Challenges in Production Incentives

Hello fellow guild members and screen industry workers.

In mid-December last year, the consultation for the retune of the NZ screen production grant ended, and with a predicted date of the release of the decision from the government in June, consequently the first half of this year has been spent with many in the industry concerned and wondering if the changes when they finally come were going to be the rebalancing that we needed to continue to build on the infrastructure investment by both regional authorities, business owners, and the momentum the screen industry was starting to get happening.

Since our last incentive rejig about 10 years ago when we moved from a 10% rebate to 20% for international production that met the criteria, we put ourselves back into the middle of the pack and saw a visible uplift in the amount, quality, and quantity of production both domestic and international. There was commentary at the time and since that we “don’t want to engage in a race to the bottom” with these incentives. In response to this, I would have to say no one has ever talked about trying to have the highest incentive in the world and essentially compete with other regions only in this respect.

I think the real conversation here has always been looking to position NZ in the middle of the pack of rebate levels. We, as a national screen industry, only have the crew and infrastructure for a certain amount of work and cannot even dream to compete with the UK, Canada, or even Australia in terms of the scope and number of projects those regions can facilitate.

In my opinion, as what happened ten years ago has happened again. Time and audited studies have shown again and again the value the streams of direct foreign investment international screen projects bring to a country. As in 2013, other regions have realized the value of encouraging this type of investment, and the overall average incentive offered by countries we compare ourselves to has increased. As we can see with Australia, they have seen the opportunity and raised their federal screen industry rebate to 30%. And we need to remember here this rebate is handing back a portion of money that would never have come into the economy without the incentive.

But this time, our response has not been bold or decisive as last time. This time, we have done virtually nothing substantive. We have upped our incentive to domestic productions, which is great, but aside from a name change highlighting the fact the scheme is a rebate and a promise to simplify the complicated uplift, we, as a country, have done nothing to increase our competitiveness and stay in the middle of the pack. We are again slipping further behind.

Time will tell, and let’s hope we do not see a lack of production cause our talented members to look offshore for work. With most of the studies showing at least a 6-1 benefit for each dollar of rebate expended, one would almost say increasing our rebate (as Australia did) might have been a no-brainer.

I would have liked to see a more dynamic methodology established. Something like an equation that calculated what our offshore competitors were currently offering and generated an advised number of where we should aim our rebate to stay in the middle of the pack and in a zone that was recognized as competitive.

Time will tell. I hope the next year of screen production in New Zealand starts to look brighter than it currently seems.