For a Government which has in the past been critical of others for ''picking winners'', news this week of changes to the structure and level of support for overseas and New Zealand film and television productions came as something of a surprise.
In Opposition, National was deeply opposed to any thoughts a government should provide subsidies to one industry over another. Market forces were meant to provide the sort of competitive edge New Zealand needed to survive in the world.
However, it appears the lure of Hollywood is too much for Prime Minister John Key to resist.
This Government changed the law to ensure the filming of Sir Peter Jackson's Hobbit movies could take place in New Zealand. Mr Key is also known to have wined and dined with Warner Brothers executives, much to the annoyance of New Zealand actors who believed the prime minister was selling them out to overseas stars. Now, Mr Key has fronted a press conference with Economic Minister Steven Joyce and Arts, Culture and Heritage Minister Chris Finlayson, and alongside Avatar director James Cameron, to sign an agreement which will see the next three Avatar films made in New Zealand.
Mr Key said the investment would be significant - a minimum of $500 million for the three films.
If certain criteria are met, the rebate for the film will be lifted to 25% from the newly announced 20%. The film must have significant additional economic benefits for this country. Mr Joyce says he expects the Avatar films will qualify for the 25% rebate. The spending on production and employment of more New Zealanders seems the only justification for this.
Around the world, the film industry is feted and subsidised. Just last month, the European Union agreed to new rules which allow governments to cover 50% of the costs of a film from production and script-writing to distribution and promotional costs. Governments will also be able to require between 50% and 80% of subsidised films' budgets be spent within their country. Between them, EU governments pay out nearly $NZ5 billion using measures ranging from direct subsidies to tax breaks to the film industry, according to research.
The news of the Avatar subsidies went global, with news agencies reporting the New Zealand Government's plan. The main theme of the coverage was ''race to the bottom'', where competing countries give increased incentives to dismantle currently existing regulatory standards.
New Zealand is competing with countries such as Canada and the United States, which are boosting subsidies for producers to shoot films far from the traditional studios of Los Angeles. North Carolina is having a rethink of the subsidies, which has been welcomed by many in the state. Last year, North Carolina spent $NZ83 million and in return got 14,100 temporary jobs and $NZ334 million in spending on local goods, services and workers.
The Lord of The Rings provided obvious tourism advantages for New Zealand. Tourists came to this country, including this region, to view the stunning landscapes used by Sir Peter in his filming. It is hard to imagine tourists flocking to a studio somewhere in Wellington or Auckland to watch a blue-clad actor with table tennis balls strapped to their body as Avatar technicians work their magic.
Mr Finlayson should be asking himself what arts, culture and heritage benefits subsidising Avatar will bring to the sector he holds so dear. Mr Key, and especially Mr Joyce, need to consider which films would have come to New Zealand without any financial sweeteners. While there may be a case for promoting local film-making talent, there does not seem much of a case for subsidising Mr Cameron, even if he now owns a swathe of the Wairarapa. And what kinds of returns could be gained for providing tax breaks elsewhere?
If the answer is a stronger export-led economy through supporting emerging manufacturers, the subsidy support for the film industry is misdirected.
