New Zealand Government reconsidering cap to screen production grant

Recent press reports indicate that the New Zealand Government’s current position now appears to be that it will not introduce a cap on subsidies provided to the film industry, following earlier comments made by Economic Development Minister David Parker that the Government was looking at ways to limit exposure to the film subsidy regime.

The New Zealand Screen Production Grant (NZSPG) was introduced in 2014 to support New Zealand’s screen sector by incentivising production activity, through a rebate of up to 20% (25% in certain circumstances) for international productions and 40% for domestic productions. Mr. Parker’s comments regarding limiting exposure to the regime followed reports that the Government has paid more than $550 million to film companies through the rebates.

Following an evaluation of the New Zealand Screen Production Grant commissioned by the Ministry of Business, Innovation & Employment, the Government appears to have abandoned plans to cap the film subsidies. Key findings of the evaluation report, authored by Sapere Research Group, found that:

  • The NZSPG generates additional production activity that would not occur in New Zealand without the grant;
  • The screen sector appears to generate spillover benefits for other sectors of the economy; and
  • The screen sector is growing but is not yet sustainable without the grant.

Mr. Parker has however stated that the Government would review the criteria for the extra 5% grant, which is currently provided for international productions in certain circumstances. It would also ensure that film producers could not “double-dip” in the screen production grants and the research & development tax credits that are to be introduced across industries.

For further information regarding the New Zealand Screen Production Grant and its criteria, see our previous article or contact Christopher Young.

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