Partial economic assessment of MOUs for the 5% Uplift of the New Zealand Screen Production Grant

This is the web version of the report. A downloadable PDF can be found at the link below.

Preface

This report presents the findings of a truncated programme of work, by Business and Economic Research Limited (BERL) for the Ministry of Business, Innovation and Employment (MBIE), to evaluate the economic effects of the MOUs for the 5% Uplift of the New Zealand Screen Production Grant. It was intended to undertake a more comprehensive programme, but this proved to be impossible. Specifically, circumstances prevented the completion of interviews with all identifiable signatories to the MOUs that are a feature of the Uplift scheme (the scheme). Similarly, it was not possible to gather insights and information from the individuals who it was thought were likely to have benefitted from internships and mentorships associated with the MOUs. For these reasons, the report is referred to as a partial assessment.

Nonetheless, the work undertaken has provided some useful insights into what benefits the scheme has delivered and what their value has been.  In addition, it collected some suggestions as to how the scheme could become more effective. Furthermore, although this was not a specific objective of the assessment, the key screen industry players who agreed to be interviewed contributed important opinions on what conditions are necessary to enable New Zealand to attract more international screen productions.

Executive summary

About the assessment

International screen productions in New Zealand can be awarded an extra 5% of qualifying production expenditure in funding (Uplift), over and above the standard 20% rebate of the New Zealand Screen Production Grant (NZSPG). Productions must be invited to apply for the Uplift, and their application then be approved by a panel assessing the Significant Economic Benefits of their application. If successful, productions then enter into a Memorandum of Understanding (MOU) with the New Zealand Government, specifying the activities and deliverables to which they will commit in exchange for the Uplift.

To date, there have been 8 MOUs, and this report presents the results of a partial assessment of the economic effects of the 6 MOUs that were within scope. The assessment was partial because it was not feasible to complete the information gathering to complete the work as planned. Nevertheless, the work has produced some useful findings about the effects of the MOUs.

The work was partly based on analysis of the expenditure associated with the productions for which an MOU was developed.  It also involved analysis of the findings from a set of interviews with parties to, and beneficiaries of, the MOU activities and deliverables. Interviews were also held with other players in the New Zealand screen sector who were thought likely, as observers, to have insights into the effects of the MOUs.

Findings from analysis of the expenditure data and interview findings

The principal findings of the assessment have been:

• The 6 productions that were the subject of an MOU between August 2015 and March 2022 were, on average, very much larger, in terms of their production expenditure, than the 109 international productions that received the standard rate of the NZSPG (Often PDV-only productions are smaller, so it could skew the comparison). 
• Typically, the MOUs committed the Uplift recipients to:
  • deliver various forms of screen content to New Zealand agencies for promotional purposes, and to cooperate in promotional events
  • provide internships or mentorships for New Zealand screen professionals
  • transfer technology and skills to New Zealand production service providers.
• 2 of the MOUs provided for the inclusion of a New Zealand character in the production, and 1 resulted in significant infrastructure investment.
• The studio representatives interviewed indicated that the MOU activities and deliverables would not normally be provided as part of a production that did not receive the Uplift. This implies that the economic benefits flowing from the MOUs were largely “additional,” i.e. would not have eventuated in the absence of the MOUs.
• The studio representatives also indicated that the Uplift funding resulting from the MOUs was an important factor in the decision to bring their productions to New Zealand, although other factors (including the availability of sound stages and high calibre production professionals) were also important.
• The findings from the other interviews (with the beneficiaries of the MOU activities and deliverables, and related New Zealand screen sector players) were consistent with those carried out with the interviews with the studio representatives.

Key conclusions based on this partial assessment

The analysis of the production expenditure data and the interview findings indicate the following conclusions:

• The activities and deliverables flowing from the MOUs have the potential to generate significant and enduring economic benefits
• Most of the benefits can only be described, rather than measured, and this means that the value for money of the Uplift cannot be stated
• The Uplift has played an important part in influencing the decisions to bring productions to New Zealand that might otherwise have gone elsewhere.

However, it is also advised that these are heavily qualified conclusions because the information gathering work underlying the assessment was truncated.  Further information gathering and analysis would be required to confirm them.

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