by Daniel Dunkley — 28 July 2023
New Zealand is becoming a less competitive destination for international film productions, with “the real danger of shrinking in this area”. Economic Development Secretary Barbara Edmonds and Arts, Culture, and Heritage Minister Carmel Sepuloni have warned that the local film industry is facing a decline in competitiveness due to increasing competition from Australia and other countries. They suggest that keeping the New Zealand Display Production Grant (NZSPG) in its current form is not a viable option. The ministers warned that a reduction in international film production would hurt the domestic sector, given the close relationship between the capacity and capabilities of the workforce. The government will announce final changes to the NZSPG in the coming days after launching a consultation on the scheme late last year. The NZSPG allows local producers to claim 40% of every dollar spent in New Zealand, while international manufacturers can claim 20%. An additional 5% increase for major foreign productions could have a significant economic impact. The 5% increase for major productions should also be simplified to attract big-name shows and movies. The moves come after the Australian government expanded its equivalent return scheme from 16.5% to 30% for international film and television productions. Rival markets like the UK have also turned to film production in recent years, raising taxes on movies and TV shows.
Sepuloni and Edmonds reiterated their priority to make “some small, easily achievable changes” to the NZSPG to “add value” and end the uncertainty facing the sector. They also recommend resetting the post-production, digital, and visual effects (PDV) allowance to a flat rate of 20% and lowering the production threshold from $500,000 to $250,000. Estimates predict costs will increase from $16.2 million to $66.7 million per year due to changes to the NZSPG. Costs will only be incurred in 2025–26.
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