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The $11 billion man strikes again

Written By: - Date published: 8:41 am, July 7th, 2022 - 22 comments
Categories: film, national, politicans, same old national, Steven Joyce, uncategorized - Tags:

Remember Steven Joyce, the serial economics paper failer who claimed there was a $11.7 billion dollar hole in Labour’s alternative budget, even though history shows there was an actual $7.5 billion surplus?

Another example of his negotiation prowess has recently received media attention and the only conclusion that can be drawn is that his ability to analyse crown accounts is matched by his ability to negotiate.

From Jason Walls at the Herald:

Taxpayers have so far paid more than $140 million worth of subsidies to help produce the upcoming sequels to the Avatar movie.

According to figures from the New Zealand Film Commission, the cash rebates for the upcoming movies will be the second largest in the agency’s history.

The only production to have received more taxpayers’ cash is the Hobbit movies – which received more than $161m between 2012 and 2015.

But, given the last of the four Avatar sequels is not due to be released until 2028, it’s likely the government cash it will receive in total will overtake the Lord of the Rings prequels at some point soon.

The deal was signed in 2013 by the Key Government and amazingly did not have a cap on the amount that could be spent.  The sky is the limit in terms of what the Government may have to fork out.

And some of the benefits negotiated suggested that Joyce’s understanding of where the future was leading us was also deficient.

David Parker tried to wind the subsidy scheme back in 2018 but was not able to do so.  From an earlier Matt Nippert Herald article from 2018:

The government has abandoned plans to rein in ballooning subsides for Hollywood, citing film industry opposition and the threat of lawsuits from the producers of James Cameron’s Avatar films.

The Weekend Herald reported in June these payments – that sees studios get cash payments of up to 25 per cent of their local spending on productions – had totalled $575 million since 2010, prompting Economic Development Minister David Parker to announce he was looking at ways to cap or limit the escalating costs to taxpayers.

But yesterday Parker, speaking from Australia, said following consultations with industry around the viability of their business – and thousands of accompanying jobs – without subsidies, and legal advice over a 2013 deal signed with Avatar producers, said cuts or changes to the subsidy scheme were now off the table.

“We’re not proposing to introduce a cap. We accept that the subsides are necessary, and we accept there’s a benefit to the country,” he said.

And the problem is with the form of the contract itself:

Parker said any changes to the subsidy scheme would expose the government to legal risks.

“The advice we had is that the last government had agreed to an uncapped liability for future subsidies for the Avatar film series. If we were to cancel that and to pull out of that deal there would have been litigation issues,” he said.

Act who was in a confidence and supply agreement with National at the time has cynically tried to blame Labour for this.  From the Jason Walls article:

The Act Party wants the Government to immediately stop providing subsidies to studios producing movies in New Zealand.

“Every dollar that’s spent on a subsidy for [the] Hollywood elite is a dollar that’s not spent somewhere else in our economy,” deputy leader Brooke Van Velden said.

She said production companies receiving millions through the rebates is a slap in the face to the likes of the Breast Cancer Foundation – which wanted just $15m in funding to catch up on screenings missed due to the Covid lockdown.

“Instead – they’re giving it to Hollywood elite. I think their priorities are wrong and we need to have more respect for New Zealand taxpayers.”

Van Velden’s criticism although valid is being addressed to the wrong party.  She should aim her broadside at her potential coalition partner.

Let us add this to a very long list of examples of where National, supposedly the party of economic geniuses, stuffed things up badly.  And we are still paying for it.

22 comments on “The $11 billion man strikes again ”

  1. Tiger Mountain 1

    “Stevie’s Hole” erroneous as it was, did exactly what it was intended to do, and cost NZ Labour 2–4% of votes in that election by some academics and pundits estimates.

    Give him another dildo!

    • mickysavage 1.1

      Yep I can recall clearly it stalled Labour’s momentum. It was one of the most appalling acts of political bastardry I have ever witnessed.

  2. Nic the NZer 2

    Does anybody know, what was the budget forecast surplus/deficit figure at the time?

    Was it zero? Or did Joyce deviate by more or less than 11.7 billion from Treasury?

    • Brigitte 2.1

      My understanding was that it related to future years.

      Treasury projects tax income allowing for salary inflation. But they assume no change to expenses for 3 years unless explicitly allowed for (which it never is). That's why deficits always move to surplus (and growing surpluses) in all the projections.

      Joyce was pointing out that those future surpluses had been allocated without anything left over for salary increases for public servants (nurses, police etc) nor for normal inflation. I can't verify if 11b is correct but it certainly wasn't small.

      You should be thankful that he was unable to explain his figure in plain english.

      • Craig H 2.1.1

        Going by all the economists who disagreed with Joyce at the time, he was mistaken. Labour did allow for salary increases but Joyce missed where it was in the budgets because it was in a non-standard place.

  3. Ad 3

    Not that I want to speak in favour of Stephen Joyce too often, but it was his rollout of Fibre to the Driveway that enabled New Zealand to get through the COVID 19 crisis with much business and learning operating as business as usual. I very much doubt that Labour from 2017 would have been able to deliver the fibreoptic network given their execution record.

    Also Joyce's fibre programme enabled the entire film and television industry to grow far faster than it would have otherwise. Film is the best state-sponsored new industry we've had in 50 years, and yes they were National deals.

    Also it was Minister Stephen Joyce who in 2017 expanded the ambit of Crown Fibre Holdings into Crown Infrastructure Partners. This new structure was quickly adopted by the incoming Labour government to generate infrastructure for housing in both the public and private sectors. Labour otherwise didn't have a structure to do it.

    What Labour delivered us was regulated dialup and a multi-year regulatory war to cut up Telecom into pieces. A battle worth fighting sure – but it took National to make it useful to the country.

    • Poission 3.1

      Yeah but my phone bill is dearer then my power bill ( in the middle of a canterbury winter)

    • Muttonbird 3.2

      Are you comparing the fibre roll-out to light rail?

      One is a bit of trench digging and cable laying which may be obsolete sooner rather than later. It cost about 1.5 billion. The other is 100 year sustainability infrastructure benefitting generations to come, costing 30 billion.

      • Ad 3.2.1

        No I'm not and I don't need to.

        • Muttonbird 3.2.1.1

          Well, you did use a bit of ditch-digging work done with cheap foreign labour as a weapon to bash Labour Party with.

          • Ad 3.2.1.1.1

            The entire country runs on cheap foreign labour. What's your issue again?

            • Muttonbird 3.2.1.1.1.1

              :lol: I think you meant to post this on another forum.

            • theotherpat 3.2.1.1.1.2

              "The entire country runs on cheap foreign labour."…i am wondering…what is your position on this?

              • Ad

                Pretty simple:

                I would prefer that we had zero minimum wage jobs, bountiful salaries for everyone, and needed to import the merest fraction of the highest of specialist staff.

                We don't. What we have instead is evident in health, education, construction, fishing, agriculture, eldercare, and pretty much any other part of our economy.

    • SPC 3.3

      The idea that New Zealand was dependent on National being in government and Joyce being the Minister to have got fibre rollout is something not even John Key or Steven Joyce have ever claimed.

    • woodart 3.4

      fibre rollout, who cares, it all comes through the airwaves into a wireless modem. the fibre rollout was just another corporate sweetener that we are all paying for.

  4. Populuxe1 4

    Tell me you don't understand how rebates work without telling me you don't understand how rebates work.

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