NZ government grilled for tenuous Hobbit job claim after $NZ67m subsidy

15 January, 2013 by Brendan Swift

The New Zealand government's claim that The Hobbit films would create 3000 jobs was initially made by Peter Jackson’s production company and never independently verified, according to documents obtained by the NZ First party.

The documents also show that the government’s first query about jobs was made a year after it had already granted an estimated $NZ67 million subsidy to Warners Bros and effectively removed the right of film workers to unionise amid threats to take the production offshore.

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An email from a representative from the office of NZ prime minister John Key to Jackson's production company Wingnut Films said the PM had asked how many jobs the Hobbit movies would create. (A copy of the emails can be found here.)

"The context is, if he's asked about Labour's industrial relations policy and how it might impact on the NZ film industry he can say something like 'about 3000 people will work on the Hobbit movies, if that policy had been in place then all those people might never have got a job'. Would it be possible to get an estimated number? Just to the nearest 500 or 1000 would be fine." 

In reply, a representative from Wingnut said: "3000 is a good number. We have 1000 on payroll at the studio, 1000 at Weta Digital, and nearing 1000 across Weta Workshop, Park Road Post, related companies and casual contractors".

The email exchange was sent on October 21, 2011 – almost a year after the subsidy and employment changes.

NZ Economic Development Minister Steven Joyce told Radio New Zealand that Wingnut Films provided a breakdown of the figure and that he did not know how many of the jobs existed before the Hobbit films were made.

"We have a thousand at the studio, a thousand at Weta Digital and nearing a thousand across Weta Workshop, Park Road Post, related companies and casual contractors," he said.

A government asking a private company for evidence of the benefits of a major taxpayer subsidy without independent verification represents a major conflict of interest. 

NZ First leader Winston Peters said the first Hobbit film had grossed more than $US1 billion around the world and called on Warner Brothers to repay the $NZ67 million subsidy.

“The government claims that filming The Hobbit in New Zealand created an extra 3000 jobs and this was value for money to taxpayers but documents (attached) from John Key’s office show this figure was plucked out of thin air," he said in a statement. "Questions have to be answered about how many of these jobs existed prior to filming, how many of them will exist once the final film has premiered, and how many of these jobs actually went to New Zealanders."

In 2011, when the New South Wales state government agreed to provide financial incentives to lure Alex Proyas' Paradise Lost to the state, it claimed that the production would create 1300 jobs and $88 million of expenditure. An earlier email from Proyas to premier Barry O'Farrell's office, aimed at garnering support for the production, estimated that it could potentially create $US94.09 million in expenditure and create 1127 jobs. The production was later placed on hold.

A NSW government executive previously said that such claims are independently verified.  

Contact this reporter at bswift@if.com.au or on Twitter at @bcswift.

 

 

 

 

 

 

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