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

 


CORRECT: Hobbit tax rebate swells to $67.1 mln in 2nd year

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

(Fixes extra subsidy figure in 10th graph)

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$15 million 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

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news