New Zealand’s Rich Production Incentives Draw Global Projects
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For a small country with a film industry that is export-driven, the quality of New Zealand’s incentives is critical.
Despite the kudos and tourism dollars delivered by producing the New Line’s “Lord of the Rings” franchise and “The Hobbit,” by 2013 New Zealand knew that its incentives had lost their competitive edge.
In 2014, the government responded by collapsing its two film oversight bodies into one, and replacing the Large Budget Screen Production Grant and Screen Production Incentive Fund with the New Zealand Screen Production Grant.
The result is one of the simplest and most robust rebate programs anywhere in the world.
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“Having a competitive incentive is what keeps you in the game,” says Catherine Bates, head of incentives within the New Zealand Film Commission. “New Zealand is now known for offering a mixture of size, scale, skills and locations.”
For international productions to access the program, a minimum of NZ$15 million ($9.5 million) of local qualifying spend is required for a feature film, or NZ$4 million for a TV show. With the thresholds passed, the NZFC will rebate a standard 20%.
The program’s great beauty is threefold: that the NZFC operates wide definitions of what counts as local spending; that the rebate is a grant, not a tax refund, or an investment stake; and that it is uncapped.
“A 20% grant becomes quite competitive when you run the budget, take in the labor qualities and factor in the weak exchange rate,” says Bates. But for good measure she explains that the NZSPG operates with a high degree of transparency and the backing of two ministries.
For really large, special case, movies the NZSPG designates can be topped up by further five percentage points, in a process known as an “uplift.” It requires an applicant to spend $19 million on the current production — and $63 million in the previous five years — and prove significant economic benefits to the country.
To date, only five films have qualified — “Power Rangers Dino Charge,” “Pete’s Dragon,” “Ghost in the Shell,” “The Meg” and “Mortal Engines” — with the current “Avatar” movie series clearly also a likely sixth.
Those productions were required to create and leave behind assets that have included a large-scale student education program, tourist attractions, and in the case of “The Meg,” water tanks and green screen facilities at the newly built Kumeu Film Studios, near Auckland. It also provided New Zealander Cliff Curtis a prominent role. Conditions attached to “Avatar” include an education function for producer Jon Landau, and the requirement that director James Cameron participates in a national tourism campaign.
Other mid-sized productions are encouraged to use New Zealand’s facilities houses through a Post, Digital and Visual Effects (PDV) scheme that offers grants of 20% of qualifying New Zealand production expenditure up to an expenditure threshold of $15 million, and an 18% grant above the threshold.
Kiwi filmmakers can access their own incentives, the New Zealand Grant, which comes with lower spending requirements, and the possibility of a 40% rebate of qualifying spending. But it also comes with a significant New Zealand cultural test and the production must share profits with the NZFC.
Glossy literary adaptation “The Luminaries,” produced by Working Title and Southern Light Films for the BBC in the U.K. and TVNZ in New Zealand, recently took this route.
It stars Eva Green, Himesh Patel, Ewen Leslie and Eve Hewson in a tale of an adventurer who travels from Britain to New Zealand to seek her fortune in the country’s short-lived 19th century gold rush.
Alternatively, international co-productions using one of 18 bilateral treaties, can access the local grant scheme as an alternative to the NZSPG or the PDV.
That’s because, by definition, an official co-production is considered as having two home countries.
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