The Government has announced a boost in screen production incentives for both overseas and New Zealand film and television productions, along with a deal securing production of the next three Avatar films in New Zealand.

The move has been welcomed by guilds and industry organisations, and comes after ongoing concerns about a decline in screen business in New Zealand and a Screen Industry Forum in November.

The rebate on international film and television productions now rises from 15 per cent to 20 per cent. A further 5 per cent will be available for international productions that deliver significant economic benefits to New Zealand. Eligibility will be assessed through a points system, yet to be released.

New Zealand productions will continue to be able to access 40 per cent, but that will now be extended to television and productions with larger budgets.  The two tiered system will take the form of a rebate on productions up to $15m qualifying New Zealand production expenditure (QNZPE) and equity on productions between $15m and $50m QNZPE.

“This is a significant and aspirational opportunity for NZ producers, screen companies can now have higher budget ambitions and are incentivised to create and develop NZ owned film and television IP that they can exploit internationally,” said SPADA co-president Richard Fletcher.

The changes come as the existing Screen Production Incentive Fund and Large Budget Screen Production Grant are combined to form the New Zealand Screen Production Grant, an uncapped fund.

NZ Equity welcomed the removal of the distinction between film and television when supporting local productions through the 40 per cent rebate and changing the support structure for local productions from a grant to an equity stake to incentivise more middle sized NZ-owned and developed productions.

Equity president Jennifer Ward-Lealand said it was “a real shot in the arm for the local screen industry”.

“Equity has for some time now been arguing that while we very much support large scale foreign productions coming to New Zealand, we must not forget about the local industry, the local industrial base and of course the creation of local stories.”

The New Zealand Film Commission said there will be a process of engagement with the New Zealand industry early in 2014 to finalise the points test that will apply to New Zealand productions. The criteria and details on how to apply for the New Zealand Screen Production Grant will be available on www.nzfilm.co.nz from 1 April 2014.

The Government also announced it has signed a memorandum of understanding with Lightstorm Entertainment and Twentieth Century Fox Film Corporation that will see the next three Avatar films made in New Zealand.

Provided the new Avatar films fulfil the requirements set out in the MoU, they will qualify for a total rebate of 25 per cent.

The announcement was made on Monday 16 December by Prime Minister John Key, Economic Development Minister Steven Joyce and Arts, Culture and Heritage Minister Christopher Finlayson at Wellington alongside Avatar Director James Cameron, Producer Jon Landau, and Twentieth Century Fox Film co-President of Worldwide Theatrical Marketing and Distribution Paul Hanneman.

The MoU includes an offer by James Cameron and Jon Landau to serve as founding members of a new screen advisory board, which will provide advice and guidance to New Zealand screen and film makers looking to succeed internationally.

Equity congratulated Cameron and Landau on steps to be founding members of the advisory board and said the producers of Avatar have shown significant good faith in working with the local industry.

“The difficulties faced by the production service sector working on international productions has shown us that we need to nurture our local industry and local industrial base if we are to build a sustainable, vibrant and successful industry. We would expect that this principle would also extend to developing and providing opportunities to the talented performer base we have in New Zealand,” said Ms Ward-Lealand.

The MoU also provides:

•  A commitment by both parties to grow the screen sector in New Zealand and to building a long term and productive relationship between the Crown and Lightstorm/Twentieth Century Fox.
• Spending of at least NZ$500 million on production activity in New Zealand, including most of the live action shooting and visual effects.
• Employment and skills opportunities for New Zealanders, including in Head of Department roles. Around 90 per cent of live action crew are expected to be New Zealanders.  Alongside this, an internship programme will be supported.
• New Zealand hosting at least one official red carpet premiere, and a featurette on New Zealand being included in DVDs and Blu Rays.
• Marketing and promotion of New Zealand and its film industry alongside the three Avatar films, transferring technological know-how to New Zealanders, and retaining screen production infrastructure in New Zealand that could be used for industry training.

In announcing the screen incentive changes Economic Development Minister Steven Joyce said in recent months there has been a sharp downturn in international production activity in New Zealand for both film and TV. This is due to a combination of factors, including increasingly generous grant rebates and tax relief offered by other countries.

“To support and develop our screen sector, the Government is altering our screen production incentives to both encourage more mid-sized locally-driven productions and attract more international productions while our own domestic industry develops – without engaging in a ‘race to the bottom’ mentality."

Minister for Arts, Culture and Heritage Christopher Finlayson said changing our screen production incentives will provide breathing space to develop a more sustainable local screen industry that generates more Kiwi-owned intellectual property.

"We want to protect and enhance the wider economic benefits from the screen sector including tourism and boosting New Zealand’s international profile, while at the same time developing a more sustainable local industry that is less dependent on international productions."