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The New Zealand government is attempting to boost the country's screen industry, with improvements to the Large Budget Screen Production Grant (LBSPG), and ongoing funding for Film New Zealand, Economic Development Minister Trevor Mallard has announced.
"These changes will ensure that New Zealand remains a competitive and attractive location for the international screen industry," Mallard stated on Monday.
"Large budget international productions have a positive impact on the New Zealand economy. However, we are operating in a competitive environment and it is important that our incentives are tailored to the needs of the international industry," he added.
Film New Zealand - the one-stop shop organisation which helps facilitate access to New Zealand as a location for international film makers - has also been granted six years of additional funding until 2012/13, worth NZ$4.8 million (US$3.8 million) in total.
"I am also announcing major improvements to the Large Budget Screen Production Grant, including moving to make bundled films eligible. These changes will provide a great boost to the local industry - ensuring the grant is an incentive that is competitive internationally, but which enables us to maintain our high quality reputation and support our core strengths in technology and production locations," Mallard announced. He continued:
"New Zealand has a strong international reputation with a great depth of talent, cutting-edge technology and diverse production locations. The grant, which complements these strengths, offers a financial incentive that compares very favourably with incentives available in other countries. The changes we have introduced will reinforce our reputation as a film-friendly and competitive location."
"This grant has helped attract major productions to New Zealand. Since the grant was introduced in July 2003 nine major productions have come here and benefited, receiving grants totalling $NZ90.41m (GST exclusive) which reflects a total qualifying New Zealand production expenditure of $NZ 723million. However recently grant spending has dropped and we are facing increasing competition as a location for large budget films."
"The changes we’ve introduced will help us stay ahead of the game while still keeping the grant format and payment process simple, transparent and quick."
The changes to the Large Budget Screen Production Grant include:
"There is significant international support for bundling and it is likely to bring an increase of quality work to New Zealand. Attracting bundled productions will provide greater work continuity and certainty for the local industry. The minimum spend for each production will ensure there is a focus on quality for bundled productions," said Mallard.
"The specific post-production, digital and visual effects incentive recognises New Zealand’s strengths in design. It will act as a catalyst for growth in this sector and will enable New Zealand to attract more of the total international post-production digital and visual effects market," he added.
The changes to the scheme are effective from 16 July.
The impact of the changes will be tracked through an annual report to Cabinet summarising Large Budget Screen Production Grant expenditure in the previous financial year and projected future expenditure. There will also be a full review of the grant at the end of 2011.
"I've also asked officials to report back to me on the implications of these changes for the domestic industry," Mallard announced.The Film NZ funding amounts to NZ$750,000 (excluding GST) per year for 2007/2008 and 2008/09 as part of Budget 2007, and a further NZ$799,000 for the 2009/10 year and NZ$833,000 for the years 2010/11, 2011/12 and 2012/13 from the GIF sector project fund.
Post-production, digital and visual effects activities cover a wide range of post and pre-production activities including 3D scanning, animation, soundtrack, digital and audio effects, costume effects and prosthetics.A comprehensive report in our Intelligence Report series examining tax-sheltering arrangements for investors, including Venture Capital, Forest Finance, Film Finance, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report5.asp
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