This blog routinely points out that subsidies in the VFX industry have led to a “race to the bottom” where various governments engage in a trade war as they outbid each other trying to lure US studio work.
If you remember, two years ago I wrote a few posts about how WB threatened to film The Hobbit elsewhere if the NZ government didn’t sweeten the incentives deals.
Well now it seems US Studio producers want more as the PM visits to meet with Hollywood execs:
“People are cutting extraordinary deals,” said Rubin. “Thirty, 45% tax kickbacks if you make your movie there.”
To lure Hollywood to New Zealand, Key would have to offer more than just “incomparable” scenery, he added.
Rubin said the strong New Zealand dollar, which has doubled in value since The Lord of the Rings trilogy began to be shot here in the late 1990s, is a problem for the country’s film industry.
If you have a moment, a podcast by a New Zealand radio station has an in depth discussion about the subsidies they offer to US Studios. At one point they ponder if it’s even worth it given that they will leave for the next country offering more.
In the UK, Wired reports that the UK VFX industry is under threat. Among many of those threats, we are starting to see the Vancouver subsidies injure the UK industry:
Getting them to keep the post-production work in the UK is trickier, as countries like Canada undercut the British tax breaks in that area — a film company can spend 25 percent of their budget in the UK, qualify for the filming credit, and then head to another country with the remaining 75 percent of the budget to take advantage of another tax credit. That could mean the loss of “billions”, says Hunt.
The only solution is to keep giving more and more money to the US Studios.