Amazon up for $375m grant
‘‘It defies belief that a Left-wing government would line the pockets of Jeff Bezos at the expense of ordinary taxpayers.’’
David Seymour ACT leader
Amazon and its billionaire founder, Jeff Bezos, could receive a subsidy worth more than $300 million from Kiwi taxpayers for producing the Lord of the
Rings television series here, the ACT Party says.
Economic Development Minister Phil Twyford announced yesterday that Amazon Studios would base the production in New Zealand, after months of speculation.
He forecast the series would employ hundreds of New Zealanders and provide a ‘‘mega jolt in the arm’’ for the local screen production industry.
But Amazon could be in line for a refund of up to $375m through the Screen Production Grant, based on the series costing an expected $1.5 billion, ACT leader David Seymour said.
Amazon is 16 per cent-owned by Bezos, who owns Amazon shares worth US$107B (NZ$170B), making him the world’s richest man, ahead of Microsoft founder Bill Gates.
‘‘It defies belief that a Leftwing government would line the pockets of Jeff Bezos at the expense of ordinary taxpayers,’’ Seymour said.
‘‘Even worse, the return to New Zealand on one dollar of spending through the Screen Production Grant could be as low as 70 cents.
‘‘Labour and National have been locked in a costly race to the bottom to secure TV and movie productions and the photo opportunities that come with them,’’ he said.
The Screen Production Grant enables international film and television productions to receive a cash grant equivalent to up to 25 per cent of their eligible budgets. Not all spending necessarily qualifies for the rebate.
Exclusions include fees and expenses for crew and staff who work on productions for less than two weeks, and services provided for local productions from outside New Zealand.
The base rate of the Screen Production Grant is 20 per cent but a ‘‘5 per cent uplift’’ can be available for productions deemed to have ‘‘a significant economic benefit’’ commensurate with the grant.
Eligible spending on the LOTR television series would qualify for the 20 per cent rebate but Amazon Studios had not been guaranteed the maximum 25 per cent rate, Ministry of Business, Innovation and Employment policy manager Robyn Henderson indicated.
Discussions were under way and a decision on the uplift would be made before the end of the year, she said.
Twyford said the Government had not offered Amazon any incentives beyond the Screen Production Grant to film the series in New Zealand.
‘‘Over the last 20 years, this country has built up an industry that generated over $3b of revenue last year and has 16,000 workers.
‘‘Without the Screen Production Grant, we would not see that continue,’’ he said.
The television series has been
touted as the most expensive in history.
Controversy over film and television incentives pre-date the Screen Production Grants, which were introduced in 2014.
They replaced the Large Budget Screen Production Grant that provided $45m for Avatar, which was the world’s most expensive film when it was made in 2009.
Economic consultancy Sapere Research said that between 2014 and 2017 Screen Production Grants generated ‘‘economic benefits’’ worth twice the value of the grants it handed out, in a report it produced for the Culture and Heritage Ministry and Ministry of Business, Innovation and Employment.
But the Treasury questioned whether Sapere had overestimated the benefits by taking a ‘‘short-term view’’, in a memo that was released last year.
The Treasury argued instead that the benefits of the screen grants were ‘‘uncertain’’ and they might be costing the country overall.