New Zealand struggling to keep production of Hobbit films

David Barber

Wellington (dpa) – A two-hour meeting between New Zealand Prime Minister John Key and Warner Bros movie executives Tuesday failed to produce a decision on where two planned films of JRR Tolkien’s novel The Hobbit would be made.

Key confirmed the studio wanted the government to change labour laws to ensure there would be no union disruption of filming and bigger tax breaks to make movies in New Zealand.

He said government negotiators would continue talks with the executives during the night and on Wednesday.

Key insisted that he would not try to match large tax incentives offered by other countries keen to lure the production away from New Zealand, where local director Peter Jackson made the Oscar-winning trilogy of Tolkien’s The Lord of the Rings, the sequel to The Hobbit.

“If we could make the deal sweeter for them, that would help – that’s something we would consider,” Key said. “But we can’t bridge the gap that is potentially on offer from other locations around the world.

“We’re not prepared to do that, and I don’t think the New Zealand taxpayer would want us to do that.”

The government is offering tax breaks equivalent to 15 per cent of domestic spending on the project. Ireland, for instance, is reportedly offering 28 per cent.

“We are not going to buy these movies in New Zealand,” Key said. “If they don’t stack up, they’ll have to go someplace else.”

He also said the negotiations were not just about tax breaks.

Warner Bros said earlier that it was looking at overseas locations after an international actors union boycott over terms and conditions of working on the films.

The boycott was lifted, but Key said, “There is no question the industrial action has caused real concern, and they’ll need resolution to some of those issues. It’s also fair to say if it wasn’t for the industrial action, they were good to go.”

Key said Warner Bros didn’t have much faith in assurances from the Council of Trade Unions that no strikes would occur.

The row – which has given The Hobbit unprecedented publicity before a camera has started whirring – has gripped New Zealanders, who came to call their country Middle Earth after Tolkien’s setting for his fantasy novels.

Thousands gathered at rallies around the country Monday to show support for the films, holding banners reading, “NZ is Middle Earth,” “Save the Hobbit” and “We’re all Hobbits.”

Richard Taylor – founder of Weta Workshop, which won Oscars for creating effects on The Lord of the Rings movies – told a crowd of about 2,000 in Wellington that the nation’s film industry, which had “indelibly stamped the culture of New Zealand on the world stage,” was in peril if The Hobbit films were to be made elsewhere.

Key said production in New Zealand would bring commercial benefits and another boost to tourism, as occurred after the success of The Lord of the Rings films.