Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Hobbit tax rebate swells to $67.1M in year two of production

Hobbit tax rebate swells to $67.1 mln in second year of production

By Paul McBeth

Nov. 26 (BusinessDesk) - New Zealand taxpayers lent a $67.1 million helping hand via tax rebates for the making of Peter Jackson's movie The Hobbit in the first two years of actual production, according to its financial statements.

The movie, produced by Warner Bros Entertainment subsidiary 3 Foot 7, reaped $46.9 million from New Zealand's large budget screen production grant in the 12 months ended March 31, according to statements lodged with the Companies Office. That added to the $20.2 million tax rebate it received in 2011, the first year it got the subsidy.

Shooting on The Hobbit wrapped in early July of this year, meaning the company should be able to claim a further rebate in the 2013 period.

The subsidy over the two years amounts to about 14.6 percent of the $459.6 million production cost incurred over the 2011 and 2012 financial years, just below the 15 percent of locally incurred costs that can be claimed back in tax under the scheme, known as qualifying New Zealand production expenditure.

New Zealand is coming under pressure to raise the subsidy as the weak US dollar eats into Hollywood studios' margins. Last month producer James Cameron, who used Wellington-based Weta Digital for his Avatar film, told TVNZ's Q&A programme Prime Minister John Key discussed "the idea of possibly altering the rebate scheme to keep pace with the change in the dollar" with studio executives on a whirlwind visit to Los Angeles.

The Hobbit production company narrowed its loss to $8.2 million in the 2012 year from $70.4 million a year earlier. The way the production is financed means filming costs are covered by interest free loans from New Line Cinema. 3 Foot 7 can then satisfy that debt, plus take a margin, by charging production service fees once filming is completed.

The company lifted its production service fee to $266.3 million in the 2012 period, from $50.1 million a year earlier. That left $27.6 million in outstanding production advances, as at March 31.

New Zealand's capital, Wellington, is preparing to host the world premiere of the first Hobbit film on Wednesday, and Wellington City Council has put up some $1.1 million for a raft of activities, including outdoor screenings of the Lord of the Rings trilogy and a week-long artisan market two blocks away from the red carpet.

The movie trilogy, originally slated for two films, suffered several delays, including funding woes from MGM, first-choice director Guillermo del Toro quitting and producer Peter Jackson taking over, a threatened actors’ boycott, and surgery for Jackson.

The film became a political football in 2010, and saw Prime Minister Key step in to broker a deal with Warner Bros executives amid fears the production could be shipped somewhere cheaper as local actors sought to firm up their working conditions.

That saw the government give the studios an extra subsidy of up to US$7.5 million per movie for spending more than $200 million, expanding what spending qualifies for the rebate under the existing rules, and changing employment law to classify all film workers as contractors by default. It would also stump up US$10 million to market local tourism as part of The Hobbit’s release.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

March 2017: Commerce Commission Delays Decision On Fairfax-NZME

The Commerce Commission has delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market. More>>

ALSO:

Plan Plan: Permanent Independent Hearings Panel Proposed For Planning

The Productivity Commission recommends creating a permanent independent hearings panel like the one that cut through local politics to settle Auckland’s Unitary Plan, for the whole country. More>>

ALSO:

Statistics: NZ Jobless Rate Falls To 5.1% Under New Methodology

New Zealand's unemployment rate fell more than expected in the second quarter as Statistics New Zealand adopted a new way of measuring the labour market to bring the country in line with international practices, and while a growing economy continued to support jobs growth. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news