Well it’s that time of the year! Seems almost every October the US studios start bullying New Zealand into handing over more free taxpayer money or else they’ll pull film work from the country. This time it’s about Avatar:
After the success of movies like The Lord of the Rings and Avatar, the New Zealand film industry is now facing crippling losses.
There are new calls for the Government to review tax incentives for foreign productions as the industry faces losing a billion dollar blockbuster.
Industry rumours about Avatar have been flying thick and fast – that production is moving to Australia or even Mexico.
Is Fox really going to pull Avatar from NZ? No way. However the idea here is to deliver a few threats, scare some people into protesting to save Avatar, and chich-ching: Politicians start handing over the free money to the studios. It was almost 3 years ago to the day that Warner Bros pulled the same shenanigans:
New Zealand: Casualties Of The Film Subsidy War – The real reasons Peter Jackson almost took the Hobbit out of NZ.
US Studio Warner Bros. Leverages NZ – What NZ had to do to keep The Hobbit.
Back in 2010, New Zealand was experiencing a record high .75 NZD against the US dollar making it far more expensive to do The Hobbit there than the last time they made the Rings films. Given that NZ’s 15% film subsidies were much lower than UK, AUS, and Canada, Warner Bros. figured it could leverage the NZ government into handing out more money. After a bunch of protests by citizens to “Save the Hobbit!”, the Prime Minister of NZ held emergency meetings with the Tea Party… err I mean Warner Bros. and surprisingly NZ handed over larger subsidies to keep the Hobbit there.
Now in 2013, the same dynamic persists under much more pressure. It’s now almost 15% more expensive for US studios to do work in NZ with the NZD now hitting another record of .85 to the US dollar. The subsidies are still much less than other countries and with Peter Jackson contemplating slowing down, New Zealand is unfortunately a good target for another round of leveraging.