James Cameron signs up to make 3 more Avatar movies in NZ after Govt almost doubles rebate for big foreign movie productions

By Bernard Hickey

20th Century Fox and James Cameron have agreed to spend at least NZ$500 million to make the next three Avatar movies in New Zealand after the Government agreed to increase the rebate for foreign movie productions to as high as 25% from 15%. This implies a Government subsidy of around NZ$125 million to get the three movies made in New Zealand.

Prime Minister John Key and Economic Development Minister Stephen Joyce made the announcement at an event in Wellington with Cameron, Producer Jon Landau and Twentieth Century Fox Film co-President of Worldwide Theatrical Marketing and Distribution Paul Hanneman.

“This is excellent news for the New Zealand screen industry. The Avatar sequels will provide hundreds of jobs and thousands of hours of work directly in the screen sector as well as jobs right across the economy,” Joyce said. 

“They will be a very big boost to the screen industry while we look to develop more New Zealand-sourced productions," he said.

The deal comes with the Government's announcement of a plan to increase the baseline rebate for such large productions to 20% from 15% and to offer a further 5% to those that provide extra benefits to New Zealand.

A Memorandum of Understanding (MOU) signed between the Government and 20th Century Fox provided for:

1. A commitment by both parties to grow the screen sector in New Zealand and to building a long term and productive relationship between the Crown and Lightstorm/Twentieth Century Fox.

2.  Spending of at least NZ$500 million on production activity in New Zealand, including most of the live action shooting and visual effects. 

3.  Employment and skills opportunities for New Zealanders, including in Head of Department roles, with around 90% of of live action crew expected to be New Zealanders. An internship programme would also be supported.

4.  New Zealand hosting at least one official red carpet premiere, and a featurette on New Zealand being included in DVDs and Blu Rays.

5. Cameron and Landau would serve as founding members of a new screen advisory board to New Zealand screen and film makers looking to succeed internationally.

6.  Marketing and promotion of New Zealand and its film industry alongside the three Avatar films, transferring technological know-how to New Zealanders, and retaining screen production infrastructure in New Zealand that could be used for industry training. 

'Grow mid-sized productions'

Elsewhere, Arts, Culture and Heritage Minister Chris Finlayson gave more detail on the changes to the subsidies for large film and television productions.

Finlayson said the changes were designed to encourage the growth of mid-sized New Zealand-based productions, while also increasing the competitiveness of international productions in the short to medium term.

Finlayson said a new consolidated fund would provide an internationally competitive incentive of 20% of qualifying costs of international productions made locally, with a further 5% available "where productions can demonstrate significant economic benefits and activities to strengthen the local industry."

Medium-sized productions (between NZ$15 million and NZ$50 million) which feature New Zealand content and significant local creative control would qualify for more support than previously.

“These changes will help ensure a screen industry that is more sustainable, brings greater long-term economic benefits to New Zealand, and avoids the peaks and troughs that are solely dependent on large international productions,” Joyce said.

“New Zealand is recognised internationally for our world-class expertise in making quality film and television. Our screen industry has grown significantly over the 15 years and is an important contributor to our economy and to our international profile. New Zealand has a lot to offer with a skilled and capable workforce, flexible employment laws, proven expertise in post-production, natural scenery and competitive labour costs."

Joyce acknowledged a sharp downturn in recent months in international production activity in New Zealand for both film and TV. "This is due to a combination of factors, including increasingly generous grant rebates and tax relief offered by other countries," Joyce said.

Here's the details

From April 1 next year the Large Budget Screen Production Grant (LBSPG) and Screen Production Incentive Fund (SPIF) would be combined to form a single scheme called the New Zealand Screen Production Grant (NZSPG). It will be uncapped.

The existing rebates of 15% for the LBSPG and up to 40% for the SPIF would be replaced by two rebates: 20% (plus an extra 5% for productions that meet extra criteria) for international productions; and up to 40% for New Zealand productions.

To gain an additional 5 per cent rebate, applicants would have to meet a points test relating to "significant economic benefits."

For New Zealand productions, a two tier system would be created. ‘New Zealand productions’ means productions with very high New Zealand content, such as a New Zealand story and a high level of New Zealand creative control. Local productions of up to NZ$15 million would have to gain a certain number of New Zealand content points test to gain the 40% rebate, payable as a grant.

For New Zealand film and television productions for between NZ$15 million and NZ$50 million support would be provided as an equity share as opposed to a grant and be subject to scoring a certain number of points on a points test relating to business as well as cultural factors.

'Indirect economic benefits'

Later in the announcement, a Questions and Answers section of the minister's announcement said the screen sector produced a range of "unique direct and indirect economic benefits to New Zealand."

"These include lifting the international profile of New Zealand on the world stage, and attracting more tourists and other people-to-people linkages. This profiling of New Zealand provides benefits to other industries and the country generally," Finlayson's office said.

"These changes will encourage New Zealand’s screen industry to become more adept at taking advantage of this dynamic and rapidly changing environment and become more entrepreneurial," it said.

The overall budget cap of NZ$63.5 million over five years was being replaced by an uncapped provision and caps on individual productions were being increased to NZ$20 million (40% of NZ$50 million QNZPE).  This will allow larger-budget New Zealand screen productions to access funding. Because the new provision is uncapped, productions of all sizes will have an equal opportunity to qualify for funding, i.e. smaller-budget productions will not be crowded out by larger-budget productions.

Political reaction

Labour Arts Culture and Heritage spokeswoman Jacinda Ardern said the announcement was a much needed lifeline to an industry in crisis, although it would be too late for some.

“Labour had already announced that it would lift the incentive regime. The Government only acted when world-class post-production facilities started closing their doors," Ardern said.

She said Labour would now look at the detail because little had been said about changes about the criteria to qualify for the rebate.

“We have the opportunity  to build a regime that is not focused on one big budget movie at a time, but that works for the whole industry, and across the whole country. To do that, the Government must now consult with local industry players, especially those in Auckland."

(Updated with more detail, comments, reaction)