• July 9, 2022
ACT Deputy Leader Brooke van Velden. Photo: ACT Party
Screen industry leaders are crying foul over the ACT Party's “misguided” attack on a tax rebate that attracts international film giants to New Zealand shores.
In a press release, titled Avatar subsidies leave taxpayers feeling blue, ACT deputy leader, Brooke van Velden, says New Zealand would be "better off scrapping the Screen Production Grant, and other corporate welfare, and allowing taxpayers to keep the money”.
In the NZ Herald van Velden notes the first Avatar movie made about $3 billion profit. "They don’t need this [rebate] money. Kiwis need it in their back pockets.”
Brendon Durey, president of the Screen Industry Guild of Aotearoa New Zealand, says Van Velden is wrong to think Kiwis will be better off if the rebate was scrapped.
He says the money comes from the taxes film companies have already paid while making the movie in New Zealand.
“It's new money coming into the economy. It’s not taxpayers money out of people's pockets,” he says.
Irene Gardiner, president of the Screen Production and Development Association, says Van Velden’s statements are misleading.
“She was very misguided to the point of being incorrect,” she says.
She says the grant is not a handout to “Hollywood fat cats”, but a rebate on money they spend in New Zealand.
“A project like Avatar puts millions and millions and millions of dollars into the New Zealand economy and then a small percentage of that, 20 per cent, goes back to them to make them come here,” she says.
Durey says it is wrong for Van Velden to say the $200 million rebate the Avatar sequels received could be used towards domestic health services.
“No, without the [incentive of a rebate], there is no $200 million,” he says
A New Zealand Film Commission study showed for every dollar of the rebate, the country stillmakes $6.11, which is "incredible", he says.
Without the rebate, New Zealand would lose out on all the money international films bring.
Gardiner says film incentives are “a business practice that exists in the global film industry and you don’t get the film without it".
"They go elsewhere. Our beautiful scenery and our fabulously talented crews are sadly, not enough,” says Gardiner.
Australia offers a 40 per cent tax credit for feature films, and the UK a 25 per cent tax credit on most of a production's spend.
The New Zealand Screen Production Grant (NZSPG) offers a 20 per cent rebate for international productions and an additional 5 per cent can be applied for by larger productions, such as the Avatar sequels.
The production of those sequels in New Zealand was secured by then Prime Minister John Key in 2013.
New Zealand Film Commission documents show after the rebates have been paid, international productions have brought more than $4.6 billion into New Zealand since 2010.
The ACT party would see screen rebates scrapped altogether in its 2022 Alternative Budget.
Gardiner says if ACT had its way, the international side to the New Zealand film industry would be killed off overnight.
“Do you wanna throw away the millions they’re bringing in at a time when New Zealand needs money because of covid?”
She says Avatar may have made $3 billion but it isn't about that "It’s about us and what we would lose if we didn’t do that.”
Recently, Variety reported the Czech Republic suspended its production incentives and is now losing films to other countries.
After New Zealand fost Amazon’s billion-dollar The Rings of Power to the UK, the Government launched a review into the NZSPG to “ensure the screen sector has a more secure long term future”.
“When we don’t get competitive, this country loses billions of dollars, literally billions of dollars in incoming revenue,” says Durey.
Both Gardiner and Durey say National has been supportive of the industry and a potential coalition with ACT is not concerning.
“I don’t think cutting the legs off a billion-dollar industry is necessarily going to be one of the things that [ACT] will get past the larger partner,” says Durey.
National and ACT have been contacted for comment.