Treasury warned on risk of Hobbit hustle

Written By: - Date published: 12:00 pm, December 2nd, 2010 - 11 comments
Categories: business, capitalism, film - Tags: , , ,

Remember how Peter Jackson and Warner Bros pulled the old Hollywood shakedown on us? By making a hollow threat to film elsewhere they got an extra $33 million and a law passed just for them. This was supposedly necessary to save a vital economy gain for the country but the Government knew that was bollocks all along.

Vernon Small reports that Treasury had been warning that the Government should get rid of the Large Budget Screen Productions Grant months ago:

“Months before the decision to subsidise The Hobbit, officials had called for an end to assistance for the film industry, saying it was negative for the economy and presented a risk to the Government’s books.

Documents issued under the Official Information Act show that Treasury urged ministers in February to discuss whether any further assistance was merited. “…

“….The demand-driven nature of the LBSPG … can also create forecasting problems and fiscal risks for the Crown.”

Like the risk of the country flying to into a panic because a major studio says boo, leading to the government handing over another $33 million.

“[Treasury’s advice] was never discussed between ministers because there was no need.”

Yeah, no need until it was too late and we were caught in the middle of Warner Bros shakedown. Always prepared, the Nats.

Treasury considered the evaluation raised “sufficient concern about the scheme’s value for ministers to approach any extension or reconfirmation of the grants with caution”.

Well caution is one thing we didn’t get. The Government appears to have asked for no advice whatsoever on the benefits and costs of caving into Jackson and Warners’ threats, they just got out the cheque book and said ‘how much’?

In the February paper, officials argued it was not clear if the assistance provided significant economic benefits.

In terms of cost it sometimes exceeded support for tourism, one of the largest export earners, and support for private sector research and development of $47.4m “where the evidence of benefits to the wider economy is strong”.

Key got hustled out of $33 million and played the hero who had saved the day for New Zealand. But would this money have been more productively spent on R&D or on teachers’ pay, rather than on assuaging an empty threat?

11 comments on “Treasury warned on risk of Hobbit hustle”

  1. ianmac 1

    Someone published the uncertain estimates on whether the investment brought returns or not. It ranged from about $40million gains to negative $30million. Read it somewhere a few weeks ago. The claims that it would benefit $400million were unfounded. The gains from the Hobbit were minimal. Somewhere around 3% of tourist would come because of Matamata and the Hobbits. The next 10% would visit the Hobbits while they were here just because it fitted in with their travel opportunities. (Hope I remembered that reasonably well?)

  2. Anne 2

    The whole sorry saga turned into a public relations exercise on the part of Key &co., so that they could ingratiate themselves further in the eyes of a naive and stupid public.

    A $30 million dollar PR excrecise!! (err… I meant exercise, but the typo has an element of truth to it too).

    • Jim Nald 2.1

      Is that like a new ‘blend word’ or portmanteau a la Lewis Carroll, deriving from excrement and excise?

      (I think I must shake off my recent references to human anatomy and bodily substances.)

      • Anne 2.1.1

        @ Jim Nald
        You put it better than I ever could…
        Didn’t think of ‘excise’ but that completes the tableau.

    • pollywog 2.2

      must have been why Blinglish was nowhere to be seen and was making squeaks about not bringing out the cheque book beforehand…

      …having given out a few shakedowns, he’d know one when he saw it coming and decided to wash his hands of it

      pity his boss doesn’t listen to anyone but his media handlers…

      “just smile and wave John, just smile and wave.”

  3. Lanthanide 3

    Marty – are you sure it’s $33M?

    I believe at least some of the numbers were in $US, and the amount won’t actually be handed over until later during production, or whatever. By which time the NZ $ could’ve fallen, making the figure much worse. Or alternatively the US $ could’ve fallen, making the number much better (but probably causing the film to massively blow it’s budget in the process).

  4. Ron 4

    in the end, though, we can call Sir Pete’s credibility into question over this whole fiasco.

    Another case (as is so often the case with Jonkey) of the public accepting thier words becuase they are a “nice and successful person”. Style over substance. PR and advertising over facts.

    captcha : connections

    • g says 4.1

      i agree ron. i go back to that interview on nine to noon when mrs jackson and the script writer appeared. in a fine award winning performance, in a true near to tears fashion, they portrayed the end of the project that they could see slipping away…
      followed by ms kelly who informed us that the sunday evening before this interview, warners, sir peter and the unions had agreed that the blacklist had been lifted and that warners would control the release of this information.
      it all seemed like a big beat-up and a hoax…
      forgotten silver anyone?

  5. Rich 5

    Moreover, it’s entirely possible that things will turn pear-shaped either creatively or financially and the film will never be finished. Or it could be a complete turkey and put film studios of NZ and Peter Jackson forever.

  6. Gosman 6

    ” But would this money have been more productively spent …or on teachers’ pay,”

    LOL!

    I believe the answer to that is an unequivacal NO.

    Where is the evidence that increasing teachers pay has a major impact on the economic fortune of a country?

  7. James 7

    “Key got hustled out of $33 million and played the hero who had saved the day for New Zealand. But would this money have been more productively spent on R&D or on teachers’ pay, rather than on assuaging an empty threat?”

    Groan. The 33million wouldn’t exist without the 500 million investment from the film coming here anyway, so it doesn’t really matter does it. Ridiculous.

Links to post

Recent Comments

Recent Posts

  • Public support keeps Healthy Homes Bill on track
    The strong call from the public for warm, dry, healthy rentals has helped the Healthy Homes Guarantee Bill to pass its second reading, says Leader of the Opposition Andrew Little. ...
    2 hours ago
  • More proof National not delivering for New Zealanders
    The Ministry of Social Development’s latest Household Incomes Report is more hard evidence of the growing poverty in New Zealand, says Leader of the Opposition Andrew Little. “National claims to be delivering for New Zealanders. This report puts the lie ...
    2 days ago
  • Strong support from medical community for Healthy Homes Bill
    More than a thousand medical professionals, medical students, and other New Zealanders have shown their support for Labour’s Healthy Homes Guarantee Bill, says Leader of the Opposition Andrew Little. ...
    2 days ago
  • Labour will fund Buller Health Centre
    A Labour Government will fully fund the Buller Integrated Family Health Centre in Westport, confirming its commitment to the people of the West Coast and the role of central government to fund essential public services, says Labour’s Health spokesperson David ...
    2 days ago
  • National’s affordable promise for Auckland more smoke and mirrors
    The 26,000 additional houses National plans to build in Auckland on public land over the next decade include fewer than 5,000 affordable homes, while more than 60 per cent will be available for speculators to buy, says Leader of the ...
    2 days ago
  • National out of touch over immigration
    National’s abrupt backflip on their recently-announced changes to immigration shows they never understood the problem and just came up with a confused knee jerk response, says Leader of the Opposition Andrew Little. “Regional communities and businesses were quite right to ...
    3 days ago
  • English out of touch on homelessness
    Bill English’s comments that he doesn’t know why people are complaining about the blowout in the number of homeless families the government is putting up in motels just shows how tired and out of touch National is after nine years, ...
    3 days ago
  • All Kiwis to have same standard of cancer care
    Labour is promising that all New Zealanders will have access to the same level of cancer care no matter where they live in the country, says Leader of the Opposition Andrew Little.   “As someone who has survived cancer I ...
    4 days ago
  • Infrastructure announcement too long coming
    “What took you so long?” is Labour’s response to the Government’s announcement of a new infrastructure investment vehicle. Labour’s Auckland Issues spokesperson Phil Twyford says Labour announced its policy in 2015 to debt-finance infrastructure and service that debt with targeted ...
    4 days ago
  • Time for a breather on immigration
    National has no idea how to house the record number of people entering New Zealand, let alone cope with the pressure on health, education, and transport from this record population growth, says Labour’s Immigration spokesperson Iain Lees-Galloway. ...
    6 days ago
  • Labour to invest $4 billion in education
    Labour’s Education Manifesto will bring positive change across the education sector and is backed by a massive investment, says Labour’s Education Spokesperson Chris Hipkins.  “Labour’s plan will see an extra $4 billion invested over the next four years. It’s organised ...
    6 days ago
  • National’s shame: worst homelessness in the OECD
    National’s legacy is a housing crisis that has given New Zealand the worst homeless rate in the developed world, says Labour’s Housing spokesperson Phil Twyford. ...
    6 days ago
  • Labour taking action on school donations
    Labour will end so-called voluntary school donations for the majority of parents across the country under its $4 billion plan to revitalise the education sector, says Labour Leader Andrew Little. “Labour has always been committed to a world-class free education ...
    6 days ago
  • Labour to work with Queenstown to build more houses
    Labour will work with Queenstown-Lakes District Council, iwi, and the Community Housing Trust to build the modern, affordable housing Queenstown desperately needs, says Leader of the Opposition Andrew Little. ...
    7 days ago
  • Nats blow the Budget on motels after bowling state houses
    National is spending $140,000 a day putting homeless families in motels, the legacy of nine years of selling off and knocking down state houses, says Labour Housing spokesperson Phil Twyford. ...
    7 days ago
  • New revelations in Joanne Harrison report
    The State Services Commission’s report into the treatment of whistle-blowers by Joanne Harrison has revealed new accusations against the convicted fraudster, says Labour MP Sue Moroney.  “The report found that four staff inside the Ministry of Transport who had raised ...
    7 days ago
  • Snafu at Princess Margaret
    Jonathan Coleman has to stop the stalling over a new building for mental health services in Christchurch to replace the quake damaged Princess Margaret Hospital, says Labour’s Health spokesperson David Clark. “The Government must accept that Christchurch is still recovering ...
    1 week ago
  • Labour’s fiscal plan to build a fairer New Zealand
    Labour will re-build our housing, health and education while responsibly managing New Zealand’s finances, says Leader of the Opposition Andrew Little.  “Under Labour’s Fiscal Plan we will deliver big investments in the services we all need and care about, invest ...
    1 week ago
  • Nats show they’re the tax dodgers’ best friends
    The government is taking the knife to IRD at a time when we need a highly skilled department to ensure that multinationals and speculators don’t get away with dodging tax, says Labour’s Revenue spokesperson Michael Wood. ...
    1 week ago
  • Labour secures the future for NZ Super
    A Labour Government will secure the future for New Zealand Superannuation so we can continue to provide superannuation to those retiring at age 65, says Leader of the Opposition Andrew Little. “One of the first things a Labour-led Government will ...
    1 week ago
  • Multinationals must pay fair share of tax
    A Labour Government will crack down on multinational companies that are dodging paying their fair share of tax, says Labour Leader Andrew Little. “New Zealanders are missing out by hundreds of millions according to the IRD because multinational companies can ...
    1 week ago
  • ACT’s approach to children backward and ill informed
    Act’s new deputy leader’s claim that Labour’s support for families could “extend the misery of child poverty and even child abuse” is ill informed and offensive, says Labour’s Deputy Leader Jacinda Ardern. ...
    2 weeks ago
  • Canterbury hatchet job a disgrace
    The Government’s glib acceptance of advice that the Canterbury District Health Board doesn’t need more money is a hatchet job and a disgrace, says Labour’s Health Spokesperson David Clark. “To claim that the DHB was using tactics to leverage more ...
    2 weeks ago
  • Quality for Kiwi kids at ECE
    After more than a decade of rapid growth in the number of children participating in Early Childhood Education (ECE), it’s time to take stock and map out a clear plan for the future, says Labour’s Education spokesperson Chris Hipkins. ...
    2 weeks ago
  • Labour to boost ECE quality
    Labour will ensure kids get the best start in life by boosting funding for Early Childhood Centres to employ 100 per cent qualified and registered teachers, says Leader of the Opposition Andrew Little. ...
    2 weeks ago
  • Labour will stump up a million dollars for Maniototo Hospital
    A Labour led Government will make a million dollars available to rebuild the Maniototo Base hospital in Ranfurly, says the Leader of the Opposition Andrew Little.  “This will be a much needed boost for a long overdue rebuild that has ...
    2 weeks ago
  • No vision for the West Coast
    The West Coast welcomes any Government investment in our region but the lack of any real alternative vision for the West Coast’s economy is disappointing, says Damien O’Connor Labour’s West Coast-Tasman MP.  “The establishment of a Mining Research Unit will ...
    2 weeks ago
  • National’s youth work scheme too little too late
    After nine years, National’s belated attempt to provide work opportunities for unemployed youth should be seen for what it is, a half-hearted, election gimmick from a party that’s ignored the problem till now, says Leader of the Opposition Andrew Little. ...
    2 weeks ago
  • Kiwis won’t fall for Joyce’s spin
    Steven Joyce’s embarrassingly obvious spin on Labour’s Families Package won’t fool anyone, says Labour’s Finance spokesperson Grant Robertson. ...
    2 weeks ago
  • Labour prioritises families and public services
    Labour’s Families Package delivers a bigger income boost to more than 70 per cent of families with children than Budget 2017. By not spending $1.5 billion a year on tax cuts, Labour is able to do more for lower and ...
    2 weeks ago
  • Kiwis can’t sleep in your ghost houses, Nick
    The Government’s housing infrastructure announcement is another Nick Smith special – over-promising with no detail on delivery, says Labour’s Housing spokesperson Phil Twyford. ...
    2 weeks ago
  • Labour helps older New Zealanders and low income families with winter heating bills
    Labour will further boost its commitment to warm, healthy housing with a Winter Energy Payment for superannuitants and people receiving main benefits, says Leader of the Opposition Andrew Little. “Everyone deserves a warm, healthy home to live in. But that’s ...
    2 weeks ago
  • National must rule out retrospective override for Ruataniwha
    National must categorically rule out using retrospective legislation to override the Supreme Court’s decision that the land swap of conservation land flooded by the proposed Ruataniwha Dam was illegal, says Labour’s Shadow Attorney General David Parker. “Having not got their ...
    3 weeks ago
  • Flavell’s failure a win for Māori landowners
    The Māori Development Minister’s admission that his unpopular Ture Whenua Māori Bill won’t pass into law prior to the election is a victory for Māori landowners, but only a change of government will keep the Bill gone for good, says ...
    3 weeks ago