A leading Kiwi film and television producer believes the government's deal with Warner Bros is a good one.
John Barnett told TVNZ News at 8 that the deal was "terrific".
"Under the original scenario there would have been a 15% rebate, which would have been $75 million. So what the Prime Minister has done is negotiated a deal where another $US15 million... has also been put into the pot for Warners," Barnett said.
"But the trade-off is an enormous trade boost for New Zealand, a tourism boost. I think he's done a great deal."
Ministers signed the agreement at 7pm after two days of crisis talks with studio executives who wanted more money than the government was prepared to give, and sought assurances there was no possibility of legal disputes that could hold up production.
Prime Minister John Key then announced that The Hobbit movies have been saved for New Zealand.
"This will mean an additional rebate for The Hobbit movies of up to $US7.5 million dollars per picture, subject to the success of the movies," Key said.
The agreement will also see labour law changes pushed through Parliament tomorrow.
The $670 million movies will be directed by Sir Peter Jackson, and Key said tonight a long-term partnership had been achieved for New Zealand's $2.8 billion film industry.
He said he was satisfied with the outcome.
"I'm delighted we have achieved this result. Making the two movies here will not only safeguard work for thousands of New Zealanders but will also allow us to follow the success of the Lord of the Rings trilogy in once again promoting New Zealand on the world stage."
Part of the arrangement will see new legislation introduced to clarify the distinction between independent contractors and employees. The bill will go through Parliament under urgency, and Key said he already had enough support to ensure it was passed.
Key said the law change would relate "only to the film production industry. It is this clarification that will guarantee the movies are made in New Zealand.
"We will be moving to ensure that New Zealand law in this area is settled to give film producers like Warner Brothers the confidence they need to produce their movies in New Zealand.
"This is commercial reality," Key said. "Without this change, those movies would not be made in New Zealand."
Sweeteners and pay-offs
Key also announced a sweetener aimed at making it more attractive for other production companies, along with Warners, to film in New Zealand.
"The government has moved to widen the qualifying criteria for the large-budget screen production fund, to improve New Zealand's competitiveness as a film destination for large-budget films like The Hobbit."
He added that the government and Warner Bros have agreed to work
together in a long-term strategic partnership to promote New
Zealand as both a film production and tourism destination.
But that will come at a cost.
"The government will offset $US10 million of Warners marketing costs as part of the strategic partnership. This will include working with Sir Peter Jackson on the development of appropriately themed material that will promote New Zealand as a tourism destination," Key said.
"It is envisaged that this material will be included on all DVDs and digital products likely to reach tens of millions of international consumers. In addition to this, the government will be working with Time Warner as a strategic partner to promote New Zealand across their stable of media outlets."
Better money elsewhere?
Key said Warner Brothers argued for more than the $20 million tax rebate - $US7.5 million per picture - which is on top of the standard 15% that big movies get.
"They could have held out for a lot more, I made it clear we had reached our limit," he said.
"We've done the business... there are bigger bucks overseas but they wanted to make the movies here."
Barnett told TVNZ at 8 that was true.
"He's right because Ireland has 28%, someone else offered 30% and we couldn't just match that. In fact in the US some of the states are offering well over 40%," Barnett said.
"On top of that you've got to admit that Peter Jackson is an enormous pull for this picture - Warners want Peter to be happy, they want the project to take place here, they want to use the facilities that Peter's built at Weta Workshop.
"In the end it's actually cheaper to make it here than other places, not because of the labour but because there is stability and because the infrastructure exists and because we're good at that we do," Barnett said.
Key said he hadn't spoken to Sir Peter since the deal was made "but I'm sure he's going to be a very happy camper tonight".
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