Incentive changes for a sustainable NZ screen industry

The Government today announced changes to the structure and level of support for overseas and New Zealand film and television productions to ensure the further development of New Zealand’s screen industry.

The new changes are designed to encourage the growth of mid-sized New Zealand-based productions that can compete successfully on the world stage; while also increasing the competitiveness of our incentives for international productions in the short to medium term.

A new consolidated fund will provide an internationally competitive incentive of 20 per cent of qualifying costs of international productions made locally, with a further 5 per cent available where productions can demonstrate significant economic benefits and activities to strengthen the local industry. Medium-sized productions (between $15 million and $50 million) which feature New Zealand content and significant local creative control will qualify for more support than previously, in order to harness and grow the benefits from local intellectual property.

“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,” Mr Joyce says.

“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.
“In recent months there has been a sharp downturn 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.

“To support and develop our screen sector, the Government is altering our screen production incentives to both encourage more mid-sized locally-driven productions and attract more international productions while our own domestic industry develops – without engaging in a ‘race to the bottom’ mentality,” Mr Joyce says.

“We want to protect and enhance the wider economic benefits from the screen sector including tourism and boosting New Zealand’s international profile, while at the same time developing a more sustainable local industry that is less dependent on international productions,” Mr Finlayson says.

“Changing our screen production incentives will provide breathing space to develop a more sustainable local screen industry that generates more Kiwi-owned intellectual property.”

Changes from 1 April 2014 include:

· The Large Budget Screen Production Grant (LBSPG) and Screen Production Incentive Fund (SPIF) will be combined to form a single scheme called the New Zealand Screen Production Grant (NZSPG)

· Existing rebates of 15 per cent for the LBSPG and up to 40 per cent for the SPIF will be replaced by two rebates: 20 per cent (plus an extra 5 per cent for productions that meet extra criteria); and up to 40 per cent for New Zealand productions

· For international productions, 20 per cent will become the new baseline rebate accessible on the basis of qualifying New Zealand production expenditure over certain qualifying expenditure thresholds. To gain an additional 5 per cent rebate, applicants will need to meet a points test relating to significant economic benefits. The extra 5 per cent rebate replaces the existing ‘additional grant’ which will be discontinued

· For New Zealand productions, a two tier system will 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

· For New Zealand film and television productions of up to $15 million, it will be necessary to gain a certain number of points on the New Zealand content points test to gain the 40 per cent rebate, payable as a grant.

· For New Zealand film and television productions in excess of $15 million and up to a maximum of $50 million, support will be provided as an equity share as opposed to a grant payment and be subject to scoring a certain number of points on a points test relating to business as well as cultural factors.

“These announcements build on the changes the Government made in July to lower the qualifying expenditure threshold for TV productions and dropping qualifying expenditure for the Post, Digital and Visual Grant,” Mr Finlayson says.

“The Government will be consulting on these changes with the local screen industry early next year particularly how the new points system will be implemented.”

“The global screen industry is dynamic and rapidly changing and these new incentives will ensure we continue to attract overseas investment while at the same time developing our local screen industry so more New Zealand-made stories can successfully compete on the international stage,” Mr Joyce says.

“It is intended that Ministers will keep reviewing these incentives over time, with the overall aim of encouraging more New Zealand-sourced creative intellectual property which is less dependent on competing with other countries’ international incentive schemes.”

ENDS

Screen_Production_Incentives__Cabinet_Paper.pdf

Screen_Production_Incentives__Minute.pdf

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