Amazon in line for hundreds of millions in tax subsidies for filming Lord of the Rings series in NZ

A spokesman for the Minister of Business, Innovation and Employment (MBIE) told the Herald Amazon is eligible for a 20 per cent tax subsidy for every dollar it spends in New Zealand.

One of the world's biggest companies is in line to receive hundreds of millions of dollars in subsidies from taxpayers for producing the most expensive TV show in history, in New Zealand.

Amazon has confirmed a Lord of the Rings TV series will be produced in New Zealand, at a reported cost of $1.5 billion.

A spokesman for the Minister of Business, Innovation and Employment (MBIE) told the Herald that Amazon is eligible for a 20 per cent tax subsidy for every dollar it spends in New Zealand.

This means Amazon would be in line for a $300 million taxpayer-funded subsidy, based on the reported $1.5 billion cost of production.

And that subsidy may well get even larger.

"This type of production may offer significant economic benefits to New Zealand and discussions are under way to assess whether it does meet the New Zealand Screen Production Grant criteria for a further 5 per cent uplift," the MBIE spokesman said.

That means the series could be in line for a 25 per cent subsidy on specified goods and services purchased in New Zealand – MBIE only authorises this level of rebate under "certain circumstances".

The MBIE spokesman added that a decision on further subsidies would be made before the end of the year.

There is no cap on how much a studio, such as Amazon, can claim in subsidies, according to MBIE.

The subsidy is through the New Zealand Screen Production Grant – a scheme put in place in 2014 which aims to attract studios to produce movies and TV in New Zealand.

The announcement with Amazon follows a similar blockbuster deal struck by the last government with producers of James Cameron's Avatar sequels, currently filming in Wellington and Auckland.

The Avatar films, expected to cost at least $500m, were secured on the back of a 25 per cent subsidy.

ACT leader David Seymour said it defies belief that a left-wing government would line the pockets of Amazon boss and founder Jeff Bezos at the expense of ordinary taxpayers.

"The Government has confirmed that its much-vaunted 'Wellbeing Budget' will improve the financial wellbeing of the world's richest man."

He said every dollar spent on subsidies for television and movie productions is a dollar that can't be spent elsewhere.

"We would be better off scrapping the Screen Production Grant, and other corporate welfare, and allowing taxpayers to keep the money."

But it remains unclear just where all the money will be coming from.

MBIE figures show the New Zealand Screen Production Grant was allocated $171.5 million for 2020 and $25.5 million the year after. Nothing has been allocated for 2022 and 2023.