Introduction
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About the 5% uplift of the New Zealand Screen Production Grant
The New Zealand Screen Production Grant (NZSPG) was established in 2014, and offers a rebate of 40% for qualifying domestic productions, and 20% for qualifying international productions. An additional 5% rebate (5% uplift) is available for live action productions that meet a Significant Economic Benefits (SEB) Points Test. International productions must be invited to apply for the uplift, and their application is then considered by a panel assessing their likely Significant Economic Benefits. 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.
The purpose of the NZSPG International Grant is to provide economic and industry development benefits to New Zealand by incentivising screen productions that would not otherwise have been made here. The 5% uplift is reflective of the fact that screen productions can raise New Zealand’s profile internationally, attract high value tourists, and profile our innovative and creative people and technologies.
It is expected that productions in receipt of the 5% uplift will be well placed to market, promote and showcase New Zealand. Productions that are approved for the 5% uplift by the Significant Economic Benefits Panel enter into a legally binding Memorandum of Understanding (MOU) providing for activities and deliverables. Payment of the 5% uplift is conditional on these deliverables being delivered by the production within the timeframe specified in the MOU.
Applicants for the uplift must be a special purpose vehicle (SPV), registered in New Zealand and established principally in relation to making the production.
Productions associated with Memorandums of Understanding
8 international productions have been subject to an MOU. 6 were considered for this project.
- Ghost in the Shell – released in 2017
- Mortal Engines – released in 2019
- Mulan – released in 2020
- The Meg – released in 2018
- Pete’s Dragon – released in 2016
- Power Rangers (Dino Charge) – streamed in 2015
The other 2 productions were agreed as out of scope of the assessment for the following reasons:
- Amazon Untitled project - Season 1 – the 5% incentive was withdrawn following Amazon’s decision to shift production offshore after Season 1
- Avatar sequels– production of the first sequel is ongoing (scheduled for release late in 2022).
Objectives of the assessment
The assessment was designed to examine only the economic effects of the MOUs for the 5% Uplift side of the NZSPG, rather than the effects of the NZSPG funding as a whole. The 2 key objectives were to:
- Inform government partners as to whether the MOUs have delivered the anticipated economic benefits, and
- Inform the approach MBIE may take to future uplift MOUs, and advise future policy to inform uplift MOU terms.
MBIE’s specification for the assessment also indicated that the principal questions were:
- What activities occurred under the MOUs?
- How did the activities compare with the activities agreed to in the MOUs?
- Were any of the activities/deliverables itemised in the MOUs difficult to complete? And, if so, what particular activities/deliverables?
- Did the uplift grant cover the cost of fulfilling the terms of the MOUs? And, if not, how much extra spending was needed?
- What were the direct and indirect/spill over benefits of the activities?
- In what ways has/will the New Zealand economy benefit from the activities and deliverables resulting from the MOUs?
Intended methodology
The methodology recognised that the 5% uplift is likely to have both short-term and ongoing effects. The short-term effects will be generated by “additional” production expenditure induced by the MOUs. In this context, additional production expenditure is expenditure in New Zealand that would not have occurred in the absence of the 5% uplift. The extent to which this happened is explored in section 5 of this report. The ongoing effects will be generated by the activities and deliverables that occurred as a result of the uplift.
The methodology was designed to collect information from all parties to the MOUs, as well as organisations and individuals that benefitted from, or participated in, MOU activities and deliverables. Interviews were also held with a set of other informants who worked for organisations that had a role or stake in promoting the development of the New Zealand screen sector. The plan was that the information would then be analysed to generate quantitative and qualitative estimates of the uplift scheme’s economic effects.
Extent to which the methodology was completed
To obtain the information alluded to above, a total of eleven interviews were held. The names of the organisations of the interviewees are shown in section 4. Data on the Qualifying New Zealand Production Expenditure, and the associated grant funding, was provided by the New Zealand Film Commission (NZFC).
It was not possible to interview representatives of the studios responsible for 2 of the productions: Ghost in the Shell, and Mortal Engines. Nor was it possible to interview any of the 20 or so individuals who participated in internships or mentorships agreed to as part of the MOUs. The latter represented a significant gap, given the importance of workforce development in the health of any industry, and noting what the studio representatives said about the importance of the availability of high calibre production staff in decisions about where productions are filmed.
The work plan for the assessment provided for the delivery of an emerging findings report on the completion of the intended information gathering, prior to the analysis of the information to generate estimates of the economic effects of the uplift. Although the information gathering did not go as far as was intended, this partial assessment report includes some, largely qualitative, analysis of the effects.
If it had been possible to complete a larger programme of information gathering, the findings would also have included quantitative and qualitative analysis of the economic effects of the MOUs.
Structure of the report
Features of the MOUs — the key features of the MOUs, focusing on the activities and deliverables to which they committed the studios in return for the uplift funding.
The uplift in context — puts the uplift productions into context, by comparing their Qualifying New Zealand Production Expenditure (QNZPE) and grant funding, with the QNZPE and grant funding for productions that did not receive the uplift.
Summary of the information gathered from interviews — sets out the findings from the interviews with the studios, beneficiaries of the MOUs, and a range of other informants who had insights into the operation of the uplift scheme.
Assessing the economic effects — draws on the interview findings, and the QNZPE data, to consider what the economic effects of the MOUs have been.
Conclusions — draws some conclusions about the effectiveness of the MOUs in relation to the objectives of using them.