The Government is under pressure to raise the 15 per cent subsidy it offers to lure foreign film and television companies, to compete with an Australian proposal raised by Hollywood heavyweights who dined with the Prime Minister this week.
John Key met the heads of Fox, Disney, Warner Bros, Universal, Sony and MGM studios at a dinner hosted by Avatar director James Cameron and his associate John Landau on Thursday with actor Cliff Curtis and Weta supremo Sir Richard Taylor.
The meal followed a day of meetings in Hollywood for Mr Key, including a visit to the set of TV show Body of Proof, where he was introduced to the cast, including former Desperate Housewives star Dana Delany.
Up for discussion at Thursday's dinner at the Landau home were alleged internet pirate Kim Dotcom, the Trans-Pacific Partnership (TPP) and the 15 per cent subsidy NZ pays film companies to secure their business.
Taxpayers have spent more than $500 million in the past decade subsidising Hollywood productions, including Sir Peter Jackson's Lord of the Rings. Subsidies for The Hobbit are expected to reach $60 million.
Mr Key said the executives had said NZ's film grant or rebate system was "quite good" and probably around the middle of the pack compared with those offered by other countries.
"A couple of them talked about the fact that Australia is thinking about moving their incentives to 30 per cent. Whether they actually do or not I don't know but I think [Prime Minister] Julia Gillard made some sort of announcement when she was on the set of Wolverine recently."
Ms Gillard said Arts Minister Simon Crean would consider a petition circulating in the Australian film industry calling on Canberra to increase its 16.5 per cent rebate to 30 per cent in order to make the industry there competitive with rivals.
"We'll have a look at that," Mr Key told the Herald yesterday.
He said the movie industry would always want better incentives.
"But I think they're conscious of the fact that we would have limited capacity to deliver more.
"If we want to do more in New Zealand, we might want to think about the overall package, but we need to think that through carefully."
As well as Australia, New Zealand competed primarily with the UK and Canada to secure big-budget Hollywood productions, Mr Key said.
Thursday's dinner was well attended by top executives, "because they see NZ as a very credible place to make movies and we're definitely on their radar screen".
Disney and Warner Bros both saw changes to NZ labour laws in response to threats that The Hobbit movies would be made elsewhere had been seen as a big positive, Mr Key said.
The PM confirmed that the chief executive of the Motion Picture Association of America, Chris Dodd, had raised the Dotcom Megaupload issue "in passing" during the dinner.
"He just essentially noted that the case was ongoing in New Zealand, and I just confirmed that and said yes. He didn't dwell on that."
Mr Key said the studio heads at the dinner "talked a bit about intellectual property, but really more in the context of TPP and those negotiations".
"Obviously they're making the case that they invest hugely in the creation of intellectual property and it's critically important for their capacity to continue to be able to invest for that intellectual property to be protected."
Taxpayers' helping hand
* The Large Budget Screen Production Grant: a 15 per cent rebate for film and television productions in New Zealand worth more than $15 million.
* The Post, Digital and Visual Effects Grant: Also a 15 per cent rebate but on productions' digital and visual effects work done in New Zealand worth between $3 million and $15 million.
* Location Offset: A 16.5 per cent rebate for film and television productions in Australia worth more than A$15 million.
* The Post, Digital and Visual Effects Offset: A 30 per cent rebate on digital and visual effects work done in Australia worth more than A$500,000.