Mike Hosking: Lauding it - film subsidies have worked in NZ

COMMENT:

Here's one for the purists: subsidies are not our cup of tea, they're not part of our game plan.

Not since Roger Douglas came along in 1984, pulled the rug out from under the New Zealand economy, dusted it off, and told us to get on with paying our own way.

Years later, perhaps in a move of some irony given it was a National government, they decided that subsidising film was a good idea. You'll remember the Lord of the Rings drama, Hollywood wined and dined at Peter Jackson's behest - and a deal was done to have taxpayer support in order to bring jobs and income here, as opposed to seeing it float off elsewhere.

Not just that, but years later it was decided to increase the subsidy, thus making the taxpayer even more liable for the film industry's expenses.

Now, for the purist, of which I'd loosely regard myself as one, this seems an anathema. It shouldn't be allowed because it's potentially a slippery slope.

Why just film? Why not manufacturing? Well maybe, just maybe, it's because film is unique.

We have the latest numbers as to whether any of this has actually worked. In the last eight years, the subsidies have cost us $550 million, but last year alone Wellington's economy got $260 million. That's not bad.

2500 jobs, not bad.

$700 million in revenue for the film making business, that's $450 million in post production work alone. There were 5000 hotel nights using 1500 vendors, 900 crew, 800 digital artists.

Weta, who of course are the backbone of all this, got 150,000 visitors alone, paying visitors. It's a bone fide tourist attraction.

So the question is - is $68 million on average a year a good return on the $260 million income with all those jobs, and all that work? You would have to conclude, yes.

Now the great worry of course is the film subsidy industry is dangerous in the sense it's potentially a race to the bottom. Once you enter the world of artificial subsidy you compete against every other country, from India, to Ireland, to Canada, that is happy to have the glamour of Hollywood at their place. And many are not as fiscally rigorous or pure as us.

But you would have to say, so far, so good. It might just be that the film industry is unique because I doubt many would argue we can spread this as a model to everyone, because it simply wouldn't work.

From manufacturing, to car assembly, to tech, it's all about scale and we'd never compete. But in film it seems we can and do, and the numbers tell the story.

We built it, we subsidised it, and they came.