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Tax breaks and the Hobbit

Written By: - Date published: 7:06 pm, October 26th, 2010 - 93 comments
Categories: capitalism - Tags: , ,

From Stuff:

A meeting between Warner Brothers and senior government ministers has ended, with studio executives asking for larger incentives to keep The Hobbit movies in NZ.

The two-hour meeting, which included New Line Cinema boss Toby Emmerich, ended with no resolution to the Hobbit standoff.

Following the meeting, Prime Minister John Key confirmed there would be more discussions overnight and tomorrow before a decision on whether the movie would be filmed here.

He reiterated that industrial issues had been the major concern of the studios but confirmed for the first time that the studio was also seeking a bigger sweetener from taxpayers.

Classic.

93 comments on “Tax breaks and the Hobbit”

  1. Colonial Viper 1

    but confirmed for the first time that the studio was also seeking a bigger sweetener from taxpayers.

    I’m shocked. SHOCKED I tell you :shock:

    • Fisiani 1.1

      I am also shocked that a greedy Australian union with no thought for the health of the NZ Film industry could end up costing us so much.

      • IrishBill 1.1.1

        Heh. Your desperate denial is kinda touching.

      • rijab 1.1.2

        Did you read the above?…

        I figure someone with your interesting opinion must AT LEAST follow stuff coverage almost as gospel…

        My security word for this post is ‘analysis’ … Maybe you would have been better suited to get this one!

      • SHG 1.1.3

        I had taken the “greedy Australian union” line earlier this week, but today I saw this in an article on Stuff:

        Mr Whipp led the boycott call against The Hobbit and has been slammed by Sir Peter for destabilising the Australian big budget movie industry and seeking to do the same here.

        But Mr Whipp told Radio New Zealand he was only acting on the instructions of New Zealand actors.

        ”I have no particular interest in this whatsoever. Our interest is in doing what it is that those people working in the film industry want us to do. The performers have decided they want to join the union and want us to speak for them so that’s what were doing.”

        Either he’s lying, or NZ Actors Equity is more to blame than it would have us believe.

        • prism 1.1.3.1

          I think the Oz guy had carte blamche – the guy was seen to be as smart as a whipp – he planned the campaign and the NZs were just bobbing along behind. It would no doubt have seemed a bit naff to get cold feet as soon as any action was proposed. And it’s possible that the NZs might just have been advised of it without any opportunity of discussion and alteration.

    • Chess Player 1.2

      Glad you can see the funny side…

      There’s real people, with real jobs at stake here. ‘Knowledge Wave’ type jobs no less – the ones we really need in this country.

      Oh well, at least you’re getting a good laugh out of it I guess…

      • IrishBill 1.2.1

        Mate, when you’ve seen as much of this kind of dirty sharp business as I have you either laugh or you cry.

      • Colonial Viper 1.2.2

        There’s real people, with real jobs at stake here. ‘Knowledge Wave’ type jobs no less – the ones we really need in this country.

        Then you support workers across the industry banding together to negotiate fair minimum terms and conditions?

  2. rijab 2

    The MSM act as if this is some great revelation… If they’d done their job, they’d be able to actually follow up with some decent analysis, but instead they’re all silly possums staring into bright headlights waiting for the impact!

  3. ghostwhowalksnz 3

    The arrogance of the Studio!
    The ministers should have gone for a Co executive Producer billing and in the opening titles. Nothing less

    Dare we ask for John Key- Peter Jackson Film credit?

    • Rich 3.1

      I reckon every New Zealander should get a credit in return for the $20 or so we’re all putting in if this gets made here.

      It wouldn’t be any more boring to watch than the preceding 180 minutes of overlong effects-driven filmage.

      • Lanthanide 3.1.1

        You mean 540 minutes, if you’re talking about LotR. IIRC the director’s cut for Return of the King was 4 hours long.

  4. Bob Stanforth 4

    Thats right, huge surprise that a powerful company will take the opportunity presented to them by some dumb fuck Australian unionist to talk money. And worse, the CTU, who eat dinner at Matterhorn when they stay in Wellington, backed them up. LMFAO.

    That never happens LOL

    Get real.

    Warners will rightly take ANY opportunity to cut costs, as would any organisation – even a union. They would be stupid not to.

    Thanks for the wonderful opportunity youse fullahs, choice eh bro :)

    • IrishBill 4.1

      Nope the CTU came in, settled the dispute and got the ban called off. Try harder bob.

      • Bob Stanforth 4.1.1

        No need to, ask Joe and Joanne Public. Hated. End. Of. Story.

        Hence why Ms Kelly is showing on iPredict. Big change a comin’ – bring it. :)

        Hell, even I think twice about going to Matterhorn, and often (90%) of the time the client pays. But then my clients aint earning $30K and paying dues.

        But do keep trying, its fun watching :)

        • mickysavage 4.1.1.1

          All trade unionists are witches, they are witches, burn them, burn them, it is their fault

          And if you try to reason that there are no witches then this is conclusive proof that you are also a witch and need to be burned

          After all a couple of Internet polls say so. It must be true …

          • Herodotus 4.1.1.1.1

            Mickey Take a bus, visit a cafe and listen to the conservations. The PR war is lost irrespective of who (If any side) is right, now there is this association of additional govt subsidies being paid to keep the film due to the actions of a few from AE. Nat govt sponsored brought to you by the letters C T & U.

            • mickysavage 4.1.1.1.1.1

              Does it bug you Herodotus that you may win the PR war but it is because people made a mistake about what actually happened?

              I would be ashamed …

              • Herodotus

                Dont apply the “You may win” . You just do not know how any of us vote or for what reasons ;-). We sometimes learn(I hope) very painful lessons from our experiences.
                “it is because people made a mistake about what actually happened?” this could also be applied to many supposidly successful govts until we examine their legacy. But I digress. Or that the main issue has past and now there are peripheral issues that have taken over. There are most probably 2 people more untouchable than PJ to attack in NZ at the moment. He was a bad target without a water tight backup.

                • OK so does it bug you because you believe that you will win the PR war even though the majority of the public have got it wrong?

                  • Bob Stanforth

                    Thats right.

                    Millions of NZ’ers have it wrong. They are stoopid.

                    Or maybe, just maybe, they have it right and YOU are wrong. And HK (wow, irony or what???) fucked it all up

                    Sky is falling x 3 LOL

                    But again, please keep going, who would have thought the opportunity to watch stoopid would have come this way :)

                    • Maynard J

                      Well everyone seems to have forgotten the CTU got involved well after the boycott was called with the sole intent of ending the boycott through resolving the dispute, and had succeeded until Jackson’s tirade.

                      I’m pretty sure that is factually correct. What with that would you disagree with in that?

                      (Your comments appear to be written by someone old enough to know better, yet trying to sound like an angry young person, or the immature rantings of an angry young person – parody is hard to detect online – so I’m not sure you’re given to rational reply. Surprise me.)

                  • Herodotus

                    From my reading of the story (majority sourced from this site) there are many asumptions, and time lines. Yet the timelines do not marry up (from one version to the other)as to when events were suppose to happen and connections as to when different individuals were made aware of these. Perhaps what would demonstrate to us comon folk. Would be a time line with who knew what when. Sure Warner Bros were notified of A at this date but does that mean also those on PJ’s team were informed and if so when. Same with the AE, CTU and Mr Whipp.
                    Why where the associated workers not rep by their union and the CTU co-ordinated the different union groups. (I ass-u-me they have union representitive). It has been portrayed that the Actors were after more $ without thinking of the implications of work being lost and thus affecting other workers livelihoods.

          • tea 4.1.1.1.2

            That’s what Paul Holmes says. He’s a journalist. Me Ma saw ‘im on the tele. Once he was even media advisor to the great man Don Brash.

  5. Bill 5

    “…John Key confirmed there would be more discussions overnight and tomorrow before a decision…”

    Gee. Must be great to go into discussions/negotiations knowing the precise time scales required to reach an agreement…decision…except people don’t have negotiations over decisions. So Johnny – the casting couch whore auditioning for the role of Hero of Middle NZ (Middle Earth is spoken for) – is sitting down for drinks and nibbles tonight and tomorrow. Nice.

    Before announcing that x millions of my money and your money has been given away to wealthy people. Again. And that it’s for our own good.

    And many will believe him and cheer the new hero, ‘Mighty Slayer of Integrity’.

  6. jbanks 6

    “He reiterated that industrial issues had been the major concern of the studios but confirmed for the first time that the studio was also seeking a bigger sweetener from taxpayers.”

    They’re seeking a bigger sweetener because of the industrial issues.

    It’s about covering risk. It’s really not that hard to comprehend.

    • Colonial Viper 6.1

      They’re seeking a bigger sweetener because of the industrial issues.

      It’s about covering risk. It’s really not that hard to comprehend.

      Pathetic rationale. How much tax payers money is it going to take to cover off the risk of a US$500M production? US$500M? How does a “sweetener” change risk *at all*?

      And if they are using the NZ Govt as an insurance company, why aren’t they paying us?

      Basically you’re full of it, again.

      More to the point, why are you backing a foreign corporate taking tax payer dollars on corporate welfare?

      • jbanks 6.1.1

        You’re about to overtake Draco as the stupidest poster here.

        Unless somehow Warner Brothers is different from just about every other foreign investor then the illegal actions of the union scum would have affected their confidence in many wider respects in relation to NZ. We’re covering the risk of WB exposing themselves to a volatile labour market when there are less risky alternatives available.

        Why the hell would they stay based solely on the word of illegitimate, incompetent unions?

        When it comes to business, you need to STFU fool.

        • mickysavage 6.1.1.1

          You lost any chance of my treating your comment with any sort of intellectual respect when you said “union scum”.

          We are covering the risk of Warners wanting even more money because the situation here has been so badly misrepresented.

          How do you feel that your tax money is being used to bolster National’s union bashing reelection prospects?

    • Nah they just want more money. They do not care what the reason is.

  7. burt 7


    “But 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.”

    Says it all really.

    • Colonial Viper 7.1

      Idiot. Both of you.

    • So Burt

      As Viper says there are two statements of fact in the same article and you choose without support to accept Key’s comment. Did you think about researching the other comment before slavishly supporting the first one?

      • burt 7.2.1

        mickysavage

        Back in January I said this;

        I agree there are some issues to discuss here. There are up sides and down sides to govt picking the winners and losers for tax breaks and an open discussion needs to be had about it.

        And I provided this link and this quote from it;

        The amount of money that New Line reclaimed in tax breaks on the 3 “Lord of the Rings” films was ten times more than the entire annual budget of the New Zealand Film Commission, which funds local film-making.

        I’ve never supported the govt picking the winners and losers in business via favourable or targeted tax breaks. It’s a wide open door to ill thought out and/or popularist intervention plus it is fertile soil for the seeds of corruption. Look I understood the economic benefits in 2003 and I had my say then. I don’t get why National are funding it at all, if the conditions are not as favourable for local business as they are for multi nationals then that’s wrong IMHO.

        So sure, talk to me about how you define the appropriate level of tax breaks? Tell me what made Labour’s just the right balance of seeding the economy and what makes National’s a gross abuse of tax payers money. Oh and I’d be interested to hear your perspective on what so needed changing from the employment terms and conditions the LOTR movies were made under as well.

  8. Carol 8

    It’s not just about the money (at least not as far as the government’s concerned). The government is seeking to tailor or employment laws just to keep Warners (and/or themselves) happy:

    http://www.radionz.co.nz/news/national/60438/goverment-looking-at-law-change-to-save-hobbit

    Government ministers are meeting with their legal advisers on Tuesday night about possible changes to industrial law to try to ensure The Hobbit films are made in New Zealand.

    ….He says ministers will be meeting with lawyers about what possible changes can be made to industrial law, to give an assurance to Warner Bros that if The Hobbit is made in New Zealand it will not be upset by industrial action.

    Mr Key said he expects a decision on the films later this week …

    • Colonial Viper 8.1

      Tailor employment laws?

      Hey I bet Gerry Brownlee could do all of that with a wave of his CERRA wand!

    • SHG 8.2

      Of course the Government is looking for ways to tweak employment laws; that it might want to do so is of surprise to no-one. But until the past two weeks it would have faced public opposition. Now the Government can do whatever the f*ck it wants, thanks to the PR disaster wrought by the representatives of Actors Equity, the MEAA, and the CTU. It doesn’t matter what the facts are because the story has a life of its own now, and that story is that THE UNIONS ARE TRYING TO F*CK THE KIWI FILM AND TOURISM INDUSTRIES.

      If Gerry Brownlee were tomorrow to announce that AE, the MEAA, and the CTU had been dissolved by executive order, the voting public of New Zealand would support it. THAT’s the disaster here. The representatives of Actors Equity, the MEAA, and the CTU have handled this whole situation with such incompetence that now the Government has carte blanche to do whatever it wants to employment legislation.

  9. gn 9

    [Not needed…RL]

    • Colonial Viper 9.1

      Workers rights are more important than kowtowing to foreign shareholders and corporates who treat our workers with disdain, mate.

      Fucked an entire export industry

      These films are not a NZ export industry, the final finished product is owned by foreigners. Or do you not get that?

      That is why economic sovereignty and owning our own methods of production is crucial for our economic future.

  10. nilats 10

    hands growing on the palms of the hands lefties?
    Govt in weak position bc of union idiots thought they could roll over WB.
    Real Homer Simpson thought processes.

  11. prism 11

    From the end of stuff piece referring to Simon Whipp in Oz “He disputed claims from the Jackson camp that the MEAA had brought the Australian movie industry to its knees and said conditions under which big budget movies filmed in Australia hadn’t changed in 30 years.”

    That should be incorrect. What would be the point of having a union if they couldn’t win some improvements in 30 years?

    Key says that warners are unsure of the integrity of all the unions involved. If he and the NACT govt took the trouble to talk to and build a relationship with our unions then he would know that they can be trusted and be able to reassure warners about this. Instead he has climbed into bed with his buddies and turned off his brain.

  12. Rharn 12

    I think I’ll stop watching the news for the next day or so. The idea of Key strutting about how the Hobbit is going to be good for the economy etc and all the Nat commenters poncing on about how Key sorted out the unions etc will make me puke. Hell I may even ‘boycott’ the film in protest against my taxpayer money being increased to keep the movie here. And I am a Tolkien fan from way way back before the Hobbit and Lord of the Rings became mainstream literature.

    • burt 12.1

      I hope you didn’t go and watch LOTR after all the tax payer money Labour poured into it – but hey let me guess – it’s different when Labour do it !

      • Crumble 12.1.1

        Its different because Labour did not bullshit around with it and claim its all the unions fault and then whored the country, like some tin-pot 3rd world shit hole, to a big international company.

      • Adrian 12.1.2

        It wasn’t Labour, it was National in May 1999 after the Budget that got rid of non-recouse loans for films ,kiwifruit etc. Labour inherited it. There was blood on the floor until 2am in the morning between Jackson, New Line and Miramax and the then National finance ministers when the tax breaks got reinstated. Learn your history, this is the second time Jackson and these arseholes have ambushed a NZ government.

    • SHG 12.2

      I thought the whole film-industry tax-break system was implemented by Jim Anderton during the last Labour Government?

      • IrishBill 12.2.1

        I never said the tax-break was a bad idea. I just said it was the reason that Warners were looking at moving the Hobbit.

        • Marty G 12.2.1.1

          funny to see Key, having talked up ‘crisis’ to hit the unions, then try to jawbone down the tax breaks justified by said ‘crisis’ before the talks.

          Also, hours before the meeting Key dismissed Mallard’s suggestion that the high exchange rate was a cause of the producers wanting more money – their costs in US$ are rising with the falling exchange rate… Emerging from the meeting, according to TV1, Key said that the exchange rate was a big part of it…

          … he didn’t say they had said anything about the union.

      • Crumble 12.2.2

        I don’t have an issue with the tax breaks for the film. The issue I have is old Johnny Boy saying its nothing to do with tax breaks but if we give them more they might stay here. Bloody pimp.

      • Marty G 12.2.3

        Actually, SHG, what happened was the previous system of breaks (instituted by National in the 90s I presume) expired in 2002 and the current system was instituted in its place when Jackson and Taylor threatened capital flight….

        hmmm, that sounds familiar….

  13. MrSmith 13

    What exactly where we exporting ? I fiction movie about fiction book, nothing then. all things come to an end some time gn, even nothing.

    • Marty G 13.1

      well, people place value on art and intangible services as much as wood and wool.

      To say that people are dumb to want to consume art or that people are dumb to produce it for them reduces the human experience to just being good producing automatons.

      That said, I’ll never understand how these movies can cost $2 million a minute to make. Especially when some of the great movies have been made on a shoestring.

      • Adrian 13.1.1

        They don’t, the true cost is about 25-30% of the published cost. The rest is promotion ( about 40% of the headline), 20% finders fees for the money taken in by the studio and about 10% padding. Remember the studio never puts up any of it’s own money, it is merely a clearing house.

  14. bobo 14

    Look I have no problem with PJ lobbying for more tax incentives out in the open , just the whole weaselly underhand way this whole beat-up has gone on day after day as lead on the news is pathetic no wonder its 90% opinion polls against the union whipping boy. The right wingers know this was never about a tiny union stalling the hobbit, its just an excuse to bag unions full-stop. Its like watching a fucking pantomime how this is playing out with Key coming out of the Warners meeting with his typical lying forehead frown commenting on how its the unions fault but oh he’s smoothing them over..

    Think ill watch Coro the acting is way better..

  15. tea 15

    You will find- if you’re not jounralists- well at least if you are able to find it you are too good a journalist to be employed in NZ- ie Gordon Campbell writing for stuff- that the Nats commissioned Jackson to write a report about this.

    He said: more tax breaks asap please.

    English said: No.

    Now they are saying it a little louder. And the unions are copping the flack.

    • SHG 15.1

      And rightly so, NZ Actors Equity and the CTU are so stupid I’m amazed that they can collectively remember to breathe. I’ve never seen an industrial negotiation handled with such staggering incompetence.

      Seriously, it’s almost enough to have me BELIEVING that there’s a shadowy conspiracy behind everything. Because there’s no way that people can really be as utterly self-destructively useless as NZ Actors Equity and the CTU appear to be. They MUST have been set up. No-one’s that inept in real life.

  16. Nick C 16

    I dont think anyone is surprised that the studio is asking for more money given the circumstances; they have been opportunistic as any company would.

    The real question is: Would this meeting be occuring if there hadnt been a global boycott? Of course not, the movie would have gone ahead as scheduled in NZ. You can come in and say ‘but they sorted out the boycott weeks ago’ but that misses the point. You cant drop a bomb, realise it was a bad move, and ignore the fallout. No one can predict the path which industrial relations in the film industry will go down now, but it seems a lot more probable that it will be a rocky one than before the boycott, which worries the studio.

    • RedLogix 16.1

      Really…do you think WB are such wilting flowers that they’ve never dealt hard-ball with a union before?

    • Armchair Critic 16.2

      Would this meeting be occuring if there hadnt been a global boycott?
      Yeah, it probably would have occurred. It would not have hogged the headlines, though.
      And this government loves handing out subsidies.

      • Nick C 16.2.1

        “Yeah, it probably would have occurred.”

        Rubbish. THere have been heaps of other overseas productions which have happened in NZ since the film tax credits were established for LOTR (Avatar, Narnia movies, King Kong, Gladiator TV series and more). This is the first time that the increasing of the income tax credits has been considered by the government.

        “And this government loves handing out subsidies”

        Name some other examples then. I dont think there are, there hasnt really been wholesale subsidies of big business in this country since Roger Douglas abolished them; film tax credits are very much an exception.

        • Marty G 16.2.1.1

          The SCF bailout is equivalent to a 100% risk subsidy for high risk investors.

          • Nick C 16.2.1.1.1

            True, but if you look at it that way almost everything government spends money on could be considered a subsidy.

            • Colonial Viper 16.2.1.1.1.1

              No Nick C, it is a subsidy if you are giving tax payers money to an established private sector interest which should be funding their profit motivated activities itself.

              Looks like the Right quite like their corporate welfare subsidies.

              • Nick C

                ACC is a subsidy for those who get injured playing dangerous sports, Income tax is a subsidy of gambling because gambling winnings arent taxable, Insulation schemes are a subsidy for building companies, Government investment in internet fiber is a subsidy for businesses which use large amounts of internet, GST off Fresh Fruit and veges, banning alcohol at conveniance stores is a subsidy for supermarkets, just about every complication in the tax code is a subsidy for lawyers.

                I could go on.

                • Colonial Viper

                  No my friend, subsidies are those Government monies directly set aside for and then given over to private business interests conducting private for profit business.

                  Supporting the injury recovery of a person with ACC is therefore not a subsidy, just like putting a road in front of your house is not a subsidy.

                  I could go on.

                  just about every complication in the tax code is a subsidy for lawyers.

                  I see it now. The price of everything and the value of nothing has infected your DNA.

                  • Nick C

                    No no Marty used the term ‘equivilent’, so not just something which is literally a subsidy. I took this to mean anything where some of the cost of an activity are paid for by the government.

                    Clearly a cost of skateboarding is that you might break your leg and not be able to do your job for a few months. But if this happens ACC gives you most of your income. So it is equivilent to a risk subsidy for most of the risk of skateboarding, just as the bailout of SCF is a risk subsidy for the risk of investing.

                    • Colonial Viper

                      I took this to mean anything where some of the cost of an activity are paid for by the government.

                      So everything spent by and associated with the Government is a ‘subsidy’?

                      Its ridiculous and meaningless. Government enables societal function and looks after the welfare of its citizens, it does not ‘subsidise’ good societal function because society is a superset of economic activity not a subset.

                      “Risk subsidy” my ass. Throw away the economics cost/capital dominant perspective and look at these issues from the people oriented perspective of social equity and justice.

              • Nick C

                As for this charge that ‘the right loves corperate welfare’, much of rogernomics was about abolishing corperate welfare. Import licences used to be known as licences to print money because they were effectivly government granted monopolies to those who were friends of politicians. Agricultural subsidies and equiviletn subsidies to many manafacturers were also abolished.

                You could argue that privitisation is a subsidy for corperations. Admittedly if you privitise at too lower price it is, but if you get a fair price it isnt. And I can think of no greater corperate welfare policy in the last 15 years than the nationalisation of kiwirail.

                • Colonial Viper

                  Oh get off it, Rogernomics was not about abolishing corporate welfare it was about kicking out supports for NZ based and owned SMEs, ones which collectively employed tens of thousands of NZ’ers. And giving money to huge foreign multinationals is similar to this in what ways?

                  And I can think of no greater corperate welfare policy in the last 15 years than the nationalisation of kiwirail.

                  We bought Kiwirail from Toll as an infrastructure asset for all of NZ. How is that corporate welfare? We own Kiwirail now as a core strategic asset for the benefit of all NZ’ers. Can you say the same for the SCF bail out? Or The Hobbit film when it is released?

    • Lazy Susan 16.3

      Would this meeting be occuring if there hadnt been a global boycott? Of course not, the movie would have gone ahead as scheduled in NZ.

      So what make you certain about this Nick C. This movie has been beset by problems and Warners are looking to trim costs. Last week Jackson said Warners weren’t interested in additional tax breaks but now according to Key they are. We are being played mate – wise up.

  17. ak 17

    So to recap:

    The Left wins major victories in Local Body elections.

    The unions step up a series of campaigns.

    By-election Labour victory coming up before Christmas break.

    Govt bennie-bash due just before bleak Christmas.

    Key is old mates with top Warners executive.

    Warners execs threaten to take populist toy away, blame unions.

    Key backs Warners, offers them taxpayer millions, blames unions.

    MSM and rabid blograbble blames unions.

    Should’ve seen it coming.

    A good ole engineered union-bash.

    Corker. Desperation. Recycling targets for hate.

    Forging greater resolve with every gloating utterance.

    The doughboy and the fatcats

    Playing kiwis for hobbits.

  18. Adrian 18

    ak. Exactly. Welcome to commerce American style. The only things that the Yanks are World Champions at.

  19. IanG 19

    Echos of “shock doctrine” here for me – create a crisis, then use the crisis as an opportunity to bash the unions and screw the workers – just watch for law changes and handing over taxpayers money to private hands

    • Colonial Viper 19.1

      Simply awful. What’s worse is that NZ’ers are cheering on as they themselves are being totally bent over a barrel.

    • SHG 19.2

      You forgot “accompanied by a huge leap in the polls”

      • Colonial Viper 19.2.1

        Oh no SHG, we haven’t forgotten that for Key, the main point of handing over these tax payers dollars is to stay in political power.

        • SHG 19.2.1.1

          And the unions handed it to him on a plate, while Phil Goff was…um… say, where HAS Phil Goff been during all this?

          • Colonial Viper 19.2.1.1.1

            Doing what political leaders should be doing – not getting involved in an industrial dispute between workers and private sector interests.

            Someone send a memo to Jonkey.

            • SHG 19.2.1.1.1.1

              Someone send a memo to Andrew Little, his career choices look irreconcilable.

              Hey, maybe that’s where Phil Goff has been. Distancing himself from anything to do with unions.

              • Colonial Viper

                Hey why don’t you write your own political sitcom?

                Call it the Right Wing, a group of politicans who don’t even realise that political meddling in private sector industrial disputes is inappropriate, but actually welcomes it.

                On the other hand it sounds so shit that it’d get cancelled after just one season.

  20. Lazy Susan 20

    The Warners boys must think they’ve struck gold. Not only do they get open door to the PM but he’s willing to change the country’s labour laws and entertain the idea of sending them away with a cheque that, according to PJ, they don’t even want!

    Oh, if only they could get such red carpet treatment back home. JK for President!

  21. seeker 21

    Gordon Campbell wrote “On the latest stages of the Hobbit drama” in Scoop 22-10-10 and included this (hope I’m allowed to copy?):

    “The Boyens argument is that everything was hunky dory from her perspective, until the unions intervened a few weeks ago. If that was true for her, it wasn’t for Warners. At the beginning of September, Warners thought that a deal for MGM – their co-partner in The Hobbit – was in the bag, with Spyglass at the helm. Currently, it isn’t. The situation won’t become clear until October 29, when the MGM creditors vote on it. Currently, Warners faces a raft of new headaches, including the genuine prospect of its partner (a) contracting with it under a Spyglass run regime to market and distribute The Hobbit or (b) entering a deal with Lionsgate where the new MGM will probably have to buy out maverick investor Carl Icahn. Both options will reverberate and affect the numbers on The Hobbit, Both make the level of production subsidies available on The Hobbit anything but a red herring.

    Only Warners know how those numbers are currently shaking down. Hopefully by the time their executives arrive next week, Jackson will have stopped behaving like Thorin Oakenshield, having a hissy fit over the Arkenstone. ”
    ENDS ”

    Thus I figured that we would not get answers until Friday at least and now John Key has confirmed that almost. The L A Times wrote a similar set of facts and included the updated fact that Carl Icahn, apparently a quite formidable blue meanie on the old business and money front, was putting off his decision until November 1!!
    Alana Brown has written quite well on this topic too on Scoop, and provided the LA Times links on the subject.

    Meanwhile back in the old shire kingdom of the U.K., Leavesden Studios, was recently bought by Warner Bros .a few months ago (Dom Post21-10-10 and Financial Times ) as a permanent European Base, and is looking forward to the Hobbit arriving there according to the Daily Mail,UK22-10-2010. Fran Walsh mentioned Leavesden as a possible location in a couple of newspaper reports. She must know that Warners have just bought it and that it has 3D facilities and can recreate most environments (it’s huge). Perhaps Warners’ want PJ to work there, they would have spent much money on it I would think. However British unions….
    Whoops how late is it!

  22. Irascible 22

    Here’s Key’s clarification on the issue from the Herald:
    A meeting last night between Warner executives and senior Government ministers pinpointed labour laws as the greatest issue.

    Mr Key said the “paramount” problem was that film workers on independent contracts could be legally seen as employees, even if their contracts specifically called them contractors.

    That followed a Supreme Court ruling in 2005 on James Bryson, a model maker on the Lord of the Rings movies, who was deemed an employee, even though he was hired as a contractor.

    “They’re not arguing people can’t be employees,” Mr Key said.

    “They’re just saying that if someone is engaged by their production company as a contractor, they want to know if that’s how it’s going to end up, and if it doesn’t, that has other economic consequences for them.

    “They’re out of here, if we can’t give them the clarity. There’s no question about that.”

    So it’s nothing to do with Actors’ Equity and their attempts to get an employment contract or clarity about their contracts with Wing Nut but everything to do with Warners wanting to keep their profit margin up without worrying about any legal consequences blowing up in the event of them being taken to court in NZ over any possible employment issue arising from their behaviour as employers while operating in NZ.

    Key’s reaction is to agree to change NZ’s employment laws to suit the demands of Warners lawyers.

    So the spin was there to divert attention from the blatant attempt to change NZ’s employment laws to benefit a privileged few. Corruption from the USA business again???

    • If the law is the problem it has been a problem since 2005. AFAIK it has only been raised as an issue recently. Another smokescreen?

    • Kevin Welsh 22.2

      I saw this comment on the NBR yesterday, posted by Penny Bright. I hope it is acceptable to cut and paste here:

      Bryson v Three Foot Six Ltd: Employee or Independent Contractor?

      Under NZ law, it has been determined that at least one ‘employee’ of Three Foot Six (previously involved in the production of Lord of the Rings) had been hired as an ‘independent contractor’ – when he was NOT. So – arguably this employer acted ‘illegally’ of their own accord.
      FYI.
      SPADA UPDATE ON THE BRYSON DECISION
      In the aftermath of the Bryson Supreme Court decision of 16 June 2005[1] some media articles appeared predicting a shake up for the industry.
      More balanced articles ensued, outlining what the Court had actually decided and why, including commentary from lawyers who work with the screen industry.
      SPADA, with the assistance of Minter Ellison has prepared this update for members. This is the third update in a series that SPADA has put out since the Bryson case began its trajectory through the courts.
The main message remains the same: there has not been any recent material change to the law regarding the status of workers as employees or contractors.
      However, the Bryson decision is a timely reminder that production companies need to make sure that their contractual documentation is clear and that it is consistent with what happens on a day to day basis between the parties.
      For your guidance, Minter Ellison has set out relevant questions for applying the traditional tests (see the attached checklist) when considering the real nature of the relationship between parties.

      [1] Supreme Court of New Zealand Media Release (16 June 2005)

      James Bryson v Three Foot Six Limited (SC CIV 24/2004) [2005 NZSC 34]
      
EMPLOYEE OR INDEPENDENT CONTRACTOR?
      Section 6 of the Employment Relations Act 2000 governs whether an individual will be found to be an employee or an independent contractor. If there is any dispute as to status, it is up to the Employment Court or the Employment Relations Authority to determine the “real nature” of the relationship between the parties.
      The recent decision of the Supreme Court in Bryson v Three Foot Six Ltd [2005] NZSC 34 has confirmed that the traditional tests (see the attached checklist), will continue to be used in establishing the true nature of the relationship between parties.
      In addition, the intention of the parties continues to be relevant, but not determinative. One indication of the parties’ intention is the contractual wording.
      Another relevant factor may be industry practice, although, again, this is not determinative (Bryson v Three Foot Six Ltd [2003] 1 ERNZ 581(EC)).
      There are a number of questions to be asked, the answers to which will help to establish whether a worker is an employee or an independent contractor.
      As a general guide, if you have more ticks in the “YES” column then there is more prospect that the status of a worker is that of a contractor; if you have more ticks in the “NO” column then there is more prospect that the status of a worker is that of an employee.
      Relevant questions to ask:
      YES Indicates Independent Contractor
      NO Indicates Employee
      “Real nature of the relationship test” – look at the contractual wording, industry practice and any other relevant factors, as well as the following tests to determine what the “real nature” of the relationship is:
      “Control Test”: how much control does the worker have?
      Does the worker have control over his or her hours?
Does the worker have control over where the work is done?
      
Does the worker have control over what work is done?

      Can the worker be dismissed without a good reason?
      
“Integration Test”: is the worker a part of the “employer’s” business?
      
Does the worker charge the principal GST?
Does the worker invoice the principal?
      
Does the worker have his or her own client base?

      Does the worker pay his or her own ACC levies?

      Does the worker pay any overheads related to the job? 
Is there anything preventing the worker from having the benefit of “minimum entitlements” such as paid holidays, paid sick leave and paid bereavement leave? “Fundamental (or Economic Reality) Test”: is the worker in business on his or her own account?
      Does the worker provide his or her own equipment?

      Does the worker hire his or her own helpers?
Does the worker take any responsibility for investment and management?

      Does the worker have the opportunity to profit from sound management and performance of his or her tasks?

      Does the worker undertake any financial risk him or herself?
      Other relevant factors may include the following
      Does the worker claim for expenses off his/her tax (eg tools, equipment, clothing, transport costs etc)?
 Does the worker operate as a company?

      Does the worker invoice for his or her services?

      • lprent 22.2.1

        Cut and paste that length. Normally no. I’d expect links and small quotes. But the NBR is behind a pay wall and that is an interesting comment.

        I see penny bright is continuing to target the NBR

      • mickysavage 22.2.2

        The other interesting issue is that this is a problem for Three Foot 6 but not Warners? Surely the contract will be for the provision of a film and the fact that the contractor may subsequently have problems with an employee/independent contractor surely is of no relevance to Warners.

        Some more detail is needed.

  23. Cnr Joe 23

    So – the new line is Warners and Jackson are concerned about Unionised employee unrest – threaten to move somewhere else (where there are no unions, just contractors?). Where would that be? Somalia?
    So PJ gets so upset at the prospect of having to negotiate with NZ workers on his films – imagine how ropeable he’ll get with his new workforce (wherever that may be) if they dare talk back to him.
    He says its not about the money (exchange rate, subsidies..) but his whole career has been about the money since LotR. He seemed to do it for the love before then but hey – planes as a hobby and method of transport are quite spency.
    So PJ and his self-interested priorities have changed. Kiwi Middle Earth fans have not caught up with that.

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