necessary to keep The Hobbit in New Zealand means film workers will be independent contractors by default, and cannot later claim to be an employee unless it was set down in a written agreement from the outset.

Labour MP Charles Chauvel said it was bad law passed under a defective process that would only create more litigation - the opposite effect of what it was trying to achieve.

"The law governing the status of workers in New Zealand has been well settled for the past 5 1/2 years since the Supreme Court decision in Bryson vs Three Foot Six," Mr Chauvel said.

"There have been no significant cases since then on whether workers are employees or contractors, so there was no need to change the law under urgency in the way National has just done."

National's Tau Henare said Labour did not support the Employment Relations (Film Production Work) Amendment Bill bill because it was looking after its union mates.

"Talk about overseas influence - I've never seen the likes of it before, an Australian union waltzes in and tells workers in this country what to do," he said. "Warner Bros were about to bugger off - and a billion dollars would have gone."

- additional reporting NZPA