Movies like LOTR and Avatar put NZ on the world stage... are we about to throw that away?

Hundreds of millions of dollars could be wiped from our economy and thousands of jobs lost if the outcome of the long-awaited screen sector review does not reflect a changing and more competitive global screen environment.

The review is specifically looking at the Screen Production Grant (NZSPG) which is the rebate given to studios that bring their productions to New Zealand. The review was announced in December 2021 and a decision is expected sometime next month. This drawn-out process and the uncertainty around the announcement has already seen studios that were considering New Zealand as a destination take their films, and hundreds of jobs and careers they support, elsewhere.

Any doubts as to the value of the screen sector to New Zealand’s economy are quickly dispelled when you read an independent report by international consultancy firm Olsberg SPI. Released in 2022 it shows for every $1 spent on the incentive scheme, there is a $6.11 benefit to New Zealand. $3.3b is pumped into our economy every year and more than 16,500 people employed.

Claims the NZSPG is a scheme

that just lines the pockets of already wealthy international studios are ill-informed and erroneous. In order for a production to receive a rebate, it first has to spend many millions more in New Zealand with local businesses and service providers.

Currently our screen incentive sees international productions eligible to receive a 20% rebate, with an extra 5% if they can demonstrate significant economic benefit to NZ.

Avatar: The Way of Water earned NZ another Oscar and cemented Wellington’s reputation as world-leading in VFX and postproduction. The production has invested more than $700m in NZ goods and services for a rebate of $130m.

And we can’t forget the 1400-plus crew employed, and more than 2000 individual outside vendors contracted. The figures

speak for themselves.

Across the Tasman the Australian government recognises the massive contribution productions make. In its latest budget it substantially increased and simplified the financial support for international film productions. The Location Offset has increased from 16.5% to 30%, and when you include state incentives, some productions could receive up to a 40% rebate on their spend.

It takes effect from July 1, and has put the New Zealand film industry firmly on the back foot. Here in Wellington we can expect Australia’s move to have a significant impact.

There are many reasons countries offer incentive schemes. The film sector supports the creative sector, skilled jobs, and a huge range of businesses. In Wellington this ranges from the NZSO for musical scores, to actors, builders, IT workers, hospitality, caterers and many more. It can also do wonders for tourism and for New Zealand’s national reputation.

We don’t need to be reminded of the ongoing benefits of The Lord of the Rings and The Hobbit.

In our region there has been a massive investment in the purpose-built world-class studio facility in Upper Hutt – it has everything a large-scale film or television series needs in one location.

Wellington has been recognised by Unesco for our rich film heritage and our commitment to a more inclusive and sustainable (economically, socially and environmentally) screen sector.

Wellington has delivered programmes to ensure underrepresented and underserved communities have access to making and engaging with film culture.

Within months of celebrating the release of Avatar, the Tongan community came out in force to celebrate Ma¯fana energy with the World Premiere of Wellingtonmade Red, White & Brass.

These are two amazing examples of the economic and cultural contribution our screen sector makes to our region and New Zealand.

There is potential for all of this to continue to grow but only if we remain competitive.

Yes, we have unique locations, world-leading post-production facilities and highly-skilled and talented crew but we cannot rely on these alone to compensate for a weak financial incentive.

At a time when the international screen sector is undergoing a significant adjustment, decisionmakers are acutely cost-conscious. We are in talks with international studios right now looking to bring their productions to New Zealand.

In last week’s budget the value of the multi-billion-dollar video game industry was finally acknowledged, with a 20% rebate for companies. That thinking needs to continue.

Now is the time for the Government to carefully consider whether New Zealand’s screen sector will remain in the frame.

There is potential for all of this to continue to grow but only if we remain competitive.