Heavyweight director Sir Peter Jackson pressed Government ministers to reject official advice recommending a ballooning film subsidy scheme be reined in.

"Jackson acknowledged that writing big cheques for Hollywood might seem unfair, but the industry was unique, this was how it operated and the benefits to NZ were considerable," records notes from a meeting held in August between the director - whose Weta group is a major beneficiary of the scheme - and Prime Minister Jacinda Ardern and economic development minister David Parker.

The file note, prepared by Ardern's then chief press secretary Mike Jaspers and released under the Official Information Act, reveals the meeting was called by Jackson to discuss Weekend Herald reports in June that the Government was considering advice recommending an upper limit be set on rebates paid to Hollywood studios.

Parker was wary of setting limits, but concerned the scheme was open to criticism: "He [Parker] reiterated he was not particularly attracted to an annual cap, but pointed out the political risks around subsidising one particular industry over another."

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Two weeks after this "side meeting" between the film-maker and the pair, the ministers - along with Grant Robertson and Clare Curran - directed officials to take the cap proposal off the table.

Both Ardern and Parker said the meeting did not inform their decision.

Ardern's office issued a statement that though Jackson was in favour of leaving the subsidy regime unchanged, "however the decision wasn't based on that, but rather the Prime Minister's long-standing support for its continuation".

Parker's office this week pointed to the note's characterisation of his views of a cap at the time as "not particularly attractive", and said the decision made was the correct one.

"It's abundantly clear that without these subsidies the industry would fail," Parker's spokesman said.

But ACT MP David Seymour said the quick and quiet backdown weakened the Government's ability to drive a harder bargain with Hollywood film studios, who have played countries like New Zealand, Australia and Canada off against each other for ever-higher levels of subsidy.

"The film industry now knows New Zealand is a soft touch. They've been given an inch, they're going to come and take a billion," Seymour said.

Jackson did not respond to questions this week about the meeting, seeing the movie mogul's policy of not commenting stretch into its ninth month.

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"Jackson said a cap was not necessary given the industry was only capable of two to three major productions a year. A cap would only serve to cap the potential income the country could earn," the note said.

The file note also shows Clare Olssen, executive producer at Jackson's WingNut Films, saying the media reports of a possible cap "had been picked up in Hollywood and was causing uncertainty - 'mixed messages'."

It also records criticism by Jackson of the previous government over a budget freeze at the NZ Film Commission. "This was hampering the commission's ability to nurture talent, and find the next 'Jackson' ... Previous govt had ignored the issue which had frustrated him," the note said.

Treasury and MBIE analysts had concluded in the middle of last year that, in light of rapidly escalating costs and an inability to prove the scheme was value for money to the taxpayer, a cap on the subsidies should be considered to avoid regular budget blowouts and a possible waste of money.

Baftas and Oscars in the Weta Workshop boardroom. Weta and the Miramar-based film industry have become large operations with help from Government subsidies. Photo / Mike Scott
Baftas and Oscars in the Weta Workshop boardroom. Weta and the Miramar-based film industry have become large operations with help from Government subsidies. Photo / Mike Scott

Spending on the international Screen Production Grant, which pays international film studios up to 25c for every dollar spent in New Zealand for screen productions, was set up 15 years ago with a $40m annual budget but spending last year totalled $149.2m.

The current high level was forecast to remain or expand further when work begins in earnest on Avatar sequels.

Diary notes obtained under the OIA from the prime minister and the minister of economic development show the meeting was properly declared and diaried.

Parker's spokesman said the reference to "political risk" around the scheme was an acceptance they were necessary but not ideal.

"His underlying point was that we shouldn't generally subsidise one industry over another and this was a reminder that subsidies are not a given."

Parker's spokesman declined, citing confidentiality, to say how much additional public funding the film subsidy scheme would be seeking at the upcoming budget.

Advice obtained under the OIA from MBIE suggests the scheme will require the allocation of $560m in funding over the next four-year budget cycle.