Labour MP Trevor Mallard said today the film's main producer Warner Brothers had raised concerns over the exchange rate between New Zealand and the United States while he was a minister in the previous government.
"There was a lot of discussion about the dollar. One of the discussions was if the dollar went past 50 cents it might be uneconomic for them to make films there,'' he said.
Prime Minister John Key and senior ministers will today meet several high-powered executives from Warner Bros and head of production company New Line, Toby Emmerich, in a bid to keep the movies here.
Mr Mallard said he expected the exchange rate would come up for discussion.
"I'm sure the level of the dollar is what Warner Bros will tell the Prime Minister is one of the factors he should consider in the financial arrangements for the film industry.''
But Mr Key said today the issue of where the films would be shot went beyond the exchange rate.
"This is about a long-term relationship with Warner Bros, and continuing that long-term relationship. It's not just about what the exchange rate is today,'' he said.
"The problem has been that two years ago, when they first looked at making the Hobbit movies, the US exchange rate was approximately 55 cents. Today it's 75 cents so that has a big financial impact on Warner Bros. But that's also true of our exporters - it's one of the real challenges they face.''
Economic Development Minister Gerry Brownlee said the exchange rate issue was not unique to New Zealand's film industry.
"The US currency is falling, but it has to be remembered it's falling against every other currency in the world as well. So it's not something that's unique to New Zealand.''
Mr Brownlee said lifting the Government's 15 percent subsidy for filmmakers would not be on the table at the meeting.
The subsidy was comparable to what other countries were offering.
"We think what we're offering is a good arrangement, and it is competitive.''
