This is a tough one, isn’t it? Should we keep subsidising massive block buster projects? Should we as New Zealand taxpayers be giving cash to one of the world’s richest men so he can make a TV series here?
The question’s come up again because it’s been revealed that Amazon has chosen New Zealand as the destination to make the new Lord of the Rings TV series. We’re just waiting on Amazon to officially announce that, but the Government has hinted such a statement is coming soon.
If they do, it means that Amazon will qualify for a 25 per cent tax refund, which could mean a subsidy of potentially millions. And Amazon probably doesn’t need the money because it’s owned by Jeff Bezos, who’s worth $230 billion.
The government is defending the subsidy, which is ironic because not long ago they were promising to cut back on it.
But obviously, this government has realised what others before it have, which is that we scrap the subsidy, we will lose our film industry. The entire thing will pack up and go to Scotland or whatever other place is offering the best subsidy because that’s how it works. There’s no loyalty, the film industry goes where the best money is.
Some people hate this subsidy. Their argument often is that if you subsidise one industry you must be prepared to subsidise any, that there’s nothing special about the film industry. But that isn’t true: this is an industry that gives us a double whammy.
Not only does it provide jobs and pay tax, but it also quietly markets New Zealand to the world. Cn you say the same about the car industry? Can you say that subsidising car manufacturing in this country would also entice tourists? No, you can’t.
And it’s a no brainer that the subsidy for the film industry has not only kept that here, but also attracted how many tourists to come and see Middle Earth and Hobbiton and the Weta Cave.
Ultimately though, the subsidy has to be at a level where we get money back, right? There’s no point in putting more money into something than you can get back from it. That’s a terrible investment
Is the film subsidy returning us money? It’s hard to know for sure, because these economic evaluations are hard to trust, but it looks like it.
A report from a couple of years ago found that the benefits “significantly outweigh” the cost of the grants, and Stats NZ last year said the screen industry is worth $1.1 billion annually, employing 14,000 people. Those are people being upskilled by an industry pumping up our international reputation as a travel destination
So, on balance, I tend to think this grant is money well spent.