Treasury questions subsidies to overseas film industry

Treasury has criticised government subsidies to overseas filmmakers saying the economic return is probably considerably less than the money being paid out.

Eighty million dollars a year is spent on encouraging Hollywood movie-makers to film in New Zealand.

But in documents released to the New Zealand Herald under the Official Information Act, Treasury said the net economic return was likely to be only about $14 million a year.

The estimate has been peer-reviewed by two economic consultancies.

Treasury also said indirect benefits such as increased tourism was difficult to quantify, and if attracting tourists was the objective, it might be better to put the money directly into that sector.

The ACT Party said the government should immediately stop subsidising overseas movie-makers to shoot their films in New Zealand.

Leader David Seymour said it was not a good use of taxpayers’ money.

“To effectively reduce the tax rate for just one industry that happens to provide politicians with good photo-ops on the red carpet is not the prudent way to manage New Zealand’s economy in the long term,” he said.

The Economic Development Minister, David Parker, said earlier this year that without subsidies the film industry would not exist.

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