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Key 'not overly confident' about Hobbit

Published: 9:09PM Tuesday October 26, 2010 Source: ONE News/NZPA

Prime Minister John Key says it is still 50-50 whether or not The Hobbit movies will be made in New Zealand and he's not overly confident they will.

He was speaking after a meeting at Premier House in Wellington involving representatives from the United States-based production companies Warner Bros and New Line Cinema, and government ministers.

Key said industrial laws and other economic issues will be considered over the next day or two.

Warner Brothers started looking for alternative locations after the Australian-based union Media, Entertainment and Arts Alliance issued an international actors' work ban on the films in an attempt to negotiate a collective contract for the performers involved.

New Zealand Actors Equity, part of the MEAA, withdrew the recommendation last week, but the studio had already started to consider shifting production elsewhere.

"The reality is that if it wasn't for the industrial action then they would have pulled the trigger on these movies some months ago and unfortunately that's the position we now find ourselves in," Key told reporters at parliament after the meeting.

He said industrial relations were the primary concern, but there were also economic issues to consider.

Key said changes to industrial laws would be looked at.

"The lawyers will sit down and think about industrial policy, we will go away and think about the proposition economically, and we will re-group and over the 24 to 36 hours see whether a deal is possible."

Key said there was a "very large" shortfall between what New Zealand was prepared to offer in terms of tax sweeteners, and what other countries were prepared to offer and there will not be a bidding war.

He said it's still very 50-50 whether or not the movies will be shot in New Zealand and "I'm not overly confident, I have to say."

Key said: "There's a big gap economically between what's on the table and unfortunately we can't put back together those pieces that have been broken but we'll do our best.

"I think they have burnt a lot of money in the last six weeks or so trying to make a decision about whether they are going to go ahead in New Zealand or go ahead in another location and they've been looking aggressively overseas in quite a few locations. They eventually want to get on with it."

Key said Warner Bros like the creative work done in New Zealand and want to do business here, but the studio needs certainty.

"These are some of the biggest movies Warner Brothers will have ever made so they are trying to take risks away. And...the actions of the unions in the last few months spells out large risk to them and they have a fiduciary responsibility to their shareholders to do the best they can to make sure that they can make their movies."

The Prime Minister said he thinks there will be a decision from the studios by the end of the week at the latest on whether the movies are going to be made in New Zealand.