NZ "The Hobbit Scandal": Threats fly over Hobbit document release


Warner Bros is threatening that the Government’s release of confidential documents about the Hobbit union debate would be a “major disincentive” to future film-making in New Zealand.

The New Zealand Ombudsman has ordered the Government to release documents about the deal it struck to ensure the Hobbit movies were made in the country.

The Government secured the three movies by changing employment laws and beefing up the tax rebate sweetener for the productions, resulting in an additional $25 million in incentives for Warner Bros."


What a big bag of bull shit this is.


“Ask not what your country can do for you, ask what your country can do for Warner Bros.”


I’m confused…New Zealand IS Middle Earth…Where the F@@@ else would it be made??


Haha, looks like we got up to the chapter “Out Of The Frying-Pan Into The Fire”.


Typical corporate/ government behaviour in this day, and age.

Hopefully the documents will be released, and scrutinized for anything illegal.


If you work in the industry, you have to be careful about wishing for something like that.

Sometimes… the economic or business benefit you enjoy is actually connected to the financial advantage offered by a seemingly unrelated bit of exploitation.

Exploitation/one-sided agreement is obviously what Warner is afraid of being exposed of having done here.

That money usually trickles down here and there, and usually other majors do similar things such that exposing one exposes others. Which, if that avenue is closed, or say, there results increased scrutiny of how large studios close deals to go on location, there may be issues on the project side as well… and it affects a lot of people.

In an ideal world, it would be win-win-win-win for everybody… but more often than not these days, someone is left holding the burning basket - and if that person cries foul and authorities swoop in, it just becomes someone else’s turn to hold onto it.


There won’t be anything illegal because the government changed the law to suit. It could be very embarrassing though, especially for the NZ govt and especially because of the wider current political context.

With regards to Warner’s, I imagine that they are more concerned that their negotiation tactics might be revealed to other governments who they might want to strong-arm in the future.


It’s quite commonplace for countries with a relatively small film industry to offer tax breaks and incentives. My country is a good example: our film industry relies on the film tax laws to draw large productions to our shores. For instance: Saving Private Ryan was filmed in Ireland. So was Braveheart.
In Britain they factor film tax incentives into the budget quite often.
and let’s not forget where the term ‘spaghetti western’ comes from.:smiley:

Also, the fact that Australia was attempting to entice the production there was a disaster waiting to happen from a nationalistic standpoint.:wink:


Yeah, but how many of them changed labour laws at the behest of a foreign company, which is what this is really about? That’s all a political discussion, however, so out of bounds for this forum and probably boring for most non-NZ domestics.

A more interesting discussion, especially in the current climate demonstrated by threads here, is what the documents, if released, might reveal about Warner’s stance regarding various labour-related matters.


Yes but employment laws were not changed nor workers rights compromised.


So the NZ government pulled a few strings to enable a highly profitable (and prestigious) trilogy of films to be made…maybe I missed something but to me that sounds like a good thing.

Whats the alternative? I mean its motion pictures, you know one of the most glamorous jobs on earth! If these guys were working in a chicken factory I could understand, but this just seems ridiculous to me.

Great idea, run a flourishing creative industry into the ground with incessant complaining and shit stirring.


Yeah but the NZ government had no way to know if the films would fly or flop, or if they would benefit the country or just the movie people. They seem to have done a deal to undermine workers rights in secret behind the publics back. If they had been up-front about it, people over there may not have been as outraged.
Now the NZ government is trying to cover-up the cover-up. I thought things like that only happened in America and Canada. :wink:


The union had wanted local actors and other production workers to be hired as full-fledged employees on union contracts.

The legislation clarifies that film industry workers are independent contractors rather than employees.

Earlier this week, they reached a deal which offers additional tax breaks to the movie-makers plus help with marketing costs, as well as the labour law change.

Taken from an article on the BBC News Site

I’m not sure if it’s $25 million per film, or $25 million for the first film, and a %15 tax breaks for production. Plus, as the quote mentions helping out with marketing costs, on top of changing the labour laws.

In case you’re wondering what the difference is between an independent contractor, and an employee in New Zealand law;

independent contractors:

are not covered by the ERA or the Holidays Act 2003;
can (generally) be terminated by the provision of notice;
are responsible for their own ACC and tax payments; and
may need to be GST registered.


are covered by the Employment Relations Act 2000 (ERA);
have minimum legislative entitlements such as annual leave, public holidays, sick leave, and bereavement leave, as provided by the Holidays Act 2003;
cannot be lawfully dismissed unless there is substantive justification and a fair process is followed; and
fulfil their tax and ACC obligations through their employers.

So if ‘all’ workers in the film-industry are now automatically classed as independent, well, then they have lost a significant amount of rights that most take for granted.

When I come to think of this, most of the blame should be pointed squarely at Warner Bros. for forcing the hand of the New Zealand government. It’s an incredibly disgusting tactic that they have pulled - I did read that the unions retracted their demands, and yet Warner Bros. still threatened to take the work overseas. But still, the government should have told them straight. I doubt Warner Bros. would have followed through with it.


But of course its going to be successful, its the hobbit :slight_smile:

I think there are times where rules need to be bent. A collapse of Weta would be tragic for New Zealand. I’m not saying that loosing the hobbit would cause it, but it certainly would not help.

The country has a population half that of London its worth twisting the rules to keep something like that going imo.

Weta also seem to be pretty keen on hiring local talent, I imagine a lot of the labor laws were designed around industries like farming, those are not really fit for purpose when working on career defining films.

I personally signed away the EU working hours directive on joining my company.


When I come to think of this, most of the blame should be pointed squarely at Warner Bros. for forcing the hand of the New Zealand government. It’s an incredibly disgusting tactic that they have pulled - I did read that the unions retracted their demands, and yet Warner Bros. still threatened to take the work overseas. But still, the government should have told them straight. I doubt Warner Bros. would have followed through with it.

Honestly though, that’s how business works. They obviously had leverage and utilized it, if they didn’t then they wouldn’t be doing their jobs. End goal is to make money! I think people working in creative industries forget this because their passion is not money focused but if you spend any amount of time working in say IT or business focused service industries you quickly grasp this reality.


Unfortunately that’s not how domestic politics works. New Zealand is a sovereign nation and a democracy.

Warner Brothers managed to get the NZ government to rush a law change through parliament within 24 hours of asking for it, completely bypassing a lot of usual processes that laws go through in order to become laws. They also got an extra $30 million on top of the tax break they where originally getting.

I’m less concerned about the money, but I find it hard to imagine anybody would be happy with a foreign corporation or government dictating the laws of their country.


The documents have been released and look to be a bit of a storm in a teacup. More embarrassing to the NZ govt than anyone else. Time will tell what Warner’s reaction will be, if any.


Yeah I had a read over the documents last night and after all the threats from WB and PJ there didn’t seem to be anything in there that we didn’t kind of already know.


I totally agree!