Member log in

Hobbit 'likely' to force employment law change - PM

The Government is "likely" to make changes to employment law to reassure US movie giant Warner Bros. it can make The Hobbit here without facing the threat of industrial action, says Prime Minister John Key.

Mr Key, senior cabinet ministers and officials were meeting meet Warner Bros. representatives again this afternoon and the major sticking point now appears to be what financial incentives the Government can offer to have Warner Bros. make the $670 million production here.

Mr Key met Warner Bros. executives for more than two hours yesterday and advice overnight meant it was looking increasingly likely the two parties could reach agreement on changing employment law.

"One way or the other this issue will be resolved, my guess, by the end of the week, if not earlier."

However, financially things were looking difficult, Mr Key told media at the official opening of Wellington Airport's new international terminal today.

Mr Key would not go into details, but Warner Bros. wanted "lots" of financial incentives but the Government was not offering lots in return.

"We don't have the capacity to write out cheques.

"If it comes down to a bidding war New Zealand is going to lose. If New Zealand bases the entire industry on some sort of financial incentives then it's not going to be a long-lasting industry."

Mr Key said The Hobbit was an expensive project and Warner Bros. was worried there was a degree of ambiguity in current employment law, which would have been fine if the industrial scene was settled, but the aggressive union action had undermined that.

"Every day they spend in court, unable to film, over time, is millions and millions of dollars. It's just a risk they are not prepared to take."

The producers are worried about legal definitions of contractors and employees in New Zealand law, which they think could be used against them. They are also said to have been spooked by union action and the international "do not work" order.

The actors' unions involved in the threat to boycott The Hobbit have guaranteed that the filming will not be disrupted by industrial action, but Mr Key rejected the idea there was stability in the film industry workforce.

There had been "big breakdown" in the relations between the unions and the studio, he said.

The aim was to have The Hobbit made here, but also to have Warner Bros. and other movie makers come here, he said.

"That will happen when we have predictability in employment law."

Mr Key denied the Government was being "played" by Warner Bros. and it was not using The Hobbit as a stalking horse to change employment laws.

Mr Key also denied the country would lose face if it changed laws at the behest of Warner Bros.

"It's the practicalities of the world we live in. If we want to secure those movies and others made in this environment we'll need to give people clarity about the law is when you are a contractor and when you are an employee.

"Governments all the time change their laws to add clarity to legislation. It's not the first time we have done it and it probably won't be the last."

Rallies in support of filming The Hobbit here showed it was people who worked in the industry that wanted the law changes, he said.

"It's not like we are going against the workforce, we are actually supporting the workforce.

More by NZPA

More on:

Comments and questions
5

One term National Government.

So, in fairness then, remembering that at one glorious stage it was IRD's slogan 'to be fair', I imagine on this new law, that IRD will go back and rescind all actions taken on the independent contractor/employee divide in the past: there's an awful lot of taxpayers that IRD have hung out to dry on this issue.

Silly me: the movies are a 'special' industry, they get tax breaks and everything on a plate, of course. And good on them. Just a pity the collectivists who rule us don't make the connection that freer employment laws and tax breaks if they grow the movie sector, then they grow the private sector in total. Guess it's just the un-precious ones who have to pay for the welfare state, union idiots like Helen Kelly, actor idiots like Malcolm on the dole, and MP perks.

As usual tribeless you always get up someone that wants to do something for this country. Good on John Key for interferring this time. Sure politics should not be involved but in order to keep such a great money making opportunity for NZ in the country, it was necessary.

Grow up Tribeless and be happy that we are going to be getting something out of the rest of the world. Just imagine that you owned a pub and a group of 100 people wanted to pay big money to come for dinner and a night out but someone told them not to. As a publican, aren't you going to entice them with maybe a little discount in order to get the trade. HELLO!!!

One must admit that the Hobbit Affair is a gift from the Gods of Politics to John Key. With neat footwork and quick mind, he can skirt all the obvious traps.

The triple prize is his:
*The unions have been trapped in a very vulnerable position, look bad and are back peddling fast.
*John scores yet another “very” for the “Very, very good friends” label that describes our relationship with the USA.
*Our labour friendly laws get another sandpapering, to make them more employer friendly

Just remember the other side of the coin:
*The unions were just trying to get a better deal for their members. They may have thumped the table, but got savagely mauled in return.
*The Americans have a dark side in war, commerce and entertainment, which we should never forget.
* Arguably, NZ workers need more protection now, than in the past 70 odd years

In employment or politics, it is not a matter of absolute right and wrong, it's getting the balance of power right, so businesses and the system can work efficiently and everyone gets a fair share.

Try reading what I wrote Sarah.

I said that if tax breaks and freer employment laws grows movie making, then it also grows the private sector and wealth creation, period.

And the double standard that a lot of taxpayers who had desired conditions as independent contractors, have had those conditions, and thus their ability to operate, destroyed by IRD audits, making them employees. Yet this one 'special' industry gets it own 'special' law.

Good on Warners: the unions have played into their hands. Boo to the politicians for distorting the free market further and further so that the government picked winners get all the spoils, the rest have to pay for it.

We must separate government and the economy, and allow laissez-faire.